Yamana Outlines Post-Merger Growth Strategy


Following the merger of Meridian Gold and Northern Orion into Yamana Gold (See E&MJ, October 2007, p. 10) Yamana released a press statement on October 18 outlining its strategic plan for exploiting the combined mining assets gained from the acquisition. The long-term plan, according to Yamana’s management, is focused on organic growth, initially targeting production of 1.2 million oz of gold in 2008 and increasing to 2.2 million oz in 2012. Production at these levels will be driven from enhancements, expansions, improvements and development of existing assets. Yamana owns seven producing mines, two of which are undergoing expansion; five development-stage projects and an extensive exploration portfolio in North, Central and South America.

The principal components of targeted production to a sustainable production level of 2.2 million oz include the following:
• Increasing sustainable gold production at the Chapada mine in Brazil from a baseline of 170,000 oz of gold in addition to copper, with plant capacity increases;
• Increasing production at the El Peñón mine in Chile initially to 420,000 gold equivalent oz (GEO) and potential to achieve approximately 500,000 oz (GEO) with modest plant capacity increases and tailings improvements;
• Increasing production at the Jacobina mine in Brazil to exceed 200,000 oz Au largely from development of new mine areas including Canavieiras and Morro do Vento;
• Increasing production at the Gualcamayo property in Argentina from an initial target of 200,000 oz/y Au to over 300,000 oz from growing resources at satellite and potential underground areas;
• Increasing production at the Minera Florida mine in Chile to approximately 120,000 oz/y Au from plant capacity increases;
• Developing the Mercedes property in Mexico to a production level of up to 200,000 oz/y Au with a target date for production of 2009;
• Developing the C1 Santa Luz property in Brazil to over 100,000 oz/y Au with a target date of December 2007 for a feasibility study;
• Developing the Jeronimo project to a production level of 150,000 oz/y Au;
• Pursuing the San Andres mine in Honduras for a production level of 90,000 to 100,000 oz/y Au;
• Improvements and enhancements at the Sao Francisco mine in Brazil to increase production to up to 140,000 oz/y Au; and
• Continuing development efforts at the Sao Vicente, La Pepa, Amancaya and other projects.

Toronto-based Yamana Gold and Meridian Gold, Reno, Nevada, USA, after an extended hostile takeover battle, announced on September 24 that they had agreed to a $3.55-billion deal in which Yamana acquired all of Meridian’s outstanding shares. Under the terms of the agreement, Meridian’s shareholders received C$7 in cash plus 2.235 Yamana common shares for each Meridian common share tendered and taken up by Yamana. Yamana and Northern Orion, a Canadian mid-tier copper and gold producer, announced their merger on the same day Yamana made its unsolicited bid for Meridian.


As featured in Womp 07 Vol 8 - www.womp-int.com