Agnico/Yamana/Osisko -- summary under Shares for Shares and Cash

Overview

Under a CBCA Plan of Arrangement, each Osisko common share will be exchanged under s. 86 for one new (Class A) common share of Osisko and a common share of a newly-formed subsidiary (New Osisko). Each Class A share will then be transferred to Acquisitionco (an Ontario Newco owned on a 50-50 basis by Agnico and Yamana or their subsidiaries) in consideration for the "Transaction Consideration," comprising $2.09 of cash, 0.07264 of an Agnico common share and 0.26471 of a Yamana common share. Non-resident shareholders will receive New Osisko shares instead as consideration for the transfer of their Osisko shares to Acquisitionco. Holders of out-of-the-money Osisko options will be paid their Black Scholes value.

Osisko

A CBCA corporation listed on the TSX and the Deutsche Borse which is currently producing gold in the Abitibit region of Quebec.

New Osisko

A Quebec company, newly-formed by Osisko, which will hold Mexican assets (through two Canadian subsidiaries each holding 50% of Campania Minera Osisko Mexico, S.A. de C.V.), a 2% NSR on Canadian exploration properties held directly or indirectly by Osisko and a 5% NSR on the "Canadian Malartic Properties" (mining rights and related assets in the Abitibi region of Quebec including reserves of 6.3M gold ounces) to be held by Canadian Malartic GP (collectively, the "New Osisko Assets" referred to in 2 below). It will be capitalized with $155M of cash and will apply for a TSX listing.

Canadian Malartic GP

Will be a wholly-owned partnership of Osisko with the exception of a small GP interest held through a wholly-owned Osisko subsidiary. According to the chart, it will be a hybrid entity, i.e., a partnership for Canadian purposes and a corporation for U.S. tax purposes.

U.S. securities laws

The issuance of Agnico, Yamana and New Osisko shares to Osisko shareholders is occurring in reliance on the s. 3(a)(10) exemption. Each of Osisko, Agnico and Yamana is a foreign private issuer, so that solicitations of U.S. shareholders of Osisko are being made only in accordance with Canadian securities laws.

Plan of Arrangement

1. Osisko will transfer its interest in the Canadian Malartic Assets to Canadian Malartic GP in consideration for the assumption of liabilities and an increased partnership interest.
2. Osisko will transfer its interest in the New Osisko Assets to New Osisko in consideration for the issuance of commons shares and the assumption of liabilities.
3. Each Osisko common share held by a dissenter will be surrendered to Osisko.
4. Osisko will issue shares to those exercising options.
5. If so approved by the shareholders, out-of-the-money options will be cash-surrendered for their Black Scholes value.
6. Each Osisko common share held by a non-resident or acquired in 4 will be transferred to Acquisitionco in consideration for the right to receive the Transaction Consideration and the right to receive one New Osisko common share.
7. Each outstanding Osisko common share will be exchanged for one Osisko Class A share (essentially a common share with two votes per share and with a requirement that the Class A share terms not be modified without 75% class approval – and with their stated capital subsequently being reduced to $1.00 in aggregate) and one New Osisko common share.
8. Acquisitionco will deliver New Osisko common shares as required in 6.
9. Each outstanding Class A share of Osisko (other than those held by Acquisitionco) will be transferred to Acquisitionco for the Transaction Consideration (with Acquisitionco having been funded by Agnico and Yamana with such consideration pursuant to a "Funding Agreement," immediately before the Plan of Arrangement)..
10. Yamana Subco (a CBCA subsidiary of Yamana holding Osisko and Yamanacommon shares) will be wound up, with such Yamana common shares cancelled.

Consolidation

If so approved by the New Osisko shareholders, the New Osisko shares will be consolidated on a 10-for-1 basis.

Canadian tax consequences

S. 86 exchange. The fair market value of the distributed New Osisko shares is not expected to exceed the paid-up capital of the (old) Osisko common shares of $4.02 per share, so that no deemed dividend should arise on the exchange of the Osisko common shares for Class A shares and New Osisko shares. S. 86 will apply to such exchange so that a holder of Osisko common shares will be considered to have disposed of its shares for the greater of their adjusted cost base and the fair market value of the New Osisko shares received on the exchange.

Class A share exchange

Will occur on a taxable basis.

Dissenters

Disposition will give rise to a deemed dividend to the extent that the amount received (excluding any interest award) exceeds the paid-up capital of the common shares subject (in the case of a corporate shareholder) to s. 55(2) applying.

U.S. tax consequences

The exchange of Osisko common shares for cash, Agnico and Yamana shares, and New Osisko shares is believed to be a taxable transaction.