YAMANA GOLD INC. (TSX: YRI; NYSE: AUY) (“Yamana” or the “Company”)
is pleased to announce it has completed the previously announced
sale to Nomad Royalty Company Ltd. (formerly, Guerrero Ventures
Inc.) (“Nomad”) of a portfolio of royalty interests and the
contingent payment to be received upon declaration of commercial
production at the Deep Carbonates Project (“DCP”) at the Gualcamayo
gold mine (together, the “Sale Transaction”) for total
consideration of $65 million. Nomad is expected to commence
trading on the Toronto Stock Exchange on or about May 29, 2020,
under the symbol “NSR”.
The consideration was structured to realize
immediate value for non-core assets through a cash component and
medium term value growth through a significant share position in a
newly created, growth-oriented company with a strong asset base and
a driven and experienced management team.
As such, Yamana has received initial upfront
cash consideration of $10 million as well as $45 million in common
shares of Nomad at a price of C$0.90 per share. In addition, Yamana
has the right to receive an additional $10 million through a
deferred cash payment (the “Deferred Cash Payment”), that may be
paid in cash or common shares of Nomad. Yamana is entitled to
receive interest on the Deferred Cash Payment at a rate of 3% per
year and the Deferred Cash Payment may be converted at any time, in
whole or in part, by Yamana into shares of Nomad at a conversion
price of C$0.90 per share. While the Deferred Cash Payment will be
due for payment in full at the end of two years, Nomad may prepay
the Deferred Cash Payment at the end of one year,
subject to additional payment by Nomad equal to 5% of the Deferred
Cash Payment, or $500,000, and the right of Yamana to convert the
Deferred Cash Payment into shares of Nomad at a price of C$0.90 per
share.
The closing of the Sale Transaction underpins
another step in the Company’s strategy to optimize its portfolio,
continuing the strengthening of its financial flexibility and
creating value from its strategic assets. The Sale Transaction
provides Yamana with a meaningful stake in a new precious metals
royalty company that has a strong and diversified asset base,
significant potential upside through project development, mineral
resource expansions and mine life extensions, as well as
like-minded corporate objectives and a growth mandate in a strong
precious metals price environment.
On closing of the Sale Transaction, certain
funds related to Orion Resource Partners (USA) LP (collectively,
“Orion”) and Yamana own approximately 77% and 13% of the
outstanding shares of Nomad, respectively. Concurrent with the
closing of the Sale Transaction, Yamana and Orion entered into an
investor rights agreement with Nomad (the “Investor Rights
Agreement”) pursuant to which, among other things, Yamana is
entitled to maintain its percentage ownership of the issued and
outstanding common shares of Nomad and to have one nominee on
Nomad’s Board of Directors. On closing of the Sale Transaction,
Gerardo Fernandez, Senior Vice President, Corporate Development of
Yamana, was appointed as Yamana’s nominee. Yamana’s entitlements
under the Investor Rights Agreement remain in place so long as
Yamana’s share ownership interest remains at or above 10% of the
issued and outstanding common shares of Nomad. Pursuant to the
Investor Rights Agreement, Yamana has also agreed not to dispose of
any Nomad shares held by it, without the prior written consent of
Nomad during the period ending on the earlier of November 27, 2020
and the date that Yamana’s share ownership interest drops below
10%.
Additional details with respect to the Sale
Transaction are available in the Company’s press release dated
February 23, 2020, available on the Company’s website at
www.yamana.com.
Early Warning Disclosure
Pursuant to the Sale Transaction, Yamana
acquired 66,500,000 Nomad shares and is deemed to have acquired and
to be the beneficial owner of approximately 15,655,555 Nomad
shares, assuming the conversion of the Deferred Cash Payment,
representing in the aggregate approximately 13.01% of the issued
and outstanding Nomad shares on a non-diluted basis and
approximately 15.60% of the issued and outstanding Nomad shares on
a partially-diluted basis. The exact number of Nomad shares
issuable upon conversion of the Deferred Cash Payment will vary
based on the Bank of Canada exchange rate used at the time to
convert the amount of the Deferred Cash Payment into Canadian
dollars.
While Yamana currently has no plans or
intentions with respect to the Nomad securities, subject to the
restrictions on dispositions noted above, and depending on market
conditions, general economic and industry conditions, trading
prices of Nomad’s securities, Nomad’s business, financial condition
and prospects and/or other relevant factors, Yamana may develop
such plans or intentions in the future and, may from time to time
acquire additional securities, dispose of some or all of the
existing or additional securities or may continue to hold the Nomad
Shares or other securities of Nomad.
Yamana will file an early warning report under
National Instrument 62-103 in connection with the closing of the
Sale Transaction. A copy of the early warning report filed by
Yamana will be available under Nomad’s profile on SEDAR
at www.sedar.com or by contacting Sofia Tsakos, Senior Vice
President, General Counsel and Corporate Secretary at 416-815-0220.
Yamana’s head office is located at Royal Bank Plaza, North Tower,
200 Bay Street, Suite 2200, Toronto, ON, M5J 2J3 and Nomad’s
head office is located at 1275 Av. des Canadiens-de-Montréal, Suite
500, Montréal, Quebec H3B 0G4.
Counsel and Advisors
Cassels Brock & Blackwell LLP acted as legal
advisors to Yamana. RBC Capital Markets acted as financial
advisor to Yamana.
About Yamana
Yamana Gold Inc. is a Canadian-based precious
metals producer with significant gold and silver production,
development stage properties, exploration properties, and land
positions throughout the Americas, including Canada, Brazil, Chile
and Argentina. Yamana plans to continue to build on this base
through expansion and optimization initiatives at existing
operating mines, development of new mines, the advancement of its
exploration properties and, at times, by targeting other
consolidation opportunities with a primary focus in the
Americas.
FOR FURTHER INFORMATION, PLEASE
CONTACT:Investor Relations
416-815-02201-888-809-0925Email: investor@yamana.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS: This news release contains or incorporates by reference
“forward-looking statements” and “forward-looking information”
under applicable Canadian securities legislation and within the
meaning of the United States Private Securities Litigation Reform
Act of 1995. Forward-looking information includes, but is not
limited to information with respect to the Company’s strategy,
plans and objectives, including the anticipated benefits of the
Sale Transaction, the Company’s expectations with respect to the
sale or purchase or sale of Nomad shares in the future, on the open
market or in private transactions; Yamana’s plans to continue to
build on its asset base through expansion an optimization
initiatives at existing operating mines, development of new mines,
the advancement of its exploration properties and, at times, by
targeting other gold consolidation opportunities with a primary
focus in the Americas. Forward-looking statements are characterized
by words such as “plan", “expect”, “budget”, “target”, “project”,
“intend”, “believe”, “anticipate”, “estimate” and other similar
words, or statements that certain events or conditions “may” or
“will” occur. Forward-looking statements are based on the opinions,
assumptions and estimates of management considered reasonable at
the date the statements are made, and are inherently subject to a
variety of risks and uncertainties and other known and unknown
factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
These factors include market conditions, as well as those risk
factors discussed or referred to herein and in the Company's Annual
Information Form filed with the securities regulatory authorities
in all provinces of Canada and available at www.sedar.com, and the
Company’s Annual Report on Form 40-F filed with the United
States Securities and Exchange Commission. Although the
Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results not to be
anticipated, estimated or intended. There can be no assurance
that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. The Company undertakes no
obligation to update forward-looking statements if circumstances or
management’s estimates, assumptions or opinions should change,
except as required by applicable law. The reader is cautioned not
to place undue reliance on forward-looking statements. The
forward-looking information contained herein is presented for the
purpose of assisting investors in understanding the Company’s
expected financial and operational performance and results as at
and for the periods ended on the dates presented in the Company’s
plans and objectives and may not be appropriate for other
purposes.
All amounts are expressed in United States
Dollars unless otherwise indicated
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