Gold Fields and AngloGold Ashanti have agreed on a proposed joint venture (JV)in Ghana between Gold Fields' Tarkwa and AngloGold Ashanti's neighbouring Iduapriem Mines.
The proposed Ghana Joint Venture (JV) is projected to create Africa's largest gold mine, a joint media release from Johannesburg, South Africa, and copied to the Ghanaian Times has announced.
The Tarkwa Mine is held by Gold Fields Ghana, in which Gold Fields currently owns a 90 percent share, with Government of Ghana (GoG) holds 10 percent, whilethe Iduapriem Mine is currently 100 percent owned by AngloGold Ashanti.
Both mines are located near the town of Tarkwa in Ghana's Western Region.
Benefits of the proposed JV include an estimated life of at least 18 years, which could increase through an extension and optimisation plan, to be consideredover the next three years.
This could also enhance envisaged production and cost parameters, the release said.
There is also an estimated average annual production (100 percent basis) of almost 900koz over the first five years and average annual production in excess of 600koz over the estimated life of operation.
The release said, "The Parties"had agreed in principle on the key terms of the proposed JV and indicated that they had begun preliminary, high-level and constructive engagements with senior government officials in Ghana.
These engagements would continue with the Government of Ghana, relevant regulators and other key stakeholders, with a view to implementing the proposed Joint Venture as soon as practically possible.
The Parties have agreed to mutual exclusivity during this engagement, the release added.
"It is intended that the Proposed Joint Venture will be an incorporated joint venture, constituted within Gold Fields Ghana and operated by Gold Fields.
"AngloGold Ashanti will contribute its 100 percent interest in Iduapriem to Gold Fields Ghana in return for a shareholding in that company.
"The Parties do not anticipate that any material, additional capital injection will be required by either company to establish the Proposed Joint Venture and is expected to materially improve its capital intensity once operational," it explained.
Again, the release stated, excluding the interest to be held by the GoG, Gold Fields would have an interest of 66.7 percent, or two-thirdswhile AngloGold Ashanti would have an interest of 33.3 percent, or one-third, in the Proposed Joint Venture.
It continued "the Proposed Joint Venture would create the largest gold mine in Africa and one of the largest in the world, it will be a high-quality operation, supported by a substantial mineral endowment and an initial life spanning almost two decades.
"Operational synergies will be achieved by optimising 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," the statement said.
The Interim CEO Gold Fields, Martin Preece, noted that the JVwas an exciting opportunity to combine mining operations "that are essentially part of the same mineral deposit and is something that Gold Fields and AngloGold Ashanti have discussed many times before over the years."
He believed that the ability to optimise mining and the use of shared infrastructure across the combined operation would result in significant flexibility in mine planning, materially enhancing the economics of the mine.
This deal, Preece added, also ensures quality and scale of operation that would be world class.
"That unlocked value will underpin the Proposed Joint Venture's continued contribution to our host communities and Ghana for decades to come. For Gold Fields, it will also significantly enhance the overall quality of our portfolio," he explained.