Yamana Gold Inc. (GFI) Earnings Call Transcript & Summary

Hi, good afternoon and good morning, ladies and gents. Welcome to Gold Fields presentation titled, A Combination for Long-term Value Creation, the acquisition of Yamana Gold. So this is an update to the market. Firstly, I draw your attention, as always, to the disclaimers, and you'll see that in the back of the presentation. Today on the presentation, it will be myself but also Lucho Rivera, who's the Executive Vice President of our Americas region; and also Dr. Matt Crawford, who's our Head of Exploration. And so we're going to talk in -- there's a section of the presentation where we're going to ask both Lucho and Matt to give us a bit more information and just to share with us some of the things that they've seen in the -- as they went through the due diligence. And they're also going to share some of the potential that they see in the combination of the assets for Yamana. Also joining us on the line is Peter Marrone, the Executive Chairman of Yamana Gold, who's going to share with us after I run through an executive summary. Peter is going to share some of his insights into what he sees in the combination of both Gold Fields and Yamana. So these next 3 slides are really going to be both an executive summary. But they're also going to be going to form the agenda, so helping us show what the various components of the presentation will look like. So on the left-hand side, first, we thought it would be useful to share with you what we see in the context of our strategy. So firstly, Gold Fields has consistently invested to grow the value and the quality of its portfolio. We've also had successful execution of our strategy, and that's seen shareholder returns that have rewarded shareholders. Thirdly, we have a track record of delivery in Gold Fields that has led us now to a position of strength despite the systemic challenges that have been faced by the broader gold industry. And then lastly, what we see in the context of our strategy that the Yamana acquisition represents the next phase of our strategy. And Gold Fields are investing in growing the value and the quality of our portfolio and then also proactively addressing industry-wide production and reserve replacement challenges, of which Gold Fields is not immune. So when we look at, well, then why this deal? We're going to focus through -- and this will form the agenda for the presentation. What we're going to do is I'm to talk to you why we see this as a winning combination, the fact that our portfolios are complementary and that they are greater than the sum of the parts. We also have strong conviction in our ability to deliver superior value from Yamana's assets in excess of the offer consideration. Secondly, there's a section that's going to talk to why we believe that we can unlock these world-class assets. So Gold Fields has this unique combination of both technical and financial capabilities to realize the full potential of Yamana's assets. And then lastly, we're going to share what this combined company could look like. So we'll have comparative scale, liquidity, diversification and operating metrics that are comparable to the peer -- to the major peers but with us being at a material value discount. There's enhanced scope for capital -- for disciplined capital allocation and portfolio optimization. And then lastly, we're going to talk through because we have confidence in our near-term cash flow generation that it supports prioritizing shareholder distributions that we can enhance our dividend policy today. I shared this sort of schematic with you slightly differently, but the theme is still the same in the first presentation when we announced this at the end of May. And what we were showing is that our offer made at the time of $6.7 billion, yes, was an implied premium to Yamana's market cap of the day. But it's not a premium to the value that we can see in the portfolio in a conservative management case. And I think as we go through the rest of the presentation, we're going to be able to demonstrate to you what the upside case looks like and what the upside value of this combined business looks like. So we believe that Gold Fields is uniquely placed to deliver that potential upside in the Yamana portfolio. So this is the third slide of the sort of executive summary. And it really talks to the rationale for this transaction is anchored in the long-term decision making to grow the value and the quality of our portfolio. The focus is around long-term value, and we acknowledge that there is short-term dilution. This transaction is an investment into longer-term replacement, growth and fundamental value, which are all essential to preserving our ability to maintain and grow shareholder distributions beyond the medium term. We believe that the value-creation opportunity with the Yamana assets is transformative for Gold Fields, and it is the key success factors of us being able to deliver that are the Gold Fields' core competencies, which I'll share a little bit more with you in the coming section. The near-term cash flow dilution is mitigated by new opportunities that we see in the business that are created by the transaction to generate enhanced operating cash flow. We believe that we have the core technical competencies and the financial capacity to maximize the full potential of Yamana's assets. We've spoken to you about cost synergies before of about $40 million a year. But the operational synergies that we're going to talk you through, through the course of this presentation, that will, of course, only be confirmed once we implement the transactions are expected to significantly exceed the very small cost synergies that so far we've identified. It's the combined strength of this enlarged portfolio. And then now and because we don't need to allocate cash grow further options for the company, that we believe that now we have the confidence to be able to announce an enhanced dividend policy. We're announcing today that we will increase the dividend payout policy, which was -- in the past, was 25% to 35%. Now we are increasing that to 30% to 45% of normalized earnings. And then we'll be targeting to pay dividends at the top end of the revised dividend policy. So 45% of normalized earnings for the 2023 financial year. And that, of course, follows the implementation of the proposed acquisition. And then lastly, we are today also putting forward a proposal that we will be intending to list Gold Fields also on the Toronto Stock Exchange, providing shareholders with greater flexibility. So the presentation that we're then going to see going forward sets -- to set out in further detail: firstly, the value creation opportunities that are afforded by this transaction and why Gold Fields is best placed to realize them; and then secondly, the compelling position of this enlarged Gold Fields Group, which is able to drive greater shareholder value creation. So that's really the executive summary of the presentation that's to come. But before we get into the detail, I'm going to hand over to Peter Marrone, as I introduce the Executive Chairman of Yamana, to give us some thoughts and insights into his view of the transaction. So Peter, over to you.

Chris, thank you very much. So let me begin by saying that you've talked about the combination of 2 industry leaders, creating a gold major with a strong platform for returns and growth. For those of you who are not familiar with Yamana, we produce over 1 million ounces of gold equivalent. We're underpinned by low-cost performance. We've guided for this year that we will be producing gold -- our gold equivalent ounces at an all-in sustaining cost of below $1,090 per ounce. We produced gold and silver. And the combination on a gold equivalency basis is just over 1 million ounces, with a growth trajectory that takes us to incrementally to 1,060,000 ounces and then 1,250,000 and ultimately to 1,500,000 ounces. The important part though is that this is low risk, and this is low capital. And that is part of the philosophy of the company, which is that we are delighted to have growth, but we don't want to have growth that sacrifices our ability to generate cash flow and free cash flow and pay dividends. We have a world-class asset portfolio that is -- has been reviewed in its entirety by Gold Fields. That includes Malartic, Jacobina, El Peñon, with an unrivaled development pipeline. We have a portfolio across the Americas. We call it mining-friendly jurisdictions. More importantly, these are rules-based jurisdictions, and this is critical and important. And interestingly, if we look at Gold Fields, while they are in different jurisdictions to ours, in many respects, there are rules-based jurisdictions that are mining-friendly jurisdictions also. We have a strong balance sheet and a track record of increasing shareholder returns. And we have leading health, safety, environmental and community relations credentials. For those who are not familiar with Gold Fields, as we reviewed the company and as part of our diligence, we looked at a company with over 2.3 million ounces of gold production per year, exceptional portfolio of assets across many different parts of the world. But as I mentioned, all the mining-friendly jurisdictions. And the company is set to ramp up Salares Norte and South Deep that allows for a robust increase in production and in cash flows. We look at it from the lens of what's the technical expertise. And it was our observation that there's a deep technical competency, a strong track record of successfully delivering growth projects in this company. They have, comparable to us, a strong balance sheet to internally finance their low-capital growth. And they're accelerating the cash flow generation for the reasons that I gave a few moments ago, which is mostly the result of Salares Norte and South Deep. And of course, its ESG, its health, safety, environment and community relations credentials are comparable to ours and similar to us, unrivaled. So let's look a little bit then on Slide 6 with the deal rationale that was -- that drove this -- the industrial logic of this deal. What did we see in looking at Gold Fields? We saw a comparable track record of long-term value creation and high-quality, low-risk assets, a high-quality, low-risk portfolio. We recognize that the market is rewarding scale, not only in terms of size but in terms of quality of assets. The market is rewarding free cash flow generation and increases in free cash flow and rewarding responsible growth. So the growth does not come at a significant cost in the form of capital, and that cuts into free cash flow and the ability of companies to pay returns -- cash returns to investors. We also looked at it and said, given the portfolio that Yamana has, we were punching above our weight class. And while we could continue to manage that portfolio on our own, we looked at it from the lens that this is a portfolio that is better suited in a larger company that can more effectively and competently deliver further value from that portfolio. I mentioned a few moments ago, getting to 1.5 million ounces of production. The growth trajectory of the company indeed is much more than that. That number goes to higher than 2.5 million ounces as a result of the assets that are in the portfolio. I'm not suggesting by any means that all of that would be developed or developed within a short-term time frame. But certainly, over the longer-term time frame, that's the growth trajectory of the portfolio that the company has. And so we looked at it from the lens of 1-million-ounce-per-year producer, the market capitalization that we had and concluded that a transformative transaction was the best path to realize the intrinsic value that is in Yamana. And interestingly then, Gold Fields was able to see that intrinsic value and recognize that, that intrinsic value was well in excess, not only of what was in market but also what was being offered as part of the transaction. This transaction offers quality and scale, Chris, as you mentioned. I would put it in the following way. We enter into an elite group of companies within the 4 largest precious metals producers in the world. But that's only the entry point. The entry isn't [ about ] elite club. But then how do we compare in the sense of reserves and resources and mine life, cash flow generation, conversion of cash flow and revenue to free cash flow and all the other measures that one looks at: growth, the one looks at when one is comparing one mining company to another? And the conclusion that we reached is that while we're in this elite club as a result of this transaction, we are a superlative in that elite club. We have a complementary portfolio that is driving the combination that is greater than, as you put it, the sum of the parts. It's a world-class asset base with substantial value-creation opportunities. We have the ability to realize the full potential of the assets in our portfolio through the combined technical and financial capabilities of the 2 companies. We're strongly positioned as compared to the gold majors on key metrics. And as you mentioned in the introduction, we are at a material value discount. If we had our market capitalization and Gold Field's market capitalization, we're still at a fraction of the market capitalization of the other 3 companies that are in that elite club and, interestingly, with better assets, with a greater ability to generate more value and, as I mentioned a few moments ago, longer mine life and a better ability to convert cash flow and revenue into free cash flow. So we're better for longer in that elite club. And we're delighted with the enhanced dividend policy. We've been a big believer in the return of cash to investors. Since the first declaration of a dividend in late 2006, we've paid more than $1.1 billion in dividends. Even for a company as comparatively small, the size that we are, we've paid a significant amount in the form of dividends. And since 2019, we've increased the dividend of full 500%. And so we're delighted with the approach the Gold Fields' stakes. It's a methodical approach. We're delighted with this enhanced dividend policy, and we think that this is -- should be significant to investors. If we move to Slide 7, we believe this is the best option to creating lasting value for Yamana. Both companies undertook an extensive review process. We have been in due diligence for the better part of the last 7 months. Each company had other options, and none were as compelling as this transaction. Let me put it bluntly, and this will be more fulsomely discussed in our management information circular. We had other options. We're aware that Gold Fields had other options. We were pursuing some of those other options, some under-the-counter confidentiality and some in the form of desktop and initial discussions. But we selected Gold Fields, and Gold Fields selected Yamana out of the many options under consideration. This represents the best value. I would like to editorialize for a moment. I've heard it said that there is low risk of a competing offer coming in. And in some respects, I can understand that because this combination creates something that is quite unique. It is stellar. And so from that perspective then, my conclusion is that this is the deal that should prevail, and this is the deal that shareholders should support. And in the context of shareholders, for all shareholders, this combination offers a world-class company that rivals and exceeds the peers on a number of metrics and, as I described it, this elite club of super majors. For Canadian shareholders, the combined company will offer a Toronto Stock Exchange listing and provide investors with exposure to an impressive and robust suite of assets in Canada that will be managed from Toronto and the Abitibi region. For South African shareholders, the combined company offers a unique opportunity to participate in a diversified top-tier company that becomes a strong South African and international gold mining champion. A further comment that I'd like to make. Chris, you've mentioned that your South African shareholders would like to meet with Yamana. I'm looking forward to that meeting. We are scheduling those meetings later this month. I am delighted that they're looking forward to meeting with us, and we are equally delighted to be meeting with them. We're confident that once they meet with me, once they meet with our team, once they get to know Yamana a little bit better, it will come as evident to them as it is to us, that this is a compelling transaction that should be approved by shareholders. And for our shareholders and understandably shareholders are interested in cash returns and particularly in these challenging times, certainly in our industry. The combined company offers an enhanced dividend and upgraded dividend policy that is overwhelmingly supported by this combination. It is better for longer that dividend is likely stronger for longer as a result of this combination. I will conclude this portion of the presentation by saying the following. We were impressed by the broad technical competency of Gold Fields, which we believe surpasses those of other alternatives. And with that in mind, I'll turn it back over to you, Chris, to go through some of the technical issues that you took on and reviewed as part of this transaction.

Peter, thanks very much for those insights. What I'm going to do now is run through these 4 different sections. The first section we're going to talk to is around the strategic context. And this is what we can see in the space of our strategy. First of all, I'm going to share with you that we have a track record of creating superior value through execution of our strategy. I'm going to be talking you through we're in a position of relative strength from which to address systemic challenges in our industry. And lastly, that we are now ready to deliver on the next phase of value creation. So as we think about, well, who is Gold Fields? And are we going to change who Gold Fields is? We have our core competencies in our business that I'm going to share -- on the next slide, just some examples with you, but we have core competencies around building mines. I mean we have built, commissioned and delivered mines. And we are now in the process of delivering Salares Norte, which will be delivered in the first -- at the end of the first quarter next year. We have bought unloved assets and drove operational performance and, therefore, have an ability around operational excellence and improvement. Thirdly, we have and expertise in our business around brownfields and greenfields exploration. And lastly, the whole of Gold Fields has been created by M&A. Every asset that we have in our company at the moment is as a result of acquisition by Gold Fields. So it is not abnormal. It's not strange for us to be encountering on this process about acquiring the Yamana assets. And at the same time, the DNA of how we run the business around capital discipline, around growing margins and extending the life is not about to change. And as a result of our core competencies and our DNA, we continue to drive sustainable shareholder value creation. This is just some examples of that in practice that I mentioned, our core competencies. Just for example, if we think about the Australian assets that we acquired, we were able to drive operational excellence and to turn what were previously unloved assets that were not getting capital now into the lowest all-in cost producer in Australia. We've been able to bring about the technical expertise in brownfields exploration that has seen significant generation of reserve and life into those Australian assets. And then just to pick up, say, another example. If you think about Salares, that was our own greenfields exploration that was able to find that asset. And as a result of that, we have developed that from greenfields exploration all the way now into being able to deliver a mine that will be in production in the first portion of next year. And then as you see on the right-hand side, as we have brought about that core competency with our DNA of focusing on disciplined capital allocation, returning cash and growing total shareholder return at the same time as growing our margins and growing the life, we can bring all of those competencies to the Yamana assets. Here's -- in the following 2 slides, just a little bit more examples of what that looks like. So when we talk about that we've got the expertise to extend asset lives through exploration, here is just some examples since 2020. If, for example, we look at just choosing 1 or 2, if we look at St Ives. We bought St Ives at 2.3 million ounces of reserve. Since then, we have mined 8.5 -- 8.4 million ounces, and we still have reserves higher than when we first started at St Ives. So we have discovered 8.5 million ounces at St Ives and with a reserve multiplier of 3.6x. And likewise, as you go through those assets, you can see the competence that we have, in particularly, in this case, in our orogenic ore bodies but also our other assets. And we think that Yamana presents a fantastic opportunity for Gold Fields for us to repeat that kind of success at some of the Yamana assets, for example, at Canadian Malartic, Jacobina and El Peñon. Likewise, I mentioned that we have the expertise to build mines. We bought into a tiny little underground asset at Cerro Corona, and we turned that into and built the Cerro Corona mine in Peru. We have, likewise, bought into the joint venture at Gruyere and have built that mine. If you see on the right-hand side some of the comments, we built that with a design capacity of 7.5 million tonnes per annum. We have a debottlenecking exercise as we're ramping up that asset that has now -- now got a throughput capacity of 9.2 million ounces with a plan to go to 10 million tonnes -- sorry, million tonnes per annum -- by 2024. So demonstrating again that we can build mines, and we can also improve them to get more out of those mines. And then lastly, as we've spoken, we are in the process of building the Salares Norte mine. And we can bring that experience to Wasamac and MARA and future assets that come with the Yamana portfolio. And that strategy has created considerable shareholder value. If you go down the left-hand side, you can see that if you just look at margin and cash flow over the last 5 years has increased by 44%. If you look at the asset life, just of the international asset portfolio, it's 10% higher than where it was in 5 years ago. But of course, we have mined 5 years of production out of those mines. And we have improved the balance sheet whilst we've been doing that. And whilst we've been investing in growth opportunities at Salares, we have improved the balance sheet by 58%. So if you look at the right-hand side, over the past 5 years, total shareholder return for Gold Fields has been 233%. So why we share this with you is that our strategy and the focus on investing in our portfolio of assets has created significant value for shareholders. And it's exactly that DNA that we will continue to drive value into the future. But it's put us in a strong position relative to challenges faced by the industry. So if you look on the top left-hand side chart, this is a Wood Mackenzie global gold production chart. It shows that the global gold production over the next few years will probably peak and then start to decline. If you look at -- this as an S&P graph below that, it is showing that exploration is yielding fewer results. And so although the exploration budgets have increased now in the industry, spending more than $5 billion a year, you can see that the discovered gold is becoming much, much lower than it was a decade ago. And it's with that challenge that the industry faces, we think that we are both well positioned. If you look at the top right-hand side chart, versus our peers. So this is a chart that compares the -- over the next 5 years, the industry growth versus each other. You can see Gold Fields is certainly better than the rest of the industry over the next few years. But on a pro forma basis that we're in a very good position. And also what we have been able to do is proactively address, not too dissimilar to what the global gold production is facing, a declining production profile in Gold Fields. And as I've said to you before, we don't have the internal assets to invest in the way that we have invested over the last number of years, and that's why the Yamana acquisition represents for us the next major step in delivering our strategy. And so at the end of last year, we put together the updated strategy for the group. It was acknowledging that we are growing still over the next few years, with the delivery of South Deep and the Salares. And the focus now is to say, well, what is the value and the quality of our portfolio going forward. The industry, as I've mentioned to you, is facing systemic reserve replacement challenges. And as I mentioned to you, we don't have the portfolio that is required now to maintain that value going forward. But what we do see as part of our strategy is to repeat what this company has done for over 100 years, is to invest in the future. And so it's that particular area of growing the value and quality of our portfolio of assets that the Yamana transaction talks to. We think that we are ahead of the curve before you really see a rising competition and cost of M&A transaction in the gold industry going forward. So as we put together and we think about -- so then why this deal? So we have spoken to you in the executive summary saying that we think this is a winning combination of assets. We think this is the most compelling option for the next phase of growth. It's a natural extension of our existing strategy and expertise, and they're also complementary portfolios that drive a combination which is greater than the sum of the parts. And that's what we're going to tell you in this section. So firstly, when we looked at what is it that we should be doing for our growth going forward and our replacement and what we should be focusing on, it wasn't just, well, why don't we become this size company or that size company. We were very clear about our screening criteria, and that's what we were looking for. So if we look down the left-hand side, we can see -- you can see that we didn't have a particular growth number in there at all. It was all around making sure that whatever we do had to improve our asset quality, so of life of mine and all-in sustaining cost. We had to grow our cash flows. We had to at least be equal to or improve our jurisdictional quality. We had to, of course, strengthen our pipeline. But also, we wanted assets that -- where we had a competitive advantage. We have talked to our core strengths and our core competencies. And so we said to people we don't want to look at things that we don't really have expertise on. And then lastly, whatever we did couldn't take us backwards on our ESG journey. And then if you look at, well, then which companies and which options actually delivered on that criteria. We kept coming back to the quality and the strategic fit and the strategic ticks of those boxes with the Yamana assets. If we just go through a few of those to highlight some of those. For example, when we are talking about asset quality, I mean we get into one of the best mining jurisdictions in the world, with 1 of the top 10 gold assets globally by getting into Canadian Malartic. Jacobina is one of the lowest-cost gold mines in the Americas. If you look at growing cash flows, we know that our cash flows start declining after a number of years. By putting these 2 companies together, we generate robust cash flows. And the initiatives that we're talking about and the execution of all of these flagship opportunities continue to grow the cash flows. And certainly, we have the ability to continue to grow cash flows over an extended period of time. We looked at jurisdictional quality and the assets that come with Yamana, as Peter mentioned. We get assets in Canada, Chile, Brazil, all of those complementing our South American developing footprint. And so I won't go through all of those, but you can see how Yamana assets ticked all those boxes around our screening criteria. So what we were looking for, for our strategy going forward. So this has got proper industrial logic. So it just makes sense when you look at the way these assets are combined. Also, as Peter mentioned, that we have done this over a period of 7, 8 months. And so we understand that the market won't yet have a level of understanding that we have after spending so much time in going to these assets. But that's also why through the engagement that we've had with you but also through today, giving the next level of detail and then the subsequent roadshows that we're going to do is to help you see what we can see in the Yamana assets. So if we look at the opportunities to apply our core competencies, if we look down the left-hand side, so the opportunities that we have around our underground mining expertise, our ability to develop projects, the growth that we have within our operating regions, asset optimization, so improving the mining business and the processing and our ESG commitments. If you look down the Gold Fields line, you can see where those sort of key competencies and the opportunities have been able to be applied at the Gold Fields assets. But then likewise, we put the Yamana assets next to it, and you can see those exact core competencies and those opportunities as we've applied them to Gold Fields, equally can apply to Yamana. So just demonstrating how much opportunity we have to bring that expertise and what we're used to mining in Gold Fields, and I'm going to share some of that examples with you to be able to bring that competency to the Yamana assets. So it's this commonality between the portfolios that enables us to add significant value to the Yamana portfolio. So you'll have -- we've spoken about the potential that there is in both Yamana. We've spoken about what some of the opportunities they are in Gold Fields. But if you have a look at our -- on the left-hand side on the top chart, it shows the growth of our guidance between the 2 companies. But over the next 3 years, we will be at 3.8 million ounces. And on the next slide, I'll just show the sort of what comes down and what comes up, but we think very easily, we will be able to maintain around about a 4-million-ounce equivalent steady-state production with, of course, swings and roundabouts a little bit around that. But around about a 4-million-ounce steady-state production is, in our view, very easily maintained. But what you see on the bottom chart is what we avoid and this is what's missed, I think, in some of the discussions around only the cost synergies. What we do by introducing the Yamana assets into our business is avoid a very material step-up in all-in costs that comes as our production profile starts declining. And so you can see the combination of these assets, yes, there's a little bit of an improvement initially. But largely, our portfolios are quite similar. But it's when ours starts kicking up that this has got huge benefit. And so $100 an ounce reduction in all-in sustaining cost is a very material benefit that comes from putting these 2 portfolios together. If we look at the next chart on the left-hand side, says pretty much the same thing, but it shows where some of that opportunity comes from. So again, you can see the growth to 2024. The combined ounce is about 3.8 million ounces. You can see over the next number of years as the Gold Fields production declines by about 0.7 million ounces. And you can see both the combination of Wasamac, advanced projects on the existing operations, some of the optionality around strategic assets, where that growth and replacement could come from in the next number of years. And that's what you see on the right-hand side. It shows, as Peter spoke about, both the 10-year outlook but then also the 1.5 million ounce plan, and Peter even spoke about optionality above that. You can see just where some of those options come from. And of course, they are options. So that means that you can sort of play around with those to maintain a steady production profile, and you can invest you want in a number of these different assets to be able to both replace and grow production over a number of years. Also, you can see that this option was strategically more attractive to us than many other options. I shared with you the screening profile, the investment criteria that we looked at, which included asset quality, cash flow generation, jurisdictional quality and the like. And that's not -- you don't see that if you're only looking at a purchase price of luckily one metric. But nevertheless, if you look at this chart, it's just one metric that shows total acquisition cost. And you can see Yamana assets are right at the bottom end of that profile. But of course, what you don't see on the left-hand side is that some of those assets are both subscale or come from geographies and jurisdictions that we don't want to be in. And that you miss from just looking at these individual metrics. But nevertheless, what we're trying to demonstrate -- and there's any number of these, what we're trying to demonstrate to you is this was -- this is, with Yamana, a much lower cost and, in the way we've structured this deal, a much better outcome for Gold Fields to be able to get into high-quality assets. And then there was a number of other things that came with this. For example, we have complementary cultures around the way we think about technology, leveraging regional platforms and getting scale in a region and then sharing best practices. And we're going to share in the next section quite a bit more around this. Likewise, what we were able to do is we have a lot of similarities around the underlying geology. So when we look at the orogenics in Australia, for example, that red -- the red Australia, you can see we have exactly the same type of geology in the orogenics in Canada. Likewise, when we look at the paleoplacer deposits in Brazil, they're very similar to the paleoplacer deposits in both South Africa and Tarkwa, where we both got an underground and a surface operation. And likewise, in the epithermals that we find in Chile and Peru, we have very similar. And here, we've got Yamana that ahead of us in the learning curve in Chile, and as we go into the mining of Salares and eventually consider going underground at Salares, all of those options, we have similar geology. So we're now guys walked into the due diligence in the Yamana assets, they said, we can see this geology. We know it because we -- it exists in Gold Fields. And then also, we have that come with these assets entry into Canada. We get into one of the best jurisdictions -- mining jurisdictions in the world, with one of the largest and lowest-cost gold mines in Canada, in an area we've tried to get into for more than a decade now, into the Abitibi mining area of Quebec in Canada. So as we've tried to get into those areas and found it extremely difficult from the outside in, we get into those assets and get into Canada as part of this acquisition with the Yamana assets. So we think this is one of the real benefits that come from this portfolio. And likewise, it enables us to form an operating hub in South America. We've seen the benefit that comes from a regional hub in Australia and the benefits on operational efficiencies and other value creation opportunities. And we are going to be able to be developing that in both in Chile and Argentina and then also with Peru and Brazil. So creating a new operating hub, creating substance that enables us to have greater efficiencies in South America. And with that, that is not so easy to see from just the valuation and the sum of the parts that comes with the Yamana acquisition. What you get to this package of assets comes an extensive exploration pipeline. And it's only when you don't have those optionalities, you realize when you get this kind of optionality that pretty much comes at a very low cost that it adds just this incredible optionality for the longer term in this portfolio. So they all come together. The assets that we buy plus the benefits of the geology plus the benefits of getting into Canada, scaling up South America and this extensive portfolio of exploration assets all come with this, and that's the reason why we say that we think this is a winning combination. So in the next section, we're going to talk about, well, what can we do with those assets? And how do we see any further value that we can create? And that's why this section is talking about unlocking world-class assets. I'm going to also ask Lucho, our Head of our South American operations and also Matt Crawford to be able to pretty much to run most of this presentation and just tell you some of the things that they see. But we're going to talk to you about the substantial value opportunity that we see within the Yamana assets. We're going to talk to you about our operating capabilities that can realize substantially more potential in the combined portfolio. We'll talk you through some of the projects and some of the options that we've got like MARA that can be unlocked through our financial and technical capability. And we're going to talk to you about the operational synergies that are far in excess of the initially identified cost synergies. So I'm going to share -- we -- or the 3 of us who are going to share with you just some -- we're going to talk you through some of our flagship assets, both in -- so we won't run through all the assets. We're going to do the top 3 in Yamana, and we're also going to go through some of the top assets in Gold Fields. And the reason for that is to give you comfort that Gold Fields assets are in a good shape and that the reason for doing this deal are for all the reasons I've spoken about and have got nothing to do with trying to hide some problem within Gold Fields. So we're going to share just again with you some of what Gold Fields looks like, but I think it's also for the benefit of some of the Yamana shareholders that perhaps don't know Gold Fields as well either. So I'm going to start with Canadian Malartic. This is one of -- as I mentioned, one of the largest gold mines in a Tier 1 jurisdiction with significant growth potential. If we look at the guidance at the bottom, this is only on the 50% basis because this is a 50% with Agnico Eagle. And you can see that this is producing 320,000 to 340,000 ounces, our 50%, at just over $1,000 an ounce. With that, I'm going to hand over to you, Matt, and perhaps you can tell us what you can see in this amazing asset.

No problem. Thanks, Chris. Yes. I'm an exploration geologist with Gold Fields, and I've been with the company for close to 20 years. And before we dive in a bit deeper, I think it's important to say that the -- our snapshot view of the core assets in Yamana have -- has really been brought about by a larger, highly technically capable due diligence team. And we have the fortunate opportunity to be able to review projects around the world. And importantly, not all projects pass our filters. Our key objective is to find value projects for Gold Fields and to upgrade the portfolio. But the core assets in Yamana actually have passed our filters, and that's why we're sitting here today. In terms of -- at a macro level, from the due diligence team, we saw very well-run mines of the core assets that we saw. And importantly, that's underpinned by not only strong management teams, but also it's underpinned by quality resource bases. And the next thing we look for is growth potential, and all these operations have significant growth potential of those core resource basis. And then the last point is that, again, all the core assets have a very significant land holding, which really allows us to tap into that long-term future potential of those assets. In terms of what we see at Malartic, it's truly a world-class asset. And what comes with world-class assets is options. It's had 10 million ounces of past production -- or 10 million-plus ounces of past production. And we see a resource base of near 15 million ounces. That optionality in terms of world-class systems gives you access to multiple ore surfaces, which really translates to multiple mining fronts but also multiple growth opportunities going forward. What Gold Fields brings to the table, we're not going to be operating the mine. But in terms of these orogenic style ore bodies, we are well and truly in our comfort zone. Agnico gain a partner basically that have a very deep understanding of orogenic ore bodies like the ones in Australia. And secondly, we also -- we are underground operators, and that's demonstrated by our mines in South Deep, St Ives and Agnew. Next slide, please, Chris. So just to give you a snapshot of the scale and the upside opportunity that we see at Malartic. This is a long section view through the project. In the top left, there's the current open pit with about 5 million ounces of production in the last decade. And then the 15-million-ounce resource potential that I mentioned is the next era for this mine when it transitions to underground. And that's the tap into this 15-plus-million-ounce resource potential. Now importantly, that only near 50% of that resource base actually forms the 2021 underground mine plan. And so it's very -- in terms of value, we see a great opportunity for resource conversion through their aggressive drill programs in the near and medium term. But again, one of the big value drivers is that they will have an underutilized mill beyond 2028. And so again, like our Australian operations, the key objective for exploration is try and fill that mill. And given the broad spread of targets that Malartic offers, we see substantial potential to actually utilize that mill in the medium to long term. And ultimately, if you can actually discover significant resources down plunge, like the early indications of the East Gouldie extensions are showing, there could be potential for a second shaft in the future, which, again, really drives increased throughput and then can go through the mill. Ultimately, we view this project as very similar to our orogenic portfolio. We're very comfortable with it, and we can see that Agnico are very good operators. So there's a lot of positives to this project. Next one, Chris. If we then just step back out and look at a plan view of Canadian Malartic, the joint venture company has actually done an excellent job of consolidating landholding around this project. And one particular example is the Camflo acquisition in 2021, which is around historic mine of past production of 1.6 million ounces. Yamana were pretty upbeat about this project. And again, it's projects like this that have the potential to come into the mine life and utilize that mill in the medium term. Again, we see that as a significant value add for Gold Fields and the [ greater around ] partnership. In terms of Canada, we've always -- as Chris has said, we've tried to get in there. This is an excellent entry point into Canada. But also given our brownfields and development experience, we can't forget our future project at Wasamac up the road. We feel that we have the skills expertise, and we are a willing partner to help take these assets forward, but also, the Wasamac project is certainly on our radar. Thanks, Chris.

Thanks. Matt. Okay. So looking at Jacobina. So this is 100% owned project in Brazil. This is also a top-tier, long-life underground mine that's more than doubled its production over the last number of years. We -- if we look at the chart on the bottom, we are in the process -- or Yamana is in the process of delivering Phase 2 of that project. It will get to 230,000 ounces over the next 4 years, certainly by the look of things that will probably get there a lot earlier. If we look at on the -- just under the key value opportunities, we see Phase 3 up to 270,000 ounces Phase 4 up to 350,000, absolutely possible. And I'm going to hand over to Lucho. Perhaps -- sorry, before I do that, I think I'll be remiss not to point out the low all-in cost or the all-in sustaining cost. So this is one of the lowest-cost producers in South America, so now producing at about 200,000 ounces at under $800 an ounce. So one of the lowest-cost gold mines in the Americas with production upside. I'm going to hand over to Lucho, who as the Head of the South American operations, we also asked to join the due diligence team that Matt was talking about. So why don't I hand over to you, Lucho?

Thanks, Chris. As mentioned, my name is Lucho Rivera. I'm the Executive VP for Gold Fields in Americas. Before joining Gold Fields, I worked for MMG. I was in charge of running Las Bambas project and later Las Bambas operation. Before MMG, I worked for Xstrata, later Glencore Xstrata. I was in charge of running the Antapaccay project and later [ Las Antapaccay ] operation. And before that, I was in charge of running Alumbrera operations, which is part of the MARA project. In regards to Jacobina, we visited the site 2 months ago. We were highly impressed by many things. First, the high and great reputation that the local mining company, Jacobina Mineração e Comércio, has in Brazil. They're being recognized as one of the best place to work in the mining category in Brazil during the last 3 years. We visited the site. Then we went underground, and then we could see that the mining fronts are in really good condition, were really well serviced, very well maintained. There are good water controls, good temperature controls, no dust, et cetera. We also had a chance to visit the process plant, very good housekeeping in the plant. I got to confess that before the due -- this visit, we were a bit skeptical about the expansions. But we could confirm during this visit that the plant had achieved in the last May, more -- have milled more than 8,400 tonnes per day, which is part of the most important milestones they have as part of the Phase 4 -- Phase 2 completion. We could see as well that there is enough room in the plant to execute the Phase 3. And there is enough room in the site to execute Phase 4. We also had a chance to visit the TSF, and we were pleasantly impressed by the highest standards that the local team, the local management applies in the dams -- in the tailings dam. The dam -- the tailings dam is controlled by a local control room, very modern. But what is most important, they engage all downstream community in a unique manner. They keep informing the downstream communities on the activities they execute in the TSF. That plus the very proactive local employment programs they have, the local team has, they have secured more than 87% of the work is coming from the local communities. And more than 90% of the workers came from the state of Bahia. So with that in hand, they are in good conditions to secure a future social license they may need for future expansions. But finally, what really impressed me is that unique geological endowment they have in the Jacobina reach, something comparable as mentioned by Chris with our Tarkwa assets. And for sure, with that in hand, I think we can go beyond Phase 4 is what I think. And for sure, with right product approach will be conditions to surpass that 15,000 tonnes that are now proposed as part of the Phase 4. And I hand this to Matt to talk about our geological endowment.

Yes. Thanks, Lucho. We, as a due diligence team, went to site, and I must admit we had some question marks over. We've seen in the marketing these multi-phase expansion plans for Jacobina. And we actually left site really quite upbeat, completely opposite. That is really what we've seen is a very strong production growth over 8 years. And that really stems from quite bold targets set by the corporate team. And what is -- what that is testament to the site management, and the technical teams actually took that, and they've delivered year-on-year. So that was really impressive. That core production base that they've set up at the mine, there is expansion opportunities in multiple directions. This is -- these are shallow mines, geotechnically favorable. And then longer term, we actually see our pipeline well beyond their current life of mine. In terms of these images -- just give you a snapshot of the regional and the mine to the full asset view. In terms of geology, we are right at home that the paleoplacers [ that store ] our ore bodies are very similar to our Tarkwa and South Deep. You could take a geologist, for example, from South Deep or Tarkwa, put them into Jacobina, and they would feel well in Chile in their comfort zone and hit the ground running. In terms of growth across the asset, we see really on 3 fronts. In the mining center down to the bottom left, 2.5 million ounces of past production. And I think about 5 -- plus 5 million ounces of resource plus reserve in that area with a very good spread of targets, a very healthy pipeline of exploration targets. Then further north, there's an emerging opportunity at Jacobina Norte, which is comparable in strike length in terms of anomalism near surface. But also, they've done proof-of-concept drilling, and that's confirmed that these mineral-origin [ ray ] systems occur at depth. So we actually see a potential for our future mining fronts up in Jacobina Norte. And that's certainly compelling targets that we would certainly want to invest in further exploration. The beauty of a bigger company, it means that we're going to be able to expand the exploration budgets a little but also importantly, bring our brownfields expertise and toolkits. When it comes to sort of geophysical work and geochemistry, we apply those skills and experiences to the Yamana package to really fast track those longer-term exploration opportunities coming forward. Next slide, please. Just in terms of their greater consolidated land holding. The map doesn't do it full justice. That is actually 150 kilometers of strike potential of prospective rocks that are similar to the Jacobina belt, okay? Again, with a bigger company, we have an opportunity to actually really screen the regional potential of that belt and, again, build that longer-term portfolio or pipeline for the Jacobina asset. Next one, please, Chris. So again, just to draw your eyes to the left, these are the expansion players that Yamana have been -- indicated to the market. In terms of the bulk exploration portfolio that we've reviewed, we see a very healthy pipeline of targets that would certainly support these phases of growth in the medium to long term. I draw your eyes to the images to the right. That is the near mine itself, again, 2.5 million ounces of past production. These are long section views cut parallel to the ore body. As you can see, a whole bunch of circles, which are the current exploration targets. These have all got some levels of drilling to indicate that the risks do continue along strike. In terms of scale, the red opportunities are immediately in around major production centers already. And these are very close to resource potential that can be brought into resources in -- with significant investment in infill drilling. I've got to remind you that these ore bodies are very drill intensive, okay? And it's no different to a lot of our brownfields operations. Yamana have never starved any of their mines in this regard, and that is exactly the same approach that we commit to across all our operations. And the results have come through, as you can see, in strong production growth through time. Again, the same approach across our Australian and assets in the Gold Fields portfolio. In terms of where Gold Fields can add value, it's important to always try to understand where the high grade is in these ore bodies. And then we can actually try and fast track that and optimize it through the production schedule. We would invest heavily in trying to really understand that better and really build that understanding and take it further afield into the regional properties as well. Overall, we see improved optimization. But overall, the mine is very well run in very good hands. Thanks very much, Chris.

Thanks, Matt. Okay. And then so on to El Peñon, so the third of the big 3 assets. And perhaps I'll make a comment about when I mentioned the big 3. The top 3 assets within Yamana, when we did the feasibility, and we understand what is the value that we can see and what we're paying for, 85% of the value comes from these top 3 assets. So again, it provides a very low level of risk with huge upside potential just on the top 3 assets. In addition to that comes all of the other potential that we spoke about. But importantly to know that 85% of that value came from these top 3 assets. So El Peñon also not quite of the same level as the previous 2 that you've seen but still a cornerstone underground mine, strong cash flow generation, producing around about 230,000 ounces. It has been as high as 300,000 ounces. And again, Matt will talk around just some of the opportunities that we see. But again, you can see at a low all-in cost -- all-in sustaining cost under $900 an ounce. And with that, Matt, I'll hand over to you.

Actually, [ we'll have Lucho first ].

Okay. Thanks.

Thanks, Chris. So yes, as you know, El Peñon is located in the second region of Northern Chile and Antofagasta and Salares Norte. Our project is located in the third region, Atacama. They are really close one to each other, and that proximity give us the chances to capture rapidly synergies in terms of cost reduction, overhead expenses, commercial deals, massive supply chain, et cetera. If we add to this concept the fact that we have a mine, Minera Florida, located in Central Chile, plus Cerro Moro and the MARA project and future MARA operation, which is located not far from Salares Norte across the border and the Jacobina asset plus the low-cost operation in Peru, the Cerro Corona, we will have one of the most powerful technical, operational and commercial hub in the continent. With that in hand, we'll be in really good conditions to share first knowledge, the great underground capabilities in El Peñon, their great skills to manage dry stacking, our great experience in discovering, developing and delivering projects we have in Salares and in Corona, too. On top of that, we will add all our social experience in Peru -- in Northern Peru that can be perfectly added to the great work that the MARA team is doing in Northern Argentina. So with that in hand, again, we -- what we foresee here is very solid hub that can deliver value in the short term. Thanks, Chris.

Thanks, Lucho. Matt?

Yes. Thanks, Lucho. Before I talk about El Peñon in general, I just want to step out and talk about Chile. But as Gold Fields is shifting to a new phase of growth, we have developed a 3-tiered -- 3-stream strategy to growing our regions. And the first stream is growing brownfields exploration and leveraging our capital investment in our mills and development projects. And this is an example of the Salares Norte, where we've significantly ramped up exploration on the back of production starting. The stream 2 is actually expanding our exploration footprint within the regions where we operate. And that's very much looking for stand-alone new discoveries. That is also taking our skills and experience from our mine sites and applying it elsewhere in emerging targets to really bolster our regions. The stream 3 is our active screening throughout the 3 of the regions where we operate, looking for near-term production development projects that can really significantly grow our regions quite quickly. And the -- in terms of the stream 3, El Peñon is a great example of an acquisition combination. If you actually take the Yamana assets in Chile and you dovetail it into our portfolio, it really does fit with this multi-stream strategy that we've adopted. Stream 2 in terms of exploration footprint, Yamana have a significant land holding around El Peñon but much further afield. They also have advanced resource projects like Agua de la Falda not too far from Salares Norte that are in there sort of earlier pipeline. Just moving into El Peñon itself. The due diligence team, we went there, and I suppose we expected to see a mature mine that was getting depleted in opportunities. But it was really quite the opposite. We went there. We saw a very strong production operation over a sort of a 30-year history. A lot of employees that have actually -- were there from day 1. But importantly, as you can see on the graph on the right, a strong resource reserve increase over the last 5 years. And with these epithermal systems, there's usually a top and a bottom to them, and then you get depleted through time, and you have to go laterally. What the team have demonstrated, that is a lot of the El Peñon veins actually continue further into more less prospective host rocks at depth, which is one exploration front that we would certainly want to continue to invest in. And then further afield, they've actually then stepped off laterally to the south and confirmed that the El Peñon veins do continue to the south, and I'll talk about that in the future. But overall, we see a rich variety of targets, a very strong commitment to exploration and drilling that can -- that really sustains that ongoing resource base. And so we see this mine could be sustained well beyond the current life of mine. In terms of Gold Fields value-add, again, a bigger company, a much more breadth of expertise across the company. We see some modernization approaches across the full mining value chain that we could -- to bring in and help improve the project. But overall, these are incremental changes and evolutionary steps. We wouldn't be coming in and changing anything overnight. Next one, please, Chris. So just again about that sort of medium-term pipeline and future for El Peñon. They have a very significant land holding. But in the mine itself, 5.5 million ounces of gold produced and 137 million ounces of silver. And that's located in that yellow circle on the block diagram to your left. So it's been a very phenomenal, impressive ore body from that perspective. The Yamana team acknowledged that the current production base is really exploiting a bunch of smaller subsidiary veins compared to the more higher-tonnage veins that the initial mine was built on. And ultimately, longer term, it would be a key exploration objective, try and find another primary vein to really derisk future production and give a nice anchor production source to take this mine forward. And Yamana have certainly invested in the right way to at least start that process. We would pick this up from a Gold Fields point of view, and again, apply a lot more aggressive approach, further afield, to really try and fast track those kind of discoveries and see where there is a more significant vein system to the south. And that's pretty much the step 1 would be to take our skills and experience and our key specialists in the geophysics front to come and really open up the exploration search base in the Yamana district. Thanks very much, Chris.

Thanks, Matt. Okay. So with that, we just, today, have wanted to focus on the top 3 Yamana assets and what we could see and what we thought we could contribute. But I guess both for Gold Fields shareholders who may be concerned that there's something problematic with our existing assets or for non-Gold Fields shareholders who don't really know the mine, I'll just run through a couple of slides, a bit quicker than we have done with the Yamana assets. But we're just going to run through a couple of slides, give you a sense of just some of the flagship operations within Gold Fields. Firstly is the Tarkwa mine in Ghana, of which we own 90%. We mine over 500,000 ounces a year, of which our stake is around about 460,000 ounces at an all-in sustaining cost of $1,200. So the mine is in great shape. It has -- as it stands now with its reserve of 14-year life. And we have potential to continue driving that way into the future. One of the things that our team is looking at now is what are the next value opportunities at Tarkwa. And under Joshua's leadership, the team in Ghana are looking at, well, what do we need to do to have a step change in unit costs. For example, do we need different size and style of equipment. Those are the kind of things that we are looking now for the next phase of value. But an incredible Tier 1 mine in a jurisdiction that we've been able to mine for many, many years. Next one. So in Australia, in general, we don't have a summary slide for Australia. But Australia will continue to deliver over 1 million ounces from those 4 mines for the next 10 years. That's how to think about Australia. Currently, our Australian assets have the lowest all-in cost in Australia. I'm just going to talk to 2 of the assets. St. Ives in Australia, which we own 100% of. We currently are mining 380,000 ounces a year. We have previously mined more from the open pit. So we're now going more to the underground options, the Invincible Complex, which was discovered by our team in Australia, that complex is -- continues to grow. It's an incredible ore body. And as we maintain that kind of level of production going underground, we are able to do that because of the great work and the fines that we've been able to find in the underground ore bodies. And Invincible is just one example of the great work that our team have done there. So as it stands now, a 10-year life of mine with options because of these orogenic ore bodies to continue drilling, continue extending life of mine. Next in Australia is Granny Smith. Likewise, these are underground operations, delivering about 270,000 ounces at an all-in cost -- all-in sustaining cost of $1,160 an ounce. As it stands now, a 10-year life of mine, again, like with St. Ives and like with Granny Smith and Agnew. Because of the orogenic nature, we will continue to see life of mine extensions from the brownfields exploration that we have consistently applied. This is a 6 gram a tonne ore body. And with -- as we go deeper, we're looking at now a potential option from the Wallaby and Granny Smith open pit complex to be able to supplement both underground operation with a bit of open pit. So there's some of those options for asset optimization or improvements in the way that we do business at Granny Smith. So another great operation, one of the flagship operations in the group. As I said, I haven't brought a slide for the Gruyere joint venture, but another fantastic asset that we'll continue to see low-cost production for well over the next decade. And then South Deep in South Africa, previously an asset that wasn't always performing as well as it has been over the last few years. But under the leadership of Martin Preece and Benford and Grant and the team at South Deep, over the last number of years, they've managed to turn that around. We're starting to deliver what we say we're going to deliver. Last year, we had a 24% increase in production. We have guidance over the next 4 years of increasing production again by another 20% to 30%. We're very well on track to deliver that. I mean this is a bulk mechanized mine underground at depth that is continuing to increase its production. So with over 80 years of life, mechanized underground operations with continued increases over the next number of years, we look to certainly beat inflation costs and now start reducing the all-in cost at South Deep. And then lastly, I think this is one of the stars in the flagships of the Gold Fields portfolio that's under development. Salares Norte in Chile, 100% owned by Gold Fields, is a high-grade epithermal gold-silver open pit deposit. We will deliver that project in the early part of next year. We will see -- it's got an 11.5-year mine life as it currently stands. The initial 7 years will average 450,000 ounces of gold equivalents at an all-in sustaining cost of about $550 an ounce. So you can just see the massive potential, the massive value that comes out of the Salares Norte project. Next year, about 200,000 ounces, and then we peak for the following 2 years at about 600,000 ounces equivalent for the year. And then we drop down to about that 450,000 ounces. So a fantastic body with a gold grade of 5 grams a tonne and gold equivalents running at 450,000 ounces a year. And then MARA, which is one of the options that come with Yamana with a package of Yamana assets. But this is the Yamana -- or the MARA project is a large-scale copper-gold porphyry deposit, very similar to what we mine at Cerro Corona in Peru. So very similar to what we know. And this potential, globally significant. So this is one of the large undeveloped copper-gold porphyries with established infrastructure, very importantly. It is in Argentina, and we need to deal with the country risk. But we thought it would be useful to talk -- to hear Lucho's view because as Lucho said earlier, he's to be the General Manager at Alumbrera, which was the mine that mined this pits in front of you. So I'll hand over to Lucho, who can talk you through what we see in MARA and what it could potentially be in our hands at the appropriate time. So Lucho, over to you.

Thanks, Chris. As mentioned by Chris, MARA is one of the few large copper-gold porphyry in the world. As mentioned before, it's very similar to Cerro Corona in all terms, from the geological point of view, from the open pit approach as well, from the dewatering activities, from the double benching techniques we use -- we may use in both pits, from a metallurgical approach, and as I mentioned, from the social challenges we have in both sides, et cetera. So yes, I did work there. As you see in that photo, I was involved in constructing that pit. But the good news is that in Goldfields, we have people, we have engineers that worked for MARA before Gold Fields. Our project director in Salares, Mr. Max Combes, worked for Alumbrera. Our construction manager, Fabian D´Urso as well in Salares worked for Alumbrera. Actually, our country manager in Chile, Mr. Daniel Diez, worked for Yamana. He was in charge of the interaction in MARA. Plus, when we visited the site 2 months ago, we found that the MARA team is highly skilled and really well experienced in the project, this being involved in MARA for the last 15 years and longer. So with those capabilities, with those skills, I think we are in perfect conditions to deliver the project. For sure, as mentioned by Chris, we need to discuss this with the partners, Glencore, Newmont, and secure the right process, the right stage gates to decide the work ahead with the project. Please, in the next slide -- let me move to the next slide.

Just before you move on, what I should have mentioned, Lucho, upfront is if you look at the 2 little bar graphs at the bottom left, it just gives you a size -- a sense of what the scale of this project could be. I mean on gold equivalents, this could be, for our 56%, 750,000 ounces a year. Or if you look at it on the right-hand side on copper equivalents, 300 million pounds of copper equivalent annually at an all-in cost of $1.40 per pound. So I should have mentioned -- so this is truly a substantial project, not without its challenges. Lucho will talk to that.

Yes. Okay. Yes, 2 months ago, we visited the site. We were in the market. We could see that the mine pit is really in good shape, very well maintained and serviced. The pit walls are geotechnically monitored on a daily basis, in real time. We visited as well the process plant. And the process plant is powered. There's electricity there. And the mills, ball mills, SAG mills, and the flotation circuits are ready to go. We also visited the TSF. As well, it's very well maintained, very well serviced. We could see water on the tails beaches for dust control purposes, et cetera. So with that in hand, we can say that for any project, the most difficult components are the plant and the TSF. And I got to say, on the pipeline, the concentrate pipeline to the port, the filter plant and the port, all those components are ready in MARA. The only thing in terms of project approach we have to do now is construct the mine pit. For sure, we need to be -- complete the conveyor belt and connect that to the plant. But with our experience we have in Cerro Corona and in our Australian operations, we are in perfect conditions to develop that open pit and run that whole process. Again, we have to say again that we need to secure the right steps, the water permits, the social licenses, the environmental permits and what is most important, the fiscal stability agreement with the right forums, with the regional government, with the national government in Argentina. Thanks, Chris.

Thanks, Lucho. So I think the way to close out MARA is the deal has not been done for MARA. And we can see the value of what we have paid without any of the development assets that will come at the appropriate time. I think what we wanted to do in this whole section is talk to you about what we see and what we as Gold Fields can deliver. And one of those things is MARA, which I think, to be fair, in Yamana, probably just not big enough as a company to be able to deliver that. But certainly, with Gold Fields, with both our technical and financial capabilities, we could build a mine like this at the appropriate time. That could be a proper world-class Tier 1 asset in our company in the future at the appropriate time, assuming that we can deal with the country risk issues and making sure that we get the right assurances and permits, et cetera, from the government. So we mentioned upfront the potential for cost synergies when we did the previous presentation of about $40 million a year. And we said -- but we know and we can see, and that's what the section of the presentation is meant to do, is to demonstrate to you the substantial upside that we can see based on our track record of delivering from our core competencies and the way our DNA, the way we run our business in these other operations. So these synergies or these operational synergies, like we have delivered in Australia, when we took over those mines, we were able to add another at least 1% recovery from all of the plants by investing correctly and investing in some of the bells and whistles that make that happen. Now we can do the same on the Yamana assets. Both Lucho and Matt have talked about what they can see and what some of that potential could look like. So it's always difficult to quantify that at this stage, but we know that these synergies that we've spent the last probably half an hour talking to you about are going to far exceed the initial cost synergies that we've identified. And then on the next page I'm going to share, there's probably another third layer of additional cost benefit that could potentially come from portfolio management optionality. So one of the things in a combined company of this size is it offers management the portfolio optionality ability that's not available normally in the stand-alone group. If you look at the chart on the left-hand side at the top, that's the same profile we showed you before. And we said that we could easily maintain, let's say, around 4 million ounces. But another way to look at this is we could maintain 3.5 million to 4 million ounces and look at portfolio rationalization. This is just one of -- an example that we ran that if you took out -- if you took out -- just here, I think this was 2 assets, one in Gold Fields and one in the Yamana assets, higher-cost, lower-life assets. We could reduce our all-in sustaining cost. We could enable greater capital recycling that go to higher return and more strategic assets, and of course, that allows us to continue just paying more back to shareholders. This example showed $20 an ounce, I mean, $20 an ounce at 3.5 million ounces. I mean that's $70 million a year of savings that could come as a result of portfolio rationalization, particularly if these assets are -- our assets are not generating meaningful cash flow. So I've demonstrated to you over this period, we started by showing that the Yamana assets enable us to avoid quite a substantial increase in unit costs in the second half of this decade. So we save about $100 an ounce there. Yes, there will be some cost saving as a result of overhead costs and supply chain. Then there's an additional layer of the operational synergies, and there's a potential for portfolio management. When you add all that together, you can start seeing what we see in these combined assets. While it's quite difficult to quantify all of that at this point in time, all of those options are available to the combined company. And so I showed schematically in the beginning what some of that potential could look like. If we start on the left-hand side, so we haven't put numbers here, but these are all the options that we can see, pull together sort of on one slide. So the boxes that are in blue, that's what we see in the near-term catalysts. And then the boxes in gold that are -- that are colored in boxes, that's what we can already quantify. And then the boxes that are dotted are options that we can see but not yet quantify. I think what you can see from this schematic is just showing all through both the Gold Fields and the Yamana assets, the massive potential that exists in this portfolio of assets. So this is not just about trying to be bigger. This is certainly not just about only focusing on, well, we've got to replace mines. You can see from this approach is that we have a vision of creating substantial additional value for the future that come around as a result of all these different options that you can see. And many of these options are actually low capital intensity. So things that you can do, as both Lucho and Matt was saying, on the existing mines, we can see these options. South Deep is going to continue to deliver. Salares will continue to deliver. Jacobina can absolutely be grown through Phase 3 and 4 that are not big capital numbers. The synergies are going to be delivered. Canadian Malartic, as we convert the resource to reserves, you're going to see a massive increase in value coming from that operation and the like. So the point I want to leave you with is that this combination creates a platform for further growth and value creation with both near, medium and long-term catalysts. So then finally, and this is the last section, and it won't be too much longer, and we'll wrap up. But this is what the combined company could look like. So we're going to show you that this positions us favorably versus the major peers. We have a strong balance sheet and free cash flow generation. We've enhanced our dividend policy and that the value that we create is greater than the sum of the parts. So if we look at the slide, it shows that the balance sheet of this company is in a very strong position. We have maintained a net debt-to-EBITDA position at 0.4x. So seldom do you get to acquire a big company like Yamana when you don't have major debt issues that come with that, and you force to sell assets to be able to manage the debt. Here, you can see that on a pro forma basis, we're at 0.4x. We have significant liquidity in the combined facilities of Yamana and Gold Fields of $3.8 billion, and both Yamana and Gold Fields are investment grade. So we continue to focus on reducing our debt, and we still have commitments to keep our maximum leverage at about 1x. So none of that, that we've, in the past talked to you, has changed in the way we think about management of debt and the balance sheet. So balance sheet is in a great shape. And the fact that we haven't needed to put a lot of cash into this deal to get this deal done actually means that the company is very well positioned to be able to continue paying returns to shareholders and still judicious investment in value-accretive options. And we've spoken about the dividend, and you will have seen in our announcement today that we are making 2 announcements, which we think will improve the value of the transaction to shareholders. So we're not changing the structure of the deal but are improving. Because of our comfort in the cash generation ability of the company, we've increased our dividend policy payout -- our dividend payout policy to between 30% and 45% of normalized earnings. And to try and help with some of the short-term dilution, we have, in 2023, said that we will pay out a 45% of normalized earnings. And so you can see it reflects our desire to return additional cash to shareholders. Our increased confidence in cash flow and the fact that we're not using cash to go and find new growth options has enabled us to have a higher dividend policy. Of course, in this period for 2022, just to be very clear, our interim dividend, which we're going to announce in the next while because we can't change the terms of our agreement, is subject to this 25% to 35% payout policy. And then the second point that we're announcing today -- okay. So sorry, there's load shedding in South Africa. So the second point that we're going to make is that we are going to be announcing our intention to list on the TSX, on the Toronto Stock Exchange, and we think that, that will give us -- our shareholders additional optionality and way to list -- and way to participate in Gold Fields shares. Sorry, we're just a technical issue. If you could just bear with us. Back and running. Hopefully, you can all hear us. Okay. So if we move on to the next slide. Well, I'm the operator, I suppose. Okay. So if we look at -- I mean both -- Peter mentioned it, that Yamana have, over a number of years, focused on increasing their returns to shareholders. Likewise, Gold Fields has done the same. So both companies are thinking very similarly about increasing returns to shareholders. Our dividend yield increases with a 45% payout ratio. And as I've mentioned, we are announcing an enhanced dividend policy range and increasing our payout for 2023 at the top end of the policy. If you look at the bottom chart, this has been actually, if you look over 5 years, actually a good time to do this deal. If you look at the exchange ratio, so you'll recall the structure of the deal is once we agreed on the relative value, we agreed to lock in the exchange ratio of 0.6 Gold Fields share for every Yamana share, taking into account that over time the share prices will fluctuate. If you look at over the past 5 years, the first 3 years of that 5 years, actually, Yamana was trading above 0.6 compared to Gold Fields. And as that started declining, actually, it then became a good time for Gold Fields to be engaging with Yamana. And of course, with the premium, we go back to 0.6x, that's actually the average over the last 5 years. So I think the point that we're trying to make is you're never going to get it right 100%. And of course, you don't do the deal over a weekend. You do a deal over a period of time. But as we've done this deal over a period of time, in our view, this actually is a good time for this deal to be done. And the 0.6x ratio that we've agreed is actually the average over the last 5 years. So in terms of the last 5 years, that's exactly the number that we have agreed with Yamana for this transaction. If we look at the global peers, we believe that we are strongly positioned versus the gold majors on all of these metrics. So if you look at whether it's absolute production numbers over the next number of years, if you look at reserve life using the Wood Mackenzie numbers on the pro forma basis, we have a 20-year life of mine. On a free cash flow yield on a pro forma basis, we have better cash flow yields than the top 3 gold producers. If you look at the production growth over the next 3 years, we are better than the top 3. And if you look at all-in sustaining costs, the bars at the bottom, we're certainly amongst the top producers. And then if you look at the chart on the bottom, and Peter Marrone mentioned this a bit earlier, saying that with massive potential, upside potential on those shares. So if you look at those metrics and how we compare to the gold majors and the potential for rerating of this company, we think that there is massive potential for the future in this combined business. And then if we look on the next slide, we have now commenced planning for integration. That's very early stage. So Martin Preece, our EVP that's running South Deep, is now going to be running this project and certainly going to be -- now we commence the engagement ourselves in Yamana, and we will start planning for the combined company integration. So we're starting to think about that. It's on the plan with enough time so that we can all hit the ground running once the deal commences in -- at the end of October. And so how do we put all that together? I realize that this has been a long presentation, but it was important for us to take you to this next level of detail to help you see some of what we could see. So if we summarize all that and think about what we can see in the context of our strategy, that Gold Fields does have a track record of long-term value creation through the execution of the strategy at the time, we're in a position of relative strength now as Gold Fields to address some of the systemic challenges that the gold sector faces and which we are not immune to. And then Yamana cements our strong positioning, and it represents a hugely value-accretive next phase for Gold Fields. And when we asked why the deal, why Yamana is -- our views, firstly, this is a winning combination of assets that are complementary to our own, driving a combination that's greater than the sum of the parts. We have a strong conviction in our core competencies to deliver superior value from the Yamana assets way in excess of the offer consideration. We believe in our potential, our own DNA and our core competencies to unlock significant additional value in those assets. And then lastly, as we think about, well, what does this combined company looks like, you can see we're very well positioned versus the gold majors on the key metrics with a significant value discount offering huge upside potential for both sets of shareholders. And then we have enhanced the dividend policy to pay at the top end of the range for 2023 and intend listing on the Toronto Stock Exchange. All of that focused on quality growth, financial discipline and shareholder returns. So with that, ladies and gents, thanks very much for your time. I realize it was a long presentation, but both -- but our team and also Peter remain open to any questions that you may have. Thanks.

Chris, we'll start with questions from the conference call, please.

The first question comes from Adrian Hammond of SBG Securities.

I have a couple of questions, I guess, and quite important ones, I think. I've listened to your presentation, and you've made your argument very clear, and I think we all appreciate where you're coming from in terms of longevity and the asset portfolio and what it offers. But clearly, the market seems to think differently with Yamana currently trading at a 14% discount to the offer. Well, how do you think the market is not aligned here? What is your response to this? I have a few more after this.

Okay. Thanks, Adrian. Look, I mean, I think, first of all, we anticipated that when we announced the deal, given the premium offer and the fact that this wasn't going to be an immediately obvious deal to shareholders that, that was likely to have an impact on the share price. And I guess we weren't surprised. It was a greater reduction than we had anticipated. But the fact is we had anticipated a reduction because of the premium and over time expected that to rerate. And then we acknowledge that this is going to take time for us to help our shareholders see what we can see, and this is all part of that process. It hasn't helped that over this last month that we've seen a massive reduction in pretty much all commodities in the commodity markets, and the gold sector itself was not spared. But if you have a look at our performance versus the gold sector, Adrian, you can see we have recovered some of that. And so this -- in Gold Fields, you saw the reduction of about 23% over time. We've now had a -- I think it's a 17% reduction in the overall gold index. And therefore -- so versus the index, we have come back quite nicely. So we do think that we're starting to see shareholders get this. We certainly haven't had the same level of reduction over the last month. And I think we're starting to come back, both Gold Fields and Yamana. So I think it's a combination of what I've said to both the fact this is not an immediately obvious transaction, and some of the Goldfield shareholders don't really understand the gold -- the Yamana assets and vice versa, and the fact that we've paid a premium will take time to recover. But I think what we're describing both to everyone on the call today and what we will be going around again to see all of our global shareholders is to help them see the value that we see. This is a tremendously value-accretive opportunity that will take some time for shareholders to see. And just given the upside opportunity, we think that shareholders, as they get to understand this more deeply, that share price will -- and certainly the combined share price will recover.

Chris, maybe if I can jump into some specifics. And I appreciate the detail, yes, you've provided us, and challenges are faced trying to incorporate Yamana into the modeling processes to have a longer view on the CapEx outlook. You've given us ASIC costs up to 2030 on Slide 19, but what -- are you able to furnish us with nonsustaining CapEx outlook for the group, particularly around Malartic underground expansion and Jacobina Phase 2, 3, 4? And then secondly, I'm just a bit curious on why Malartic has no declared underground reserves. And so how should we -- how confident is the team on how economic these answers can be and potential risks such as rock mechanics?

Peter, should I hand that second part of that question over to you about the conversion of reserve -- of resource to reserve at Malartic? Because I know you've got a lot of insights into that.

So not unique to this particular circumstance. In developing an underground mine in Canada, particularly if there's gap, it is not unique to start the development plan while one continues to do the conversion of resources to proven and probable reserves. This is an ore -- these are ore bodies that are homogeneous. They're porphyry-type rock, but there's continuity. We tested it by drilling where the model anticipates that there should be mineralization and almost at a 100% level we hit mineralization as the model predicted. So on that basis, the conclusion was that we will have a very, very high probability of the conversion of resources to reserves. Interestingly, we go through a process in our company. In this particular case, there are 3 different -- let's call them, 3 companies. Malartic is managed not by 1 of the 2 companies, but it is managed independently with a 50-50 true joint venture created between the 2 companies. Interestingly, at the end of last year, 2 of the 3 qualified persons were prepared to declare reserves. And as you know, there's a judgment that goes into the declaration of reserves based on the drilling that was done. The conclusion that was reached was as to a little bit more tightening of the drill spacing in order to get to that point where all 3 are comfortable that we're declaring proven and probable. And interestingly, now that we're more than 50% into the year, in all of the cases where we've done that infill drilling and tightening the drill spacing, it's proved to be very successful. So to give you the short answer, we expect that all of the proven -- all of the minable ounces that are in the mine plan at 7.2 million ounces will come into proven and probable reserves between this year and next year. I would not be surprised, based on what I have been seeing internally, if a large portion of that, certainly the majority of it, would come into proven and probable reserves this year alone. We're already at the point of being able to demonstrate that it has proven and probable reserves. We'll provide an update on our exploration efforts and some of the indicators that point to that with our second quarter results within a few weeks. But for now, I hope you take some comfort that what we're seeing internally is what 2 of the 3 qualified persons were seeing at the end of last year, which is that all of the 7.2 million ounces converts to proven and probable and a very, very large portion of that converts a proven and probable this year and almost all of it, if not all of it, converts to proven and probable between this year and next year.

And then, Adrian, I think we can take offline just the conversation around how do we help with some of your modeling on the all-in -- all the sustaining capital. So we can get back to you on that and try and help with some of that modeling. And we can certainly engage with Yamana to help with understanding that as well.

One last one just on jurisdiction and particularly Chile, which is -- seems to be putting a lot of sort of headwinds against some companies regarding expansion plans there from the regulator -- environmental regulator. Can you just give us an update on the sanctions brought against Salares regarding the chinchillas and more recently issue with the foxes?

Yes. So there's nothing new. I mean we've got Lucho on the line as well. So Lucho can certainly talk to that. But look, at the moment, we are still engaging with the environmental authority. We are very much engaged with them. And as recently as like a week or 2 ago, we were engaged with them around what the next steps are. It is winter in Chile at the moment. So one way or another, there wasn't going to be any major relocation of chinchilla now. And remember, we only have to relocate -- we have to be in a position to mine at that area in 2025. So this is not immediately an issue for us, and we have got time to resolve this with the environmental authorities. I think it even could be a bit more difficult going forward, but we are not overly concerned that -- what we're seeing in the discussions with the environmental authorities that we won't be able to, in time, move the chinchilla, the few that are in that rocky outcrop where we need to mine in 2025. So nothing much has changed. And yes, I think there's fairly tough conversations happening in Chile. But overall, we think that we will be able to find a way forward through that with the environmental authority. Do you want to add?

Yes, just to mention our country manager, Daniel, Mr. Daniel Diez, he met with several authorities last week to keep them informed about our diverse initiatives we have in terms of protection biodiversity in Salares, not only in terms of foxes but as well the chinchilla, of course, but as well in terms of the local vegetation, vicuna, manaca, et cetera. So we have a very broad and sound strategy for protecting the biodiversity, not only chinchilla and foxes. At this point in time, we are very proactive and discussing and informing authorities.

The next question comes from Jason Fairclough of Bank of America.

Yes. Appreciate the presentation today. Look, we've been talking with clients on the deal. And I guess just some feedback for you is that people see the deal is fairly dilutive to Gold Fields if you don't include value from MARA. And I guess you're suggesting that you don't need value from MARA for the deal to work, if I understand you correctly, Chris. But I was wondering, could you give us a little bit more color on MARA? I mean is this -- if we were to talk about a path to development, is this first metal that's 5 years away? Or is it 10? And then if we think about Argentina as a mining destination, it's actually been quite challenging for many years now. And again, is it realistic to think that we'd see capital flowing in? And lastly, you do have partners in the project. So what do the partners think about ultimately a new vehicle driving here? And are the partners supportive of the development of MARA?

Jason, thanks very much. Perhaps I'll make a couple of comments about how we have seen MARA. And then, Peter, feel free if you want to add anything on top of that. So we have been very clear. When we did the due diligence, we had a very small component of the value, very similar to what the market average was in the sum of the parts ascribed to MARA. So the market sees a very low component associated with MARA. Peter can talk about what the value potentially in cash could look like for their stake. But the fact is, Jason, just to be absolutely clear, this deal does not have to be done for MARA. If you were to monetize that component, we would be -- we would still see substantially more value in what we are paying, and it doesn't need MARA to justify this deal. We think that there is value in MARA. But at the same time, it's an option for us, like we have a number of other options, and that in our hands, we've demonstrated that both the risk to actually building it is a lot lower than potentially people think, the engineering risk. Because the plant is there. The tailings dam is there, as Lucho said. The port is in place. The pipeline, all those sort of things are in place. And generally in a large development project, that's where the risk would be. So engineering-wise, we can build this. We're a big enough company that financially, we could build this. You're absolutely right to point out that, yes, there's risk around Argentina. And we would absolutely have to -- we have the comfort and the assurances and the appropriate licenses to guarantee that we -- if we put money in, we could get money out. So it is an option for us that at some point in time, we could develop. I think if it was -- let's say, everything was equal playing field on the political front and on the country risk, this will be built between that 5- and 10-year period. But it doesn't have to be and what we're not committing to. I think, again, just to be absolutely clear, the deal doesn't have to be done because of MARA. It is a fantastic opportunity, and it is in a mining jurisdiction of Argentina that you can operate in. That is a good mining jurisdiction. So yes, we would have to get the assurances, and very similar to what we did in Chile, we made sure that we had the stability agreements. We had the access to water. We had all the things that we needed to have secured before we push the button to continue. So Jason, I think it is an option. We're absolutely technically capable of delivering this and financially capable as a combined company. We haven't yet spoken to the joint venture partners because we're still in the process of securing the deal. But there will come a time where we talk to our combined partners, and both Newmont and Glencore, our partners, we'd be more than happy to work with. And what that may look like in the future will be subject to us having conversations going forward. But yes, we're not overly stressed about MARA. It is a fantastic option. It's a great optionality for the future. We have to have the right assurances. And at the right time, we can develop this. But the deal is not dependent on Mara going ahead. Peter, I don't know if you want to add anything to that. I mean clearly, you've got a lot of experience about MARA.

Yes. So Jason, we've not met before, and I look forward to an opportunity at some point to meeting. But there's a lot to unpackage in the question that you have asked, starting with the accretion/dilution analysis. If one includes MARA or does not include MARA, assume MARA at the value that is ascribed in market, that's the consensus average of about $400 million. If you assume that and no more than that, although this asset is worth substantially more than that, this transaction is accretive, and this is part of the analysis that our Board of Directors had to go through, is accretive to the net asset value of Gold Fields, full stop. It is highly accretive to that net asset value and becomes even more accretive. If one applies a value from MARA, or the 56.25%, it is more than what's in consensus. And I think it's very legitimate to say that it should be more than that. We've said from the very beginning that this transaction is accretive to Yamana on short-term cash flow. Chris mentioned that in his presentation. It is accretive to Gold Fields on net asset value with or without a higher value from MARA. And it's very accretive to Gold Fields on longer-term cash flow as a result of the growth projects that we have inside the portfolio. And so it's a bit of a you win some, we win some. That is normal as part of any transaction. I would go further, and I would say when we're looking at net asset values, it's right to take a look at MARA, but one has to look at all the other assets in the portfolio as well. In the consensus estimate, roughly 50% of Canadian Malartic is carried at $1.7 billion. That seems unbelievably low to us. That's an asset, that's a mine that is within the top 10 in the world. And indeed, I would go further. I would say that this will become a mine that is within the top 5 in the world when the dust has settled. The Gold Fields team made reference to Camflo, which is a near to surface, likely open pittable ore body that would be mined. And that ore will go through the plant, the potential for a second shaft. Presently, we're contemplating a mine plan that has between 500,000 and 600,000 ounces of production per year from the underground up to 2039, 2040. That mine life will likely be significantly extended. Remember, only 7.2 million ounces is in the current inventory of mineable out of a platform of 15.5 million ounces with that 15.5 million having increased a full 1.5 million ounces last year alone. So it's a large platform, likely going to get bigger, and the likely production platform is well in excess of that 500,000 to 600,000 ounces per year on a 100% basis and likely getting closer to 1 million ounces per year. It will be -- it is a formidable mine and will become an even more formidable mine. And we can certainly make a very compelling case that the net asset value for that asset should be well in excess of that $1.7 billion for the 50% that is ascribed to it in consensus. Coming back to MARA, I'm not sure how to answer the question of when will it be developed. I can answer the question from Yamana's point of view that it would be more challenging for us to develop it because of the size and scale of company that we are. It becomes more interesting for a company the size and scale of the new Gold Fields to develop it because of the size and scale that it becomes. And so it becomes a more interesting prospect for its development. But I'm not sure that I would get to that point. The point that I'd get to is what's the value that can be ascribed based on the optionality offered by this asset. As an example, if Yamana were to sell its 56%, we would get a certain price. You are aware of the way these things work. Those who might be interested in buying our 56% will gauge our ability to develop it when they're offering a price. Because Gold Fields is a larger company, we'd be in a position to be able to see that they can develop it. And it would become realistic that it could develop it. The result of that is that if Gold Fields choose to sell it, it would probably garner a substantially higher price than we would be able to get. We tested this last year. And we received offers that were close to, just a little above, that number that is in consensus. I strongly implore you to consider what that looks like if Gold Fields comes to the conclusion, once this transaction is completed, that it prefers to sell its 56%. I think that, that number would be a multiple of what was on offer to our company. And why? Going back to first principles. Because Gold Fields can legitimately say we can develop it. We've got the competency to be able to do it, the balance sheet to be able to do it. And the size and scale of project is not overwhelming to a company that has a production platform of 4 million ounces versus a platform of 1 million ounces. So I would say that, that optionality is important, as Chris has mentioned in the presentation. The credibility factor increases dramatically for that asset as a result of this transaction. And one more point that I'll make on MARA. We went through considerable efforts several years ago that took us the better part of 2 years to agree with local authorities, provincial governments, national governments and the 2 partners to integrate the Alumbrera assets with the Agua Rica project to create MARA. The result of all of that is that it's a brownfield project. And so the risk to capital and the risk to development is significantly less. Our 115,000 tonne per day plant is a big plant. And in a part of the world where there's more labor inefficiency than other -- inefficiency than other places, it's understandable that one would want to think long and hard about developing that size and scale a plant. The open pit is an open pit. The conveyor system is a conventional conveyor system. It is the plant that is the issue. By creating this integration, we've actually significantly derisked the project and made the project far more capable for development should a larger company choose to develop that.

The next question comes from Jared Hoover of RMB Morgan Stanley.

Yes. I think the presentation was quite comprehensive and laid out a lot of optionality from the 3 major assets within the Yamana that contribute about 85% of the transaction value. But I think one of the things that's missing for me or maybe rather that what I'm grappling with is really the discussion around the risks to really achieving this realized potential -- or the risk to realizing the potential in Yamana. And I guess on that front, I guess I have 3 questions or three-pronged rather. The first is, Chris, if you wouldn't mind maybe just discussing some of the key assumptions. You don't have to go through all of them, but some of the key ones to achieve your base case valuation for Yamana. I think in one of the first slides in your presentation, it looked like your base case valuation was larger than the $6.7 billion implied transaction value. And aligned to that, what are the risks that you see to actually achieving that base case valuation? And almost a very similar question for your upside case as well. The second part of my question is I know you did give us an ASIC profile right around about 2030. But if maybe you could discuss some of the incremental CapEx and exploration that you would need to unconstrain some of Yamana's underground mines and really drive that resource to reserve conversion. Because I guess the way I look at it, I mean, on paper, it's a 5- to 10-year reserve life. Yamana have demonstrated a history of reserve conversion. And I guess the mine plan has talked about 15 years. But to really achieve that, you need to unconstrain all of the underground mines and drive that reserve conversion. And my third point is just on reserve pricing. It does look like Yamana declared their reserves at about $1,250. Gold Fields declared theirs at about $1,300. So once you had to integrate Yamana into Gold Fields, what does that do to Yamana's reserves? And have you taken that into consideration when you talk about the $100 ASIC reduction in the combined entities profile out to 2030? I'll leave it there for now and maybe follow up with 1 or 2 more.

Okay. I mean, thanks, Jared. Look, I think that was the intention of today's presentation, to demonstrate that actually we see very low level of risk in the purchase price and that we don't need -- we had the discussion already around MARA. We don't need the optionality of the projects to be able to make the reserve life. And secondly, what we wanted to do by bringing Matt and Lucho into the discussion today. I mean we couldn't bring the whole due diligence team into the conversation, but it was to give you a sense that actually what they saw was certainly operations that were very well run. Options for growth on all of those mines were very low capital intensity growth. So by saying to you that when we see 85% of the value coming from just the top 3 mines, of course, there's still value that comes from the 2 other operational mines and there's still value that comes from the options because we didn't -- in our base case, Jared, we didn't value any of the projects that were not already approved. So for example, Jacobina Phase 3 will be part of the upside. Now you heard Matt talk about that and say can we do Jacobina Phase 3. And Lucho spoke about the plant's got capacity. This is very, very simple to continue developing and get the next phases of expansion. So back to the risks and the key assumptions, we use the long-term gold price for the modeling, and that's what we use. We continue, as you correctly say, to use $1,300 for resource and $1,500 for reserve. That's not that dissimilar. We haven't valued in the option if we convert to $1,300 all around, all that will happen is we'll get slightly more reserve and resource. So that hasn't been valued in because that will be around the edges. So I think the way I would sort of summarize that, Jared, is that based on the offer price that we could see at a long-term gold price, at the -- understanding the assets, going to visit the assets, getting a feel for what those assets are producing and the upside potential on those assets, the base case and what we are pricing has got actually a very low level of risk and the upside potential that it comes from a whole range of optionality, some of which will be delivered, some of which will be kept for later, depending on the way we look at the capital and the capital allocation going forward. So it's difficult right now to say, well, option 1 will go before option 2 and before option 3, the value in which we'll continue doing the work and building on the great work that's been done in Yamana. But we think it's actually a low risk base case option with huge upside that -- and the all-in sustaining cost profile, I mean, we've given you an indication of that. And it certainly reduces our own all-in sustaining cost. So what it does do is it takes a risk out of the Gold Fields business by combining it with the Yamana assets. The -- I mean, I think what we wanted to do is give -- with Matt talking to you about what he sees in the reserve conversion, saying that the Yamana team are doing a good job. And so there's no reason for us to believe -- and the due diligence confirmed that. There's no reason for us to believe that there's -- that they're not doing a good job, that they're not investing in reserve replacement. But what Matt was able to say to you is with the Gold Fields approach in a bigger company, we could probably put a bit more money into that and certainly bring more modern techniques in terms of geophysics and the way we think about geochemistry. We will be able to enhance that work. So again, we think that all we have seen, our view is an improvement to that, not a backward step. Gold Fields has demonstrated, and we showed through multiple places in the presentation that we have an experience, and it's one of our core competencies in growing life and investing in exploration. And all we'll do is enhance that in Yamana. So Matt said that Yamana hasn't been starved, but what you will see is an enhancement to that. So I think, again, we derisked, we lowered the level of risk and that when we looked at the Yamana assets, we don't think that there's a large degree of risk in their base business for which our valuation shows that we can see more. And you're right, we can see in our base case valuation a higher number than what we are paying for these assets. Yes, perhaps I'll leave it there. I mean if you want to pick up with us and Yamana going forward on potentially more detail around CapEx and exploration, we can pick that up separately, Jared. Peter, I don't know if there was anything from there that you felt that you wanted to add to that.

I would -- I'd add the following, Chris. It isn't to say that there isn't a different approach. There might be different approaches that work better than what we've been doing. But we've talked about Canadian Malartic. Presently, if we look at the proven and probable reserves, establishing mine life for Yamana, we're not including any proven and probable reserves for Malartic underground. But that number will increase quite dramatically, as I mentioned in response to another question. El Peñon is another excellent example of the point. If we look at El Peñon from 1999 when it first started operations to present day, it has never had more than 6 to 8 years of proven and probable reserves in any 1 year. And yet here we are in 2022, still 7.5 years of proven and probable reserves. Again, taking gold and silver into account. And I know that sometimes people overlook the silver part. The silver part on a gold equivalency basis gives us about 7 to 7.5 years of proven and probable reserves. In 2007, when we acquired El Peñon, it had 7 years of mine life, and here we are in 2022 with 7 to 7.5 years of mine life. We found that it is more cost effective knowing where mineralization is, understanding these epithermal vein systems. It is more cost-effective for us to do development work and drilling as part of that to convert resources into proven and probable reserves rather than to drill significantly and cut into cash flows. Just as an example, we were spending more than $32 million per year on exploration at El Pinon. We found that spending $16 million to $17 million per year gets us to the same result, although admittedly, not with a large increase -- improvement in probable reserves in any particular 1-year period. Although even there, interestingly, even with that $16 million, $17 million, we've been able to show an increased improvement in probable reserves above what we've mined -- what we've depleted by a full 30% within the course of the last several years. So it's just a difference in approach, a difference in methodology, perhaps one that's a bit more conservative in terms of spending money on exploration at the expense of doing development work, when the time comes, and at the expense of preserving cash for cash flows. But we're certainly very confident that, that mine life that you mentioned is just a fraction of the actual mine life. The actual mine life goes substantially longer than what's shown improvement in probable reserves.

That was that was clear. Just one more follow-up, please. And I just wanted to make sure I understood this correctly. And I'm right in saying that the 4 million gold equivalent ounce profile, obviously, not taking into consideration any divestments, is that a base case assumption? Or is that just potentially what the pro forma entity could do? And aligned to that, if I look at Slide 45, there's quite a neat block there that talks about mine life inventory, including near mine open pit exploration at Canadian Malartic. I think that refers to Camflo. Assuming the transaction goes through, should we be thinking of that as something that's also in your base case and in that 4 million gold equivalent ounce production profile? I'll leave it there.

Yes. Jared, at the moment, Camflo because we're not the operators yet and the operators would have to -- and the combined, as Yamana was saying with Agnico, the way I understand it, that hasn't been included in the upside, and so that you do see a drop in production as we go underground. Now clearly, as Peter mentioned, that -- I mean that's why that asset was acquired. And you would imagine that, that would be part of future thinking to be able to top that up because if you got plant capacity, why would you not try and fill it. So that is not included in our numbers yet because the operators haven't confirmed that yet. And I think the 4 million ounces was roughly what we can see from the assets as we see them. That's not that much more than the 3.8 million ounces that we get to anyway. Yes, we start dropping off in Gold Fields base assets, but then we start topping that up with some of the other opportunities. So it looks indicatively that that's about the range, Jared, that we would want. But that would not be -- so not -- we're not willing to commit to that is absolutely our number yet. I mean we would have to understand these assets better. We would have to understand the timing of the projects. We'd have to understand the timing of our own assets and how they talk to each other. But that's just indicatively what we think the profile will roughly be and that we can maintain without any very significant investment in the future projects, in big projects. So -- and then as we showed in a subsequent graph, but it could equally be a lower number than that with divestment of some of the assets if that actually added more cash flow and more value to the company. So again, I think we're demonstrating this is not an absolute volume number that we have to be as big as possible. It is absolutely about where the best value number for the sustained group is going forward. And that could just as easily be 3.5 million as 4 million ounces. So no, we're not yet committing to that number, but I think it's indicatively around the 2 ranges that we think with divestment probably more around the 3.5 million ounces and otherwise could be around about 4 million ounces. So I think somewhere in that range is how we're thinking about the combined business, but we will only know that in time to come once we get our teeth into the planning cycles of these assets.

The next question comes from Raj Ray of BMO Capital Markets.

My first question is on your enhanced dividend policy. Just wanted to get a sense that given the near-term dilution to your current shareholders, and I'm not talking about the pro forma shareholders, I'm wondering if you could have and would consider a special dividend at some point.

Yes. Thanks, Raj. I think let's see what the business looks like as we get to 2023. The point is that special dividends are always an option. And as we get closer to certainly 2023, with that 45% ratio, I think what that does is that roughly makes Gold Fields shareholders whole for that year. I think the -- what I'm more interested in is beyond 2023, what the cash flow position would look like, and we'd have to evaluate that at the time. But that's certainly what our intention would be, is how would you increase -- in that range of 30% to 45%, how would we be able to have higher payout ratios in those subsequent years. So yes, a special dividend is always an option available to us. But having pushed out now the top end of that range to 45%, I think that is a very, very significant return both to the combined shareholders, and that certainly would negate the short-term cash flow discount or dilution that is faced. So yes, I mean, we've demonstrated both the commitment around the raising the range, and we have demonstrated in the first year post the deal that we'd want to be at the top end of that range. And then following that, we'd have to evaluate the position of the company at the time.

My second question is around one of the comments that was made during the presentation about the Yamana assets being really well run and well capitalized. And I agree with that, but just wanted to get a sense. Now this means that the analyst estimates out there, at least for the near term, I'm talking about the 2- to 3-year term, already take in some of these upsides. And despite that, the transaction is to be dilutive from near-term cash flow earnings perspective. What I want to get some visibility on is how much additional value you can unlock from these assets over and above what's already out there in the market. And you talked about some of the synergies beyond the $40 million per year. I know you cannot give a number now, but in terms of at least giving us a time frame as to how soon you can expect to develop some of this additional sales synergies in on the $40 million per year.

Yes. Raj, thanks for that question. I mean I think that was the intention of this discussion was to talk about the value. So yes, the existing business, we have confirmed that we think they're well run. But we have shared with you even well-run assets can be run better. I mean, even in our own business, we look at it. In our asset optimization, the first leg of our strategy, we think there's opportunities to run our assets better. So with different focus, perhaps newer techniques, we think that we can run those assets better. We've given you through that range of -- the range of potential increases in value where we see some of that value coming from. We don't know yet exactly the time frame around delivering that. And that's why it's much harder to talk around the operational synergies. What we have been able to demonstrate to you is, hey, guys, we've done this before. And we've done this on all of the assets that we've taken over, and we will do it again. We've been able to, in the past, deliver value on these assets, and we will do that again. We've given you from some of the technical guys that have been there to confirm, and they say, yes, we can see well-run assets with potential. So yes, I think this will be probably in the first few years beyond that because we need to get our hands under the hood. We need to have a look at where the best options are because you won't invest in everything, and you won't invest in everything that's got a potential. You'll choose your fights, and you'll invest around where the best returns are. And that will take a bit of time to understand. But then in the following few years -- so this is not like 10 years out. This is probably 2, 3 years, and you'll already start seeing value coming from these -- from the synergy -- operational synergies. That's actually not too dissimilar from what we saw in Australia. There were some investments that had to be made, and we did that, and they were great returning investments. And over the first few years that we ran those assets, the Australian team did a great job about being able to unlock that synergy. So I think we've hopefully demonstrated through the course of the presentation the numerous potential upsides. Maybe some will develop -- deliver more than we've anticipated. Maybe some will deliver less. But they are going to be collectively way in excess of what we have paid for the Yamana assets. And I think that's what we're demonstrating, Raj, is the huge potential that exists in the combined company for both sets of shareholders. And that's why we talk around the sum is greater than -- or the value that we create is greater than the sum of the parts. And I know you'd like to get more detail and say, well, just tell me how much money, exactly by when. That's not possible at this point in time. What we're trying to demonstrate is what we see and how we would go after that based on we've done this many times before. Yes. So Raj, Matt wants to add something. Go for it, Matt.

Yes. Thanks very much. I see similar questions popping up about this resource-reserve conversion but also how we're going to capture that longer-term pipeline. The approach that Yamana takes is a portfolio approach, no different to how we would run our -- how we run our exploration business. You have a portfolio of targets, and you stage gate a whole swag of targets. And in that regard, you then graduate the best targets through the pipeline. When I say the word fast track, once you know where you can start to see signals of quality, you can then get the drill rigs on and drill it out quite quickly. So I suppose those processes are very complementary across both companies. And although you might not see it in regular market updates, that kind of work is part and parcel of doing business in these kind of drill-intensive ore bodies. It's well ingrained in our sites in Australia, and we saw it well ingrained right through Yamana. To give you a flavor of the sort of the medium-term potential of its operations, again, we iterated that El Pinon, we see targets that are consistent with this operation being sustained at current levels beyond the current life of mine. So the beauty is that we have time to actually take that portfolio approach, invest in exploration and bring those new targets through. It's not like it's only got a couple of years left and we're running out of time. So we're comfortable with that, that we have time on both of those assets. But El Pinon, we see it as business as usual for a couple of years after. But importantly, chasing those higher-value, bigger opportunities is something, again, you stage gate and you don't put all your investment dollars into 1 target. You spread across a whole range of targets. In terms of Jacobina, in terms of the portfolio that we saw, they actually have targets that we believe support our continued expansion, okay? So that's kind of the difference. We see Jacobina as the significant cash generator. And El Pinon is part of a much big regional play within Gold Fields. So again, it's just a very good exploration process that we can bolt into. But I think, again, as I said, from a bigger company perspective, we can take a bit bigger view and actually invest a bit more heavily in that longer-term pipeline very quickly to try and bring those opportunities again in the order of years as opposed to promising returns in 10 years' time frame. At the end of the day, it's all about sustaining the business is priority 1, and then we look at growth opportunities as well. So thanks very much.

Thanks. So I think we've got one more question on getting Avi saying that we've got to move on. I'm not sure if that was you Raj or someone else. Anita?

The next question, which is a final question from the line, comes from Anita Soni of CIBC Capital Markets.

My question is with regards to the dividend. So my understanding is that you're going to be paying that interim dividend to GFI shareholders only, the one that's upcoming in September or in August or September. Is that correct?

Yes, that's correct. Now the deal is not yet done by the declaration of the interim dividend. Correct.

Right. And then in 2023, when you stated that it was going to be around 45%, that's when the deal is closed. And would you expect it to fall from there when it goes -- into 2024, just the 2023 that you're targeting at 45%?

Yes, Anita, we don't know. That's yet -- I mean, that will be evaluated at the time. But I think you're seeing a demonstration of the commitment to higher dividends in the range and a desire to pay higher dividends. But that will only be confirmed when we get to evaluating what the position of the company is, what the cash flow is and what it looks like at the time. But with a higher range, shareholders should expect a higher payout, but we will only evaluate '24 at the time.

And if this deal should not close, you'd be -- in 2023, you'd be more likely at the lower end of the range is my assumption assuming that your arguments, I guess, in the last 2 hours has been that you don't have a longer-term pipeline and should -- the cash that you have on hand will probably be dedicated to bolstering up that pipeline. Is that correct?

Yes, I think that's right. I mean it is conditional on the deal being done. And the reason for that is exactly as you described, is we would have to reevaluate then, well, what does the future look like in particular, if it's going to be cash-acquired additional assets. So yes, that's exactly right. I think you've summarized it well.

Okay. And then the final question, sorry, was that is the 30% to 45% conditional upon the deal closing. If the deal doesn't close, would it be 25% to 35% still? Or is it going to be 30% to 45% regardless of whether or not the deal closes?

Yes. The 30% to 45% is not conditional on the deal closing, and the 30% to 45% is the new dividend policy range.

Can we just -- one from the webcast quickly. Timing of the issue of the circulars, the meeting and the closing. And then the rest, I'll circle back to those.

Okay. Do you want to just -- why don't you just talk to that, Avi?

Yes. So at the current schedule, circulars will be posted in the first half of September, second week of September; shareholder vote, second week of October; and then the deal should close by the end of October. The rest of the questions, I'll pick up by e-mail.

Okay. Super. Well, ladies and gents, thanks very much. Peter, thank you very much. I guess I'll say from my side, I'll let you say thanks as well, Peter. But yes, thank you very much for your time. I know it's been a long presentation. But we did want to both update the market and give you, I think, a greater level of granularity about what it is that we're seeing. So thanks very much for your time, and we very much appreciate it. And for the shareholders and for many of you, we will meet you in person on the road in the next couple of weeks. Peter, why don't I hand over to you for the final word.

Chris, as a final word, I would say what I said earlier in the presentation. We were impressed by the technical depth and competency of Gold Fields management. This presentation is a lengthy presentation, perhaps a necessarily lengthy presentation given the amount of work that has gone into the due diligence on our companies. But it demonstrates the technical depth and breadth of the organization. So we are delighted to be partnered with you in making this deal happen. And I'm very confident that we will garner that shareholder vote, and we will be creating that company that is amongst the most significant of the elites in our industry. So thank you very much for allowing me to participate in this discussion. And thank you, everyone, for spending your time with us.

Thanks, Peter. And ladies and gents, thanks very much. That concludes the presentation. Thanks.