Gold Fields completes Osisko buy for ownership of Windfall

South Africa’s Gold Fields (NYSE: GFI; JSE: GFI) said on Monday it had completed the $1.9-billion acquisition of Osisko Mining, which makes it the sole owner of the Windfall project and the surrounding exploration district in Quebec.

The project, previously held in an equal partnership by the two companies, is expected to help Gold Fields balance its aging assets in Ghana and Peru, adding 300,000 oz. per year at an all-in sustaining cost (AISC) of under US$800 per ounce, from early 2027.

The deal, announced in August, drew some criticism as as Gold Fields paid a 55% premium for the second batch of Osisko shares. Chief executive Mike Fraser assured the market on Monday that Gold Fields remained in a strong financial position following the acquisition, maintaining its investment-grade credit rating.

Analysts have pointed that Gold Fields paid a premium for Osisko mainly to acquire a high-quality project and prevent being outbid for a growth asset in a strongly supportive gold market. Several banks and agencies forecast that prices for the precious metal will surpass US$2,800 per oz. this year and reach US$3,000 per oz. by 2025.

The executive said the company’s financial outlook was anticipated to strengthen further, thanks to cash flow growth projected for the remainder of the year and into 2025, driven by increased production volumes at various operations.

“Deposits of the scale and quality of Windfall with highly prospective exploration camps are rare, particularly in a world-class jurisdiction like Quebec,” Fraser said. “This transaction therefore marks an important step in our journey to continue improving the quality of our portfolio.”

Growth “anchor”

Gold Fields plans to bring Windfall into production by the end of 2026 or early 2027. The project, along with the recently commissioned Salares Norte project in Chile, is central to the company’s growth strategy.

“Windfall will be a real anchor for Gold Fields’ portfolio,” Fraser told The Northern Miner in September. “It’s a place we’ve long looked at to grow our footprint.”

The asset holds proven and probable reserves totalling 3.2 million oz. gold in 12 million tonnes at 8.1 grams gold per tonne. Further exploration could extend the project’s lifespan, adding more long-term value, the company says.

Founded in 1887 by Cecil John Rhodes, Gold Fields has reshaped itself throughout the years. It sold all but one of its South African assets a decade ago, refocusing on newer, more profitable deposits in Ghana, Australia, and the Americas.

The gold producer projects output this year to total 2.2 million to 2.3 million oz. of the precious metal, revised down from an original estimate of 2.3 million to 2.4 million oz. to account for the delays in the Salares Norte ramp up.