After some weeks of protracted negotiations, Yamana Gold and Meridian Gold have entered into a definitive support agreement pursuant to which Yamana has agreed to revise its offer to purchase all of the outstanding common shares of Meridian and Meridian’s Board of Directors has agreed to unanimously recommend that Meridian shareholders accept Yamana’s revised offer. So, all looks set fair for the threeway merger of Yamana, Meridian and Northern Orion.
Under the latest support agreement, Yamana has agreed to revise its offer to increase the cash component of the offer by C$0.50 per share to a total of C$7.00 per share. The share component of the offer will remain unchanged. Under the terms of the revised offer, Meridian’s shareholders will now receive C$7.00 in cash plus 2.235 Yamana common shares for each Meridian common share tendered and taken up by Yamana. The cash portion of the consideration will be funded from Yamana’s currently available debt facilities.
“As a result of our extensive discussions with Meridian since the previous increase in our offer and a review of Meridian’s confidential information through due diligence, we have been able to augment our initial assessments and increase our offer,” said Yamana Chairman and CEO Peter Marrone. “Meridian has done an excellent job of building a focused, high quality, dominant position in a way consistent with Yamana’s approach. We see tremendous upside in Meridian’s assets which will translate into substantial value for all shareholders. This agreement brings together three successful companies and is in the mutual interests of both Yamana and Meridian shareholders. As a result of a friendly transaction, the management teams of Yamana and Meridian have agreed to work together to implement an integration plan in order to begin maximizing value for all shareholders as soon as possible.”
Meridian’s President and CEO Ed Dowling said, “Our agreement provides Meridian shareholders with an attractive premium for their shares and a significant stake in a dynamic and growing company. The combined company represents an exceptional value-based investment providing growth in resources, production, cash flow and earnings along with sustainability and longevity.”
Yamana is a Canadian gold producer with significant gold production, gold development stage properties, exploration properties, and land positions in Brazil, Argentina and Central America. Yamana is producing gold at intermediate company production levels in addition to significant copper production. Yamana’s management plans to continue to build on this base through the advancement of its exploration properties and by targeting other gold consolidation opportunities in Brazil, Argentina and elsewhere in the Americas.
A unique mid-tier producer, with world-class mining operations in Chile and Nevada and a pipeline of promising exploration projects throughout the Americas, Meridian Gold’s success to date has been based on grassroots gold discoveries and a low-cost strategy, resulting in a better approach to adding value and balancing growth.
Northern Orion Resources is one of the world’s lowest-cost copper and gold producers. Its principal cash-flow producing asset is its 12.5% interest in the high-grade Bajo de Alumbrera copper/gold mine in northwest Argentina. The company is also developing its wholly owned Agua Rica copper/gold/moly deposit located 34 km upland from Alumbrera, with which it shares similar metallurgical and recovery processes. Agua Rica contains an estimated 21,800 Mlb of copper, 13.3 Moz of gold and 1,700 Mlb of molybdenum as well as silver. It could produce approximately 150,000 t/y of copper, associated gold and molybdenum.
