Yamana Gold Announces First Quarter 2014 Results
TORONTO, ONTARIO--(Marketwired - Apr 29, 2014) - YAMANA GOLD
INC. (TSX:YRI)(NYSE:AUY) ("Yamana" or "the Company") today
announced its financial and operating results for the first quarter
2014.
HIGHLIGHTS
- Production and costs for the first quarter were within budget
expectations.
- Production is expected to accelerate quarter-over-quarter with
the biggest increases expected at Chapada, El Peñón, Mercedes, and
Jacobina.
- Gualcamayo production increased 10% over fourth quarter 2013
and 28% over first quarter 2013 with the contribution from QDD
Lower West and Amelia Inés; and
- April 2014 production was a record of approximately 20,000
ounces.
- Pilar production increased 13% over fourth quarter 2013 as
ramp-up accelerated.
- Total production for the first four months of approximately
380,000 gold equivalent ounces ("GEO") (1) with second quarter
average monthly production expected to be 16% higher than the
average monthly production in the first quarter.
- April 2014 production at Jacobina was 6,000 ounces as grade
continued to increase and is expected to increase to approximately
2 grams per tonne by the fourth quarter.
- Updated Cerro Moro feasibility study reduces initial capital
expenditure to $126 million;
- The project is expected to create significant value and provide
robust returns.
"In the first quarter, we delivered production in line with our
budget at costs consistent with the lower levels established last
year. Subsequently, for the month of April we delivered a
significant production increase which is a trend we expect to
continue throughout the second quarter and balance of the year,
positioning us well for our production this year. We also expect to
balance production growth with cost containment and margin
preservation," said Peter Marrone, Chairman and Chief Executive
Officer. "Expansionary capital expenditures were down significantly
compared to first quarter last year and with the second quarter
expected to be the last period of the current phase of expansionary
capital spending, we expect our cash balance to increase in coming
quarters. The combination of increasing production at lower costs,
and the continued focus on balancing top and bottom line growth is
expected to result in quarterly cash flow returning to the baseline
level we established last year."
FIRST QUARTER 2014 OVERVIEW
- Production of 271,908 GEO; and
- 27.6 million pounds of copper.
- By-product cash costs(2) of $450 per GEO and $640 per GEO on a
co-product basis.
- All-in sustaining cash costs ("AISC")(2,4) of $975 per GEO on a
co-product basis and $820 per GEO on a by-product basis.
- Adjusted earnings(2) from continuing operations of $12.1
million ($0.02 per share);
- Net loss of $28.7 million ($0.04 per share).
- Cash flows before changes in non-cash working capital(2,3) of
$93.6 million ($0.12 per share).
- Cash flows after changes in non-cash working capital(3) of
$39.0 million ($0.05 per share).
(All amounts are expressed in United States dollars unless
otherwise indicated, unaudited.)
- GEO assumes gold plus the gold equivalent of silver using a
ratio of 50:1.
- Refers to a non-GAAP measure. Reconciliation of non-GAAP
measures are available at www.yamana.com/Q12014
- Cash flows from operating activities.
- Includes cash costs, sustaining capital, corporate general and
administrative expense and exploration expense.
KEY STATISTICS
|
Three Months Ending Mar 31st |
(In thousands of United States Dollars except for shares and per
share amounts, unaudited) |
2014 |
|
2013 |
Revenue |
353,916 |
|
534,873 |
Cost of sales excluding depletion, depreciation and
amortization |
208,865 |
|
230,741 |
Depletion, depreciation and amortization |
111,950 |
|
96,123 |
General and administrative expenses |
31,468 |
|
36,713 |
Exploration and evaluation expenses |
4,600 |
|
6,923 |
Equity (losses)/earnings from associate (Alumbrera) |
1,165 |
|
133 |
Operating earnings |
33,101 |
|
208,009 |
Net (loss)/earnings |
(29,608 |
) |
102,096 |
Net (loss)/earnings per share |
(0.04 |
) |
0.14 |
Adjusted earnings |
12,100 |
|
116,084 |
Adjusted earnings per share |
0.02 |
|
0.16 |
Cash flow generated from operations after changes in non-cash
working capital |
38,977 |
|
173,801 |
Per share |
0.05 |
|
0.23 |
Cash flow generated from operations before changes in non-cash
working capital |
93,622 |
|
214,219 |
Per share |
0.12 |
|
0.29 |
Average realized gold price per ounce |
1,300 |
|
1,620 |
Average realized silver price per ounce |
20.43 |
|
29.81 |
Average realized copper price per pound |
3.25 |
|
3.58 |
|
|
|
|
PRODUCTION SUMMARY - FINANCIAL AND OPERATING
SUMMARY |
|
Three Months Ending Mar 31st |
|
2014 |
2013 |
Total gold equivalent ounces - produced |
271,908 |
291,312 |
|
Gold produced |
228,371 |
248,239 |
|
Silver produced (millions of ounces) |
2.2 |
2.2 |
Total gold equivalent ounces - sold |
250,067 |
292,039 |
Total copper produced - Chapada (millions of
pounds) |
27.6 |
27.4 |
Total copper sold - Chapada (millions of pounds) |
25.4 |
29.1 |
|
|
|
|
Three Months Ending Mar 31st |
(in GEO) |
2014 |
2013 |
Co-product cash costs per gold equivalent ounce |
$640 |
$587 |
|
Cash cost per pound of copper - Chapada |
$1.84 |
$1.90 |
By-product cash costs per gold equivalent ounce |
$450 |
$383 |
All-in sustaining cash costs per GEO, by-product
basis |
$820 |
$856 |
All-in sustaining cash costs per GEO, co-product
basis |
$975 |
$1,014 |
|
|
|
PRODUCTION BREAKDOWN |
|
Three Months Ending Mar 31st |
(in GEO) |
2014 |
2013 |
Chapada |
21,710 |
23,358 |
El Peñón |
96,165 |
120,684 |
Gualcamayo |
38,481 |
30,177 |
Jacobina |
14,853 |
17,366 |
Minera Florida |
28,315 |
34,024 |
Fazenda Brasiliero |
12,693 |
16,797 |
Mercedes |
25,460 |
36,575 |
C1 Santa Luz * |
6,720 |
- |
Pilar * |
11,885 |
- |
Other |
15,626 |
12,331 |
TOTAL |
271,908 |
291,312 |
* Commissioning production as the mine is not yet in commercial
operation.
Financial Results for the three months ended March 31, 2014
Cash flows from operating activities after changes in non-cash
working capital items for the three month period ended March 31,
2014 were $39.0 million, compared to $173.8 million for the quarter
ended March 31, 2013. Cash flows from operating activities before
changes in non-cash working capital for the three months ended
March 31, 2014 were $93.6 million, compared to $214.2 million
generated for the same period of 2013. Lower cash flows from
operating activities compared to that of the same quarter in the
prior year were due to lower metal prices and lower sale volumes,
partly offset by lower income taxes paid and higher cash
distributions from Alumbrera.
Cash flows from operating activities before changes in non-cash
working capital were $0.12 per share. The Company expects 2014
average quarterly cash flow to be above the baseline established in
2013 as production increases and costs decrease.
Net loss for the quarter was $29.6 million or $0.04 per share,
compared with net earnings of $102.1 million or basic and diluted
earnings of $0.14 per share for the three months ended March 31,
2013. Adjusted earnings was $12.1 million or $0.02 per share for
the three months ended March 31, 2014, compared with $116.1 million
or $0.16 per share in the first quarter of 2013. Lower adjusted
earnings were attributed to lower realized metal prices of
approximately 20% for gold, 31% for silver and 9% for copper, lower
volume of metal sales and higher cost of sales.
Revenues were $353.9 million in the first quarter compared with
$534.9 million in the first quarter of 2013. Mine operating
earnings were $33.1 million, compared with $208.0 million in the
first quarter of 2013. Lower revenues and mine operating earnings
were due to lower metal prices and to lower volume of gold and
copper sales. Lower metal prices accounted for 58% of the variance
in revenues in comparison to the first quarter of 2013 representing
approximately $0.16 per share in earnings. Lower sales volume of
copper in concentrate was attributed to 9,600 tonnes of unsold
concentrate production that was accounted for in inventory as at
March 31 containing an estimated 5.2 million pounds of copper with
an approximate sales value of $15.6 million, which was shipped
following the end of the quarter.
Revenues for the three months ended March 31, 2014 were
generated from the sale of 192,586 ounces of gold, 2.2 million
ounces of silver and 25.4 million pounds of copper, excluding
Alumbrera which is accounted for as an equity investment. This
compares to sales, excluding Alumbrera, of 241,259 ounces of gold,
2.2 million ounces of silver and 29.1 million pounds of copper for
the three months ended March 31, 2013.
The average realized price of gold in the first quarter of 2014
was $1,300 per ounce compared to $1,620 per ounce in the same
quarter of 2013, representing a decrease of 20%. The average
realized price of copper was $3.25 per pound compared to $3.58 per
pound in the first quarter of 2013, representing a decrease of 9%,
and the average realized silver price was $20.43 per ounce compared
to $29.81 per ounce in the first quarter of 2013, representing a
decrease of 31%.
Cost of sales excluding depletion, depreciation and amortization
for the three months ended March 31, 2014 was $208.9 million
compared with $230.7 million for the same quarter of 2013. Cost of
sales excluding depletion, depreciation and amortization was lower
than that of the same period in 2013 due to lower sales volume.
Depletion, depreciation and amortization ("DDA") expense for the
quarter was $112.0 million, compared to $96.1 million in the first
quarter of 2013. The increase was attributable to higher DDA at
Gualcamayo from Amelia Inés (open-pit) and QDD Lower West
(underground) which started to contribute to production in late
2013.
Other expenses including of general and administrative,
exploration and evaluation, other and net finance expenses were
$51.0 million in the quarter, compared to $52.9 million in the
three months ended March 31, 2013. The other expenses are discussed
below:
General and administrative expenses were $31.5 million in the
first quarter compared to $36.7 million in the same quarter of 2013
a decrease of 14%. It is expected that general and administrative
expenses will continue to be maintained at current levels or lower
as a result of the cost containment initiatives undertaken by the
Company in 2013.
Exploration and evaluation expenses were $4.6 million, compared
to $6.9 million incurred in the first quarter of 2013. The decrease
in exploration and evaluation expenses is a result of the Company's
reduced focus on greenfield exploration relative to the first
quarter of 2013.
Other expenses were $12.5 million in the quarter compared to
$2.1 million in the first quarter of 2013. The increase in other
expenses primarily reflects the write-off of uncollectible indirect
tax credits during the quarter.
Finance expense net of finance income was $2.4 million in the
quarter compared to $7.1 million in the first quarter of 2013.
Lower net finance expense was mainly due to higher foreign exchange
gains that resulted from favourable movements in exchange rates of
currencies for which the Company settles its mine operating
expenses.
Equity earnings from Alumbrera were $1.2 million for the quarter
compared with earnings of $0.1 million for the three months ended
March 31, 2013. Higher equity earnings were due to higher sales
volumes partly offset by lower metal prices. Cash dividends from
the Company's equity investment in Alumbrera received in the
quarter were $17.6 million compared to $4.6 million in the first
quarter of 2013.
The Company recorded an income tax expense of $12.9 million in
the first quarter of 2014 compared to a tax expense of $53.2
million in the same quarter of 2013. The lower income tax expense
in the first quarter of 2014 is attributable to lower earnings
relative to that of the first quarter of 2013. The income tax
provision for the first quarter of 2014 reflects a current income
tax expense of $23.1 million compared to current tax expense of
$52.2 million in the same quarter of 2013, and a deferred income
tax recovery of $10.2 million compared to a deferred tax expense of
$1.0 million. During the quarter, the exchange rates of Brazilian
Real and Argentinean Peso declined in value against the US Dollar.
As a result for local purposes, a charge of $34.5 million relating
to unrealized foreign exchange was recorded in the deferred tax
expense. The impact of these foreign exchange movements on taxes
are non-cash and as such excluded from adjusted earnings. See
Note 22 to the Condensed Consolidated Interim Financial
Statements for a breakdown of the foreign exchange and interest and
penalties charged to the income tax expense.
During the quarter, the capacity under the Company's revolving
line of credit was increased from $750 million to $1 billion.
Subsequent to the quarter end, the Company received commitments for
an additional senior unsecured term facility for two years of up to
a capacity of $750 million. The terms and covenants of the term
facility are substantively the same as the existing revolving
credit facility. The Company's outstanding net debt position from
all credit facilities was approximately $1.1 million. The Company
borrowed under its credit facilities to purchase an initial share
position in Osisko Mining Corporation.
Subsequent to the quarter end, the Company plans to restructure
its equity interest in the Ernesto/Pau-a-Pique mine to below 50%
with preference to the repayment of its investment. The Company
will continue to manage Ernesto/Pau-a-Pique until the end of year
subject to any renewal at that time.
Operating Results for the three months ended March 31, 2014
Total production for the first quarter of 2014 was 271,908 GEO,
compared to 291,312 GEO produced in the first quarter of 2013.
Total production included the Company's attributable production
from Alumbrera of 10,115 ounces of gold and production during
commissioning of 24,116 ounces of gold.
Commercial production for the first quarter was 247,792 GEO
compared with 287,203 GEO produced in the first quarter of 2013.
Total commercial production comprised of 204,255 of gold and 2.2
million ounces of silver, compared to 244,129 ounces of gold and
2.2 million ounces of silver produced in the same quarter of 2013.
Gualcamayo increased production by 28% relative to the first
quarter of 2013 and 10% relative to the fourth quarter of 2013 with
production contribution from the QDD Lower West underground mine
and from Amelia Inés. Overall gold production at other mines was
consistent with plan despite some operations being impacted by a
more severe rainy season in certain regions. Similar to previous
years, first quarter production was planned to be the lowest of the
year given the rainy season and the ramp-up of new projects. Total
production for the first four months of approximately 380,000 GEO,
in line with budget, with second quarter average monthly production
expected to be 16% higher than the average monthly production in
the first quarter. Production is expected to accelerate for the
remainder of the year as ordinary course mine sequencing will
result in mining of higher grade areas with the largest impact at
mines that contribute most significantly to the operating cash flow
generation of the Company.
By-product cash costs for the first quarter of 2014 averaged
$450 per GEO, compared with $383 per GEO in the first quarter of
2013. By-product cash costs were impacted by a lower copper credit
contribution from Chapada and Alumbrera due to a lower copper price
and lower sales volume. The average market price for copper in the
first quarter of 2014 was 11% lower than the average of the same
quarter in 2013. By-product and co-product cash costs were impacted
by planned lower grades at certain mines and higher input costs
compared to the three months ended March 31, 2013. Co-product cash
costs for the first quarter averaged $640 per GEO, compared to $587
per GEO for the first quarter of 2013.
All-in sustaining cash costs ("AISC") were $820 per GEO on a
by-product basis, compared to $856 per GEO for the first quarter of
2013 and well below the plan level of $850 per GEO. AISC were $975
per GEO on a co-product basis for the first quarter of 2014,
compared to $1,014 per GEO for the first quarter of 2013.
Copper production for the quarter was 27.6 million pounds from
the Chapada mine, compared to 27.4 million pounds for the same
quarter of 2013. A total of 7.2 million pounds of copper produced
from Alumbrera were attributable to the Company, compared with 6.3
million pounds for the quarter ended March 31, 2013. Total copper
production for the first quarter of 2014 was 34.7 million pounds,
compared with 33.6 million pounds in the first quarter of 2013.
Co-product cash costs per pound of copper were $1.84 per pound
from the Chapada mine compared to $1.90 per pound of copper in the
same quarter of 2013. Co-product cash costs per pound of copper for
the quarter including the Company's interest in Alumbrera were
$1.96 per pound compared to $1.99 per pound for the first quarter
of 2013.
OPERATING MINES
Charts providing a summary of mine-by-mine operating results are
presented at the end of this press release.
Chapada, Brazil
In the first quarter of 2014, Chapada produced a total of 21,710
GEO, which consisted of 20,455 ounces of gold and 62,729 ounces of
silver, contained in concentrate compared with 23,358 GEO, which
consisted of 21,722 ounces of gold and 81,812 ounces of silver
contained in concentrate in the same quarter of 2013. Chapada
copper production was 27.6 million pounds in the quarter compared
with production of 27.4 million pounds of copper in the first
quarter of 2013.
Production for the quarter was lower than the first quarter of
2013 as a result of lower tonnage processed compared to the first
quarter of 2013. Lower tonnage mined and processed was the result
of heavier rainfall during the current wet season compared to 2013
and harder ore that affected mill performance. The mine has reduced
drilling patterns spacings to improve ore fragmentation in blasting
in order to enhance plant throughput and will realize further
improvements throughout the year on completion of the installation
of an in-pit crusher and certain other optimizations. Production at
Chapada is expected to be stronger in the second half of the year
with the dry season enabling greater flexibility to access higher
grade areas unavailable during the wet season and the additional
contribution from higher grade ore at Corpo Sul by the end of year.
Corpo Sul is an adjacent near-to-surface ore body to the main pit.
Pre-stripping is underway at Corpo Sul and ore feed is expected to
be available later this year.
By-product cash costs for the quarter were negative
$867 per GEO, compared with negative $1,796 per GEO for
the same quarter in 2013. Higher by-product cash costs per GEO was
mainly due to the effect of lower copper sales volume and lower
copper prices in the first quarter of 2014 compared to 2013,
resulting in a lower copper by-product credit for the quarter.
Co-product cash costs were $489 per GEO in the first quarter,
compared to $463 per GEO in the same quarter of 2013. Co-product
cash costs for copper were $1.84 per pound in the first quarter
versus $1.90 per pound in the same quarter of 2013.
Chapada revenues for the quarter net of sales taxes and
treatment and refining costs were $89.4 million (Q1 2013 - $125.9
million). Revenues included mark-to-market adjustments and
provisional pricing settlements in the quarter of negative
$5.5 million (Q1 2013 - negative $7.4 million).
The Company continues to advance initiatives to improve
production. These initiatives include modifications to the grinding
circuit and the installation of an in-pit crusher to increase
throughput. The in-pit crusher is planned to be commissioning by
the end of the second quarter. Additionally, the development of
Corpo Sul, a gold and copper deposit at the southwest end of the
main ore body of Chapada is the most prospective new opportunity
planned to increase production at Chapada. Pre-stripping at Corpo
Sul began in the first quarter and will continue throughout the
year. Corpo Sul is expected to contribute to higher gold and copper
grades expected to begin in the third quarter this year. Other
opportunities under evaluation include Suruca and Arco Sul.
El Peñón, Chile
In the first quarter of 2014, El Peñón produced 96,165 GEO,
which consisted of 59,669 ounces of gold and 1.8 million ounces of
silver, compared to 120,684 GEO, which consisted of 90,155 ounces
of gold and 1.5 million ounces of silver in the same quarter of
2013. Production in the first quarter exceeded budget. Normal
sequencing in the mine plan called for mining in lower gold and
silver grade areas which has higher silver grade and recovery than
other ore bodies at El Peñón and in particular from the recently
started Pampa Augusta Victoria open-pit operation. Feed grades for
gold are expected to increase to higher levels in the second
quarter. Silver grade and recovery was consistent with budget
although higher than the first quarter of 2013. Scheduled
replacement of equipment is also underway to further improve
productivity and reduce mining costs. This will contribute to
greater flexibility in ore blending and, as a result, increase
production during the balance of the year, positioning El Peñón to
meet its 2014 production plan.
Co-product cash costs were $532 per gold ounce, compared with
$455 per gold ounce in the first quarter of 2013. The increase in
co-product cash costs per GEO was mainly due to higher tonnage
mined and the lower gold feed grade resulting in higher per-unit
cost.
Mercedes, Mexico
Production of 25,460 GEO in the first quarter consisted of
23,579 ounces of gold and 94,042 ounces of silver, compared with
36,575 GEO, which consisted of 33,039 ounces of gold and 176,801
ounces of silver in the first quarter of 2013. Production was
consistent with budget levels, mining lower grade areas as part of
normal mine sequencing. Mining of higher grade areas is planned
throughout the year with gold and silver grades expected to be at
2013 levels in the third quarter. A brief labour interruption in
February also impacted plant throughput for the quarter. Feed
grades are expected to improve in the second half of the year.
Co-product cash costs of $655 per GEO were 26% higher than $519
in the same quarter of 2013. Higher co-product cash costs were due
to higher unit costs associated with mining in lower grade
areas.
Development of other areas continued during the first quarter at
Mercedes including: infrastructure and sill development of the
Barrancas zone, updating and reviewing studies to refine the mine
design and permitting for Lupita and Diluvio. At Rey del Oro, an
open-pit mineral reserve was defined in 2013 and the basis for
which the application for permitting is now being advanced. The
underground zone at Rey del Oro is being further defined by
drilling and development work to provide additional information for
inclusion in the mine design.
Gualcamayo, Argentina
Gualcamayo produced 38,481 ounces of gold in the first quarter
compared with 30,177 ounces produced in the first quarter of 2013,
representing a 28% increase as a result of the contribution from
the new underground operation. Production was also 10% higher than
the fourth quarter of 2013. Higher production was the result of
more tonnes mined and processed as the ramp of QDD Main Phase III
is now complete and higher grades resulting from the new mineral
source of ore Amelia Inés ("AIM") and QDD Lower West ("QDDLW")
underground, which were partially offset by lower recoveries.
Production for April is a record of approximately 20,000 ounces
for the month representing a 56% increase to average monthly
production in the first quarter. This positions Gualcamayo to meet
and potentially exceed 2014 budget production expectations. The
metallurgy of the ore from AIM and QDD Lower West impacts
recoveries as it requires a longer leaching cycle than that of QDD
Main, and increases the amount of ore on the heap leach pad. To
improve recoveries, a plan is currently under review which
contemplates the installation of a filtering station and an
increase in volume of treatment capacity. These plant modifications
are expected to improve recovery rates beginning later in the
year.
Co-product cash costs were $739 per ounce in the first quarter
compared with $584 per ounce in the first quarter of 2013.
Co-product cash costs for the first quarter were in line with
budget although higher than in the first quarter of 2013 due to
higher cost underground mining at QDD Lower West. Equally,
co-product cash costs were 10% lower than in the fourth quarter
2013. Cash costs were also impacted by local inflationary pressures
on labour and camp service costs, which were partly offset by the
effect of the devaluation of the Argentina Peso on the portion of
the operating cost structure reflected in local currency. The
completion of the installation of a conveyor belt, which will
reduce the cost of transport of ore from the QDD Lower West
underground mine, is underway and expected to improve mining costs
later this year.
The Company also continues to progress with studies of the
options for processing the newly discovered sulphide resources
including Rodado.
Minera Florida, Chile
In the first quarter of 2013, Minera Florida produced 28,315
GEO, which consisted of 24,409 ounces of gold and 195,287 ounces of
silver, compared to 34,024 GEO, which consisted of 26,651 ounces of
gold and 368,634 ounces of silver in the first quarter of 2013.
Lower production was mainly attributed to lower feed grades
expected as part of the mine plan.
Despite lower production, co-product cash costs for the quarter
were $630 per GEO, representing a 15% reduction, compared with $744
per GEO in the same quarter in 2013. Lower cash costs was the
result of continuous efforts at cost improvement initiatives
implemented in 2013, the devaluation of the Chilean Peso versus the
U.S. Dollar and higher by-product credit from sales of zinc. The
mine produced and sold 1,792 tonnes of zinc concentrate in the
quarter, compared with 928 tonnes of zinc concentrate produced and
sold in the first quarter of 2013, representing a 93% increase in
volume of zinc produced and sold.
Jacobina, Brazil
Gold production at Jacobina was 14,853 ounces in the first
quarter, compared with 17,366 ounces produced in the same quarter
of 2013. Lower production resulted from reduced throughput offset
by improved feed grade. In April, production at Jacobina was
approximately 6,000 ounces of gold, approximately 1,000 gold ounces
higher than the average monthly production rate in the first
quarter, in part due to a planned access to higher grade areas
compared to the first quarter. As part of a redeveloped mine plan
in 2013, mining of higher grade areas will continue in 2014 with
grade expected to increase to approximately 2 g/t by the fourth
quarter of 2014. As noted, these results are in line with the
revised plan set in 2013 for Jacobina to focus on producing quality
ounces with sustainable margins and maximize profitability and as
such in the short term and the emphasis has been on reducing costs
rather than maximizing production preparing for a return to higher
production levels and lower costs for the medium and longer
term.
Co-product cash costs were $1,245 per ounce for the first
quarter compared to co-product cash costs of $1,276 per ounce for
the first quarter of 2013. Lower co-product cash costs in the
current quarter, in spite of reduced production volume, compared to
the first quarter last year reflects the effect of mine
management's continuous effort in executing the cost containment
initiatives implemented since the second quarter of 2013.
The management structure for the oversight of the mine was also
changed with oversight now provided by our Chilean management which
has considerable underground experience. A development plan to
improve production intermediate and longer term is in progress, the
initial benefits of which are expected by the third quarter of this
year.
OTHER MINES
Fazenda Brasileiro, Brazil
Production was 12,693 ounces of gold in the quarter compared to
16,797 ounces of gold in the same quarter of 2013 as a result of
lower feed grades. Several initiatives are underway to meet
production target, these include the development of new open-pit
mineral reserves, improvement in underground production with
arrival of new equipment and evaluation of oxide ore from C1 Santa
Luz to be treated in Fazenda Brasileiro. It is anticipated that the
mine will meet its production plan set for 2014.
Co-product cash costs averaged $958 per ounce for the first
quarter, compared to $920 per ounce in the first quarter of
2013.
Alumbrera, Argentina
The Company's interest in Alumbrera is accounted for as an
equity investment. The Company recorded earnings from its 12.5%
interest in Alumbrera of $1.2 million for the three months ended
March 31, 2014, compared with earnings of $0.1 million for the same
period of 2013.
The Company received cash distributions $17.6 million in the
quarter ended March 31, 2014, compared with $4.6 million cash
distribution in the quarter ended March 31, 2013.
For the quarter, attributable production from Alumbrera was
10,115 ounces of gold and 7.2 million pounds of copper. This
compares with attributable production of 8,222 ounces of gold and
6.3 million pounds of copper in the first quarter of 2013.
By-product cash costs per ounce of gold averaged
negative $1,413 for the quarter ended March 31, 2014
compared with negative $303 per ounce for the comparable
period in 2013. By-product cash costs were lower due to the
increase in copper sale credit as a result of higher volume of
copper sales by Alumbrera in 2013, partly offset by lower average
market prices for copper. Co-product cash costs per ounce for gold
averaged $309 for the quarter ended March 31, 2014, compared with
$396 per ounce for the same period of 2013. Co-product cash costs
for copper averaged $2.40 per pound for the quarter ended March 31,
2014, unchanged from the comparable period of 2013.
MINES IN COMMISSIONING
C1 Santa Luz, Brazil
Processing improvements are the focus to improve production at
the mine. Processing improvements include the introduction of a
thickener and a regeneration kiln. Improvements in recovery rates
from the carbon-in-leach (CIL) circuit are also currently underway.
These intermediate term improvements are in progress and are
expected to significantly improve recoveries in the second quarter
with commercial production commencing in the third quarter.
Additionally, the Company plans to install a roaster as part of a
long term solution in improving recovery rates. Current studies
suggest recovery rates with a roaster would exceed 90%. C1 Santa
Luz production would reach levels in excess of 120,000 ounces
annually with recoveries at that level. The long term plan includes
increasing the underground sulphide mineral resource potential
under the current open pit.
During the commissioning phase, a stockpile is being accumulated
which will provide additional flexibility and increasing
reliability for the operation as process improvements are
implemented and take hold.
Commissioning production was 6,720 ounces of gold in the first
quarter. Process improvements were initiated after the quarter
end.
Pilar, Brazil
Commissioning continued to ramp-up with completion of
commissioning expected in the third quarter of 2014.
The newly delivered low-profile equipment, whose purpose is to
improve dilution and productivity was deployed late in the quarter
and will be fully operational in May. This new low-profile mining
equipment is one of a series of initiatives being implemented to
increase mining efficiencies at the operation and reduce dilution
over the life of the mine. The Company is also evaluating further
opportunities including the potential for more selectively mining
the higher grade ore shoots that would have a positive impact on
the operation as the in-situ grades are much higher than the
current mineral reserve grade. Efforts continue to be focused on an
infill drilling program to ensure these higher grade ore shoots can
be mined efficiently and brought into production as soon as
possible. The Company is now developing plans for Pilar to reach an
annual production level of 100,000 gold ounces.
Production of ore from Caiamar, a satellite deposit, is ramping
up for processing at Pilar with the higher grades offsetting the
additional transportation costs to the plant. The Company also
continues development of the Maria Lazarus deposit which is a
nearer-to-plant satellite deposit with expected contribution to
production and better costs due to ore geometry.
Commissioning production for the first quarter was 11,885 ounces
of gold, representing an increase of 13% from the fourth quarter of
2013. Recovery rates continued to improve in the quarter. The
Company confirms prior guidance that completion of commissioning is
on target for the third quarter of 2014.
CONSTRUCTION AND DEVELOPMENT PROJECTS
Cerro Moro, Argentina
Cerro Moro is a high-grade gold and silver deposit located in
the Santa Cruz province of Argentina with similarities to the
deposits at the El Peñón and Mercedes mines. With the feasibility
study completed, detailed engineering and pre-development work is
on track towards a planned construction decision before the end of
2014 targeting initial production in the first half of 2016.
The parameters of the updated feasibility study include an
initial capital investment of approximately $126 million,
throughput rate of 700 tonnes per day, expected annual production
of approximately 150,000 GEO at life of mine cash costs of
approximately $352 per GEO and all-in sustaining cash costs of
approximately $525 per GEO which includes life of mine sustaining
capital of $174 million of which $133 million is for underground
development. The initial capital expenditure estimates for the
project of $126 million would be spent beginning in 2015 and mostly
in 2016. Detailed engineering has commenced to confirm assumptions
and further refine capital costs to precision levels normally
better than feasibility study levels. Although the total capital,
once this process is completed, is not expected to exceed $150
million which assumes a contingency in excess of the feasibility
study.
The feasibility study contemplates small open pits for the first
three years followed by the development of underground areas. The
Company is also evaluating optimizations and efficiencies that
include scalability of the plant. The processing plant is to be
built in two phases. The first phase to recover metal from a high
grade gravity concentrate; and the second phase, after year three,
will add floatation to increase recoveries. Development of the
underground areas and second phase plant capital will be fully
funded through cash flow.
The project is expected to generate significant returns, create
robust value and positively contribute to cash flow per share. This
operation aligns with the Company's focus to balance production of
growth and capital spending to maximize value creation.
Suyai, Argentina
Suyai is a high-grade gold and silver deposit located in the
Chubut province of Argentina. An application for the environmental
impact study ("EIS") is underway for exploration and development
work which will be followed by permitting for an operational EIS
within the current mining and environmental laws of the Chubut
Province.
The plan being evaluated is a small scale underground operation
with off-site processing or direct sale of a precious metal
concentrate. The parameters of the current plan include an initial
capital investment of approximately $220 million, initial
throughput rate of 1,150 tonnes per day with the ability to expand
over time and expected annual production of approximately 150,000
GEO at costs consistent with the Company's current all-in
sustaining cash cost structure.
EXPLORATION
Exploration at Yamana continues to be a key to unlocking value
at existing operations. The 2014 program will continue to focus on
finding higher quality ounces, those with the greatest potential to
most quickly generate cash flow allowing the Company to grow
prudently and profitably.
The following summary highlights key updates from the
exploration program at the Company since December 31, 2013.
Cerro Moro, Argentina
Surface exploration consisting of detailed mapping and sampling
of prospective targets in the Escondida and La Negra blocks were
the focus of the exploration program during the first quarter of
2014. Mapping and sampling from the decline ramp and cross cuts of
the Escondida fault and associated veins, breccia, and stockwork
systems, is underway. Sampling of the Escondida veins and
structures is expected to confirm values in the mineral resource
and mineral reserve models. To date, veins and structures exposed
in the decline are located as modeled from the surface
drilling.
Gualcamayo, Argentina
The 2014 exploration program at Gualcamayo will focus on
expanding the Rodado southwest mineral orebody and testing new
target areas for near surface oxide potential. A drill program has
been planned to collect core samples of the sulfide zones that can
be properly preserved for metallurgical work and used for the
sulfide feasibility study of the deep sulfide mineral deposits.
During the first quarter, 4,626 metres were completed in 11 drill
holes at Gualcamayo with 945 metres completed in 2 holes that
correspond to the metallurgical test program mentioned above.
El Peñón, Chile
The 2014 exploration program at El Peñón involves a combination
of surface and underground infill and exploration drill programs
coupled with additional surface detailed mapping, sampling and
brownfields target development. The program is expected to provide
new mineral resources and upgrade existing mineral resources to
mineral reserve categorization. This is a continuation of the 2013
program that focused on mineral resource discovery.
The exploration program will build on the success of the 2013
program, continuing to test and extend the Borde Oeste mineral
intercepts to the north and south. A horizontal exploration hole
drilled from a southern Providencia underground drill station to
the west intercepted at least three narrow but moderate to high
grade intervals that could be southern extensions of the known El
Peñón veins systems. Initial follow-up holes drilled from the
surface have intercepted important mineral intervals that further
support the continuity of the 2013 intercepts.
During the first quarter, the Company focused on the Providencia
HW1, HW2 and HW3 structures with very encouraging results. The
Company also focused on developing targets to the southwest, east
and west of the prolific main northeast trending mineral trend at
El Peñón and to the west of the mineral bodies at Fortuna. These
efforts identified several new and reaffirmed previously known
target areas to the south and southwest of existing operations.
Minera Florida, Chile
The 2014 exploration program at Minera Florida will focus on
upgrading mineral resources to replace and expand mineral reserves
and developing new targets through surface mapping and sampling
that could be drill tested in the second half of the year.
By the end of the first quarter, the underground based drill
program has completed approximately 7,000 metres of the 18,500
metres planned for the year. Targets tested to date include the
Mina Este, Hallazgo, Triangulo Mineralizado, Halo Mineralizado Este
and Maquis Clavo II, which are all within the current operating
mine limits, and results to date are as expected and support
continued work in these areas.
Mercedes, Mexico
Exploration investments continue at Mercedes with a focus on
testing for extensions of known ore bodies along the
Mercedes-Barrancas-Marianas trend and upgrading inferred and
indicated mineral resources into mineral reserve category. During
the year, the Company expects to complete at least 18,500 metres of
surface and underground drilling, development of underground drill
stations along with important surface reconnaissance and district
target development work.
The surface exploration program began in mid-January and has
completed 21 holes for 7,081 metres to date. Initial results are
encouraging and are being followed up down dip and along
strike.
Pilar, Brazil
Underground mapping and sampling along with computer modeling of
drill data has identified moderate to high grade indicated and
inferred mineral resource shoots to be drill-tested from the
surface during 2014 to expand the mineral resource and mineral
reserve base at Pilar. The surface and underground based drill
program to test these mineral shoots began late in the first
quarter. Additionally, further testing and definition drilling at
Maria Lazarus is planned for 2014 and is expected to be performed
in the second half of 2014.
Chapada, Brazil
The focus of the 2014 exploration program at Chapada is to
continue to expand known mineral bodies and discover a new
satellite mineral body that can be quickly defined and added to the
mineral resource inventories. The Company expects 12,000 metres to
be drilled within the known mine areas as infill and extension
programs and 9,700 metres to be drilled on targets developed
through near-mine and regional mapping and sampling programs
relying on prior knowledge of the areas along with data acquired
from existing aeromagnetic and radiometric surveys.
Exploration and Infill drill programs are expected to commence
in the second quarter of 2014. Priority targets for the exploration
program will be testing newly recognized geophysical anomalies,
follow-up on the geologic and geochemical anomalies defined in the
first quarter and additional testing of the Taquaracu target, which
is located approximately 15 kilometres southwest of Corpo Sul. The
infill program will help to define areas within Suruca, Corpo Sul
and other targets as needed.
OUTLOOK AND STRATEGY
The Company continues to pursue its stated philosophy of finding
the optimal balance between containing costs, protecting and
preserving margins and increasing production to generate, maximize
and sustain cash flow. By focusing on these metrics that contribute
best to cash flow generation and financial performance and by
continuing to build on its mineral reserve and resource base, the
Company will continue to deliver value to shareholders.
The Company has indicated budget production of 1.4 million gold
equivalent ounces ("GEO") in 2014. The Company performs various
evaluations to maximize the level of confidence and reliability in
the forecast production, costs and cash flow generation capacity at
every operation. These evaluations identify ounces that the Company
considers to have a lower level of certainty or reliability on any
of production, costs or cash flow generation. The Company considers
70,000 GEO, or less than five per cent, of its budgeted production
for 2014 to have a lower level of certainty as they relate to new
operations that are progressing to full capacity. Most of these
ounces would be in pre-commercial production and as such do not
impact operating cash flow expectations for the year. The Company's
first quarter production for all metals was in line with budget.
The Company confirms its expectation in achieving production within
the above range for the year. The acceleration in production
quarter over quarter, that takes the Company from first quarter
production levels to meet annual budget production will result from
ordinary course mine sequencing which will lead to mining of higher
grade areas for the remainder of the year at mines that contribute
most significantly to operating cash flow and ramp up to commercial
production of certain mines as planned. The Company's 2015
production is also expected to further increase with a further
significant increase occurring in 2016 with the potential start-up
of Cerro Moro. Silver production is expected to be approximately
8.8 million ounces in 2014 which is included in GEO at a ratio of
50:1. Copper production in 2014 from Chapada mine is expected to be
approximately 134 million pounds.
The Company confirms that in reaching these production levels,
all-in sustaining cash costs ("AISC") are expected to be below $850
per GEO on a by-product basis and $925 per GEO on a co-product
basis. Cash costs on a by-product basis are calculated after base
metal by-product credit, which assumes a price forecast for copper
of $3.20 per pound.
Expected expansionary capital spending for 2014 remains as
previously stated at approximately $150 million (excluding
capitalized interest). The Company continues to allocate capital to
those opportunities that can most readily contribute to cash flow.
The estimate for expansionary capital includes an amount for
pre-development at Cerro Moro and would increase once a
construction decision is made although most of the amount required
for Cerro Moro would be spent in 2015 and 2016. Exploration
expenditures for 2014 are also expected to remain as previously
stated at $70 million. The 2014 exploration program will continue
to focus on increasing mineral reserves and mineral resources with
its near-mine and regional exploration programs, as well as
continuing to explore identified greenfield targets and generate
new targets.
Sustaining capital is estimated at $320 million although it is
included in AISC on a per GEO basis.
The Company continues to work toward future target of over 1.5
million GEO which it believes remains achievable with its existing
portfolio of assets. The Company continues to refine this further
growth to ensure it will be delivered reflecting an appropriate
balance of production, costs and margin preservation and the
generation, maximization and sustainability of cash flow.
Exploration results continue to support the higher level of
sustainable production through its producing mines. Details of the
exploration program year to date can be found in Section 7
Construction, Development and Exploration.
Subsequent to the quarter end, the Company announced a plan of
arrangement with Agnico Eagle Mines Limited to jointly acquire a
100% interest in Osisko Mining Corporation. Pursuant to this plan
of arrangement, the acquisition would result in the Company
acquiring a 50% interest in Osisko Mining Corporation whose assets
include the Canadian Malartic mine located in Quebec, Canada. This
would immediately add approximately 300,000 GEO to the Company's
annual production at average costs consistent with the Company's
current cost structure. The joint operation is consistent with the
Company's operating focus in the Americas, and would provide the
Company an entry, and opportunity to diversify, into Canada, an
established mining friendly jurisdiction in North America. In
addition, to maintaining the Company's average cash costs, the
Canadian Malartic mine will be self-funding including capital
requirements. It also provides significant mineral reserve growth
and a large mineral resource base for future growth. The Company
will update its financial targets accordingly upon closing of the
transaction. The plan of arrangement is subject to approval of the
shareholders of Osisko Mining Corporation at a meeting planned in
late May.
Further details of the 2014 first quarter results can be found
in the Company's unaudited Management's Discussion and Analysis and
unaudited Consolidated Financial Statements at
http://www.yamana.com/Investors/FinancialCorporateReports.
FIRST QUARTER 2014 CONFERENCE CALL:
Conference call information for Wednesday, April 30, 2014 at
8:30 a.m. ET.
Toll Free (North America): 1-800-355-4959
Toronto Local and International: 416-695-6616
Webcast: www.yamana.com
Conference Call REPLAY:
Toll Free (North America): 1-800-408-3053 Passcode 2392753
Toronto Local and International: 905-694-9451 Passcode
2392753
The conference call replay will be available from 12:00 p.m. ET
on April 30, 2014 until 11:59 p.m. ET on May 14, 2014.
Annual Meeting of Shareholders
The Annual Meeting of Shareholders will take place on Wednesday,
April 30, 2014 at 11:00 a.m. ET at the Design Exchange, 234 Bay
Street, Toronto Dominion Centre, Toronto, Ontario, Canada.
For those unable to attend the meeting in person, a live video
and audio webcast including slide presentation can be accessed from
Yamana's website.
For further information on the conference call or webcast,
please contact the Investor Relations Department at
investor@yamana.com or visit www.yamana.com.
About Yamana
Yamana is a Canadian-based gold producer with significant gold
production, gold development stage properties, exploration
properties, and land positions throughout the Americas including
Brazil, Argentina, Chile and Mexico. Pending completion of a plan
of arrangement relating to the purchase of Osisko Mining
Corporation, the Company will also have significant precious metals
properties in Canada. 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.
Chile |
|
|
|
|
|
|
|
|
|
|
|
Ore Processed |
Gold Grade g/t |
Silver Grade g/t |
Gold Recovery (%) |
Silver Recovery (%) |
Gold Ounces Produced |
Silver Ounces Produced |
GEO Produced |
GEO Sold |
Cash Cost per GEO |
El Peñón |
|
|
|
|
|
|
|
|
|
|
Q1 2014 |
351,401 |
5.75 |
192.32 |
93.2 |
83.5 |
59,669 |
1,824,794 |
96,165 |
95,962 |
$532 |
Total 2013 |
1,422,054 |
7.94 |
187.16 |
93.0 |
75.7 |
338,231 |
6,464,623 |
467,523 |
466,093 |
$485 |
Q4 2013 |
352,276 |
6.46 |
183.42 |
93.0 |
80.3 |
68,246 |
1,655,910 |
101,364 |
99,546 |
$593 |
Q3 2013 |
351,795 |
8.26 |
201.99 |
93.5 |
77.0 |
87,968 |
1,768,205 |
123,333 |
130,014 |
$458 |
Q2 2013 |
356,607 |
8.66 |
187.09 |
92.6 |
71.2 |
91,861 |
1,514,057 |
122,142 |
118,977 |
$451 |
Q1 2013 |
361,377 |
8.37 |
176.43 |
93.0 |
74.0 |
90,155 |
1,526,451 |
120,684 |
117,557 |
$455 |
Total 2012 |
1,415,292 |
7.47 |
199.21 |
93.5 |
80.0 |
317,557 |
7,246,951 |
462,496 |
457,703 |
$440 |
Q4 2012 |
362,874 |
8.59 |
195.00 |
93.0 |
76.0 |
93,448 |
1,733,573 |
128,119 |
127,431 |
$415 |
Q3 2012 |
361,544 |
7.72 |
196.33 |
93.3 |
78.1 |
83,092 |
1,768,273 |
118,457 |
117,390 |
$422 |
Q2 2012 |
355,132 |
6.32 |
194.34 |
94.1 |
82.5 |
68,275 |
1,848,501 |
105,245 |
104,872 |
$491 |
Q1 2012 |
335,741 |
7.19 |
212.02 |
93.5 |
82.9 |
72,742 |
1,896,604 |
110,675 |
108,010 |
$442 |
Minera Florida |
|
|
|
|
|
|
|
|
|
|
Q1 2014 |
447,402 |
2.14 |
25.97 |
79.3 |
52.3 |
24,409 |
195,287 |
28,315 |
28,970 |
$630 |
Total 2013 |
1,754,785 |
2.45 |
32.02 |
76.1 |
57.2 |
99,000 |
979,514 |
118,590 |
118,687 |
$747 |
Q4 2013 |
492,257 |
2.07 |
39.16 |
79.0 |
61.6 |
24,539 |
298,696 |
30,513 |
29,732 |
$592 |
Q3 2013 |
448,820 |
2.27 |
23.92 |
78.0 |
56.0 |
23,848 |
181,156 |
27,471 |
27,398 |
$762 |
Q2 2013 |
402,130 |
2.58 |
18.16 |
77.7 |
53.8 |
23,962 |
131,029 |
26,582 |
26,462 |
$915 |
Q1 2013 |
411,578 |
2.98 |
45.84 |
69.0 |
56.3 |
26,651 |
368,634 |
34,024 |
35,095 |
$744 |
Total 2012 |
902,788 |
3.34 |
39.29 |
81.1 |
67.6 |
89,163 |
825,812 |
105,679 |
107,198 |
$797 |
Q4 2012 |
222,440 |
3.53 |
46.90 |
81.6 |
69.8 |
27,889 |
245,393 |
32,797 |
33,244 |
$805 |
Q3 2012 |
227,246 |
2.97 |
37.16 |
80.5 |
67.3 |
19,994 |
210,297 |
24,200 |
24,371 |
$826 |
Q2 2012 |
224,107 |
3.15 |
43.31 |
80.8 |
69.6 |
19,179 |
239,931 |
23,978 |
23,229 |
$811 |
Q1 2012 |
228,994 |
3.70 |
25.23 |
81.4 |
62.4 |
22,101 |
130,191 |
24,705 |
26,354 |
$748 |
|
|
|
|
|
|
|
|
|
|
|
Brazil |
|
|
|
|
|
|
|
|
|
|
Ore Processed |
Gold Grade g/t |
Gold Recovery (%) |
GEO Produced |
GEO Sold |
By-Product Cash Cost per GEO |
Co-Product Cash Cost per GEO |
Chapada |
|
|
|
|
|
|
|
|
Q1 2014 |
|
4,844,752 |
0.23 |
58.7 |
21,710 |
19,046 |
($867) |
$489 |
Total 2013 |
|
21,347,439 |
0.26 |
57.9 |
110,618 |
102,018 |
($1,296) |
$400 |
Q4 2013 |
|
5,540,262 |
0.28 |
57.5 |
29,817 |
27,707 |
($1,547) |
$377 |
Q3 2013 |
|
5,682,276 |
0.27 |
58.3 |
30,917 |
28,249 |
($1,367) |
$358 |
Q2 2013 |
|
5,016,383 |
0.26 |
59.6 |
26,525 |
21,182 |
($490) |
$421 |
Q1 2013 |
|
5,108,519 |
0.23 |
56.0 |
23,358 |
24,882 |
($1,796) |
$463 |
Total 2012 |
|
21,591,482 |
0.29 |
59.4 |
128,172 |
121,030 |
($1,865) |
$333 |
Q4 2012 |
|
5,734,592 |
0.28 |
59.4 |
32,498 |
29,331 |
($2,021) |
$349 |
Q3 2012 |
|
5,566,744 |
0.30 |
58.6 |
33,610 |
29,883 |
($1,659) |
$341 |
Q2 2012 |
|
5,802,649 |
0.30 |
59.8 |
35,697 |
35,847 |
($2,207) |
$302 |
Q1 2012 |
|
4,487,496 |
0.29 |
59.6 |
26,367 |
25,969 |
($1,473) |
$348 |
Jacobina |
|
|
|
|
|
|
|
|
Q1 2014 |
|
339,882 |
1.51 |
90.1 |
14,853 |
15,363 |
|
$1,245 |
Total 2013 |
|
1,575,629 |
1.57 |
92.2 |
73,695 |
77,190 |
|
$1,174 |
Q4 2013 |
|
396,235 |
1.64 |
93.2 |
19,519 |
19,105 |
|
$1,140 |
Q3 2013 |
|
380,054 |
1.66 |
95.4 |
19,325 |
18,017 |
|
$1,029 |
Q2 2013 |
|
384,614 |
1.55 |
90.8 |
17,485 |
19,350 |
|
$1,270 |
Q1 2013 |
|
414,725 |
1.45 |
90.0 |
17,366 |
20,718 |
|
$1,276 |
Total 2012 |
|
2,104,683 |
1.84 |
93.8 |
116,863 |
114,786 |
|
$747 |
Q4 2012 |
|
508,737 |
1.87 |
92.5 |
28,337 |
25,843 |
|
$825 |
Q3 2012 |
|
545,578 |
1.81 |
94.4 |
30,028 |
31,385 |
|
$768 |
Q2 2012 |
|
523,603 |
1.75 |
95.1 |
28,005 |
27,852 |
|
$735 |
Q1 2012 |
|
526,765 |
1.94 |
93.0 |
30,493 |
29,706 |
|
$666 |
Fazenda Brasileiro |
|
|
|
|
|
|
Q1 2014 |
|
254,620 |
1.76 |
90.8 |
12,693 |
13,856 |
|
$958 |
Total 2013 |
|
1,103,248 |
2.17 |
91.1 |
70,079 |
69,193 |
|
$808 |
Q4 2013 |
|
284,684 |
2.15 |
93.3 |
18,270 |
17,152 |
|
$809 |
Q3 2013 |
|
292,696 |
1.97 |
90.0 |
16,717 |
17,573 |
|
$724 |
Q2 2013 |
|
279,862 |
2.22 |
91.2 |
18,295 |
18,874 |
|
$782 |
Q1 2013 |
|
246,006 |
2.36 |
89.8 |
16,797 |
15,594 |
|
$920 |
Total 2012 |
|
1,048,489 |
2.22 |
89.5 |
67,130 |
66,805 |
|
$872 |
Q4 2012 |
|
270,998 |
2.28 |
91.8 |
18,251 |
17,773 |
|
$856 |
Q3 2012 |
|
255,769 |
2.52 |
89.6 |
18,601 |
20,448 |
|
$803 |
Q2 2012 |
|
251,430 |
2.27 |
88.4 |
16,219 |
14,048 |
|
$827 |
Q1 2012 |
|
270,292 |
1.84 |
88.1 |
14,059 |
14,536 |
|
$1,037 |
|
|
|
|
|
|
|
|
|
Argentina |
|
|
|
|
|
|
|
Ore Processed |
Gold Grade g/t |
Gold Recovery (%) |
Gold Ounces Produced |
Gold Ounces Sold |
Cash Cost per GEO |
Gualcamayo |
|
|
|
|
|
|
Q1 2014 |
1,905,687 |
1.47 |
68.0 |
38,481 |
38,781 |
$739 |
Total 2013 |
6,568,912 |
0.88 |
72.5 |
120,337 |
111,134 |
$772 |
Q4 2013 |
1,561,180 |
1.61 |
43.7 |
34,929 |
34,264 |
$825 |
Q3 2013 |
1,298,811 |
0.86 |
75.8 |
27,678 |
20,570 |
$919 |
Q2 2013 |
1,915,698 |
0.51 |
87.2 |
27,553 |
27,770 |
$761 |
Q1 2013 |
1,793,223 |
0.67 |
79.0 |
30,177 |
28,530 |
$584 |
Total 2012 |
7,742,140 |
0.80 |
75.5 |
147,310 |
149,372 |
$536 |
Q4 2012 |
2,002,170 |
0.66 |
75.8 |
31,502 |
33,568 |
$485 |
Q3 2012 |
1,664,568 |
0.78 |
94.0 |
38,248 |
42,095 |
$669 |
Q2 2012 |
1,977,398 |
0.90 |
71.6 |
38,297 |
33,832 |
$547 |
Q1 2012 |
2,098,004 |
0.85 |
68.1 |
39,263 |
39,877 |
$436 |
Alumbrera |
|
|
|
|
|
|
Q1 2014 |
1,108,149 |
0.42 |
67.4 |
10,115 |
13,507 |
($1,413) |
Total 2013 |
4,671,322 |
0.37 |
70.0 |
39,157 |
34,521 |
($252) |
Q4 2013 |
1,211,561 |
0.40 |
73.0 |
11,319 |
8,291 |
($261) |
Q3 2013 |
1,101,433 |
0.37 |
73.9 |
9,634 |
10,677 |
($339) |
Q2 2013 |
1,187,250 |
0.38 |
69.0 |
9,983 |
8,047 |
($115) |
Q1 2013 |
1,171,078 |
0.34 |
64.8 |
8,222 |
7,507 |
($303) |
Total 2012 |
4,962,373 |
0.40 |
71.0 |
46,077 |
43,580 |
($1,203) |
Q4 2012 |
1,305,186 |
0.36 |
71.0 |
10,769 |
13,546 |
($2,012) |
Q3 2012 |
1,271,732 |
0.45 |
72.8 |
13,633 |
18,566 |
($2,254) |
Q2 2012 |
1,218,825 |
0.44 |
71.2 |
12,359 |
3,242 |
$711 |
Q1 2012 |
1,166,630 |
0.36 |
67.5 |
9,317 |
8,227 |
($1,270) |
|
|
|
|
|
|
|
Mexico |
|
|
|
|
|
|
|
|
|
|
|
Ore Processed |
Gold Grade g/t |
Silver Grade g/t |
Gold Recovery (%) |
Silver Recovery (%) |
Gold Ounces Produced |
Silver Ounces Produced |
GEO Produced |
GEO Sold |
Cash Cost per GEO |
Mercedes |
|
|
|
|
|
|
|
|
|
|
Q1 2014 |
159,562 |
4.82 |
60.07 |
94.7 |
30.2 |
23,579 |
94,042 |
25,460 |
24,582 |
$655 |
Total 2013 |
670,867 |
6.16 |
79.39 |
94.5 |
34.4 |
129,327 |
614,562 |
141,618 |
146,438 |
$496 |
Q4 2013 |
169,768 |
5.58 |
72.84 |
94.3 |
35.5 |
28,821 |
144,715 |
31,716 |
33,062 |
$656 |
Q3 2013 |
171,556 |
5.83 |
68.66 |
94.1 |
29.4 |
31,765 |
116,840 |
34,102 |
33,627 |
$478 |
Q2 2013 |
164,422 |
6.74 |
90.61 |
94.5 |
34.4 |
35,701 |
176,205 |
39,226 |
37,593 |
$363 |
Q1 2013 |
165,122 |
6.54 |
86.09 |
95.0 |
39.0 |
33,039 |
176,801 |
36,575 |
42,156 |
$519 |
Total 2012 |
603,188 |
6.43 |
78.42 |
94.8 |
32.0 |
116,215 |
489,747 |
126,010 |
126,515 |
$485 |
Q4 2012 |
164,285 |
7.38 |
85.17 |
95.8 |
39.0 |
36,057 |
169,313 |
39,443 |
36,879 |
$435 |
Q3 2012 |
151,415 |
6.77 |
74.23 |
94.5 |
29.6 |
31,497 |
110,817 |
33,713 |
31,835 |
$490 |
Q2 2012 |
151,425 |
5.53 |
70.63 |
94.9 |
30.8 |
26,646 |
112,729 |
28,900 |
28,760 |
$499 |
Q1 2012 |
136,063 |
5.90 |
83.62 |
93.7 |
28.4 |
22,016 |
96,887 |
23,953 |
29,041 |
$534 |
|
|
|
|
|
|
|
|
|
|
|
Copper Production |
|
|
|
|
|
|
|
|
Ore Processed |
|
Copper Ore Grade |
Copper Recovery (%) |
Copper Produced (M lbs.) |
Copper Sold (M lbs.) |
Cash costs per pound of copper |
Chapada |
|
|
|
|
|
|
|
Q1 2014 |
4,844,752 |
|
0.33 |
79.3 |
27.6 |
25.4 |
$1.84 |
Total 2013 |
21,347,439 |
|
0.35 |
79.7 |
130.2 |
126 |
$1.65 |
Q4 2013 |
5,540,262 |
|
0.37 |
80.4 |
36 |
34.5 |
$1.53 |
Q3 2013 |
5,682,276 |
|
0.36 |
80.9 |
36.8 |
35.7 |
$1.48 |
Q2 2013 |
5,016,383 |
|
0.34 |
80.2 |
30.1 |
26.7 |
$1.76 |
Q1 2013 |
5,108,519 |
|
0.31 |
77.0 |
27.4 |
29.1 |
$1.90 |
Total 2012 |
21,591,482 |
|
0.39 |
82.2 |
150.6 |
139.0 |
$1.40 |
Q4 2012 |
5,734,592 |
|
0.40 |
81.1 |
40.5 |
37.3 |
$1.38 |
Q3 2012 |
5,566,744 |
|
0.40 |
80.6 |
39.4 |
37.1 |
$1.38 |
Q2 2012 |
5,802,649 |
|
0.38 |
83.3 |
40.4 |
37.4 |
$1.34 |
Q1 2012 |
4,487,496 |
|
0.36 |
84.0 |
30.3 |
27.3 |
$1.51 |
Alumbrera |
|
|
|
|
|
|
|
Q1 2014 |
1,108,149 |
|
0.38 |
76.8 |
7.2 |
10.7 |
$2.40 |
Total 2013 |
4,671,322 |
|
0.37 |
79.0 |
30.2 |
25.8 |
$2.21 |
Q4 2013 |
1,211,561 |
|
0.43 |
84.0 |
9.6 |
6.6 |
$1.75 |
Q3 2013 |
1,101,433 |
|
0.36 |
80.7 |
7.1 |
7.3 |
$2.45 |
Q2 2013 |
1,187,250 |
|
0.40 |
76.0 |
7.2 |
6.5 |
$2.40 |
Q1 2013 |
1,171,078 |
|
0.32 |
75.2 |
6.3 |
5.5 |
$2.40 |
Total 2012 |
4,962,373 |
|
0.40 |
84.0 |
37.4 |
35.4 |
$1.81 |
Q4 2012 |
1,305,186 |
|
0.30 |
85.0 |
8.5 |
11.1 |
$2.15 |
Q3 2012 |
1,271,732 |
|
0.44 |
85.1 |
10.4 |
14.8 |
$1.92 |
Q2 2012 |
1,218,825 |
|
0.45 |
85.9 |
10.5 |
2.3 |
$1.41 |
Q1 2012 |
1,166,630 |
|
0.40 |
79.4 |
8.0 |
7.2 |
$1.85 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news
release contains "forward-looking statements" within the meaning of
the United States Private Securities Litigation Reform Act of 1995
and applicable Canadian securities legislation. Except for
statements of historical fact relating to the Company, information
contained herein constitutes forward-looking statements, including
any information as to the Company's strategy, plans or future
financial or operating performance. 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 expected 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, the impact of the proposed new mining law in Brazil 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
and zinc), currency exchange rates (such as the Brazilian Real, the
Chilean Peso, the Argentine Peso, and the Mexican 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, risk related to non-core mine
dispositions, risks related to acquisitions, changes in project
parameters as plans continue to be refined, changes in project
development, construction, production and commissioning time
frames, risk related to joint venture operations, the possibility
of project cost overruns or 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 time lines, government regulation and the risk of
government expropriation or nationalization of mining operations,
environmental risks, unanticipated reclamation expenses, title
disputes or claims, limitations on insurance coverage and timing
and possible outcome of pending litigation and labour disputes, as
well as those risk factors discussed or referred to in the
Company's current and annual Management's Discussion and Analysis
and the 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 expected financial and
operational performance and results as at and for the periods ended
on the dates presented in the Company's plans and objectives and
may not be appropriate for other purposes.
CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING ESTIMATES
OF MEASURED, INDICATED AND INFERRED MINERAL RESOURCES
This news release uses the terms "mineral resource", "measured
mineral resource", "indicated mineral resource" and "inferred
mineral resource" are defined in and required to be disclosed by NI
43-101. However, these terms are not defined terms under Industry
Guide 7 and are not permitted to be used in reports and
registration statements of United States companies filed with the
Commission. Investors are cautioned not to assume that any part or
all of the mineral deposits in these categories will ever be
converted into mineral reserves. "Inferred mineral resources" have
a great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource
will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of
feasibility or pre-feasibility studies, except in rare cases.
Investors are cautioned not to assume that all or any part of an
inferred mineral resource exists or is economically or legally
mineable. Disclosure of "contained ounces" in a mineral resource is
permitted disclosure under Canadian regulations. In contrast, the
Commission only permits U.S. companies to report mineralization
that does not constitute "mineral reserves" by Commission standards
as in place tonnage and grade without reference to unit measures.
Accordingly, information contained in this news release may not be
comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements under the
United States federal securities laws and the rules and regulations
of the Commission thereunder.
NON-GAAP MEASURES
The Company has included certain non-GAAP measures including
"Co-product cash costs per gold equivalent ounce", "Co-product cash
costs per pound of copper", "By-product cash costs per gold
equivalent ounce", "Adjusted Earnings or Loss and Adjusted Earnings
or Loss per share" to supplement its financial statements, which
are presented in accordance with International Financial Reporting
Standards ("IFRS"). The term IFRS and generally accepted accounting
principles ("GAAP") are used interchangeably throughout this
MD&A, except that 2010 financial data is presented in
accordance with previous Canadian GAAP.
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 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.
Gold equivalent ounces assumes gold plus the gold equivalent of
silver using a ratio of 50:1.
CASH 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 International
Financial Reporting Standards ("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 operations. Average cash
costs figures are calculated in accordance with a standard
developed by The Gold Institute, which was a worldwide association
of suppliers of gold and gold products and included leading North
American gold producers. The Gold Institute ceased operations in
2002, but the standard remains the generally accepted standard of
reporting cash costs of production in North America. Adoption of
the standard is voluntary and the cost measures presented herein
may not be comparable to other similarly titled measures of other
companies. Cash costs include mine site operating costs such as
mining, processing, administration, royalties and production taxes,
but are exclusive of amortization, reclamation, capital,
development and exploration costs. Cash costs are computed both on
a co-product, by-product and all-in sustaining basis.
Cash costs per gold equivalent ounce on a by-product basis is
calculated by applying zinc and copper net revenue as a credit to
the cost of gold production and as such the by-product gold
equivalent ounce cash costs are impacted by realized zinc and
copper prices. These costs are then divided by gold equivalent
ounces produced. Gold equivalent ounces are determined by
converting silver production to its gold equivalent using relative
gold/silver metal prices at an assumed ratio and adding the
converted silver production expressed in gold ounces to the ounces
of gold production.
Cash costs on a co-product basis are computed by allocating
operating cash costs to metals, mainly gold and copper, based on an
estimated or assumed ratio. These costs are then divided by gold
equivalent ounces produced and pounds of copper produced to arrive
at the average cash costs of production per gold equivalent ounce
and per pound of copper, respectively. Production of zinc is not
considered a core business of the Company; therefore, the net
revenue of zinc is always treated as a credit to the costs of gold
production.
All-in sustaining cash costs seeks to represent total sustaining
expenditures of producing gold equivalent ounces from current
operations, including by-product cash costs, mine sustaining
capital expenditures, corporate general and administrative expense
excluding stock-based compensation and exploration and evaluation
expense. As such, it does not include capital expenditures
attributable to projects or mine expansions, exploration and
evaluation costs attributable to growth projects, income tax
payments, financing costs and dividend payments. Consequently, this
measure is not representative of all of the Company's cash
expenditures. In addition, our calculation of all-in sustaining
cash costs does not include depletion, depreciation and
amortization expense as it does not reflect the impact of
expenditures incurred in prior periods. This performance measure
has no standard meaning and is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures prepared in accordance with GAAP.
Cash costs per gold equivalent ounce and per pound of copper are
calculated on a weighted average basis.
The measure of cash costs, along with revenue from sales, is
considered to be a key indicator of a company's ability to generate
operating earnings and cash flow from its mining operations. This
data is furnished to provide additional information and is a
non-GAAP measure. It should not be considered in isolation as a
substitute for measures of performance prepared in accordance with
IFRS and is not necessarily indicative of operating costs,
operating profit or cash flows presented under IFRS.
ADJUSTED EARNINGS OR LOSS AND ADJUSTED EARNINGS OR LOSS PER
SHARE
The Company uses the financial measures "Adjusted Earnings or
Loss" and "Adjusted Earnings or Loss per share" to supplement
information in its consolidated financial statements. The Company
believes that in addition to conventional measures prepared in
accordance with IFRS, the Company and certain investors and
analysts use this information to evaluate the Company's
performance. The presentation of adjusted measures are not meant to
be a substitute for net earnings or loss or net earnings or loss
per share presented in accordance with IFRS, but rather should be
evaluated in conjunction with such IFRS measures. Adjusted Earnings
or Loss and Adjusted Earnings or Loss per share are calculated as
net earnings excluding (a) share-based payments and other
compensation, (b) unrealized foreign exchange (gains) losses
related to revaluation of deferred income tax asset and liability
on non-monetary items, (c) unrealized foreign exchange (gains)
losses related to other items, (d) unrealized (gains) losses on
commodity derivatives, (e) impairment losses and reversals, (f)
deferred income tax expense (recovery) on the translation of
foreign currency inter-corporate debt, (g) mark-to-market (gains)
losses on share-purchase warrants, (h) write-down of investments
and other assets and any other non-recurring adjustments.
Non-recurring adjustments from unusual events or circumstances are
reviewed from time to time based on materiality and the nature of
the event or circumstance. Earnings adjustments for the comparative
period reflect both continuing and discontinued operations.
The terms "Adjusted Earnings (Loss)" and "Adjusted Earnings
(Loss) per share" do not have a standardized meaning prescribed by
IFRS, and therefore the Company's definitions are unlikely to be
comparable to similar measures presented by other companies.
Management believes that the presentation of Adjusted Earnings or
Loss and Adjusted Earnings or Loss per share provide useful
information to investors because they exclude non-cash and other
charges and are a better indication of the Company's profitability
from operations. The items excluded from the computation of
Adjusted Earnings or Loss and Adjusted Earnings or Loss per share,
which are otherwise included in the determination of net earnings
or loss and net earnings or loss per share prepared in accordance
with IFRS, are items that the Company does not consider to be
meaningful in evaluating the Company's past financial performance
or the future prospects and may hinder a comparison of its
period-to-period profitability. Reconciliations of Adjusted
Earnings to net earnings are provided in the Company's MD&A
Section 5 "Overview of Annual Results" and Section 6 "Overview of
Quarterly Results" for both the yearly and quarterly
reconciliations, respectively, found on the Company's website at
www.yamana.com.
ADDITIONAL MEASURES
The Company uses other financial measures the presentation of
which is not meant to be a substitute for other subtotals or totals
presented in accordance with IFRS, but rather should be evaluated
in conjunction with such IFRS measures. The following other
financial measures are used:
- Gross margin - represents the amount of revenues in excess of
cost of sales excluding depletion, depreciation and
amortization.
- Mine operating earnings - represents the amount of revenues in
excess of cost of sales excluding depletion, depreciation and
amortization and depletion, depreciation and amortization.
- Operating earnings - represents the amount of earnings before
net finance income/expense and income tax expense.
- Cash flows generated from operations before changes in non-cash
working capital - excludes the non-cash movement from
period-to-period in working capital items including accounts
receivable, advances and deposits, inventory, accounts payable and
accrued liabilities. Cash flows generated from operations before
changes in non-cash working capital per share is calculated by
dividing the cash flows generated from operations before changes in
non-cash working capital, as reported in the consolidated statement
of cash flows, by the basic weighted average number of common
shares outstanding of the corresponding period.
The terms described above do not have a standardized meaning
prescribed by IFRS, and therefore the Company's definitions are
unlikely to be comparable to similar measures presented by other
companies. The Company's management believes that their
presentation provides useful information to investors because gross
margin excludes the non-cash operating cost item (i.e.
depreciation, depletion and amortization), Cash flows generated
from operations before changes in non-cash working capital excludes
the non-cash movement in working capital items, mine operating
earnings excludes expenses not directly associate with commercial
production and operating earnings excludes finance and tax related
expenses and income/recoveries. These, in management's view,
provide useful information of the Company's cash flows from
operations and are considered to be meaningful in evaluating the
Company's past financial performance or the future prospects.
Yamana Gold Inc.Lisa DoddridgeVice President, Corporate
Communications andInvestor Relations416-815-0220 or
1-888-809-0925investor@yamana.com
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