Gold Fields Ltd. said March 29 that it entered into a definitive agreement to form a 50/50 joint venture with Asanko Gold Inc. over the Asanko gold mine in Ghana. Gold Fields is paying US$165 million upfront and will pay a deferred US$20 million.
Separately, Gold Fields will invest US$17.6 million for a 9.9% stake in Asanko Gold. The subscription is not conditional on completion of the joint venture deal.
Gold Fields is financing the deals from cash resources and existing credit lines.
Asanko is a multideposit complex, with two main deposits, Nkran and Esaase, and nine known satellite deposits.
The upfront payment will be used to immediately retire the debt of Asanko Gold Ghana Ltd., which controls the mine. Repaying a US$164 million loan from the Red Kite group will leave Asanko Gold debt free. The deferred payment will fall due when an agreed Esaase milestone is reached or Dec. 31, 2019, whichever is earlier.
Asanko Gold will remain the operator of the mine. The joint venture transaction is expected to be completed during the third quarter.