Yamana Gold Inc - Founder and Executive Chairman, Peter Marrone
Founder and Executive Chairman, Peter Marrone
Source: Young Mining Professionals
  • Yamana Gold (TSX:YRI) has sold a portfolio of royalty interests to Nomad Royalty Company for a total of C$65 million
  • An upfront payment of $10 million has been received, as well as $45 million in Nomad common shares at a price of 90 cents each
  • The company also has the right to receive a further $10 million through a deferred cash payment
  • The sale forms part of a wider initiative to stabilise the company’s portfolio of assets and strengthen its financial flexibility
  • Yamana Gold (YRI) is up 1.73 per cent and is trading at $7.04 per share, with a market cap of $6.7 billion

Yamana Gold (TSX:YRI) has sold a portfolio of royalty interests to Nomad Royalty Company for a total of C$65 million.

The portfolio consists of a one per cent net smelter return royalty on gold production from the Riacho dos Machados mine in Brazil, and a two per cent net smelter royalty on production from the Suruca project in Goiás, Brazil.

It portfolio also includes a two per cent net smelter royalty on oxide gold production from the Gualcamayo gold mine in Argentina, once the site produces approximately 275,000 ounces. 

A 1.5 per cent net smelter royalty will also apply to the Deep Carbonates Project, located within the Gualcamayo gold mine.

Finally, a $30 million cash payment will be receivable following declaration of commercial production at the Deep Carbonates Project.

So far, Yamana has received an upfront cash payment of $10 million, as well as $45 million in Nomad Royalty Company shares at a price of 90 cents each. 

The company also has the right to receive an additional $10 million through a deferred payment, which may be satisfied in either cash or shares.

Yamana will receive interest on the deferred payment at a rate of three per cent per year and is due for payment in full within two years.

Such consideration was structured by Yamana so it could realise immediate value for non-core assets via the cash component. It also establishes the potential for longer-term growth with a significant shareholding in an early-stage, growth-oriented company.

The sale forms part of a wider initiative designed to optimise Yamana’s asset portfolio and strengthen its financial flexibility.

Yamana Gold (YRI) is up 1.73 per cent and is trading at $7.04 per share at 1:38pm EDT.

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