Gold Fields pivots into strength

Gold Fields began 2024 with new chief executive, Mike Fraser, taking the reins to bring some stability and direction to the company after a turbulent couple of years which saw it try and fail to close a major acquisition to penetrate North America, then pivot to an equally meaningful transaction.

The push into North America saw Gold Fields bid to take out Yamana Gold, with executives from Gold Fields and Yamana spending most of 2022 telling anyone who would listen about the deal, before the company was trumped, almost at the last minute,and Agnico Eagle Mines. The failure ultimately cost former chief executive 

Fraser, formerly president and COO at diversified miner South32, brings a chief executive to the rudder to execute the company's growth and development vision, which includes a fair amount of mine building. Fraser's first task is completing the build of the transformative, yet troubled and delayed,gold mine development in Chile, before then tackling the integration of assets in Ghana that will result in the creation of, and supporting Osisko Mining on the

"If we go back to the Yamana transaction, we had a really good strategic intent about trying to fill our post-10 years reserve pipeline. … It is really easy in our industry to get caught up with what the future holds for us, because, largely, we're dealing with shorter-life assets."

"The problem with getting into mega deals is that very often you create a disconnect between the horizon of your current stakeholders, and what is right for the business in the long term. It was probably a bit of a surprise when we walked away from that transaction, but it was the right decision because we realised there's other ways of addressing the same strategic objectives," Fraser told Mining Journal.

Yamana was a 1Mozpa gold producer whose portfolio included half of the Canadian Malartic mine in Quebec, and an attempt at instant growth. The company's pivot is moving to its strength, which is building value. 

Salares Norte is in the final phases of its construction. It is a project Gold Fields has steered through discovery, exploration, development, and soon, into production. It is due to produce 250,000oz this year, growing to 580,000oz in 2025 and an average of 600,000ozpa over its first five years. 

"This is an example of what Gold Fields really well: Gold Fields discovered it, took it through the study phase, they committed to the development of this asset, and they're going to be the operator and will continue to explore the nearby land package to see if we can enhance the value of it. It will deliver those ounces at $790/oz [all-in sustaining cost], which at these gold prices will generate huge cash flow which will go into the treasury and be used to continue to invest in the business, returning cash to shareholders, etc," said Fraser.

In Ghana, the strategic partnership formed with AngloGold Ashanti will unite their Tarkwa and Iduapriem mines. "[Ghana and Windfall] are more digestible opportunities where you can create that balance between returns to shareholders, sustaining the business and not overly stressing our balance sheet. The industry has been littered with failures in taking too many big bold steps that haven't been disciplined," said Fraser.

Both Ghana and Windfall are partnerships with other companies, which Fraser believes is a growing trend in the sector as competitors seek to generate value. The change in thinking is epitomised by the creation of Nevada Gold Mines (NGM) by Barrick Gold and Newmont in 2019, a JV 20 years in the making.

"The mining sector is moving towards partnership in terms of development, whereas in the past miners tended to not want to talk to each other not share or collaborate. This is something that as an industry, we haven't been great at. We have to take a leaf out of some other industries, notably the oil and gas industry, which has generally been quite good at performing in and creating shared business. … The premise of finding more collaborative ways of unlocking value we will see a lot more often," said Fraser.

The Ghana JV echoes the benefits of the NGM JV. "When we put these two assets together, we unlock reserves that we wouldn't have otherwise been able to, which extends the mine life for up to 18 years," said Fraser.

At Windfall, where Gold Fields is partnered with Osisko Mining, the companies anticipate obtaining approval for the environmental impact assessment in the March quarter of 2025, following which a formal development approval is anticipated. Windfall will have an 18-month construction period for the mill and processing facility, with first pour at the end of 2026 or early in 2027. "It is going to be a 300,000ozpa mine for the next decade, but more importantly, it comes with is a huge exploration land of around 400km2 to extend the life," said Fraser. 

Shares in Gold Fields are trading at US$12.41, valuing the company at $11.1 billion.