Gold Fields launches R4bn bookbuild to fund Chilean mine

Multinational gold producer Gold Fields has announced its intention to place new shares with a view to raising around R4 billion ($269 million) in order to develop its Salares Norte silver-gold mine project in Chile. 

The share placing, which represents around 5% of the company's existing ordinary shares, will be done through an accelerated bookbuild launched immediately.

JP Morgan will act as sole global coordinator, and  JP Morgan and BMO Capital Markets will act as joint bookrunners.

Salares Norte is expected to have an initial 11.5 year life of mine, with an average annual production of 450 000 ounces of gold over the first seven years, according to Gold Fields. Production is expected to kick off in 2023. 

"In order to progress with the construction of the Project, the board of directors of Gold Fields (the “Board”) has been formulating its funding strategy," Gold Fields said.

"Following a review of the alternatives available to the Company and consistent with the Company’s prudence regarding its debt position, the Board believes that a combination of the proceeds of the Placing, operational cash flow and existing debt facilities will allow the Company to fully fund the construction of Salares Norte, and allow Gold Fields to maintain a 10% interest in this world-class project and exploration district."

Gold Fields' shareholder notice said the listing and trading of the placing shares on the JSE was expected to commence next week Tuesday morning or another time and date agreed between the Gold Fields and JP Morgan.

The shareholder notice said the price per ordinary share would be decided at the close of the bookbuild, and announced through another shareholder notice after the bookbuild's close.

"The timing of the closing of the bookbuild, the placing [rice and allocations are at the discretion of the company and the managers," Gold Fields said.

Gold Fields also reported a jump in earnings on Wednesday, thanks to higher production and a decrease in costs. 

Reporting its results a day earlier than expected, Gold Fields also declared a 91 of 100 cents per share final dividend.