TORONTO, Aug. 4 /CNW/ - YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:YAU) today announced that it has made a construction decision at QDD Lower West, the planned underground ore body at its Gualcamayo mine, which will supplement existing operations at Gualcamayo, and made a further construction decision for the development of its Pilar project in Brazil. The Company also reported updates on its other development and exploration projects. All amounts are expressed in United States Dollars unless otherwise indicated.
"The supplemental production at Gualcamayo along with Pilar provides us with our next stage of growth into 2013, which will be beyond our initial production target of 1.5 million gold equivalent ounces," said Yamana's chairman and chief executive officer, Peter Marrone. "We have numerous other projects under evaluation in addition to expected continuing exploration successes, which we are confident will provide further production growth."
Gualcamayo, Argentina
Advanced Mine Plan and Construction Decision at QDD Lower West
Yamana has updated its production plan for Gualcamayo to include the results of the recently completed feasibility study update for QDD Lower West, the planned underground ore body below the current QDD open pit operations and one of several identified areas of mineralization at Gualcamayo, and has made a construction decision for QDD Lower West.
Capital required for QDD Lower West is estimated at approximately $85 million and is required primarily for mine development as ore is expected to be processed through existing heap leaching operations and facilities at Gualcamayo. This will be an underground mine, with ore being extracted through the sublevel stoping method.
Gualcamayo production will result from a mix of various ores including from QDD and from QDD Lower West. Production from QDD Lower West is targeted to begin in early 2013, ahead of the originally planned 2015. Recovery at QDD Lower West is expected to be at approximately 65%, although recovery in the first couple of years would be higher. Cumulative recovery from all ores at Gualcamayo is expected to be in the order of approximately 65% to 75%. While recovery will be lower from QDD Lower West than the main open pit ore, gold will be recovered through the heap leaching processing facilities already in operation at Gualcamayo, thereby reducing the need for additional capital for production from QDD Lower West. In addition, ore from QDD Lower West increases the overall grade at Gualcamayo, thereby contributing to an increase in overall production.
QDD Lower West's current mineral reserves and metallurgical testwork support heap leaching recovery at the planned recovery rate. Given the significant additional exploration opportunity at QDD Lower West, the Company will continue its exploration efforts as it progresses with mine development. The Company plans to monitor the option of adding a milling facility which would increase recoveries and production. The prospect of a mill is dependent on continuing exploration success and the delineation of additional mineral reserves and this initiative will be further evaluated in late 2011.
The following is a summary of the updated and current mineral reserves and mineral resources at Gualcamayo:
Total mineral reserve and mineral resource estimates at Gualcamayo have increased from those published as at the end of 2009. Proven and probable mineral reserves have increased by approximately six percent and with the upgrade of inferred resources, measured and indicated resources have increased by approximately 29 percent.
The following is a summary of the key operating parameters at Gualcamayo beginning in 2011 accounting for a combination of the various ores.
Capital cost: approximately $85 million (QDD Lower West mine development)
Cash cost per ounce(1): $395-415
Mining cost per tonne of ore: $4.70-4.90
Plant cost per tonne or ore: $2.50-2.70
G&A and other cost per tonne: $1.30-1.50
Average throughput: approximately 10,000,000 tonnes per year
Initial mine life: 9 years
Plant recovery rate: approximately 71% (cumulative)
Planned sustainable production at Gualcamayo is targeted at more than 190,000 ounces per year. The following is a summary of the updated expected annual production from Gualcamayo for the next five years.
The Company views the increase in production at Gualcamayo from QDD Lower West as a base case scenario which may be improved upon with more ounces discovered and with the evaluation of the milling concept as noted above.
Further exploration efforts continue at QDD Lower West. Yamana believes mineral reserves and mineral resources at Gualcamayo will continue to be increased significantly, particularly at QDD Lower West. During the first half of 2010, 40 drill holes totaling 9,964 metres were completed from underground development at the west end of the QDD Lower West ore body. The drilling, designed to upgrade inferred mineral resources, resulted in an increase in the measured and indicated mineral resources category and confirmed that the QDD Lower West ore body remains open to the west. One kilometre further to the west, at the 3D target, the Rodado tunnel was completed to a length of 300 metres and underground drilling commenced at the end of May 2010. The strike length of QDD Lower West has the potential to double to more than 2 kilometres.
The Company will evaluate how additional mineral resources from this exploration plan will further contribute to gold production, particularly in later years with the objective of maintaining the sustainable production plan exceeding an average of 190,000 ounces per year through 2020.
In the second quarter of 2010, production at Gualcamayo was 37,467 ounces representing an increase of over 8,000 ounces or 27 percent compared to the first quarter of 2010. Total gold production at Gualcamayo for the first half of 2010 was 66,928 ounces at cash cost of $434 per ounce. Production was entirely from the QDD open pit operations only. Yamana expects production at Gualcamayo to increase sequentially quarter-over-quarter similar to 2009 and that it will achieve planned levels of production for the remainder of the year.
Pilar, Brazil
Construction Decision
Yamana also announced today that it has made a construction decision on its 100 percent owned Pilar project in Brazil. The decision was based on a recently completed positive feasibility study which delivered the first mineral reserve estimate for Pilar.
The Pilar project is a gold project located in Goias, Brazil, approximately 300 kilometres northwest of the city of Brasilia and approximately 70 kilometres south of Yamana's Chapada mine. Pilar is located east of the Crixas Greenstone Belt which hosts the Serra Grande gold mine and the Guarinos Greenstone Belt which is east of the Crixas Belt and similar in shape and size. The Crixas and Pilar gold mineralization have very similar structural control, hydrothermal alteration, stratigraphy and tectonic history, and are approximately 40 kilometres apart. Yamana controls approximately 65,000 hectares of mineral claims and permits that cover the majority of the Guarinos and Pilar Greenstone belts.
The Company has also provided an exploration update on its extension drilling program at Pilar and will continue its exploration efforts with the view of increasing overall mineral resources. During the permitting period, which is expected to continue into the first quarter of 2011, the Company will continue to advance exploration and development work to upgrade mineral resources to mineral reserves. The vein structure of the ore body varies in width. Hence, additional delineation work will allow for more reliability once production begins, which is targeted for mid-2013. Earth work is expected to begin in early to mid 2011 (after the rainy season and following the completion of permitting) and construction is expected to take 24-30 months.
The following is a summary of the current mineral reserves and mineral resources for the Jordino deposit at Pilar based on drill results up until the end of April 2010:
Total mineral resources (including reserves) for the Jordino deposit increased by 32 percent from the published estimate for mineral resources as at the end of 2009. The new mineral reserves at Pilar increase the Company's total proven and probable mineral reserves by seven percent to 18.7 million ounces of gold. Pilar, based on production, mineral reserves and resources, and anticipated further exploration success, now represents one of the more significant projects for Yamana.
Key parameters of the Pilar feasibility study include:
Capital cost: approximately $180 million
Cash cost per ounce(1): $430-460
Mining cost per tonne of ore: $34-36
Plant cost per tonne of ore: $12-14
G&A and other cost per tonne of ore: $6-8
Average throughput: approximately 1,000,000 tonnes per year
Average annual production: approximately 120,000 ounces of gold
Initial mine life: 9 years
Plant recovery rate: 95%
The after-tax internal rate of return (IRR) exceeds the planned corporate objective of at least 20 percent.
Pilar is planned as an underground mine with ore being extracted through the room and pillar method with a conventional milling, gravity and carbon in pulp processing plant.
Further Exploration
Drilling during the first half of 2010 has focused on extending the main Jordino mineralization down dip. 18,000 metres of diamond drilling has been completed to date this year (See Figure 1) and the Company continues to report positive results, mainly in the north portion of the Jordino trend, where a 700 metre down dip extension of mineralization has been confirmed with significant gold grades along a strike length of 400 metres (See Figure 2). This down dip extension is currently double the dip length of the current mineral resource implying significant exploration upside and mineral resource growth.
An additional 15,000 metres of drilling will be completed on the Jordino deposit to extend the deposit down dip along its entire strike length of more than 1,200 metres. Based on drilling results, the mineral resource has the potential to significantly increase from its currently estimated size. An updated mineral resource estimate is expected be completed by the year end of 2010.
El Penon, Fazenda Brasileiro and Jacobina
The Company continues with significant exploration efforts at all its mines with a particular focus on El Penon, Fazenda Brasileiro and Jacobina, and intends to provide a further exploration update for these mines by the end of 2010.
Chapada, Brazil
Yamana is currently advancing a feasibility-level study for Suruca, the new gold mineralized area at Chapada, which the Company expects to complete by the end of 2010. A total of 15,500 metres of extension and infill diamond drilling was completed in 2010 and the results have extended Suruca from 500 metres along strike to 1,100 metres along strike and showed that the mineralization remains open to northeast. An 800 metre section of the northeast part of the deposit has been drilled on 100 metre spacing. The Company believes Suruca will provide substantial gold only production growth at this already robust and long life mine. The Company contemplates a shallow open pit operation with ore hauled to the Chapada plant for processing.
Jeronimo, Chile
Yamana holds a 57% controlling and operating interest in the Jeronimo project, which is located in Region II of northern Chile. Yamana continues to advance Jeronimo having made significant advancements in metallurgical testwork and intends to deliver a feasibility study in late 2011.
Quality Assurance and Quality Control
Yamana incorporates a rigorous Quality Assurance and Quality Control program for all of its mines and exploration projects which conforms to industry Best Practices as outlined by the CSE and National Instrument 43-101. This includes the use of independent third party laboratories and the use of professionally prepared standards and blanks and analysis of sample duplicates with a second independent laboratory.
Qualified Person
Evandro Cintra, P.Geo., Senior Vice President, Technical Services of Yamana Gold Inc. has reviewed and confirmed the scientific and technical information contained within this news release in relation to Gualcamayo and Pilar and serves as the Qualified Person as defined in National Instrument 43-101.
Sergio Brandao Silva, P.Geo., Brazil Exploration Director of Yamana Gold Inc. has reviewed and confirmed the drilling and exploration information contained within this news release in relation to Pilar and serves as the Qualified Person as defined in National Instrument 43-101.
Mark Hawksworth, P. Geo, Mercedes Project Exploration Manager for Yamana Gold Inc. has reviewed and confirmed the scientific and technical information contained within this news release in relation to Mercedes and serves as the Qualified Person as defined in National Instrument 43-101.
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.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news release contains or incorporates by reference "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 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, 2009 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 exploration, development and operational plans 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". The Company believes that these measures, together with measures determined in accordance with Canadian GAAP, 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 Canadian GAAP, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP
CO-PRODUCT CASH COSTS
The Company has included cash costs per GEO 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 Canadian GAAP 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 Canadian GAAP. Cash costs per GEO are determined in accordance with the Gold Institute's Production Cost Standard and are calculated on a co-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.
To see the maps attached to this press release, please go to: http://files.newswire.ca/797/YRIMaps.pdf
----------------------------------------------
(1) Cash costs per GEO is a non-GAAP measure. A definition is provided at
the end of this press release.
For further information: Letitia Wong, Director, Investor Relations, (416) 815-0220, Email: investor@yamana.com, www.yamana.com; MEDIA INQUIRIES: Mansfield Communications Inc., Hugh Mansfield, (416) 599-0024
"The supplemental production at Gualcamayo along with Pilar provides us with our next stage of growth into 2013, which will be beyond our initial production target of 1.5 million gold equivalent ounces," said Yamana's chairman and chief executive officer, Peter Marrone. "We have numerous other projects under evaluation in addition to expected continuing exploration successes, which we are confident will provide further production growth."
Gualcamayo, Argentina
Advanced Mine Plan and Construction Decision at QDD Lower West
Yamana has updated its production plan for Gualcamayo to include the results of the recently completed feasibility study update for QDD Lower West, the planned underground ore body below the current QDD open pit operations and one of several identified areas of mineralization at Gualcamayo, and has made a construction decision for QDD Lower West.
Capital required for QDD Lower West is estimated at approximately $85 million and is required primarily for mine development as ore is expected to be processed through existing heap leaching operations and facilities at Gualcamayo. This will be an underground mine, with ore being extracted through the sublevel stoping method.
Gualcamayo production will result from a mix of various ores including from QDD and from QDD Lower West. Production from QDD Lower West is targeted to begin in early 2013, ahead of the originally planned 2015. Recovery at QDD Lower West is expected to be at approximately 65%, although recovery in the first couple of years would be higher. Cumulative recovery from all ores at Gualcamayo is expected to be in the order of approximately 65% to 75%. While recovery will be lower from QDD Lower West than the main open pit ore, gold will be recovered through the heap leaching processing facilities already in operation at Gualcamayo, thereby reducing the need for additional capital for production from QDD Lower West. In addition, ore from QDD Lower West increases the overall grade at Gualcamayo, thereby contributing to an increase in overall production.
QDD Lower West's current mineral reserves and metallurgical testwork support heap leaching recovery at the planned recovery rate. Given the significant additional exploration opportunity at QDD Lower West, the Company will continue its exploration efforts as it progresses with mine development. The Company plans to monitor the option of adding a milling facility which would increase recoveries and production. The prospect of a mill is dependent on continuing exploration success and the delineation of additional mineral reserves and this initiative will be further evaluated in late 2011.
The following is a summary of the updated and current mineral reserves and mineral resources at Gualcamayo:
Total mineral reserve and mineral resource estimates at Gualcamayo have increased from those published as at the end of 2009. Proven and probable mineral reserves have increased by approximately six percent and with the upgrade of inferred resources, measured and indicated resources have increased by approximately 29 percent.
The following is a summary of the key operating parameters at Gualcamayo beginning in 2011 accounting for a combination of the various ores.
Capital cost: approximately $85 million (QDD Lower West mine development)
Cash cost per ounce(1): $395-415
Mining cost per tonne of ore: $4.70-4.90
Plant cost per tonne or ore: $2.50-2.70
G&A and other cost per tonne: $1.30-1.50
Average throughput: approximately 10,000,000 tonnes per year
Initial mine life: 9 years
Plant recovery rate: approximately 71% (cumulative)
Planned sustainable production at Gualcamayo is targeted at more than 190,000 ounces per year. The following is a summary of the updated expected annual production from Gualcamayo for the next five years.
The Company views the increase in production at Gualcamayo from QDD Lower West as a base case scenario which may be improved upon with more ounces discovered and with the evaluation of the milling concept as noted above.
Further exploration efforts continue at QDD Lower West. Yamana believes mineral reserves and mineral resources at Gualcamayo will continue to be increased significantly, particularly at QDD Lower West. During the first half of 2010, 40 drill holes totaling 9,964 metres were completed from underground development at the west end of the QDD Lower West ore body. The drilling, designed to upgrade inferred mineral resources, resulted in an increase in the measured and indicated mineral resources category and confirmed that the QDD Lower West ore body remains open to the west. One kilometre further to the west, at the 3D target, the Rodado tunnel was completed to a length of 300 metres and underground drilling commenced at the end of May 2010. The strike length of QDD Lower West has the potential to double to more than 2 kilometres.
The Company will evaluate how additional mineral resources from this exploration plan will further contribute to gold production, particularly in later years with the objective of maintaining the sustainable production plan exceeding an average of 190,000 ounces per year through 2020.
In the second quarter of 2010, production at Gualcamayo was 37,467 ounces representing an increase of over 8,000 ounces or 27 percent compared to the first quarter of 2010. Total gold production at Gualcamayo for the first half of 2010 was 66,928 ounces at cash cost of $434 per ounce. Production was entirely from the QDD open pit operations only. Yamana expects production at Gualcamayo to increase sequentially quarter-over-quarter similar to 2009 and that it will achieve planned levels of production for the remainder of the year.
Pilar, Brazil
Construction Decision
Yamana also announced today that it has made a construction decision on its 100 percent owned Pilar project in Brazil. The decision was based on a recently completed positive feasibility study which delivered the first mineral reserve estimate for Pilar.
The Pilar project is a gold project located in Goias, Brazil, approximately 300 kilometres northwest of the city of Brasilia and approximately 70 kilometres south of Yamana's Chapada mine. Pilar is located east of the Crixas Greenstone Belt which hosts the Serra Grande gold mine and the Guarinos Greenstone Belt which is east of the Crixas Belt and similar in shape and size. The Crixas and Pilar gold mineralization have very similar structural control, hydrothermal alteration, stratigraphy and tectonic history, and are approximately 40 kilometres apart. Yamana controls approximately 65,000 hectares of mineral claims and permits that cover the majority of the Guarinos and Pilar Greenstone belts.
The Company has also provided an exploration update on its extension drilling program at Pilar and will continue its exploration efforts with the view of increasing overall mineral resources. During the permitting period, which is expected to continue into the first quarter of 2011, the Company will continue to advance exploration and development work to upgrade mineral resources to mineral reserves. The vein structure of the ore body varies in width. Hence, additional delineation work will allow for more reliability once production begins, which is targeted for mid-2013. Earth work is expected to begin in early to mid 2011 (after the rainy season and following the completion of permitting) and construction is expected to take 24-30 months.
The following is a summary of the current mineral reserves and mineral resources for the Jordino deposit at Pilar based on drill results up until the end of April 2010:
Total mineral resources (including reserves) for the Jordino deposit increased by 32 percent from the published estimate for mineral resources as at the end of 2009. The new mineral reserves at Pilar increase the Company's total proven and probable mineral reserves by seven percent to 18.7 million ounces of gold. Pilar, based on production, mineral reserves and resources, and anticipated further exploration success, now represents one of the more significant projects for Yamana.
Key parameters of the Pilar feasibility study include:
Capital cost: approximately $180 million
Cash cost per ounce(1): $430-460
Mining cost per tonne of ore: $34-36
Plant cost per tonne of ore: $12-14
G&A and other cost per tonne of ore: $6-8
Average throughput: approximately 1,000,000 tonnes per year
Average annual production: approximately 120,000 ounces of gold
Initial mine life: 9 years
Plant recovery rate: 95%
The after-tax internal rate of return (IRR) exceeds the planned corporate objective of at least 20 percent.
Pilar is planned as an underground mine with ore being extracted through the room and pillar method with a conventional milling, gravity and carbon in pulp processing plant.
Further Exploration
Drilling during the first half of 2010 has focused on extending the main Jordino mineralization down dip. 18,000 metres of diamond drilling has been completed to date this year (See Figure 1) and the Company continues to report positive results, mainly in the north portion of the Jordino trend, where a 700 metre down dip extension of mineralization has been confirmed with significant gold grades along a strike length of 400 metres (See Figure 2). This down dip extension is currently double the dip length of the current mineral resource implying significant exploration upside and mineral resource growth.
An additional 15,000 metres of drilling will be completed on the Jordino deposit to extend the deposit down dip along its entire strike length of more than 1,200 metres. Based on drilling results, the mineral resource has the potential to significantly increase from its currently estimated size. An updated mineral resource estimate is expected be completed by the year end of 2010.
El Penon, Fazenda Brasileiro and Jacobina
The Company continues with significant exploration efforts at all its mines with a particular focus on El Penon, Fazenda Brasileiro and Jacobina, and intends to provide a further exploration update for these mines by the end of 2010.
Chapada, Brazil
Yamana is currently advancing a feasibility-level study for Suruca, the new gold mineralized area at Chapada, which the Company expects to complete by the end of 2010. A total of 15,500 metres of extension and infill diamond drilling was completed in 2010 and the results have extended Suruca from 500 metres along strike to 1,100 metres along strike and showed that the mineralization remains open to northeast. An 800 metre section of the northeast part of the deposit has been drilled on 100 metre spacing. The Company believes Suruca will provide substantial gold only production growth at this already robust and long life mine. The Company contemplates a shallow open pit operation with ore hauled to the Chapada plant for processing.
Jeronimo, Chile
Yamana holds a 57% controlling and operating interest in the Jeronimo project, which is located in Region II of northern Chile. Yamana continues to advance Jeronimo having made significant advancements in metallurgical testwork and intends to deliver a feasibility study in late 2011.
Quality Assurance and Quality Control
Yamana incorporates a rigorous Quality Assurance and Quality Control program for all of its mines and exploration projects which conforms to industry Best Practices as outlined by the CSE and National Instrument 43-101. This includes the use of independent third party laboratories and the use of professionally prepared standards and blanks and analysis of sample duplicates with a second independent laboratory.
Qualified Person
Evandro Cintra, P.Geo., Senior Vice President, Technical Services of Yamana Gold Inc. has reviewed and confirmed the scientific and technical information contained within this news release in relation to Gualcamayo and Pilar and serves as the Qualified Person as defined in National Instrument 43-101.
Sergio Brandao Silva, P.Geo., Brazil Exploration Director of Yamana Gold Inc. has reviewed and confirmed the drilling and exploration information contained within this news release in relation to Pilar and serves as the Qualified Person as defined in National Instrument 43-101.
Mark Hawksworth, P. Geo, Mercedes Project Exploration Manager for Yamana Gold Inc. has reviewed and confirmed the scientific and technical information contained within this news release in relation to Mercedes and serves as the Qualified Person as defined in National Instrument 43-101.
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.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news release contains or incorporates by reference "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 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, 2009 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 exploration, development and operational plans 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". The Company believes that these measures, together with measures determined in accordance with Canadian GAAP, 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 Canadian GAAP, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP
CO-PRODUCT CASH COSTS
The Company has included cash costs per GEO 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 Canadian GAAP 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 Canadian GAAP. Cash costs per GEO are determined in accordance with the Gold Institute's Production Cost Standard and are calculated on a co-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.
To see the maps attached to this press release, please go to: http://files.newswire.ca/797/YRIMaps.pdf
----------------------------------------------
(1) Cash costs per GEO is a non-GAAP measure. A definition is provided at
the end of this press release.
For further information: Letitia Wong, Director, Investor Relations, (416) 815-0220, Email: investor@yamana.com, www.yamana.com; MEDIA INQUIRIES: Mansfield Communications Inc., Hugh Mansfield, (416) 599-0024
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