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 February 2006
Commission
File Number 001-31880
|
Yamana
Gold Inc.
(Translation
of registrant's name into English)
|
|
150
York Street
Suite
1902
Toronto,
Ontario M5H 3S5
(Address
of principal
executive offices)
|
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
|
....[ ]..... | 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.
|
Yes
|
....[ ].... |
No
|
....[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: February 22, 2006 | /s/ Charles Main | |
|
Name: Charles Main |
||
| Title: CFO | ||
 |
|
NEWS
RELEASE
Combination
of Yamana and Desert Sun Creates Leading Intermediate Gold
Producer.
Toronto,
Ontario, February 22, 2006
- Yamana
Gold Inc. (Yamana) (TSX:YRI;
AMEX:AUY; LSE (AIM):YAU)
and
Desert Sun Mining Inc. (DSM)
(TSX: DSM;AMEX:DEZ)
today
announced a transaction which provides that Yamana will acquire all of the
outstanding common shares of DSM in exchange for Yamana common shares. DSM
shareholders will receive 0.6 of a Yamana common share for each DSM common
share
held. Based on the 5-Day weighted average of Yamana’s share price, the
transaction price is C$5.47 per DSM common share, representing a premium of
21.1% over the 5-Day weighted average price of DSM’s common shares. DSM owns the
long-life Jacobina gold mine in Bahia, Brazil near Yamana’s Fazenda Brasileiro
mine and its C1 Santa Luz pre-feasibility project.
The
transaction results in Yamana becoming a leading intermediate gold producer
with
the following profile:
| · |
Estimated
annualized gold production of 450,000 ounces in 2006 increasing to
700,000
ounces in 2007 and to more than 800,000 ounces in 2008 from operating
mines and mines under construction (includes expansion plan for Jacobina
Mine proposed by Desert Sun and excludes near development stage projects
held by Yamana)
|
| · |
Total
resource base of approximately 11.6 million ounces of measured and
indicated resources plus inferred resources of approximately 6.1
million
ounces
|
| · |
Proven
and probable reserves of approximately 7.6 million gold ounces (included
in above measured and indicated resource total
above)
|
| · |
Proven
and probable copper reserves of approximately 2.3 billion
pounds
|
| · |
Cash
costs projected at US$270 per ounce of gold in 2006, with US$125
and
US$115 per ounce of gold projected for 2007 and 2008,
respectively
|
| · |
One
of the largest Brazilian exploration land holdings with a significant
presence in three major gold belts
|
The
transaction provides the following anticipated benefits to Yamana and DSM
shareholders:
| · |
Creates
an intermediate gold producer with one of the largest production
growth
profiles
|
| · |
Increases
operational strength and management
depth
|
| · |
Facilitates
operational and administrative synergies
|
| · |
Results
in a company with further growth potential from existing development-stage
assets and better positioned to take advantage of additional
acquisitions
|
| · |
Broadens
shareholder base and increases share
liquidity
|
The
transaction is accretive to Yamana in terms of net asset value and longer-term
earnings and cash flow per share. DSM shareholders will benefit from an
attractive premium and the opportunity to participate in the future growth
of
the combined company.
Increased
Profile
Peter
Marrone, President and Chief Executive Officer of Yamana said, “In our strategic
vision which we articulated in late 2005, our goal was to produce 750,000 ounces
of gold by 2008. With this acquisition, we will exceed that goal. As a result
of
this increased production profile and with the advancement of our
development-stage or near development-stage assets, we are now targeting
production of 1.0 million ounces by 2008. The purchase of Desert Sun adds a
large-scale, long-life operation to Yamana’s existing operations. The Jacobina
Mine is near our existing operations in the State of Bahia in Brazil. The
resulting synergies created by combining the Jacobina Mine with our existing
operations in Bahia are tremendous. Further, the addition of the 150-km long
Bahia Gold Belt’s exploration potential will contribute to further growth. With
the new production profile, Yamana will be one of the largest intermediate
producers with projected future cash costs among the lowest in the industry.
Our
combined market capitalization is well below that of our peers and so we see
significant upside value in the shares of the combined company.”
Bruce
Humphrey, President and Chief Executive Officer of Desert Sun said, “From the
perspective of a Desert Sun shareholder, the transaction provides an attractive
premium while still maintaining significant upside exposure. Further, it
provides diversification from being a one-mine company and it combines the
strength of two respected operating teams. We are confident that Yamana’s shares
represent good value and that we will participate in the upside through share
ownership in the combined company.”
Summary
of the Transaction
The
acquisition of DSM will be completed by way of a court approved Plan of
Arrangement whereby each DSM common share will be exchanged for 0.6 of a Yamana
common share. All DSM 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 76% by existing
Yamana shareholders and 24% by existing DSM shareholders. The total number
of
Yamana common shares outstanding would be approximately 262.1 million, on a
pro
forma basis after giving effect to Yamana’s previously announced acquisition of
RNC Gold Inc. The transaction values DSM at approximately US$500 million on
a
non-diluted basis.
The
acquisition has the unanimous approval of the Boards of Directors of Yamana
and
DSM. The Board of Directors of DSM, having received the unanimous recommendation
of a special committee of directors, is recommending that holders of DSM common
shares vote in favour of the transaction. GMP Securities L.P. provided an
opinion to the special committee of the board of directors of DSM that the
business combination is fair, from a financial point of view, to the holders
of
common shares of DSM.
Yamana
has agreed with DSM that Bruce Humphrey (DSM President and CEO) and Stan Bharti
(DSM Chairman) will join its board of directors. It is expected that Yamana’s
management team will be supplemented with the addition of certain officers
from
DSM to whom Yamana intends to extend offers of employment.
Commenting
on management, Peter Marrone said, “We have a very capable management team and
we welcome new additions to that team. The operational depth of the company
will
increase and better position us for further growth.”
The
transaction is subject to all requisite regulatory and court approvals, 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
shareholders of DSM at a meeting of holders of common shares of DSM. The
shareholder meeting is expected to be held on March 31, 2006, with the
transaction anticipated to close shortly thereafter.
If
the
combination does not occur under certain circumstances, DSM has agreed to pay
Yamana a break-fee of C$21.5 million.
Yamana’s
financial advisor is National Bank Financial Inc. DSM’s financial advisor is
Sprott Securities Inc. and its special committee of directors is being advised
by GMP Securities L.P.
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. With the acquisition of RNC Gold, Yamana also
owns two producing mines in Central America. Yamana expects to produce gold
at
intermediate company production levels in 2006 in addition to significant copper
production by 2007. Company management plans to continue 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.
About
Desert Sun Mining
Desert
Sun Mining is a Canadian gold mining company listed on the Toronto Stock
Exchange and the American Stock Exchange with 100% ownership of the Jacobina
Mine and the 155 km long Bahia Gold Belt in the state of Bahia, in northeastern
Brazil.
Conference
Call
A
conference call is scheduled for Wednesday, February 22, 2006 at 10:00 a.m.
Eastern time.
| Call-in numbers: | Local and international: | 416-644-3433 |
| North American toll-free: | 800-814-4859 |
A
replay
of this conference call will be available from Wednesday, February 22, 2006
(1:00 p.m.) until Wednesday, March 1, 2006. (11:59 p.m.)
| Replay numbers: | Local and international: | 416-640-1917 Passcode: 21168019# |
| North American toll-free: | 877-289-8525 Passcode: 21168019# |
A presentation providing further information on these transactions and on the business combination will also be available on Yamana’s and DSM’s web sites at www.yamana.com and www.desertsunmining.com, respectively.
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 DSM. 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 DSM’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
DSM
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 DSM 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/DSM 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 DSM filed with the securities regulatory
authorities in Canada and available at www.sedar.com,
and
Yamana’s Annual Report on Form 40-F and DSM’s Annual Report on Form 20-F, each
filed with the United States Securities and Exchange Commission. Although
management of each of Yamana and DSM 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 DSM undertakes to update any forward-looking statements that are
incorporated by reference herein, except in accordance with applicable
securities laws.
Mineral
resources which are not mineral reserves do not have demonstrated economic
viability. Readers should refer to the respective Annual Information Forms
of
Yamana, DSM and RNC Gold Inc, each for the year ended December 31, 2004, and
other continuous disclosure documents filed by each of Yamana, DSM and RNC
Gold
Inc. since January 1, 2005 available at www.sedar.com,
for
further information relating to the mineral resources and mineral reserves
of
Yamana, DSM and RNC Gold Inc.
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.
A
table
summarizing the reserves and resources for each of DSM and Yamana’ projects is
provided as follows:
For
further information please contact:
|
Yamana Gold Inc.
Peter Marrone
President and Chief Executive Officer
+1 416 815-0220
|
Desert Sun Mining
Bruce Humphrey
President and Chief Executive Officer
+1 416 861-5901
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