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Friday, Apr 19, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Gold

Gold Fields and AngloGold Ashanti propose Ghana partnership for continent’s biggest gold mine

The companies have agreed upon key terms for the joint venture and estimate it would produce 11.8M oz over 18 years

AngloGold Ashanti and Gold Fields propose Ghana partnership for continent's biggest gold mine
Gold Fields was the first mining company to establish a charitable foundation for the community in Ghana. Photo via Gold Fields

Gold Fields Limited (JSE: GFI) and South Africa’s AngloGold Ashanti (JSE: ANG) have agreed to certain key terms of a proposed partnership in Ghana that the company’s believe will result in Africa’s largest gold mine and one of the world’s largest gold operations as well.

The two African gold producers announced the news on Thursday and the joint venture (JV) would combine Gold Fields’ Tarkwa mine with AngloGold Ashanti’s Iduapriem mining operation, both located in the country’s western region.

Gold Fields would own 60 per cent of the venture, AngloGold Ashanti would have a 30 per cent stake and the Government of Ghana would possess the remaining 10 per cent.

Read more: Calibre Mining reports high-grade ore from Pavon central mine

Read more: Calibre Mining broke gold production records with 10% increase in 2022

The mine could potentially generate 900koz annually in the coming years

Potential benefits from the JV would include greater economic prosperity for the region, the establishment of Ghana as an African mining hub and an increased number of investors.

The companies anticipate that the mine would generate nearly 900 kilo ounces annually over the next five years and 600 kilo ounces afterwards with a total mine life of 18 years or more.

Both parties want to implement the proposed JV as soon as possible and have been conversing with Ghana’s government officials, regulators and other stakeholders to help accomplish that goal. Implementation of the project will not occur until certain agreements with the country’s government have been met, definitive transaction agreements have concluded and regulatory approvals have been solidified.

The proposed project would be operated solely by Gold Fields with AngloGold Ashanti providing a 100 per cent interest in its Iduapriem mine in exchange for an unspecified amount of shares in Gold Fields Ghana, the operator’s subsidiary in the country.

“The ability to optimize mining and the use of shared infrastructure across the combined operation will result in significant flexibility in mine planning, materially enhancing the economics of the mine and ensuring quality and scale of operation that will be world class,” said Martin Preece, Interim CEO of Gold Fields.

The two companies have discussed the possibility of a joint venture many times during recent years, according to Preece.

“By creating one of the world’s largest open-pit gold operations, in a pre-eminent mining jurisdiction, we will create longer-term value not only for AngloGold Ashanti and Gold Fields, but for the combined stakeholders in our local host communities and for all of Ghana,” added Alberto Calderon, CEO of AngloGold Ashanti.

Read more: Calibre Mining strengthens management team with two new vice presidents

Read more: Calibre Mining increases mineral resources and reserves at its Nicaragua and Nevada operations

The International Trade Administration says Ghana produces more gold than any other African country and that the commodity accounts for 95 per cent of the nation’s mineral revenue.

Gold mining accounted for 48.4 per cent of Ghana’s gross merchandise exports in 2020, according to Canada’s Trade Commissioner Service.

The Ghana Chamber of Mines has said that revenue obtained from Ghana’s gold exports totalled approximately US$5 billion in 2021.

 

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