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Australia’s Gold Road Resources rejected a $2.1 billion takeover proposal from Gold Fields, calling the offer opportunistic following a drop in quarterly production.
The all-cash proposal was made earlier this month against a backdrop of surging gold prices, which recently surpassed $3,000 a troy ounce for the first time as economic uncertainty fuels demand for the metal as a perceived safe haven.
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South Africa’s Gold Fields offered to buy Gold Road for 3.05 Australian dollars a share. Its offer represents a 28% premium to Gold Road’s closing share price on March 21 and gives the miner an equity value of 3.3 billion Australian dollars, equivalent to $2.07 billion, Gold Fields said.
The two companies jointly own the Gruyere gold mine, which Gold Fields operates, in Western Australia’s northeastern goldfields region.
Gold Road said the proposal by its joint-venture partner “coincided with a lower March 2025 quarter production due to maintenance on the primary crusher and the failure of two conveyor belts.” Gold output from the Gruyere mine during the three months through March is expected to be between 70,000 ounces and 73,000 ounces, down from 91,631 ounces the quarter prior.
The bid was also made ahead of studies into a potential underground expansion, to which it attributed no value, Gold Road said in a statement.
Gold Road’s directors unanimously concluded the offer materially undervalued the company, the Australian miner said. It called the proposal “highly opportunistic in nature.”
Gold Fields wants to consolidate the ownership of the Gruyere mine, which has low costs and a long life, the South African mining company said in a separate statement. Doing so would eliminate some inefficiencies that arise from the current joint-ownership structure, Gold Fields said.
After rejecting the proposal, Gold Road made a counteroffer to Gold Fields to buy its 50% Gruyere stake. Gold Fields rebuffed that proposal.
Mike Fraser, chief executive of Gold Fields, said the South African miner is disappointed Gold Road’s directors rejected the offer. “Gold Fields will continue to seek the engagement of the Gold Road board to consider the merits of the proposed acquisition and to advance the proposal,” he said.