Meridian Gold rejects Yamana's ammended offer



    2.9% INCREASE NOT MEANINGFUL

    REVISED OFFER CONTINUES TO BE INADEQUATE

    RENO, NV, Aug. 20 /CNW/ - Meridian Gold Inc. ("Meridian Gold" or the
"Company") (TSX:MNG) (NYSE:  MDG) today announced that its Board of Directors
unanimously recommends that shareholders reject the amended unsolicited offer
by Yamana Gold Inc. ("Yamana") and not tender any of their shares. The Board
carefully reviewed and considered Yamana's amended offer to acquire the common
shares of Meridian Gold and determined that the amended offer still fails to
provide full value for Meridian Gold shares.
    Brian Kennedy, Chairman of Meridian Gold's Board of Directors, stated,
"After careful review, the Board has concluded that Yamana's amended offer
still falls short. Given the lack of any meaningful improvement in the offer,
the Board continues to believe that holding Meridian shares is preferable to
accepting the inadequate Yamana offer."
    Ed Dowling, Meridian Gold's President and Chief Executive Officer,
commented, "Meridian Gold continues to build on its highly successful track
record of discovering, developing and operating gold mines. I am extremely
proud of the way our people have maintained their focus on execution of our
core strategy of organic growth. Yamana's amended offer simply fails to
adequately compensate Meridian Gold shareholders for our exploration,
development and operating success, our world-class asset quality and our
future growth potential."
    In arriving at its recommendation that Meridian Gold shareholders reject
the amended Yamana offer and not tender their shares, Meridian Gold's Board of
Directors carefully reviewed its reasons for rejecting the original offer, as
well as the following factors:

    
    -  the C$0.85 increase in the cash portion of the consideration
       represents only a 2.9% increase in the total consideration as
       of the announcement date of the amended offer;

    -  the cash has increased only from 10.9% to 13.4% of the total
       consideration as of the announcement date of the amended
       offer, and the offer still consists overwhelmingly of Yamana
       shares;

    -  if the Meridian shares had tracked the rise in the
       Philadelphia Gold & Silver Index (XAU) since Yamana's original
       June 27 announcement, the amended offer would represent a one
       day premium of only 8.3%.
    

    Meridian Gold's Board of Directors has received written opinions from
each of its financial advisors, BMO Capital Markets and Goldman, Sachs & Co.,
to the effect that, as of the date of such opinions and subject to certain
assumptions and conditions set forth in the respective opinions, the
consideration offered under the amended Yamana offer was inadequate, from a
financial point of view, to Meridian Gold shareholders. Copies of these
opinions, which Meridian Gold shareholders are urged to read in their
entirety, are being filed as exhibits to Meridian Gold's
Solicitation/Recommendation Statement on Schedule 14D-9, as amended, which is
available at www.sec.gov and www.sedar.com.
    BMO Capital Markets and Goldman, Sachs & Co. are acting as financial
advisors to the Company. Canadian legal counsel to the Company is Fraser
Milner Casgrain LLP and U.S. legal counsel is Skadden, Arps, Slate, Meagher &
Flom LLP.

    Meridian Gold Investor Presentation
    -----------------------------------
    A presentation relating to the Board of Directors' recommendation to
Meridian Gold shareholders to reject the amended Yamana offer can be viewed on
Meridian Gold's website at www.meridiangold.com.

    About Meridian Gold
    -------------------
    A unique mid-tier gold producer, with world-class mining operations in
Chile and Nevada and a pipeline of promising development and exploration
projects throughout the Americas, Meridian Gold's success to date has been
based on grassroots gold discoveries and a low-cost strategy, resulting in a
better approach to adding value and balancing growth. Meridian Gold strives to
be "The Premier Value Gold Mining Company," while building a better future for
all of its stakeholders.

    Additional Information for Meridian Gold Shareholders
    -----------------------------------------------------
    Shareholders of Meridian Gold and other interested parties are advised to
read Meridian Gold's Directors' Circular and the Solicitation/Recommendation
Statement on Schedule 14D-9 filed with the U.S. Securities and Exchange
Commission ("SEC") on July 31, 2007 (including any amendments or supplements
thereto and the other documents filed as exhibits thereto), because they
contain important information. Shareholders may obtain a free copy of the
Directors' Circular and Meridian Gold's Schedule 14D-9 at the Investor
Relations section of Meridian Gold's website at www.meridiangold.com, or by
contacting Georgeson Shareholder, the information agent retained by Meridian
Gold, at 1-888-605-7618. Free copies of the Directors' Circular are also
available at www.sedar.com and, together with Meridian Gold's Schedule 14D-9,
at www.sec.gov and www.sedar.com. The Directors' Circular was filed by
Meridian Gold as an exhibit to Meridian Gold's Schedule 14D-9.

    Cautionary Statement
    --------------------
    This press release, including the discussion of the reasons for the Board
of Directors' recommendation that Meridian Gold shareholders reject the Yamana
offer, contains forward-looking information (as defined in the Securities Act
(Ontario)) and forward-looking statements that are based on expectations,
estimates and projections as of the date of this press release. These
forward-looking statements can often, but not always, be identified by the use
of forward-looking terminology such as "plans", "predicts", "expects" or "does
not expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases, or statements that certain actions,
events or results "may", "could", "would", "might" or "will" be taken, occur
or be achieved. Actual results and developments (including forecasted
production, earnings and cash flows) are likely to differ, and may differ
materially, from those expressed or implied by the forward-looking statements
contained in this press release.
    Forward-looking statements contained in this press release are based on a
number of assumptions that may prove to be incorrect, including, but not
limited to: the value of the assets of Meridian Gold, Yamana and Northern
Orion; the successful completion of new development projects, planned
expansions or other projects within the timelines anticipated and at
anticipated production levels; the accuracy of reserve and resource estimates,
grades, mine life and cash cost estimates; whether mineral resources can be
developed; interest and exchange rates; the price of gold and other metals;
the strength of the economic fundamentals of gold relative to other base
metals; competitive conditions in the mining industry; title to mineral
properties; financing requirements; general economic conditions; changes in
laws, rules and regulations applicable to Meridian Gold; and whether or not an
alternative transaction superior to the Yamana offer may emerge. In addition
to being subject to a number of assumptions, forward-looking statements in
this press release involve known and unknown risks, uncertainties and other
factors that may cause actual results and developments to be materially
different from those expressed or implied by such forward-looking statements,
including the risks identified under "Note Concerning Resource Calculations"
in Meridian Gold's Directors' Circular as well as the risks identified in the
filings by Meridian Gold with the SEC and Canadian provincial securities
regulatory authorities, including Meridian Gold's Annual Report on Form 40-F
for the fiscal year ended December 31, 2006.
    Meridian Gold believes that the expectations reflected in the
forward-looking statements contained in this press release are reasonable, but
no assurance can be given that these expectations will prove to be correct. In
addition, although Meridian Gold has attempted to identify important factors
that could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other factors that
cause actions, events or results not to be as anticipated, estimated or
intended. Accordingly, you should not place undue reliance on any
forward-looking statements contained in this press release.





For further information:

For further information: Meridian Gold Inc., Krista Muhr, (800)
572-4519, Senior Manager, Investor Relations, Fax: (775) 850-3733,
krista.muhr@meridiangold.com; or Georgeson Shareholder, 1-888-605-7618, (212)
440-9800; or Media Relations: Sard Verbinnen & Co., Dan Gagnier, (212)
687-8080 x.226, Paul Kranhold, (415) 618-8750; Meridian Gold Inc., 9670
Gateway Drive, Suite 200, Reno, Nevada 89521, Phone: (775) 850-3777, Fax:
(775) 850-3733

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