Gold Fields Ltd (GFIJ.J), opens new tab has agreed to acquire Osisko Mining (OSK.TO), opens new tab for C$2.16 billion ($1.57 billion), it said on Monday, barely two years after an attempt to buy another Canadian miner was scuppered by a rival offer.
The Johannesburg-based gold producer will pay C$4.90 per share, a 55% premium to Osisko's Aug. 9 trading price, it said in a statement. The deal will help the South African producer expand its presence in the Americas region, where it already has mines in Chile and Peru.
Osisko shares soared 63% as trading opened in Toronto on Monday, while Gold Fields shares extended losses to trade 5.6% down at 1431 GMT, at their lowest since early July.
CEO Mike Fraser told Reuters that making a cash offer had helped Gold Fields move quickly, and also avoided a share dilution.
"We understand some of the competitors were attempting to...compete on a share based transaction. They would have probably had to compete at a higher price."
Gold Fields' $6.7 billion all-share offer to buy Yamana Gold in 2022 failed after the Canadian miner backed a $4.8 billion cash and share bid from Agnico Eagle (AEM.TO), opens new tab and Pan American Silver Corp (PAAS.TO), opens new tab.
Founded by Cecil John Rhodes in 1887, Gold Fields has shifted its focus to lucrative deposits in Ghana, Australia and the Americas given the geological challenges of digging in some of the world's deepest mines in its home country.
It said Osisko's projects in Quebec would help Gold Fields "firmly solidify" its footprint in one of the largest gold deposits in Canada.
Fraser said in an earlier statement that the deal would help Gold Fields take full control of the Windfall Project that it is already developing with Osisko in the province, with production is expected to start in 2026.
Osisko, which has recommended the deal to its shareholders, said Gold Fields was well suited to take the Windfall project into production.
Reuters