The LoI outlines an agreement in which Minera Alumbrera will be granted an exclusive four-year option to acquire Yamana’s interest in the Agua Rica project for progressive option payments of up to $110 million. Xstrata Copper and Goldcorp will finance all payments related to the option on a 57.14% and 42.86% basis, respectively.

Xstrata Copper and Goldcorp can collectively elect to exercise the option at any time during the four-year period through an “approval-to-proceed” decision for construction of the Agua Rica project. On approval to proceed, Yamana would receive $150 million and on commissioning an additional $50 million. Yamana would also retain the right to a deferred payment related to 65% of the payable gold production from Agua Rica to a maximum of 2.3 million oz.

Minera Alumbrera will manage the Agua Rica project and fund completion of a final feasibility study and all development costs. The respective ownership interests in Minera Alumbrera would remain unchanged and would apply to the Agua Rica project.

Agua Rica is a large-scale copper-goldmolybdenum deposit. Yamana has completed several of a series of optimizations to a 2006 feasibility study. Production has been projected at 370 million lb/y of copper and 148,000 oz/y of gold over the first 10 years of production. Mine life is estimated at 26.5 years. Proven and probable reserves currently stand at 9.5 billion lb of copper and 6.5 million oz of gold, plus additional measured and indicated resources of 4.9 billion lb of copper and 2.5 million oz of gold.