Gold Road Resources (GOR) & Goldfields
Hi James What are your thoughts on the Goldfields take over completely all shares in Gold Road, Note Gold Road will pay a dividend prior to it being successful in September.
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Answer
Hi Wally,
South African mining company Gold Fields is acquiring Gold Road Resources in a deal valued at approximately $3.7 billion. The acquisition will grant Gold Fields full ownership of the Gruyere gold mine in Western Australia, previously operated as a 50:50 joint venture between the two companies. The deal is made of two components:
- Gold Road shareholders will receive $2.52 per share in cash.
- An additional amount linked to Gold Road’s indirect stake in Northern Star Resources, stemming from its 17.3% holding in De Grey Mining, which was acquired by Northern Star earlier this year.
In addition to the interim dividend, Gold Road announced a fully franked special dividend of approximately $0.35 per share, contingent upon the completion of the acquisition by Gold Fields. This special dividend is to be fully funded by Gold Road’s existing cash reserves and other available liquidity sources.
- Overall, we think it’s a good deal for GOR shareholders, with the stock is up ~63% year-to-date, putting it well ahead most of its peers.
