Adnan Adams Mohammed
Chris Griffith, former Chief Executive Officer of Goldfields, has hinted that, the joint venture proposal between Goldfields Tarkwa and Anglogold Iduaprim he started before quitting has failed.
Gold Fields in 2022 announced joint ventures with AngloGold Ashanti in Ghana and another with Osisko Metals in Canada.
“All those things didn’t happen one or two months after I left. They were started well into my time,” he said in a recent interview published in the Financial Mail.
Implementation of the proposed joint venture (JV) between Gold Fields and AngloGold Ashanti, aimed to create Africa’s largest gold mine in Ghana, was to start by the end of 2023 or at least early 2024.
This is subject to agreement with the Government of Ghana, conclusion of all due diligence processes, and requisite regulatory approvals.
However, according to Economy Times investigation, Goldfields had stayed back from the deal because the government is demanding an upfront tax payment for five years period. Several phone calls to the Goldfields Ghana Head Office based in Accra to speak to get confirmation on the matter through the official telephone number was not successful.
The JV, was to combine Gold Fields’ Tarkwa Mine and AngloGold Ashanti’s Iduapriem Mine, to be incorporated within Gold Fields Ghana. This would be supported by a substantial mineral endowment and an initial life span of almost two decades.
The Tarkwa Mine is currently 90 percent owned by Gold Fields Ghana, with the Government of Ghana holding the remaining 10 percent. The Iduapriem Mine, meanwhile, is 100 percent owned by AngloGold Ashanti.
“It’s hard to offer an exact timeline, given that this will involve detailed discussions with the government and requires regulatory approvals, but we hope to be able to implement the transaction by the end of 2023 or early next year at the latest,” a statement issued by the two parties said in part.
The Executive Vice President and Head of Gold Fields West Africa, Joshua Mortoti, during a press briefing in Accra, said the proposed JV would improve life of mine, ensure business efficiency and operational synergy through combining respective ore bodies and infrastructure for the benefit of shareholders and stakeholders.
“We are extremely excited about the opportunity to create a mining entity with the potential to become the largest gold mine in Africa, delivering safe, sustainable and profitable production over the long term by combining two parts of the same world-class ore body,” Mr. Mortoti stated.
“We will do this by leveraging the operating efficiency advantage at Tarkwa, due to its scale, to unlock higher gold grades at lduapriem and maximising production across both processing plants,” he added.
Excluding the interest held by the Government of Ghana, Gold Fields would have a 66.7 percent interest in the joint venture. AngloGold Ashanti would have a 33.3 percent interest. However, it is proposed that once the requisite approvals are received, the Government of Ghana will have a stake of around 10 percent in the JV, Gold Fields will have 60 percent, and AngloGold will have 30 percent.
It is not expected that any material additional capital injection will be required by either company to establish the proposed JV as the new venture is anticipated to materially improve its capital intensity once operational.
The new entity is estimated to have a life of at least 18 years, with an estimated average annual production of almost 900koz over the first five years and average annual production in excess of 600koz over the estimated life of the operation.
The ore reserves for the proposed joint venture are expected to exceed the sum of the ore reserves for the stand-alone operations due to anticipated operational synergies and the declaration of additional mineral resources and ore reserves.
“Gold Fields and AngloGold Ashanti share a long history in Ghana and are committed to working collaboratively to operate a world-class gold mine. This creates a platform to develop the substantial mineral endowment at Tarkwa and lduapriem,” Mr. Mortoti highlighted.
Also, the Managing Director of AngloGold Ashanti Ghana, Eric Asubonteng, believd through the creation of one of the world’s largest gold operations on the back of the proposed JV – in a pre-eminent mining jurisdiction – there will be a creation of a longer-term value not only for AngloGold Ashanti and Gold Fields, but for the combined stakeholders.
“This proposed joint venture manages to capture true synergies in a commercially sensible way, by removing the fence between two halves of the same deposit and managing their operations and infrastructure under a single structure,” Mr. Asubonteng said.
“We expect that reserves of the proposed joint venture will exceed the sum of the reserves for the stand-alone operations, given the extent of the anticipated operational synergies,” he added.