"Extorre is a mining company with exploration and development stage precious metals projects, the most advanced of which is its Cerro Moro project, a high grade, gold silver deposit with approximately 1.36 million ounces of gold equivalent indicated mineral resources and 1.05 million ounces of gold equivalent inferred mineral resources, located in the province of Santa Cruz in Argentina."

"The offer represents a 54% premium to Extorre's 20-day volume weighted average price ("VWAP") and an 18% premium to the 60-day VWAP for the period ending June 15, 2012."

TORONTO, ONTARIO -- (MARKET WIRE) -- 06/18/12

YAMANA GOLD INC. (TSX:YRI)(NYSE:AUY)(LSE:YAU) ("Yamana" or the "Company") today announced that it has entered into a definitive agreement (the "Agreement") with Extorre Gold Mines Limited (TSX:XG)(NYSE Amex:XG)(NYSE MKT:XG)(FRANKFURT:E1R) ("Extorre") whereby Yamana will acquire all of the issued and outstanding common shares of Extorre. Extorre is a mining company with exploration and development stage precious metals projects, the most advanced of which is its Cerro Moro project, a high grade, gold silver deposit with approximately 1.36 million ounces of gold equivalent indicated mineral resources and 1.05 million ounces of gold equivalent inferred mineral resources, located in the province of Santa Cruz in Argentina.

Under the terms of the Agreement, each Extorre shareholder will receive $4.26 per share comprised of $3.50 in cash and 0.0467 of a Yamana common share for each Extorre common share held. The offer represents a 54% premium to Extorre's 20-day volume weighted average price ("VWAP") and an 18% premium to the 60-day VWAP for the period ending June 15, 2012. The transaction value, net of cash and on a basic shares outstanding basis, is approximately $395 million, representing approximately 3% of Yamana's pro-forma market capitalization.

"For the past few years, Yamana has been focused on organic growth and we plan to continue with this strategic direction moving forward. We have recently indicated Yamana would consider tuck-in acquisitions in mining-friendly and familiar jurisdictions that fit our other criteria including opportunity for organic growth, accelerated path to development and production and high return. Extorre represents one of these opportunities. It is a relatively small transaction in that it represents only 3% of Yamana's market capitalization yet it could ultimately deliver more than 10% of our total gold equivalent production," commented Peter Marrone, Chairman and Chief Executive Officer. "It is rare to find such a small transaction that could contribute meaningfully to increases in net asset value, production and cash flow. While this represents only 3% of market capitalization, it could contribute to a multiple of that in cash flow growth. In our view, it is one of the best undeveloped, high-grade opportunities in the Americas. Further, Yamana has the operational, jurisdictional, and financial strength to advance the project on a timely basis which will be beneficial for all stakeholders involved. In addition, this represents significant value to Extorre shareholders in terms of both cash and continuing participation in Yamana shares."

Completion of the transaction is subject to approval by Extorre shareholders and other customary conditions, including court approvals and the receipt of all necessary regulatory approvals. The transaction is expected to close in August 2012.

Yamana's financial advisors in relation to the transaction are Barclays Capital and CIBC World Markets Inc. Its Canadian legal advisor is Cassels Brock and Blackwell LLP and its US legal advisor is Paul, Weiss, Rifkind, Wharton & Garrison LLP. For more details about the transaction please refer to the investor presentation on Yamana's website at www.yamana.com.

(All amounts are expressed in Canadian dollars, unless otherwise indicated)

Cerro Moro

Extorre's principal asset is the 95% owned Cerro Moro project, an advanced stage, high grade vein system located in the Santa Cruz province of Argentina. The project covers 177 square kilometres and is located approximately 70 kilometres southwest of the coastal port city of Puerto Deseado, and 130 kilometres east of the Cerro Vanguardia gold silver mine. In April 2012, Extorre released a preliminary economic assessment ("PEA-3") for Cerro Moro that outlined a possible 1,150 tonnes per day ("tpd") or 1,300 tpd combined open pit and underground mining operation that could potentially produce gold equivalent production of 248,000 ounces per year at cash costs of $303/ gold equivalent ounce (first five years).

Current resources are summarized as follows:
Tonnage Grade (g/t) Contained Material

---------- ---------------------- -----------------------------

Mt Au Ag GEO koz, Au Moz, Ag kGEO

Indicated 2.43 7.4 498.8 17.4 578 38.9 1,356

Inferred 4.75 3.5 172 6.9 528 26.2 1,053

(i)Gold equivalent ounces ("GEO") are calculated on the basis of a 50:1

ratio between gold and silver.

For additional details on the Cerro Moro project, please see the technical report entitled "Preliminary Economic Assessment for The Cerro Moro Gold-Silver Project, Santa Cruz Province, Argentina," dated March 30, 2012 and co-authored by Carlos Guzman, Mining Eng., Registered Member of the Chilean Mining Commission, Bill Gosling, BSc Eng., MBA, FAusIMM, David (Ted) Coupland, BSc, DipGeoSc CFSG ASIA, MAusIMM (CP), Anthony Sanford, BSc, MBA, SACNASP Pr.Sci.Nat., Krishna Sinha, P. Eng., Utah and Michael Gabora, P. Geo, Ontario. A copy of the technical report can be obtained from SEDAR at www.sedar.com.

About Yamana

Yamana is a Canadian-based gold producer with significant gold production, gold development stage properties, exploration properties, and land positions in Brazil, Argentina, Chile, Mexico and Colombia. Yamana plans to continue to build on this base through existing operating mine expansions, throughput increases, development of new mines, the advancement of its exploration properties and by targeting other gold consolidation opportunities with a primary focus in the Americas