GOLD Fields has secured complete ownership of the Gruyere gold operation after Gold Road Resources shareholders overwhelmingly endorsed the South African company’s $3.8bn acquisition offer.
The buyout received backing from more than 99% of votes cast, according to a report by the West Australian on Monday. The vote ends a protracted takeover battle that exposed deep operational tensions between Gruyere’s former joint venture partners, the paper said.
Gold Road and Gold Fields previously held equal stakes in the Western Australian mine, though the Johannesburg-listed giant maintained operational control throughout their partnership.
The deal approved today represents a significant improvement from Gold Fields’ initial $3.31bn approach in March, which Gold Road CEO Duncan Gibbs dismissed as both a “low ball” offer and aggressive “bear-hug” tactic.
A revised proposal agreed in May ultimately satisfied shareholders and resolved disputes that had simmered since Gruyere began production in 2019.
Mike Fraser, CEO of Gold Fields told Miningmx that there was major value to flow from owning all of Gruyere. “We keep on getting told this is a full price. But there are a couple of things that aren’t well understood in the bid price,” said Fraser.
One is that Gold Fields will no longer be required to pay a royalty to Gold Road for sharing Gruyere, a 350,000oz a year gold mine in Western Australia, Fraser said. Secondly, there’s a $300m tax advantage as Gold Fields can depreciate Gruyere across all its assets.
There’s also the rising gold price.
The conclusion of the Gold Road takeover comes on the day the gold price pushed upwards to yet another record. At the time of writing it was trading at $3,725/oz, roughly $700/oz more than Gold Fields’s average realised price for the first six months of its financial year.
In August, Gold Fields announced it had increased attributable production for the six months by 24% to 1.14 million ounces which, combined with the higher gold price, resulted in the group generating adjusted free cash flow of $952m compared with a negative cash outflow of $58m in the first half of 2024.
The group has declared an interim dividend of 700 South African cents a share which is more than double the 300c interim paid in 2024 and represents a payout of 34% of normalised earnings in line with Gold Fields’s policy of paying a base dividend of between 30% and 45% of normalised earnings.
Shares in Gold Fields rose to a fresh all time high. The Johannesburg-headquartered company is currently capitalised at R643bn on the JSE, only about R55bn less than Anglo American.
Valued at R497bn AngloGold Ashanti was also at a new all-time high. Shares in Harmony gained nearly 10%. At R305.71/share, they are slightly off their all-time high of R340.45/share registered in April.
