Meridian nods to upped Yamana offer

Denver, CO – Calling it a winning combination with consent of all parties, Yamana Gold (YRI-T, AUY-N, YAU-L) and Meridian Gold (MNG-T, MDG-N) have entered into a definitive support agreement following Yamanas boosted bid for its desired takeover target.

By increasing the cash component of its offer by 50 to $7.00 per share, on top of the 2.235 Yamana shares for each Meridian share, Yamana secured support from Meridians board.

The cash portion of Yamanas bid has stepped up from an original $3.15 per share in late-June, to $4.00, then $6.50 just last week prior to this final offer increase.

Yamana Gold chairman and CEO, Peter Marrone, describes the hostile-turn-friendly takeover bid as a unique three-month period.

The revised offer now places a spot premium of about 38% on Meridian based on both company’s June 27th closing prices. Yamana will look at its credit facilities to borrow about $700 million to fund the deal valuing Meridian at about $3.6 billion.

The combined pro-forma production outlook for the new-Yamana is about one million oz. of gold production this year, 1.2 million oz in 2008 and more than 1.5 million oz. gold by 2009.

Both Marrone and Meridian president and CEO, Ed Dowling, concurred, this is about cash flow and earnings. The pro-forma company will enjoy very low (negative) gold production costs with silver and copper by-products factored in. The new-Yamana will also have a significantly broadened Americas focus.

Peter has always wanted to a consensual deal, hes implored many times to do that, explained Dowling. But our position has always been the same its all about value. Based on the negotiations of last week, our Board unanimously agreed to enter into this consensual acquisition and in the end our Board has done the right thing for shareholders.

While Yamana will benefit going forward, from the assets and culture at Meridian, our shareholders are going to benefit from the assets, culture, growth profile and potential from the new-Yamana, continued Dowling.

Yamanas offer is conditional on 50.1% of Meridian issued and outstanding shares, as well as the usual legal and regulatory approvals. About 24.4 million Meridian shares have been tendered as of September 19, 2007, representing about one-quarter of the total shares.

Yamana and Northern Orion Resources (NNO-T, NTO-X) have amended their merger plan to accommodate the new acceptance line. Shareholders of Northern Orion accepted a plan of arrangement in late August under which Northern Orion shareholders will receive 0.543 of a Yamana share plus 0.1 for one Northern Orion share, valuing Northern Orion at $6.90 per share or about $1.4 billion fully diluted.

Shares of Yamana sagged a few percent, trading off 45 to the $12.10-level with the September 24th increased offer news, while Meridian shares closed down about 60 at $33.60 apiece.