Yamana Gold Reports Fourth Quarter and Year End Results-Record 2007 Revenue and Earnings, Increased Mineral Reserves, Operational and Exploration Update



    
    TSX: YRI
    NYSE:   AUY
    LSE: YAU
    

    TORONTO, March 25 /CNW/ - YAMANA GOLD INC. (TSX:YRI)(NYSE:  AUY)(LSE:YAU)
today announced its financial and operating results for the fourth quarter and
year ended December 31, 2007 and provided a progress update on its strategic
plan. Financial results reflect the activities of Meridian Gold and Northern
Orion only since their acquisition in October, 2007 and not for the full
quarter or year. All dollar amounts are expressed in US dollars unless
otherwise specified.

    2007 FOURTH QUARTER AND FULL YEAR HIGHLIGHTS

    
    Financial(1)

    -   Fourth quarter sales of $218.6 million, an increase of 9% over the
        third quarter. Annual sales of $747.1 million, an increase of 342%
        over the prior year.

    -   Net earnings were $47.1 million for the fourth quarter, an increase
        of 57% over the third quarter. For the year, net earnings of
        $157.2 million, an increase of 324% over the prior year.

    -   Adjusted earnings for the year of $259.1 million before income tax
        effects and $227.6 million after income tax effects or $0.55 per
        share, representing an increase of 686% over the prior year.

    -   Mine operating earnings of $384.6 million for the year, an increase
        of approximately 1,000% over the prior year.

    -   Cash and short-term investments of approximately $330 million as at
        December 31, 2007 compared to $69.7 million as at December 31, 2006.

    -   Cash flow from operations of $145.8 million for the fourth quarter
        after changes in non-cash working capital items. For the year, cash
        flow from operations of $293.9 million after changes in non-cash
        working capital items, representing $0.71 per share.

    -   Declared quarterly dividends of $0.01 per share per quarter.

    (1) Not included in sales, receivables, earnings or cash flow for the
        quarter or year end are concentrate sales pricing adjustments payable
        before April 30, 2008 for concentrate sold in the fourth quarter.
        Estimated additional amounts due to the Company are approximately
        $30 million of which $9.2 million has already been received.

    Operational

    -   Commercial production declared at the Chapada copper-gold project in
        February 2007, on budget and ahead of schedule.

    -   Total production from all mines of 1,023,855 gold equivalent ounces
        (GEO) for the twelve month period ended December 31, 2007 including
        pre-acquisition production of 426,552 gold equivalent ounces from the
        El Penon, Minera Florida, Rossi and Alumbrera mines. GEO includes
        gold and silver only.

    -   Total attributable production (not including pre-acquisition
        production) of 597,304 GEO for the year, an increase of 90% over the
        year ended December 31, 2006 at an average cash cost after by-product
        credits of $(182) per GEO. Total attributable production of 229,488
        GEO during the fourth quarter at average cash costs after by-products
        of $(9) per ounce.

    Development and Exploration

    -   Continued exploration efforts with significant successes, including
        an exploration program at El Penon to identify and define further
        high grade veins.

    -   Mineral resources at El Penon increased by more than 1 million ounces
        of gold during the year.

    -   Completed a positive feasibility study for the C1 Santa Luz gold
        project in Brazil.

    -   New discovery at Pilar de Goias.

    -   Continued construction at Sao Vicente.

    -   Continued construction of Gualcamayo with targeted start up in Q3
        2008.

    -   Received a scoping study for the Amelia Ines and Magdalena (AIM)
        deposits at Gualcamayo indicating that the deposits are higher grade,
        larger than initially projected, remain open for expansion and are
        expected to significantly contribute to production levels at
        Gualcamayo.

    -   Expansion program at the Jacobina mine well underway with 8,500 tpd
        throughput expected by the end of 2008.

    -   Positive scoping study results for Chapada pyrite project, sulphuric
        acid market study.

    -   Proven and probable gold reserves increased by 11.1 million ounces or
        163% from 6.8 million ounces on December 31, 2006 to 17.9 million
        ounces on December 31, 2007.

    Corporate activities

    -   Completed the acquisition of Meridian Gold Inc. and Northern Orion
        Resources Inc. for total consideration of $4.8 billion.

    -   Secured a credit facility for up to $700 million.

    -   Increased copper hedging program and secured an accelerated payback
        of one year at the Chapada copper-gold project.

    -   Completed currency hedges for 280 million Reais.
    

    "This year has been a transformative year," commented Peter Marrone,
Yamana's Chairman and CEO. "We have progressed from a dominant intermediate
gold producer to the premier gold producer. Further, we have diversified our
operating profile by adding another world class asset, El Penon, to our
portfolio and by strengthening our operating base in Argentina and securing a
strong operating base in Chile. If we compare our current production, growth,
sustainability and low costs, we rank amongst the best gold producers in the
world. With seven operating mines, and five in development, Yamana has a
unique offering of growth, sustainability and value."
    "In the current environment of significantly escalating capital costs,
Yamana's strategic view is that it is prudent to purchase or increase existing
production or develop more modest development stage projects as it mitigates
capital risk particularly with large scale development projects," added Mr.
Marrone. "With last year's acquisition, Yamana has fortified the base for
subsequent phases of organic growth from a robust exploration, and smaller
scale, near infrastructure development portfolio, and continue to grow cash
flow and earnings throughout 2008."

    STRATEGIC PLAN AND OUTLOOK

    The Company's strategic plan is focused on organic growth through
increases in mineral reserves and targeting production of 1.3 million GEO in
2008 and progressively increasing to a sustainable level of 2.2 million ounces
of gold starting in 2012. Production at these levels will be driven from
optimizing operations, enhancements, expansions, improvements and development
of existing assets and completion of the construction of projects currently
under development.
    Investments in high target exploration areas and successes from Yamana's
robust exploration portfolio will support and supplement these levels. In
addition to Yamana's goal of replacing mined ounces in 2008, particular focus
will be placed on operational developments and opportunities to maximize value
at Chapada, El Penon, Jacobina and Gualcamayo, and on exploration developments
at El Penon, QDD Lower West zone at Gualcamayo and Mercedes.
    In addition to production growth, Yamana remains committed to growing
earnings and cash flow, maintaining our low cost production as demonstrated by
our industry-leading low cash costs and returning value to shareholders. The
Company expects capital investments over the next three years to be in the
range of $1.3 billion, which will be funded by existing cash and operating
cash flow. Yamana's financial strategy involves ensuring there are sufficient
resources available to bring the Company's development projects into
production and fund an exploration program focused on high priority targets.
    Upcoming events include the release of initial resource estimates for La
Pepa, Jeronimo and Amancaya in the first half of 2008; updated resource
estimates for El Penon based on ongoing drilling; a feasibility study for the
Mercedes project in Mexico by the end of 2008; a feasibility study update for
Gualcamayo by the end of 2008; and additional upside from Yamana's advanced
exploration portfolio during the year.

    Continuing Developments - Operations

    El Penon, Chile

    Yamana has advanced its plans to increase production at the El Penon
mine, now anticipating increasing production to an annual rate of
approximately 500,000 GEO per year by the fourth quarter of 2008. Yamana has
prepared a detailed mine plan and is advancing development work to further
increase production at El Penon to approximately 600,000 GEO per year by 2010.
Further, Yamana is now determining if production can be increased to more than
650,000 GEO per year including ore from the development of Amancaya.
    Yamana has sufficiently advanced mine development and a mine plan which
would see ore processing increase to a sustainable level of approximately
3,500 tpd by the fourth quarter this year, increasing the production rate to
500,000 GEO per year. Yamana has also developed a plan to increase plant
throughput to 5,000 tpd and is now continuing development work primarily at
the Bonanza and Al Este veins in order to develop sufficient ore to meet the
increased plant capacity. This would result in production increasing to
600,000 GEO per year by 2010 subject to completion of development work.
    Existing mineral resources and an historical 72% conversion rate of
resources to reserves at El Penon support the Company's view that production
can be increased initially to 500,000 GEO per year and then to 600,000 GEO per
year for a sustainable period of at least 10 years. Further exploration
efforts in the North Block area would further increase resources and reserves.
    Upgrade of equipment and improvements in mine production and efficiency
are now underway. Expected capital costs of approximately $91 million for 2008
and 2009 are included in Yamana's previously announced capital costs for these
years.
    With the advancement of the mine plans for these increases in progress,
Yamana is now investigating the merits of further increasing production
through the integration and implementation of Amancaya ore with El Penon which
would see production increase to 650,000 GEO per year.

    Chapada, Brazil

    Expansion Plan

    Yamana has continued to advance its plan to double throughput at Chapada.
Yamana is now targeting processing 20 million tonnes of ore in 2009,
increasing to approximately 32 million tonnes of ore in 2010. This would
result in increased total production in the first five years (2008 to 2010) to
approximately 930 million pounds of copper and 740,000 ounces of gold. Total
average production from 2008 through to 2015 would be approximately 192
million pounds of copper and 133,000 ounces of gold per year.
    Capital expenditures for this expansion are estimated at $230 million
over 2009 and 2010, all of which has been assumed in Yamana's previously
announced capital expenditures for 2008 through to 2010 of approximately $1.3
billion. A complete expansion plan is expected to be completed by the end of
the year with increase in throughput expected to begin in 2009.

    Chapada Pyrite

    The original scoping study released in May 2007 concluded that additional
gold and copper can be recovered from the pyrite concentrate taken from the
tailings at the Chapada Mine and, in addition, a total of over 560,000 tonnes
of sulphuric acid would be produced.
    By treating approximately 580,000 tonnes per year of pyrite concentrate
over the Chapada mine life, about 10.6 million tonnes of sulphuric acid would
be produced and an additional 320,000 ounces of gold and 94 million pounds of
copper would be recovered.
    The original scoping study assumed hydrometallurgy for processing and on
that basis capital expenditures were estimated at $60 to $80 million for ore
processing. Yamana is investigating the merits of heap leaching, which would
be a more modest capital expenditure estimate at approximately $20 million.
    Yamana continues to advance discussions with potential manufacturers and
purchasers of sulphuric acid including agriculture/fertilizer businesses. The
supply alternative to these businesses is costly in part due to significant
transportation costs that would be associated with importing sulphuric acid.
    Yamana expects to complete an internal study by the end of 2008 and to
complete processing facilities for gold and copper recovery in the pyrite in
late 2010.

    Chapada Oxide Material

    The Chapada mine has an oxide material reserve of approximately 6 million
tonnes of ore at an average grade of 0.5 g/t Au and 0.5% Cu. Yamana has now
begun to implement plans to process the oxide material, which would yield an
additional 7 million pounds of copper and 10,200 ounces of gold over an eight
year mine life.
    Capital expenditure is estimated at approximately $30 million. Yamana
continues to conduct metallurgical testing to improve recovery and is
targeting production of gold and copper from the oxide material in 2010.
    Beginning in late 2010, total additional annual production from the
pyrite and oxide material would be approximately 27,200 ounces of gold and 12
million pounds of copper for an initial six to eight year period. Additional
revenues would come from a royalty on sulphuric acid or the sale of sulphur in
the pyrite.

    Jacobina, Brazil

    In mid-April, Jacobina will be producing at full capacity following the
plant shut down during February and March of this year due to upgrades to the
mills in order to accommodate the increase in production and longer mine life.
Engineering and construction continued to advance in 2007 and early 2008 with
throughput capacity increasing to 6,500 tpd in mid-April. Production at
Jacobina is expected to increase quarter over quarter in 2008 as the mine
ramps up to 8,500 tpd by year end. Plant capacity is expected to increase to
8,500 tpd by a series of further improvements to the plant. At 8,500 tpd,
annual production is projected at approximately 190,000 ounces of gold per
year.

    Gualcamayo, Argentina

    Yamana continues to progress its plan at Gualcamayo to reach 300,000
ounces of annual sustainable gold production. The Gualcamayo mine will be
comprised of three main mining opportunities - Quebrada Del Diablo (QDD),
Amelia Ines and Magdalena (AIM) and QDD Lower West. Construction is expected
to be completed in the third quarter of 2008 for the main QDD deposit with ore
production start-up this summer. Mine development work at the Amelia Ines and
Magdalena satellite deposits is expected to begin in the second half of 2008,
with production start-up targeted for mid-2009. An initial resource estimate
for QDD Lower West is outlined below in the Continuing Developments -
Exploration section. Metallurgical testwork supports the integration of QDD
Lower West into the overall operations.
    Planned production from all three main areas of mineralization combined
is expected to be approximately 300,000 ounces of sustainable gold per year
beginning in late 2010 when production from QDD Lower West begins.

    Minera Florida, Chile

    Yamana continues to advance its mine and mill expansion at Minera Florida
which is expected to increase milling capacity to over 2,600 tpd and annual
production to 65-70,000 GEO by November 2008, increasing to 125-135,000 GEO in
2009. Based on exploration potential and the history of replacing reverves, a
new plan is in place to increase plant capacity to 3,500 tpd in 2009.

    Continuing Developments - Exploration

    El Penon, Chile

    Exploration drilling recommenced at El Penon in late February.
Approximately 130,000 metres of drilling is planned for 2008 primarily in the
North Block area where the high grade Bonanza vein was discovered in 2007.
Drilling will focus on extending the known vein structures, Bonanza, Al Este
and Esmeralda in addition to identifying new structures. The potential for
identifying new structures was confirmed in late 2007 when drilling
approximately 800 metres east of Bonanza intersected significant gold and
silver mineralization. Hole SNX0012 returned 0.46 metres true width of 12.4
g/t Au and 1,028 g/t Ag, and 0.92 metres true width of 14.6 g/t Au and 1,597
g/t Ag from down hole depths of 397 and 402 metres respectively. Drilling in
2008 will test the strike and dip extensions of this structure to verify its
continuity.

    Qualified Persons

    Mr. William H. Wulftange, P. Geo., Corporate Director, Technical
Compliance of Yamana Gold Inc., has supervised the preparation of the El Penon
technical data contained within this press release and serves as the Qualified
Person as defined by National Instrument 43-101.

    Gualcamayo, Argentina - QDD Lower West

    The recently defined QDD Lower West mineral resource is part of a WNW
trending, subhorizontal, westerly plunging tensional gash, hosted by carbonate
breccias, marble and karsted limestones. Drilling indicates that the
dilational structure is still open down plunge and along strike. More than 75%
of the mineral resource in QDD Lower West is oxide and therefore amenable to
heap leaching.
    The mineral resource for the QDD Lower West zone was estimated by
ordinary kriging constrained by a 3D solid model based on a 1 g/t gold grade
shell. The zone has been intersected by 16 core holes drilled between 2005 and
December 2007. Drilling and underground development is continuing to test for
expansion of the zone and to upgrade inferred resources to the measured and
indicated category. Dimensions of this continuous zone of mineralization are
currently 300 metres of strike, 100 metres thickness and minimum down dip
length of 160 metres.

    
    The QDD Lower West mineral resource using all available data to the end
    of 2007 is summarized below:

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
               MEASURED               INDICATED          MEASURED+INDICATED
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cut-  Tonnes                 Tonnes                  Tonnes
    off  greater         in-    greater                 greater          in-
     Au     than   Au   situ       than   Au in-situ       than   Au    situ
    g/t   Cutoff  g/t ounces     Cutoff  g/t  ounces     Cutoff  g/t  ounces
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    1.0  100,600 3.54 11,400  4,358,500 2.61 365,300  4,459,100 2.63 376,800
    -------------------------------------------------------------------------
    1.2   98,900 3.58 11,400  4,333,100 2.62 364,400  4,432,000 2.64 375,800
    -------------------------------------------------------------------------
    1.4   91,900 3.75 11,100  4,269,900 2.64 361,700  4,361,800 2.66 372,800
    -------------------------------------------------------------------------
    1.6   86,200 3.90 10,800  4,082,000 2.69 352,600  4,168,200 2.71 363,400
    -------------------------------------------------------------------------
    1.8   79,900 4.07 10,500  3,695,200 2.79 331,300  3,775,100 2.82 341,800
    -------------------------------------------------------------------------
    2.0   74,200 4.24 10,100  3,167,100 2.94 299,000  3,241,300 2.97 309,100
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                   INFERRED
    -----------------------------
    -----------------------------
    Cut-     Tonnes
    off     greater          in-
     Au        than   Au    situ
    g/t      Cutoff  g/t  ounces
    -----------------------------
    -----------------------------
    1.0   2,808,600 2.59 234,100
    -----------------------------
    1.2   2,808,600 2.59 234,100
    -----------------------------
    1.4   2,806,300 2.59 233,900
    -----------------------------
    1.6   2,786,500 2.60 232,900
    -----------------------------
    1.8   2,696,800 2.63 228,000
    -----------------------------
    2.0   2,462,800 2.70 213,600
    -----------------------------
    -----------------------------
    

    The previously published feasibility study for Gualcamayo in August 2007
did not incorporate any of these resource ounces into the economic analysis
for the project.


    Qualified Person

    Yamana retained Mr. Ronald Simpson, P. Geo. of GeoSim Services Inc. to
complete a mineral resource update of the QDD Lower West deposit at the
Gualcamayo project in San Juan, Argentina. Mr. Simpson has extensive
experience with the Gualcamayo project having visited various times in the
last four years and also having completed resource estimates on the QDD
deposit in 2001, 2004 and 2006 and on the Amelia and Magdalena deposits in
2007. Mr. Simpson has supervised the preparation of the QDD Lower West
technical data contained within this press release and serves as the Qualified
Person as defined by National Instrument 43-101.

    Mercedes, Mexico

    Mineral Resource Estimate

    Preliminary inferred mineral resource calculations have been completed
through drill hole M08-212 using an ID3 method. The cutoff date for the
mineral resources was the end of January. The AuEq was calculated using a
conversion of 150:1 for the Ag:Au which includes the recovery for silver.


    
          Inferred Mineral Resource Estimate (2.0 g/t AuEq cutoff)
    -------------------------------------------------------------------------
                                 Au     Ag
                      Tonnes    g/t    g/t       Oz Au      Oz Ag       AuEq
    -------------------------------------------------------------------------
    Mercedes Zone  2,095,000   8.31   91.4     559,000  6,156,000    600,040
    -------------------------------------------------------------------------
    Klondike Zone    671,000   6.18   33.5     133,000    724,000    137,827
    -------------------------------------------------------------------------


    Total          2,766,000   7.78   77.4     692,000  6,880,000    737,867
    -------------------------------------------------------------------------
    

    Continuing Exploration

    Drilling is on-going at Mercedes with 5 core rigs currently on-site.
Exploration during the fourth quarter of 2007 and first quarter of 2008 has
focused primarily on the Mercedes Vein zone with a) 30-metre infill drilling
above the 900-metre elevation, and b) wide spaced exploration drilling to the
northwest of the Corona de Oro shoot. Since the October 16, 2007 press release
announcing new drilling results, a total of 131 core holes totaling 34,844
metres have been completed (M07-137 to M08-267), bringing the total project
drilling to 82,915 metres in 367 holes. Assay results have been received up to
hole M08-212.

    Mercedes In-Fill Results

    In-fill drill results to-date continue to confirm the presence of a zone
of contiguous +2.0 g/t AuEq mineralization along a 1,100-metre strike length
of the Mercedes Vein zone, which encompasses the Corona de Oro, Centinela and
Casa Blanca ore shoots. Gold-silver mineralization is contained within complex
multi-stage epithermal low sulphidation quartz-carbonate vein, stockwork and
breccia zones up to 15.0 metres in true width, hosted within a thick sequence
of andesite flows and volcanic breccias. Ore grade values have been
intersected locally over a vertical range of up to 440 metres (720 to 1,160
metre elevation).

    The presence of bonanza grade gold and silver values within the heart of
the Corona de Oro ore shoot has been confirmed by 30-metre infill drilling,
highlighted by the following intercepts:

    
    M07-172 14.79 metres (8.20 true width) @ 69.86 g/t Au and 427.6 g/t Ag

    M07-176 7.10 metres (4.90 true width) @ 73.69 g/t Au and 373.2 g/t Ag

    M07-184 13.18 metres (5.20 true width) @ 30.23 g/t Au and 191.5 g/t Ag

    M07-189 8.35 metres (3.00 true width) @ 123.74 g/t Au and 407.6 g/t Ag

    Mercedes in-fill drill results are shown on the attached Figure 1 and in
    Table 1.

    Mercedes Northwest Extension Exploration Drilling
    

    Limited wide-spaced exploration drilling was conducted along 300 metres
of strike length to the northwest of the Corona de Oro ore shoot. Drilling
intersected anomalous to local high grade Au-Ag values in epithermal
quartz-carbonate veins along strike and at depth, as well as in the parallel
Paloma Vein zone (located NE and parallel to the Mercedes Vein). Significant
intercepts in this area include:

    
    M07-142 (Paloma) 13.11 metres (8.00 true width) @ 3.53 g/t Au and
    109.0 g/t Ag

    M07-145 (Mercedes) 9.39 metres (4.90 true width) @ 14.66 g/t Au and
    134.6 g/t Ag

    M07-152 (Mercedes) 3.43 metres (1.40 true width) @ 13.52 g/t Au and
    165.3 g/t Ag

    Mercedes Northwest Extension drill results are attached in Table 2.
    

    Klondike

    Using a 0.5 g/t AuEq cutoff, core drilling at Klondike in 2007 identified
a contiguous zone of mineralization nearly 400 metres long and up to 55.0
meters in width, covering a vertical range of 240 metres (1,000 to 1,240 metre
elevation). Gold-silver mineralization is contained within complex multi-stage
epithermal low sulphidation quartz-carbonate vein, stockwork and breccia
zones, hosted within a thick sequence of andesite flows and volcanic breccias.
    Exploration drilling at Klondike was temporarily placed on hold in
November 2007, to focus on Mercedes Vein in-fill drilling. Exploration
drilling will resume in the second quarter, focusing on both the western
extension of the Klondike Vein zone, which is covered by post-mineral volcanic
and sedimentary rocks, and a series of at least four sub-parallel epithermal
vein zones that have been identified in the andesite basin to the south of the
Klondike Vein zone.

    Outlook

    Exploration drilling in the second quarter of 2008 will focus on these
two structural trends, particularly to the northwest of the Aida Mine, where
the highly prospective projections of both of these structures are covered by
post-mineral sedimentary rocks.
    M3 Engineering, with offices in Hermosillo and Tucson, has been
contracted to lead a scoping study which is ongoing and includes water,
geotechnical, siting, environmental, and metallurgical investigations.
Permitting is underway for an exploration ramp which is planned to start in
the second quarter. This production sized ramp will be 1,700 metres long, at
-15%, and will facilitate underground in-fill drilling, and bulk sampling
along cross-cuts.

    Quality Assurance and Control

    All samples were collected through diamond drilling, which is being
conducted by Major Drilling. The samples are collected by splitting the core
in half using hydraulic splitters. The average sample size is approximately
0.9 metres and weighs approximately 2.9 kilograms and the second half of the
core is maintained in secure locked warehouses. The Mercedes project uses ALS
Chemex in Mexico for sample preparation and ALS Chemex in Vancouver for sample
analysis. The core samples are picked up directly at the project site by ALS
Chemex and sent to the Chemex prep facility in Hermosillo, Mexico. The total
sample is cruzad to +75% passing a 2 mm screen. A smaller portion, up to 250
grams is then pulverized so plus 85% passes a -200 mesh. The pulps are sent to
the Vancouver laboratory where both Au and Ag are analyzed by fire
assay/gravimetric finish (50-gram pulp). Some samples are also assayed by
metallic screen methods when visible gold is noted, to verify fire assay gold
grades. Yamana operates a QA/QC program at Mercedes that includes the
insertion of a series of professionally prepared certified standards and
blanks, as well as locally prepared sterile samples, into the sample stream. A
number of reject samples are systematically forwarded to ACME Laboratory in
Vancouver, for comparison of Au and Ag grades.

    Qualified Persons

    Mr. Mark A. Hawksworth, P. Geo, Senior Geologist, Mercedes Project, of
Yamana Gold Inc., and Mr. Greg Walker, P. Geo, Senior Manager, Resource
Estimation of Yamana Gold Inc., have supervised the preparation of the
Mercedes technical data contained within this press release and serve as the
Qualified Persons as defined by National Instrument 43-101.

    Pilar de Goias, Brazil

    Exploration drilling resulted in a new discovery at the Pilar de Goias
project in the Archean Greenstone Belt in November 2007. Mineral resources at
Pilar are detailed in the Mineral Reserves and Resources section of this press
release. Yamana's targeted drilling program will continue in 2008. Pilar de
Goias is an underexplored gold belt with significant potential for discovery
of new gold deposits.

    FIRST QUARTER 2008 OUTLOOK

    Production for the first quarter of 2008 is expected to be approximately
220,000 GEO. Copper production from Chapada for the first quarter of 2008 is
expected to be approximately 30 million pounds of copper. This is in line with
budget expectations and production is expected to increase quarter over
quarter during the year.

    FINANCIAL AND OPERATING SUMMARY

    Financial results reflect the activities of Meridian and Northern Orion
only since their acquisition in October 2007 and not for the full quarter or
year. Earnings adjusted for certain non-cash and non-recurring transactions
for the fourth quarter ended December 31, 2007 were $35.2 million or $0.06 per
share, compared to $0.5 million or $nil per share for the prior year. Adjusted
earnings for the year were $227.6 million, compared to $19.5 million for the
prior comparative year. The increase in earnings is primarily due to
commencement and ramp up of operations at the Chapada Mine.
    For the year, adjusted earnings were $0.55 per share. This compares to
adjusted earnings per share of $0.07 for the previous comparative year,
representing an increase of 686% year over year.
    Consolidated net earnings for the fourth quarter were $47.1 million,
compared to $6.1 million for the same quarter ended in 2006. Net earnings for
the year were $157.2 million. This compares to a loss of $70.2 million and
$4.1 million for the years ended 2006 and 2005, respectively.
    Basic and diluted earnings per share for the quarter were $0.08, compared
to $0.02 for the same period last year. For the year, basic earnings were
$0.38 per share. Diluted earnings per share were $0.36 per share for the year.
This compares to a basic and diluted loss per share of $(0.25) for 2006 and
$(0.03) per share for 2005.
    Fourth quarter revenues were $218.6 million, compared to $60 million for
the same period last year. Revenue for the year was $747.1 million, an
increase of 342% over the preceding year. The increase in revenue is
attributable to an increase in sales volume due to production from operations
previously under construction, the impact from the acquisition of Meridian,
the addition of copper sales and an increase in both the gold and copper
prices over the prior year.
    Revenues for the fourth quarter included sales of 161,753 ounces of gold,
28.4 million pounds of copper and 1.8 million ounces of silver. The average
realized price for the quarter was $795 per ounce of gold, $3.19 per pound of
copper and $14.14 per ounce of silver. Revenues for the year included 532,531
ounces of gold and 117 million pounds of payable copper and 1.8 million ounces
of silver. The average realized price for the year was $707 per ounce of gold,
$3.32 per pound of copper and $14.14 per ounce of silver.
    The Company's average realized gold price during the year of $707 per
ounce compares to an average realized price of $613 and $448 per ounce during
the prior years ended 2006 and 2005. All gold sales were transacted in the
spot market. The spot price itself increased 15% relative to the year ended
December 31, 2006. The higher gold price positively affected the Company's
revenues. The impact of a higher average gold price on mine operating earnings
was partially offset by a strengthening of the Brazilian Real relative to the
US Dollar and higher operating costs. Higher local operating costs before the
impact of foreign exchange movements were a result of increases in maintenance
costs, the price of fuel, the price of power, and other consumables.
    The average realized copper price from Chapada was $3.32 per pound for
the year which compares to an average spot price of $3.23 per pound for the
year.
    Mine operating earnings for the fourth quarter were $76.6 million,
compared to $8.9 million for the fourth quarter of 2006 and compared to $124.9
million for the third quarter of 2007. Mine operating earnings for the fourth
quarter were impacted by the decline in the copper price during the quarter.
For the year, mine operating earnings were $384.6 million. This compares to
$35.1 million for the year ended 2006 and $8.6 million for the year ended
2005. Earnings do not include concentrate sales pricing adjustments payable
before April 30, 2008 for concentrate sold in the fourth quarter. Estimated
additional amounts due to the Company of approximately $30 million, of which
$9.2 million has already been received, are not included as receivables or in
earnings and cash flow for the fourth quarter or year end. These results
represent tremendous growth over the past two years resulting from commercial
production at the Chapada mine and Sao Francisco mine commencing February 2007
and August 2006, respectively, the acquisition of the Jacobina mine as of
April 6, 2006, the acquisition of the San Andres mine as of February 28, 2006
and the acquisition of the El Penon and Minera Florida mines as of October 12,
2007.
    Total production for the fourth quarter was 262,352 GEO including
Yamana's proportionate interest from the Alumbrera mine. Production
attributable to Yamana for the quarter was 229,488 GEO. In 2007, total
production from all mines was approximately 1.0 million gold equivalent ounces
including pre-acquisition production. For 2007, Yamana produced 576,908 GEO
excluding production from its equity interest from the Alumbrera mine and
pre-acquisition production from other acquired mines. Total production
including Alumbrera was 597,304 GEO. This compares to total production of
313,591 ounces of gold in 2006 and 115,572 ounces of gold in 2005.
    Average cash costs after by-products for the fourth quarter were $(9) per
GEO. For the year, average cash costs after by-products were $(182) per GEO,
including Alumbrera. This compares to cash costs of $326 per ounce of gold in
2006 and $289 per ounce of gold for 2005.
    Copper production for the fourth quarter was 30.5 million pounds from the
Chapada mine. An additional 11.4 million pounds of copper were produced from
the Alumbrera mine attributable to Yamana. Copper production for the year was
122.9 million pounds from the Chapada mine.
    Co-product cash costs per pound of copper were $0.78 for the fourth
quarter and $0.72 for the year from the Chapada mine. Co-product cash costs,
including Yamana's interest in the Alumbrera mine, were $0.97 per pound for
the fourth quarter and $0.79 per pound for the year.
    Inventory as at December 31, 2007 was $97.6 million, compared to $51.3
million as at December 31, 2006. Inventory increased as a result of the
acquisitions and ramp up of recently constructed mines.
    Proven and probable mineral reserves were 17.9 million ounces of
contained gold,182 million ounces of contained silver and 11.4 billion pounds
of contained copper as of December 31, 2007 based on a gold price of $550-$575
per ounce, a silver price of $10.75 per ounce and a copper price of $1.75 per
pound. This represents an increase of approximately 11.1 million ounces of
gold or 163% from the prior year.
    General and administrative expenses for the fourth quarter were $37.7
million. General and administrative expenses for the year were $68.5 million
(2006 - $24.4 million; 2005 - $10.4 million) and include $16 million of
non-recurring internal transaction related costs.
    The Company recorded an earnings pick-up from its 12.5% interest in the
Alumbrera Mine of $3.8 million for the fourth quarter and the year, which was
adversely affected by fair value adjustments on inventory as of the date of
acquisition. Had the Company not been required to fair value inventory as of
the acquisition date, the equity pick-up would have been approximately $10.0
million net of additional amortization expense of $5.1 million on the amount
of the purchase price allocation in excess of Northern Orion's carrying value
of Alumbrera.
    Cash and short-term investments as at December 31, 2007 were
approximately $330 million compared to $69.7 million as at December 31, 2006.
Working capital as at December 31, 2007 was $177.9 million compared to $76.3
million as at December 31, 2006. The increase in cash and working capital is a
result of the increase in operation activities primarily from the Chapada
mine.
    Cash flow from operations before changes in non-cash working capital
items was $28.0 million for the fourth quarter, compared to $8.8 million for
the comparative quarter ended December 31, 2006. Cash flow from operations
after changes in non-cash working capital items was $145.8 million for the
fourth quarter, compared to $8.8 million for the comparative quarter ended
December 31, 2006.
    Cash flow from operations before changes in non-cash working capital
items was $292.8 million for the year compared to $40.2 million and $6.4
million for the years ended 2006 and 2005, respectively. The increase in cash
flow from operations for the twelve months is primarily due to the start-up of
operations at the Chapada Mine and the acquisition of El Penon and Minera
Florida mines. Cash flow from operations for the year after changes in
non-cash working capital was $293.9 million compared to an outflow of $3.2
million and an inflow of $3.4 million for the years ended 2006 and 2005,
respectively.

    
    OPERATIONS REVIEW AND UPDATE


    Three months ended December 31, 2007(1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total Gold Total Gold Cash costs per
    Equivalent Equivalent Gold
                                    Production          Sales     Equivalent
                                          (oz)          (oz.)          ounce
                                  -------------------------------------------
                                  -------------------------------------------
    (in US$ millions)                       Q4             Q4             Q4
                                  -------------------------------------------
                                  -------------------------------------------
    Chapada                             45,428         38,852          ($969)
    El Penon(i)                        101,692        101,205    $       262
    Sao Francisco                       21,244         21,057    $       455
    Jacobina                            18,264         19,996    $       626
    San Andres                           8,139          7,718    $       648
    Fazenda Brasileiro                  22,506         18,228    $       460
    Fazenda Nova                             -              -              -
    Minera Florida(i)                   16,705         14,969    $       259
    Rossi (40% interest)(i)              4,828          4,226    $       410
                                  -------------------------------------------
    Total before equity
     interest                          238,806        226,251    $       107
                                  -------------------------------------------
    Alumbrera
     (12.5% interest)(i)                23,546         29,718          ($886)
                                  -------------------------------------------
                                  -------------------------------------------
    Total                              252,352        255,969            ($3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Gold equivalent ounces include silver ounces converted to gold on the
        ratio of 55:1 for 2007.
    (i) Including pre-acquisition production.



    Year Ended December 31, 2007(1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                    Total Gold     Total Gold     Cash costs
                                    Equivalent     Equivalent       per Gold
                                    Production          Sales     Equivalent
                                          (oz)          (oz.)          ounce
                                  -------------------------------------------
                                  -------------------------------------------
    (in US$ millions)                     2007           2007           2007
                                  -------------------------------------------
                                  -------------------------------------------
    Chapada                            178,125        168,135        ($1,360)
    El Penon(i)                        383,448        373,478    $       225
    Sao Francisco                      104,764        104,672    $       373
    Jacobina                            54,076         54,458    $       541
    San Andres                          51,538         53,692    $       410
    Fazenda Brasileiro                  87,969         86,959    $       388
    Fazenda Nova                         6,925          8,712    $       551
    Minera Florida(i)                   68,297         65,692    $       249
    Rossi (40% interest)(i)             11,820         11,204    $       426
                                  -------------------------------------------
    Total before equity
     interest                          946,962        927,002            ($7)
                                  -------------------------------------------
    Alumbrera
     (12.5% interest)(i)                76,893         75,586          ($926)
                                  -------------------------------------------
                                  -------------------------------------------
    Total                            1,023,855      1,002,588           ($75)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Gold equivalent ounces include silver ounces converted to gold on the
        ratio of 55:1 for 2007.
    (i) Including pre-acquisition production.





    MINERAL RESERVES AND RE

SOURCES (Mineral resources exclude proven and probable mineral reserves) Mineral Reserves (Proven and Probable) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gold Proven Reserves Probable Reserves ----------------------------------------------------- ----------------------------------------------------- Contained Contained Tonnes Grade oz. Tonnes Grade oz. (000's) (g/t) (000's) (000's) (g/t) (000's) ----------------------------------------------------- Alhue/ Minera Florida (2) 680 4.25 93 3,469 4.57 509 Alumbrera (12.5%) (1) 46,250 0.45 669 1,250 0.35 14 Chapada (1) 17,331 0.33 184 293,489 0.23 2,170 C1-Santa Luz (1) 10,491 1.76 592 6,782 1.50 328 El Penon (2) 1,490 7.03 337 7,554 6.57 1,595 Fazenda Brasileiro (1) 1,746 2.91 164 974 3.20 100 Gualcamayo (1) 7,523 0.98 237 59,332 0.80 1,534 Jacobina (1) 3,559 1.98 227 15,270 2.03 997 San Andres (1) 27,171 0.69 606 6,302 0.67 135 ----------------------------------------------------- Sao Francisco - Main Ore (1) 17,955 1.21 696 8,026 1.41 364 Sao Francisco - ROM Ore (1) 11,323 0.28 102 5,962 0.27 52 Total Sao Francisco (1) 29,277 0.85 798 13,988 0.93 417 ----------------------------------------------------- Sao Vicente - Main Ore (1) 6,580 1.06 225 2,854 0.90 82 Sao Vicente - ROM Ore (i) (1) 1,694 0.27 15 1,932 0.33 20 Total Sao Vicente (1) 8,274 0.90 239 4,786 0.67 103 ----------------------------------------------------- Rossi (40%) (2) - - - 209 14.36 97 Sub Total Gold Reserves 153,791 0.84 4,146 413,406 0.60 7,998 ----------------------------------------------------- Agua Rica (1) 347,831 0.25 2,818 449,892 0.205 2,965 Total Gold Reserves 501,622 0.43 6,964 863,089 0.40 10,963 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gold Total - Proven and Probable ------------------------------- ------------------------------- Contained Tonnes Grade oz. (000's) (g/t) (000's) ------------------------------- Alhue/ Minera Florida (2) 4,149 4.51 602 Alumbrera (12.5%) (1) 47,500 0.45 683 Chapada (1) 310,820 0.24 2,354 C1-Santa Luz (1) 17,272 1.66 920 El Penon (2) 9,045 6.64 1,931 Fazenda Brasileiro (1) 2,720 3.02 264 Gualcamayo (1) 66,855 0.82 1,771 Jacobina (1) 18,829 2.02 1,224 San Andres (1) 33,473 0.69 741 ------------------------------- Sao Francisco - Main Ore (1) 25,980 1.27 1,061 Sao Francisco - ROM Ore (1) 17,285 0.28 154 Total Sao Francisco (1) 43,266 0.87 1,215 ------------------------------- Sao Vicente - Main Ore (1) 9,434 1.01 307 Sao Vicente - ROM Ore (i) (1) 3,626 0.30 35 Total Sao Vicente (1) 13,060 0.81 342 ------------------------------- Rossi (40%) (2) 209 14.36 97 Sub Total Gold Reserves 567,198 0.67 12,144 ------------------------------- Agua Rica (1) 797,723 0.23 5,771 Total Gold Reserves 1,364,921 0.41 17,915 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (i) Sao Vicente ROM Probable Reserves include 1.26mm tonnes at 0.36 g/t Au of Tailings material not considered in the Resource numbers below. ------------------------------------------------------------------------- ------------------------------------------------------------------------- Silver Proven Reserves Probable Reserves ---------------------------------------------------- ----------------------------------------------------- Contained Contained Tonnes Grade oz. Tonnes Grade oz. (000's) (g/t) (000's) (000's) (g/t) (000's) ----------------------------------------------------- Alhue/ Minera Florida (2) 680 28.40 621 3,469 38.83 4,330 El Penon (2) 1,491 315.26 15,108 7,554 272.55 66,215 San Andres (1) 27,171 2.60 2,273 6,302 2.68 543 Sub Total Silver Reserves 29,342 19.08 18,002 17,325 127.62 71,088 ----------------------------------------------------- Agua Rica (1) 347,831 3.83 42,775 449,892 3.46 49,989 Total Silver Reserves 377,172 5.01 60,777 467,218 8.06 121,077 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Silver Total - Proven and Probable ------------------------------- ------------------------------- Contained Tonnes Grade oz. (000's) (g/t) (000's) ------------------------------- Alhue/ Minera Florida (2) 4,149 37.12 4,952 El Penon (2) 9,045 279.65 81,323 San Andr,s (1) 33,473 2.62 2,816 Sub Total Silver Reserves 46,667 59.38 89,091 ------------------------------- Agua Rica (1) 797,723 3.62 92,767 Total Silver Reserves 844,390 6.70 181,857 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Copper Proven Reserves Probable Reserves ----------------------------------------------------- ----------------------------------------------------- Tonnes Grade Contained Tonnes Grade Contained (000's) (%) lbs (mm) (000's) (%) lbs (mm) ----------------------------------------------------- Alumbrera (12.5%) (1) 46,250 0.38% 387 1,250 0.43% 12 Chapada (1) 17,331 0.42% 161 293,489 0.33% 2,135 Sub Total Copper Reserves 63,581 0.39% 548 294,739 0.33% 2,147 ----------------------------------------------------- Agua Rica (1) 347,831 0.57% 4,386 449,892 0.43% 4,285 Total Copper Reserves 411,412 0.54% 4,934 744,631 0.39% 6,432 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Copper Total - Proven and Probable ------------------------------- ------------------------------- Tonnes Grade Contained (000's) (%) lbs (mm) ------------------------------- Alumbrera (12.5%) (1) 47,500 0.38% 399 Chapada (1) 310,820 0.34% 2,296 Sub Total Copper Reserves 358,320 0.34% 2,695 ------------------------------- Agua Rica (1) 797,723 0.49% 8,670 Total Copper Reserves 1,156,043 0.45% 11,365 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Zinc Proven Reserves Probable Reserves ----------------------------------------------------- ----------------------------------------------------- Tonnes Grade Contained Tonnes Grade Contained (000's) (%) lbs (mm) (000's) (%) lbs (mm) ----------------------------------------------------- Alhue/ Minera Florida (2) 680 1.17% 18 3,469 1.08% 83 Total Zinc Reserves 680 1.17% 18 3,469 1.08% 83 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Zinc Total - Proven and Probable ------------------------------- ------------------------------- Tonnes Grade Contained (000's) (%) lbs (mm) ------------------------------- Alhue/ Minera Florida (2) 4,149 1.09% 100 Total Zinc Reserves 4,149 1.09% 100 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Molybdenum Proven Reserves Probable Reserves ----------------------------------------------------- ----------------------------------------------------- Tonnes Grade Contained Tonnes Grade Contained (000's) (%) lbs (mm) (000's) (%) lbs (mm) ----------------------------------------------------- Alumbrera (12.5%) (1) 46,250 0.013% 13 1,250 0.019% 1 Sub Total Moly Reserves 46,250 0.013% 13 1,250 0.019% 1 ----------------------------------------------------- Agua Rica (1) 347,831 0.035% 268 449,892 0.033% 327 Total Moly Reserves 394,081 0.032% 282 451,142 0.033% 328 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Molybdenum Total - Proven and Probable ------------------------------- ------------------------------- Tonnes Grade Contained (000's) (%) lbs (mm) ------------------------------- Alumbrera (12.5%) (1) 47,500 0.013% 14 Sub Total Moly Reserves 47,500 0.013% 14 ------------------------------- Agua Rica (1) 797,723 0.034% 598 Total Moly Reserves 845,223 0.033% 612 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Mineral Resources (Measured, Indicated and Inferred)(i) (Mineral Resources have been categorized as Resources that remain after removal of Reserves) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gold Measured Resources Indicated Resources ----------------------------------------------------- ----------------------------------------------------- Contained Contained Tonnes Grade oz. Tonnes Grade oz. (000's) (g/t) (000's) (000's) (g/t) (000's) ----------------------------------------------------- Alhue/ Minera Florida (2) 580 4.46 83 2,088 4.86 326 Amancaya (2) - - - - - - C1-Santa Luz (1) 10,973 1.45 512 13,063 1.41 591 Chapada (1) 731 0.10 2 119,086 0.13 502 El Penon (2) 470 13.07 198 2,918 8.01 751 Ernesto (1) - - - 1,520 3.66 179 Esquel (2) - - - 4,700 15.00 2,286 Fazenda Brasileiro (1) 1,107 3.19 114 697 2.83 63 Jeronimo (2) - - - 1,110 7.90 284 Pau a Pique (1) - - - 159 3.84 20 Pilar (1) - - - - - - Rossi (40%) (2) - - - - - San Andres (1) 31,040 0.58 578 11,886 0.55 209 ----------------------------------------------------- Sao Francisco - Main Ore 11,069 0.77 274 13,420 0.86 372 Sao Francisco - ROM Ore 10,014 0.17 56 18,044 0.22 126 Total Sao Francisco (1) 21,083 0.49 330 31,464 0.49 498 ----------------------------------------------------- Jacobina (1) 7,962 2.23 571 19,388 2.49 1,554 Sao Vicente (1) 7,910 0.52 133 8,138 0.63 166 Gualcamayo (1) 661 2.81 60 22,615 1.65 1,202 ----------------------------------------------------- Sub Total Gold Resources 51,509 1.56 2,580 238,830 1.12 8,630 Agua Rica (1) 64,169 0.17 361 248,108 0.16 1,299 Total Gold Resources 115,678 0.64 2,941 486,938 0.63 9,929 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gold Total - Measured and Indicated Inferred Resources ----------------------------------------------------- ----------------------------------------------------- Contained Contained Tonnes Grade oz. Tonnes Grade oz. (000's) (g/t) (000's) (000's) (g/t) (000's) ----------------------------------------------------- Alhue/ Minera Florida (2) 2,668 4.77 409 2,416 5.18 402 Amancaya (2) - - - 1,390 7.90 351 C1-Santa Luz (1) 24,036 1.43 1,103 4,638 1.40 208 Chapada (1) 119,817 0.13 504 304,861 0.11 1,078 El Penon (2) 3,388 8.71 949 4,425 10.63 1,513 Ernesto (1) 1,520 3.66 179 2,144 2.61 180 Esquel (2) 4,700 15.00 2,286 900 9.90 274 Fazenda Brasileiro (1) 1,805 3.05 177 442 5.30 75 Jeronimo (2) 1,110 7.90 284 3,100 7.10 701 Pau a Pique (1) 159 3.84 20 3,384 5.09 554 Pilar (1) - - - 12,400 2.42 965 Rossi (40%) (2) - - - 224 10.08 72 San Andres (1) 42,962 0.57 787 249 0.62 5 ----------------------------------------------------- Sao Francisco - Main Ore 24,489 0.82 646 23,904 0.82 630 Sao Francisco - ROM Ore 28,058 0.20 182 39,847 0.24 307 Total Sao Francisco (1) 52,547 0.49 828 63,751 0.46 937 ----------------------------------------------------- Jacobina (1) 27,350 2.42 2,125 47,398 2.61 3,975 Sao Vicente (1) 16,048 0.58 298 3,623 0.87 101 Gualcamayo (1) 23,275 1.69 1,261 15,586 1.38 692 ----------------------------------------------------- Sub Total Gold Resources 278,464 1.25 11,210 470,931 0.80 12,083 Agua Rica (1) 312,277 0.17 1,660 651,000 0.12 2,512 Total Gold Resources 590,741 0.64 12,870 1,121,931 0.41 14,595 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Silver Measured Resources Indicated Resources ----------------------------------------------------- ----------------------------------------------------- Contained Contained Tonnes Grade oz. Tonnes Grade oz. (000's) (g/t) (000's) (000's) (g/t) (000's) ----------------------------------------------------- Alhue/ Minera Florida (2) 580 26.27 490 2,088 40.35 2,708 Amancaya (2) - - - - - - El Penon (2) 470 258.80 3,914 2,918 219.22 20,563 Esquel (2) - - - 4,700 23.00 3,523 San Andres (1) 31,040 1.96 1,956 11,886 1.46 558 ----------------------------------------------------- Sub Total Silver Resources 32,090 6.16 6,360 21,592 39.33 27,352 Agua Rica (1) 64,169 2.38 4,911 248,108 2.74 21,823 Total Silver Resources 96,260 3.64 11,271 269,699 5.67 49,175 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Silver Total - Measured and Indicated Inferred Resources ----------------------------------------------------- ----------------------------------------------------- Contained Contained Tonnes Grade oz. Tonnes Grade oz. (000's) (g/t) (000's) (000's) (g/t) (000's) ----------------------------------------------------- Alhue/ Minera Florida (2) 2,668 37.30 3,198 2,416 46.50 3,612 Amancaya (2) - - - 1,390 73.00 3,270 El Penon (2) 3,388 224.72 24,477 4,425 291.07 41,411 Esquel (2) 4,700 23.00 3,523 900 21.00 575 San Andres (1) 42,926 1.82 2,512 249 1.32 11 ----------------------------------------------------- Sub Total Silver Resources 53,682 19.51 33,710 9,380 162.16 48,878 Agua Rica (1) 312,277 2.66 26,734 651,000 2.30 48,139 Total Silver Resources 365,959 5.13 60,444 660,380 4.57 97,017 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Copper Measured Resources Indicated Resources ----------------------------------------------------- ----------------------------------------------------- Tonnes Grade Contained Tonnes Grade Contained (000's) (%) lbs (mm) (000's) (%) lbs (mm) ----------------------------------------------------- Chapada (1) 731 0.18% 3 119,086 0.22% 578 731 0.18% 3 119,086 0.22% 578 ----------------------------------------------------- Agua Rica (1) 64,169 0.11% 716 248,108 0.09% 2,178 Total Copper Resources (2) 64,900 0.11% 718 367,194 0.20% 2,756 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Copper Total - Measured and Indicated Inferred Resources ----------------------------------------------------- ----------------------------------------------------- Tonnes Grade Contained Tonnes Grade Contained (000's) (%) lbs (mm) (000's) (%) lbs (mm) ----------------------------------------------------- Chapada (1) 119,817 0.22% 581 304,861 0.19% 1,277 119,817 0.22% 581 304,861 0.19% 1,277 ----------------------------------------------------- Agua Rica (1) 312,277 0.09% 2,894 651,000 0.34% 4,880 Total Copper Resources (2) 432,094 0.19% 3,475 955,861 0.35% 6,157 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Zinc Measured Resources Indicated Resources ----------------------------------------------------- ----------------------------------------------------- Tonnes Grade Contained Tonnes Grade Contained (000's) (%) lbs (mm) (000's) (%) lbs (mm) ----------------------------------------------------- Alhue/ Minera Florida (2) 580 1.09% 14 2,088 1.19% 55 Total Zinc Resources 580 1.09% 14 2,088 1.19% 55 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Zinc Total - Measured and Indicated Inferred Resources ----------------------------------------------------- ----------------------------------------------------- Tonnes Grade Contained Tonnes Grade Contained (000's) (%) lbs (mm) (000's) (%) lbs (mm) ----------------------------------------------------- Alhue/ Minera Florida (2) 2,668 1.16% 69 2,416 1.16% 62 Total Zinc Resources 2,668 1.16% 69 2,416 1.16% 62 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Molybdenum Measured Resources Indicated Resources ----------------------------------------------------- ----------------------------------------------------- Tonnes Grade Contained Tonnes Grade Contained (000's) (%) lbs (mm) (000's) (%) lbs (mm) ----------------------------------------------------- Agua Rica (1) 64,169 0.01% 40 248,108 0.01% 165 Total Moly Resources 64,169 0.01% 40 248,108 0.01% 165 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Molybdenum Total - Measured and Indicated Inferred Resources ----------------------------------------------------- ----------------------------------------------------- Tonnes Grade Contained Tonnes Grade Contained (000's) (%) lbs (mm) (000's) (%) lbs (mm) ----------------------------------------------------- Agua Rica (1) 312,277 0.01% 206 651,000 0.03% 488 Total Moly Resources 312,277 0.01% 206 651,000 0.03% 488 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (i) Mineral resources do not include the Mercedes resource estimate or the QDD Lower West resource estimate at Gualcamayo reported on March 25, 2008. Mineral reserve and resource estimates presented were prepared by or under the supervision of external consultants or by internal qualified persons as indicated in the table below in accordance with NI 43-101. In estimating the mineral reserves and mineral resources, such persons made assumptions, and used parameters and methods appropriate for each property, and verified the data disclosed, including sampling, analytical and test data underlying such estimates. These estimates have been reviewed by Evandro Cintra (1), Vice-President Technical Services, and William H. Wulftange (2), Corporate Director, Technical Compliance, who are both "qualified persons", as that term is defined in NI 43-101. These figures are estimates, however, and no assurance can be given that the indicated amounts of quantities will be produced. Price fluctuations may render mineral reserves containing relatively lower grades of gold mineralization uneconomic. Moreover, short-term operating factors relating to the mineral reserves could affect the Company's profitability in any particular accounting period. The Company is not aware of any environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues which may materially affect the Company's mineral reserve and resource estimates, other than factors discussed above and in "Risks and Uncertainties" in the Management Discussion and Analysis section of the annual report and "Risk Factors" in the annual information form of the Company. Mineral Reserves and Resources ------------------------------------------------------------------------- Property Qualified Persons for Qualified Persons for Mineral Reserves Mineral Resources ------------------------------------------------------------------------- Fazenda Brasileiro Beau Nicholls, B.Sc. Beau Nicholls, B.Sc. (Geo) MAIG, (Geo) MAIG Geoexplore Consultoria Geoexplore Consultoria e Servicos Ltda. e Servicos Ltda. ------------------------------------------------------------------------- C-1 Santa Luz Enrique Munoz Gonzalez, Marco Antonio Alfaro MAusIMM, Metalica Sironvalle, MAusIMM, Consultores S.A. Metalica Consultores S.A. ------------------------------------------------------------------------- Jacobina Juan Pablo Gonzalez, Dr. Marcelo Godoy, MAusIMM IIMCH, Golder & MAusIMM, SME, IAMG, Golder Associates S.A. (Chile) & Associates S.A. (Chile) ------------------------------------------------------------------------- Pindobacu Not applicable Evandro Cintra, Ph.D., P.Geo. Vice President, Technical Services, Yamana Gold Inc. ------------------------------------------------------------------------- Sao Francisco Renato Petter, P. Eng., Rodrigo B. Mello, P.Geo, Technical Services, NCL Brasil Ltda. Yamana Gold Inc. ------------------------------------------------------------------------- Sao Vicente Karl M. Kolin, P. Eng., Mario E. Rossi, P.Eng., Gustavson Associates LLC Principal Geostatiscian, Geosystems International Inc. ------------------------------------------------------------------------- Ernesto Not applicable Rodrigo B. Mello, P.Geo., NCL Brasil Ltda. ------------------------------------------------------------------------- Pau a Pique Not applicable Rodrigo B. Mello, P.Geo., NCL Brasil Ltda. ------------------------------------------------------------------------- Chapada Michael G. Hester, Michael G. Hester, FAusIMM, Vice President, FAusIMM, Vice President, Principal Mining Engineer, Principal Mining Engineer, Independent Mining Independent Mining Consultants Inc. Consultants Inc. ------------------------------------------------------------------------- San Andres Renato Petter, P. Eng., Evandro Cintra, Ph.D., Technical Services, P.Geo. Vice President, Yamana Gold Inc. Technical Services, Yamana Gold Inc. ------------------------------------------------------------------------- Gualcamayo Annoush Ebrahimi, P. Eng., Ronald G. Simpson, P.Geo., of Wardrop Engineering GeoSim Services Inc. Inc. ------------------------------------------------------------------------- Pilar de Goias Not applicable Pamela L. De Mark, BAppSc (App Geo), MAusIMM, Senior Consultant, Snowden Mining Industry Consultants Inc. ------------------------------------------------------------------------- El Penon Greg Walker, P.Geo., Greg Walker, P.Geo., Senior Manager, Senior Manager, Resource Estimation, Resource Estimation, Yamana Gold Inc. Yamana Gold Inc. ------------------------------------------------------------------------- Alhue/ Minera Greg Walker, P.Geo., Greg Walker, P.Geo., Florida Senior Manager, Senior Manager Resource Estimation, Resource Estimation, Yamana Gold Inc. Yamana Gold Inc. ------------------------------------------------------------------------- Amancaya Not applicable Chester M. Moore, P.Eng., Scott Wilson Roscoe Postle Associates Inc. ------------------------------------------------------------------------- Agua Rica Gerrit Vox, P. Eng., Gary H. Giroux, P. Eng., Principal Mining Engineer of Giroux Consultants Ltd. of AMEC plc ------------------------------------------------------------------------- Alumbrera Luis A. Rivera, MAusIMM, Luis A. Rivera, MAusIMM, Xstrata Plc Xstrata Plc ------------------------------------------------------------------------- Jeronimo Not applicable Chester M. Moore, P. Eng., Scott Wilson Roscoe Postle Associates Inc. ------------------------------------------------------------------------- Esquel Not applicable Robin J. Young, P. Geo., Western Services Engineering, Inc. ------------------------------------------------------------------------- ------------------------------------------------------------------------- Mineral Mineral Reserve Resources Cut-off Grade Cut-off Grade Mine (g/t gold; Price Price (g/t gold; % copper) % copper) ------------------------------------------------------------------------- Fazenda Brasileiro 1.50 US$575 n/a 1.50 C1-Santa Luz 0.50 US$575 n/a 0.50 Fazenda Nova 0.40 US$575 n/a 0.40 Jacobina 1.49 US$575 n/a 0.50 Sao Francisco 0.36 and 0.15 US$575 n/a 0.36 and 0.15 Sao Vicente 0.35 and 0.22 US$427.5 n/a 0.20 Ernesto US$575 n/a 1.5 and 1.0 PAP US$575 n/a 1.0 Chapada 0.17% Cu US$575 US$1.75 0.17% Cu San Andres 0.41 and 0.64 US$575 n/a 0.4 Gualcamayo 0.3; 0.5; 1.0 US$575 n/a 0.3; 0.5; 1.0 Pilar US$575 n/a 0.5 and 1.5 El Penon 4.5 to 6.5 GEO US$575 n/a 3.9 GEO Alhue/Minera Florida 3.70 US$575 n/a 2.5 GEO Amancaya US$550 n/a 1.0 open pit: 3.4 underground Agua Rica 0.20% Cu US$425 US$1.10/lb 0.20% Cu Alumbrera 0.26% Cu US$500 US$1.25/lb 0.26% Cu Equivalent CONFERENCE CALL A conference call and audio webcast is scheduled for March 26, 2008 at 11:00 a.m. E.T. to discuss the 2007 fourth quarter and year end results. Conference Call Information: Local and Toll Free (North America): 866-540-8136 International: 416-340-8010 Participant Audio Webcast: www.yamana.com Conference Call REPLAY: Replay Call: 416-695-5800 Passcode 3249602 followed by the number sign Replay Toll Free Call: 800-408-3053 Passcode 3249602 followed by the number sign The conference call replay will be available from 1:00 p.m. E.T. on March 26, 2008 until 11:59 p.m. E.T. on April 2, 2008. For further information on the Conference Call or audio webcast, please contact the Investor Relations Department or visit our website, 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 in Brazil, Argentina, Chile, Mexico, Central America and the United States. Yamana is producing gold and other precious metals at intermediate company production levels in addition to significant copper production. Company management 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 Brazil, Argentina, Chile and elsewhere in the Americas. FORWARD-LOOKING STATEMENTS: This news release contains certain "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended and "forward-looking information" under applicable Canadian securities laws. Except for statements of historical fact relating to the company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "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 and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include possible variations in ore grade or recovery rates, fluctuating metal prices, prices for sulphiric acid and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life of Chapada, availability of a local market for the sale of sulphiric acid, unanticipated results of future studies, as well as those risk factors discussed or referred to in the Company's annual Management's Discussion and Analysis and Annual Information Form filed with the securities regulatory authorities in all provinces of Canada and available at www.sedar.com, and the Company's Annual Report on Form 40-F filed with the United States Securities and Exchange Commission. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements. CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED MINERAL RE

SOURCES This news release uses the terms "Measured", "Indicated" and "Inferred" Mineral Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. NON-GAAP MEASURES The Company has included certain non-GAAP measures including cash cost per ounce data, adjusted net earnings (loss) and adjusted net earnings (loss) per share 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 from operating cash costs by-product revenues. 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 not provided formal reconciliations of these statistics. Cash costs are reconciled by the following: non-cash movements in net working capital items and provisions for losses on inventory. The Company uses the financial measures "adjusted net income (loss)" and "adjusted earnings (loss) per share" to supplement information in its consolidated financial statements. The presentation of adjusted measures are not meant to be a substitute for net earnings (loss) or net earnings (loss) per share presented in accordance with GAAP, but rather should be evaluated in conjunction with such GAAP measures. Adjusted net earnings (loss) and adjusted net earnings (loss) per share are calculated as net earnings excluding (a) stock options expense, (b) foreign exchange loss, (c) future income tax expense (recovery) on the translation of foreign currency inter corporate debt, (d) unrealized gains (losses) on commodity contracts, (e) debt repayment expense, (f) impairment losses, (g) non-controlling interest and (h) internal transaction costs. The terms "adjusted net earnings (loss)" and "adjusted net 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 net earnings (loss) and adjusted net earnings (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 net earnings (loss) and adjusted net earnings (loss) per share, which are otherwise included in the determination of net earnings (loss) and net earnings (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. 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" or "cash flow 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 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. Table 1 Mercedes Vein: Total Drill Intercepts ------------------------------------------------------------------------- Year Hole AREA True From Interval Width Au Ag (m) (m) (m) g/t g/t ------------------------------------------------------------------------- 2007 (i) M07-140 Paloma 165.10 4.38 2.67 6.51 75.3 M07-142 Aida 428.24 7.86 4.30 3.06 74.0 M07-145 C.de Oro 455.73 9.39 4.90 14.66 134.6 M07-152 C.de Oro 276.86 3.43 1.40 13.52 165.3 M07-162 C.de Oro 170.69 7.22 5.80 8.00 106.3 M07-163 C.de Oro 184.90 7.62 5.50 5.82 122.3 M07-166 C.de Oro 195.77 9.30 4.90 4.59 91.6 M07-168 C.de Oro 98.55 1.88 1.00 28.14 250.1 M07-169 C.de Oro 168.77 3.48 2.25 17.42 162.0 M07-170 C.de Oro 233.70 24.27 12.90 8.80 159.6 M07-171 C.de Oro 117.86 5.89 3.60 9.12 115.0 M07-172 C.de Oro 193.28 14.79 8.20 69.68 427.6 M07-173 C.de Oro 272.79 15.91 7.30 8.95 193.8 M07-174 C.de Oro 158.90 4.70 3.10 5.73 75.6 M07-175 C.de Oro 137.61 2.78 1.80 5.99 77.2 M07-176 C.de Oro 139.20 7.10 4.90 73.69 373.2 M07-178 C.de Oro 186.54 8.78 5.00 14.78 129.1 M07-179 C.de Oro 188.93 8.48 4.90 3.29 102.0 M07-180 C.de Oro 103.14 9.05 6.80 7.19 116.0 M07-181 C.de Oro 207.20 6.77 4.50 3.19 139.0 M07-182 C.de Oro 169.47 3.73 2.5 11.89 147.0 M07-183 C.de Oro 121.92 11.52 8.20 5.84 122.0 M07-184 C.de Oro 224.35 13.18 5.20 30.23 191.5 M07-185 C.de Oro 196.78 12.72 9.00 13.04 207.0 M07-186 C.de Oro 156.60 13.87 6.80 10.41 126.0 M07-187 C.de Oro 166.02 15.95 9.00 12.61 142.9 M07-188 C.de Oro 218.24 7.19 5.70 6.26 84.5 M07-189 C.de Oro 239.67 8.35 3.00 123.74 407.6 M07-190 C.de Oro 127.10 3.70 2.40 8.50 144.7 M07-191 C.de Oro 238.42 7.25 5.70 4.47 77.0 M08-194 C.de Oro 267.80 24.81 12.00 7.51 99.9 M08-195 C.de Oro 267.00 1.80 1.10 7.84 72.5 M08-196 C.de Oro 176.50 6.97 3.10 6.06 60.4 ------------------------------------------------------------------------- 2008 M08-197 C.de Oro 193.95 9.10 5.25 6.18 172.0 M08-198 C.de Oro 195.34 7.76 5.20 4.18 61.2 M08-200 C.de Oro 147.56 3.01 1.70 6.21 113.6 M08-202 C.de Oro 250.51 4.27 2.25 5.90 39.5 M08-203 C.de Oro 181.41 6.26 3.10 2.33 96.7 M08-204 C.de Oro 127.30 6.55 4.40 11.40 147.4 M08-205 C.de Oro 138.08 6.62 4.50 5.28 116.7 M08-207 Casa Blanca 226.00 3.40 2.40 14.57 398.9 M08-208 Casa Blanca 198.97 16.46 9.70 5.83 71.1 M08-209 C.de Oro 166.42 9.14 4.75 3.67 80.6 M08-210 C.de Oro 198.95 10.75 4.04 4.98 47.4 ------------------------------------------------------------------------- (i) Assay results since last press release in 2007 Table 2 Mercedes: Northwest Extension drill results ------------------------------------------------------------------------- ------------------------------------------------------------------------- True Year Hole AREA From To Interval Width Au Ag (m) (m) (m) (m) g/t g/t ------------------------------------------------------------------------- ------------------------------------------------------------------------- 2007 M07-140 Paloma 165.10 169.48 4.38 2.67 6.51 75.3 M07-140 Paloma 171.66 174.00 2.34 1.44 2.84 159.9 M07-140 Paloma 163.10 176.21 13.11 8.00 3.53 109.0 ------------------------------------------------------------------------- M07-148 Paloma 47.24 47.85 0.61 0.40 14.45 55.0 ------------------------------------------------------------------------- M07-152 Paloma 126.70 134.18 7.48 3.70 2.38 30.9 ------------------------------------------------------------------------- ------------------------------------------------------------------------- To view Figure 1: Mercedes Vein: Total Drill Intercepts; please visit the following link: http://media3.marketwire.com/docs/yamanafigure1.pdf Summary Fourth Quarter Statement of Operations For the Three Months Ended ---------------------------- (in thousands of U.S. Dollars, unaudited) December 31, December 31, 2007 2006 Revenues $ 218,597 $ 59,951 Cost of sales (107,885) (36,193) Depreciation, amortization and depletion (32,276) (14,708) Accretion of asset retirement obligations (1,827) (146) Mine operating earnings 76,609 8,904 Expenses General and administrative and other expenses (37,692) (10,610) Other losses (14,338) (12,264) Operating earnings (loss) 24,579 (13,970) Other business income (11,203) (393) Unrealized gain on derivatives 50,417 1,229 Earnings (loss) before income taxes 63,793 (13,134) Income tax (expense) recovery (14,667) 19,276 Non-controlling interest (2,017) - Net earnings $ 47,109 $ 6,141 Non-GAAP Adjustments: Stock-based compensation 28 2,798 Foreign exchange loss 33,359 5,790 Unrealized gain on derivatives (50,417) (1,229) (Recovery) loss on impairment of Fazenda Nova and sill pillar failure expenses (13,783) 3,675 Recovery of loss on tax credits (4,931) - Future income tax expense (recovery) on foreign currency translation of inter corporate debt 1,197 6,439 Internal transaction costs 15,799 - Debt repayment or extinguishment expense 1,957 - Non-controlling interest 2,017 - Adjusted earnings (loss) before income tax Effects 32,335 23,614 Income tax effect of adjustments 2,886 (23,110) Adjusted net earnings (a non-GAAP measure) $ 35,221 $ 504 Basic earnings (loss) per share $ 0.08 $ 0.02 Diluted earnings (loss) per share $ 0.08 $ 0.02 Adjusted net earnings per share $ 0.06 $ 0.00 (a non-GAAP measure) Yamana Gold Inc. Consolidated Balance Sheets For the Years Ended December 31, 2007 (In thousands of U.S. Dollars) 2007 2006 ------------------------------------------------------------------------- Assets Cash and cash equivalents $ 284,894 $ 69,680 Restricted cash and short-term investments 57,982 - Accounts receivable 81,774 6,036 Advances and deposits 75,626 24,244 Inventory 97,626 51,252 Income taxes recoverable 23,347 2,248 Current portion of derivative related assets 10,560 - Future income tax assets 8,322 - Other current assets 10,373 - ------------------------------------------------------------------------- 650,504 153,460 Capital Property, plant and equipment 486,669 134,792 Assets under construction 82,662 224,650 Mineral properties 8,137,353 1,496,732 ------------------------------------------------------------------------- 8,706,684 1,856,174 Other Available-for-sale securities 23,201 28,009 Share purchase warrants held 140 313 Equity investment in Minera Alumbrera Ltd 240,622 - Derivative related assets 7,654 - Long-term investments 30,113 - Other assets 57,584 34,452 Future income tax assets 124,422 53,784 Goodwill 55,000 55,000 ------------------------------------------------------------------------- 538,736 171,558 $ 9,895,924 $ 2,181,192 ------------------------------------------------------------------------- Liabilities Current Accounts payable $ 136,355 $ 39,467 Accrued liabilities 126,487 10,722 Income taxes payable 56,288 3,922 Current portion of derivative related liabilities 53,954 21,163 Current portion of credit facilities 83,245 - Current portion of long term liabilities - 1,927 Other current liabilities 16,305 - ------------------------------------------------------------------------- 472,634 77,201 Long term Credit facilities 539,179 - Asset retirement obligation 63,444 18,720 Derivative related liabilities 27,933 23,260 Future income tax liabilities 2,696,387 328,372 Long term liabilities 142,716 17,049 ------------------------------------------------------------------------- 3,469,659 387,401 ------------------------------------------------------------------------- 3,942,293 464,602 ------------------------------------------------------------------------- Non-controlling interest 46,810 - Shareholders' Equity Capital Stock Issued and outstanding 668,416,987 common shares (December 31, 2006 - 344,595,212 shares) 5,502,518 1,619,850 Shares to be issued - 42,492 Share purchase warrants 270,805 73,004 Contributed surplus 77,393 61,578 Accumulated other comprehensive loss (3,855) - Retained earnings (deficit) 59,960 (80,334) ------------------------------------------------------------------------- 5,906,821 1,716,590 ------------------------------------------------------------------------- $ 9,895,924 $ 2,181,192 ------------------------------------------------------------------------- YAMANA GOLD INC. Consolidated Statements of Operations For the Years Ended December 31, 2007 (In thousands of U.S. Dollars) 2007 2006 2005 ------------------------------------------------------------------------- Revenues $ 747,091 $ 169,206 $ 46,038 Cost of sales (287,640) (100,004) (30,371) Depreciation, amortization and depletion (71,815) (33,510) (6,740) Accretion of asset retirement obligations (3,056) (636) (358) ------------------------------------------------------------------------- Mine operating earnings 384,580 35,056 8,569 Expenses General and administrative (68,525) (24,350) (10,415) Foreign exchange (loss) gain (40,385) 343 369 Stock-based compensation (726) (41,099) (2,298) Other recoveries (losses) 1,051 (3,675) - ------------------------------------------------------------------------- Operating earnings (loss) 275,995 (33,725) (3,775) Investment and other business income 11,503 5,328 4,049 Interest and financing expense (22,034) (28,846) (94) Equity earnings from Minera Alumbrera 3,820 - - Realized loss on derivatives (17,082) - - Unrealized loss on derivatives (29,068) (35,773) (8,615) Loss on sale of assets - (2,186) - ------------------------------------------------------------------------- Earnings (loss) before income taxes and non-controlling interest 223,134 (95,202) (8,435) Income tax (expense) recovery (63,872) 25,039 4,324 Non-controlling interest (2,017) - - ------------------------------------------------------------------------- Net earnings (loss) $ 157,245 $ (70,163) $ (4,111) ------------------------------------------------------------------------- Basic earnings (loss) per share $ 0.38 $ (0.25) $ (0.03) ------------------------------------------------------------------------- Diluted earnings (loss) per share $ 0.36 $ (0.25) $ (0.03) ------------------------------------------------------------------------- Basic weighted average number of shares outstanding (in thousands) 415,232 276,617 144,888 ------------------------------------------------------------------------- Diluted weighted average number of shares outstanding (in thousands) 431,917 276,617 144,888 YAMANA GOLD INC. Consolidated Statements of Changes in Shareholders' Equity For the Years Ended December 31, 2007 (In thousands of U.S. Dollars) 2007 2006 2005 ------------------------------------------------------------------------- Common shares (in thousands) Balance, beginning of year 344,595 191,342 122,287 Issued on exercise of stock options, share appreciation 10,507 15,540 43,055 rights and warrants Issued on business acquisitions 312,465 119,874 - Public offering - 17,400 26,000 Other (including acquisition of Maria Preta Property) 850 439 - ------------------------------------------------------------------------- 668,417 344,595 191,342 ------------------------------------------------------------------------- Common shares Balance, beginning of year $ 1,619,850 $ 310,409 $ 147,407 Issued on exercise of stock options, share appreciation rights and warrants 99,091 82,594 57,713 Issued on business acquisitions 3,772,313 1,053,071 - Public offering - 170,030 105,289 Other (including acquisition of Maria Preta Property) 11,264 3,746 - ---------------------------------------------------------------------------- $ 5,502,518 $ 1,619,850 $ 310,409 Shares to be issued Balance, beginning of year $ 42,492 $ - $ - (Issued) exercise of stock options, share appreciation rights and warrants (3,009) 3,009 - Issued on business acquisitions (39,483) 39,483 - ------------------------------------------------------------------------- $ - $ 42,492 $ - ------------------------------------------------------------------------- Share purchase warrants Balance, beginning of year $ 73,004 $ 3,737 $ 10,864 Warrants issued - 13,111 1,374 Expiry or exercise of warrants (4,906) (18,355) (8,501) Value of warrants issued on business acquisitions 202,707 74,511 - ------------------------------------------------------------------------- $ 270,805 $ 73,004 $ 3,737 ------------------------------------------------------------------------- Contributed surplus Balance, beginning of period $ 61,578 $ 4,676 $ 1,775 Transfer of stock-based compensation on the exercise of stock options and share appreciation rights (36,789) (35,657) (324) Stock-based compensation on the grant or vesting of stock options 437 38,516 2,298 Value of options acquired on business acquisitions 52,167 54,041 - Expiry of warrants - 2 927 ------------------------------------------------------------------------- $ 77,393 $ 61,578 $ 4,676 ------------------------------------------------------------------------- Total capital stock, share purchase warrants and contributed surplus $ 5,850,716 $ 1,796,924 $ 318,822 ------------------------------------------------------------------------- Retained earnings (deficit) Balance, beginning of period $ (80,334) $ (3,848) $ 263 Opening adjustments 249 - - Net earnings (loss) 157,245 (70,163) (4,111) Dividends declared (17,200) (6,323) - ------------------------------------------------------------------------- Retained earnings (deficit), end of period 59,960 (80,334) (3,848) Accumulated other comprehensive income (3,855) - - Total retained earnings (deficit) and accumulated other comprehensive income $ 56,105 $ (80,334) $ (3,848) Total shareholders' equity $ 5,906,821 $ 1,716,590 $ 314,974 Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2007 (In thousands of U.S. Dollars) 2007 2006 2005 Net earnings (loss) $ 157,245 $ (70,163) $ (4,111) Other comprehensive loss, net of tax (345) - - Comprehensive income (loss) $ 156,900 $ (70,163) $ (4,111) YAMANA GOLD INC. Consolidated Statements of Cash Flows For the Years Ended December 31, 2007 (In thousands of U.S. Dollars) 2007 2006 2005 ------------------------------------------------------------------------- Operating Activities Net earnings for the year $ 157,245 $ (70,163) $ (4,111) Asset retirement obligations paid (4,710) (358) (309) Non-operating financing fee - 5,000 - Realized foreign exchange losses on financing activities 26,962 - - Items not involving cash: Depreciation, amortization and depletion 71,815 33,510 6,740 Stock-based compensation 726 41,099 2,298 Future income taxes (15,607) (31,077) (4,447) Accretion of asset retirement obligations 3,056 636 358 Unrealized foreign exchange 17,765 (343) (3,252) Unrealized loss on commodity contracts 29,068 35,773 8,615 Impairment of the Fazenda Nova Mine and other asset write-offs 4,206 3,675 - Equity earnings from Minera Alumbrera (3,820) - - Non-controlling interest 2,017 - - Financing charges 3,352 19,744 - Other 769 2,675 553 ------------------------------------------------------------------------- 292,844 40,171 6,445 Net change in non-cash working capital 1,030 (43,386) (3,035) ------------------------------------------------------------------------- 293,874 (3,215) 3,410 ------------------------------------------------------------------------- Financing Activities Issue of common shares, options and warrants for cash (net of issue costs) 37,912 221,209 155,099 Dividends paid (17,200) (2,883) - Proceeds of notes payable and long term Liabilities 654,174 - 100,000 Repayment of notes payable and long term Liabilities (53,278) (115,414) Financing costs - (5,000) - Deferred financing charges (7,264) - (4,630) ------------------------------------------------------------------------- 614,344 97,912 250,469 ------------------------------------------------------------------------- Investing Activities Expenditures on mineral properties (131,926) (64,829) (23,199) Acquisition of property, plant and equipment (90,999) (27,762) (5,752) Expenditures on assets under construction (50,227) (126,710) (132,031) Corporate acquisitions, net of cash acquired (416,668) 66,815 - Loan receivable - - (18,986) Cash distributions from Minera Alumbrera Ltd 19,375 - - Settlement of hedges (16,565) - - Other assets and investments (15,582) (26,543) (12,584) ------------------------------------------------------------------------- (702,592) (179,029) (192,552) ------------------------------------------------------------------------- Effect of foreign exchange on non-US dollar denominated 9,588 2,379 3,252 cash and cash equivalents Increase (decrease) in cash and cash equivalents 215,214 (81,953) 64,579 Cash and cash equivalents, beginning of year 69,680 151,633 87,054 ------------------------------------------------------------------------- Cash and cash equivalents, end of year $ 284,894 $ 69,680 $ 151,633 ------------------------------------------------------------------------- Cash and cash equivalents are comprised of the following: Cash at bank and bank term deposits $ 200,751 $ 69,680 $ 151,633 Short-term money market securities 84,143 - - ------------------------------------------------------------------------- $ 284,894 $ 69,680 $ 151,633

For further information:

For further information: MEDIA INQUIRIES: Mansfield Communications Inc.,
Hugh Mansfield, (416) 599-0024 or YAMANA GOLD INC., Jodi Peake, Vice
President, Public & Investor Relations, (416) 815-0220, Email:
investor@yamana.com or YAMANA GOLD INC., Letitia Wong, Director, Investor
Relations, (416) 815-0220, Email: investor@yamana.com, Website:
www.yamana.com

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