YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:AUY) (“Yamana” or the
“Company”) is pleased to announce the successful completion of
Yamana’s acquisition of the Wasamac property and the Camflo
property and mill from Monarch Gold Corporation (“Monarch”) through
its acquisition of all of the issued and outstanding shares of
Monarch (the “Monarch Shares”) not owned by Yamana under the
previously-announced plan of arrangement (the “Arrangement”). In
connection with the Arrangement, Monarch completed a spin-out to
its shareholders, through newly formed Monarch Mining Corporation
(“Monarch Mining”), of its other mineral properties and certain
other assets and liabilities.
The addition of the Wasamac project to Yamana’s
portfolio further solidifies the Company’s long-term growth profile
with a top-tier gold project in Quebec’s Abitibi region, a prolific
mining district where Yamana has deep operational and technical
expertise and experience. Additional details about Wasamac and
Yamana’s initial plans for the asset include:
- Wasamac is located 15 kilometres
west of Rouyn-Noranda in the Abitibi region of Quebec adjacent to
the Trans-Canada highway and Ontario Northland rail line, and 100
kilometres from the Company’s 50%-owned Canadian Malartic
mine.
- The project consists of a single,
continuous shear zone with a consistent grade distribution and wide
mining widths, making it amenable to simple, productive, and cost
efficient underground bulk mining methods.
- The geological characteristics of
the Wasamac ore body suggest it holds the potential to be an
underground mine with the potential to achieve the same scale,
grade, production, and costs as Yamana’s successful Jacobina mine
in Brazil, and it possesses many parallels to the underground
project at Canadian Malartic.
- The project has existing proven and
probable mineral reserves of 1.8 million ounces of gold at 2.56
grams per tonne.(1) (See mineral reserve and mineral resource
statement at the end of this press release.) Mineral resources and
proven and probable mineral reserves are supported by a Feasibility
Study(1) previously completed by Monarch in 2018 (the “Wasamac
Feasibility Study”), and Yamana completed independent geological
modelling, mineral resources and mineral reserves validations,
among other extensive work, as part of its due diligence reviews to
ensure greater levels of accuracy. There remains excellent
potential for significant future exploration success and mineral
resource conversion, with the deposit remaining open at depth and
along strike.
- The currently defined deposit is
situated at shallow depths in comparison to other Abitibi mines.
Current known mineralization reaches a depth of approximately 800
metres, which offers the opportunity for ramp access at low
relative up-front development costs over a relatively short
development time frame.
- Yamana plans to build on the
ongoing permitting and social licensing effort carried out by
Monarch, applying the Company’s strong ESG framework and best
practices, and leveraging the Company’s extensive experience in
permitting and proven track record of building strong, respectful,
and mutually beneficial relationships with the communities and
governments wherever it operates.
- The Company will target increasing
the mineral inventory and perform optimizations to further enhance
the project’s value, advance engineering, and de-risk execution,
leveraging Yamana’s technical expertise and adhering to the
Company’s disciplined capital approach.
- Building off the work completed to
date, Yamana plans to commence an exploration and infill drilling
campaign and other studies to refine and expand upon the potential
of Wasamac and its development alternatives.
- The Company plans to open a
regional office in the coming months to support community
engagement.
Completion of the
Arrangement
Under the terms of the Arrangement, each former
holder of Monarch Shares received, in exchange for each Monarch
Share held immediately prior to the effective time of the
Arrangement: (i) 0.0376 of a Yamana Share; (ii) C$0.192 in cash
from Yamana; and (iii) 0.2 of a share of Monarch Mining.
In aggregate, Yamana issued 11,608,195 Yamana
Shares (the “Consideration Shares”) and approximately C$59.3
million in cash under the Arrangement to former Monarch
shareholders as consideration for their Monarch Shares. Upon
closing of the Arrangement, existing Yamana shareholders and former
Monarch shareholders own approximately 98.8% and 1.2% of the issued
and outstanding Yamana Shares, respectively. Monarch shareholders
also received shares of Monarch Mining under the Arrangement.
Yamana now owns 4,450,000 common shares of Monarch Mining, or
approximately 6.7% of the outstanding common shares of Monarch
Mining, and is entitled to acquire an additional 2,225,000 common
shares of Monarch Mining upon the exercise of previously held
Monarch warrants, representing a partially-diluted share ownership
in Monarch Mining of approximately 9.8%. Yamana looks forward to
participating in the value created from Monarch’s remaining
pipeline of development and exploration projects.
As Monarch is now a wholly-owned subsidiary of
the Company, the Monarch Shares are anticipated to be de-listed
from the Toronto Stock Exchange (“TSX”) at the beginning of next
week. Yamana will also apply to the applicable securities
regulators to have Monarch cease to be a reporting issuer and
terminate the entity’s public reporting obligations. This release
is being made jointly with Monarch, as Monarch currently remains a
reporting issuer.
The Company also plans to apply to the Financial
Conduct Authority (the “FCA”) and London Stock Exchange plc (the
“LSE”) respectively for the Consideration Shares issued under the
Arrangement to be admitted to the standard listing segment of the
Official List of the FCA and to trading on the main market for
listed securities of the LSE (together, “Admission”). It is
expected that Admission will become effective at 8:00 a.m. on 27
January 2021. An additional 388,759 Yamana Shares have been
reserved for issuance to former Monarch warrantholders on exercise
of their warrants.
Following the issuance of the Consideration Shares,
the Company’s issued share capital now consists of 964,260,851
common shares and the total number of voting rights in the Company
is 964,260,851. This figure may be used by Shareholders as the
denominator for the calculations by which they determine if they
are required to notify their interest in, or a change in their
interest in, the Company under the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority.
Further details regarding the Arrangement are set
out in the management information circular of Monarch dated
November 30, 2020, which is available on under Monarch’s profile on
SEDAR at www.sedar.com. A copy of the early warning report of
Yamana in connection with the acquisition of the Monarch Shares is
available on SEDAR under Monarch’s SEDAR profile at www.sedar.com
and can be obtained by contacting Yamana at the contact information
below.
Information for Former Monarch
Shareholders
Pursuant to the Arrangement, former Monarch
shareholders are entitled to receive the above-noted cash and Share
Consideration for each Monarch Share held prior to closing of the
Arrangement.
In order to receive such consideration in
exchange for Monarch Shares, registered shareholders of Monarch
must complete, sign, date and return the letter of transmittal that
was mailed to each Monarch shareholder prior to closing. The letter
of transmittal is also available under Monarch’s profile on SEDAR
at www.sedar.com. For those shareholders of Monarch whose
Monarch Shares are registered in the name of a broker, investment
dealer, bank, trust company, trust or other intermediary or
nominee, they should contact such nominee for assistance in
depositing their Monarch Shares and should follow the instructions
of such intermediary or nominee. For further details regarding the
submission of the letters of transmittal, please refer to the
Monarch management information circular dated November 30, 2020
available under Monarch’s profile on SEDAR at www.sedar.com, or
questions may be directed to the depositary, Computershare Trust
Company of Canada, at 1-800-564-6253 or via email at
corporateactions@computershare.com.
Mineral Reserve Statement, Wasamac
deposit
|
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) |
Gold |
1,028 |
2.66 |
88 |
20,427 |
2.56 |
1,679 |
21,455 |
2.56 |
1,767 |
Mineral Resource Statement, Wasamac
deposit
|
Measured Mineral Resources |
Indicated Mineral Resources |
Total Measured & Indicated |
|
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) |
Gold |
3,990 |
2.52 |
323 |
25,870 |
2.72 |
2,265 |
29,860 |
2.70 |
2,588 |
|
Inferred Mineral Resources |
|
Tonnes |
Grade |
Contained |
|
(000’s) |
(g/t) |
oz. (000’s) |
Gold |
4,160 |
2.20 |
294 |
To view all of the assumptions and the names of
qualified persons who prepare the mineral reserve and mineral
resource estimates, please refer to the Wasamac Feasibility Study
available under Monarch’s profile on SEDAR at www.sedar.com.
Qualified Persons Scientific
and technical information contained in this news release has been
reviewed and approved by Sébastien Bernier (P.Geo and Senior
Director, Geology and Mineral 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 YamanaYamana 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
Relations416-815-02201-888-809-0925Email:
investor@yamana.com
FTI Consulting (UK Public Relations)Sara Powell
/ Ben
Brewerton
+44 203 727 1000Email: Yamana.gold@fticonsulting.com
Credit Suisse (Joint UK Corporate
Broker)Ben Lawrence / David Nangle Telephone: +44 (0) 20
7888 8888
Joh. Berenberg Gossler & Co. KG
(Joint UK Corporate Broker)Matthew Armitt /
Jennifer Wyllie / Detlir Elezi Telephone: +44 (0) 20 3207 7800
Peel Hunt LLP (Joint UK Corporate
Broker)Ross Allister / David McKeown / Alexander
AllenTelephone: +44 (0) 20 7418 8900
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 expected timing for the
de-listing of the Monarch Shares from the TSX, and Monarch ceasing
to be a reporting issuer and the Company’s initial plans for the
Wasamac project. 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 ability of the parties to receive, in a
timely manner and on satisfactory terms, the necessary regulatory
approval and other expectations and assumptions concerning the
Arrangement changing; the Company’s plans related to the Wasamac
project changing; 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.
1. For full details please refer to
Monarch’s Feasibility Study titled “Feasibility Study of the
Wasamac Project, Rouyn-Noranda, Quebec, Canada” dated December 3,
2018, with an effective date of November 1, 2018, available under
Monarch’s profile on SEDAR at www.sedar.com.
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