Gold Road Resources has agreed to enter into a 50:50 joint venture with a wholly owned Australian subsidiary of Gold Fields Limited for the development and operation of the Gruyere Gold Project in Western Australia.
Located approximately 200km east of Laverton in WA, the Gruyere Gold Project includes the Central Bore, Attila and Alaric deposits and the YAM14 and Toto Prospects, comprising 144km2 in total.
Under the transaction, Gold Field will purchase a 50% interest in the Gruyere Gold Project from Gold Road for a total of $350 million, comprising A$250 million payable on completion of the transaction and A$100 million during the construction phase.
The agreement will also see Gold Road receive 1.5% net smelter royalty on God Field’s share of production from the tenements once total gold production exceeds 2 million ounces.
Additionally, Gold Road will retain >50% economic interest in the Gruyere JV through 50% direct ownership and the1.5% net smelter royalty.
The company will fund up to 10% cost overruns on the Gruyere development budget and provide funding support for any project-level guarantee requirements.
Gold Road’s Managing Director and CEO Ian Murray said the company was happy to welcome Gold Fields as a joint venture partner.
“We are very pleased to have concluded a highly accretive transaction for shareholders, and to have Gold Fields as our chose joint venture partner, a and with who we look forward to having long and successful relationship,” Mr Murray said.
“The highly experienced Owner’s Team that we have established over the past 18 months will be the Team that will develop the Gruyere Gold Project under the guidance and leadership of Gold Field. This partnership further strengthens our strong balance sheet, allows us to significantly de-risk the Gruyere Gold Project, and enables us to pursue our growth plans much sooner than we may have under alternative funding options.”
Gold Field’s CEO Nick Holland said the deal enhances the company’s portfolio and expands its exposure to a new and emerging goldfield in Western Australia.
“We are excited about partnering with Gold Road and are hopeful this is the start of a multi-decade, mutually beneficial relationship and see significant potential synergies in resourcing, intellectual, property, procurement and technical skills,” Mr Holland added.