PI Global Investments

Gold Fields enhances dividends, seeks Toronto listing to woo Yamana shareholders

JOHANNESBURG (miningweekly.com) – Gold mining company Gold Fields on Monday announced that it would be enhancing its dividends and applying to list on the Toronto Stock Exchange (TSX) in response to the shareholders of Yamana Gold Inc, which it is taking steps to acquire.

The transaction, for which October is a targeted conclusion month, will require the approval of at least two-thirds of the votes cast by Yamana Gold shareholders voting in person or represented by proxy at a special meeting of Yamana shareholders called for that purpose.

The issuance of Gold Fields’ shares under the Transaction is also subject to the approval of at least 75% of the voting rights exercised on such resolution by Gold Fields’ shareholders at a special meeting of Gold Fields’ shareholders called to approve the Transaction.

Ontario Superior Court of Justice approval is among the approvals to which the transaction is subject.

Gold Fields has proposed acquisition of all the outstanding common shares of TSX-listed Yamana, including additional information on the quality and investment case of the combined company.

Gold Fields believes that enhancing dividends and listing on the TSX will improve the value of the transaction to shareholders.

Gold Fields stated that, given its strong conviction on cash flows, it would revise its dividend policy to enable it to declare an interim and final dividend in respect of each financial year, based on 30% to 45% of the normalised earnings attributable to owners of the parent.

Furthermore, and subject to attaining the relevant normalised earnings and the applicable legal and board approvals required to declare a dividend, Gold Fields would target paying a dividend at the top end of the revised dividend policy, which is 45% of normalised earnings, for the 2023 dividend cycles – being the 2023 interim and final dividends – following implementation of the proposed acquisition.

In addition, Gold Fields would apply to have its securities listed on the TSX, subject to the completion of the transaction, to provide shareholders additional flexibility at limited incremental cost.

The TSX listing would be in addition to Gold Fields’ existing primary listing on the Johannesburg Stock Exchange and secondary listing of American depositary shares on the New York Stock Exchange.

Gold Fields CEO Chris Griffith expressed the belief that the Yamana acquisition would deliver on our strategy to grow the value and quality of the company’s portfolio, by creating a winning combination of excellent assets with complementary operational strengths and proactively addressing industry wide production and reserve replacement challenges.

“Gold Fields has proven capacity to unlock the full potential of Yamana’s world class assets which will give us a stronger capital markets profile and enable us to generate superior shareholder returns.

“The board and management team remain steadfast in their belief in the long-term benefits that this deal will bring to both sets of shareholders.

“Having explored both organic growth and bolt-on acquisitions, moving now to complete this transaction is the best opportunity for both speed of delivery and value to accelerate the next phase of the company’s growth,” said Griffith.

Yamana is seen as providing a strategic fit to Gold Fields’ new Salares Norte mine, which is due to come on stream in the Atacama region of northern Chile early next year. Among the assets Yamana will bring to Gold Fields are the El Peñón underground gold-silver mine, also in Chile’s Atacama. (Also see attached graphic). In addition are the Tarkwa-like Jacobina gold mine in Brazil, Mara in Argentina, which a feasibility study is dye by year-end, ad the Canadian Malartic in in Canada.

Griffith expressed confidence that now is the time to invest in the right asset pipeline given the global scarcity of quality assets that are long-life, low cost, and located in appealing jurisdictions.

He expressed the conviction in a media briefing covered by Mining Weekly that the proposed Yamana acquisition would deliver on Gold Fields’ strategy and ensure it had the assets, capital and technical capability to continue to grow and deliver value for shareholders for the longer term.

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