Gold Fields to Boost Portfolio With Osisko Mining Deal

Gold Fields Limited GFI announced that it signed a deal to acquire Osisko Mining. This move is in sync with GFI's goal to strengthen its portfolio through investments in high-quality and long-life assets.

The transaction is expected to close in the fourth quarter of 2024, subject to approvals by Osisko shareholders and others.

Once the shareholders of Osisko Mining approve the deal, Gold Fields will gain complete ownership of the Windfall Project in Québec, Canada. Gold Fields and Osisko Mining  have owned and managed the project jointly since May 2023. GFI's Windfall joint venture arrangement with Osisko Mining included a C$300-million ($219 million) deferred cash payment and a C$75-million ($55 million) exploration obligation, which will now be eliminated.

The Windfall Project, situated between Val-d'Or and Chibougamau in Quebec's Abitibi region, is estimated to produce 300,000 ounces of gold per year. It is expected to have all-in-sustaining costs of $758 per ounce, making it the lowest-cost mine in Gold Fields' portfolio.

Before entering the joint venture in May 2023, Osisko Mining  invested more than C$800 million ($583 million) in the project. Since then, Gold Fields and Osisko Mining have both invested an additional C$158 million ($115 million), increasing the total investment to more than C$1 billion ($0.73 billion).

The deal is set at C$4.90 ($3.57) per share in an all-cash transaction. As of Mar 31, 2024, Gold Fields had a net debt to EBITDA ratio of 0.51X, with $424 million in cash and $1.8 billion in undrawn debt facilities.

The acquisition enables GFI to expand its presence in Québec, a Tier 1 mining jurisdiction. It will allow the company to use its expertise in greenfields exploration, project development and underground mining.

Gold Fields belongs to the Mining - Gold industry. Let us take a look at how its peers performed in the second quarter of 2024.

Agnico Eagle Mines Limited AEM reported adjusted earnings of $1.07 per share in the second quarter of 2024, up from 65 cents in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of 93 cents.

The company generated revenues of $2.08 billion, up nearly 21% year over year. The top line surpassed the Zacks Consensus Estimate of $1.72 billion.

Galiano Gold Inc. GAU reported adjusted earnings of 3 cents per share in second-quarter 2024, beating the Zacks Consensus Estimate of break-even results. Notably, it posted adjusted earnings of 5 cents in the year-ago quarter.

Galiano Gold generated revenues of $63 million in the quarter.

Kinross Gold Corporation KGC reported adjusted earnings of 14 cents per share, in line with the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of 13 cents.

Revenues rose nearly 12% year over year to $1.22 billion in the second quarter. It topped the Zacks Consensus Estimate of $1.02 billion.

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