Gold Fields Acquires Osisko Mining for $1.57B, Secures Control Over Highly Prospective Windfall Project

Gold Fields GFI is acquiring Canadian Osisko Mining OBNNF for $1.57 billion in cash. This acquisition gives the South African-based miner full ownership of the Windfall Project in Quebec, one of the developing highest-grade gold deposits.

"We are pleased to consolidate the remaining 50% interest in Windfall and its highly prospective exploration camp," said Gold Fields CEO Mike Fraser.

"Deposits with the scale and quality of Windfall, combined with a world-class jurisdiction like Québec, are extremely rare. This acquisition aligns perfectly with our strategy to improve the quality of our portfolio through investment in high-quality and long-life assets," he added.

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Two years ago, Gold Fields unsuccessfully attempted to acquire Yamana Gold. Still, its $6.7 billion all-share offer was outbid by a smaller cash and share proposal from Agnico Eagle and Pan American Silver.

In the current hot M&A market, the company didn't want to risk a similar scenario, offering a 55% premium to Osisko's price from August 9 in cash and securing control over the highly touted Windfall Project.

This project, located between Val-d'Or and Chibougamau in Quebec's Abitibi region, is expected to produce approximately 300,000 ounces of gold annually at an all-in-sustaining cost of $758 per ounce.

With a projected mine life of 10 years, Windfall is set to become one of the lowest-cost mines in Gold Fields' portfolio.

The project boasts probable mineral reserves of 12.18 million tons at 8.06 grams per ton (g/t) gold, translating to 3.16 million ounces, with a projected mine life of 10 years. Moreover, the deposit remains open along strike and at depth, offering significant upside for exploration.

Before the May 2023 joint venture, Osisko invested over C$800 million in the project. Since then, Gold Fields and Osisko have each contributed an additional C$158 million, bringing the total investment to over C$1 billion.

While this acquisition marks a significant expansion for Gold Fields, Fraser indicated that the company may consider divesting certain assets to optimize its portfolio. Specifically, assets in Ghana (Damang) and Peru (Cerro Corona) that are nearing the end of their commercially viable ore lives could be up for sale. However, no definitive decisions have been made.

The acquisition is subject to shareholder and regulatory approvals, with a shareholder meeting expected in October. Both companies' boards have endorsed the deal.

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