AngloGold, Gold Fields Ghana joins together to develop Africa’s largest gold mine.
Ghana’s Tarkwa and Iduapriem mines, owned by Gold Fields (GFIJ.J) and AngloGold Ashanti (ANGJ.J), will be combined to form the continent’s largest gold mine, the two firms disclosed on Thursday.
Their decision demonstrates how gold miners are endeavoring to merge as they work to replace declining deposits and reduce cost pressures.
The world’s largest gold producer, Newmont Corp. (NEM.N), made a $16.9 billion deal for Australia’s Newcrest Mining (NCM.AX) last month, raising concerns of a fresh round of industry consolidation.
The two miners said in a joint statement that, despite subtracting the 10% interest the Ghanaian government currently has in Tarkwa, the agreement would see Gold Fields and AngloGold controlling 67% and 33%, respectively, of the joint operation.
According to the firms, the joint venture would extract on average 900,000 ounces per year for the first five years and 600,000 ounces throughout the expected 18-year mine life.
“The proposed joint venture will establish one of the largest gold mines in the world and the largest gold mine in Africa. It will be a high-quality operation supported by a sizable mineral endowment with an initial life of roughly two decades “The businesses said.
The combined operation’s all-in-sustaining costs (AISC), a metric used by the industry, would be below $1,000 per ounce for the first five years and below $1,200 per ounce for the duration of the mine’s average lifespan.
In 2022, Iduapriem produced 248,000 ounces at a cost of $1,299 per ounce, compared to 531,600 ounces produced by Tarkwa at an AISC of $1,248 per ounce.
After failing in its attempt to purchase Canada’s Yamana Gold (YRI.TO) last year, Gold Fields has said that it will no longer pursue large M&A agreements and instead focus on achieving incremental growth through smaller deals. Alberto Calderon, the CEO of AngloGold, has also stated that the business prefers internal development over acquisitions.
In addition to Tarkwa, Gold Fields also owns 45% of Damang and Asanko, two more mines in Ghana. Together with Iduapriem, AngloGold also owns the Obuasi mine in Ghana.