Good morning, and welcome to the Newmont Goldcorp business update call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Gary Goldberg, Chief Executive Officer. Please go ahead.
Good morning. Thank you for joining us. Today, I'm joined by David Garofalo, President and Chief Executive Officer of Goldcorp. We and other leaders will be available to answer questions at the end of this call. Turning to slide two. Before we start, I'll ask you to review the cautionary statement shown here and refer to our SEC filings, which can be found on our website at newmont.com. On slide three, you'll find additional information on the proposed transaction here. Turning to slide four. We're here today to announce the formation of the world's leading gold company. I'll start by giving you a little background and context. I've been CEO of Newmont for the last six years. During that time, we've built a reputation for delivering on our commitments and building strong relationships across the gold and mining sectors.
One of our strongest connections has been with the Goldcorp team, based on our shared values and common cultures. We've looked at a number of opportunities to work together over the years. Today's announcement would not have been possible without the solid connection and trust we've built through these interactions. You've heard me say often that we continuously evaluate many opportunities and weigh them based on their value and risk. Up until now, only one has met our criteria. The transaction we are announcing today is another. One that positions our business as the gold industry leader for decades to come. Simply put, this is not a deal we have to do. This is a deal that we want to do.
It's a deal that combines world-class assets and prospects in favorable mining jurisdictions and that leverages the best of our proven abilities, including a common safety culture, superior operational execution, and continuous improvement focus to the longer-term benefit of our shareholders, employees, and host communities. Let's turn to the transaction overview on slide five. Newmont Goldcorp will be the world's leading gold business as measured by assets, prospects, people, and value. We will operate a portfolio of world-class assets on four continents with the ability to target sustainable production of between six and seven million ounces of gold annually and have the benefit of additional revenue from other products, including silver, zinc, and copper. Combining forces will also give us the sector's best project pipeline and exploration portfolio in terms of quality and depth.
These prospects translate to the gold sector's largest reserve and resource base and exceptional long-term leverage to the gold price. Finally, Newmont Goldcorp will have the financial flexibility to execute capital priorities, deliver sustainable shareholder returns, and maintain an investment-grade balance sheet. Our ability to make the most of this combination rests on great people and shared values. We are aligned in our commitment to doing things right, from sending people home safely every day to leading the way in our environmental, social, and governance practices. Taken together, these attributes give Newmont Goldcorp a clear competitive advantage and the ability to generate industry-leading returns for decades to come. Now I'd like to summarize the transaction highlights for you on slide six. Our boards of directors have unanimously recommended an all-share combination of Newmont and Goldcorp to create the world's leading gold company.
Newmont will acquire the outstanding shares of Goldcorp at an exchange ratio of 0.328 of a Newmont share and $0.02 cash for each Goldcorp share. This equates to a Goldcorp equity value of $10 billion with a 17% premium based on the company's 20-day volume weighted average price as of Friday's close. After closing, Newmont and Goldcorp shareholders will own approximately 65% and 35% of the combined company, respectively. Newmont Goldcorp will be listed on the New York Stock Exchange and will seek listing on the Toronto Stock Exchange upon close. We are pleased to announce the transaction was unanimously approved by the directors of both companies, and we expect to close in the second quarter of 2019.
There are a number of regulatory approvals and other customary closing conditions that our teams will be working diligently to complete over the coming months. With that, I'd like to thank the Goldcorp team for their partnership and professionalism and turn it over to Dave for his perspectives.
Thanks, Gary. Over the past six years, the Newmont team has executed a thoughtful plan to position the company for long-term success by optimizing their portfolio through non-core asset sales, advancing profitable growth, investing in exploration to support a stable production profile, and strengthening their balance sheet while returning cash to shareholders. At Goldcorp, we've also spent the last several years focused on a highly complementary strategy to drive long-term shareholder value with a mission to sustainably produce 3 million-4 million ounces of gold annually from 6-8 large-scale districts. These districts are located in areas with low political risk and high exploration potential. We've been successfully progressing towards these goals. However, Goldcorp's board and management team believe we can maximize the Full Potential value of our future by combining with another industry leader, Newmont. Turning to Slide seven.
The formation of Newmont Goldcorp ensures that Canada will continue to be a pillar for an industry-leading gold company that is responsible, invests in the long-term success of its assets, and has the financial strength to explore and develop the next generation of mines. Newmont Goldcorp will establish its North American regional operating office in Vancouver, preserving jobs in Canada and establishing a base for certain global functions and centers of excellence for a Canadian workforce of more than 4,000 employees, and a combined North American workforce of approximately 10,000 employees. Company operations to be overseen by the Vancouver office will include all sites in Canada and the United States, which combined have gold production of more than 3 million ounces per year, compared to 2.5 million ounces of production currently managed from Goldcorp's Vancouver head office.
Newmont Goldcorp will also provide prospects for new investments in a reinvigorated exploration program in Canada, with the largest pipeline of feasibility and development stage assets in the Canadian gold business, including Galore Creek, Century, and Coffee projects. The company will establish a share listing on the Toronto Stock Exchange, providing Canadian investors with a dedicated investment vehicle. We've only strengthened our ability to continue honoring our commitments through collaboration agreements with 26 First Nation communities across Canada for sustainable development and benefit sharing with our partners. Back to Gary for a review of our combined portfolio on Slide number eight.
Thank you, Dave. This transaction brings together two world-class operating, project, and exploration portfolios. As you can see, we will significantly increase our presence in the Americas with the addition of Goldcorp's four operating mines in Canada and three operating mines and joint ventures in Argentina, Chile, the Dominican Republic, and Mexico. Combined with Newmont's 12 operating mines in the United States, South America, Ghana, and Australia, Newmont Goldcorp will be able to leverage its scale and operational expertise to unlock value. Collectively, our combined assets will establish Newmont Goldcorp as the world's leading gold producer with the ability to target sustainable production of 6 to 7 million ounces of gold across four operating regions. Turning to our combined project pipeline on Slide nine. Newmont Goldcorp will have the best project pipeline in the gold industry, providing the foundation for steady, profitable production and cash flow for decades.
This pipeline gives us significant optionality and will continue to advance only those projects that meet our minimum hurdle rate of 15%. The depth of this pipeline also allows us to optimize projects to ensure that capital is deployed effectively and efficiently based on value and risk. Turning to our combined exploration portfolio on Slide 10. Newmont Goldcorp's combined exploration portfolio includes 17 sets of near mine opportunities and 14 distinct greenfield targets. Newmont was one of the few gold companies that continued to invest in exploration through the last downturn, and we've been increasing our focus on growing reserves and resources to fill our longer-term project pipeline. Similar to Newmont, Goldcorp is focused on the development of a world-class target pipeline to deliver prospective future development opportunities.
The majority of Goldcorp's exploration focus is on near mine development and greenfield exploration through investments in high-quality exploration companies, which are intended to provide toeholds in highly prospective gold districts. Goldcorp will contribute over 20 strategic investments to our world-class exploration program. In summary, maintaining a superior exploration program will remain a cornerstone to Newmont Goldcorp's strategy for long-term value creation. Turning to Slide 11 for a look at our reserves. We will have the largest gold reserve and resource base in the world, along with the highest reserves per share in the gold industry. Also, more than half of our reserves will be located in Canada, the United States, and Australia, with the remainder in Latin America, Mexico, and Ghana.
Newmont Goldcorp's assets will be centered in the world's most favorable and prospective mining jurisdictions and gold districts, which is a distinct competitive advantage and positions us to deliver sustainable returns. Turning to Slide 12 for a financial summary. Newmont and Goldcorp's portfolios have historically delivered solid financial results. As you can see here, this combination will be especially powerful when it comes to returns, including the scale of our cash generation and earnings potential. This potential, combined with our investment-grade balance sheet, provides us the ability to fund our most promising projects and target six to seven million ounces of gold production over a decades-long time horizon. Getting into the specifics on how we'll create value on Slide 13.
We will apply the best of each company's operating models, systems, and technologies to create a safe, high-performing organization known for superior operational and project execution and leadership in sustainability and responsibility. As we target sustainable production of six to seven million ounces of gold annually, we will continue to be disciplined in our capital allocation strategy and maintain an unwavering focus on value and shareholder returns. Our investment-grade credit profile and the equity-based transaction will allow Newmont Goldcorp to maintain a strong balance sheet, which can be used to fund our most promising projects, repay debt as it comes due, and deliver superior returns to shareholders. As I mentioned previously, we will advance our most promising projects that meet our minimum hurdle rate of 15%.
We've identified up to $100 million in annual pre-tax synergies that we expect Newmont Goldcorp to deliver, along with additional upside from cost savings achieved with the application of our Full Potential continuous improvement program. Both companies have a successful history of portfolio optimization, including monetizing non-core assets through divestments. Taken together, our streamlining efforts have generated nearly $4 billion since 2013. Newmont Goldcorp is targeting one to $1.5 billion in asset divestitures over the next two years, as we go through a disciplined process to assess our assets on a value and risk basis. Turning to Slide 14 for an overview of how this transaction will benefit our employees. Newmont Goldcorp will have 20,000 employees and a total workforce of approximately 38,000 individuals who will be focused on operating safely every day and driving a culture of zero harm.
The combination will provide expansive career development opportunities and the ability to pursue new jobs in new places. However, these places will feel familiar due to our strong cultural alignment of inclusion, diversity, and employee empowerment. Newmont Goldcorp will also continue leading the industry in environmental, social, and corporate governance performance. Turning to slide 15 to look at how we stack up against the competition. For our shareholders, the combination is expected to be immediately accretive, and it positions Newmont Goldcorp as the go-to gold equity. We'll lead the pack in total enterprise value and reserves and continue to have a laser focus on returns, including free cash flow and providing an industry-leading dividend yield. We intend to maintain a stable and sustainable annualized dividend of $0.56 per share, with the usual review and approval through our board process.
Our key differentiators are supported by strong financial flexibility and an investment-grade balance sheet. Turning to slide 16 for a look at our governance and management. The combined entity will be led by an experienced management team with a proven track record of execution and delivery, and a board that is focused on creating value and improving lives through sustainable and responsible mining. At close, the board of directors will be proportionally comprised of two-thirds Newmont and one-third Goldcorp directors, with Noreen Doyle serving as our chair and Ian Telfer serving as deputy chair. At close, I will serve as Chief Executive Officer for Newmont Goldcorp, and Tom Palmer will serve as President and Chief Operating Officer. Together, we will be responsible for appointing the remaining members of the new management team on a best talent basis.
Tom and I will be working diligently with our team over the coming months to ensure a smooth and successful integration, which is anticipated to be substantially complete in the fourth quarter of 2019. Tom and I have both had significant experience preparing for and delivering complex business integration processes, so are well-equipped to take on this key task. As part of a planned and orderly leadership succession process, I've been engaged in discussions with the board, anticipating my retirement in early 2019. In October of 2018, Newmont announced Tom's promotion to President and COO as part of that process. To ensure a smooth and successful combination, I've agreed to lead Newmont Goldcorp through closure of the transaction and integration of the two companies. This is expected to occur in the fourth quarter of 2019, at which time Tom would become President and Chief Executive Officer.
With this transition, Newmont Goldcorp will continue to have a proven leader who I've worked with the board to help develop and who's committed to advancing people, process improvements, and performance. Wrapping it all up on slide 17. We're very excited about this opportunity and have clear implementation plans in place to transform two world-class companies into the world's leading gold company. For nearly 100 years, Newmont has been recognized as one of the world's premier mining companies. Today, with the combination with Goldcorp, we're in a position to continue leading the sector in profitability and responsibility for the next century. Thank you for your time. With that, I'll turn it over to the operator to open the line for questions. As a courtesy to all participants, we ask that you limit yourself to one question and a follow-up. If time permits, we'll re-prompt for additional questions.
We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. Our first question will come from John Bridges of J.P. Morgan. Please go ahead.
Good morning, everybody. Good morning, Gary, Dave. Congratulations.
I hear you, Gary, on this being a deal you want to do rather than one that you need to do. I just wonder for Dave, what drove the timing of this? On paper, you're about to deliver on all the good work you've been on for the last couple of years. I just wondered what was driving this timing.
No, you're right, John. We actually had a very strong fourth quarter, and we're starting to see a rebound in our production. It was up 25% quarter-over-quarter. Our all-in sustaining costs were below $800 an ounce. All that meaningful investment we've been making in our existing operations and brownfield expansions is actually starting to reap reward. This was a unique opportunity to provide us both the technical and financial firepower to advance our robust project pipeline. We have a number of projects of scale in the pipeline, including Coffee, NuevaUnión, Norte, Viihto, and Century. Of course, Newmont brings in a large pipeline as well, including Galore in Canada and a number of other projects that only enhances our ability to deliver sustainable production long term.
It's a unique opportunity to create a leading gold company, the leading gold company in this space, with all the financial and technical firepower we need to advance that robust project pipeline on a combined basis.
As a follow-up, there were some press reports that there'd been discussions between yourselves and Newcrest. I'm just wondering if there was an auction process, which means that there's less likely to be any competition for your hand in this marriage.
Yeah, we don't comment on speculation, and all the details of this deal will be in the circular once it's mailed.
Okay. Thanks, guys. Well done.
Thanks, John.
Our next question comes from Fahad Tariq of Credit Suisse. Please go ahead.
Hi. Good morning. Thanks for taking my question. Can you talk a little bit more about the $100 million in annual synergies? I think looking at the operational map, it doesn't seem as obvious because there doesn't seem to be as much geographic overlap between the two companies. Maybe some more color on just the buckets or broadly where you see those synergies coming from. Thanks.
Yep. Thanks, Fahad. At this stage, what we've done is gone through a process at a high level to go through and understand, as we combine the organizations, where there's potential overlap and where we see some initial areas that would streamline our overheads. That's basically the buckets that are there today. We're going to be in the process of moving our North American headquarters out of Elko into Vancouver as part of our bolstered presence in Canada, and we'll be looking for the best of the best to staff that up as we go through the process. We also have our Full Potential continuous improvement program that we'd be applying to Goldcorp's assets.
Applying the process that we've been able to demonstrate over the last 5 years very effectively to drive continuous improvement through the business is an opportunity we see. We've not included that in the $100 million number as we presented this to the market.
Okay, great. Just a follow-up, just maybe more on the administrative side. Goldcorp was supposed to have their investor date this Friday with updated guidance maybe on an asset-by-asset level. Are we going to still expect guidance for Goldcorp's assets? If so, when would that be?
As Gary said, we're looking at sustainable production from the combined portfolio of 6 million to 7 million ounces as we look at which assets are non-core to the portfolio. I think once we've been through that process, I'll let Gary interject as well. I think we'll provide holistic guidance for the combined portfolio.
I think as we go forward, get the information circulars out, move through the process, we'll be in a position to provide guidance on the combined entity in the future.
Thank you.
Thanks, Fahad.
Our next question comes from Matthew Murphy of Barclays. Please go ahead.
Hi, David. Hi, Gary. Question for Gary, just on that six to seven-million-ounce target. Have you identified roughly how many ounces in assets would be non-core? i.e., how much production are you assuming you sell to get to that six to seven million ounces? Or is a lot of that six to seven million ounces just reached by the natural decrease in production over time?
Yep. Matthew, what we're doing is going through a process similar to what we followed over the last six years at Newmont, looking at value and risk, looking at whether we can improve the value or reduce the risk on assets. Then make a decision as to which assets we would continue to operate or not. We'll go through this entire process of optimizing the portfolio, looking at both the operating assets and the projects, and looking at which we want to bring on. When we bring them on is going to be the other part of that process. Stay tuned as we go through this in terms of further details, but that's basically the process we intend to follow.
Okay. Just as a background on the deal, just interested in how much opportunity you did have to do due diligence ahead of the deal.
Yeah. Thank you, Matthew. We had an extensive opportunity to work with the Goldcorp team, visited operations, go through complete due diligence, review of data rooms, and ask and answer all the questions that we've asked along the way.
I'd just say we did the same. On top of that, Gary and Art on my team have been working together for three years, looking at opportunities together. It was a high degree of familiarity between the technical teams that we established over that period.
Thank you.
Thank you.
Our next question comes from Josh Wolfson of Desjardins. Please go ahead.
Hi. I was wondering if you could provide any more details on what the non-core assets are and the assets that would potentially be up for divestiture post this transaction.
Well, Josh, at this stage, we want to go through the process, reviewing value and risk, make sure we've achieved the best value that we can from the assets or reduced risk, and then make a decision as to which assets to sell. We've laid out a timeline and a rough number here of $1 billion-$1.5 billion over a two-year period. We've had lots of inbound calls today from different folks who have interest in different assets. I know there's lots of interest out there, we're going to go through our own internal process and be in a position as we get towards close to be able to move forward.
Okay, maybe as a follow-up, in terms of the portfolio assets that would satisfy the company's 15% threshold returns, beyond Coffee within Goldcorp's portfolio, is there anything that Newmont would see as meeting that hurdle rate or could potentially meet that hurdle rate?
I think what you saw on the chart with all the different projects are all projects that we believe either are at or could achieve that sort of a hurdle rate. That's why we go through a very detailed stage gate process of review along the way. If they're not able to meet that, we would go a different direction. That clearly is one of the key financial hurdles that needs to be met along the way.
Okay, great. Thank you very much.
Thanks, Josh.
Our next question comes from Anita Soni of CIBC. Please go ahead.
Hi. Good morning, guys. My question was the same as Josh, essentially about the asset divestitures and somewhat laying out a timeframe. I think it's been asked and answered. Thanks.
Thanks, Anita.
Again, if you have a question, please press star, then one. Our next question comes from Brian MacArthur of Raymond James. Please go ahead.
Good morning. This may fall under the synergy discussion that you can't give us a lot more info, but is there any tax efficiencies in all of this? It looks like you've got a lot of regional setup. Is there any benefit at a corporate basis?
I'll hand over to Nancy to address that.
Great question. We are continuing to look at all the attributes of both companies and the combined entity, we will certainly be looking to utilize tax pools in both Canada and the U.S. to the extent possible. It's still very early days as we put together the combined entity, those are attributes that we're looking at and continuing to model. We do believe there'll be some positive outcomes from that pooling.
Would that be included in the $100 million?
No, it would not.
Thank you.
Our next question comes from Paresh Sood of Morgan Stanley. Please go ahead.
Hey, guys. Congratulations. A couple of questions. First one, this deal, what does it do to your appetite for smaller deals here and there, whether that's in something early stage or, let's say, something like KCGM, if it becomes available at the right price?
Paresh, I think, just as we've been doing over the last five or six years, we'll always look at opportunities on a value versus risk basis. If they make sense, then we'd move forward, and if not, we wouldn't.
All right. If we look at your joint pipeline with Goldcorp, maybe in some months, then you start thinking about use of cash. How long do you need where you can start figuring out how to prioritize these projects and if some of Goldcorp's projects could rank above your projects?
No, that's part of the process we're working through in terms of prioritizing and optimizing both the operations and the projects and when's the right time to bring them in. That work is ongoing as part of our overall integration process.
Thanks. Given that your overlap with Barrick has increased with this transaction, should we read into that at all? Is there something that we should understand from that for the future?
I'm sorry, I didn't follow what you were asking. Say that again.
Your overlap with Barrick has increased with this transaction with another JV, should we read anything into that? Is there something on the cards in the future around cooperation of some kind?
No, I think, just as we have been cooperating with Barrick at our joint venture in Western Nevada and at our joint venture in Australia, this adds another couple of joint ventures that we look forward to working with them on.
All right, guys. Thanks so much, all the best.
Thank you.
Our next question comes from Tanya Jakusconek of Scotiabank. Please go ahead.
Okay, great. Good morning, everybody, congratulations. Gary, maybe a holistic question for you. There's 20 mines that you're going to have in your portfolio. How many do you think are manageable? I mean, 20 is too many
What do you think a manageable rate is for a six to seven-million-ounce producer?
Yeah. Tanya, thank you, and a good question. From my standpoint, we've got a well-established regional structure in place already today that covers North America, South America, Australia, and Ghana. We're adding basically an additional six operating mines plus other joint ventures to that. We'll go through the process, value versus risk in terms of optimizing that portfolio, what operations do we need, what projects, when do they come in, and also go through, and I haven't had much chance to really emphasize it, the exploration potential. I had a slide in the pack that showed all the areas where we're working for both brownfield and greenfield opportunities to be able to grow in these safe jurisdictions.
We'll go through a rigorous process, but I think within our existing operating model that we have, and we want to take a look and borrow where we can from Goldcorp on areas that make good sense. We'll continue to apply the good rigor and discipline that we've applied to our current portfolio to the overall asset base and do what makes the most sense for the business going forward.
Okay. I guess, we'll get more on that. Maybe just another question, if I could, just on, Dave mentioned that you've been working with Goldcorp for the last three years looking at assets. Perhaps just more a little bit on the background to this acquisition in terms of when did this acquisition really start to play forward?
Like I say, we've been working with Dave and the team and his predecessors over the years in terms of looking at opportunities together. I won't get into what opportunities we've looked at, we've developed a good relationship, one that common cultures is demonstrated and common values between the companies, and it's something that's evolved over time to what we've been able to announce today.
Okay, I guess I'll wait for the information circular. Thank you.
Our next question comes from Mike Parkin of National Bank. Please go ahead.
Hi, guys. Largely, my question's been answered. Thanks.
Thanks, Mike.
Our next question comes from Chris Carey of Deutsche Bank. Please go ahead.
Hi, Gary and David. I think most of the key questions have been answered. Just coming at the divestiture and the overall mix of where you want the company to be with 6 million-7 million ounces overall, maybe you can just talk about the regions of the globe that you see as the key developments of where you want to put the efforts. Maybe what the mix from a jurisdiction point of view might be as a target?
Yeah, I think, Chris, from our standpoint, it's not really targeting so many ounces from a region. It's where we'll find the best value from our assets and within the scope of those four operating regions. Clearly Canada, we've grown both with the acquisition of the four operating mines, but we've had Galore Creek, you've got the Coffee Project, you've got the other projects there. South America, we will continue to look at the projects there that we have and Goldcorp has had as it bring forward. We continue to move forward with good projects. You look in Australia at the Tanami, the next stage of expansion there, and in Ghana with the expansion opportunities, finishing the mill expansion later this year and looking at the opportunities for further underground development at both Ahafo and Akyem, as well as the potential development of Ahafo North.
We'll be taking a look at that whole picture, but really it boils down to what's the best value versus risk, and we'll put that whole picture together.
Okay. Thanks, Gary. Just to follow up to that, you talked about the 15% hurdle requirement. Can you just talk through your views on cash cost position of assets, maybe mine life, some of the other considerations when you're looking at assets? Is it plus 10 years a certain position within the cost curve, et cetera? Thanks.
No, Chris, exactly. When we talk of value, we're talking about position on the cost curve for the asset, so that's of importance. We're looking at mine life and 10 years at a minimum would be one of the elements. Then the return characteristics, which in our case, we're saying is a minimum 15%. Those are the key areas that we focus on.
Okay, that's it for me. Thanks guys.
Thanks, Chris.
Our next question is from John Tumazos of John Tumazos Very Independent Research. Please go ahead.
Congratulations, Gary, on your next endeavors.
Thank you, John.
On the surface, the Vancouver enlarged office would seem a little less efficient than Nevada reporting directly to Denver. On the surface, the new office hub in Miami, a cynic could call it a new bureaucracy. Are there gonna be some offsetting rationalizations? For example, will Newmont trim 50 or 100 people from the Greenwood, Colorado, office or make some other cuts to offset what a cynic might call the new bureaucracies?
First of all, John, in terms of new endeavors, we've got a pretty big plate in front of us here that we're gonna be focusing and I'll be working closely with Tom on. In terms of the regional headquarters, the Miami office is not new. We moved our Lima office as part of integrating Merian and our Peru operations, as well as other exploration efforts in South America to a new location. We assessed a number of different locations and decided to locate that group in Miami. That group's about 40 people, so it's actually a bit smaller than what we used to have in Peru. We still have presences in the regions and at the sites, but we've brought those things that make best sense to cover on a regional basis together there.
We'd be following that same model of what we would locate in Vancouver at the end of the day, and what would still remain in Nevada, and what would remain in different places around the world ultimately. But what we have is a global footprint, and we have the four regional offices. That's where the people deal best with the issues in the region at the time, and I think that's worked very successfully over the years. We've gone through and optimized the size of those over the last five or six years. It's something we continually look at there, as well as our head office and what the needs are. We'll be locating some global functions in Vancouver as part of this process, which makes sense in terms of availability for talent that we're able to attract in Vancouver versus in Elko.
I'm sensitive to the point that we've got to go through a proper process with our employees in Elko and with the employees in Vancouver and, quite frankly, around the world as we go through and get the best of the best to set up the business for success in the future.
Thank you.
Thanks, John.
Our next question comes from Michael Dudas of Vertical Research Partners. Please go ahead.
Gary, David, good morning.
Morning, Mike.
Gary, with this transaction, does this impact materially any of the outlook and the timing of what you discussed at the investor internet discussion in December?
In terms of our portfolio, obviously, we'll have to take a step back and relook at sequencing of projects at the end of the day. I think in terms of our base portfolio, we gave that guidance for 2019. I wouldn't see huge changes in terms of where we're at for 2019 in particular. For the longer-term outlook, clearly, we're set up now for decades out in the future, which is an important difference here in terms of the opportunity this gives us to optimize operations, projects, and exploration portfolio.
All right. Understood. Just want to understand the nearer term outlook for the new projects, which you confidently answered. A second question would be, from a balance sheet perspective, maybe Nancy, how do you think about with the new profile and the capitalization of the company and what the debt metrics are, the opportunities for lengthening, reducing, maybe working capital opportunities to take out of the combined business, and how much more leverage in this big, larger organization could you be thinking about as you think about funding some of these projects over the next several years?
Yeah, great question. We still have a very robust focus on the balance sheet. You've seen Newmont be a good steward of the balance sheet over the last number of years. We will continue that philosophy with the combined entity. We will have a very manageable debt portfolio at closing. We'll continue to rationalize that and move towards very much an investment-grade balance sheet. We will still have the optionality to continue to pay our debt as it comes due. We'll be able to offer many returns to shareholders in the form of our sustainable dividend and our share buyback that we participated in over the last few years.
The good news is the balance sheet will come more into line with what you've seen from Newmont over the last years, and it'll just take us a bit of time to get there, but we would still anticipate the same amount of net debt to EBITDA in that less than one times ratio, which is what we've sort of been striving for over time. We're pleased with the balance sheet strength, and we'll continue to focus on it in the way we have.
Excellent. Just one final quick follow-up. Gary, when you looked at the assets in the transaction valuation, I assume you assumed a $12 or $1,250 long-term gold price. How did it look from a sensitivity analysis as you think about maybe in a more difficult price environment when looking at these assets on return from an operations standpoint?
No, I think as we've assessed the overall acquisition, we're really positioning this business to be in a position to work through the cycles, and that's why we look at optimizing assets, projects, the whole portfolio to be able to be in the position to thrive through the cycles.
That's clear.
That's where we have the flexibility with the different projects as to timing. We've had the same with Newmont, and this gives us even more flexibility in terms of the overall portfolio.
Thank you, Gary.
Thank you.
Our next question comes from Andrew Tuffias of Barclays. Please go ahead.
Hey, good morning. I appreciate the comments you just made on the balance sheet, just to clarify, is there a specific credit rating that you plan to target? As a follow-up, do you envision the two balance sheets becoming one credit in the future, either through guarantees or some other method?
Yes, absolutely. We were out visiting the rating agencies last week, we had very good, robust conversations about that. We anticipate maintaining our credit rating of investment-grade at this point in time, we anticipate that the agencies will comment further soon this week, we'll also see a likely ratings update after closing is the anticipated timing. Yes, we anticipate being one credit going forward and the Goldcorp notes and such would move up under Newmont. We'll consider other options for those, fundamentally think of it as one credit post-closing.
Thanks very much.
Thank you.
Again, if you have a question, please press star then one. Our next question will come from Anita Soni of CIBC. Please go ahead.
Hi. Thanks for allowing the follow-up. Two questions that I have. First, on your dividend prioritization, previously, it was a big priority for Newmont, and I just want to know where that stands now going forward. Secondly, on the guidance, Newmont, you guys have provided your guidance back in December. Goldcorp has not, and they've canceled their investor day. I'm just wondering when we're going to get the Goldcorp side of the equation. Will that be with reporting of results? Would that be Goldcorp still reporting the results and putting that out? Or when should we be looking for what the combined company will be producing in 2019?
Yeah, absolutely.
Why don't you cover the dividend first?
Yes. That has been a priority for us, and we do anticipate remaining at the $0.56 dividend as we move forward. That's very much in line with the same philosophy that Newmont has had. On the combined entity, we still have the capacity to pay that dividend. We've indicated, a stable, sustainable dividend over time is our target, and we will continue to honor that commitment. From the perspective of additional guidance and more information.
Yeah, I'll field that. Thanks very much. As I said earlier, Anita, we will be providing guidance on the combined entity in due course once we've gone through a process of evaluating the core and non-core operations when the combined portfolio, then we'll provide holistic guidance for the new entity.
All right. Thank you very much.
Thanks, Anita.
Our next question comes from Stephen Butler of GMP Securities. Please go ahead.
Good morning, guys. Gary, question for you. You said in your introductory remarks that you don't have to do this deal, but you want to do this deal here today. Can you give us again the key reasons for that? I guess you were talking about, in your remarks, increased flexibility in the project pipeline, and obviously, given what's happened to the share price, relative exchange ratios, it seems to be very accretive to your financial and valuation metrics. Is that the two key reasons or anything else you'd like to say?
Yeah, I think as I look, it's the whole list. First of all, it's accretive to shareholders, as you pointed out, so that's key. The ability to come in and go through our disciplined process to optimize the overall portfolio to a production level of roughly six to seven million ounces a year, the synergy value, the upside potential from that in terms of being able to apply our Full Potential continuous improvement program across the portfolio we think is good. When you optimize the projects, when they come on, when's the right time, we see decades out into the future that we've set the company up for. That's really it. We put ourselves in the position of the best portfolio of operating assets, projects, and exploration prospects.
Okay. Thanks very much for that. Appreciate it.
Thank you.
This concludes our question and answer session. I would like to turn the conference back over to Gary Goldberg for any closing remarks.
Thanks all for joining the call today. I want to thank Dave and his team and the Newmont team that have been involved in this process and look forward to continuing to share with you what the future will look like. Thank you for your interest in the Newmont Goldcorp strategic combination. Have a safe day.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.