Yamana Gold sells $88M Brio Gold shares, retains control

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By Ted Liu

Brio Gold Inc. (TSX: BRIO) and Yamana Gold Inc. (TSX: YRI; NYSE: AUY) have entered into an agreement with a syndicate of underwriters co-led by Canaccord Genuity Corp., CIBC Capital Markets and National Bank Financial Ltd. pursuant to which the underwriters have agreed to purchase 26,667,000 common shares of Brio Gold currently held by Yamana on a bought deal basis at $3.00 per Brio Gold common share.

Yamana Gold has granted the underwriters an over-allotment option, exercisable in whole or in part at any time until 30 days following the closing of the offering, for an additional 2,667,000 Brio Gold common shares. If the option is exercised in full, the total gross proceeds to Yamana will be $88,002,000.

Prior to the offering Yamana owned 89,202,922 common shares of Brio Gold representing in the aggregate 79.3% of the issued and outstanding common shares on a basic basis and 75.3% on a fully diluted basis. After giving effect to this offering, and assuming the full exercise of the over-allotment option, Yamana will own 59,868,922 common shares, representing in the aggregate 53.2% of the issued and outstanding common shares on a basic basis and 50.5% on a fully diluted basis.

“We are pleased to announce this sale of Brio Gold shares which is consistent with the plan we have implemented to realize value from our Brio Gold holdings. The sale of over 26 million shares of Brio reduces our investment significantly and is expected to meaningfully increase liquidity for the shares. The proceeds from the sale advance our stated goals of increasing our cash balances and decreasing our net debt. Further, we believe that reducing our interest in Brio Gold and creating liquidity will lead to additional opportunities with our remaining holdings in Brio Gold,” commented Peter Marrone, Chairman & CEO of Yamana.

Brio Gold is a new Canadian mining company with significant gold producing, development and exploration stage properties in Brazil. Brio Gold’s portfolio includes three operating mines and a gold project, which is a fully-permitted, fully-constructed mine that is currently on care and maintenance and is expected to be re-started in 2018. Brio Gold produced 189,662 ounces of gold in 2016 and at full annual run-rate expects annual production to be approximately 400,000 ounces of gold.

photo credit: Brio Gold