Gold Fields partners with Osisko to develop the Windfall project in Québec, Canada
Gold Fields Limited
(Reg. No. 1968/004880/06)
(Incorporated in the Republic of South Africa)
JSE, NYSE, DIFX Share Code: GFI
ISIN Code:ZAE000018123
(“Gold Fields” or the “Company”)
Gold Fields partners with Osisko to develop the Windfall project in
Québec, Canada
Johannesburg, 2 May 2023: Gold Fields Limited (Gold Fields) (JSE,
NYSE: GFI) is pleased to announce a partnership with Osisko Mining
Inc. (TSX: OSK) (Osisko) to develop and mine the world class
underground Windfall Project in Québec, Canada, now known as the
Windfall Mining Group (Partnership). Under executed and implemented
transaction agreements, Gold Fields, through a 100% held Canadian
subsidiary, has acquired a 50% interest in the feasibility stage
Windfall Project (including exploration potential) on the following
key terms:
a) Cash payment of C$300 million (c.US$220 million) paid on signing;
b) Cash payment of C$300 million payable on issuance of key permits
by the Deputy Minister of Québec’s Ministère de l’Environnement,
de la Lutte contre les changements climatiques, de la Faune et
des Parcs (MELCCFP) to the Partnership authorising the
construction and operation of the Windfall Project; and
c) 50/50 co-share of interim and construction capital expenditures.
Under the Partnership, Gold Fields has also acquired a 50% up-front
vested interest in Osisko’s highly prospective Urban Barry and
Quévillon district exploration camps, totaling approximately 2,400km2
(Exploration Properties), which will be co-explored and co-developed
under the Partnership. In exchange, Gold Fields will fund the first
C$75 million in regional exploration on those Exploration Properties
over the first seven years of the Partnership. Thereafter, exploration
spend will be shared 50/50.
This transaction constitutes a measured strategic entry into a sought
after, Tier 1 mining jurisdiction, at an attractive valuation,
underpinned by a world class near mine asset, with significant camp
scale exploration potential. Gold Fields is excited to do so in
partnership with an experienced operator in Osisko, who has already
achieved great exploration success at Windfall and the Urban Barry
camp, and who brings with them a successful track record and reputation
of permitting, constructing, commissioning and operating Tier 1 assets
in the province of Québec.
Under the Partnership structure, each of Osisko and Gold Fields
respectively hold an effective 50% partnership interest in the
Windfall Project and the Exploration Properties. Management and
operatorship will be joint, and each partner holds a 50% interest in
a newly incorporated company responsible for managing the operations
of the Windfall Project and exploring the Exploration Properties for
and on behalf of Gold Fields and Osisko. The management company will
be governed by a Board of Directors comprising three directors
nominated by Gold Fields and three directors nominated by Osisko.
Having carried out extensive due diligence, management interaction
and site visits for just over a year, Gold Fields believes the Windfall
Project is on track to become a high-quality, low-cost underground
gold mine with a relatively small surface footprint and considerable
growth prospects along strike and down plunge, well beyond delineated
Mineral Reserves and the current 10 year projected mine life set out
in Osisko’s December 2022 Windfall Feasibility Study.
Drawing on more than 20 years of successful brownfields exploration
and reserve growth at its Western Australian operations, Gold Fields
sees the potential for a similar path to emerge at the Windfall, Urban
Barry and Quévillon belts. These gold belts bear striking similarities
to Western Australia's highly productive greenstone gold belts and
boast a growing number of exciting targets within Osisko’s extensive
and underexplored land tenure.
To accelerate the next phase of discoveries, Gold Fields will fund
the first C$75M over the next seven years, with the goal of fast-
tracking exploration discovery and transitioning the Windfall, Urban
Barry and Quévillon belts into premier, multi-decade mining
operations. Property-wide regional and near-deposit exploration is
already in progress, with 6 drills exploring targets developed by
Osisko over the past 7 years, and include the Golden Bear, Fox and
Shellian prospects. An initial exploration program developed by Osisko
and Gold Fields includes $20 million dedicated to these and other
targets in the coming 24 months.
Strategic rationale
This transaction will firmly deliver on Pillar 3 of the Gold Fields
strategy of growing the value and quality of our portfolio of assets.
The Windfall Project and the Exploration Properties comprehensively
tick Gold Fields’ key portfolio management criteria.
Gold Fields believes the projected 10-year LOM (based only on stated
Mineral Reserves in the Windfall Feasibility Study) to be
conservative. The average projected all-in-sustaining-cost (AISC),
as per the Feasibility Study, of US$758/oz (C$985/oz) is expected to
position Windfall as one of the lowest cost mines in our portfolio,
thus enhancing the average asset quality of the Gold Fields portfolio.
Further, a producing mine in Canada enhances the jurisdictional
quality of our global footprint.
The life extension upside, both within the Windfall mine footprint
through resource conversion and expected onsite exploration success,
together with significant regional exploration potential on the
Exploration Properties is anticipated to provide a range of additional
opportunities to Gold Fields’ pipeline. None of these upside
opportunities form part of the Windfall Feasibility Study.
Gold Fields brings extensive experience in exploring, delineating and
mining similar complex orebodies like the Windfall deposit, through
two decades of effective and profitable mining at our Western
Australian assets in particular. The Windfall opportunity presents
geology and mining methods we know and understand well. Our operating
and construction experience, particularly at Gruyere and Salares
Norte, together with Osisko’s Québec exploration and construction
credentials, forge a strong capability that will strive to unlock
significant value through permitting, construction and operation from
the Windfall project and the Exploration Properties.
Significantly, the Windfall Partnership is also consistent with Pillar
2 of Gold Fields strategy – to build on our leading commitment to ESG
– and will contribute to achieving our 2030 ESG commitments. We are
encouraged by Osisko’s strong ESG practices and relationships with
their host communities. Osisko has demonstrated genuine commitment
through its actions by, for example, the recent agreement with
Miyuukaa Corp. a wholly-owned corporation of the Cree First Nation of
Waswanipi with respect to the construction of proposed transmission
facilities and the transmission of hydroelectric power to the Windfall
Project through an 87km powerline. Construction of the powerline is
already underway.
Asset description
Based on the Windfall Feasibility Study 1:
• Mineral Reserves of 3.2Moz (12.18Mt at 8.06g/t)
• Life-of-mine of 10 years
• Average production (100% basis) of 294,000 ounces (peak
production of 374,000 ounces in year 2)
• AISC of US$758/oz (C$985/oz)
• Total capital expenditure of c.C$1.1bn which includes pre-
construction spend and project capital to be funded 50/50
• First production is expected in 2025, subject to approval of
permitting and final engineering design
Total investment into the Windfall Project by Osisko to date exceeds
C$800m. Some of the underground infrastructure already in place
includes 12.5km of underground development to 635 metres of vertical
depth, four main ventilation raises and 40 drill bays. To date Osisko
has completed three test stopes to confirm the ability to target ore
in production quantities. In addition, extensive civil works have
already been undertaken, including a lined waste pad and lined water
treatment ponds, an accommodation complex, administrative offices, a
communication tower and recreation area.
1. The results of the Windfall Feasibility Study can be found at:
https://www.osiskomining.com/osisko-mining-delivers-positive-feasibility-study-for-windfall
Osisko submitted the Environmental Impact Assessment Report for the
Windfall Project to the relevant authorities at the end of March 2023.
Deal structure and funding
The acquisition of the 50% Partnership interest was executed and
completed on 2 May 2023, and there are no further conditions precedent,
including regulatory approvals, to closing. Requisite South African
Reserve Bank notification has been made.
The Windfall Partnership in which Gold Fields has invested holds the
mining rights, permits, employees, contracts and associated assets
necessary to continue the exploration and development of the Windfall
Project and the Exploration Properties in collaboration with Osisko.
Gold Fields has funded the initial C$300m through existing cash
reserves and debt facilities. We intend to fund the remaining purchase
price and project capital from internally generated cash and debt
facilities.
Our enhanced dividend payout of 30% to 45% of normalised earnings will
be effective from the 2023 interim dividend declaration and this
transaction will not impact the dividend payout.
Comment from Martin Preece (Gold Fields interim CEO)
“We are very pleased to be partnering with Osisko to bring the high-
quality Windfall Project into production and believe that this will
be the first mine of several in this partnership in a highly
prospective region. We have actively reviewed a range of opportunities
to gain exposure to the prolific Abitibi region and believe that this
deal is the opportunity which meets our requirements. We are excited
to be working together with our partners to create value for all our
stakeholders.
This deal, following the recently announced JV with AngloGold Ashanti
in Ghana demonstrates our commitment to growing the value and quality
of our portfolio of assets. Further, adding in Salares Norte, which
is expected to come into production at the end of this year,
strengthens Gold Fields’ future production profile and enhances its
position on the cost curve.”
The Partnership is classified below the 5% categorisation level, thus
not categorised in terms of the JSE Listings Requirements.
McCarthy Tétrault LLP acted as legal advisers to Gold Fields on the
transaction.
Enquiries
Investors
Avishkar Nagaser
Tel: +27 11 562-9775
Mobile: +27 82 312 8692
Email: Avishkar.Nagaser@goldfields.com
Thomas Mengel
Tel: +27 11 562-9849
Mobile: +27 72 493 5170
Email: Thomas.Mengel@goldfields.com
Media
Sven Lunsche
Tel: +27 11 562-9763
Mobile: +27 83 260 9279
Email: Sven.Lunsche@goldfields.com
Notes to editors
About Gold Fields
Gold Fields is a globally diversified gold producer with nine
operating mines in Australia, South Africa, Ghana (including the
Asanko JV) and Peru and one project in Chile. We have total
attributable annual gold-equivalent production of 2.40Moz, proved and
probable gold Mineral Reserves of 46.1Moz, measured and indicated gold
Mineral Resources of 31.1Moz (excluding Mineral Reserves) and inferred
Gold Mineral Resources of 11.2Moz (excluding Mineral Reserves). Our
shares are listed on the Johannesburg Stock Exchange (JSE) and our
American depositary shares trade on the New York Exchange (NYSE).
Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
About Osisko Mining Inc.
Osisko is a listed mineral exploration company (TSX:OSK) focused on
the acquisition, exploration, and development of precious metal
resource properties in Canada. Prior to this transaction Osisko held
a 100% interest in the high-grade Windfall gold deposit located
between Val-d'Or and Chibougamau in Québec and in a large area of
claims in the surrounding Urban Barry area and nearby Quévillon area
(approximately 2,400 square kilometres).
Forward-Looking Statements
This announcement contains forward-looking statements within the meaning of the “safe harbour”
provisions of the United States Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical fact included in this announcement may be forward-looking
statements. Forward-looking statements may be identified by the use of words such as “will”,
““would”, “expect”, “potential”, “may”, “believe”, “anticipate”, “target”, “estimate” and words
of similar meaning.
These forward-looking statements, including among others, those relating to Gold Fields’ future
financial position, business strategies, business prospects, production and operational
guidance, ESG-related targets, and plans and objectives for future operations (including LOM
extension), project finance and the completion or successful integration of joint ventures, are
necessarily estimates reflecting the best judgement of Gold Fields’ management. Readers are
cautioned not to place undue reliance on such statements. Forward-looking statements involve a
number of known and unknown risks, uncertainties and other factors, many of which are difficult
to predict and generally beyond the control of Gold Fields that could cause its actual results
and outcomes to be materially different from historical results or from any future results
expressed or implied by such forward-looking statements. As a consequence, these forward-looking
statements should be considered in light of various important factors, including those set forth
in Gold Fields 2022 Integrated Annual Report and annual report on Form 20-F filed with the
Securities and Exchange Commission (SEC) on 30 March 2023 (SEC File no. 001-31318). These
forward-looking statements speak only as of the date of this announcement. Gold Fields expressly
disclaims any obligation or undertaking to update or revise any forward-looking statement
(except to the extent legally required).
Non-IFRS Measures
The information contained in this announcement contains certain non-IFRS measures, including
AISC. These measures may not be comparable to similarly-titled measures used by other companies
and are not measures of Gold Fields’ financial performance under IFRS. These measures should
not be considered in isolation or as a substitute for measures of performance prepared in
accordance with IFRS.
Date: 02-05-2023 01:00:00
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