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A worker cleans gold bars at South Africa's Gold Fields South Deep mine in Westonaria, South Africa, on March 9, 2017.Siphiwe Sibeko/Reuters

South African mining company Gold Fields Ltd. GFI-N is sweetening its dividend policy and seeking a listing on the Toronto Stock Exchange as it tries to placate shareholders who have been skeptical of its planned US$6.7-billion takeover of Toronto-based Yamana Gold Inc.

The merger, which would create the world’s fourth-biggest gold producer, has been poorly received by many investors, with the share price of Gold Fields plummeting by 23 per cent on the New York Stock Exchange on May 31 when the deal was announced.

Since then, Gold Fields has been working hard to sell the deal with an online advertising and publicity campaign, including paid Twitter posts. On Monday it went a step further, announcing a higher dividend range and a planned TSX listing, as chief executive Chris Griffith predicted “superior shareholder returns” from the “winning combination of excellent assets.”

Gold Fields CEO disappointed as share price falls after Yamana takeover announcement but vows to plow on

Under the new policy, Gold Fields says it will pay out 30 per cent to 45 per cent of its normalized earnings at the interim and final dividend stages, up significantly from the existing policy of 25 per cent to 35 per cent. The company also promises a 45-per-cent payout for the 2023 interim and final dividends after it completes the Yamana acquisition.

The boosted dividends are aimed at reassuring shareholders who might have worried Gold Fields’ cash would now go into new growth projects, Mr. Griffith told a media call on Monday.

“It’s sending a message around confidence that we have in the business,” he said. “It’s trying to acknowledge people’s challenges and difficulties.”

Gold Fields currently has its primary listing on the Johannesburg Stock Exchange and a secondary listing on the New York exchange. It plans to keep its head office in Johannesburg after the merger.

Gold Fields previously said Yamana would delist from the TSX after the merger is approved, but now it plans to seek a Toronto listing for the merged company.

“The other three big gold mining companies are listed on the TSX,” Mr. Griffith said. “If we’re going to be competing head-to-head in that club, I think we must be on the same field. It doesn’t add a lot of work, and the cost is negligible, so why not be where the other major companies are?”

Some of the company’s leading shareholders, including British investment firm Redwheel, have described the merger plan as too expensive and risky. Redwheel said last month the South African company “has made a serious error” in its takeover strategy.

Mr. Griffith, however, said Gold Fields remains steadfast in pursuing the deal. “I think we can get shareholders seeing what we see,” he said. “The underlying logic of this deal is really, really amazing.”

Yamana Gold, founded in 2003, has its most valuable asset in the Abitibi gold belt of Quebec, where it owns half of the huge Malartic mine.

“We’ve tried for 10 years to get into that area of Canada,” Mr. Griffith said. “It’s one of the best parts of Canada, in one of the best jurisdictions for mining in the world.”

Gold Fields, founded by Cecil Rhodes in 1887, owns the three-kilometres-deep South Deep mine in South Africa. But it has increasingly diversified away from the older mine industry in South Africa, and it now has operations in West Africa, Australia and South America.

Under the agreed terms of the all-stock transaction, Yamana shareholders are to receive 0.6 of a Gold Fields share for each of their Yamana shares. Based on the share value on the New York exchange in late May, this equated to a 42-per-cent premium over the market price.

Yamana’s executive chairman, Peter Marrone, said he was delighted with the Gold Fields announcement of an increased dividend policy. He also disclosed that Yamana had been pursuing other potential deals, but chose Gold Fields as the best value.

“Each company had other options, and none were as compelling as this transaction,” he told a call with investors on Monday. “We selected Gold Fields, and Gold Fields selected Yamana, out of the many options under consideration.”

Analysts at RBC Capital Markets, however, were more cautious about the deal. In a note on Monday, they said the planned TSX listing could improve Yamana’s shareholder vote in support of the transaction, but they believe there is still a “high hurdle” for the companies to complete the merger, despite the revised dividend policy.

“In our view, these changes are incremental in nature,” they said. “We view no material variances from our prior transaction takeaways.”

Gold Fields shareholders are scheduled to vote on the planned merger in October.

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