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Yamana Gold buying out Northern Quebec’s Monarch Gold in C$152 million deal

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(Kitco News) - Mining activity in Northern Quebec continues to heat up, with Yamana Gold increasing its footprint in the Abitibi region after it announced it would buy Monarch Gold’s Wasamac property and the Camflo property and mill.

Announced Monday, under the agreements of the friendly takeover, Yamana will purchase all outstanding Monarch shares in a cash and equity deal valued at approximately C$152 million.

“The acquisition provides Yamana with a high-quality project with a significant mineral reserve and mineral resource base and excellent potential for further expansion. The acquisition adds to the company’s footprint in the Abitibi region, which is consistent with Yamana’s strategy to build on its existing presence in established mining jurisdictions where it has deep technical, geological, and operational expertise,” the company said in a press release.

Monarch said that the takeover bid represents a 43% premium from Friday’s closing price.

Ahead of the takeover, Monarch will also spinout its other properties. The Spinco company will be valued at C$43 million.

The takeover is expected to be completed by January 2021.

“We have built, over the years, a great portfolio through acquisitions and organic growth which led to this fruitful transaction within the diversified portfolio of Yamana,” said Jean-Marc Lacoste, president and CEO of Monarch. “A project the size of Wasamac needed a strategic alliance with a good developer and operator with a track record of success in similar styled mineralization and we believe this transaction is in the best interests of the shareholders.”

Lacoste added that the company’s remaining properties in the prolific gold region will continue to be developed, providing shareholders with more long-term value.

Yamana currently has a significant footprint in the Abitibi region. It has a 50% stake in the Malartic Mine, Canada’s biggest gold mine.

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