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The transaction represents a 43% premium to the closing price of Monarch shares on the
Transaction Terms
Upon implementation of the plan of arrangement, the following assets and liabilities will be transferred by Monarch to
- The Beaufor mine, the McKenzie Break property, the Croinor Gold property, the
Swanson property and the Beacon Gold mill and property (the "SpinCo Properties ''); C$14 million cash;- All assets and liabilities related to the
SpinCo Properties .
Following the Spin-Out, each outstanding common share of Monarch will be exchanged for:
C$0.192 in cash from Yamana;- 0.0376 of a Yamana share (a value of
C$0.288 based on the volume weighted average price of the Yamana shares on the TSX for the 20 trading days ending onOctober 30, 2020 ); - 0.20 of a SpinCo Share (with each full share having a value of
C$0.75 per share).
Following the completion of the transaction, Monarch Shareholders will own approximately 1.3% of Yamana and 100% of
Board of Directors' Recommendations
The Agreement has been unanimously approved by the Board of Directors of Monarch (with the exception of
Transaction Conditions & Timing
Full details of the transaction will be included in the management information circular of Monarch that is expected to be mailed to Monarch Shareholders' in
The directors and senior officers of Monarch, holding in aggregate over 3% of the issued and outstanding common shares of Monarch, have entered into voting support agreements with Yamana, pursuant to which they have agreed to vote their shares in favour of the transaction. Certain larger shareholders of Monarch have also entered into support agreements and together with shares already owned or held by Yamana, approximately 28% of Monarch's issued and outstanding shares would be voted in support of the Transaction.
The transaction does not require the approval of the shareholders of Yamana. The completion of the transaction is also subject to the receipt of court, stock exchange and any other required regulatory approval, and is subject to certain customary closing conditions for transactions of this nature.
The Agreement provides for, among other things customary board support and non-solicitation covenants, with "fiduciary out" provisions that allow Monarch to accept a superior proposal, subject to a "right to match period" in favour of Yamana. The Agreement also provides for a termination fee of
The companies are working towards closing the transaction by the end of 2020 and not later than early
None of the securities to be issued pursuant to the transaction have been or will be registered under the United States Securities Act of 1933, as amended (the "
Value to Monarch Shareholders
- The total consideration values Monarch at approximately
C$200 million orC$0.63 per share - a premium of approximately 43% to the closing price of the Monarch shares on the TSX onOctober 30, 2020 and a premium of 43% based on the volume weighted average price of the Monarch and Yamana shares for the 20 trading days ending onOctober 30, 2020 - Exposure to Yamana's portfolio of high-quality mines and development projects, in addition to ongoing participation in value creation at Wasamac
- Access to Yamana's technical, project development and operating capabilities as well as financial resources
- Potential for value accretion through a re-valuation in Yamana's share price as the Company continues to deliver and de-risks its combined asset portfolio
- Participation in Yamana's dividend program
- Participation in the well-capitalized
SpinCo , which will hold a significant portfolio of advanced exploration assets in the prolific Abitibi mining camp, a fully permitted 750tpd mill, and the past producingBeaufor Mine .
Strategic Rationale for Yamana
The acquisition provides Yamana with a high-quality project with a significant mineral reserve and resource base and excellent potential for further expansion. The acquisition adds to the Company's footprint in the Abitibi region, which is consistent with Yamana's strategy to build on its existing presence in established mining jurisdictions where it has deep technical, geological, and operational expertise. In addition, the acquisition of the Wasamac and Camflo properties adds to Yamana's pipeline of organic opportunities, significantly enhancing the Company's future growth prospects. The company has considerable experience in large bulk tonnage underground mines, experience which will support the development of Wasamac. Furthermore, the acquisition aligns with the Company's strategy for a balanced approach to capital allocation.
Advisors and Counsel
The Board of Directors of Monarch has engaged Stifel GMP as its financial advisors and Monarch has engaged
Yamana has engaged
ABOUT YAMANA
Yamana Gold Inc. is a Canadian-based precious metals producer with significant gold and silver production, development stage properties, exploration properties, and land positions throughout the
ABOUT
Forward-Looking Statements
The forward-looking statements in this press release involve known and unknown risks, uncertainties and other factors that may cause Monarch's actual results, performance and achievements to be materially different from the results, performance or achievements expressed or implied therein. Neither TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this press release.
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SOURCE
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