Yamana Gold Enters into Agreement for the Sale of Certain Non-Core Assets
June 09 2009 - 7:33PM
PR Newswire (US)
- Transaction Includes Sale of San Andres, Sao Francisco and Sao
Vicente Mines to Aura Minerals - TORONTO, June 9
/PRNewswire-FirstCall/ -- YAMANA GOLD INC. (TSX: YRI; NYSE: AUY;
LSE: YAU) today announced that it has signed an agreement with Aura
Minerals Inc. under which Aura would purchase three of Yamana's
non-core operating mines - the San Andres Mine in Honduras and the
Sao Francisco and Sao Vicente Mines each located in Brazil. Aura
will acquire the San Andres Mine in Honduras and the Sao Francisco
and Sao Vicente Mines in Brazil for an aggregate initial purchase
price of approximately US$200 million, including approximately
US$90 million in cash, US$70 million in deferred cash payments and
US$40 million in Aura common shares. The transaction will close in
two parts in order to accommodate jurisdiction-related regulatory
requirements. The first part which relates to the sale of San
Andres is expected to close on July 23, 2009 at which time Yamana
will receive total consideration of approximately US$74 million.
The second part which relates to the sale of Sao Francisco and Sao
Vicente is expected to close by year-end. In addition, Yamana will
retain a contingent cash flow-based royalty on San Andres, Sao
Francisco and Sao Vicente that will provide additional payments to
Yamana of up to US$40 million, which it fully expects to receive
with payments beginning as early as 2012. "This transaction
streamlines our asset portfolio, further focusing on our core
assets, on our core operating jurisdictions and on advancing our
high-returning development stage projects, effectively positioning
Yamana for the next wave of growth," commented Peter Marrone,
Yamana's chairman and chief executive officer. "The sale of these
non-core mines is expected to result in lower cash operating costs,
higher margins and increased reserves, production and cash flow per
mine. We believe we will derive significantly more value from our
share position than had these mines remained directly held by our
company, particularly in a higher gold price environment. We are
confident in the ability of Aura's management to manage these
mines, allowing us to maintain an interest through our share
position and royalty." The Aura common shares to be issued to
Yamana as partial consideration for the purchase of the three mines
will be issued at C$0.40 per share, and Yamana will maintain a
meaningful share holding in Aura. The San Andres, Sao Francisco and
Sao Vicente Mines are three solid operations and Yamana is
confident that under the capable management by Aura, these
operations will deliver considerable further value for all
shareholders. The transaction is subject to customary closing
conditions including definitive documentation and completion of a
financing by Aura to fund the cash portion of the purchase price.
National Bank Financial is acting as the financial advisor to
Yamana with respect to this transaction. Yamana's legal advisor is
Cassels Brock & Blackwell LLP. 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 Central America.
The Company plans to continue to build on this base through
existing operating mine expansions and throughput increases, the
advancement of its exploration properties and by targeting other
gold consolidation opportunities in the Americas. CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS: This news release contains or
incorporates by reference "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
successful completion of the proposed purchase and sale of non-core
assets comprised of the Company's San Andres Mine, Sao Francisco
Mine and Sao Vicente Mine, 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 and the Chilean 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 resources, changes in
project parameters as plans continue to be refined, changes in
project development, 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, 2008 filed with the securities
regulatory authorities in all provinces of Canada and available at
http://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 proposed transaction with Aura Minerals and may not
be appropriate for other purposes. DATASOURCE: Yamana Gold Inc.
CONTACT: MEDIA INQUIRIES: Mansfield Communications Inc., Hugh
Mansfield, (416) 599-0024; Jodi Peake, Vice President, Corporate
Communications & Investor Relations, (416) 815-0220, Email: ;
Letitia Wong, Director, Investor Relations, (416) 815-0220, Email:
, http://www.yamana.com/
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