Gold Fields, one of the world’s largest gold mining firms, and AngloGold Ashanti, a Denver-based mining company, have announced their proposed joint venture to create the biggest gold mine in Africa. The companies plan on joining Gold Fields’ Tarkwa mine with AngloGold Ashanti’s nearby Iduapriem mines in a proposed joint venture in Ghana.
Gold Fields currently holds a 90% share of the Tarkwa mine and the Government of Ghana holds the remaining 10%. AngloGold Ashanti owns 100% of the Iduapriem mine. Both mines sit in the Western region of Ghana, near the town of Tarwa.
The proposed joint venture constituted within Gold Fields Ghana will be operated by Gold Fields. AngloGold Ashanti plans to contribute 100% interest in its Iduapriem mine to Gold Fields in exchange for company shareholdings. As a result, Gold Fields will maintain two-thirds interest (66.7%) and AngloGold Ashanti will hold one-third interest (33.3%) of the proposed joint venture project, excluding the 10% interest held by the Government of Ghana.
“The proposed joint venture would create the largest gold mine in Africa and one of the largest in the world. It will be a high-quality operation, supported by a substantial mineral endowment and an initial life spanning almost two decades. Operational synergies will be achieved by optimizing mining of the combined ore bodies and consolidating the infrastructure of the immediately adjacent mines for the long-term benefit of all shareholders and stakeholders,” the companies explain in a joint statement.
Tarkwa produced 531,600 ounces of gold with all-in and all-sustaining costs averaging $1,248 per ounce in 2022. As of December 2021, Tarkwa produced 5.22 million ounces of proved and probable gold mineral reserves and 3.38 million ounces of measured, indicated, and inferred gold mineral resources.
In 2022, Iduapriem mining operations produced 248,000 ounces of gold with all-in-sustaining costs averaging at $1,299 per ounce. As of December 2022, the mine produced 2.42 million ounces of proved and probable gold mineral reserves and 3.92 million ounces of indicated and inferred gold resources.
“This combination puts together two parts of the same world-class ore body, allowing us to share skills and infrastructure to significantly enhance every aspect of this mining operation, from exploration and planning to mining and processing. By creating one of the world’s largest open-pit gold operations, in a pre-eminent mining jurisdiction, we will create longer-term value not only for AngloGold Ashanti and Gold Fields, but for the combined stakeholders in our local host communities and for all of Ghana,” Alberto Calderon, the CEO of AngloGold Ashanti, explains.
The current proposed joint venture has an estimated lifespan of 18 years, though the companies may increase it with an extension and optimization plan. Over the next three years, the companies will enhance the estimated cost parameters, production requirements, and provisions, which may extend the project’s lifespan.
The joint project has an estimated annual production of 900k ounces at a 100% basis in the first five years with production averages leveling in excess of 600k ounces throughout the estimated 18-year lifespan. Both companies expect to spend around $1,000 per ounce for the first five years of production, then an average of $1,200 per ounce over the full 18-year course (in 2023 USD terms).
When you add the current ounces produced from each mine, you’ll see that the levels do not add up to the estimated production rates for the joint venture. The companies believe that the joint project will exceed individual operation production levels because of improved operational synergies. By combining forces, these two major mining organizations plan to streamline the process to optimize output.
“The Proposed Joint Venture is an exciting opportunity to combine mining operations that are essentially part of the same mineral deposit and is something that Gold Fields and AngloGold Ashanti have discussed many times before over the years,” Martin Preece, the interim CEO of Gold Fields explains. “The ability to optimize mining and the use of shared infrastructure across the combined operation will result in significant flexibility in mine planning, materially enhancing the economics of the mine and ensuring quality and scale of operation that will be world class. That unlocked value will underpin the Proposed Joint Venture’s continued contribution to our host communities and Ghana for decades to come. For Gold Fields, it will also significantly enhance the overall quality of our portfolio.”
The Gold Fields and AngloGold Ashanti joint venture in Ghana displays an exciting movement in the gold mining industry. As we enter 2023, more major organizations are taking aggressive steps to increase output and expand operations.
