Yamana struggles to find buyers for Brazil mines – by Boyd Erman and Rachelle Younglai (Globe and Mail – June 23, 2014)

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Yamana Gold Inc. has been trying to sell mines in Brazil for months, but is struggling to drum up interest in all the properties, people familiar with the matter say.

The Toronto-based company put its three mines in Brazil up for sale at the beginning of the year and hired Royal Bank of Canada to run the process, the sources said. A spokesman for Yamana declined to comment.

The Chapada, Jacobina and Fazenda Brasileiro mines are nearing the end of their lives and are facing problems. They have a combined net asset value of about $3-billion (U.S.), according to a recent report from Canaccord Genuity.

“I am not surprised that people have passed on it because they are very mature mines,” said John Ing, the president of investment firm Maison Placements Canada. “Jacobina has never worked right. Chapada has been a disappointment and Fazenda is very small.”

Yamana was previously focused on building its portfolio in South America until it teamed up with another Canadian miner to buy half of Osisko Mining Corp.’s large gold mine in Quebec.

The Quebec gold mine, Canadian Malartic, holds more than nine million ounces of gold reserves and is ramping up production.

In a recent report, Canaccord Genuity analyst Tony Lesiak said he sees the potential for Yamana to try to sell “non-core Brazilian assets” such as its C1 Santa Luz, Ernesto/Pau-a-Pique, Pilar, Fazenda Brasileiro and Jacobina operations.

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