Gold Road Resources has rejected an unsolicited takeover proposal from Gold Fields, its 50:50 joint venture partner for the Gruyere gold mine in Western Australia.
The offer was received on March 7 and, if accepted, would have involved Gold Fields acquiring 100 per cent of the shares on issue in Gold Road via a scheme of arrangement for $3.05 per share, valuing Gold Road at $3.3 billion.
This offer comprised $2.27 cash per share and a variable portion equal to the value of Gold Road’s shareholding in De Grey Mining. De Grey is soon set to be acquired by Northern Star Resources for $5 billion.
Gold Fields’ proposal would have consolidated its ownership of Gruyere, of which it is currently manager.
Gold Fields chief executive officer Mike Fraser said the offer “represents a compelling opportunity for Gold Road shareholders to realise an attractive and certain cash price for their investment”.
However, after consideration and engagement with Gold Fields, Gold Road said the proposal “materially under values” the company.
“Gold Road notes that the receipt of the offer coincided with a lower March 2025 quarter production due to maintenance on the primary crusher and the failure of two conveyor belts,” Gold Road said.
“The offer attributes no value at all to the potential underground expansion of the Gruyere mine. As such, the Gold Road board formed the view that it is not in the best interest of its shareholders to accept the offer and rejected the offer on March 14.”
Fraser said Gold Fields will continue to seek the engagement of the Gold Road board.
“Consolidation of the remaining 50 per cent interest in Gruyere will eliminate dis-synergies that arise through the current joint venture ownership,” Fraser said.
“The proposed acquisition would be consistent with our strategy to improve the quality of our portfolio through investment in high-quality, long-life assets, like Gruyere, similar to our recent acquisition of the Windfall project (in Canada).”
After rejecting Gold Fields’ offer, Gold Road tabled an alternative proposal to acquire the remaining interest in Gruyere. However, this counterproposal was rejected.
“Gold Road has engaged in active correspondence and dialogue with Gold Fields to consider whether Gold Fields would address the deficiencies of its offer,” Gold Road said.
Fraser said Gold Fields will remain disciplined with regards to its proposed acquisition of Gold Road.
“Gold Fields also remains committed to maintaining a strong balance sheet with sufficient access to liquidity and funding to finance the proposed acquisition,” Fraser said.
Despite lower production projected for the March 2025 quarter, Gruyere is guided to produce 325,000–355,000 ounces in 2025.
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