TORONTO, ONTARIO –(Marketwire –Jan. 11, 2012 ) –YAMANA GOLD INC. (TSX:YRI)(NYSE:AUY)(LSE:YAU) (“Yamana” or “the Company”) today provided operational results for the full year 2011 and updated the Company’s outlook for 2012 – 2014.2011 OPERATIONAL HIGHLIGHTS
— 1.10 million gold equivalent ounces (GEO)(1) of total production for
2011, an increase of 5% from 2010 and within previously provided
guidance.o El Penon exceeded guidance with 476,000 GEO production for the
year.
o Chapada gold production was 135,000 ounces, in line with
guidance, and Chapada copper production was 166 million pounds,
exceeding guidance and representing an 11% increase from 2010
levels.
o Gualcamayo gold production was 159,000 ounces, in line with
guidance and representing an 18% increase from 2010 levels.
o Jacobina gold production was 122,000 ounces, in line with
guidance, continuing the consistent and predictable performance
of recent years.— Cash costs(2) for the full year 2011 were approximately
$50 per GEO
after by-product credits, significantly less than previously stated
guidance of less than$250 per GEO.
OUTLOOK HIGHLIGHTS
— 2012 production is expected to be in the range of 1.2 – 1.3 million GEO,
an increase of 13% versus 2011 levels.— 2013 production is expected to be in the range of 1.5 – 1.7 million GEO,
an increase of approximately 43% versus 2011 levels.— 2014 production is targeted at a sustainable level of approximately 1.75
million GEO.
“In 2011, we continued to focus on delivering strong operating results leading to the generation of significant cash flow. This cash flow has allowed us to fully fund our growth, reward shareholders through increased dividends and accelerate capital spending to enhance our production growth profile. In the coming year, our focus on strong operating results leading to expected increases in cash flow will continue,” commented
(All amounts are expressed in
(1) Silver production is treated as a gold equivalent at a ratio of 50:1.
(2) By product cash costs are non-GAAP measures. A description of non-GAAP measures can be found at the end of this press release.
2011 PRELIMINARY OPERATING RESULTS
Production and costs for 2011 were within previously provided guidance. Production during Q4, 2011 was approximately 276,900 GEO, at costs consistent with guidance. For the full year ended
Full year production at the Company’s flagship operations delivered the most significant growth in both production and cash flow. El Penon production exceeded guidance, increasing by 11% from 2010 levels to 476,000 GEO. Chapada produced 135,000 gold ounces for the year and delivered copper production exceeding guidance at 166 million pounds, an increase of 11% from 2010 levels. Gualcamayo production was 159,000 ounces, in line with guidance. Jacobina produced 122,000 gold ounces in 2011, also within guidance. The Company’s newest operation, Mercedes, produced 8,400 commissioning GEO since the start-up of production in
Production on a mine-by-mine basis for Q4, 2011 and for the full year is summarized below:
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Preliminary Production (GEO) Q4 2011 FY2011
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Chapada 34,300 135,334
El Penon 115,000 475,543
Gualcamayo 40,700 158,871
Jacobina 32,000 121,693
Minera Florida 23,200 102,788
Mercedes 8,400 8,400
Fazenda Brasileiro 15,600 55,193
Alumbrera (12.5%) 7,700 44,457
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Total Production (GEO) 276,900 1,102,279
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Total Copper (M lbs.)(Chapada) 45 166
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PRODUCTION OUTLOOK 2012-2014
Production in 2012 is expected to be in the range of 1.2 – 1.3 million GEO. This will represent an increase from 2011 production of 13%, most of which will come from Mercedes as its production ramps up, and the Minera Florida expansion which will add to production starting end of
Production in 2013 is expected to increase by 43% from 2011 levels to a range of 1.5 – 1.7 million GEO, most of which will come from a full year of production from C1
Estimated production on a mine-by-mine basis for 2012-2013 is detailed below:
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Estimated Production (GEO) 2012E 2013E
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Chapada 110,000-120,000 140,000-160,000
El Penon 430,000-455,000 435,000-455,000
Gualcamayo 155,000-180,000 180,000-190,000
Jacobina 130,000-145,000 130,000-140,000
Minera Florida 135,000-150,000 140,000-155,000
Mercedes 105,000-120,000 125,000-135,000
Fazenda Brasileiro 50,000-60,000 50,000-60,000
Alumbrera (12.5%) 40,000-50,000 40,000-50,000
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Development Projects 20,000-30,000 240,000-315,000
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Total GEO 1,175,000-1,310,000 1,480,000-1,660,000
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Total Copper (M lbs)(Chapada) 140-155 120-135
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Silver production is expected to be consistent at between eight to nine million ounces in each of 2012 and 2013. Silver production is reported as a gold equivalent and included in the above forecasts and reported at a ratio of 50:1.
In late
Planned production for 2014 is expected to be at a sustainable level of approximately 1.75 million GEO.
Opportunities for sustainable production of over 1.75 million GEO in 2014 and sustainability thereafter include the following:
— Development plan for Chapada to incorporate Corpo Sul which is expected
to primarily sustain current production grades and levels for both
copper and gold.
— Production at El Penon increasing to a sustainable 440,000 GEO per year
as development work is completed at newly discovered ore bodies.
— Full ramp up of Gualcamayo’s expansions to be completed mid-2013, which
should increase sustainable production to over 200,000 gold ounces per
year beginning in 2014.
— Evaluation of milling higher grade ore at Gualcamayo subject to mineral
resource increases into 2012 and 2013, in relation to which a scoping
study is expected to be completed in mid-2012.
— Development of higher grade areas at Jacobina increasing production to
above 140,000 gold ounces per year beginning in 2014.
— Increasing Mercedes production to a sustainable level of 140,000 GEO
beginning in 2014 resulting mostly from a throughput increase to up to
1,800 tonnes per day.
— Increasing Pilar production to 140,000-150,000 gold ounces beginning in
2014 mostly due to an increase in plant capacity and processing ore from
Pilar and nearby Caiamar which is higher grade.
Current exploration and early development projects will potentially add to this production level and will be included in our guidance and forecasts once construction decisions have been made. These standalone projects include: Jeronimo, Agua Rica and Suyai.
CASH COSTS
Estimated cash costs for 2012 are forecasted to be below
CAPITAL EXPENDITURES
Total development capital spent in 2011, not including capitalized exploration, is approximately
Development capital to be spent in 2012, including the
— Initial development capital for Jeronimo in anticipation of a
construction decision expected in 2012. Jeronimo’s annual gold
production is expected to be approximately 150,000 ounces per year, with
production in the early years of approximately 190,000 ounces.
— Initial development capital for various studies relating to Suyai,
leading to the evaluation of Suyai as a high grade, low cost underground
mine with off-site processing, tailings and waste facilities.
— Development capital forPampa Augusta Victoria (PAV) and other vein
structures at El Penon which is expected to improve production and
provide mining flexibility for a sustainable production level of at
least 440,000 GEO per year and to increase mine life.
— Development capital for Caiamar, which will contribute to production at
Pilar thereby increasing production to a minimum of 140,000 gold ounces
per year once in full production.
— Development capital at higher grade ore bodies at Jacobina, allowing
production to increase to above 140,000 gold ounces per year.
Development capital will decline into 2013 and the following years as the Company’s development projects are completed.
For 2012, sustaining capital is expected to be
The Company is also contemplating certain initiatives that will result in improved recoveries, reduced costs and/or mine life extension at various operations. These projects are currently being evaluated with final decisions still pending. The most significant impact projects are at El Penon, Chapada and Pilar.
EXPLORATION
The Company expects to spend approximately
CURRENCY ASSUMPTIONS:
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2012E 2013E 2014E
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Brazilian Real / US$ 1.80 1.80 1.80
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Argentine Peso / US$ 4.50 4.75 4.75
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Chilean Peso / US$ 500 500 500
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About Yamana
Yamana is a Canadian-based gold producer with significant gold production, gold development stage properties, exploration properties, and land positions in
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 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 mineral 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
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 press release.
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.
CO-PRODUCT AND BY-PRODUCT CASH COSTS
The Company has included cash costs per GEO and cash costs per pound of copper 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 IFRS 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 IFRS. Cash costs per GEO are determined in accordance with the
FOR FURTHER INFORMATION PLEASE CONTACT:
Yamana Gold Inc.
Lisa Doddridge
Vice President, Corporate Communications
and Investor Relations
416-945-7362, 1-888-809-0925
[email protected]
