YAU Yamana Gold

 
TIDMYAU 
 
YAMANA ADVANCES AGUA RICA STRATEGY THROUGH AGREEMENT WITH XSTRATA AND GOLDCORP 
- TARGETING INTEGRATION INTO ALUMBRERA 
 
(all amounts expressed in US dollars) 
 
TORONTO, March 8 /CNW/ - YAMANA GOLD INC. (TSX: YRI) (NYSE: AUY) (LSE: YAU) 
("Yamana" or "The Company") today announced an arrangement, subject to formal 
documentation, with Xstrata Queensland Limited ("Xstrata") and Goldcorp Inc. 
("Goldcorp") that would facilitate the ultimate integration of Agua Rica into 
Minera Alumbrera ("Alumbrera"). Agua Rica is a 100% Yamana owned, development 
stage project in the province of Catamarca, Argentina and is located 
approximately 35 kilometres from the currently operating Alumbrera mine. 
Subject to Xstrata and Goldcorp exercising their option to have Alumbrera 
acquire Agua Rica, and following the integration of the projects, Xstrata, 
Goldcorp and Yamana would own interests in the combined project of 50%, 37.5% 
and 12.5% respectively, consistent with their current interests in Alumbrera. 
 
The terms of the agreement provide for Yamana to receive from Xstrata and 
Goldcorp a combination of payments summarized as follows: 
 
    -  Initial payments totaling $110 million, payable as follows: 
 
 
 
         -  $10 million payable within seven days of this announcement 
 
         -  $20 million payable upon execution of formal transaction 
 
            documents ("closing") 
 
         -  $20 million payable 12 months from closing 
 
         -  $30 million payable 24 months from closing 
 
         -  $30 million payable 36 months from closing 
 
 
 
    -  Further payments totaling $200 million, which include: 
 
 
 
         - $150 million payable upon approval to proceed with construction 
 
         - $50 million payable upon achieving commercial production 
 
In addition to the above consideration in this transaction, the Company would 
also receive a deferred consideration revenue stream. The deferred 
consideration to be received by Yamana would be based on a formula (subject to 
certain adjustments) as follows: 
 
         65% of payable gold produced X (spot gold price - ($450 + 10% X 
 
         (spot gold price - $1000))), up to a maximum of 2.3 million ounces 
 
         paid to Yamana 
 
This would allow the Company to retain positive exposure to the majority of the 
significant gold resources at the Agua Rica project. 
 
Given that Yamana would retain a 12.5% interest in the combined project, the 
Company is effectively agreeing to sell only 87.5% of Agua Rica. With its 
continued interest through its Alumbrera ownership, Yamana would also benefit 
from the significant synergies that would be realized through the combination 
of two projects and from the cash flows to be received through ongoing 
dividends over a mine life estimated at more than 25 years. 
 
"We are pleased to come to an agreement with Xstrata and Goldcorp with respect 
to Agua Rica," commented Peter Marrone, Chairman and CEO. "After reviewing a 
number of strategic alternatives for Agua Rica, it was clear that this 
transaction provides the best opportunity for development of Agua Rica and the 
greatest value potential to all parties. We are pleased with the value we will 
receive for Agua Rica in addition to maintaining exposure to a significant 
portion of the gold at the project. We are also pleased that our interest in 
Alumbrera, which we will continue to own, would also increase in value once a 
formal decision for construction and integration occurs. The ultimate 
integration of the projects, Agua Rica and Alumbrera, would create considerable 
further value not only for us, but for all stakeholders, and would ensure the 
development of Agua Rica and continuation of Alumbrera. This would be positive 
for all parties. The well established relationships of Alumbrera and its joint 
venture partners with governments and other stakeholders would also facilitate 
the timely development of Agua Rica." 
 
A formal decision to purchase Agua Rica would be made at the time of a 
construction decision. Should Xstrata and Goldcorp decide not to make a 
construction decision, or should the four year option period expire, Yamana 
would retain all payments received prior to termination and be entitled to all 
work product, technical studies and reports developed with respect to Agua Rica 
during the option period. 
 
The formal transaction documents are expected to be signed as soon as possible, 
although not later than August 31, 2011. During the period prior to a formal 
construction decision, Alumbrera will be responsible for the management and 
funding of all the feasibility study and development work relating to Agua 
Rica. 
 
Yamana is being advised by Bank of America Merrill Lynch as its financial 
advisor in connection with its sourcing and review of strategic alternatives 
relating to Agua Rica. 
 
About Yamana 
 
Yamana is a Canadian-based gold producer with significant gold production, gold 
development stage properties, exploration properties, and land positions in 
Brazil, Argentina, Chile, Mexico and Colombia. Yamana plans to continue to 
build on this base through existing operating mine expansions, throughput 
increases, development of new mines, advancement of its exploration properties 
and by targeting other gold consolidation opportunities with a primary focus in 
the Americas. 
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: 
 
This news release contains "forward-looking statements" within the meaning of 
the United States Private Securities Litigation Reform Act of 1995 and 
applicable Canadian securities legislation. Except for statements of historical 
fact relating to the Company, information contained herein constitutes 
forward-looking statements, including any information as to the Company's 
strategy, plans or future financial or operating performance. 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 projects and 
exploration programs discussed herein being met, 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, copper, silver and 
zinc), currency exchange rates (such as the Brazilian Real, the Chilean Peso 
and the Argentine Peso versus the United States Dollar), possible variations in 
ore grade or recovery rates, changes in the Company's hedging program, changes 
in accounting policies, changes in the Company's corporate mineral resources, 
risk related to non-core mine dispositions, changes in project parametres as 
plans continue to be refined, changes in project development, construction, 
production and commissioning time frames, risk related to joint venture 
operations, the possibility of project cost overruns or 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 time lines, government regulation of mining operations, 
environmental risks, unanticipated reclamation expenses, title disputes or 
claims, limitations on insurance coverage and timing and possible outcome of 
pending litigation and labour disputes, as well as those risk factors discussed 
or referred to in the Company's annual Management's Discussion and Analysis and 
Annual Information Form for the year ended December 31, 2009 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. 
 
For further information: For further information: Lisa Doddridge, Vice 
President, Corporate Communications and Investor Relations, (416) 815-0220, 
Email: investor(at)yamana.com; or Linda Armstrong, Director, Investor 
Relations, (416) 815-0220, Email: investor(at)yamana.com; www.yamana.com 
 
 
 
(YRI. AUY) 
 
 
 
 
 
END 
 

Yamana Gold (LSE:YAU)
Historical Stock Chart
From Jun 2024 to Jul 2024

Yamana Gold (LSE:YAU)
Historical Stock Chart
From Jul 2023 to Jul 2024