Gold Fields Limited (JSE, NYSE: GFI) forged a JV partnership with Osisko Mining Inc. (TSX: OSK)
On Tuesday, South Africa-based gold producing company Gold Fields Limited (JSE, NYSE: GFI) forged a JV partnership with Osisko Mining Inc. (TSX: OSK), a Canada-based mineral exploration company to develop and mine the Windfall Project in Quebec, Canada. Following the deal, shares of Gold Fields rose 3.5% while those of Osisko fell 5.0% Tuesday.
Under the agreement, Gold Fields through its 100% held Canadian subsidiary has acquired a 50% interest in the project for an initial cash consideration of C$300 million, and a further C$300 million is payable on issuance of key regulatory permits by the Government. The partnership also allowed Gold Fields to acquire a 50% up-front vested interest in Osisko’s resourceful Urban Barry and Quévillon district exploration camps.
Gold Fields made use of its existing cash reserves and debt facilities to fund the initial C$300 million and intends to fund the balance purchase price from internally generated cash and debt facilities. The company’s interim Chief Executive Officer Martin Preece said, “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.” The investment enables Gold Fields to foray into the coveted Canadian mining sector, which it had been eyeing for years.
Gold Fields has a diversified presence with nine operating mines in Australia, South Africa, Ghana (including the Asanko JV), Peru and one project in Chile, while TSX-listed Osisko is engaged in exploration and development of precious metal resources in Canada.
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