Osisko Mining and Gold Fields have established a 50:50 joint venture (JV) to develop and mine the Windfall gold mining project in Quebec, Canada.

South Africa-based Gold Fields will pay C$600m ($440m) in cash for its 50% partnership stake in the JV, called Windfall Mining Group.

The JV will develop the surrounding Urban Barry and Quévillon exploration properties in addition to the Windfall project.

Gold Fields will pay an initial $300m upon signing followed by a further C$300m on receipt of construction and operating permits.

It will use cash reserves and debt facilities to pay the initial amount.

The company must also solely fund up to C$75m for exploration over seven years.

Separately, Gold Fields has to make two additional payments of C$17m to Osisko to reimburse items already spent by the latter for pre-construction work.

Thereafter, the two companies will share all pre-construction and construction expenses on a 50/50 basis.

The Windfall gold deposit is situated between Val-d’Or and Chibougamau in Quebec’s Abitibi region, with the project expected to have an initial ten-year mine life. 

Osisko chairman and CEO John Burzynski said: “This partnership further strengthens our strong balance sheet, allows us to significantly de-risk Windfall and brings us a very important step closer to realising our objective of becoming a leading Canadian gold producer.

“With the proceeds from this transaction, Osisko is fully funded for our share of development capital to bring Windfall into production. Osisko shareholders retain considerable upside in the project while also benefitting from the mine building, operating and technical expertise of Gold Fields.” 

Gold Fields said that the JV supports its entry into a ‘coveted jurisdiction’.

Last year, its bid to acquire Canadian gold producer Yamana Gold collapsed in favour of a joint offer from Agnico Eagle Mines and Pan American Silver.

Meanwhile, Gold Fields and AngloGold Ashanti announced plans in March 2023 to set up a JV, which would bring together Gold Fields’ Tarkwa gold mine and AngloGold Ashanti’s adjacent Iduapriem gold mine.

The move is said to result in the creation of Africa’s largest gold mine.