Gold Fields’ Griffith expects direction of Yamana vote will be clear in a week

Gold Fields CEO, Chris Griffiths

GOLD Fields CEO, Chris Griffith said the company would have more visibility of how shareholders would vote on its proposed $6.7bn takeover of Yamana Gold once they had absorbed the details of a circular published today.

The vote, which is set down for November 22, will be preceded by a meeting of shareholders of Yamana Gold. Gold Fields requires 75% of shareholders to approve the deal whereas Yamana requires two-thirds of total shareholder support.

“In the next week or two we’ll be able to start asking shareholders how they intend to vote,” said Griffith at a media briefing today following publication of the circular. “That’s because most shareholders have asked to see the circular first.”

Griffith said “all the signs are starting to point in the right direction”. However it was “a pity” that the offer – which comprises 0.6 Gold Fields shares for each Yamana share held – had coincided with a downturn in the metal prices across the board.

He acknowledged that some shareholders might be prevented from thinking long term given the fact gold was about $200/oz weaker than in May when the offer was launched. “The gold price is down 10% since start of transaction, but global equities are down 25%. So that particular market is reacting much more negatively than the gold price.

“The current market might prevent shareholders to think long term, but our business is long term and we will face many cycles. We are focused on producing gold at the low end of cost curve and returning cash to shareholders – none of that has changed.

“For that reason, we think shareholders will vote for the transaction because it has so much upside in it,” said Griffith.

Griffith shrugged off suggestions that the resignation of three members of Gold Fields’ executive team indicated antipathy for the deal as their reasons were different from one another, although he acknowledged it didn’t “feel good when the three left together”.

“They all remain entirely committed to the deal,” he said.

Miningmx reported on October 21 that Brett Mattison, executive vice president of strategy, planning and corporate development, Taryn Leishman, executive vice president: group head of legal and compliance, and Avishkar Nagaser, executive vice president: Investor relations and corporate affairs had tendered their resignation.

They had agreed to stay on until March by which time the Yamana transaction, if approved, would be bedded down.

In the circular, Gold Fields said that the board of the combined Gold Fields/Yamana company would consist only of Gold Fields directors. Asked why no Yamana directors were interested in serving in the company post the deal, Griffith said there “had been conversations” but that the boards of both companies had reached “an amicable understanding”.

“We (Gold Fields) have Canadian board members (already) as we do South Americans. There were conversations but we can provide no more detail on that,” he said.

The new company’s executive committee would consist of Yamana and Gold Fields executives. “We are right now in the process of going through that,” he said.