South African mining giant Gold Fields has sold its 45% stake in Ghana’s Asanko gold mine to its joint venture partner Galiano Gold, in a cash and shares deal worth $170 million. The transaction, which closed on Thursday, gives Galiano full ownership and control of the mine, which is one of the largest in Ghana and produced 170,000 ounces of gold in 2022.
Gold Fields, which also operates mines in South Africa, Australia, Peru, and Chile, said the deal was part of its strategy to focus on its core assets and optimize its portfolio. The company has been reviewing its investment in Asanko since 2018, when it entered into a joint venture with Galiano and the government of Ghana, which holds a 10% free carried interest in the mine.
“It is clear that the committed path forward for the Asanko mine requires consolidated ownership, and Gold Fields is pleased to realize value for its holding now,” said Gold Fields interim CEO Martin Preece in a statement.
Galiano, a Canada-listed miner that already owned 45% of Asanko, said the deal would simplify the governance and management of the mine, and allow it to pursue growth opportunities in the region. Galiano will pay $150 million in cash and $20 million in shares to Gold Fields, which will increase its stake in Galiano from 9.8% to 12.4%.
“We are excited to take full ownership of the Asanko gold mine, our flagship asset, and look forward to unlocking its full potential for the benefit of all our stakeholders,” said Galiano CEO Greg McCunn in a statement.
The Asanko gold mine comprises two main deposits, Nkran and Esaase, and nine satellite deposits. It has a mineral reserve of 4.4 million ounces and a mine life of 10 years. Galiano said it plans to invest in exploration and development projects to extend the mine life and increase production.
The deal comes amid a wave of consolidation and divestment in the global gold mining sector, as companies seek to improve their balance sheets, streamline their operations, and take advantage of high gold prices. According to Refinitiv data, the value of mergers and acquisitions in the gold mining industry reached $16.8 billion in 2022, the highest since 2010.
Gold Fields, which is the world’s eighth-largest gold producer, said it remains committed to its operations in Ghana, where it also owns the Tarkwa and Damang mines. In March, the company announced a plan to merge the two mines with AngloGold Ashanti’s Iduapriem mine, creating Africa’s biggest gold mine with an annual production of 900,000 ounces. The proposed transaction is still under consideration by the Ghanaian authorities.
Ghana is Africa’s largest gold producer and the world’s tenth-largest, with an output of 4.1 million ounces in 2022, according to the Ghana Chamber of Mines. The country’s gold mining industry contributes about 5% of its gross domestic product and 40% of its export earnings.
Source: Reuters
