TORONTO, Jan. 14 /CNW/ - YAMANA GOLD INC. (TSX:YRI)(NYSE: AUY)(LSE:YAU)
today announced its operating outlook including production and cost guidance
for 2008 and 2009, as well as fourth quarter operational highlights.
2008/2009 OPERATING OUTLOOK
Gold production is expected to total up to 1.3 million gold equivalent
ounces (GEO) in 2008 increasing to 1.6 million gold equivalent ounces in 2009
from mines currently in production and mines under construction. Estimated
gold and copper production for 2008 and 2009 is detailed below. Silver
production of approximately 10 million ounces for 2008 and 2009 is treated as
a gold equivalent.
Gold Production Estimates (oz) 2008E 2009E
Chapada 170-175,000 175-180,000
El Penon (GEO) 425-435,000 425-435,000
Sao Francisco 130-140,000 145-155,000
Gualcamayo 85-95,000 240-250,000
Jacobina 135-145,000 180-190,000
San Andres 75-85,000 90-100,000
Fazenda Brasileiro 85-90,000 95-100,000
Minera Florida (GEO) 65-70,000 125-135,000
Sao Vicente 5-10,000 55-65,000
Alumbrera 60-65,000 55-60,000
Rossi (GEO) 30-40,000 30-40,000
Total GEO (including silver) 1,265-1,350,000 1,530-1,620,000
Copper (lbs) (Chapada) 155-160,000,000 160-165,000,000
Co-product cash cost per GEO (US$) $ 285-295 $ 290-310
Co-product cash cost per lb (US$) $0.60-0.65 $0.60-0.65
By-product cash cost per GEO (US$) $(40) - $0 $ 40 -$80
Cash costs and gold equivalent ounces were calculated using the following
metal prices and exchange rates:
Gold (US$/oz) 700 700
Silver (US$/oz) 13.00 13.00
Copper (US$/lb) 3.00 3.00
Zinc (US$/tonne) 2,600.00 2,600.00
BRL Real/US$ 1.90 1.90
ARS Peso/US$ 3.10 3.10
CLP Peso/US$ 510.00 550.00
Cash costs reported on a GEO and by-product basis apply zinc and Chapada
copper net revenue as a credit to the cost of gold production and as such the
by-product GEO cash costs are impacted by realized zinc and copper prices.
Copper from Alumbrera is not included in the by-product cash cost calculation.
Further, gold production is expected to increase while copper and zinc
production remain constant and as such the impact of the by-product credit is
reduced on a per ounce basis with increasing gold production. Cash costs are
also impacted by an expected inflation year over year. Further, the Company's
comparatively low cash costs are also underpinned by estimated gold only cash
costs at Chapada and El Penon. Chapada's gold only cash costs are expected to
average in the range of $225 to $250 per ounce for 2008 and approximately
$(1,904) per ounce by applying copper as a by-product. El Penon gold only cash
costs are expected to range from $240 to $275 per ounce for 2008. These are
low cash costs per ounce by current industry standards.
Estimated gold production from advanced projects includes Gualcamayo and
Sao Vicente which are both currently under construction. Production from
Gualcamayo and Sao Vicente is for partial year 2008 with production expected
at Gualcamayo starting in the second half of 2008 and at Sao Vicente starting
in Q4 2008. Planned production for Gualcamayo is expected to be approximately
200,000 ounces of gold per year from 2009 onward, with the potential to
increase to 300,000 ounces of gold per year including QDD Lower West in later
years. In full production, cash costs at Gualcamayo are estimated to average
in the range of $270 to $290 per ounce.
Production at Jacobina is expected to increase quarter over quarter in
2008 as the mine ramps up to its planned first phase throughput expansion
level. In the first quarter of 2008, production and costs will be impacted at
Jacobina as planned upgrades to the mills will be required in February and
March to accommodate the increase in production and longer mine life. The
Company will continue development work and to mine and stockpile ore during
this period. For 2008, cash costs at the mine are estimated to average in the
range $290 to $330 per ounce with higher costs in the first half of 2008 due
to these expansion activities.
At Sao Francisco, improvements in mining and ore processing are expected
to result in increased production beginning in 2008. Further, in circuit
inventory on the leach pads from the fourth quarter of 2007 is expected to
increase production in the first quarter of 2008. Cash costs at Sao Francisco
are estimated to average in the range of $350 to $390 per ounce for 2008.
Increased production in 2009 at Minera Florida results from the expansion
at the mine which is in progress. Cash costs at Minera Florida are estimated
to average in the range of $230 to $270 per GEO for 2008. Cash costs are
expected to be significantly lower in 2009 with the planned expansion.
Cash costs at the Company's other operations are expected to be on
average $350 to $400 per ounce for 2008.
Cash costs are reported on an annual basis but are expected to vary from
quarter to quarter. For 2008 the range of cash costs on a co-product basis not
including any by-products are expected to be as follows: Q1 - $325 to $335 per
GEO, Q2 - $285 to $295 per GEO, Q3 - $270 to $280 per GEO and Q4 - $265 to
$275 per GEO. The average total cash costs for 2008 are shown in the table
Production in 2008 is expected to ramp up progressively quarter over
quarter with production in the second half of the year exceeding the first
half of the year.
Yamana remains fully financed for its strategic gold growth plan where
enhancements, expansions, improvements and development of existing assets are
expected to drive production towards the Company's objective to produce more
than 2.2 million ounces of gold in 2012. The Company has approximately US$300
million in cash and cash equivalents as at December 31, 2007 and US$630
million drawn on the Company's credit facilities related to the acquisition of
Meridian and Northern Orion, for a net debt position of approximately US$330
million. The Company also has approximately US$62 million in investments as at
December 31, 2007. The net debt will be repaid through available funds and
Yamana expects capital investments for 2008 to total approximately US$575
million including approximately US$84 million for exploration (US$43 expensed,
US$41 capitalized). Yamana's dedicated exploration program in 2008 will focus
on mine, near-mine and regional exploration activities in Brazil, Chile,
Argentina, Mexico, Nicaragua, Peru and Nevada. Yamana plans approximately
350,000 metres of total drilling on all projects in 2008. The Company is fully
funded in all of its capital and exploration programs. The Company is driven
by a corporate philosophy of maximizing cash flow and production.
FOURTH QUARTER OPERATIONAL HIGHLIGHTS
Yamana provides the following operational update for the fourth quarter
of 2007. Total production during the fourth quarter from all mines owned by
Yamana was approximately 189,000 ounces of gold, 2.5 million ounces of silver
(approximately 235,000 GEO), along with 30.5 million pounds of copper and 835
tonnes of zinc. For the year-ended December 31, 2007, production totaled
approximately 773,000 ounces of gold and 8.6 million ounces of silver
(approximately 933,000 GEO) along with 123 million pounds of copper and 3,500
tonnes of zinc. Additional gold and copper production from Alumbrera is not
included in these numbers.
At Chapada, a total of 52,000 tonnes of concentrate was produced and
approximately 45,000 tonnes of concentrate was delivered for sale during the
quarter. Concentrate production is expected to increase further and cash costs
are expected to decline at Chapada as operations ramp up to full capacity.
Gold production during the fourth quarter was more than 45,000 ounces from
Chapada, and copper production totaled approximately 30.5 million pounds.
Production at Jacobina continued to ramp up during the fourth quarter to
approximately 18,000 ounces following implementation of additional safety
protocols and recommendations of rock mechanics advisers after certain sill
pillar failures in historically mined areas which occurred in early 2007 year.
Engineering and construction continued to advance to increase the throughput
capacity to 6,500 tonnes per day early in the second quarter of 2008 and to
8,500 tonnes per day by the end of 2008.
During the fourth quarter, gold inventory at Sao Francisco increased as
the Company began to load ore onto the second lifts of the heap leach pads
which resulted in an increased heap leach cycle. The Company anticpated higher
production in the fourth quarter, although all of the difference remains in
inventory. A total of approximately 32,800 ounces was loaded onto the pads in
ore with recoverable gold of 25,300 ounces and production of approximately
21,200 ounces. While below the estimate for the fourth quarter, Yamana is
expecting recovery in the in circuit gold in early 2008.
At El Penon, gold production for the fourth quarter was approximately
59,000 ounces, which is consistent with Company estimates. During the fourth
quarter, silver production reached a record quarterly amount of 2.3 million
ounces. Total GEO production of approximately 102,000 ounces exceeded Company
estimates. Also during the fourth quarter, construction of the portal and
initial development to the new Bonanza discovery was initiated.
At Minera Florida, gold production was approximately 14,000 ounces and
silver production was approximately 137,000 ounces for total GEO of
approximately 16,500 ounces. Start-up of the new flotation cells was as
planned with a three percent improvement in gold recovery as expected. Fourth
quarter zinc recovery increased to 70.8% versus 2007 budget expectations of
60.8%. Regulatory approval was received during the fourth quarter for the 2008
mine and plant expansion programs.
Gold production from other mines was approximately 30,500 ounces during
the fourth quarter.
The Company continued its development efforts at Gualcamayo and Sao
Vicente in the fourth quarter with production expected to begin in mid-2008 at
Gualcamayo and late 2008 for Sao Vicente.
The Company also continued to advance the C1 Santa Luz feasibility study
and to accumulate information for an initial resource estimate at Bonanza and
an updated estimate at Al Este at El Penon. Further, the Company began
expansion plans at San Andres.
At Jeronimo, considerable metallurgical testing was performed in 2007
with encouraging results. Flotation in an inert atmosphere has been
demonstrated by these tests to be technically feasible and has been determined
to be the most promising ore processing technique. Further test work has been
scheduled in the first quarter of 2008 to focus on the most commercially
viable downstream process option for the flotation concentrates. Further test
results are expected by the end of the first quarter.
Yamana expects to release the update to the Gualcamayo feasibility study
for the satellite deposits Amelia Ines and Magdalena by the end of January
2008. The feasibility study for C1 Santa Luz in Brazil is also expected to be
released by the end of January 2008, as well as an initial resource estimate
at Bonanza and an updated estimate at Al Este in Chile. The Company is also
expecting to release a resource estimate for QDD Lower West at Gualcamayo
(which is the third area of mineralization) in February 2008. A new resource
estimate at the Mercedes project in Mexico is anticipated in before the end of
Yamana will release its full fourth quarter financial results after the
close of business on March 25, 2008. A conference call will follow on March
Evandro Cintra, P. Geo., Vice President, Technical Services of Yamana
Gold Inc., has reviewed and approved the contents of this press release and
serves as the "Qualified Person" as defined by National Instrument 43-101.
Yamana is a Canadian 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 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, 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, 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
For further information:
For further information: Yamana Gold Inc., Jodi Peake, Vice President,
Public & Investor Relations, (416) 815-0220, Email: firstname.lastname@example.org; or
Yamana Gold Inc., Letitia Wong, Director, Investor Relations, (416) 815-0220,
Email: email@example.com, Website: www.yamana.com