JOHANNESBURG - South African-based gold mining company, Gold Fields, announced on Wednesday that it has, through a wholly owned subsidiary, entered into a definitive agreement to form a 50:50 incorporated joint venture with Canada's Asanko Gold, Inc.
The transaction is subject to certain customary conditions.
Asanko is a Canadian-based gold producer with operations in Ghana.
The company's principal assets are the Obotan operation and the Esaase deposit, collectively the AGM, which are situated 100km north of Gold Fields’ Tarkwa and Damang operations along the prospective and under explored Asankrangwa greenstone belt in Ghana.
Gold Fields said that its subsidiary agreed to acquire a 50 percent stake in Asanko Gold Ghana Limited's (AGG), 90 percent interest in the Asanko Gold Mine, associated properties and exploration rights in Ghana (AGM).
The purchase consideration comprises an upfront payment of U.S.$165 million on closing of the transaction and a deferred payment of U.S.$20 million.
In addition, Gold Fields' subsidiary agreed to subscribe to a 9.9 percent share placement in Asanko by way of a private placement of 22,354,657 Asanko shares at a price of approximately U.S.$0.79 cents.
Gold Fields said that the Asanko joint venture will give it immediate access to low-cost production ounces, increasing the quality of its portfolio. Asanko's guidance for 2019-2023 is average annual production of 253,000 ounces at all-in sustaining costs (AISC) of US$860/oz, with a life-of-mine of at least 15 years.
- African News Agency (ANA)