Yamana Gold Inc. will create a spinoff for its lower value mines in Brazil, pending 2015, according to company officials; Brio Gold Inc. will be a 100% owned subsidiary of the Toronto-based miner.
A weak market prompted the move, said company representatives. “This segregates portfolios, focuses our efforts, reduces costs and allows us to maximize value,” Yamana CEO Peter Marrone said in a statement; former Augusta Resource Corp. CEO Gil Clausen will lead the new entity.
Brio Gold will control Yamana’s Fazenda Brasileiro, Pilar and C1 Santa Luz assets, alongside related exploration concessions, said the company. The unit, they added, is forecast to initially produce more than 130,000 gold oz annually, amid potential increases.
Q3 Yamana earnings featured a $668.3 million write-down encompassing C1 Santa Luz and Pilar, both newly built operations, said officials. Yamana, which also operates in Chile, Argentina, Canada and Mexico, will continue managing its other Brazilian assets through a local, scaled-back supervisory team.