Yamana Gold Increases Cash Consideration; Reduces Minimum Tender Condition; and Extends Offer for Meridian Gold

    TSX: YRI
    NYSE:   AUY
    LSE: YAU

today announced that it has reduced the minimum tender condition relating to
the offer to acquire all of the outstanding common shares of Meridian Gold
Inc. to 50.1 percent and extended the offer deadline to 8:00 pm (Toronto time)
on October 2, 2007. Previously, the offer was contingent on 66 2/3 percent of
the common shares on a fully diluted basis being deposited to the offer by
8:00 pm (Toronto time) on September 24, 2007.
    Yamana has also increased the cash component of the offer by C$2.50 per
share to a total of C$6.50 per share, which represents an approximate 63
percent increase in the cash portion of the consideration. The share component
of the offer is unchanged. Meridian Gold shareholders will now be entitled to
receive 2.235 Yamana common shares plus C$6.50 in cash for each Meridian
common share tendered and taken up by Yamana. The cash portion of the
consideration will be funded from currently available debt facilities.
    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 offer now represents a spot premium of
approximately 36 percent. The premium is approximately 37 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 18.3 percent of the offer.
    In arriving at the decision to increase the cash component of its offer,
Yamana's management and Board of Directors considered, among other things,
current market conditions, operational upside at Meridian's assets, the advice
of its financial advisors and updated fairness opinions from Genuity Capital
Markets and Canaccord Capital Corporation indicating that the revised terms of
the offer are fair, from a financial point of view, to Yamana.
    "Where we see the most upside with Meridian's assets is in the expansion
of El Penon, the maturing of Mercedes as a development project and the
ultimate permitting and development of Esquel," said Antenor Silva, Yamana's
president and chief operating officer. "We believe that the expansion at El
Penon can be successfully completed with the goal of expediting the increase
in production from current levels. Although this will take time and effort, we
have undertaken a similar expansion at one of our underground mines. At
Mercedes, we expect to ultimately be able to develop a mine consistent in size
and scope with Yamana's C1 Santa Luz project in Brazil. Based on our
experience and track record in Argentina, we are confident that we have an
excellent opportunity to develop Esquel and, in time, realize the value of the
high grade gold deposit which presently has limited value."
    "Based on our assumptions and the value we see in Meridian's assets, we
are offering a full and fair premium to Meridian shareholders," commented
Peter Marrone, Yamana's chairman and chief executive officer. "We urge any
Meridian shareholders who have not yet tendered their shares to do so today.
We also encourage support from Meridian as we believe this combination results
in a compelling company offering significant value for all shareholders. We
have evaluated all of the sources of additional value including what has been
offered publicly by Meridian in recent announcements. Our revised offer
follows discussions with our shareholders and Meridian shareholders and we
believe the offer addresses the issues raised by Meridian. As we have said
from the beginning, the transaction creates a substantive company that is
greater than the sum of its parts."


    1.  Superior Return on Investment

    -   Both Yamana and Yamana after this transaction is completed offer
        significantly higher earnings on a per dollar invested basis

    2.  Best Exposure to Cash Flow - Yamana offers amongst the highest level
        of cash flow in its peer group on a per dollar invested basis and New
        Yamana offers significantly more exposure to gold prices

    -   Yamana's share price has correlated more favorably to the price of

    3.  Enhanced Operational Depth and Track Record

    -   Yamana built two significant mines last year alone: the Sao Francisco
        gold mine and the Chapada gold-copper mine (one of the three largest
        metal mines in Brazil)

    -   Yamana has a track record of meeting long-term production targets

    4.  Superior Growth Profile - Production, Earnings and Cash Flow

    -   New Yamana's growth is primarily fueled by Yamana's existing
        development project pipeline

    -   Yamana's growth is driven 100 percent by gold

    5.  Superior Risk-Reward Proposition

    -   There is a significant benefit to combining an established producer
        with lesser growth with a current producer showing substantial growth

    -   The New Yamana includes seven producing mines and a substantial gold-
        only development pipeline

    -   Yamana's project pipeline is backed by independent technical
        information and an experienced in-house development team

    It is Yamana's intention to ultimately acquire 100 percent of Meridian's
issued and outstanding shares.
    Other than agreeing to the reduced minimum tender condition of 50.1
percent of outstanding Meridian common shares on a fully diluted basis, the
terms of Yamana's consensual 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 for the Meridian shares
under the new minimum tender condition.
    Full details of the new Yamana offer are included in a Notice of
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 Variation and Extension will also be mailed to
Meridian shareholders.
    Approximately 24.4 million Meridian common shares have been tendered to
the offer as at September 19, 2007, representing about 24 percent of the
outstanding common shares of Meridian. All Meridian shareholders, including
shareholders who tendered to the offer prior to today's announcement, will
receive the increased consideration under the revised offer upon completion of
the transaction.

    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 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.
    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 Offer.

    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 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.

For further information:

For further information: 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, Toll-Free within North America: 1-888-750-5834,
Bankers and brokers call collect: (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, Email:
investor@yamana.com; or YAMANA GOLD INC., Jodi Peake, Vice President, Investor
Relations, (416) 815-0220, Email: investor@yamana.com, Website:

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