Argentina Mine Changes Hands

Canada’s Yamana has agreed to acquire Argentina-focused mining company Extorre Gold Mines, in a deal valued at approximately CAD395m ($385m), it says. The transaction gives Yamana the Cerro Moro gold and silver project, located in Argentina’s Santa Cruz province. Extorre shareholders are to receive CAD4.26 per share – CAD3.50 in cash and 0.0467 of a Yamana common share – for each Extorre common share they own. The price represents a 54% premium to Extorre’s 20-day volume-weighted average price. Though the buy represents only 3% of Yamana’s market capitalization, it could contribute to a multiple of that in cash flow growth, the company says. Extorre says it pursued a sale after a decline in gold mining shares, economic uncertainty and the situation in Argentina meant financing Cerro Moro on its own became too expensive. Yamana was advised by Barclays Capital and CIBC World Markets, and Extorre was advised by Canaccord Genuity. The agreement includes a CAD15m breakup fee. Yamana operates in Brazil, Argentina, Chile, Mexico and Colombia.