Gold Fields and AngloGold Ashanti propose joint venture to create Africa’s largest gold mine

JOHANNESBURG - In a deal that will create the largest gold mine in Africa, Gold Fields and AngloGold Ashanti have agreed on the key terms of a proposed joint venture ( JV) in Ghana between Gold Fields' Tarkwa and AngloGold Ashanti's neighbouring Iduapriem mines.

The two have agreed in principle on the key terms of the proposed JV and have commenced with preliminary, high-level engagements with senior government officials in Ghana with a view to implementing the JV as soon as practically possible.

The parties have agreed to mutual exclusivity during this engagement.

The Tarkwa Mine is held by Gold Fields Ghana, in which Gold Fields currently owns a 90 percent share, and the government of Ghana has 10 percent. The Iduapriem Mine is 100 percent owned by AngloGold Ashanti. Both mines are located near the town of Tarkwa in Ghana's Western Region.

The venture is intended to be constituted within Gold Fields Ghana, and operated by that company. AngloGold Ashanti will contribute its 100 percent interest in Iduapriem to Gold Fields Ghana in return for a shareholding.

The parties do not anticipate that any material additional capital injection will be required by either company to establish the JV.

Excluding the interest to be held by the government, Gold Fields will have an interest of 66.7 percent in the JV, while AngloGold Ashanti will have an interest of 33.3 percent.

The JV would create the largest gold mine in Africa and one of the largest in the world.

It will be a high-quality operation with an average annual production of almost 900, 000 ounces over the first five years and average annual production in excess of 600, 000 ounces over the estimated 18-year life of the operation.

Operational synergies will be achieved by optimising the mining of the combined ore bodies and consolidating the infrastructure of the immediately adjacent mines for the long-term benefit of all shareholders and stakeholders.