REVENUE INCREASES 22%, OPERATING CASH FLOW INCREASES 57%, RECORD
ADJUSTED EARNINGS INCREASES 63%
YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:YAU)
("Yamana" or "the Company") today announced its financial
and operating results for the third quarter of 2011.
HIGHLIGHTS FOR THE THIRD
QUARTER 2011
- Production
of 279,274 gold equivalent ounces (GEO)(1) at cash costs of $94
per GEO(2)(3)
- Gold production of
230,986 ounces
- Silver production of
2.4 million ounces
- Significant
financial and operational increases over the third quarter of 2010
- Production increased 4%
to 279,274 GEO
- Revenue increased 22%
to $555 million
- Record
adjusted earnings(2) increased 63% to $190 million,
$0.26 per share
- Cash
flow generated from operations(5) increased 57% to $330
million, $0.44 per share
- Generated
cash margin of $1,603 per ounce(4), an increase
of 36%
- Cash
and cash equivalents at September 30, 2011 were $570
million, a 73% increase from the beginning of the year
- Cash
flow generated from operations(5) increased 66% to over $945
million, $1.27 per share, as at September
30, 2011
- Dividend
increased for the second time this year to $0.20 per share
annually
"We continued to focus
on delivering growth across all measures, enhancing shareholder value and
generating significant cash flow in the third quarter.� We continued to
make progress at our four development projects and we will see a first gold
pour at Mercedes before year end.� We also increased cash balances while
further reducing debt.� We have consistently said that the objective of
the Company is to generate increasing cash flow and as our cash flow reaches a
new sustainable level, we would evaluate further return of value to
shareholders with the dividend," commented Peter Marrone,
Chairman and CEO. "To that point, along with our other accomplishments in
the quarter, we are pleased that we have increased our dividend for the second
time this year and are now at a level of $0.20 per share
annually which represents an over 60 percent increase in the last twelve
months.� This further increase of $0.02 per share will take
effect at the end of this year and coincides with our newest mine coming into
production."
KEY STATISTICS
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Three months ended
Sept 30
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Nine months ended
Sept 30
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(In thousands of US dollars except where noted)
|
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2011
|
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�
|
�
|
2010
|
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�
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�
|
2011
|
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|
�
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�
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�
|
2010
|
Revenues
|
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|
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|
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$
|
�
|
555,211
|
�
|
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|
$
|
�
|
453,965
|
�
|
�
|
$
|
�
|
1,604,571
|
�
|
�
|
$
|
�
|
1,151,681
|
Cost of sales excluding depletion, depreciation and
amortization
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
189,429
|
�
|
�
|
�
|
�
|
171,913
|
�
|
�
|
�
|
�
|
538,308
|
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|
�
|
�
|
�
|
452,722
|
Depletion,
depreciation and amortization
|
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|
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|
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|
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|
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|
93,619
|
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|
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|
�
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�
|
79,485
|
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|
�
|
�
|
�
|
263,148
|
�
|
�
|
�
|
�
|
218,255
|
General
and administrative expenses
|
�
|
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|
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|
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|
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|
27,470
|
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24,719
|
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|
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|
�
|
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|
89,038
|
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|
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|
�
|
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|
79,364
|
Exploration
expenses
|
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|
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7,741
|
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�
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|
12,249
|
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|
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|
�
|
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|
23,318
|
�
|
�
|
�
|
�
|
29,699
|
Operating
Earnings
|
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|
229,776
|
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|
171,737
|
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|
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|
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|
697,116
|
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|
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|
�
|
�
|
392,936
|
Equity
earnings from Alumbrera
|
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|
9,425
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|
10,689
|
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|
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|
�
|
�
|
37,750
|
�
|
�
|
�
|
�
|
30,140
|
Net
earnings
|
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|
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|
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|
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|
�
|
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|
�
|
115,767
|
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|
�
|
�
|
�
|
139,243
|
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|
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|
�
|
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|
458,696
|
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|
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|
�
|
�
|
340,918
|
Adjusted
earnings
|
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|
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|
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|
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|
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|
�
|
�
|
190,267
|
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|
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|
�
|
�
|
117,254
|
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|
�
|
�
|
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|
528,654
|
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|
�
|
�
|
�
|
277,225
|
Adjusted
earnings per share
|
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|
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|
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|
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|
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|
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|
0.26
|
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0.16
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|
0.71
|
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|
0.38
|
Cash flow generated from operations after changes in
working capital
|
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|
342,268
|
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|
162,279
|
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|
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|
886,932
|
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430,824
|
Per
share
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0.46
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0.22
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1.19
|
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�
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�
|
0.58
|
Cash flow generated from operations before changes
in
working capital
|
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� � �
330,522
|
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210,852
|
�
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|
945,939
|
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567,997
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Per
share
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� � � 0.44
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� 0..28
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� � 1.27
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0.77
|
Average realized gold price per ounce
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$
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$
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� � � 1,235
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$
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� � �
1,532
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$
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� 1,186
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Average realized� silver price per ounce
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$
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� � 37.52
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$
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� � � 19.73
|
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$
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36.42
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$
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� � �
� 18.37
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Average realized copper price per pound
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$
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� � �
� � � � 3.98
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$
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� � � 3.27
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$
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4..15
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$
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|
PRODUCTION SUMMARY
FINANCIAL AND OPERATING SUMMARY
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Three months ended
Sept 30
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Nine months ended
Sept 30
|
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2011
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2010
|
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|
2011
|
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2010
|
Total gold equivalent ounces - produced
|
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|
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|
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|
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|
�
|
�
|
279,274
|
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|
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|
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|
267,409
|
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|
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|
�
|
825,379
|
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|
�
|
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|
760,509
|
� � � �
|
Gold
produced
|
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|
�
|
�
|
�
|
230,986
|
�
|
�
|
�
|
�
|
222,299
|
�
|
�
|
�
|
�
|
684,613
|
�
|
�
|
�
|
�
|
621,361
|
� � � �
|
Silver produced (millions of ounces)
|
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|
2.4
|
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2.5
|
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|
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|
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|
7.0
|
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|
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|
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|
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|
7.7
|
Total gold equivalent ounces - sold
|
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|
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|
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|
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|
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|
277,528
|
�
|
�
|
�
|
�
|
271,942
|
�
|
�
|
�
|
�
|
817,321
|
�
|
�
|
�
|
�
|
768,033
|
Total copper� produced - Chapada (millions of
pounds)
|
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|
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|
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|
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|
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|
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|
41.4
|
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|
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|
42.8
|
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|
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|
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|
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|
120.6
|
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|
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|
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|
�
|
109.5
|
Total copper sold - Chapada (millions of pounds)
|
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|
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|
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|
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|
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|
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|
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|
38.7
|
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|
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|
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|
43.5
|
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|
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|
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|
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|
110.0
|
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|
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|
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|
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|
104.2
|
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|
Three months ended
Sept 30
|
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|
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|
Nine months ended
Sept 30
|
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|
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|
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|
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|
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|
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|
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|
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|
2011
|
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|
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|
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|
2010
|
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|
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|
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|
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|
2011
|
�
|
�
|
�
|
�
|
2010
|
Co-product cash costs per gold equivalent ounce
|
�
|
�
|
�
|
�
|
�
|
$
|
�
|
468
|
�
|
�
|
$
|
�
|
439
|
�
|
�
|
$
|
�
|
456
|
�
|
�
|
$
|
�
|
433
|
� � � �
|
Cash cost per pound of copper (2) -
Chapada
|
�
|
�
|
�
|
�
|
�
|
$
|
�
|
1.45
|
�
|
�
|
$
|
�
|
1.14
|
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|
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|
$
|
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|
1.33
|
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|
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|
$
|
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|
1.16
|
By-product cash costs per gold equivalent ounce(2)
|
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|
�
|
�
|
�
|
�
|
$
|
�
|
� � 94
|
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|
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|
$
|
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|
� � 58
|
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|
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|
$
|
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9
|
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$
|
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|
� � 82
|
Revenues were $555.2
million in the third quarter on the sale of 214,980 ounces of gold, 2.6
million ounces of silver, and 38.7 million pounds of copper, compared with $454.0
million in the same quarter of 2010 on the sale of 217,094 ounces of
gold from continuing operations excluding Alumbrera, 2.5 million ounces of
silver and 43.5 million pounds of copper from continuing operations excluding
Alumbrera. Alumbrera is accounted for as an equity investment. Higher revenues
contributed to higher mine operating earnings of $272.2 million
in the quarter, compared to $202.6 million in the third quarter
of 2010.
Revenues were over $1.6
billion in the nine months of 2011 consisting of sales of 643,491
ounces of gold, 6.9 million ounces of silver, and 110.0 million pounds of
copper excluding Alumbrera, compared with $1.2 billion in the
same quarter of 2010 on the sale of 591,361 ounces of gold, 7.7 million ounces
of silver and 104.2 million pounds of copper excluding Alumbrera.
Adjusted earnings were $190.3
million or $0.26 per share in the third quarter of 2011
compared with $117.3 million or $0.16 per share
in the same quarter of 2010 representing an increase of 63% on a per share
basis. Higher adjusted earnings in the third quarter of 2011 were mainly due to
an increase in operating margins as a result of favourable metal prices.
Adjusted earnings were $528.7
million or $0.71 per share in the nine months of 2011
compared with $277.2 million or $0.38 per share
in the same nine-month period of 2010 representing an increase of 87% on a per
share basis. Higher adjusted earnings in the nine months of 2011 were mainly
due to an increase in adjusted mine operating earnings on cost containment,
strong prices for gold, silver and copper compared with the same period of
2010.
Net earnings for the quarter
were $115.8 million or $0.16 per share on a basic
and diluted basis, compared with net earnings of $139.2 million
or $0.19 per share for the third quarter of 2010. The decrease
in earnings for the quarter was fully attributable to unrealized foreign exchange
losses that are excluded from adjusted earnings as these are non-cash and
unrealized. The total impact on earnings for the quarter due to unrealized
foreign exchange losses was $76.4 million or $0.10
per share of which $25.5 million is presented in finance expense
and $50.9 million in income tax expense. Operating earnings were
$229.8 million for the quarter compared with $171.7
million for the third quarter of 2010, representing an increase of 34%.
Net earnings for the nine
months were $458.7 million compared with net earnings of $340.9
million for the nine months of 2010, which included earnings from
discontinued operations of $11.3 million. Earnings per share
increased 38% to $0.62 on a basic and diluted basis for the
nine-month period of 2011, compared with basic and diluted earnings per share
of $0.45 for the same period in 2010.
The Company recorded equity
earnings from its 12.5% interest in Alumbrera of $9.4 million
for the quarter, compared with $10.7 million attributable to the
Company in the quarter ended September 30, 2010. In the quarter,
the Company did not receive any cash dividends from Alumbrera compared to the
receipt of $6.6 million in the third quarter of 2010..�
Subsequent to the quarter end, the Company received $23.75 million
in dividends from Alumbrera.
Cash flows generated from
continuing operations before changes in working capital were $330.5
million or $0.44 per share in the third quarter of 2011
compared with $210.9 million or $0.28 per share
for the third quarter of 2010. Cash flows generated from continuing operations
before changes in working capital were $945.9 million or $1.27
per share for the nine months ended September 30, 2011 compared
to $568.0 million or $0.77 per share for the same
period last year.� Cash flows generated from operating activities from
continuing operations after changes in non-cash working capital were $342.3
million for the third quarter compared with $162.3 million
for the quarter ended September 30, 2010. Cash flows generated
from operating activities from continuing operations after changes in non-cash
working capital were $886.9 million compared to $430.8
million for the nine months ended September 30, 2011
versus the same period last year. The increase in cash flows from operations
was primarily due to an increase in gold, silver and copper prices generating
higher sales revenues.
The Company is well
positioned to meet its financial obligations. Cash and cash equivalents as at September
30, 2011 were $570.5 million, representing an increase
of $240.0 million since December 31, 2010, as a
result of increased cash flows from operating activities. During the quarter, a
total of $30 million of debt repayments and payment of dividends
of $22.4 million (third quarter 2010: $11.3 million)
were made.� The Company received $20.0 million of option
payment related to the sale of the Agua Rica project in the quarter.
In the three months ended September
30, 2011, production of gold equivalent ounces totaled 279,274 GEO
compared with 267,409 GEO in 2010, representing a quarter-over-quarter increase
of 4%. Copper production of 41.4 million pounds from Chapada decreased by 3%
over production of 42.8 million pounds in the three months ended September
30, 2010. Additionally, 9.5 million pounds of copper produced from
Alumbrera were attributable to the Company in the third quarter of 2011,
compared to 8.3 million pounds in the quarter ended September 30, 2010.
For the quarter, by-product
cash costs were $94 per GEO compared with $58 per
GEO in the third quarter of 2010.
The Company continues to
operate with by-product cash costs below $250 per GEO, as
previously guided, reflecting the Company's cost containment efforts.�
By-product cash costs take into account the natural hedge between by-product
metal prices and the Company's production cost structure. The Company's
by-product credits from copper sales inherently offset unusually high mining
inflation during periods of high metal prices. The copper market remains tighter
than markets for most other base metals. Inventories are relatively low, there
is little excess mine capacity, and mine utilization rates remain high,
supporting strong pricing with expected price volatility in the short to medium
term.
Quarter-over-quarter cash
costs were also impacted by movements in foreign exchange currencies. The value
of the Chilean Peso increased by 12% and the Brazilian Real increased by 8%
against the United States
Dollar. The Company has hedged approximately 55% of the operating expenses of
its mines in Brazil
for the remainder of the year with an average contract rate of 2.08 Reais per
United States Dollar that largely offset the foreign exchange losses related to
operating expenses incurred in Reais.
Average co-product cash costs
for the quarter were $468 per GEO including Alumbrera,
representing a 7% increase from $439 per GEO for the third
quarter of 2010. Reliability of operations and cost management improvement
allowed the Company to mitigate the adverse impact of a strong Brazilian Real
and Chilean Peso.
Co-product cash costs per
pound of copper were $1.45 for the quarter from Chapada,
compared with $1.14, and co-product cash costs including the
Company's interest in the Alumbrera Mine were $1.48
per pound of copper, compared with $1.20 for the quarter ended September
30, 2010.
OPERATING MINES
A summary of mine-by-mine
operating results can be found on the final page of this press release.
Chapada, Brazil
Chapada produced a total of 36,075 ounces of gold contained in concentrate in
the third quarter compared with 40,405 ounces of gold in concentrate in the
third quarter of 2010.. Chapada copper production of 41.4 million pounds in the
third quarter was 3% lower than the production of 42.8 million pounds of copper
contained in concentrate during the comparable period in 2010. Lower production
of both gold and copper in the quarter compared with the third quarter of 2010
was mainly due to lower tonnage of ore mined and processed and lower gold grade
partly offset by improved gold and copper recovery rates.
Copper contained in
concentrate has remained within the range of 35-40 million pounds per quarter.
By-product cash costs for
the quarter were negative $2,045 per ounce, compared with
negative $1,856 per GEO for the same quarter of 2010.
Higher by-product cash costs credits reflect the strength of copper prices
compared to prior year, especially in the first half of the quarter, resulting
in lower by-product cash costs.
Co-product cash costs for
the quarter were $329 per gold ounce and $1.45
per pound of copper compared to $301 per gold ounce and $1.14
per pound of copper for the same quarter of 2010. The increase in co-product
cash costs per ounce of gold and per pound of copper is primarily due to lower
grade and mining inflationary pressures.
Chapada revenues for the
quarter net of sales taxes and treatment and refining costs were $149.1
million. Revenues included mark-to-market adjustments and final and
provisional pricing settlements in the quarter of negative $41.6 million.
During the quarter,
drilling at Corpo Sul has identified an extension of gold and copper
mineralization now traced along a strike length of 3 kilometres, and
mineralization remains open along strike to the southwest and down dip. Results
were received from 9,208 metres of drilling in 47 drill holes. With the
discovery of Corpo Sul this year and Suruca in 2010, gold and copper
mineralization has now been identified along a strike length of over 12
kilometres. A first mineral resource estimate of the new Corpo Sul discovery
will be completed during the fourth quarter of 2011. Completion of the
feasibility study for the Suruca heap leach oxide project northeast of Chapada
is expected by December 2011.
The Company is evaluating
Corpo Sul as a shallow low strip ratio open pit satellite operation that would
contribute to copper and gold production at Chapada from 2014 onward, with
grades that are believed to be greater than the grades the Company would
otherwise be mining from the main Chapada pit.
A feasibility study for
Suruca is currently underway with the focus primarily on an initial average
gold contribution of approximately 40,000 to 50,000 ounces per year beginning
in 2014 from oxide ore. Completion of the feasibility study is expected by January
2012. Development plans and permitting are in progress for a heap leach
operation to supplement production from the main Chapada pit.
Cumulatively, with the
contributions to gold production expected from Suruca oxide ore, along with an
anticipated Corpo Sul contribution to copper and gold production, overall
copper and gold production would exceed currently planned production at Chapada
beginning in 2014.
During the remainder of
2011, diamond drilling continues to focus on the expansion and delineation of
mineralization at Corpo Sul and the southern extension of Suruca towards the
Chapada pit.
Jacobina, Brazil
Production at Jacobina was 31,567 ounces of gold in the third quarter, compared
with production of 33,637 ounces of gold in the third quarter of 2010. The
decrease in production was mainly due to lower tonnage of ore processed and
lower feed grade. Production for the quarter was on plan which anticipated
lower grades.
Cash costs averaged $654
per ounce of gold for the third quarter compared with $463 per
ounce of gold in the third quarter of 2010 mainly due to the impact of lower
grade, general mining inflation and the appreciation of the Brazilian Real.
The objectives of the 2011
exploration program at Jacobina are to upgrade current mineral resources to
mineral reserves at Canavieiras and Morro do Vento, to improve overall mineral
reserve grade for the mine, and to add new mineral resources along strike
extensions in those zones. The 2011 exploration budget of $5 million
includes 14,000 metres of diamond drilling.
The Company continues to
focus on upgrading the current mineral resources to mineral reserves at
Canavieiras and Morro do Vento and improving overall mineral reserve grade for
the mine. Mining of higher grade areas could increase average annual production
at Jacobina to 150,000 gold ounces beginning in 2014.� Production
increases from higher grade and new gold ounces from new areas will utilize the
existing processing capacity.
Fazenda Brasileiro,
Brazil
The Fazenda Brasileiro Mine produced 14,335 ounces of gold
in the quarter ended September 30, 2011. This compares to 17,161
ounces of gold in the third quarter of 2010. Cash costs for the third quarter
were $940 per ounce compared with $620 per ounce
for the same period in 2010. Grade for the quarter was 1.99 g/t compared to
2.14 g/t for the comparative quarter last year, representing an expected
decline in grade of 7%, which impacted cash costs.� Appreciation of the
Brazilian Real relative to the United States Dollar also impacted cash costs.
The Fazenda Brasileiro mine
was acquired in 2003 with 2.5 years of mine life remaining based on known
mineral reserves. The Company has since been mining at Fazenda Brasileiro for
seven years. The mine continues to further outline exploration potential and
resource additions are expected in 2011..
The two new mineralization
zones, CLX2 and Lagoa do Gato, both discovered in 2009, are identified as
having significant potential for high-grade sources of ore for the mill. Both
infill and extension drilling confirm the continuity of mineralization in both
areas. In 2011, the Company continues to develop the high-grade mineral
reserves at CLX2, improve mine fleet costs using road trucks and focus on
continuing to extend Fazenda Brasileiro's mine life.
El Peñón, Chile
El Peñón produced 120,627 GEO during the third quarter of 2011. Production
for the quarter consisted of 76,347 ounces of gold and 2.2 million ounces of
silver, compared with 105,212 GEO, which consisted of 63,417 ounces of gold and
2.3 million ounces of silver produced in the third quarter of 2010. This
represents a 15% quarter-over-quarter increase in 2011 versus 2010 production
on a GEO basis.
Higher GEO production was
mainly due to improved gold grade and better recovery rates for gold and silver
compared with the same quarter of 2010. Higher grade areas including Al
Este and Bonanza contributed to the increase in GEO production. As
well, since conversion to owner-mining, operational dilution has decreased and
feed grade has improved. This combined with increased capacity has led to
increased production. The decrease in silver production was primarily the
result of lower tonnage processed.
Cash costs were $407
per GEO in the quarter ended September 30, 2011, representing a
12% improvement, compared with $461 per GEO in the third quarter
in 2010, which included the impact of maintenance cost on improvement of fleet
availability subsequent to the process of transition from contract mining to
owner mining. Reliability of operation and cost management improvement allowed
mine management to mitigate the adverse impact of the appreciation of the
Chilean Peso versus the United States Dollar.
To date, approximately $8.5
million of the total $36.5 million in exploration
spending at El Peñón is being focused on Pampa Augusta Victoria
("PAV") with the objective of completing an initial mineral reserve
and mineral resource estimate. Approximately $4.0 million has
been spent year-to-date. The majority of the drilling is being completed on the
Victoria vein, which continues to return significant near surface gold and
silver values. The near surface, highly oxidized nature of this mineralization
will facilitate rapid low cost development and recoveries which should be in the
range of the original near surface mineralization at El Peñón (approximately
95 percent for gold and 90 percent for silver).
During the third quarter,
26 drill holes totaling 12,690 metres were completed at PAV. The drilling
continued to extend mineralization at the main Victoria vein down dip and will
allow for the estimation of a mineral reserve during the fourth quarter. A new
vein, Victoria West,
was discovered approximately 200 metres to the west of the main Victoria vein.
Drilling will continue to delineate this new vein in the fourth quarter.
Exploration drilling at PAV
also continues to further extend mineralization at Victoria both along strike
and down dip and is expected to expand and confirm the mineral resource
potential of the Victoria Este, Elizabeth and the new Victoria
West veins. It is anticipated that development can be accelerated
and ore could be mined from PAV as early as 2013.
PAV is expected to provide
further sustainability at current production levels in El Peñón's mine life
by increasing mine certainty and flexibility.
Minera Florida, Chile
Minera Florida produced a total of 26,577 GEO in the current quarter,
representing a decrease of 4%, compared with 27,652 GEO in the third quarter of
2010.
Gold grade for the quarter
averaged 3.45 g/t which was lower than the 4.30 g/t for the third quarter of
2010. The Company continues to focus on getting production from higher grade
veins.
In addition, the mine
produced 2,389 tonnes of zinc in the three-month period ended September
30, 2011 compared with 1,746 tonnes of zinc produced in the third
quarter of 2010. Zinc is accounted for as a by-product credit to cash costs.
Cash costs for the third
quarter were $588 per GEO compared with $425 per
GEO in the same quarter in 2010 due to lower production, appreciation of the
Chilean Peso, mining inflation, higher energy costs and lower grades mined. The
average value of the Chilean Peso appreciated 12% against the United States
Dollar in the third quarter compared with the average exchange rate of the same
quarter of 2010.
The Company's expansion
project at Minera Florida is designed to increase annual production by
approximately 40,000 GEO per year for five years through the re-treatment of
tailings. The project continues to advance with start-up planned for January
2012. Total capital for the Minera Florida expansion is estimated to be
$75 million. The increase over feasibility levels is attributed
to currency and cost increases but also to a change in the scope of the project
which includes a zinc floatation plant for recovering zinc which is expected to
reduce ongoing operating costs.
Near-mine exploration at
Minera Florida is focused on the Portezuelo, El Roble and Tribuna sectors to
delineate the extension of the orebody. Mine development has advanced as
planned in areas such as Tribuna, Maqui Clavo I, with the purpose to maintain
and ensure future production levels.
Gualcamayo, Argentina
Gualcamayo produced 37,381 ounces of gold in the third quarter compared with
31,972 ounces produced in the third quarter of 2010, representing a 17%
quarter-over-quarter improvement. Production increased as a result of mining
higher grade benches and improvements in recovery partly offset by lower
tonnage processed. Mining for the quarter was consistent with the block model
with modestly higher grades than expected.
Gold recovery rate at
Gualcamayo was 67.7% for the third quarter, an improvement from 57.8% for the
comparative quarter of 2010. The Company implemented action plans in the
leaching area and ADR plant to improve recoveries and minimize carbon fines as
it completes the construction of a new heap leach pad later this year.
Enhancements of stacking and filtering techniques have also contributed to the
improvement in recovery.
Cash costs were $442
per ounce in the quarter ended September 30, 2011, compared with
$480 per ounce in the third quarter of 2010, representing an 8%
improvement.
In 2011, the Company is
focusing on a number of operational initiatives, including efforts in
sustaining the 1,500 tonne per hour feed through the plant, underground
development of QDD Lower West and expansion of heap leach pad at Valle Norte.
Development of QDD Lower West continues. Success at this deposit will make an
additional positive contribution to mineral reserves and mineral resources for
Gualcamayo in 2011. Processing of ore from QDD Lower West will be through the
existing heap leach facilities; however, as reserves and resources at QDD Lower
West increase, the Company will evaluate possibly milling the ore to enhance
recovery of gold ounces. Gold production for the rest of 2011 is expected to
increase based on continuing higher grades, increases in crusher availability
and throughput tonnage.
Alumbrera, Argentina
The Company's interest in the Alumbrera Mine is accounted
for as an equity investment. The Company recorded earnings from its 12.5%
interest in Alumbrera Mine of $9..4 million
and $37.7 million for the three-month and nine-month periods
ended September 30, 2011, compared with $10.7 million
and $30.1 million reported for the respective periods of 2010.
The Company did not receive any cash dividends during the three months and $26.3
million for the nine-month period ended September 30, 2011,
compared with $6.6 million and $37.3 million for
the comparative periods in 2010. Subsequent to the quarter end, the Company
received $23.75 million in dividends from Alumbrera.
Attributable production
from Alumbrera was 12,712 ounces of gold and 9.5 million pounds of copper for
the quarter. This compares with attributable production of 11,370 ounces of
gold and 8.3 million pounds of copper for the third quarter of 2010.
In the first quarter of
2011, the Company announced an agreement with Xstrata Queensland Limited
("Xstrata") and Goldcorp
Inc. ("Goldcorp") that facilitates the integration of Agua
Rica, which is currently 100% owned by Yamana, into Minera Alumbrera
("MAA"). On September 1, Xstrata, Goldcorp
and the Company announced that they reached a definitive agreement providing
MAA the exclusive option to acquire Yamana's 100% interest in the Agua Rica
project.
The respective ownership
interests in MAA, i.e. Xstrata (50%), Goldcorp (37.5%)
and Yamana (12.5%), would remain unchanged and include the Agua Rica project.
The integration of Agua Rica with Alumbrera provides the greatest value
potential for the Company and the best opportunity for the development of Agua
Rica in the Catamarca province of Argentina.
CONSTRUCTION AND
DEVELOPMENT PROJECTS
The following summary
highlights key updates from the construction and development projects at the
Company.
Mercedes, Mexico
Construction continued at Mercedes with the first pour of gold and start-up of
operations expected by year end, six months earlier than originally planned and
as announced last quarter. Commercial production is expected by mid-2012. As of
September 30, 2011, overall physical advancement of the project
was 94% complete. The project continued to advance toward completion with the
completion of the power line in the third quarter and with the advancement of
plant construction, structural, mechanical and piping installation and the
continuation of commissioning activities. Approximately 90% of the updated
budget costs were committed as of September 30, 2011. The
Company also continued to advance the development of the Barrancas
zone, a high grade area at Mercedes, which was not contemplated as part of the
feasibility study. This zone could potentially support an enhanced production
profile at Mercedes which is initially expected to produce approximately
120,000 gold equivalent ounces with the potential to increase to 150,000 GEO
per year beginning in 2014.� The Company is also continuing the
development of new discoveries and evaluating plans for additional sustainable
production in the future years.
Ernesto &
Pau-a-Pique, Brazil
Construction progress is on schedule with commissioning and start-up of
production expected by the end of 2012 and commercial production by mid-2013.
As of September 30, 2011, physical advancement continued and was
approximately 55% complete. Earthworks were completed during the third quarter.
Activities continued on mine development, detailed engineering and civil works;
electromechanical works began just before the end of the quarter. Approximately
63% of updated budget costs were committed as of September 30, 2011.
Annual production is expected to be approximately 100,000 gold ounces with
average annual production during the first two full years expected to be
approximately 120,000 gold ounces.
C1 Santa Luz, Brazil
Construction progress is on schedule with commissioning and start-up of
production expected by the end of 2012 and commercial production by mid-2013.
As of September 30, 2011, physical advancement of the project
was approximately 49% complete which includes the completion of the foundation
for the SAG mill.. Earthworks were near completion and civil works were
approximately 31% complete. Approximately 47% of updated budget costs have been
committed. Annual production is expected to be approximately 100,000 gold
ounces with average annual production during the first two full years to exceed
130,000 gold ounces.
Pilar, Brazil
Construction progress is on schedule with commissioning and start-up of
production expected by mid-2013 with commercial production expected by the end
of 2013. As at September 30, 2011, detailed engineering and
earthworks were approximately 58% complete and 30% of updated budget costs were
committed. Annual production from the mine is estimated to be 120,000 ounces of
gold.
Resource development and
work on a feasibility study continued at Caiamar, a high-grade satellite
deposit located 38 kilometres west of Pilar. The ore from this deposit can be
processed at Pilar with the higher grades offsetting the additional
transportation costs. Caiamar and the resource development of other targets
could positively impact capacity utilization and production rates at Pilar as
early as 2014. The project is being built with 30% additional capacity to that
contemplated in the feasibility study in anticipation of significant resource
growth.
Agua Rica, Argentina
On September 1, the Company and its joint venture partners
announced that they reached a definitive agreement providing Minera Alumbrera
("MAA") the exclusive option to acquire the Company's 100% interest
in the Agua Rica project, which represents a significant step toward advancing
the plan to integrate Agua Rica into MAA. Under the direction of Xstrata,
operator of MAA, MAA has initiated an update to the feasibility study with
respect to the integration of its operations and those of Minera Agua Rica.
Jeronimo, Chile
Following the delivery of the first mineral reserve estimate at Jeronimo in
early 2011, a feasibility study of Jeronimo is currently underway and it is
expected to be delivered in the first quarter of 2012. This reflects the
Company's intention of continuing to refine the economics of this project by
evaluating various processing methods, accounting for potential by-product
credits and other optimizations that could positively impact the project.
EXPLORATION
The Company continues to
actively explore its targets around existing mines along with its efforts to
look for opportunities elsewhere in the Americas.
The Company is largely focused on developing its future based on its
exploration successes and organic growth.
Total exploration
expenditures for the third quarter of 2011 were $37.4 million of
which $29.7 million was capitalized and $7.7 million
expensed.� Total exploration expenditures for the nine months ended September
30, 2011 were $88.9 million of which $65.6 million
was capitalized and $23.3 million was expensed.
The Company has further
increased its exploration budget to $111 million from the original
budget of $85 million, an increase of approximately 31%, given
the acceleration of the projects. The increase partially resulted from the
significant cash flow being generated by the Company, the success of the 2010
program, as well as the success already achieved in 2011.
OUTLOOK AND STRATEGY
Consistent with the
guidance previously provided, production is expected to be in the range of
approximately 1.04 million GEO to 1.14 million GEO in 2011. Production is
expected to increase to approximately 1.7 million ounces by 2014 as four
development stage projects including C1 Santa Luz, Mercedes,
Ernesto/Pau-a-Pique and Pilar, where construction decisions have already been
made, and the expansion project of Minera Florida tailings is expected to start
contributing to production levels.
Copper production is
expected to be in the range of 145 million to 160 million pounds in 2011 and
140 million to 160 million pounds in 2012. Annual silver production is expected
to be approximately 9 million ounces in 2011 and 2012.
The Company's strategy and
philosophy is to undertake projects which are easily funded from internal cash
flows, with comparatively modest capital requirements and where cost escalation
risks are manageable. In the second quarter, the Company provided an update of
estimates of expansionary capital expenditures from 2011 to 2013, which remain
our current guidance of expansionary capital expenditures. With more than $1.1
billion of available cash and undrawn credit available at the end of
the third quarter of 2011, in addition to expected robust cash flows from
operations, the Company is fully funded for its expected growth.
Further details of the 2011
third quarter results can be found in the Company's unaudited Management's
Discussion and Analysis and unaudited Consolidated Financial Statements at http://www.yamana.com/Investors/FinancialCorporateReports
THIRD QUARTER CONFERENCE
CALL
Q3 Conference Call Information for Thursday November 3, 2011, 11:00
a.m. ET
Toll Free (North America):
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�
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�
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888-231-8191
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International:
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�
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647-427-7450
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Participant Audio Webcast:
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www.yamana.com
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Q3 Conference Call REPLAY:
Toll
Free Replay Call (North America):
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�
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�
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�
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�
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855-859-2056, Passcode
13919248#
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Replay Call:
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�
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�
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416-849-0833, Passcode
13919248#
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The conference call replay
will be available from 2:45 p.m. ET on November 3, 2011
until 11:59 p.m. ET on November 17, 2011.
Via Webcast
Live Audio & Webcast: www.yamana.com
For further information on
the conference call or audio webcast, please contact the Investor Relations
Department or visit our website, www.yamana.com.
About Yamana
Yamana is a Canadian-based
gold producer with significant gold production, gold development stage
properties, exploration properties, and land positions in Brazil,
Argentina, Chile,
Mexico and Colombia.
Yamana plans to continue to build on this base through existing operating mine
expansions, throughput increases, development of new mines, the advancement of
its exploration properties and by targeting other gold consolidation
opportunities with a primary focus in the Americas.
MINE BY MINE OPERATING
SUMMARY:� � �
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El
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Ore
Processed
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Gold
Grade
g/t
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Silver
Grade
g/t
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Gold
Recovery
(%)
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Silver
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Gold
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Silver
Ounces
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Gold
Equivalent
Ounces
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Gold
Equivalent
Ounces Sold(1)
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Cash
Cost
per GEO (2)
|
Q3
2011
|
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367,503
|
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6.77
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215.46
|
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93.6
|
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86.8
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76,347
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2,213,974
|
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120,627
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125,600
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$
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407
|
Q2
2011
|
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�
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362,778
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7.64
|
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220.24
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93.4
|
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85.1
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80,861
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2,162,850
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124,118
|
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117,030
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$
|
� � � � � � � �
382
|
Q1
2011
|
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358,013
|
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6.91
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227.8
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92.0
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79.9
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73,568
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2,111,482
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115,798
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114,803
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Total
2010
|
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1,522,366
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5.74
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228.5
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91.2
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84.1
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256,530
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9,427,208
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427,934
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431,665
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428
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Q4
2010
|
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366,424
|
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6.94
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229.2
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91.3
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79.5
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74,785
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2,145,809
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113,800
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114,403
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$
|
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421
|
Q3
2010
|
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|
396,209
|
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|
5.48
|
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|
216.8
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90.8
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83.3
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63,417
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2,298,731
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105,212
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108,204
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$
|
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461
|
Q2
2010
|
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392,223
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4.97
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216.3
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92.0
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87.1
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57,351
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2,372,380
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100,485
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102,324
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449
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Q1
2010
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367,509
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5.64
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253.3
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90.4
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86.3
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60,977
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2,610,289
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108,437
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106,739
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�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Minera
Florida
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Q3
2011
|
�
|
�
|
242,670
|
�
|
�
|
3.45
|
�
|
�
|
38.01
|
�
|
�
|
84.0
|
�
|
�
|
67.6
|
�
|
�
|
22,569
|
�
|
�
|
200,399
|
�
|
�
|
26,577
|
�
|
�
|
28,717
|
�
|
�
|
$
|
�
� � � � � 588
|
Q2
2011
|
�
|
�
|
238,287
|
�
|
�
|
3.43
|
�
|
�
|
31.8
|
�
|
�
|
83.9
|
�
|
�
|
68.0
|
�
|
�
|
22,034
|
�
|
�
|
167,114
|
�
|
�
|
25,376
|
�
|
�
|
22,831
|
�
|
�
|
$
|
� � � � � � � �
614
|
Q1
2011
|
�
|
�
|
232,284
|
�
|
�
|
3.78
|
�
|
�
|
35.2
|
�
|
�
|
84.6
|
�
|
�
|
68.7
|
�
|
�
|
23,986
|
�
|
�
|
182,453
|
�
|
�
|
27,635
|
�
|
�
|
26,798
|
�
|
�
|
$
|
� � � � � � �
476
|
Total
2010
|
�
|
�
|
779,836
|
�
|
�
|
4.41
|
�
|
�
|
33.4
|
�
|
�
|
83.7
|
�
|
�
|
67.8
|
�
|
�
|
94,585
|
�
|
�
|
606,071
|
�
|
�
|
105,604
|
�
|
�
|
102,819
|
�
|
�
|
$
|
� � � � � � �
416
|
Q4
2010
|
�
|
�
|
214,859
|
�
|
�
|
4.68
|
�
|
�
|
45.1
|
�
|
�
|
84.7
|
�
|
�
|
70.6
|
�
|
�
|
27,787
|
�
|
�
|
234,339
|
�
|
�
|
32,048
|
�
|
�
|
30,525
|
�
|
�
|
$
|
� � � � � � �
479
|
Q3
2010
|
�
|
�
|
207,834
|
�
|
�
|
4.30
|
�
|
�
|
39.2
|
�
|
�
|
84.2
|
�
|
�
|
67.0
|
�
|
�
|
24,337
|
�
|
�
|
182,332
|
�
|
�
|
27,652
|
�
|
�
|
27,667
|
�
|
�
|
$
|
� � � � � � �
425
|
Q2
2010
|
�
|
�
|
204,512
|
�
|
�
|
4.27
|
�
|
�
|
21.2
|
�
|
�
|
82..0
|
�
|
�
|
66.1
|
�
|
�
|
23,543
|
�
|
�
|
95,249
|
�
|
�
|
25,274
|
�
|
�
|
23,020
|
�
|
�
|
$
|
� � � � � � �
370
|
Q1
2010
|
�
|
�
|
152,631
|
�
|
�
|
4.38
|
�
|
�
|
25.2
|
�
|
�
|
84.0
|
�
|
�
|
67.2
|
�
|
�
|
18,918
|
�
|
�
|
94,151
|
�
|
�
|
20,630
|
�
|
�
|
21,608
|
�
|
�
|
$
|
� � � � � � �
363
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Brazil
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Chapada
|
�
|
�
|
Ore
Processed
|
�
|
�
|
Gold
Grade
g/t
|
�
|
�
|
Gold
Recovery
(%)
|
�
|
�
|
Gold
Ounces
Produced
|
�
|
�
|
Gold
Ounces
Sold
|
�
|
�
|
�
|
Cash Cost per
oz(2)
|
Q3
2011
|
�
|
�
|
5,075,556
|
�
|
�
|
0.33
|
�
|
�
|
66.0
|
�
|
�
|
36,075
|
�
|
�
|
28,618
|
�
|
�
|
$
|
� � � � � � � �
(2,045)
|
Q2
2011
|
�
|
�
|
4,857,313
|
�
|
�
|
0.32
|
�
|
�
|
64.3
|
�
|
�
|
31,566
|
�
|
�
|
34,260
|
�
|
�
|
$
|
� � � � � � � �
(3,555)
|
Q1
2011
|
�
|
�
|
5,088,739
|
�
|
�
|
0.32
|
�
|
�
|
64.7
|
�
|
�
|
33,392
|
�
|
�
|
33,395
|
�
|
�
|
$
|
� � � �
� � (2,615)
|
Total
2010
|
�
|
�
|
19,195,578
|
�
|
�
|
0.35
|
�
|
�
|
62.3
|
�
|
�
|
135,613
|
�
|
�
|
127,450
|
�
|
�
|
$
|
� �
� � � � (2,073)
|
Q4
2010
|
�
|
�
|
4,757,679
|
�
|
�
|
0.37
|
�
|
�
|
64.9
|
�
|
�
|
36,965
|
�
|
�
|
31,421
|
�
|
�
|
$
|
� �
� � � � (2,863)
|
Q3
2010
|
�
|
�
|
5,246,202
|
�
|
�
|
0.38
|
�
|
�
|
63.4
|
�
|
�
|
40,405
|
�
|
�
|
35,591
|
�
|
�
|
$
|
� � � � � � �
(1,856)
|
Q2
2010
|
�
|
�
|
4,873,077
|
�
|
�
|
0.32
|
�
|
�
|
60.7
|
�
|
�
|
30,450
|
�
|
�
|
32,881
|
�
|
�
|
$
|
� � � � � � �
(1,583)
|
Q1
2010
|
�
|
�
|
4,318,621
|
�
|
�
|
0.34
|
�
|
�
|
60.0
|
�
|
�
|
27,794
|
�
|
�
|
27,557
|
�
|
�
|
$
|
� � � � � � �
(1,876)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Jacobina
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Q3
2011
|
�
|
�
|
559,207
|
�
|
�
|
1.89
|
�
|
�
|
92.9
|
�
|
�
|
31,567
|
�
|
�
|
30,528
|
�
|
�
|
$
|
� � � � � � � � �
654
|
Q2
2011
|
�
|
�
|
532,496
|
�
|
�
|
1.74
|
�
|
�
|
93.4
|
�
|
�
|
27,806
|
�
|
�
|
28,354
|
�
|
�
|
$
|
� � � � � � � �
663
|
Q1
2011
|
�
|
�
|
529,035
|
�
|
�
|
1.91
|
�
|
�
|
93.5
|
�
|
�
|
30,319
|
�
|
�
|
31,537
|
�
|
�
|
$
|
� � � � � � � �
611
|
Total
2010
|
�
|
�
|
2,158,097
|
�
|
�
|
1.89
|
�
|
�
|
93.2
|
�
|
�
|
122,160
|
�
|
�
|
121,405
|
�
|
�
|
$
|
� � � � � � � �
535
|
Q4
2010
|
�
|
�
|
542,055
|
�
|
�
|
2.06
|
�
|
�
|
94.1
|
�
|
�
|
33,718
|
�
|
�
|
33,530
|
�
|
�
|
$
|
� � � � � � � �
495
|
Q3
2010
|
�
|
�
|
570,799
|
�
|
�
|
1.95
|
�
|
�
|
93.8
|
�
|
�
|
33,637
|
�
|
�
|
32,517
|
�
|
�
|
$
|
� � � � � � � �
463
|
Q2
2010
|
�
|
�
|
556,376
|
�
|
�
|
1.79
|
�
|
�
|
93.0
|
�
|
�
|
29,785
|
�
|
�
|
29,110
|
�
|
�
|
$
|
� � � � � � � �
534
|
Q1
2010
|
�
|
�
|
488,865
|
�
|
�
|
1.73
|
�
|
�
|
91.9
|
�
|
�
|
25,021
|
�
|
�
|
26,249
|
�
|
�
|
$
|
� � � � � � � �
687
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Fazenda
Brasileiro
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Q3
2011
|
�
|
�
|
249,752
|
�
|
�
|
1.99
|
�
|
�
|
89.9
|
�
|
�
|
14,335
|
�
|
�
|
14,534
|
�
|
�
|
$
|
� � � � � � � � � � �
940
|
Q2
2011
|
�
|
�
|
246,551
|
�
|
�
|
2.02
|
�
|
�
|
87.5
|
�
|
�
|
14,007
|
�
|
�
|
13,052
|
�
|
�
|
$
|
� � � � � � � � � � �
934
|
Q1
2011
|
�
|
�
|
205,389
|
�
|
�
|
1.93
|
�
|
�
|
88.2
|
�
|
�
|
11,252
|
�
|
�
|
12,891
|
�
|
�
|
$
|
� � � � � � � � � � �
968
|
Total
2010
|
�
|
�
|
1,110,204
|
�
|
�
|
2.22
|
�
|
�
|
88.6
|
�
|
�
|
70,084
|
�
|
�
|
72,316
|
�
|
�
|
$
|
� � � � � � � � � � �
628
|
Q4
2010
|
�
|
�
|
275,184
|
�
|
�
|
2.53
|
�
|
�
|
89.4
|
�
|
�
|
19,852
|
�
|
�
|
18,822
|
�
|
�
|
$
|
� � � � � � � � � � �
705
|
Q3
2010
|
�
|
�
|
279,734
|
�
|
�
|
2.14
|
�
|
�
|
89.0
|
�
|
�
|
17,161
|
�
|
�
|
19,208
|
�
|
�
|
$
|
� � � � � � � � � � �
620
|
Q2
2010
|
�
|
�
|
273,706
|
�
|
�
|
2.36
|
�
|
�
|
88.2
|
�
|
�
|
18,333
|
�
|
�
|
15,801
|
�
|
�
|
$
|
� � � � � � � � � � �
559
|
Q1
2010
|
�
|
�
|
281,579
|
�
|
�
|
1.84
|
�
|
�
|
87..3
|
�
|
�
|
14,738
|
�
|
�
|
18,485
|
�
|
�
|
$
|
� � � � � � � � � � �
622
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Argentina
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Gualcamayo
|
�
|
�
|
Ore
Processed
|
�
|
�
|
Gold
Grade
g/t
|
�
|
�
|
Gold
Recovery
(%)
|
�
|
�
|
Gold
Ounces
Produced
|
�
|
�
|
Gold�
Ounces
Sold
|
�
|
�
|
�
|
Cash
Cost
per oz (2)
|
Q3
2011
|
�
|
�
|
1,844,293
|
�
|
�
|
0.94
|
�
|
�
|
67.7
|
�
|
�
|
37,381
|
�
|
�
|
38,354
|
�
|
�
|
$
|
� � � �
� � � � 442
|
Q2
2011
|
�
|
�
|
1,882,237
|
�
|
�
|
1.02
|
�
|
�
|
74.4
|
�
|
�
|
43,194
|
�
|
�
|
46,399
|
�
|
�
|
$
|
� � � � � �
� � 399
|
Q1
2011
|
�
|
�
|
1,896,533
|
�
|
�
|
0.95
|
�
|
�
|
66.4
|
�
|
�
|
37,597
|
�
|
�
|
34,665
|
�
|
�
|
$
|
� � � � � � � � � �
507
|
Total
2010
|
�
|
�
|
7,528,690
|
�
|
�
|
0.82
|
�
|
�
|
67.8
|
�
|
�
|
135,140
|
�
|
�
|
141,734
|
�
|
�
|
$
|
� � � � � � � � � �
506
|
Q4
2010
|
�
|
�
|
1,818,571
|
�
|
�
|
0.89
|
�
|
�
|
69.5
|
�
|
�
|
36,239
|
�
|
�
|
36,649
|
�
|
�
|
$
|
� � � � � � � � � �
662
|
Q3
2010
|
�
|
�
|
1,982,929
|
�
|
�
|
0.87
|
�
|
�
|
57.8
|
�
|
�
|
31,972
|
�
|
�
|
38,660
|
�
|
�
|
$
|
� � � � � � � � � �
480
|
Q2
2010
|
�
|
�
|
1,940,939
|
�
|
�
|
0.85
|
�
|
�
|
70.4
|
�
|
�
|
37,467
|
�
|
�
|
30,283
|
�
|
�
|
$
|
� � � � � � � � � �
427
|
Q1
2010
|
�
|
�
|
1,786,251
|
�
|
�
|
0.68
|
�
|
�
|
76.0
|
�
|
�
|
29,462
|
�
|
�
|
36,142
|
�
|
�
|
$
|
� � � � � � � � � �
443
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Alumbrera
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Q3
2011
|
�
|
�
|
1,239,638
|
�
|
�
|
0.44
|
�
|
�
|
71.8
|
�
|
�
|
12,712
|
�
|
�
|
11,177
|
�
|
�
|
$
|
� � � �
(1,216)
|
Q2
2011
|
�
|
�
|
1,227,348�
|
�
|
�
|
0.47�
|
�
|
�
|
68.2
|
�
|
�
|
12,670
|
�
|
�
|
12,367
|
�
|
�
|
$
|
� � � �
(1,736)
|
Q1
2011
|
�
|
�
|
1,131,995
|
�
|
�
|
0.45
|
�
|
�
|
69.3
|
�
|
�
|
11,374
|
�
|
�
|
11,412
|
�
|
�
|
$
|
� � � � �
(1,452)
|
Total
2010
|
�
|
�
|
4,509,332
|
�
|
�
|
0.46
|
�
|
�
|
73.0
|
�
|
�
|
50,656
|
�
|
�
|
48,940
|
�
|
�
|
$
|
� � � � �
(1,404)
|
Q4
2010
|
�
|
�
|
1,160,601
|
�
|
�
|
0.50
|
�
|
�
|
76.0
|
�
|
�
|
14,061
|
�
|
�
|
12,951
|
�
|
�
|
$
|
� � � � �
(1,556)
|
Q3
2010
|
�
|
�
|
1,102,574
|
�
|
�
|
0.42
|
�
|
�
|
72.8
|
�
|
�
|
11,370
|
�
|
�
|
10,095
|
�
|
�
|
$
|
� � � � � � � �
(993)
|
Q2
2010
|
�
|
�
|
1,117,957
|
�
|
�
|
0.43
|
�
|
�
|
69.9
|
�
|
�
|
11,470
|
�
|
�
|
15,638
|
�
|
�
|
$
|
� � � � �
(1,938)
|
Q1
2010
|
�
|
�
|
1,128,200
|
�
|
�
|
0.51
|
�
|
�
|
72.2
|
�
|
�
|
13,755
|
�
|
�
|
10,256
|
�
|
�
|
$
|
� � � � �
(1,142)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Copper
Production
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Chapada
|
�
|
�
|
Ore
Processed
|
�
|
�
|
Copper
Ore
Grade
|
�
|
�
|
Copper
Recovery
(%)
|
�
|
�
|
Copper
Produced
(M lbs.)
|
�
|
�
|
Copper
Sold
(M lbs.)
|
�
|
�
|
�
|
Cash
costs
per pound
of copper
|
Q3
2011
|
�
|
�
|
5,075,556
|
�
|
�
|
0.42
|
�
|
�
|
87.5
|
�
|
�
|
41.4
|
�
|
�
|
38.7
|
�
|
�
|
$
|
� �
� � 1.45
|
Q2
2011
|
�
|
�
|
4,857,313
|
�
|
�
|
0.43
|
�
|
�
|
88.4
|
�
|
�
|
40.8
|
�
|
�
|
41.6
|
�
|
�
|
$
|
� � � � � � �
1.32
|
Q1
2011
|
�
|
�
|
5,088,739
|
�
|
�
|
0.39
|
�
|
�
|
87.1
|
�
|
�
|
38.5
|
�
|
�
|
29.7
|
�
|
�
|
$
|
� � � � � � �
1.21
|
Total
2010
|
�
|
�
|
19,195,578
|
�
|
�
|
0.41
|
�
|
�
|
86.5
|
�
|
�
|
149.4
|
�
|
�
|
143.8
|
�
|
�
|
$
|
� � � � � � �
1.17
|
Q4
2010
|
�
|
�
|
4,757,679
|
�
|
�
|
0.44
|
�
|
�
|
86.2
|
�
|
�
|
39.9
|
�
|
�
|
39..6
|
�
|
�
|
$
|
� � � � � � �
1.20
|
Q3
2010
|
�
|
�
|
5,246,202
|
�
|
�
|
0.43
|
�
|
�
|
86.8
|
�
|
�
|
42.8
|
�
|
�
|
43.5
|
�
|
�
|
$
|
� � � � � � �
1.14
|
Q2
2010
|
�
|
�
|
4,873,077
|
�
|
�
|
0.39
|
�
|
�
|
87.2
|
�
|
�
|
37.0
|
�
|
�
|
31.6
|
�
|
�
|
$
|
� � � � � � �
1.13
|
Q1
2010
|
�
|
�
|
4,318,621
|
�
|
�
|
0.36
|
�
|
�
|
85.5
|
�
|
�
|
29.7
|
�
|
�
|
29..1
|
�
|
�
|
$
|
� � � � � � �
1.24
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Alumbrera
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Q3
2011
|
�
|
�
|
1,239,638
|
�
|
�
|
0.44
|
�
|
�
|
79.5
|
�
|
�
|
9.5
|
�
|
�
|
7.9
|
�
|
�
|
$
|
� � � � � � �
1.58
|
Q2
2011
|
�
|
�
|
1,227,348
|
�
|
�
|
0.45
|
�
|
�
|
77.2
|
�
|
�
|
9.3
|
�
|
�
|
8.8
|
�
|
�
|
$
|
� � � � � � �
1.54
|
Q1
2011
|
�
|
�
|
1,131,995
|
�
|
�
|
0.39
|
�
|
�
|
73.1
|
�
|
�
|
7.1
|
�
|
�
|
7.1
|
�
|
�
|
$
|
� � � � � � �
1.85
|
Total
2010
|
�
|
�
|
4,509,332
|
�
|
�
|
0.50
|
�
|
�
|
82.0
|
�
|
�
|
38.7
|
�
|
�
|
37.0
|
�
|
�
|
$
|
� � � � � � �
1.29
|
Q4
2010
|
�
|
�
|
1,160,601
|
�
|
�
|
0.40
|
�
|
�
|
81.0
|
�
|
�
|
9.3
|
�
|
�
|
9.0
|
�
|
�
|
$
|
� � � � � � �
1.37
|
Q3
2010
|
�
|
�
|
1,102,574
|
�
|
�
|
0.40
|
�
|
�
|
82.2
|
�
|
�
|
8.3
|
�
|
�
|
7.7
|
�
|
�
|
$
|
� � � � � � �
1.53
|
Q2
2010
|
�
|
�
|
1,117,957
|
�
|
�
|
0.44
|
�
|
�
|
81.4
|
�
|
�
|
9.3
|
�
|
�
|
12.1
|
�
|
�
|
$
|
� � � � � � �
1.52
|
Q1
2010
|
�
|
�
|
1,128,200
|
�
|
�
|
0.54
|
�
|
�
|
84.7
|
�
|
�
|
11..8
|
�
|
�
|
8.2
|
�
|
�
|
$
|
� � � � � � �
0.89
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news
release contains "forward-looking statements" within the meaning of
the United States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation.� Except for statements of
historical fact relating to the Company, information contained herein
constitutes forward-looking statements, including any information as to the
Company's strategy, plans or future financial or operating performance.�
Forward-looking statements are characterized by words such as "plan,"
"expect", "budget", "target",
"project", "intend," "believe",
"anticipate", "estimate" and other similar words, or
statements that certain events or conditions "may" or "will"
occur.� Forward-looking statements are based on the opinions, assumptions
and estimates of management considered reasonable at the date the statements
are made, and are inherently subject to a variety of risks and uncertainties
and other known and unknown factors that could cause actual events or results
to differ materially from those projected in the forward-looking
statements.� These factors include the Company's expectations in
connection with the projects and exploration programs discussed herein being
met, the impact of general business and economic conditions, global liquidity
and credit availability on the timing of cash flows and the values of assets
and liabilities based on projected future conditions, fluctuating metal prices
(such as gold, copper, silver and zinc), currency exchange rates (such as the
Brazilian Real, the Chilean Peso and the Argentine Peso versus the
United States Dollar), possible variations in ore grade or recovery
rates, changes in the Company's hedging program, changes in accounting
policies, changes in the Company's corporate mineral resources, risk related to
non-core mine dispositions, changes in project parameters as plans continue to
be refined, changes in project development,� construction, production and
commissioning time frames, risk related to joint venture operations, the
possibility of project cost overruns or unanticipated costs and expenses,
higher prices for fuel, steel, power, labour and other consumables contributing
to higher costs and general risks of the mining industry, failure of plant,
equipment or processes to operate as anticipated, unexpected changes in mine
life, final pricing for concentrate sales, unanticipated results of future
studies, seasonality and unanticipated weather changes, costs and timing of the
development of new deposits, success of exploration activities, permitting time
lines, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims, limitations on
insurance coverage and timing and possible outcome of pending litigation and
labour disputes, as well as those risk factors discussed or referred to in the
Company's annual Management's Discussion and Analysis and Annual Information
Form for the year ended December 31, 2010 filed with the
securities regulatory authorities in all provinces of Canada
and available at www.sedar.com, and the
Company's Annual Report on Form 40-F filed with the United States
Securities and Exchange Commission.� Although the Company has
attempted to identify important factors that could cause actual actions, events
or results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or results
not to be anticipated, estimated or intended.� There can be no assurance
that forward-looking statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such
statements.� The Company undertakes no obligation to update
forward-looking statements if circumstances or management's estimates,
assumptions or opinions should change, except as required by applicable
law.� The reader is cautioned not to place undue reliance on forward-looking
statements. The forward-looking information contained herein is presented for
the purpose of assisting investors in understanding the Company's expected
financial and operational performance and results as at and for the periods
ended on the dates presented in the Company's plans and objectives and may not
be appropriate for other purposes.
NON-GAAP MEASURES
The Company has included certain non-GAAP measures including
"Co-product cash costs per gold equivalent ounce", "Co-product
cash costs per pound of copper", "By-product cash costs per gold
equivalent ounce", "Adjusted Earnings or Loss and Adjusted Earnings
or Loss per share" to supplement its financial statements, which are
presented in accordance with International Financial Reporting Standards
("IFRS"). The term IFRS and generally accepted accounting principles
("GAAP") are used interchangeably throughout this press release.
The Company believes that these measures, together with measures determined
in accordance with IFRS, provide investors with an improved ability to evaluate
the underlying performance of the Company. Non-GAAP measures do not have any
standardized meaning prescribed under IFRS, and therefore they may not be
comparable to similar measures employed by other companies. The data is intended
to provide additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance with IFRS.
CO-PRODUCT AND BY-PRODUCT
CASH COSTS
The Company has included
cash costs per GEO and cash costs per pound of copper information because it
understands that certain investors use this information to determine the
Company's ability to generate earnings and cash flows for use in investing and
other activities. The Company believes that conventional measures of
performance prepared in accordance with IFRS do not fully illustrate the
ability of its operating mines to generate cash flows. The measures are not
necessarily indicative of operating profit or cash flows from operations as
determined under IFRS. Cash costs per GEO are determined in accordance with the
Gold Institute's Production Cost Standard and are calculated on a
co-product and by-product basis. Cash costs on a co-product basis are computed
by allocating operating cash costs separately to metals (gold and copper) based
on an estimated or assumed ratio. Cash costs on a by-product basis are computed
by deducting copper by-product revenues from the calculation of cash costs of
production per GEO. Cash costs per GEO and per pound of copper are calculated
on a weighted average basis.
ADJUSTED EARNINGS OR LOSS
AND ADJUSTED EARNINGS OR LOSS PER SHARE
The Company uses the
financial measures "Adjusted Earnings or Loss" and "Adjusted
Earnings or Loss per share" to supplement information in its consolidated
financial statements. The Company believes that in addition to conventional
measures prepared in accordance with IFRS, the Company and certain investors
and analysts use this information to evaluate the Company's performance. The
presentation of adjusted measures are not meant to be a substitute for net
earnings or loss or net earnings or loss per share presented in accordance with
IFRS, but rather should be evaluated in conjunction with such IFRS measures.
Adjusted Earnings or Loss and Adjusted Earnings or Loss per share are
calculated as net earnings excluding (a) stock-based compensation, (b)
unrealized foreign exchange (gains) losses related to revaluation of deferred
income tax asset and liability on non-monetary items, (c) unrealized foreign exchange
(gains) losses related to other items, (d) unrealized (gains) losses on
commodity derivatives, (e) impairment losses, (f) deferred income tax expense
(recovery) on the translation of foreign currency inter-corporate debt, (g)
write-down of investments and other assets and any other non-recurring
adjustments, (h) mark-to-market (gains) losses on share-purchase warrants.
Non-recurring adjustments from unusual events or circumstances, such as the
unprecedented volatility of copper prices in the fourth quarter of 2008, are
reviewed from time to time based on materiality and the nature of the event or
circumstance. Earnings adjustments for the comparative period reflect both
continuing and discontinued operations.
The terms "Adjusted
Earnings (Loss)" and "Adjusted Earnings (Loss) per share" do not
have a standardized meaning prescribed by IFRS, and therefore the Company's
definitions are unlikely to be comparable to similar measures presented by
other companies. Management believes that the presentation of Adjusted Earnings
or Loss and Adjusted Earnings or Loss per share provide useful information to
investors because they exclude non-cash and other charges and are a better
indication of the Company's profitability from operations. The items excluded
from the computation of Adjusted Earnings or Loss and Adjusted Earnings or Loss
per share, which are otherwise included in the determination of net earnings or
loss and net earnings or loss per share prepared in accordance with IFRS, are
items that the Company does not consider to be meaningful in evaluating the
Company's past financial performance or the future prospects and may hinder a
comparison of its period-to-period profitability. A reconciliation of Adjusted
Earnings to net earnings as well as a discussion of the adjusting items is
provided in Section 4 "Overview of Financial Results" for both the
yearly and quarterly reconciliations.
__________________________________________________________________
- Gold equivalent ounces (GEO) includes silver production
at a ratio of 50:1.
- Refers to a non-GAAP measure.� Reconciliation of
non-GAAP measures are available at www.yamana.com/q32011.
- Cash costs are shown on a by-product basis including
Alumbrera unless otherwise noted.
- Cash
margin is the difference between the average realized gold price received
less by-product cash costs per GEO.
- Cash
flow from operations before changes in non-cash working capital.
�