YAMANA GOLD INC. (TSX:YRI; NYSE:AUY) (“Yamana” or “the Company”) is
pleased to announce the results of the pre-feasibility study
(“PFS”) on the Agua Rica project in the Catamarca Province of
Argentina.
Pre-Feasibility Study
Highlights
- Proven and probable copper mineral reserves increased from
year-end 2018 by 21% to 11.8 billion pounds and gold mineral
reserves increased by 12% to 7.4 million ounces
- Initial long mine life of 28 years
- Annual production for the first 10 full years increased to 533
million pounds of copper equivalent(1) production
- Cash costs decreased to $1.29 per pound and all-in sustaining
costs (“AISC”)(2) decreased to $1.52 per pound for the first 10
years of production
- Net present value (“NPV”) increased to $1.935 billion with an
increased after-tax internal rate of return (“IRR”) of
19.7%(3)
- Full feasibility study expected to be completed by 2020
The positive PFS results follow the March 7,
2019, announcement of a definitive integration plan between
Yamana, Glencore International AG (“Glencore”), and Newmont
Goldcorp Corporation (“Newmont Goldcorp”) (collectively
the “Parties”), which contemplates the development and
operation of the Agua Rica project using the infrastructure
and facilities of Minera Alumbrera Ltd. (“Alumbrera”),
realizing important synergies, lowering initial capital
required, and reducing the environmental footprint.
(All amounts are expressed in United States
Dollars unless otherwise indicated.)
- Copper equivalent metal includes copper with gold, molybdenum,
and silver converted to copper-equivalent metal based on the
following metal price assumptions: $6,614 per tonne of copper,
$1,250 per ounce for gold, $24,250 per tonne for molybdenum, and
$18.00 per ounce for silver.
- Refers to a non-GAAP financial measure. Please see the
discussion included at the end of this press release under the
heading “Non-GAAP Financial Measures”.
- Assuming metal prices of $3.00 per pound of copper, $1,300 per
ounce of gold price, $18.00 per ounce of silver, $11.00 per pound
of molybdenum and using an 8% discount rate.
The integration plan
generates significant synergies and lowers execution
risk by bringing together the extensive mineral resource of
Agua Rica with the existing infrastructure of Alumbrera to create a
unique, high quality, and low risk brownfield project
that the Parties believe will bring significant
value to shareholders and local communities and stakeholders. This
unique and innovative project will serve to position Catamarca as a
focal point for development in northwestern Argentina.
The Parties are pleased to
have collectively advanced the integration of Agua Rica
and Alumbrera and now to have advanced the PFS under the
oversight and with the support of a technical committee comprised
of their respective representatives. The Parties also recognize and
appreciate the collaboration of the national government of
Argentina and provincial government of Catamarca, along with
several state-owned entities, which led to the integration plan
thereby supporting advancing the project with the PFS.
Based on mineral reserves updated as at June 30,
2019, the PFS estimates a mine life of 28 years with average annual
production over the first 10 years of approximately 533 million
pounds of copper equivalent(1) including 107,000 ounces of gold and
contributions of molybdenum and silver. Costs are expected to
fall well within the lower half of the cost curve, with average
cash costs over the first 10 years estimated at $1.29 per pound and
competitive AISC(2) of $1.52 per pound for the same
period.
The initial capital cost estimate of $2.4
billion realizes significant synergies from using the
infrastructure and facilities of Alumbrera. The project is
expected to generate strong economic returns with an after-tax NPV
at an 8% discount rate (a discount rate that is consistent with
other investments in country and the brown fields nature of the
project) of $1.935 billion, and an after-tax IRR of 19.7%, assuming
a copper price of $3.00 per pound (“base case”).
Opportunities to further improve the economics will be evaluated in
a value-seeking study scheduled for 2019 and the full feasibility
study expected by 2020.
Parameter |
Base Case |
Comparison to RPM 2014 Study(5) |
Life of Mine (years) |
|
28 |
|
Increased |
Contained copper equivalent production
(pounds)(1) |
|
|
First 10 full years (millions) |
|
533 |
|
Increased |
Life of Mine (millions) |
|
452 |
|
Increased |
Throughput (tonnes per day, “tpd”) |
|
110,000 |
|
- |
Strip ratio (tonnes waste: tonnes ore) |
|
|
First 10 full years |
|
2.43 |
|
Improved |
Life of Mine |
|
1.66 |
|
Improved |
Costs per tonne of ore processed (Life of
Mine) |
|
|
Mining |
$ |
4.87 |
|
- |
Process Plant |
$ |
5.53 |
|
- |
G&A |
$ |
0.87 |
|
- |
Others (including freight and royalties) |
$ |
2.05 |
|
- |
Total Operating Cost |
$ |
13.32 |
|
Improved |
Cash costs(2) (per pound) |
|
|
First 10 full years |
$ |
1.29 |
|
- |
Life of Mine |
$ |
1.34 |
|
- |
AISC(2) (per pound) |
|
|
First 10 full years |
$ |
1.52 |
|
- |
Life of Mine |
$ |
1.54 |
|
- |
Capital Costs |
|
|
Initial Capex (millions) |
$ |
2,386 |
|
- |
Sustaining Capex (millions) |
$ |
1,537 |
|
- |
Concentrate Grade (Life of Mine) |
|
|
Copper |
|
25.2 |
% |
- |
Gold |
|
4.5 g/t |
|
- |
Silver |
|
74.7 g/t |
|
- |
Molybdenum |
|
50.0 |
% |
- |
NPV(3,4) (millions) |
$ |
1,935 |
|
Improved |
After-Tax IRR(3) |
|
19.7 |
% |
Improved |
Annual EBITDA(2) |
|
|
First 10 full years (millions) |
$ |
773 |
|
Increased |
Life of Mine (millions) |
$ |
610 |
|
Increased |
- Copper equivalent metal includes copper with gold, molybdenum,
and silver converted to copper-equivalent metal based on the
following metal price assumptions: $6,614 per tonne of copper,
$1,250 per ounce of gold, $24,250 per tonne of molybdenum, and
$18.00 per ounce of silver.
- Refers to a non-GAAP financial measure. Please see the
discussion included at the end of this press release under the
heading “Non-GAAP Financial Measures”.
- Assuming metal prices of $3.00 per pound of copper, $1,300 per
ounce of gold price, $18.00 per ounce of silver, $11.00 per pound
of molybdenum.
- Assuming an 8% discount rate.
- Independent Engineering Review of the Agua Rica project, Runge
Pincock Minarco, dated December 9, 2014.
Sensitivities to copper price are presented in
the table below with each $0.25 increase per pound of copper
equating to a more than $500 million increase in NPV versus the
base case. The strong financial projections of the base case,
the project resilience to lower copper prices, and its leverage to
higher metal prices, in addition to the potential for optimizations
of the project in the next stages of design, present an opportunity
for the Parties to realize significant value from this high quality
project.
Copper Price (per pound) (1) |
$ |
2.50 |
|
$ |
2.75 |
|
|
$3.00 (4) |
|
$ |
3.25 |
|
$ |
3.50 |
|
Based on Reserves (100% basis) |
|
|
|
|
|
NPV(2) (millions) |
$ |
901 |
|
$ |
1,421 |
|
$ |
1,935 |
|
$ |
2,446 |
|
$ |
2,955 |
|
After-Tax IRR (%) |
|
13.8 |
% |
|
16.9 |
% |
|
19.7 |
% |
|
22.5 |
% |
|
25.1 |
% |
Annual EBITDA(3) (millions) |
|
|
|
|
|
First five full years |
$ |
689 |
|
$ |
803 |
|
$ |
918 |
|
$ |
1,033 |
|
$ |
1,148 |
|
First 10 full years |
$ |
568 |
|
$ |
670 |
|
$ |
773 |
|
$ |
875 |
|
$ |
977 |
|
Life of Mine |
$ |
442 |
|
$ |
526 |
|
$ |
610 |
|
$ |
694 |
|
$ |
778 |
|
- Metal price assumptions include gold price $1,300 per ounce,
silver price $18.00 per ounce, molybdenum $11.00 per pound.
- Discount rate of 8%.
- Refers to a non-GAAP financial measure. Please see the
discussion included at the end of this press release under the
heading “Non-GAAP Financial Measures”.
- Base case assumption.
The PFS assumes a throughput rate of 110,000 tpd
with scenarios considering a higher throughput rate to be evaluated
in the value-seeking study and subsequent full feasibility study.
Preliminary evaluations have indicated the potential for
significant upside to the project economics from increases to
throughput with existing mineral reserves to 115,000 tpd, which
would improve NPV to over $145 million and require only a marginal
increase to initial capital.
The PFS significantly advances Agua Rica and
underscores Agua Rica as a long-life, low-cost project with robust
economics and significant upside potential. Opportunities to
realize further upside include converting economic-grade inferred
mineral resources within the pit and expanding throughput scenarios
to increase metal production and returns, among others.
The Parties have undertaken
considerable preliminary work to ensure the highest standards of
environmental protection. The environmental design criteria have
been defined using the best practices of the mining industry,
international guidelines, legal requirements, and
corporate policies with the sole objective to prevent or minimize
impacts to the environment, while embracing the
unique characteristics of the region.
About the Agua Rica – Alumbrera
Integrated Project
Agua Rica is a large-scale copper, gold, silver,
and molybdenum deposit located in the Catamarca Province,
Argentina, 25 kilometres north of Andalgalá. The project has proven
and probable mineral reserves of 11.8 billion pounds of copper and
7.4 million ounces of gold contained in 1.104 million tonnes of
ore. Mineral resources include 260,000 tonnes of measured and
indicated mineral resources, containing more than 1.6 billion
pounds of copper and 954,000 ounces of gold. Additionally,
inferred mineral resources of 743,000 tonnes represent significant
upside potential to further define an increase to mineral reserves
and life of mine.
The PFS for the integrated project considers the
Agua Rica deposit will be mined via a conventional high tonnage
truck and shovel open pit operation. Average life of mine
material moved is expected to be approximately 108 million tonnes
per year, with ore feed of 40 million tonnes per year and average
life of mine strip ratio of 1.66.
Ore extracted from the mine will be transported
from the open pit by truck to the primary crusher area and then
transported via a conventional conveyor to the existing Alumbrera
processing plant. To route the overland conveyor system,
approximately 5.2 kilometres of tunnel development will be
required. The conveyor extends 35 kilometres to the Alumbrera
process plant, where it will feed the existing stacker conveyor via
a new transfer station.
Relatively modest modifications to the circuit
are needed to process the Agua Rica ore in order to produce copper
and by-products concentrate, which will then be transported to the
port for commercialization. An in-situ blending strategy has
been defined to manage the concentrate quality over certain years
of the mine life, which will allow the project to achieve the
desired targets. Further optimizations to this strategy will be
studied in the next design phase.
The mineral reserves pit contains 160 million
tonnes of inferred mineral resources classified as waste in the
base case. The majority of this material is not scheduled to be
mined until late in the mine life and could displace lower grade
material within the pit, representing an immediate opportunity to
improve the base case by increasing average annual production if
the inferred mineral resources can be converted to mineral
reserves.
The high quality and well-preserved existing
infrastructure of Alumbrera is fully utilized in the integration.
Tailings storage facility, power supply, water supply, ancillary
buildings, and logistical installations, among other
infrastructure, are all included. This significantly reduces
the environmental footprint of the project. Given the level
of progress achieved in the PFS, the Parties have begun the process
to prepare the Environmental Impact Assessment (“EIA”) for the
integrated project, as well as continuing engagement with local
stakeholders and local communities.
The Company plans to commence a review of
strategic and value-creating alternatives in the interests of
advancing the project to development. This review may be
commenced as soon as this year and continue through the period that
a full feasibility study is advanced. Any additional upside
opportunities for the project that will be considered as part of
the feasibility study will be taken into account as part of this
review. The project represents exceptional value across many fronts
already, which is expected to improve with the upside
opportunities.
The Parties will continue to work in close
consultation with local communities, governments, and Catamarca
authorities to ensure project design adheres to strict permitting
standards that reduce Agua Rica’s environmental footprint. In
addition, the project will implement the Mining Association of
Canada’s Towards Sustainable Mining Protocols, a rigorous
performance management system that helps mining companies evaluate
and manage their environmental and social responsibilities. Agua
Rica also plans to renew its ISO 14001 and OSHAS 18001
certifications and continue to engage extensively with local
communities and promote diversity and shared values in the
region.
Other News - Early Results of Previously Announced Cash
Tender Offer of Notes
The Company reported today that it has received
$462,420,000 of notes tendered under its note purchase offering,
which now allocates in full the cash reserved toward its debt
reduction plan. This well positions the Company toward achieving
its goal of meaningfully retiring outstanding debt and thereby
significantly improving its financial position in order to pursue
organic growth and value creating opportunities including the
opportunity that the integrated Agua Rica project represents.
Mineral Reserve Statement, Agua Rica
Project
|
Proven Mineral Reserves |
Probable Mineral Reserves |
Total Proven & Probable |
|
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
Gold |
587,200 |
0.25 |
4,720 |
517,600 |
0.16 |
2,663 |
1,104,800 |
0.21 |
7,382 |
Silver |
587,200 |
3.02 |
57,014 |
517,600 |
2.63 |
43,766 |
1,104,800 |
2.84 |
100,781 |
|
|
|
|
|
|
|
|
|
|
|
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
Copper |
587,200 |
0.57 |
4,779 |
517,600 |
0.43 |
4,450 |
1,104,800 |
0.48 |
11,829 |
Molybdenum |
587,200 |
0.03 |
279 |
517,600 |
0.03 |
342 |
1,104,800 |
0.03 |
731 |
Mineral Resource Statement, Agua Rica
Project
|
Measured Mineral Resources |
Indicated Mineral Resources |
Total Measured & Indicated |
|
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
Gold |
53,600 |
0.13 |
224 |
206,300 |
0.11 |
730 |
259,900 |
0.11 |
954 |
Silver |
53,600 |
1.55 |
2,671 |
206,300 |
1.80 |
12,337 |
259,900 |
1.80 |
15,008 |
|
|
|
|
|
|
|
|
|
|
|
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
Copper |
53,600 |
0.22 |
260 |
206,300 |
0.30 |
1,364 |
259,900 |
0.28 |
1,624 |
Molybdenum |
53,600 |
0.02 |
24 |
206,300 |
0.03 |
136 |
259,900 |
0.03 |
160 |
|
Inferred Mineral Resources |
|
Tonnes |
Grade |
Contained |
|
(000's) |
(g/t) |
oz. (000's) |
Gold |
742,900 |
0.09 |
2,150 |
Silver |
742,900 |
1.62 |
38,693 |
|
|
|
|
|
Tonnes |
Grade |
Contained |
|
(000's) |
(%) |
lbs (mm) |
Copper |
742,900 |
0.23 |
3,767 |
Molybdenum |
742,900 |
0.03 |
491 |
Mineral Reserve and Mineral
Resource Reporting Notes
Mineral
Reserves |
Mineral Resources |
Open pit mineral reserves are reported at a variable cut off value,
which averages $8.42/t. The cut off value is based on metal
assumptions of $3.00/lb for copper, $1,250/oz for gold, $18.00/oz
for silver, and $11.00/lb for molybdenum. A life of mine average
open pit costs of $1.72/t moved, processing and G&A cost of
$6.70/t of run of mine processed. The strip ratio of the mineral
reserves is 1.66 with overall slope angles varying from 39 to 45
degrees depending on the geotechnical sector. |
Mineral resources are constrained by an optimized pit shell based
on a metal assumption of $4.00/lb for copper, $1,600/oz for gold,
$24.00/oz for silver, and $11.00/lb for molybdenum. Open pit
mineral resources are reported at a variable cut off value, which
averages $8.42/t with overall slope angles varying from 39 to 45
degrees depending on the geotechnical sector. |
- Mineral reserves and mineral resources are estimated using a
variable metallurgical recovery. A life of mine average
metallurgical recoveries are 86% for copper, 35% for gold, 43% for
silver and 44% for molybdenum were considered.
- CIM (2014) definitions were followed for mineral reserves
and mineral resources.
- All mineral resources are reported exclusive of mineral
reserves.
- Mineral resources which are not mineral reserves do not have
demonstrated economic viability.
- Mineral reserves and mineral resources are reported as of June
30, 2019.
- Due to rounding, numbers may not add precisely to the
totals.
- Mineral reserves QP, Giorgio de Tomi, MIMMM CEng. Member of the
Institute of Minerals, Materials and Mining (UK), and Chartered
Engineers (UK) of MCB Serviços e Mineração Ltda., consultants to
Yamana. Mineral resources QP, Felipe Machado de Araújo, Registered
Member of Chilean Mining Commission, former employee of
Yamana.
Qualified Persons
Scientific and technical information contained
in this news release has been reviewed and approved by Anthony
Maycock, P. Eng, of MM Consultores Limitada, who is a "Qualified
Person" as defined by Canadian Securities Administrators' National
Instrument 43-101 - Standards of Disclosure for Mineral
Projects.
About Yamana
Yamana is a Canadian-based gold, silver and
copper producer with a significant portfolio comprised of operating
mines, development stage projects, and exploration and mineral
properties throughout the Americas, mainly in Canada, Brazil, Chile
and Argentina. Yamana plans to continue to build on this base
through expansion and optimization initiatives at existing
operating mines, development of new mines, the advancement of its
exploration properties and, at times, by targeting other
consolidation opportunities with a primary focus in the
Americas.
FOR FURTHER INFORMATION PLEASE CONTACT:Investor Relations
416-815-02201-888-809-0925Email: investor@yamana.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS: CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This news release contains or incorporates
by reference “forward-looking statements” and “forward-looking
information” under applicable Canadian securities legislation
within the meaning of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking information
includes, but is not limited to information with respect to the
Agua Rica project and the Alumbrera mine, and the Parties strategy,
plans and future financial or operating performance for the
integration referred to herein. Forward-looking statements are
characterized by words such as “plan,” “expect”, “budget”,
“target”, “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, assumptions and estimates of management
considered reasonable at the date the statements are made, and are
inherently subject to a variety of risks and uncertainties and
other known and unknown factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. These factors include the
Parties’ expectations in connection with the development,
exploration and construction plans for the integrated Agua Rica and
Alumbrera discussed herein being met, and the impact of general
business and economic conditions, global liquidity and credit
availability on the timing of cash flows and the values of assets
and liabilities based on projected future conditions, fluctuating
metal prices (such as gold, copper, silver, zinc and molybdenum),
currency exchange rates (such as the Argentine peso versus the
United States dollar), the impact of inflation, possible variations
in ore grade or recovery rates, hedging programs, changes in
accounting policies, changes in Mineral Resources and Mineral
Reserves, risks related to other investments, risks related to
metal purchase agreements, risks related to acquisitions, changes
in project parameters as plans continue to be refined, changes in
project development, construction, production and commissioning
time frames, unanticipated costs and expenses, higher prices for
fuel, steel, power, labour and other consumables contributing to
higher costs and general risks of the mining industry, failure of
plant, equipment or processes to operate as anticipated, unexpected
changes in mine life, final pricing for concentrate sales,
unanticipated results of future studies, seasonality and
unanticipated weather changes, costs and timing of the development
of new deposits, success of exploration activities, permitting
timelines, government regulation and the risk of government
expropriation or nationalization of mining operations, risks
related to relying on local advisors and consultants in foreign
jurisdictions, environmental risks, unanticipated reclamation
expenses, risks related to fiscal stability agreements, risks
relating to joint venture operations, title disputes or claims,
limitations on insurance coverage and timing and possible outcome
of pending and outstanding litigation and labour disputes, risks
related to enforcing legal rights in foreign jurisdictions, as well
as those risk factors discussed or referred to herein and in the
Parties filings with applicable securities regulatory authorities
and publically available. Although the Parties have 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. The Parties undertake no obligation to update
forward-looking statements if circumstances or management’s
estimates, assumptions or opinions should change, except as
required by applicable law. The reader is cautioned not to place
undue reliance on forward-looking statements. The forward-looking
information contained herein is presented for the purpose of
assisting investors in understanding the Parties’ expected plans
and objectives and may not be appropriate for other purposes.
NON-GAAP FINANCIAL MEASURESThe Company has
included certain non-GAAP performance measures in this press
release, including the following:
- Cash Costs per pound of copper
sold;
- All-in Sustaining Costs per pound
of copper sold;
- EBITDA
The Company believes that these measures,
together with measures determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying
performance of the Company. Non-GAAP financial measures do not have
any standardized meaning prescribed under IFRS, and therefore they
may not be comparable to similar measures employed by other
companies. The data is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. Management's determination of the components of
non-GAAP and additional measures are evaluated on a periodic basis
influenced by new items and transactions, a review of investor uses
and new regulations as applicable. Any changes to the
measures are duly noted and retrospectively applied as
applicable.
CASH COSTS AND ALL-IN SUSTAINING
COSTS
The Company discloses “Cash Costs” because it
understands that certain investors use this information to
determine the Company’s ability to generate earnings and cash flows
for use in investing and other activities. The Company
believes that conventional measures of performance prepared in
accordance with IFRS do not fully illustrate the ability of its
operating mines to generate cash flows. The measures, as
determined under IFRS, are not necessarily indicative of operating
profit or cash flows from operating activities.
The measure of Cash Costs and All-in Sustaining
Costs (AISC), along with revenue from sales, is considered to be a
key indicator of a company’s ability to generate operating earnings
and cash flows from its mining operations. This data is furnished
to provide additional information and is a non-GAAP financial
measure. The terms Cash Costs per pound of copper sold, and AISC
per pound of copper sold do not have any standardized meaning
prescribed under IFRS, and therefore they may not be comparable to
similar measures employed by other companies. Non-GAAP financial
measures should not be considered in isolation as a substitute for
measures of performance prepared in accordance with IFRS and are
not necessarily indicative of operating costs, operating profit or
cash flows presented under IFRS.
Cash Costs include mine site operating costs
such as mining, processing, administration, production taxes and
royalties which are not based on sales or taxable income
calculations, but are exclusive of amortization, reclamation,
capital, development and exploration costs. The Company
believes that such measure provides useful information about its
underlying Cash Costs of operations. Cash Costs are computed
on a weighted average basis as follows:
- Cash Costs of copper - shown
on a per pound basis. Costs directly attributable to GEO and copper
will be allocated on that attributable basis. Non-attributable
costs will be allocated based on the relative value of revenues for
each metal, which will be determined annually at the beginning of
each year. Costs attributable to copper sales are divided by
commercial copper pounds sold.
AISC figures are calculated in accordance with a
standard developed by the World Gold Council (“WGC”) (a
non-regulatory, market development organization for the gold
industry). Adoption of the standard is voluntary and the cost
measures presented herein may not be comparable to other similarly
titled measures of other companies.
AISC per sold seeks to represent total
sustaining expenditures of producing and selling. The total costs
used as the numerator of the unitary calculation represent Cash
Costs (defined above) and includes cost components of mine
sustaining capital expenditures including stripping and underground
mine development, corporate and mine-site general and
administrative expense, sustaining mine-site exploration and
evaluation expensed and capitalized and accretion and amortization
of reclamation and remediation. AISC do not include capital
expenditures attributable to projects or mine expansions,
exploration and evaluation costs attributable to growth projects,
income tax payments, borrowing costs and dividend payments.
Consequently, this measure is not representative of all of the
Company's cash expenditures. In addition, the calculation of AISC
does not include depletion, depreciation and amortization expense
as it does not reflect the impact of expenditures incurred in prior
periods.
- AISC per pound of copper -
reflect allocations of the aforementioned cost components on the
basis that is consistent with the nature of each of the cost
component to GEO or copper production activities.
EBITDA
EBITDA is a non-GAAP financial measure, which
excludes the following from net earnings:
• Income tax expense; • Finance costs; and •
Depletion, depreciation and amortization.
Management believes that EBITDA is a valuable
indicator of the Company’s ability to generate liquidity by
producing operating cash flow to fund working capital needs,
service debt obligations, and fund capital expenditures. Management
uses EBITDA for this purpose. EBITDA is also frequently used by
investors and analysts for valuation purposes whereby EBITDA is
multiplied by a factor or “EBITDA multiple” that is based on an
observed or inferred relationship between EBITDA and market values
to determine the approximate total enterprise value of a
company.
Yamana Gold (NYSE:AUY)
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