TIDMYAU
Yamana Gold reports first quarter 2010 results
- Continued production, revenues, earnings and cash flow growth -
TORONTO, May 3 /CNW/ - YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:YAU)
today announced its financial and operating results for the first quarter
ended March 31, 2010. All dollar amounts are expressed in United States
Dollars unless otherwise specified.
FIRST QUARTER HIGHLIGHTS
Financial and Operating Highlights
Highlights for the three-month period ended March 31, 2010 include:
- Total production from continuing operations of 239,838 gold
equivalent ounces (GEO)
- Cash costs(1) from continuing operations, excluding Alumbrera, of
$161 per GEO
- Revenues of $346.3 million
- Mine operating earnings of $129.9 million
- Net earnings of $79.5 million
- Adjusted Earnings(1) of $73.2 million or $0.10 per share
For the three months ended March 31,
(In millions of United States Dollars
except per share amounts) 2010
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Net earnings $ 79.5
Non-cash unrealized foreign exchange gains (5.7)
Non-cash unrealized gains on derivatives (4.6)
Non-recurring business acquisition costs 0.8
Stock-based and other compensation 5.6
Future income tax recovery on translation of intercompany debt (3.8)
Other non-recurring loss 1.1
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Adjusted Earnings before income tax effects 73.0
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Income tax effect of adjustments 0.2
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Adjusted Earnings $ 73.2
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Adjusted Earnings per share $ 0.10
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- Cash flows from continuing operations after changes in non-cash
working capital items of $125.7 million or $0.17 per share and from
continuing operations before changes in non-cash working capital
items(1) of $137.8 million or $0.19 per share.
Development, Exploration and Corporate Highlights
Highlights for the three-month period ended March 31, 2010 include:
- Completed basic engineering and advanced mine development at
Mercedes. Mine construction is expected to begin in May 2010 with
production expected to start-up in 2012.
- Completed basic engineering and advanced detailed engineering at C1
Santa Luz. Mine construction is expected to begin in 2010 with
production start-up in 2012.
- Undertook optimization initiatives at Agua Rica and received an
updated mine plan prepared by an independent engineering consulting
firm, which includes a new mineral reserve estimate containing
approximately 10 percent more copper and 12 percent more gold than
previously reported.
- Made a construction decision for the development of Ernesto/Pau-a-
Pique for start-up in 2012.
- Provided a new strategic plan for the optimization of El Penon and
announced the discovery of a new high grade gold and silver vein
system, Pampa Augusta Victoria.
"We remain committed to sustainable production which will initially be at
a level of approximately 1.1 million GEO and increase from that point," said
Yamana's chairman and chief executive officer, Peter Marrone. "Our focus has
been on ensuring operational reliability from existing mines although also
from future operations from mines now in development. The first quarter
demonstrated our continued commitment and focus in these matters. We have
three development stage projects now in progress, two optimization strategies
being evaluated, an exploration program which is expected to deliver strong
results this year and further cash flow growth anticipated in 2010. 2010 is
expected to be a significant year of achievement for Yamana."
FINANCIAL AND OPERATING SUMMARY
Revenues for the three-month period ended March 31, 2010 were $346.3
million, representing a 62 percent increase from the previous year.
Mine operating earnings for the three-month period ended March 31, 2010
were $129.9 million, representing a 99 percent increase from the previous
year.
Adjusted Earnings for the three-month period ended March 31, 2010 were
$73.2 million, or $0.10 per share, representing a 13 percent increase from the
previous year. Net earnings for the three-month period ended March 31, 2010
were $79.5 million.
Cash flows from continuing operations after changes in non-cash working
capital items for the three-month period ended March 31, 2010 were $125.7
million, or $0.17 per share, representing a 121 percent increase from the
previous year. Cash flows from continuing operations before changes in
non-cash working capital items for the three-month period ended March 31, 2010
were $137.8 million, or $0.19 per share, representing a 103 percent increase
from the previous year.
Cash and cash equivalents as at March 31, 2010 were $222.0 million.
Total production from continuing operations for the three-month period
ended March 31, 2010 was 239,838 GEO (comprised of 190,666 ounces of gold and
2.7 million ounces of silver) representing a six percent increase from the
previous year. Production is expected to ramp up quarter-over-quarter
throughout the year similar to trends in 2009. Consistent with this trend of
increased production, April production exceeded average monthly production in
the first quarter and provides further confidence in production guidance for
2010.
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Mine Q1 2010
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Chapada 27,794
El Penon 108,437
Gualcamayo 29,462
Jacobina 25,022
Minera Florida 20,630
Fazenda Brasileiro 14,738
Alumbrera (12.5%) 13,755
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Total 239,838
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Production is on track to achieve annual guidance of 1,030,000 to
1,145,000 GEO.
Cash costs from continuing operations, excluding Alumbrera, for the
three-month period ended March 31, 2010 were $161 per GEO. Cash costs are
expected to decline quarter-over-quarter throughout the year as production
ramps up, similar to trends in 2009.
Gross margin(1) per GEO sold for the three-month period ended March 31,
2010 was $842 per GEO, representing a 67 percent increase from the previous
year.
"The first quarter exhibited significant growth from last year," said
Chuck Main, Yamana's executive vice president, finance and chief financial
officer. "This sets the stage for solid results for the remainder of the year.
We have a healthy cash balance and robust cash flow which is expected to
experience further growth this year as we receive the full benefit from a full
year of commercial production at Gualcamayo and the benefit of higher levels
of production from El Penon."
Chapada, Brazil
Production at Chapada was 27,794 ounces in the first quarter. Mine
operations in the first quarter would normally be expected to be lower than in
subsequent quarters as a result of the rainy season. In the first quarter, the
Company also began operating the new fleet of large trucks. Production in the
second and third quarters of 2010 is expected to be at higher levels as the
rainy season dissipates similar to trends seen in 2009. Production
expectations for the year remain consistent with previous guidance.
Optimizations continue in the first quarter and are scheduled to increase
throughput to up to 22 million tonnes per year before 2012.
El Penon, Chile
El Penon produced 108,437 GEO in the first quarter, with throughput
increases resulting from plant upgrades completed in the fourth quarter.
During the quarter, Yamana also completed the transition to owner-mining.
Production in 2010 is expected to remain in the range of the first quarter
with modest variations quarter-over-quarter although costs are expected to
improve as efficiencies derived from owner-mining are recognized. Production
expectations for the year remain consistent with previous guidance. Yamana
continues to evaluate further optimization strategies at El Penon to increase
production from current levels. Recent plant expansions and resource
contributions from the newly discovered high grade vein systems, Pampa Augusta
Victoria, will further support this objective.
Gualcamayo, Argentina
Production at Gualcamayo was 29,462 ounces in the first quarter. Both
tonnage and grade are expected to increase throughout the year. Production
expectations for the year remain consistent with previous guidance.
Jacobina, Brazil
Production at Jacobina was 25,022 ounces in the first quarter. The
Company remains focused on improving dilution and recovery as well as
improving equipment availability and maintenance to better manage costs.
Production expectations for the year remain consistent with previous guidance.
The Company also remains focused on exploring, discovering and developing
higher grade areas including Canavieiras. Exploration efforts will also be
focused on the new discovery, Lagartixa, which exhibits substantially higher
grade than the current mineral reserve grade at Jacobina.
Minera Florida, Chile
Production at Minera Florida was 20,630 GEO in the first quarter and was
impacted by the earthquake which occurred on February 27. Processing resumed
in the second half of March, and essentially reached full capacity in the end
of March. Production expectations for the year remain consistent with previous
guidance. Yamana continues to advance its tailings reprocessing project at
Minera Florida, which is expected to add an additional 40,000 GEO beginning in
2012.
Fazenda Brasileiro, Brazil
Production at Fazenda Brasileiro was 14,738 ounces of gold. Production
expectations for the year remain consistent with previous guidance although
there will be variations quarter-over-quarter. As Fazenda Brasileiro reaches
the end of its known mine life, based on mineral reserves, exploration efforts
continue to focus on the two newly discovered areas, CLX2 and Lagoa do Gato,
which Yamana believes represent significant potential to increase the mine
life.
DEVELOPMENT UPDATE
C1 Santa Luz, Brazil
Yamana continues to conduct development work at C1 Santa Luz. Basic
engineering has been completed and detailed engineering is advancing.
Permitting and the start-up of construction are expected in 2010 with
production expected to commence in 2012. During the permitting period, Yamana
has undertaken a program to conduct pilot plant tests on metallurgy and
recoveries to ensure operational reliability once operations begin.
Mercedes, Mexico
Yamana continues to conduct development work at Mercedes. Basic
engineering and advanced mine development has been completed and exploration
results continue to confirm Mercedes' high geological potential. The Company
has purchased key lead time items and construction is expected to begin in May
2010 with production expected to commence in 2012.
Ernesto/Pau-a-Pique, Brazil
Yamana made a construction decision earlier this year for the development
of Ernesto/Pau-a-Pique based on positive feasibility results. Yamana continues
to conduct basic engineering and develop an exploration tunnel to facilitate
drilling in deeper areas where there are further mineral resources. The
Company also continues to conduct additional tests on metallurgy and
recoveries. Permitting is underway and construction is expected to begin in
2010 with production start-up targeted for 2012.
Agua Rica, Argentina
The Company continues to advance its Agua Rica project and, as part of
these initiatives, most recently the Company received an updated mine plan for
Agua Rica prepared by an independent engineering consulting firm. Under the
revised mine plan the project would deliver 870 million tonnes of ore over an
estimated mine life of 26.5 years and the new estimate for mineral reserves,
which contain approximately 10% more copper and 12% more gold than previously
reported and which forms the basis for the new mine plan, is summarized as
follows:
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Tonnes Cu Grade Au Grade Mo Grade Ag Grade
(000s) (%) (g/t) (%) (g/t)
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Proven 380,236 0.569 0.257 0.032 3.91
Probable 489,301 0.440 0.213 0.030 3.52
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Total proven and
probable mineral
reserves 869,537 0.496 0.232 0.031 3.69
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This reserve estimate is based on $2.25 / lb Cu, $825 / oz gold, $12 /
lb Mo and $14 / oz Ag and contains 9.5 billion pounds of copper, 6.5 million
ounces of gold, 595 million pounds of molybdenum and 103 million ounces of
silver.
Average annual production over the project mine life is summarized as
follows:
Time Frame
--------------------------------------
5 Years 10 Years LOM
---------- ---------- ----------
Copper (mm lbs/yr) 419 370 306
Gold - (000s oz/yr) 140 148 129
Molybdenum - (mm lbs/yr) 15.2 13.9 15.3
Silver - (000s oz/yr) 1,987 2,605 2,513
Other optimization initiatives remain under review. These include but are
not limited to the following:
1. Alternative concentrate transport logistics (eg. trucking and rail
versus pipeline);
2. Paste versus filtered tailings disposal;
3. Alternative waste disposal logistics and scheduling;
4. Two tunnels - one for ore and one for waste versus to one large
tunnel for both;
5. Alternative access routes to the mine;
6. Rhenium as a source of by-product credits; and
7. Optimization of grinding requirements
In addition, Yamana will determine further improvements in assumed gold
and molybdenum recoveries in particular. Actual gold recoveries at comparable
porphyry operations are significantly in excess of the assumed gold recoveries
for Agua Rica. Metallurgical testwork for copper had been significantly more
advanced than testwork for recoveries of other metals in the prior feasibility
study and the Company intends to conduct further metallurgical testwork to
increase gold and molybdenum recoveries. Any additional gold production from
these tests is not yet included in the mine plan.
Agua Rica is an exceptional development stage project offering
significant value and the Company is working towards a formal construction
decision for the project. Work continues on the preparation of a full update
to the prior feasibility study which will incorporate the recently completed
mine plan update and all other optimization initiatives as appropriate.
Overview of Financial Results
The following table presents a summary of financial and operating
information for the three months ended March 31, 2010:
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(in thousands of United States Dollars
except for shares and per share amounts; unaudited) March 31, 2010
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Revenues $ 346,341
Cost of sales excluding depletion, depreciation and
amortization (145,143)
Depletion, depreciation and amortization (69,707)
Accretion of asset retirement obligations (1,580)
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Mine operating earnings 129,911
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Expenses
General and administrative (24,042)
Exploration (6,758)
Other (3,725)
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Operating earnings 95,386
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Other business and interest expenses (15,946)
Foreign exchange gain 3,689
Realized loss on derivatives (5,230)
Unrealized gain on derivatives 4,586
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Earnings from continuing operations before income taxes, equity
earnings and extraordinary items 82,485
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Income tax expense (21,950)
Equity earnings from Minera Alumbrera 11,652
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Earnings from continuing operations 72,187
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Earnings from discontinued operations 7,352
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Net earnings $ 79,539
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Earnings Adjustments:
Non-cash unrealized foreign exchange gains (5,755)
Non-cash unrealized gains on derivatives (4,586)
Non-recurring business acquisition costs 822
Stock-based and other compensation 5,583
Future income tax recovery on translation of intercompany debt (3,772)
Other non-recurring loss 1,144
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Adjusted earnings before income tax effects 72,975
Income tax effect of adjustments 231
Adjusted Earnings $ 73,206
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Basic earnings per share $ 0.11
Diluted earnings per share $ 0.11
Adjusted Earnings per share $ 0.10
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Cash flow from operations (after changes in non-cash working
capital items) $ 125,671
Cash flow from operations (before changes in non-cash working
capital items) $ 137,830
Capital expenditures $ 126,445
Cash and cash equivalents (end of period) $ 221,983
Average realized gold price per ounce $ 1,114
Average realized silver price per ounce $ 17.07
Chapada average realized copper price per pound $ 3.25
Gold sales (ounces) 197,598
Silver sales (millions of ounces) 2.7
Chapada payable copper contained in concentrate sales
(millions of lbs) 29.1
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Further details of the 2010 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", or at www.sedar.com under the
Company's profile.
OUTLOOK AND STRATEGY
The Company continues to adhere to its key commitments to sustainable
production, stability of jurisdictions, disciplined growth and industry low
cash costs, which underlie Yamana's success in the past year.
The Company is committed to a sustainable production platform of
approximately 1.1 million gold GEO mainly from its six producing mines:
Chapada, Jacobina and Fazenda Brasileiro located in Brazil, El Penon and
Minera Florida in Chile, and Gualcamayo in Argentina. Production is expected
to be in the range of 1.030 million GEO to 1.145 million GEO in 2010
consistent with previous guidance. Copper production is expected to be in
excess of 150 million pounds in 2010 consistent with previous guidance.
Cumulatively, the above operating mines provide the Company with robust,
long-life production at the projected levels. The Company's approach to
sustainability, which is broader than consistent production levels, includes
the adherence to best practices and international policies for health and
safety, environment and community relations. The Company's focus on and
initiatives in creating strong community relations and support systems, energy
management, improvement of water quality and availability, in addition to
quality of life, are all important elements of its commitment to
sustainability.
The Company remains committed to operating in comparatively stable
jurisdictions, preferably where there is an established mining culture and
tradition. Yamana remains focused on the Americas, with production coming from
operating mines in Brazil, Chile and Argentina, and with a reach soon into
Mexico where the Mercedes project is expected to begin construction in May
2010. The Company is also active on the exploration front in Colombia.
The Company's well defined development stage and exploration projects, in
addition to further value-enhancing opportunities, provide the Company with a
superior organic growth profile and value proposition. Production growth will
come from the Company's development stage projects: C1 Santa Luz, Mercedes,
Ernesto/Pau-a-Pique, and from a tailings reprocessing project at the Minera
Florida mine. Production would initially increase by an additional 400,000 GEO
annually at cash costs consistent with the current cost and operating
structure. Production is expected to ramp up substantially in 2012 to
approximately 1.3 million GEO as these projects commence operations, with
production by the end of 2012 expected to be at an annual run rate of
approximately 1.5 million GEO, which represents a 46 percent increase in
production from 2009.
Further growth is expected from other pending projects, which include QDD
Lower West which will add to production at the Gualcamayo mine in Argentina,
along with Pilar and Caiamar, both of which are in Brazil close to the Chapada
mine. These projects are expected to increase the Company's production level.
Exploration successes and the development of Agua Rica are also expected to
further supplement long-term growth of the Company. Agua Rica is an
exceptional stand-alone project offering significant value and the Company is
working towards a formal construction decision for the project. Work continues
on the preparation of a full update to the prior feasibility study which will
incorporate the recently completed mine plan update, revised capital cost
estimates and all other optimization initiatives as appropriate.
NON-GAAP MEASURES
The Company has included certain non-GAAP measures including "By-product
cash costs per gold equivalent ounce", "Adjusted Earnings or Loss and Adjusted
Earnings or Loss per share", "Cash flows from operations before changes in
non-cash working capital" or "Cash flows from operating activities before
changes in non-cash working capital per share" and "Gross margin" to
supplement its financial statements, which are presented in accordance with
Canadian GAAP.
The Company believes that these measures, together with measures
determined in accordance with Canadian GAAP, 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
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.
RECONCILIATION OF NON-GAAP MEASURES
By-product Cash Costs
The Company has included cash costs per GEO information 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 Canadian GAAP do not fully illustrate
the ability of its operating mines to generate cash flows. The measures are
not necessarily indicative of operating profit or cash flows from operations
as determined under Canadian GAAP. Cash costs per GEO are determined in
accordance with the Gold Institute's Production Cost Standard and are
calculated on a co-product and by-product basis. Cash costs on a by-product
basis are computed by deducting copper by-product revenues from the
calculation of co-product cash costs of production per GEO. Cash costs on a
co-product basis are computed by allocating operating cash costs separately to
metals (gold and copper) based on an estimated or assumed ratio. Cash costs
per GEO are calculated on a weighted average basis.
Reconciliation of cost of sales per the financial statements to
by-product cash costs per GEO produced from continuing operations:
------------------------------------------
GEO In thousands of United States Dollars
United States Dollars per GEO
For the three months --------------------- --------------------
ended March 31, 2010 2009 2010 2009
-------------------------------------------------------------------------
Cost of sales (i) $ 145,143 $ 102,032 $ 642 $ 540
Adjustments:
Chapada treatment and refining
costs related to gold and
copper 5,863 8,847 26 47
Inventory movements and
adjustments (10,757) (6,363) (48) (34)
Commercial selling costs (5,182) (5,593) (23) (30)
Chapada copper revenue
including copper pricing
adjustment (98,650) (21,567) (436) (114)
--------------------------------------------------- ---------------------
Total GEO by-product cash
costs (excluding Alumbrera) $ 36,417 $ 77,356 $ 161 $ 409
Mineral Alumbrera (12.5%
interest) by-product cash
costs (15,708) (4,456) (1,142) (283)
--------------------------------------------------- ---------------------
Total GEO by-product cash
costs (i) $ 20,709 $ 72,900 $ 86 $ 356
--------------------------------------------------- ---------------------
Commercial GEO produced
excluding Alumbrera 226,083 189,293
---------------------------------------------------
Commercial GEO produced
including Alumbrera 239,838 205,038
---------------------------------------------------
(i) Cost of sales includes non-cash items including the impact of the
movement in inventory.
(ii) Amortization and inventory purchase accounting adjustments are
excluded from both total cash costs and cost of sales.
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 GAAP, 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 GAAP, but rather should be evaluated in
conjunction with such GAAP measures. Adjusted Earnings or Loss and Adjusted
Earnings or Loss per share are calculated as net earnings excluding (a)
stock-based compensation, (b) foreign exchange (gains) losses, (c) unrealized
(gains) losses on commodity derivatives, (d) impairment losses, (e) future
income tax expense (recovery) on the translation of foreign currency
inter-corporate debt, and (f) write-down of investments and other assets and
any other non-recurring adjustments. Non-recurring adjustments from unusual
and extraordinary events or circumstances, such as the unprecedented
volatility of copper prices in the fourth quarter of 2008, are reviewed from
time to time based on materiality and the nature of the event or circumstance.
Earnings adjustments 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 Canadian GAAP, 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 Canadian GAAP, 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. A reconciliation of Adjusted Earnings to net
earnings is provided on page one of this press release.
Cash Flows From Continuing Operations Before Changes in Non-Cash Working
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Capital
-------
The Company uses the financial measure "cash flows from operations before
changes in non-cash working capital" or "cash flows from operating activities
before changes in non-cash working capital" to supplement its consolidated
financial statements. The presentation of cash flows from operations before
changes in non-cash working capital is not meant to be a substitute for cash
flows from operations or cash flows from operating activities presented in
accordance with Canadian GAAP, but rather should be evaluated in conjunction
with such Canadian GAAP measures. Cash flows 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 flows from operations before changes in non-cash working
capital" or "cash flows from operating activities 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 flows 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 and is a better
indication of the Company's cash flows from operations and considered to be
meaningful in evaluating the Company's past financial performance or the
future prospects. The Company believes that a conventional measure of
performance prepared in accordance with Canadian GAAP does not fully
illustrate the ability of its operating mines to generate cash flows.
The following table provides a reconciliation of cash flows from
operation before changes in non-cash working capital:
Three months ended
---------------------
March 31, March 31,
In thousands of United States Dollars 2010 2009
-------------------------------------------------------------------------
Cash flows from operating activities of continuing
operations $ 125,671 $ 56,746
Adjustments:
Net change in non-cash working capital 12,159 11,272
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Cash flows from operating activities of continuing
operations before changes in non-cash working
capital $ 137,830 $ 68,018
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Cash flow per share
-------------------
The Company uses the financial measure "cash flow per share." The
presentation of cash flow per share is not meant to be a substitute for cash
flows from operations or cash flows from operating activities presented in
accordance with Canadian GAAP, but rather should be evaluated in conjunction
with such Canadian GAAP measures. "Cash flow per share" is calculated as "cash
flows from operations after changes in non-cash working capital" divided by
the weighted average number of shares outstanding and/or as "cash flows from
operating activities before changes in non-cash working capital" (Non-GAAP
measure) divided by the weighted average number of shares outstanding for the
period.
The term "cash flow per share" does not have a standardized meaning
prescribed by Canadian GAAP, and therefore the Company's definition is
unlikely to be comparable to similar measures presented by other companies.
The Company's management believes that the presentation of cash flow per share
provides useful information to investors because it presents cash flows from
operations on a per share basis and is useful information to investors in
evaluating the Company's past financial performance or future prospects in its
ability to generate cash flows.
The table below presents the calculation of cash flow per share:
Three months ended
---------------------
March 31, March 31,
In millions of United States Dollars 2010 2009
-------------------------------------------------------------------------
Cash flows from continuing operations after
changes in non-cash working capital $ 125.7 $ 56.8
Cash flows from continuing operations before
changes in non-cash working capital $ 137.8 $ 68.0
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Weighted average number of shares outstanding 737 733
-------------------------------------------------------------------------
Cash flows from continuing operations after changes
in non-cash working capital per share $ 0.17 $ 0.08
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Cash flows from continuing operations before
changes in non-cash working capital per share $ 0.19 $ 0.09
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Gross margin
------------
The Company uses the financial measure "gross margin" to supplement its
consolidated financial statements. The presentation of gross margin is not
meant to be a substitute for net earnings presented in accordance with
Canadian GAAP, but rather should be evaluated in conjunction with such
Canadian GAAP measures. Gross margin represent the amount of revenues in
excess of cost of sales. It may be expressed in terms of percentage of
revenues, both in total amount or on a per GEO basis.
The terms "gross margin" does not have a standardized meaning prescribed
by Canadian GAAP, and therefore the Company's definitions is unlikely to be
comparable to similar measures presented by other companies. The Company's
management believes that the presentation of gross margin provides useful
information to investors because it excludes the non-cash operating cost items
such as depreciation, depletion and amortization and accretion for asset
retirement obligations and considers this non-GAAP measure 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 flows.
The following table provides a reconciliation of gross margin:
Three months ended
---------------------
March 31, March 31,
2010 2009
-------------------------------------------------------------------------
Revenues $ 346,341 $ 213,600
Cost of sales excluding depletion, depreciation
and amortization (145,143) (102,032)
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Gross Margin $ 201,198 $ 111,568
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Gross Margin as % of Revenues from continuing
operations 58% 52%
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GEO Sold (excluding Alumbrera) 239,069 222,008
Gross Margin per GEO Sold $ 842 $ 503
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FIRST QUARTER CONFERENCE CALL
A conference call and audio webcast is scheduled for May 4, 2010 at
11:00 a.m. E.T. to discuss 2010 first quarter results.
Q1 Conference Call Information:
Toll Free (North America): 888-231-8191
International: 647-427-7450
Participant Audio Webcast: www.yamana.com
Q1 Conference Call REPLAY:
--------------------------
Toll Free Replay Call (North America): 800-642-1687, Passcode 63821038
followed by the number sign
Replay Call: 416-849-0833, Passcode 63821038
followed by the number sign
The conference call replay will be available from 12:15 p.m. ET on May 5,
2010 until 11:59 p.m. ET on May 19, 2010.
For further information on the conference call or audio webcast, please
contact the Investor Relations Department or visit our website,
www.yamana.com.
ANALYST AND INVESTOR DAY NOTIFICATION
Yamana will be hosting its annual analyst and investor day on May 4th at
1:00 p.m. ET. To access the audio webcast and download presentation slides for
Yamana's Analyst and Investor Day, please visit www.yamana.com.
ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders will take place on Wednesday, May 5,
2010 at 11:00 a.m. ET, 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): 888-231-8191
International: 647-427-7450
Via Webcast:
------------
Live Audio Webcast: www.yamana.com
Conference Call REPLAY:
-----------------------
Toll Free Replay Call (North America): 800-642-1687, Passcode 63829307
followed by the number sign
Replay Call: 416-849-0833, Passcode 63829307
followed by the number sign
The conference call replay will be available from 3:15 p.m. ET on May 5,
2010 until 11:59 p.m. ET on May 19, 2010.
Quality Assurance and Quality Control
Yamana incorporates a rigorous Quality Assurance and Quality Control
program for all of its mines and exploration projects which conforms to
industry Best Practices as outlined by the CSE and National Instrument 43-101.
This includes the use of independent third party laboratories and the use of
professionally prepared standards and blanks and analysis of sample duplicates
with a second independent laboratory.
Qualified Person
Evandro Cintra, P.Geo., Senior Vice President, Technical Services of
Yamana Gold Inc. has reviewed and confirmed the scientific and technical
information contained within this news release other than Agua Rica and serves
as the Qualified Person as defined in National Instrument 43-101.
Qualified Person
Enrique Munoz Gonzalez, MAusIMM of Metalica Consultores S.A. has reviewed
and confirmed the data on Agua Rica contained within this news release and
serves as the Qualified Person as defined in National Instrument 43-101.
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 Colombia. 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
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 Company's expectations
in connection with the projects and exploration programs discussed herein
being met, 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 and the Argentine 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, risk related to non-core mine
dispositions, 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 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, 2009 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.
------------
1) Cash costs per GEO, adjusted earnings, adjusted earnings per share,
cash flows from operations before changes in non-cash working
capital, cash flows from operations before changes in non-cash
working capital per share and gross margin are non-GAAP measures.
Reconciliation of non-GAAP measures is located on pages 8 to 11 of
this press release. Cash costs are shown on a by-product basis.
For further information: Letitia Wong, Director, Investor Relations, (416)
815-0220, Email: investor(at)yamana.com, www.yamana.com; MEDIA INQUIRIES:
Mansfield Communications Inc., Hugh Mansfield, (416) 599-0024
(YRI. AUY YAU)
END
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