On 12 August 2024 Gold Fields announced that it had acquired Osisko Mining, consolidating ownership of the Windfall Project and the surrounding exploration district.
The company has entered into a definitive agreement with Osisko Mining to acquire all the common shares of Osisko Mining on the Toronto Stock Exchange (TSX). If approved by Osisko Mining shareholders, this transaction will give Gold Fields full control of the of the Windfall Project in Québec, Canada, currently jointly and equally owned and managed by Gold Fields and Osisko Mining.
Gold Fields has agreed to acquire the Osisko Mining shares at a price of CAD4.90/share in an all-cash transaction. The offer price implies a fully diluted equity value for Osisko Mining of approximately CAD2.16-billion (USD1.57-billion) and enterprise value of CAD1.48-billion (USD1.08-billion)1. The offer price is a premium of 55% to Osisko Mining’s 20-day volume-weighted average trading price on the TSX for the period ending 9 August 2024.
Once completed, the transaction will consolidate Gold Fields’ 50% partnership stake into full ownership and control of the Windfall Project and its entire exploration district and will eliminate the company’s existing obligations of a CAD300-million deferred cash payment and CAD75-million exploration obligation, which were part of the May 2023 Windfall JV transaction with Osisko Mining.
The transaction will be subject to the approval of at least two‐thirds of the votes cast by Osisko Mining shareholders, as well as a simple majority of the votes cast by Osisko Mining shareholders excluding certain related parties, at a shareholder meeting expected to be held in October 2024. Both companies’ boards of directors have approved and are supportive of the transaction, with Osisko Mining directors recommending that shareholders vote in favor of the transaction.
The transaction will be implemented by way of a Canadian plan of arrangement. If approved by Osisko Mining shareholders and once all regulatory and court approvals have been received, it is envisaged that the transaction will be finalised in Q4 2024.
Gold Fields’s CEO Mike Fraser welcomed the deal: “We are pleased to consolidate the remaining 50% interest in Windfall and its highly prospective exploration camp. Deposits with the scale and quality of Windfall, with a highly prospective exploration camp on top of that, are extremely rare, let alone in a world-class jurisdiction like Québec, Canada.
“Throughout our joint ownership of the project since May 2023, and the due diligence that preceded it, we have developed a strong understanding of Windfall and its potential and view it as the next long-life cornerstone asset in our portfolio.
“The acquisition is consistent with our strategy to improve the quality of our portfolio through investment in high-quality, long-life assets, like Windfall. It provides an opportunity to consolidate our presence in Québec, a Tier-1 mining jurisdiction, and apply our experience in greenfields exploration, project development and underground mining.”
The company noted it is in a strong financial position to satisfy the transaction funding requirements, with an investment grade credit rating. As of 31 March 2024, Gold Fields had a net debt to EBITDA of 0.51x, held USD424-million in cash and approximately USD1.8-billion in undrawn debt facilities. On 15 May 2024 the company repaid bonds totalling USD500 million. In addition to cash on hand and the undrawn debt facilities, Gold Fields has also received a commitment from several banks to provide USD500-million via a new bank liquidity facility to fund part of the transaction.
Fraser said that he is confident that Gold Fields will retain the current project team: “We would like to thank the Osisko Mining team for their support since the announcement of our partnership in 2023. We look forward to continue working closely with the host Cree First Nation of Waswanipi, other local communities, the Québec Government and Windfall employees and business partners as we advance this project, which I strongly believe will create shared, enduring value for Gold Fields and our people, community, business and government partners.”
Osisko Mining CEO John Burzynski said: “We are pleased to be handing over the reins to Gold Fields, a partner whose expertise and vision align with the solid foundations we have established over the past years. Throughout our collaboration, Gold Fields has demonstrated a commitment not only to advancing a promising project in a key sector of Québec’s economy, but also to establish strong and enduring relationships within the local community.
“As they assume leadership, we are confident that Gold Fields will continue to build upon this momentum, furthering both the project and the socio-economic development of the region. Their understanding of the industry, coupled with their dedication to sustainable growth, positions them to create lasting value that will benefit all stakeholders and Québec’s economy for years to come.”
Source: Supplied by Gold Fields
References:
- Enterprise value calculated as the CAD2.16-billion fully diluted equity value less net cash, securities, proceeds from in-the-money dilutive securities and CAD300-million deferred cash payment.