The deal makes Gold Fields the sole owner of the Windfall project in Quebec, which it has been developing in a 50/50 joint venture with Osisko.
The deal fell through when Yamana accepted a higher joint bid from Agnico Eagle Mines (TSX: AEM; NYSE: AEM) and Pan American Silver (TSX: PAAS; NYSE: PAAS), overriding Gold Fields’ original offer.
The Windfall deal helps fill the gap left by that missed opportunity, adding 300,000 oz. per year at an all-in sustaining cost (AISC) of under $800 per oz. from early 2027.
“Windfall will be a real anchor for Gold Fields’ portfolio,” Fraser told The Northern Miner last week during the Gold Forum Americas in Colorado Springs. “It’s a place we’ve long looked at to grow our footprint.”
Over the past 10 years, the company has shifted away from its historic base in South Africa and focused on high-potential, lower-risk projects in places like Ghana, Australia, and the Americas. South Africa has produced some of the world’s mining heavyweights including Anglo American (LSE: AAL), Sibanye-Stillwater (JSE: SSW; NYSE: SBSW) and Impala Platinum (JSE: IMP). Impala and Sibanye-Stillwater had already expanded to North America.
But a C$600 million investment by Gold Fields in May last year saw the companies create a 50/50 joint venture on the Windfall Lake project, allowing Gold Fields to find a foot in the door for the eventual takeover.
“Over the last 15 months, we’ve gotten to know the project well,” Fraser, who has held the reins since October last year, said. “We’re excited about its future upside,” Fraser said.
Windfall, located in Quebec’s Abitibi region, holds an estimated 3.2 million oz. gold in 12 million tonnes at 8.1 grams gold per tonne in proven and probable reserves. Further exploration could extend the project’s lifespan, adding more long-term value, Fraser said.
Fraser also pointed out the similarities between Windfall and Gold Fields’ St. Ives mine in Australia. These parallels, he said, give the company confidence in its ability to execute the project efficiently.
Analyst critiques
The acquisition has drawn some criticism. Barrick Gold (TSX: ABX; NYSE: GOLD) CEO Mark Bristow suggested that Gold Fields may have overpaid for Windfall Lake, echoing concerns from some analysts that the price tag could stretch the company’s balance sheet and put pressure on returns.
In a mid-August note, BMO Capital Markets analyst Andrew Mikitchook said the cash bid highlighted the quality and scarcity of Windfall, while the existing joint venture and premium made a competing bid unlikely.
However, fellow BMO analyst Raj Ray at the time questioned the timing of the move, pointing out that Gold Fields sacrificed near-term cash flow while taking on development and execution risks. Ray also noted the deal increased pressure on the successful ramp-up of Salares Norte, which is yet to prove itself.
Greener pastures
Gold Fields’ exit from South Africa a decade ago marked a major turning point. The company, founded by Cecil John Rhodes in the late 1880s, sold off most of its South African assets as production slowed and risks increased. It then turned its attention to international markets, seeking new opportunities in North and South America.
Over the past decade, the company has expanded into these regions with projects like Salares Norte in Chile. However, severe winter conditions have hindered the project’s ramp-up, forcing revisions to production guidance and creating uncertainty around near-term output.
Gold Fields projects gold output this year to total 2.2 million to 2.3 million oz., revised down from an original estimate of 2.3 million to 2.4 million oz. to account for the delays in the Salares Norte ramp up.
At $15.53 apiece, the company’s New York-quoted shares are up 29% over the past 12 months, having touched $10.31 and $18.97. The company has a market capitalization of $13.9 billion.
