Gold Fields Acquisition Targets Yamana Assets Valued at $6-8 Billion

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By Nelson Banya

Oct 22 (Reuters) – An independent valuation estimated Yamana Gold’s mining assets at between $6 billion and $8 billion, matching South Africa’s Gold Fields initial offer price for the Canadian miner, sources showed. circulars published Friday evening.

Gold Fields announced an agreement to acquire Yamana in an all-stock deal that valued the Canadian company at $6.7 billion on May 31.

But investors feared the deal would be dilutive and overvalued. Yamana sent shares of Gold Fields down 20% on the day of the announcement.

The gap between Gold Fields’ bid value and Yamana’s stock price narrowed following the stock’s plunge.

A valuation report produced by CIBC World Markets Inc. on August 30 had valued Yamana’s mining assets, which include 50% of Canadian Malarctic – one of the world’s largest gold mines – at between $6.825 billion and $8.025 billion. dollars, according to the circulars.

CIBC, one of Canada’s largest investment banks, said its report did not assess Yamana as a corporate entity and excluded the company’s expenses and interest on debt held at the level of the company. ‘company.

Gold Fields and Yamana did not provide financial projections, but used 2021 financial reports to show that the combined entity would have reported revenue of $6 billion and annual profit of $744 million if the agreement had been executed on January 1 of last year.

The boards of both companies said they unanimously support the transaction, which would see Gold Fields own 69% of the combined entity and current Yamana shareholders own 31%.

“The combined company will be one of the world’s top four gold companies with a diversified portfolio of high-quality, long-lived assets with tangible short- and long-term growth opportunities,” the directors said.

Gold Fields said Yamana is giving it a coveted spot in North America and bringing new assets on board at a time when the industry is facing depleted reserves.

Yamana and Gold Fields shareholders will vote on the deal on Nov. 21 and 22, respectively.

The transactions require the approval of 75% of Gold Fields shareholders, while Yamana needs 66.67% support. (Reporting by Nelson Banya; Editing by Robert Birsel)

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