Yamana Gold

Yamana Gold Inc. is a Canadian company that owns and operates gold, silver and copper mines in Canada, Chile, Brazil and Argentina. Headquartered in Toronto, the company was founded in 1994 and became listed on the Toronto Stock Exchange in 1995, the New York Stock Exchange in 2007, and the London Stock Exchange in 2020. The company became a gold producer after its 2003 re-restructuring in which Peter Marrone took over as Chief Executive Officer and it merged with Brazilian company Santa Elina Mines Corporation. The combined company was able to use Yamana's access to capital with Santa Elina development properties to bring the Chapada mine into production. From there the company combined with other TSX-listed companies RNC Gold, Desert Sun Mining, Viceroy Exploration, Northern Orion Resources, Meridian Gold, Osisko Mining and Extorre Gold Mines which each contributed either a producing mine or a development project that was able to come into commercial production.

Yamana Gold Inc.
FormerlyYamana Resources
TypePublic
TSX: YRI
NYSE: AUY
LSE: AUY
IndustryMining
FoundedMarch 17, 1994
Headquarters
Toronto, Ontario
,
Canada
Key people
Victor Bradley (CEO, 1994-2003)
Peter Marrone (CEO, 2003-18)
Daniel Racine (CEO, 2018-current)
ProductsGold, silver
Revenue
  • $1.612 billion (2019)
  • $1.799 billion (2018)
  • $1.804 billion (2017
[1]
Number of employees
12,471 [2]
SubsidiariesCanadian Malartic Corporation
Minera Yamana Chile SpA
Estelar Resources S.A. (Argentina)
Jacobina Mineração e Comercio Ltd. (Brazil)
Websitewww.yamana.com

The company was able to produce over 1 million ounces of gold per year between 2009 and 2016 until it spun off Brio Gold as a separate company with several of its Brazilian assets.[3] With the company facing criticism for its executive compensation packages and debt load, Daniel Racine replaced Marrone as CEO in 2018[4] and the company sold its Chapada and Gualcamayo mines.

Corporate history

Minera Yamana was founded on March 19, 1994, headquartered in Toronto and headed by Victor Bradley as Chief Executive Officer (CEO), as a mineral exploration company focused on properties within Argentina. The private company went public, effective February 7, 1995, through a reverse takeover of Toronto Stock Exchange-listed of Wiscan Resources Inc. with the combined company emerging with the new name Yamana Resources Inc. The company acquired and assessed numerous mineral properties in South America and Indonesia until 2000 when it settled on developing a silver mine in Santa Cruz Province, Argentina. However, the company was unable to manage the development phase and was forced to sell the property in April 2002 to avoid bankruptcy.

The company restructured in July-August 2003 with its new CEO, Peter Marrone. In addition to changing its name to Yamana Gold, incorporating a subsidiary in the British Virgin Islands, and consolidating its stock on a 28:1 basis, the company was joined by the Brazilian company Santa Elina Mines Corporation. In exchange for stock ownership in Yamana Gold, Santa Elina ownership of the Fazenda Nova, São Francisco, and Chapada development projects were transferred to Yamana. In the same month, they also purchased the aging Fazenda Brasileiro gold mine from Companhia Vale do Rio Doce, immediately making Yamana a gold producer.[5] Investment decisions to commence construction on the three Santa Elina projects were made in 2004, with the Fazenda Nova mine achieving commercial production in 2005 followed by São Francisco and Chapada mines in 2006.

Marrone continued to quickly expand the company in 2006 by merging with TSX-listed RNC Gold which owned two small gold mines in Nicaragua and had recently-acquired the San Andrés mine in Honduras,[6] and then with TSX and AMEX-listed Desert Sun Mining Corp for its Jacobina mine in Brazil,[7] and then with TSX-listed Viceroy Exploration for its Gualcamayo exploration project in Argentina.[8] Along with Northern Orion Resources, the company spent 2007 engaged in a hostile takeover of Meridian Gold. Meridian had resisted, the merger was agreed to after Yamana increased their offer to $3.5 billion (in cash and shares).[9][10] Yamana had increased their gold production numbers from 101,000 ounces of gold in 2004 to 597,304 oz in 2007, to 1,201,200 oz in 2009.

Yamana would continue to produce over a million ounces of gold each year, even though they sold the San Andrés, Sao Francisco and Sao Vicente mines to Victor Bradley's Aura Minerals in late-2009. The Gualcamayo mine achieved production in July 2009 followed by the Mercedes mine in February 2012. In 2014, Yamana formed a joint venture with Agnico Eagle Mines Limited to make a white knight bid for Osisko Mining Corporation who was in the midst of fighting a hostile takeover by Goldcorp;[11] Yamana emerged with a 50% stake in the Canadian Malartic Corporation which would quickly surpass Meridian's El Peñón mine as their most productive gold producer. Yamana would fall under the one million ounces of gold in 2017 as they spun off Brio Gold as a separate company with control of the Fazenda Brasileiro mine and several development projects.[12] The company's next mine, the Cerro Moro mine in Argentina, acquired as a development project in Yamana's 2012 acquisition of Extorre Gold Mines, began production in 2018.[13]

By 2018, the company had accumulated a high debt load of US$1.6 billion, mostly from Canadian Malartic, and taken criticism from industry analysts and shareholders for its excessive executive compensation packages.[14] That year Daniel Racine succeeded Marrone as CEO, with Marrone staying with the company on staff and on the board, in a position titled Executive Chairman.[15] The next year, Yamana sold the Chapada copper-gold mine to Lundin Mining for $800 million[16] and its Gualcamayo mine to Colombian company Mineros S.A. for $85 million to pay down its debt.[17]

Mining operations

Along with several exploration and development properties, as of 2020, Yamana Gold operates five gold mines:

Past operations
  • The Chapada gold-silver-copper mine, located in Goiás, Brazil, was acquired by Yamana Gold as part of its 2003 re-structuring. The mine began producing gold, silver and copper for Yamana Gold in February 2007 until it was sold in 2019.
  • The Gualcamayo gold mine, located in San Juan Province, Argentina, was acquired as a development project with Yamana's merger with Viceroy Exploration. Yamana brought it into production in 2009 and operated it for 10 years before selling it to another mining company.
  • The Fazenda Brasileiro gold mine, located in Bahia, Brazil, was Yamana's first operating mine. Purchased from Vale in 2003, Yamana relinquished control in 2017 as part of the spin off of Brio Gold as a separate company.
  • The Mercedes gold-silver mine, located in Sonora, Mexico, was Meridian Gold's development project that Yamana brought into production in 2012. The mine was sold to Premier Gold Inc. in 2016.
  • The Fazenda Nova Mine was a small gold mine in Goiás, Brazil, which was among the first properties acquired in Yamana's 2003 re-structuring. It was the first mine the company developed itself. It was opened in 2004 with only a four year expected mine life and was subsequently placed in care and maintenance.
  • The São Francisco gold mine in Mato Grosso, Brazil, was also among the first properties acquired in Yamana's 2003 re-structuring. It was developed by the company and operated from 2006 until its sale to Aura Minerals in 2009.

References
  1. "Yamana Gold Financial Statements 2005-2020 | AUY". Macro Trends.
  2. "Company Profile for Yamana Gold Inc (AUY)" (PDF). Retrieved 2019-02-21.
  3. "Yamana Gold Closes Brio Gold Purchase Rights Offering; Brio to Begin Trading on TSX". Junior Mining Network. Retrieved December 23, 2016.
  4. Press, The Canadian (2018-08-08). "Yamana Gold founder Marrone shifts from CEO to executive chairman - BNN Bloomberg". BNN. Retrieved 2020-04-10.
  5. Whyte, James (August 8, 2005). "Fazenda Brasileiro a success for Yamana". The Northern Miner.
  6. Hasselback, Drew (December 6, 2005). "Gold sector buying spree". National Post. p. FP1.
  7. Willis, Andrew (February 27, 2006). "How Yamana CEO first struck gold with Desert Sun". The Globe and Mail. p. B3.
  8. Tait, Carrie (August 18, 2006). "Yamana bids for Viceroy". National Post. p. FP1.
  9. McLeod, Lori (June 28, 2007). "Three-way deal would form mining giant". The Globe and Mail. p. B1.
  10. Koven, Peter (September 25, 2007). "Yamana gets Meridian; Takeover deal got friendly as CEOs got talking". National Post. p. FP4.
  11. Younglai, Rachelle (April 3, 2014). "Osisko finds white knight in Yamana". The Globe and Mail. p. B1.
  12. Kiladze, Tim (November 22, 2016). "Yamana's gold IPO on track, but prices at deep discount". The Globe and Mail. p. B2.Brio Gold Inc would be listed on the Toronto Stock Exchange but be acquired by Leagold Mining Corporation in 2018.
  13. Keevil, Matthew (June 25, 2012). "Yamana pounces on Extorre". The Northern Miner. Retrieved June 12, 2020.
  14. Mcgee, Niall (May 13, 2019). "Yamana founder says gold industry should reassess executive compensation levels: Peter Marrone's comments come after proxy firm recommended investors vote against executive pay package". The Globe and Mail. p. B2.
  15. McCrae, Michael (August 8, 2018). "Yamana Gold names new CEO, creates executive chairman role". Mining.com. Retrieved June 12, 2020.
  16. Friedman, Gabriel (April 16, 2019). "Yamana lightens debt load with sale; $1B cash deal with lundin for brazil mine". National Post. p. FP1.
  17. "Yamana Gold sells Gualcamayo to Mineros in $85 million deal". Mining.com. October 26, 2018. Retrieved June 12, 2020.
  18. "Annual Information form for the Fiscal Year Ended December 31, 2019" (Press release). Yamana Gold. SEDAR. March 30, 2020.
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