Gold Fields is set to acquire Canadian gold junior Osisko Mining in a cash deal valued at C$2.16 billion, gaining 100% control of the Windfall gold project in Quebec. This acquisition follows Gold Fields’ initial 50% stake in the project, secured in May last year.
The deal, offering C$4.90 per Osisko share, grants Gold Fields full ownership of Osisko’s 70% stake in a joint venture with Bonterra Resources, covering an additional 225 km² of exploration ground adjacent to Windfall. This acquisition positions Gold Fields to control the entire exploration district.
Gold Fields CEO Mike Fraser highlighted the significance of Windfall, describing it as one of Canada’s largest gold deposits and a top-ten global deposit by head grade. The project is expected to produce around 300,000 ounces of gold at an all-in sustaining cost (AISC) of US$758/oz, making it one of the lowest-cost mines in Gold Fields’ portfolio with a projected 10-year mine life.
Addressing concerns about operating in Quebec, Fraser praised the province’s pro-mining stance and strong community and state support. He noted that initial interactions with Quebec’s Ministry of the Environment have not raised any red flags.
Gold Fields is paying a 55% premium for Osisko, which Fraser justifies due to the competitive acquisition process and the stagnant share price of Osisko over the past year. Fraser believes the price is reasonable given the asset’s quality and the detailed assessment Gold Fields has conducted.
The all-cash transaction, Fraser stated, will not affect Gold Fields’ dividend payments. He emphasized that maintaining the dividend policy and avoiding stock dilution were key considerations, given the company’s current low gearing and available balance sheet capacity.