Yamana Gold to acquire Monarch Gold Corp.

November 2, 2020

Yamana Gold Inc. announced that it has entered into a definitive agreement with Monarch Gold Corp. to acquire the Wasamac property and the Camflo property and mill through the acquisition of all of the outstanding shares of Monarch not owned by Yamana under a plan of arrangement for consideration, including cash and shares, of approximately C$152 million.

In connection with the plan Monarch will spin off its other mineral properties and other assets and liabilities into a new company.

The Wasamac gold underground project, located 15 km west of Rouyn-Noranda in the Abitibi region of Quebec adjacent to the Trans-Canada highway and Ontario Northland rail line, and 100 km from the Company’s 50 percent-owned Canadian Malartic Mine.

Wasamac consists of five well developed ore shoots within a single, continuous shear zone with a consistent grade distribution and wide mining widths, making it amenable to simple, productive, and cost efficient underground bulk mining methods.

The project has existing proven and probable mineral reserves of 1.8 million ounces of gold at 2.56 grams per tonne.

Wasamac fits well into the exploration and development strategy of the Yamana, which aims to develop properties in mining friendly jurisdictions with mineral inventories of more than 1.5 million ounces that can support production levels of more than 150,000 ounces per year that can be built with internal cash flows.

Once the transaction is completed, Monarch’s shareholders will own 1.3 percent of Yamana and 100 percent of the new miner and Yamana will own 100 percent of Monarch.

The new company will hold Monarch’s Beaufor mine, McKenzie Break property, Croinor Gold property, Swanson property and the Beacon Gold asset.
Yamana plans to build on the ongoing permitting and social licensing effort carried out by Monarch, applying Yamana’s strong ESG framework and best practices, and leveraging the company’s extensive experience in permitting and proven track record of building strong, respectful, and mutually beneficial relationships with the communities and governments wherever it operates.

The geological characteristics of the Wasamac ore body suggest it holds the potential to be an underground mine achieving the same scale, grade, production, and costs as Yamana’s successful Jacobina Mine in Brazil, and it possesses many parallels to the Yamana’s 50 percent-owned Canadian Malartic Underground Project located in the same Abitibi region in Quebec.

The Camflo property, located 15 km northwest of Val-d’Or, includes the old Camflo Mine, which closed in 1992, and a permitted mill. The property has not been explored since the mid-1980s and Yamana believes it has good exploration upside. Monarch has digitized historical exploration data, which Yamana intends to review, after which it will make a determination whether to commence an exploratory drill program.

The acquisition provides Yamana with a high-quality project with a significant mineral reserve and mineral resource base and excellent potential for further expansion. The acquisition adds to the company’s footprint in the Abitibi region, which is consistent with Yamana’s strategy to build on its existing presence in established mining jurisdictions where it has deep technical, geological, and operational expertise. In addition, the acquisition of the Wasamac and Camflo properties adds to Yamana’s pipeline of organic opportunities, significantly enhancing the Company’s future growth prospects. The company has considerable experience in large bulk tonnage underground mines, experience which will support the development of Wasamac. Furthermore, the acquisition aligns with the company’s strategy for a balanced approach to capital allocation, as discussed further in the section that follows.



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