Gold Fields sells its 45% shareholding in Asanko Mine for around $170 million

Gold Fields Limited has announced the divestment of its 45 percent shareholding in the Asanko Gold Mine to TSX-listed joint venture partner Galiano Gold, for a total consideration of US$170 million.

Gold Fields will also receive a one percent net smelter royalty on future production from the Mine’s main deposit at Nkran in the Western Region.

Gold Fields and Galiano Gold, each owned 45 percent shares in Asanko Mine, with Galiano managing the Mine, while the Government of Ghana holds the remaining 10 per cent.

The transaction would be settled by Galiano to Gold Fields, through a combination of upfront, deferred and contingent considerations as follows: US$85 million would be settled with US$65 million in cash and US$20 million in Galiano shares on completion of the transaction.

Mr Martin Preece, the Interim Chief Executive Officer of Gold Fields, in a press release copied to the Ghana News Agency, gave the breakdown of the payments as follows: “US$25 million on 31 December 2025; US$30 million on 31 December 2026; and US$30 million plus a one per cent net smelter royalty to be paid, once more than 100,000 ounces of gold equivalent is produced from the Nkran deposit”.

He said, “The royalty is capped at a volume of 447, 000 ounces”.

Currently, Gold Fields has a 9.8 percent shareholding in Galiano and the share purchase agreement limits the shareholding it could raise to 19.9 per cent.

Should the market value of Galiano shares be less than the requisite US$20 million, the company would make up the difference with an additional cash payment, the release said.

Commenting on the divestment, Mr Preece said: “We are pleased to have concluded this agreement with Galiano, and it is clear that the committed path forward for the Asanko Mine requires consolidated ownership”.

He said Gold Fields was pleased to realise value for its holding now while providing flexibility to Galiano in the recapitalisation of the Mine and resuming mining to maximise its prospects of success.

“Divestment of our interest in Asanko is part of our ongoing disciplined portfolio management process and releases capital for deployment by the Company in line with our other capital allocation priorities.”

The current transaction, expected to be completed during the first quarter of 2024, is subject to several conditions, including regulatory approvals.