Gold Fields completes A$63m Ghana deal

Gold Fields Ltd and Toronto-listed mining royalty company Repadre Capital Corp on Thursday said they had concluded their purchase of 90% of Abosso Goldfields Ltd in a cash and share deal from Australian outfit Ranger Minerals Ltd.

Abosso is an unlisted Ghanaian firm which holds 100% of the Damang Gold Mine in that country.

Gold Fields paid Aus $63.3 million cash, while Repadre contributed 4 million of its shares.

Damang lies adjacent, to the north, of Gold Field's lucrative Tarkwa open-pit operation, which produced some 440,000 ounces of gold at cash costs of $155 per ounce, in the year ended June 30, 2001.

The ownership structure of Damang will mirror that of Tarkwa, with Gold Fields holding 71.1%, Repadre 18.9% and the Ghanaian government 10%.

Damang produced just over 322,000 ounces of gold in the same period, at $208 per ounce, but Gold Fields would expect to lower this through synergies with Tarkwa.

Damang has reserves of 1.53 million ounces as at the latest estimate of March 2001, while resources are around 3.03 million ounces.

As at Dec. 31, 2001, Abosso had US $10 million of external debt, some US $9 million of net working capital; and a hedge book of approximately 420,000 ounces of gold which, at current gold prices, has a positive mark-to-market value, Gold Fields said.

This book would be opportunistically unwound over the next three months, in line with its strategy of being unhedged, expect where required by banks as collateral for development funding, the company added.

"In addition to the potential synergies between the two properties, it gives us control of one of the most permissive gold provinces in West Africa," Gold Fields chairman and chief executive Chris Thompson.

"Between Tarkwa and Damang we now have more than 18 kilometres of Tarkwaian Structure along strike, similar to the geology in which we are successfully heap leaching at Tarkwa," Thompson added.

"In addition, the Damang property contains at least two additional prospects with mineralisation similar to that presently being mined at Damang, which could be amenable to milling. We are planning to aggressively explore this ground."

The acquisition also gave Tarkwa access to the Damang mill facility, which would enable greater flexibility in the treatment of varying types of ore found in the area, Thompson said.

Joe Conway, chief executive of Repadre, said the deal would contribute more than 150,000 ounces of annual gold production to Repadre's account.

"We look forward to the synergies that will arise from this combination and the continuance of our excellent relationship with the operator, Gold Fields," he added.