Yamana is focused on ensuring production and cost stability at its cornerstone operations due to the ongoing volatility in precious metal prices. For Yamana, 2014 was a challenging year as some projects did not meet expectations. However, the company implemented plans to improve the outlook for these projects. The addition of Canadian Malartic in mid-2014 contributed significantly to an enhanced core portfolio, positioned to deliver high quality ounces. The focus on cornerstone operations has resulted in a core portfolio with a stabilized production and cost base, and sustainable cash flow levels. For 2015, Yamana expects to deliver production growth across its portfolio with gold production increasing by around 9% to 1.30 million ounces along with 9.6 million ounces of silver and 120 million pounds of copper. Gold production is expected to consist of about 1.17 million ounces of gold from the company's cornerstone operations and its other producing mines, and roughly 130,000 ounces attributable to Brio Gold consisting of 60,000 ounces from Fazenda Brasileiro and 70,000 ounces from Pilar. Expansionary capital spending for 2015 is expected to be roughly $90 million to $140 million, including initial capital spend on the construction of Cerro Moro and projects to increase recoveries at Chapada. The company remains committed to allocating capital to those opportunities that can most readily contribute to cash flow. Earnings Whispers Our proven model does not conclusively show that Yamana will beat the Zacks Consensus Estimate in the first quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below. Zacks ESP: The Earnings ESP for Yamana is 0.00% — as the Most Accurate estimate stands at a loss of 1 cent and the Zacks Consensus Estimate is at break-even.
Zacks Rank #3 (Hold): Yamana currently holds a Zacks Rank #3, which when combined with an ESP of 0.00% makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions. Stocks That Warrant a Look Here are some other companies in the basic materials sector you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter: AuRico Gold Inc. AUQ has an earnings ESP of +16.67% and a Zacks Rank #2 (Buy). Alamos Gold Inc. AGI has an earnings ESP of +50.00% and a Zacks Rank #3. Eldorado Gold Corp. EGO has an earnings ESP of +50.00% and a Zacks Rank #3. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report YAMANA GOLD INC (AUY): Free Stock Analysis Report ALAMOS GOLD INC (AGI): Free Stock Analysis Report ELDORADO GOLD (EGO): Free Stock Analysis Report AURICO GOLD INC (AUQ): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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