TORONTO,
ONTARIO–(Marketwired – Feb. 10, 2014) – YAMANA GOLD INC. (TSX:YRI)(NYSE:AUY)
(“Yamana” or “the Company”) reports preliminary operational
results for the fourth quarter and full year 2013, updates the Company’s
outlook and provides a corporate update.

The Company continues
to be focused on creating a balance between costs and production, margin
preservation and the generation and protection of cash flow. The Company
continues to believe this approach is appropriate and prudent to create longer
term value in the prevailing environment of uncertain commodity prices.

For 2013, cash flow
remained robust notwithstanding significant declines in precious metals prices.
In the second quarter, the Company implemented a cost savings program that has
allowed the generation of robust cash flow into year end notwithstanding lower
commodity prices. Cash flow expectations for the fourth quarter should be above
levels in the second quarter when the Company’s cost savings and containment
program was initiated.

The Company produced
approximately 1.2 million gold equivalent ounces (“GEO”)¹ in 2013
consisting of over 1.0 million ounces of gold and 8.4 million ounces of silver.
All-in sustaining cash costs (“AISC”)²’³ on a co-product basis for
the full year were approximately $947 per GEO and $814 per GEO on a by-product
basis. AISCs averaged below $925 per GEO on a co-product basis for the year
beginning in the second quarter when the Company’s cost containment initiative
was announced.

(All amounts are
expressed in United States dollars unless otherwise indicated.)

¹Silver production is
treated as a gold equivalent at a ratio of 50:1.

²Refers to a non-GAAP
measure. Reconciliation of non-GAAP measures are available at www.yamana.com/q32013.

³Includes cash costs,
sustaining capital, corporate general and administrative expense and
exploration expense.

Production Observations

• Production
  at all operating mines, not including new operations, met or exceeded goals set
  in 2013; this includes the revised goals set at Jacobina in the first quarter.

   

  • At
    Jacobina near term objectives for improvement of costs and underground
    development have been met or exceeded; and

  • Longer
    term objective of development of higher grade areas is in progress.

• Shortfall
  in production compared to overall production goals can be attributed entirely
  to new operations all of which were met with challenges and delays in 2013,
  which were resolved by year end. In the fourth quarter, there were significant
  improvements in production at Pilar and Ernesto/Pau-a-Pique with a continuing
  steady state ramp-up at C1 Santa Luz. Pilar and Ernesto/Pau-a-Pique production
  increased by 115% and 46% over third quarter levels with significant
  improvements occurring in December.

• Delayed
  equipment for Pilar, whose purpose is to improve dilution and productivity, has
  arrived on site and now better positions the operation to meet 2014 expectations.

• Gualcamayo
  production also improved in the fourth quarter. The underground expansion began
  contributing, while later than expected, in early December. Production at
  Gualcamayo for December and January averaged over 14,000 ounces per month, consistent
  with expected production levels of the expanded operation.

• Production
  levels were tapered at El Peñón and Mercedes in the fourth quarter to better
  position those mines for production in 2014, although both produced above
  goals.

• All
  mines are now producing which should significantly improve the reliability of
  production and cost estimates going forward beginning in 2014.

Costs Observations

Preliminary cash cost
estimates2 for 2013 are $596 per GEO on a co-product basis and $410 per GEO
after by-product credits which is consistent with previous guidance.

Preliminary cash cost
estimates for the fourth quarter are $647 per GEO on a co-product basis and
$417 per GEO after by-product credits which is consistent with previous
guidance.

All-in sustaining cash
costs for the full year 2013 were approximately $947 per GEO on a co-product
basis and $814 per GEO on a by-product basis.

All-in sustaining cash
costs for the fourth quarter were approximately $935 per GEO on a co-product
basis and $754 per GEO on a by-product basis.

The average all-in
sustaining cash cost on a co-product basis for the last three quarters was
below $925 per GEO, exceeding expectations laid out in the cost containment
initiative introduced in the second quarter.

Preliminary production
on a mine-by-mine basis for the fourth quarter and full year 2013 is summarized
below:

* Commissioning
production as the mine is not yet in commercial operation.  

The shortfall between
production and guidance is attributed entirely to new operations all of which
were met with challenges and delays in 2013, which were resolved by year end. Significant
production increases in 2014 will result from these new operations having
completed their ramp-up through the end of last year. Production in January
2014 has met overall goals and specific goals by mine, which positions the
Company to meet its expectations of increases in production in 2014 over 2013
at contained levels for costs and be able to more reliably estimate its
production and costs going forward.

PRODUCTION OUTLOOK

The Company has
budgeted production of 1.4 million GEO in 2014 at all-in sustaining cash costs
below $850 per GEO on a by-product basis and $925 per GEO on a co-product
basis. Silver production is expected to be approximately 8.8 million ounces in
2014 which is included in GEO.

As part of the annual
budgeting process, the Company has performed 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. For budgeted
production in 2014, all of these ounces relate to new operations as they
progress to full capacity. The Company considers 70,000 production ounces, or less
than five per cent, of its budgeted production for 2014 to be within this
category and most of these ounces would be in pre-commercial production and as
such not impact its cash flow expectations for the year.

The Company strives to
achieve budgeted production and conducts these evaluations for the purposes of
stress testing its business plan and for evaluation of the proper balance
between production and costs and other factors that may influence or affect
cash flow. While the Company will make every effort to produce at budget
levels, this approach provides a reasonable tool for assessing downside risk to
production or where costs are at risk or where the level of reliability for
certain production is below the level of total of its expected production. The
Company remains focused on the generation and maximization of cash flow.

The table below
provides the mine-by-mine 2014 production expectations according to budget.

Production in 2015 is
expected to further increase. The Company is evaluating proposed plans for
production increases in light of its philosophy of balancing production with
costs.

COSTS & ADDITIONAL
GUIDANCE

Estimated cash costs
for 2014 are forecast to be in line with 2013 on both a co-product and
by-product basis. Cash costs on a by-product basis are calculated after base
metal by-product credits, which assumes a price forecast for copper of $3.20
per pound.

As previously guided,
all-in sustaining cash costs for 2014 are expected to be below $850 per GEO on
a by-product basis and $925 per GEO on a co-product basis.

For 2014, sustaining
capital is expected to be approximately $320 to $340 million or approximately
$250 per GEO when allocating all capital to gold ounces with no consideration
for copper. The Company treats copper as a by-product and applies all
sustaining capital to GEOs. The expected decline in sustaining capital is in
part the result of the Company’s cost containment initiatives related to
maintenance, and the expected growth in gold production. Sustaining capital is
included in all-in sustaining cash costs.

Expansionary capital
spending for 2014 is expected to be approximately $150 million, which is
significantly lower than 2013 as the Company’s newest operations ramp-up to
commercial production and the Company continues to allocate capital to those
opportunities that can most readily contribute to cash flow.

The Company expects to
spend approximately $70 million on exploration where the focus continues to be
on near mine exploration and ounces that can most quickly be brought into
production and contribute to cash flow generation.

For 2014,
depreciation, depletion and amortization (“DD&A”) is expected to
be approximately $340 per GEO when excluding any allocation to copper as the
Company treats copper as a by-product and applies all DD&A to GEO.

General and
administrative expenses are expected to be below $140 million. The effective
tax rate for 2014 is forecast to be between 30 – 32%.

OTHER CORPORATE
UPDATES

Cerro Moro

Work continued on
updating the feasibility study and is expected to be completed in 2014.

The updated
feasibility study includes the following parameters:

• Initial
  capital costs expected to be approximately $150 million;

• Throughput
  rate of fewer than 750 tonnes per day;

• Expected
  production of approximately 150,000 GEO per annum;

• AISC
  are expected to be below the Company’s current costs structure.

Certain
pre-development work, including the development of a production ready decline
into one of the ore bodies, continues. Depending on the outcome of the studies
and subsequent construction decision, production could begin in 2016.

This reduced-scale operation
aligns with Yamana’s focus to balance production growth and capital spending to
maximize value creation, and allows the option to expand the operation in the
future if economically justified. The design is consistent with the Company’s
objective to be prudent in its capital spending in the current market
environment.

As a construction
decision is pending, expansionary capital estimates for 2014 would increase by
the amount required for Cerro Moro and depending on when a construction
decision is made and when in the year construction would begin.

Suyai

The Company plans to
apply for the needed permits in 2014.

A number of relevant
studies have already been completed and others are ongoing, which would
position the Company well to apply for permitting this year.

The current plan being
evaluated includes an underground operation without any chemical processing
onsite that will produce a precious metals concentrate that could be sold to
third parties or potentially processed at Cerro Moro.

The current plan also
includes the following parameters:

• Initial
  capital costs expected to be approximately $220 million;

• Throughput
  rate initially of approximately 1,150 tonnes per day; with a plan to expand
  over time;

• Expected
  production of approximately 150,000 GEO per annum;

• AISC
  are expected to be below the Company’s current costs structure.

This smaller scale
mining approach and processing off-site is a new approach not previously
contemplated for the development of Suyai.

This high grade
gold-silver deposit has similarities to the deposits at El Peñón and Mercedes,
and has the potential to add significant value to the Company’s portfolio of
producing mines. Consistent with the Company’s focus to balance production
growth and capital allocation, the plan for Suyai is being evaluated to ensure
it maximizes value creation while mitigating costs. The Company remains
committed to working with local communities and governments to ensure its plan
is in compliance with applicable laws and regulations.

Management Update

The Company also
announced the following enhancements to the senior management team:

Mr. Darcy Marud has
been appointed to the newly created position of Executive Vice President,
Enterprise Strategy. This position will be responsible for the integration of
exploration, operations and technical services, and will report directly to the
Chief Executive Officer. Mr. Marud has over 27 years of experience as a gold
exploration geologist in the Americas and since 2007 had held the position of
Senior Vice-President, Exploration at Yamana. This position recognizes the
importance of the various disciplines for proper evaluation and development of
new projects.

Mr. William (Butch)
Wulftange has been appointed Senior Vice President, Exploration. Mr. Wulftange
has over 30 years of experience in exploration, technical compliance and
business development with mining companies in the Americas. He most recently
held the position of Vice President, Resources & Reserves and Technical
Compliance at Yamana.

Mr. Trevor Mulroney
has been appointed Vice President, Operations, Argentina. This position will be
responsible for all operations processes and procedures at the mine and project
level in Argentina, and will report jointly to the Chief Operating Officer and
Vice President, Country Manager, Argentina. Mr. Mulroney has over 28 years of
operational and corporate experience across a wide range of commodities and
jurisdictions. Before joining Yamana, Mr. Mulroney was President and Chief
Executive Officer at Extorre Gold Mines. Mr. Mulroney has been and remains
responsible for Cerro Moro’s feasibility study.

As the Company enters
into a new phase of growth from projects in the pipeline, the Company also will
be recruiting more support in its technical services department to improve the
timeliness and quality of studies and advancement of these projects into production
while continuing to enhance value.

Additional Financial Considerations

Impairment testing is
conducted on a regular basis and at least annually. Impairment testing is
performed using life of mine after-tax cash flow projections, which incorporate
reasonable estimates of future metal prices, production based on current
estimates of recoverable mineral reserves and mineral resources, exploration
potential, future operating costs, capital expenditures, inflation, and
long-term foreign exchange rates. As part of its fourth quarter and full year
financial results and in connection with the Company’s annual impairment
testing, Yamana is conducting a review of its assets for possible impairment
charges. Preliminary analysis indicates that non-cash impairments may be
possible at Alumbrera, Ernesto/Pau-a-Pique, Jeronimo and other minor
properties, all of which are under evaluation. There is no indication for
impairment of any other of the Company’s assets. The total non-cash impairment
is expected to be approximately six percent of total asset book value.

FOURTH QUARTER AND
FULL YEAR 2013 RESULTS

The Company will
release its fourth quarter and full year 2013 results, and 2013 mineral
resource and mineral reserve estimate after market close on February 18, 2014
followed by a conference call and webcast on February 19, 2014 at 8:30 a.m. ET.

For further
information on the conference call or webcast, please contact the Investor
Relations Department at [email protected] 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. 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.

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 for the year
ended December 31st, 2012 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 for the year ended December 31st, 2012 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 “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.

Lisa Doddridge

Vice President,
Corporate Communications & Investor Relation

416-945-7362

1-888-809-0925

[email protected]