Public Investment Corporation grabs pricing opportunity to increase its stake to 20%
18 June 2024 - 18:05
by Kabelo Khumalo
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Gold Fields’ South Deep mine near Johannesburg. Picture: SUPPLIED
The Public Investment Corporation (PIC) has bought further shares in Gold Fields, doubling its stake in the mining house in a space of a year.
Gold Fields, worth about R219bn on the JSE, said on Tuesday that the PIC had increased its holding in the company to just over 20%.
The move comes at a time when the mining major’s stock is down more than 17% in the past week, giving the fund manager a low entry point.
Business Day reported a year ago that the PIC had spent about R14bn increasing its stake in Gold Fields from 10% to 15%.
The company’s robust market capitalisation and the price-to-earnings ratio, the proportion of a company’s share price to its earnings per share, has made it a compelling investment proposition. Investors are also drawn to the dividend payouts, with the company having maintained dividend payments for 33 consecutive years.
The group has tweaked its strategy somewhat after its failed bid to buy Yamana Gold in a R120bn all-share deal fell through in 2022. The deal was criticised at the time by shareholders arguing that management was overpaying for an asset with limited growth potential.
Gold Fields, one of the world’s largest producers, was scooped to the potentially lucrative deal by a rival joint bid by Agnico Eagle and Pan American Silver.
The group in 2023 entered into several joint ventures, indicating its change in strategy. The group a year ago formed a 50/50 partnership with Canadian company Osisko Mining to develop the gold project, which will require about R15bn in capital expenditure.
Two months before that, Gold Fields and AngloGold Ashanti created Africa’s largest gold mine in Ghana. The partnership brought together Gold Fields’ Tarkwa Mine and AngloGold Ashanti’s Iduapriem Mine, both of which are located near the town of Tarkwa in western Ghana.
Gold Fields has operations in SA, Peru, Chile, Australia, Canada and Ghana.
The group last week updated its production guidance for 2024, with it now expecting to produce between 2.2-million and 2.3-million ounces of gold, a decrease from the previous forecast.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
PIC snaps up a larger chunk of Gold Fields
Public Investment Corporation grabs pricing opportunity to increase its stake to 20%
The Public Investment Corporation (PIC) has bought further shares in Gold Fields, doubling its stake in the mining house in a space of a year.
Gold Fields, worth about R219bn on the JSE, said on Tuesday that the PIC had increased its holding in the company to just over 20%.
The move comes at a time when the mining major’s stock is down more than 17% in the past week, giving the fund manager a low entry point.
Business Day reported a year ago that the PIC had spent about R14bn increasing its stake in Gold Fields from 10% to 15%.
The company’s robust market capitalisation and the price-to-earnings ratio, the proportion of a company’s share price to its earnings per share, has made it a compelling investment proposition. Investors are also drawn to the dividend payouts, with the company having maintained dividend payments for 33 consecutive years.
The group has tweaked its strategy somewhat after its failed bid to buy Yamana Gold in a R120bn all-share deal fell through in 2022. The deal was criticised at the time by shareholders arguing that management was overpaying for an asset with limited growth potential.
Gold Fields, one of the world’s largest producers, was scooped to the potentially lucrative deal by a rival joint bid by Agnico Eagle and Pan American Silver.
The group in 2023 entered into several joint ventures, indicating its change in strategy. The group a year ago formed a 50/50 partnership with Canadian company Osisko Mining to develop the gold project, which will require about R15bn in capital expenditure.
Two months before that, Gold Fields and AngloGold Ashanti created Africa’s largest gold mine in Ghana. The partnership brought together Gold Fields’ Tarkwa Mine and AngloGold Ashanti’s Iduapriem Mine, both of which are located near the town of Tarkwa in western Ghana.
Gold Fields has operations in SA, Peru, Chile, Australia, Canada and Ghana.
The group last week updated its production guidance for 2024, with it now expecting to produce between 2.2-million and 2.3-million ounces of gold, a decrease from the previous forecast.
khumalok@businesslive.co.za
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