Lowering Yamana’s Fair Value Estimate on Underwhelming Terms of Chapada Mine Sale
On April 15, Yamana announced the sale of its Chapada mine to Lundin Mining for roughly $1 billion. We think Yamana received below fair value for the mine, especially since only $800 million of the purchase price is an upfront cash payment. The additional financial flexibility provided by the cash proceeds is helpful, but the mine sale puts additional pressure on Yamana to develop production elsewhere. This is concerning, given that certain mines from the company's last investment cycle have fai...Yamana Gold is engaged in the exploration, development, extraction, processing and reclamation of gold and other precious metals mining throughout the Americas including Brazil, Argentina, Chile, Mexico and Colombia. As of Dec 31 2011, total proven reserves for gold, silver, cooper, zinc and molybdenum was 618,709,000 tonnes, 27,316,000 tonnes, 387,660,000 tonnes, 5,004,000 tonnes and 32,000,000 tonnes, respectively.
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