South Africa’s Gold Fields (NYSE, JSE: GFI) has paused underground development at Windfall in Quebec after an exploration-work permit expired, leaving its proposed $1.9 billion (C$2.7 billion) gold mine waiting on separate provincial environmental approval.
The permit allowing bulk-exploration work expired at the end of August, CEO Mike Fraser said Wednesday at an industry event in Colorado Springs. Gold Fields expects Windfall, about 415 km northwest of Quebec City, to produce 300,000 oz. a year from 2029.
“If it had happened two months ago, we’d be working, and that’s the bottleneck we’re trying to work through,” Fraser told The Northern Miner Wednesday at Mining Forum Americas.
Windfall is central to Gold Fields’ growth plans, but the company can’t move into full construction until Quebec authorizes the project. The delay comes as it pursues a rejected Northern Star Resources (ASX: NST) takeover proposal initially worth A$38.7 billion and seeks renewed mining leases for Tarkwa in Ghana, which expire in April 2027. The uncertainties at Windfall and Tarkwa weigh on the company’s valuation, Fraser said.
Shares in Gold Fields fell 1% to $36.10 apiece on Wednesday afternoon, valuing the major at $32 billion. The stock has traded in a 12-month range of $31.11 to $61.64.
Permit bottleneck
Engineering and tender preparation continue while Gold Fields awaits a recommendation to the Quebec government from the Environmental and Social Impact Review Committee, Fraser said.
Approval had initially been expected by June.
“So I’m still hopeful that we can get it before the end of the year,” he said.
Fraser didn’t revise Gold Fields’ 2029 first-production target, although the halt to underground development leaves less room for further delays. Construction capital is expected at the upper end of the company’s 2025 estimate, Gold Fields said last month.
The company signed an impact benefit agreement with the Cree First Nation of Waswanipi, Cree Nation Government and Grand Council of the Crees in June. Talks with Cree leadership and families affected by Windfall’s development continue, Fraser said.
Gold Fields gained full ownership of Windfall in October 2024 through its C$2.16-billion takeover of Osisko Mining, after paying C$300 million for an initial 50% stake in May 2023.
The proposed mine was already under environmental review, limiting Gold Fields’ ability to change its scope without resetting the approval process. Its priority is to build the initial mine before pursuing expansions, Fraser said.
Canada’s federal push to accelerate investment needs closer coordination with provincial approvals and First Nations, he said. Windfall’s main approval process is provincial, and federal ambitions haven’t necessarily translated into action at every level of government.
Lease dispute
Fraser took a harder line on Ghana, warning Gold Fields could escalate its dispute over Tarkwa’s mining leases, which expire in April 2027.
Engagement with the government has been difficult, and the two sides haven’t agreed on the mine’s future, he said.
“But we are not going to be bullied because we believe we have very clear rights for being well considered for this lease extension,” he said.
Though Fraser didn’t specify what escalation would involve, he said the uncertainty arising from the dispute undermines confidence in African mining.
Gold Fields applied for renewal in November last year and submitted a commercial proposal in July, according to company disclosures. Spending to expand Tarkwa will depend on progress toward renewing the leases, Gold Fields said.
Takeover test
Gold Fields remains open to changing the cash-and-share mix of its Northern Star proposal if talks advance, Fraser said. He didn’t commit to raising the price.
The proposal offered 0.3125 Gold Fields shares plus A$7.25 cash for each Northern Star share. Its implied value fell from A$27 a share using Gold Fields’ Sept. 11 closing price to A$25.19 by Sept. 25 as the bidder’s stock weakened.
Northern Star’s board unanimously rejected the conditional, non-binding approach. It said the proposal undervalued its assets and would expose shareholders to additional jurisdictional and operating risks through payment largely in Gold Fields shares.
Gold Fields submitted the proposal to unlock discussions after informal approaches failed to make progress, Fraser said. An activist shareholder’s arrival on Northern Star’s register and board changes helped prompt the move.
Gold Fields shareholders see the operating logic but worry about overpayment, he said. The company would walk away if the transaction eroded value for its investors.
The company estimates $4 billion to $5 billion of benefits over time. Roughly half comes from tax benefits, a quarter from operating changes and the rest from procurement and overhead savings, Fraser said. The estimates haven’t been tested through detailed due diligence.
In South Africa, annual attributable production at Gold Fields’ South Deep mine is expected to rise 20% to about 356,000 oz. by 2030 from 297,000 oz. last year, then climb another 20% to roughly 430,000 oz. after the South of Wrench area starts producing in 2031, Fraser said.
Asset sales
Gold Fields also plans at least $4 billion of asset sales after a completed deal. Potential buyers have already expressed interest, Fraser said, declining to identify the assets.
The proposed Northern Star transaction would provide a route to an Australian listing and investors who prefer locally traded shares, he said.
Gold Fields reported $2.2 billion in adjusted free cash flow in the first half and forecasts growth to about 3 million oz. a year by 2031 from its existing portfolio. That leaves it an alternative to pursuing Northern Star at any price, Fraser said.
“It’s really testing an idea that we think can create value for everyone. But if it doesn’t, we’re not going to do it.”