As a long suffering owner of this once promising explorer I'd like to hear from others on this thread about their opinions on the news today (the market gave it a positive vote) :
Yamana announces that it has entered into an agreement with Royal Gold, Inc., which will acquire:
* by way of a private placement, 3 million units of Yamana - each unit consisting of one common share and one-half of a share purchase warrant - for C$ 1.8 million. Each full warrant entitles Royal Gold, for three years, to purchase one Yamana share for C$0.50/share
* by way of purchase for US$ 150,000, a 2% net smelter return royalty on all mineral production from Yamana's current mineral property holdings in Santa Cruz province, Argentina - including the high-grade Martha silver mine within the Bacon property and the high-grade gold discovery at the Coyote vein within the Martinetas property.
Yamana's 100% owned mineral holdings in Santa Cruz province, Argentina, cover nearly 1,500 square kilometers in an emerging precious-metals district that includes the major new operating mine, Cerro Vanguardia, and other gold-silver discoveries. Santa Cruz is one of Argentina's premier mining provinces offering significant encouragement to exploration and development, easy access to highways and ocean ports and, in the eastern part of the province, to energy. Yamana has been an aggressive explorer in this province for more than eight years.
For the Martha silver mine within the Bacon property, Yamana has secured a US$ 4 million financing commitment from Northgate Exploration Ltd., to fund Phase I of a four-phase development program. This initial phase involves the mining of high-grade, silver-bearing direct shipping ore (''DSO'') - silver ore that can be shipped directly to a smelter with no on-site processing. The profits from Phase I will be reinvested in Phases II, III, and IV - the objective being to create a self-sufficient silver mining operation.
The DSO mining program is expected to begin early in 2001 and, within that year, to produce some 4 million ounces of silver from a current global resource estimate of 9.3 million ounces of silver - an estimate which has been audited and endorsed by Micon International Limited.
The Bacon property covers 44 square kilometers (4,401 hectares) with the Martha silver mine covering only 42 hectares within the larger area. There is excellent potential for additional high-grade shoots in the Veta Martha vein system outside the mine area, and many targets still to be tested elsewhere on Bacon and on the adjacent Argenta, Grillo, and Bola properties.
Royal Gold will also have the opportunity to provide additional project development financing to Yamana for any of its Santa Cruz properties for a three-year period from the closing of this transaction.
Royal Gold's investment will be used for general corporate purposes and for advancement of the Martinetas high-grade gold property.
Stanley Dempsey, Chairman and CEO of Royal Gold, stated, ''We are pleased to be able to assist Yamana in its development of a high-quality mining operation in what appears to be a significant mineral district in Argentina. This transaction exposes our shareholders to the dramatic price appreciation potential of silver. We look forward to Yamana's further successes in the Santa Cruz province.''
Victor Bradley, President and CEO of Yamana, stated, ''We are delighted to forge this alliance with Royal Gold and to share with them our vision for future developments in this emerging precious-metals province in southern Patagonia, Argentina.''
At the close of the private placement transaction, and before consideration of share purchase warrants, Royal Gold expects that it will hold approximately 7% of the issued and outstanding shares of Yamana. All such shares, and any shares acquired upon the exercise of the Yamana warrants will be subject to certain restrictions upon resale.
Completion of the transaction is subject to execution of definitive documentation and regulatory approval.
Yamana Resources Inc. is a Canadian exploration company focused on silver exploration and development in Argentina, with additional precious-metals interests in Paraguay in partnership with Newmont Mining Corporation [NYSE:NEM - news]. |
