Yamana Gold Inc.

Yamana Gold Inc.

October 27, 2006 22:30 ET

Yamana Acquires Additional 2.7 Million Viceroy Shares and Commences Compulsory Acquisition

TORONTO, ONTARIO--(CCNMatthews - Oct. 27, 2006) - Yamana Gold Inc. (Yamana) (TSX:YRI)(AMEX:AUY)(AIM:YAU) is pleased to announce that it has acquired an additional 2,700,089 common shares of Viceroy Exploration Ltd. under its Offer to acquire all of the Viceroy common shares. Yamana has now acquired a total of 51,735,680 Viceroy common shares, representing approximately 95% of the outstanding Viceroy common shares and approximately 93% of the Viceroy common shares on a fully diluted basis. Yamana intends to issue Yamana common shares in payment for the recently tendered Viceroy common shares on October 31, 2006.

Yamana's offer has now expired. Since the offer was accepted by holders of more then 90% of the Viceroy common shares, Yamana will commence the compulsory acquisition of the remaining Viceroy common shares not already owned by Yamana at the same price of 0.97 Yamana common shares for each Viceroy common share.

About Yamana

Yamana is a Canadian gold producer with significant gold production, gold and copper gold development stage properties, exploration properties, and land positions in Brazil, Argentina and Central America. Yamana expects to produce gold at intermediate company production levels in 2006 in addition to significant copper production by 2007. Company management plans to continue to build on this base through the advancement of its exploration properties and by targeting other gold consolidation opportunities in Brazil, Argentina and elsewhere in Latin America.

Forward Looking Statements

This news release contains "forward-looking statements", within the meaning of Canadian securities legislation, concerning the business, operations and financial performance and condition of each of Yamana and Viceroy. Forward-looking statements include, but are not limited to, statements with respect to estimated production, synergies and financial impact of the Offer; the completion of the compulsory acquisition, the benefits of the Offer and the development potential of Yamana's properties (including Gualcamayo); the future price of gold and copper; the estimation of mineral reserves and resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; permitting time lines and permitting, mining or processing issues; currency exchange rate fluctuations; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Yamana and Viceroy to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to: unexpected events during construction, expansion and start-up; variations in ore grade, tonnes mined, crushed or milled; variations in relative amounts of refractory, non-refractory and transition ores; delay or failure to receive board or government approvals; timing and availability of external financing on acceptable terms; the businesses of Yamana and Viceroy not being integrated successfully or such integration proving more difficult, time consuming or costly than expected; not realizing on the anticipated benefits from the Yamana/Viceroy transaction or not realizing on such anticipated benefits within the expected time frame; risks related to international operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold and copper; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in the completion of development or construction activities, as well as those factors discussed in or referred to in the current annual Management's Discussion and Analysis and current Annual Information Form of each of Yamana and Viceroy filed with the securities regulatory authorities in Canada and available at www.sedar.com, and Yamana's and Viceroy's Annual Reports or Form 40-F filed with the United States Securities and Exchange Commission. Although management of each of Yamana and Viceroy has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Neither Yamana nor Viceroy undertakes to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

This news release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or invitation to sell, any of the securities of Yamana or Viceroy. Such an offer may only be made pursuant to an offer and take-over bid circular filed with the securities regulatory authorities in Canada. On September 8, 2006, Yamana filed an offer and take-over bid circular with Canadian provincial securities regulators. Yamana also filed with the U.S. Securities and Exchange Commission a Registration Statement on Form F-8 as well as a Schedule 14D-1F tender offer statement, both of which include the offer and take-over bid circular. Investors and security holders are urged to read the offer and take-over bid circular regarding the proposed business combination transaction because they contain important information. Investors may obtain a free copy of the offer and take-over bid circular and other documents filed by Yamana with the Canadian provincial securities regulators on SEDAR at www.sedar.com, and with the SEC at the SEC's website at www.sec.gov. The offer and take-over bid circular and these other documents may also be obtained for free on Yamana's website or by directing a request to Yamana.

Contact Information

  • Yamana Gold Inc.
    Peter Marrone
    President and Chief Executive Officer
    (416) 815-0220
    Yamana Gold Inc.
    Leslie Powers
    Director Investor & Public Relations
    (416) 815-0220
    Viceroy Exploration Ltd
    Patrick Downey
    President and Chief Executive Officer
    (604) 669-4777