TORONTO (miningweekly.com) – Gold miner Osisko Mining on Wednesday announced that Latin America-focused precious metals miner Yamana Gold would acquire a 50% interest in Osisko's mining and exploration assets in a deal valued at about C$929.6-million.

Under terms of the multifaceted agreement that could potentially snub Goldcorp’s C$2.94-billion hostile takeover bid for Osisko, Yamana would pay C$441.5-million in cash and 95.7-million in common shares.

"Since the middle of January our shareholders have been subjected to a low-value hostile offer. Today's announcement brings significantly greater value to our shareholders," Osisko president and CEO Sean Roosen said.

When the deal has been implemented, each outstanding Osisko common share would be exchanged for C$2.194 in cash, 0.2119 of a Yamana common share, and a new common share of Osisko.

Based on the closing price of Yamana shares on the TSX on Tuesday, the value of the interest in Yamana shares is C$2.06 apiece, the ascribed value of the new common share of Osisko of C$3.35, each outstanding Osisko share was valued at C$7.601 apiece.

Under the agreement, Yamana would become an equal partner in all Osisko's mining and exploration assets. Osisko would continue to operate the Canadian Malartic mine and all other projects under the guidance of a joint operating committee, and would also maintain its head office in Montreal.

The agreement will be implemented by way of a statutory plan of arrangement. Osisko would transfer all its rights, titles and interests in its mining assets, including the flagship Canadian Malartic mine and its advanced and greenfield exploration properties, to one or more general partnerships. Yamana would then acquire a 50% interest in the units of each of the general partnerships.

The total value of C$7.60 per Osisko share represented a premium of about 10% over Osisko's closing price as of Tuesday, and 22% to the Goldcorp offer of C$6.21.

Osisko would retain a 2% royalty on all general partnership projects other than Canadian Malartic.

"This transaction provides an entry into a new world-class North American jurisdiction with an immediate increase in production and improvement to our already low-cost structure, in addition to the significant and immediate positive impact to our current and future cash flow generation," Yamana chairperson and CEO Peter Marrone said.

Osisko had also entered into binding commitment agreements with CPPIB Credit Investments, a subsidiary of CPP Investment Board for an increase under its existing credit facility and with La Caisse de depot et placement du Quebec (La Caisse) to buy a gold stream on the Canadian Malartic mine.

The gold stream agreement and the increase in the credit facility would provide C$550-million in additional funding to Osisko. Together with cash from Yamana, these investments total about C$1-billion in cash to be distributed to Osisko shareholders.

The Canadian Malartic General Partnership will sell 37 500 oz/y of gold at 43% of the gold price to La Caisse for a deposit of C$275-million.

Osisko's CPPIB credit facility of C$150-million would be transferred to the Canadian Malartic General Partnership and increased by C$275-million, with an interest rate of 7.625%, providing a total of C$425-million of debt to finance the transaction.

Osisko said that its board had unanimously recommended the arrangement, and said that it would hold a special meeting next month for shareholders to vote on the transaction.

By Wednesday afternoon, Osisko’s TSX-listed shares traded 5.81% higher at C$7.28 apiece, and those of Yamana were down 2.16% at C$9.50 a share, despite earlier gains.