Executives from the South African-based miner brought forward plans for an Australian investor roadshow last week, seeking to boost its profile and win over key fund managers after Western Australia's Northern Star Resources dismissed the takeover approach.
Fraser noted there appeared to be widespread consensus among investors on the 'strategic logic' of a merger, according to materials shown at the briefings. Slides presented to fund managers argued that combining the two companies' projects in Western Australia would create a global gold production powerhouse in what the company described as a 'world-class province', capable of rivaling major international operations such as Barrick and Newmont's Nevada Gold Mines joint venture and Agnico Eagle's Abitibi hub in Canada.
If the takeover succeeds, the combined group would rank as the second-biggest gold producer globally, trailing only Denver-based Newmont. The merged entity would control eight of Australia's 20 biggest gold mines, including Northern Star's massive 'Super Pit' in Kalgoorlie, and produce an estimated 4.1 million ounces of gold per year.
Northern Star's board has so far refused to engage, branding the bid opportunistic. Gold Fields is hoping that pressure from institutional shareholders will force the company to the negotiating table.
Gold Fields is a South African mining company with operations across Africa, Australia and the Americas. Northern Star Resources, headquartered in Perth, is Australia's largest listed gold producer and operates mines across Western Australia and Alaska.
Industry analysts have noted that a successful combination would give Gold Fields a dominant position in Western Australia's gold-rich Yilgarn Craton, where both companies hold extensive tenements. The deal would also provide Gold Fields with a larger listing on the Australian Securities Exchange.
The outcome may hinge on whether Northern Star's largest institutional investors see the offer as fair value or side with the board's assessment that the company is worth more on its own.