South Africa’s Gold Fields announced on Aug. 12 that it has an agreement to acquire Canada’s Osisko Mining in an all-cash deal worth $2.16 billion. Once the sale is approved, Gold Fields would gain full control of the Windfall gold project, located in Quebec, which it currently has a 50-per-cent stake in, as well as the entire exploration area associated with the project.  

The company expects the deal to be finalized in the fourth quarter of this year. The offer was approved by the Osisko board and still needs a minimum of two-thirds of Osisko shareholders to vote in favour. The acquisition is the largest takeover of a Canadian junior mining company not yet in production in recent years. 

The Windfall project is located in the Eeyou-Itschee James Bay territory of Quebec, and on the traditional territory of the Cree First Nation of Waswanipi. The project property comprises 286 independent claims, totalling a combined area of 12,523 hectares. Environmental permitting for Windfall's full-scale construction is advancing, and final authorization is anticipated for 2025. 

Gold Fields is aiming to have the mine begin production by the end of 2026 or early 2027 and, according to Osisko Mining’s 2022 feasibility study, the project is expected to yield 306,000 ounces of gold per year over 10 years at an average all-in sustaining cost of US$758 per ounce. Peak production at Windfall would see an output of 374,000 ounces of gold produced in the second year, with an after-tax net present value of $1.2 billion and 34 per cent after-tax unlevered internal rate of return, based on a gold price of US$1,600 per ounce. 

According to Gold Fields, the acquisition is part of its growth strategy as it seeks to replace output from its outdated assets located in Peru and Ghana. The Windfall project will aid the company in broadening its presence in the Americas, where it currently owns the Salares Norte gold-silver greenfield project in the Atacama region of Chile, and the Cerro Corona copper-gold mine in northern Peru.  

This is not the first time that Gold Fields has sought to add a Canadian mining company to its portfolio. In 2022, it tried to purchase Yamana Gold but it was outbid by a joint offer from Agnico Eagle Mines and Pan American Silver Corp. The chief executive officer (CEO) of Gold Fields at the time, Chris Griffith, stepped down as a result.  

While the federal government announced it will tighten M&A restrictions to limit foreign takeovers of big Canadian mining companies to protect the country’s critical minerals sector, the deal is not anticipated to raise major national security concerns since gold is not a critical mineral. 

“We are pleased to be handing over the reins to Gold Fields, a partner whose expertise and vision align with the solid foundations we have established over the past years,” said John Burzynski, CEO of Osisko Mining, in an Aug. 12 press release. “Throughout our collaboration, Gold Fields has demonstrated a commitment not only to advancing a promising project in a key sector of Quebec's economy, but also to establishing strong and enduring relationships within the local community.”