Yamana Gold (AUY) Announces Acquisition of Properties Adjoining Wasamac Project in Abitibi-Témiscamingue Region Which Represent Structural Extension
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YAMANA GOLD INC. (TSX: YRI; NYSE: AUY; LSE: AUY) (“Yamana” or “the Company”) is pleased to announce that it has agreed to acquire from Globex Mining Enterprises Inc. the Francoeur, Arntfield and Lac Fortune gold properties adjoining the Company’s Wasamac project as well as additional claims in the Beuchastel township to the east of the Wasamac project.
The acquisition of the Globex claims will significantly add to the exploration upside of the Wasamac project, and it is consistent with Yamana’s strategy to expand its presence in the Abitibi-Témiscamingue Region of Quebec. Historical drilling, previous production from Francoeur and Arntfield, both former operating mines, and recent trenching and exploration work by Globex has defined a six-kilometre western continuation of the Wasa shear — located immediately north of the prolific Cadillac Break — with mineralization similar to that at Wasamac. Data from the Globex properties and the adjoining Wasamac project will be consolidated, and exploration drilling is expected to begin during the second half of 2021 with the objective of adding mineral resources that could extend mine life or enhance production at the proposed Wasamac mine.
The Globex properties also cover several historical gold producers located along the shear zone and, notwithstanding past production, exploration will build on a historical drill database of 1,024 drill holes by drilling several high potential targets with significant gold intercepts located outside of the historically mined areas as well as extending known mineral resources. Wasamac, Francoeur and Arntfield have recorded past production of over 823,000 ounces of gold, including 508,642 ounces at Francoeur (2.60 million tonnes at 6.1 grams per tonne (“g/t”)); 252,923 ounces at Wasamac (1.89 million tonnes at 4.2 g/t); and 61,524 ounces at Arntfield (480,000 tonnes at 4.0 g/t).(1) The presence of significant mineralization and excellent exploration upside adjacent to a planned mine site underscores the potential to add significant value in the short term to the Wasamac project.
Pursuant to the terms of the Agreement, Yamana will pay an initial amount of C$4,000,000 on closing, which at the direction of Globex will be paid in shares, with the remaining payment of C$11,000,000 payable over four years in either cash or shares at the election of Globex. In addition, Globex will receive a 2% Gross Metal Royalty from Yamana, of which 0.5% may be bought back at any time by Yamana for C$1,500,000, following which the royalty would be reduced to a 1.5% Gross Metal Royalty.
The acquisition also includes certain other claims in Malartic township adjacent to the Camflo property which the Company previously acquired and has transferred to the Canadian Malartic General Partnership. These claims will be made available to the partnership also.
Closing of the Transaction is expected to take place on or about June 21, 2021, subject to usual closing conditions.
The Wasamac Underground Gold Project
Yamana’s Wasamac project is located in the Abitibi-Témiscamingue Region of Quebec, 100 kilometres from the Company’s 50%-owned Canadian Malartic mine. The project has existing proven and probable mineral reserves of 1.8 million ounces of gold (21.45 million tonnes at 2.56 g/t), measured and indicated mineral resources of 525,000 ounces (6.95 million tonnes at 2.35 g/t), and inferred mineral resources of 263,000 ounces (3.78 million tonnes at 2.17 g/t) supported by a previously completed Feasibility Study in 2018.
Following an in-depth review of the 2018 Feasibility Study, Yamana has identified opportunities to optimize the processing plant design, incorporate increased levels of automation in the underground mine, and optimize the materials handling system to increase the planned throughput rate to 7,000 tonnes per day. In addition, the processing plant and associated infrastructure have been designed at a nameplate capacity of 7,500 tonnes per day, representing further production upside. Additional metallurgical test work supports an optimized processing flow sheet, meaning that the higher throughput can be achieved with similar-sized equipment to the 2018 study. In the mine, the underground crusher and conveyor system requires significantly less capital development compared to the previous study.
The higher throughput rate supports the Company’s vision of Wasamac as a 170,000 to 200,000 ounce per year producer with all-in sustaining costs well below the Company’s average. The Company has also identified opportunities to convert additional mineral reserves at the same average gold grade to maintain an initial reserve life at the higher than Feasibility Study throughput and production levels referred to above of more than 10 years. In addition, mineral resources exclusive of mineral reserves along with expansion potential at depth and in other areas of the original claims package support a strategic mine life of more than 15 years. This geological and exploration potential is significantly improved with the purchase of the Globex claims.
The details of a definitive update of the Feasibility Study are expected to be announced on or before the release of the Company’s second quarter production and financial results expected in late July, at which point a formal construction decision will be made for the Wasamac project. In this period of updating the Feasibility Study, the Company has also begun the permitting process and established an office and regional presence in Abitibi-Témiscamingue.
Qualified PersonsScientific and technical information contained in this news release has been reviewed and approved by Sébastien Bernier (P.Geo and Senior Director, Geology and Mineral Resources). Sébastien Bernier is an employee of Yamana Gold Inc. and a "Qualified Person" as defined by Canadian Securities Administrators' National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
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