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Guerrero Ventures Inc (2)
Symbol GV
Shares Issued 33,282,236
Close 2020-02-21 C$ 0.38
Recent Sedar Documents

Yamana closes royalty portfolio sale to Guerrero

2020-05-27 21:59 ET - News Release

See News Release (C-YRI) Yamana Gold Inc

An anonymous director of Yamana reports

YAMANA GOLD ANNOUNCES THE COMPLETION OF THE SALE OF ITS ROYALTY PORTFOLIO FOR TOTAL CONSIDERATION OF $65 MILLION

Yamana Gold Inc. has completed the previously announced sale to Nomad Royalty Company Ltd. (formerly Guerrero Ventures Inc.) of a portfolio of royalty interests and the contingent payment to be received upon declaration of commercial production at the Deep Carbonates project (DCP) at the Gualcamayo gold mine for total consideration of $65-million. Nomad is expected to commence trading on the Toronto Stock Exchange on or about May 29, 2020, under the symbol NSR. All amounts are expressed in U.S. dollars unless otherwise indicated.

The consideration was structured to realize immediate value for non-core assets through a cash component and medium-term value growth through a significant share position in a newly created, growth-oriented company with a strong asset base and a driven and experienced management team.

As such, Yamana has received initial upfront cash consideration of $10-million, as well as $45-million in common shares of Nomad at a price of 90 cents per share. In addition, Yamana has the right to receive an additional $10-million through a deferred cash payment that may be paid in cash or common shares of Nomad. Yamana is entitled to receive interest on the deferred cash payment at a rate of 3 per cent per year, and the deferred cash payment may be converted at any time, in whole or in part, by Yamana into shares of Nomad at a conversion price of 90 cents per share. While the deferred cash payment will be due for payment in full at the end of two years, Nomad may prepay the deferred cash payment at the end of one year, subject to additional payment by Nomad equal to 5 per cent of the deferred cash payment, or $500,000, and the right of Yamana to convert the deferred cash payment into shares of Nomad at a price of 90 cents per share.

The closing of the sale transaction underpins another step in the company's strategy to optimize its portfolio, continuing the strengthening of its financial flexibility and creating value from its strategic assets. The sale transaction provides Yamana with a meaningful stake in a new precious metal royalty company that has a strong and diversified asset base, significant potential upside through project development, mineral resource expansions, and mine life extensions, as well as like-minded corporate objectives and a growth mandate in a strong precious metal price environment.

On closing of the sale transaction, certain funds related to Orion Resource Partners (USA) LP and Yamana own approximately 77 per cent and 13 per cent of the outstanding shares of Nomad, respectively. Concurrent with the closing of the sale transaction, Yamana and Orion entered into an investor rights agreement with Nomad pursuant to which, among other things, Yamana is entitled to maintain its percentage ownership of the issued and outstanding common shares of Nomad and to have one nominee on Nomad's board of directors. On closing of the sale transaction, Gerardo Fernandez, senior vice-president, corporate development, of Yamana, was appointed as Yamana's nominee. Yamana's entitlements under the investor rights agreement remain in place so long as Yamana's share ownership interest remains at or above 10 per cent of the issued and outstanding common shares of Nomad. Pursuant to the investor rights agreement, Yamana has also agreed not to dispose of any Nomad shares held by it, without the prior written consent of Nomad during the period ending on the earlier of Nov. 27, 2020, and the date that Yamana's share ownership interest drops below 10 per cent.

Additional details with respect to the sale transaction are available in the company's press release dated Feb. 24, 2020, available on the company's website.

Early warning disclosure

Pursuant to the sale transaction, Yamana acquired 66.5 million Nomad shares and is deemed to have acquired and to be the beneficial owner of approximately 15,655,555 Nomad shares, assuming the conversion of the deferred cash payment, representing in the aggregate approximately 13.01 per cent of the issued and outstanding Nomad shares on a non-diluted basis and approximately 15.60 per cent of the issued and outstanding Nomad shares on a partially diluted basis. The exact number of Nomad shares issuable upon conversion of the deferred cash payment will vary based on the Bank of Canada exchange rate used at the time to convert the amount of the deferred cash payment into Canadian dollars.

While Yamana currently has no plans or intentions with respect to the Nomad securities, subject to the restrictions on dispositions noted herein, and depending on market conditions, general economic and industry conditions, trading prices of Nomad's securities, Nomad's business, financial condition and prospects, and/or other relevant factors, Yamana may develop such plans or intentions in the future and may, from time to time, acquire additional securities, dispose of some or all of the existing or additional securities, or may continue to hold the Nomad shares or other securities of Nomad.

Yamana will file an early warning report under National Instrument 62-103 in connection with the closing of the sale transaction. A copy of the early warning report filed by Yamana will be available under Nomad's profile on SEDAR or by contacting Sofia Tsakos, senior vice-president, general counsel and corporate secretary at 416-815-0220.

Counsel and advisers

Cassels Brock & Blackwell LLP acted as legal advisers to Yamana. RBC Capital Markets acted as financial adviser to Yamana.

About Yamana Gold Inc.

Yamana Gold is a Canadian-based precious metal producer with significant gold and silver production, development-stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina. Yamana plans to continue to build on this base through expansion and optimization initiatives at existing operating mines, through development of new mines, through the advancement of its exploration properties, and, at times, by targeting other consolidation opportunities with a primary focus in the Americas.

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