logo-loader
MiningGold & silver
Yamana Gold

Yamana Gold agrees to sell Brazilian mine to Lundin Mining in US$1 billion deal

The Chapada mine, located in the state of Goiás, is a copper-gold operation that began production in 2007

brazilian flag
The Chapada mine and Suruca project are in western Brazil

Yamana Gold Inc (TSE:YRI) (NYSE:AUY) announced Monday morning that it agreed to sell its Brazilian mine to Lundin Mining Corporation (TSE:LUN) (OTCMKTS:LUNMF) for US$1 billion.

The Chapada mine, located in the state of Goiás, is a copper-gold operation that began production in 2007.

READ: Newmont's $10B deal to buy rival Goldcorp undercut by major shareholder's opposition

Under the terms of the agreement, Yamana will receive $800 million upon closing of the sale, with an additional consideration of up to $125 million contingent on the gold price, $100 million based on the development of a pyrite circuit to optimize the operation, and a royalty on the adjacent Suruca gold project.

The Suruca project lies seven kilometres northeast of Chapada and has an estimated annual production profile of around 150,000 ounces.

“While Chapada has been a valued asset for Yamana, the sale transaction delivers a significant gain, delivers a high after-tax return and financially repositions the company with a significant and immediate improvement to overall financial flexibility,” said Peter Marrone, Yamana’s CEO, in a statement.

Near-term value

According to Marrone, the sale allows the gold miner to pursue near-term value maximizing portfolio opportunities and increase shareholder returns, initially by way of a 100% increase in the annual dividend.

Yamana’s Canadian shares slipped around 3% to C$3.32 by Monday afternoon, while its US-listed shares were down 2% to US$2.50 on Monday afternoon.

Lundin’s shares gained around 8% to C$7.35 in Canada and 8% in the US, to US$5.52.

--Updates with share price--

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Quick facts: Yamana Gold

Price: £0.00

Market: TSX
Market Cap: £0.00
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Full interview: Summit Wireless Technologies to roll out WiSA certified...

Summit Wireless Technologies Inc (NASDAQ:WISA) CEO Brett Moyer talks to Proactive after an exciting Q2 for the California-based sound technology company. Among the highlights, Moyer says LG Electronics Inc will be rolling out television products that uses Summit's WiSA technology. These...

1 hour, 1 minute ago

2 min read