Gold Fields has registered its resolve to pursue growth by building new mines and searching for new gold deposits after a bid to rapidly expand through a US$6.7 billion acquisition of Yamana Gold was foiled by rivals.
Martin Preece, Gold Fields interim Chief Executive, disclosed that it is now opting to invest in new operations, “building one mine at a time” in regions such as Canada and Latin America, where there are more lucrative gold deposits,
Preece noted that Gold Fields could still pursue smaller acquisitions, but it lost appetite for large deals after the Yamana bid also provoked angst among investors who balked at the premium offered to the Canadian miner and the subsequent share dilution.
“Our going back to basics is we find the right mine and build it, we know how to build mines. I think the advantage of building mines is you find them at early stage and you can get in at a reasonable cost and you can enjoy the upside.”
Martin Preece
Gold Fields, like its Johannesburg-based rival AngloGold Ashanti, has shifted focus from its home country to more profitable mines in Ghana, Australia and the Americas region.
While the gold miner founded by Cecil John Rhodes in 1887 still runs South Deep operation in South Africa, mining in the country has become more difficult as the geological challenges of extracting bullion from the world’s deepest deposits are worsened by severe power outages and crime.
Preece further disclosed Gold Fields plans to start a new mine at its Windfall project by 2026 targeting about 300,000 ounces of gold at full production.
Renewed Push into Canada’s Mining Sector
Preece indicated that the Canadian project, being jointly developed with Osisko Mining, offers Gold Fields a renewed push into Canada’s mining sector even after it failed to bag Yamana.
The partnership with Osisko Mining offers new opportunities to search for deposits in areas adjacent to the Windfall project, ensuring Gold Fields’ presence in Canada for a long time, Preece added.
The new mines are needed as some of the company’s assets, such as the Damang and Cerro Corona mines in Ghana and Peru, respectively, run out of commercially viable ore.
The miner’s Salares Norte mine in Chile will start producing in the fourth quarter and will help Gold Fields’ output peak at about 2.8 million ounces by 2025 from a level of about 2.3 million now, the CEO said.
“Certainly, in Canada we want to strengthen our foothold, look for the right opportunities. Canada is underexplored and there is still huge potential.”
Martin Preece
Gold Fields has total attributable annual gold-equivalent production of 2.40Moz, attributable gold Mineral Reserves of 46.1Moz and Mineral Resources of 42.3Moz (excluding Mineral Reserves).
Gold Fields Limited is one of the world’s largest gold mining firms. Headquartered in Johannesburg, South Africa, the company is listed on both the Johannesburg Stock Exchange (JSE) and the New York Stock Exchange (NYSE).
Growth efforts are focused mainly in the regions where it currently operates, and are mainly driven through brownfields exploration on its existing land positions and through mergers and acquisitions in the same regions.
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