Yamana's portfolio of operations was an attractive feature for Gold Fields, especially the Canadian Malartic mine in Quebec. Courtesy of Canadian Malartic.

South African miner Gold Fields announced on May 31 it will be acquiring Canadian company Yamana Gold in a deal valued at US$6.7 billion. The deal would place Gold Fields as the world’s fourth largest gold major miner after its expected conclusion in the second half of 2022.

The deal values Yamana shares at a 33.8 per cent premium, with Yamana shareholders receiving 0.6 Gold Fields shares for each outstanding share in Yamana that they own.

Once the acquisition closes, Gold Fields and Yamana shareholders will own an anticipated 61 per cent and 39 per cent of the combined group respectively. The deal’s finalization will require approval by the shareholders of both companies.

Gold Fields’ expressed interest in the takeover comes from Yamana’s portfolio of high-quality, long-life assets in mining-friendly countries across the Americas, especially the Canadian Malartic mine in Quebec and Jacobina mine in Brazil. Gold Fields, in turn, is active in Ghana, Australia, South America and South Africa. Upon realization of the combined group, which will remain based in Johannesburg, Gold Fields will maintain Yamana’s presence in all regions, including its active mines in Canada and South America.

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Gold Fields expects the deal to grow the value and quality of the combined portfolio, enhance its geographic diversity, strengthen the company’s financial position through complementary cash flows and create a strong growth pipeline. The most recent releases for Gold Fields and Yamana place their mineral resources at 121.1 million ounces from 1.9 billion tonnes at a grade of 1.98 grams per tonne and 14.5 million ounces from 444.7 million tonnes at a grade of 1.02 grams per tonne, respectively.

As for Yamana, the value of the transaction comes from its share of retained ownership in the combined group, its international presence and regional relevance, Gold Fields’ strength and experience in management, a higher cash flow and the realization of fair value for its shareholders.

“Each company brings with it a unique set of skills and geological knowledge, enabling the combined group to enhance its assets more efficiently over the long-term than they could as separate companies,” said Gold Fields CEO Chris Griffith.