Two firms propose Ghana Joint Venture to create Africa’s largest gold mine

Gold Fields Anglogold Ashanti
Gold Fields Anglogold Ashanti

Gold Fields and AngloGold Ashanti have agreed on key terms of a proposed joint venture in Ghana between Gold Fields’ Tarkwa and AngloGold Ashanti’s neighbouring Iduapriem mines.

The Tarkwa Mine is held by Gold Fields Ghana in, which Gold Fields currently owns a 90 per cent share and the Government of Ghana (GoG) holding 10 per cent.

The Iduapriem Mine is currently 100 per cent owned by AngloGold Ashanti.
A statement issued in Accra jointly by the parties said both mines were located near Tarkwa in the Western Region.
It said the parties had agreed in principle on the key terms of the Proposed Joint Venture.

They had commenced with preliminary, high-level and constructive engagements with senior government officials in Ghana and would continue engaging with the government, relevant regulators and other key stakeholders, with a view to implementing the proposed Joint Venture as soon as practically possible.

“The Parties have agreed to mutual exclusivity during this engagement,” it said
The statement said it was intended that the proposed Joint Venture would be an incorporated joint venture, constituted within Gold Fields Ghana and operated by Gold Fields.

AngloGold Ashanti would contribute its 100 per cent interest in Iduapriem to Gold Fields Ghana in return for a shareholding in that company.

It said the parties did not anticipate that any material, additional capital injection would be required by either company to establish the proposed Joint Venture and was expected to materially improve its capital intensity once operational.

The statement said excluding the interest to be held by the Government, Gold Fields would have an interest of 66.7 per cent, or two-thirds, and AngloGold Ashanti would have an interest of 33.3 per cent or one-third, in the proposed Joint Venture.

The Proposed Joint Venture would create the largest gold mine in Africa and one of the largest in the world.
It will be a high-quality operation, supported by a substantial mineral endowment and an initial life spanning almost two decades.

It said operational synergies would be achieved by optimising mining of the combined ore bodies and consolidating the infrastructure of the immediately adjacent mines for the long-term benefit of all shareholders and stakeholders.

Mr Martin Preece, Interim CEO, Gold Fields, said: “The proposed Joint Venture is an exciting opportunity to combine mining operations that are essentially part of the same mineral deposit and is something that Gold Fields and AngloGold Ashanti have discussed many times before over the years.”

He said the ability to optimise mining and the use of shared infrastructure across the combined operation would result in significant flexibility in mine planning, materially enhancing the economics of the mine and ensuring quality and scale of operation that would be world class.

He said the unlocked value would underpin the proposed Joint Venture’s continued contribution to the host communities and Ghana for decades to come.

“For Gold Fields, it will also significantly enhance the overall quality of our portfolio,” he added.

Mr Alberto Calderon, CEO, AngloGold Ashanti said: “This combination puts together two parts of the same world-class ore body, allowing us to share skills and infrastructure to significantly enhance every aspect of this mining operation, from exploration and planning, to mining and processing.”

He said by creating one of the world’s largest open-pit gold operations, in a pre-eminent mining jurisdiction, they would create longer-term value not only for AngloGold Ashanti and Gold Fields, but for the combined stakeholders in their local host communities and for all of Ghana.

Benefits of the proposed Joint Venture include an estimated life of at least 18 years, which could increase through an extension and optimisation plan, and be considered under the Venture over the next three years, and could also enhance envisaged production and cost parameters.

It would also have an estimated average annual production (100 per cent basis) of almost 900koz over the first five years and average annual production in excess of 600koz over the estimated life of operation and an estimated all in sustaining cost (in 2023 terms) of less than US$1,000/oz over the first five years and less than US$1,200/oz over the estimated life of operation.

It is expected that the Ore reserves for the Venture would exceed the sum of the Ore reserves for the stand-alone operations due to the anticipated operational synergies, and the declaration of additional Mineral Resources and Ore reserves as a result.

Key principles of Venture are that Gold Fields and AngloGold Ashanti have collaborated across a broad and comprehensive range of work streams to formulate the indicative base case for the combination, which underpins the estimates above.

Additional, detailed work would now be undertaken to develop the optimised initial operating plan, which will apply from commencement of the Proposed Joint Venture.

The statement said Gold Fields and AngloGold Ashanti had agreed on the governance principles of the Venture, including their respective representation in management committees for the Venture and the board of Gold Fields Ghana.

As operator of Gold Fields Ghana, Gold Fields would receive a management and technical fee determined on an arms-length basis.

The implementation was subject to reaching agreement with the GoG regarding the Venture and conclusion of confirmatory due diligence and definitive transaction agreements, and securing all requisite regulatory approvals.
Subject to satisfaction of these conditions, the Parties intend to implement the Venture as soon as practically possible.

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