Gold Fields Ltd. to Acquire Osisko Mining in C$2.16 Billion Deal, Gaining Full Control of Windfall Project

Gold Fields Ltd. (GFIJ.J), a major global gold producer, has announced an agreement to acquire Canadian miner Osisko Mining (OSK.TO) for C$2.16 billion ($1.57 billion). The transaction, which values Osisko at C$4.90 per share, represents a 55% premium over its August 9 trading price and is poised to significantly strengthen Gold Fields' presence in North America.

Once completed, the acquisition will allow Gold Fields to consolidate its 50% partnership stake in the Windfall Project into full ownership. This includes control over the entire Windfall exploration district, eliminating existing obligations such as a C$300 million deferred cash payment and a C$75 million exploration obligation from a previous joint venture agreement made in May 2023.

The transaction, structured as a cash offer, is expected to close in the fourth quarter of 2024, subject to approval by at least two-thirds of Osisko Mining shareholders at a meeting scheduled for October 2024. Additionally, the deal requires a simple majority vote excluding certain related parties. Both companies' boards of directors have endorsed the transaction, with Osisko Mining's board recommending that shareholders vote in favor.

Gold Fields CEO Mike Fraser expressed his enthusiasm for the acquisition, stating, "We are pleased to consolidate the remaining 50% interest in Windfall and its highly prospective exploration camp. Deposits with the scale and quality of Windfall, with a highly prospective exploration camp on top of that, are extremely rare, let alone in a world-class jurisdiction like Québec, Canada."

This strategic acquisition follows Gold Fields' unsuccessful attempt to acquire Yamana Gold in 2022 and aligns with the company's broader strategy to expand in the Americas, where it already operates mines in Chile and Peru. Osisko Mining's key projects in Quebec, particularly the Windfall Project, are expected to play a critical role in solidifying Gold Fields' foothold in one of Canada's most significant gold-producing regions.

Osisko Mining's shares surged 63% in Toronto following the announcement, while Gold Fields' shares fell by 5.6% amid concerns about the long-term financial and operational impacts of the deal. Analysts have highlighted potential risks associated with bringing the Windfall Project to production, particularly given Gold Fields' recent challenges in ramping up production at its Salares Norte mine in Chile.

The deal will be funded through Gold Fields' existing cash reserves, un-drawn bank facilities, and additional financing from a consortium of lenders. The company is also considering asset sales, including its Damang mine in Ghana and Cerro Corona mine in Peru, which are nearing the end of their commercially viable ore production.

If approved by Osisko shareholders and after receiving all necessary regulatory and court approvals, the transaction will be implemented through a Canadian plan of arrangement and is expected to be finalized in Q4 2024.

Osisko Mining's Chairman and CEO, John Burzynski, praised the deal, noting that the premium offered reflects the potential of the Windfall Project and provides an early payout for investors.

This acquisition marks a significant milestone for Gold Fields as it continues to expand its global footprint, particularly in the Americas, while navigating the challenges of developing the Windfall Project and integrating Osisko's assets into its portfolio.