Gold Fields, Repadre to acquire Ghanaian gold mine (October 22, 2001)

South African gold producer Gold Fields (GOLD-Q) and Toronto-based Repadre Capital (RPD-T) have reached a memorandum of understanding with Perth-based Ranger Minerals for the purchase of Ranger’s 90% stake in Abosso Goldfields.

Under the deal, Gold Fields would contribute A$63.3 million in cash via a corporate debt facility provided by Barclays Capital. For its part, Repadre would issue 4 million shares to Ranger. South African Reserve Bank approval for the transaction has been secured.

The transaction is subject to:

• approval by the government of Ghana by February 15, 2002;
• the successful completion of due diligence by all parties by November 9, 2001; and
• approval by Ranger shareholders and, if required, by Repadre shareholders by January 15, 2002;

The deal is expected to wrap up by February 28, 2002, unless mutually extended by the parties.

If completed, the deal would see Abosso become 71.1% owned by Gold Fields, Repadre would hold 18.9% and the Ghanaian government would retain a 10% stake. Gold Fields and Repadre will also acquire all outstanding loans from Ranger to Abosso.

Abosso holds 100% of the Damang gold mine in Ghana. Damang hosts resources of about 3 million ounces gold and reserves of 1.53 million ounces gold. During the Financial year ended June 31, 2001 the mine processed 4.54 million tons averaging 2.42 grams gold per ton to produce 322,046 ounces of gold. Total cash costs were US$208 per ounce.

At the end of June, Abosso had US$15 million of external debt; about US$14 million of net working capital; and a positive-mark-to-market hedge book covering about 500,000 ounces.

Gold Fields’ CEO Chris Thompson said, “This is another attractive acquisition for Gold Fields and we are particularly delighted that it is in Africa. Like our Tarkwa mine next door, Damang is an open pit operation and we plan to maximize synergies between these two assets.”

Repadre expects the acquisition to boost its attributable gold production to more than 170,000 ounces annually.