Yamana Gold has signed a deal to purchase a 50% share of Osisko Mining's assets for C$441.5m ($400.3m) in cash and 95.7 million common shares of Yamana, worth C$929.6m ($842.85m).
Following the transaction, Yamana will have an equal share in all of Osisko's mining and exploration assets and Osisko would continue to operate the Canadian Malartic Mine and all other projects under a joint operating committee.
As part of the agreement, Osisko will transfer all of its rights, titles and interests in its mining assets, including the Canadian Malartic Mine greenfield exploration properties to one or more general partnerships.
Apart from Canadian Malartic, Osisko would be able to keep an additional 2% royalty on all general partnership projects.
Osisko had previously signed binding commitment agreements with CPPIB Credit Investments (CPPIB) for growth under its current credit facility, and with La Caisse de depot et placement du Québec for the sale of a gold stream on the Canadian Malartic Mine.
Yamana Gold chairman and chief executive officer Peter Marrone said the transaction will enable the company to venture into a new jurisdiction in North America, with an immediate increase in production and improvement to its structure.
"This remains consistent with our stated objectives of focusing on top and bottom line growth, and balancing production and costs to preserve margin and enhance cashflow generation capacity," Marrone said.
With the new approach, the Yamana will get the opportunity to gain access and exposure to a quality asset with low risk and immediate growth.
The transaction is expected to be completed by 30 May and is subjected to all shareholder, court, regulatory and exchange approvals.