Yamana/Extorre

Documents
(SEDAR filing: 23 July 2012) Circular for acquisition by Yamana Gold Inc. ("Yamama") of all the outstanding common shares of Extorre Gold Mines Limited ("Extorre") in consideration for cash and Yamana common shares (3793 K). Gowling
Summaries
Summary Under
Tax Topics - Public Transactions - Mergers & Acquisitions - Mergers (mostly Plans of Arrangement) - Shares for Shares and Cash
Yamana acquisition of Extorre for cash and shares with potential s. 85(1) rollover

CBCA Plan of Arrangement under which Yamana (TSX and NYSE) acquires all of the outstanding common shares of Extorre (TSX and NYSE MKT). $3.50 of cash (estimated to represent 82% of the consideration) and 0.0467 of a Yamana common share is to be provided in exchange for each Extorre common share. (This consideration is calculated to represent a premium of 54% and values the outstanding Extorre shares at $414 million). Each holder of an Extorre incentive stock option is entitled to receive, on exercise of the option, 0.2648 of a Yamana common share. A break fee of $15 million is payable in connection with the acceptance of a superior proposal or if the Extorre ceases to support the transaction.

Canadian taxation

Canadian residents or non-residents holding their Extorre shares as taxable Canadian property may make a s. 85(1) election (0r s. 85(2) election for a partnership - or the Quebec equivalents) with Yamana provided they provide the necessary information within 90 days after the effective date of the Arrangement; and Yamana will sign and return the election forms within 30 days. The tax election package and instruction letter will be made available on the Yamana website within 30 days of the effective date of the Arrangement. Full rollover treatment may not be available depending on the adjusted cost base of the holder's Extorre shares.

In the absence of a s. 85 election, the exchange will be taxable (no s. 85.1 rollover.)

A non-resident Extorre shareholder will not be subject to Canadian capital gains tax on the exchange if the holder's shares are not taxable Canadian property. In this regard, Extorre considers that its common shares do not currently derive more than 50% of their fair market value from Canadian resource properties etc.

US taxation

The exchange generally will be a fully taxable event. Extorre is believed to be a PFIC for its current and prior years. Extorre will make available upon written request a "PFIC Annual Information Statement" as described in US Treasury Regulation Section 1.1295(g) for its 2011 and 2012 years.