At Last, the New Yamana

Well, that was quick. Last week I wondered what it would take to get Meridian Gold (NYSE:MDG) shareholders to tender their shares to Yamana Gold (NYSE:AUY). The answer's "half a dollar," as it turns out. OK, half a dollar per share, or roughly $50 million. But still, that's pretty negligible when you're talking about a multibillion-dollar transaction.

I'm glad that's over with. Now that the gold-miner mating ritual has drawn to a close, what exactly are we dealing with here?

Yamana, Meridian, and Northern Orion Resources (AMEX:NTO) are now one. Yamana CEO Peter Marrone has dubbed the golden Frankenstein "New Yamana." The combined company has reserves roughly equal to those of Agnico-Eagle Mines (NYSE:AEM), and more inferred resources than Kinross Gold (NYSE:KGC) or any other miner in its mid-tier peer group. Production is set to ramp up roughly 20% in 2008, and about 25% in 2009.

Mineral sales, 70% of which are projected to come from gold, will be funding a very deep pipeline of development projects, some of which I've alluded to. New Yamana is now targeting 2.2 million ounces of gold production by 2012, which would more than double today's run rate in five years' time.

It's going to take some time for Yamana to digest these huge acquisitions. If gold prices resume their run at record highs, that process will go a lot quicker. I'm pretty neutral on the shares today, but I'll be eyeing them avariciously if we see a repeat of the mid-August freak out.

For more information on old Yamana, check out my two-part interview with Peter Marrone.