South Africa’s Gold Fields and Canada’s Asanko Gold are pleased to announce a 50:50 joint venture partnership with regards to Ghana’s newest gold mine, the Asanko Gold Mine (AGM), which is located in the Ashanti Region of Ghana.
Gold Fields will pay Asanko Gold a total consideration of US$185 million to buy a 50% interest in Asanko’s 90% holding of the AGM, which comprises two main deposits, Nkran and Esaase, nine known satellite deposits, a 5 million tonne per annum Carbon-in-Leach plant and a number of highly prospective exploration targets.
As part of the joint venture agreement, Asanko will continue to manage and operate the AGM. A management committee, comprising representatives from Asanko and Gold Fields, will be formed to oversee operation of the mine. Upon completion, expected in Q3 2018, Gold Fields and Asanko will each hold a 45% interest in the AGM. The Government of Ghana’s ownership of 10% (through a free carried interest) will remain unchanged.
Benefits of the Joint Venture for Gold Fields
The joint venture will provide Gold Fields with immediate access to low-cost production ounces, increasing the quality of Gold Fields’ portfolio of mines around the world. The transaction is also in line with Gold Fields’ growth strategy of focusing on jurisdictions in which it already has an established footprint. As the AGM is located in Ghana, about 100km from Gold Fields’ Damang and Tarkwa mines, the company is adding an asset in a country where it has operated for over 20 years.
Nick Holland, CEO of Gold Fields, commented: “Portfolio management is one of Gold Fields’ strategic objectives, as we continually seek to improve the quality of our portfolio to enhance the Group’s cash generation. This joint venture will provide us with additional quality production in a country that we know well, having operated in Ghana for more than 20 years.”
Benefits of the Joint Venture for Asanko Gold
This joint venture partnership with Gold Fields provides a unique opportunity for Asanko to progress its expansion and project development program in a timely manner, bringing the Esaase deposit into production in 2019.
Importantly, the Asanko team will continue to operate and manage the AGM, with access to Gold Field’s technical and exploration expertise. This joint venture will impact positively on Asanko’s debt structure and free up cash flow for further growth in line with their vision of becoming a mid-tier gold producer. It is further an endorsement by one of the world’s largest gold producers of the AGM as a quality asset.
Peter Breese, CEO of Asanko, commented: “This is a great outcome for our employees and contractors as we will continue to manage and operate the AGM. We will now move forward with our plans to develop the large-scale Esaase deposit and increase gold production, thereby securing a sustainable future for the mine, its employees and all stakeholders. Gold Fields brings significant technical and exploration expertise which will be accessible to the Asanko team as we continue to build the AGM into one of the largest mines in Ghana.”
Key Facts about the Asanko Gold Mine
- The Asanko Gold Mine is predominantly operated and managed by Ghanaians
- The mine supports over 200 Ghanaian businesses with the procurement of goods and services
- Two of the mine’s three mining contractors are indigenous Ghanaian mining contractors
- The mine supports a number of corporate social responsibility projects through “The Asanko Opportunity Cycle” including the award-winning Obotan Co-operative Credit Union, which is bringing access to finance to the mine’s catchment area.
- In 2017, the Asanko Gold Mine produced 205,047 ounces
- In 2018, the Asanko Gold Mine is targeting 200,000-220,000 ounces