South African mining giants put merger on hold

AngloGold Ashanti and Gold Fields have agreed to pause discussions over combining their assets in Ghana.

The two JSE-listed companies previously proposed a joint venture to combine their Iduapriem and Tarkwa gold mines in Ghana.

Iduapriem is in Ghana’s western region, roughly 70km north of Takoradi and about 10km southwest of Gold Fields’ Tarkwa mine.

The open pit mine started gold production in 1992 and was acquired by AngloGold Ashanti in 2002, when it merged with Ashanti Goldfields.

In March 2023, the companies proposed combining the neighbouring mines and have since held constructive dialogues with the Government of Ghana to obtain the necessary approvals.

Since the start of the discussions, AngloGold Ashanti identified changes in its standalone mine plan for Iduapriem, which it believes have the potential to unlock significant additional value.

Thus, the companies have decided to pause discussions about their joint venture so that they can focus on improving the standalone performance of the respective sites.

This will allow AngloGold Ashanti to consolidate improvements to its long-term mining plan, which currently shows the highest value of its options.

Gold Fields expansion

Despite the deal with AngloGold Ashanti going on pause, Gold Fields announced yesterday, 05 May, that it will acquire Australia’s Gold Road Resources for AUD$3.7 billion (roughly R45 billion).

Gold Fields entered into a binding Scheme Implementation Deed to purchase 100% of Gold Road’s issued and outstanding share capital.

The board of Gold Road recommended that shareholders vote in favour of the purchase, without a superior proposal and subject to an independent expert’s report.

The two companies already collaborate at the Gruyere gold mine in Western Australia, with each holding a 50% share.

In addition to its 50% stake in the Gruyere gold mine, the group holds 100%-owned exploration projects across the broader Yamarna Greenstone Belt.

Gold Fields said that the consolidation forms part of its strategy of improving its portfolio quality with the purchase of high-quality, long-life assets.

The transaction comes after Gold Fields produced incredibly strong results amidst a record-high gold price due to heightened uncertainty. The group’s net income rose by 248.68% to USD428 million (R7.8 billion).