Yamana Gold and Meridian Gold Reach Agreement

YAMANA GOLD INC. (TSX: YRI)(NYSE: AUY)(LSE: YAU) 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 possible."

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 longevity."

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 follows: