Yamana Gold Announces Second Quarter 2011 Results - Records Achieved in Revenue, Cash Flow and Earnings
TORONTO, Aug. 3, 2011 /CNW/ --
(Based on IFRS and in United States dollars unless otherwise specified)
TORONTO, Aug. 3, 2011 /CNW/ - YAMANA GOLD INC. (TSX: YRI) (NYSE: AUY) (LSE: YAU) ('Yamana' or 'the Company') today
announced its financial and operating results for the second quarter of
2011.
HIGHLIGHTS FOR THE SECOND QUARTER 2011
-- Production of 278,737 gold equivalent ounces (GEO)((1) )at cash
costs of negative $80 per GEO((2)(3))
o Gold production of 232,138 ounces
o Silver production of 2.3 million ounces
o Generated cash margin of $1,589 per ounce((4))
-- Mercedes is expected to commence production by year-end, ahead
of the original plan for mid-year 2012
-- Significant financial and operational increases over the second
quarter of 2010
o Production increased 10% to 278,737 GEO
o Record revenue increased 63% to $573.3 million
o Record net earnings increased 178% to $194.7 million, $0.26 per
share
o Record adjusted earnings((2)) increased 122% to $186.2 million,
$0.25 per share
o Record cash flow generated from operations((2)(5) )increased 70% to
$331.0 million, $0.44 per share
-- Cash and cash equivalents at June 30, 2011 were $520.9 million,
a $60 million increase from the end of the first quarter of
2011
1. Gold equivalent ounces (GEO) includes silver production at a ratio
of 50:1.
2. Refers to a non-GAAP measure. Reconciliations can be found at the
end of this press release.
3. Cash costs are shown on a by-product basis including Alumbrera
unless otherwise noted.
4. Cash margin is the difference between the average realized gold
price received less by-product cash costs per GEO.
5. Cash flow from operations before changes in non-cash working
capital.
'Our second quarter results continue to demonstrate our focus and
commitment to increased reliability and continuous improvement in our
operational and financial results,' commented Peter Marrone, Chairman
and CEO. 'Our operational successes resulted in records in revenue,
cash flow and earnings both on an absolute basis and on a per share
basis. This allowed us to increase our dividend in the quarter by
50%.'
'In addition, we are ahead of schedule on delivering production growth,
with Mercedes expecting its first gold pour before year-end and all of
our other construction projects are on track. We continue to expect to
deliver over 60% production growth over four years taking our
sustainable production level to 1.7 million ounces in 2014.'
KEY STATISTICS
Three months ended Six months ended
June 30, June 30,
In millions of US dollars except 2011 2010 2011 2010
where noted
Revenues $573.3 $351.4 $1049.4 $697.7
Cost of sales excluding depletion, 191.8 135.7 348.9 280.8
depreciation and amortization
Depletion, depreciation and 89.0 68.7 169.5 138.8
amortization
General and administrative 34.1 29.3 61.6 54.6
expenses
Exploration expenses 9.1 10.7 15.6 17.5
Operating Earnings 254.7 110.2 467.3 221.2
Equity earnings from Alumbrera 16.6 7.8 28.3 19.5
Adjusted earnings 186.2 84.0 338.4 160.0
Adjusted earnings per share 0.25 0.12 0.46 0.22
Cash flow generated from 315.8 127.2 544.7 268.5
operations after changes in
working capital
Per share 0.42 0.17 0.73 0.36
Cash flow generated from 331.0 194.3 615.4 358.8
operations before changes in
working capital
Per share 0.44 0.26 0.83 0.49
Average realized gold price per $1,509 $1,201 $1,450 $1,157
ounce
Average realized silver price per $37.76 $18.45 $35.78 $17.74
ounce
Average realized copper price per $4.22 $3.07 $4.25 $3.16
pound
PRODUCTION SUMMARY
FINANCIAL AND OPERATING SUMMARY
Three months ended Six months ended
June 30, June 30,
2011 2010 2011 2010
Total gold 278,737 253,264 546,105 493,100
equivalent
ounces -
produced
Gold produced 232,138 208,399 453,627 399,062
Silver 2,329,964 2,467,629 4,623,898 5,172,069
produced
(millions of
ounces)
Total gold 261,926 233,413 516,014 470,192
equivalent
ounces - sold
(excl.
Alumbrera)
Total copper 40.8 37.0 79.2 66.7
produced -
Chapada
(millions of
pounds)
Total copper 41.6 31.6 71.3 60.7
sold - Chapada
(millions of
pounds)
Co-product cash $ 451 $ 434 $ 450 $ 429
costs per gold
equivalent ounce
Cash cost per $ 1.32 $ 1.13 $ 1.26 $ 1.18
pound of
copper -
Chapada
By-product cash $ (80) $ 103 $ (34) $ 95
costs per gold
equivalent ounce
Revenues were $573.3 million in the second quarter on the sale of
220,376 ounces of gold excluding Alumbrera, 2.1 million ounces of
silver, and 41.6 million pounds of copper excluding Alumbrera compared
with $351.4 million in the same quarter of 2010 on the sale of 186,921
ounces of gold excluding Alumbrera, 2.6 million ounces of silver and
31.6 million pounds of copper excluding Alumbrera.
Record adjusted earnings were $186.2 million, an increase of 122%, or
$0.25 per share in the second quarter of 2011 compared with adjusted
earnings of $84.0 million or $0.12 per share in the same quarter of
2010.
Record net earnings for the quarter were $194.7 million, an increase of
178%, compared with net earnings of $70.1 million for the second
quarter of 2010, which included earnings from discontinued operations
of $6.5 million. Earnings per share increased 189% to $0.26 on a basic
and diluted basis for the second quarter of 2011, compared with basic
and diluted earnings per share of $0.09 for the same quarter in 2010.
Cash flow generated from operations before changes in working capital
was $331.0 or $0.44 per share compared with $194.3 million or $0.26 per
share for the second quarter of 2010, which reflects certain
reclassifications made under IFRS.
The increase in cash flows generated from operations was primarily due
to strong cost constraint, an increase in gold, silver and copper
volume and prices generating higher sales revenues and favourable final
pricing adjustments on copper in concentrate shipments.
The Company is well positioned to meet its financial obligations. Cash
and cash equivalents as at June 30, 2011 were $520.9 million,
representing an increase of $190.4 million since December 31, 2010, as
a result of increased cash flows from operating activities. A total of
$25 million of debt repayments were made during the quarter.
In the three months ended June 30, 2011, production of GEO totaled
278,737 GEO compared with 253,264 GEO in 2010, representing a
quarter-over-quarter increase of 10%.
In the second quarter of 2011, copper production of 40.8 million pounds
from the Chapada mine increased by 10% over production of 37.0 million
pounds in the three months ended June 30, 2010. Tonnage of copper
concentrate production at Chapada also increased by 9.9% over the
second quarter of 2010. Additionally, 9.3 million pounds of copper
produced from Alumbrera were attributable to the Company in the second
quarter of 2011, the same as the amount produced in the quarter ended
June 30, 2010.
For the quarter, by-product cash costs including Alumbrera were negative $80 per GEO and excluding Alumbrera were negative $2 per GEO compared with positive $103 per GEO and positive $201 per GEO, respectively, in the second quarter of 2010. By-product
cash costs take into account the natural hedge of by-product metal
prices for the Company's production cost structure. By-product credits
inherently offset unusually high mining inflation during periods of
high metal prices. The Company believes that by-product cash costs are
a better representation of its cost structure. Lower by-product cash
costs compared to last year reflect strong cost containment and strong
copper prices which mitigated cost pressures due to mining industry
inflation and the appreciation of currencies in the countries where the
Company's mines are located. Quarter-over-quarter, the value of the
Chilean Peso increased by 15% and the Brazilian Real went up 13%
against the United States Dollar. The Company has hedged approximately
55% of the operating expenses of its mines in Brazil for the remainder
of the year with an average contract rate of 2.08 Reais per United
States Dollar that largely offset the foreign exchange losses related
to operating expenses incurred in Reais.
Average co-product cash costs for the quarter were $451 per GEO
including Alumbrera, representing a 3.9% increase from $434 per GEO for
the second quarter of 2010; excluding Alumbrera, average co-product
cash costs increased by 4.1% to $461 per GEO from $443 per GEO.
Reliability of operations and cost management improvement allowed the
Company to mitigate the adverse impact of a strong Brazilian Real and
Chilean Peso.
Co-product cash costs per pound of copper were $1.32 for the quarter
from Chapada, compared with $1.13 in the second quarter of 2010 and
co-product cash costs including the Company's interest in the Alumbrera
mine were $1.36 per pound of copper, compared with $1.21 for the
quarter ended June 30, 2010.
Operating Mines
A summary of mine-by-mine operating results can be found on the final
page of this press release.
Chapada, Brazil
Chapada produced a total of 31,566 ounces of gold contained in
concentrate in the second quarter of 2011 compared with 30,450 ounces
of gold in concentrate in the second quarter of 2010, representing a
quarter-over-quarter increase of 3.7%. Chapada copper production of
40.8 million pounds in the second quarter was 10% higher than the
production of 37.0 million pounds of copper contained in concentrate
during the comparable period in 2010.
Higher production of both gold and copper in the quarter compared with
the second quarter of 2010 was mainly due to copper grade and gold and
copper recovery rates.
Copper contained in concentrate has remained within the range of 35-40
million pounds per quarter.
By-product cash costs for the quarter were negative $3,555 per ounce compared with negative $1,583 per ounce for the same quarter of 2010. Higher by-product cash
cost credits reflect the continuous strength of copper prices resulting
in lower by-product cash costs.
Co-product cash costs for the quarter were $342 per gold ounce and $1.32
per pound of copper compared to $350 per gold ounce and $1.13 per pound
of copper for the same quarter of 2010. The increase in co-product cash
costs per pound of copper is primarily due to an increase in
transportation costs allocated to copper.
The exploration program at Chapada includes 23,000 metres of diamond
drilling that will principally target the southern extension of the
Chapada pit at Corpo Sul and the southern extension at Suruca, a
satellite deposit that is located six kilometres northeast of Chapada.
Drilling at Corpo Sul has identified gold and copper mineralization
along a minimum strike length of 1.7 kilometres, to a depth of almost
200 metres and mineralization remains open along strike and down dip.
Results were received from seven drill holes, three located immediately
adjacent to the Chapada open pit and four located approximately 1.7
kilometres further along strike to the southwest at Corpo Sul. All of
the holes returned mineralization similar in grade and composition to
that currently being mined. With the discovery of Suruca in late 2009
and the positive results at Corpo Sul this year, copper and gold
mineralization has now been identified along a strike length of almost
12 kilometres including the main Chapada deposit.
The Company is also evaluating Corpo Sul as a satellite shallow low
strip ratio open pit operation that would contribute to copper and gold
production at Chapada, from 2014 onward, with grades greater than the
grades the Company would otherwise be mining from the main Chapada pit.
A feasibility study for Suruca is currently underway with the focus
primarily on an initial average gold production contribution of
approximately 40,000 to 50,000 ounces per year beginning in 2014 from
oxide ore. Development plans and permitting are in progress for a heap
leach operation to supplement production from the main Chapada pit.
Cumulatively, with the contribution to gold production from Suruca oxide
ore along with Corpo Sul's contribution to copper and gold production,
overall copper and gold production would exceed currently planned
production at Chapada beginning in 2014.
During the remainder of 2011, diamond drilling will continue to focus on
the expansion and delineation of mineralization at Corpo Sul and the
southern extension of Suruca towards the Chapada pit.
Jacobina, Brazil
Production at Jacobina was 27,806 ounces of gold in the second quarter
of 2011 compared to production of 29,785 ounces of gold in the second
quarter of 2010. Production for the quarter was on plan which
anticipated lower grades.
The Company continues to focus on upgrading the current mineral
resources to mineral reserves at Canavieiras and Morro Do Vento and
improving overall mineral reserve grade for the mine. Mining of higher
grade areas could increase average annual production at Jacobina to
150,000 gold ounces beginning in 2014.
Cash costs averaged $663 per ounce of gold for the second quarter
compared with $534 per ounce of gold in the second quarter of 2010
mainly due to lower production and higher plant costs as a result of
down-time caused by normal course repairs and maintenance costs that
were higher during the quarter.
The objectives of the 2011 exploration program at Jacobina are to
upgrade current mineral resources to mineral reserves at Canavieiras
and Morro do Vento, to improve overall mineral reserve grade for the
mine, and to add new mineral resources along strike extensions in those
zones. The 2011 exploration budget of $5 million includes 14,000 metres
of diamond drilling.
To date in 2011, 19 drill holes have been completed at the Canavieiras
deposit and results from the first 10 holes confirm grades that are
higher than the current mineral reserve grade. Mining of higher grade
areas is expected to increase annual production up to 150,000 gold
ounces commencing in 2014.
Fazenda Brasileiro, Brazil
The Fazenda Brasileiro mine produced 14,007 ounces of gold in the
quarter ended June 30, 2011. This compares to 18,333 ounces of gold in
the second quarter of 2010. Cash costs for the second quarter were $934
per ounce compared with $559 per ounce for the same period in 2010.
Grade for the quarter was 2.02 g/t compared to 2.36 g/t for the
comparative quarter last year, representing a planned decline in grade
of 14%, which impacted cash costs. Appreciation of the Brazilian Real
relative to the United States Dollar also impacted cash costs.
The Fazenda Brasileiro mine was acquired in 2003 with two and a half
years of mine life remaining based on known mineral reserves. The
Company has since been mining at Fazenda Brasileiro for seven years.
The mine continues to further outline exploration potential and
resource additions are expected in 2011.
The two new mineralization zones, CLX2 and Lagoa do Gato, both
discovered in 2009, are identified as having significant potential for
high-grade sources of ore for the mill. Both infill and extension
drilling confirm the continuity of mineralization in both areas. In
2011, the Company continues to develop the high-grade mineral reserves
at CLX2, improve mine fleet costs using road trucks and focus on
continuing to extend Fazenda Brasileiro's mine life.
El Peñón, Chile
El Peñón produced 124,118 GEO during the second quarter of 2011.
Production for the quarter consisted of 80,861 ounces of gold and 2.2
million ounces of silver, compared with 100,485 GEO, which consisted of
57,351 ounces of gold and 2.4 million ounces of silver produced in the
second quarter of 2010. This represents a 24% quarter-over-quarter
increase in 2011 versus 2010 production on a GEO basis.
Higher GEO production was mainly due to improved gold and silver grades
compared with the same quarter of 2010. Higher grade areas including Al
Este and Bonanza contributed to the increase in GEO production. As
well, since conversion to owner-mining, operational dilution has
decreased and feed grade has improved. This, combined with increased
capacity, has led to increased production. The decrease in silver
production was primarily the result of lower tonnage processed and
lower recoveries.
Cash costs were $382 per GEO in the quarter ended June 30, 2011,
compared with $449 per GEO in the second quarter in 2010, which
included the impact of maintenance cost on improvement of fleet
availability subsequent to the process of transition from contract
mining to owner mining. Reliability of operation and cost management
improvement allowed mine management to mitigate the adverse impact of
the appreciation of the Chilean Peso versus the United States Dollar.
The average currency exchange rate of the Chilean Peso versus the
United States Dollar went up by 15% from the second quarter of 2010.
During 2011 approximately $4.5 million of the total $25 million in
exploration spending at El Peñón will be focused on Pampa Augusta
Victoria ('PAV') with the objective of completing an initial mineral
reserve and mineral resource estimate. The majority of the drilling is
being completed on the Victoria vein, which, to date, has returned
significant near surface gold and silver values.
The Victoria vein system has been traced along a strike length of over
400 metres and to a vertical depth of at least 100 metres from the
surface at 1,750 metres elevation to 1,625 metres elevation. The
mineralization remains open along strike and down dip. The near
surface, highly oxidized nature of this mineralization will facilitate
rapid low cost development and recoveries which should be in the range
of the original near surface mineralization at El Peñón (approximately
95 percent for gold and 90 percent for silver).
Exploration drilling will continue throughout 2011 to further extend
mineralization at Victoria both along strike and down dip and is
expected to expand and confirm the mineral resource potential of the
Victoria Este and Elizabeth veins. It is anticipated that development
can be accelerated and ore could be mined from PAV as early as 2013.
PAV is expected to provide further sustainability at current production
levels in El Peñón's mine life by increasing mine certainty and
flexibility.
Minera Florida, Chile
Minera Florida produced a total of 25,376 GEO in the current quarter
compared with 25,274 GEO in the second quarter of 2010.
Gold grade for the quarter averaged 3.43 g/t which was lower than the
4.27 g/t for the second quarter of 2010. The lower gold grade was part
of the mine plan. Production from veins with better gold grade such as
Tribuna and Victoria is expected to commence in the near term.
In addition, the mine produced 1,863 tonnes of zinc in the three-month
period ended June 30, 2011 compared with 1,592 tonnes of zinc produced
in the second quarter of 2010. Zinc is accounted for as a by-product
credit to cash costs.
Cash costs for the second quarter were $614 per GEO compared with $370
per GEO in the same quarter in 2010 due to the appreciation of the
Chilean Peso, mining inflation, higher energy costs and lower grades
mined.
The Company's expansion project at Minera Florida is designed to
increase annual production at Minera Florida by approximately 40,000
GEO per year for five years through the re-treatment of tailings. The
project continues to advance ahead of schedule with completion planned
for late 2011. Total expansionary capital at Minera Florida is now
estimated to be $75 million. The increase over feasibility levels is
largely attributed to a change in the scope of the project which
includes a zinc flotation plant for recovering zinc which is expected
to reduce costs.
Gualcamayo, Argentina
Gualcamayo produced 43,194 ounces of gold in the second quarter of 2011
compared with 37,467 ounces produced in the second quarter of 2010,
representing a 15% quarter-over-quarter improvement. Production
increased as a result of mining higher grade benches (20% increase in
grade) and improvements in recovery. Mining for the quarter was
consistent with the block model with modestly higher grades than
expected.
Gold recovery rate at Gualcamayo was 74.4% for the second quarter, an
improvement from 66.4% for the first quarter and 70.4% for the
comparative quarter of 2010. The current recovery rate is in line with
our projection of a sustainable range of 70% to 75%. The Company
continues to take steps to improve recoveries and minimize carbon fines
as it completes the construction of a new heap leach pad later this
year.
Cash costs were $399 per ounce in the quarter ended June 30, 2011,
compared with $427 per ounce in the second quarter of 2010,
representing a 6.6% improvement. Management continued to reduce cash
costs from $662 per ounce level in the fourth quarter of 2010 and $507
per ounce in the first quarter this year down to the current level.
In 2011, the Company is focusing on a number of operational initiatives,
including efforts in sustaining the 1,500 tonne per hour feed through
the plant, underground development of QDD Lower West and expansion of
the heap leach pad at Valle Norte. Development of QDD Lower West
continues. Success at this deposit will make an additional positive
contribution to mineral reserves and mineral resources for Gualcamayo
in 2011. In addition, the Company will continue to work on reducing
reliance on contractors for increased cost predictability. Gold
production for the second half of 2011 is expected to increase based on
continuing higher grades, increases in crusher availability and
throughput tonnage.
Alumbrera, Argentina
The Company's interest in the Alumbrera Mine is accounted for as an
equity investment. The Company recorded earnings from its 12.5%
interest in Alumbrera Mine of $16.6 million and $28.3 million for the
three month and six month periods ended June 30, 2011, compared with
$7.8 million and $19.5 million reported for the respective periods of
2010. The Company received $6.6 million in cash distributions during
the three months and $27.0 million for the six month period ended June
30, 2011 compared with $17.9 million and $30.7 million for the
comparative periods in 2010.
Attributable production from Alumbrera was 12,670 ounces of gold and 9.3
million pounds of copper for the quarter. This compares with
attributable production of 11,470 ounces of gold and 9.3 million pounds
of copper for the second quarter of 2010.
In the first quarter of 2011, the Company announced an agreement with
Xstrata Queensland Limited ('Xstrata') and Goldcorp Inc. ('Goldcorp')
that would facilitate the integration of Agua Rica, which is currently
100% owned by Yamana, into Minera Alumbrera. Following the integration,
Xstrata, Goldcorp and Yamana would own interests in the combined
projects of 50%, 37.5% and 12.5% respectively, consistent with their
current interest in Alumbrera. The integration of Agua Rica with
Alumbrera provides the greatest value potential for Yamana and the best
opportunity for the development of Agua Rica in the Catamarca province
of Argentina.
CONSTRUCTION AND DEVELOPMENT PROJECTS
All construction projects are on or in the case of Mercedes, ahead of
schedule. All permits have been received. Detailed engineering has or
is currently advancing and long-lead time equipment has been ordered
for the various projects. Mine development is also advancing on
schedule with accelerated development of newly discovered higher grade
areas at Mercedes.
The following summary highlights key updates from the construction and
development projects at the Company.
Mercedes, Mexico
Mercedes is a gold/silver project located in Sonora, Mexico currently
under construction. Construction is ahead of schedule with start-up of
production expected by the end of 2011 rather than the original plan of
the second quarter of 2012 and commercial production is now expected by
mid-2012. As of June 30, 2011, overall physical advancement of the
project was approximately 85%. Advancement included completion of the
tailings dam, approximately 90% advancement of over structural,
mechanical and piping installation and near completion of the
powerline. In addition, approximately 85% of budget costs were
committed as at June 30, 2011. The Company is also advancing the
development of Barrancas, a newly discovered higher grade area at
Mercedes. Barrancas is a more recent discovery made after the
decision was made to develop Mercedes. Estimated total project capital
expenditures for Mercedes are expected to be $194 million of which
approximately $10 million is a newly allocated amount for the
advancement of Barrancas providing the potential to increase production
at Mercedes of approximately $16 million. The increase in capital
expenditure above the $168 million, not including new development, can
be attributed to the strengthening of the Mexican Peso in comparison to
the Company's assumed foreign exchange rate in the previous bugeted
amounts. Annual production at Mercedes is expected initially to be
approximately 120,000 GEO and plans are underway to increase production
to up to 150,000 GEO per year beginning in 2014.
Ernesto & Pau-a-Pique, Brazil
Construction progress is on schedule with commissioning and start-up of
production expected by the end of 2012 and commercial production by
mid-2013. As at June 30, 2011, physical advancement was approximately
42% with earthworks ahead of schedule and the tailings dam completed.
Approximately 59% of budget costs were committed as at June 30, 2011.
Annual production is expected to be approximately 100,000 gold ounces
with production during the first two full years expected to be
approximately 120,000 gold ounces.
C1 Santa Luz, Brazil
Construction progress is on schedule with commissioning and start-up of
production expected by the end of 2012 and commercial production by
early-2013. As at June 30, 2011, detailed engineering and the tailings
were completed. Total physical advancement of the project was
approximately 40% and 50% of budget costs have been committed. Annual
production is expected to be approximately 100,000 gold ounces with
production during the first two full years expected to exceed 130,000
gold ounces.
Pilar, Brazil
Pilar is a development stage project located in Goias, Brazil
approximately 80 kilometres from the Company's Chapada mine.
Construction progress is on schedule with commissioning and start-up of
production expected mid-2013 with commercial production expected by the
end of 2013. Annual production from the mine is estimated to be
120,000 ounces of gold.
The Pilar project is being built at a capacity level that is 30% higher
than that contemplated in the feasibility study. Discovery of new
mineral resources along with the decision to advance Caiamar, a deposit
located 38 kilometres from Pilar, to pre-feasibility assuming that ore
would be processed at Pilar is expected to support the higher capacity
level. Studies have been completed confirming the processing plant at
Pilar is suitable for processing the Caiamar ore and the higher grades
can offset the costs of transporting the ore. Resource development
work has started at Caiamar, which could positively impact capacity
utilization and Pilar production rates as early as 2014.
Agua Rica, Argentina
The Company is in the process of completing final documentation for the
integration of Minera Agua Rica into Minera Alumbrera ('MAA') and
targeting to close the transaction by the end of August 2011. Under the
direction of Xstrata, operator of MAA, MAA has initiated a feasibility
study with respect to the integration of its operations and those of
Minera Agua Rica.
Jeronimo, Chile
Following the delivery of the first mineral reserve estimate at Jeronimo
in early 2011, a feasibility study of Jeronimo is currently underway.
This reflects the Company's intention on continuing to refine the
economics of this project by evaluating various processing methods,
accounting for potential by-product credits and other optimizations
that could positively impact the project.
EXPLORATION
The Company continues to actively explore its exploration targets around
existing mines along with its efforts to look for new opportunities
such as on the ground purchases elsewhere in the Americas. The Company
is largely focused on developing its future based on its exploration
successes and organic growth.
In May 2011, the Company announced an increase in its exploration budget
for 2011 by approximately 25% to $105 million. The increase partially
resulted from the significant cash flow being generated by the Company,
the success of the 2010 program, as well as the success already
achieved in 2011.
The following summary highlights key updates from the exploration
program at the Company since the end of the first quarter 2011.
BRAZIL
Pilar
During 2011, approximately 45,000 metres of diamond drilling will be
completed as part of a $9.8 million exploration budget. The drilling is
focused on the expansion of the Jordino mineral resource both down dip,
which has been shown to be open for more than two kilometres of dip
length, and along strike to the north towards Tres Buracos, where a
small near surface, inferred mineral resource exists. Year-to-date, 74
drill holes have been completed totaling 24,000 metres and drill
results confirm that growth in mineral reserves and mineral resources
is expected to continue in 2011.
Arco Sul
Arco Sul is a new discovery that was made in late 2010. The discovery
was made one kilometre from the Company's decommissioned Fazenda Nova
mine in western Goiás State, Brazil and 380 kilometres from the
Company's Chapada Mine. The discovery is characterized by a zone of
stockwork and breccias that appear to be the strike and dip extension
of previously mined oxide ores at Fazenda Nova.
Mineralization has been traced along strike for one kilometre and across
a width of 300 metres as shown by current drilling and geologic
interpretation. Diamond drilling began in September 2010 and 12 holes
totaling 5,300 metres have been drilled to date. Additional drilling
will be completed in 2011 to better understand the geometry of
mineralization.
MEXICO
Mercedes
The 2011 exploration budget of $8.5 million includes approximately
45,000 metres of diamond drilling focused on the expansion of mineral
reserves and mineral resources, particularly at the Lagunas Norte and
Diluvio zones within the Barrancas and Lupita vein zones. The grades
encountered at Lagunas Norte continue to be significantly higher than
the average mineral resource grades within the Mercedes project area.
The Lagunas Norte ore shoot is currently defined along 130 metres of
strike length and is an extension to the Lagunas zone. The recent
drill campaign at the Diluvio zone continues to confirm continuity of
this zone, with gold/silver mineralization delineated in an area of
approximately 600 metres by 250 metres containing multiple
vein/stockwork zones of up to 140 metres in width.
Three core rigs are currently on site and a total of 20,815 metres have
been drilled in 55 holes year-to-date. The Lagunas Norte discovery is
currently not reflected in Mercedes' mineral reserves and mineral
resources. Exploration success is expected to continue the rapid, low
cost mineral resource development at Mercedes resulting in an
opportunity to extend the mine life and increase annual production
levels, which has now identified over 400 metres along strike and up to
150 metres down dip. The total length of the Barrancas zone is 1,100
metres, including Barrancas Centro, Lagunas and Lagunas Norte.
The continued exploration success and growing mineral resources at
Mercedes are being evaluated to potentially increase mining and
production rates as well as the extension of mine life.
OUTLOOK AND STRATEGY
Consistent with the guidance provided previously, production is expected
to be in the range of approximately 1.04 million GEO to 1.14 million
GEO in 2011. Production is expected to increase to approximately 1.7
million GEO by 2014 as four development stage projects including C1
Santa Luz, Mercedes, Ernesto/Pau-a-Pique and Pilar, where construction
decisions have already been made, and the expansion project of Minera
Florida tailings are expected to start contributing to production
levels.
These development projects are advancing on schedule and are fully
funded from the Company's available cash and cash flows generated from
operations. By 2014, production is targeted to be more than 1.7
million GEO, which represents production growth over four years of
approximately 65% compared to 2010 production levels. Annual silver
production is expected to be approximately 9 million ounces in 2011 and
2012. Copper production is expected to be in the range of 145 million
to 160 million pounds in 2011 and 140 million to 160 million pounds in
2012. This projection does not include any additional production from
new projects, expansions and optimizations under current evaluation.
The Company's strategy and philosophy is to undertake projects which are
easily funded from internal cash flows, with comparatively modest
capital requirements and where cost escalation risks are manageable.
The following is an update of current estimates of expansionary capital
expenditures from 2011 to 2013 as compared to previous guidance. Of the
planned increases in capital expenditures of $206 million,
approximately $30 million relates to scoping changes and advancement of
development and the balance is the result of current cost inputs and
foreign exchange rates as compared to previous guidance.
2011 2011 2012 2012 2013 2013
Budget Revised Budget Revised Budget Revised
Expansionary 446 500 413 509 14 70
Capex
Change 54 96 56
These estimates are based on a series of assumptions and actual
expenditures will be dependent on realized foreign exchange rates and
market conditions for inputs at the time of realization.
The above mentioned estimated capital expenditures for 2013 does not
include projects for which a construction decision has not yet been
made.
The Company expects sustaining capital for the next three years to be in
the range of $200 to $240 million per year.
Further details of the 2011 second quarter results can be found in the
Company's unaudited Management's Discussion and Analysis and unaudited
Consolidated Financial Statements at http://www.yamana.com/Investors/FinancialCorporateReports
SECOND QUARTER CONFERENCE CALL
Q2 Conference Call Information for Thursday August 4(th), 2011 at 11:00 a.m. ET:
Toll Free 888-231-8191
(North
America):
International: 647-427-7450
Participant www.yamana.com
Audio Webcast:
Q2 Conference Call REPLAY:
Toll Free Replay Call (North America): 800-642-1687, Passcode 80669630#
Replay Call: 416-849-0833, Passcode 80669630#
The conference call replay will be available from 2:45 p.m. ET on August
4, 2011 until 11:59 p.m. ET on August 18, 2011.
Via Webcast
Live Audio & Webcast: www.yamana.com
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 and Colombia.
Yamana plans to continue to build on this base through existing
operating mine expansions, throughput increases, development of new
mines, the advancement of its exploration properties and by targeting
other gold consolidation opportunities with a primary focus in the
Americas.
Mine by mine operating summary:
Chile
Ore Gold Silver Gold Silver Gold Silver Gold Gold Cash Cost per
Processed Grade Grade Recovery Recovery Ounces Ounces Equivalent Equivalent GEO
El g/t g/t (%) (%) Produced Produced Ounces Ounces ⁽¹⁾
Peñón Produced Sold
Q2 2011 362,778 7.64 220.2 93.4 85.1 80,861 2,162,850 124,118 117,030 $ 382
Q1 2011 358,013 6.91 227.8 92.0 79.9 73,568 2,111,482 115,798 114,803 $ 397
Total 1,522,366 5.74 228.5 91.2 84.1 256,530 9,427,208 427,934 431,665 $ 428
2010
Q4 2010 366,424 6.94 229.2 91.3 79.5 74,785 2,145,809 113,800 114,403 $ 421
Q3 2010 396,209 5.48 216.8 90.8 83.3 63,417 2,298,731 105,212 108,204 $ 461
Q2 2010 392,223 4.97 216.3 92.0 87.1 57,351 2,372,380 100,485 102,324 $ 449
Q1 2010 367,509 5.64 253.3 90.4 86.3 60,977 2,610,289 108,437 106,739 $ 384
Minera
Florida
Q2 2011 238,287 3.43 31.8 83.9 68.0 22,034 167,114 25,376 22,831 $ 614
Q1 2011 232,284 3.78 35.2 84.6 68.7 23,986 182,453 27,635 26,798 $ 476
Total 779,836 4.41 33.4 83.7 67.8 94,585 606,071 105,604 102,819 $ 416
2010
Q4 2010 214,859 4.68 45.1 84.7 70.6 27,787 234,339 32,048 30,525 $ 479
Q3 2010 207,834 4.30 39.2 84.2 67.0 24,337 182,332 27,652 27,667 $ 425
Q2 2010 204,512 4.27 21.2 82.0 66.1 23,543 95,249 25,274 23,020 $ 370
Q1 2010 152,631 4.38 25.2 84.0 67.2 18,918 94,151 20,630 21,608 $ 363
Brazil
Ore Gold Gold Gold Gold Cash Cost per
Processed Grade Recovery Ounces Ounces oz
Chapada g/t (%) Produced Sold ⁽¹⁾
Q2 2011 4,857,313 0.32 64.3 31,566 34,260 $ (3,555)
Q1 2011 5,088,739 0.32 64.7 33,392 33,395 $ (2,615)
Total 2010 19,195,578 0.35 62.3 135,613 127,450 $ (2,073)
Q4 2010 4,757,679 0.37 64.9 36,965 31,421 $ (2,863)
Q3 2010 5,246,202 0.38 63.4 40,405 35,591 $ (1,856)
Q2 2010 4,873,077 0.32 60.7 30,450 32,881 $ (1,583)
Q1 2010 4,318,621 0.34 60.0 27,794 27,557 $ (1,876)
Jacobina
Q2 2011 532,496 1.74 93.4 27,806 28,354 $ 663
Q1 2011 529,035 1.91 93.5 30,319 31,537 $ 611
Total 2010 2,158,097 1.89 93.2 122,160 121,405 $ 535
Q4 2010 542,055 2.06 94.1 33,718 33,530 $ 495
Q3 2010 570,799 1.95 93.8 33,637 32,517 $ 463
Q2 2010 556,376 1.79 93.0 29,785 29,110 $ 534
Q1 2010 488,865 1.73 91.9 25,021 26,249 $ 687
Fazenda
Brasileiro
Q2 2011 246,551 2.02 87.5 14,007 13,052 $ 934
Q1 2011 205,389 1.93 88.2 11,252 12,891 $ 968
Total 2010 1,110,204 2.22 88.6 70,084 72,316 $ 628
Q4 2010 275,184 2.53 89.4 19,852 18,822 $ 705
Q3 2010 279,734 2.14 89.0 17,161 19,208 $ 620
Q2 2010 273,706 2.36 88.2 18,333 15,801 $ 559
Q1 2010 281,579 1.84 87.3 14,738 18,485 $ 622
Argentina
Ore Gold Gold Gold Gold Cash Cost
Processed Grade Recovery Ounces Ounces per oz
Gualcamayo g/t (%) Produced Sold ⁽¹⁾
Q2 2011 1,882,237 1.02 74.4 43,194 46,399 $ 399
Q1 2011 1,896,533 0.95 66.4 37,597 34,665 $ 507
Total 2010 7,528,690 0.82 67.8 135,140 141,734 $ 506
Q4 2010 1,818,571 0.89 69.5 36,239 36,649 $ 662
Q3 2010 1,982,929 0.87 57.8 31,972 38,660 $ 480
Q2 2010 1,940,939 0.85 70.4 37,467 30,283 $ 427
Q1 2010 1,786,251 0.68 76.0 29,462 36,142 $ 443
Alumbrera
Q2 2011 1,227,348 0.47 68.2 12,670 12,367 $ (1,736)
Q1 2011 1,131,995 0.45 69.3 11,374 11,412 $ (1,452)
Total 2010 4,509,332 0.46 73.0 50,656 48,940 $ (1,404)
Q4 2010 1,160,601 0.50 76.0 14,061 12,951 $ (1,556)
Q3 2010 1,102,574 0.42 72.8 11,370 10,095 $ (993)
Q2 2010 1,117,957 0.43 69.9 11,470 15,638 $ (1,938)
Q1 2010 1,128,200 0.51 72.2 13,755 10,256 $ (1,142)
Copper
Production
Ore Copper Copper Copper Copper Cash costs
Processed Ore Grade Recovery Produced Sold per pound
Chapada (%) (M lbs.) (M lbs.) of copper
Q2 2011 4,857,313 0.43 88.4 40.8 41.6 $
1.32
Q1 2011 5,088,739 0.39 87.1 38.5 29.7 $
1.21
Total 2010 19,195,578 0.41 86.5 149.4 143.8 $
1.17
Q4 2010 4,757,679 0.44 86.2 39.9 39.6 $
1.20
Q3 2010 5,246,202 0.43 86.8 42.8 43.5 $
1.14
Q2 2010 4,873,077 0.39 87.2 37.0 31.6 $
1.13
Q1 2010 4,318,621 0.36 85.5 29.7 29.1 $
1.24
Alumbrera
Q2 2011 1,227,348 0.45 77.2 9.3 8.8 $
1.54
Q1 2011 1,131,995 0.39 73.1 7.1 7.1 $
1.85
Total 2010 4,509,332 0.50 82.0 38.7 37.0 $
1.29
Q4 2010 1,160,601 0.40 81.0 9.3 9.0 $
1.37
Q3 2010 1,102,574 0.40 82.2 8.3 7.7 $
1.53
Q2 2010 1,117,957 0.44 81.4 9.3 12.1 $
1.52
Q1 2010 1,128,200 0.54 84.7 11.8 8.2 $
0.89
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news release contains 'forward-looking statements' within the
meaning of the United States Private Securities Litigation Reform Act
of 1995 and applicable Canadian securities legislation. Except for
statements of historical fact relating to the Company, information
contained herein constitutes forward-looking statements, including any
information as to the Company's strategy, plans or future financial or
operating performance. Forward-looking statements are characterized by
words such as 'plan,' 'expect', 'budget', 'target', 'project',
'intend,' 'believe', 'anticipate', 'estimate' and other similar words,
or statements that certain events or conditions 'may' or 'will' occur.
Forward-looking statements are based on the opinions, assumptions and
estimates of management considered reasonable at the date the
statements are made, and are inherently subject to a variety of risks
and uncertainties and other known and unknown factors that could cause
actual events or results to differ materially from those projected in
the forward-looking statements. These factors include the Company's
expectations in connection with the projects and exploration programs
discussed herein being met, the impact of general business and economic
conditions, global liquidity and credit availability on the timing of
cash flows and the values of assets and liabilities based on projected
future conditions, fluctuating metal prices (such as gold, copper,
silver and zinc), currency exchange rates (such as the Brazilian Real,
the Chilean Peso and the Argentine Peso versus the United States
Dollar), possible variations in ore grade or recovery rates, changes in
the Company's hedging program, changes in accounting policies, changes
in the Company's corporate mineral resources, risk related to non-core
mine dispositions, changes in project parameters as plans continue to
be refined, changes in project development, construction, production
and commissioning time frames, risk related to joint venture
operations, the possibility of project cost overruns or unanticipated
costs and expenses, higher prices for fuel, steel, power, labour and
other consumables contributing to higher costs and general risks of the
mining industry, failure of plant, equipment or processes to operate as
anticipated, unexpected changes in mine life, final pricing for
concentrate sales, unanticipated results of future studies, seasonality
and unanticipated weather changes, costs and timing of the development
of new deposits, success of exploration activities, permitting time
lines, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims,
limitations on insurance coverage and timing and possible outcome of
pending litigation and labour disputes, as well as those risk factors
discussed or referred to in the Company's annual Management's
Discussion and Analysis and Annual Information Form for the year ended
December 31, 2010 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 presented for the
purpose of assisting investors in understanding the Company's expected
financial and operational performance and results as at and for the
periods ended on the dates presented in the Company's plans and
objectives and may not be appropriate for other purposes.
NON-GAAP MEASURES
The Company has included certain non-GAAP measures including 'Co-product cash costs per gold equivalent ounce', 'Co-product cash costs per pound of copper', 'By-product cash costs per
gold equivalent ounce', 'Adjusted Earnings or Loss and Adjusted
Earnings or Loss per share' to supplement its financial statements, which are presented in
accordance with International Financial Reporting Standards ('IFRS').
The term IFRS and generally accepted accounting principles ('GAAP') are
used interchangeably throughout this press release.
The Company believes that these measures, together with measures
determined in accordance with IFRS, provide investors with an improved
ability to evaluate the underlying performance of the Company.
Non-GAAP measures do not have any standardized meaning prescribed under
IFRS, and therefore they may not be comparable to similar measures
employed by other companies. The data is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS.
Co-product and By-product Cash Costs
The Company has included cash costs per GEO and cash costs per pound of
copper information because it understands that certain investors use
this information to determine the Company's ability to generate
earnings and cash flows for use in investing and other activities. The
Company believes that conventional measures of performance prepared in
accordance with IFRS do not fully illustrate the ability of its
operating mines to generate cash flows. The measures are not
necessarily indicative of operating profit or cash flows from
operations as determined under IFRS. Cash costs per GEO are determined
in accordance with the Gold Institute's Production Cost Standard and
are calculated on a co-product and by-product basis. Cash costs on a
co-product basis are computed by allocating operating cash costs
separately to metals (gold and copper) based on an estimated or assumed
ratio. Cash costs on a by-product basis are computed by deducting
copper by-product revenues from the calculation of cash costs of
production per GEO. Cash costs per GEO and per pound of copper are
calculated on a weighted average basis.
Per Gold Equivalent Ounce ('GEO')
The following tables provide a reconciliation of cost of sales per the
financial statements to (i) Co-product Cash Costs per GEO, (ii)
Co-product Cash Costs per lb of Copper and (iii) By-product Cash Costs
per GEO:
Reconciliation of Cost of Sales per the Financial Statements to
Co-product Cash Costs per GEO
In thousands of United States Dollars
GEO United States Dollars per gold equivalent ounce
For the three months 2011 2010 2011 2010
ended June 30,
Cost of sales (i) $ 191,777 $ 135,666 $ 721 $ 561
(iii)
Adjustments:
Copper contained in (47,904) (35,644) (180) (148)
concentrate related
cash costs (excluding
related TCRC's) (ii)
Treatment and 1,049 1,294 4 5
refining costs (TCRC)
related to Chapada
gold
Inventory movements (14,121) 11,543 (53) 48
and adjustments
Commercial selling (8,220) (5,626) (31) (23)
costs
Total GEO co-product $ 122,581 $ 107,233 $ 461 $ 443
cash costs (excluding
Alumbrera)
Minera Alumbrera 3,033 2,730 239 238
(12.5% interest) GEO
cash costs
Total GEO co-product $ 125,614 $ 109,964 $ 451 $ 434
cash costs (iii)
Commercial GEO 266,067 241,794
produced excluding
Alumbrera
Commercial GEO 278,737 253,264
produced including
Alumbrera
In thousands of United States Dollars
GEO United States Dollars per gold equivalent ounce
For the six months 2011 2010 2011 2010
ended June 30,
Cost of sales (i) $ 348,879 $ 280,809 $ 668 $ 600
(iii)
Adjustments:
Copper contained in (90,089) (67,676) (173) (145)
concentrate related
cash costs (excluding
related TCRC's) (ii)
Treatment and 1,957 2,326 4 5
refining costs (TCRC)
related to Chapada
gold
Inventory movements (5,752) 786 (11) 2
and adjustments
Commercial selling (15,235) (10,808) (29) (23)
costs
Total GEO co-product $ 239,760 $ 205,437 $ 459 $ 439
cash costs (excluding
Alumbrera)
Minera Alumbrera 5,812 6,095 242 242
(12.5% interest) GEO
cash costs
Total GEO co-product $ 245,572 $ 211,532 $ 450 $ 429
cash costs (iii)
Commercial GEO 522,061 467,875
produced excluding
Alumbrera
Commercial GEO 546,105 493,100
produced including
Alumbrera
(i) Cost of sales includes non-cash items including the impact
of the movement in inventory.
(ii) Costs directly attributed to a specific metal are allocated
to that metal. Costs not directly attributed to a specific
metal are allocated based on relative value. As a rule of
thumb, the relative value has been 80/75% copper and 20/25%
gold. TCRC's are defined as treatment and refining charges.
(iii) Depletion, depreciation and amortization is excluded from
both total cash costs and cost of sales from continuing
operations for the comparative period.
Reconciliation of Cost of Sales per the Financial Statements to
Co-product Cash Costs per Pound of Copper
In thousands of United States Dollars
Copper United States Dollars per pound of copper
For the three months 2011 2010 2011 2010
ended June 30,
Cost of sales (i) (iii) $ 191,777 $ 135,666 $ 4.70 $ 3.67
Adjustments:
GEO related cash costs
(excluding related
TCRC's) (ii) (121,532) (105,938) (2.98) (2.87)
Treatment and refining
costs (TCRC)
related to Chapada
copper 5,716 6,158 0.14 0.17
Inventory movements and (14,121) 11,543 (0.35) 0.31
adjustments
Commercial selling costs (8,220) (5,626) (0.19) (0.15)
Total copper co-product
cash costs
(excluding Alumbrera) $ 53,620 $ 41,803 $ 1.32 $ 1.13
Minera Alumbrera (12.5%
interest)
copper cash costs 14,340 14,174 1.54 1.52
Total copper co-product $ 67,960 $ 55,978 $ 1.36 $ 1.21
cash costs (iii)
Copper produced
excluding Alumbrera
(millions of lbs) 40.8 37.0
Copper produced
including Alumbrera
(millions of lbs) 50.1 46.3
In thousands of United States Dollars
Copper United States Dollars per pound of copper
For the six months ended 2011 2010 2011 2010
June 30,
Cost of sales (i) (iii) $ 348,879 $ 280,809 $ 4.40 $ 4.21
Adjustments:
GEO related cash costs
(excluding related
TCRC's) (ii) (237,803) (203,110) (3.00) (3.04)
Treatment and refining
costs (TCRC)
related to Chapada
copper 9,993 10,989 0.13 0.16
Inventory movements and (5,752) 786 (0.07) 0.01
adjustments
Commercial selling costs (15,235) (10,808) (0.20) (0.16)
Total copper co-product
cash costs
(excluding Alumbrera) $ 100,082 $ 78,666 $ 1.26 $ 1.18
Minera Alumbrera (12.5%
interest)
copper cash costs 27,525 24,641 1.67 1.17
Total copper co-product $ 127,607 $ 103,307 $ 1.33 $ 1.18
cash costs (iii)
Copper produced
excluding Alumbrera
(millions of lbs) 79.2 66.7
Copper produced
including Alumbrera
(millions of lbs) 95.7 87.8
(i) Cost of sales includes non-cash items including the impact
of the movement in inventory.
(ii) Costs directly attributed to a specific metal are allocated
to that metal. Costs not directly attributed to a specific
metal are allocated based on relative value. As a rule of
thumb, the relative value has been 80/75% copper and 20/25%
gold. TCRC's are defined as treatment and refining charges.
(iii) Depletion, depreciation and amortization is excluded from
both total cash costs and cost of sales from continuing
operations for the comparative period.
Reconciliation of cost of sales per the financial statements to
by-product cash costs per GEO
In thousands of United States Dollars
GEO United States Dollars per gold equivalent ounce
For the three months 2011 2010 2011 2010
ended June 30,
Cost of sales (i) $ 191,777 $ 135,666 $ 721 $ 561
Adjustments:
Chapada treatment and 6,765 7,452 25 31
refining costs
related to gold
and copper
Inventory movements (14,121) 11,543 (53) 48
and adjustments
Commercial selling (8,220) (5,626) (31) (23)
costs
Chapada copper
revenue
including copper
pricing adjustment (176,617) (100,646) (664) (416)
Total GEO by-product
cash costs
(excluding
Alumbrera) $ (416) $ 48,389 $ (2) $ 201
Minera Alumbrera
(12.5% interest)
by-product cash
costs (21,995) (22,223) (1,736) (1,938)
Total GEO by-product $ (22,411) $ 26,167 $ (80) $ 103
cash costs (i)
Commercial GEO
produced excluding
Alumbrera 266,067 241,794
Commercial GEO
produced including
Alumbrera 278,737 253,264
In thousands of United States Dollars
GEO United States Dollars per gold equivalent ounce
For the six months 2011 2010 2011 2010
ended June 30,
Cost of sales (i) $ 348,879 $ 280,809 $ 668 $ 600
Adjustments:
Chapada treatment and
refining costs
related to gold
and copper 11,950 13,315 23 28
Inventory movements (5,752) 786 (11) 2
and adjustments
Commercial selling (15,235) (10,808) (29) (23)
costs
Chapada copper
revenue
including copper
pricing adjustment (319,941) (199,296) (613) (426)
Total GEO by-product
cash costs
(excluding
Alumbrera) $ 19,901 $ 84,806 $ 38 $ 181
Minera Alumbrera
(12.5% interest)
by-product cash
costs (38,510) (37,931) (1,602) (1,504)
Total GEO by-product $ (18,609) $ 46,875 $ (34) $ 95
cash costs (i)
Commercial GEO
produced excluding
Alumbrera 522,061 467,875
Commercial GEO
produced including
Alumbrera 546,105 493,100
Depletion, depreciation and amortization is excluded from both
(i) total cash costs and cost of sales from continuing operations
for the comparative period.
Adjusted Earnings or Loss and Adjusted Earnings or Loss per share
The Company uses the financial measures 'Adjusted Earnings or Loss' and
'Adjusted Earnings or Loss per share' to supplement information in its
consolidated financial statements. The Company believes that in
addition to conventional measures prepared in accordance with IFRS, the
Company and certain investors and analysts use this information to
evaluate the Company's performance. The presentation of adjusted
measures are not meant to be a substitute for net earnings or loss or
net earnings or loss per share presented in accordance with IFRS, but
rather should be evaluated in conjunction with such IFRS measures.
Adjusted Earnings or Loss and Adjusted Earnings or Loss per share are
calculated as net earnings excluding (a) stock-based compensation, (b)
unrealized foreign exchange (gains) losses related to revaluation of
deferred income tax asset and liability on non-monetary items, (c)
unrealized foreign exchange (gains) losses related to other items, (d)
unrealized (gains) losses on commodity derivatives, (e) impairment
losses, (f) future income tax expense (recovery) on the translation of
foreign currency inter-corporate debt, (g) write-down of investments
and other assets and any other non-recurring adjustments, (h)
mark-to-market (gains) losses on share-purchase warrants. Non-recurring
adjustments from unusual events or circumstances, such as the
unprecedented volatility of copper prices in the fourth quarter of
2008, are reviewed from time to time based on materiality and the
nature of the event or circumstance. Earnings adjustments for the
comparative period reflect both continuing and discontinued operations.
The terms 'Adjusted Earnings (Loss)' and 'Adjusted Earnings (Loss) per
share' do not have a standardized meaning prescribed by IFRS, 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 Earnings or Loss and Adjusted Earnings or
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 Earnings or Loss and Adjusted Earnings or Loss
per share, which are otherwise included in the determination of net
earnings or loss and net earnings or loss per share prepared in
accordance with IFRS, 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. A reconciliation of Adjusted Earnings
to net earnings as well as a discussion of the adjusting items is
provided in Section 4 'Overview of Financial Results' for both the
yearly and quarterly reconciliations.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/August2011/03/c8995.html
| Lisa Doddridge Vice President, Corporate Communications and Investor Relations (416) 945-7362 1-888-809-0925 Email: lisa.doddridge@yamana.com | Linda Armstrong Director, Investor Relations (416) 945-7357 1-888-809-0925 Email: linda.armstrong@yamana.com www.yamana.com |