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Yamana Gold Completes Acquisition of Wasamac Property and Camflo Property and Mill, and Begins Advancing Wasamac Development Plans

Jan 25, 2021

YAMANA GOLD INC. has announced the successful completion of Yamana’s acquisition of the Wasamac property and the Camflo property and mill from Monarch Gold Corporation through its acquisition of all of the issued and outstanding shares of Monarch not owned by Yamana under the previously-announced plan of arrangement.

Monarch was one of two companies exploring the use of the Kidd Creek concentrator complex for the possible processing of gold ore. 

In connection with the Arrangement, Monarch completed a spin-out to its shareholders, through newly formed Monarch Mining Corporation (“Monarch Mining”), of its other mineral properties and certain other assets and liabilities. 

The addition of the Wasamac project to Yamana’s portfolio further solidifies the Company’s long-term growth profile with a top-tier gold project in Quebec’s Abitibi region, a prolific mining district where Yamana has deep operational and technical expertise and experience. Additional details about Wasamac and Yamana’s initial plans for the asset include:

  • Wasamac is located 15 kilometres west of Rouyn-Noranda in the Abitibi region of Quebec adjacent to the Trans-Canada highway and Ontario Northland rail line, and 100 kilometres from the Company’s 50%-owned Canadian Malartic mine.
  • The project consists of 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 geological characteristics of the Wasamac ore body suggest it holds the potential to be an underground mine with the potential to achieve the same scale, grade, production, and costs as Yamana’s successful Jacobina mine in Brazil, and it possesses many parallels to the underground project at Canadian Malartic.
  • The project has existing proven and probable mineral reserves of 1.8 million ounces of gold at 2.56 grams per tonne.(1) (See mineral reserve and mineral resource statement at the end of this press release.) Mineral resources and proven and probable mineral reserves are supported by a Feasibility Study(1) previously completed by Monarch in 2018 (the “Wasamac Feasibility Study”), and Yamana completed independent geological modelling, mineral resources and mineral reserves validations, among other extensive work, as part of its due diligence reviews to ensure greater levels of accuracy. There remains excellent potential for significant future exploration success and mineral resource conversion, with the deposit remaining open at depth and along strike.
  • The currently defined deposit is situated at shallow depths in comparison to other Abitibi mines. Current known mineralization reaches a depth of approximately 800 metres, which offers the opportunity for ramp access at low relative up-front development costs over a relatively short development time frame.
  • Yamana plans to build on the ongoing permitting and social licensing effort carried out by Monarch, applying the Company’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 Company will target increasing the mineral inventory and perform optimizations to further enhance the project’s value, advance engineering, and de-risk execution, leveraging Yamana’s technical expertise and adhering to the Company’s disciplined capital approach.
  • Building off the work completed to date, Yamana plans to commence an exploration and infill drilling campaign and other studies to refine and expand upon the potential of Wasamac and its development alternatives.
  • The Company plans to open a regional office in the coming months to support community engagement.

Completion of the Arrangement 

Under the terms of the Arrangement, each former holder of Monarch Shares received, in exchange for each Monarch Share held immediately prior to the effective time of the Arrangement: (i) 0.0376 of a Yamana Share; (ii) C$0.192 in cash from Yamana; and (iii) 0.2 of a share of Monarch Mining.

In aggregate, Yamana issued 11,608,195 Yamana Shares (the “Consideration Shares”) and approximately C$59.3 million in cash under the Arrangement to former Monarch shareholders as consideration for their Monarch Shares. Upon closing of the Arrangement, existing Yamana shareholders and former Monarch shareholders own approximately 98.8% and 1.2% of the issued and outstanding Yamana Shares, respectively. Monarch shareholders also received shares of Monarch Mining under the Arrangement. Yamana now owns 4,450,000 common shares of Monarch Mining, or approximately 6.7% of the outstanding common shares of Monarch Mining, and is entitled to acquire an additional 2,225,000 common shares of Monarch Mining upon the exercise of previously held Monarch warrants, representing a partially-diluted share ownership in Monarch Mining of approximately 9.8%. Yamana looks forward to participating in the value created from Monarch’s remaining pipeline of development and exploration projects.

As Monarch is now a wholly-owned subsidiary of the Company, the Monarch Shares are anticipated to be de-listed from the Toronto Stock Exchange (“TSX”) at the beginning of next week. Yamana will also apply to the applicable securities regulators to have Monarch cease to be a reporting issuer and terminate the entity’s public reporting obligations. This release is being made jointly with Monarch, as Monarch currently remains a reporting issuer.

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