Yamana Extends Offer for Meridian Gold and Increases Cash Consideration to C$4.00 Per Share

    TSX: YRI
    NYSE:   AUY
    LSE: YAU

today announced that it has increased the cash component of its offer to
acquire all of the outstanding common shares of Meridian Gold Inc., waived the
due diligence access condition and extended the offer deadline to September 7,
    Yamana has raised the cash component of the offer by C$0.85 per share to
a total of C$4.00 per share, which represents an approximate 27% increase in
the cash portion of the consideration. Meridian Gold shareholders will now be
entitled to receive 2.235 Yamana common shares plus C$4.00 in cash for each
Meridian common share tendered and taken up by Yamana. The cash portion of the
consideration will now be funded from a new $400 million acquisition five-year
credit facility obtained specifically for the purposes of this offer. Yamana
no longer intends to rely on the funds previously made available from Northern
Orion to fund the cash portion of its offer.
    Based on the respective closing prices on the Toronto Stock Exchange on
June 27, 2007 (the date of Yamana's original proposal to Meridian) Yamana's
offer now represents a spot premium of approximately 26.3%. The premium is
approximately 27.6% based on the then 20-day average closing prices on the
Toronto Stock Exchange.
    "We have listened to shareholders and, equally, we have made it clear
that we would be prudent and disciplined. This is a full, fair and final
price," said Peter Marrone, Yamana's chairman and chief executive officer.
"The offer provides Meridian shareholders with considerable value including a
significant cash payment and a stake in a gold-focused mid-tier producer with
significant share liquidity, strong returns, a proven ability to deliver on
development projects and meaningful growth potential from an extensive gold
only exploration and development pipeline."
    "We believe that our offer is the most compelling choice for Meridian's
shareholders," continued Mr. Marrone. "We encourage Meridian's shareholders to
consider these benefits and tender their shares to the offer."
    In addition, Yamana has waived the due diligence condition. While Yamana
would have preferred to conduct due diligence, it has relied on Meridian's
public disclosure and believes the benefits of certainty with proceeding on an
unconditional basis outweigh the need for due diligence.
    The timeline for acceptance of the offer is also extended to 8:00 p.m.
(Toronto time) on September 7, 2007, the 50th day following its commencement
of the offer, in order to provide Meridian shareholders with an opportunity to
fully consider the offer and tender to it. In the event that the Board of
Meridian does not take the necessary steps to waive the Meridian rights plan,
Yamana intends to apply to the applicable securities regulatory authorities
for a cease trade order prohibiting the trading and exercise of the rights.
    The terms of Yamana's consensual deal with Northern Orion remain
unchanged and the Board of Northern Orion continue to support the transaction
and unanimously recommend that their shareholders vote in favour of the Plan
of Arrangement at the special meeting scheduled to take place on August 22,
2007. Following an affirmative vote, it is Yamana's intention to close the
Plan of Arrangement with Northern Orion as soon as practical after the
successful tender for the Meridian shares.
    "We are providing increased certainty for both Northern Orion and
Meridian shareholders by eliminating the due diligence access condition and
securing the approval of Northern Orion shareholders well in advance of the
expiry date," continued Mr. Marrone. "There is a strategic fit and logic to
this combination and we believe the rapid pace of change in our industry and
capital markets further underscores the merits of this combination."
    Full details of the new Yamana offer are included in a Notice of Change,
Variation and Extension that will be filed on SEDAR (www.sedar.com) and on the
SEC's website (www.sec.gov) and will be made available on Yamana's website
(www.yamana.com). The Notice of Change, Variation and Extension is in the
process of being mailed to Meridian shareholders.
    Genuity Capital Markets, Canaccord Capital Corporation and JP Morgan are
financial advisors to Yamana. Yamana's Canadian legal advisor is Cassels Brock
& Blackwell LLP and its US legal advisor is Dorsey & Whitney LLP.
    For the purposes of U.S. tender offer rules, Yamana hereby discloses that
approximately 21,611 Meridian common shares have been tendered to the offer as
at August 13, 2007. The original expiry date of the offer before the extension
was August 27, 2007.

    Conference Call

    Yamana will host a conference call and webcast to discuss the proposed
transaction on August 14, 2007 at 11 a.m. (ET). A slide presentation will
accompany the conference call and webcast. To view the slide presentation and
webcast, please visit the Events section of the web site at www.yamana.com.
The slide presentation is also available by clicking on the link provided on
the home page for documents relating to the proposed transaction.

    Conference Call Information:

    Toll Free:                   800-814-4857

    Conference Call REPLAY:
    Replay Call:                 416-640-1917 Passcode 21243800
                                 followed by the pound key.

    Replay Toll Free Call:       877-289-8525 Passcode 21243800
                                 followed by the pound key.

    The conference call replay will be available from 9:00 a.m. (ET) on
August 15, 2007 until 11:59 p.m. (ET) on August 22, 2007.

    About Yamana

    Yamana is a Canadian gold producer with significant gold production, gold
development stage properties, exploration properties, and land positions in
Brazil, Argentina and Central America. Yamana is producing gold at
intermediate company production levels in addition to significant copper
production. Yamana's management plans to continue to build on this base
through the advancement of its exploration properties and by targeting other
gold consolidation opportunities in Brazil, Argentina and elsewhere in the

    IMPORTANT NOTICE: This press release does not constitute an offer to buy
or an invitation to sell, any of the securities of Yamana, Northern Orion or
Meridian. Such an offer may only be made pursuant to a registration statement
and prospectus filed with the U.S. Securities and Exchange Commission and an
offer to purchase and circular filed with Canadian securities regulatory
authorities. Yamana has filed with the U.S. Securities and Exchange Commission
a Registration Statement on Form F-10 as well as a Schedule TO tender offer
statement both of which include the offer and take-over bid circular relating
to the Meridian offer and is mailing the offer and take-over circular to
Meridian shareholders. Investors and security holders are urged to read the
Registration Statement, the offer and take-over bid circular and any other
relevant documents filed wit the SEC and Canadian securities regulators,
regarding the proposed business combination transaction because they contain
important information. Investors may obtain a free copy of the offer and
take-over bid circular and other documents filed by Yamana with the SEC at the
SEC's website at www.sec.gov. The offer and take-over bid circular and other
documents may also be obtained for free on Yamana's website at www.yamana.com
or by directing a request to Yamana's investor relations department.

    Persons who are resident in the United Kingdom should note the following

    (i) the formal offering and takeover-bid circular to be issued to
Meridian shareholders ("Offer and Circular") will not constitute a prospectus
for the purposes of the Prospectus Rules ("Prospectus Rules") published by the
Financial Services Authority of the United Kingdom (the "FSA"). Accordingly,
the Offer and Circular has not been, and will not be, approved by the FSA or
by London Stock Exchange plc. No action has been or is intended to be taken by
Yamana or by Genuity Capital Markets or Canaccord Capital Corporation, or any
of their affiliated entities, that would permit a public offer of Yamana
Common Shares to be made in the United Kingdom, which would require an
approved prospectus to be made available to the public in the United Kingdom
(in accordance with the United Kingdom Financial Services and Markets Act 2000
("FSMA") and the Prospectus Rules before such an offer was made.

    (ii) The Offer will be made to or directed at, and deposits of Meridian
shares will be accepted from, only those shareholders in the United Kingdom
who are (or who are acting on behalf of), and who are able to establish to the
satisfaction of Yamana that they are (or are acting on behalf of): "qualified
investors" within the meaning of section 86(7) of FSMA, and who are also
persons falling within Article 19(5) or Article 49(2)(a) to (d) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. UK
shareholders receiving the Offer and Circular should consult with their legal
advisors to determine whether they are eligible to receive and accept the

    FORWARD-LOOKING STATEMENTS: This news release contains certain
"forward-looking statements" and "forward-looking information" under
applicable Canadian securities laws concerning the proposed transaction
between Yamana, Northern Orion and Meridian. Except for statements of
historical fact relating to the companies, certain information contained
herein constitutes forward-looking statements. Forward-looking statements are
frequently characterized by words such as "plan," "expect," "project,"
"intend," "believe," "anticipate", "estimate" and other similar words, or
statements that certain events or conditions "may" or "will" occur.
Forward-looking statements are based on the opinions and estimates of
management at the date the statements are made, and are based on a number of
assumptions and subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ materially from
those projected in the forward-looking statements. Assumptions upon which such
forward-looking statements are based include that Yamana will be successful in
acquiring 100% of the issued and outstanding Meridian shares, that the
shareholders of Northern Orion will approve the transaction, that all required
third party regulatory and governmental approvals to the transactions will be
obtained and all other conditions to completion of the transactions will be
satisfied or waived. Many of these assumptions are based on factors and events
that are not within the control of Yamana and there is no assurance they will
prove to be correct.
    Factors that could cause actual results to vary materially from results
anticipated by such forward-looking statements include changes in market
conditions, variations in ore grade or recovery rates, risks relating to
international operations, fluctuating metal prices and currency exchange
rates, changes in project parameters, the possibility of project cost overruns
or unanticipated costs and expenses, labour disputes and other risks of the
mining industry, failure of plant, equipment or processes to operate as
anticipated, the business of the companies not being integrated successfully
or such integration proving more difficult, time consuming or costly than
expected as well as those risk factors discussed or referred to in the annual
Management's Discussion and Analysis and Annual Information Form for each of
Yamana filed with the securities regulatory authorities in all provinces of
Canada and available at www.sedar.com, and the Annual Report on Form 40-F of
Yamana filed with the United States Securities and Exchange Commission.
Although Yamana 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 anticipated, estimated or intended. There can be
no assurance that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Yamana undertakes no obligation to update
forward-looking statements if circumstances or management's estimates or
opinions should change except as required by applicable securities laws. The
reader is cautioned not to place undue reliance on forward-looking statements.
Any forward-looking statements of facts related to Meridian are derived from
Meridian's publicly filed reports.


SOURCES This news release uses the terms "Measured", "Indicated" and "Inferred" Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. CAUTIONARY LANGUAGE REGARDING RESERVES AND RE

SOURCES Readers are advised that National Instrument 43-101 of the Canadian Securities Administrators requires that each category of mineral reserves and mineral resources be reported separately. Mineral resources are not mineral reserves and have not demonstrated economic viability. Other than as disclosed, the effective date, details of key assumptions, parameters and methods used in the foregoing estimates and other information is disclosed in the Annual Information Form of Yamana for the year ended December 31, 2006 available under Yamana's profile at www.sedar.com, for this detailed information, which is subject to the qualifications and notes set forth therein.

For further information:

For further information: FOR INVESTOR QUESTIONS, CONTACT: Kingsdale
Shareholder Services, Toll-free: 1-866-897-7644, Banks and brokers call
collect: (416) 867-2272, Email: contactus@kingsdaleshareholder.com; or MEDIA
CONTACT: Mansfield Communications Inc., Hugh Mansfield, (416) 599-0024; or
Yamana Gold Inc., Peter Marrone, Chairman & Chief Executive Officer, (416)
815-0220, Email: investor@yamana.com; or Yamana Gold Inc., Jodi Peake,
Director, Investor Relations, (416) 815-0220, Email: investor@yamana.com,
Website: www.yamana.com

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