FORM
6-K
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
of Foreign Private Issuer
Pursuant
to Rule 13a-16 or 15d-16
of
the Securities Exchange Act of 1934
For
the
month of December 2005
Commission
File Number 001-31880
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Yamana
Gold Inc.
(Translation
of registrant's name into English)
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150
York Street
Suite
1902
Toronto,
Ontario M5H 3S5
(Address
of principal executive offices)
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Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F.
|
Form
20-F
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....[ ]..... | Form 40-F | ....[X].... |
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ____
Note:
Regulation S-T Rule 101(b)(1) only permits the submission in
paper of a Form 6-K if submitted solely to provide an attached annual
report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): ____
Note:
Regulation S-T Rule 101(b)(7) only permits the submission in
paper of a Form 6-K if submitted to furnish a report or other document that
the registrant foreign private issuer must furnish and make public under the
laws of the jurisdiction in which the registrant is incorporated, domiciled
or
legally organized (the registrant’s “home country”), or under the rules of the
home country exchange on which the registrant’s securities are traded, as long
as the report or other document is not a press release, is not required to
be
and has not been distributed to the registrant’s security holders, and, if
discussing a material event, has already been the subject of a Form 6-K
submission or other Commission filing on EDGAR.
Indicate
by check mark whether by furnishing the information contained in this Form,
the
registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
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Yes
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....[ ].... |
No
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....[X].... |
If
"Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ________
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| YAMANA GOLD INC. | ||
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| Date: December 4, 2005 | /s/ Charles Main | |
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Name: Charles Main |
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| Title: CFO | ||
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NEWS
RELEASE
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YAMANA
ANNUAL PRODUCTION GROWS TO ALMOST 400,000 OZ OF GOLD IN 2006 AND TO MORE THAN
650,000 OZ
OF
GOLD BY 2008 WITH ACQUISITION OF RNC GOLD
Toronto,
Ontario, December 4, 2005
- Yamana
Gold Inc. (“Yamana”) (TSX:YRI;
AMEX:AUY; LSE (AIM):YAU)
and RNC
Gold Inc. (“RNC”)
(TSX: RNC)
today
announced transactions which provide for Yamana to acquire RNC and 100% of
the
San Andres gold mine in Honduras which is currently subject to a purchase
agreement with RNC. These transactions result in the following.
| · |
Increase
Yamana’s estimated annual gold production by more than 130,000 ounces to
a
total of almost 400,000 ounces in 2006, increasing to more than 550,000
ounces in 2007 and 650,000 ounces by
2008
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| · |
Bring
Yamana one step closer to a sustainable target production level of
750,000
ounces which is the level of production that Yamana is targeting
by
2008
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| · |
Fuel
Yamana’s growth in projected operating cash flow with average cash costs
per ounce after by-product credits decreasing from approximately
US$250 in
2006 to less than US$100 by 2007 after by product
credits
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| · |
Provide
operating costs in United States dollars and as such lessens the
effects
of foreign exchange fluctuations on
costs
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| · |
Increase
Yamana’s projected year end 2005 reserve base by approximately 1.2 million
ounces and add measured and indicated and inferred resources of
approximately 1.4 million and 821,000 ounces,
respectively
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| · |
Result
in immediate accretion to Yamana shareholders across all key financial
measures
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| · |
Add
two mines and another advanced development property along with a
portfolio
of exciting exploration targets in Central America
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| · |
Capitalize
on Yamana’s operating and heap leach expertise in Latin America
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| · |
Create
an opportunity for general and administrative cost
synergies
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Pursuant
to the transactions, shareholders of RNC will receive 0.12 of a Yamana common
share for each RNC common share. In addition, concurrent with the announcement
of this transaction, Yamana entered into an agreement with RNC extending a
loan
of approximately US$18.9 million in order to facilitate RNC’s purchase of a 75%
interest in the San Andres gold mine, Honduras. The loan will be secured by
the
mine and related assets and Yamana has the option to apply the loan proceeds
toward the purchase of the mine. Yamana will exercise RNC’s option to purchase
the remaining 25% interest in San Andres concurrent with the closing of the
transaction for consideration equal to US$4 million payable in Yamana shares.
The effect of these transactions is that Yamana will acquire all of RNC and,
in
the event Yamana exercises its option, Yamana will also own the San Andres
Mine.
The
total
cost of the transaction to Yamana is US$49 million. Based on the 10-day
volume-weighted-average trading prices of approximately C$5.66 for Yamana and
C$0.56 for RNC on Friday December 2, the exchange ratio implies a premium for
the transaction of 20.7%.
Increased
production
Peter
Marrone, President and Chief Executive Officer of Yamana said, “The transaction
strengthens Yamana’s position as a fast-growing, intermediate-size gold
producer. With this transaction, Yamana has made a material step towards
accomplishing its strategic goal of producing 750,000 ounces by 2008. Further,
we have added a production and exploration platform in another area of Latin
America. We have increased our exploration portfolio significantly in addition
to adding an initial 130,000 ounces of annual gold production beginning in
2006
increasing by up to 180,000 ounces by 2008. San Andres in particular is a good
quality and well-run mine with an initial 5-year mine life, and the potential
to
significantly add to that.”
Upon
the
successful completion of the acquisition of RNC, Yamana will have added two
producing mines, La Libertad (Nicaragua), and San Andres (Honduras) to its
portfolio. Yamana will also own the Cerro Quema project (Panama), a development
stage property. In addition, Yamana will own the highly prospective exploration
ground surrounding RNC’s Bonanza mine (Nicaragua) with a two-year option to
purchase the Bonanza mine. With the acquisition of RNC and San Andres, Yamana’s
annual production would be almost 400,000 ounces in 2006, increasing to
approximately 550,000 ounces in 2007 and 650,000 ounces in 2008. Cash costs
after by-product credits are projected to decrease to levels below US$100 per
ounce beginning in 2007 and beyond. These projected production levels and cash
cost estimates do not include further production possibilities from the
development of any of Yamana’s additional advanced exploration projects,
including São Vicente, C1 Santa Luz and Ernesto, nor from operational
improvements to be undertaken at La Libertad and San Andres. They do include
projected production for Cerro Quema beginning in December 2007, although Yamana
plans to re-evaluate the development timetable for this mine.
Randall
Martin, President and Chief Executive Officer of RNC, commenting on the
acquisition stated, “We believe there is significant value in our assets and
that this value will be better realized through the combination with a
well-capitalized company with a strong operational team such as Yamana. The
transaction will also allow RNC shareholders to participate in Yamana’s quality
mining assets and growth potential.”
Summary
of the Transaction
The
acquisition of RNC will be completed by way of a court approved Plan of
Arrangement whereby each RNC common share will be exchanged for 0.12 of a Yamana
common share. All RNC options and warrants will become exercisable for common
shares of Yamana based on the exchange ratio. As a result of the proposed
transaction, the combined company will be held approximately 97% by existing
Yamana shareholders and 3% by existing RNC shareholders. The total number of
Yamana common shares outstanding would be approximately 197 million, on a pro
forma basis.
Concurrent
with this announcement, Yamana agreed to advance US$18.9 million to RNC as
a
senior secured loan (“the Loan”) thereby allowing RNC to complete its previously
announced acquisition of a 75% interest in the San Andres Mine and related
transactions. The Loan will be secured by a pledge of all of the shares of
the
RNC subsidiary holding the mine and by a security interest in all of the assets
comprising the San Andres Mine. The Loan will otherwise be non-recourse to
RNC.
The
Loan
will bear interest at a rate of 10% per annum and shall be due on March 7,
2006.
In the event of a default under the Loan, including if the acquisition of RNC
by
Yamana is terminated or does not close on or before March 7, 2006, the Loan
shall be immediately due and payable in full, together with accrued and unpaid
interest. In such event, Yamana may exercise an option (the “San Andres Option”)
to acquire the 75% in the interest in the San Andres Mine for an exercise price
equal to the principal amount and any accrued interest due on the
Loan.
Pursuant
to the transaction, Yamana will exercise RNC’s existing option to acquire the
other 25% of the San Andres Mine immediately prior to closing. In
the
event that Yamana exercises the San Andres Option or acquires the 75% interest
in the San Andres Mine by enforcing its security under the Loan, Yamana shall
be
obligated to acquire and the management group (including certain RNC senior
managers) owning a 25% interest in the San Andres mine shall be obligated to
sell the 25% interest within 15 business days. The purchase price of the 25%
interest is US$4 million payable in Yamana shares.
The
acquisition will include the exploration properties surrounding the
Hemco/Bonanza Mine exploitation concession in Nicaragua currently held by a
subsidiary of RNC but not the exploitation concession containing the
Hemco/Bonanza Mine which will be sold to a RNC management group, subject to
Yamana having the option to re-acquire the mine within a period of two years.
That mine is not core to Yamana’s operations and Yamana considers the value to
be in the exploration concessions that it will be acquiring.
The
acquisition has the unanimous approval of the boards of directors of Yamana
and
RNC. The board of directors of RNC, having received the recommendation of an
independent committee of directors, is recommending that RNC shareholders vote
in favour of the transaction. Canaccord Capital Corporation provided an opinion
to the independent committee of the board of directors of RNC that the business
combination and all related transactions, taken as a whole, are fair, from
a
financial point of view, to the disinterested holders of common shares of RNC.
Yamana’s
management team will remain unchanged.
The
merger is subject to completion of satisfactory due diligence of RNC and San
Andres by Yamana prior to the advance of the Loan. The combination is subject
to
all requisite regulatory court and approvals and third party consents and other
conditions customary in transactions of this nature. The combination must be
approved by at least two-thirds of the votes cast by the shareholders of RNC
at
a shareholder meeting and approved by a majority of the votes cast at such
meeting by disinterested shareholders of RNC. The shareholder meeting is
expected to be held in February 2006, with the transaction expected to close
shortly thereafter.
If
the
combination does not occur under certain circumstances, RNC has agreed to pay
Yamana a break-fee of US$1.8 million, one-half of which may be paid at RNC’s
option in RNC common shares.
Yamana’s
financial advisors are National Bank Financial Inc. RNC’s financial advisors are
Canaccord Capital Corporation.
About
Yamana
Yamana
is
a Canadian gold producer with significant gold production, gold and copper-gold
development stage properties, exploration properties and land positions in
all
major mineral areas in Brazil. Yamana expects to produce gold at intermediate
company production levels by 2006 in addition to significant copper production
by 2007. Company management plans to build on this base through the advancement
of its exploration properties and by targeting other gold consolidation
opportunities in Brazil and elsewhere in Latin America.
Yamana
has approximately 191.3 million shares outstanding.
About
RNC
RNC
Gold
Inc. is a gold mining company focused on mines and projects in Central America.
From its current annual production base of 100,000 ounces of gold, RNC is
positioned for growth through the acquisition of San Andres, construction of
the
Cerro Quema development stage project, operational efficiencies and through
exploration on property surrounding its present mines. The Company's main assets
include the La Libertad and Bonanza mines in Nicaragua, and the Cerro Quema
project under construction in Panama. The company has entered into an agreement
to acquire the San Andres mine in Honduras that will increase its annual
production base to approximately 180,000 ounces of gold per year by 2008.
RNC
has
approximately 40.6 million common shares outstanding.
Conference
Call
A
conference call is scheduled for Monday, December 5, 2005 at 10:00 a.m. Eastern
time.
| Call-in numbers: | Local and international: | 416-644-3426 |
| North American toll-free: | 800-814-4857 |
A
replay
of this conference call will be available from Monday December 5, 2005 (12:00
p.m.) until Monday December 12, 2005. (11:59 p.m.)
| Reply numbers: | Local and international: | 416-640-1917 Passcode: 21167034# |
| North American toll-free: | 877-289-8525 Passcode: 21167034# |
A
presentation providing further information on these transactions and on the
business combination will also be available on Yamana’s and
RNC’s
web sites at www.yamana.com
and
www.rncgold.com,
respectively, on December 5, 2005.
Cautionary
Statements
This
news release contains “forward-looking statements”, within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and similar
Canadian legislation, concerning the business, operations and financial
performance and condition of each of Yamana and RNC. Forward-looking statements
include, but are not limited to, statements with respect to estimated
production, synergies and financial impact of the proposed transaction; the
benefits of the proposed transaction and the development potential of Yamana’s
and RNC’s properties; the future price of gold and copper; the estimation of
mineral reserves and resources; the realization of mineral reserve estimates;
the timing and amount of estimated future production; costs of production;
capital expenditures; success of exploration activities; permitting time lines
and permitting, mining or processing issues; currency exchange rate
fluctuations; government regulation of mining operations; environmental risks;
unanticipated reclamation expenses; title disputes or claims; and limitations
on
insurance coverage. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as “plans”, “expects”
or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”,
or variations of such words and phrases or state that certain actions, events
or
results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be
achieved”. Forward-looking statements are based on the opinions and estimates of
management as of the date such statements are made, and they are subject to
known and unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of Yamana and
RNC
to be materially different from those expressed or implied by such
forward-looking statements, including but not limited to risks related to:
unexpected events during construction, expansion and start-up; variations in
ore
grade, tones mined, crushed or milled; variations in relative amounts of
refractory, non-refractory and transition ores; delay or failure to receive
board or government approvals; timing and availability of external financing
on
acceptable terms; the businesses of Yamana and RNC not being integrated
successfully or such integration proving more difficult, time consuming or
costly than expected; not realizing on the anticipated benefits from the
Yamana/RNC transaction or not realizing on such anticipated benefits within
the
expected time frame; risks related to international operations; actual results
of current exploration activities; actual results of current reclamation
activities; conclusions of economic evaluations; changes in project parameters
as plans continue to be refined; future prices of gold and copper; possible
variations in ore reserves, grade or recovery rates; failure of plant, equipment
or processes to operate as anticipated; accidents, labour disputes and other
risks of the mining industry; delays in the completion of development or
construction activities, as well as those factors discussed in or referred
to in
the current annual Management’s Discussion and Analysis and current Annual
Information Form of each of Yamana and RNC filed with the securities regulatory
authorities in Canada and available at www.sedar.com,
and
Yamana’s Form 40-F filed with the United States Securities and Exchange
Commission. Although management of each of Yamana and RNC has attempted to
identify important factors that could cause actual results to differ materially
from those contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended. There can
be
no assurance that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements. Neither Yamana nor RNC undertakes to update any
forward-looking statements that are incorporated by reference herein, except
in
accordance with applicable securities laws.
Readers
are advised that National Instrument 43-101 of the Canadian Securities
Administrators requires that each category of mineral reserves and mineral
resources be reported separately. Readers should refer to the respective Annual
Information Forms of Yamana and RNC, each for the year ended December 31, 2004,
and other continuous disclosure documents filed by each of Yamana and RNC since
January 1, 2005 available at www.sedar.com,
for
this detailed information, which is subject to the qualifications and notes
set
forth therein.
Cautionary
Note to United States Investors Concerning Estimates of Measured, Indicated
and
Inferred Resources:
This
news release uses the terms “Measured”, “Indicated” and “Inferred” Resources.
United States investors are advised that while such terms are recognized and
required by Canadian regulations, the United States Securities and Exchange
Commission does not recognize them. “Inferred Mineral Resources” have a great
amount of uncertainty as to their existence, and as to their economic and legal
feasibility. It cannot be assumed that all or any part of an Inferred Mineral
Resource will ever be upgraded to a higher category. Under Canadian rules,
estimates of Inferred Mineral Resources may not form the basis of feasibility
or
other economic studies. United
States investors are cautioned not to assume that all or any part of Measured
or
Indicated Mineral Resources will ever be converted into Mineral Reserves. United
States investors are also cautioned not to assume that all or any part of an
Inferred Mineral Resource exists, or is economically or legally
mineable.
For
further information please contact:
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Yamana
Gold Inc.
Peter
Marrone
President
and Chief Executive Officer
+1
416 815 0220
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RNC
Gold Inc.
J.
Randall Martin
Chairman
and Chief Executive Officer
+1 416 365-9777
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