YAMANA GOLD INC. (TSX:YRI; NYSE:AUY) (“Yamana” or “the Company”)
today provided an update on its generative exploration program
whose primary objective is to advance the Company’s pipeline of
highly prospective exploration projects.
The Company has built large land positions in
all countries where it has producing assets, and it is pursuing
exploration projects in these countries that are at different
stages of advancement. Investing prudently and responsibly in these
projects today will ensure Yamana maintains its status as a
dominant gold company while continuing to grow and meet its
corporate objective to maximize free cash flow.
The Company will also continue to invest in
near-mine exploration to extend the lives of its current
operations, including the Canadian Malartic underground project,
and advance the Agua Rica project to feasibility study. The
generative exploration program will allow the Company to target a
number of other advanced and advancing opportunities in its
portfolio and help lay the foundation for the next generation of
Yamana mines in the coming decade.
“Yamana has always taken a long-term strategic
perspective,” said Henry Marsden, Senior Vice President of
Exploration at Yamana. “We believe that investing in a generative
exploration program today will secure our future tomorrow. We have
strong prospects in mine-friendly jurisdictions that we know well,
and we are confident that they will become a cornerstone of
Yamana’s next generation of mines.”
The following are key elements and objectives of
the generative exploration program:
- Target the Company’s most advanced
exploration projects while retaining the flexibility to prioritize
other projects in the portfolio as and when merited by drill
results.
- Add new inferred mineral resources
of at least 1.5 million ounces of gold equivalent within the next
three years to move at least one project towards a preliminary
economic assessment.
- On a longer term basis, advance at
least one project to a mineral inventory that is large enough to
support a mine plan demonstrating positive economics with annual
gold production of approximately 150,000 ounces for at least eight
years.
- Advance both gold-only and
copper-gold projects and, in the latter case, consider joint
venture agreements aimed at increasing mineral resource and
advancing the project to development while Yamana maintains an
economic interest in the project.
The Company expects to invest approximately $53
million in the program over the next three years, with $14 million
budgeted for 2020, $18 million budgeted for 2021, and $21 million
for 2022. Funding will be derived primarily from proceeds from
monetizations of non-cash producing assets and, where applicable,
flow-through funding agreements. The Company also expects to derive
funding from expected joint venture opportunities, particularly for
copper-gold projects. For information on exploration budgeting
related to the Company’s core assets, please refer to the press
release issued February 13, 2020, titled: ‘Yamana Gold Provides
2020-2022 Outlook.’
The generative exploration program will at first
focus on the most advanced projects in Yamana’s portfolio while
continuing drilling activity at a number of the Company’s highly
prospective earlier stage projects. These projects are categorized
as Tier One, Tier Two, or Tier Three projects, which are defined as
follows:
Tier One |
Projects with well-defined gold mineral resources and opportunities
to grow to a potentially economic threshold in the next three
years |
Tier Two |
Projects that have achieved significant drill intercepts and whose
geology along with other factors support rapid resource growth |
Tier Three |
Highly prospective projects with known mineralization defined with
rock and soil geochemistry that warrant future drill testing |
The Company is confident that its exploration
pipeline includes projects that can meet its shorter-term objective
of at least one project achieving 1.5 million ounces of gold in the
inferred mineral resource category within three years as well as
its longer-term objective of building at least one gold mineral
resource that can support a mine with annual production of
approximately 150,000 ounces per year for at least eight years.
Further, the Company is very confident that the allocated
exploration budget will be sufficient to achieve these goals.
While the Company is prioritizing its most
advanced exploration projects, a key element of the generative
exploration program is to build in the flexibility and agility to
shift focus quickly if a Tier Two or Tier Three project shows the
greatest potential to meet the Company’s objectives. The Company is
currently prioritizing projects in Brazil and Canada, but it also
holds large land packages in Chile and Argentina that it continues
to explore and evaluate.
SOURCES OF FUNDING
The Company does not intend to fund the program
from its free cash flow. Yamana holds a number of assets in
its portfolio that do not currently generate cash. The Company is
currently evaluating the monetization of some of these assets, and
it anticipates using the proceeds to fund the $53 million
investment in the generative exploration program. Where applicable,
the Company will also consider flow-through funding as an
alternative source of capital, and it will also consider joint
venture or similar arrangements to advance projects with large
prospective copper mineral resources.
By funding the generative exploration program in
this manner, the Company is aiming to ensure the program’s
long-term viability regardless of fluctuations in metal prices. In
addition, monetizing assets that are not generating free cash is
consistent with the Company’s primary objectives of turning
non-cash flow generating assets into assets that generate cash
flow, maximizing free cash flow, and returning cash to
shareholders.
The following is an overview of Yamana’s Tier
One projects along with select Tier Two and Tier Three
projects.
Figure 1: Tiered exploration projects in
Brazil
https://www.globenewswire.com/NewsRoom/AttachmentNg/67cedd2c-7e6d-44a5-8e15-845352ee92e3
Figure 2: Tiered exploration projects in
Canada
https://www.globenewswire.com/NewsRoom/AttachmentNg/26b0e56c-494f-4e9f-ace9-fa5cab7b1efb
TIER ONE PROJECTS
Lavra Velha
Lavra Velha is a near surface advanced
exploration project located in the Lavra Velha district in Brazil’s
Bahia state. Surface work and drilling has defined significant gold
mineralization, building on the 2013 inferred mineral resource of
3.93 million tonnes at 4.29 grams per tonne (“g/t”) for 543,000
ounces of gold. The defined Lavra Velha deposit consists of
shallowly dipping near surface mineralization that may be amenable
to low capital intensity open pit mining and heap leaching.
Metallurgical studies are ongoing. Drilling to date has
generated a number of significant gold intercepts not currently
included in the historical mineral resource estimates. Notable
results reported as estimated true width include: 10.70 metres at
20.03 g/t of gold (starting at 23 metres down hole); 9.56 metres at
9.49 g/t of gold (starting at 105 metres down hole); 19.70 metres
at 4.00 g/t of gold (starting at 112 metres down hole); and 27.93
metres at 2.82 g/t of gold (starting at 115 metres down hole).
Exploration has defined numerous additional gold
anomalies in soil and rock which will be drill tested as part of
the program. There are significant drill targets on the
55,000-hectare property, and Lavra Velha represents one of the most
immediate, shorter term opportunities to achieve the Company’s
stated exploration goals given the mineral resource to date and
drilling following the initial mineral resource estimate. Further,
Lavra Velha is highly prospective to meet the Company’s long-term
objectives, as it is a shallow, flat-dipping orebody, making it
ideal for open pit mining with a low strip ratio, and oxide
mineralization, with potential to be processed as a heap leach
operation. Therefore, the project has potential as a low capital
cost, low operating cost operation.
See Figure 3 for a property map of Lavra Velha
and Figure 4 for an outline of a mineral resource along with
adjacent exploration targets and select drilling
results. Download a PDF of detailed drill hole results at
Lavra Velha.
Figure 3: Lavra Velha property map
showing geological setting, gold rock geochemistry, and location of
the Lavra Velha target.
https://www.globenewswire.com/NewsRoom/AttachmentNg/58c7f36e-8f0a-40b1-aba6-e09ed70c3853
Figure 4: Lavra Velha map showing
outline of inferred mineral resource, adjacent exploration targets,
and select drilling results (reported as estimated
true width, with depth of interval in parenthesis for intervals
greater than 1 g/t of gold).
https://www.globenewswire.com/NewsRoom/AttachmentNg/f939d12a-5182-4f0f-9258-5ecd2ec53cd1
Monument Bay
Yamana is actively exploring its 31,000-hectare
Monument Bay project, which is located in northeast Manitoba. The
project covers the Twin Lakes shear zone, a strongly developed
regional structure that hosts gold mineralization along a
three-kilometre strike length. The Company has previously completed
an exploration agreement with Red Sucker Lake First Nation in 2018.
Mineral resources for Monument Bay demonstrate a large mineralized
envelope with higher grade plunging mineralized shoots that could
be accessed via open pit mining or, as mineralization continues at
depth, could be mined underground. In part, the exploration program
will focus on those higher grade extensions at depth. The
exploration program will also focus on areas surrounding the Twin
Lakes shear zone where the Company believes considerable
opportunity exists to increase resources. As such, while drilling
on the core Twin Lakes shear zone will continue, including down
plunge, exploration has recently expanded to other targets within
the existing exploration permit using reverse circulation drilling
to collect basal till and top-of-bedrock samples. Property-wide
exploration and follow-up diamond drilling will also continue in
2020 to build on the substantial Twin Lakes mineralization with the
goal of establishing a new mineral resource and conceptual mine
plan over the next year. Both open pit and underground options
are being considered.
Monument Bay, although in a remote location, has
certain advantages as a Canadian project, as Canada is one of the
world’s highest ranked mining jurisdictions, has low power costs,
and predictable mining regulations.
Figure 5: Monument Bay property geology
map showing footprint of the Twin Lakes deposit, distribution of
drill holes, and potential mineralization hosting structures and
targets.
https://www.globenewswire.com/NewsRoom/AttachmentNg/0440b4aa-cced-4295-b1f1-3e64332268ba
TIER TWO PROJECTS
Jacobina Norte
The Jacobina Norte project, located in Brazil’s
Bahia state just a few kilometres away from the Jacobina mine, is
one of Yamana’s most promising advancing exploration projects. The
Company controls 78,000 hectares that cover over 150 kilometres of
strike extent of the Serra do Corrego Formation, which hosts
paleoplacer gold mineralization at the Jacobina mine. Surface
exploration along strike has defined mineralization at Jacobina
Norte where surface sampling and historic shallow drilling of
mineralized reefs along a 15-kilometre trend have defined
significant gold grades.
Select historic drill results reported as core
lengths from this zone include: 5.38 metres at 3.97 g/t of gold;
2.50 metres at 2.58 g/t of gold; 4.13 metres at 2.34 g/t of gold;
and 2.78 metres at 2.32 g/t of gold. True widths are not
interpreted at this time. Exploratory drilling and further surface
exploration in 2020 will advance this prospect. Once a mineral
resource is identified for Jacobina Norte, the Company will
evaluate if the area is best developed as a standalone mine or as a
source of additional mine feed to the existing Jacobina plant. The
southernmost section of Jacobina Norte (the Serra Branca target) is
located just nine kilometres north of Canavieiras Norte within the
existing Jacobina mine infrastructure. See Figure 6 for
details of the Jacobina Norte property.
The experience at the Jacobina mine leads the
Company to conclude that there is a strong possibility over the
next decade of a second Jacobina-type mine along the concession
owned by Yamana near the current Jacobina mine. Further, the
concessions extend well beyond the Jacobina mine and Jacobina
Norte, which creates excellent opportunities for further prospects.
Figure 6: Jacobina Norte plan map
showing Yamana mineral claims, simplified geology, surface rock
sample gold geochemistry and 2009 Yamana drilling results as well
as historic drilling results (reported as g/t of gold over core
length in metres) where values are greater than 2.0 g/t of gold
over greater than 2.0 metres core length.
https://www.globenewswire.com/NewsRoom/AttachmentNg/a1d073de-1cc9-4827-89aa-2d36f65bf04c
Borborema
The Borborema project is a 25,000-hectare land
package in the Borborema district in Brazil’s Pernambuco state. The
project is located in a Proterozoic magmatic arc environment that
is similar to the belt hosting the Chapada mine, a large
copper-gold mine developed by Yamana and put into production in
2007.
Originally explored for narrow high grade veins,
exploration also identified strong copper–gold anomalies in both
rocks and soils. Initial drill testing of the São Francisco target
in 2019 generated near to surface, very high grade copper
intercepts from massive sulphide mineralization. Notable drill
intercepts with greater than 5% copper include: 3.66 metres at 0.58
g/t of gold and 7.14% copper (12.33 g/t gold equivalent)1 (starting
at 90 metres down hole); 2.97 metres at 0.40 g/t of gold and 7.20%
copper (12.25 g/t gold equivalent) (starting at 44.18 metres down
hole); and 7.5 metres at 0.35 g/t of gold and 6.41% copper (10.90
g/t gold equivalent) (starting at 70.37 metres down hole). True
widths are not interpreted at this time.
Exploration will expand on the known intercepts
and drill test other copper-gold soil anomalies to better define
the size and nature of the asset. While the Company will
continue to advance Borborema, the project is primarily a high
grade copper deposit with some gold. As such, Borborema represents
an excellent opportunity for a joint venture pursuant to which
Yamana would continue to benefit and create value while it
maintains its focus on its precious metals opportunities.
See Figure 7 for a property map of Borborema and
Figure 8 for drilling highlights at São Francisco. Download a
PDF of detailed drill hole results for the São Francisco
target.
Figure 7: Borborema
property map showing claims, geological setting, surface
rock copper and gold geochemistry, and copper and gold
targets.
https://www.globenewswire.com/NewsRoom/AttachmentNg/b9e47440-12e6-4633-90d2-35a0fdf0c436
Figure 8: São Francisco
target geological setting with select surface rock sample gold and
copper geochemistry and drilling highlights
(drilling results reported as core length, with depth of
interval indicated in parenthesis for intercepts with greater than
5% copper).
https://www.globenewswire.com/NewsRoom/AttachmentNg/bc855f59-0674-486f-83e0-6995abf886aa
Ivolandia
The Ivolandia project is located in Brazil’s
Goias state, south of the Chapada mine. Gold-in-soil anomalies and
surface gold mineralization were drill tested in wide-spaced
exploration holes in 2011-12 and more recently in
2019. Results to date suggest lower grade although very near
to surface oxide mineralization with large tonnage
potential. Select drilling results greater than 50 metres core
length with over 0.5 g/t of gold include: IVO-08 with 146.44 metres
at 0.56 g/t of gold (from surface), including 12.77 metres at 1.30
g/t of gold; and IVO-03 with 54.0 metres at 0.55 g/t of gold
starting at a hole depth of six metres. True widths are not
interpreted at this time. Exploration will continue in 2020 on this
67,500-hectare land package to drill test known targets, and expand
the mineralization footprint. As Ivolandia is very near to surface
and mineralization is oxide, there is a possible opportunity for a
very shallow open pit heap leach operation. See Figure 9 for a
property map of Ivolandia and Figure 10 for a target zone
map. Download a PDF of detailed drill hole results at
Ivolandia.
Figure 9: Ivolandia property map showing claims,
geology, surface rock gold geochemistry and stream sediment sample
results (gold grain counts).
https://www.globenewswire.com/NewsRoom/AttachmentNg/9e13eb83-93df-43c1-b0e6-8493bbbe73f2
Figure 10: Ivolandia main zone target
map showing geology and select drilling results (reported as g/t of
gold over core length, with starting point of interval indicated in
parenthesis) for drill holes with greater than 0.5
g/t gold over greater than 20 metres core length.
https://www.globenewswire.com/NewsRoom/AttachmentNg/5b16088b-e1cf-4b4f-b756-d77bed2efbd1
Domain
The Domain project is located near Oxford Lake
in northeast Manitoba. The land position consists of a
20,000-hectare property 100%-controlled by Yamana that is largely
unexplored. Interpretation of regional airborne magnetics together
with government geological survey till geochemistry support a
highly prospective environment for folded iron formation hosted
gold. The Yamana property surrounds three claims totaling 576
hectares that are under a joint venture agreement with New
Dimension Resources, which holds a 29.6% interest. The joint
venture claims cover an area of historic drilling with significant
gold intercepts hosted by iron formation that includes intervals
reported by Rolling Rock Resources in 2008 and New Dimension
Resources in 2017. Notable drill intercepts include: RR-08-23, 2.65
metres at 17.44 g/t of gold and 2.67 metres at 10.43 g/t of gold;
RR-08-21, 2.70 metres at 15.16 g/t of gold; and RR-08-20, 9.0
metres at 7.29 g/t of gold. True widths are estimated to be 80-100%
of core length based on limited drilling.
Yamana will continue to engage with the
Bunibonibee Cree Nation in 2020 in an effort to reach a mutually
beneficial agreement supporting the advancement of exploration
within this large, prospective land package. See Figure 11 for a
Domain property map. Download a PDF of detailed drill hole
results at Domain.
Figure 11: Domain Property map showing
claim outlines, geological setting, location of drill collars, and
geophysical HLEM (horizontal loop electromagnetics) conductors and
high magnetic responses. Historic drilling highlights reported for
holes with gold in g/t multiplied by core length in metres (g/t*m)
greater than 25. True widths are estimated to be 80-100% of core
length based on limited drilling.
https://www.globenewswire.com/NewsRoom/AttachmentNg/a8760ff0-227f-455f-b00e-18c124b2c77c
TIER THREE PROJECTS
Yamana controls a number of prospective land
packages with mineralization defined by surface exploration but
with little or no drilling completed to date. Notable Tier Three
projects include the Mara Rosa and Colider projects in Brazil along
with the Red Lake project in Canada.
Mara Rosa, located north of the Chapada mine in
Goias state, consists of 120,000 hectares of prospective mineral
concessions. This land package is marked by the same alteration
footprint as Chapada with widespread kyanite schist. Extensive soil
geochemistry has established the presence of a number of
significant copper, copper-gold, and gold only targets, several of
which are drill ready. Exploration in 2020 will systematically test
the stronger anomalies while continuing to build surface targets
with geochemical, geological, and geophysical data.
Colider is an early stage project located in
Mato Grosso state in the newly developing Alta Floresta district,
which is being explored for porphyry copper deposits by Anglo
American and Aura Minerals. Yamana has completed soil and rock
geochemistry on parts of the 9,700-hectare property with several
drill-ready gold targets defined. Surface work will continue and
initial exploratory drilling is expected in 2020.
The Red Lake project, located in northwestern
Ontario, consists of 543 hectares of land in two property
positions: North Madsen and Headway. North Madsen covers a
significant mineral envelope defined by 280 drill holes immediately
west of the Hasaga gold deposit owned by Premier Gold Mines.
Headway consists of 127 hectares south and adjacent to Newmont’s
Red Lake Gold Mines operation. Exploration targets at Headway
include potential down-dip projections of gold-bearing structures
occurring in the hanging wall of the high grade zone at the Red
Lake complex.
Qualified Persons and Data
VerificationScientific and technical information contained
in this press release has been reviewed and approved by Henry
Marsden (P. Geo. and Senior Vice President, Exploration). Mr.
Marsden 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.
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
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 proposed
generative exploration program and prospective and highly
prospective targets and projects, the Company’s short-term and
longer-term goals and objectives of the program; the Company’s
expectation that it will continue to generate cash flow and execute
on monetization initiatives, possible flow-through funding
agreements and joint venture funding opportunities, some of which
will support the generative exploration program. . 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 unforeseen
impacts on cash flow, monetization initiatives, available residual
cash, and other funding opportunities; unforeseen exploration and
test results, and other risk factors discussed 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 proposed generative exploration program and the
short-term and longer-term goals and objectives thereof, as well as
the Company’s expected sources of funding for the program and may
not be appropriate for other purposes.
(All amounts are expressed in United States
dollars unless otherwise indicated)
1 Gold equivalent grade calculated using a gold value of
US$1,250 per ounce and a copper value of US$3 per pound.
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