JSE-listed gold producer Gold Fields has completed the US$185 million joint venture transaction with Canadian gold producer Asanko Gold, gaining it a 50% stake in the Asanko gold mine and associated properties in Ghana, West Africa.
The Asanko gold mine is a multi-deposit complex, with two main deposits, Nkran and Esaase, and nine known satellite deposits.
Upon closing of the transaction, Asanko Gold received $165 million in cash from Gold Fields, with the remaining $20 million receivable in cash upon achievement of an agreed Esaase development milestone but in any event by no later than 31 December 2019.
The transaction will impact the recognition, presentation and measurement of assets and liabilities associated with Asanko’s Ghanaian operations. Asanko Gold expects to record a non-cash loss associated with the loss of control of the Asanko gold mine and associated properties in the second quarter of 2018, which is expected to be approximately $0.60 to $0.80 per share.
“The JV transaction with Gold Fields marks an important milestone for Asanko as we emerge completely debt-free, with a strong partner, a solid long life production base, competitive cost profile, fully funded organic growth and significant exploration potential,” says Asanko Gold president and CEO Peter Breese.
“In anticipation of the closing of the transaction we have already established the various working groups with our new partners to ensure that the Asanko gold mine continues to operate in an efficient manner,” Breese said.
He also thanked the Ghanaian Government for their assistance in facilitating the completion of this transaction well ahead of schedule.
Asanko will continue to manage the operations and will remain the operator. A joint venture management committee, comprising representatives from Asanko and Gold Fields, will be formed for purposes of overseeing the operation of the mine, with material decisions (including budgets, capital expenditure) requiring unanimous approval. A technical sub-committee will also be formed to provide technical advisory services to the management committee.
Repayment of the Red Kite Debt
Following the receipt of the cash proceeds pursuant to the transaction, Asanko Gold has repaid in full, without any penalties, all outstanding principal and capitalized interest owing to Red Kite. Red Kite’s current gold offtake agreement remains in effect until all outstanding ounces have been delivered to Red Kite or the joint venture elects to terminate the offtake and pay the associated termination fee.