STRICTLY PRIVATE AND CONFIDENTIAL June 27, 2007 Northern Orion Resources Inc. 1075 West Georgia Street, Ste. 250 Vancouver, B.C. V6C 3C9 Attention: David Cohen, President and Chief Executive Officer Dear Mr. Cohen:Strictly Private and Confidential • July 5th, 2007 • Northern Orion Resources Inc • Metal mining
This letter is to set out our agreement with respect to the proposed acquisition of all of the issued and outstanding securities of Northern Orion Resources Inc. ("Northern Orion") by Yamana Gold Inc. ("Yamana") pursuant to a transaction (the "Transaction") whereby the holders of common shares of Northern Orion will receive common shares of Yamana on the basis of 0.543 of a common share of Yamana (the "Exchange Ratio"), or the Exchange Ratio and nominal cash consideration, for each one common share of Northern Orion. While we anticipate that the Transaction will be structured as a statutory plan of arrangement of Northern Orion, the steps in the plan of arrangement will be mutually determined by Yamana and Northern Orion based on tax, securities and corporate law and other considerations. The parties may consider an alternative form of transaction provided there are no material adverse tax or other consequences to Yamana, Northern Orion or shareholders of Northern Orion. Yamana intends
