Yamana Gold Inc. has announced it is in the advanced stages of the application process with the FCA and the London Stock Exchange (LSE) for the admission of the company’s common shares to the standard segment of the Official List and to trading on the LSE’s Main Market.
- Yamana is in the advanced stages of the LSE listing process and intends for the company’s common shares to be admitted to the standard segment of the Official List and to trading on the LSE’s Main Market in the next few months.
- In addition to its other listings on the New York Stock Exchange and the Toronto Stock Exchange, the company believes that a listing on the LSE is well positioned to bring European investors on to the company’s share register.
- The LSE listing will provide all investors access and exposure to:
- A large Canadian-based precious metals producer with significant gold and silver production in established mining jurisdictions in the Americas and a proven track record of new discoveries and conversion of mineral resources to mineral reserves.
- Five high-quality, long-life producing mines in mining-friendly jurisdictions.
- A production platform of approximately 1 million gold equivalent ounces (GEO) in 2021 and 2022 with a low cost structure.
- Strong and increasing free cash flow along with continued future growth with low near-to-medium term capital commitments.
- A strong value proposition based on trading multiples, a rising cash flow profile, and a considerable net asset value base with significant near-future improvement opportunities.
- A portfolio of well-advanced development projects, highly prospective exploration properties and strategic investments throughout the Americas that provide optionality for value creation via development or asset monetisations that can further strengthen the financial position of the company.
- A commitment to the highest ESG (environmental, social and governance) standards with a long track record of sustainable development and environmental stewardship in the communities and countries in which the company operates.
- A strong balance sheet with net debt below CAN$769 million with a net debt leverage ratio of 1.0x and trending below 0.5x in the next few years.
- A track record of delivering cash returns to shareholders with dividends which to date have accumulated to over CAN$940 million since dividends were first paid just over thirteen years ago and which, more recently, increased three times in the last year for a cumulative increase of more than 210%.
- The company is not intending to raise equity capital in conjunction with the LSE listing.
By listing on the LSE, Yamana intends to become the ‘investment of choice’ in London for those looking for exposure to gold, supported by a strong, sustainable dividend.
Among the factors considered by the company in pursuing the listing, it noted that the LSE currently has a limited number of sizeable pure-play gold producers with annual production of 1 million oz or more, all of which comes from mines in established mining jurisdictions in the Americas with supportive infrastructure and protocols relating to mining. Yamana believes the LSE listing will provide UK and European investors with greater, more local exposure to a new high-quality investment choice of a type not currently available on the exchange.
Listing on the LSE will offer the company improved liquidity and allow it to expand its share register with an enlarged investor base.
Peter Marrone, Executive Chairman of Yamana Gold, commented: “This is an ideal time to be to be joining the London market. Yamana is in as strong a position as it has ever been, with a strong and rising cash flow profile, an outstanding portfolio of producing mines and projects, and a number of compelling opportunities to grow organically. We have the balance sheet strength to advance these opportunities while continuing to increase shareholder returns, as evidenced by the three increases to our dividend over the past 12 months.
“Significant upside for gold equities remains, driven by recent events and the macroeconomic backdrop. As an Americas-focused gold producer, with a first-class management team and Board, alongside a healthy dividend yield, Yamana offers a new, high-quality investment choice for the European investor looking for long-term exposure to gold.
“Investing in gold is prudent at any time, but investing in a multi-asset, multi-jurisdictional, sizeable and diversified and high-quality gold producer, with a strong balance sheet and a commitment to paying dividends, is better still.”
Daniel Racine, President and CEO, added: “We pride ourselves on operational excellence and a whole-hearted commitment to the highest standards on environmental, social, and governance behaviour. We believe these qualities will resonate well with European and UK investors who focus on the London market.”
A compelling investment case
Yamana’s diversified portfolio of five high-quality, long-life mines in mining-friendly jurisdictions in the Americas includes the Canadian Malartic Mine (Canada, 50% interest), the Jacobina Mine (Brazil), the El Peñón Mine (Chile), the Cerro Moro Mine (Argentina) and the Minera Florida Mine (Chile).
In 2019, Yamana’s production platform was approximately 1 million GEO at all-in-sustaining costs (AISC) below CAN$980 per GEO. The Company delivered on financial results with 2019 highlights including CAN$1,612.2 million in revenue and net earnings of CAN$225.6 million at an average gold price of CAN$1,392 / oz. Cash flow from operating activities rose to CAN$521.8 million, a 29% year-over-year increase that contributed to a CAN$771.1 million decrease in net debt.
The company views the payment of dividends as an important mechanism to manage its capital base, create financial discipline, and maximise returns for shareholders. The company has begun to report dividends on a GEO basis with a target range of CAN$50 - CAN$100 per GEO annually for shareholders.
Yamana’s strong financial and operational performance has continued into 2020 with the company continuing to generate significant cash flows, reducing net debt and further increasing financial flexibility. In its 2Q20 ended 30 June 2020, net debt decreased by approximately CAN$100 million to below CAN$769 million. The company’s cash position at the end of 2Q20 was in excess of CAN$320 million.
The company also continues to deliver on its portfolio optimisation strategy, which generates value from a pipeline of development projects, exploration properties and other strategic assets, notably the Agua Rica project (Argentina), the Monument Bay project (Canada), the Suyai project (Argentina), and interests in Equinox Gold and Nomad Royalty. These, and other assets in the company’s portfolio, provide Yamana with a high degree of optionality to create long-term shareholder value via development or through monetisations that can increase cash flow and further strengthen the Company’s financial position.
Appointment of legal advisor, corporate broker and public relations
Yamana has engaged Memery Crystal LLP as its legal advisors and retained Tavistock Communications Ltd to provide financial public relations and investor relations services in the UK. The company has engaged Velocity Trade Capital Ltd as a Canadian financial advisor and has initiated the process of appointing UK corporate brokers.
Read the article online at: https://www.globalminingreview.com/finance-business/20072020/yamana-gold-intends-to-list-on-lse/