Osisko Metals has finalised a 50:50 joint venture (JV) agreement with a subsidiary of South African gold miner Gold Fields to develop and mine the former’s 100% owned underground Windfall gold project in Québec, Canada.
As per the terms of the agreement, Gold Fields has acquired a stake of 50% in the JV for a consideration of C$600m ($440.6m) in cash to Osisko Metals.
Dubbed Windfall Mining Group, the JV will also develop the surrounding Urban Barry and Quévillon exploration properties, that span a combined area of around 2,400km².
The C$300m ($220.26m) initial payment has been paid on signing of the agreement and the remaining amount is payable once the Québec government issues the necessary permits for the development and operation of the Windfall gold project.
Besides, Gold Fields will finance the first C$75m ($55m) in regional exploration during the first seven years of the partnership.
Gold Fields interim CEO Martin Preece said: “This deal, following the recently announced JV with AngloGold Ashanti in Ghana demonstrates our commitment to growing the value and quality of our portfolio of assets.
“Further, adding in Salares Norte, which is expected to come into production at the end of this year, strengthens Gold Fields’ future production profile and enhances its position on the cost curve.”
The South African gold mining company also has to make two additional payments of C$17m ($12.48m) each to Osisko Metals to reimburse items already spent by the latter for pre-construction work.
Located in the Abitibi greenstone belt, in Eeyou Istchee James Bay, the Windfall gold project is expected to have an average annual gold production of 294,000 ounces.
With an estimated total capital expenditure of nearly C$1.1bn ($807.8m), the Windfall project has a 10-year life of mine.
Subject to the approval of permitting and final engineering design, the underground gold project is expected to achieve its first production in 2025.
Osisko Metals chairman and CEO John Burzynski said: “With the proceeds from this Transaction, Osisko is fully-funded for our share of development capital to bring Windfall into production.
“Osisko shareholders retain considerable upside in the project while also benefiting from the mine building, operating and technical expertise of Gold Fields.”
