South African giant buying Australian company for R45 billion

South African gold miner Gold Fields, via its subsidiary Gruyere Holdings, is acquiring Australia’s Gold Road Resources for AUD$3.7 billion (roughly R45 billion).

Gold Fields has entered into a binding Scheme Implementation Deed to acquire 100% of the issued and outstanding share capital of Gold Road.

Gold Road’s Board has unanimously recommended that its shareholders vote in favour of the scheme, in the absence of a superior proposal and subject to an independent expert’s report.

Gold Road holds a 50% interest in the Gruyere gold mine in Western Australia and a portfolio of 100%-owned exploration projects across the broader Yamarna Greenstone Belt.

Gold Fields currently holds the other 50% interest in the Gruyere gold mine, and said that the consolidation forms part of its strategy of improving portfolio quality via high-quality, long-life assets.

“We are grateful for our partnership with Gold Road, which has seen the asset evolve from exploration discovery to a high-quality operational mine,” said Gold Fields CEO Mike Fraser.

“We look forward to maximising the potential of the Gruyere gold mine and Gold Road’s exploration package to the benefit of Gold Fields shareholders.”

The transaction comes after Gold Fields produced robust results, buoyed by the record-high gold price. Its net income in 2024 grew by 248.68% to USD428 million (R7.8 billion). 

Structure of the deal

Under the terms of the scheme, Gold Road shareholders would be entitled to receive a cash consideration equivalent to the value of A$3.40 (R62) per Gold Road share, comprising the following:

• A fixed cash portion of A$2.52 for each Gold Road share, and
• A variable cash portion equal to the full value of each shareholder’s proportion of Gold Road’s shareholding in Northern Star Resources based on the prevailing 5-day volume-weighted average price immediately before the Scheme becomes effective.
  • As of 2 May 2025, the Variable Cash Consideration is A$0.88 per Gold Road share.

The value of the variable cash consideration will fluctuate based on movements in the value of Northern Star shares until the scheme becomes effective.

Should the scheme become effective, Gold Road intends to declare a fully franked special dividend.

The quantum of the special dividend will be based on Gold Road’s prevailing franking account balance at the time of distribution, it said.

This implies a special dividend of roughly A$0.35 per Gold Road share for a total special dividend payment to all Gold Road shareholders of approximately A$379 million.

The special dividend paid will be fully funded by Gold Road’s existing cash balance and other sources of liquidity and will be deducted from the fixed cash consideration.

The ultimate amount payable as a special dividend will be subject to Gold Road’s financial performance until the scheme becomes effective.

However, the payment and amount of any special dividend are still at the discretion of the Gold Road Board.

The Scheme Consideration values Gold Road’s equity at roughly A$3.7 billion, implying a total enterprise value of roughly A$2.6 billion. The offer presents premiums of:

• 43% to Gold Road’s undisturbed closing share price of A$2.38 per share on 21 March 2025;
• 35% to Gold Road’s undisturbed 30-day VWAP of A$2.52 per share on 21 March 2025; and
• 39% to Gold Road’s undisturbed 3-month VWAP of A$2.45 per share on 21 March 2025.`

Gold Fields said that the scheme’s price is ‘best and final’ and will not be increased further unless a superior proposal emerges.