YAMANA GOLD INC. (TSX:YRI) (NYSE:AUY) is pleased to announce it has entered into an agreement  to sell certain jointly owned exploration properties of the Canadian Malartic Corporation including the Kirkland Lake and Hammond Reef properties. The Transaction is structured as a sale of assets by CMC (in which Yamana holds a 50% indirect interest) pursuant to which Agnico Eagle Mines Limited will acquire all of Yamana’s indirect 50% interest in the Canadian exploration assets of CMC in consideration of cash proceeds to Yamana of $162.5 million. The Transaction will not affect the Canadian Malartic mine and related assets including Odyssey, East Malartic, Midway, and East Amphi. The Transaction is scheduled to close in the first quarter of 2018.

The Transaction is consistent with the Company’s stated objective to improve its financial position. Other recent and current initiatives which have or will further advance this initiative include the following.

First and foremost are planned cash flow increases which are expected as the Company continues to deliver operational improvements and advance its development stage projects, most notably Cerro Moro which remains on budget and on schedule for startup in early 2018. Mechanical completion of the key process plant facilities at Cerro Moro is on track to be completed by the end of 2017 and commissioning of the crushing and conveying circuit began in December. Mine development is now being managed by Operations having already transitioned from Technical Services. With Cerro Moro contributing to production in 2018 and with its projected low cost profile, the Company expects meaningful increases to EBITDA and cash flow for 2018 and beyond.

Secondly, the recently announced offering of senior notes provides further financial flexibility over the medium term. The Company expects to use this enhanced flexibility to replace and upgrade mine cash flows and to target further optimization and other opportunities. Yamana is committed to advancing its project pipeline with the sequencing established to manage balance sheet strength while also ensuring the pipeline is well positioned in those countries and jurisdictions where the Company has the most familiarity.

Thirdly, the Company is advancing on several other monetization initiatives as part of ongoing strategic and technical reviews of its asset portfolio. These reviews relate to both non-cash flow generating assets and other assets. In the case of other assets, the Company considers the contribution to cash flows from those assets and whether or not the possible monetization of or other strategic alternatives for those assets may deliver more value than the immediate cash flows that they generate. In 2016, the Company sold its Mercedes mine on this basis and after such a review.

The assets sold as part of the Transaction are non-cash flow generating and, after the Company completed strategic and technical reviews, it concluded that more value would be derived in the immediate and intermediate terms through a monetization than through continued evaluation of those assets for development. Another previously announced and similar strategic review that may result in a partial or whole monetization relates to Agua Rica which is a feasibility stage copper-gold asset wholly owned by Yamana.

The Company is committed to delivering production from quality mines and projects while also improving its cash balances, reducing its net debt and properly managing its balance sheet and overall financial position. This Transaction and the recent issue of the senior notes considerably advance these goals. And, continued operational and financial performance from the Company’s six mines along with the contribution to be provided by Cerro Moro, beginning in 2018, will further advance these goals also.

Under the Agreement, if Agnico Eagle sells any of the Kirkland Lake and Hammond Reef properties during the 24-month period from the date of the Agreement, Yamana will participate in any increase in net proceeds received by Agnico Eagle in the sale. The Transaction is subject to notification under the Competition Act (Canada) and the receipt of government, First Nations and other third party consents.

About Yamana

Yamana is a Canadian-based gold producer with significant gold production, gold development stage properties, exploration properties, and land positions throughout the Americas including Canada, Brazil, Chile and Argentina. Yamana plans to continue to build on this base through existing operating mine expansions, throughput increases, development of new mines, the advancement of its exploration properties and, at times, by targeting other gold consolidation opportunities with a primary focus in the Americas.