Wednesday, February 22, 2006

Yamana Gold to buy Desert Sun Mining in 5.47 cad/share

LONDON (AFX) - AIM-listed Canadian Yamana Gold Inc said it will acquire all shares in peer Desert Sun Mining Corp (DSM) in a recommended 5.47 cad per share deal.

DSM owns the long-life Jacobina gold mine in Bahia, Brazil near Yamana's Fazenda Brasileiro mine and its C1 Santa Luz pre-feasibility project.

DSM shareholders will receive 0.6 of a Yamana common share for each DSM common share held.

Based on the 5-day weighted average of Yamana's share price, the transaction price represents a premium of 21.1 pct over the average price of DSM's shares.

The transaction results in Yamana becoming a leading intermediate gold producer with an estimated annualized gold production of 450,000 ounces in 2006 increasing to 700,000 ounces in 2007 and to more than 800,000 ounces in 2008 from operating mines and mines under construction.

Yamana president and chief executive Peter Marrone said the company's stated goal in late 2005 was to produce 750,000 ounces of gold by 2008.

"With this acquisition, we will exceed that goal. As a result of this increased production profile and with the advancement of our development-stage or near development-stage assets, we are now targeting production of 1.0 million ounces by 2008," he said.

The enlarged company will have a total resource base of approximately 11.6 mln ounces of measured and indicated gold resources - of which 7.6 mln proven and probable - plus inferred resources of approximately 6.1 mln ounces.


Yamana Gold

Labels: ,


Post a Comment

Links to this post:

Create a Link

<< Home