South Africa-based Gold Fields has signed a scheme implementation deed (SID) to acquire mid-tier Australian gold producer Gold Road Resources in a transaction valued at approximately A$3.7bn ($2.4bn).
Gold Fields stated that the acquisition aligns with its strategy to enhance portfolio value through consolidation of existing joint ventures. This includes securing full ownership of the Gruyere gold mine in Western Australia, where the company currently serves as operator.
The company noted that Gruyere’s status as a producing asset would immediately support its cash-flow profile and strengthen its capacity to deliver shareholder returns.
Full control of Gruyere is also expected to improve operational decision-making and provide greater flexibility in future development planning.
Additionally, Gold Road’s exploration assets in the Yamarna Greenstone Belt in Western Australia are said to offer potential for developing satellite deposits. These could extend mine life and reduce operational costs by leveraging existing infrastructure, said Gold Fields.
Gold Fields CEO Mike Fraser said: “Gold Fields is pleased that the SID has been executed and that the Gold Road Board unanimously supports the Scheme.
“Throughout the period of engagement on the Scheme, we have noted our commitment to remaining disciplined and prudent in our acquisition strategy to ensure continued maximisation of Gold Fields’ shareholder value.
“The consolidation of our ownership in the Gruyere gold mine is firmly aligned to our strategy of improving portfolio quality through investment in high-quality, long-life assets and is immediately additive to the Group’s cash generation.”
Under the scheme, each Gold Road shareholder would receive a fixed cash payment of A$2.52 ($1.63) per share, reduced by any special dividend paid before the implementation date. In addition, shareholders are entitled to a variable cash component representing the proportional value of Gold Road’s investment in Northern Star Resources.
As of 2 May 2025, this variable component equated to A$0.88 ($0.57) per share, bringing the total offer to A$3.4 ($2.21).
This total consideration reflects a 43% premium to Gold Road’s closing price of A$2.38 ($1.54) on 21 March 2025 and a 39% premium to the three-month volume weighted average price prior to the announcement of the initial offer on 24 March.
Gold Road managing director and CEO Duncan Gibbs said: “The Scheme provides Gold Road shareholders with an opportunity to realise certain value for their Gold Road shares at a compelling premium.
“This offer price represents a material premium to the undisturbed share price prior to the initial Gold Fields’ proposal and a material premium to longer term trading levels.
“The Gold Road team will work closely with all stakeholders, including our employees, suppliers and the traditional owners of the lands on which we operate, to ensure their interests are prioritised should the Scheme proceed.”
The implementation of the scheme remains subject to customary regulatory and shareholder approvals. A Scheme Meeting is expected to be held in September 2025, with final court approval anticipated shortly after. If all conditions are met, the transaction could complete by October.
The Gold Road board has unanimously recommended that shareholders vote in favour of the scheme, subject to the absence of a superior proposal and the independent expert concluding the offer is in shareholders’ best interests. Board members have also committed to voting their own shares in favour of the scheme on the same basis.
Gold Road has indicated it may issue a fully franked special dividend of approximately A$0.35 ($0.23) per share, depending on the franking account balance at the time the scheme becomes effective. If declared, the dividend would be funded from Gold Road’s existing liquidity and would reduce the fixed cash consideration proportionally.
Gold Fields has described the offer as its “best and final,” indicating no further increase unless a superior proposal arises. The company confirmed this stance in correspondence with Gold Road as part of the deed.
Investors controlling around 7.5% of Gold Road’s outstanding shares have indicated their intention to support the scheme, subject to the same conditions laid out by the board. These include UniSuper, Yarra Capital Management, First Sentier Investors, and Perpetual Asset Management.
In addition to shareholder and court approval, the scheme is contingent on regulatory clearance, including from the Australian Foreign Investment Review Board. The transaction must also satisfy several conditions outlined in the scheme deed, including no material adverse changes and retention of Gold Road’s shareholding in Northern Star.
A break fee of A$37.1m ($24.06m) would be payable by Gold Road in specific circumstances, such as the acceptance of a competing proposal or a failure to uphold exclusivity clauses.
