'The gold sector is highly fragmented'- Gold Fields Mike Fraser on consolidation in the mining space

There are more opportunities for consolidation in the gold sector, said Mike Fraser, CEO of Gold Fields. 

This week Fraser spoke to Kitco Mining at the Gold Forum Americas / XPL-DEV 2024 in Colorado.

Headquartered in South Africa, Gold Fields is a 918,000 ounce gold producer. In 2022 Gold Fields tried to acquire Yamana Gold. Agnico Eagle Mines prevailed after Gold Fields' investors soured on the deal. Gold Fields CEO Chris Griffith left the company. Fraser took over in October 2023. 

Fraser discussed Gold Fields other purchase, Osisko Mining's Windfall in Quebec. Gold Fields had initially acquired a 50% stake in the project 18 months ago. Recently Gold Fields completed the acquisition by purchasing the remaining 50% for C$2.16 billion. 

Fraser explained that the two-phased acquisition allowed the company to gradually familiarize itself with the Quebec jurisdiction and operational conditions before fully committing. 

"I think the way it's played out has really been the best way possible for Goldfields to enter into 100 percent of that asset," said Fraser.

The Windfall project, which holds 7.4 million ounces of gold reserves, is seen as a strategic move by Gold Fields. Despite a 55% premium on the second tranche, Fraser highlighted that the acquisition came with several financial benefits, such as cash already on hand and relief from funding further exploration. He described the acquisition price as fair, considering the future value it will generate. 

"M& A is only one leg of our strategy to grow and improve the quality of our portfolio," said Fraser. "We also have a very strong brownfields program where we explore around our existing projects, but ...[these] bolt-on acquisitions are really going to be opportunities to move forward. The gold sector is highly fragmented...compared to other industries, and there definitely are opportunities for further consolidation."

Coverage of the Gold Forum Americas / XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.