Yamana Gold, Inc.
) has completed its previously announced acquisition of Extorre
Gold Mines Limited. The acquisition was sealed after Extorre's
shareholders voted for the deal at a special meeting held on August
15. The final court approval for the transaction was received by
Extorre on August 21.
Yamana had agreed to pay the shareholders of Extorre $4.26 for
every share, with $3.50 in cash. The remaining part of the
consideration will be satisfied by issuing 0.0467 of a Yamana
common share for each common share of Extorre. The deal is worth
The acquisition of Extorre brings a number of development
projects under Yamana's jurisdiction, of which Cerro Moro is the
most crucial. Cerro Moro has high grade gold and silver deposits in
Santa Cruz, Argentina. It has 1.36 million ounces of gold
equivalent indicated mineral resources and 1.05 million ounces of
gold equivalent inferred mineral resources.
Yamana stated that it has already started working on
integrating, exploring and developing the Cerro Morro project. It
plans to spend $5 million on Cerro Morro over the next four months
for upgrading and increasing the mine's mineral resources.
In addition, Yamana is planning to start production at the mine
in 2015 with a production target of around 200,000 gold equivalent
ounces per year. The additional production will boost Yamana's
output by more than 10% annually and also result in an improvement
in cash flow and earnings.
Yamana holds a Zacks #5 Rank, reflecting a short-term (1 to 3
months) Strong Sell rating.
YAMANA GOLD INC (AUY): Free Stock Analysis
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