Gold Fields keeping powder dry for higher Gold Road offer?
GOLD Fields is to raise a bond aimed at repaying a $750m bridge facility used in the acquisition of Osisko Mining, a Canadian firm.In October, the Johannesburg miner agreed to pay $1.39bn for a 50% stake in Osisko Mining which owns the Windfall project in Québec. Gold Fields already owned 50% in Osisko following a $600m deal in 2023.The transaction drew criticism from some quarters as Gold Fields paid a 55% premium for the second tranche of Osisko shares. Since then the gold price has gained 17%.Windfall is expected to produce approximately 300,000 oz of gold at an all-in sustaining cost of $758/oz. “Deposits of the scale and quality of Windfall with highly prospective exploration camps are rare, particularly in a world-class jurisdiction like Québec, Canada,” Mike Fraser, CEO of Gold Fields told Miningmx in February.Gold Fields said in an announcement on Monday it had mandated Citigroup, RBC Capital Markets and Scotia Capital as bookrunners for the bond.The choice of a bond over repaying the Windfall debt is an interesting one as Gold Fields is highly cash generative and could choose to repay the debt that way. Gold Fields is forecast by Bloomberg to generate $1.5bn in free cash flow this year.It may mean the gold miner is keeping its powder dry for Gold Road Resources after it emerged on March 24 that a A$3.3bn (R37.7bn) bid for the Australian listed firm by Gold Fields had been rejected. Gold Road Resources owns 50% of Gruyere mine in Western Australia. As Gold Fields owns the balance – and is the operator – it’s logical (and low risk) to buy out the other half.The market believes Gold Fields’s will table a higher offer for Gold Road given its share price performance. This is despite relations between itself and Gold Road Resources having deteriorated, the latter claiming las week Gold Fields’s decision to publicise its offer was a strategy to divide and rule its shareholders.“After a bid is rejected, the takeover company usually comes back with a second more lucrative bid,” Jessica Amir, a market analyst at trading platform Moomoo told Reuters.Gold Fields, which bought 50% of Gruyere for A$350m in 2016, said in January it expected the mine to increase production over the next three years producing as much as 375,000 oz annually. Gold Road Resources made a counter offer for Gold Fields’s stake in Gruyere, rejected by Gold Fields.The post Gold Fields keeping powder dry for higher Gold Road offer? appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com
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