Yamana Gold and Meridian Gold Reach Agreement

    Yamana increases cash consideration; extends offer to acquire Meridian

    TSX: YRI
    LSE: YAU
    NYSE:   AUY

and MERIDIAN GOLD INC. (TSX:MNG)(NYSE:  MDG) today announced that they have
entered into a definitive support agreement pursuant to which Yamana has
agreed to revise its offer to purchase all of the outstanding common shares of
Meridian and Meridian's Board of Directors has agreed to unanimously recommend
that Meridian shareholders accept Yamana's revised offer.
    Under the support agreement, Yamana has agreed to revise its offer to
increase the cash component of the offer by C$0.50 per share to a total of   
C$7.00 per share. The share component of the offer will remain unchanged.
Under the terms of the revised offer, Meridian's shareholders will now receive
C$7.00 in cash plus 2.235 Yamana common shares for each Meridian common share
tendered and taken up by Yamana. The cash portion of the consideration will be
funded from Yamana's currently available debt facilities.
    Yamana has also agreed to extend the offer to 12:00 midnight (Toronto
time) on October 12, 2007.
    Based on the closing prices of Yamana shares and Meridian shares on the
Toronto Stock Exchange on June 27, 2007 (the date of Yamana's original
proposal to Meridian) Yamana's revised offer now represents a spot premium of
approximately 37.7 percent. The premium is approximately 38 percent based on
the then 20-day average closing prices of each company's shares on the Toronto
Stock Exchange. Based on Yamana's closing price at the time of the original
proposal, the cash component now accounts for about 28 percent of the offer.
    Based on a careful review of the revised terms of the Yamana offer among
other factors, the Board of Directors of Meridian has determined that the
revised Yamana offer is fair to Meridian's shareholders and unanimously
recommends that its shareholders accept the offer. Meridian's financial
advisors, Goldman, Sachs & Co. and BMO Capital Markets, have also each
provided opinions to the Meridian Board of Directors that, subject to the
assumptions, limitations and qualifications stated in such opinions, the
consideration to be received under the offer is fair, from a financial point
of view, to Meridian's shareholders. The full text of these opinions, which
Meridian shareholders are urged to read in their entirety, will be set forth
in the Meridian Director's Circular.
    Genuity Capital Markets, Canaccord Capital Corporation and J.P. Morgan
Securities Inc. are acting as Yamana's financial advisors, and both Genuity
and Canaccord have provided updated fairness opinions to Yamana's Board of
Directors indicating that the revised terms of the offer are fair, from a
financial point of view, to Yamana.
    "As a result of our extensive discussions with Meridian since the
previous increase in our offer and a review of Meridian's confidential
information through due diligence, we have been able to augment our initial
assessments and increase our offer," said Yamana Chairman and Chief Executive
Officer Peter Marrone. "Meridian has done an excellent job of building a
focused, high quality, dominant position in a way consistent with Yamana's
approach. We see tremendous upside in Meridian's assets which will translate
into substantial value for all shareholders."
    "This agreement brings together three successful companies and is in the
mutual interests of both Yamana and Meridian shareholders," continued Mr.
Marrone. "As a result of a friendly transaction, the management teams of
Yamana and Meridian have agreed to work together to implement an integration
plan in order to begin maximizing value for all shareholders as soon as
    Meridian's President and Chief Executive Officer Ed Dowling said, "Our
agreement provides Meridian shareholders with an attractive premium for their
shares and a significant stake in a dynamic and growing company. The combined
company represents an exceptional value-based investment providing growth in
resources, production, cash flow and earnings along with sustainability and
    The mailing of a notice of variation and extension amending the offer
with an amended Meridian directors' circular is expected to occur on or before
September 28, 2007. Completion of the offer will be subject to certain
conditions including that 50.1 percent of the issued and outstanding shares of
Meridian on a fully diluted basis be tendered to the offer.
    Yamana has also agreed to appoint three of Meridian's current directors
to Yamana's Board of Directors upon completion of the transaction.
    Approximately 24.4 million common shares had been deposited to Yamana's
offer as of Wednesday, September 19, 2007, which is the date prior to the date
of the last notice of variation and extension and which is most reliable for
information on total shares tendered.
    The terms of Yamana's agreement with Northern Orion remain unchanged and
it is Yamana's intention to close the Plan of Arrangement with Northern Orion
as soon as practical after the successful tender of the Meridian shares.

    Conference Call/Webcast

    Yamana and Meridian will hold a conference call and audio webcast as

    Monday, September 24, 2007 at 11:00 am (EST)

    North America: 1-866-250-4892
    International: 416-644-3432

    The live audio webcast can be accessed at www.yamana.com.

    A replay of the call will be available from 2:00 pm E.T. on September 25,
2007 until 11:59 pm E.T. on October 4, 2007. To access the replay, call
416-640-1917 or toll-free 1-877-289-8525 and enter the passcode 21248083
followed by the pound key.

    Media Conference

    A formal press conference will take place on Monday, September 24, 2007
at 10:15 MT at the Hyatt Regency Hotel, Capital Ballroom 1, 650 - 15th Street,
Denver, Colorado, 802025, Tel: (303) 436-1234.

    All media inquiries should be direct to Hugh Mansfield, Mansfield
Communications Inc., Tel: (416) 599-0024.

    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

    About Meridian

    A unique mid-tier producer, with world-class mining operations in Chile
and Nevada and a pipeline of promising 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

    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 as amended by notices of variation and extension and is
mailing the notice of variation and extension to Meridian shareholders.
Investors and security holders are urged to read the Registration Statement,
the offer and take-over bid circular, the notices of variation and extension
and notice of extension and any other relevant documents filed with 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, notices of
variation and extension, the notice of extension 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, notices of variation and extension, the notice of
extension 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.
    Meridian's Board will issue a Notice of Change to its Directors' Circular
and amend its Solicitation/Recommendation Statement on Schedule 14D-9 in
response to the revised Yamana offer. Each of these revised documents will
contain important information, including the Board's recommendation to
Meridian shareholders with respect to the revised Yamana offer. Shareholders
of Meridian and other interested parties are advised to read the Notice of
Change to Directors' Circular (when it becomes available) and the
Solicitation/Recommendation Statement on Schedule 14D-9 filed by Meridian with
the U.S. Securities and Exchange Commission on July 31, 2007 (and any
amendments (including the forthcoming amendment) or supplements thereto and
the other documents filed as exhibits thereto), because they contain important
information. Shareholders and other interested parties may obtain a free copy
of the Notice of Change to Directors' Circular (when it becomes available) and
Meridian's Schedule 14D-9 at the Investor Relations section of Meridian's
website at www.meridiangold.com, or by contacting Georgeson Shareholder, the
information agent retained by Meridian, at 1-888-605-7618. Free copies of
Meridian's Notice of Change to Directors' Circular (when it becomes available)
may also be obtained at www.sedar.com and, together with Meridian's Schedule
14D-9, at www.sec.gov. The Notice of Change to Directors' Circular will be
filed by Meridian as an exhibit to its Schedule 14D-9.

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

    (i) the formal offer 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 Yamana's ability to successfully
complete the Yamana offer and the Northern Orion transaction; 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; title to mineral
properties; financing requirements; and general economic conditions. 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, Northern Orion and Meridian 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 each of Yamana and Meridian 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.

For further information:

For further information: FOR INVESTOR QUESTIONS, In Canada: Kingsdale
Shareholder Services, Toll-free: 1-866-897-7644, Banks and brokers call
collect: (416) 867-2272, Email: contactus@kingsdaleshareholder.com; or In the
USA and International: Innisfree M&A Incorporated, (212) 750-5831; or MEDIA
CONTACT: Mansfield Communications Inc., Hugh Mansfield, (416) 599-0024; or
Yamana Gold Inc., Peter Marrone, Chairman & Chief Executive Officer, (416)
815-0220; or Yamana Gold Inc., Jodi Peake, Vice President, Investor Relations,
(416) 815-0220, Email: investor@yamana.com, Website: www.yamana.com; or
Meridian Gold Inc. Krista Muhr, Senior Manager, Investor Relations,
1-800-572-4519; or Media Relations: Sard Verbinnen & Co., Dan Gagnier, (212)
687-8080 x 226; or Sard Verbinnen & Co., Paul Kranhold, (415) 618-8750

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