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Yamana Gold Announces Agreement to Sell its Royalty Portfolio for Total Consideration of US$65 Million


On February 23, 2020, Yamana Gold Inc. announced that it entered into a definitive agreement to sell a portfolio of royalty interests and a contingent payment to Guerrero Ventures Inc. for total consideration of US$65 million. The consideration is comprised of US$45 million in common shares of Guerrero and US$20 million in cash, US$10 million of which may be through a deferred cash payment.

Yamana’s portfolio of assets being sold under the sale transaction consists of:

  • 1% net smelter return royalty (NSR) on gold production from the Riacho dos Machados gold mine operating in Minas Gerais, Brazil
  • 2% NSR on oxide gold production from the Gualcamayo gold mine operating in San Juan, Argentina, once the operation produces approximately 275,000 ounces from January 1, 2020
  • 1.5% NSR on production from the Deep Carbonates Project at the Gualcamayo gold mine
  • $30 million cash payment receivable upon declaration of commercial production at the Deep Carbonates Project at the Gualcamayo gold mine
  • 2% NSR on production from the Suruca project in Goiás, Brazil

Concurrently with the purchase of the Yamana portfolio of assets, Guerrero agreed to purchase a portfolio of precious metals royalty, stream and gold loan assets from certain funds related to Orion Resource Partners (USA) LP for total consideration of US$268 million. Upon closing of the acquisitions, Guerrero intends to change its name to “Nomad Royalty Company Ltd.” and Orion and Yamana are expected to hold approximately 77% and 13% of the outstanding shares of Nomad, respectively, on a pro forma basis.

Cassels acted as external counsel to Yamana with a team comprised of Mark Bennett, Cathy Mercer, Jamie Litchen and David Singh (Mining, Securities and M&A).

RELATED EXPERTISE: Mining | Securities | Mergers & Acquisitions