Major South African miner buys rival for R44 billion

Gold Fields will buy Gold Road Resources in a deal valuing its Australian joint venture partner at A$3.7 billion (R44 billion), a sweetened offer following weeks of negotiations over their key project in Western Australia.

Perth-based Gold Road said in a statement Monday that the Johannesburg-listed miner will use cash to acquire all outstanding shares at A$3.40 each, 12% higher than Gold Fields’ previously rejected proposal in March. 

Gold Road shares jumped as much as 12% after the announcement, and were trading 9% higher at A$3.24 a share as of 10:47 a.m. in Sydney.

Bullion’s record-breaking rally over the past three years – with prices topping $3,500 an ounce last month – has renewed interest in deal-making across the sector after years of overspending and operational setbacks curbed appetite for assets.

While that means some deals may be negotiated toward the top of the market, large producers have been encouraged to sell smaller mines that, without fresh investment, are approaching the end of their lives.

The deal – which was unanimously recommended by Gold Road board members – will consolidate Gold Fields’ 50% ownership of the joint-venture Gruyere mine it operates in Western Australia.

The project, which produced 287,000 ounces of gold in 2024, accounted for about 11% of Gold Fields’ free cash flow from extractive operations last year.

There’s been a flurry of deals in the gold space in recent months, including Northern Star Resources Ltd.’s purchase of De Grey Mining Ltd. in an all-share takeover valuing the target at about A$5 billion, which was completed Monday.

CMOC Group purchased Canada’s Lumina Gold Corp. in April, while Gold Fields last year agreed to buy Osisko Mining Inc. as part of a push to diversify away from South Africa.

Meanwhile, Newmont – the world’s largest gold producer – generated $4.3 billion on asset sales earlier this year, while Barrick Gold last month exited an Alaskan mining project by selling its 50% stake to billionaire John Paulson and Novagold Resources for $1 billion.

Gold Fields’ offer implies a total enterprise value of A$2.4 billion and represents a premium of 43% to the Australian company’s closing price on 21 March – before the larger miner initially announced its acquisition intention, Gold Road said Monday.