Yamana Gold and the Sale of the Gualcamayo Mine

Yamana gold Inc. entered into a definitive purchase agreement to sell 100% of its interest in the Gualcamayo mine located in San Juan Province, to Mineros S.A.

Pursuant to the Purchase Agreement for Gualcamayo, Yamana will receive consideration made of the following:

·         $30 million in cash, payable at closing.

·         An additional $30 million in cash upon declaration of commercial production of the Deep Carbonates project, which is an undeveloped mineral resource below the existing oxide gold mineralization at Gualcamayo.

·         A 2% net smelter return royalty (“NSR”) at Gualcamayo on metal produced after the initial 396,000 ounces, capped at $50 million of total payments (excluding the Deep Carbonates Project); and

·         A 1.5%, uncapped NSR on the Deep Carbonates project.

The Sale Transaction was structured to provide both immediate payments and value, and future payments and value.  The Sale Transaction is consistent with the Company’s stated approach to focus on operations and projects where there is more certainty of production, costs, longer life and capital requirements.  Furthermore, with the two NSRs the Company preserves considerable upside value from this structure, both to metal prices and new discoveries and production, in relation to its carrying value.

The total value of the consideration for Gualcamayo resulting from the Sale Transaction is in line with recent market valuations for comparable assets. These valuations are reflective of the current commodity price environment, which is approximately $100 per ounce of gold lower than as of December 31, 2017. This total value is estimated at approximately $85.0 million and, as such, the carrying value of Gualcamayo has been reduced to this amount. However, the consideration offers considerable upside as noted above.

The Sale Transaction is subject to customary regulatory and third party approvals and other customary closing conditions and is expected to close in the fourth quarter of 2018.

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