Transaction Overview
Gold Fields has announced the sale of its 45% share in Ghana’s Asanko gold mine to Galiano Gold, a TSX-listed joint venture partner, for a total consideration of $170 million. Alongside the sale, Gold Fields will acquire a 1% net smelter royalty on future production from the Nkran deposit, the primary deposit at the Asanko mine. The mine is jointly owned by Gold Fields and Galiano Gold, with each holding a 45% stake and the Government of Ghana owning the remaining 10%.
Settlement Terms
The transaction will be settled through various payments:
- An upfront payment of $85 million, consisting of $65 million in cash and $20 million in Galiano shares upon transaction completion.
- A deferred payment of $25 million due by December 31, 2025.
- Another deferred payment of $30 million due by December 31, 2026.
- An additional $30 million, along with a 1% net smelter royalty, payable once gold production from the Nkran deposit exceeds 100,000 ounces. This royalty is capped at 447,000 ounces.
Gold Fields’ Shareholding in Galiano
Gold Fields currently holds a 9.8% share in Galiano Gold. Post-transaction, this shareholding could increase to a maximum of 19.9%, as per the share purchase agreement. If the market value of Galiano shares falls short of $20 million, Galiano will compensate the difference with an additional cash payment.
Management’s Perspective
Martin Preece, Interim CEO of Gold Fields, commented on the divestment, noting that consolidated ownership of the Asanko mine is necessary for its future success. He emphasized that the divestment aligns with Gold Fields’ disciplined portfolio management and capital allocation priorities. The divestment allows Gold Fields to reallocate capital efficiently.
Transaction Completion Timeline
The transaction, expected to complete in Q1 2024, is subject to regulatory approvals and other standard conditions.
The divestment marks a significant shift in the management and ownership of the Asanko gold mine, reflecting strategic realignment in the gold mining sector. 
