Yamana Gold Announces Fourth Quarter and Year End 2013 Results
TORONTO, ONTARIO--(Marketwired - Feb 18, 2014) - YAMANA GOLD
INC. (TSX:YRI) (NYSE:AUY) ("Yamana" or "the Company") today
announced its financial and operating results for the fourth
quarter and year end 2013.
HIGHLIGHTS FOR THE YEAR 2013 |
|
FINANCIAL -- Cash flow trend is positive in new price
environment |
- Revenue for the fourth quarter of $420.7 million and $1.84
billion for full year.
- Adjusted earnings(1) of $273.4 million or $0.36 per share for
full year after adjusting for one time and non-cash items of $719.6
million; net loss(2) for full year of $446.2 million or $0.59 per
share.
- Adjusted earnings of $36.7 million or $0.05 per share for the
fourth quarter after adjusting for one time and non-cash items of
$620.7 million; net loss(2) for the fourth quarter of $583.9
million or $0.78 per share.
- Cash flows from operating activities before changes in non-cash
working capital(1) of $0.22 per share for the fourth quarter or
$165.3 million and $0.94 per share for the full year or $707.9
million.
- Cash flows from operating activities after changes in non-cash
working capital of $0.25 per share for the fourth quarter or $184.8
million and $0.87 per share for the full year or $653.1
million.
- General and administrative expenses of $135.3 million, a
decrease of 7% year over year.
OPERATIONAL -- Costs stabilizing at industry low
levels |
- Production of 1.2 million gold equivalent ounces (GEO)(3) , at
all-in sustaining cash costs ("AISC")(1,4) on a co-product basis
for the full year were $947 per GEO and $814 per GEO on a
by-product basis.
- Gold production of 1.03 million ounces
- Silver production of 8.4 million ounces
- Production in the fourth quarter of 303,768 GEO at AISC of $935
per GEO on a co-product basis and $754 per GEO on a by-product
basis.
- AISC on a co-product basis for the last three quarters was $924
per GEO, exceeding expectations of the cost containment initiative
announced in the second quarter.
- Cash costs(1) for 2013 of $596 per GEO on a co-product basis
and $410 per GEO after by-product credits which is consistent with
previous guidance.
- Cash costs for the fourth quarter of $647 per GEO on a
co-product basis and $417 per GEO after by-product credits .
(All amounts are expressed in United States dollars unless
otherwise indicated, unaudited.) |
- Refers to a non-GAAP measure. Reconciliation of non-GAAP
measures are available at www.yamana.com/2013
- Attributable to Yamana equity holders, after deducting
non-controlling interest's share of non-recurring impairment
charge.
- GEO assumes gold plus the gold equivalent of silver using a
ratio of 50:1.
- Includes cash costs, sustaining capital, corporate general and
administrative expense and exploration expense.
|
Three Months Ending Dec 31st |
|
Twelve Months Ending Dec 31st |
|
(In thousands of United States Dollars except for shares and per
share amounts, unaudited) |
2013 |
|
2012 |
|
2013 |
|
2012 |
|
Revenue |
420,663 |
|
629,505 |
|
1,842,682 |
|
2,336,762 |
|
Cost of sales excluding depletion, depreciation and
amortization |
(239,030 |
) |
(207,228 |
) |
(900,789 |
) |
(831,754 |
) |
Depletion, depreciation and amortization |
(111,520 |
) |
(100,195 |
) |
(401,115 |
) |
(383,738 |
) |
General and administrative expenses |
(29,800 |
) |
(39,000 |
) |
(135,320 |
) |
(145,856 |
) |
Impairment of mineral properties and other assets |
(672,000 |
) |
(10,896 |
) |
(682,273 |
) |
(67,684 |
) |
Exploration and evaluation expenses |
(8,000 |
) |
(15,100 |
) |
(30,151 |
) |
(58,049 |
) |
Equity (losses)/earnings from associate (Alumbrera) |
(5,086 |
) |
18,147 |
|
(3,905 |
) |
50,642 |
|
Mine operating earnings |
70,113 |
|
322,082 |
|
540,778 |
|
1,121,270 |
|
Net (loss)/earnings (i) |
(583,936 |
) |
169,161 |
|
(446,247 |
) |
442,064 |
|
Net (loss)/earnings per share (i) |
(0.78 |
) |
0.23 |
|
(0.59 |
) |
0.59 |
|
Adjusted earnings |
36,719 |
|
197,368 |
|
273,358 |
|
694,333 |
|
Adjusted earnings per share |
0.05 |
|
0.26 |
|
0.36 |
|
0.93 |
|
Cash flow from operating activities after changes in non-cash
working capital |
184,845 |
|
367,881 |
|
653,135 |
|
1,158,057 |
|
Per share |
0.25 |
|
0.49 |
|
0.87 |
|
1.55 |
|
Cash flow from operating activities before changes in non-cash
working capital |
165,315 |
|
298,064 |
|
707,861 |
|
1,044,946 |
|
Per share |
0.22 |
|
0.40 |
|
0.94 |
|
1.40 |
|
Average realized gold price per ounce |
1,277 |
|
1,692 |
|
1,408 |
|
1,670 |
|
Average realized silver price per ounce |
20.63 |
|
31.37 |
|
23.73 |
|
30.46 |
|
Average realized copper price per pound |
3.37 |
|
3.54 |
|
3.28 |
|
3.60 |
|
(i)
Attributable to Yamana equity holders, after deducting
non-controlling interest's share of non-recurring impairment
charge. |
|
|
PRODUCTION SUMMARY - FINANCIAL AND
OPERATING SUMMARY |
|
|
Three Months Ending Dec 31st |
|
Twelve Months Ending Dec 31st |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
Total gold equivalent ounces - produced |
303,768 |
|
322,990 |
|
1,197,559 |
|
1,201,010 |
|
Gold produced |
260,187 |
|
276,373 |
|
1,029,863 |
|
1,019,969 |
|
Silver produced (millions of ounces) |
2.2 |
|
2.3 |
|
8.4 |
|
9.0 |
Total gold equivalent ounces - sold |
305,376 |
|
317,615 |
|
1,178,972 |
|
1,186,991 |
Total copper produced - Chapada (millions of
pounds) |
36.0 |
|
40.5 |
|
130.2 |
|
150.6 |
Total copper sold - Chapada (millions of pounds) |
34.5 |
|
37.3 |
|
126.0 |
|
139.0 |
|
|
|
|
|
|
|
|
|
Three Months Ending Dec 31st |
|
Twelve Months Ending Dec 31st |
(in GEO) |
2013 |
|
2012 |
|
2013 |
|
2012 |
Co-product cash costs per gold equivalent ounce |
$647 |
|
$517 |
|
$596 |
|
$525 |
|
Cash cost per pound of copper - Chapada |
$1.53 |
|
$1.38 |
|
$1.65 |
|
$1.40 |
By-product cash costs per gold equivalent ounce |
$417 |
|
$198 |
|
$410 |
|
$230 |
All-in sustaining cash costs per GEO, by-product
basis |
$754 |
|
n/a |
|
$814 |
|
n/a |
All-in sustaining cash costs per GEO, co-product
basis |
$935 |
|
n/a |
|
$947 |
|
n/a |
|
Three Months Ending Dec 31st |
|
Twelve Months Ending Dec 31st |
(in GEO) |
2013 |
|
2012 |
|
2013 |
|
2012 |
Chapada |
29,817 |
|
32,498 |
|
110,618 |
|
128,171 |
El Peñón |
101,364 |
|
128,119 |
|
467,523 |
|
462,496 |
Gualcamayo |
34,929 |
|
31,502 |
|
120,337 |
|
147,310 |
Jacobina |
19,519 |
|
28,337 |
|
73,695 |
|
116,863 |
Minera Florida |
30,513 |
|
32,797 |
|
118,590 |
|
105,679 |
Fazenda Brasiliero |
18,270 |
|
18,251 |
|
70,079 |
|
67,130 |
Mercedes* |
31,716 |
|
39,443 |
|
141,618 |
|
126,010 |
Ernesto/Pau-a-Pique** |
9,707 |
|
1,274 |
|
27,571 |
|
1,274 |
C1 Santa Luz** |
6,120 |
|
- |
|
12,997 |
|
- |
Pilar** |
10,494 |
|
- |
|
15,374 |
|
- |
Alumbrera |
11,319 |
|
10,769 |
|
39,157 |
|
46,077 |
TOTAL |
303,768 |
|
322,990 |
|
1,197,559 |
|
1,201,010 |
|
|
* |
Includes commissioning production of 8,959 GEO in January of 2012,
commercial production started on February 1, 2012. |
** |
Commissioning production as the mine is not yet in commercial
operation. |
Financial Results for the year ended December 31, 2013
Cash flows from operating activities before changes in non-cash
working capital for the year ended December 31, 2013 were $653.1
million compared to $1.16 billion for the year ended December 31,
2012. Cash flows from operating activities before changes in
non-cash working capital items for the year ended December 31, 2013
were $707.9 million compared to $1.04 billion for the year ended
December 31, 2012. Cash and cash equivalents as at December 31,
2013 were $220.0 million compared to $349.6 million as at December
31, 2012.
Net loss for the year 2013 was $446.2 million or $0.59 per share
compared with net earnings of $442.1 million or basic and diluted
earnings per share of $0.59 for the year 2012. Net loss for the
year includes an impairment charge of $574.2 million, net of taxes
in respect to certain mineral properties. Adjusted earnings were
$273.4 million or $0.36 per share in 2013, compared with $694.3
million or $0.93 per share in 2012. Lower adjusted earnings were
mainly attributed to the decline in metal prices and lower sales
volume of gold, copper and silver, combined with inflationary
impacts on costs and lower equity earnings from the Company's 12.5%
of interest in Alumbrera.
Revenues were $1.84 billion in 2013 compared with $2.3 billion
in 2012. Mine operating earnings were $540.8 million, compared with
$1.12 billion in 2012. Lower revenues and mine operating earnings
were due to lower metal prices and lower sales volumes of gold,
copper in concentrate and silver. Higher cost of sales, including
depletion, depreciation and amortization expenses, was mainly
related to higher cost inflation relative to that of 2012.
The average realized gold price in 2013 was $1,408 per ounce
versus $1,670 per ounce in 2012 or 16% lower. The average realized
copper price was $3.28 per pound versus $3.60 per pound in 2012 or
9% lower. The average realized silver price was $23.73 per ounce
compared to $30.46 per ounce in 2012 or 22% lower.
Revenues for 2013 were generated from the sale of 925,496 ounces
of gold, 8.3 million ounces of silver and 126.0 million pounds of
copper, excluding Alumbrera which is accounted for as an equity
investment. This compares to sales, excluding Alumbrera, of 963,833
ounces of gold, 9.0 million ounces of silver and 139.0 million
pounds of copper in 2012.
Cost of sales excluding depletion, depreciation and amortization
for 2013 was $900.8 million compared with $831.8 million in the
same period of 2012. The increase in cost of sales was mainly due
to higher co-product cash costs as a result of inflationary
pressures in the countries where the Company operates.
Depletion, depreciation and amortization ("DDA") expense for the
year 2013 was $401.1 million, compared to $383.7 million in the
same period of 2012. The increase in DDA is attributable to higher
levels of depletable capital expenditures and higher cost ore
bodies being depleted.
Other expenses including general and administrative, exploration
and evaluation, other operating and net finance expenses were
$249.8 million in the year ended December 31, 2013, compared to
$289.1 million in the year ended December 31, 2012. The net
decrease in other expenses is detailed below:
General and administrative expenses were $135.3 million in 2013
compared to $145.9 million in the twelve months ended December 31,
2012. General and administrative expenses have declined mainly as a
result of the Company's cost containment initiative introduced in
May 2013, and are expected to be maintained at these lower levels
in 2014.
Exploration and evaluation expenses were $30.2 million in 2013,
compared to $58.0 million incurred in 2012 as a result of the
Company's reduced focus on greenfield exploration.
Other operating expenses were $78.1 million in the year compared
to $99.3 million in 2012. Lower other operating expenses reflect
lower impairment of investments in available-for-sale securities of
$16.3 million for the year compared to $67.7 million in 2012, an
$18.1 million write-off of long-term tax credits and a loss of
$38.4 million incurred on the sale of non-core exploration
properties with no 2012 comparative.
Net finance expenses were $6.3 million for the year compared
with net finance expenses of $53.5 million in the same period of
2012. Lower net finance expense was mainly due to higher foreign
exchange gains in the amount of $17.7 million compared to a foreign
exchange loss of $25.9 million in the comparative period.
Equity loss from associate was $3.9 million for 2013 compared
with earnings of $50.6 million in 2012. The equity loss was driven
by lower revenues as a result of lower metal prices and lower sales
volume of copper and gold concentrate due to lower production from
Alumbrera. Cash dividends from the Company's equity investment in
Alumbrera during 2013 were $27.9 million compared to $nil
in 2012. During the year, the Company also received loan proceeds
of $44.6 million from Alumbrera.
The Company recorded an income tax expense of $79.1 million in
2013 compared to $373.1 million in the same period of 2012. The
decrease in the income tax expense is a result of lower earnings
relative to the comparative year. The income tax provision for
theyear ended December 31, 2013 reflects a current income tax
expense of $140.6 million compared to current tax expense of $265.5
million in 2012, and a deferred income tax recovery of $61.5
million compared to deferred tax expense of $107.6 million. The
effective tax rate on adjusted earnings for the year of 2013 was
30.0% compared to 25.0% for 2012.
Financial Results for the three months ended December 31,
2013
Cash flows from operating activities before changes in non-cash
working capital for the quarter ended December 31, 2013 were $165.3
million, lower than the $298.1 million generated for the same
period of 2012. Lower cash flows from operating activities compared
to that of the same quarter in the prior year were mainly due to a
decline in revenue as a result of a decline in metal prices and
lower sale volumes. However, cash flows from operating activities
before changes in non-cash working capital were 10% above levels in
the second quarter when the Company's cost savings and containment
program was initiated. Cash flows from operating activities after
taking into effect changes in non-cash working capital items for
the three month period ended December 31, 2013 were inflows of
$184.8 million, compared to inflows of $367.9 million for the three
month period ended December 31, 2012, which reflects a decrease in
trade receivables.
Net loss for the quarter was $583.9 million or $0.78 per share
compared with net earnings of $169.2 million or basic earnings per
share of $0.23 and diluted earnings per share of $0.22 for the
three months ended December 31, 2012. Net loss for the quarter
includes an impairment charge of 535.8 million, net of taxes in
respect to certain mineral properties. Adjusted earnings were $36.7
million or $0.05 per share in the fourth quarter, compared with
$197.4 million or $0.26 per share in the fourth quarter of 2012.
Lower adjusted earnings were attributed to lower realized metal
prices, lower volume of metal sales, higher cash costs and an
equity loss from the Company's 12.5% of interest in Alumbrera.
Revenues were $420.7 million in the fourth quarter compared with
$629.5 million in the fourth quarter of 2012. Mine operating
earnings were $70.1 million, compared with $322.1 million in the
fourth quarter of 2012. Lower revenues and mine operating earnings
were primarily due to lower metal prices in addition to lower
volume of gold and copper sales. Lower metal prices accounted for
58% of the variance in revenues in comparison to the fourth quarter
of 2012 representing approximately $0.16 per share in earnings.
Lower cost of sales, including depletion, depreciation and
amortization expenses, corresponded to lower sales volumes of gold
and copper.
Revenues for the fourth quarter were generated from the sale of
218,223 ounces of gold, 2.1 million ounces of silver and 34.5
million pounds of copper, excluding Alumbrera which is accounted
for as an equity investment. This compares to sales, excluding
Alumbrera, of 258,978 ounces of gold, 2.3 million ounces of silver
and 37.1 million pounds of copper in the three months ended
December 31, 2012.
The average realized price of gold in the fourth quarter of 2013
was $1,277 per ounce compared to $1,692 per ounce in the same
quarter of 2012, representing a decrease of 24%. The average
realized price of copper was $3.37 per pound compared to $3.54 per
pound in the fourth quarter of last year, representing a decrease
of 5%, and the average realized silver price was $20.63 per ounce
compared to $31.37 per ounce in the fourth quarter of 2012,
representing a decrease of 33%.
Cost of sales excluding depletion, depreciation and amortization
for the fourth quarter of 2013 was $239.0 million compared with
$207.2 million in same quarter of 2012. Cost of sales excluding
depletion, depreciation and amortization was higher compared to the
same period in 2012 was mainly due to the higher co-product cash
cost of production.
Depletion, depreciation and amortization ("DDA") expense for the
quarter was $111.5 million, compared to $100.2 million in the
fourth quarter of 2012. The increase was attributable to higher DDA
at Gualcamayo from AIM which contributed to production levels in
2013 and DDA from the tailings retreatment plant at Minera Florida
which also started to contribute to production in 2013.
Other expenses including of general and administrative,
exploration and evaluation, other operating and net finance
expenses were $62.7 million in the quarter, compared to $66.9
million in the three months ended December 31, 2012. The net
decrease in other expenses is detailed below:
General and administrative expenses were $29.8 million in the
fourth quarter compared to $39.0 million in the same quarter of
2012. It is expected that general and administrative expenses will
continue to be maintained at current levels as a result of the cost
containment initiatives undertaken by the Company.
Exploration and evaluation expenses were $8.0 million, compared
to $15.1 million incurred in the fourth quarter of 2012 as a result
of the Company's reduced focus on greenfield exploration relative
to 2012.
Other operating expenses were $47.1 million in the quarter
compared to $5.8 million in the fourth quarter of 2012. The
increase in other operating expenses primarily reflects a $38.4
million loss on sale of non-core exploration properties during the
quarter.
Net finance income was $22.1 million mainly related to foreign
exchange gains in the quarter compared to net finance expenses of
$7.0 million in the fourth quarter of 2012. Foreign exchange gains
resulted from favourable exchange rates of country currencies with
which the Company settled its mine operating expenses compared to
foreign exchange losses in the comparative period of 2012.
Equity loss from associate was $5.1 million for the quarter
compared with earnings of $50.6 million in the fourth quarter of
2012. The lower equity earnings were mainly due to lower revenues
as a result of lower metal prices and lower sales volume of
concentrate in addition to higher co-product cash costs from
Alumbrera. Lower volume of concentrate produced was due to mining
in lower grade areas. Cash dividends from the Company's equity
investment in Alumbrera received in the quarter were $6.8 million
compared to $nil in the fourth quarter of 2012.
The Company recorded an income tax recovery of $57.6 million in
the fourth quarter of 2013 compared to tax expense of $93.2 million
in the same quarter of 2012. The lower income tax expense in the
fourth quarter of 2013 is attributable to lower earnings relative
to that of the fourth quarter of 2012. The income tax provision for
the fourth quarter of 2013 reflects a current income tax expense of
$40.7 million compared to tax expense of $46.8 million in the same
quarter of 2012, and a deferred income tax recovery of $98.3
million compared to tax expense of $98.9 million. During the
quarter, the exchange rates of Brazilian Real and Argentinean Peso
against the US Dollar increased. As a result for local purposes, a
reduction of $2.4 million relating to unrealized foreign exchange
gain was recorded in the deferred tax expense. The impact of these
foreign exchange movements on taxes are non-cash and as such
excluded from adjusted earnings. The adjusted tax rate for the
fourth quarter of 2013 was 22.3% compared to 29.7% for the fourth
quarter of 2012.
Operating Results for the year ended December 31, 2013
Total production for the Company was 1.20 million GEO comparable
to 2012 production level of 1.20 million GEO. Total production for
the year consisted of 1.03 million ounces of gold and 8.4 million
ounces of silver, representing an increase of 1% in gold production
and a 7% decrease in silver production over the period of 2012.
Total production included the Company's attributable production
from Alumbrera of 39,157 ounces of gold and production during
commissioning from Ernesto/Pau-a-Pique, C1 Santa Luz and Pilar of
55,942 ounces of gold. This compares with total production in 2012
of 1.20 million GEO that consisted of 1.01 million ounces of gold
and 9.0 million ounces of silver. The 2012 production also included
commissioning production of 12,094 GEO from Mercedes, Minera
Florida and Ernesto/Pau-a-Pique.
Commercial production for the year consisted of 1.14 million GEO
compared with 1.19 million GEO produced in 2012. Commercial
production for 2013 consisted of 973,921 ounces of gold and 8.38
million ounces of silver, representing a 1% increase in gold
production and a 7% decrease in silver production over the
commercial production of 733,910 ounces of gold and 8.93 million
ounces of silver in 2012.
By-product cash costs for the year averaged $410 per GEO,
compared with $230 per GEO in the same period of 2012. By-product
cash costs were impacted by a lower copper credit contribution due
to lower copper market prices and lower copper sales volume. The
average market price for copper in 2013 was 8% lower than the
average of 2012. By-product cash costs for 2013 exceeded the
Company's previous guidance for a 2013 year-average of below $365
per GEO, which assumed a copper price of $4.00 per pound compared
to average market price for the year of $3.32 per pound and the
Company's average realized price of $3.28 per pound.
Co-product cash costs for the year were $596 per GEO compared
with $525 per GEO in 2012.
Effective January 1, 2013, the Company began reporting all-in
sustaining cash costs, which seeks to represent total sustaining
expenditures of producing gold equivalent ounces from current
operations, based on by-product and co-product cash costs,
including cost components of mine sustaining capital expenditures,
corporate general and administrative expense excluding stock-based
compensation and exploration and evaluation expense. For 2013,
all-in sustaining cash costs were $814 per GEO on a by-product
basis and $947 per GEO on a co-product basis. Average all-in
sustaining cash cost on a co-product basis for the last three
quarters was below $925 per GEO meeting expectations of the cost
containment initiative implemented in the second quarter.
Copper production for the year was 130.2 million pounds from the
Chapada mine, compared with 150.6 million pounds for the same
period of 2012. Chapada copper production was lower primarily as a
result of expected lower copper grade and recovery rate compared
with 2012. A total of 30.2 million pounds of copper produced from
Alumbrera were attributable to the Company in 2013, compared to
37.4 million pounds for the year ended December 31, 2012. Total
copper production for 2013 was 160.5 million pounds, compared with
188.0 million pounds in 2012. The new ore body, Corpo Sul, and the
regrinding project at Chapada are expected to contribute to future
gold and copper production.
Co-product cash costs per pound of copper averaged $1.65 per
pound from the Chapada mine in 2013, compared with $1.40 per pound
in the year ended December 31, 2012. Co-product cash costs per
pound of copper for the year including the Company's interest in
the Alumbrera mine were $1.75 per pound compared to $1.48 per pound
for the year ended December 31, 2012.
Operating Results for the three months ended December 31,
2013
Total production for the fourth quarter of 2013 was 303,768 GEO,
a decrease of 6% from the 322,990 GEO produced in the fourth
quarter of 2012. Total fourth quarter production consisted of
260,187 ounces of gold and 2.2 million ounces of silver, compared
to 276,373 ounces of gold and 2.3 million ounces of silver produced
in the same quarter of 2012. Total production included the
Company's attributable production from Alumbrera of 11,319 ounces
of gold and production during commissioning from
Ernesto/Pau-a-Pique, C1 Santa Luz and Pilar of 26,321 ounces of
gold.
Commercial production for the fourth quarter comprised of
277,447 GEO compared with 321,716 GEO produced in the fourth
quarter of 2012. Total commercial production consisted of 233,866
of gold and 2.2 million ounces of silver, compared to commercial
production of 264,888 ounces of gold and 2.2 million ounces of
silver in the same quarter of 2012. The decrease in gold production
was mainly due to the decreased production levels from Chapada,
Jacobina, El Peñón, Minera Florida and Mercedes, partly offset by
increased production levels from Gualcamayo and Alumbrera.
By-product cash costs for the fourth quarter of 2013 averaged
$417 per GEO, compared with $198 per GEO in the fourth quarter of
2012. By-product cash costs were impacted by a lower copper credit
contribution from Chapada and Alumbrera due to the decline in the
copper price and lower copper sales volume. The average market
price for copper in the fourth quarter of 2013 was 9% lower than
the average of the same quarter in 2012.
Co-product cash costs for the fourth quarter averaged $647 per
GEO, compared to $517 per GEO for the fourth quarter of 2012.
Planned lower grades at certain mines and higher input costs during
the quarter relative to the same quarter of 2012 impacted costs
compared to the three months ended December 31, 2012. In comparison
to the third quarter of 2013, production levels at El Peñón and
Mercedes were tapered to contain increasing costs and better
position those mines for 2014.
All-in sustaining cash costs were $754 per GEO on a by-product
basis well below the guidance level of $850 per GEO and $935 per
GEO on a co-product basis for the fourth quarter of 2013 in line
with the guidance level of $925 per GEO on a co-product basis.
Copper production for the quarter was 36.0 million pounds from
the Chapada mine, compared with 40.5 million pounds for same
quarter of 2012. Chapada copper production was lower primarily as a
result of expected lower copper grade compared to the fourth
quarter of 2012. A total of 9.6 million pounds of copper produced
from Alumbrera were attributable to the Company, compared with 8.5
million pounds for the quarter ended December 31, 2012 mainly due
to higher copper feed grade. Total copper production for the fourth
quarter of 2013 was 45.6 million pounds, compared with 49.0 million
pounds in the fourth quarter of 2012.
Co-product cash costs per pound of copper averaged $1.53 per
pound from the Chapada mine compared to $1.38 per pound of copper
in the same quarter of 2012. Co-product cash costs per pound of
copper for the quarter including the Company's interest in
Alumbrera were $1.58 per pound compared to $1.51 per pound for the
fourth quarter of 2012.
OPERATING MINES
Charts providing a summary of mine-by-mine operating results are
presented at the end of this press release.
Chapada, Brazil
Chapada produced a total of 110,618 GEO contained in concentrate
in 2013 compared with 128,171 GEO contained in concentrate in 2012.
The 2013 production consisted of 104,096 ounces of gold and 326,087
ounces of silver compared with 119,655 ounces of gold and 425,805
ounces of silver contained in 2012. Chapada copper production was
130.2 million pounds in 2013 compared with production of 150.6
million pounds of copper in 2012. Production for the current year
was lower than 2012 as a result of anticipated lower grades and
recovery rates.
By-product cash costs for 2013 were negative $1,296 per
GEO, compared with negative $1,865 per GEO for 2012.
Higher by-product cash costs per GEO was mainly due to the effect
of lower copper sales volume and lower average copper prices in
2013 compared to 2012 resulting in a lower copper revenue
by-product credit. Copper prices were 8% lower in 2013 compared to
2012.
Co-product cash costs were $400 per GEO in 2013, compared to
$333 per GEO in 2012. Co-product cash costs for copper were $1.65
per pound in 2013 versus $1.40 per pound in 2012.
Chapada revenues for the year net of sales taxes and treatment
and refining costs were $504.2 million (2012 - $675.1 million).
Revenues included mark-to-market adjustments and provisional
pricing settlements in the year of negative $10.5 million
(2012 - positive $19.4 million).
In the fourth quarter of 2013, Chapada produced a total of
29,817 GEO, which consisted of 28,223 ounces of gold and 79,696
ounces of silver, contained in concentrate compared with 32,498
GEO, which consisted of 30,121 ounces of gold and 118,874 ounces of
silver contained in concentrate in the same quarter of 2012.
Chapada copper production was 36.0 million pounds in the quarter
compared with production of 40.5 million pounds of copper in the
fourth quarter of 2012.
Production for the quarter was lower than the fourth quarter of
2012 as a result of the anticipated lower copper grades and
recovery rates for 2013 relative to 2012. Production for the second
half of 2013 was 22% higher than the first half of the year,
reflecting a pattern similar to previous years.
By-product cash costs for the quarter were negative
$1,547 per GEO, compared with negative $2,021 per GEO for
the same quarter in 2012. Higher by-product cash costs per GEO was
mainly due to the effect of lower copper sales volume and lower
copper prices in the fourth quarter of 2013 compared to 2012,
resulting in a lower copper by-product credit for the quarter.
Co-product cash costs were $377 per GEO in the fourth quarter,
compared to $349 per GEO in the same quarter of 2012. Co-product
cash costs for copper were $1.53 per pound in the fourth quarter
versus $1.38 per pound in the same quarter of 2012.
Chapada revenues for the quarter net of sales taxes and
treatment and refining costs were $135.6 million (Q4 2012 - $174.9
million). Revenues included mark-to-market adjustments and
provisional pricing settlements in the quarter of positive $0.1
million (Q4 2012 - positive $4.1 million).
The Company is evaluating the level of profitable production
with minimal capital requirements. Initiatives planned for 2014
include modifications to the grinding circuit, the installation of
an in-pit crusher to increase throughput, and the development of
new ore bodies including Corpo Sul. These opportunities provide the
potential for increased production at Chapada with Corpo Sul being
the largest and most prospective new opportunity that are planned
to increase production at Chapada towards sustainable future
production levels of at least 130,000 GEO and 130 million pounds of
copper at an optimal cost structure.
Corpo Sul is a gold and copper deposit at the southwest end of
the main ore body of Chapada with mineral resources of higher
average grade ores especially near the current Chapada pit.
Development and geotechnical work, including the rock mechanics
study, the hydrogeological study and the mine study, continued in
support of the development of the new Corpo Sul area. Infill
drilling at Corpo Sul continues to support the view that ore from
this deposit will be higher grade in both copper and gold and
thereby, when blended with ore from the main pit, should increase
overall gold and copper production at the operation.
Other opportunities under evaluation include Suruca and Arco
Sul.
El Peñón, Chile
In 2013, El Peñón produced 467,523 GEO, which consisted of
338,231 ounces of gold and 6.5 million ounces of silver,
representing an increase from 462,496 GEO, which consisted of
317,557 ounces of gold and 7.2 million ounces of silver in 2012.
Production at El Peñón is expected to normalize to an average of
approximately 440,000 GEO per year.
Co-product cash costs for 2013 were $485 per gold ounce,
compared with $440 per gold ounce in 2012. The increase in
co-product cash costs per GEO was mainly due to labour inflation
partially offset by higher gold feed grades.
In the fourth quarter of 2013, El Peñón produced 101,364 GEO,
which consisted of 68,246 ounces of gold and 1.7 million ounces of
silver, compared to 128,119 GEO, which consisted of 93,448 ounces
of gold and 1.7 million ounces of silver in the same quarter of
2012. Production decreased mainly as a result of normal sequencing
in the mine plan which called for mining in lower gold and silver
grade areas. Silver recoveries which vary according to the blending
of ore being fed to the mill also impacted production.
Co-product cash costs were $593 per gold ounce, compared with
$415 per gold ounce in the fourth quarter of 2012. The increase in
co-product cash costs per GEO was mainly due to labour inflation
and higher per-unit fixed cost as a result of lower GEO
production.
Mercedes, Mexico
In 2013, Mercedes produced 141,618 GEO, which consisted of
129,327 ounces of gold and 614,562 ounces of silver, compared with
126,010 GEO, which consisted of 116,215 ounces of gold and 489,747
ounces of silver in 2012. The production increase was driven by
increased tonnage of ore processed which was partly offset by lower
gold feed grades.
Co-product cash costs averaged $496 per GEO which were 2% higher
than the average of $485 per GEO in 2012. Co-product cash costs
increased slightly due to higher mining costs per GEO associated
with mining in lower grade areas as part of the mine plan.
Production of 31,716 GEO in the fourth quarter consisted of
28,821 ounces of gold and 144,715 ounces of silver, compared with
39,443 GEO, which consisted of 36,057 ounces of gold and 169,313
ounces of silver in the fourth quarter of 2012. The lower quarterly
production was the result of normal mine sequencing in areas of
lower gold and silver grades.
Co-product cash costs of $656 per GEO were 51% higher than $435
in the same quarter of 2012. Higher co-product cash costs were due
to higher mining costs associated with mining in lower grade areas
as part of the mine plan.
Development continued at the Barrancas zone, where the higher
grade Lagunas Norte vein, one of the newest discoveries at the
mine, is located. Production of the Barrancas zone started in the
third quarter of 2012. Confirmation of the width and grades of
mineralization by infill drilling at Lupita and the recent
discovery of high-grade mineralization at Rey del Oro that may be
amenable to underground mining methods have positively impacted
measured and indicated mineral resources. Development of Diluvio
will commence in 2014.
Gualcamayo, Argentina
In 2013, Gualcamayo produced 120,337 ounces of gold compared
with 147,310 ounces produced in 2012. Lower production was the
result of fewer tonnes processed and lower recovery rates, partly
offset by improved feed grade. Gualcamayo underwent a transition in
2013 as the mine's open-pit operations at QDD Main transitioned to
the new Phase III, resulting in a decline in ore processed compared
to that of 2012. Production at QDD Main Phase III began in August
and ramp-up, which has been slower than plan, continued into the
fourth quarter impacting the total tonnage. The QDD Lower West
("QDDLW") underground mine also began to contribute to heap leach
stacking. Completion of the underground conveyor for QDDLW is
expected in the second quarter and production is expected to ramp
up each quarter during 2014.
Co-product cash costs in 2013 averaged $772 per ounce compared
with $536 per ounce in 2012. Co-product cash costs were impacted by
the inflationary pressures on the local cost escalation of labour,
operational services and contractors.
Gualcamayo produced 34,929 ounces of gold in the fourth quarter
compared with 31,502 ounces produced in the fourth quarter of 2012.
Higher production was the result of feed from higher grade ore from
QDD Main Phase III, Amelia Ines ("AIM") and QDDLW underground which
was partially offset by lower recoveries from AIM and QDDLW ore.
Production at Gualcamayo for December and January averaged over
14,000 ounces per month, consistent with expected production levels
of the expanded operation.
The metallurgy of the ore from AIM and QDDLW requires a longer
leaching cycle than that of QDD Main and will result in lower
recoveries. While planned, improvements to the existing plant
including the installation of a filtering station and an increase
in the volume of treatment capacity are planned in 2014 to improve
recovery rates.
Co-product cash costs were $825 per ounce in the fourth quarter
compared with $485 per ounce in the fourth quarter of 2012. Higher
co-product cash costs were mainly due to delays in the transition
to QDD Main Phase III, start-up of higher cost underground mining
at QDDLW and the duration of the leaching cycle. Higher cash costs
were further exacerbated by the effect of local inflationary
pressure on labour and services.
Mining costs decreased by 10% from the third quarter and the
trend is expected to continue in the first quarter of 2014. Efforts
are being made to reduce development costs by transitioning the
underground mine development to be performed fully in-house by the
second half of 2014. To date, most of the equipment has been
delivered and the Company is now operating with a planned reduction
of contractors. Additionally, the Company is looking at renting
equipment for QDD Main as a means of increasing equipment
availability and reducing maintenance and overhaul costs. Cash
costs per ounce will however, vary depending on the area from which
ore is being sourced. Periods with a higher proportion of ore
sourced from the underground mine will generate higher operating
costs.
The Company continues to have exploration success with the
increase of the sulphide resource at QDDLW and related areas
including Rodado. As the sulphide portion of the ore body grows,
the Company is continuing to progress with studies of the options
for processing these newly discovered resources.
Jacobina, Brazil
In 2013, Jacobina produced 73,695 ounces of gold, compared with
116,863 ounces of gold produced in 2012. Production was lower
resulting from lower throughput, lower feed grade and higher
dilution. Production at Jacobina met the revised goals set in the
first quarter of 2013 and more importantly the near term objective
for improvement of costs and underground development have been met,
and the longer term objective of development of higher grade areas
is in progress.
Co-product cash costs averaged $1,174 per ounce for the year
compared with $747 per ounce in 2012 as a result of lower
production volume in 2013.
Gold production at Jacobina was 19,519 ounces in the fourth
quarter, compared with 28,337 ounces produced in the same quarter
of 2012. Production was lower resulting from lower feed grade,
higher dilution and lower tonnage processed.
Co-product cash costs were $1,140 per ounce for the fourth
quarter, a decline from the beginning of the year as a result of
the cost containment initiatives implemented since the second
quarter, compared to co-product cash costs of $825 per ounce for
the fourth quarter of 2012. Higher co-product cash costs in the
fourth quarter compared to the same quarter last year reflect
reduced production volume but are expected to return to levels of
approximately $800 to $850 per ounce in the longer-term.
The Company has taken an impairment charge of $55.0 million
against the carrying value of the goodwill allocated to the
Jacobina mine in the fourth quarter.
Minera Florida, Chile
In 2013, Minera Florida produced 118,590 GEO, which consisted of
99,000 ounces of gold and 979,514 ounces of silver, compared to
105,679 GEO, which consisted of 89,163 ounces of gold and 825,812
ounces of silver in 2012, representing an increase in GEO
production by 12%. Production at Minera Florida was as expected as
the expansion for the retreatment of historic tailings made a
contribution in the first of a five year planned production
profile. Production in 2013 included commissioning production of
1,861 GEO from the tailings retreatment plant.
In addition, the mine produced and sold 5,997 tonnes of zinc in
2013, compared with 5,381 tonnes of zinc produced and sold in 2012.
Zinc is accounted for as a by-product credit to cash costs.
Co-product cash costs for the year were $747 per GEO compared
with $797 per GEO in 2012. The retreatment of the tailings has
contributed lower cost ounces to Minera Florida's production
profile benefiting from no mining costs. Additionally cash costs
benefited from higher credits from the sale of zinc resulting from
an 11% increase in volume of zinc sold and higher prices for zinc
compared to 2012.
In the fourth quarter of 2013, Minera Florida produced 30,513
GEO, which consisted of 24,539 ounces of gold and 298,696 ounces of
silver, compared to 32,797 GEO, which consisted of 27,889 ounces of
gold and 245,383 ounces of silver in the fourth quarter of 2012.
Lower production was mainly attributed to lower feed grades and
lower recovery rates.
Co-product cash costs for the quarter were $592 per GEO,
representing a 26% reduction, compared with $805 per GEO in the
same quarter in 2012. In 2013, the Company initiated a plan of
headcount reductions and cost improvements that resulted in
co-product cash costs per GEO in the fourth quarter 22% lower than
that of the third quarter and 35% lower than that of the second
quarter. Production from the tailings retreatment plant has also
benefited from no mining costs associated with the reprocessing of
tailings material.
The mine produced and sold 1,647 tonnes of zinc concentrate in
the quarter, compared with 1,353 tonnes of zinc concentrate
produced and sold in the fourth quarter of 2012. Higher credits
from the sale of zinc resulted from a 22% increase in volume of
zinc sold compared to the fourth quarter of 2012.
OTHER MINES
Fazenda Brasileiro, Brazil
In 2013, Fazenda Brasileiro produced 70,079 ounces of gold
compared to 67,130 ounces of gold in 2012, representing a 4%
year-over-year increase and its second consecutive yearly increase.
Co-product cash costs averaged $808 per ounce for the year,
representing a 7% decrease from $872 per ounce in 2012.
Production was 18,270 ounces of gold in the quarter compared to
18,251 ounces of gold in the same quarter of 2012.
Co-product cash costs averaged $809 per ounce for the fourth
quarter, 5% lower than $856 per ounce in the fourth quarter of
2012. In 2013, the Company initiated a plan to reduce costs and now
will return the focus to the production growth objectives at
Fazenda Brasileiro.
The Company has continued to extend mine life since the
operation was acquired in 2003 with two and a half years of mine
life remaining based on the known mineral reserves at that time.
The Company continues infill and extension drilling at Fazenda
Brasileiro with a focus on finding additional mineral reserves and
mineral resources.
Alumbrera, Argentina
The Company's interest in Alumbrera is accounted for as an
equity investment. The Company recorded a loss from its 12.5%
interest in Alumbrera of $3.9 million and $5.1 million for the year
and three months ended December 31, 2013, compared with earnings of
$50.6 million and $18.1 million for the same periods of 2012.
Decrease in equity earnings was mainly due to lower revenues as a
result of lower metal prices and lower sales volume of the gold and
copper concentrate.
The Company received cash distributions $27.9 million in 2013 of
which $6.8 million in the quarter ended December 31, 2013, compared
with $nil cash distribution in the 2012.
Through its annual impairment testing, the Company has recorded
an impairment charge in the amount of $70.0 million in respect to
its 12.5% interest in Alumbrera.
Attributable production from Alumbrera was 39,157 ounces of gold
and 30.2 million pounds of copper for 2013, compared with 46,077
ounces of gold and 37.4 million pounds of copper for 2012. For the
quarter, attributable production from Alumbrera was 11,319 ounces
of gold and 9.6 million pounds of copper. This compares with
attributable production of 10,769 ounces of gold and 8.5 million
pounds of copper in the fourth quarter of 2012.
By-product cash costs per ounce of gold averaged
negative $252 for the year and negative $261 for
the quarter ended December 31, 2013 compared with negative
$1,203 and negative $2,012 per ounce for the comparable
periods in 2012. By-product cash costs were higher due to the
decrease in copper sale credit as a result of lower average market
prices for copper and lower volume of copper sales by Alumbrera in
2013. Co-product cash costs per ounce for gold averaged $364 and
$313 for the year and quarter ended December 31, 2013, compared
with $308 and $343 per ounce for the same periods of 2012.
Co-product cash costs for copper averaged $2.21 per pound and $1.75
per pound for the year and quarter ended December 31, 2013,
compared with $1.81 per pound and $2.15 per pound for the
comparable periods of 2012.
Ernesto/Pau-a-Pique, Brazil
Ernesto/Pau-a-Pique was originally planned as a combination of
an open-pit operation at Ernesto and an underground operation at
Pau-a-Pique with a common plant. A plan has now been developed
which continues to include an underground operation at Pau-a-Pique
but now also contemplates a near-to-surface underground operation
at Ernesto. The Company continues to evaluate other opportunities
including the various satellite open-pit deposits already
identified that could further positively contribute to the
operation. Commissioning continued in the quarter from the
underground Pau-a-Pique with less ore from the first open-pit in
Ernesto as an access ramp is being developed in order to evaluate
and better understand the near surface underground ore body at
Ernesto.
Commissioning production was 27,571 ounces in 2013 and 9,707
ounces for the fourth quarter, representing an increase of 46% from
the third quarter. During the fourth quarter, the Company continued
to address challenges associated with start-up. In 2013, a loss
during commissioning of $30.4 million was capitalized and netted to
the capital expenditures of the project. Completion of
commissioning is expected in the second quarter of 2014.
As a result of the delayed start-up of operations and the
decline in the metal prices, the Company has taken an impairment
charge of $168.2 million, net of taxes against the carrying value
of the Ernesto/Pau-a-Pique mine in the fourth quarter.
C1 Santa Luz, Brazil
Commissioning began in mid-2013 which was delayed due to
permitting, availability of equipment and the need to ensure
sufficient water reserves for continuous operations. With permits
in place and sufficient water secured, C1 Santa Luz is continuing
to ramp-up. Process improvements will be a key factor to improve
production at the mine.
The Company has developed and is now implementing certain
processing improvements which includes the introduction of a
thickener and a regeneration furnace. In addition, recoveries
should improve as mining transitions to fresh sulphide ore. During
the commissioning phase a stockpile was accumulated which will
provide additional flexibility increasing reliability for the
operation as process improvements are implemented and take
hold.
Commissioning production was 12,997 in 2013 and 6,120 ounces of
gold in the fourth quarter due to lower recoveries. In 2013, loss
during commissioning of $25.9 million was capitalized and netted to
the capital expenditures of the project. Completion of
commissioning is expected in the third quarter of 2014.
Pilar, Brazil
Commissioning began at the beginning of the third quarter and
has progressed more gradually than expected due to the decline in
metal prices and delays in equipment delivery. However, most of the
delayed equipment whose purpose is to improve dilution and
productivity has now arrived on site and now better positions the
operation to meet 2014 expectations. This new low profile mining
equipment is one of a series of initiatives being implemented to
increase mining efficiencies at the operation and reduce dilution.
The mine infrastructure to support the new low profile equipment
will be fully operational in the second quarter. The Company is
also evaluating further opportunities including the potential for
more selectively mining the higher grade ore shoots that would have
positive impact on the operation as the in-situ grades are higher
than the current mineral reserve grade. Efforts are focused on an
infill drilling program that is currently underway to ensure these
higher grade ore shoots can be mined efficiently.
Commissioning production for the fourth quarter was 10,494
ounces of gold, representing an increase of 115% from the third
quarter. Total commissioning production for the year 2013 was
15,374 gold ounces. In 2013, loss during commissioning of $22.1
million was capitalized and netted to the capital expenditures of
the project.
Underground development at Pilar continued to progress. The ore
from Caiamar, a satellite deposit, is expected to be processed at
Pilar with the higher grades offsetting the additional
transportation costs. Additionally, the Company has elected to take
Maria Lazarus through the development cycle on an expedited basis
as the exploration drilling results to date indicate possible
contribution to future production. Completion of commissioning is
expected in the third quarter of 2014.
EXPLORATION
Exploration at Yamana continues to be a key to unlocking value
at existing operations. The 2014 program will continue to focus on
finding higher quality ounces, those with the greatest potential to
most quickly generate cash flow allowing the Company to grow
prudently and profitably.
The exploration expenditure for 2013 was $112.0 million.
Exploration expenditures included an infill program at Cerro Moro
and Gualcamayo, which added new mineral resources. Exploration will
continue to focus on mineral resource discovery and development as
well as mineral reserve growth at existing operations, development
projects and on new discoveries to continue developing the
Company's project pipeline. A total of 242,200 metres of drilling
at 12 mines and projects were completed as part of the 2013
exploration program.
Consistent with the Company's cost containment initiatives and
the focus on ounces that can best contribute to cash flow, the
Company has evaluated its exploration program and where prudent has
reallocated funds to those programs delivering the most encouraging
results.
The following summary highlights key updates from the
exploration program at the Company for 2013.
Chapada, Brazil
The focus of the 2013 exploration program at Chapada was the
completion of an infill program at Corpo Sul to further upgrade the
mineral resources to mineral reserves. The program at Chapada
included 3,545 metres in 51 holes with very favorable results.
Closer spaced drilling identified southwest trending high grade
gold and copper mineralized zones that will improve the average
grade of the Corpo Sul and Chapada deposits and add both copper
pounds and gold ounces to the mineral resource and mineral reserve
inventory. Exploration efforts at Chapada have resulted in
increased gold and copper mineral reserves for year end 2013 and
have developed important additional targets that will be tested in
2014. The Chapada near mine exploration program investigated
several targets including Hidrothermalito Sul, South Mundinho,
Suruca and Suruca West using geophysics, geologic mapping and
stream and outcrop geochemical sampling to develop drill
targets.
Hidrothermalito Sul - Assay results received early in the fourth
quarter define drill intercepts of anomalous gold up to 12 metres
in length in several holes The Company is encouraged by these
initial results and will incorporate this information to develop
new targets to be tested in 2014.
Suruca - Final assay results from the 50 by 50 metre infill
drill program are in hand and will be evaluated for mineral
resource and mineral reserve potential in 2014.
Arco Sul - Arco Sul is a discovery made in late 2010 located in
Western Goias State, 260 kilometres southwest of Yamana's Chapada
mine. Grade shell models were constructed during the fourth quarter
utilizing a 1.5 g/t cut-off grade for the high grade envelopes and
0.5 g/t Au for the low grade envelopes for both the Lavrinha and
Vital deposits. A total of 16 mineral zones are defined at Lavrinha
and 11 at Vital. Mineral resources will be reported internally at a
1.5, 2.0 and 2.5 cut-off grade to help define deposit economics and
sensitivity.
Ernesto/Pau-a-Pique, Brazil
The 2013 exploration program included a total of 13,928 meters
that were completed in 95 drill holes investigating near-mine
targets and extensions. This program discovered several new mineral
traps that host potential ore grade gold mineralization which may
lead to higher production rates and extend the life of mine
profile. Surface mapping and geochemical sampling located the
Upper, Bonus and Ponces Lacerda traps, which are new discoveries on
the surface, and drilling has confirmed that the Upper and Bonus
traps extend laterally and down dip.
Pilar, Brazil
Underground mapping and sampling along with computer modeling of
drill data has identified moderate to high grade inferred resource
ore shoots that will be drill-tested from the surface during 2014
to expand the mineral resource and mineral reserve base at
Pilar.
Maria Lazarus - The Maria Lazarus target is located 15
kilometres west of the Pilar mine in the Guarinos greenstone belt.
The Maria Lazarus access ramp drilling was completed in October
with 1,002 metres drilled in 13 holes. A geologic model of Maria
Lazarus was developed outlining eight identifiable units including
quartz-biotite-chlorite schist which hosts the majority of the gold
bearing quartz and quartz-albite vein mineralization at Maria
Lazarus. The mineral resource model was also developed into three
regions (south, central and north) and divided into five levels.
The mineral zones at Maria Lazarus dip 40-50 degrees and are
thought to be extractable using common underground mining
techniques.
Caiamar - Geologic work was focused on mapping the underground
exposures. Mapping identified two main phases of deformation via
thrust faulting and northwestern to southeastern structural
movement.
C1 Santa Luz, Brazil
The 2013 exploration program was successful in identifying and
outlining a deep down dip extension to the C1 near-surface deposit
that will add important ounces and grade to the mineral resource
inventory. The new mineralization is thought to be of sufficient
width and grade to be economically extracted using common
underground mining techniques. An economic evaluation will be
initiated in 2014.
During the year, the near-mine and district exploration drill
programs completed 21,332 metres distributed in 66 holes. The near
mine program tested the up-dip extension of the southwestern deep
target and completed infill holes and tested the northern
extensions at Antas III. The regional program tested the Gravata
and Rancho do Carneiro targets. Results from both programs are in
line with prior results and are being evaluated for economic
potential.
Results of additional surveys to be performed to collect IP
Resistivity data at C1 and Magnetotellurics (MT) activity over the
meta-volcanic rocks to the west will be incorporated into the
exploration program for 2014.
Cerro Moro, Argentina
The focus of the 2013 exploration program was to develop and
test new targets that are both within and outside of the known
mineralized structural blocks. During the fourth quarter, 1,077
metres in five holes were drilled to complete the 2013 exploration
drill program. This drilling tested the Carlita, Patricia and
Margarita veins in an effort to build and expand the known
mineralization envelopes. The final hole of the year drilled at the
southeast end of the Margarita system cut important gold and silver
values directly beneath the P0/P1 contact leaving the structure
open to the southeast and to depth.
Following completion of the exploration drill program, the
geology department focused on end of year data compilation, local
mapping and sampling programs, development support activities,
mineral resource estimation and outlining the 2014 exploration
program.
Gualcamayo, Argentina
Due to positive results returned from drill holes testing the
Rodado southwest and beneath QDDLW early in the year, exploration
drilling was focused on Rodado southwest. During the fourth
quarter, two diamond core rigs completed a total of 3,878 metres
distributed in nine holes positioned from two underground drill
stations. Positive assay results from these holes continued to
expand the mineral envelope of Rodado southwest and the potential
ore body, which remains open along strike and down dip. This deep
mineralization is unoxidized and found largely within hydrothermal
and tectonic breccia. A feasibility study is needed to determine
the viability of the mineral zones.
El Peñón, Chile
The 2013 exploration program tested the limits of near-mine
veins and ore zones for extensions and probed the limits of the El
Peñón mine complex for new discoveries. Both programs were
successful in finding new veins, such as the NW("north west")1, NW2
and NW3 structures within the Providencia system and the a new vein
structure referred to as the Borde Oeste vein located one kilometer
east of the Cerro Martillo operations. Both discoveries will be
subject to infill drilling during 2014 to upgrade the mineral
resources to mineral reserves and find a spot in the life of mine
production tables at El Peñón.
Surface and underground based drill-testing of targets within
the El Peñón mine area continued through the fourth quarter with
29,514 metres distributed in 95 holes completed, bringing the year
2013 drill totals to 93,333 metres completed in 298 holes.
Exploration and limited infill drill-testing of the NW1, NW2 and
NW3 targets within the Providencia structural trend continued along
with a similarly focused program on the newly discovered Borde
Oeste trend.
At the NW1, NW2 and NW3 northwest trending structures tested
within the Providencia system, narrow to moderate widths of
moderate to high grade gold and silver are being defined.
In an effort to expand near-mine targets and develop new
structures, long horizontal holes have been completed. One hole to
the west from the south end of the Providencia tunnel cut three
potential structural extensions as evidenced by narrow high grade
gold and silver assay results. The final 0.5 metre intercept of
moderate gold and silver values is 300 meters south of the Pampa
Campamento structure. These intercepts will be followed up with
both surface and underground based drilling in the first quarter of
2014.
Minera Florida, Chile
The 2013 exploration program at Minera Florida tested numerous
targets within the Mina Este structural zone adjacent to the
Milenium complex and Tribuna northwest, Sorpresa and Peumo to the
northwest, and also executed a near-mine exploration program,
testing surface targets close to the Minera Florida mine complex.
Exploration was successful testing most of the targets for mineral
resource extensions, added new mineral resource ounces and
developed new target areas for testing in 2014. In the fourth
quarter the program completed 4,510 metres distributed in 29 holes
. The program tested targets within Mina Este such as Triangulo
Mineralizado, Lisset and PVO and additional targets including
Tribuna, Victoria and Hallazgo. Assay results continue to show
positive results from most targets. As an example, a hole drilled
at the Triangulo Mineralizado target cut 10 mineral intercepts in
the first 70 metres of the hole that are characterized as narrow to
moderately wide zones of potential ore grade gold equivalent
grades.
The near-mine exploration program completed 3,069 metres in 13
holes to test the down dip extensions of the Las Lauras-Fantasma
and Gasparin-Lazo-Polvorin structural system from surface based
drill locations. Results received to date are mixed. The structural
trends were cut by all of the drill holes yet grade continuity was
not firmly established. Evaluation of the results is on-going.
Impairment
The Company assesses at the end of each reporting period whether
there is any indication, from external and internal sources of
information, that an asset or cash generating unit ("CGU") may be
impaired. Impairment testing is performed using life of mine
after-tax cash flow projections. During the second quarter, the
Company updated its after-tax life of mine cash flow projections
with updated economic assumptions as a result of the decline in
metal prices towards the latter half of the second quarter of 2013.
Based on its assessment during the second quarter, the Company
concluded that there were no impairment charges in respect to its
mineral properties as at June 30, 2013 as a result of the decline
in metal prices at that time. Adverse changes in metal price
assumptions were partially offset by other inputs that resulted in
lower costs and updated mine plans. The recoverable values in the
impairment assessment in the second quarter were calculated
assuming long-term prices of $1,375 per ounce of gold and $3.00 per
pound of copper.
In early October of 2013, after the spot price for gold returned
to the $1,350 per ounce level, it started a continuous decline
during the fourth quarter and dipped below $1,200 per ounce by late
December. During the fourth quarter, the Company performed its
impairment test updating its life of mine after-tax cash flow
projections for updated reasonable estimates of future metal
prices, production based on current estimates of recoverable
mineral reserves and mineral resources, recent operating and
exploration results, exploration potential, future operating costs,
capital expenditures, inflation and long-term foreign exchange
rates. The Company examined future cash flows, the intrinsic value
beyond proven and probable mineral reserves, value of land
holdings, as well as other factors, which are determinants of
commercial viability of each mining property in its portfolio, and
concluded that a total of $672.0 million ($563.9 million, net of
taxes) of impairment charges should be recognized. The impairment
charges in the fourth quarter include the following:
|
For the periods ended December 31, 2013 |
(in million dollars) |
Three months |
|
Twelve months |
|
Impairment |
|
After-tax Impairment |
|
Impairment |
|
After-tax Impairment |
Goodwill |
55.0 |
|
55.0 |
|
55.0 |
|
55.0 |
Ernesto/Pau-a-Pique |
175.0 |
|
168.2 |
|
175.0 |
|
168.2 |
Alumbrera (12.5% Interest) |
70.0 |
|
70.0 |
|
70.0 |
|
70.0 |
Jeronimo* |
110.0 |
|
88.0 |
|
110.0 |
|
88.0 |
Exploration properties |
262.0 |
|
182.8 |
|
272.3 |
|
193.0 |
Impairment on mineral properties |
672.0 |
|
563.9 |
|
682.3 |
|
574.2 |
Less: Non-controlling interest (43.3%) - Jeronimo |
|
|
-28.1 |
|
|
|
-28.1 |
Impact on net earnings |
|
|
535.8 |
|
|
|
546.1 |
* |
The
Company holds 56.7% interest in the Agua de La Falda ("ADLF")
project. The ADLF project is an exploration project which includes
the Jeronimo deposit and is located in northern Chile. |
The Company expects there is further or additional value in
these properties over and above what they are being written down to
but not metal price assumptions used in the impairment testing. The
valuation of impairment is based on current forecasts for long-term
metal prices which have been influenced by the recent decline in
spot prices over the last nine months of 2013. These metal price
assumptions are then held constant over mine lives which in some
cases are in excess of fifteen years. The fair values in the
impairment assessment in the fourth quarter were calculated
assuming long-term prices of $1,300 per ounce of gold and $3.00 per
pound of copper. The historical three-year average gold price was
approximately $1,550 per ounce well in excess of the long-term gold
price assumption used in its impairment testing. The Company
believes that it is prudent to update its metal price assumption
used in its impairment testing to reflect current forecasts and it
does not rely on higher prices to drive its business plans,
however, the Company remains positive on the long-term price
fundamentals for its metals. The Company will continue to monitor
the valuation of its assets and the impact of changes in economic
assumptions and mine plans on these valuations. Higher prices in
the future could result in greater volatility in earnings, as the
Company reassesses the fair value of its mineral properties and
could potentially reverse a portion or all of the impairment
charges taken.
In addition to the impairment charges mentioned above, an
additional $10.3 million (before and net of taxes) related to minor
exploration properties was recognized during the year on the
decision of not proceeding with further exploration and/or
disposition in the prior quarters of 2013, bringing the impairment
charges against mineral properties for the year to a total of
$682.3 million (574.2 million, net of taxes).
Further details of the 2013 fourth quarter and full year 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.
Q4 and Full Year 2013 Conference Call: |
|
Conference call information for Wednesday, February 19,
2013, 8:30 a.m. ET. |
|
Toll
Free (North America): |
1-800-355-4959 |
|
Toronto Local and International: |
416-695-6616 |
|
Webcast: |
http://www.yamana.com/ |
|
|
|
|
Conference Call REPLAY: |
|
|
|
|
|
Toll
Free (North America): |
1-800-408-3053 |
Passcode 9088417 |
Toronto Local and International: |
905-694-9451 |
Passcode 9088417 |
The conference call replay will be available from 2:00 p.m. ET
on February 19, 2014 until 11:59 p.m. ET on February 27, 2014.
For further information on the conference call or webcast,
please contact the Investor Relations Department at
investor@yamana.com or visit 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 throughout the Americas including
Brazil, Argentina, Chile and Mexico. 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.
Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore Processed |
|
Gold Grade g/t |
|
Silver Grade g/t |
|
Gold Recovery (% |
) |
Silver Recovery (% |
) |
Gold Ounces Produced |
|
Silver Ounces Produced |
|
GEO Produced |
|
GEO Sold |
|
Cash Cost per GEO |
El Peñón |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
1,422,054 |
|
7.94 |
|
187.16 |
|
93.0 |
|
75.7 |
|
338,231 |
|
6,464,623 |
|
467,523 |
|
466,093 |
|
$485 |
Q4 2013 |
352,276 |
|
6.46 |
|
183.42 |
|
93.0 |
|
80.3 |
|
68,246 |
|
1,655,910 |
|
101,364 |
|
99,546 |
|
$593 |
Q3 2013 |
351,795 |
|
8.26 |
|
201.99 |
|
93.5 |
|
77.0 |
|
87,968 |
|
1,768,205 |
|
123,333 |
|
130,014 |
|
$458 |
Q2 2013 |
356,607 |
|
8.66 |
|
187.09 |
|
92.6 |
|
71.2 |
|
91,861 |
|
1,514,057 |
|
122,142 |
|
118,977 |
|
$451 |
Q1 2013 |
361,377 |
|
8.37 |
|
176.43 |
|
93.0 |
|
74.0 |
|
90,155 |
|
1,526,451 |
|
120,684 |
|
117,557 |
|
$455 |
Total 2012 |
1,415,292 |
|
7.47 |
|
199.21 |
|
93.5 |
|
80.0 |
|
317,557 |
|
7,246,951 |
|
462,496 |
|
457,703 |
|
$440 |
Q4 2012 |
362,874 |
|
8.59 |
|
195.00 |
|
93.0 |
|
76.0 |
|
93,448 |
|
1,733,573 |
|
128,119 |
|
127,431 |
|
$415 |
Q3 2012 |
361,544 |
|
7.72 |
|
196.33 |
|
93.3 |
|
78.1 |
|
83,092 |
|
1,768,273 |
|
118,457 |
|
117,390 |
|
$422 |
Q2 2012 |
355,132 |
|
6.32 |
|
194.34 |
|
94.1 |
|
82.5 |
|
68,275 |
|
1,848,501 |
|
105,245 |
|
104,872 |
|
$491 |
Q1 2012 |
335,741 |
|
7.19 |
|
212.02 |
|
93.5 |
|
82.9 |
|
72,742 |
|
1,896,604 |
|
110,675 |
|
108,010 |
|
$442 |
Minera Florida |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
1,754,785 |
|
2.45 |
|
32.02 |
|
76.1 |
|
57.2 |
|
99,000 |
|
979,514 |
|
118,590 |
|
118,687 |
|
$747 |
Q4 2013 |
492,257 |
|
2.07 |
|
39.16 |
|
79.0 |
|
61.6 |
|
24,539 |
|
298,696 |
|
30,513 |
|
29,732 |
|
$592 |
Q3 2013 |
448,820 |
|
2.27 |
|
23.92 |
|
78.0 |
|
56.0 |
|
23,848 |
|
181,156 |
|
27,471 |
|
27,398 |
|
$762 |
Q2 2013 |
402,130 |
|
2.58 |
|
18.16 |
|
77.7 |
|
53.8 |
|
23,962 |
|
131,029 |
|
26,582 |
|
26,462 |
|
$915 |
Q1 2013 |
411,578 |
|
2.98 |
|
45.84 |
|
69.0 |
|
56.3 |
|
26,651 |
|
368,634 |
|
34,024 |
|
35,095 |
|
$744 |
Total 2012 |
902,788 |
|
3.34 |
|
39.29 |
|
81.1 |
|
67.6 |
|
89,163 |
|
825,812 |
|
105,679 |
|
107,198 |
|
$797 |
Q4 2012 |
222,440 |
|
3.53 |
|
46.90 |
|
81.6 |
|
69.8 |
|
27,889 |
|
245,393 |
|
32,797 |
|
33,244 |
|
$805 |
Q3 2012 |
227,246 |
|
2.97 |
|
37.16 |
|
80.5 |
|
67.3 |
|
19,994 |
|
210,297 |
|
24,200 |
|
24,371 |
|
$826 |
Q2 2012 |
224,107 |
|
3.15 |
|
43.31 |
|
80.8 |
|
69.6 |
|
19,179 |
|
239,931 |
|
23,978 |
|
23,229 |
|
$811 |
Q1 2012 |
228,994 |
|
3.70 |
|
25.23 |
|
81.4 |
|
62.4 |
|
22,101 |
|
130,191 |
|
24,705 |
|
26,354 |
|
$748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore Processed |
|
Gold Grade g/t |
|
Gold Recovery (% |
) |
GEO Produced |
|
GEO Sold |
By-Product Cash Cost per GEO |
|
Co-Product Cash Cost per GEO |
Chapada |
|
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
21,347,439 |
|
0.26 |
|
57.9 |
|
110,618 |
|
102,018 |
($1,296 |
) |
$400 |
Q4 2013 |
5,540,262 |
|
0.28 |
|
57.5 |
|
29,817 |
|
27,707 |
($1,547 |
) |
$377 |
Q3 2013 |
5,682,276 |
|
0.27 |
|
58.3 |
|
30,917 |
|
28,249 |
($1,367 |
) |
$358 |
Q2 2013 |
5,016,383 |
|
0.26 |
|
59.6 |
|
26,525 |
|
21,182 |
($490 |
) |
$421 |
Q1 2013 |
5,108,519 |
|
0.23 |
|
56.0 |
|
23,358 |
|
24,882 |
($1,769 |
) |
$463 |
Total 2012 |
21,591,482 |
|
0.29 |
|
59.4 |
|
128,172 |
|
121,030 |
($1,865 |
) |
$333 |
Q4 2012 |
5,734,592 |
|
0.28 |
|
59.4 |
|
32,498 |
|
29,331 |
($2,021 |
) |
$349 |
Q3 2012 |
5,566,744 |
|
0.30 |
|
58.6 |
|
33,610 |
|
29,883 |
($1,659 |
) |
$341 |
Q2 2012 |
5,802,649 |
|
0.30 |
|
59.8 |
|
35,697 |
|
35,847 |
($2,207 |
) |
$302 |
Q1 2012 |
4,487,496 |
|
0.29 |
|
59.6 |
|
26,367 |
|
25,969 |
($1,473 |
) |
$348 |
Jacobina |
|
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
1,575,629 |
|
1.57 |
|
92.2 |
|
73,695 |
|
77,190 |
|
|
$1,174 |
Q4 2013 |
396,235 |
|
1.64 |
|
93.2 |
|
19,519 |
|
19,105 |
|
|
$1,140 |
Q3 2013 |
380,054 |
|
1.66 |
|
95.4 |
|
19,325 |
|
18,017 |
|
|
$1,029 |
Q2 2013 |
384,614 |
|
1.55 |
|
90.8 |
|
17,485 |
|
19,350 |
|
|
$1,270 |
Q1 2013 |
414,725 |
|
1.45 |
|
90.0 |
|
17,366 |
|
20,718 |
|
|
$1,276 |
Total 2012 |
2,104,683 |
|
1.84 |
|
93.8 |
|
116,863 |
|
114,786 |
|
|
$747 |
Q4 2012 |
508,737 |
|
1.87 |
|
92.5 |
|
28,337 |
|
25,843 |
|
|
$825 |
Q3 2012 |
545,578 |
|
1.81 |
|
94.4 |
|
30,028 |
|
31,385 |
|
|
$768 |
Q2 2012 |
523,603 |
|
1.75 |
|
95.1 |
|
28,005 |
|
27,852 |
|
|
$735 |
Q1 2012 |
526,765 |
|
1.94 |
|
93.0 |
|
30,493 |
|
29,706 |
|
|
$666 |
Fazenda Brasileiro |
|
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
1,103,248 |
|
2.17 |
|
91.1 |
|
70,079 |
|
69,193 |
|
|
$808 |
Q4 2013 |
284,684 |
|
2.15 |
|
93.3 |
|
18,270 |
|
17,152 |
|
|
$809 |
Q3 2013 |
292,696 |
|
1.97 |
|
90.0 |
|
16,717 |
|
17,573 |
|
|
$724 |
Q2 2013 |
279,862 |
|
2.22 |
|
91.2 |
|
18,295 |
|
18,874 |
|
|
$782 |
Q1 2013 |
246,006 |
|
2.36 |
|
89.8 |
|
16,797 |
|
15,594 |
|
|
$920 |
Total 2012 |
1,048,489 |
|
2.22 |
|
89.5 |
|
67,130 |
|
66,805 |
|
|
$872 |
Q4 2012 |
270,998 |
|
2.28 |
|
91.8 |
|
18,251 |
|
17,773 |
|
|
$856 |
Q3 2012 |
255,769 |
|
2.52 |
|
89.6 |
|
18,601 |
|
20,448 |
|
|
$803 |
Q2 2012 |
251,430 |
|
2.27 |
|
88.4 |
|
16,219 |
|
14,048 |
|
|
$827 |
Q1 2012 |
270,292 |
|
1.84 |
|
88.1 |
|
14,059 |
|
14,536 |
|
|
$1,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Argentina |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore Processed |
|
Gold Grade g/t |
|
Gold Recovery (% |
) |
Gold Ounces Produced |
|
Gold Ounces Sold |
|
Cash Cost per GEO |
|
Gualcamayo |
|
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
6,568,912 |
|
0.88 |
|
72.5 |
|
120,337 |
|
111,134 |
|
$772 |
|
Q4 2013 |
1,561,180 |
|
1.61 |
|
43.7 |
|
34,929 |
|
34,264 |
|
$825 |
|
Q3 2013 |
1,298,811 |
|
0.86 |
|
75.8 |
|
27,678 |
|
20,570 |
|
$919 |
|
Q2 2013 |
1,915,698 |
|
0.51 |
|
87.2 |
|
27,553 |
|
27,770 |
|
$761 |
|
Q1 2013 |
1,793,223 |
|
0.67 |
|
79.0 |
|
30,177 |
|
28,530 |
|
$584 |
|
Total 2012 |
7,742,140 |
|
0.80 |
|
75.5 |
|
147,310 |
|
149,372 |
|
$536 |
|
Q4 2012 |
2,002,170 |
|
0.66 |
|
75.8 |
|
31,502 |
|
33,568 |
|
$485 |
|
Q3 2012 |
1,664,568 |
|
0.78 |
|
94.0 |
|
38,248 |
|
42,095 |
|
$669 |
|
Q2 2012 |
1,977,398 |
|
0.90 |
|
71.6 |
|
38,297 |
|
33,832 |
|
$547 |
|
Q1 2012 |
2,098,004 |
|
0.85 |
|
68.1 |
|
39,263 |
|
39,877 |
|
$436 |
|
Alumbrera |
|
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
4,671,322 |
|
0.37 |
|
70.0 |
|
39,157 |
|
34,521 |
|
($252 |
) |
Q4 2013 |
1,211,561 |
|
0.40 |
|
73.0 |
|
11,319 |
|
8,291 |
|
($261 |
) |
Q3 2013 |
1,101,433 |
|
0.37 |
|
73.9 |
|
9,634 |
|
10,677 |
|
($339 |
) |
Q2 2013 |
1,187,250 |
|
0.38 |
|
69.0 |
|
9,983 |
|
8,047 |
|
($115 |
) |
Q1 2013 |
1,171,078 |
|
0.34 |
|
64.8 |
|
8,222 |
|
7,507 |
|
($303 |
) |
Total 2012 |
4,962,373 |
|
0.40 |
|
71.0 |
|
46,077 |
|
43,580 |
|
($1,203 |
) |
Q4 2012 |
1,305,186 |
|
0.36 |
|
71.0 |
|
10,769 |
|
13,546 |
|
($2,012 |
) |
Q3 2012 |
1,271,732 |
|
0.45 |
|
72.8 |
|
13,633 |
|
18,566 |
|
($2,254 |
) |
Q2 2012 |
1,218,825 |
|
0.44 |
|
71.2 |
|
12,359 |
|
3,242 |
|
$711 |
|
Q1 2012 |
1,166,630 |
|
0.36 |
|
67.5 |
|
9,317 |
|
8,227 |
|
($1,270 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore Processed |
|
Gold Grade g/t |
|
Silver Grade g/t |
|
Gold Recovery (% |
) |
Silver Recovery (% |
) |
Gold Ounces Produced |
|
Silver Ounces Produced |
|
GEO Produced |
|
GEO Sold |
|
Cash Cost per GEO |
Mercedes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
670,867 |
|
6.16 |
|
79.39 |
|
94.5 |
|
34.4 |
|
129,327 |
|
614,562 |
|
141,618 |
|
146,438 |
|
$496 |
Q4 2013 |
169,768 |
|
5.58 |
|
72.84 |
|
94.3 |
|
35.5 |
|
28,821 |
|
144,715 |
|
31,716 |
|
33,062 |
|
$656 |
Q3 2013 |
171,556 |
|
5.83 |
|
68.66 |
|
94.1 |
|
29.4 |
|
31,765 |
|
116,840 |
|
34,102 |
|
33,627 |
|
$478 |
Q2 2013 |
164,422 |
|
6.74 |
|
90.61 |
|
94.5 |
|
34.4 |
|
35,701 |
|
176,205 |
|
39,226 |
|
37,593 |
|
$363 |
Q1 2013 |
165,122 |
|
6.54 |
|
86.09 |
|
95.0 |
|
39.0 |
|
33,039 |
|
176,801 |
|
36,575 |
|
42,156 |
|
$519 |
Total 2012 |
603,188 |
|
6.43 |
|
78.42 |
|
94.8 |
|
32.0 |
|
116,215 |
|
489,747 |
|
126,010 |
|
126,515 |
|
$485 |
Q4 2012 |
164,285 |
|
7.38 |
|
85.17 |
|
95.8 |
|
39.0 |
|
36,057 |
|
169,313 |
|
39,443 |
|
36,879 |
|
$435 |
Q3 2012 |
151,415 |
|
6.77 |
|
74.23 |
|
94.5 |
|
29.6 |
|
31,497 |
|
110,817 |
|
33,713 |
|
31,835 |
|
$490 |
Q2 2012 |
151,425 |
|
5.53 |
|
70.63 |
|
94.9 |
|
30.8 |
|
26,646 |
|
112,729 |
|
28,900 |
|
28,760 |
|
$499 |
Q1 2012 |
136,063 |
|
5.90 |
|
83.62 |
|
93.7 |
|
28.4 |
|
22,016 |
|
96,887 |
|
23,953 |
|
29,041 |
|
$534 |
|
|
|
|
|
|
|
|
|
|
|
|
Copper Production |
|
|
|
|
|
|
|
|
|
|
|
|
Ore Processed |
|
Copper Ore Grade |
|
Copper Recovery (% |
) |
Copper Produced (M lbs. |
) |
Copper Sold (M lbs. |
) |
Cash costs per pound of copper |
Chapada |
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
21,347,439 |
|
0.35 |
|
79.7 |
|
130.2 |
|
126 |
|
$1.65 |
Q4 2013 |
5,540,262 |
|
0.37 |
|
80.4 |
|
36 |
|
34.5 |
|
$1.53 |
Q3 2013 |
5,682,276 |
|
0.36 |
|
80.9 |
|
36.8 |
|
35.7 |
|
$1.48 |
Q2 2013 |
5,016,383 |
|
0.34 |
|
80.2 |
|
30.1 |
|
26.7 |
|
$1.76 |
Q1 2013 |
5,108,519 |
|
0.31 |
|
77.0 |
|
27.4 |
|
29.1 |
|
$1.90 |
Total 2012 |
21,591,482 |
|
0.39 |
|
82.2 |
|
150.6 |
|
139.0 |
|
$1.40 |
Q4 2012 |
5,734,592 |
|
0.40 |
|
81.1 |
|
40.5 |
|
37.3 |
|
$1.38 |
Q3 2012 |
5,566,744 |
|
0.40 |
|
80.6 |
|
39.4 |
|
37.1 |
|
$1.38 |
Q2 2012 |
5,802,649 |
|
0.38 |
|
83.3 |
|
40.4 |
|
37.4 |
|
$1.34 |
Q1 2012 |
4,487,496 |
|
0.36 |
|
84.0 |
|
30.3 |
|
27.3 |
|
$1.51 |
Alumbrera |
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
4,671,322 |
|
0.37 |
|
79.0 |
|
30.2 |
|
25.8 |
|
$2.21 |
Q4 2013 |
1,211,561 |
|
0.43 |
|
84.0 |
|
9.6 |
|
6.6 |
|
$1.75 |
Q3 2013 |
1,101,433 |
|
0.36 |
|
80.7 |
|
7.1 |
|
7.3 |
|
$2.45 |
Q2 2013 |
1,187,250 |
|
0.40 |
|
76.0 |
|
7.2 |
|
6.5 |
|
$2.40 |
Q1 2013 |
1,171,078 |
|
0.32 |
|
75.2 |
|
6.3 |
|
5.5 |
|
$2.40 |
Total 2012 |
4,962,373 |
|
0.40 |
|
84.0 |
|
37.4 |
|
35.4 |
|
$1.81 |
Q4 2012 |
1,305,186 |
|
0.30 |
|
85.0 |
|
8.5 |
|
11.1 |
|
$2.15 |
Q3 2012 |
1,271,732 |
|
0.44 |
|
85.1 |
|
10.4 |
|
14.8 |
|
$1.92 |
Q2 2012 |
1,218,825 |
|
0.45 |
|
85.9 |
|
10.5 |
|
2.3 |
|
$1.41 |
Q1 2012 |
1,166,630 |
|
0.40 |
|
79.4 |
|
8.0 |
|
7.2 |
|
$1.85 |
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 expected production and
exploration, development and expansion plans at the Company's
projects discussed herein being met, the impact of proposed
optimizations at the Company's projects, the impact of the proposed
new mining law in Brazil and 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, the Argentine Peso,
and the Mexican Peso versus the United States Dollar), the impact
of inflation, possible variations in ore grade or recovery rates,
changes in the Company's hedging program, changes in accounting
policies, changes in mineral resources and mineral reserves, risk
related to non-core mine dispositions, risks related to
acquisitions, 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 and the risk of government
expropriation or nationalization 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 current and annual Management's Discussion and Analysis
and the Annual Information Form filed with the securities
regulatory authorities in all provinces of Canada and available at
www.sedar.com, and the Company's Annual Report on Form 40-F filed
with the United States Securities and Exchange Commission. Although
the Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results not to be
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. The Company undertakes no
obligation to update forward-looking statements if circumstances or
management's estimates, assumptions or opinions should change,
except as required by applicable law. The reader is cautioned not
to place undue reliance on forward-looking statements. The
forward-looking information contained herein is 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.
CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING ESTIMATES
OF MEASURED, INDICATED AND INFERRED MINERAL RESOURCES
This news release uses the terms "mineral resource", "measured
mineral resource", "indicated mineral resource" and "inferred
mineral resource" are defined in and required to be disclosed by NI
43-101. However, these terms are not defined terms under Industry
Guide 7 and are not permitted to be used in reports and
registration statements of United States companies filed with the
Commission. Investors are cautioned not to assume that any part or
all of the mineral deposits in these categories will ever be
converted into mineral reserves. "Inferred mineral resources" have
a great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource
will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of
feasibility or pre-feasibility studies, except in rare cases.
Investors are cautioned not to assume that all or any part of an
inferred mineral resource exists or is economically or legally
mineable. Disclosure of "contained ounces" in a mineral resource is
permitted disclosure under Canadian regulations. In contrast, the
Commission only permits U.S. companies to report mineralization
that does not constitute "mineral reserves" by Commission standards
as in place tonnage and grade without reference to unit measures.
Accordingly, information contained in this news release may not be
comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements under the
United States federal securities laws and the rules and regulations
of the Commission thereunder.
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
MD&A, except that 2010 financial data is presented in
accordance with previous Canadian GAAP.
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.
Gold equivalent ounces assumes gold plus the gold equivalent of
silver using a ratio of 50:1.
CASH COSTS
The Company discloses "cash costs" 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 International
Financial Reporting Standards ("IFRS") do not fully illustrate the
ability of its operating mines to generate cash flows. The
measures, as determined under IFRS, are not necessarily indicative
of operating profit or cash flows from operations. Average cash
costs figures are calculated in accordance with a standard
developed by The Gold Institute, which was a worldwide association
of suppliers of gold and gold products and included leading North
American gold producers. The Gold Institute ceased operations in
2002, but the standard remains the generally accepted standard of
reporting cash costs of production in North America. Adoption of
the standard is voluntary and the cost measures presented herein
may not be comparable to other similarly titled measures of other
companies. Cash costs include mine site operating costs such as
mining, processing, administration, royalties and production taxes,
but are exclusive of amortization, reclamation, capital,
development and exploration costs. Cash costs are computed both on
a co-product, by-product and all-in sustaining basis.
Cash costs per gold equivalent ounce on a by-product basis is
calculated by applying zinc and copper net revenue as a credit to
the cost of gold production and as such the by-product gold
equivalent ounce cash costs are impacted by realized zinc and
copper prices. These costs are then divided by gold equivalent
ounces produced. Gold equivalent ounces are determined by
converting silver production to its gold equivalent using relative
gold/silver metal prices at an assumed ratio and adding the
converted silver production expressed in gold ounces to the ounces
of gold production.
Cash costs on a co-product basis are computed by allocating
operating cash costs to metals, mainly gold and copper, based on an
estimated or assumed ratio. These costs are then divided by gold
equivalent ounces produced and pounds of copper produced to arrive
at the average cash costs of production per gold equivalent ounce
and per pound of copper, respectively. Production of zinc is not
considered a core business of the Company; therefore, the net
revenue of zinc is always treated as a credit to the costs of gold
production.
All-in sustaining cash costs seeks to represent total sustaining
expenditures of producing gold equivalent ounces from current
operations, including by-product cash costs, mine sustaining
capital expenditures, corporate general and administrative expense
excluding stock-based compensation and exploration and evaluation
expense. As such, it does not include capital expenditures
attributable to projects or mine expansions, exploration and
evaluation costs attributable to growth projects, income tax
payments, financing costs and dividend payments. Consequently, this
measure is not representative of all of the Company's cash
expenditures. In addition, our calculation of all-in sustaining
cash costs does not include depletion, depreciation and
amortization expense as it does not reflect the impact of
expenditures incurred in prior periods. This performance measure
has no standard meaning and is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures prepared in accordance with GAAP.
Cash costs per gold equivalent ounce and per pound of copper are
calculated on a weighted average basis.
The measure of cash costs, along with revenue from sales, is
considered to be a key indicator of a company's ability to generate
operating earnings and cash flow from its mining operations. This
data is furnished to provide additional information and is a
non-GAAP measure. It should not be considered in isolation as a
substitute for measures of performance prepared in accordance with
IFRS and is not necessarily indicative of operating costs,
operating profit or cash flows presented under IFRS.
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) share-based payments and other
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 and reversals, (f)
deferred income tax expense (recovery) on the translation of
foreign currency inter-corporate debt, (g) mark-to-market (gains)
losses on share-purchase warrants, (h) write-down of investments
and other assets and any other non-recurring adjustments.
Non-recurring adjustments from unusual events or circumstances 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. Reconciliations of Adjusted
Earnings to net earnings are provided in the Company's MD&A
Section 5 "Overview of Annual Results" and Section 6 "Overview of
Quarterly Results" for both the yearly and quarterly
reconciliations, respectively, found on the Company's website at
www.yamana.com.
ADDITIONAL MEASURES
The Company uses other financial measures the presentation of
which is not meant to be a substitute for other subtotals or totals
presented in accordance with IFRS, but rather should be evaluated
in conjunction with such IFRS measures. The following other
financial measures are used:
- Gross margin - represents the amount of revenues in excess of
cost of sales excluding depletion, depreciation and
amortization.
- Mine operating earnings - represents the amount of revenues in
excess of cost of sales excluding depletion, depreciation and
amortization and depletion, depreciation and amortization.
- Operating earnings - represents the amount of earnings before
net finance income/expense and income tax expense.
- Cash flows from operating activities before changes in non-cash
working capital - excludes the non-cash movement from
period-to-period in working capital items including accounts
receivable, advances and deposits, inventory, accounts payable and
accrued liabilities. Cash flows from operating activities before
changes in non-cash working capital per share is calculated by
dividing the cash flows generated from operations before changes in
non-cash working capital, as reported in the consolidated statement
of cash flows, by the basic weighted average number of common
shares outstanding of the corresponding period.
The terms described above 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. The Company's management believes that their
presentation provides useful information to investors because gross
margin excludes the non-cash operating cost item (i.e.
depreciation, depletion and amortization), Cash flows from
operating activities before changes in non-cash working capital
excludes the non-cash movement in working capital items, mine
operating earnings excludes expenses not directly associate with
commercial production and operating earnings excludes finance and
tax related expenses and income/recoveries. These, in management's
view, provide useful information of the Company's cash flows from
operations and are considered to be meaningful in evaluating the
Company's past financial performance or the future prospects.
Yamana Gold Inc.Lisa DoddridgeVice President, Corporate
Communications andInvestor Relations416-815-0220 or
1-888-809-0925investor@yamana.com
Yamana Gold (TSX:YRI)
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