Yamana Gold Provides QDD Lower West Update

    TSX: YRI
    NYSE:   AUY
    LSE: YAU

today announced the results of its studies relating to the mining of
Gualcamayo's QDD Lower West underground deposit. Two alternative approaches to
mining the deposit were considered with the conclusion that QDD Lower West is
feasible as an underground operation under either approach. The approaches
were evaluated based on overall project cost, complexity, total gold recovery,
value and return maximization and the potential for further upside. Under the
first approach, mining would be by shrinkage fill with production targeted to
begin in 2011. Under the second approach, a front caving with pillar recovery
method would be used with targeted production expected to begin in 2015. The
latter approach would effectively extend Gualcamayo's expected mine life from
nine years to 13 years.
    The Gualcamayo property is located in northern San Juan Province,
Argentina, approximately 270 km north of the provincial capital, San Juan
City. It consists of three main mineral deposits, the main QDD deposit, the
Amelia Ines and Magdalena (AIM) satellite deposits and the QDD Lower West
underground zone. The QDD Lower West deposit is located at least 500 metres
below QDD, towards the west and continued drilling on the deposit is expected
to increase reserves, particularly in the western extension.
    The property is situated within a complex structural block of
Cambrian/Ordovician carbonate sediments in the Pre-cordillera formed by the
Andean deformational east-west compression. Gold mineralization is
disseminated within carbonate sediments. The project has been evaluated based
on approximately 15,000 metres of drilling, although considerable drilling and
other related exploration is ongoing in the western extension, extensive
geological, geotechnical and metallurgical test work, feasibility level design
and engineering and initial underground development to improve knowledge of
the deposit and provide access for underground exploration. The metallurgical
testwork supports heap leaching recovery of approximately 80% within 30 days.
    The QDD Lower West mineral resource estimate, based on a cut off grade of
1.0 g/t Au using sample data received as of September 30, 2008, includes
measured and indicated resources of 8.26 million tonnes grading 2.90 g/t Au
containing 769,000 ounces of gold, and inferred resources of 1.60 million
tonnes grading 2.66 g/t Au containing 136,000 ounces of gold. This compares to
previously announced (March 25, 2008 press release) measured and indicated
resources using a cut off grade of 1.0 g/t Au of 4.46 million tonnes grading
2.63 g/t Au containing 376,800 ounces of gold, and inferred resources of 2.81
million tonnes grading 2.59 g/t Au containing 234,100 ounces of gold. The
table below shows a breakdown of the currently defined mineral resources using
different cut off grades between 1.0 and 2.0 g/t Au.

               Measured               Indicated       Measured and Indicated
          Tonnes                 Tonnes                  Tonnes
         greater                greater                 greater
    Cut- than or                than or                 than or
     off   equal          in-     equal           in-     equal          in-
    (g/t      to   Au    situ        to    Au    situ        to   Au    situ
    Au)   Cutoff  g/t  ounces    Cutoff   g/t  ounces    Cutoff  g/t  ounces
    1.0  486,000 3.075 48,000 7,775,000 2.885 721,000 8,261,000 2.896 769,000
    1.2  468,000 3.152 47,000 7,684,000 2.906 718,000 8,151,000 2.919 765,000
    1.4  443,000 3.253 46,000 7,379,000 2.971 705,000 7,823,000 2.987 751,000
    1.6  410,000 3.396 45,000 6,895,000 3.074 681,000 7,304,000 3.092 726,000
    1.8  373,000 3.562 43,000 6,264,000 3.212 647,000 6,637,000 3.232 690,000
    2.0  341,000 3.719 41,000 5,623,000 3.362 608,000 5,964,000 3.382 648,000
           than or
    Cutoff   equal           in-
    (g/t        to    Au    situ
    Au)     Cutoff   g/t  ounces
    1.0  1,595,000 2.657 136,000
    1.2  1,595,000 2.657 136,000
    1.4  1,591,000 2.659 136,000
    1.6  1,563,000 2.680 135,000
    1.8  1,436,000 2.766 128,000
    2.0  1,214,000 2.923 114,000

    The results of the evaluation using the comparative approaches to mining
    are summarized as follows:

                                  Shrinkage Fill           Front Caving
                             Tonnes  Au g/t      Oz     Tonnes    g/t      Oz
    Proven                  192,257    2.88  17,775    431,703   2.54  35,254
    Probable              3,484,625    2.63 294,671  6,872,156   2.46 543,525
    Internal Dilution
    (Probable)            3,246,574    1.04 108,533  4,167,853   1.05 140,700
    Total Contained
     Reserves             6,923,456    1.89 420,979 11,471,712   1.95 719,479

    Mine Life (years)                    4.5               7
    Capex (US$ MM)                       $62             $62
    Timing of Construction         2010-2011       2013-2015
    Cash Costs (US$/Oz)                 $365            $293
    After-tax IRR                        20%             37%

    The financial analysis for the studies used a gold price of US$725 per
ounce. At the current gold price of US$900 per ounce, the after-tax IRR for
the QDD Lower West project using the front caving approach increases to over
50% and the project would have an after-tax net present value (5% discount
rate) of approximately US$100 million.
    Production expectations under the two alternatives, adding production
from the other Gualcamayo operations, would be as follows:

                   PRODUCTION PROFILE (000 oz)(i)
              Shrinkage Fill               Front Caving
    2009        144    51     195            144    51     195
    2010        140    80     220            140    80     220
    2011   40   124    39     203            124    39     163
    2012   79   156    33     268            156    33     188
    2013   95   153    32     279            153    32     184
    2014  102   140    32     275            140    32     172
    2015   21   181    32     233       54   181    32     267
    2016        192     5     197      108   192     5     305
    2017        104     1     105       92   104     1     198
    2018                                92                  92
    2019                                92                  92
    2020                                74                  74
    2021                                63                  63
    Total 337 1,333   305   1,975      576 1,333   305   2,214
    (i)Variance range of plus/minus 7% for total production.

    Both mining methods are feasible although the front caving mining
alternative increases total minable ounces, reduces costs, provides
significantly improved returns, allows for the expansion of resources and
better addresses geotechnical constraints and provides for a longer mine life
and a higher return and value. The shrinkage fill method would accelerate
production from QDD Lower West. Based on these results, the Company has
decided to advance the front caving mining method. Further, the Company will
continue drilling with the goal of proving up the QDD Lower West western
extension which has the potential to significantly expand reserves. With
additional drilling and assuming an extension of QDD Lower West, the Company
believes that it may accelerate the production schedule under the front caving
alternative by beginning mining in the western extremity, thereby advancing
production, further increasing the value of QDD Lower West and its return on

    Based on results of the study, advantages of pursuing the front caving
alternative include:

    -   improved project returns and net present value;

    -   improved cash costs relating to the underground mining thereby
        decreasing the average cash costs for Gualcamayo;

    -   significant increase in mineable and recoverable reserves;

    -   higher average head grade; and

    -   increased mine life for Gualcamayo to approximately 13 years from its
        current mine life of nine years.

    The financial analysis of both alternatives suggests that the value of
and the return for QDD Lower West are more sensitive to gold price and
operating costs than capital expenditures. As drilling continues, the Company
will continue to evaluate opportunities to further enhance project economics
including the potential to reduce operating costs, increase mineable reserves
through extension to the west and accelerate production.
    The current analysis for the front caving approach considers mining
beginning in the area below the main QDD open pit which is the area with the
most defined resources. The Company continues to evaluate advancing production
before 2015 by beginning mining in the western extension using the same front
caving mining approach. The Company has allocated almost its entire US $6
million exploration budget for Gualcamayo in 2009 toward further exploration
of QDD Lower West. The exploration program includes about 100 metres of
underground development and 10,000 metres of diamond drilling to extend the
QDD Lower West deposit along strike to the west. Any defined extension at the
end of 2009 would allow the Company to further consider the merits of
beginning mining operations at QDD Lower West in the western extension, the
result of which would be to capture all the benefits of a longer mine life,
better costs, more minable ounces, and better value and return from the front
caving approach while also adding the benefit of advancing production earlier
than 2015.


    The Company is expecting to deliver an initial feasibility study for the
Mercedes project in Mexico and also a scoping study for the
Ernesto/Pau-a-Pique project in Brazil in mid-February.

    Qualified Person

    Evandro Cintra, P. Geo., Senior 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.

    About Yamana

    Yamana is a Canadian gold producer with significant gold production, gold
development stage properties, exploration properties, and land positions in
Brazil, Argentina, Chile, Mexico and Central America. 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.

contains certain "forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and "forward-looking
information" under applicable Canadian securities legislation. Except for
statements of historical fact relating to the company, information contained
herein constitutes forward-looking statements, including any information as to
the Company's strategy, plans or future financial or operating performance.
Forward-looking statements are characterized by words such as "plan,"
"expect,", "budget", "target", "project," "intend," "believe," "anticipate",
"estimate" and other similar words, or statements that certain events or
conditions "may" or "will" occur. Forward-looking statements are based on the
opinions, assumptions and estimates of management considered reasonable at the
date the statements are made, and are inherently subject to a variety of risks
and uncertainties and other known and unknown factors that could cause actual
events or results to differ materially from those projected in the
forward-looking statements. These factors include, but are not limited to, the
advantages determined based on findings of the various studies conducted on
the QDD Lower West underground deposit proving to be accurate, the impact of
general business and economic conditions, global liquidity and credit
availability on the timing of cash flows and the values of assets and
liabilities based on projected future conditions, possible variations in ore
grade or recovery rates, fluctuating metal prices (such as gold, copper,
silver and zinc), currency exchange rates (such as the Brazilian Real and the
Chilean Peso versus the United States Dollar), changes in the Company's
hedging program, changes in accounting policies, changes in the Company's
corporate resources, changes in project parameters as plans continue to be
refined, changes in project development and production time frames, risk
related to joint venture operations, the possibility of project cost overruns
or unanticipated costs and expenses, higher prices for fuel, steel, power,
labour and other consumables contributing to higher costs and general risks of
the mining industry, failure of plant, equipment or processes to operate as
anticipated, unexpected changes in mine life, final pricing for concentrate
sales, unanticipated results of future studies, seasonality and unanticipated
weather changes, costs and timing of the development of new deposits, success
of exploration activities, permitting time lines, government regulation of
mining operations, environmental risks, unanticipated reclamation expenses,
title disputes or claims, limitations on insurance coverage and timing and
possible outcome of pending litigation and labour disputes, as well as those
risk factors discussed or referred to in the Company's annual Management's
Discussion and Analysis and Annual Information Form 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,
assumptions or opinions should change, except as required by applicable law.
The reader is cautioned not to place undue reliance on forward-looking
statements. The forward-looking information contained herein is presently for
the purpose of assisting investors in understanding the Company's expected
financial and operational performance and the Company's plans and objectives
and may not be appropriate for other purposes.

For further information:

For further information: Yamana Gold Inc., Jodi Peake, Vice President,
Corporate Communications & 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; or MEDIA CONTACT: Mansfield Communications Inc., Hugh
Mansfield, (416) 599-0024

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