Yamana Gold Inc, Canada's third-largest producer of the metal, today agreed to buy Argentina-focused Extorre Gold Mines Ltd, in a C$414 million ($404.1 million) cash-and-stock deal.
Vancouver, British Colombia-based Extorre's flag ship project is the high quality Cerro Moro gold and silver project in Argentina's Santa Cruz province.
The Cerro Moro project is estimated to hold approximately 1.36 million ounces of gold equivalent indicated mineral resources and 1.05 million ounces of gold equivalent inferred mineral resources.
Under the terms of the deal, Extorre shareholder will receive 3.50 in cash and 0.0467 of a common share based Yamana closing price of $16.36 on the Toronto Stock Exchange on 15 June. The transaction value is approximately $414 million.
''We are pleased to be entering into this transaction with Yamana. Extorre's share price has suffered dramatically over the past few months due to a number of factors, including: global political and economic uncertainty impacting credit markets; a broad sell-off of all junior non-producing gold companies; concerns with respect to share dilution arising from a decision to develop the Cerro Moro project; and a series of events that have raised the perceived investment risk in Argentina,'' said Yale Simpson, co-chairman of Extorre.
''Extorre represents one of these opportunities,'' said Peter Marrone, chairman and CEO of Yamana. ''It is a relatively small transaction in that it represents only three per cent of Yamana's market capitalisation yet it could ultimately deliver more than 10 per cent of our total gold equivalent production.''
''In our view, it is one of the best undeveloped, high-grade opportunities in the Americas,'' Marrone said, adding that Yamana has the operational, jurisdictional and financial strength to advance the project on a timely basis to benefit all stakeholders.
Toronto, Ontario-based Yamana is a gold producer with significant production, development stage properties, exploration properties and land positions in Brazil, Argentina, Chile, Mexico and Colombia.