[ad_1]
GOLD Fields has sold shares of two non-core investments for a combined $ 88 million, a debt reduction strategy that most likely has future funding targets, including the $ 834-million Salares Norte project in Chile.
"One of our main goals is to reduce the amount of debt on the balance sheet," said Nick Holland, CEO of Gold Fields, in a company statement. "In addition to the Gold Fields debt restructuring announced in recent months, using proceeds from the sale of our non-core investments to reduce debt will further improve liquidity," he said.
Non-core investments were a 19.9% interest in Maverix, a Toronto-based gold and royalties circulation company, which Gold Fields sold for $ 68 and a 19.9% ownership interest. in the Sydney Red 5, sold for $ 20 million. "Both positions were sold at a significant premium to acquisition costs through transparency," said Gold Fields.
Gold Fields has announced that it would hold 4,125 million Maverix warrants, which equates to a 3.68% stake in the company on a partially diluted basis. Gold Fields sold the majority of its royalty portfolio to Maverix in December 2016 in return for the 19.9% interest.
In April 2019, Gold Fields sold its 247 million shares of Red 5 for AUD 0.12 per share. Gold Fields acquired the stake at 0.05 Australian dollar per share in October 2017 after selling its Darlot gold mine in Western Australia to Red 5, he said.
On May 9, Gold Fields announced it had raised $ 1 billion from two new bonds, as it had previously announced. The bonds consist of a $ 500 million five-year instrument with a coupon of 5.125% and a $ 500 million 10-year bond with a coupon of 6.125%. The average coupon is 5.625%. To demonstrate its interest in the solvency of the company, Gold Fields said the last combined book of the bond issue was more than $ 3 billion.
The proceeds will be used to repay the amounts owing under the $ 1.29 billion credit facility agreement and to refinance or redeem certain other existing debt, or for general corporate purposes, to announced the company in May.
Gold Fields said in April that it is optimistic about the development of Salares Norte, which is currently undergoing an environmental impact study that is expected to last 18 to 24 months to the Chilean authorities. The government accepted the EIA on July 11 for review.
All things being equal, the construction on Salares Norte was to start at the end of 2020 and the first gold production in 2023. The mine would have an initial life of 11.5 years and its lifetime production of 3, 7 million ounces of gold equivalent all maintain cost of $ 465 / ounce.
In addition to capital expenditures of $ 834 million, Gold Fields had already spent approximately $ 220 million to strengthen the deposit, which would result in a cost of $ 66 per ounce of reserve.
Before continuing with Salares Norte, one of the pieces of the financing puzzle could be a final decision as to whether Gold Fields remains attached to its South Deep mine in South Africa. According to JP Morgan Cazenove, the financing of Salares Note and the fate of South Deep were mutually exclusive.
"It probably means that a strategic solution at South Deep is probably a prerequisite to approving Salares funding," said Dominic O. Kane, a gold bank badyst. "Such a strategic solution at South Deep would be a positive catalyst for Gold Fields stock price."
Source link
