Gold Fields withdraws $1.4bn offer for Kirkland Lake
South Africa’s Gold Fields (JSE, NYSE: GFI), the world’s seventh-largest bullion producer, has withdrawn an joint offer with Silver Standard Resources (TSX:SSO) to buy Kirkland Lake Gold after the Canadian miner rejected the bid last week.
The Johannesburg-based company, however, said it remained interested in a negotiated transaction, even though Kirkland seems to be moving ahead with plans to take over Australia’s Newmarket Gold in a transaction estimated in Cdn$1 billion ($764 million).
If approved, and the Toronto-based miner is asking shareholders to do so, such deal will create what the firms said will be a low-cost producer with operations in Canada and Australia.
But if Kirkland shareholders reject the takeover, Gold Fields said on Friday it was ready to pursue negotiations.
The company’s comments come after a few of Kirkland shareholders said on Wednesday that they wanted the company to resume talks with Gold Fields and Silver Standard, arguing that the miner rejected their bid too quickly.
They have also asked Kirkland to disclose more details of the joint offer so that they can compare it to the benefits an acquisition of Newmarket would bring.
Kirkland Lake owns five former mines north-eastern Ontario, which produced 22 million ounces of gold at an average grade of 15.1 grams per tonne, according to the company’s website. With its high-grade production and reserves located in a safe, mining-friendly jurisdiction, the firm’s appeal has been strengthened by a scarcity of growth opportunities in the gold sector. The firm also has more than $200 million of cash and equivalents on hand.