Hello and welcome everyone to today's call. My name is Becky and I'll be your operator today. During the presentation, you can register a question by pressing star followed by one on your keypad. If you change your mind, please press star followed by two. I will now hand over to your host, Octavio Alvídrez, CEO, to begin. Please go ahead.
Thank you, Becky. Good morning everyone, and thank you for joining us today. I'm very excited to share the details of Fresnillo's proposed acquisition of Probe Gold Inc., a transaction that marks a milestone in our growth strategy. Probe is a gold developer that is listed on the Toronto Stock Exchange and owns the Novador Gold Project and a large exploration land package in Quebec and Ontario in Canada. Before we begin, I want to remind everyone that today's presentation contains forward-looking statements as we are seeing the slide right now. I encourage you to read the cautionary statements in this slide. Today, I'm joined by Mario Arreguín, our CFO, Marcelo Ramos, Senior Vice President of Business Development, and Guillermo Gastelum, Senior Vice President of Exploration. Let me start with the highlights of this transaction.
Fresnillo will acquire all outstanding shares of Probe Gold in an all-cash deal through a Canadian plan of arrangement under Canadian laws, which is analogous to a scheme of arrangement in the U.K. We are excited to add a high-quality project to our existing world-class operations and development pipeline in Mexico. We are also excited that our first major acquisition outside Mexico is in Canada, a country with a strong partnership with Mexico and a global reputation for mining excellence. There may be no better region to make this strategic entry than the prolific Val-d'Or Mining Camp in Quebec. Val-d'Or is renowned for its rich gold mining history, skilled workforce, and excellent infrastructure. Probe Gold brings a large resource base of 10 million ounces, including 8 million ounces at its flagship Novador Gold Project.
We are also excited about the large and unexplored land package of approximately 1,800 sq km in Val-d'Or, adjacent to major gold operations. This significant exploration potential provides Fresnillo with a unique opportunity to leverage our technical expertise and exploration capabilities in a highly prospective region. On slide five, and moving on to the summary of the transaction, Fresnillo will acquire all outstanding shares of Probe Gold for cash with a total equity value of CAD 780 million, which is approximately $560 million. Each Probe shareholder will receive CAD 3.65 of cash per share of Probe held. This represents a 24% premium on a 30-day VWAP to Probe's closing price. The transaction has unanimous support. From Probe's board of directors and is subject to certain conditions, including obtaining Probe shareholder and court approvals.
Current Probe's management and directors, and Eldorado, which owns approximately 12% of the shares outstanding, have entered into voting support agreements to vote their shares in favor of the transaction. The deal includes customary protections, and we are targeting completion of this transaction in Q1 of 2026. On slide six and seven, we will review the mining concessions. The Novador Gold Project is located just 25 kilometers east of Val-d'Or, benefiting from proximity to highways, power, and rail, very good infrastructure. The deposits are mesothermal, vein-type, amenable to both open-pit and underground mining. Probe has released an updated PEA in 2024, which demonstrates robust economics and potential. We are going to optimize the project and undertake work to add resources and further de-risk the project. On slide nine, the exploration upside and optimization highlights Fresnillo's long-standing core competency, as you know, is exploration.
Probe's assets offer considerable exploration upside due to the substantial unexplored land package in a tier-one mining jurisdiction. We have undertaken significant due diligence, and we see opportunities to extend mineralization at depth and laterally, and to add open-pit resources at higher gold prices. In terms of timing, we anticipate mailing the management information circular to Probe shareholders in December, with the shareholder vote expected in January 2026 and closing targeted for Q1 2026. We have always taken a disciplined and long-term view to capital allocation, and I want to confirm that we will continue to do so in the future. To reiterate, this transaction provides Fresnillo with a foothold in Canada, a large and growing resource base through the addition of a high-quality development project and underpinned by substantial exploration upside.
While today's announcement is about growth and our entry into a new tier-one mining jurisdiction, I want to emphasize that Mexico remains our home base. Our commitment to our existing operations, projects, communities, and stakeholders in Mexico is unwavering. This acquisition completes our portfolio and enhances our ability to deliver sustainable value, both at home in Mexico and in Canada. We are confident this will generate attractive returns and create long-term value for our shareholders. I will now pass it back to. Becky, our operator, who is going to open the floor for Q&A.
Thank you. If you wish to ask a question, please press star followed by one on your telephone keypad now. If for any reason you want to remove your question from the queue, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Marina Calero from RBC. Your line is now open. Please go ahead.
Hi, good morning. Thanks for the call. I just have two questions on my side. The first one, the assets you have acquired are located near the properties of other mining companies. To what extent have you engaged with those parties, and do you see any potential opportunities for cooperation or synergies with them? The second question I have is related to your growth projects in Mexico. What does this mean for the other gold projects you have in the pipeline, and how do you see the sequencing of the different growth options you have? Thank you.
Thank you, Marina. Yes, that area. We have several mining companies. As we do always in Mexico and in some other jurisdictions, for example, in Chile and Peru, we are open to collaboration, as it will be the case also in Quebec. We believe we have the technical capabilities to develop this project in Quebec, starting with more exploration. As we all know, we have a very good track record in developing, constructing, and operating assets, as we've seen in Mexico, in which we doubled the number of operations we had in 10 years. We expect to have or apply these technical capabilities in this new endeavor. In regards to the pipeline that we have for growth projects in Mexico, we will continue to develop as planned these projects. We do have the resources and also the technical capabilities.
Let me remind the growth projects that we have in Mexico, which are Orisyvo in the Chihuahua State, Rodeo, future mining operation in Durango, Tajitos in the Herradura cluster, and the recent discovery of Guanajuato South in the Guanajuato State. We are also adding some other projects in some of the jurisdictions like Lucerito, as we mentioned. Our target, as we mentioned in our last calls, will be to first develop a brownfield project that we have on hand, specifically in the Herradura area with the Badges underground operation. Thank you for the question for it.
Thank you. Our next question comes from Alain Gabriel from Morgan Stanley. Your line is now open. Please go ahead.
Yes, hi, good morning, and thank you for taking my questions. I have a couple of questions. One is, how comfortable are you with the pre-feasibility studies that were published by Probe Gold? Are you adopting their key metrics, such as CapEx, annual production, etc., or do you envisage a proper overhaul of these metrics? I guess this question is more about the due diligence you've done on this project and the key metrics. The second question is, you have a very rapidly increasing cash balance on your balance sheet. What does this acquisition mean for your year-end capital returns to shareholders in terms of special dividends? How should we think about the cash that you expect to return to shareholders at year-end? Thank you.
Thank you, Alan. Yes, we reviewed thoroughly and in-depth all the information, the public information that we have from Probe . We reviewed it quite with a technical, I would say, interdisciplinary technical team. It was over several months that we did. Of course, with our technical capabilities and a disciplined approach that we have to reviewing projects, we had a chance to really take into account all those key metrics that you mentioned and adjust according to our knowledge, our experience, our database, and some others. In general, we took what they had in the PEA that they have. In terms of cash balance, yes, at the end of June, we had approximately $1.8 billion with the good operating performance in our current operations.
With the current metal prices for gold and silver, and also just recently also zinc, we expect to have a very good cash balance at the end of this year. That way, we will be able to probably, and according to projections, have a similar dividend amount for next year as we did in this 2025.
Thank you very much. Thank you.
Thank you. Our next question comes from Amos Fletcher from Barclays . Your line is now open. Please go ahead.
Yeah, morning, gentlemen. I guess a couple of questions. The first one, slightly to follow up on what Alain was saying. Should we assume that this transaction reduces your final dividend for this year by $560 million? The second question was just to ask, is this the start of a strategy to diversify the group internationally on a bigger scale? Should we expect more activity outside Mexico going forward, or do you envision this as a sort of one-off deal? Thanks very much.
Thank you for your question. I will ask Mario Arreguín, our CFO, to take on the first one. Please, Mario.
Thank you, Octavio. In terms of our cash balance, assuming this remain currently where they are, we are expecting to close the year with a cash balance of approximately $2.8 billion. This acquisition, the payment is due in January or the first quarter of the year, and we expect this to be around $560 million. After we make the payment, we would still have a very robust cash balance of around $2.2 billion. In that regard, our dividend policy would not have any effect at all. We will maintain the same dividend policy that we put in place on the day of the IPO 18 years ago, which is balancing growth with returns to our shareholders. In other words, we invest in 50% of our profit and returning back to our shareholders 50%. That is our policy, and as always, based on our needs at that point in time.
After considering the different commitments that we have in terms of our budgeted exploration and our budgeted CapEx for 2026, at that point in time, we will analyze the cash balance and propose something to our board of directors. We don't expect this to have any impact at all on our dividend policy.
Thank you, Mario. In terms of the strategy and our entrance to a new jurisdiction with today's announcement, if we review some of the annual reports, it's been several years in which we have been evaluating opportunities to go into some other different jurisdictions. This announcement today ticks all the boxes that we look forward to having in our portfolio. As I mentioned, the merits of the project, the merits of the land package, the merits of the jurisdiction. Canada, Quebec, and specifically the Val-d'Or area, ticks all the boxes. In the past, as you know, we have been exploring in Peru for some years, also in Chile, in which we have even a JV for exploration. We are looking all the time for these kinds of opportunities. This represents a major acquisition compared to the previous one that we've done in some of these other countries that I mentioned.
As I said, we will also remain Mexico as our home base and our main playground, but we have the ability with the technical team that we have to go in tier-one jurisdiction as Canada. We'll continue looking for, I mean, this is a very good opportunistic acquisition that we're doing.
Thank you. Our next question comes from Richard Hatch from Berenberg. Your line is now open. Please go ahead.
We can hear you, Richard.
We have lost connection to Richard. Just as a reminder, to ask a question, please press star followed by one on your telephone keypads. That's star followed by one on your telephone keypads. We currently have no further questions, so I'll hand back to Octavio for closing remarks.
Thank you all, the participants in this call. We continue to be open to questions and answers in our London office. Thank you very much.