Sale of Darlot Mine to Red 5
Gold Fields Limited has announced the sale of its Darlot mine in Western Australia, through a wholly owned subsidiary, to ASX-listed Red 5 Limited for a total consideration of A$18.5m,comprising A$12m in cash and 130m Red 5 shares. The cash component is made up of A$7m upfront and A$5m deferred for up to 24 months. The deferred consideration may be taken as additional shares in Red 5 or as cash at Gold Fields’ election.
Red 5 intends to undertake a rights issue in order to assist with the funding of the cash component and general working capital purposes. Gold Fields will underwrite the rights issue up to A$7m.
Gold Fields Executive Vice President – Australasia, Stuart Mathews said the sale of Darlot is in line with the company’s strategy to continually upgrade the Gold Fields portfolio.
“Gold Fields’ decision to sell Darlot was based on achieving the best balance for the company’s evolving Western Australian assets,” he said.
“We announced the commencement of the sale process to our staff and the market in February 2017, and we have maintained its operations during that time.”
Mr Mathews said Gold Fields has reached an agreement with Red 5 that will ensure the continuation of operations at Darlot, which will benefit the companies, the on-site team, industry and the community.
“Gold Fields continues to invest heavily in Western Australia as evidenced by our annual A$90m near-mine exploration programme and the A$350m investment to acquire 50 per cent of Gruyere,” he said.
Darlot was acquired by Gold Fields in 2013 as part of the acquisition of Barrick Gold’s Yilgarn South assets. Gold Fields has invested heavily to extend the life of the mine beyond the initial projected six months, which has resulted in Darlot producing more than 241,000 ounces of gold in the past three years.
The transaction is subject to customary conditions, including Red 5 shareholder approval, and is scheduled for completion and ownership transfer in September 2017.