Gold Fields Limited (GFI) Earnings Call Transcript & Summary

With us today, we have Chris Griffith, Gold Fields' CEO; and Peter Marrone, the leader Chairman for the Yamana Gold. I will hand over to Chris now and then we'll hand over to the question of the presentation ends. Mr. Chris?

So thanks for that introduction, Avishkar. Hi, Peter. And to all of you, ladies and gentlemen, on the call. Good day to you all. As always, we draw your attention in this case, to the most significant disclaimer pages that you've ever seen. So there's 3 pages of disclaimers, please note those given the context of this -- this presentation today are very important disclaimer. So I guess the question is, so why this deal, we are extremely excited to be announced today, the acquisition of Yamana Gold. And we think this is truly a transaction that delivers on our strategic importance and strategic initiatives for the future of this company, will also deliver significant long-term value creation for shareholders. In line with the strategy of Gold Fields, we have done extensive work, building on our previous strategy. The team in Gold Fields has done a lot of work with the support of the Board, engaged in an extensive review since the end of last year and looked at a range of opportunities that deliver the strategic imperatives that we were looking for, for this company, which is to grow one of the strategy legs to grow the value and quality of our portfolio. We have followed a strict evaluation criteria, a rigorous process to come up with the opportunities that we want to pursue and thereby have identified Yamana as what we think is a unique opportunity for Goldfield. In Yamana, Gold Fields will acquire a high-quality portfolio of assets that will continue to deliver and grow the business and the capital returns from the company. We get a world-class asset portfolio, including Canadian Malartic and Jacobina. We'll have an increased diversity of exposure across premier gold regions, including an enhanced access into North America with Canadian Malartic in Canada, on competitive economics. We get as part of the portfolio of assets, deep project line, providing excellent opportunities and optionality for the future. One of the great things about the combination of these companies is we think that there is a cultural alignment seldom seen between the combination of 2 companies, including shared focus on delivery, a track record of delivery on production growth and ESG priorities. We think that there's significant value potential within the combined business that we've identified through detailed due diligence all the way from the initial engagements, management presentations, the data room, but also including detailed sites and complementary site visits between the management teams of both companies. This transaction certainly positions gold fields at the forefront of the gold sector and will result in a unique investment opportunity for our stakeholders. So what I'm going to be doing over the next number of slides is expanding a little bit on this introduction. This slide, those of you who follow Gold Fields will have seen this slide before. This is the summary of the purpose, our vision, our values and our strategy that we announced to the market at the end of last year. This was building on the previous strategy that the company has, in our view, successfully delivered. I'm going to point you to in that circle in the middle, the bottom green component where you see strategy pillar because this presentation addresses that element of the strategy, we talked to growing the value and the quality of our portfolio of assets. So you can see from what comes Is that this is entirely focused on the strategy and they're delivering the next potential phase of the company's strategy. So I mentioned that we have followed a very diligent process to look at the opportunities. First of all, taking into account what the market regularly gives us feedback for and what drives value. On the 2 on the right-hand side, you can see that the market regularly gives us feedback to say that unless you have the right quality of assets, life of mine and all-in sustaining costs and a number of other metrics, but also geographical or jurisdictional quality. Unless you have quality assets, it doesn't really matter what comes after that is you're never going to get premium value. Of course, for management, making sure that we deliver on what we say we're going to deliver and delivering on our strategy so that people believe if they put money behind us that they'll get the returns that we promise, making sure we've got the right balance sheet that we don't put the company at risk that -- we have the right discipline in our financial allocation of capital and that we generate shareholder return. So the market is telling us this. What the market is also saying is size and scale is of itself not a premium driver. And certainly, that's not been the focus, although the outcome, which we'll speak about later is that this is a greater scale company. It certainly wasn't the driving force of this deal. I think the next slide on the left-hand side shows the criteria that we have used to evaluate the external opportunity set. So we look at it as we look at the opportunities. We look at these 6 points on the left-hand side and say whatever we do and whatever we're looking at, we must improve the business on these metrics. So we're saying that if these things that we're looking at do not bring improved asset quality in terms of life of mine and sustaining costs or that we're not growing cash flows or if we're bringing assets to the table, that they don't improve our jurisdictional quality. Having spent all this time over the last 10 years, I think a portfolio of assets in what we believe, is very, very good jurisdictions, we don't want to go and mess that up. Whatever we do, we said in the strategy, given the Gold Fields' portfolio, we grow production to 2024, but there as, as we get to 2.8 million ounces, our production profile starts dropping off as some of our mines come to the end of their life. And it was this particular thing as we think for the future of the company, we're thinking about the strategy of the company, making sure that whatever we do is enhancing the pipeline of this company. And then having a look at what we go at. I mean, we good we believe at running underground operations. We can run open pit operations. We have fixed up operations before like Australian assets, and we can build new mines. What we're saying is whatever we do and whatever we buy must make sure that it can talk to our competitive advantage. And then lastly, given all the work that Gold Fields has done over a number of years, what we don't want to do is put together a portfolio that takes us backwards in our ESG commitment. And then what you see on the right-hand side is you see that Yamana pretty much ticks all of those boxes and ticks those boxes very comprehensively. And as the work that [indiscernible] and his team and our executive team, as we've evaluated opportunities, and we see -- what are the companies or what are the single asset opportunities that help tick all those boxes. We keep coming back to say that Yamana Gold is the best opportunity that we could see. And a bit later when I talk to you about the value that we can see in this company, we believe is substantially higher than the value that we are paying for these assets. So this is what you're going to see. So when we put these 2 companies together, this is just a summary of some of the metrics that you can see when we initially put these 2 together. And as we go through the presentation, you'll see that some of these metrics will continue to improve. So on the left-hand side at the top, you see we put the 2 companies together. We'll have pro forma production for 2021 of 3.4 million ounces. That grows over the next number of years to 3.8 million ounces. At the bottom left-hand side, you can see what the growth rate over the next 3 years is the Gold Fields , the 2 companies put together the growth rate over the next number of years of 7.4%, a reserve life with over 3.8 million ounces of 25 years. All-in sustaining costs by putting together the Yamana assets with the Gold Fields' assets, actually, our all-in sustaining cost reduces. And of course, as we put the 2 combined portfolios together, there remains opportunities to be able to continue improving that all-in sustaining cost. But absolutely, you can see from this particular graph that it meets one of the strategic criteria of saying that if we put things together, we must be reducing our costs. These 2 companies will produce a free cash flow yield of 5.2%, and in the bottom box on the right-hand side, you can see these 2 companies will have a market cap when you put them together $16 billion. And because of the metrics that you're seeing on the left-hand side with a huge potential to re-rate if you compare how we feature versus the other major gold companies, and when you look at the market cap, we believe that there's huge potential for a re-rate of the share. Importantly, though, this deal has not been done on the premise that there will be a re-rate to the shares. What you can see from this slide is the inevitable conclusion that we think that, that is an outcome that will be an outcome of putting these 2 companies together. This is another way of looking at that message. If you look at a number of metrics, P/NAV, EV/EBITDA and price to cash flow, you can see and compare based on the metrics I showed you what the potential is for significant value creation in this company. So the transaction structure, how we put this deal together, this is an all-share acquisition of Yamana by Gold Fields . Yamana shareholders will receive 0.6x of Gold Fields' ordinary share or an ADS for every Yamana share held. It offers on The 10-day VWAP of 33.8% premium versus the prices that you see on the slide. This will be executed by a plan of arrangement in Canada or a category 1 transaction for Gold Fields in South Africa. Gold Fields will continue to be a Gold Fields  Limited and headquartered in South Africa. Trading on the JSE with its primary listing and ADS has traded on the secondary listing in the New York Stock Exchange. Gold Fields will own 61% and Yamana shareholders 39% of the combined company. And one of the things that I'll show you on the next slide is another way, although that was not how the deal was done and which was done from the bottom up on a value basis, I will show you on a number of metrics that sort of show that, that ratio feels right. We require shareholder approvals as the size of this deal would indicate, Gold Fields required 75% and Yamana shareholder, 66% approval. We expect to do this and have this complete in Q3 with the closing of the deal early in Q4 of this year. As you would expect, there are mutual deal protections with break fees of about 4.5% of the market cap of both companies with the break fee for Yamana $300 million and Gold Fields $450 million. In addition to all the other protections that you would normally expect of a deal of this nature. I mentioned to you that although the deal now I'm going to talk about the value that we can see and what we can see in addition to that, but if you try to get a sense of what does this look like and feel like and does a 61%, 39% split [feels] right. So if you look at a number of metrics that you see on the left-hand side, whether it's reserves, resources, production, production in the next number of years, consensus NAV or all-in sustaining costs. If you have a look at that and you look at that red line, that is the 61%, 39% split, you can see roughly that is where these various metrics between the 2 companies' contribution land. So I think what this is another way of saying that this deal feels right at that split for the various 2 companies in the combined company. This is an important slide because it indicatively gives you a sense of the value that we can see we start from the left-hand side, you can see that gold fields market cap of $10.9 billion. The current market cap of just around $5 billion. You can see with the dotted box just below -- just above that in blue shows that -- yes, but the year's high has been as high as $6.2 billion. So if you look at that and the market, the deal that we're doing today is equivalent to $6.7 billion. What we're showing is we can see that value. So that little box on the top side, we can see $6.7 billion for what we are paying. So we think this is a very good deal for the Yamana shareholders. But for Gold shareholders as well, you can see on the boxes on the right-hand side that we haven't had to push the boat out and put absolutely everything into the future. So some of the upside is what we're paying and some of the benefit -- the future benefit both in pipeline in future project expansions we pay for, but that upside and a majority of that upside or significant upside above that comes from value that we haven't used in our valuation -- another way to think about that is the 12 month target price for Yamana is $7 billion. So the market is seeing $7 billion and $6.7 billion is not out of line with what the market is seeing. The market is saying it will take some time to get there. And so for the Yamana shareholders our views, that's an acceleration of value. But some of that value will be unlocked because of the combination of the 2 companies. So in a much bigger company, you see the text under those gold boxes. Some of that, like MARA and the execution of that, which will happen in a much more likely to happen in a larger company is where additional value will come from. So this is not to say to the Gold Fields , so this is to say to the Gold Fields shareholders, both because of the delivery of Wasamac, Mara, future value coming from just unlocking the ongoing unlocking of value from existing assets. On the very right-hand side, you see that we've got synergies that are not included in that value. This deal is not based on synergies. Yes, there is some synergy and we haven't tried to push the boat out and I'm going to share with you how some of the synergies work. But actually, we see much more upside in synergy on upside production or upside efficiency by working together. There's near-term potential at some of these -- at almost all of these mines that has not been included in the value of this company. The development projects like larger development projects that are longer term, say, for example, the second shaft is a Canadian Malartic, or Phase 4 Jacobina that forms part of that bucket of absolutely value we can see that that has not been included in the valuation. And then a very significant exploration portfolio that comes with this deal. So yes, of course, we're paying for that. This is like an investment in a mine. You invest the money to expect greater returns later. So because today, we've had a lot of questions about is the short-term dilution? Yes, there is some short-term dilution as you pay a premium for investing in a much more significant value that comes with this combination of assets. And then the strap line at the bottom says, don't forget, but if you -- if we were not to do this deal, as we need to supplement our portfolio of assets in our pipeline, as we need to do that, of course, we are going to invest and we're going to have to put money into those assets. We had a discussion on one of the calls today where someone was saying to us, well, look, the value of our company per reserve ounce for Gold Fields is currently about $220 an ounce. The value of what we are buying is $6.7 billion for Yamana per reserve ounce is $208 an ounce. We have to go for that bottom strap line, the pipeline that we need to go invest in. You're investing in single assets, good quality assets, that's going to come at $350 to $400 an ounce. It's just another way of helping us see that the value that we are paying for this asset, in our view, we are paying for some of the value that we see, and there's still potential upside with the combination of these, well, there's definitely significant value upside still to come from this company. So what does that look like? What does the new company look like? And now I'll speed up a bit as we go through the presentation. But this truly looks like if you think about 2 puzzle pieces sitting alongside each other, as opposed to 2 puzzle pieces sitting on top of each other. So yes, there's things that Gold Fields bring in the short term, and there's things that the Yamana suite of assets bring in the longer term, but in the overlapping both companies are very disciplined cash-generating assets. So it's not like 1 only brings long-term benefit 1 only brings short-term. These are well-established companies, generating growth, generating cash returns and returning cash to shareholders, but we add complementary portfolios to each other. I'm not going to run through those, but for those who know, Gold Fields will know that this is what we're bringing. We're bringing a very substantial growth in the short term and very substantial cash generation ability, very strong focus on ESG and a disciplined approach to growth, cap returns, shareholder returns. On the right-hand side, you can see what Yamana bring, a set of projects near-term and medium-term pipeline, established operations, 3 of those 5 assets, we'd want to go and buy tomorrow. So in the individual rights, these are great assets that we are putting in our portfolio. The geographic position of these companies is complementary to ours. A deep pipeline, I've got a slide in a couple of slides time, that will give you a sense of how extensive that exploration portfolio is. but also a strong track record of cost-effective mining and on mining on assets that are actually quite complementary to Gold Fields . And then very importantly, right to end very similar approaches to ESG. So this is what it looks like when you put these 2 companies together, starting from the right-hand side, you can see Australia. So that's our existing [strain] footprint of about 1 million ounces We're working our way to the left. You can see Africa worth 1.1 million ounces and about 24% of the future NAV of this company. Having a look at the left-hand side, looking at North America. So we have long wanted to get into Canada, and it's always been too expensive and we found difficult to -- on a stand-alone basis to get into Canada so that it adds value to the company. Now we have one of the best mines in Canada. We -- in the 50-50 JV with Agnico, we get into 1 of the best mines in Canada with an exploration project in -- not in exploration, a near-term project in Wasamac and a footprint to allow us to potentially grow in Canada. The most significant put together, which is why I listed for last is in South America. So if you look at -- I mean, this will be about 40% of the company's NAV. If you look at Chile down the left-hand side, the El Peñón asset, again, 1 of the 3 assets that we would want to go and target even if it is a stand-alone asset. So El Peñón, very close and with plenty of synergies with Salares, with our exploration potential and the exploration potential around those assets are definitely in years to come, you're going to see that, that's going to be a much bigger footprint in that area. With the Minera Florida mine, you can see what the contribution from Chile is. In addition to that, we have 1 of the really sale mines, Jacobina, again, a mine that we want to own in its own right with enormous potential. I've already spoken about the Yamana team are busy executing the final stages of Stage 2. There's a Stage 3 and then a Stage 4 and with plenty of opportunities along that Greenstone Belt in Brazil. And then lastly, in MARA, in Argentina, we have is an operating mine [ CeraMora ], a smaller mine, but it's only a small footprint of that mine that has yet been explored. The real start of the future portfolio is the Mara project. It is a big project, one of the largest undeveloped copper gold projects around in the world at the moment. certainly, in the combined business, this is likely to be an asset that is likely to be developed in a much bigger company. And this could be 400,000 to 600,000 ounces a year of gold equivalent, and I know a lot of folks think about tomorrow and that have done work around minor Think about it as a big greenfield mine. Well, it's not a greenfield mine and it was an existing mine when it was [Olumbrera]. So it's got a plant got a tailings dam, it's got licenses. It's got its pipeline to the coast, got the logistics in place to get the rail line down to the port. And all we've got to do is go and build a new mine. Of course, it's not nearly as simple as that, but it's not a -- this is not a greenfield's mine. And in a bigger mine like ours, this is highly likely that an operation like this at the right time can and will be developed. So if you look at that together, this is what the combined company will look like. And you can see all of this in very, very attractive gold mining jurisdictions. These are the assets, the flagship assets in Gold Fields and not all of our assets, but certainly the assets that move the dial take think -- is in Australia, South Deep in South Africa that's now becoming and as it's growing and has growth for the next number of years, Granny Smith in Australia and the Salares Norte mine, one of the best gold assets being developed in the world at this point in time. will develop on average, 450,000 ounces of gold with just over $500 an ounce all-in cost. So that's the portfolio. Those of you who know Goldfields will know these assets. Those who know Yamana will know these assets, but for most of the Gold Fields  shareholders, these will be new to them. I won't go through all of the details, but I will pick out 1 or 2 highlights. If you look at Canadian Malartic, this is a joint venture run by or managed by Agnico, but producing over 700,000 ounces a year, of which our share is 360,000 ounces. So a very material mine at all-in cost of -- all-in sustaining cost of $900 an ounce with underground potential, half of the potential of that underground, we have not included in our valuation, the second big on the whole new load of deposits that is available with the potential next shaft. All of that has not been included in the valuation that we see for the company. That will be developed in time. I mean this is one of this style mines across gold mines across the world. Next is El Peñón in Chile, very close to our Salares Norte mine, great synergies between these a proper mine in its own right to low-cost $930 an ounce with future potential has been as high as 300,000 ounces and has the potential to go back there. We look at Jacobina in Brazil. It looks -- so currently at 186,000 ounces, growing all the time as we speak. So this will be low CapEx growth comes with the various next phase -- so we have El Peñón growing to -- in this phase -- sorry, Jacobina growing in this phase, I think, Peter, it's a 220,000 to 230,000 ounces. It's got another phase after that, could grow to [ 350,000 ]. And beyond that, we have untapped potential beyond [ 400,000 ]. So this mine in disciplined capital investment as it has been doing over the last number of years has got tremendous potential, and you can see this is what the all-in sustaining cost of this mine at under $750 an ounce. You see what that combination is why we've seen the reduction, the contribution helps to reduce the all-in cost of golds. And then I've already spoken a little bit about MARA. And in the appendix to this presentation is a little bit more detail about MARA and something that still is very exciting for us in the future. Again, if we choose not to invest in this project in time, there's still significant value that could be created if you were to monetize this asset. The point I'm making is you don't have to -- we don't have to see for now the development of MARA to be able to justify the price that we are paying for these assets. And then on this slide just shows you what the growth looks like over the next couple of years. We grew from 3.3 combination to 3.8 million ounces. You can see beyond that, say, over the next 10 years, if you want to put a time line to that. And I know the Yamana team are probably saying, well, no, it will get there a lot quicker than that. But you can put a realistic time line over there and say that you could very easily if you look at the hatched bars, you could add 1 million ounces over that period. Yes, some of that will replace some declining production from Gold Fields , but the majority of that will be production growth. But again, I think sometimes this alarms people because I think my goodness we're going to now just be using all the capital in growth. The great thing about this is there is potential for good disciplined growth and in subsequent slides, I'll show you our focus, we haven't lost the focus on returning cash to shareholders. So what you have here is opportunities and in a disciplined way, you can bring these on and not undermine your ability to return cash and increasing returns to cash to shareholders. I won't go through this, but I think pictorially, you can just see this is the pipeline of early-stage exploration, development projects, near-term potential and execution. We started execution. You can see Salares with blue is gold field. The Salares is the projects that we have in execution at the moment, and there are 2 projects, Jacobina and Odyssey at Canadian Malartic under execution at the moment. Left of that, you see the near-term potential. And this is all low CapEx, production expansion at all of those operations. Again, you can see what comes from Gold Fields and what comes from Yamana. The point that we've been making is Gold Fields doesn't have a pipeline, we will need to invest in that. And then you can see the number of exploration opportunities. A number of those are advanced exploration opportunities. So they're close to being able to be used in investment decisions. The next 2 slides, I think are important from the point of now of thinking about the way the company will still retain its DNA around capital discipline and shareholder returns. On the left-hand side, you can see the combined company has a net debt to EBITDA of 0.39%. That means actually both companies have a net debt to 0.39% because that's what Gold Fields  now. The point here is that we are not buying into a company that has got substantial debt. So both companies have got very good balance sheet. Balance sheet is in great shape. -- both of the companies are investment-grade rating. If you look at the liquidity, this combined company will have liquidity of $3.8 billion. So no need to go back to the market, no need to do anything different or anything strange we're putting together 2 companies with balance sheet in great shape. And it's also companies that have been thinking about returns to shareholders in a similar way. You can see over the last number of years, how both Gold Fields and Yamana have increased cash returns to shareholders. You can see our dividend yield at the moment is 2.5% with a potential for that to increase. And if we look on the right-hand side, I think the important message that we want to leave with is what we are doing is providing optionality and we are putting the company in a strategically fantastic position to manage for the next 10, 20, 30 years. But our focus will remain the DNA of this company will not change. It's not changing as a result of executing on our strategy that our focus remains on financial different and shareholder returns. I mentioned that transfer. What we didn't want to do is put a company together that took us backwards on our ESG journey. Here, you can see just with a very high-level snapshot on the left-hand side, Gold Fields , on the right-hand side, Yamana, with not too dissimilar ratings, although sometimes of different rating agencies and with similar commitments in the blue bars at the bottom. A number of -- by putting these assets together, we actually bring some lower cost -- some lower emission assets therefore, helping the combined company to have a lower emission footprint going forward, certainly helping the ESG journey. So very similar approaches on the ESG front between our 2 companies. I mentioned that this deal is not premised on synergies. There are synergies. There will be some synergy around corporate services. You can see this is a portion of the corporate savings, which I think is possible. And I don't think he's pushing the boat out. There will be material, in our view, supply chain savings on the when we put together the South American assets, and we have a much more leveraged, much more bulky South American business. And we do think that then by supply chain and bulk purchasing, we can deliver additional synergies. But I think it's on the operational front on the bottom left-hand side that I'm the most excited. So here, we have we have 2 sets of a very strong technical teams that are able to work together and actually in an environment where technical expertise is so rare, what you can see is I'm much more excited about the operational improvements and the operational benefits that we can get by working together. We've spoken about the synergies and opportunities we can see, but we don't think that, that -- those opportunities apply to everyone. So we don't think what [Joe blogs] can come with each company do the same deal as we have, and they'll get the same benefits. So I'll share with you -- I mean, if you just think about the type of assets that we're putting together. So if we look at the Jacobina and Tarkwa, they -- if you put the previous those 2 continents together, you can see that those assets were part of the same type of mining geology -- and the Jacobina and the Tarkwa mines are very similar. And the expertise that you man have for mining underground on those assets and that we've got for the open pit mines there, there's plenty of opportunities for both sides of this company to be able to contribute. We look at the orogenic in Australia and Canada and Wasamac, we think there's a huge amount of opportunity. These opportunities aren't available to everyone else. The copper gold poultry synergies and the way we think about mining those at Cerro Corona, we think will help hugely at delivering of MARA. And likewise, the same type of geology exists in for El Peñón and Salares given that they're in exactly the same region. So here, you can see that our technical teams and technical operational synergies are not available to everyone else, and they certainly are available to improve the revenue line of the synergies here. So -- but there are synergies, but this deal is not premised on delivering synergies. So I'm going to hand over to Peter because he's going to talk about, well, why should we do a business with Goldfield, -- but Peter, over to you.

Chris, thank you very much. I'm going to begin with a couple of comments and a question. So I founded this company in 2003, and some of the commentary today amongst our shareholders was, is this better suit for you that you founded this company, and now it is effectively being sold to someone else. The second comment is that we present an Americas portfolio that is an excellent fit into a number of different opportunities. And that begs the question, why do a deal? Why this one? And the answer to that question is this is a unique value proposition. It combines two strong platforms, creating a company that is better than the sum of the parts. And Gold Fields is the best custodian for these assets. Let's talk a little bit about the custodian ship, and let's talk a bit about the -- what gets created. It creates an immediate scale to become a new major gold company with unparalleled growth and quality. Top-tier assets with leading reserve life index amongst the senior gold producers. And that's before we look at resources to further bolster longevity. It will be the third largest precious metals producer by 2024. It has brownfield growth, as Chris mentioned, not Greenfield growth. Where is the risk? The risk is not on the mine. The risk is often on the plant, particularly large plants, big scale plants in more difficult, less labor effective parts of the world, when the plants are built, that become substantially easier. It's low cost growth. It will be the fourth largest company by market capitalization, but this presents that value proposition that I referred to a moment ago, as we meet the multiples of those larger peers. We have a complementary regional approach in the company. We believe in regional significance even dominance in the regions in which we operate. And we think we certainly see, based on our diligence that Gold Fields sticks a similar approach. Yamana shareholders retained 39% of the combined company. And that's reflective of the inherent fair value. It's consistent with comparative net asset value contributions. And that's why these discussions were constructive. Gold Fields came to the conclusion that we were looking to come to, which is that the market is not reflecting our inherent fair value, and we can justify an inherent fair value that is higher that 39% is reflective of that conclusion. It enables Yamana shareholders to capture more of that inherent value in assets, as you mentioned, Chris, such as Jacobina and MARA, where the geological experience, together with size and scale will make a difference to the advancement and development of those projects. And with a larger company, the value in the assets such as MARA can be an earth, and we also came to the conclusion in our diligence that management competency is required to develop world-class assets. MARA is a world-class asset, and it requires management competency to get to that point. This globally diversified company will have 14 operating mines across premier rules-based mining jurisdiction. Once again, it was consistent with our philosophy. We want to be in mining-friendly jurisdictions, and we want to be in rules-based jurisdictions. No one could argue that's true of where you are in Australia. That is very true of South Africa. It's true of Ghana, where Tarkwa is, you have an asset in Chile, which is where we are already have a platform. Rules-based mining-friendly jurisdictions with this mining pedigree, and where we don't have to worry about where the labor force is coming from because it's already there in the jurisdictions in which we operate. This will have an expanded global footprint in those rules-based jurisdictions, to complement our Americas portfolio. We have a shared management belief in building regional dominance anchored by flagship assets. In addition to all of that, it creates an industry-leading management bench strength. And I appreciate that there are many who say, well, what are the synergies. Fortunately, we have some synergies here. But these deals should not be done based on the synergies. We're in an industry that is suffering in many respects from a shortage of high-quality, competent and capable managers. If we can bring 2 companies together and improve that management bench strength, that's critical to success. I describe it as more ores in the water and more hands in the ores, and that's critical and important to a combination and the success of that combination. We have a shared common vision and a commitment, as you mentioned, to ESG and the care of the host communities in which we operate. We have a joint track record of successfully delivering on projects and extensive -- with extensive technical capabilities. The combined management provides significant experience in certain geologies, comparable in our company to your company. We can complement the skills of deep underground bulk mining and open pit competencies. South Deep is 1 of the deepest mines in the world. And we have a mine in Canada that is a deep mine that requires a shaft, maybe a second shaft. We firmly believe in our management and in our Board of Directors that this is not a mine that we'll be producing 500,000 to 600,000 ounces per year. There's plant capacity of 56,000 tonnes per day. Why would you ever limit yourself to 1 shaft at 20,000 tonnes per day. we would always try to optimize that. And with the experience in South Africa, we think that can parlay well into looking at how can we fast track how can the new company fast track the development of another shaft and getting more ore to surface to go through that additional capacity. We have a complementary experience in Latin America to deliver value from exploration and through development and operational excellence. You talk a little bit about the shared knowledge. Salares Norte, El Peñón and Minera Florida. There's a Chilean platform, and that platform can be used for optimizations, risk mitigation and value creation. It's always easier when there's a platform rather than just a stand-alone sole asset in a particular jurisdiction. And that platform delivers more than 330,000 ounces per year. So it's a robust strong platform in the country. Odyssey and South Deep has underground both mining, as I mentioned, these are two 2 quality assets in quality jurisdictions where the experience in deep underground mining in one will parlay well in the other. You've mentioned Jacobina and Tarkwa and the shared experiences and knowledge that can be translated between the two. And while you talked about MARA and Cerro Corona, I think it's also relevant and important to talk about what happens with MARA. Here is an asset that should be developed. It's an asset that certainly should go through the process of consideration for development in a company that produces 1 million ounces per year, that's a more difficult decision to make, 1 that we would likely make but a more difficult decision than a company that produces up to 4 million ounces per year or more. And we believe steadfastly and wholeheartedly while you're cautiously and conservatively talking about growing this company to 4 million ounces per year, we think that, that number is likely higher than that. So we have the scale to execute on these organic growth projects, and we can crystallize that inherent value immediately. But for those shareholders who choose to remain, and I hope that there are many of those shareholders, there's significant value upside in maintaining a shareholder in this company.

So I've only got one landing slide. And that is what we think will be the outcome of pretty these two companies together. I started the presentation by talking about why we started looking at the assets that we're looking at and what we were trying to achieve and why we landed on Yamana. The outcome is when we do put these two together, while some of those may not be have been the driving forces behind the deal. The outcome is what we think a true combination for long-term value. This will be a super impressive company when this deal goes through. We will be creating a gold major with a compelling value proposition. It's a long-life, low-cost leading growth mine and few companies can boast of those -- all three of those components at the same time. We'll have a portfolio diversified across the premier gold region. Almost all of the big mining -- gold mining companies have got some parts or some components of their business that is in less attractive jurisdictions. That won't be the case for Gold Fields. This is complementary high-quality portfolios with strong cash flows and a deep project and exploration pipeline. We have, as Peter mentioned, a robust platform to build off. We're not starting from a fresh. We're not putting together a very early stage development company. These are 2 well-established companies that we're putting together, an awesome platform to deliver a disciplined organic growth strategy. We have a Gold Fields project development track record. We can build mines, we can fix mines and we can run mines. We have a strong balance sheet to be able to execute our projects in a disciplined way without going back to shareholders and without putting the balance sheet under pressure. Our vision that we highlighted upfront when we last year were thinking about, well, actually, where could we take Gold Fields too. And we were thinking that this is possible. And I know most people put our visions like this that are aspirational. When we say that how do we become the preferred gold mining company? We actually people go to. So investors go to, governments go to, communities go to, employees go to. We think that this combination is fast tracking our company to be able to deliver on being the preferred gold mining company that delivers superior value but sustainably. We've mentioned that we haven't lost focus on our ESG. And actually, this complementary portfolio actually accelerates some of the delivery that we have on ESG, with both of us committed to zero emissions by 2050, zero fatalities and increasing gender diversity amongst the whole range of ESG metrics that we measure, have targets for and that we update the market on regularly. And then at the same time, that bottom strap line, I think, says that whilst we are doing that. We will continue doing that, remaining focused on quality growth. So not growth for the sake of growth and not scale for the sake of scale, financial discipline and increasing shareholder returns. So ladies and gentlemen, thanks very much for your time. Thanks very much, Peter, for the 2 of us together. And I think we are now going to go through Q&A. And Avi, do you want to manage that or how are we going to do that?

[Operator Instructions] The first question comes from the line of Anita Soni from CIBC Gold Markets.

First question for me is in terms of -- I noticed in the presentation there wasn't any indications on what the key management roles would be. Is there anyone in the C-suite at Yamana staying on in the new company? It's my first question.

So we haven't. Thanks, Anita, for the question. So we haven't landed in all that. I think post the conversation -- post this announcement today and as we engage with the management team, we will then have conversations with the management team. I mean it is a takeover, and it is an acquisition and Gold Fields management and the Board will run the company. But as Peter said, -- number one, firstly, on the operational front, we absolutely need just lock stock and barrel everyone that's running those assets to run those assets because they're not competing in any role. . And there can't be 2 combined management and boards, but there absolutely is space for senior leadership roles. There's absolutely space. There's still plenty of work to be done with the integration. And the answer to your question, Anita, is that we will be engaging with the Yamana management, our management, and we will be seeing on what basis on a merit basis, which staff we integrate into the future company. But we haven't spent that time here. We haven't agreed so -- and we haven't spoken to any of the senior leadership in Yamana.

Okay. And then second question, in terms of the project pipeline for Humana, I mean Jacobina is not expensive capital, but I'm just -- I'm just sort of thinking about the Malartic expansion at Odyssey underground or so mine to work to that tomorrow. And then Wasamac, should we assume that the capital spending programs and the start-up time lines are unchanged with this deal? Or should we think that you might reevaluate and consider and talk with your partners on Malartic at least?

Well, Anita, certainly, in terms of how the we compared models and in valuing the company, the conclusion that was reached was that the steady issue goes on the project development for the underground of Malartic and also for Wasamac. So Chris, perhaps you can comment on this. But my impression, certainly our management's impression is part of the diligence is that we're not changing the time lines on those projects, they're progressing according to the time line that we've set for them.

Yes. Peter, I would agree with that. Look, we don't have a desire to say, stop all things, and we want the business to continue running -- but yes, in a combined business, of course, we will evaluate project and capital allocation. Of course, we'll do that. So that doesn't mean that we want anything to stop. We don't want Gold Fields sales business to get distracted. They've got to continue delivering and all the things that they know they need to deliver. And on the same message, and Peter, I'm sure you've been saying that to your team and we'll be saying that to the team is this is a business that's running and running well. Just carry on, and we will around that, be talking to each other about exactly what that will look like. But there's no intention to put things on hold and to stop value that already [indiscernible] There was none of these things that had a bigger red light next to it, saying, "Oh my goodness, if we have a look at this, we've got to stop A, B and C. We didn't have any of that because we can see some of that value. We buy into that value and how we integrate that, it will be a function of the future. But at this point in time, Peter's absolutely right as we want the businesses to carry on performing.

Okay. And then my last question was just with regards to the TSX listing. You mentioned that you would delist that one for Yamana. And I'm just curious why focus just in Johannesburg and not retain that listing in Canada given the large ownership base that's here?

So look, at the moment, the offer is, Anita, for either Gold Fields shares or for ADSs. So that's the offer. That's the construct of the deal -- and therefore, the shareholders in Yamana will be offered either of those 2 options. And under those 2 options, we don't need to retain the listing on the TSX.

Anita, the volume -- the overwhelming majority of the volume in our stock is on the New York Stock Exchange and the 2 are interchangeable. And that's true of the ADRs as well. So it was not a sticky point for our Board of Directors. While you're right that there's a Canadian base equally, the overwhelming majority of volume is in New York, and certainly, our Board's experience is that investors go to where the volume is. And so that is why we came to this conclusion.

The next question comes from the line of Josh Wolfson from RBC Capital Markets.

Just a question on the regulatory side. What approvals are required? Or is there any complexity associated with the domicile of each respective company?

We're not seeing any regulatory hurdles other than ordinary course and normally when one has multiple jurisdictions. So from the timing point of view, the only issue on timing is the delivery of pro forma financial statements for an information circular. Gold Fields publishes results semiannually, and we publish results quarterly. And so we will have a discussion on how we can expedite our financial results for the second quarter, Gold Fields'  financial results for the half year so that we can provide that -- those information circulars into our shareholders' hands sooner rather than later. But from a regulatory point of view to go strictly to your question, we're not seeing anything that is an impediment or hurdle to timing -- and while we've said in our announcement that we expect to be completed in the fourth quarter, certainly, we're aiming for the third quarter at the end of the third quarter.

I've got nothing further to add to. Peter. Thanks very much. We don't see any regulatory hurdles that are not part of the normal process of doing a deal that is taking to.

Got it. And on the Goldfield side, I think for Goldfield shareholders, there certainly looks to be high dilution associated with this transaction for near-term operating metrics. And even when you look at what gold fields would have looked like with Salares Norte coming online, and there being high cash flow there. The deal still looks quite dilutive. I understand there are some merits here to scale, but there does seem to be a larger sacrifice of what that upside is and diluting that growth. Is there anything that we're not seeing here in terms of maybe risks on the project or other upside for Yamana within Gold Fields that we should be thinking about?

No, I don't think so. I mean I think we spent quite a bit of time in the presentation talking about the value that we can see Yamana share price is undervalued. But that value is not only seen by us. It's also seen by the market. So the market is anticipating that in the not-too-distant future as delivery of certain this happens, that value will come through. Yes, you pay for control, you pay for a takeout and you pay for some of the upside value you will pay to the existing owners. . But I've made -- I've hopefully made it clear. And hopefully, I've emphasized enough that we still see plenty of upside and we avoid a very material injections of -- or investments in cash more likely of what we still have to do for the future of our company. And I think that's not being felt to it's not being valued and that's not been seen, but that still has to happen in Gold Fields going forward. So I'd like to think of this rather by the Gold Fields investors like we would invest in a mine you would invest in some of the value that we can see. And that's, I think, what we are doing. We are investing our shareholders. We're saying we can see that value and a lot more, and we're asking you to invest in and trust management because we can do this. We can see that. And what we're asking you to do is invest in this future value and the future of this company at what we think is a very, very attractive premium to get in there. So this premium that we're paying is not wild compared to what the market sees. They're not valuing that now. We will get there. Some of that value unlocked will come in our hands, and we don't see any material downside. I mean there's normal mining things we've got in our own assets that we've got to manage on a day-to-day basis. None of those, in particular, 3 big assets that make up 85% to 90% of the value of Yamana. These are well-run assets. They've got low cost. They're contributing to a reduction in our all-in cost. We're excited to be able to leverage off the synergies between our 2 companies, and we are not seeing any material downside. And even in the big project, MARA, where traditionally, I think most people have said, "Oh, we don't know if this will ever be developed. In our hands, we in this combined company's hands because we have the scale to develop that. And actually, in the risk of where big projects are, they're in the plant, they're in the pipeline, they're in the logistics and they're in the tailings end, that's where the risk is. And so yes, there will still be risk, and we've got to go through it and evaluate. But I don't see incidental risks to be able to develop a project like that. Over time, at the right time and at the right pace, we think that we can develop that. We don't see, otherwise, we wouldn't be sitting here today if we believe there was material risk to the delivery of the value that we can see.

Josh, I'm going to supplement that answer a little bit by providing a bit of a challenge. You refer to high dilution. But look, when one looks at the dilution, we have to look at short term, long term, what are the assumptions? What is the methodology that's being looked at? Is it net asset value, cash flow, free cash flow? And my experience over 3.5 decades of transactions is that the best transactions are the ones that don't check every box, but they check some of the boxes for one side and some of the boxes for the other. But we have to be very cautious when we talk about high dilution or any dilution because it is all based on the assumptions, and what is it that one is looking at. If we look at net asset value, for example, this transaction is very close to neutral to net asset value. There will be accretion to one company on short-term cash flow and accretion to the other company on longer term cash flow. And all of that is to look at in the context of the assumptions as MARA get developed or not developed. If MARA get developed, then longer term, it would be dilutive to our cash flow. But equally, it would be more of a challenge, as I mentioned for Yamana to develop MARA than it would be for this combined company .

The next question comes from the line of Adrian Hammond from SBG Securities.

Chris, thanks for the clear rationale presented today. I'd just like to perhaps ask a question on the software issues around cultural fit between the 2 companies and where there some thought was taken into account regarding that? And I draw your attention to deals of the past such as that between Barrick and Randgold versus Newmont and Goldcorp, where clearly, very different companies merged, combined and both had very different outcomes. If you look at the share prices, relative performance. So -- could you give us some color as to what thinking was considered regarding whether this is a risk or not?

Yes. Thanks for an interesting question, Adrian. Something that because, of course, we have to operate these assets going forward. We have to manage a combined company. And I think Gold Fields has got sufficient history to be able to acknowledge that we all come from different parts of the world, and we all bring some cultural complexity and we bring some cultural advantage. And you just look at Gold Fields as it stands today, is that we have Australian, South Africans, [Ghana] Peruvians, Chileans and even if you just look at Peruvians and Chileans, even -- although they're next door neighbors, they can be quite different. So number one, from a portfolio of what we're putting together, we're putting more Chileans, some Brazilians. This is not different from what we're doing today. And then we get to additional -- we get Canadians. I'm not sure about Canadians. But other than those, this is not -- it's not something that we manage. They're not different for us to be able to manage, different cultural groups of people together. What we -- so that's not a problem for us. And we're absolutely excited about bringing different thinking and different people into our business because we just believe that diversity creates strength. In the culture that we've been looking at is to say, is this like do we think the same way about business? It's not the cultural from different parts of the world. We talk about -- are we going to find a company that are just a bunch of cowboys and that they hurt people and they don't care about communities and they don't care about the impact that they have on society and how they're thinking about the future and the contribution they make and the purpose that they have, that's important for us. Is this just a company that only wants to grow and not return cash to shareholders because those are things that are quite difficult to change. And then what you've got to do if you find that, that is insurmountable, then you've got to say, well, we've got to do something fundamentally different or we don't do the business together. And our view is that, that's not what we found. We found very similar cultural approaches to safety, to the environment, to help to engaging with governments, to engaging with local governments, to engaging with communities, to thinking about the impact in the future and the contribution you want to make to net zero and that sort of thing. So we think, of course, we're going to have -- we'll be different companies that will be different. I mean, I guess, a smaller company can be more nimble than a bigger company. A bigger company can have other benefits. I think we're going to put together some pretty interesting positive cultural fits. The contributions that we make because of the places we come from across the world, I think it will be positive. And all around, I think, Adrian, when we've looked at culture from that point of view, how do we run the business? We found that actually our businesses are run very, very similarly. We have different sizes, sure. We operate a little bit differently in different parts of the world. And yes, we are being strength to that discussion from both sides. I don't know if you want to add anything to that. One of the things -- I mean, when we were doing when Brett and his team are going through this, it is absolutely one of the questions we ask is around the cultural fit. and we can't say that for every company that we looked at. We don't think that there are companies. There's some companies where we had a big cost, a big cross next to some of those things. So it's not just because how you get a big tick under circumstances. We -- for a number of companies, you said we don't want to work with these guys.

Perhaps will add something to this. Do you know -- and I'm sorry, Adrian, we've not met, so I will look forward to meeting at some point. But there is certainly a willingness today to talk about climate action -- but the way we view climate action is that effectively, it's an extension of if you're protecting the global environment, you're also caring about the local environment. And we, as a company, have been very sensitive to ensuring that we're taking care of that we are responsive to local environmental issues that we are responsive to community issues that we engage effectively with immunities. We would not do a deal with a company that did not have that similar level of engagement. Part of our diligence, and this was something that was critically important to our Board of Directors part of our diligence was that we wanted to make sure that from a health safety environment and community point of view, there was a similarity of simpatico between the 2 cultures. And we certainly came to the conclusion that there is.

Thanks. Perhaps if I have a follow-up, if Chris, you've now secured the future effectively and having used the balance sheet. Are you willing to enhance dividends for shareholders?

Yes. I hope I said it at least 10 times today, Adrian is the discipline on returning to share cash to shareholders and increasing cash to shareholders is as strong as it ever was, and that's not we're not changing the way we think about that. Yes. No, I mean that's always been 9, 10. Adrian, as we deliver Salares, the intention was and the expectation was that we would be able to increase returns to shareholders. I think the one thing that Paul always says is absolutely as we increase the size of the pie, the slice, even if the percentage slice is the same, the absolute amount. I know you know that well, but we will be returning increased cash to shareholders. And I mean there's different ways, of course, as you know, for shareholder returns. But that hopefully, I'll stress at least 10 times today that, that is not changing.

The next question comes from the line of John Tumazos from John Tumazos Very Independent Research..

Thank you very much and congratulations on this enormous work to get the transaction thus far. I have 2 questions. First, the Agnico Kirkland transaction announced within the last year, had a tremendous rationale, but the merged firm has not outperformed Barrick or Newmont. So what will be your posture if the market doesn't appreciate this REM brand as much as you do? We all thought the Agnico Kirkland deal would trade up Second question, South Deeps is half of the resources in GFI. And it's been a problematic mine for 2 or 3 decades. Could you just review the fatality record and the risks of regulations come down on it? And then secondly, a 6 of the resources of GFI are undeveloped, and I've been reading about Chinchillas and rare species of Fox's and heaven forbid, the mine is half built and not completed like [Pasco] Sorry, we had those concerns.

No, I think they're fine, John, and hopefully, we can address them now. John, I don't appreciate the -- our story. I mean, we've been working on this story collectively between our 2 companies for, I don't know, like 8 months or something -- so we don't expect the market to have instantaneously the same level of appreciation for this deal as we do. I mean we have been working deeply on these things doing. And as Brett and his team are saying and the same for Gerardo and your team, Peter, is our teams have been working at various layers of increasing depth all the way from initial discussions, desktop reviews management presentations, data rooms, bike visits. But our teams have got a very good understanding of the assets, both ways, reciprocally of what we're dealing with. And so when we say to the market, we can see A, B and C, it's not because we woke up one day or we read a report. It's because of detailed work over an extensive period of time that has led us to this position that we believe and we can see and we can justify it to our shareholders. Now for many shareholders, they would have seen this for the first time because, of course, we've been working behind closed doors and to make sure that we want to get to this position and that we can motivate to shareholders. So we're not asking shareholders to vote today. And by the time that we do our shareholders to vote. We plan to engage both Peter's team, who's Peter has got as much work to do as I and my team have got to do, because Peter has got to stay to his shareholders, we think the Gold Fields are the right custodians for these assets, and that you want to be embed with it. We've got to go to our shareholders and say, "We think you're paying for the right reasons and look at it is what we are buying and what we are creating. So we expect to be busy for the next for the next couple of months. We expect that we've got work to do. And we don't begrudge that work. It's our obligation to show our shareholders what we can see. And so we'll be doing that. And we do that gladly, and we actually are very excited to be able to share this message and to share this vision and to share this work that our teams have done. So at this point in time, I don't think if there's somebody doesn't see it yet that we say that we can't help them see it over time. Peter, do you want to add to that?

John, I would add, look, it's never clear why 1 transaction may be in favor and another in this favor. But it's very difficult for us to be people to say, why would the Agnico Kirkland deal and I don't know if it did or didn't underperform, but why would that deal have underperformed. But I think the starting point should always be -- let's ask the question, why did the 2 companies do a deal? . And is it consistent with their philosophy? Is it consistent with what they have said and whether or not they sit, what does it create? And in this case, we're not trying to create something, as Chris said, that is bigger, bigger seems to be better today than it has been in the past, but better is always better. And so what we're trying to do here is we're trying to say we're creating a company that demonstrably is better across all of the measures. And if we're successful indicating that, then we should be able to capture that value in our shares in the shares of gold fields. And I think we'll be successful at being able to do that. And the starting point is we ask the question and why are we doing it? We're doing it because we're creating a better company I know you asked questions, and Chris will answer this on Salares Norte and Chinchillas and Foxes and I don't know if the [coal was Fox or boxes] or the Sout Deep, but our diligence we visited those sites. And the conclusion that we reached. I can put hand on heart pound the table and say that an excellent job is being done at South Deeps to promote what the company is saying which is that we can get a better production at better cost. And there doesn't appear to be any issue that leads to a delay in the start-up of operations, it's Salares Norte that's we can give that endorsement because we've been there in conducted due diligence.

Thanks, Peter. So I'll quickly talk about Salares and South Deep. Look, we got asked a few times today. So why now? But potentially, this deal when South Deep was in -- wasn't yet in the position it is today. So 2 years ago, this would have been a difficult deal to sell to shareholders. We were much -- pardon me, much further away for delivering of Salares and we were -- we certainly hadn't yet got South Deep to a position that it was generating sustainable cash flow and had a profit trajectory that people could buy into. But over the last number of years, and I claim no credit for this is work that's been underway for many years. And certainly, [ Nick ] has been telling the market that guys, the work that we're doing is going to deliver. And some of the tough work that, that team took in 2017 and '18 to restruct mine, sort out the labor relations take on the unions have a much more constructive post sort of new South Deep, a much more constructive relationship with unions under the leadership of [ Martin Preece and Benson ] team. So we have got South Deep in our view now a mine that is -- it's like any other mine now. It's just generating free cash flow. It's got an upward trajectory. It's doing some fantastic work on thinking about the future or with their people on safety -- and the improvements in safety at that mine over the last number of years have been tremendous. So we've got faith in the team, and they've demonstrated that. And over the last number of years, we have seen very substantial increases in cash flow and our views that, that will continue. And whilst we had a 21% or 29% increase in '21 over '20, over the next number of years, we've said that we will continue to deliver growth and we'll see 20% to 30% increase in the growth and commensurative we will be able or aligned with that, we will be able to manage inflation and you'll see a real reduction in unit costs from that operation. So that's become like any mine now. Yes, it's had a troublesome history. But over the last 3 years, you can see there's been a track record of delivery and improving delivery and that will continue. Of the Salares,, we've had -- we've been very clear about what our challenges around Chinchilla are. There's like 15 or 20 Chinchilla on the project side. So in one specific area, in a rocky outcrop area that we need to start mining in 2025. So we don't think that we need to -- because it's the stripping at Agua Amarga where we only need this is the second fit that we need to start stripping much later on. So we don't think we can move those 15 or 20 Chinchilla in 1 morning. We just need to take the environmental authorities along with us, and we understand that this is a difficult period as a change in the constitution and they're putting in place more environmental rights. I mean we are working alongside the government. We're working alongside as many experts as we can find. We've got the universities. We've got people that are studying and doing PhDs on Chinchillas. And we got the best minds around thinking about how we move it. So we're not going -- we're not mowing down Chinchilla Habitat or anything like that. We've got enough time to solve this and to move it Chinchilla to a different relocate. So we are not worried about around Chinchillas. The foxes are something that we know this is a new thing for us. So we've got it because they move around foxes. And we've just got to make sure we've got protocols on the mine that can make these foxes which incidentally hunt these until. So we are not worried about the environmental impact that absolutely need to be managed, and that's absolutely something we want to do. We don't want to harm any of those natural or known flora and we'll do whatever is necessary to look after them. We are not worried about and it is -- it poses in our view, very, very low risk to our projects.

Can you just refresh us how long has it been since there's been a fatality at South Deeps and I know there were many 10, 20, 30 years ago. I've been watching it since [plus] '98. Maybe it would give us comfort to understand the dimunition and improvement in safety?

So we had one fatality in April of last year. And it was quite a strange fatality when we had a very long drill steel that was stuck in a ore pass shoot and it had [Benton] was under tension and the oil the [shaft Timmerman], who is cutting this because he want to do clear the drill steel out of the chute hadn't realize the tension that was in the drill steel when we cut the drill steel, it sprung back like steel and unfortunately struck [ and see me for -- he] struck him and he was slightly injured. So this is not, for example, a fall of ground injury, the kind of risk that you would anticipate at a deep seismically active mine. I think the team have done a great job in terms of mine design, in terms of support being able to look after the safety of people at South Deep. Thanks, John.

The next question comes from the line of Grant Sporre from Bloomberg Intelligence.

Chris, A lot of the questions have been answered, but I've just got a follow-up one, in terms of the Mara project, from my assessment, it does -- it is quite a large part of the value equation for the acquisition. How many of your due diligence sort of discussed plans with the minority partners, Glencore or Newmont in terms of developing the mine and their thoughts around that?

No. I mean you can imagine, we can't yet go to the other partners to tell them, hey, we're sniffing around these things are in discussions. So no, we will only be able to have these conversations afterwards. Look, perhaps one other thing. I mean the thing about South America, I guess it's like other mining jurisdictions. The people sort of move around, and we have got people in our business probably to Peter's irritation at some point in the past that used to work on some of these projects that work for us now. I mean we had -- we've got -- our Head of our new Chilean operations used to work at Mara. You've got folks used to work at Jacobina. We've got our head of our South American operations, [Lucho], who used to be and run Alumbrera. So when we send some of these people back you say, well, tell us what it looks like compared to when you were there. And some of this was fairly recently, but [Lucho] used to work a long time ago at Alumbrera, which is now the MARA plant. And their feedback to us was the plants in good shape. It needs very little capital. These assets have been look after well. They're running well. In some of the guys who used to, for example, work at Jacobina say, this is like 100x better than it was when it was way back when they used to work there. So we've got a number of other -- other than our people, and we took these very experienced mining engineers, geologists, exploration geologists formed very substantial teams that went to visit these operations. And we've got we've got thumbs up from people that not only visited those operations because if some of them used to work there, including some people at MARA. And some of our guys are saying, yes, I mean, this is a big project. And yes, we've got any JV has got an additional layer of complexity. But none of our guys are saying, I mean, we manage mines and things like that, we manage big projects, we manage mines, we manage regions on a daily basis. So none of our guys are saying, we can't manage this. One of the things Brett said to [Lucho] when he went there, he says, "Hey, you're going to have to run these things, can you run them? Do you want to run them? So when we went there, it's different to say, "Oh, no, well, this looks lovely, then I'll give it to somebody else. Someone says to you, you're going to run this thing, then all of a sudden, you've got a very different perspective of whether these are good assets to own. And our team have come back and saying, "These are great assets, we should own them. I mean the team they when they let Jacobina, they texted Brett and say, we've got to own this mine. So again, of course, there's risk in anything. Our view is that this is about the lowest risk combination that we can see and the assets are the lowest risk asset combinations that we can see. Yes, we've we are not approving MARA today. We will have to work with the team and neither Yamana approving the project today. So we're not concerned that we won't in the fullness of time, be able to do just to some of those assets. I think it looks like we're running out of questions. I think perhaps this time, are there more questions coming in somewhere else? They are okay.

The next question comes from the line of René Hochreiter from NOAH .

Chris and Peter well done on the deal. I think it's going to be a good one this one and getting up the mining production log to third place, well done. Peter said something about the market not reflecting the inherent value of Yamana. Why do you think that is?

What a good question, René, and I wish I could give you the categorical and unequivocal answer. But sometimes, the -- there could be many reasons but take an asset like MARA, this is an example. We think MARA should be developed. Clearly, there's still work in front of us. As Chris said, it has to go through completion of feasibility study. and going through the permitting process. But it's advancing well. And it's a low capital intensity project. And all of the engineers in our company, and I would surmise -- I would surmise that in Chris' company would say, the challenge of an asset like that is 115,000 tonne per day plant. It's not the mine. It's the plant. But if a plant is already built, then a lot of is significantly, if not completely removed. So it should be developed. Having said all of that, Yamana is a substantive company, but we're a substantive company with 1 million ounces of global production between gold and silver, gold equivalent production per year. So I think if I were an investor, I would have a natural skepticism to say how much value will I place in it? Because I don't know if a company that size would want to develop an asset even of that quality, but an asset of that size. The part of what we've been dealing with is what are the strategic alternatives that we should consider? And I think you would agree with me, René, that markets prefer certainty rather than strategic alternatives without a decision on one or another. What is interesting about this combination is that with the production platform of call it, roughly 3.5 million ounces per year. It's an entirely different paradigm should the decision be made to develop it. And so it seems to me that it will unearth more value in a larger company than it would in a smaller company, even one as substandard as Yamana.

Okay. Good. Now that's a good answer. Just following on from Adrian's question. What sort of dividend yield could we expect? I mean, you said you're sitting on about 2.5% at the moment. I see [ nuance] 3.2% and Agnico Eagle. What sort of dividend yield, obviously, it depends on the gold price, but what sort of dividend yield are you looking at to maintain going into the future?

Yes, René, I mean, we've said that we would -- that we've got a dividend policy of 25% to 35% of normalized earnings. I think for now, until we sort of see how things pan out, we would lever at that. I think we absolutely would expect to be -- so we've been paying 30%, as you know, for a number of years now. And I think we would have an expectation of moving to the top end of that range as we start delivering Salares. So I think that would still be our plan. We would plan as we put the 2 companies together to retain that. We don't have a plan to all of a sudden chase projects. There may be a period before other fairly material capital allocation kicks in, that there's at the top end of that range. But I think we both myself and Paul and our Board have said, look, for now, we think that's an appropriate range. Let's leave it like that and hopefully get to the top end of that range in the next while. So yes, we'll leave that. But of course, remember, the other point I mentioned is as we create more value, the size of that pie that we take 25% to 35% off is much greater. So I think we would seek to get the benefit of both of those René. That's how we keep our dividend policy for now.

Okay. One last question. Of the 14 mines that you have, which -- how many of them are going to be working at less than $1,000 an ounce AISC?

So certainly, the 3 big -- so I see breaks counting quickly helping the accounts were like 5, I think. René. We'll come back to you if that number is different.

The next question comes from the line of Mike Parkin from National Bank.

Most of my questions have been answered. But just wondering if you're considering a minimum scale of assets on a go-forward basis on deal conclusion in terms of kind of a threshold between card noncore, given your scale, one would kind of seem to think that there might be a couple of assets that are moving into the noncore bucket. Just any color there would be appreciated?.

Yes, Mike, thanks for the question. It's something that we absolutely are always focused on. And again, I mentioned if 3 of the assets in Yamana are delivering 85%, 90% of the NAV, then that is absolutely a logical question. But likewise, we have got a number of assets in Damang is 1 of those, for example, that we're thinking about. So we are doing study work to see if we are able to do the next value accretive investment at Damang. So there is some questions even in our own portfolio that fit that. We don't have a problem with sort of 14 to 15 assets given the regionalized way we run our business. So Australia, that's 1 million ounces with those 4 mines, that's very easy for 1 team to manage. We we would like to have more than 1 asset per country because 1 asset is an inefficient way to leverage sufficient scale. So none of we see worries us that we've got too many assets or too many regions. The good thing about what we're doing is we're not adding significant amounts of regions. We are adding Canada. We wanted to get into Canada. We think that Canada can provide a springboard in time to be a much more substantive region. So we're not worried about that, but we absolutely will look at a number of the smaller assets that are generating less cash flow to say they're not better housed in other companies. So yes, we'll do that. I think what we want to do is upfront, not commit to that because, for example, I mentioned earlier in the presentation, we're quite intrigued with Cerro Moro, for example, in Argentina. So yes, there are certain challenges in Argentina you want to make sure you've covered. But also we have touched such a small or Yamana touched up a small part of the total potential of that asset. You want to make sure that you don't give away an asset or sell just because it's small now, an asset that could be massively different in the future. So they want to give up that optionality. We just want to make sure that we have -- we have crossed and ticked those boxes. But over time, asset rationalization is absolutely part of the way that we think about that third leg of our strategy around improving the value and the quality of our portfolio of assets. I mean even the way we think about, if you look at the 3 mines, the 3 -- those flagship mines that we spoke about in Yamana those are $900 and below. If you exit 2 of the smaller mines that are $1,200, $1,300, all of a sudden, you have a massive improvement in the quality of your portfolio, in a bigger portfolio that becomes much easier to do. So yes, there may be some of those assets that are better held in others' hands, but we don't believe that we qualified yet to make those calls.

Mike, you are familiar with the history of Jacobina. And I know that there are people on this call that are thinking that perhaps none of them will acknowledge, but -- if we go back to 2014, 2015, when it was struggling at 75,000, 78,000 ounces per year, there were many who said, "Why don't you sell it because it's not core, and look at it today. So I think that a strategy, Chris, as you mentioned, take your time and evaluate the geological potential, exploration potential, what can be done to improve? The cash flows of an asset is always critical. Imagine if we had sold Jacobina in 2015, thinking it was not core. We would not be doing this deal. Jacobina has become a world-class asset that, in many ways, even with 230,000 ounces of production per year, punches well above its weight class in terms of its cash flows with an all-in cost of below $750 per ounce. There are mines that are producing 250,000 ounces per year that generate less cash flow. So I would encourage Chris and his Board and management and everyone who is on this call is, say, take a very sanguine view and take your time because one never knows where the future is.

It seems like we've got one more question on the line.

The last question comes from the line of Leroy Mnguni from HSBC.

Thanks for squeezing me in. I appreciate it. Chris, my questions are related to the life reserve life of mine of the Canadian Malartic asset and El Peñón mine in Chile. So it seems like -- if you're looking at the reserves, they've got pretty short lives. Is there a risk of maybe an exploration or maybe CapEx catch-up that is required there? And then related to that, I mean is the risk here not that you're going to end up having the same challenge that you have now of needing to convince shareholders of the life potential of these assets like you do in Australia? And that puts a lid on your ability to rerate.

Let me -- Chris and I were sort of passing the baton on who should start answering the question. El Peñón is if we go back to its history going back to 1999, it has never had more in any one year, more than 6 to 8 years of proven and probable reserves. We acquired it in 2007 with 7.5 years of proven and probable reserves. And here we are in 2022, almost 2023, and we still have 7.5 years of proven and probable reserves. . And we keep finding new ounces except that it is more cost effective to find those ounces year-over-year rather than spend a fortune, we spent $16 million in exploration we could be spending more, but we -- we would be wasting money because as we explore, we make new discoveries, year-over-year improvement in proven and probable reserves replacement of what is mined. And then we're also into development on those ounces. So it's more effective from a cost point of view and from the generation of cash flows. And interestingly, and this was entirely coincidental, gentlemen, who are here on the Gold Fields side. But we've made a new discovery at El Peñón. And this is literally over the course of the last year. We've called it South Deep. And that was entirely coincidental. It's clearly in Spanish, but translated. But South Deep appears to be the extension of historical veins that were much richer and wider. We're not yet at the point of saying that this completely redefines the mine, but we are comfortable in saying that, that discovery alone will extend mine life. It's yet another area for exploration year-over-year to extend mine life. So we're very reluctant on an asset like El Peñón, [defer] only to Reserve Life Index because Reserve Life Index completely underestimates the value of that asset. Imagine if in 1999 or 2000, when it said because the reserve life index then being about 5.5 years, that's how we will evaluate except El Peñón has been one of the more prolific mines in my view, a top-tier mine in the world.

Leroy, I mean this is something actually we were puzzling about when we had to look at Canadian Malartic. So it's one asset that we couldn't get to physically we talked to plenty of people with lots of work and even talked to some advisers that had done some work there. The one -- I mean if you look at the resources, if you look at 19 million ounces of resource, this is a monster mine. And I think this is the point that we have got experience in the Australian orogenic and we understand how to think about some of these mines. So this thing is so massive that you could spend an incredible amount of money trying to convert resource to reserve. And actually, what we've come to realize is they just think about this differently. And once they have delineated the ore body and have sufficient knowledge and sufficient confidence in the -- this is the way I'm going to let you understand, sufficient confidence in the continuity of that ore bodies, and they say, well, plug away spending a whole lot of extra capital that you could rather put into developing the mine into converting the resource to reserve. So once they are clear, they've got a certain amount of reserve, they're very clear about the resource they said, let's rather put that money into developing the mine. And if you look at the resource, there is 19 million ounces, and that is not valuing still huge portions of that asset. This is not an asset that you're going to be saying after 5 years time, we run out of reserves. This is or resource. This is an incredible asset. And if you listen to the management presentations, they talk and they see this asset developing from a 700 to 1 million-ounce mine. Now we're not valuing this like that. I'm reflecting on what I hear and what I see, but they do think about this in a different way. So like you think about Australian assets, Leroy, you need to think about these orogenic are -- that's their nature that you don't ever only focus on the reserve.

And Chris, what -- I'll supplement that by saying that with the Odyssey project in Malartic, there's more than 16.5 million ounces of resources. That number increased by [4.5 million ] ounces last year alone. But this year and next year, will be 2 really important years because these will be the 2 years. Remember, we're already in development on the ore body and that shaft to access the ores. But this year, we'll be converting a big part of the mineable ounces into proven and probable reserves this year and next year. So it will be an exclusive increase in proven and probable reserves across the board in Yamana, but certainly in respect of that asset.

Questions. Avi, is that correct?

Yes. So look, I think just from our team, thanks very much to everyone on the line. It's been a great pleasure to be able to present to you, and thanks very much for the questions. And with that, we'll bring the presentation to a close. Thanks. Thanks, Peter.

Thank you for joining today's call. You may now disconnect.