Today Glencore International AG (“Glencore”) announced, and has
made Yamana Gold Inc. (TSX:YRI; NYSE:AUY; LSE:AUY) (“Yamana” or the
“Company”) aware under the terms of the MARA joint venture (“MARA
JV”), that it has reached an agreement (the “Agreement”) to acquire
Newmont Corporation’s (“Newmont”) 18.75% shareholding in the MARA
Project (“MARA” or the “Project”). Following completion of the
Agreement, Yamana remains the MARA JV operator with a 56.25%
interest in MARA, with Glencore owning the remaining 43.75%. Yamana
welcomes Glencore’s increased stake in the Project and believes the
Agreement is a positive step for MARA, as the consolidation of
ownership amongst partners provides a further endorsement of the
quality and strategic optionality inherent in the Project, as well
as underpinning its value.
Under the terms of the Agreement, Glencore will
pay Newmont $124.9 million upon closing and a $30 million deferred
payment upon commercial production subject to an annual interest
charge of 6%. Total deferred consideration is capped at $50
million. Based on the NPV(8%) of $1.9 billion as determined by the
2020 PFS-B results summarized below, the implied P/NAV transaction
multiple is approximately 0.5x which Yamana believes is in line
with comparable precedent transactions for the sale of a minority
interest in projects at similar stage of development.
Glencore previously operated Minera Alumbrera,
in which Yamana was a partner. Currently Minera Alumbrera is part
of the MARA Project after its integration with Minera Agua Rica,
which Yamana wholly owned. Glencore has worked with Yamana in the
formation of the MARA JV, the integration of the processing plant,
related infrastructure and other assets of Minera Alumbrera with
the Agua Rica deposit, and the advancement of the Project since
then.
Yamana looks forward to continuing its work with
Glencore and the local stakeholders as MARA advances its
permitting, engineering, social licensing and field work towards
the goal of finalizing the feasibility study and the environmental
and social impact assessment, which the Company expects will
further increase the Project’s value.
About MARA
The MARA project is high-quality, low-risk
brownfield project located in the Catamarca province of Argentina.
On a 100% basis, MARA has Proven and Probable Mineral Reserves of
11.8 billion pounds of copper and 7.4 million ounces of gold
contained in 1.1 billion tonnes of ore(1). Based on the results of
the PFS(B) completed in 2020, the project highlights include:
- Initial long mine life of 28
years
- Annual ore feed of 42 million
tonnes per year
- Annual production for the first 10
full years of 556 million pounds of copper equivalent
production(2)
- Cash costs(3) of $1.32 per pound
and AISC(3) of $1.44 per pound for the first 10 years of
production
- Initial capital of $2.78
billion
- NPV of $1.906 billion and an IRR of
21.2% assuming metal prices of $3.00 per pound of copper, $1,300
per ounce of gold price, $18.00 per ounce of silver, $11.00 per
pound of molybdenum and using an 8% discount rate
- The project economics increase to
an NPV of greater than $3 billion and an IRR of approximately 30%
assuming $3.50 per pound of copper and $1,600 per ounce of
gold
Additional Project information can be found on
the MARA project webpage.
Qualified Persons
Scientific and technical information contained
in this news release has been reviewed and approved by Sébastien
Bernier (P. Geo and Senior Director, Reserves and Resources).
Sébastien Bernier is an employee of Yamana Gold Inc. and a
"Qualified Person" as defined by Canadian Securities
Administrators' National Instrument 43-101 - Standards of
Disclosure for Mineral Projects.
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
FTI Consulting (UK Public Relations)Sara Powell
/ Ben Brewerton+44 7974 201 715223 / +44 203 727 1000
ENDNOTES
(1) Summary
of MARA’s attributable gold and copper Mineral Reserves. Mineral
Reserves are estimated using a variable metallurgical recovery.
Average metallurgical recoveries of 86% Cu, 35% Au, 43% Ag, and 44%
Mo were considered. Open pit mineral reserves are reported at a
variable cut-off value averaging $8.42/t, based on metal price
assumptions of $3.00/lb Cu, $1,250/oz Au, $18/oz Ag, and $11/lb Mo.
A LOM average open pit costs of $1.72/t moved, processing and
G&A cost of $6.70/t of run of mine processed. The strip ratio
of the mineral reserves is 1.7 with overall slope angles varying
from 39° to 45° depending on the geotechnical sector.
Gold |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
|
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
MARA (56.25%) |
330,300 |
0.25 |
2,655 |
291,150 |
0.16 |
1,498 |
621,450 |
0.21 |
4,152 |
Copper |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
|
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
MARA (56.25%) |
330,300 |
0.57 |
4,151 |
291,150 |
0.39 |
2,503 |
621,450 |
0.49 |
6,654 |
(2) Copper
equivalent metal includes copper with gold, molybdenum, and silver
converted to copper-equivalent metal based on the following metal
price assumptions: $6,614 per tonne of copper, $1,250 per ounce for
gold, $24,250 per tonne for molybdenum, and $18.00 per ounce for
silver.
(3) A
non-GAAP financial performance measure. Please refer to section 11
of the Company's Management's Discussion and Analysis for the
quarter ended June 30, 2022, dated July 28, 2022, as filed on SEDAR
at www.sedar.com, EDGAR and incorporated by reference to this press
release. The most directly comparable GAAP metric is cost of
sales.
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, expectations and beliefs in connection with the MARA
project, including production, capital and operating costs, and the
advancement of its feasibility study. 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 the Company’s
expectations in connection with the production and exploration,
development and expansion plans at the Company's projects being
met, the impact of proposed optimizations at the Company's
projects, changes in national and local government legislation,
taxation, controls or regulations and/or change in the
administration of laws, policies and practices, and the impact of
general business and economic conditions, global liquidity and
credit availability on the timing of cash flows and the values of
assets and liabilities based on projected future conditions,
fluctuating metal prices (such as gold, silver, copper and zinc),
currency exchange rates (such as the Canadian Dollar, the Brazilian
Real, the Chilean Peso and the Argentine Peso versus the United
States Dollar), the impact of inflation, possible variations in ore
grade or recovery rates, changes in the Company’s hedging program,
changes in accounting policies, changes in mineral resources and
mineral reserves, risks related to asset dispositions, risks
related to metal purchase agreements, risks related to
acquisitions, changes in project parameters as plans continue to be
refined, changes in project development, construction, production
and commissioning time frames, risks associated with infectious
diseases, including COVID-19, unanticipated costs and expenses,
higher prices for fuel, steel, power, labour and other consumables
contributing to higher costs and general risks of the mining
industry, failure of plant, equipment or processes to operate as
anticipated, unexpected changes in mine life, final pricing for
concentrate sales, unanticipated results of future studies,
seasonality and unanticipated weather changes, costs and timing of
the development of new deposits, success of exploration activities,
permitting timelines, government regulation and the risk of
government expropriation or nationalization of mining operations,
risks related to relying on local advisors and consultants in
foreign jurisdictions, environmental risks, unanticipated
reclamation expenses, risks relating to joint venture operations,
title disputes or claims, limitations on insurance coverage, timing
and possible outcome of pending and outstanding litigation and
labour disputes, risks related to enforcing legal rights in foreign
jurisdictions, as well as those risk factors discussed or referred
to 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 what the Company believes to be its true
value proposition and may not be appropriate for other
purposes.
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