TIDMYAU
Yamana Gold reports first quarter 2009 results
- Record quarterly production levels; costs continue to decline -
TORONTO, May 5 /CNW/ - YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:YAU)
today announced its financial and operating results for the first quarter
ended March 31, 2009. All dollar amounts are expressed in United States
dollars unless otherwise specified.
FINANCIAL AND OPERATING HIGHLIGHTS
Financial and Operating
Highlights for the three-month period ended March 31, 2009 include:
- Revenues of $224.3 million
- Net earnings of $86.0 million, or $0.12 per share
- Cash flow from operations of $78.0 million before changes in non-cash
working capital items and $66.4 million after changes in non-cash
working capital items
- Total production from all mines of 271,482 gold equivalent ounces
(GEO)
- Average co-product cash costs of $379 per GEO
Development and Exploration
Highlights for the three-month period ended March 31, 2009 include:
- Provided an update to QDD Lower West showing positive economic
results and an increase in gold resources
- Announced positive results from Mercedes pre-feasibility study
supporting development of Mercedes as a mine
- Provided Ernesto/Pau-a-Pique scoping study and further update
indicating considerable potential exists for increasing resources at
the project
- Completed Pilar mineral resource estimate demonstrating substantial
increase in contained ounces and significant improvement in grade
"We showed exceptional results in the first quarter across all key
measures." commented Peter Marrone, Yamana's chairman and CEO. "Production was
in line with previous guidance. Costs were in line with expectations and
continued to decline. Gualcamayo and Sao Vicente are advancing towards
commercial production. We experienced significant advancements in our
development and near development stage projects during the quarter, further
supporting our growth plan and complementing our significant increase in
resources at the end of 2008 and strong growth across all key measures."
FINANCIAL AND OPERATING SUMMARY
Revenues for the first quarter of 2009 were $224.3 million. Revenues for
the quarter included a non-cash mark-to-market gain of $34.9 million related
to prior period invoices.
Net earnings for the first quarter of 2009 were $86.0 million, or $0.12
per share, representing a 33 percent increase from the comparative period last
year.
Cash flow from operations for the first quarter of 2009 was $78.0 million
before changes in non-cash working capital items, including pricing
adjustments of $32.8 million related to Chapada concentrate sales due to the
unprecedented decline in copper prices from the fourth quarter of 2008. Cash
flow from operations after changes in non-cash working capital items for the
first quarter of 2009 was $66.4 million, compared with $8.0 million in the
first quarter of 2008.
Total production for the first quarter of 2009 was 271,482 GEO (including
Alumbrera). Yamana previously guided a baseline of 290,000 GEO within a range
of +/-7 percent. Production increased month over month with March production
of 95,773 GEO, confirming the expected ramp up in production anticipated for
the remainder of the year. Cash costs for the first quarter 2009 were $379 per
GEO, confirming the expected downward trend. The Company believes further
improvements in costs may be realized over time.
Chapada, Brazil
Production at Chapada increased during the first quarter of 2009 to
38,552 ounces of gold mainly due to higher tonnage of ore mined and processed.
Yamana continued with the planned expansion to 20 million tonnes per year with
completion expected by the third quarter of 2009.
El Penon, Chile
El Penon produced 84,351 GEO during the first quarter, compared with
97,873 GEO and 97,944 GEO produced in the first quarter and fourth quarter of
2008, respectively. An interim quarter short-term production shortfall was a
result of grade variation, which reversed by the end of the quarter.
Production levels increased from 22,365 GEO in February to 31,801 GEO in
March, which was in line with budget expectations. Efforts have been
undertaken to create an ore stock pile which will allow for more consistent
production and better management of grade. Gold and silver grades are expected
to increase in the second half of the year. Yamana has previously guided that
El Penon is expected to produce most of its gold equivalent ounces in the
second half of 2009.
Jacobina, Brazil
First quarter production at Jacobina reached record levels and exceeded
expectations totaling 27,078 ounces of gold. This represents an increase of 16
percent from the fourth quarter of 2008, 46 percent from the third quarter of
2008 and 113 percent from the first quarter of 2008, consistent quarter over
quarter production growth. Costs also continue to show improvement quarter
over quarter declining to $400 per oz of gold, a decrease of 30 percent from
the fourth quarter of 2008, 48 percent from the third quarter of 2008 and 28
percent from the first quarter of 2008.
Gualcamayo, Argentina
Production totaled 20,483 ounces of gold in the first quarter of 2009,
meeting budget expectations. The primary crusher, ore pass and related
conveyor system are now complete and undergoing commissioning. Commercial
production is expected to begin in mid-2009.
Minera Florida, Chile
First quarter production of approximately 19,302 gold equivalent ounces
was consistent with Company expectations. Production in April increased by
approximately 7% from March, confirming the expected ramp up in production as
the expansion was completed in the first quarter. The largest increase in
production quarter over quarter is expected in the second quarter.
Fazenda Brasileiro, Brazil
First quarter production of 20,010 ounces of gold was in line with
Company expectations. Yamana expects production to increase to levels higher
than first quarter levels for the remainder of the year.
Guapore Mines, Brazil
Total production from the Guapore mines was 31,363 ounces of gold. Sao
Francisco performed to expectations, with production totaling 20,223 ounces of
gold in the first quarter. Commissioning continued at Sao Vicente and
production for the first quarter was 11,140 ounces of gold. Commercial
production at Sao Vicente is expected to begin in mid-2009.
San Andres, Honduras
First quarter production of 14,958 ounces of gold exceeded budget and
costs continued to show a trend of consistent improvement with Q1 costs lower
than budget.
Overview of Financial Results
The following table presents a summary of financial information for the
three months ended March 31, 2009:
(in thousands of United States Dollars; unaudited) March 31,
2009
-------------------------------------------------------------------------
Revenues $ 244,293
Cost of sales (119,585)
Depreciation, amortization and depletion (48,968)
Accretion of asset retirement obligations (801)
-------------------------------------------------------------------------
Mine operating earnings 74,939
Expenses
General and administrative and other (15,985)
Exploration (5,432)
-------------------------------------------------------------------------
Operating earnings 53,522
Foreign exchange gain 78,801
Other business income 2,759
Realized gain on derivatives 23,374
Unrealized loss on derivatives (47,724)
-------------------------------------------------------------------------
Earnings before income taxes and equity earnings 110,732
Income tax expense (31,779)
Equity earnings from Minera Alumbrera 7,040
-------------------------------------------------------------------------
Net earnings $ 85,993
-------------------------------------------------------------------------
Basic earnings per share $ 0.12
Diluted earnings per share $ 0.12
-------------------------------------------------------------------------
Cash flow from operations (before
changes in non-cash working capital items) $ 78,039
Cash flow from operations (after
changes in non-cash working capital items) $ 66,390
Capital expenditures $ 104,794
Cash and cash equivalents (end of period) $ 96,461
Average realized gold price per ounce $ 906
Average realized silver price per ounce $ 12.59
Chapada average realized copper price per lb $ 1.53
Gold sales (ounces) (excluding Alumbrera) 205,890
Silver sales (millions of ounces) 2.4
Chapada payable copper contained in
concentrate sales (millions of lbs)
32.4
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Further details of the 2009 first quarter results can be found in the
Company's unaudited Management's Discussion and Analysis and Interim
Consolidated Financial Statements at www.yamana.com, in the "Investors"
section under "Financial and Corporate Reports".
OUTLOOK
The Company remains focused on its core mines, generating cash flow,
preserving capital, maximizing cash balances and maintaining maximum
flexibility across its various interests including its development stage and
near development stage projects. The Company continues to focus on containing
costs and ensuring effective management of capital expenditures. It will also
continue to be committed to prudent and disciplined growth and will continue
to improve the value and returns of its various projects. In 2009, the focus
will be to increase mineral resources and mineral reserves and refine cost
analyses for four of the Company's principal development or near development
stage projects with the intention of making construction decisions
subsequently.
With total cash and available credit at approximately $347 million,
supplemented by robust cash flow in addition to assets with additional cash
value, Yamana is well positioned financially to fund its strategic growth
plans. Yamana continues with its plan to increase annual production to 2.0
million gold equivalent ounces in 2012. The advancement of certain development
stage projects, once construction decisions are made would advance Yamana
toward that target.
FIRST QUARTER CONFERENCE CALL
A conference call and audio webcast is scheduled for May 6, 2008 at 8:30
a.m. E.T. to discuss 2009 first quarter results.
Q1 Conference Call Information:
-------------------------------
Toll Free (North America): 800-732-6179
International: 416-915-5762
Participant Audio Webcast: www.yamana.com
Q1 Conference Call REPLAY:
Toll Free Replay Call (North America): 877-289-8525, Passcode 21303229
followed by the number sign.
Replay Call: 416-640-1917, Passcode 21303229
followed by the number sign.
The conference call replay will be available from 10:30 a.m. EST on May
6, 2009 until 11:59 p.m. EST on May 20, 2009.
For further information on the conference call or audio webcast, please
contact the Investor Relations Department or visit our website,
www.yamana.com.
ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders will take place on Wednesday, May 6,
2009 at 11:00 a.m. EST, and will be held at the Four Seasons Centre for the
Performing Arts, located at 145 Queen Street West, Toronto, Ontario, Canada.
The main entrance is located at the southeast corner of Queen Street West and
University Avenue.
For those unable to attend the meeting in person, there are several
listen-only alternatives listed below.
Via Telephone:
--------------
Toll Free (North America): 800-733-7560
International: 416-644-3417
Via Webcast:
------------
Live Audio Webcast: www.yamana.com
Conference Call REPLAY:
-----------------------
Toll Free Replay Call (North America): 877-289-8525, Passcode 21302802
followed by the number sign.
Replay Call: 416-640-1917, Passcode, 21302802
followed by the number sign.
The conference call replay will be available from 2:00 p.m. EST on May 6,
2009 until 11:59 p.m. EST on May 20, 2009. For further information on the
conference call or audio webcast, please contact the Investor Relations
Department or visit our website, www.yamana.com.
UPCOMING EVENTS
- Update to C1 Santa Luz economic analysis: Q3 2009
- C1 Santa Luz construction decision: H2 2009
- Ernesto/Pau-a-Pique feasibility study and construction decision: by
end of 2009
- Mercedes feasibility study and construction decision: Q1 2010
- Pilar feasibility study and construction decision: Q1 2010
About Yamana
Yamana is a Canadian-based gold producer with significant gold
production, gold development stage properties, exploration properties, and
land positions in Brazil, Argentina, Chile, Mexico and Central America. The
Company plans to continue to build on this base through existing operating
mine expansions and throughput increases, the advancement of its exploration
properties and by targeting other gold consolidation opportunities in the
Americas.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news release
contains or incorporates by reference "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 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 and the
Chilean Peso versus the United States Dollar), possible variations in ore
grade or recovery rates, changes in the Company's hedging program, changes in
accounting policies, changes in the Company's corporate resources, changes in
project parameters as plans continue to be refined, changes in project
development, 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 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 annual Management's
Discussion and Analysis and Annual Information Form for the year ended
December 31, 2008 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.
NON-GAAP MEASURES
The Company has included certain non-GAAP measures including cash cost
per gold equivalent ounce ("GEO") and cash flow from operations before changes
in non-cash working capital to supplement its financial statements, which are
presented in accordance with Canadian GAAP. Non-GAAP measures do not have any
standardized meaning prescribed under Canadian GAAP, 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 Canadian GAAP.
The Company has included cash cost per ounce information data because it
understands that certain investors use this information to determine the
Company's ability to generate earnings and cash flow for use in investing and
other activities. The Company believes that conventional measures of
performance prepared in accordance with Canadian GAAP do not fully illustrate
the ability of its operating mines to generate cash flow. The measures are not
necessarily indicative of operating profit or cash flow from operations as
determined under Canadian GAAP. Cash costs are calculated on a by-product and
co-product basis. Cash costs are determined in accordance with the Gold
Institute's Production Cost Standard. By-product cash costs are computed by
deducting by-product copper and zinc revenues from operating cash costs. Cash
costs on a co-product basis are computed by allocating operating cash costs
separately to metals based on an estimated or assumed ratio. Where cost per
ounce data is computed by dividing GAAP operating cost components by ounces
sold, the Company has provided a formal reconciliation of these statistics in
the Company's Management's Discussion and Analysis for the quarter ended March
31, 2009 available at www.sedar.com or on the Company's website at
www.yamana.com.
The Company uses the financial measure "cash flow from operations before
changes in non-cash working capital" or "cash flow from operating activities
before changes in non-cash working capital" to supplement its consolidated
financial statements. The presentation of cash flow from operations before
changes in non-cash working capital is not meant to be a substitute for cash
flow from operations or cash flow from operating activities presented in
accordance with GAAP, but rather should be evaluated in conjunction with such
GAAP measures. Cash flow 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. The terms "cash flow from operations
before changes in non-cash working capital" do not have a standardized meaning
prescribed by Canadian GAAP, and therefore the Company's definitions are
unlikely to be comparable to similar measures presented by other companies.
The Company's management believes that the presentation of cash flow from
operations before changes in non-cash working capital provides useful
information to investors because it excludes the non-cash movement in working
capital items is a better indication of the Company's cash flow from
operations and considered to be meaningful in evaluating the Company's past
financial performance or the future prospects. The Company believes that
conventional measure of performance prepared in accordance with Canadian GAAP
does not fully illustrate the ability of its operating mines to generate cash
flow.
For further information: MEDIA INQUIRIES: Mansfield Communications Inc., Hugh
Mansfield, (416) 599-0024; Jodi Peake, Vice President, Corporate
Communications & Investor Relations, (416) 815-0220, Email:
investor(at)yamana.com; Letitia Wong, Director, Investor Relations, (416)
815-0220, Email: investor(at)yamana.com, Website: www.yamana.com
(YRI. AUY YAU)
END
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