Yamana Gold Reports Third Quarter 2007 Results: Record Revenue and Mine Operating Earnings



    
    TSX: YRI
    NYSE:   AUY
    LSE: YAU
    

    TORONTO, Nov. 7 /CNW/ - YAMANA GOLD INC. (TSX:YRI)(NYSE:  AUY)(LSE:YAU) is
pleased to announce its financial and operating results for the quarter ended
September 30, 2007. All dollar amounts are expressed in US dollars unless
otherwise specified.

    Third Quarter Highlights from the period of July 1, 2007 to September 30,
2007 include the following:

    
    Operational

    -  Total production of 131,366 ounces of gold for the quarter an increase
       of 48% over the comparative quarter ended September 30, 2006 and an
       increase of 13% over the quarter ended June 30, 2007. Total production
       of 367,816 ounces on a year to date basis.

    -  Average cash costs of $(339) per ounce after by-product credits and on
       a co-product basis of $322 per ounce of gold (excluding the Fazenda
       Nova Mine) and $0.71 per pound of copper on a co-product basis.

    -  Chapada attained record production of gold and copper at 49,716 ounces
       and 33 million pounds respectively with mine operating earnings of
       $112.7 million.

    -  Total concentrate production from Chapada of 54,268 tonnes for the
       quarter up from 50,304 tonnes in the second quarter of 2007.

    -  Continued development plan at Jacobina focusing on the Canavieiras
       Mine development with two ramps to accelerate development.

    -  Received positive feasibility and scoping studies for the QDD and AIM
       deposits of Gualcamayo and the formal approval for its Gualcamayo
       Environmental Assessment report. Production is expected to begin in
       mid-2008.

    Financial

    -  Record quarterly sales of $199.7 million, an increase of 297% over the
       comparative quarter ended September 30, 2006 and an increase of 9%
       over the preceding quarter ended June 30, 2007.

    -  Mine operating earnings of $124.9 million for the quarter, an increase
       of 1,216% over the comparative quarter ended September 30, 2006 and
       17% over the preceding quarter ended June 30, 2007.

    -  Adjusted earnings for the quarter of $91.9 million before income tax
       and $71.5 million after income tax effects representing $0.20 per
       share.

    -  Net earnings for the quarter of $30.0 million or $0.08 per share (the
       primary difference between accounting net earnings and adjusted net
       earnings is non-cash mark-to-market copper hedge losses which assumes
       continued high prices for copper at the time of future settlement and
       which would have a meaningful positive impact on revenues and earnings
       for non-hedged copper at that time).

    -  Cash flow from operations of $105.0 million before changes in non-cash
       working capital, representing $0.30 per share.

    -  Cash balance of $66.9 million as at September 30, 2007. Accounts
       receivable of $129.8 million as at September 30, 2007 of which
       $78.8 million has been received subsequent to the quarter end and
       $18.2 million is collectable by mid-November and will further increase
       available cash.

    -  Declared further quarterly dividend of $0.01 per share.

    Exploration

    -  Continued exploration efforts with significant exploration successes.

    -  Received a scoping study for the Amelia Ines and Magdalena (AIM)
       deposits with work to date indicating that the deposits are higher
       grade, larger than initially projected, remain open for expansion and
       are expected to provide a larger and more significant contribution to
       the Gualcamayo project than was originally contemplated.

    -  Resources expected to increase at Jacobina as exploration and
       development continues.

    Other

    -  Closed on a definitive business combination agreement with Northern
       Orion Resources Inc. and Meridian Gold Inc. subsequent to quarter end.
       Details provided in section 4 "Business Acquisitions".

    -  Obtained credit facility of up to $700 million subsequent to the
       quarter end.

    -  Entered into copper forward contracts at a weighted average forward
       price of $2.97 per pound of copper on a total of 124.9 million pounds
       of copper for 2008, 2009 and 2010 and $2.37 per pound of copper on a
       total of 35 million pounds of copper for 2011.
    

    "During this quarter we continued to grow production in an environment of
extremely robust commodity prices and delivered positive earnings and cash
flow results," said Peter Marrone, chairman and chief executive officer of
Yamana Gold Inc. "With the recent acquisition of Northern Orion and Meridian
Gold, we now have seven producing mines, including two major expansions, five
development stage projects and what is probably the best exploration portfolio
in all of Central and South America. This extensive pipeline underpins our
recently announced strategic plan to organically grow production to a
sustainable 2.2 million ounces of gold by 2012 while continuing to provide
shareholders with superior leverage to the gold price and increased growth in
cash flow and earnings."

    Strategic Plan and Outlook

    The Company's strategic plan, previously announced on October 18, 2007,
is focused on organic growth initially targeting production of 1.2 million
ounces of gold 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 enhancements, expansions, improvements and development of
existing assets. Exploration successes from the Company's robust exploration
portfolio will support and supplement these levels. Assuming positive
feasibility studies for its advanced exploration stage projects, the Company
expects capital investments over the next four years to be in the range of $1
to 1.3 billion.

    The Company owns seven producing mines, two of which are undergoing
expansion, five development stage projects and an extensive exploration
portfolio in the Americas. The Company's mining approach is to target low cost
of production both before and particularly after by-product credits.

    Financial and Operating Summary

    Net earnings for the quarter were $30.0 million compared to a loss for
the comparative quarter ended September 30, 2006 of $12.1 million,
representing an improvement of $42.1 million. Net earnings on a year to date
basis were $110.1 million compared to a loss of $76.3 million for the nine
months ended September 30, 2006, representing an improvement of $186.4
million. The increase in earnings is primarily due to commencement and ramp up
of operations at the Chapada Mine since the beginning of this year.

    Net earnings for the quarter and nine months ended September 30, 2007
included certain non-cash and non-recurring charges in respect of stock-based
compensation, foreign exchange gains or losses, unrealized losses on
derivatives, loss on impairment of the Fazenda Nova Mine, non-production costs
during business interruption (sill pillar failure costs), a future income tax
expense on foreign currency translation of inter corporate debt and a
provision for losses on certain tax credits. The largest adjustment item is
the mark-to-market on the copper derivatives which is a non-cash and
non-realized loss. This assumes continued high prices for copper at the time
of future settlement which would have a meaningful positive impact on revenues
and earnings for the non-hedged copper at that time and is a result of the
Company not being able to apply hedge accounting for its copper derivatives
given that the copper is contained in concentrate.

    Earnings adjusted for these non-cash and non-recurring items was $91.9
million before income tax effects and $71.5 million after income tax effects
for the quarter ended September 30, 2007 compared to $4.7 million after tax
for the comparative quarter representing an increase of $1,421%.

    Both basic and diluted earnings per share were $0.08 for the quarter.
Basic earnings per share was $0.31 and diluted earnings per share was $0.30
for the nine month period ended September 30, 2007. This compares to a basic
and diluted loss per share of $0.04 and $0.30 for the comparative periods
ended September 30, 2006, respectively.

    Earnings per share for the quarter adjusted for certain non-cash and
non-recurring items were $0.20 per share. This compares to adjusted earnings
per share of $0.02 for the comparative quarter ended September 30, 2006, and
$0.22 per share for the quarter ended June 30, 2007.

    Revenue for the quarter was $199.7 million, an increase of 9% over the
preceding quarter and an increase of 297% over the comparative quarter ended
September 30, 2006. Revenue on a year to date basis was $528.5 million, an
increase of 384% over the comparative nine month period ended September 30,
2006.

    Revenue for the quarter included sales from 128,056 ounces of gold and
33.0 million pounds of copper. Revenue for the nine months includes sales of
370,777 ounces of gold and 88.6 million pounds of copper. Revenue for the
comparative three and nine month period ended September 30, 2006 included
sales from 82,602 and 180,702 ounces of gold, respectively.

    The Company's average net realized gold price during the quarter was $686
per ounce, an increase of 12% from an average net realized price of $615 per
ounce during the comparative quarter ended September 30, 2006. This compares
to an average spot price for the quarter of $681 per ounce. On a year to date
basis, the company has realized an average net gold sale price of $666 per
ounce consistent with the average spot price for the period.

    Mine operating earnings were $124.9 million and $308.0 million for the
quarter and nine months ended September 30, 2007, respectively. Mine operating
earnings for the nine months include earnings from all existing mines. Mine
operating earnings for the comparative nine months were $26.2 million and
included earnings from the Fazenda Brasileiro Mine, the Fazenda Nova Mine and
the San Andres Mine and Jacobina Mines as of the date of acquisition and
earnings for two months at Sao Francisco.

    A total of 131,366 ounces were produced during the quarter up from
115,843 ounces for the quarter ended June 30, 2007. On a year to date basis,
the Company produced 367,816 ounces of gold. A total of 88,781 ounces and
201,147 ounces of gold were produced by the Company's mines during the
comparative quarter and nine month period ended September 30, 2006.

    Additionally, production for the quarter and the nine months ended
September 30, 2007 included 33.5 million pounds of copper within 54,628 tonnes
of concentrate and 92.4 million pounds of copper within 149,362 tonnes of
concentrate, respectively. For the quarter ended June 30, 2007 copper
production amounted to 31.5 million pounds within 50,304 tonnes of
concentrate.

    Average cash costs for the quarter net of by-product credits were $(339)
per ounce compared to $337 per ounce for the comparative quarter ended
September 30, 2006. Average cash costs for the nine months ended September 30,
2007 were $(292) per ounce compared to $329 for the comparative nine months
ended September 30, 2006. Cash costs for the three and nine month periods
ended September 30, 2007 for the Fazenda Nova Mine are not reflective of
ongoing operations as Fazenda Nova operations have been discontinued. Average
cash costs for the quarter excluding Fazenda Nova were $(342) per ounce. On a
co-product basis cash costs for the quarter were $0.71 per pound of copper and
$322 per ounce of gold (excluding Fazenda Nova).

    The Company recorded a non-recurring loss from non-production costs
during business interruption of $13.2 million year-to-date as a result of sill
pillar failures at its Jacobina Mine during the first quarter. The Company has
filed an insurance claim with respect to these business interruption losses.
Any insurance recovery will be credited to net earnings in the period that the
claim is settled with the insurance company.

    Inventory as at September 30, 2007 was $68.7 million and is comparable to
that of the preceding quarter ended June 30, 2007 of $62.3 million. This
compares to $51.3 million as at December 31, 2006.

    Cash as at September 30, 2007 was $66.9 million compared to $89.0 million
as at June 30, 2007 and $69.7 million as at December 31, 2006. The decrease in
cash is due to capital investments in property, plant and equipment, mining
interests and our construction projects. As at September 30 2007, the Company
had accounts receivables in the amount of $129.8 million, compared to $72.1
million as at June 30, 2007 and $6.0 million as at December 31, 2006. The
increase in accounts receivable is due to concentrate receivables as at the
quarter end from Chapada Mine sales and is ordinary course as it is dependent
on the timing of shipments and as production increases at the Chapada Mine and
concentrate sales increase accordingly.

    Working capital as at September 30, 2007 was $159.4 million compared
$76.3 million as at December 31, 2006 and $120.6 million as at June 30, 2007.
The increase in working capital is primarily related to the start up of
operations at the Chapada Mine and the increase of sales accordingly.

    Cash flow from operations before changes in non-cash working capital
items was $105.0 million for the quarter compared to $14.6 million for the
comparative quarter ended September 30, 2006 and $90.9 million for the second
quarter of 2007. Cash flow from operations before changes in non-cash working
capital items was $264.8 million for the nine month period ended September 30,
2007 compared to $37.5 million for the comparative nine month period ended
September 30, 2006. The increase in cash flow from operations for the three
and nine months is primarily due to start-up of operations at the Chapada
Mine.

    General and administrative expenses were $11.9 million and $30.8 million
for the three and nine month periods, respectively. This compares to $5.1
million and $13.7 million for the comparative three and nine month periods
ended September 30, 2006 and $10.7 million for the second quarter of 2007. The
increase in general and administrative expenses reflects the Company's growth
from operations and acquisitions and the growing infrastructure to support its
production growth.

    The Company recorded unrealized derivative losses of $50.8 million and
$79.5 million for the three and nine months ended September 30, 2007,
respectively. These unrealized losses consist principally of mark-to-market
gains and losses on copper commodity contracts. The spot copper price has
declined subsequent to the quarter, from $3.70 per pound as at September 30,
2007 to $3.42 as at November 2, 2007. A change of this magnitude would totally
reverse the third quarter unrealized loss.


    
    Conference Call


    A conference call and audio webcast has been scheduled for
    November 8, 2007 at 11:00 a.m. EST to discuss the third
    quarter results.


    Conference Call Information:
    ----------------------------


    Toll Free (North America):                            866-542-4236
    International:                                        416-641-6125
    Participant Audio Webcast:                          www.yamana.com



    Conference Call REPLAY:
    -----------------------


    Replay Call:                       416-695-5800 Passcode 3239999
                                       followed by the number sign

    Replay Toll Free Call:             800-408-3053 Passcode 3239999
                                       followed by the number sign
    


    The conference call replay will be available from 1:20 p.m. EST on
November 8, 2007 until 11:59 p.m. EST on November 15, 2007.

    About Yamana

    Yamana is a Canadian gold producer with significant gold production, gold
development stage properties, exploration properties and land positions in
Brazil, Argentina and Central America. With the purchase of Meridian Gold, the
Company now also owns mines and properties in Chile, Mexico and the United
States. Yamana is producing gold at intermediate company production levels in
addition to significant copper production. Yamana's management plans to
continue to build on this base through the advancement of its exploration
properties and by targeting other gold consolidation opportunities in the
Americas.

    
                                    Yamana Gold Inc.
                               Summarized Quarterly Data
       (thousands of United States dollars, except where noted, unaudited)
    -------------------------------------------------------------------------


                      For the Three Months ended  For the Nine Months ended
                      September 30, September 30, September 30, September 30,
                              2007          2006          2007          2006

    -------------------------------------------------------------------------

    Financial
    Operating cash
     flow before
      changes in working
      capital             $104,978       $14,603      $264,817       $37,516


    Operating cash
     flow per share          $0.30         $0.05         $0.75         $0.15


    Adjusted earnings     $471,461        $4,690      $195,169       $19,002


    Adjusted earnings
     per share               $0.20         $0.02         $0.55         $0.07


    Weighted average
     number of
     Common shares
     (in thousands)       $355,378      $293,272     $354,208       $256,201


    Outstanding basic
     (in thousands)        355,737       293,685      355,737        293,685


    Net Earnings (loss)     29,950       (12,085)     110,136        (76,304)


    Basic earnings per
     share basic             $0.08        ($0.04)       $0.31         ($0.30)





    Production Statistics
    -------------------------------------------------------------------------
                         Three months ended                Nine months ended
                 September        September        September       September
                  30, 2007         30, 2006         30, 2007        30, 2006


                       Cash             Cash            Cash            Cash
                      costs            costs           costs           costs
                        per              per             per             per
                         oz.              oz.             oz.             oz.
               Pro-  (a non-   Pro-   (a non-    Pro- (a non-   Pro-  (a non-
               duc-    GAAP    duc-     GAAP     duc-   GAAP    duc-    GAAP
              tion      mea-  tion       mea-   tion     mea-  tion      mea-
               (oz.)   sure)   (oz.)    sure)   (oz.)   sure)   (oz.)   sure)
    -------------------------------------------------------------------------
    Gold
     Produc-
     tion


    Brazil


     Chapada 49,716 $ (1,560)      - $    - 132,697 $ (1,494)      -  $    -

     Sao
     Fran-
     cisco   27,271 $    390  20,789 $  314  83,520 $    352   20,789 $  314
    Jacobina 17,289 $    544  19,321 $  317  35,812 $    499   41,654 $  325
    Fazenda         $         18,569 $  356  65,462 $    363   55,970 $  347
    Brasil-
     eiro    24,086      351
    Fazenda
     Nova       498 $    368   6,548 $  306   6,926 $    551   21,990 $  290
    -------------------------------------------------------------------------
    Total
     Brazil 118,860 $   (411) 65,227 $  326 324,417 $   (381) 140,403 $  327
    -------------------------------------------------------------------------
    Central
     Amer-
     ica
      San
      An-
       dres  12,506 $    346  14,685  $ 386  43,399 $   (381)  38,494  $ 339
    -------------------------------------------------------------------------
    Com-
     mer-
     cial
     Pro-
     duc-
     tion   131,366 $   (339) 79,912  $ 337 367,816 $   (292) 178,897  $ 329
    -------------------------------------------------------------------------
    Pre-com-
     mer-
     cial
    Pro-
     duc-
     tion
    Sao
     Fran-
     cisco        - $      -   8,869  $   -       - $       -  22,250  $   -
    -------------------------------------------------------------------------


    Pre-acqui-
     sition
     Pro-
     duc-
     tion


    Jaco-
     bina         -        -       -      -       -         -  18,974      -
    San
     Andres       -        -       -      -       -         -  13,987      -
    Post
     acqui-
     sition
     produc-
     tion
     from
     opera-
     tions -
     La
     Liber-
     tad          -        -       -      -       -         -  12,721      -
    -------------------------------------------------------------------------
    TOTAL
    GOLD
    PRO-
     DUC-
     TION   131,366 $      -  88,781  $   - 367,816 $       - 246,829  $   -
    -------------------------------------------------------------------------
    Concentrate
    (tonnes)
    Chapada  54,628                         149,362

    Copper
    contained
    in Con-
     cen-
     trate
     (mill-
     ions
     lbs)
    Chapada     5.5        -       -      -    92.4         -       -      -


    Con-
     cen-
     trate
     (ton-
     nes)
     Chap-
     ada     54,628        -       -      - 149,362         -       -      -
    -------------------------------------------------------------------------
    (i) Chapada cash costs on a co-product basis for the periods ended
        September 30, 2007



                                            Three Months   Nine Months
    Gold                                            $188          $194
    Copper                                         $0.71         $0.70





    Operating Statistics


                      For the three months ended   For the nine months ended
                         September     September    September      September
                                30,           30,          30,            30,
                              2007          2006         2007           2006
    CHAPADA
    -------------------------------------------------------------------------


    Production
    Ore mined (tonnes)   4,174,786             -    12,900,704             -


    Ore milled (tonnes)  3,256,283             -     9,956,108             -



    Ore grade Gold         0.64g/t             -       0.59g/t             -


    Ore grade Copper         0.52%             -         0.50%             -



    Concentrate (tonnes)    54,628             -       149,362             -


    Gold contained in
     concentrate (ounces)   49,716             -       132,697             -


    Copper contained
     in concentrate   33.5 million             -  92.4 million             -
     (pounds)


    Concentrate grade
     - gold                28.3g/t             -       27.6g/t             -


    Concentrate grade
     - copper                27.8%             -         28.1%             -



    Gold contained in
     concentrate recovery
     rate                    73.7%             -         73.1%             -


    Copper contained in
     concentrate
     recovery rate           89.0%             -         87.2%             -


    Sales
    Concentrate (tonnes)    55,773             -       152,571             -


    Payable gold
     contained in
     concentrate
     (ounces)               48,133             -       129,283             -


    Payable copper
     contained in
     concentrate      33.0 million             -  88.6 million             -



    Cash costs per
     ounce produced  $      (1,560)            - $      (1,494)            -


    -------------------------------------------------------------------------



    SAO FRANCISCO MINE


    -------------------------------------------------------------------------


    Gold production -
     pre-commercial
     (ounces)                    -         8,869             -        22,250
    Gold production -
     commercial (ounces)    27,271        20,789        83,520        20,789
    -------------------------------------------------------------------------
    Total gold production
     (ounces)               27,271        29,658        83,520        43,039
    -------------------------------------------------------------------------


    Gold sales (ounces)     23,114        21,828        83,616        21,828


    Cash costs per ounce
     produced             $    390      $    314     $     352       $   314


    Ore Grade              0.61g/t       0.58g/t       0.55g/t       0.58g/t
    Full recovery rate (ii)      -             -           77%             -
    Ore Recovery rate (i)    61.0%            (i)        69.1%            (i)
    Ore mined (tonnes)   2,072,564     1,892,474     5,807,938     3,665,089


    (i)   Recovery cycle not complete
    (ii)  Full recovery rate represents the recovery rate over the leaching
          cycle
    (iii) Sao Francisco commenced commercial production August 1, 2006
    -------------------------------------------------------------------------


    JACOBINA


    -------------------------------------------------------------------------


    Gold production
     (ounces)               17,289        19,321        35,812        41,654
    Gold sales (ounces)     15,335        20,221        34,462        44,235
    Cash costs per ounce
     produced             $    544      $    317      $    499      $    325


    Ore Grade              1.79g/t       1.72g/t       1.71g/t       1.88g/t
    Ore Recovery rate        94.7%         93.6%         94.8%         93.6%
    Ore mined (tonnes)     321,058       333,649       689,142       638,291
    Ore milled (tonnes)    317,430       372,790       685,514       737,728


    (i) At September 30, 2006 production statistics from the date of
    acquisition of April 15, 2006
    -------------------------------------------------------------------------


    SAN ANDRES


    -------------------------------------------------------------------------
    Gold production
     (ounces)               12,506        14,685        43,399        38,494
    Gold sales (ounces)     12,798        14,578        45,973        38,224


    Cash costs per ounce
     produced             $    346      $    386      $    365      $    339


    Ore Grade              0.69g/t       0.63g/t       0.59g/t       0.70g/t
    Ore Recovery rate       152.1%         89.3%        104.1%         88.5%
    Ore mined (tonnes)     347,875       900,727     2,180,581     2,630,583


    -------------------------------------------------------------------------


    FAZENDA BRASILEIRO MINE


    -------------------------------------------------------------------------


    Gold production
     (ounces)               24,086        18,569        65,462        55,970
    Gold sales (ounces)     26,940        19,835        68,731        54,747


    Cash costs per ounce
     produced             $    351      $    356      $    363      $    347


    Ore Grade              3.01g/t       2.54g/t       2.80g/t       2.57g/t
    Ore Recovery rate        95.1%         93.0%         94.3%         91.5%
    Ore mined (tonnes)     259,780       247,518       779,868       737,285
    Ore milled (tonnes)    261,960       244,038       769,979       740,788


    -------------------------------------------------------------------------


    FAZENDA NOVA MINE


    -------------------------------------------------------------------------


    Gold production
     (ounces)                  498         6,548         6,926        21,990
    Gold sales (ounces)      1,736         6,140         8,712        21,668


    Cash costs per ounce
     produced             $    368      $    306      $    551      $    290


    Ore Grade                   (i)      0.63g/t       0.48g/t       0.67g/t
    Ore Recovery rate           (i)        70.0%         98.3%         72.4%
    Ore mined (tonnes)          (i)      477,211       424,396     1,399,451


    (i) Fazenda Nova ceased mining in May 2007
    -------------------------------------------------------------------------



    YAMANA GOLD INC.
    Consolidated Balance Sheets
    As at
    (In thousands of US Dollars; unaudited)





                                                  September 30,  December 31,
                                                          2007          2006


    -------------------------------------------------------------------------


    Assets
    Current
    Cash and cash equivalents                       $   66,944    $   69,680
    Accounts receivable                                129,780         6,036
    Advances and deposits                               39,729        24,244
    Inventory                                           68,659        51,252
    Income taxes recoverable                            14,013         2,248
    Current portion of derivative related assets         9,110             -


    -------------------------------------------------------------------------
                                                       328,235       153,460
    Capital
    Property, plant and equipment                      380,629       134,792
    Assets under construction                           16,698       224,650
    Mineral properties                               1,578,971     1,496,732


    -------------------------------------------------------------------------
                                                     1,976,298     1,856,174


    Other
    Available-for-sale securities                       23,354        28,009
    Share purchase warrants held                           254           313
    Derivative related assets                            8,434             -
    Other assets                                        51,239        34,452
    Future income tax assets                            74,181        53,784
    Goodwill                                            55,000        55,000


    -------------------------------------------------------------------------
                                                       212,462       171,558


                                                    $2,516,995    $2,181,192


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Liabilities
    Current
    Accounts payable                                $   55,953    $   39,467
    Accrued liabilities                                 21,689        10,722
    Income taxes payable                                28,685         3,922
    Current portion of derivative related
     liabilities                                        62,143        21,163
    Current portion of long term liabilities               341         1,927


    -------------------------------------------------------------------------
                                                       168,811        77,201
    Long term
    Asset retirement obligation                         26,373        18,720
    Derivative related liabilities                      59,882        23,260
    Future income tax liabilities                      384,009       328,372
    Long term liabilities                               19,321        17,049


    -------------------------------------------------------------------------
                                                       489,585       387,401


    -------------------------------------------------------------------------
                                                       658,396       464,602


    -------------------------------------------------------------------------


    Shareholders' Equity
    Capital Stock
    Issued and outstanding 355,737,057
     common shares
     (December 31, 2006 - 344,595,212 shares)        1,720,997     1,619,850
    Shares to be issued                                      -        42,492
    Share purchase warrants                             72,902        73,004
    Contributed surplus                                 40,266        61,578
    Accumulated other comprehensive income               5,014             -


    Retained earnings (deficit)                         19,420       (80,334)


    -------------------------------------------------------------------------
                                                     1,858,599     1,716,590


    -------------------------------------------------------------------------


                                                    $2,516,995    $2,181,192


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    YAMANA GOLD INC.
    Consolidated Statements of Operations
    For the Periods Ended
    (In thousands of US Dollars except for share and per share amounts;
     unaudited)



                      For the three months ended   For the nine months ended
                         September     September     September     September
                          30, 2007      30, 2006      30, 2007      30, 2006


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Revenues            $  199,693    $   50,299    $  528,493    $  109,256
    Cost of sales          (58,800)      (31,752)     (179,755)      (63,811)
    Depreciation,
     amortization
     and depletion         (15,435)       (8,888)      (39,539)      (18,802)
    Accretion of asset
     retirement
     obligations              (522)         (167)       (1,229)         (490)


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Mine operating
     earnings              124,936         9,492       307,970        26,153


    Expenses
    General and
     administrative        (11,924)       (5,057)      (30,833)      (13,740)
    Foreign exchange
     (loss) gain              (331)          540        (7,026)        6,133
    Stock-based
     compensation             (137)         (761)         (698)      (38,301)
    Other losses            (5,305)            -       (17,997)            -


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Operating earnings
     (loss)                107,239         4,214       251,416       (19,755)


    Investment and other
     business income         1,003         1,200         6,019         4,251
    Interest and
     financing expense      (3,929)       (1,650)       (9,548)      (27,376)
    Realized loss on
     derivatives            (9,061)            -        (9,061)            -
    Unrealized loss on
     derivatives           (50,786)      (16,716)      (79,485)      (37,002)


    Loss on assets held
     for sale                    -             -             -        (2,186)


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Earnings (loss) before
     income taxes           44,466       (12,952)      159,341       (82,068)


    Income tax (expense)
     recovery              (14,516)          867       (49,205)        5,764


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Net earnings (loss) $   29,950    $  (12,085)   $  110,136    $  (76,304)


    Basic earnings
     (loss) per share   $     0.08    $    (0.04)   $     0.31    $    (0.30)


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Diluted earnings
     (loss) per share   $     0.08    $    (0.04)   $     0.30    $    (0.30)


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Basic weighted
     average number of
     shares outstanding
     (in thousands)        355,378       293,272       354,208       256,201


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Diluted weighted
     average number of
     shares outstanding
     (in thousands)        365,519       293,272       366,554       256,201


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    YAMANA GOLD INC.
    Consolidated Statements of Cash Flows
    For the Periods Ended
    (In thousands of US Dollars; unaudited)


                      For the three months ended   For the nine months ended
                         September     September     September     September
                          30, 2007      30, 2006      30, 2007      30, 2006


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Operating
     Activities
    Net earnings for
     the period         $   29,950    $  (12,085)   $  110,136    $  (76,303)
    Asset retirement
     obligations
     realized                 (281)          (41)       (1,141)         (259)
    Non-operating
     financing fee               -             -             -         5,000
    Items not involving
     cash
      Depreciation,
       amortization
       and depletion        15,435         8,888        39,539        19,729
       Stock-based
        compensation           137           761           698        38,300
       Future income taxes   2,261          (451)       12,937        (8,107)
       Accretion of
        asset retirement
        obligations            522           167         1,229           504
       Unrealized foreign
        exchange             4,960             -        14,119             -
       Unrealized loss
        on derivatives      50,786        16,716        79,485        37,002
       Impairment of the
        Fazenda Nova Mine
        and other asset
        write-offs               -             -         1,821             -
       (Recovery) provision
        for losses
        on inventory          (467)        1,553         3,871         1,543
       Financing charge          -             -             -        19,744
       Other                 1,675          (905)        2,123           363


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                           104,978        14,603       264,817        37,516


    Net change in
     non-cash
     working capital       (49,624)      (36,922)     (116,745)      (44,631)


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            55,354       (22,319)      148,072        (7,115)


    Financing Activities
    Issue of common
     shares, options and
     warrants for cash
     (net of issue costs)    2,348         2,384        25,567       213,835
    Dividends paid          (3,301)            -       (10,519)            -
    Settlement of
     derivatives            (4,177)            -        (8,639)            -
    Deferred financing
     charges                   486             -           (48)         (224)
    Repayment of notes
     payable and long
     term liabilities         (806)       (1,016)       (2,090)     (119,151)


                            (5,450)        1,368         4,271        94,460



    Investing Activities
    Expenditures on
     mineral properties    (26,819)      (16,992)      (67,737)      (36,365)
    Acquisition of
     property, plant
     and equipment         (21,818)       (6,905)      (53,152)      (14,855)
    Expenditures on
     assets under
     construction          (13,896)      (17,567)      (16,461)     (111,201)
    Deferred business
     development expenses   (6,294)            -        (6,294)            -
    Proceeds on
     disposition
     of assets                 737             -           737             -
    Cash acquired on
     business
     combinations
     (net of costs)              -           423          (848)       13,037
    Other assets            (3,282)       (9,622)      (14,333)      (18,861)



                           (71,372)      (50,663)     (158,088)     (168,245)



    Effect of foreign
     exchange on non-US
     dollar denominated
     cash and cash
     equivalents              (544)            -         3,009             -


    Decrease in cash
     and cash equivalents  (21,468)      (71,614)       (5,745)      (80,900)

    Cash and cash
     equivalents,
     beginning of period    88,956       142,347        69,680       151,633



    Cash and cash
     equivalents,
     end of period      $   66,944    $   70,733    $   66,944    $   70,733



    Cash and cash
     equivalents are
     comprised of
     the following:
    Cash at bank        $   49,639    $   33,700    $   49,639    $   33,700
    Bank term deposits      17,305        37,033        17,305        37,033



                        $   66,944    $   70,733    $   66,944    $   70,733
    




    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, 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 RE

SOURCES This news release uses the terms "Measured", "Indicated" and "Inferred" 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. CAUTIONARY LANGUAGE REGARDING RESERVES AND RE

SOURCES Readers are advised that National Instrument 43-101 of the Canadian Securities Administrators requires that each category of mineral reserves and mineral resources be reported separately. Mineral resources are not mineral reserves and have not demonstrated economic viability. Other than as disclosed, the effective date, details of key assumptions, parameters and methods used in the foregoing estimates and other information is disclosed in the Annual Information Form of Yamana for the year ended December 31, 2006 available under Yamana's profile at www.sedar.com, for this detailed information, which is subject to the qualifications and notes set forth therein.

For further information:

For further information: Yamana Gold Inc., Jodi Peake, Vice President,
Public & Investor Relations, (416) 815-0220, Email: investor@yamana.com,
Website: www.yamana.com

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YAMANA GOLD INC.

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