Yamana Gold recently announced it plans to acquire Extorre, a mining company with exploration and development stage precious metals projects. The most advanced of which is its Cerro Moro project, a high grade, gold silver deposit with approximately 1.36 million oz of gold equivalent indicated mineral resources and 1.05 million oz of gold equivalent inferred mineral resources, located in the province of Santa Cruz in Argentina. The transaction is valued at $395 million.
“For the past few years, Yamana has been focused on organic growth and we plan to continue with this strategic direction moving forward,” said Peter Marrone, chairman and CEO, Yamana Gold. “We have recently indicated Yamana would consider tuck-in acquisitions in mining-friendly and familiar jurisdictions that fit our other criteria including opportunity for organic growth, accelerated path to development and production and high return. Extorre represents one of these opportunities. It is a relatively small transaction in that it represents only 3% of Yamana’s market capitalization yet it could ultimately deliver more than 10% of our total gold equivalent production. It is rare to find such a small transaction that could contribute meaningfully to increases in net asset value, production and cash flow.” The transaction is expected to close in August 2012.