In an effort to create shareholder value and better monetize certain non-core assets in Brazil, Yamana Gold, Inc. (AUY) on Tuesday announced plans to spin-off its Brio Gold subsidiary into a standalone publicly traded company.

In a statement Tuesday, the Toronto-based gold exploration company said that the spin-off will allow it to "better focus on its portfolio of six, soon to be seven, producing mines in top mining jurisdictions and on its organic growth pipeline." The company has already filed a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada in connection with the secondary offering. (See also: What's Behind Yamana Gold's 18% One-Month Decline?)

The company said it will give shareholders an opportunity to buy each share of Brio Gold it holds. The price of each Brio share will be determined by market conditions, which will be outlined in a final prospectus. Completion of the Spin-off will also enable Yamana to better focus on its portfolio of six, soon to be seven, producing mines in top mining jurisdictions and on its organic growth pipeline, Yamana said in the press release.

Yamana will use the proceeds from the spin-off to support its debt-reduction efforts and to give it the financial flexibility to pursue its business plan and strategic objectives. As of the most recent quarter, Yamana had a net debt position of about $1.5 billion. Its shares have plunged more than 36% over the past three months as gold prices declined below $1,300 per ounce.

On Tuesday, Yamana shares rose as much as 3.5%, thanks to the news of the spin-off and the rising gold prices. Gold prices closed up 0.02% $1,263.10 on Tuesday on the back of a softer dollar. Gold becomes more attractive for foreign investors because it is dollar-denominated and more affordable to own. (See also:Yamana Gold Rises With Higher Gold Prices.)

Yamana shares closed on Tuesday at $3.79, up 2.71%. Despite the recent weakness, the shares are still up 104% year-to-date, compared with a 4.36% rise in the S&P 500 (SPX) index.

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