That will be your coordinator for today's event. Please note this conference is being recorded and for the duration of the call, your lines will be on listen only. However, you. I will now hand you over to your host, Sebastien Dumontesit, CEO of Endeavour Mining and Richard Young, CEO of Duranga Transaction. To begin today's conference.
Thank you.
Good morning, everyone. Thank you operator. My name is Sebastian De Montesu, President and CEO of Endeavour Mining. Welcome, and thank you very much for joining us today as we announced the combination with Taranga to create a new top 10 senior gold producer. We are with Richard incredibly excited about this transaction as it makes sense on so many levels and offers a strong opportunity for rerating for both sets of a compelling transaction.
Afterwards,
here on Slide 2. Let's now turn to Slide 3, which provides a high level summary of the transaction rationale We believe that this transaction follows the successful M and A trend we are currently seeing across the industry. There are many examples where good companies not necessarily needing to do M and A have come together and have immediately created value for their shareholders. We believe that this transaction will do the same First and about most importance, this combination has a very compelling industrial logic. It combines 2 high quality West African asset portfolios at a time when both companies have recently completed investment phases and are now generating healthy cash flows.
As such, the future looks bright for both companies and even brighter together. Secondly, As a result of this combination, we will create a new top 10 senior gold producer with very strong attributes. Production will be diversified across several flagship mines, across three countries. And we will also have an industry leading growth pipeline and arguably the largest and highest quality exploration portfolio in West Africa. We are also doing this transaction because we see strong rerating potential.
In fact, Richard and I agree that we'll while both our respective companies have stronger rating potential on a stand alone basis, We see an even larger upside through this combination, and we see this as a catalyst to accelerate our re ratings for both sets of shareholders. The combined company will have among the most attractive trading multiples compared to its senior gold peer group. In addition, we believe that the rerating would be supported by enhanced capital market profile. As you might have seen, the other large news of the day is our intend to list on the London Stock exchange as a premium issuer. He has premium and not standard as some other companies recently announced.
This is a big distinguishing factor as it will create the largest premium listed pure gold producer in London with a target to be included in the FTSE 100. This should further help our combined rerating due to inflow demand from indexation. And of course, the company would have strong attributes with strong cash flow generation and a robust balance sheet capable of sustaining an attractive dividend yield. Before we dive into the presentation further, Richard would you like to say a few words?
Well, Sebastian, thank you. Yes, I would, and good day to everyone. Today is a milestone day for Taranga. As Sebastian has outlined, and will outline as he goes through the presentation. Our merger with Endeavor creates what we believe on the Tranga side is a best in class senior gold producer.
When I look at the merger through the lens of Taranga shareholders, there's a lot to like. The new senior gold producer will have things that Taranga shareholders are looking for and expect when they invested in Taranga, and that is among the lowest all in sustaining costs of any senior gold company, as well as Sebastian noted the best growth profile. And what's new for Tarang of shareholders, is a more diversified production base with 6 core mines across three countries. A stronger balance sheet, an attractive dividend, and the scale and liquidity required to attract generalist investors. Our board believes, as Sebastian mentioned, that endeavor targeting a premium listing on the London Stock Exchange.
They will likely become a FTSE 100 listing and there's a lot of follow on index buying that comes from that. Will lay out, there are very real opportunities to achieve meaningful financial operating and capital synergies with this combination. Over the last three years, Taranga's stock has been a top performer. This combination provides a modest premium but more importantly offers participation in what we believe is the best in class senior gold producer trading at very attractive valuation I'm proud single asset producer with 1 standalone mine in Senegal to a low cost mid tier gold producer over the past 2 years. Today, Sabinell Masswa is a Tier 1 asset.
High grade, low cost with a significant potential to materially increase resources and reserves over the next 12 to 24 months. Our second mine, Lao, has far surpassed expectations. And with a recent revision to our mine plan, we'll continue to outperform for many years. We expect these two mines to produce more than 500,000 ounces of gold per year at very low cost. That's for at least the next 5 years.
Our expiration pipeline includes Golden Hill and Afema. 2 rapidly advancing projects with all indications that they will be future mines. As we have built our asset base, we have made a name for ourselves as responsible minors with a strong social license in each of the three countries that we operate in. At this point, I'd like to take a moment to thank our host governments in West Africa for supporting us as we work to build our company and achieve our vision. We believe the company is in very good hands with Seb and his team who share our vision of what a responsible minor is.
I would also like to thank all of our shareholders for their support and a specific call out to our largest shareholder, David Memran. David had a strong belief in our mid tier ambition from day 1. And without him, we would not be where we are today. Finally, I'd like to thank all of our employees who comprise the Taranga family for their commitment and hard work. With that, I'll turn
diving into the presentation on Slide 4, we see the exciting company this will create. All our combined assets are located within West Africa. So clearly, our DNA is West Africa, supporting the compelling industrial logic of this transaction. We will enhance our strategic position in the region with an extensive presence across the entirety of the West African Birmian Gainston Belt with 6 core mine across three countries. This solidifies our leading position in the mining friendly jurisdictions of Cote d'Ivoire and Bockina Faso and now in Senegal too.
As I've mentioned, we will be a top 10 global gold producer with an average annual production of over 1,500,000 ounces of gold, and all in sustaining costs amongst the lowest in the industry. For those endeavor shareholders who may not be too familiar with the Terenga assets, Let me take you through their portfolio on Slide 5. We are confident these assets will integrate well with our existing West African operating platform, and believe that this combination represents an opportunity to capture unique synergies. What stands out is that each asset brings its own significant contribution First, the duo in the crown, Sabadala Massawa Mining Complex in Senegal. Ceranga did an amazing job consolidating the Sawa project with Sabadala earlier this year.
The combined operation has the potential to become another highest quality mine, with above 400,000 ounce of annual production, low cost, long life, long mine life and significant reserves. This asset also provide us with a new operating platform in Senegal, which is a very stable mining friendly jurisdiction. Moving across to Bockina Faso, we are adding the 1 year mine, which Terengas successfully built in commission in 2019, and which produces approximately 150,000 ounce at an all in sustaining cost of roughly $900. This asset will be a strong cash generator. As we saw with the semaphot transition, we expect to capture significant local synergies by integrating Wahgnion into our well established West African platform.
And of course, we like the exploration upside. Patrick's going to be happy and have fun. The developments made at Sabadala Massawa and 1 year over the past 12 months have been game changing for Terenga. This was shown by a 700% increase in operating cash flow to $75,600,000 in Q3 compared to last year, supported, of course, with higher gold price. The 3rd asset also in Bockina Faso is a Golden Hill project, which is located within trucking distance of our Hounde mine.
The project already has 800,000 ounces of MNI Resources and 700,000 ounces of inferred resources, which we will aim to grow further. Given its close proximity to our Hounde plant, we see potential to consider the development project, the development of this project as a satellite to Hounde, which will significantly lower capital cost and potentially accelerate the development timeline. And finally, not on the page but making headlines more and more at their is the Afema joint venture in Kosaguar, where an initial resource is expected to be announced in the coming months. Turning to Slide 6, you see our family bubble chart, which shows how our various assets fit into our portfolio. Put simply, our strategy has been to move assets into the bottom right box, which is above 10 years mine life and below $8.50 all in sustaining costs.
As you can see, Sabadala Masawa is well positioned and with the expansion plan next year, it will clearly become a highest quality asset. If we look at the pie charts on the right, you can see that the combined entity has production, which will be well diversified across three countries, with resources and reserves further diversified across 4 countries given the strong project pipeline. Over the page on Slide 7, we believe this transaction has the potential to create significant synergies across the corporate, regional and mine site level as we leverage our West operating model and integration platform. Following the acquisition of CEMAFO and as part of the broader integration process, we undertook a comprehensive evaluation of our organizational structure and made a number of changes to ensure we are well set up for future growth. At the corporate level, we aim to leverage our recent experience with the CEMAFO acquisition to deliver significant synergies.
In total, we were able to identify additional value for shareholders through our combination with Taranga. As I mentioned, the integration team is already in place we'll be able to quickly transition the people and operations from Turanga to the Endeavour management model, which as Richard said, is a very similar model So we're very confident on the ability to integrate. We also have a clear path inside for G and A cost savings, which we expect to start draw on the benefits of being the largest gold producer in each of Senegal, both in Afaceau and Cote d'Ivoire, where we have strong Nitty And Government Relations, which are beneficial to all our stakeholders. And our existing platform in booking AFSO will enable a rapid integration of Wahgnion and Golden Hill. Finally, at the mine site level, we believe we can achieve significant synergies in areas such as optimization of mining fleets, processing flow sheet upgrades, procurement and supply chains, and leveraging of our centralized support services.
In addition, there is potential to realize significant synergies by operating Golden Hill as a Hyundai satellite deposit. What is most interesting for me is looking at the map on the right. The Endeavour SEMAFO and Taranga transaction has consolidated the highly prospective Houndebel Our footprint now spans 3 mines, 2 projects and the largest exploration tenements on this belt. With an annual production of over 600,000 ounces coming from this belt, we believe that this will be comparable to other world class belt. On Slide 8, you can see that this transaction will leapfrog us into the senior category with total gold production above 1,500,000 per year.
While we are not doing this combination solely for the purpose of size, this added scale does factor in the screening of large global investment funds. As a larger company, we expect to see improved access to capital and enhanced trading liquidity as we become more investable for both generalist and resource focused funds alike around the world. Moving to Slide 9, you can see our position related to the senior producer peer group, With all in sustaining costs below $900 per ounce, I would say maybe even $800.50, we are very well positioned among the peer group. This metric is very important for both Taranga and Endeavour. Both companies have dedicated the last several years to building a robust business that operates at low cost.
As such, it was important for both of us to not dilute our sales by combining with higher cost assets to maintain a high quality portfolio. Turning to Slide 10. Many of you will be familiar with our portfolio of assets, which will be bolstered by the addition of the Tering assets. As a combined entity, we have strong exposure across the full mining cycle. Starting on the left, I believe we have some of the most exciting greenfield projects in West Africa which gives us significant optionality when looking at future growth.
We have more than 10 significant greenfield projects where we see promising potential for additional discoveries. On the development front, we already have Fetekho and Kalana, Peteco has had some significant recent success with an increase in the resource to 2,500,000 ounces and an acceleration of the pre feasibility study to early 2021. We can also add now the Golden Hill project and the Afema expiration to Bantou and Nabanga, which we acquired from Singapore earlier this year. Looking at our producing mines, we have 6 core producing operations and 8 mines in total, Sabadilla Masawa Plus Ity and Hounde from the heart of the combined business with Boungou Mana and Wahgnion all representing additional opportunities for mines in Endeavourstar box. This expanded optionality across our portfolio gives us enormous flexibility for the future and each of these projects will compete for capital within our disciplined approach around capital allocation.
Moving to Slide 11. You see here that the combined business would have a strong balance sheet compared to others in your producers. On the right hand side of the slide, you can see we're very well positioned among our peer group based on net debt to trailing 12 months EBITDA. We will also be moving strong ability to pay an attractive dividend yield going forward. As you noted, we declared our 1st dividend last week and this combination provides further confidence in the sustainability of while paying dividends and growing organically, which would give us further ability to increase our shareholder returns program as part of our capital allocation framework.
As part of the transaction, we are also pleased to have the continued strong support of our major shareholder Laman Shah, Nagib Saguares, who has committed to invest $200,000,000 in support of the combination. In addition, we will be undertaking a comprehensive refinancing of the combined entities debt package. The main benefit here is and less favorable offtake agreements, which are currently on the Terenga balance sheet. We will also have a financing structure that is more flexible As we move to the next slide, I will note that Endeavor recently declared its 1st dividend as a key step on the path to a sustainable dividend policy. Our first dividend of $60,000,000, representing approximately a 1.6% yield on an annual basis will be payable to shareholders during Q1 based on the record date to be set before the transaction closes.
We want to ensure that our long term shareholders will stood with us through the last several years of growth and deleveraging are rewarded for the patients. Following this first dividend, we expect to declare dividends on semiannual basis with the goal of maintaining a similar annual dividend yield until we have reached a net cash position of $250,000,000. Which in fact might be as early as Q2. At that time, we will reassess our capital allocation priorities and consider further augmenting our shareholder return program against other potential uses of capital. On the right hand side of the page, you can see that our first dividend positions us very competitively against our new senior producer peer group.
Being a dividend payer opens us up to an entirely new class of shareholders for whom this is critical consideration. As we mentioned at the start of the presentation, the combined company will be well positioned amongst its peers with a great opportunity for rerating, On Slide 13, you can see how we stack up against the count based on price to net asset value, enterprise value to EBITDA and free cash flow yield. I hope you will agree that there is significant potential for us to move up this chart as we deliver on our commitments and demonstrate the additional value that we can create. Moving to Slide 14. As I mentioned earlier, the other important news of the day is our intent to list on the London Stock Exchange as a premium issuer following the completion of the transaction.
You can see how our production compares to the LST listed peer group, With the removal of Rand Gold, the LSC has relatively limited option for those seeking significant diversified gold production exposure. On completion of the listing process, we will be the largest premium London listed pure gold producer and the 2nd overall and we further believe that expect indexation to add strong incremental shareholder demand, therefore, further supporting our rerating potential. The next item to note is the great support that we have from a group of core shareholders as shown on Slide 15. On the end of the slide, La Mancha has agreed to voted occurring approximately 24% position in favor of the transaction. On the Terengas side, both Tableau and Barrick have agreed to support the transaction.
Between the two companies, they control approximately 33 percent of the voting shares of Theranga and they have committed to vote in favor of the transaction at the upcoming Teranga shareholder meeting. Both Tableau and Barrick bring extensive know how operating in Africa with David Nimro, owner of Tableau, an experienced and well connected businessman in both Senegal and Cote d'Ivoire. Overall, we're very pleased to have all three supporters of the combined company. Obviously, as you have seen, post board have also unanimously been supporting this transaction. On Slide 16, we have set out how the transaction creates benefits for both sets of shareholders.
For Endeavor, in addition to the assets, which we've addressed at Lens, there is a strong economic rationale to pursue this acquisition, which I hope to have made clear throughout this presentation. The transaction is immediately accretive on a net NAF per share basis. On cash flow per share and earnings per share metric, It is neutral over the next 2 years and then significantly accretive beginning 23 when the Massawa expansion is fully realized. All of this accretion occurs without accounting for the impact of the synergies we expect to realize. Endeavor shareholders will also benefit from a more diversified entity to support ongoing dividend payments moving forward.
Duranga shareholders, as Richard explained earlier, can expect to realize an immediate premium and lock in their strong share price appreciation since the Masawa acquisition. The combined entity will be a larger, more diversified and operationally and financially derisked company with a proven track record of project development a clear route to further value upside. The transaction also significantly enhances growth optionality for Taranga shareholders, within an expanded portfolio and a stronger Let me take a moment to summarize the benefits for both companies. This combination creates a top 10 global gold producer with over 1,500,000 ounces of annual gold production at low all in sustaining costs. Both companies will contribute in a balanced manner to the combined entity's value.
The combined entity will have strong cash flow generation capability and a strong balance sheet with the capacity to simultaneously fund growth and pay dividend, while building a strong net cash position in 2021. We will also have the scale and liquidity to attract generalist investors with a combined market cap of over $6,000,000,000 and an attractive valuation related to the peer group. Both group of shareholders have the potential to benefit from a rerating driven by attractive valuation metrics, underpinned by a sustainable dividend policy, a net listing and potential inclusion in the FTSE 100. Finally, we can reiterate that we have strong support from 3 cornerstones investors who can all contribute their extensive relationship and experience operating in Africa. Clearly, the rationale for this transaction is compelling and the pathway for shareholder value creation with that line is achievable.
In closing, let me summarize our combined vision the company that will become after this transaction as shown on Slide 17. We want to create a resilient and sustainable business for the long term. Reward our loyal shareholders while attracting new ones and remain the partner of choice in the communities where we operate. To that end, we believe that this combination supports this objective given how compelling it is. Richard and I are excited to think about what we are able to do together.
Delivering on our shared ambition as we embark on this exciting journey. Richard and I will be now happy to take any questions you may have. Operator?
Of course, thank you. Please ensure your line remains muted locally And the first question comes from the line of Raj Ray from BMO Capital Markets. Please go ahead.
When Richard was on a great transaction. My first question is on the digital digital digital digital for the German that you used recently the last week and given the COVID pandemic, and how long would divestiture do this in flower and how much of that we're able to accomplish?
Sure, Raj. Well, both companies have been doing due diligence together since April. So following shortly after the announcement on the CEMAFO transaction, In the case of Endeavor, we were pretty familiar with Massawa given that we did due diligence when it was a Randgold asset. So we knew well the asset. It's been, I would say, with Richard team is a bit has been nearly 6 months that we've been working on this and making it.
It's not something that happened yesterday. We've been carefully monitoring the steps done between Turanga and Masawa through their transaction. We've been able to, despite COVID-nineteen, we've been able to do a first wave of different site visits during the during the summer, in fact, in August. And then we've been able to do a second ways of visit over the last 3, 4 weeks, which have been successful on both sides. Extensive work has been done, redoing reserves and so on.
So, you know, we had a very strong level of, you know, on confidence on both side. Was a bit unfortunate that, the leak, you know, was made last week, but, you know, the, the leak came where, you know, we were finalizing terms. So, we were very, very close to the finish line. And therefore, the league didn't impact the way we were progressing towards this transaction. But, Richard, you may want to comment also on your side.
Thank you, Sebastian and Raj, that's a great question. So What we did for Endeavour's principal assets, we rebuilt the resource and reserve models. We reviewed all metallurgy and test results We reviewed all the costs. For, you know, some of the other assets, it wasn't as detailed, but it was a thorough view, and we're very comfortable and excited with those assets. And we think that, in particular, the core assets have tremendous growth opportunities.
Yes. The other thing I would add Raj is this is a combination between, you know, 2 companies that knows each other very well. There is not that many, you know, strong and good operators in West Africa. So Richard and I and our teams are seeing each other on a very frequent basis. Obviously, we feel that we have a very similar culture.
You know, if you take, for example, poll day, the current GM at Wahgnion, we are used to work with him. Very comfortable, very comfortable also with the experience team that Richard has at Sabadula in Massawa. So we were extremely comfortable in proceeding from a technical standpoint. The genesis of this beyond the regular discussions that Richard and I have been having is, I've been pushing about 18 months ago for Thiranga and Masawa to really combine, because Masawa on a stand alone basis was not making the numbers. In order to progress.
And therefore, Richard did the right move in combining Sabadala with Massawa. And it became extremely logical for both of us to move forward on this transaction.
Thank you, Sebastian. My second question is for you, Sebastian, on your portfolio. So you got 8 operating assets, among them, Agbaou and Karma, short mine life. But then you got 2 great development it's the Decaturo and, I'm really trying at the Golden Hill that has what synergies for the Hyundai. If you look at your current four do you think this is optimal portfolio and this is potential for a vision of more assets in that?
Sure. What I think over the 3 plus the 3, 3, 4 last years, we've been active in managing the portfolio. Making sure that we do focus management on the right assets and in particular assets which are able to generate the right level of returns that we're expecting for our shareholders. As you pointed out, and I think in the in the presentation, we clearly outlined that we had 6 core assets and from Agbaou and Karma are lagging a bit behind, in particular, in terms of mine lives and cost. So, I wouldn't be surprised if over the next the next few months is once the closing of this transaction, if we start optimizing the portfolio around those assets.
Okay. Thanks, Mr. Sebastian. Just two more questions on my side, if I may. First up on the readouts I answered LSE listing, a premium listing, beyond the redomiciling, is there any other conditions that you need to meet to do that?
And also, are you looking to change the premium listing and the TSX composite listing and at the same time? And the second question is on the dividend timing, just back to when we expect to pay that, I would like to pay that before the transaction closes. Yes. That's it.
Sure. Well, first of all, what's important is, we view this listing as complimentary to, to the Canadian list So we're not expecting any impact for our Canadian and North American investors that are through, through the TS6. The timing for the UK listing is obviously post closing of this transaction. I would anticipate that it's probably going to take about 6 months post closing to prepare for this premium listing. So I would target, you know, around end of Q2, beginning of Q3 for the food for the LDC listing.
Becoming premium, there is different ways in becoming premium. So, yeah, we're confident that, we can make mid dose criteria and again, meeting dose criteria without any particular impact for Canada.
Okay. Thank you. And secondly on the dividends timing?
So on the dividends, as you saw, as part of our Q3, you know, endeavor stand alone has decided to, you know, to move forward with a $60,000,000 dividend. Representing about 1.6 percent dividend yield. So this will be paid prior to the closing of the transaction to endeavor shareholders. So somehow in, around the, around beginning of January, beginning mid January, And then what we say with Richard is that the combined group will have a very strong balance sheet with very limited net debt on upon closing in particular with the $200,000,000 capital injection from given the strong cash flow and the low cost of the combined group that we're extremely confident in generating strong cash flow going forward. And to maintain a minimum, dividend of at least 1.6% yield going forward.
The objective is to reach as quick as possible a net cash balance of $250,000,000 for the company. And once we've reached that net cash balance to progressively increase the dividend yield, based on the cash flow generated, So at this stage, in terms of timing, what we said is that the next dividends will be paid on a semiannual basis. We would expect the combined group to benefit from a 1st semiannual dividend as part of our Q2 results. And then the second one as part of our year end results 21.
Thank you. The next question comes from the line of Fahad Tariq from Credit Suisse. Please go ahead.
Hi, good morning. Thanks for taking my questions.
I
have 2. I'll allot them 1 by 1. On the first, as you think about your, decision on either Fetekro or Kalana. Has that timing changed now? Because you have obviously you're a larger company now, so you've already achieved the growth, but also maybe you need more time to look at the entire portfolio and think about what assets make sense in terms of development.
Anything on the timing would be helpful. Thanks.
Thanks. I had, I mean, no changes on that front. I mean, obviously, Sabadala Massawa project is is progressing. There are some CapEx in 'twenty one and then the bigger ones will come in 'twenty two and 'twenty three. On our side for new projects.
As we said, nothing before end of 'twenty one, beginning of 'twenty two. So we'll continue to progress both feasibility studies for, Fetekro and Kalana. And only one will be launched in 22 based on merits and returns. So there is no changes on that front. Then what we like with the this transaction is basically being able to increase the pipeline for future projects So we still have the BEN 2 projects that we got through, you know, the semaphore acquisitions that we need to progress in terms of drilling.
And then we have this, Golden Hill project that we need to further drill and that will nicely, potentially fit as a satellite to, to Hounde. So that's another one. And then it's really going to be about the amazing exploration portfolio that this combined group is getting both on the, you know, on the core assets. As you know, we still have a lot of exploration potential on our core assets, Hounde and Ity. We see amazing potential on Massawa and on Wahgnion, which is great.
And then we've got a big a big, big number of targets, including the exciting Afema, but not to mention all the exploration also from the CEMAFO portfolio, including the ones at Mana and Bongo. So a lot, a lot to be done and which is why with Richard, we're confident that, you know, this combined group has then all the right features, going forward to create organic growth without having to move into other M and A.
That's clear. My only other question was, I think previously you had mentioned that some of the countries in which you operate in West Africa, they are part of a similar economic block in terms of setting the taxation or royalty structure? Does Senegal also part of that West African block, or is it a separate kind of regulatory jurisdiction with separate royalties and separate taxation? Thanks.
Yes, exactly if I had. I mean, Senegal is part of, of the same, West African economic monetary union as, asco Diva and in Burkina Faso and Mali and Niger. So this is part also of the attractiveness, using the same currency, having the same central bank, and therefore aligning progressively both in terms of taxes, but also in terms of mining codes. So this is why this portfolio and combination between the two companies is so natural and so attractive. Thank
you.
The next question comes from the line of Jonathan Guy from Berenberg. Please go ahead.
Hi guys, thanks very much for taking the question and congratulations on the transaction. Just looking forward, you'll have 1,500,000 ounce a year production. You've flagged a couple of assets that become noncore, and you've got some, you know, great projects in Setacro And Golden Hill, which you can bring into the portfolio. But it is from this point forward is the ambition to maintain at 1,500,000 ounces, or do you see yourself ultimately being a 2,000,000 ounce sir? And, what are your thoughts on further M and A?
Is this it for the next couple of years or are you still looking?
Thanks, Jonathan. You know, 1,500,000 ounce, we said in the past that being between 1 to 1 point was probably the right spot, simply because, this is a tough business where you need to replace depletion every year. And you're talking about reserves, So with a combined group at 1,500,000 ounce, we're going to have to replace about 1,500,000 ounce of reserves, which is probably about 3,000,000 ounces of resources. Which, you know, thanks to the quality of the portfolio and the exploration portfolio in particular, you know, we believe this is feasible, but there is no intention, I mean, to you know, beyond the 2,000,000 ounce. We have a lot of projects.
So we'll see how those different projects taxing progressively into the pipeline. And, yeah, I think we, you know, we're very, very happy. We have now the right, I would say, portfolio diversified geographically think that was the missing point following the Semafo transaction, which is some concerns by some investors on being too exposed to Borkina, which we don't feel because we are extremely happy in Borkina Faso. Obviously, this combination with Saranga gives, a much broader geographical exposure. Highly focused geographically, but at the same time, modified over 3 countries, a strong pipeline, both in terms of project and exploration.
So we've got everything we need going forward to grow organically.
Just to ask, I mean, you guys, you've got La Mancha, you've got Tableau, you've got Barrick, and obviously, you guys, the management team. I mean, there's as for, you know, people with sort of fairly or 4 groups with fairly significant experience in the industry there. Are you all in absolute agreement about the strategy, or do you expect baric or tablet or output at some point, what's, how will the strategy change as these 2 other groups that have come into the tent?
Well, you know, the way I will look at it is, and based on the support agreements that we got from, you know, all set of shareholders is that, they are all happy for this combination to happen and they are all happy with the potential rerating that we would be expecting from this combination. You know, La Mancha and the Gipsaw arrays will be about 19% at closing, following their $200,000,000 top up So 19% largest shareholder in the combined group. Tableau, David Miro, will be about 7% in the combined group and Barrick about 4%. I mean, it's known that Barrick down the road will be selling progressively their their stake. I mean, I don't think that their strategy is to keep investment in other gold mine companies.
But I know and believe that they want to continue to enjoy the rerating of this combination So, I won't expect them to, to come out shortly. And, and David Mihan is, you know, is committed, you know, the Miron family have been extremely successful operating in West Africa across different businesses and in particular in Senegal and in Cote d'ivoire. I do believe that David is also personally a friend and he is extremely committed to see the success of this transaction. And committed to the long term in seeing some strong value creation. So we have a good core shareholders that are here for the long term and in particular to support the rerating that we are expecting from this amazing combination.
Seban, it's Richard. Sorry, John, thanks. I just add to that. And I echo Sebastian's comments, but I think they need to be emphasized. So, you know, as we moved being Tarang into that mid tier status, there were a number of options for us, and options that would have included a larger upfront premium.
But both David and Mark truly believed in what we're creating and the opportunity for a rerate. So of all the choices that we we would have had, they were very, very strongly in favor of this. They believe in in the the combined entity, this new best in class senior gold stock that's being created. So not only are they happy, they fundamentally are are very, very supportive and believe, to their core in in the rerate that the Endeavor shares are going to have over the next few years as we execute.
Thank you, Richard.
Sorry about that. No, no, no, it was important to, further give colors. So thanks, Rich.
The next question comes from the line of Wayne Lam from RBC Capital Markets. Please go ahead.
Good morning guys and congratulations on the combination. I was just curious, Are there any specific country level approvals required for the transaction within the countries that you guys operate?
Thanks, Wayne. There is no regulatory requirements. But obviously, we do have an entertained strong relationship with the host countries where we operate. And therefore, both Richard and I have been informing this morning, each of the 3 key countries where we operate. You know, we have strong relationship in Cote d'Ivoire and in Burkina and Richard may want to comment, but I seen how strong also the relationship of Theranga in Senegal, where they are the largest gold producer.
Richard?
Apologies. We lost Richard. He strengthened Alina.
Okay. No problem. Yeah. So, I mean, we no particular requirements and strong relationship on both sides where we operate. And therefore, both governments, 3 governments have been already informed and are supportive of this transaction.
Okay, great. Thanks. And then I'm just wondering if you could just walk us through some of the due diligence done on the refractory ore at Massawa. I understand, the focus of the operations in the endeavor portfolio has mostly been on oxide material in wondering the level of comfort with the Masawa asset?
Sure. Wayne, I think that we We did detailed due diligence on the Masawa asset when it was owned by Randgold. So we're not discovering the refractory and the buybacks approach for optimizing recoveries at Massawa. On top of that, we've been extremely comfortable with the PFS and the studies that the Turanga management team have done. Which was a very, very thorough and detailed analysis, looking forward to work with them on the next step, which is the feasibility study.
In house, we have some more competencies. If we take, for example, Mark Marcon, our Chief Operating Officer, he was operating one of the biggest buybacks plant in Ghana. So, we have, we have, you know, here and there, some good competences around buyouts. And I truly believe that going forward, gold companies will have to get this strong expertise in refractory ore there are a lot, a lot of refractory ore across West Africa. And therefore, this will become a core competence going forward for major companies.
Okay, perfect. That's all from me. Thank you.
Thank you. The next question comes from the line of Anita Sonae from CIBC World Markets. Please go ahead.
Good morning. Sebastian, can you tell me what you think has been the holdback for both Endeavour shares and Taranga shares And what do you think this combination will do in terms of, actually getting you to rerate for both, for both stock?
Sure. Well, I think Anita and Richard can probably complement thing a lot in building their minds. We went through construction of both Ahunde and Ity and with strong leverage So we started deleveraging, you know, over the last 12 months and, you know, very successfully I think and very quickly. Being able in less than a year after commissioning ity and ramping up ity being able to be in a dividend position. Be net cash 0 on a stand alone basis at the end of the year and the combined group will be close to net cash 0 on the closing date.
So I think the expectation is really through the cash flow generation that this combined group will be generating think if you take some analysts consensus, we're close to 17% to 19% cash flow yield for the combined group. And therefore, when you look on a cash flow per share, I mean, this group has truly a significant potential on upside. Richard?
Thank you, Sebastian. From the Taranga side, and I think for Taranga shareholders, we've acquired Massawa and we've laid out, as Spash, you mentioned, the PFS. But again, they haven't really seen the benefit. We only hit commercial production for Maswa on September 1st. And I think that with another quarter or 2 under our belt, as MASFET delivers, I think you'll start to see that rerate as the market becomes comfortable with that integration.
And we've already guided that Q4 will be a record quarter for us. And then Sebastian mentioned, the market is looking for us to deleverage. So we had indicated on our third quarter conference call that on a standalone basis, we would be net cash by this time next year. So I think as we move through the course of 2021, naturally, we would see the rerate as we continue to execute. And on a combined basis, I think that when you look at our operating and financial metrics, I think there's an entirely new level of of the combined entity as we're able to tap into, larger generalist shareholders.
Okay. Thank you for that. And then the second question I have is, with just to confirm with respect to the dividend, going forward when you reassess it on a semiannual basis, I guess that would be mid year 2021. That would definitely apply to both but for shareholders, the 1.6% yield that you had introduced before?
Yes, exactly, Anita. So what we say is minimum will be 1.6%. On an annual basis going forward. And if at that time, we reach above $250,000,000 net cash, then we will be from there increasing the dividend yield.
Okay. And then just in terms of the team that's going to be left in place from Taranda, can we talk about who is going to be retained and who might no longer be with the firm and in time?
Sure. Well, the endeavor executive team will remain in place, but in addition, we the objective is to complement you know, our team with key senior managers from Sierra and I'd like in fact to take the opportunity. So thanks Anita for mentioning to to Saint Richard in advance, who is, you know, will be staying on for a few months during the transition period. To allow maximizing the synergies and prepare for a strong value creation between the two companies.
That's it for my questions. I'll jump back in the queue. Thanks.
Thank you. The next question comes from the line of John DeMarco from National Bank Financial. Please go ahead.
Well, thank you, operator. Congratulations, Sebastian, Richard. A couple of questions. First off, previously you had mentioned that you were considering either a US or a London listing. And so with the decision today about London, that's great.
Is the U. S. Listing off the table or are you going to consider an ADR or some other means?
Sure, Dan. Well, I think we were balancing between the 2 because there are some, some attractiveness on both sides. On a stand alone basis, maybe given liquidity in the U. S, we were potentially heading to New York. The combined group And given that management is based in mostly based in London and that all our assets are in West Africa and given our forecasted approach to increasing dividend yield in the future, thanks to the strong balance sheet and cash flow.
We thought that this would be appealing for the London market. And the combination having the ability potentially become a food 300 company makes it obviously even more attractive from an index tracker perspective. So, this is why we decided for London. We've started in the background already to work, working on FPP requirements and so on. And the objective, once the, the closing is done, is to head quickly, I mean, to this listing that we would anticipate to be around the end of Q2.
Okay. Okay, great. So any U. S. ADR or something, that would be for any future discussion, but nothing at this point.
Yes, exactly. I mean, if you take the you know, the run gold model, it was basically U. S. Listed, 1400 and ADRs. So, this could be one option for us down the road once the London listing is achieved.
Okay. Thank you. And, last question, great synergies on Golden Hill. What do you envision that would look like? Would that be, could you potentially expand the throughput at Hounde to have higher production, or would you would it be a supplement to extend the mine life?
Sure. I mean, too early, I would say, Don, to say at this stage, what we like is the fact that There's currently about 8000 ounces of indicated resources, 7 1000 ounces of resources, inferred resources. The average grade is about 1.8, but there are also some high grade zone. So very easy to to track and feeding the plant at Hounde. So we'll be as part of the integration, the objective will be to design some of those strategic key decisions in order to recast life of mine plants and drilling priorities in order to move forward.
Okay. Thank you for that.
The next question comes from the line of Logan Wender from BA Securities. Please go ahead.
Hi, guys. Good morning. Exciting, in afternoon, rather, to, use Sebastian, exciting acquisition. Just Two questions from me. One would be on, just looking back at CEMAFO, there was a bit of a surprise when the, government of Canada did the national security review on the Semapal acquisition, have you, eliminate the possibility of that happening in this case or is that still something that could happen?
Sure, Lawson. Well, I think, you know, the good news is that, you know, if, if, Canada had, you know, national security, you know, questions, were all answered during the CEMAFO process. So we're not expecting any difficulties on that front. Nothing has changed. And this transaction is basically reinforcing also some of the Canadian expertise that we will have going forward for the combined group.
So we're not anticipating big issues on that front.
Will there continue to be an office in, located in Canada? I think the original plan with Semifor was to keep their Montreal office.
No, there was there was no requirement to keep an office in Canada. We were interested in fact to keep some of the key teams in particular on the technical side from semafo. This is why we kept an office in Montreal. And the same way we've been discussing with Richard, we're not anticipating to close down tomorrow you know, the Toronto office. There are some, you know, strong people that, you know, will be part of this transaction going forward.
And, and the reality is that, you know, our assets are all in West Africa. And, and what we want is, you know, people to bring, their expertise, whether they are based in Australia, in Perth, in Paris, in London, in Montreal or in Toronto, I don't really care as long as it's the right quality and that they're bringing the right tools to our growth story. Yes. I mean, again, you know, from a Canadian perspective and regulatory, not expecting any particular issues.
Okay. That's very helpful color. And the second topic that I wanted to address was just on the path for Sabodala Sabodala in the salar going forward. So there is still the feasibility study to do. You've indicated confidence in the work that's been done so far, but perhaps with some of the experience you have internally, for example, working in buyox?
I mean, is there any thought to changing the process for, for handling the refractory or going forward? And could we see any substantial changes such as that in the ultimate feasibility study? Also what's the timing you're thinking on
that feasibility study? Thanks so much.
Yes, Lawson, not at all. I think we're very comfortable with progress that the, you know, the Turing team have made on the PFS. They are going right now into and Richard can comment after, but they are going into, you know, trade off studies. So, obviously, you know, some of our team, you know, will be involved and, and, and review that and work, you know, closely with the with the Terenga team. You know, going forward, it's, you know, the same people that will be, you know, running running this.
So, you know, very, very confident in the way it's been, it's been handled so far. And, you know, this will be, a smooth integration within endeavor. Richard, you want to comment further?
Yeah. I mean, Sebastian, I think you've covered it off, but I think the key point is that the PFS was really a point in time flow sheet and it's being optimized through, as Sebastian mentioned, the trade off studies. They'll be done early in the second quarter. And at that then the key decisions will be made on whatever flow sheet improvements are made and the endeavor team will be in place. And as Fashion mentioned, we've got a large group that we've brought together.
Keep in mind that Tranga really has a small technical group. There's like 5 or 6 of them. We've really leveraged off of historically some of the best people the industry, as Sebastian mentioned, globally. And so, Endeavor will be able to keep that those people those experts have been doing all this work. So I don't think Endeavor is going to miss a beat on it, and we'll be able to make the final decision what that flow sheet looks like the sizing come Q2.
You very much, Richard. Thank you, Sebastian. I look forward to following this company going forward.
Thank you. We have a follow-up question coming from the line of Anita Soni from CIBC World Markets. Please go ahead.
Hi, Sebastien, can you let us know if there's, if you've done any analysis on the cross ownership between the two companies and how much overlap there is between them?
Thanks Anita. We haven't, I think, in our slide, slide deck. I can ask Martin or Trish to, you know, to send you that over. But there is about 35% in our cross shareholding between, in particular, Black Hawk, Vanek and others
All right. Thank you. Thank you. I'll hand the call back to the speakers for any concluding remarks.
Thank you, speaker. Again, I'd like to thank you all for attending this, you know, joint call with, with Richard and, you know, wishing you all a nice day and looking forward to, you know, present you some of the results, once closing happen on this amazing company that we're building with Richard. Thank you very much.
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