Yamana’s $3.56bn bid wins Meridian

Yamana Gold, which is based in Toronto, has agreed to acquire Nevada-based Meridian Gold, for Cdn$7 per share, plus 2.235 Yamana shares for each Meridian share.

The agreement, which is strongly support by Meridian’s chief executive, came after Yamana raised its hostile takeover bid to around $3.56 billion.

Yamana is also in the process of acquiring Northern Orion Resources Inc., which is also based in Canada, and will proceed with this “as soon as practical after the successful tender of the Meridian shares.”

Northern Orion has already confirmed in writing that it will not put the proposed three-way merger to a vote of its shareholders.

According to Peter Marrone, chairman and chief executive of Yamana, the combination of Yamana, Meridian and Northern Orion could generate as much as 2.2 million ounces of gold by 2012.

By 2009, a figure of 1.4 million ounces of gold a year could be possible, which would more than double the combined 2006 levels of the companies.

The merged companies would control six mining and development projects, located in Brazil, Chile and Argentina.

However, the Argentinean Esquel project could prove a stumbling block as it has been rejected in a referendum by the residents of the Patagonian town.

Yamana regards the Esquel project as central to future production plans.