Important Tax Information for Extorre Shareholders

The exchange of Extorre Gold Mines Limited (“Extorre”) shares for Yamana Gold Inc. (“Yamana”) shares pursuant to the Plan of Arrangement will result in a disposition of Extorre shares held by each Extorre shareholder for Canadian tax purposes. Accordingly, a Extorre shareholder may realize a gain (or loss) and be subject to tax. It is possible for a Extorre shareholder that is not exempt from Canadian income tax to defer some or all of the tax resulting from the disposition by making joint tax election(s) with Yamana under section 85 of the Income Tax Act (and applicable provincial rules). Such tax election(s) must be then filed with the Canada Revenue Agency and any applicable provincial taxation authorities in the prescribed form and within the prescribed time. The joint tax election(s) are optional. A Extorre shareholder that is not exempt from Canadian income tax that does not make the joint tax election(s) with Yamana will not obtain a tax-deferred rollover in respect of any gain realized on the disposition of their Extorre shares and may be subject to Canadian income tax.

Any Extorre shareholder that is not exempt from Canadian income tax that would like to make a tax election is strongly encouraged to provide his/her name, mailing address and telephone number via voicemail on the Yamana tax election hotline at 1-855-348-5088 or via email at yamana.tax.election@ca.pwc.com. Yamana’s representatives will contact all such Extorre shareholders with instructions on how to make the tax election.

The following Extorre shareholders are NOT permitted to file a tax election:
  • Extorre shareholders that are non-residents of Canada that are not required to file a Canadian tax return. Uncertain taxpayers should contact their tax advisors.
  • Extorre shareholders that held all of their Extorre shares in an RRSP, RRIF, TFSA or other Canadian tax-exempt plan.
In addition, Extorre shareholders that realize a loss on the disposition of their Extorre shares pursuant to the Arrangement will not benefit from filing a tax election.

The foregoing is subject to the more detailed information set out in the July 13, 2012 management information circular of Extorre, a copy of which can be found on www.sedar.com under Extorre’s profile.

The Plan of Arrangement was generally a fully taxable event to U.S. holders of Extorre shares.  For more information, please refer to the section entitled "Certain United States Federal Income Tax Considerations" beginning on page 58 of Extorre's Management Information Circular dated July 13, 2012, a copy of which can be found on www.sedar.com under Extorre’s profile.

Important Transaction Information

What do I receive for each share of Extorre I own?

For each Extorre share held you will receive $3.50 in cash and 0.0467 of a common share of Yamana.

How do I convert my shares to the consideration offered by Yamana?

If your shares are held through a brokerage account or with an investment advisor, it is standard practice to receive notification directly, indicating that the brokerage firms’ reorganization department will automatically facilitate the exchange of shares. This process typically takes between 5-10 days following the closing of the transaction, which in this case occurred on August 22, 2012. If this has not yet occurred, contact your broker or investment advisor directly.

For investors not holding Extorre shares in a brokerage account, a different process will occur. You will need to complete and submit a letter of transmittal, which was mailed on July 19, 2012 to holders of Extorre shares, or can be found here. Please follow the instructions which indicate that you are required to return the letter of transmittal and your Extorre share certificates to Canadian Stock Transfer Company.

Who can I call for help?

If you have any questions relating to the exchange of your Extorre shares please contact your investment advisor or Canadian Stock Transfer Company, with contact details as follows:

CIBC Mellon Trust Company
C/O Canadian Stock Transfer Company
Tel: 416-682-3860 OR 1-800-387-0825
Fax: 1-888-486-7660
Email: inquiries@canstockta.com

By Mail
P.O. Box 1036
Adelaide Street Postal Station
Toronto, ON
M5C 2K4
Attention: Corporate Restructures

By Registered Mail, Hand or Courier

320 Bay Street
Basement Level (B1 Level)
Toronto, ON
M5H 4A6
Attention: Corporate Restructures