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Yamana Gold Completes Sale of its Chapada Mine and Launches Cash Tender Offer for Private and Public Notes

Published: 07/05/2019

Team: Mark T. Bennett, Cathy L. Mercer, Jamie Litchen, Alexander Pizale, David Singh, Jennifer Wasylyk, David Budd

On July 5, 2019, Yamana Gold Inc. completed the sale of its wholly-owned Chapada mine to Lundin Mining Corporation for total consideration of over US$1.0 billion. The Chapada mine, located in the State of Goiás, Brazil, is a copper mine with additional gold production that was developed by Yamana and began production in 2007. Cassels previously acted for Yamana on the acquisition of the Chapada project in 2003 and subsequent financings to fund construction of the mine. Pursuant to the sale transaction, Yamana received cash consideration of US$800 million at closing and is entitled to receive additional consideration of up to US$125 million based on the price of gold over a five-year period, a US$100 million payment contingent on the development of a pyrite roaster at the project by Lundin Mining, and a 2% net smelter return royalty on gold production from the Suruca gold project. 

Concurrently with the closing of the sale transaction, Yamana launched a cash tender offer for up to US$551 million of its private and public notes, subject to certain caps and other restrictions. The settlement date for the tender offer is expected to be August 12, 2019.

Cassels acted for Yamana with a team comprised of Mark Bennett, Cathy Mercer, Jamie Litchen, Alexander Pizale and David Singh (Securities, Mining and M&A) and Jennifer Wasylyk and David Budd (Financial Services).