Gold Fields Forms Joint Venture With Asanko Gold Mine

South Africa's Gold Fields and Canada's Asanko Gold have announced a 50:50 joint venture partnership with regards to Ghana's newest gold mine, the Asanko Gold Mine (AGM) located in the Ashanti Region of Ghana.

Under the agreement, Gold Fields will pay Asanko Gold a total consideration of US$185 million to buy a 50 per cent interest in Asanko's 90 per cent holding of the AGM, which comprises two main deposits, Nkran and Esaase, nine known satellite deposits, a 5 million tonne per annum Carbon-in-Leach plant and a number of highly prospective exploration targets.

A joint statement issued by the two companies said as part of the joint venture agreement, Asanko would continue to manage and operate the AGM.

"A management committee, comprising representatives from Asanko and Gold Fields, will be formed to oversee operation of the mine. Upon completion, expected in Q3 2018, Gold Fields and Asanko will each hold a 45 per cent interest in the AGM.

The statement said the government of Ghana's ownership of 10 per cent (through a free carried interest) would remain unchanged.

According to the statement, the joint venture would provide Gold Fields with immediate access to low-cost production ounces, increasing the quality of Gold Fields' portfolio of mines around the world.

The transaction the statement said was also in line with Gold Fields' growth strategy of focusing on jurisdictions in which it already has an established footprint.

"As the AGM is located in Ghana, about 100km from Gold Fields' Damang and Tarkwa mines, the company is adding an asset in a country where it has operated for over 20 years," it said.

Nick Holland, CEO of Gold Fields, said, "Portfolio management is one of Gold Fields' strategic objectives, as we continually seek to improve the quality of our portfolio to enhance the group's cash generation. This joint venture will provide us with additional quality production in a country that we know well, having operated in Ghana for more than 20 years."

"This joint venture partnership with Gold Fields provides a unique opportunity for Asanko to progress its expansion and project development programme in a timely manner, bringing the Esaase deposit into production in 2019. Importantly, the Asanko team will continue to operate and manage the AGM, with access to Gold Field's technical and exploration expertise," the statement said.

It said: "This JV will impact positively on Asanko's debt structure and free up cash flow for further growth in line with our vision of becoming a mid-tier gold producer. It is further an endorsement by one of the world's largest gold producers of the AGM as a quality asset."

Peter Breese, CEO of Asanko, said: "This is a great outcome for our employees and contractors as we will continue to manage and operate the AGM. We will now move forward with our plans to develop the large-scale Esaase deposit and increase gold production, thereby securing a sustainable future for the mine, its employees and all stakeholders. Gold Fields brings significant technical and exploration expertise which will be accessible to the Asanko team as we continue to build the AGM into one of the largest mines in Ghana."

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