Please note that this event is being recorded. I'd now like to hand the conference over to Mr. Chris Griffith. Please go ahead, sir.
Judith, thanks very much. Good morning and thank you for dialing into today's call. Before we open up for questions, I'd like to just say a few words about the announcement that we made earlier today. Over the past month, Gold Fields and Yamana have engaged extensively with shareholders. I think these meetings have been productive. Today we're providing, on the back of that, an update to the market to give further clarity on certain elements of the transaction, how we've evaluated the potential of the opportunity and our growing conviction on cash flows. Alongside this, we're also announcing two developments to the proposed transaction. The first is that we'll be revising our dividend policy, the dividend payout policy from 25%-35% to 30%-45% of normalized earnings.
Furthermore, our intention is to pay a dividend at the top end of the revised range, equivalent to a 45% payout of normalized earnings for the 2023 financial year dividend cycle, and that's post-completion. Secondly, we'll be applying to have Gold Fields securities listed on the Toronto Stock Exchange, subject to the completion of the transaction, and that's to provide shareholders additional flexibility at limited incremental cost. The TSX listing will be in addition to Gold Fields' existing primary listing on the Johannesburg Stock Exchange and our secondary listing on American depository shares on the New York Stock Exchange. Additional listing on the TSX will have no effect on where our corporate headquarters and our registered domicile is. We have a long-standing listing on the JSE and our headquarters will remain in Johannesburg, South Africa.
I want to reiterate the key reasons why we believe that this is the right next step for Gold Fields and Yamana. Gold Fields has consistently invested to grow the value and the quality of our portfolio, and the successful execution of this strategy over many years has seen shareholders rewarded with superior returns. Our delivery track record has led us to a position of strength despite systemic challenges facing the broader gold industry. This transaction is motivated by capturing long-term value. This is an investment in sustainable long-term growth to enable us to continue to maintain and grow shareholder distributions beyond the medium term. Gold Fields is confident that now is the right time to invest in the right asset pipeline given the global scarcity of quality assets that are long life, low cost and located in appealing jurisdictions.
It's within that context that the logic of this deal is based on three factors. Firstly, we think this is a winning combination. Gold Fields presently benefits from a strong near-term growth outlook with Salares Norte mine coming on stream in early 2023. We are acquiring a 10 to 15 year quality replacement and a growth profile that Yamana provides. We see that as a logical strategic fit that will result in long-term growth of the quality and value of the combined portfolio of assets. Secondly, we are unlocking world-class assets. Gold Fields has the unique combination of technical capability and financial capacity to unlock the full potential of Yamana's assets. Thirdly, we have an enhanced capital markets profile that's based on comparable scale, liquidity, diversification and operating metrics to major peers with a material value discount presently.
The Yamana acquisition represents the next phase of our strategy, and Gold Fields is investing in growing the value and quality of our portfolio and proactively addressing industry-wide production and reserve replacement challenges. Before I conclude, I'd like to say that I have been greatly encouraged by the constructive discussions that we've had with our shareholders. The board and management team remains steadfast in their belief in the long-term benefits that this deal will bring to both sets of shareholders. With that, I'd like to hand the call over to our operator and we'll answer any questions that you may have.
Thank you very much, sir. Ladies and gentlemen, at this time, if you'd like to ask a question, you're welcome to press star then one on your touchtone phone or the keypad on your screen. If you decide to withdraw your question, you're welcome to press star then two to exit the question queue. Just a reminder.
Judith, there's also a number of attendees in the room, and I'm assuming you won't have to press star or whatever it is that.
Okay. That is fine, sir.
Okay.
Are you gonna take questions on the line first?
Yes
Are we gonna come to it last?
Let's start with the conference call and then we'll come round to the attendees in the room. Thanks.
Thank you very much, sir. The first question comes from Lisa Steyn of News24.
Hi. Morning. Can you all hear me?
Can hear you fine. Thanks, Lisa.
Hi, Chris. Can you just give us a flavor of your engagements with shareholders? I mean, particularly those who are hesitant about this deal. Do you get the sense that they see something different for long-term growth for Gold Fields, or is it really their concern about short and medium-term returns? Thanks.
Yeah, thanks, Lisa. Look, I think that the reality is that the shareholders in Gold Fields and Yamana come from. You know, well, perhaps let me start with Gold Fields. Where we've got 30% of our shareholding are in South Africa, we've got 50% of our shareholding is in the U.S., and about another 20% or so in the U.K. and Europe. Even that shareholding base is quite different. And then likewise, Yamana has got Canadian shareholders, and they've got shareholders in the U.S. and Europe and the like. Not that dissimilar to us, but coming from different places. It's not surprising that many of the shareholders have got different views.
For example, in Gold Fields shareholders, I think mostly our shareholders are saying they get the industrial logic, they get the strategy. Many of them are saying, but they don't like the short-term dilution. This, I think, is probably one of the biggest issues that is raised fairly consistently across all the Gold Fields shareholders. I think for the Yamana shareholders, they say that they have both been at a substantially higher valuation, so they're saying, "Is this a fair price?" Although some parts of the shareholding are saying they don't like the dilution and they don't like the premium. On the other side are Yamana shareholders saying that they don't believe that fair value is being paid.
I think that's the tension that you're always gonna have between the acquirer and the target. In the case of Gold Fields, the fact that we're in a very, very good position now means that many of our shareholders are saying, "Hey, this is great. And we can see what's happening over the next two years. We like it, and we don't want you to do anything. And we're quite happy, and neither did we think you needed to do anything." I think that I'm giving you a sort of a roundabout answer, Lisa, to say that actually all shareholders aren't the same. They come from different places.
The one consistent message is that shareholders have largely said, "Look, we don't like the short-term dilution." Some shareholders have said, "Look, we're trying to understand the strategy, and this feels like it's come quite quickly on the basis of this great growth that's still to come." That Gold Fields is in a really good position. A number of shareholders are trying to understand the strategy, they're trying to understand the timing, and they clearly have got comments around the value that we're paying. Then some shareholders are absolutely frank with us to say they can understand that management has got to look after, the board have got to look after long-term strategy, and that often can be at odds with shareholders' short-term expectations.
Overall, I think we can. I mean, this is the point around engaging with shareholders is I think we can get shareholders to see what we are seeing and why we see this as a very, very good deal for the long-term strategy. Actually, we can still, to a large extent, look after shareholders' short-term expectations. You know, perhaps one final comment before we conclude this question, Lisa, is that we spent an extensive period of time evaluating these options, and therefore it's not unsurprising that many shareholders on day one are not gonna entirely see what we spent seven months getting to see. To that we think that this, yes, this is a fairly complex deal from the types of companies that we're putting together and from their jurisdictions.
The deal itself is not that complex. We acknowledge that this was gonna take time for shareholders to see what we can see. Also the value that we can see we can add to these assets. A little bit about a sense of shareholders coming from different places. The sort of summary around that is trying to understand the strategy, trying to understand the timing, and then also some concern around short-term dilution. Thanks, Lisa.
Thanks, Chris.
At this stage, I have no further questions from the lines. I'll hand over for questions from the room. Thank you.
All right.
Ed Stoddard with Daily Maverick, Business Maverick. I'm just wondering, Chris, about your enhanced dividend policy. I'm just wondering if do you think that will help get more shareholders on board? I'm just wondering why you're kinda making that announcement now, why we're discussing this so.
Yeah. Ed, thanks. Look, I think what you've seen is we haven't changed the structure of the deal. The structure of the deal remains the same. But for shareholders who are worried about saying, "Are we gonna take all the cash and go now?" That they were expecting dividends. And what they've come to know about Gold Fields, Disciplined capital allocation, so that we would focus on returning cash to shareholders, investing in the business and also investing in growth. People are saying, "We know Gold Fields like that, and we've come to like them. That's what we invest in. Now we worry that you're gonna go put all this money into your growth projects or into the alternatives that you're now getting." Okay. That's the first thing. People are saying, "Are you gonna change?
Are we gonna still see cash returning to shareholders, or is this gonna go somewhere else?" Then the second is, there is absolutely short-term dilution in cash flow metrics. As we put the two companies together, there is short-term dilution. What we're trying to do is send a message, firstly, that we continue to see very strong cash flows from the business, and that's why we can increase the dividend range. The second thing is, in an attempt to show there's some offset to the dilution on the cash flow metrics or the short-term metrics, we're trying to say that in the 2023 year, so once the deal is done, because we don't have to go put cash into a lot of other bolt-on acquisitions, we'll be able to pay a higher dividend.
It's really to give, I guess, comfort in the first place that there is gonna be cash returned to shareholders and at a higher range than before. That sends a message, we hope, that there is gonna be cash returned and that we're not gonna be taking all the cash and going to spend it on something else. The focus of the business will remain the same. Then secondly, we in an attempt to show some offset to the short-term cash flow dilution, we give a higher dividend. It's not changing the structure of the deal. It's sending a message around confidence that we have in the business and in the combined business going forward.
Cool. Thanks.
I've got a question. When do you have to start putting in CapEx in order to keep production at 3.2 million?
There's already CapEx. If you look at the CapEx of the business, the combined business, we've been spending around $1.1 billion. They've been spending about $400 million. They are already investing in growth and sustaining their production at Malartic and also in some of their smaller assets. The CapEx that's required for small growth in their assets is quite low intensity, and that just happens in the course of business. Then potentially for the longer term projects, that'll start in probably three to four years from now.
That's not material because some of it, of course, you know, Salares capital comes off. As Salares capital comes off and some of that picks up, we actually see a fairly stable until we start spending in MARA, which is probably, you know, a good number of years out. That's not committed yet. I think all of those, David, we'll still be able to, in the combined company, have a look at the, well, how do we now have competition for capital. Where is capital going into the best returning assets. All of that will happen now in the combined company. There's not material increase in capital over the next number of years.
Three to four years or so. At a point in time, you're gonna have to embark on one of the big, you know, big-ticket projects.
Correct.
You know, the gold price might go through a wall. There might be other unforeseen events. You put a lot of stress on your balance sheet to hang up a higher range of earnings. The stress in the company that you're building in order to achieve this ambition, do you think you're making Gold Fields a higher risk company as a result of this?
I think we're doing exactly the opposite. If you look at first of all, let's look at the structure of the deal. The structure of the deal is in shares, so we don't have to incur cash outflow in the business to get this combined business. You get replacement assets, you get all this optionality, and you get existing growth coming from a share deal. We're not putting stress on the balance sheet. We see that the payments that are coming out are not coming out of debt. We're not paying dividends out of debt. We're paying dividends out of cash flow. We're able to spend on capital. I guess the question could be, well, why don't we then commit beyond 2023 to a very high dividend payout like now?
That's for exactly the reasons you say is that, I mean, we need to see what the world looks like at that time. We've got confidence that we can increase the range. We can get confidence in the short term that the cash generation that comes from Salares and from extra South Deep production will generate the cash to pay this higher dividend. It's not putting pressure on the balance sheet. That's exactly what it's not doing. We still have, and we're not taking over a company that's got a lot of debt. Seldom do you get the opportunity to acquire a business like this that doesn't have a balance sheet issues that you don't have to go out and sell assets to repair the balance sheet. We don't have any of that.
Actually their net debt to EBITDA ratio is very similar to ours. We don't need to add debt to the balance sheet to get the deal done. I think we're actually in a really good position. It's the opposite, I think, of what you suggested. We don't have debt. We don't take on a company with debt or any material debt. 0.4x net debt to EBITDA is in a really good place. We think that we're gonna be reducing that over the next while. There's not big capital commitments. If we go into a period of time where the world is more uncertain with lower gold prices, of course, you can decide not to do those deals. But you've got the optionality.
Going forward, any cash deals or trying to get assets are gonna become more expensive. We think both from a position of strength now, where the company is and the cash flow growth over the next number of years, is a fantastic time to look at doing this deal as opposed to waiting till when you're in trouble and then potentially the world is much tougher place. If the world's much tougher in a number of years going forward, we can still keep all of our optionality. We can, I mean, even now and over the last number of years, we've been able to very judiciously pay cash back to shareholders, invest in the business on a sustaining capital, and look after the business and invest in one big project at a time. We're still easily able to do that.
Going forward, if we're investing in, you know, some smaller growth with low capital intensity and one big project at a time, it'll be very similar to what we're doing now. We'll just have higher cash flows to be able to do that. I don't think we're putting stress on the balance sheet at all.
Okay. Just a shareholder question. What is the shareholding of the combined group look like? The breakdown. The geographic breakdown of the combined group. What are the shareholdings?
They have quite a big chunk in the U.S. It's probably pretty similar to 50% U.S. I mean, South Africa might come down a bit. Maybe come down to 20%, maybe. Probably the 20% will be UK, Europe. Maybe a little more in the U.S. Maybe 5% Canada.
Okay. The Canadian share of the company is small.
Well, we don't have any.
I mean, yeah. You don't have any.
Yeah. Just likely they don't have South Africans. South Africans will come down, Canada will come down, U.S. will probably grow as a percentage a bit, and then about 20% to Europe. Yeah.
Just going back to your first answer about shareholders. Do you think in this cycle, shareholders are quite reluctant to look long term? Is there a sense in which shareholders in general are quite reluctant to look long term? Is it the case that one of the little behemoths you have to get to, that shareholders in this current cycle just want to harvest, and companies are sort of going along with that. Is that sort of a trend in general, not just related to this deal? Second, you know, when you look ahead for the gold markets, what would you be saying to them for the long term. What is the outlook?
Hilary, thanks. Look, I think shareholders. I mean, you know, even us as individuals, we are shareholders, and I guess if not one of us will have a similar outlook in life to the others. There'll be some of us that'll have a longer term view. There'll be some that have short term view. We each will have different. We'll have different perspectives. Shareholders that even in our own shareholders, we've got index funds that are. I don't know, what is the percentage of index funds? We've got 30% of index funds. You know, so even that will change. We've got a, you know, there's big components of shareholders are index, and some of that will come out because they'll come out of the small indexes for Yamana. They'll flow into bigger indexes in the combined company.
That's already a big component. That's that sort of has less of an emotional attachment to it. They'll operate in a certain way. We are seeing shareholders, unsurprisingly, many are short term. Even the guys who say they're long term, their long term is like a year or two. I think many shareholders say that, "Yeah, you've got to find a way to look after us and the long term." Some shareholders absolutely want management to do the right thing, but would prefer not to have any of the downsides of investing in the long term. I think the answer to that is shareholders are not universal.
Mostly they are more short term, and particularly when a company is in a good space because, you know, some of these shareholders have also been around through tough times, and they're saying, "Now look, now that we are in a good space, we expect to see a higher return from that." Again, that's not unexpected. I think generally shareholders are saying they acknowledge the need to invest long term. I think it's not something that people want to acknowledge, particularly in the gold industry, that there is this ongoing need to reinvest in the future. I think that's something we, both producers and shareholders, don't readily want to admit to the fact that it's becoming harder to get assets.
There's much less new assets in good jurisdictions that are becoming available through exploration. It's getting harder, and it's getting more expensive, and the quality of both the assets and the jurisdictions are getting worse. It's not, I think, something we all want to acknowledge. I think shareholders look to companies that either have less of a need to invest long term or are better at navigating it than others. You know, I think it's quite a complex question, and I think this is what we try to do, is demonstrate that we've done well from the execution of our strategy. Many of the things that shareholders are saying, "Oh, but, you know, we didn't, you know, why are you investing in something? Why are you acquiring things?" Well, actually, the whole of Gold Fields is being acquired.
The current Gold Fields, absolutely everything. South Deep, the Australian assets, the Ghanaian assets, the Peruvian assets into Solaris, all of those were acquired. It's not that this is something that is not unique now to Gold Fields. This is actually something that's been done in Gold Fields for, you know, over a hundred years. And the fact is, if we wanna be around for another hundred years, we've gotta continue looking at the future. Gold Fields is in a really good position now, and it's in a good position because it's still got growth, and it's in a good position because it's still got cash flow growth, and it's done well in investing in its existing portfolio.
Now we don't have those same options that we've had in the past, and we're gonna have to do more of what was done in the past and look to the future, and we think we're in a really good position to do that now. We acknowledge the short-term Gold Fields shareholder dilution. In the cash flow metrics, are we trying to find some way to help them look at that? I think our message to our shareholders is that in this deal, we haven't forgotten you. The DNA, what we've always focused on is returning cash to shareholders and disciplined capital allocation, growing margins and growing life. That is not gonna change in Gold Fields. We think it's a really super.
I mean, this is, we think, quite a clever way to, without putting, as David's question is, stress on the balance sheet. We get this really symbiotic combination of the two companies. Yes, Yamana shareholders benefit in the short term. In the longer term, Gold Fields shareholders benefit from not having to go out and chase worse jurisdictions, not having to chase weaker quality assets. Then the benefit for both sets of shareholders is actually the sum of this combined deal is greater than the individual components.
We're gonna try and demonstrate more of that today in the presentation to show what it is that we see about these assets that that excites us, and what it is that we see bringing our technical expertise that we can actually make more of Yamana's assets. Actually, even Yamana in the future business gets more because the pie gets bigger than both pieces put together. That's what we wanna show shareholders, and I think we can do that. I think there is benefits for shareholders, even short-term shareholders, and even for those who don't want to acknowledge the challenges in the gold mining industry, and also the challenges that Gold Fields faces going forward.
Why would it be harder to chase assets tomorrow rather than today? Do you feel that we're at the tail end of the consolidation cycle in the gold sector?
No, I think the consolidation has only started. If you look, David, we're gonna show one graph later that S&P uses to show the investment over time in exploration money and the exploration finds. So I mean, the gold industry is, you know, known well to everyone and sort of everyone's got this tale. Some companies have got potential in their businesses to keep growing. I mean, even some of our assets like the Australian assets. The benefit of that is that we've been able to keep those growing. Therefore, the belief is, well, no, you'll just be able to keep doing that in your whole company forever. That's just frankly not correct.
It's getting harder to find the assets, and where they've been found is not in the tier one jurisdictions. They're going into much more risky places. The quality of what's being found, lower grades, deeper, we've seen more assets going underground. And the fact is there's just less of it available. That means the competition for that, I think is gonna increase materially over time. If that's the case, then of course they just get more expensive. If you look at that, actually, I mean, every sort of analyst has done some version of, well, what's the cost and what's the average over the last five years or 10 years?
The difficulty with that is when you just take an average cost, for example, over the last 10 years or over the last five years, it doesn't show that actually over the last few years they're getting much more expensive. Then when you see where the deals have been done, they've been done in much more, much less attractive places. It's not so easy just to draw a line through them and just say, "Well, you know, because you've been able to do them now, why don't you say that you'll be able to do them in the future." I think the competition for those assets is gonna increase. I think you're gonna see much more M&A in the gold industry because there's just less new stuff being found.
You're gonna have to join up with where you can potentially solve, I think, very similar to what we do. I think there's gonna be much more of that going forward, and I think that's why this is a clever deal at this time. For example, Yamana, number one, it may not be around in some time to come. If you look at, you know, their value, so they will have a growth in value. They just keep doing what they're doing now. The value in a year or two's time will be higher than where it is now. We'll have to pay a higher price for it now. We think actually this is a really good time. If you look at a five-year window, and I think the way.
I'll make one comment, and then I'll go back to the five-year window. The way we structured the deal as a share exchange, at this point, 0.6x. As the share prices move up and down, you're not trying to deal either with cash or locking in the share prices, which has then got all sorts of dangers when share prices move up and down. Locking in that exchange ratio of 0.6130, 0.6 , which is 0.6139. If you go back five years, for three of those five years, they've traded over 0.6. You know, even with the premium. If we look now, when the asset came down over the last two years to 0.45, actually it's a really good time to do the deal.
Then if you pay the premium, you get back to the five-year average anyway. Over a five-year period, there actually isn't a premium. If you look at it like that, this is actually so contrary to the notion, say, "Well, why didn't you wait until your shares are better, till you've got higher share price?" Yes, we do believe that our share price will rise. Their share price will rise, but we think at a faster rate. We think this actually is quite a good time to do this deal, and that we're not overpaying. Yes, we paid a premium to the market price at the time, but not to fair value, and certainly not to the value that we can see in our hands for this combined company.
You know, we think this is a good time. We think the competition gets much tougher going forward, and I think you're gonna have to compete in much more tricky jurisdictions. If you look at some of the other benefits that come with this deal. Yes, on just on the face of it, you know, you look at number one, the three top assets make up 85% of what we pay. It's very low risk to the acquisition price. You look at the optionality that comes, actually comes at a very low price than if you had to go out and buy that optionality. You're getting a huge amount of optionality very, very cheaply. Then if you look at the other sort of why it actually makes really, really good sense is the geographies that we're buying these assets in.
Bulk of our South American operations, so they're complementary to our portfolio. Getting into Canada, you know, when you try to come into Canada from the outside, we have looked at that Abitibi region probably for the last 10 years. We've got Matt Crawford, our head of exploration, who's gonna be on the call today. We can always ask him, well, what did he see? Because he's part of the due diligence team. They've tried for over 10 years to get into that area of Canada. When you're trying to come in from outside to buy an asset, number one, the prices are very expensive. It's not that different to Australia. We get into Canada, you know, in one of the best parts of Canada, in one of the best jurisdictions for mining in the world.
We get one of the best ore bodies in the world with Canadian Malartic, and we get it as part of the deal. When actually, if you look over the five years, very little premium. As Canadian Malartic grows, that value, and as they convert resources, the value of that asset is gonna become massive compared to where it is now. Again, a really good time to buy into that. We don't have to do that from the outside in. We get that in from. The jurisdictions is really super fit to our portfolio. The geographies and the mining methods are very similar to ours. The three different types of mining that they ore bodies that they do is exactly what we do. The orogenic in Canada are exactly what we do in Australia.
The paleoplacers in Jacobina is exactly what we do in South Deep and Atacama. The ore bodies around Salares is exactly what we've got in El Peñón and Minera Florida. We can bring all of the technical expertise that we know how to use. I mean, when our guys go into those assets, they say, "Well, we know this." I mean, it looks like us.
Sorry, Chris, when you talk about the mining methods, is it all mechanized as well, pretty much? There's nothing conventional about the mining.
No.
Okay.
For example, when we do the criteria that we told the guys, you only like, you've got to look for this stuff. For example, we don't know block caving as an example for our company. Big block caves for our expertise is not something where we've got expertise. Cut and fill mining and conventional room and pillar, those are sort of things that we know how to do. We do them all the time and are open to that operation. Everything that we see in Yamana is either mining methods that we know or geology that we know. The compatibility with the geographies, the compatibility with the mining methods, the compatibility with the culture around ESG, technology, it is all very similar.
When our guys walk in there and say that we know this stuff, we see it. I mean, Luis Rivera said one of the things he said, "If we just put the Gold Fields badge on the wall," he says, "It'll feel like a Gold Fields operation at Jacobina." Except when the guys, the exploration guys, when they walked into Jacobina, they said, "The size of this thing is four times Tarkwa." Help our fellows there in the corporate office understand what they're seeing. They're saying, number one, yes, we've got growth on the existing assets. Yes, we think we can help with it. We think we can do that maybe faster. We think there's things on the recovery that we'll be able to put in that over time will make the recovery better. But they're not scrap assets.
They're certainly not as difficult as the assets we bought in Australia when we first bought those assets. What we're gonna be doing today, because there's been quite a lot of criticism to say, "Oh, this doesn't have a lot of synergy," because, you know, you can't cut this much overheads or there's no mines to put together. You know, number one, nobody believes that mining companies talk about synergy anyway. Secondly, I mean, most people just put a line through it and they say, "Well, okay," you know. The fact is that that is always the smallest amount of money you can make, is chopping a couple of people out and, you know, making it less and taking away this bell or whistle that that company's got. It's the operational synergies that are quite difficult to quantify yet.
The fact is, when we see these assets and we see that, number one, we know how to do this, we've got better technical skills than they have, and we've got a, you know, a bigger company. For example, to be able to put the right exploration in at the right assets. So when we look at the operational synergies, that will absolutely get delivered. I mean, we've demonstrated that in Australia when we took over those assets. We can build mines, number one, they can't. They've never built a mine. They bought things, and they put them together, and they've looked after them, and they've fixed them. So these are not bad assets. They're good assets in good shape. We can just do more with them. They've never actually built a mine. We can build mines.
We can do more on the life extension of brownfield exploration than we think they can. The fact is that actually, yes, they've been a sort of driven by M&A. M&A is not something we don't understand. The integration of those into our business is something that we've done many times before and can do that again. The third area of synergy that we see is around the potential now in the combined company to be able to divest of some of the higher cost smaller assets. Again, we wanna be careful about how we say that. I mean, the reality is that is what we're gonna do. I mean, we have sold mines before, and we're likely to do that again.
It just gets easier when you've got more assets and and you've got more potential to rationalize that portfolio. They've got two small assets with higher costs, but one of them, for example, at Cerro Moro in Argentina, I mean, I think we've used between 5% and 10% of that tenement. We've only touched a small little portion. I mean, there is massive optionality there. One wants to be very careful that just because you want to wave your arms around and say, "Look how much we can do, and we'll chop this up," you may give away huge optionality that is basically coming very, very cheaply. But let's say we don't think we can do anything with that. Could we divest from some of those smaller assets, including some of our assets that are coming towards the end of their life?
There's a huge potential to do that, and of course, that also contributes to lower unit costs. There is some overhead synergy, but I'm less stressed about that. That is to say you chop some things out, you'll do that, and we won't carry anything that we don't need. The real operational synergies is the geographies which we operate, the mining methods, our technical expertise, and then the potential for rationalization of the portfolio. There is way more opportunity in our combined hands than just what we are announcing on the overhead synergies, for example. You know, so the underlying logic of this deal, we think is really, really amazing. I mean, it, you know, and the way we structured that puts us in a very good place.
The outcome of that is, if you look at these, this company together, where it'll be competing with the other three majors, all of the underlying metrics, life of mine, cash flow, production growth, all-in sustaining costs. You look at all of that, we comparable to all the top four. To the top three. If we comparable to all that, we'll be at the same size as them with a much lower share price. The potential for the rerating of this company is, in our view, material. You know, all around, that's the reason why we remain excited about this deal.
Can you give us a rough timeline? I'm just wondering where, you know, when the shareholders are going to vote and that kind of thing, and when you would have to get regulatory approval. When do you expect to have the deal done, if it's going to get done?
The current timeline is the circulars will be out second week of September.
Okay.
The shareholder vote will be almost a month later. Current timing is twelfth of October. There are certain things that are impacting that, mainly financial information that needs to be prepared. One of the key things, Ed, is we need to do pro forma reviewed financials, which we'll do with the H1 results, which is the twentieth of October. We need to have that done shortly after. Early September is when the circular will go out. Those are the big ones. Then it needs JSE approval, TSX approval, Reserve Bank approval, and Investment Canada, which is sort of the competition commission up in Canada.
That's right.
Those are the big ones.
You're looking at basically October?
Yeah. After shareholder vote, I think it's two weeks for closing, so end of October.
Are any exchange controls kind of issues involved in the deal?
Yeah.
No. Nothing. It's just a mix of shareholders. Yeah. The South African shareholders hold their shares on the Johannesburg market. Yeah.
Because so that Gold Fields shareholders either have shares on the JSE or they have shares on the New York Stock Exchange through the ADS. In the future, the shareholders can opt to have either of those. As we issue the new 530 million shares or so, they can opt to either have Gold Fields shares on the JSE or they can have them on, o h, now there'll be a third option of Toronto.
Toronto. You, you're much freer now than you used to be to move cash around the merged group anyway, in terms of.
Yes. In the existing countries where we operate, we pay our taxes, pay our royalties, and then the funding flows and the dividend withholding tax comes through SA. That's right.
Yeah. You might remember, we don't have any cash movement issues at all with the current group. Yeah.
Do you wanna just go back to the line to see?
Yeah.
Other people. Is anybody else on the line? Any other questions?
Thank you very much, sir. Ladies and gentlemen, just a reminder, if you'd like to ask a question, you're welcome to press star and then one. Next question comes from Martin Creamer of Mining Weekly.
Hi, Chris. Great to chat to you. Would you not agree that there is an element of the tail wagging the dog with this deal? I mean, you went through earlier on, now you've rushed out, you've gotta get on the Toronto Stock Exchange when there's already a North American possibility there. You've gotta give bigger dividends after your company has thought this out for years and years and years. Is it not sort of populist chanting from retail investors and the institutional investors having to just sit back and listen? Is there not an element of the tail wagging the dog and you bending over backwards here?
Martin, thanks for the question. Look, I mean, I think we were clear, Martin, that the structure of the deal remains the same. I don't think we're running out and because of different views, changing the structure of the deal. Structure of the deal remains as is when we announced. What we are trying to do is listen to people when they talk to us and give us feedback. If there are challenges that people are seeing, you know, try and find ways to address that within the structure of the deal. No, I think it's not the tail wagging the dog. I think it's just prudence to find ways to make as many people happy as you can. That's what that's how I would describe it.
I think the reality is that the other three big gold mining companies are listed on the TSX. If we're going to be competing head to head in that club, I think we must be, you know, on the same field. We think that it is the right thing to list on the TSX. Originally, we said that we would delist because then Yamana will delist from the TSX, and we didn't see a need to do that. After talking to shareholders and looking at the rationale for why you would want to be on the TSX, actually we think that it doesn't add a lot of work to us.
Like, for example, we don't have to become quarterly reporters, and the cost is negligible. If that's the case, then we think, well, why not be where the other major companies are? There's some other minor benefits. But no, I don't think it's the tail wagging the dog. I think it's prudent, and without changing the structure, we're trying to see if we can, through what we've announced today, make it easier for both Canadian and North American shareholders, give them another option. Doesn't add a lot of work to us and doesn't add a lot of cost. Being on the TSX, therefore, I think is a good move, which is why we've announced that. Which is why that was just a, you know, it wasn't a reversal.
It wasn't being forced to do something we didn't wanna do. I think it was just applying our minds to what people were saying and saying, "Actually, we think it will be a good idea to be on the TSX." The dividend we commented about earlier, I think it's sending a message of confidence. We would have started paying more dividends anyway. Yeah, I think, Martin, it's trying to acknowledge people's challenges and where they've got difficulties. Is there a way to try and do that so we can make as many shareholders possible happy without amending the key elements of the transaction.
Have you bent over backwards sufficiently now, or are you prepared to bend over backwards even further?
Yeah, Martin, I think we've shown you that we you know, we're going to the top end of our range on the dividend, the new and revised dividend policy. We won't move beyond that. No, I think we've done what we can, but we have not changed the elements of the key structures of the deal. There's been no bending over backwards there. The main components of the deal are still as we originally announced. You know, I think the other thing, Martin, is that I think is important to say, because yes, we saw a big share price reduction on the day, and we did expect to actually see a reduction. Not as big as that, for sure. Just given the premium that we were paying.
There was the share price reduction and a reaction. What would happen is that in the month that our deal's been out there, we've seen a reduction of the whole market. If we look at the gold index, the whole gold index is down 17% since we started. If you look at us on the JSE, actually we're down 17%. We're actually exactly the same now as the market. We pretty much caught up on the JSE all of that. On the TSX, sorry, not the TSX, on the New York Stock Exchange. We were down 24% or so, and the GDX, so the gold index was down by 17%. We're still down 8%. You can see versus the market we've caught up from that 24% down.
Why I'm saying that is that actually we are catching up, but it's just quite difficult to see because of how bad the overall market has been. You know, gold itself has remained fairly resilient, even though it has come off about 4% or so over the last month. Compare that to the other commodities, how far they've come off. The other shares that are associated with those commodities, it's been a really brutal month. I think Gold Fields and the gold index has actually remained fairly resilient, and we're starting to come back. I think we just have to keep telling our story. We have to help shareholders see what we can see, and that's the plan and that's what today is part of that.
I think that's what we have to do as opposed to bending over backwards as you described it, Martin. Because we haven't changed the nature of the offering. We're trying to find ways to alleviate some of the concerns and the pressures. We have to just spend enough time with shareholders so they can help understand the deal. That's I think where we've got to bend over backwards, is actually just being on the road, talking to people, putting in the effort so that we can get shareholders to see what we can see.
Thanks, Chris.
Thanks, Martin.
Thank you. At this stage, I have no further questions on the line.
Maybe last question here.
Great. Very good. Thanks.
Very good. Yeah. Thanks, Dave. Very good. Okay, it seems like we have come to the end of our questions here, Judith.
Thank you very much, sir.
Okay. We'll bring the call to an end then. Thanks, everyone. Thanks for those on the line. Much appreciated. Nice to chat to you.
Thank you. Ladies and gentlemen, that concludes today's event. Thank you for joining us. You may now disconnect your line.