Regis Resources Limited ($RRL)

Thank you for standing by, and welcome to Regis Resources and Vault Minerals to merge. [Operator Instructions] Finally, I would like to remind all callers that this call is being recorded. I'd now like to welcome Jim Beyer, Regis Resources Managing Director and CEO, to begin the conference. Jim, over to you.

Thanks, Paully. Good morning, everyone, and thanks for joining us today to announce the transaction that we've agreed between Regis Resources and Vault Minerals, which is a merger of our respective companies. Also joining me on the call today is Luke Tonkin, MD and CEO of Vault. Luke is -- I'm in Sydney, Luke is in Perth. So when we get to Q&A, just give us a -- take that into account when we start to hand questions backwards and forwards. Also, I would note that we released a number of documents this morning, including a PowerPoint pack, which outlines the deal. And through this morning, I'll refer to a number of the slides through there. So you'll find it helpful if you've got that slide pack available. Look, we are very excited to be able to announce this transaction, a true merger of equals between Regis and Vault. The combined business becomes a globally relevant gold company of significantly greater scale with a high-quality portfolio of assets, exceptional cash generation capacity and the financial strength to create long-term value for shareholders. Now I'll just draw your attention to Slide 2 through to Slide 6. Before we get into the substance of the presentation, I draw your attention to the disclaimers that cover the disclosures in relation to the scheme. I now draw your attention to Slide 7, combined company overview. This transaction creates a business with significantly greater scale, a high-quality and diversified asset base and the financial strength to support long-term value creation for both Regis and Vault shareholders. The combined portfolio is anchored in Western Australia, with Duketon, King of the Hills, Tropicana, Mount Monger and Deflector. We also have exciting near-term growth potential at McPhillamys in New South Wales and Sugar Zone in Ontario, Canada. The combined business is forecast to produce over 700,000 ounces per annum in FY '26 based on our respective guidance figures, and we expect this level of production to be sustained over the longer term. The combined mineral endowment totaled 6 million ounces of ore reserves and 20.5 million ounces of mineral resources, supporting our long-term plans. Slide 8. We think the rationale for this combination is compelling both for Vault and Regis shareholders. Clearly, with the scale of our combined businesses, we become a globally significant gold miner but there's much more to it than just increasing in size. Our expanded portfolio of 5 producing assets plus 2 near-term growth options gives us genuine diversification and flexibility. It's the top of portfolio in terms of the number and type of assets, which we've been looking at for some time now. Regis and Vault are similarly minded that this combined portfolio becomes a platform which sets the company up for the long term. It enables us to deliver strong cash flow and greater value to all shareholders that either of companies could do on its own. The large reserve and resource base underpins a long-term sustainable business across a broad and diversified portfolio of mining and processing centers and improving operational flexibility. With increased scale comes increased market relevance and greater appeal to a wider global investor pool for what will be a globally significant gold company. The balance sheet will be a key differentiator for us. With approximately $1.9 billion of combined net cash in bullion and significant ongoing strong free cash flow generation, and the combined business will be able to fund its organic growth while continuing to deliver to shareholders -- deliver returns to shareholders. There are material synergies that we expect to be able to deliver through this transaction, both operationally and financial. In particular, we expect there are at least $500 million in corporate tax synergies, which will be to the benefit of both Vault and Regis shareholders. The combined management technical teams are recognized as best-in-class operators with complementary skill sets that should continue to unlock further value across the portfolio while delivering on our attractive combined growth options. Slide 9. This transaction has been structured to deliver value to both shareholder groups via an all-scrip merger. Regis is ultimately the acquiring entity. However, once the deal is completed, Vault shareholders will own 49% and Regis 51% of the new combined company. The deal will be executed through a Vault scheme of arrangement. If approved, Vault shareholders will receive 0.6947 Regis shares for each Vault share held. Vault shareholders will have the opportunity to vote on the transaction as part of the scheme process. And we look forward to Vault shareholders joining us through this transformative deal. The scheme is unanimously recommended by the Vault Board, subject to no superior proposal emerging and the independent expert concluding that the scheme is in the best interests of Vault shareholders. The Regis Board also unanimously supports the transaction. The combined business will continue as Regis Resources and remain headquartered in Perth. The combined Board will be an even combination of each of our boards with 4 directors of each company to form a new Board of 8 directors. Russell Clark, currently Non-Executive Chair of Vault will assume the position of nonexecutive chair with James Mactier, to retire, and I will maintain the role of Managing Director and CEO. I'd also like to take this opportunity to thank James for the dedication and support he's provided both to the company, but also to myself as Chair of Regis since 2018. Now moving on to Slide 10. The combined company moves decisively out of the Australian mid-tier gold towards the senior global producer peer group. Based on our combined midpoint FY '26 production guidance of just over 710,000 ounces, with 5 operating hubs plus 2 near-term growth projects all in Tier 1 jurisdictions, we think this combined portfolio puts us in a unique position relative to our peers. Diversification is really an important aspect of this transaction. Having 5 operating assets and what we hope will become 7 once Sugar Zone and McPhillamys are in production, provides us with real operational resilience through the cycle. Slide 11 now, please. A defining characteristic of the combined group is its cash-generating ability, which is ultimately what drives shareholder returns. Both Regis and Vault have demonstrated very strong cash flows on a stand-alone basis. Based on the most recent quarterly performance, the annualized free cash flow generation from a combined entity or combined company was approximately $1.7 billion per annum. This level of cash generation is significantly higher than most of our peers and will enable the funding of growth initiatives without the reliance on external capital while also maintaining an attractive capital return policy for our shareholders. Slide 12 now. Turning to the next page, balance sheet strength and growth optionality. The underlying cash generation that we -- translates directly into balance sheet strength and long-term growth optionality. The combined net cash position at 31 March was approximately $1.9 billion. It gives us multiple pathways to grow the business, including McPhillamys and Sugar Zone, providing geographic sort of diversification in Tier 1 locations alongside near-term opportunities through mill optimization and other brownfield initiatives across the portfolio. Importantly, the company has the financial capacity to advance these growth options without compromising our balance sheet integrity and still maintaining the flexibility to balance capital allocation between disciplined growth and ongoing shareholder returns. Now on to Slide 13. One of the fundamental strengths of the combined business is the scale of the mineral endowment. This will provide a clear, sustainable long-term production profile for the company. The combined business will have mineral resources of 20.5 million ounces and ore reserves of approximately 6 million ounces, which forms the foundation for long-term mine lives and ongoing optionality. The scale of the resource base creates flexibility in how we sequence development, prioritize capital and respond to changing operational and macro conditions. Over time, this endowment supports continued conversion of resources into reserves, reinforcing long-term production certainty. Slide 14 now, please. The combined portfolio brings together a quality mix of scale and diversity that improves both operational resilience and long-term growth potential. The portfolio spans multiple operating hubs and a combination of underground and open pit mines. The scale of these assets and their processing infrastructure provides us with over 22 million tonnes per annum of milling capacity across 9 mills. This is a genuine strategic infrastructure and provides us with real optional -- operational resilience. The combined resource base and exploration portfolio creates a very strong pipeline of opportunities where we will be able to prioritize the most prospective options to maximize returns. Our combined management technical teams really are complementary. Both of our companies have excellent operational teams and track records of delivery. Bringing these teams together will strengthen this further and drive capital efficiencies to unlock further value. The near-term growth projects at McPhillamys and the restart of Sugar Zone provide us with a pathway to continue growing and sustaining our strong production profile. Slide 15, please. We expect to be able to deliver a significant level of synergies from the transaction, which will be shared by both Vault and Regis shareholders. Operationally, we see opportunity to look at the way that Vault's owner mining business can be utilized across Regis assets. Given our increased scale, we expect that there will be an ability to realize procurement savings across the combined business as well as rationalization of some business costs. The transaction should also deliver at least $500 million in corporate tax benefit from the write-up of our combined asset base is a significant number, which as I said before, will be shared by both Vault and Regis shareholders. Finally, with increased scale and diversification should ultimately deliver a more attractive cost of capital going forward as we look at funding future growth initiatives to the extent that this is contemplated. Slide 16. Thanks. This deal is clearly transformational for both companies in terms of scale with a combined market cap of approximately $11 billion, the merged company becomes materially more relevant to the global gold investment universe. We expect that this increased scale materially improves our trading liquidity, supporting large and longer-term institutional participation. The combined company is relevant not only to domestic gold investors, but to a broader global investor audience and yield-focused investors aligned with our capital management policy. Slide 17. As scale, cash flow and market relevance grow, the combined company is positioned to be assessed alongside other senior global producers. The company's cash flow generation and balance sheet strength compare favorably with other global producers supporting that shift in our market positioning. The valuation metrics shown highlight the potential for a value reassessment as investors incorporate the enlarged scale and overall quality of the business. In addition, a broader investor base and deeper share liquidity support both more efficient -- support more efficient price discovery. Over time, as continued execution to plan is demonstrated, we think this can underpin a market re-rating. Slide 18 now, thanks. The combined company will be led by a balanced and experienced board and management team with strong sector credentials. The proposed Board structure reflects equal representation from both Regis and Vault, providing continuity, balance and a strong understanding of the combined portfolio. This balance ensures governance oversight that is grounded from an understanding of both organizations and deep operational and sector experience. Russell Clark will serve as Chair of the combined company with myself as MD and Chief Executive Officer. This structure provides clarity of leadership and accountability from day 1, while maintaining stability through the integration process. The combined Board and management team bring extensive experience across mining operations, project development, exploration, capital markets and corporate governance. This depth is particularly important given the scale and complexity of the enlarged asset base. With experienced leadership already in place, management is well positioned to focus on safe operations integration discipline, capital allocation and delivery against our strategic objectives. Slide 19. Ultimately, this transaction is about creating a company that is stronger, more diversified and better positioned to deliver sustainable returns across the gold cycle. At the heart of this transaction is a clear set of shared benefits for Regis and Vault shareholders. By combining the 2 businesses, we are creating a stronger company with greater scale, improved diversification, stronger cash generation and a balance sheet that supports long-term value creation.We see significant operational and financial synergies that will be delivered through this transaction, which will be shared by both Vault and Regis shareholders. I'm very excited in terms of how we're positioned to deliver our growth initiatives, both financially and operationally, while maintaining a disciplined and balanced approach to capital returns to shareholders. Importantly, the transaction structure here aligns shareholders through shared ownership in the combined entity, ensuring that both Regis and Vault shareholders participate directly in the upside from execution over time. We're confident that as the market recognizes the benefit of this transaction for both companies, we can capture the high valuation metrics seen by other senior gold producers. Slide 20. The transaction timetable is typical of a scheme of arrangement. At this stage, we expect the scheme booklet to be sent to Vault shareholders by early August, ahead of a scheme meeting where Vault shareholders will have the ability to vote on the transaction. Following that, and if approved by Vault shareholders, we expect the transaction to close in late August to early September. Slide 21 now, thanks. In closing, I'd like to thank you all for joining us for this exciting announcement today and reiterate that the Boards of both Regis and Vault unanimously endorsed this merger of equals. The combined business will have a market cap of approximately $11 billion with about $1.9 billion in cash and bullion at bank, supported by a substantial resource base, strong production profile and optionality around operations, growth and capital management. So thank you for listening, and I'll now throw it back to Paully and we'll open up for questions. Thanks.

[Operator Instructions] Your first question is from the line of Matthew Frydman of MST Financial.

Sure. Jim and Luke, firstly, can I ask reading through the fine print there, I see that you signed a confidentiality back in -- on the 3rd of February. So I mean you just probably had about 3 months of detailed due diligence before today's announcement. Can I ask both, Jim, both yourself and also Luke, what did you learn about the other assets over that time? What did you need to become comfortable with throughout that due diligence process to arrive at today's outcome, please?

All right, Matt. Well, look, I'll give our perspective first and then throw to Luke. But look, we already knew, I mean we all know each other in this game, right? We knew Vault. I've known Luke for many years and how he runs his business. So we knew the quality of the company and the assets that they've been assembling. We spent the due diligence time going in, I suppose, and looking at the detail, making sure that we understood or what we understood was actually the case. For example, had a close look at Sugar Zone to make sure that we're comfortable with that, which by the way, I think the guys have done a great job on getting that -- and progressing that along. That will be an excellent asset when it's running. So we knew the company. I mean, we understood what their assets were, but this gave us the opportunity in the detailed due diligence to get to understand more closely how the business runs, the deeper quality of the assets and just get comfortable with the fact that what we thought and what we believed was a good collection of assets and a good -- and a great collection of people was actually the case, which, of course, it was, and that's why we're progressing with this. Luke, I'll throw it to you if you would like to answer on your part.

Look, I think with -- yes, Jim and I are fossils. We've been around a while. So there's no question that we've known each other for some time, and there's an element of trust there. But ultimately, what you need to do is to ensure that your due diligence supports the data that's sitting in the data room. And the major issue for us, I think, was always confirming the reserve and the resource profiles of the company and the ability to be able to convert that going forward. The other thing is the operational behaviors on site that we wanted to see. They're very similar to ours. I think operationally, we're like-minded companies and concentrate on the key metrics of productivity and performance and safe productivity and performance. I don't think there were any elements that -- and I know Jim has done a significant job in pulling Regis back into a very profitable business and has made some fairly astute decisions with respect to Tropicana. So we needed to assess those assets and get comfort with those assets, which we have. It's very unusual for an MD to be doing site visits and tours, but both Jim and I did that, and we had an opportunity to both meet the people and to be able to assess the assets and confirm the delivery of the reserve and the resource. So there were no surprises, well-managed business and very complementary business.

Great. Maybe my follow-up, Jim, you talked about the $1.7 billion of combined free cash flow and obviously the tremendous net cash position I mean that sort of balance sheet position and cash generation proposition is certainly a little bit different to, I guess, the proposition to shareholders back when Silver Lake merged with Red 5 to form bulk in the first place, which I suppose to paraphrase is really about kind of unlocking a cash-generated business with the growth business. So can I -- I guess the question is can I ask about what capital allocation looks like post the merger given that context? I suppose at a high level, does this create a stronger base for this business to now pursue sort of more meaningful external or inorganic growth? Or is it more about derisking the returns to shareholders from the existing assets? And I'm thinking about things like does this strong position allow you to undertake projects that maybe you wouldn't have otherwise considered as individual companies like I'm throwing some hypotheticals, but maybe a larger mill expansion at King of the Hills or a bigger comeback at Duketon or something like that? Is it more about the internal optionality or unlocking more external optionality?

Yes. Good question. I guess the answer to that depends on the time frame that you look at because the part of the answer is yes, to almost all of that. The one caveat I would put on it is just because you're a larger business and have a stronger balance sheet and stronger cash flow, it doesn't mean that you invest in something that doesn't make sense. So scale doesn't necessarily mean something that's marginal or questionable suddenly becomes viable for a start. Good projects are always good projects, bad ones usually stay bad. But if you look at what our priorities are, the #1 -- first of all, the #1 priority is to get the integration sorted and make sure that we transition the businesses together, and we can continue to build on the success that both groups have been able to have over the years and build that capacity into the new business that's going forward. I think the capital -- our capital policy -- capital return policy would remain as is. Of course, that all gets -- will be reviewed, but it's a sensible thing. I mean we make a point of saying that the strong cash flows and the strong balance sheet allows us to be able to do both pursue growth while also being able to provide returns to shareholders. So I mean, your question was pretty ranging in terms of what does it do? It gives us strength to be able to do all of those activities. But the one thing that I would say is a strong balance sheet and good cash flow does not mean that we will go and chase things that don't make economic sense at the moment. What it does do is it gives us the capacity to do larger things that we might find attractive now and easier to undertake, that might also mean that we can do a couple of things at the same time. But a good balance sheet and lots of cash still doesn't make a bad project good. So the discipline that we've applied historically in both groups will continue to remain.

Your next question is from the line of Daniel Morgan of Barrenjoey.

Jim and Luke, just the tax benefits outlined, which is $500 million. Just for clarity, does this mean you've identified an estimated step-up asset value for Vault of $1.6 billion to $1.7 billion. And therefore, you would expect to pay $500 million less tax over the next decade?

Yes. Correct.

Okay. That's very clear. And I just wanted to expand this question for Luke. I just want to expand on the earlier question about the due diligence and process and just looking at the different assets. Can you just expand on your process looking at Regis and McPhillamys? I mean, obviously, it's unfortunate the government decisions and where we are on McPhillamys. But what process did you undertake to get comfort around McPhillamys being a viable project and the process from here to turn it into an approvable project?

Yes. Thanks, Dan. Look, McPhillamys is in the portfolio. It's a longer-dated asset. Our major review of McPhillamys was a simple one. I verify the resource and the reserve. I think that's pretty critical in any analysis. The complications of the Section 10 we understand. But there are other pathways to development of that project, which I think Jim has outlined previously, and there's significantly more work to do there. So that will take some period of time. Our critical focus, Dan, was really on the current assets, how they're operating, their reserve base, the conversion probability at both sites, and that included Duketon and Tropicana. And it started from geology, mining, metallurgy, all the way through to commercial and legal. So very thorough process because it's a fairly large transaction. But our key focus as well really on the operating mines. We did get comfort and a lot of comfort with the resource and the reserve at McPhillamys but we also understand the challenges that sit there, but we also understand the pathways for development. And I think patience is a key here. It will take some time to come on stream, but it has significant exposure to the gold price. And it's one of those deposits in Australia, one of the best deposits in Australia that's been undeveloped. So a significant amount of work on the current assets but a lot of comfort with McPhillamys as a project going forward. I hope that answers your question, Dan.

[Operator Instructions] And we do have a follow-up from Daniel Morgan at Barrenjoey.

I wanted to be respectful of the time. Could I get both of your perspectives when you're looking at the other side's portfolios, could you maybe opine just on something that you think is underappreciated about the other side's portfolio, an asset, an opportunity, something that maybe is not obvious to everyone?

Well, there's a few different things. But look, maybe the one that I like in particular, I like the future potential is, for a starter, Sugar Zone. I think the work that the guys have done there when they picked it up, the sensible act of parking it for a while to drill it out and reestablishing the infrastructure and the facilities, drill it to get to understand the ore body. I mean I agree with Luke, at the end of the day, you've got a fundamental key asset of the mining -- of any mining company, there's 2: does the -- have you got the material in the ground, you better make dam sure that it's there; and have you got the people to be able to get it out safely and efficiently. I like Sugar Zone. I think it's a great looking asset. And I think it sets as being something that's got the region that they've got there has got an enormous potential. And I think over the years, there's been many attempts to head into that part of the world. And I think that the way that Luke and the team have approached it is the first 1 that I've seen where it's really been clear on the risk -- clear on the strategy to manage the risk and arguably under promise and over deliver. And I think they've done a great job. And I think that's a particularly exciting area that is 1 point. I could talk on others, but I won't. I'll -- that's mine. Luke?

Dan, first, love your own assets. I think that's critical and love your people. So that's another. The most important thing, I think, from my perspective is conversion. I think that's by far the most. And there's a demonstrable trend within the Regis portfolio conversion. The next thing we look at very clearly is people. And if you look at the Regis people, you've got to have a look at their behaviors and their engagement. And that was critical on the site to us and getting that -- and look, there are a lot of people on those sites that I've known, so I felt welcomed on those sites. The most critical thing for us is the conversion of our resources to reserve and how the guys do their jobs. And I think it's as simple as that.

And you have a follow-up question from Matthew Frydman at MST Financial.

Sure. I guess it's the Dan and Matt show this morning in terms of the Q&A anyway. Can I ask -- I know obviously, VAE shareholders will get to vote on the scheme. I'm conscious of the fact that Regis shareholders won't -- isn't put to a vote in terms of Regis shareholders. Jim, I'm wondering if you've had a chance at all to engage with any of your shareholders on this transaction, whether you've received any feedback? And also whether you've got any comments in terms of the, I guess, the cross-shareholding between the two businesses and how you expect that might look post the merger?

Yes. Well, obviously, we haven't done anything leading into this, and it's a little bit early. We're only live by a couple of hours. So we've had a little bit of feedback from some and it's been positive to date. I mean in the lead up to this over the last year or so, there's always been various conversations from shareholders about where they'd like to see us. Ask 10 shareholders opinions and they can be quite varied depending on their personal intentions. But our focus is on making sure that we can create long-term value for our shareholders. And that's what we see this combination absolutely delivering into. And we think it's got the additive. It's got the great advantage that it's a combination of two businesses that will give both lots of shareholders long-term value, and that's what we like. We'll -- really, as part of this, as I said, we've had a little bit of feedback this morning as the day has barely got going and what we have received has been positive. But no doubt, we'll have different conversations and explain to people the value that we see.

And sorry, any sort of comments on the size of the cross-holding or how you expect that might play out post the merger? I think common shareholders between two?

Well, there are some common shareholders. I think one of the things that there's a lot of passives in there. But -- so there will be some consolidation in there, but I really don't have any specific comment to make about any that would contribute valuably to any conversation at this point in time as to whether we'd see any benefits or otherwise to what's out there and putting them together. Nothing to add.

Got it. All good. And then maybe just quickly, obviously, you're both pretty lean companies in terms of how you run head office and how you manage your assets. Clearly, the footprint is going to be expanded in the combined entity. Just wondering whether either of you have any thoughts on the best way to, I guess, maintain that sort of lean approach for the combined business going forward and obviously not to kind of preempt any sort of changes that you might look to make at the corporate or central level, but is conceptually the right size to manage this business from a technical and a central perspective, does that look like 1 plus 1 equals 2 to manage the combined portfolio? Or does it look a little bit different to that potentially?

Look, I'll comment on that in the first instance, and then throw it to Luke. But in this day and age, good people are the core of the company, and we've got 2 groups that have got some, get the word right, exceptional technical and operational capability. With the difficulty and the challenges that exist in the market now with just good quality -- availability of good quality people, it would be crazy to think that there would be any sense in doing anything with any kind of process that would mean that we lost that skill and that capability. So we see people on both sides that have clearly with Luke and his team, they've clearly generated an enormous amount of value pulling things together, and they are recognized, I think is -- and if they are, the demo should be, has been good operators and good technical people. And Regis, I think, has got the same sort of capability. And that's one of the great strengths of this. We're putting together 2 teams and creating, I think, what will be a bit of a powerhouse of technical and operating skills that I'm not sure will exist. And that will be one of the key levers, what are the assets of the company resources in the ground, what's the quality like? And who are the people and having the people and having the skill set to be able to deliver that. And it's such a good -- 2 good groups. It'd be crazy to do anything that meant that you'd be losing any of those skills. I'll throw it to you, Luke, if you got anything you want to comment?

Just, as I said, one of the key criteria for me is your people. And I think they're complementary. That was one of the major reasons why I did the DD site tools myself. I just wanted to see the behaviors and the quality of the people on the ground and corporately and are very complementary to the transaction. And good skill sets these days, particularly in this modern environment have become difficult to come by. So I support Jim and his comments there.

And your next question is from the line of Adam Baker from Macquarie.

Just one for you, Jim. Often when we see 2 large companies come together, there's often divestments down the track. Jim, in your view, is anything in the Vault portfolio or the Regis portfolio for that matter, which is now noncore in your view, just keen to your initial thoughts from this perspective.

No. We take a view that all of the assets are highly valuable and core to our business. So our view is that everything that we've got -- everything that both parties have got will be integrated into a new -- I mean that's the powerhouse of what we're generating. It's just the way that they run, the cash that they're generating, everything is core to that.

That's great. And secondly, as a follow-up, earlier you spoke to the large balance sheet, giving you opportunity to pursue larger or multiple opportunities at once. I guess, beyond the Sugar Zone and beyond McPhillamys, what other opportunities you're seeing across the broader portfolio, which you can pursue?

Well, as I said, the first thing that we're focusing on is getting the deal complete and ensuring that the integration happens as quickly and as efficiently as possible. After that, we will then start to -- well, we will continue to look. I mean every business is always looking at all the options out there, and it's not really -- prefer not to put the cart too far ahead of the horse at the moment. There's no doubt that that's where we'll be thinking. But right now, the focus is on the near term, get the deal done, get the integration completed.

And your next question is from the line of Ben Lyons of Jarden Securities.

Jim, Luke, congratulations on the deal. Maybe just another one on the capital allocation priorities and more specifically, the potential for capital management in the combined entity, noting that you should emerge with well over $2 billion of cash by the time the deal consummates. So just wondering, Jim, from your perspective, intuitively at this stage, what you'd consider to be an appropriate cash float for a business of this scale.

Yes. I think at this point in time, the best comment that I could give on any view on capital management would be referring people to the existing policy that we have. Apart from that, I mean, obviously, we don't -- as part of the -- once we complete the integration, we want to get on and continue to deliver more value to our shareholders and utilize the strength that we've been talking about. So we'll start to look at what -- and continue, I guess, to look at other opportunities that are there, but I really wouldn't, at this point, want to speculate any more than just pointing to what our current capital return policy is within Regis and saying that's probably the best guidance that I'm prepared to give at this stage.

Okay. Copy that. Maybe one for Luke, please. Luke, I'm interested in the timing of the transaction from the perspective of the Vault Board. And I guess on behalf of Vault shareholders, just to paraphrase really quickly, you've dealt with the punitive hedge book, you've built up balance sheet strength. King of the Hills is well past that inflection point for significant free cash generation. I'm just interested in the timing from a Vault perspective.

Well, sometimes you don't control timing, but this transaction, really, we're looking at long-term growth and the combination of the 2 companies. So this transaction gives us the opportunity for scale. It diversifies our asset class, which means intuitively, that reduces risk which is important in today's environment, particularly high inflationary environment. You mentioned about where we're at. We've done a lot of things in the last 2 years since the Red 5 transaction. And all of those things were marked out to be done during the due diligence period in any event. What this transaction allows us to do is to get on to the next leg growth in the short term. I would hate to be building a new plant at this particular point in time or planning a new plant at this particular point in time, primarily because of the high inflationary environment. Not only that is the timing is going to be delayed. So we're fortuitous to get those things done. But you've got to look at the future and the future really is about scale. It's about diversifying your asset class. It's about joining a complementary business that has some great assets, and it's also about free cash flow delivery now. So that's taken the strategy. That is the strategy that we've gone with. The Board has fully endorsed that strategy and is fully supportive of the transaction. Does that answer your question?

Yes. Yes. Yes, I'll probably take a bit of issue with the scale just for the sake of scale angle, but completely acknowledge the free cash generation. And somewhat begrudgingly do admit that larger gold companies do tend to get a market premium. But I guess I'd also sort of counter with just the rude health of your existing business at this point in time after the immense amount of hard work that the Vault Board and management team have put in. I'm sorry, I do have 1 final question, but if you'd like to respond to those comments at all, please go ahead.

No, I respect your position.

And the final question is, I haven't had a chance to go through all the deal documentation at this stage, but just if you can provide a comment on any break-fees that might be in play if a superior offer for Vault was to arise.

Yes, Ben, the standard break fee, 1% of the deal. That's about $50 million, I think.

And your next question is from the line of Levi Spry of UBS.

Congratulations. Ben got the time question. So maybe just to clarify, you didn't quantify any cost synergies of the deal, did you?

Well, the most -- I mean, we talked about opportunities that would exist with procurement and the like. But the main -- probably the single biggest one, Levi, is the tax uplift that we get, which is worth in excess of $500 million, which we think is pretty substantial.

And this concludes our Q&A session for today, and I'll turn the call back over to Jim for closing remarks.

All right. Thanks, Paully. Thanks, everybody, for joining the call. Clearly, a major transaction for both parties, putting us together. Significant cash flow, financial strength, operational capability, a diversified portfolio, clear organic growth projects, both at McPhillamys and Sugar Zone and indirect benefits of now a globally relevant group. This is a combination of two, I think, well-regarded gold companies to create another well-regarded gold company with the benefits of scale where we can leverage off each other. I'm just very excited and really looking forward to it. Thanks, everybody, for joining the call. Obviously, any follow-ups or any meetings that anybody would like to engage with us, please let us know. Thank you for joining the call. And thank you, Luke and the team at Vault for all the work that you guys have put in, and I say the same to both lots of advisers. It's been -- as they always are, it's a process, but it's great to get to this point. Thanks, everyone.

And this does conclude today's conference call. Thank you all for joining. You may now disconnect.