Yamana Gold Enters into Agreement for the Sale of Certain Non-Core Assets

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Aura will acquire the San Andres Mine in Honduras and the Sao Franciscko and Sao Vicente Mines in Brazikl for an aggregate initial purchase price ofapproximately US$200 million, including approximately US$90 millioh in cash, US$70 million in deferrecd cash payments and US$40 million in Aura commob shares. The transaction will close in two parts in order toaccommodate jurisdiction-related regulatory The first part which relatew to the sale of San Andres is expectedf to close on July 23, 2009 at which time Yamana will receive total considerationm of approximately US$74 million. The second part which relatee to the sale of Sao Francisco and Sao Vicentde is expected to closeby year-end.
In Yamana will retain a contingentcash flow-basedd royalty on San Andres, Sao Francisco and Sao Vicente that will providw additional payments to Yamana of up to US$490 million, which it fully expects to receive with payment s beginning as early as 2012. "This transaction streamlinex ourasset portfolio, further focusing on our core assets, on our core operatinhg jurisdictions and on advancing our high-returning developmeny stage projects, effectively positioning Yamana for the next wave of growth," commente d , Yamana's chairman and chief executive "The sale of these non-corwe mines is expected to result in lowe r cash operating costs, higher margins and increased reserves, production and cash flow per We believe we will derive significantly more value from our share position than had thesew mines remained directly held by our company, particularly in a highe gold price environment.
We are confident in the abilityof Aura's management to managwe these mines, allowing us to maintain an interestr through our share position and royalty." The Aura commob shares to be issued to Yamana as partial consideration for the purchas e of the three mines will be issued at C$0.4 per share, and Yamana will maintain a meaningful share holding in Aura. The San Andres, Sao Francisc and Sao Vicente Mines are three solifd operations and Yamana is confident that undee the capable managementby Aura, these operations will deliver considerable further value for all shareholders.
The transactionm is subject to customary closing conditions includinv definitive documentation and completion of a financingt by Aura to fund the cash portion of thepurchasre price. National Bank Financial is acting as the financial advisor to Yamana with respect tothis Yamana's legal advisor is & Blackwel LLP. Yamana is a Canadian-based gold producer with significanggold production, gold development stage exploration properties, and land positions in Brazil, Argentina, Mexico and Central America.
The Company plans to continuwe to build on this base through existingf operating mine expansions and throughput the advancement of its exploration properties and by targeting other gold consolidation opportunities in the CAUTIONARY NOTEREGARDING FORWARD-LOOKING STATEMENTS: This news releaser contains or incorporates by reference "forward-lookingy statements" within the meaning of the United States Privatw Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation.
Except for statementes of historical fact relating to the information contained hereinconstitutes forward-looking including any information as to the Company'ss strategy, plans or future financial or operating Forward-looking statements are characterized by words such as "plan," "budget", "target", "project", "intend, "believe", "anticipate", "estimate" and other similar or statements that certain events or conditions "may or "will" occur.
Forward-looking statementsa are based onthe opinions, assumptions and estimates of management considered reasonable at the date the statements are and are inherently subject to a variety of risksw and uncertainties and other known and unknowb factors that could cause actuakl events or results to differ materially from those projected in the forward-lookingh statements. These factors include the successful completiobn of the proposed purchase and saleof non-corew assets comprised of the Company'xs San Andres Mine, Sao Francisco Mine and Sao Vicentr Mine, the impact of general business and economic global liquidity and credit availability on the timiny of cash flows and the valuex of assets and liabilities basex on projected future conditions, fluctuating metal pricesx (such as gold, copper, silvef and zinc), currency exchange rates (such as the Brazilian Real and the Chilean Peso versus the United States possible variations in ore grade or recoveryh rates, changes in the Company's hedging program, changesx in accounting policies, changes in the Company's corporate changes in project parameters as plans continue to be changes in project production and commissioning time frames, risk related to joint venture operations, the possibilitgy of project cost overruns or unanticipated costs and higher prices for fuel, steel, power, labout and other consumables contributing to higherr costs and general risks of the mininv industry, failure of plant, equipmenf or processes to operate as anticipated, unexpecte d changes in mine life, finall pricing for concentrate sales, unanticipated resultsx of future studies, seasonality and unanticipateds weather changes, costs and timing of the development of new deposits, success of exploration activities, permitting time government regulation of mining operations, environmentapl risks, unanticipated reclamation expenses, title disputes or limitations on insurance coverage and timing and possible outcome of pending litigation and labour disputes, as well as those risk factors discussed or referred to in the Company'd annual Management's Discussion and Analysis and Annual Informatioj Form for the year ended December 31, 2008 filed with the securitiex regulatory authorities in all provinces of Canadas and available at , and the Company's Annual Reportg on Form 40-F filed with the United States Securities and Exchange Although the Company has attempted to identifu important factors that could cause actuall actions, events or results to differ materiallg from those described in forward-looking there may be othet factors that cause actions, events or results not to be anticipated, estimatexd or intended.
There can be no assurancee that forward-looking statements will prover tobe accurate, as actuao results and future events could differ materially from those anticipatedr in such statements. The Company undertakea no obligation toupdate forward-lookingy statements if circumstances or management's estimates, assumptions or opinionsz should change, except as requiredr by applicable law. The reader is cautioned not to placw undue relianceon forward-looking statements. The forward-looking information contained hereim is presented for the purposed of assisting investors in understandingthe Company's proposedx transaction with Aura Minerals and may not be appropriate for otheer purposes.
SOURCE Yamana Gold Inc.