Yamana Gold Unveils Argentine Mine Deal With Xstrata and Goldcorp

March 8, 2011 - PRLog -- Canadian-based gold producer Yamana Gold Inc., announced an agreement Tuesday, subject to formal documentation, under which one of its mine development projects in Argentina would be integrated with another nearby mining operation run by Xstrata and Goldcorp.

Yamana said the proposed deal would facilitate the ultimate integration of its 100 percent owned Agua Rica development stage project mine into the working Minera Alumbrera mine operation.

The Agua Rica development is located in the Argentine province of Catamarca, and is situated 35 kilometres from the Alumbrera mine which is operation.

Yamana said that subject to Xstrata and Goldcorp exercising their option to have Alumbrera acquire Agua Rica, and following integration of the two projects, Xstrata, Goldcorp and Yamana would own interests in the combined project of 50 percent, 37.5 percent and 12.5 percent respectively.

Such an ownership breakdown would be consistent with the three companies current interests in Alumbrera, Yamana said.

The terms of the deal provide for Yamana to receive from Xstrata and Goldcorp initial payments totaling $110 million, and further payments of $200 million, due in part to certain targets.

Yamana said that the formal transaction documents are expected to be signed imminently, and not later than August 31, 2011.

Author: Mike King, analyst.

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