YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:AUY) (“Yamana” or “the
Company”) is pleased to announce the following updates.
- At Wasamac, exploration has defined
an entirely new shear zone which demonstrates the excellent
exploration potential and opportunity to further grow the mineral
inventory and support a production platform of 200,000 ounces per
year over a mine life of at least 15 years, significantly improving
the approved development plan of an average of 169,000 ounces per
year over a mine life of 10 years, thereby meaningfully increasing
overall value.
- At Odyssey, continuing exploration
successes support the longer term potential for higher annual
production than the currently contemplated average annual
production of 545,000 ounces (100% basis) from 2029 onward and for
extending mine life beyond 2039.
- At Jacobina, the Phase 2 expansion
is progressing ahead of schedule with permitting now expected by
early 2022 which would advance the Company’s second phase expansion
to a production level of 230,000 ounces per year for multi-decades
at low cost and high cash flow.
- At Minera Florida, the Environmental and Social Impact
Assessment (“ESIA”) has been submitted and with expected permitting
timelines, the mine could begin operating at a planned 100,000
tonnes per month by 2025 and producing 120,000 ounces per
year.
Wasamac: New Mineralized Zones
Discovered, Initiating Permitting for the Bulk Sample, Engineering
Advancing
Wasamac is a development-stage underground gold
project located 15 kilometres west of Rouyn-Noranda in the prolific
Abitibi-Témiscamingue region of the mining-friendly province of
Quebec. The project is well located, adjacent to the Trans-Canada
highway and 100 kilometres west of the Company’s 50%-owned Canadian
Malartic mine.
Exploration
Exploration drilling at Wasamac continues to
deliver promising results. An exploration hole WS-21-524, drilled
south of the Wildcat zone testing targets from the 2021 magnetic
susceptibility survey, intersected two new mineralized zones,
referred to as South Wildcat. The first is a zone of shearing and
quartz carbonate stockwork in altered mafic volcanic rocks
intercepted at a downhole depth of 402.93 metres, which returned
7.31 grams per tonne (“g/t”) of gold over an estimated true width
of 3.37 metres (please see Figure 1 below). The drill hole ended in
a wide zone of shearing and strong alteration with anomalous gold
grades including 2.3 g/t of gold over a core length of 0.6 metres
and 1.3 g/t of gold over a core length of 0.3 metres. This drill
hole demonstrates the excellent potential of the area south of the
Wasamac shear and north of the Cadillac Tectonic zone and follow-up
drilling is planned for early 2022.
Figure 1: Wasamac Project, Map of
Wildcat Target with Recent Drill Highlights at South
Wildcat.https://www.globenewswire.com/NewsRoom/AttachmentNg/d3429f96-775e-4a4a-a7a1-9b5557bdeeb7
The Company believes that the discovery of the
two new parallel mineralized structures in between the Wasamac
shear and the Cadillac Tectonic zone is further evidence of the
excellent geological upside on the large Wasamac property, and it
plans to continue the drilling programs to grow the mineral
inventories with an accelerated program. These results are aligned
with the Company’s strategic objective to achieve a production
platform of 200,000 ounces per year over a mine life of at least 15
years. Furthermore, the Wasamac project further solidifies the
Company’s long-term growth profile with a top-tier gold project in
Quebec’s Abitibi-Témiscamingue Region, where Yamana has deep
operational and technical expertise.
Yamana’s average annual gold production in
Quebec, including production from Wasamac and the Odyssey
underground at Canadian Malartic, has the potential to increase to
approximately 500,000 ounces by 2028, and continue at this level
through at least 2041.
“The discovery of a new shear zone and further
exploration successes support our higher annual production plan of
200,000 ounces over a longer mine life now expected to be fifteen
years” said Yohann Bouchard, Senior Vice President and Chief
Operating Officer.
Initiating Permitting for the Bulk Sample
The Company has decided to advance the bulk
sample permitting process for Wasamac and expects to obtain the
required permitting in the first quarter of 2023. The bulk sample
permit would allow construction to commence on the ramp enabling
earlier access to the deposit in order to increase the level of
confidence in metallurgical and geotechnical assumptions and
optimize the processing flow sheet and mining sequence.
Construction on surface facilities to support the ramp development
activity and associated environmental requirements would also
advance.
The bulk sample was not considered in the
feasibility study base case and initiating the process has the
potential to further enhance the economics and mitigate risks of
the project. Additional benefits of the bulk sample include:
- Build production ready models for
the grade, recovery, and geotechnical aspects of the project, to
support the first three years of production.
- Capture opportunities to optimize
the processing performance, as preliminary results of optimization
studies indicate the potential to improve average gold recovery by
3%, and up to 5.5% for certain zones of the deposit.
- Confirm stope stability parameters
to optimize stope dimensions, backfilling strategy and mining
sequence while contributing to ensuring a safe working
environment.
- Establish drilling platforms to
perform delineation and exploration drilling at Wasamac, Wildcat
and new zones from underground.
Project Engineering and Optimization
A program has been implemented to improve
recovery, simplifying the process and to better understand the
metallurgy of the different areas of the deposit. Preliminary
testing indicates that average gold recovery could potentially
increase by approximately 3% as compared to the feasibility
study.
Substantial work is also underway to select the
leading technologies available for the development and operation of
Wasamac. The key objectives remain to increase worker safety,
minimize impact on the environment and the community, reduce
consumption of non-renewable energy and improve energy efficiency.
Technologies under evaluation include electric production vehicles,
autonomous vehicles, bio-lubricants and ventilation on demand.
The Company relies on a collaborative approach
to ensure the success of Wasamac. In this regard, our environmental
assessment process is conducted in collaboration with our
neighbors, stakeholders and First Nations. A community relations
office has now been established to further facilitate ongoing
engagement with local residents and accessibility to the Company's
team, as well as providing up-to-date information on the project. A
campaign of environmental baseline monitoring and testing is
currently underway with the objective of completing the
Environmental Impact Assessment (“EIA”) by the second quarter of
2022.
Odyssey: Development Advancing with
Continued Exploration Success
Yamana and Agnico Eagle Mines Ltd., who each
hold a 50% interest in the Canadian Malartic General Partnership
(“the Partnership”), owner and operator of the Canadian Malartic
mine, announced a positive construction decision for the Odyssey
underground project at Canadian Malartic on February 11, 2021.
The project has advanced significantly
throughout 2021, with several milestones achieved in the past
several months. In October, the concrete pour to construct the
93-metre-tall headframe was completed on schedule, in preparation
for shaft sinking to begin in 2022. The production shaft will be
6.5 metres in diameter and 1,800 metres deep, with the first of two
loading stations at 1,135 metres below surface.
In parallel, the ramp from surface to the upper
zones is advancing according to plan and, as of the end of
November, the ramp heading is approximately 250 metres below
surface. By the end of the year, the ramp is expected to be at the
elevation of the third production level and the base of the first
stoping horizon. Underground development is planned to increase in
2022 with the opening of additional headings and the addition of
Canadian Malartic development crews to complement the existing
contractor crews. As an employer of choice in the Abitibi, the
Odyssey project is successfully building a highly skilled team. The
first underground ore from Odyssey South is on track to be
processed through the existing Canadian Malartic plant in early
2023.
The combination of shaft hoisting from the lower
zones of East Gouldie and Odyssey North with truck haulage from the
upper zones of Odyssey South and East Malartic supports an
underground production rate of 19,500 tonnes per day (“tpd”) when
operating at full capacity. Additionally, the mineralization
geometry and very good rock quality are ideal for bulk mining. The
East Gouldie zone in particular is at least one kilometre in
height, one kilometre in strike length and typically 15 metres
wide, with maximum widths of up to 80 metres. Infill drilling
confirms that grade continuity throughout the deposit is excellent.
As such, large stopes of 30 to 50 metres high by 20 metres wide are
achievable.
One of the advantages of the Odyssey project is
that it will utilize the existing processing plant and
infrastructure of the open pit operation. The Canadian Malartic
mill is currently planned to be downsized from approximately 60,000
tpd to 20,000 tpd in 2026 as open pit feed declines, with one ball
mill and two crushers planned to be put in care-and-maintenance.
However, if additional ore sources are identified in future, this
equipment could remain in operation or be re-started at a later
date for possible throughput increases.
Regarding permitting, the process is advancing
according to expectations with the decree modification expected for
Q1 2022 and the mining lease expected for Q4 2022.
Exploration Update
Infill drilling at East Gouldie continues to
return significant values, confirming the continuity, grade and
widths of the mineralization. The Company expects to report first
indicated mineral resources at East Gouldie at year-end.
Additionally, drilling continues to expand the East Gouldie mineral
resource envelope on all sides, which is expected to add inferred
mineral resources at year-end, confirming our view that mine life
is expected to continue far beyond the 2039 mine plan included in
the technical study.
Shallow drilling in the Odyssey and Jupiter
zones is helping define new resources as internal zones proximal to
the Odyssey North and South deposits with most verified drill
results pending.
Exploration drilling continues to test the east
extension of the East Gouldie shear zone where previously reported
results (Please see the press release issued September 7, 2021,
titled ‘Yamana Gold Reports Positive Exploration Results at Its
Producing Mines’, available at www.yamana.com), included 6.29 g/t
of gold over an estimated true width of 4.81 metres (RD21-4678)
that extended the mineralized zone 1,260 metres beyond the reported
East Gouldie mineral resource and RD20-4674 with 3.50 g/t of gold
over an estimated true width of 9.26 metres in a new subparallel
zone, located 400 metres in the footwall for the East Gouldie zone.
Drilling is ongoing and further results from four new deep pierce
points are expected to be reported with year-end results.
In October 2021, the Canadian Malartic
exploration team was presented with the "Discovery of the Year"
Award at the Quebec Mineral Exploration Association virtual 2021
Xplor Convention in recognition for the discovery of the East
Gouldie deposit of the Odyssey mine in September 2018. The
discovery of East Gouldie at depth has significantly changed the
Odyssey project by ensuring its economic viability and providing a
long term production profile beyond the life of the open pit.
Opportunities Providing Upside to the Technical
Study
Gold production from the Odyssey mine is planned
to ramp up from 2023 to 2028 as the Canadian Malartic open pit
operation winds down. The underground operation will be in full
production from 2029, producing an expected 500,000 to 600,000
ounces per year on a 100% basis (Please see the press release
issued February 11, 2021, titled ‘Yamana Gold Reports Strong Fourth
Quarter and Full Year 2020 Results’, and NI 43-101 Technical Report
‘Canadian Malartic Mine, Quebec, Canada’ effective December 31,
2020 available at www.yamana.com or on SEDAR at www.sedar.com).
The technical study completed in December 2020,
demonstrates robust project economics with significant leverage to
higher gold prices and thus supporting the approval for project
construction. The intention of the Partnership was always to build
upon this base case scenario by realizing value enhancement
opportunities improving the production profile and extending mine
life. Throughout 2021, these opportunities have increased in
confidence and definition as a result of the ongoing exploration
success and the rapid advancement of the project.
In the near-term, Canadian Malartic has the
opportunity to improve the gold production profile during the
transition from open pit to underground mining, especially from
2026 to 2028. As a first step, the Barnat pit design was optimized,
adding 290,000 ounces (100% basis) to year-end 2020 open pit
mineral reserves. Processing of the marginal grade stockpile also
remains an opportunity, especially if the gold price remains at
current levels. Furthermore, infill drilling of the Odyssey
Internal zones from the underground ramp in 2021 has defined
potentially mineable zones that are currently not included in the
technical study mine plan and could potentially be mined from the
Odyssey South ramp within the next five years.
In the technical study, gold production during
the 2021 to 2028 construction period is expected at 932,000 ounces
(100% basis), with net proceeds from the sale of these ounces
significantly reducing the capital requirements for the
construction of the project. Assuming a gold price of $1,550 per
ounce, the projected initial expansionary capital of $1.14 billion
over this eight-year period would be reduced in half. Proceeds from
additional underground production, from Odyssey Internal zones or
other, would further reduce capital requirements.
Further opportunities are being evaluated to
extend mine life at a sustainable production rate of 500,000 to
600,000 ounces per year (100% basis). The technical study mine plan
includes 7.3 million ounces, or approximately 50% of the project’s
14.3 million ounces of mineral resources. Increased conversion of
mineral resources and ongoing extension of the mineral resource
envelopes, especially at the higher grade East Gouldie zone,
confirms the Partnership’s view that mine life will continue for
more than 20 years.
Opportunities also exist for supplemental
production sources to increase throughput beyond 20,000 tpd and
utilize the excess process capacity of the 60,000 tpd Canadian
Malartic plant. Exploration drilling of the East Gouldie Extension
and parallel structures, while widely spaced, indicate that a
corridor of mineralization extends at least 1.3 kilometres to the
east of East Gouldie. Although at the very early stages, these
results suggest the potential for a second production shaft that
could increase throughput over the longer term. Open pit and
underground exploration targets within the Canadian Malartic land
package present additional potential ore sources.
Daniel Racine, President and Chief Executive
Officer commented: “Exploration is continuing to deliver exciting
results at Odyssey and we believe that exploration successes will
in time allow the Partnership to take advantage of the excess plant
capacity in order to maximize underground production above
currently planned levels. The possible addition of a second shaft
and further production from upper ore bodies accessed by ramp are
additional opportunities that merit continuing investigation and
assessment.”
Jacobina: Phase 2 Ahead of
Schedule
Phase 2 Expansion
At Jacobina, the Phase 2 expansion is
progressing ahead of schedule. The Company’s second phase expansion
is expected to bring a production level of 230,000 ounces per year
for multi-decades at low cost and high cash flow.
Permitting for throughput of up to 10,000 tpd is
advancing according to plan, with the timeline for completion now
expected by early 2022. Based on this accelerated permitting
progress, the company expects to start producing at the throughput
rate of 8,500 tpd in 2022, significantly ahead of the original 2024
timeline.
The Company expects to achieve the Phase 2
throughput rate of 8,500 tpd by implementing a simplified approach
of debottlenecking and incremental operational improvements,
without requiring the installation of an additional ball mill. This
approach is expected to significantly reduce capital expenditures,
increase energy efficiency, and derisk the project. As such,
capital costs for the plant expansion are expected to be in the
range of $15 million to $20 million as compared to the original $57
million capital cost originally planned.
Throughput during the quarter has remained
stable at the currently permitted level of 7,500 tpd and
preparations are being made to expedite the ramp up to 8,500 tpd as
soon as the new permitting is received. Optimization of the
crushing circuit which did not require the installation of new
equipment has now been completed. Further initiatives which are
expected to be completed during the first half of 2022 include
optimizing the grinding process with the installation of ultrasonic
density meters to optimize ore feed control to the mills and
increasing the capacity of the electro-winning circuit.
The Phase 3 expansion is being evaluated to
increase throughput to 10,000 tpd. Engineering will advance in
parallel with Phase 2, with a feasibility study for Phase 3
scheduled for completion in 2023.
Minera Florida: ESIA
Submitted
At Minera Florida, the plant debottlenecking
study is advancing on schedule with the objective of increasing
mine and plant throughput from 74,500 to 100,000 tonnes per month
and thereby increasing gold production to 120,000 ounces per year.
The Company has now submitted the ESIA with the timeline expected
to be approximately 18 months for approval, with another 12 months
to receive sectorial permits. With the expected permitting
timelines, the mine could begin operating at a planned 100,000
tonnes per month level in 2025.
Qualified PersonsScientific and
technical information contained in this news release has been
reviewed and approved by Sébastien Bernier (P. Geo and Senior
Director, Geology and Mineral Resources). Sébastien Bernier is an
employee of Yamana Gold Inc. and a "Qualified Person" as defined by
Canadian Securities Administrators' National Instrument 43-101 -
Standards of Disclosure for Mineral Projects.
Quality Assurance and Quality
ControlYamana incorporates a Quality Assurance and Quality
Control (“QA/QC”) program for all of its mines and exploration
projects which conforms to industry best practices.
Samples are transported in security sealed bags
for preparation at ALS Geochemistry. ALS and SGS are both ISO
9001:2008 and 17025 certified laboratories. Gold is analyzed by
gold fire assay with 30 grams aliquot and AAS finish (lab code:
Au-AA25). Au-AA25 is certified from 0.01 to 100 g/t gold. Samples
over 100 g/t gold are re-analyzed by gravimetric finish methods.
Silver is determined using a four acid digestion and ICP-MS finish
(ultra trace). The ME-MS61 method we use for silver is certified
0.01 to 100 ppm. Five percent of all pulps are further checked by a
secondary certified laboratory (SGS) using the same ore grade fire
assay analytical method.
All exploration diamond drill cores are split in
half by core sawing and sampled at appropriate intervals for assay.
The remaining core, and pulps are stored on-site in a secure
location. We disposed of the rejects at the lab after the QAQC was
complete.
Certified reference standards, blanks and
duplicates (preparation and analytical) are routinely inserted into
the sample stream as a control for assay accuracy, bias, precision
and contamination. The results of these checks are tracked and
failures are re-analyzed. This information also includes pulp
checks carried out in the secondary lab.
About YamanaYamana Gold Inc. is
a Canadian-based precious metals producer with significant gold and
silver production, development stage properties, exploration
properties, and land positions throughout the Americas, including
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
FTI Consulting (UK Public Relations)Sara Powell
/ Ben Brewerton+44 7931 765 223 / +44 203 727 1000
Peel Hunt LLP (Joint UK Corporate
Broker)Ross Allister / David McKeown / Alexander
AllenTelephone: +44 (0) 20 7418 8900
Berenberg (Joint UK Corporate
Broker)Matthew Armitt / Jennifer Wyllie / Detlir Elezi
Telephone: +44 (0) 20 3207 7800
Credit Suisse (Joint UK Corporate
Broker)Ben Lawrence / David Nangle Telephone: +44 (0) 20
7888 8888
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 and 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 Company’s strategy,
plans or future financial or operating performance, including
exploration drilling plans and results from the Company’s
generative program and potential to significantly extend mine lives
at the Company’s projects; expected permitting and commencement of
operations; expected fourth quarter production and guidance .
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 Company’s expectations in connection with the
production and exploration, development and expansion plans at the
Company's projects discussed herein being met, the impact of
proposed optimizations at the Company's projects, changes in
national and local government legislation, taxation, controls or
regulations and/or change in the administration of laws, policies
and practices, 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, silver, copper and zinc), currency exchange rates (such as
the Canadian Dollar, the Brazilian Real, the Chilean Peso and the
Argentine Peso versus the United States Dollar), the impact of
inflation, possible variations in ore grade or recovery rates,
changes in the Company’s hedging program, changes in accounting
policies, changes in mineral resources and mineral reserves, risks
related to asset dispositions, 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, risks associated with infectious diseases, including
COVID-19, 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 relating to joint venture operations, title
disputes or claims, limitations on insurance coverage, 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 Company's Annual Information Form filed with
the securities regulatory authorities in all provinces of Canada
and available at www.sedar.com, and the Company’s Annual Report on
Form 40-F filed with the United States Securities and Exchange
Commission. Although the Company has 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 Company undertakes 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 Company’s plans and objectives in
connection with its exploration programs and results of exploration
and its expected fourth quarter production and may not be
appropriate for other purposes.
(All amounts are expressed in United States
Dollars unless otherwise indicated.)
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