Hi, good afternoon and good morning, ladies and gents.
Welcome to the Gold Fields presentation, titled The Combination for Long-Term Value Creation, the Acquisition of Yamana Gold. 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'll 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.
We're gonna talk, and there's a section of the presentation where we're gonna ask both Lucho and Matt to give us a bit more information, and just to share with us some of the things that they're seeing in, as they went through the due diligence, and they're also gonna 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 gonna share with us after I run through an executive summary. Peter's gonna share some of his insights into what he sees in the combination of both Gold Fields and Yamana.
These next three slides are really gonna be both an executive summary, but they're also gonna be gonna form the agenda, so helping us show what the various components of the presentation will look like. 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. 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.
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. When we look at, well, then, why this deal, we're gonna focus through, and this will form the agenda for the presentation. What we're gonna do is I'm gonna 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 gonna talk to why we believe that we can unlock these world-class assets. Gold Fields has this unique combination of both technical and financial capabilities to realize the full potential of Yamana's assets. Lastly, we're gonna share what this combined company could look like. We'll have comparative scale, liquidity, diversification, and operating metrics that are comparable to the peer, to the major peers. With us being at a material value discount, there's enhanced scope for capital, for disciplined capital allocation and portfolio optimization. Lastly, we're gonna 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's still the same in the first presentation when we announced this at the end of May. 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. I think as we go through the rest of the presentation, we're gonna be able to demonstrate to you what the upside case looks like and what the upside value of this combined business looks like. We believe that Gold Fields is uniquely placed to deliver that potential upside in the Yamana portfolio.
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. 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. The operational synergies that we're gonna talk you through the course of this presentation, that'll 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 because we don't need to allocate cash to grow further options for the, for the company, that we believe that now we have the confidence to be able to announce an enhanced dividend policy. We are announcing today that we will increase our, the dividend payout policy, which was in the past was 25%-35%. Now we are increasing that to 30%-45% of normalized earnings. 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. That of course follows the implementation of the proposed acquisition.
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. The presentation that we're then gonna 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. Then secondly, the compelling position of this enlarged Gold Fields group, which is able to drive greater shareholder value creation. That's really the executive summary of the presentation that's to come. Before we get into the detail, I'm gonna 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. Peter, over to you.
Chris, thank you so much. Let me begin by saying that you've talked about the combination of two 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 oz gold equivalent. We're underpinned by low cost performance. We've guided for this year that we will be producing our gold equivalent oz at an all-in sustaining cost of below $1,090 per ounce.
We produce gold and silver, and that combination on a gold equivalency basis is just over 1 million oz with a growth trajectory that takes us to incrementally to 1.06 million oz, and then 1.25 million oz, and ultimately to 1.5 million oz. The important part though is that this is low- risk and this is low- capital. 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 Peñón, 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. Interestingly, if we look at Gold Fields, while they are in different jurisdictions to ours, in many respects, they're in 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 oz of gold production per year. Exceptional portfolio of assets across many different parts of the world. As I mentioned, all the mining-friendly jurisdictions.
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 looked at it from the lens of what's the technical expertise? 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. They're accelerating their cash flow generation for the reasons that I gave a few moments ago, which is mostly the result of Salares Norte and South Deep.
Of course, its ESG, its health, safety, environment, and community relations credentials are comparable to ours and as similar to us, unrivaled. Let's look a little bit then on slide six 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.
The growth that 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. 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 oz of production. The growth trajectory of the company indeed is much more than that.
That number goes higher than 2.5 million oz as a result of the assets that are in their portfolio. I'm not suggesting by any means that all of that would be 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. We looked at it from the lens of a 1 million oz 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. Interestingly, 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 the market, but also what was being offered as part of a 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 four largest precious metals producers in the world, but that's only the entry point. The entry is into that 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, that one looks at when one is comparing one mining company to another. 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 two companies. We're strong, strongly positioned as compared to the gold majors on key metrics. As you mentioned in the introduction, we are at a material value discount. If we add our market capitalization and Gold Fields market capitalization, we're still at a fraction of the market capitalization of the other three companies that are in that elite club.
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. We're better for longer in that elite club. 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. Since 2019, we've increased the dividend a full 500%. We're delighted with the approach that Gold Fields takes. It's a methodical approach.
We're delighted with its enhanced dividend policy, and we think that this should be significant to investors. If we move to slide seven, we believe this is the best option to creating lasting value for Yamana. Both companies undertook an extensive re-review process. We have been in due diligence for the better part of the last seven 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 confidentiality and some in the form of desktop and initial discussions. 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. From that perspective, my conclusion is that this is the deal that should prevail, and this is the deal the shareholders should support. 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. 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 am looking forward to that meeting. We are scheduling those meetings later this month. I'm 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 become as evident to them as it is to us, that this is a compelling transaction that should be approved by shareholders.
For all 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 an 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. 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 gonna do now is run through these four different sections. The first section we're gonna talk to is around the strategic context. This is, you know, what we can see in the space of our strategy. First of all, I'm gonna share with you that we have a track record of creating superior value through execution of our strategy. I'm gonna be talking you through we're in a position of relative strength from which to address systemic challenges in our industry. Lastly, that we are now ready to deliver on the next phase of value creation. As we think about, well, who is Gold Fields? Are we gonna change who Gold Fields is?
We have a core competencies in our business that I'm gonna share on the next slide, just some examples with you. We have core competencies around building mines, and we have built, commissioned, and delivered mines. We are now in the process of delivering Salares Norte, which will be delivered at the end of the first quarter of next year. We have bought unloved assets and drove operational performance, and therefore have an ability around operational excellence and improvement. Thirdly, we have an expertise in our business around brownfields and greenfields exploration. 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.
It is not abnormal, it's not strange for us to be embarking on this process of both acquiring the Yamana assets. 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. 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 reserves and life into those Australian assets. Then just to pick up, say another example, if you think about Salares Norte, that was our own greenfields exploration that was able to find that asset. 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.
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 two slides, just a little bit more examples of what that looks like. When we talk about that we've got the expertise to extend asset lives through exploration. Here's just some examples since 2020. For example, we look at just choosing one or two. If we look at St Ives, we bought St Ives at 2.3 million oz of reserve.
Since then, we have mined 8.4 million oz, and we still have reserves higher than when we first started at St Ives. We have discovered 8.5 million oz at St Ives and with a reserve multiplier of 3.6x . 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. 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 Peñón. 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 tons per annum. We have a debottlenecking exercise as we're ramping up that asset that now has a throughput capacity of 9.2 million tons with a plan to go to 10 million tons per annum by 2024. Demonstrating again that we can build mines and we can also improve them to get more out of those mines.
Lastly, as we've spoken, we are in the process of building the Salares Norte mine. We can bring that experience to Wasamac and MARA and future assets that come with the Yamana portfolio. 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 five years has increased by 44%. If you look at the asset life just of the international asset portfolio is 10% higher than where it was in five years ago. Of course, we have mined five years of production out of those mines. We have improved the balance sheet whilst we've been doing that, and whilst we've been investing in growth opportunities at Salares Norte, we have improved the balance sheet by 58%.
If you look at the right-hand side over the past five years, total shareholder return for Gold Fields has been 233%. Why we share this with you is that our strategy and the focus in 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. It's put us in a strong position relative to challenges faced by the industry. 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, this is a S&P graph below that, it's showing that exploration is yielding fewer results.
Although the exploration budgets have increased, now the industry spending more than $5 billion a year, you can see that the discovered gold is becoming much lower than it was a decade ago. 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. This is a chart that compares the over the next five 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.
Also what we are then able to do is proactively address, not too dissimilar to what the global gold production is facing, a declining production profile in Gold Fields. 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. At the end of last year, we put together the updated strategy for the group. It was, you know, acknowledging that we are growing still over the next few years with the delivery of South Deep and with Salares. 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. As I mentioned to you, we don't have the portfolio that is required now to maintain that value going forward. What we do see as part of our strategy is to repeat what this company has done for over a hundred years, is to invest in the future. 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 rise in competition and cost of M&A transaction in the gold industry going forward. As we put together and we think about, so then why this deal?
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. They're also complementary portfolios that drive a combination which is greater than the sum of the parts. That's what we're gonna tell you in this, in this section. First, 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.
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. Also we wanted assets that were where we had a competitive advantage, where it talked to our core strengths and our core competencies. We said to people, you know, "We don't wanna look at things that we don't really have expertise on." Lastly, whatever we did couldn't take us backwards on our ESG journey.
Then if you look at, well, then, you know, 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 one 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 two companies together, we generate robust cash flows.
The initiatives that we talking about and the execution of all of these flagship opportunities continue to grow the cash flows. 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. I won't go through all of those, but you can see how Yamana assets ticked all those boxes around our screening criteria. What we were looking for for our strategy going forward. This has got proper industrial logic. 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 seven, eight months, and so we understand that the market won't yet have the level of understanding that we have after spending so much time in going to these assets. 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 road shows that we're gonna do, is to help you see what we can see, in the Yamana assets.
If we look at the opportunities to apply our core competencies, if we look down the left-hand side, 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. 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.
Just demonstrating how much opportunity we have to bring that expertise, and what we're used to mining in Gold Fields, and I'm gonna share some of that examples with you, be able to bring that competency to the Yamana assets. It's this commonality between the portfolios that enables us to add significant value to the Yamana portfolio. You'll have. We've spoken about the potential that there is in both Yamana. We've spoken about what some of the opportunities there are in Gold Fields. 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 two companies. That over the next three years, we'll be at 3.8 million oz.
On the next slide, I'll just show the sort of what comes down and what comes up. We think very easily we'll be able to maintain around about a 4 million ounce equivalent steady state production. With, of course, you know, 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. 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 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.
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. It's when ours starts kicking up that this has got huge benefit. A $100 an ounce reduction in all-in sustaining cost is a very material benefit that comes from putting these two 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. Again, you can see the growth to 2024, the combined oz about 3.8 million oz. You can see over the next number of years, as the Gold Fields production declines by about 0.7 million oz.
You can see both a combination of, at 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. 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. Peter even spoke about optionality above that. You can see just where some of those options come from. Of course, they are options, so that means that you can sort of play around with those to maintain a steady production profile.
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. That's not. You don't see that if you're only looking at purchase price, like, through one metric. Nevertheless, if you look at this chart, it's just one metric that shows total acquisition cost. You can see Yamana assets are right at the bottom end of that profile.
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. That you miss from just looking at these individual metrics. Nevertheless, what we're trying to demonstrate, and there's any number of these, what we're trying to demonstrate to you is 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. 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.
We're gonna 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. When we look at the orogenic in Australia, for example, the red Australia, you can see we have exactly the same type of geology in the orogenic 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've both got underground and a surface operation. Likewise, in the epithermal that we find in Chile and Peru, we have very similar. Here we've got Yamana that are ahead of us in the learning curve in Chile.
As we go into the mining of Salares Norte and eventually consider going underground at Salares Norte, all of those options, we have similar geology. When our guys walked into the due diligence in the Yamana assets, they said, "You know, we can see this geology. We know it because it exists in Gold Fields." We also have that come with these assets, entry into Canada. We get into one of the best 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.
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. We think this is one of the real benefits that come from this portfolio. 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. We're gonna be able to be developing that in both in Chile and Argentina and then also with Peru and Brazil. Creating a new operating hub, creating substance that enables us to have greater efficiencies in South America.
With 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 with this package of assets comes an extensive exploration pipeline. 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. 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.
That's the reason why we say that we think this is a winning combination. In the next section, we're gonna talk about, well, what can we do with those assets, and how do we see any further value that we can create? That's why this section is talking about unlocking world-class assets. I'm gonna also ask, Lucho, our head of our South American operations, and also, Matt Crawford, to be able to, you know, pretty much run most of this presentation and just tell you some of the things that they see. We're gonna talk to you about the substantial value opportunity that we see within the Yamana assets. We're gonna talk to you about our operating capabilities that can realize substantially more potential in a 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 gonna talk to you about the operational synergies that are far in excess of the initially identified cost synergies. Or the three of us are gonna share with you just some. We're gonna talk you through some of our flagship assets, both in. We won't run through all the assets. We're gonna do the top three in Yamana, and we're also gonna go through some of the top assets in Gold Fields.
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. We're gonna 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. I'm gonna start with Canadian Malartic. This is one of, as I've mentioned, one of the largest gold mines in a Tier One jurisdiction with significant growth potential. If we look at the guidance at the bottom, this is only on the 50% basis, 'cause this is a 50% with Agnico Eagle.
You can see that this is producing 320,000 oz-340,000 oz, or 50%, at just over $1,000 an ounce. With that, I'm gonna hand over to you, Matt, and perhaps you can tell us what you can see in this amazing asset.
No problems. Thanks, Chris. Now, I'm an exploration geologist with Gold Fields, and I've been with the company for close to 20 years. Before we dive in a bit deeper, I think it's important to say that you know, our snapshot view of the core assets in Yamana is really been brought about by a larger highly technically capable due diligence team. You know, we have the fortunate opportunity to be able to review projects around the world. Importantly, not all projects pass our filters. You know, our key objective is to find value projects for Gold Fields and to upgrade the portfolio. The core assets in Yamana actually have passed our filters, and that's why we're sitting here today.
In terms of, you know, at a macro level from the due diligence team, we saw very well-run mines of the core assets that we saw. You know, importantly, that's underpinned by not only strong management teams, but also, it's underpinned by quality resource bases. The next thing we look for is growth potential and all these operations have significant growth potential of those core resource bases. The last point is that, again, all the core assets have a very significant landholding, which really allows us to tap into that long-term future potential of those assets. In terms of what we see, you know, at Malartic, you know, it's truly a world-class asset, you know. What comes with world-class assets is options.
You know, it had 10 million oz of past production, or 10 million+ oz of past production. We see a you know, resource base of near 15 million oz. That optionality in terms of you know, 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, you know, we're not gonna be operating the mine, but in terms of these orogenic style ore bodies, we are well and truly in our comfort zone. You know, Agnico gains a partner basically that have a very deep understanding of orogenic ore bodies like the ones in Australia.
Secondly, we are underground operators, and that's demonstrated by our, you know, our mines in South Deep, St. Ives, and Agnew. Next slide, please, Chris. 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. You know, in the top- left, there's the current open pit with about 5 million oz of production in the last decade. The 15 million oz resource potential that I mentioned is the next era for this mine when it transitions to underground, and that's to tap into this 15 million+ oz resource potential.
Now importantly, that only, you know, near 50% of that resource base actually forms the 2021 underground mine plan. It's very, you know, in terms of value, we see a great opportunity for resource conversion through their aggressive drill programs in the near and medium term. One of the big value drivers is that they will have an underutilized mill beyond 2028. Again, like our Australian operations, the key objective for exploration is try and fill that mill. Given the broad spread of targets that Malartic offers, we see substantial potential to actually utilize that mill in the medium to long- term.
Ultimately, you know, 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, you know, 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, you know, the joint venture company has actually done an excellent job at consolidating land holding around this project.
One particular example is the, you know, the Camflo acquisition in 2021, which is around a historic mine of past production of 1.6 million oz. Yamana were pretty upbeat about this project. 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 Malartic 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, you know, 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, looking at Jacobina. This is a 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. If we look at the chart on the bottom, we are in the process or Yamana is in the process of delivering phase two of that project. It'll get to 230,000 oz over the next four years. Certainly by the look of things, it'll probably get there a lot earlier. If we look just under the key value opportunities, you know, we see phase three up to 270,000 oz, phase four up to 350,000 oz. Absolutely possible. I'm gonna hand over to Lucho.
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. This is one of the lowest cost producers in South America. Now producing at about 200,000 oz at under $800 an ounce. You know, one of the lowest cost gold mines in America is with production upside. I'm gonna hand over to Lucho, who, you know, as the head of the South American operations, we also asked to join the due diligence team that Matt was talking about. Why don't I hand over to you, Lucho?
Thanks, Chris. As mentioned, my name is Luis 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 the Antapaccay operation. Before that, I was in charge of running Alumbrera operation, which is part of the Minera project. In regards to Jacobina, we visited the site two 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've been recognized as one of the best places to work in the mining category in Brazil during the last three years. We visited the site, we went underground, and yeah, we could see the mining fronts are in really good condition, 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 the plant. I gotta confess that before this visit, we were a bit skeptical about the expansions. We could confirm during this visit that the plant had achieved, in the last May, have milled more than 8,400 tons per day, which is part of the most important milestones they have as part of the phase two completion.
We could see as well that there is enough room in the plant to execute phase three, and there is enough room in the site to execute phase four. We also had a chance to visit the TSF, and we were pleasantly impressed by the high standards that the local team, the local management applies in the dams, in the tailings dam. The tailings dam is controlled by a local control room, very modern. What is most important, that they engage all the downstream community in a unique manner. They keep informing the downstream communities about the activities they execute in the TSF.
That, plus the very proactive local employment programs the local team has secured more than 87% of the workers coming from the local communities. More than 90% of the workers came from the state of Bahia. With that in hand, they are in good conditions to secure the future social license they may need for future expansions. Finally, what really impressed me is that unique geological endowment they have in the Jacobina ridge. Something comparable, as mentioned by Chris, with our Tarkwa assets. For sure, with that in hand, I think we can go beyond phase four, is what I think.
For sure, with the right project approach, will be conditions to surplus those 15,000 tons that are now proposed as part of the phase four. I hand this to Matt to talk about our geological endowment.
Yeah, thanks, Lucio. We, as a due diligence team, went to site. You know, I must admit, we had some question marks over, you know, we've seen in the marketing these multi-phase expansion plans for Jacobina. We actually left site really quite upbeat. Complete opposite. That is really, you know, what we'd seen is a very strong production growth over eight years. That really stems from quite bold targets set by the corporate team. 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.
You know, this is, these are shallow mines, geotechnically favorable. Longer term, we actually see a pipeline well beyond their current life of mine. In terms of, this, these images just give you a snapshot of the regional and the mine, so the full asset view. In terms of geology, you know, we are right at home. The paleoplacer style 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 and truly in their comfort zone, hit the ground running. You know, in terms of growth across the asset, we see really on three fronts.
In the mining center down to the bottom left, you know, 2.5 million oz of past production. I think about five, + 5 million oz of resource plus reserve in that area with a very good spread of targets. Very healthy pipeline of exploration targets. Further north, there's an emerging opportunity at Jacobina Norte, which is comparable in strike length in terms of anomalism near surface. They've done proof of concept drilling, and that's confirmed that these mineralized reef systems occur at depth. We actually see potential for 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 gonna 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 will apply those skills and experiences to the Yamana package to really fast-track those longer term exploration opportunities coming forward. Next slide, please.
Talk about the four times Tarkwa just as a reference.
Oh, just in terms of their greater consolidated landholding. You know, the map doesn't do it full justice. You know, that is actually 150 km 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. Again, build that longer-term portfolio or pipeline for the Jacobina asset. Next one, please, Chris. Again, just to draw your eyes to the left, these are the expansion plans that Yamana have been indicated to the market.
In terms of the bulk, you know, 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 oz 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 reefs do continue along strike. In terms of scale, you know, the red opportunities are immediately in and around major production centers already.
These are very close to resource potential that can be brought into resources in, you know, with significant investment in field drilling. You know, I've got to remind you that these ore bodies are very drill intensive, okay. 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. 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 and understand where the high grade is in these ore bodies.
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 and in very good hands. Thanks very much, Chris.
Thanks, Matt. Okay. Onto El Peñón, the third of the big three assets. Perhaps I'll make a comment about when I mention the big three. The top three 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 three assets. It provides a very low level of risk with huge upside potential just on the top three assets. In addition to that comes all of the other potential that we spoke about. Importantly to know that 85% of that value came from these top three assets.
El Peñón also not quite to the same level as the previous two that you've seen, but still a cornerstone underground mine. Strong cash flow generation, producing around about 230,000 oz. It has been as high as 300,000 oz. And again, Matt will talk around just some of the opportunities that we see. Again, you can see at a low all-in cost, all-in sustaining cost under $900 an ounce. With that, Matt, I'll hand over to you.
Actually, I'll just have Lucio.
Oh, okay.
So that he comments first. Thanks. Yeah.
Thanks, Chris. Thanks, Matt. Well, as you know, El Peñón is located in the second region of northern Chile, Antofagasta. 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, 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 Peñón. The great skills to manage dry stacking. Our great experience in discovering, developing, and delivering products we have in Solaris 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 what the great work that the MARA team is doing in northern Argentina. With that in hand, again, what we foresee here is a very solid hub that can deliver value in the short term. Thanks, Chris.
Thanks, Lucio. Matt?
Yeah. Thanks. Thanks, Lucio. Before I talk about El Peñon in general, I just wanna step out and talk about Chile. As Gold Fields is shifting to a new phase of growth, we have developed a three-tiered, three-stream strategy to growing our regions. The first stream is growing brownfields exploration and leveraging our capital investment in our mills and development projects. This is an example at the Salares Norte, where we've significantly ramped up exploration on the back of you know, production starting. The stream two is actually expanding our exploration footprint within the regions where we operate. That's very much looking for standalone 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 three is our active screening throughout the regions where we operate, looking for near-term production development projects that can really you know significantly grow our regions quite quickly. You know, in terms of the stream three, El Peñón 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 two, in terms of exploration footprint, Yamana have a significant land holding around El Peñón, but much further afield. They also have advanced, you know, resource projects like Agua de la Falda, not too far from Salares Norte that are in their sort of earlier pipeline. Just moving into El Peñón itself, the due diligence team, you know, we went there, and I suppose we expected to see a mature mine that was getting you know depleted in opportunities. 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 one.
Importantly was, as you can see on the graph on the right, a strong resource reserve increase over the last five years. You know, 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 Peñón veins actually continue further into more or less prospective host rocks, at depth, which is, you know, one exploration front that we would certainly wanna continue to invest in. Further afield, they've actually then stepped off laterally to the south and confirmed that the El Peñón veins do continue to the south, and I'll talk about that in the future.
Overall, we see, you know, a rich variety of targets, a very strong commitment to exploration drilling that can keep that really sustains that ongoing resource base. We see this mine could be sustained well beyond the current life of mine. In terms of Gold Fields value add, you know, again, 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. Overall, these are incremental changes and evolutionary steps. We wouldn't be coming in and changing anything overnight. Next one please, Chris.
Just to again about that sort of medium-term pipeline and future for El Peñón. They have a very significant land holding, but in the mine itself, you know, 5.5 million oz of gold produced and 137 million oz of silver. That's located in that yellow circle on the block diagram to your left. 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, you know, higher tonnage veins that the initial mine was built on.
That ultimately, longer term, it would be a key exploration objective, try and find another primary vein to really, you know, de-risk future production, and give a nice anchor production source to take this mine forward. 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.
That's pretty much, you know, the step one 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 wanted to focus on the top three Yamana assets and what we could see and what we thought we could contribute. I guess for both Gold Fields shareholders who may be concerned that there's something problematic with our existing assets or for non-Gold Fields shareholders that 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. We're just gonna 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 oz a year, of which our stake is around about 460,000 oz at an all-in sustaining cost of $1,000-$1,200. The mine's in great shape. It has, as it stands now with its reserve, a 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? 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.
An incredible tier one mine in a jurisdiction that we've been able to mine for many, many years. Next one. In Australia in general, we don't have a summary slide for Australia, but Australia will continue to deliver over 1 million oz from those four 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 gonna talk to two of the assets. St Ives in Australia, which we own 100% of. We currently are mining 380,000 oz a year. We have previously mined more from the open pits. We're now going more to the underground options.
The Invincible Complex, which was discovered by our team in Australia, that complex continues to grow. It's an incredible ore body. We maintain that kind of level of production going underground, we are able to do that because of the great work and the finds that we've been able to find in the underground ore bodies. Invincible is just one example of the great work that our team have done there. 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 oz, 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 six gram a ton ore body. You know, 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.
There's some of those options for asset optimization or improvements in the way that we do business at Granny Smith. 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. 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. 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 gonna deliver.
Last year, we had a 24% increase in production. We have guidance over the next four years of increasing production again by another 20%-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. 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. Lastly, I think this is one of the stars and 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 a 11.5-year mine life as it currently stands. The initial seven years will average 450,000 oz of gold equivalents at an all-in sustaining cost of about $550 an ounce. You can just see the massive potential, the massive value that comes out of the Salares Norte project. Next year, about 200,000 oz, and then we peak for the following two years at about 600,000 oz equivalent for the year. We drop down to about that 450,000 oz.
A fantastic body with a gold grade of 5 grams a ton, and gold equivalents running at 450,000 oz a year. MARA, which is one of the options that come with the Yamana with the package of Yamana assets. 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. Very similar to what we know. This potential you know globally significant. 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.
We thought it'd be useful to talk to hear Lucho 's view because, you know, as Lucho said earlier, he used to be the general manager at Alumbrera, which was the mine that mined this pit in front of you. 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. 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 and we may use in both pits, from the metallurgical approach, and as I mentioned, from the social challenges we have in both sides, et cetera. Yeah, I did work there. As you see that photo, I was involved in constructing that pit. But the good news is that in Gold Fields, we have people, engineers that worked for MARA before Gold Fields. Our project director in Salares, Mr. Max Combes, worked for Alumbrera.
Our construction manager, Fabián D'Urso, as well, in Salares, worked for Alumbrera. Actually, our country manager in Chile, that's Mr. Manuel Díaz, worked for Yamana. He was in charge of the interaction in the area. Plus when we visited the site two months ago, we found that the management team is highly skilled and really well experienced in the project. They have been involved in the area for the last 15 years and longer. 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 go ahead with the project. Please, in the next slide.
If you let me move to the next slide.
Just before you move.
On that-
What I should have mentioned, Lucho, up front is if you look at the two little bar graphs at the bottom left, 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 oz a year. Or if you look at it on the right-hand side on copper equivalents, 300 million lbs of copper equivalent annually at an all-in cost of $1.40 per pound. I should have mentioned, so this is truly a substantial project. Not without its challenges. Lucho will talk to that.
Yeah. Okay. Yes. Two months ago, we visited the site. We were in the mine pit. We could see that the mine pit is in really good shape, very well maintained and serviced. The pit walls are geotechnically monitored on 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 and ball mills, sag mills, and the flotation circuits are ready to go. We also visited the TSF, as well as very well-maintained, very well-serviced. We could see water on the tailings beaches for dust control purposes, et cetera. With that in hand, we can say that for any project, the most difficult components are the plant and the TSF.
I gotta say, 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 complete a conveyor belt and connect that to the plant. 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 the 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, in the right forums, with the regional government, with the national government in Argentina. Thanks, Chris.
Thanks, Lucho. I think the way to close out MARA is the deal's not been done for MARA. 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. One of those things is MARA, which I think, Frank, to be fair, in Yamana, probably just not big enough as a company to be able to deliver that.
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 one 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. We mentioned upfront the potential for cost synergies when we did the previous presentation of about $40 million a year.
We know and we can see, and that's what this 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. 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 a percent 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. You know, we both, Lucho and Matt have talked about what they can see and what some of that potential could look like.
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. Then on the next page, I'm gonna share there's probably another third layer of additional cost benefit that could potentially come from portfolio management optionality. 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 standalone group. If you look at the charts on the left-hand side at the top, you know, that's the same profile we showed you before. We said that we could easily maintain, let's say, around 4 million oz.
Another way to look at this is we could maintain 3.5 million oz-4 million oz and look at portfolio rationalization. This is just one example that we ran, that if you took out just here I think this was two 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. 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 oz.
I mean, that's $70 million a year of savings that could come as a result of portfolio rationalization, particularly if these assets are assets that are not generating meaningful cash flow. 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. We save about $100 an ounce there. Yes, there will be some cost saving as a result of overhead costs and supply chain. There's an additional layer of 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 quite difficult to quantify all of that at this point in time, all of those options are available to the combined company. 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 pulled together sort of on one slide. The boxes that are in blue, that's what we see in the near-term catalysts. Then the boxes in gold that are colored in boxes, that's what we can already quantify. 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. 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. Many of these options are actually low capital intensity. Things that you can do, as both Lucho and Matt were saying, on the existing mines, we can see these options. You know, South Deep is gonna continue to deliver. Solaris will continue to deliver.
Jacobina can absolutely be grown through phase three and four. They are not big capital numbers. The synergies are gonna be delivered. Canadian Malartic, as we convert the resource to reserves, you're gonna see a massive increase in value coming from that operation and the like. The point I wanna leave you with is that this combination creates a platform for further growth and value creation with both near, medium, and long-term catalysts. 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. We're gonna 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. 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. 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're forced to sell assets to be able to manage the debt. Here you can see that on a pro forma basis, we at 0.4x. We have significant liquidity in the combined facilities of Yamana and Gold Fields of $3.8 billion. Both Yamana and Gold Fields are investment grade.
We continue to focus on reducing our debt, and we still have commitments to keep our maximum leverage at about one time. None of that we've in the past talked to you has changed in the way we think about management of debt and the balance sheet. Balance sheet's 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.
You know, we've spoken about the dividend, and you will have seen in our announcement today that we are making two announcements which we think will improve the value of the transaction to shareholders. 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 payout policy to between 30% and 45% of normalized earnings. To try and help with some of the short-term dilution, we have in 2023 said that we will pay out 45% of normalized earnings. You can see it reflects our desire to return additional cash to shareholders, our increased confidence in cash flow.
The fact that we're not using cash to go and to 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 gonna announce in the next while, 'cause we can't change the terms of our agreement, is subject to this 25%-35% payout policy. Then, the second point that we're announcing today...
Okay. Sorry, there's just load shedding in South Africa. The second point that we're gonna make is that we are going to be announcing our intention to list on the TSX, on the Toronto Stock Exchange. We think that that'll give us our shareholders additional optionality in where to list and where to participate in Gold Fields shares.
We're just having a technical issue here. If you just bear with us. Be back and running. Hopefully you can all hear us. Okay. If we move on to the next slide. We're on the operator, I suppose.
Okay. If we look at, I mean, you know, 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. Both companies are thinking very similarly about increasing returns to shareholders. Our dividend yield increases with a 45% payout ratio. 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 five years, actually a good time to do this deal. If you look at the exchange ratio, 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 0.6x 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 five years, the first three years of that five years, actually Yamana was trading above 0.6x, compared to Gold Fields. As that started declining, actually it then became a good time for Gold Fields to be engaging with Yamana. Of course, with the premium, we go back to 0.6x . That's actually the average over the last five years. You know, I think the point that we're trying to make is you're never gonna get it right 100%. Of course, you don't do the deal over a weekend. You do a deal over a period of time.
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. The 0.6x ratio that we've agreed is actually the average over the last five years. In terms of the last five years, that's exactly the number that we have agreed with Yamana for this transaction. If we look at, you know, the global peers, we believe that we are strongly positioned versus the gold majors on all of these metrics. 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 three gold producers. If you look at the production growth over the next three years, we are better than the top three. If you look at all-in sustaining costs, the bars at the bottom, we're certainly amongst the top producers. If you look at the chart on the bottom side, and Peter Marrone mentioned this a bit earlier, saying that with massive potential, upside potential, on those shares.
If you look at those metrics and how we compare to the gold majors and the potential for re-rating of this company, we think that there is massive potential for the future in this combined business. If we look on the next slide, we have now commenced the planning for integration. That's a very early stage. Martin Preece, our EVP that's running South Deep, is now gonna be running this project, and certainly gonna be. Now we commence the engagement ourselves and Yamana, and we'll start planning for the combined company integration.
We're starting to think about that, starting to plan, with enough time so that we can all hit the ground running, once the deal commences in at the end of October. How do we pull 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. 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. Then Yamana cements our strong positioning, and it represents a hugely value-accretive next phase for Gold Fields. 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.
Lastly, as we think about, well, what does this combined company look like, you can see we're very well-positioned versus the global gold majors on the key metrics, but with a significant value discount offering huge upside potential for both sets of shareholders. 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. With that, ladies and gents, thanks very much for your time. I realize it was a long presentation, but both our team and also Peter remain open to any questions that you may have. Thanks.
Okay, Chris, we'll start with questions from the conference call, please.
Thank you. The first question comes from Adrian Hammond of SBG Securities.
Hi, Chris, and everyone on your team there. Thanks very much for the presentation. 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. Clearly the market seems to think differently with Yamana currently trading at a 14% discount to the offer. Why do you think the market's not aligned here? What is your response to this? I have a few more after this. Thanks.
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 gonna be an immediately obvious deal to shareholders, that was likely to have an impact on the share price. I guess we weren't surprised. Though it was a greater reduction than we had anticipated. The fact is we had anticipated a reduction because of the premium and over time expected that to rerate. We acknowledged that this is gonna 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 we've seen a massive reduction in pretty much all commodities in the commodity markets. The gold sector itself was not spared. If you have a look at our performance versus the gold sector, Adrian, you can see we have recovered some of that. This, in Gold Fields, you know, 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. Therefore, versus the index, we have come back quite nicely. We do think that we're starting to see shareholders get this.
We certainly haven't had, you know, the same level of reduction over the last month, and I think we're starting to come back, both Gold Fields and Yamana. I think it's a combination of what I've said to you, both the fact this is not an immediately obvious transaction, and some of the Gold Fields shareholders don't really understand the Gold Fields, the Yamana assets and vice- versa. The fact that we've paid a premium will take time to recover. You know, I think what we're describing, both to everyone on the call today and what we'll 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'll take some time for shareholders to see.
Just given the upside opportunity, we think that shareholders, as they get to understand this more deeply, and certainly the combined share price will recover.
Thanks, Chris. Maybe if I can jump into some specifics. I mean, I appreciate the detail here you've provided us and the challenges faced in trying to incorporate Yamana into the portfolio, into the modeling processes to have a longer view on the CapEx outlook. You've given us AISC costs up to 2030 on slide 19. What are you able to furnish us with non-sustaining CapEx outlook for the group, particularly around the Malartic underground expansion and Jacobina in the phase 2, 3, 4? Then secondly, I'm just a bit curious on why the Malartic has no declared underground reserves. How should we, how confident is the team on how economic those ounces 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 resource to reserve at Malartic? Because I know you've got a lot of insight into that.
Not unique to this particular circumstance in developing an underground mine in Canada, particularly if there's depth, it is not unique to start the development plan while one continues to do the conversion of resources to proven and probable reserves. 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. Almost at a 100% level, we hit mineralization as the model predicted. On that basis, the conclusion was that you'll 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 three different, let's call them three companies.
Malartic is managed, not by one of the two companies, but is managed independently with a 50/50 true joint venture between the two companies. Interestingly, at the end of last year, two of the three qualified persons were prepared to declare reserves. 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, let's do a little bit more tightening of the drill spacing in order to get to that point where all three are comfortable that we're declaring proven and probable. 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 of the drill spacing, it's proved to be very successful.
To give you the short answer, we expect that the mineable ounces that are in the mine plan, that 7.2 million oz, will come into proven and probable reserves between this year and next year. I would not be surprised based on what I've 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 is 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.
For now, I hope you take some comfort that what we're seeing internally is what two of the three qualified persons were seeing at the end of last year, which is that all of the 7.2 million oz converts to proven and probable, and a very, very large portion of that converts to proven and probable this year. Almost all of it, if not all of it, converts to proven and probable between this year and next year.
Adrian, I think we can take offline just the conversation around so how do we help with some of your modeling on the all-in sustaining capital, so we can get back to you on that and try and help with some of that modeling. We can certainly engage with Yamana to help with understanding that as well.
Thanks, Chris. One last one just on jurisdiction, particularly Chile, which seems to be suffering a lot of sort of headwinds against some companies regarding expansion plans there from the environmental regulator. Can you just give us an update on the sanctions brought against Solaris, regarding the chinchillas and more recently the issue with foxes? Thanks.
Yeah. There's nothing new. I mean, we've got Lucho on the line as well, Lucho can certainly talk to that. Look, at the moment, we are still engaging with the environmental authority. We are very much engaged with them. As recently as like a week or two 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 gonna be any major relocation of chinchilla now. Remember, we only have to relocate, we have to be in a position to mine at that area in 2025. 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. Nothing much has changed. Yeah, I think there's you know fairly tough conversations happening in Chile, but overall, we think that we'll be able to find a way forward through that with the environmental authority. Do you wanna add to it?
Yeah, just to mention that our country manager, Mr. Manuel Díaz, he has met several authorities last week to keep them informed about our diverse initiatives we have in terms of protection of biodiversity in Salares . Not in terms of foxes, but as well the chinchilla, of course, but as well in terms of the local vegetation, vicuña, guanacos, et cetera. We have a very broad and sound strategy for protecting the biodiversity, not only chinchilla and foxes. Yeah, we at different time, we are very proactive and discussing and informing the authorities.
Great. Thanks.
Yeah, thanks.
Thanks, Adrian.
The next question comes from Jason Fairclough of Bank of America.
Yep. Good morning and good afternoon, gents. 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 as fairly dilutive to Gold Fields if you don't include value from MARA. I guess you're suggesting that you don't need value from MARA for the deal to work, if I understand you correctly, Chris. I was wondering, could you give us a little bit more color on MARA? I mean, if we were to talk about a path to development, is this first metal that's five years away, or is it 10? Then if we think about Argentina as a mining destination, it's actually been quite challenging for many years now.
I again, you know, is it realistic to think that we'd see capital flowing in? Lastly, you do have partners in the project, so, you know, 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. You know, perhaps I'll make a couple of comments about how we have seen MARA, and then, Peter, feel free if you wanna add anything on top of that. 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. 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. 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 still see substantially more value, in what we are paying, and it doesn't need Yamana to justify this deal. We think that there is value in Yamana, but at the same time, it's an option for us, like we have a number of other options. That, in our hands, we've demonstrated that the risk to actually building it is a lot lower than potentially people think. You know, 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. Generally, in a large development project, that's where the risk would be. 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, yeah, there's risk around Argentina, and we would absolutely have to have the comfort and the assurances and the appropriate licenses to guarantee that we, if we put money in, we could get money out. 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 five and 10-year period. 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. Yeah, we would have to get the assurances. 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 pushed the button to continue. 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.
There will come a time where, you know, where we talk to our combined partners and both Newmont and Glencore are partners, you know, we'd be more than happy to work with. You know, what that may look like in future will be a subject of us having conversations going forward. Yeah, we're not overly stressed about MARA. It is a fantastic option. It's a great optionality for the future. We'd have to have the right assurances and at the right time, we can develop this. The deal is not dependent on MARA going ahead. Peter, I don't know if you wanna add anything to that. I mean, clearly you've got a lot of experience about MARA.
Jason, we've not met before, and I'll look forward to an opportunity at some point to meeting. There's a lot to unpack 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 described 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. It is accretive to the net asset value of Gold Fields, full stop. It is highly above $400 million.
If you assume that and know 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. It 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 for MARA, the 56.25%, that is more than what's in consensus. 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 for 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. It's a bit of a you win some, we win some that is normal as part of any transactions.
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. Does 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-surface, likely open-pittable ore body that would be mined and that ore would go through the plant. The potential for a second shaft.
Presently, we're contemplating a mine plan that has between 500,000 oz and 600,000 oz of production per year from the underground up to 2039, 2040. That mine life will likely be significantly extended. Remember, only 7.2 million oz is in the current inventory of mineable out of a platform of 15.5 million oz, with that 15.5 million oz having increased a full 1.5 million oz last year alone. It's a large platform, likely going to get bigger, and the likely production platform is well in excess of that 500,000 oz -600,000 oz per year on a 100% basis, and likely getting closer to 1 million oz per year.
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 it will 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. It becomes a more interesting prospect for its development. I'm not sure that I would get to that point. The point that I get to is what's the value that can be ascribed based on the optionality offered by.
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. It becomes a more interesting prospect for its development. I'm not sure that I would get to that point. The point that I 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 for 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, would be in a position to be able to say that they can develop it, and it would become realistic that it could develop it. The result of that is that if Gold Fields should choose to sell 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 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 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 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 oz versus a platform of 1 million oz. I would say 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. One more point that I'll make on MARA. We went through considerable efforts several years ago. It took us the better part of two years to agree with local authorities, provincial governments, national governments, and the two 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. The risk to capital and the risk to development is significantly less. A 115,000-ton per day plant is a big plant. In a part of the world where there's more labor inefficiency than other places, it's understandable that one would want to think long and hard about developing that size and scale of plant. The open pit is an open pit. The conveyor system is a conventional overland conveyor.
In a part of the world where there's labor, more labor inefficiency than other places, it's understandable that one would want to think long and hard about developing that size and scale of 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 de-risked the project and made the project far more capable for development should a larger company choose to develop it.
Okay. Thanks a lot for the color. A very, detailed answer, Peter. Appreciate that. Thanks, Chris.
Thank you.
Thanks, Jason.
The next question comes from Jared Hoover of RMB Morgan Stanley.
Afternoon, Chris and team, and thanks for the call. Yeah, I think the presentation was quite comprehensive and laid out a lot of optionality from the three major assets within Yamana that contribute about 85% of the transaction value. I think one of the things that's missing for me, or maybe rather 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. I guess on that front, I guess I have three questions, or it's 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 just 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. Aligned to that, what are the risks that you see to actually achieving that base case valuation? 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 AISC 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 five to 10-year reserve life.
Yamana have demonstrated a history of reserve conversion, and I guess the mine plans talked about 15 years. To really achieve that, you need to unconstrain all of the underground mines and drive that reserve conversion. 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. Once you had to integrate Yamana into Gold Fields, what does that do to Yamana's reserves? Have you taken that into consideration when you talk about the $100 AISC reduction in the combined entity's profile out to 2030? I'll leave it there for now, and maybe follow up with one or two more. Thanks.
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. We had the discussion already around Yamana. We don't need the optionality of the projects to be able to make the reserve life. 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 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 with very low capital intensity growth.
By bringing Matt and Lucho into the discussion today, I mean, we couldn't bring the whole due diligence team into the conversation, but 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 with very low capital intensity growth. By saying to you that when we see 85% of the value coming from just the top three mines, of course, there's still value that comes from the two 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.
For example, Jacobina phase three will be part of the upside. Now, you heard Matt talk about that and say, "Can we do Jacobina phase three?" Lucho spoke about the plant's got capacity. This is very, very simple to continue developing and get the next phases of expansion. You know, back to the risks and the key assumptions. We use the long-term gold price as for the modeling and be approved. For example, Jacobina phase three will be part of the upside. Now, you heard Matt talk about that and say, "Can we do Jacobina phase three?" Lucho spoke about the plant's got capacity. This is very, very simple to continue developing and get the next phases of expansion. You know, back to the risks and the key assumptions.
We use the long-term gold price as 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 you know, we convert to $1,300 all round, all that'll happen is we'll get slightly more reserve and resource. You know, that hasn't been valued in because that'll be around the edges. I think the way I would sort of summarize that, Jared, is that based on the offer price that we could see at long-term gold price, at the understanding the assets, gonna 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 all that'll happen is we'll get slightly more reserve and resource. You know, that hasn't been valued in because that'll be around the edges. I think the way I would sort of summarize that, Jared, is that based on the offer price that we could see at long-term gold price, at the understanding the assets, gonna 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.
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'll look at the capital and the capital allocation going forward. It's difficult right now to say, "Well, option one will go before option two and before option three." The value in which, you know, we'll continue doing the work and building on the great work that's been done in Yamana. We think it's actually a low-risk base case option with huge upside that, you know. 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.
What it does do is, it takes a risk out of the Gold Fields business by combining it with the Yamana assets. You know, I think what we wanted to do is give with Matt talking to you about what he sees in the reserve conversion, saying the Yamana, you know, 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. What it does do is, it takes a risk out of the Gold Fields business by combining it with the Yamana assets. You know, I think what we wanted to do is give with Matt talking to you about what he sees in the reserve conversion, saying the Yamana team are doing a good job.
There's no reason for us to believe, and the due diligence confirmed that there's no reason for us to believe 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'll be able to enhance that work. Again, we think that, you know, all we'll see in 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. Matt said that Yamana hasn't been starved, but what you will see is an enhancement to that. You know, I think again, we de-risk, we lower the level of risk, and 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.
You're right, we can see in our base case valuation a higher number than what we are paying for these assets. Yeah, perhaps I'll leave it there. I mean, if you wanna pick up with us and Yamana going forward, you know, 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.
Well, I would 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. 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 Peñón's another excellent example, though, of the point.
If we look at El Peñón from 1999 when it first started operations to present day, it has never had more than six to eight years of proven and probable reserves in any one year. Yet, here we are in 2022 with still seven, 7.5 years of proven and probable reserves, again, taking gold and silver into account. I know that sometimes people overlook the silver part. The silver part on a gold equivalency basis gives us about seven, 7.5 years of proven and probable reserves. In 2007, when we acquired El Peñón, it had seven years of mine life, and here we are in 2022 with seven 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 Peñón.
We found that spending $16 million-$17 million per year gets us to the same result, although admittedly not with a large increase in proven and probable reserves in any particular one-year period. Although even there, interestingly, even with that $16 million-$17 million, we've been able to show an increase in proven and probable reserves above what we've mined, what we've depleted by a full 30% within the course of the last several years.
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 the cash for cash flows. 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 in proven and probable reserves.
Thanks, Jared.
Thanks, Chris. Thanks, Peter. That was clear. Just one more follow-up, please, and I just wanted to make sure I understood this correctly. Am I 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? 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. Thanks.
Yeah, Jared, at the moment, Camflo, because, you know, we're not the operators yet, and the combined, as Yamana was saying with Agnico. The way I understand it, that hasn't been included in the upside. That you do see a drop in production as we go underground. Now, clearly, as Peter mentioned, I mean, that's why that asset was acquired. You would imagine that would be part of future thinking to be able to top that up. Because, you know, if you've got plant capacity, why would you not try and fill it? That is not included in our numbers yet because the operators haven't confirmed that yet.
I think the 4 million oz was roughly what we can see from the assets as we see them. You know, that's not that much more than the 3.8 million oz that we get to anyway. Again, that would be part of future thinking to be able to top that up. Because, you know, if you've got plant capacity, why would you not try and fill it? That is not included in our numbers yet because the operators haven't confirmed that yet.
Yes, we start dropping off in Gold Fields' base assets, but then we start topping that up with some of the other opportunities. It looks indicatively that that is not included in our numbers yet because the operators haven't confirmed that yet. I think the 4 million oz was roughly what we can see from the assets as we see them. You know, that's not that much more than the 3.8 million oz 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. It looks indicatively that that's about the range, Jared, that we would want. But we're not willing to commit to that as absolutely our number yet.
I mean, we would have to understand these assets better. We'd 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. That's just indicatively what we think the profile will roughly be, and that we can maintain without any very significant investment in future projects, in big projects. You know, then as we showed in a subsequent graph, 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. 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. That could just as easily be 3.5 million oz as 4 million oz. No, we're not yet committing to that number, but I think it's indicatively around the two ranges that we think with divestment, probably more around the 3.5 million oz, and otherwise could be around about 4 million oz. 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.
Okay, great. Thanks, Chris. I'll leave it there.
Super. Thanks, Jared.
The next question comes from Raj Ray of BMO Capital Markets.
Thanks. My first question is on your enhanced dividend policy. I just wanted to get a sense, but given the near-term dilution to your current shareholders, I'm not talking about the former shareholders. I'm wondering if you could and would still consider a special dividend at some point.
Yeah, thanks, Raj. You know, 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. As we get closer to, you know, certainly 2023, with that 45% ratio, I think what that does is that roughly makes Gold Fields shareholders whole for that year. I think 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.
That's certainly what our intention would be is, you know, how would you increase, you know, in that range of 30%-45%, how would we be able to, you know, have higher payout ratios in those subsequent years. 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. That's certainly what our intention would be is, you know, how would you increase, you know, in that range of 30%-45%, how would we be able to, you know, have higher payout ratios in those subsequent years. Yes, a special dividend is always an option available to us.
Having pushed out now the top end of that range to 45%, I think that is a very, very significant return both to, you know, to the combined shareholders, and that certainly would negate the short-term cash flow, and discount or dilution that is faced. So yeah, 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 wanna be at the top end of that range. Then following that, we'd have to evaluate the position of the company at the time.
Thanks, Chris, for that. My second question is around one of the comments that was made during the presentation about the Yamana assets being well-run and well capitalized. 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 now the previous near-term, already bake in some of these upsides, and despite that, the transaction is pretty diluted from a near-term cash flow and 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. You talked about some of the synergies beyond the $40 million per year sense.
Now, this means that the analyst estimates out there, at least for the near term, I'm talking now the previous near-term, already bake in some of these upsides, and despite that, the transaction is pretty diluted from a near-term cash flow and 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. 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 timeframe as to how soon we can expect to develop some of these additional synergies beyond the $40 million per year.
Yeah, Raj, thanks for that question. I mean, I think that was the intention of this discussion, was to talk about the value. Yes, the existing business, we have confirmed that we think they're well-run. We have shared with you even well-run assets can be run better. I mean, even 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. With different focus, perhaps, newer techniques, we think that we can run those assets better. We've given you through that, you know, the range of potential increases in value where we see some of that value coming from.
We don't know yet exactly the timeframe around delivering that, and that's why, you know, it's much harder to talk about 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, "Yeah, we can see well-run assets with potential." Yeah, I think this will be probably in the first few years, beyond that because we'd need to get our hands on these.
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, "Yeah, we can see well-run assets with potential." Yeah, I think this will be probably in the first few years, beyond that, because we'd need to get our hands under the hood. We'd 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.
That'll take a bit of time to understand. Then, you know, in the following few years, so this is not like 10 years out, this is probably two, three years, and you'll already start seeing a value coming from these, from the synergy, operational synergies. That's actually not too dissimilar from what we saw in Australia. There was some investments that had to be made, and we did that, and they were great returning investments. Over the first few years that we ran those assets, the Australian team did a great job about being able to unlock that synergy. You know, I think we've hopefully demonstrated through the course of the presentation the numerous potential upsides.
Maybe some will 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. I think that's what we're demonstrating, Raj, is the huge potential that exists in the combined company for both sets of shareholders. 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.
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.
Thanks, Chris.
Yeah. Sorry, Raj. Matt wants to add something. Go for it, Matt.
Yeah. Thanks very much. I see similar questions popping up about this resource reserve conversion, but also, you know, how we're gonna capture that longer-term pipeline. The approach that Yamana takes is a portfolio approach, no different to how we run our exploration business. You have a portfolio of targets, and you stage-gate a whole swag of targets. 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. I suppose those processes are very complementary across both companies.
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. You stage-gate a whole swag of targets. 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. I suppose those processes are very complementary across both companies. 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 medium-term potential of these operations, again, we iterated that El Peñón, we see targets that are consistent with this operation being sustained at current levels beyond the current life of mine. 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. We're comfortable with that we have time on both of those assets. El Peñón, we see it as business as usual for a couple of years after. Importantly, chasing those higher value bigger current life of mine.
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. We're comfortable with that we have time on both of those assets. El Peñón, we see it as business as usual for a couple of years after. Importantly, chasing those higher value bigger opportunities is something, again, you stage-gate and you don't put all your investment dollars into one 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. That's kind of the difference.
We see Jacobina as, you know, the significant cash generator. El Peñón's part of a much bigger regional play within Gold Fields. Again, it's just a very good exploration process that we can bolt into. 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, you know, in 10 years' timeframe. At the end of the day, it's all about sustaining the business as priority one, and then we look at growth opportunities as well. Thanks very much for the question.
Great. Thanks. I think we've got one more question. I'm getting Abby saying that we've got to move on. I'm not sure if that was you, Raj, or someone else. Okay, Anita.
Thank you. The next question, which is the final question from the line, comes from Anita Soni of CIBC World Markets.
Hi. Thanks for taking my question. My question is with regards to the dividend. 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?
Yeah, that's correct. Now, the deal's not yet done by-
Okay.
The declaration of the interim dividend. Correct.
Right. Then in 2023, when you stated that it was gonna be around 45%, that's when the deal is closed. Would you expect it to fall from there when it goes into 2024? It's just the 2023 that you're targeting the 45%?
Yeah, Anita, we don't know. That will be evaluated at the time. I think you're seeing a demonstration of a commitment to higher dividends in the range and a desire to pay higher dividends. That'll 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. With a higher range, shareholders should expect a higher payout. We would only evaluate 2024 at the time.
If this deal should not close, you'd be in 2023 more likely at the lower- end of the range is my assumption, assuming that your argument, I guess, in the last two hours has been that you don't have a longer- term pipeline and the cash that you have on-hand would probably be dedicated to bolstering up that pipeline. Is that correct?
Yeah, I think that's right. I mean, it is conditional on the deal being done. The reason for that is exactly as you described. We would have to reevaluate then, well, what does the future look like, in particular if it's gonna be cash acquired additional assets. That's exactly right. I think you've summarized it well.
Okay, the final question. Sorry, what is that? Is the 30%-45% conditional upon the deal closing? If the deal doesn't close, would it be 25%-35% still? Or is it going to be 30%-45% regardless of whether or not the deal closes?
Yes. The 30%-45% is not conditional on the deal closing and the 30%-45% is the new dividend policy range.
Okay, that's it for my questions. Thank you.
Good. Super. Thanks, Anita.
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 wanna just, while you're on, why don't you just talk to that, Abby?
Yes. 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.
Great.
The rest of the questions I'll pick up via 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. Yeah, 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. Thanks very much for your time, and we very much appreciate it. 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?
Of course. 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 diligence on our companies. But it demonstrates the technical depth.
This presentation is a lengthy presentation, perhaps a necessarily lengthy presentation given the amount of work that has gone into the diligence on our companies. It demonstrates the technical depth and breadth of your organization. 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. Thank you very much for allowing me to participate in this discussion, and thank you to everyone for spending your time with us.
Thanks, Peter. For ladies and gents, thanks very much. That concludes the presentation. Thanks.