How can gold miners attract more investors? Be disciplined capital allocators says Gold Fields CEO

Going too big is inadvisable when adding gold reserves, says Gold Fields’ (NYSE:GFI) CEO Mike Fraser.

In February Fraser spoke to Kitco Mining at the BMO Global Metals, Mining & Critical Minerals Conference 2024 in Hollywood, Florida.

“I think this is where our industry has been littered with failures in the past, in taking too many big, bold steps that haven't been disciplined and well-thought through,” he said.

Gold Fields failed to acquire Yamana Gold and its Canadian Malartic gold mine back in 2022. The South African miner was outbid by Agnico Eagle Mines (TSX:AEM) and Pan American Silver (TSX:PAAS), which offered USD$4.8 billion for Yamana.

Instead, Gold Fields entered into two partnerships. The first, with AngloGold Ashanti (NYSE:AU), created Africa’s biggest gold mine by combining Gold Fields’ Tarkwa mine in Ghana with AngloGold’s adjacent Iduapriem mine.

The second was with Canada’s Osisko Mining (TSX:OSK) — a 50/50 joint venture to develop Osisko’s Windfall gold project, located in the Abitibi Greenstone Belt of Quebec.

“I think those are much more digestible opportunities where you can then create that

balance between returns to shareholders, sustaining the business and not overly stressing our balance sheets,” said Fraser.

He sees partnerships becoming more common in the mining industry, which “hasn’t been that great at collaboration,” he said. “I think that's something that actually makes a lot of sense going forward.”

Regarding Windfall, Fraser said the mine is expected to produce a yearly 300,000 ounces for the next decade, and it comes with a 400-square-kilometre exploration package that gives the JV the opportunity to extend the life-of-mine. The next step is receiving government approval for the environmental impact statement, followed by board approvals. Fraser said it will take about 18 months to construct the mill and processing facility, with first gold expected at the end of 2026 or early 2027.

Asked what the gold sector can do to increase investor appeal, Fraser said:

“I think if we can demonstrate that we are good, disciplined allocators of capital and

that we take our shareholders along the journey of reinvesting in our business, then I think we will be recognized, and the sector hopefully will attract more interest in us.”

Coverage of the BMO Global Metals, Mining & Critical Minerals Conference sponsored by First Majestic Silver (NYSE:AG).

0:00 Direction
2:14 Yamana Gold bid
3:13 Windfall project/ Ghana JV
7:06 Partnership and collaboration in the sector
8:32 Salares Norte in Chile
10:14 Sustainability/ decarbonization goals
11:54 Increasing investor appeal
13:41 Are there too many gold companies?
15:30 2024 goals

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