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Reexamining Yamana Gold's Strategy

It's been more than a year since Yamana Gold (NYSE:AUY) and Agnico Eagle Mines (NYSE:AEM) acquired Osisko Mining with cash and stocks for roughly $3.6 billion. The Canadian Malartic was the prime asset that was added Yamana - the mine is estimated to produce between 500,000 and 600,000 ounces of gold per annum over the 16-year mine life. Considering the recent changes in the gold market, was this deal a good one?

Gold prices fall but debt stays the same

Back in the middle of 2014 the price of gold was around $1,300 per ounce - this is roughly $200 more than the current price of gold or 15% higher. Considering the company purchased Osisko Mining by taking on more debt - back in 2014 the long term debt grew by more than $800 million, which was mostly related to the Canadian Malartic asset.


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