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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Yamana Gold | LSE:YAU | London | Ordinary Share | CA98462Y1007 | COM SHS NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 698.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMYAU
Yamana Gold Announces Fourth Quarter & Year End 2012 Results
FOR: YAMANA GOLD INC.
TSX SYMBOL: YRI
NYSE SYMBOL: AUY
LSE SYMBOL: YAU
February 20, 2013
Yamana Gold Announces Fourth Quarter & Year End 2012 Results
=-Record Revenues and Mine Operating Earnings--
TORONTO, ONTARIO--(Marketwire - Feb. 20, 2013) - YAMANA GOLD INC. (TSX:YRI)(NYSE:AUY)(LSE:YAU) ("Yamana" or
"the Company") today announced its financial and operating results for the fourth quarter and full year 2012.
HIGHLIGHTS FOR THE YEAR 2012
FINANCIAL:
/T/
=- Record quarterly revenue for Q4 2012 of $629.5 million; record revenue
for full year 2012 of $2.3 billion
=- Adjusted earnings(1) for Q4 2012 of $197.4 million or $0.26 per share;
for full year 2012 $694.3 million or $0.93 per share
=- Record mine operating earnings of $1.1 billion for 2012
=- Cash flow generated from operations(2) of $1.04 billion or $1.40 per
share for 2012
=- Cash and cash equivalents of $349.6 million at December 31, 2012
=- Dividends paid were $168.2 million, increased by 68% year-over-year
/T/
OPERATIONAL
/T/
=- Record production of 1.2 million gold equivalent ounces (GEO)(3), an
increase of 9% at cash costs(1)(4) of $230 per GEO
-- Gold production of 1.02 million ounces
-- Silver production of 9.0 million ounces
=- First full year of production at Mercedes of 126,010 GEO, 20% above
guidance
=- 22% production increase at Fazenda Brasiliero
=- Ernesto/Pau a Pique start-up with ramp-up expected to be completed by
mid-2013
=- Cerro Moro mineral resources increased 44% and a plan developed to
advance project
=- Exploration program increased measured and indicated mineral resources
by 15% and improved grade across all categories of mineral reserves and
mineral resources
/T/
"Our objective has been to become a more predictable and reliable precious metals company delivering value to
shareholders through increasing our resource base, expanding production and ultimately generating cash flow and
increases in cash flow," said Peter Marrone, Chief Executive Officer. "For 2012, we achieved record annual
production, partially as a result of the first full year of production at Mercedes, expanded our mineral
reserves, expanded our mineral resources most notably through the addition of Cerro Moro, and delivered strong
financial results on behalf of shareholders. In the coming year, we will continue to strive for consistency and
reliability in the delivery of high quality ounces at comparatively low cost."
/T/
(1) Refers to a non-GAAP measure. Reconcilliation of non-GAAP measures are
available at www.yamana.com/2012.
(2) Cash flow from operations before changes in non-cash working capital.
(3) Gold equivalent ounces (GEO) includes silver production at a ratio of
50:1.
(4) Cash costs are shown on a by-product basis including Alumbrera unless
otherwise noted.
/T/
KEY STATISTICS
/T/
=---------------------------------------------------------------------------
Three months ended Twelve months ended
December 31 December 31
=---------------------------------------------------------------------------
(In thousands of US dollars
except where noted) 2012 2011 2012 2011
------------------------------------------------
Revenues $ 629,505 $ 568,754 $ 2,336,762 $ 2,173,325
Cost of sales excluding
depletion, depreciation and
amortization 207,228 178,384 831,754 716,692
Depletion, depreciation and
amortization 100,195 93,611 383,738 356,759
General and administrative
expenses 38,997 32,343 145,856 121,381
Exploration expenses 15,140 9,080 58,049 32,398
Operating Earnings 280,295 247,847 936,351 944,962
Equity earnings from
associate (Alumbrera) 18,147 1,269 50,642 39,019
Net Earnings 169,161 89,599 442,064 548,294
Net Earnings per share 0.22 0.12 0.59 0.74
Adjusted earnings 197,368 184,242 694,333 712,896
Adjusted earnings per share 0.26 0.25 0.93 0.96
Cash flow generated from
operations after changes in
non-working capital 367,881 338,850 1,158,057 1,225,782
Per share 0.49 0.45 1.55 1.65
Cash flow generated from
operations before changes
in non-working capital 298,064 320,434 1,044,946 1,266,373
Per share 0.40 0.43 1.40 1.70
Average realized gold price
per ounce 1,692 1,670 1,670 1,567
Average realized silver
price per ounce 31.37 31.29 30.46 35.19
Average realized copper
price per pound 3.54 3.36 3.60 3.93
=---------------------------------------------------------------------------
/T/
PRODUCTION SUMMARY - FINANCIAL AND OPERATING SUMMARY
/T/
=---------------------------------------------------------------------------
Three months ended Twelve months ended
December 31 December 31
=---------------------------------------------------------------------------
2012 2011 2012 2011
------------------------------------------------
Total gold equivalent ounces
- produced 322,990 276,918 1,201,010 1,102,296
Gold produced 276,373 231,670 1,019,969 916,284
Silver produced (millions
of ounces) 2.3 2.3 9.0 9.3
Total gold equivalent ounces
- sold 317,615 272,491 1,186,991 1,089,811
Total copper produced -
Chapada (millions of
pounds) 40.5 45.4 150.6 166.1
Total copper sold - Chapada
(millions of pounds) 37.3 43.6 139.0 153.6
=---------------------------------------------------------------------------
=---------------------------------------------------------------------------
Three months ended Twelve months ended
December 31 December 31
=---------------------------------------------------------------------------
2012 2011 2012 2011
------------------------------------------------
Co-product cash costs per
gold equivalent ounce $ 517 $ 486 $ 525 $ 463
Cash cost per pound of
copper - Chapada $ 1.51 $ 1.37 $ 1.48 $ 1.38
By-product cash costs per
gold equivalent ounce $ 198 $ 174 $ 230 $ 50
=---------------------------------------------------------------------------
/T/
Financial Results for the year ended December 31, 2012
Net earnings for the year were $442.1 million or $0.59 per share on a basic and diluted basis, compared with
net earnings of $548.3 million or basic and diluted earnings per share of $0.74 for 2011 (2010 - $466.5
million). Net earnings for the year were impacted by an increase of the income tax expense of $83.8 million due
to the increase in the Chilean tax rate enacted in late September 2012 which affects the tax rates on deferred
income taxes. The Company has applied the new tax rate on all of its non-cash Chilean deferred income tax
liabilities resulting in an adjustment to net earnings of 2012 although deferred income taxes would only be
paid on a direct disposition of the asset that may never occur.
Adjusted earnings were $694.3 million or $0.93 basic and diluted earnings per share in 2012, compared with
$712.9 million or $0.96 per share in 2011 (2010 - $448.2 million or $0.61 per share). Lower adjusted earnings
was attributed mainly to higher net finance and other expenses, partly offset by an increase in mine operating
earnings as a result of higher volume of gold sales at higher gold prices offset by lower sales of copper and
silver, and an increase in equity earnings from the Company's 12.5% interest in Alumbrera.
Revenues were $2.3 billion in 2012 compared with $2.2 billion in 2011 (2010 - $1.7 billion). Mine operating
earnings were $1.12 billion, slightly higher than $1.10 billion in 2011 (2010 - $753.8 million). Higher
revenues and mine operating earnings were mainly due to higher sales volume of gold from the production of the
new Mercedes mine, which was under construction during the comparative period, and higher realized gold prices,
partly offset by lower copper and silver prices and lower volume of copper and concentrate sales.
Revenues for 2012 were generated from the sale of 1.19 million GEO, consisting of 1.01 million ounces of gold
and 9.0 million ounces of silver, and 139.0 million pounds of copper, excluding Alumbrera which is accounted
for as an equity investment. This compares to sales, excluding Alumbrera, of 1.09 million GEO (2010 - 1.09
million GEO) that consisted of 906,985 ounces of gold and 9.1 million ounces of silver (2010 - 909,985 ounces
of gold and 10.1 million ounces of silver), and 153.6 million pounds of copper (2010 - 143.8 million pounds) in
2011.
The average realized gold price in 2012 was $1,670 per ounce versus $1,567 per ounce in 2011 (2010 - $1,237),
the 2012 average realized copper price was $3.60 per pound versus $3.93 per pound (2010 - $3.37) and 2012
average realized silver price was $30.46 per ounce compared to $35.19 per ounce in 2011 (2010 - $20.70).
Although average realized prices for copper and silver were lower than those in 2011, average realized prices
for gold trended upward by 7% compared to 2011, consistent with market prices.
Cost of sales excluding depletion, depreciation and amortization for the year was $831.8 million compared with
$716.7 million in 2011 (2010 - $631.1 million) due to the additional volume of gold sales from Mercedes, which
was under construction in 2011, and higher cash costs per GEO.
Depletion, depreciation and amortization ("DDA") expense for the year was $383.7 million, compared to $356.8
million in the 2011 (2010 - $301.9 million). The increase in DDA is mainly driven by higher volume of gold
sales and the additional DDA from the Mercedes mine, which was under construction during 2011.
Other expenses as an aggregate of general and administrative, exploration and evaluation, other operating and
net finance expenses were $289.1 million in 2012, compared to $228.1 million in 2011 (2010 - $219.6 million).
The increase in other expenses is detailed below.
General and administrative expenses were $145.9 million in 2012 compared to $121.4 million in 2011 (2010 -
$108.9 million). The increase in administrative expenses was due to the expanded administration of the
Company's growing operations including the addition of the Mercedes mine and consulting costs related to
various process and organizational improvement initiatives.
Consistent with the Company's exploration plans to pursue organic growth while continuing to build on its
successful record of replacing and increasing mineral reserves and mineral resources, and exploration and
evaluation activities, including additional activities at the newly acquired Cerro Morro project, exploration
and evaluation expenses increased to $58.0 million from $32.4 million incurred in 2011 (2010 - $39.2 million).
Other operating expenses were $31.7 million compared to $40.2 million in 2011.
Net finance expense was $53.5 million for the year compared with net finance expense of $34.2 million in 2011
(2010 - $47.9 million). Higher net finance expense in 2012 compared to 2011, was mainly due to higher
unrealized foreign exchange loss and higher bank and financing fees, partly offset by higher capitalization of
borrowing cost for the new mines and projects under construction.
Equity earnings from associate were $50.6 million for the year compared with $39.0 million in 2011. Cash
distributions from the Company's equity investment in Alumbrera during the year were $nil compared to $71.5
million in 2011.
Export sales were suspended by Alumbrera during the second quarter of 2012 due to a new resolution in respect
to export revenue repatriation in Argentina. Export sales resumed in July 2012 under standard sales terms with
the backlog of shipment sold in the second half of 2012 following an amendment to the original resolution
extending the period for the repatriation of net export sales proceeds. In excess of 70% of the volume of sales
in all categories, including gold, copper and mineral concentrate, occurred in the second half of the year.
Non-cash impairment losses mainly related to available-for-sale investments were $67.7 million in 2012,
compared with losses of $92.6 million in 2011 (2010 - $nil).
The Company recorded an income tax expense of $373.1 million in 2012 compared to $269.9 million in 2011 (2010 -
tax expense of $128.3 million). Of the 2012 income tax expense, $83.8 million was related to the impact of
increased Chilean tax rates on deferred income taxes. The potential impact of this Chilean tax rate change was
disclosed and discussed in the Company's third quarter report. As the charge is non-cash and relates to
deferred tax balances recorded in prior years, it is added back to adjusted earnings. The 2012 income tax
provision reflects a current income tax expense of $265.5 million compared to tax expense of $266.1 million in
2011 (2010: tax expense $136.5 million) and a deferred income tax expense of $107.6 million compared to tax
expense of $3.8 in 2011 (2010: deferred tax recovery $8.2).
Cash and cash equivalents as at December 31, 2012 were $349.6 million compared to $550.4 million as at December
31, 2011. The Company continues to rebuild its cash balance subsequent to the cash consideration paid upon the
acquisition of Extorre Gold Mines Limited in August 2012. Cash flows generated from operations before changes
in non-cash working capital items for the year ended December 31, 2012 were $1.04 billion compared to $1.27
billion for 2011. The decrease was mainly due to increased cash income taxes paid and the absence of cash
dividends from Alumbrera in 2012. Cash flows from operations after taking into effect changes in working
capital items for the period ended December 31, 2012 were inflows of $1.16 billion, compared to inflows of
$1.23 billion for the year ended December 31, 2011, which includes an increase in trade payables and other
payables due to timing of payments.
As at December 31, 2012, the Company has $1.1 billion in available funds to continue to invest in future
growth.
Operating Results for the year ended December 31, 2012
Total production was a Company record 1.20 million GEO for the year and within the Company's original guidance
of 1.175 to 1.310 million GEO. Total production included the Company's attributable production from the
Alumbrera mine of 46,077 GEO and production during commissioning of Mercedes, the tailings retreatment project
at Minera Florida and Ernesto/Pau-a-Pique of 12,094 GEO, compared with total production of 1.10 million GEO for
2011 (2010: 1.09 million GEO).
Commercial production for the year of 1.19 million GEO was also an annual commercial production record,
representing a 9% increase over the commercial production of 1.09 million GEO in 2011 (2010: 1.05 million GEO).
The increase was mainly due to the contribution from the Company's new mine, Mercedes in Mexico, and increased
production from Gualcamayo and Fazenda Brasileiro.
By-product cash costs averaged $230 per GEO, compared with $50 per GEO in 2011 (2010: $50 per GEO). By-product
cash costs were impacted by lower copper sale credits as a result of lower market prices and lower volume of
sales. The average market price for copper in 2012 was 10% lower than 2011. By-product cash costs for 2012 met
the Company's previous guidance of below $250 per GEO.
Co-product cash costs were $525 per GEO compared with $463 per GEO for 2011 (2010: $442 per GEO). Planned lower
gold grades at certain mines and higher input costs during the period also impacted by-product and co-product
cash costs.
Copper production for the year was 150.6 million pounds from the Chapada mine, compared with 166.1 million
pounds for 2011 (2010: 149.4 million pounds). Chapada copper production was lower primarily as a result of
expected lower copper grade and recovery rate offset by higher throughput compared with 2011. Additionally,
37.4 million pounds of copper produced from Alumbrera were attributable to the Company, compared with 32.2
million pounds for the year ended December 31, 2011 (2010: 38.7 million pounds). Total copper production for
2012 was 188.0 million pounds, compared with 198.3 million pounds in 2011.
Co-product cash costs per pound of copper averaged $1.40 in 2012 from the Chapada mine, compared with $1.29 per
pound in 2011 (2010: $1.17 per pound). Co-product cash costs per pound of copper for the year including the
Company's interest in the Alumbrera mine were $1.48 per pound versus $1.38 per pound for 2011 (2010: $1.20 per
pound).
Financial Results for the three months ended December 31, 2012
Net earnings for the quarter were $169.2 million or $0.23 basic and $0.22 diluted per share, compared with net
earnings of $89.6 million or basic and diluted earnings per share of $0.12 for the fourth quarter of 2011.
Higher net earnings for the fourth quarter of 2012 were mainly due to higher mine operating earnings, partly
offset by higher operating expenses and higher income tax expenses.
Adjusted earnings were $197.4 million or $0.26 basic and diluted earnings per share in the fourth quarter of
2012, compared with $184.2 million or $0.25 per share in the same quarter of 2011. Higher adjusted earnings in
the fourth quarter of 2012 were mainly due to higher mine operating earnings, partly offset by higher general
and administrative expense, and exploration and evaluation expense in the fourth quarter of 2012.
Revenues were a record $629.5 million in the fourth quarter, compared with $568.8 million in the same quarter
of 2011. Mine operating earnings were $322.1 million in the quarter, compared with $296.8 million in the fourth
quarter of 2011. Higher revenues and mine operating earnings were mainly due to higher sales volume of gold
from the production of the new Mercedes mine, which was under construction during the comparative period,
higher volume of silver sales and higher metal prices, partly offset by lower volume of sales of copper at
Chapada.
Revenues for the quarter were generated from the sale of 304,070 GEO, consisted of 258,978 ounces of gold and
2.3 million ounces of silver, and 37.1 million pounds of copper, excluding Alumbrera which is accounted for as
an equity investment. This compares to sales, excluding Alumbrera, of 262,782 GEO ounces, consisting of 218,831
ounces of gold and 2.2 million ounces of silver, and 43.6 million pounds of copper in the fourth quarter of
2011.
For the fourth quarter, average realized prices for gold, copper and silver were marginally higher than the
average realized prices for the same quarter in 2011. Average realized prices for the fourth quarter of 2012
were $1,692 per ounce of gold, $3.54 per pound of copper and $31.37 per ounce of silver, compared to average
realized prices of $1,670 per ounce, $3.36 per pound of copper and $31.29 per ounce of silver in the fourth
quarter of 2011.
Cost of sales excluding depletion, depreciation and amortization for the quarter was $207.2 million compared
with $178.4 million in the fourth quarter of 2011 mainly as a result of the additional volume of gold sales,
and higher cash costs per GEO.
Depletion, depreciation and amortization ("DDA") expense for the quarter was $100.2 million, an increase from
$93.6 million in the fourth quarter of 2011. The increase in DDA is mainly driven by higher volume of gold
sales and the additional DDA from the Mercedes mine, which was under construction during the comparative period
in 2011.
Other expenses as an aggregate of general and administrative, exploration and evaluation, other operating and
net finance expenses were $66.9 million in the three months ended September 30, 2012, compared to $52.3 million
in the fourth quarter of 2011. The increase in other expenses is detailed below.
General and administrative expenses were $39.0 million compared to $32.3 million in 2011. The increase in
administrative expenses was due to the expanded administration of the Company's growing operations including
the addition of the Mercedes mine and consulting costs related to various process and organizational
improvement initiatives.
Consistent with the Company's plans to pursue organic growth while continuing to build on its successful record
of replacing and increasing mineral reserves and mineral resources, exploration and evaluation expenses
increased to $15.1 from $9.1 million incurred the comparative quarter in 2011.
Other operating expenses were $5.8 million compared to $8.8 million in the comparative quarter of 2011.
Net finance expense was $7.0 million for the fourth quarter compared with net finance expense of $2.1 million
in 2011. Higher net finance expense was mainly due to higher foreign exchange losses.
Equity earnings from Alumbrera were $18.1 million for the quarter compared with $1.3 million in the fourth
quarter of 2011. Cash distributions from the Company's equity investment in Alumbrera during the quarter were
$nil compared to $44.1 million in the fourth quarter of 2011.
Export sales were suspended by Alumbrera during the second quarter of 2012 due to a new resolution in respect
to export revenue repatriation in Argentina. Export sales resumed in July 2012 under standard sales terms with
the backlog of shipment sold in the second half of 2012 following an amendment to the original resolution
extending the period for the repatriation of net export sales proceeds. In excess of 70% of the sales volume
occurred in the second half of the year.
The Company recorded an income tax expense of $93.2 in the quarter compared to $63.6 million in the fourth
quarter of 2011. Higher income taxes were mainly due to higher net earnings.
Cash flows generated from operations before changes in non-cash working capital items for the quarter ended
December 31, 2012 were $298.1 million compared to $320.4 million for the same period ended December 31, 2011.
The decrease was mainly due to higher cash taxes paid and the absence of cash distribution from Alumbrera in
spite of higher earnings before taxation. Cash flows from operating activities for the quarter ended December
31, 2012 were $367.9 million, compared to inflows of $338.9 million for the fourth quarter of 2011. The
increase was mainly attributed to the increase of trade payables and other payables due to timing of payments.
Operating Results for the three months ended December 31, 2012
Total production was a Company record 322,990 GEO for the fourth quarter, including the Company's attributable
production from the Alumbrera mine of 10,769 GEO and production during commissioning at Ernesto Pau-a-Pique of
1,274 GEO, compared with production of 276,918 GEO for the quarter ended December 31, 2011. Commercial
production for the quarter of 321,716 GEO was also a quarterly production record, representing a 20% quarter-to-
quarter increase. The production increase was mainly due to the contribution from the Company's new mine,
Mercedes in Mexico, and increased production from Minera Florida upon completion of commissioning of its
tailings retreatment project, as well as increased production from Fazenda Brasileiro, El Penon and Alumbrera,
partly offset by decreased production at Gualcamayo, Jacobina and Chapada. Decrease in production at Gualcamayo
was mainly due to the transitioning at QDD Main open-pit from Phase II to Phase III, which will continue into
early 2013. Ore processed at Gualcamayo was drawn heavily from stockpiled material. Build-up of ore stockpiles
at Chapada and El Penon continued to provide greater flexibility in respect to future production.
By-product cash costs were $198 per GEO, compared with $174 per GEO in the fourth quarter of 2011. By-product
cash costs were impacted by lower copper sale credits as a result of lower volume of copper sales.
Co-product cash costs were $517 per GEO compared with $486 per GEO for the fourth quarter of 2011. Planned
lower gold grades at certain mines and higher input costs during the period also impacted by-product and co-
product cash costs.
Copper production for the fourth quarter was 40.5 million pounds from the Chapada mine, compared with 45.4
million pounds for the fourth quarter 2011. Chapada copper production was lower primarily as a result of lower
recovery rate partly offset by higher throughput compared with the fourth quarter of 2011. Additionally, 8.5
million pounds of copper produced from Alumbrera were attributable to the Company, compared with 6.2 million
pounds for the quarter ended December 31, 2011. Total copper production for the fourth quarter was 49.0 million
pounds, compared with 51.6 million pounds in the same quarter of 2011.
Co-product cash costs per pound of copper were $1.38 for the quarter from the Chapada mine, compared with $1.20
per pound for the fourth quarter in 2011. Co-product cash costs per pound of copper for the quarter including
the Company's interest in the Alumbrera mine were $1.51 per pound versus $1.37 per pound for the quarter ended
December 31, 2011.
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 128,171 GEO contained in concentrate in 2012 compared with 135,347 GEO contained in
concentrate in 2011. Chapada copper production was 150.6 million pounds in 2012 compared with production of
166.1 million pounds of copper in 2011.
Production for the year was expected to be lower than 2011 as a result of lower grades and recovery rates for
2012 relative to 2011. However, production was higher than plan mainly as a result of increased tonnage of ore
mined and processed. A study to increase grind capacity has been started and a carbon-in-leach ("CIL") project
is planned for 2013 to reverse the trend of lower grades and lower recovery rates.
Gold production is expected to increase in 2014 and in the years to follow, mostly as a result of the start-up
of the oxide gold operation at Suruca and the expected gold and copper production from Corpo Sul.
By-product cash costs for the year were negative $1,865 per GEO compared with negative $2,454 per GEO for 2011.
Less favourble by-product cash cost credits were due to lower copper sale credits as a result of lower market
prices and lower sales volume of copper pounds.
Co-product cash costs were $333 per GEO in 2012, compared to $319 per gold ounce in 2011. Co-product cash costs
for copper were $1.40 per pound in the year versus $1.29 per pound in 2011.
Revenues for the year net of sales taxes and treatment and refining costs were $675.1 million (2011 - $722.7
million). Revenues included mark-to-market adjustments and final and provisional pricing settlements for the
year of positive $19.4 million (2011 - negative $24.4 million).
Chapada produced a total of 32,498 GEO contained in concentrate in the fourth quarter of 2012 compared with
34,313 GEO contained in concentrate in the same quarter of 2011. Chapada copper production was 40.5 million
pounds in the quarter compared with production of 45.4 million pounds of copper in the fourth quarter of 2011.
Production for the quarter was higher than the mine plan but lower than the fourth quarter of 2011, as a result
of the anticipated lower grades and recovery rates for 2012 relative to 2011, partly offset by increased
tonnage of ore processed.
By-product cash costs for the quarter were negative $2,021 per GEO compared with negative $1,715 per GEO for
the same quarter in 2011. Favourable by-product cash cost credit per GEO was mainly due to the effect of copper
sale credits on the lower GEO production in the fourth quarter of 2012 compared to 2011, in spite of lower
total copper sales due to lower volume partly offset by higher average realized copper price for the quarter
compared to the fourth quarter of 2011.
Co-product cash costs were $349 per GEO in the fourth quarter, compared to $320 per gold ounce in the same
quarter of 2011. Co-product cash costs for copper were $1.38 per pound in the fourth quarter versus $1.20 per
pound in the same quarter of 2011.
Chapada revenues for the quarter net of sales taxes and treatment and refining costs were $174.9 million (Q4
2011 - $196.4 million). Revenues included mark-to-market adjustments and final and provisional pricing
settlements in the quarter of positive $4.1 million (Q4 2011 - positive $4.7 million).
In December 2011, the Company completed the feasibility study and basic engineering on the oxides at Suruca.
The deposit will support an additional average production of 45,000-50,000 gold ounces per year to Chapada's
operations over an initial five years beginning in late 2013.
Drilling continued at Corpo Sul in 2012, a gold and copper deposit discovered in 2011 at the southwest end of
the orebody of Chapada with mineral resources of higher average grade cores especially near the current Chapada
pit. The additional drilling has further defined the geometry and grade continuity of Corpo Sul from the
southwest limits of the 2011 mineral resources for an additional strike length of 2.9 kilometres.
Mineralization and mineral resources have been traced along a combined strike length of almost 16 kilometres
centered by the main Chapada pit. These new discoveries have led to the initiation of a pre-feasibility study,
which was completed in late 2012. Chapada is expected to enhance throughput by blending the ore from the main
Chapada pit with the higher grade ore from Corpo Sul and as its size and scale increases, it will be evaluated
as a stand-alone orebody.
The Company's strategic plan is to ensure sustainable production from Chapada at levels of at least 150,000
gold ounces and 135.0 million pounds of copper from 2015 for at least five years. Gold production for 2014 is
expected to be approximately 140,000 ounces to 160,000 ounces.
El Penon, Chile
El Penon produced 462,496 GEO during 2012 compared to 475,586 GEO in 2011. Production for the year consisted of
317,557 ounces of gold and 7.2 million ounces of silver, compared with 306,184 ounces of gold and 8.5 million
ounces of silver produced in 2011. Production of gold for the year increased by 4%, compared with 2011, mainly
as a result of higher feed grade, while production of silver decreased by 15% due to lower feed grade and lower
recovery rate.
Cash costs averaged $440 per GEO in 2012, compared with $400 per GEO in 2011. Increases in powers costs, higher
maintenance costs, including diesel and other consumable items and mining inflation generally compared to that
of 2011, contributed to higher per unit cash costs.
Production during the fourth quarter of 2012 was 128,119 GEO compared to 115,043 GEO in the same quarter of
2011, representing an 11% increase quarter-over-quarter. Compared to the third quarter of 2012, GEO production
increased by 8%, representing consecutive quarterly increases as a result of gold grade improvement since the
second quarter. Production for the quarter consisted of 93,448 ounces of gold and 1.7 million ounces of silver,
compared with 75,407 ounces of gold and 2.0 million ounces of silver produced in the fourth quarter of 2011.
Production of gold increased by 24%, compared with the same quarter of 2011, mainly as a result of higher feed
grade, while production of silver decreased by 15% due to lower feed grade and lower recovery rate. A higher
proportion of ore feed from areas of the Aleste-Bonanza vein in the quarter resulted in lower silver recovery.
Blending with ore from other areas will change the ore-mix and improve recovery in the future.
Cash costs were $415 per GEO in the fourth quarter, virtually unchanged from $413 per GEO in the fourth quarter
in 2011. While gold feed grade and recovery rate are expected to continue at the current levels, silver
recovery rate is expected to improve in 2013, according to the mine plan.
Exploration has been ongoing for 20 years at El Penon, which has a long track record of replacement of ounces
mined. The new discoveries at Dorada Sur and Dorada Oeste, Fortuna Este and Bonanza West are being focused on
in an effort to advance these targets to mineable mineral reserves in the near term. This is expected to return
significant near surface gold and silver values, improve production and provide mining flexibility for a
sustainable production level of about 440,000 GEO per year and ultimately increase mine life. Development has
commenced at Pampa Augusta Victoria and an open-pit is expected to start in the first half of 2013.
Gualcamayo, Argentina
Gualcamayo produced 147,310 ounces of gold in 2012, compared with 158,847 ounces produced in 2011. Lower
production was mainly due to the planned transitioning process from Phase II to Phase III at the QDD Main area
during the fourth quarter of 2012, and the construction and licensing delay of the Valle Norte heap leach pad
early in the year. Production at Gualcamayo is expected to increase with the ramp-up of production from QDD
Main Phase III starting in the second quarter of 2013 followed by new production from the AIM open-pit and QDD
Lower West underground operations.
Increased tonnage of ore mined in 2012 reflects Gualcamayo's continuous effort in stacking materials in
preparation of transitioning to Phase III as part of the planned expansion. Compared to 2011, recovery rate
improved mainly as a result of the production from the new Valle Norte heap leach pad.
Cash costs averaged $536 per ounce in 2012 compared with $441 per ounce in 2011. Inflationary pressures on
labour and consumable costs, lower grade and re-handling of waste costs along with increased maintenance to
improve availability of equipment resulted in higher cash costs. The QDD Main area at Gualcamayo is an open pit
operation along a mountain face and from time to time waste is removed and stored and then must be moved again
once the orebody has been accessed. This movement or re-handling of waste will cause costs to increase from
time to time. The Company is evaluating how to reduce the re-handling of waste and has initiated a maintenance
program in an effort to better contain costs.
Gualcamayo produced 31,502 ounces of gold in the fourth quarter, compared with 40,676 ounces produced in the
fourth quarter of 2011. The transitioning process from QDD Main Phase II to Phase III contributed to the lower
production. Production in the quarter was primarily sourced from the stockpiled material.
Cash costs were $485 per ounce in the quarter ended December 31, 2012 compared with $424 per ounce in the
fourth quarter of 2011. Inflationary pressures on labour and consumable costs, lower grade and re-handling of
waste costs resulted in higher cash costs in combination with lower quarterly production.
Underground development of QDD Lower West continues to advance and project completion remains on schedule. Full
ramp-up of Gualcamayo's expansions to be completed by mid-2013 are expected to increase sustainable production
to approximately 200,000 gold ounces per year beginning in 2014. A scoping study on the evaluation of milling
higher grade ore at Gualcamayo, subject to mineral resource increases in 2012 and 2013, is expected to be
completed in the first half of 2013.
Mercedes, Mexico
Mercedes' production of 126,010 GEO in 2012, including 8,959 GEO of commissioning production, was above the top
end of guidance in its first year of operation. The 2012 production consisted of 116,215 ounces of gold and
489,747 ounces of silver. Cash costs per GEO averaged $485 for the year, within the range of the Company's
previous guidance of $475 - $500 per GEO for the year.
Mercedes produced 39,443 GEO in the fourth quarter, representing consecutive increases of 17% over the third
quarter production, 36% over the second quarter and 65% over the first quarter. Fourth quarter production
consisted of 36,057 ounces of gold and 169,313 ounces of silver. Cash costs per GEO were $435 for the fourth
quarter, 11% lower than the cash costs in the third quarter, 13% lower than the second quarter and 19% lower
than the first quarter, representing decreases in consecutive quarters since the completion of commissioning.
Compared to the third quarter, feed grade improved by 9% for gold and 15% for silver; recovery rate for silver
improved by 32%.
Development continues at the Barrancas zone with the higher grade Lagunas Norte vein, one of the newest
discoveries at the mine, which started production from flat-lying ore in the third quarter. Development of the
vein structure in the Barrancas zone was not included in the original mine plan and represents a significant
opportunity to increase production. Confirmation of the width and grades of mineralization by infill drilling
at Lupita and the recent discovery of high-grade mineralization at Rey de Oro that may be amenable to
underground mining methods, are expected to continue growth of the measured and indicated mineral resources
that will extend mine life, maintain higher throughput and sustainable production levels.
Production was initially planned at an annual rate of 120,000 GEO per year. With the acceleration of
underground development and plant modifications, the Company expects production to increase to 130,000 to
140,000 GEO in 2013 and a target of 130,000 GEO to 150,000 GEO in 2014.
Jacobina, Brazil
Gold production at Jacobina was 116,863 ounces in 2012, compared with 121,675 ounces produced in 2011. The
decrease in production for the year compared to that of 2011, mainly resulted from a decrease in tonnage
processed and lower gold grade. Continued development of access to higher grade areas is expected to improve
average ore grade beginning in the second half of 2013.
Cash costs were $747 per ounce for the year compared with $643 per ounce in 2011. Cash costs were impacted by
higher labour inflation and maintenance costs in addition to continued rock support improvements made during
2012.
In the fourth quarter, gold production at Jacobina was 28,337 ounces, compared with 31,983 ounces produced in
the fourth quarter of 2011. The decrease in production primarily resulted from an 8% decrease in gold feed
grade, lower recovery rate and less tonnage processed. Cash costs were $825 per ounce for the fourth quarter
compared with $646 per ounce in the fourth quarter of 2011.
The Company continues to focus on upgrading the current mineral resources at Canavieiras and Morro do Vento and
improving overall mineral reserve grade for the mine. Development of these high-grade areas creates the
opportunity for production to increase to over 140,000 ounces. The timing of which is dependent on the pace of
development work in these higher grade areas.
Minera Florida, Chile
Minera Florida produced a total of 105,679 GEO in 2012, an increase of 3% versus production of 102,738 GEO in
2011. Production consisted of 89,163 ounces of gold and 825,812 ounces of silver, both including commissioning
production, compared to 86,914 ounces of gold and 791,173 ounces of silver. The increased production was mainly
due to the new production from the tailings retreatment project. The increase was partly offset by lower feed
grade and lower recovery rate of gold. Commercial production from tailings retreatment began on October 1,
2012. The plant continued to ramp up to an average 65% of capacity utilization in December 2012 and reaching
full design capacity in January 2013.
In addition, the mine produced 5,381 tonnes of zinc in 2012, compared with 6,958 tonnes of zinc produced in
2011. Zinc is accounted for as a by-product credit to cash costs.
Cash costs for the year were $797 per GEO compared with $591 per GEO in the same quarter in 2011 primarily as a
result of higher cost for power, increased cost in temporary mine services and labour inflation, lower credit
from sales of zinc as a result of lower production and lower prices for zinc.
Minera Florida produced a total of 32,797 GEO in the quarter, representing a 42% increase, compared with 23,151
GEO in the fourth quarter of 2011, mainly due to the new production from the tailings retreatment project.
Compared to the third quarter, feed grade improved by 19% for gold and 26% for silver.
In addition, the mine produced 1,353 tonnes of zinc in the fourth quarter, compared with 1,586 tonnes of zinc
produced in the fourth quarter of 2011.
Cash costs for the fourth quarter were $805 per GEO compared with $706 per GEO in the same quarter in 2011
primarily as a result of higher cost for power, increased cost in temporary mine services and labour inflation
and lower credit from sales of zinc as a result of lower production and lower prices for zinc.
Production from tailings retreatment is expected to ramp up and increase annual production by approximately
30,000 GEO per year for five years through the retreatment of tailings. Overall costs are expected to improve
with the addition of tailings production and the lack of mining costs associated with the retreatment of
tailings.
OTHER MINES
Fazenda Brasileiro, Brazil
Production at Fazenda Brasileiro was 67,130 ounces of gold in 2012 compared to 55,163 ounces of gold in 2011,
representing a 22% year-over-year increase. The increased production was mainly due to higher gold feed grade,
higher recovery rate and increased tonnage processed.
Cash costs averaged $872 per ounce for the year, 7% lower than $937 per ounce for 2011. Increases in tonnage
mined and tonnage processed positively impacted cash costs and more than offset the effect of mining inflation.
Production at Fazenda Brasileiro was 18,251 ounces of gold in the fourth quarter compared to 15,568 ounces of
gold in the fourth quarter of 2011, representing a 17% quarter-over-quarter increase. The increased production
was mainly due to increased tonnage processed and higher recovery rate, partly offset by lower gold feed grade.
Cash costs for the fourth quarter were $856 per ounce, 6% lower than $915 per ounce for the same period in
2011. Increases in tonnage processed positively impacted cash costs and more than offset the effect of mining
inflation.
The Fazenda Brasileiro mine was acquired in 2003 with two and a half years of mine life remaining based on
known mineral reserves. The Company has been mining at Fazenda Brasileiro for nearly nine years. The mine
continues to further outline exploration potential and mineral resource additions are expected in 2013.
Two new mineralization zones, CLX2 and Lagoa do Gato were discovered in 2009. The CLX2 zone is 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. The Company continues to develop the high-grade mineral
reserves at CLX2 with a focus on increasing mineral reserves and mineral resources.
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 $50.6 million and $18.1 million for the year and three
months ended December 31, 2012, compared with $39.0 million and $1.3 million reported for the respective
periods of 2011. Higher earnings for the year and the fourth quarter of 2012 compared to the same periods of
2011 were mainly due to higher sale volumes of mineral concentrate. Compared with the fourth quarter of 2011,
sales increased in the quarter ended December 31, 2012 as export sales by Alumbrera resumed in the third
quarter subsequent to a temporary suspension to comply with a new resolution in respect of repatriation of net
proceeds from export sales set forth by the Argentine Government.
The Company did not receive cash distributions in the year ended December 31, 2012, compared with cash
distribution of $71.5 million in 2011, of which $44.1 million was received in the fourth quarter of 2011. Cash
distributions have resumed in January 2013.
Attributable production from Alumbrera was 46,077 ounces of gold and 37.4 million pounds of copper for 2012.
This compares with attributable production of 44,502 ounces of gold and 32.2 million pounds of copper in 2011.
For the fourth quarter, attributable production from Alumbrera was 10,769 ounces of gold and 8.5 million pounds
of copper, compared with 7,746 ounces of gold and 6.2 million pounds of copper in the fourth quarter of 2011.
By-product cash costs per ounce of gold were negative $1,203 for the year and negative and $2,012 for the
quarter ended December 31, 2012, compared with negative $1,448 per ounce and negative $1,351 per ounce for the
respective periods in 2011. Co-product cash costs per ounce for gold averaged $308 for the year and $343 for
the quarter ended December 31, 2012, compared with $283 per ounce and $450 per ounce for the respective periods
of 2011. Co-product cash costs per pound for copper averaged $1.81 for the year and $2.15 for the quarter ended
December 31, 2012, compared with $1.82 per pound and $2.59 per pound for the respective periods of 2011.
Ernesto/Pau-a-Pique, Brazil
Physical completion of this new mine is on schedule. Ernesto Pau-a-Pique commenced commissioning with the first
gold ounces poured in October 2012. Commissioning will continue in early 2013 and completion of commissioning
is expected by mid-2013. Annual production is expected to be in the range of 80,000 - 95,000 ounces in 2013
with the potential to increase above that level in 2014.
Ernesto/Pau-a-Pique is made up of two different deposits, one of which is permitted and the other is currently
operating under a provisional permit. The Company expects definitive permits will be issued under a proposed
new Brazilian mining code legislation which is in progress.
CONSTRUCTION AND DEVELOPMENT PROJECTS
The following summary highlights key updates from the Company's construction and development projects.
C1 Santa Luz, Brazil
As of December 31, 2012, physical advancement of the project was over 95% complete. Civil works and
electromechanical assembly continued as planned. Power line construction is expected to be completed in early
2013. Start-up of operations is pending with completion of commissioning expected by mid-2013. Water
availability necessary for continuous operations will depend on the continuation of the rains throughout the
rainy season which progresses through March and will be supplemented by recently discovered water wells.
C1 Santa Luz is an open-pit and potential underground operation for which some concessions have already been
permitted. Mining will start in the already permitted concessions. Annual production is expected to be
approximately 100,000 gold ounces.
Pilar, Brazil
Construction progress is on schedule with commissioning and start-up of production expected by mid-2013 with
completion of commissioning expected by the end of 2013. As at December 31, 2012, mine and plant were advanced
to approximately 75% completion. Civil works were essentially completed, and work continued on
electromechanical assembly and the tailings dam. Underground development at Pilar continued to progress and
reached a total length of more than 9,000 metres and underground development at Caiamar has progressed more
than 1,000 metres.
Annual production from the mine was originally estimated to be 120,000 ounces of gold. The project is being
built with 30% additional capacity to that contemplated in the feasibility study in anticipation of significant
mineral resource growth. The Company focused exploration and evaluation on Maria Lazarus and the high grade
Jordino deposit. This resulted in a 29% increase in inferred mineral resources. These mineral resources are
expected to be upgraded during 2013.
Ore feed from Caiamar, a high-grade satellite deposit located 38 kilometres west of Pilar, is expected to
contribute to production at Pilar thereby increasing production to a minimum of 140,000 gold ounces per year
expected to begin as early as 2014. Mineral resource development and work on a feasibility study continued at
Caiamar during the quarter. The ore from this deposit can be processed at Pilar with the higher grades
offsetting the additional transportation costs.
Other
The Company continues to advance and evaluate additional projects, including Jeronimo and Suyai.
At Suyai, certain components that would lead to a feasibility study continued in the quarter. Further
advancement of the project will partly depend on the passage of new mining legislation that is pending.
At Jeronimo, both Yamana and its joint venture partner, Codelco (43% owner of the project), are evaluating the
project. During this period of evaluation, the Company is advancing other studies and reviews normally
completed after a construction decision is made. The Company's objective is to advance opportunities that
maximize cash flow and optimize the allocation of capital.
EXPLORATION
The Company is committed to developing its future based on its exploration successes and organic growth with
programs targeting mineral reserve growth and mineral resource discovery in addition to development projects
and discoveries at existing operations.
The 2012 exploration program focused on increasing the Company's mineral reserves and mineral resources,
accelerating the development of new discoveries such as Jordino and Maria Lazarus at Pilar, the extension of
Pampa Augusta Victoria and definition of a new discovery at El Penon, the expansion of high grade mineral
resources at Jacobina, the delineation and expansion of Corpo Sul at Chapada, the delineation and expansion of
QDD Lower West at Gualcamayo and the development of several greenfield projects with the potential to be
brought into the Company's project pipeline, enhancing present and future asset values. The Company also
initiated its exploration and evaluation activities at Cerro Moro, the advanced exploration and development
stage project obtained through the acquisition of Extorre in August 2012.
OUTLOOK AND STRATEGY
The Company continues with its objective to deliver consistent and reliable operational results with an
emphasis on comparatively low costs to drive strong cash flows and expanding margins. This objective will be
achieved through the delivery of high quality ounces and projects while containing costs and maintaining
disciplined capital spending. The Company continues on a steady path of organic growth through expanding
current, near-term and in-development production plans, developing new projects and advancing its exploration
properties. The Company complements its growth strategy by adding properties and projects with high development
potential and economic upside through strategic acquisitions.
Production in 2013 is expected to be in the range of 1.44 million to 1.60 million GEO with a target level of
1.48 million GEO. This will represent an increase from 2012 production of at least 20%, most of which will come
from a full year of production at Mercedes, the ramp-up of the expansion project at Minera Florida, the ramp-up
of production at the two new mines, Ernesto/Pau-a-Pique and C1 Santa Luz, and the start-up of production at
another new mine, Pilar.
Production in 2014 is expected to be in the range of 1.60 to 1.77 million GEO with a long-term sustainable
target of 1.75 million GEO, representing an increase by approximately 33% from 2012 levels. The production
increase will be in part due to a full year of production from Ernesto/Pau-a-Pique, C1 Santa Luz and Pilar, the
Gualcamayo expansion and the Suruca oxide and Corpo Sul expansions at Chapada.
Silver production is expected to be consistent at between 8 million to 9 million ounces in each of 2013 and
2014. Silver production is reported as gold equivalent ounces and included in the above forecasts at a ratio of
50:1.
Copper production is expected to be in the range of 120 million to 135 million pounds in 2013 and 130 million
to 145 million pounds in 2014. These estimates reflect the production from Chapada and do not include the
attributable production from the Company's 12.5% interest in Alumbrera.
By 2015, production is targeted to be at a sustainable level of approximately 1.75 million GEO. This includes
production from the existing mines and development projects for which construction decisions have been made.
Planned sustainable production will be augmented by additional production from the projects that are now being
evaluated, which include Cerro Moro, Jeronimo, Agua Rica and Suyai. Expected production from these projects is
not included in the projected total but could increase sustainable production levels.
Estimated cash costs for 2013 are forecast to be below $365 per GEO. Cash costs are calculated after base metal
by-product credits, which assume a price forecast for copper of $4.00 per pound.
In 2013, expected cost increases are driven by fewer copper by-product credits with relatively higher gold
production along with inflationary impacts in the countries in which the Company operates. While there is a
planned decline in copper production at Chapada in 2013, this is expected to reverse with higher copper
production beginning in 2014. The Company will continue maximizing copper production at Chapada as a strategy
for further decreasing the consolidated cost structure.
The Company expects to spend approximately $110 million to $115 million on exploration and evaluation in 2013
continuing the successful 2012 program. The 2013 exploration program will continue to focus on increasing
mineral reserves and mineral resources with its near-mine and regional exploration programs, as well as
continuing to explore identified greenfield targets and identify new targets.
Expansionary capital spending for 2013 is expected to be $470 million, which includes approximately $50 million
of unspent capital initially contemplated in 2012, and additional amounts relating to new projects including
$29 million on the construction of the carbon-in-leach plant at Chapada, $15 million for phase II of the north
pad heap leach expansion at Gualcamayo, and approximately $40 million on the advancement of Cerro Moro.
Expected spending at Cerro Moro includes amounts for the feasibility study and the development of a production
ready decline into the largest of the known ore bodies, which was the approach taken in the development of
Mercedes. This approach will provide an increased level of certainty in sustainable production levels going
forward. Expansionary capital spending is expected to decline in 2014 as the projects currently in development
will be complete and currently there are no other projects for which positive construction decisions have been
made.
In 2013, sustaining capital spending is expected to be approximately $445 million or $310 per GEO. This
allocates all capital to gold ounces with no consideration for copper. Sustaining capital per GEO is expected
to decline in future years as a result, in part, of the cost saving initiatives related to maintenance and the
expected growth in gold production.
In addition to $1.1 billion of available cash and undrawn credit available at December 31, 2012, the Company
expects significant increase in cash flows by the fourth quarter of 2013 after completion of the current
development projects. The Company continues to work on additional growth projects, expecting to move forward
with those projects that will deliver growth, maximize cash flows and demonstrate efficient use of capital.
Free cash flow should increase as cash flow is expected to exceed required capital needs.
Further details of the 2012 fourth quarter results can be found in the Company's unaudited Management's
Discussion and Analysis and unaudited Consolidated Financial Statements at
www.yamana.com/Investors/FinancialCorporateReports.
FOURTH QUARTER CONFERENCE CALL
Q4 Conference Call Information for Thursday February 21, 2013, 11:00 a.m. ET
/T/
Toll Free (North America): 1-800-355-4959
Toronto Local and International 416-695-6616
International: Participant Audio Webcast: www.yamana.com
/T/
Q4 Conference Call REPLAY:
/T/
Toll Free Replay Call (North America): 1-800-408-3053 Passcode 9088417
Toronto Local and International: 905-694-9451 Passcode 9088417
/T/
The conference call replay will be available from 2:00 p.m. ET on February 21, 2013 until 11:59 p.m. ET on
March 7, 2013.
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.
/T/
=---------------------------------------------------------------------------
Chile
Gold Silver Gold Silver
Ore Grade Grade Recovery Recovery
Processed g/t g/t (%) (%)
=---------------------------------------------------------------------------
El Penon
Total 2012 1,415,292 7.47 199.21 93.5 80.0
Q4 2012 362,874 8.59 195.00 93.0 76.0
=---------------------------------------------------------------------------
Q3 2012 361,544 7.72 196.33 93.3 78.1
Q2 2012 355,132 6.32 194.34 94.1 82.5
Q1 2012 335,741 7.19 212.02 93.5 82.9
Total 2011 1,452,090 7.05 215.90 93.0 84.0
Q4 2011 363,796 6.91 200.20 93.1 83.9
Q3 2011 367,503 6.77 215.46 93.6 86.8
Q2 2011 362,778 7.64 220.24 93.4 85.1
Q1 2011 358,013 6.91 227.80 92.0 79.9
=---------------------------------------------------------------------------
Minera Florida
Total 2012 902,788 3.34 39.29 81.1 67.6
Q4 2012 222,440 3.53 46.90 81.6 69.8
=---------------------------------------------------------------------------
Q3 2012 227,246 2.97 37.16 80.5 67.3
Q2 2012 224,107 3.15 43.31 80.8 69.6
Q1 2012 228,994 3.70 25.23 81.4 62.4
Total 2011 920,388 3.50 38.40 84.0 68.3
Q4 2011 207,147 3.37 50.30 83.5 68.9
Q3 2011 242,670 3.45 38.01 84.0 67.6
Q2 2011 238,287 3.43 31.77 83.9 68.0
Q1 2011 232,284 3.78 35.15 84.6 68.7
=---------------------------------------------------------------------------
=---------------------------------------------------------------------------
Chile
Gold Gold Cash
Gold Silver Equivalent Equiv Cost
Ounces Ounces Ounces Ounces per
Produced Produced Produced Sold GEO (1)
=---------------------------------------------------------------------------
El Penon
Total 2012 317,557 7,246,951 462,496 457,704 $ 440
Q4 2012 93,448 1,733,573 128,119 127,431 $ 415
=---------------------------------------------------------------------------
Q3 2012 83,092 1,768,273 118,457 117,390 $ 422
Q2 2012 68,275 1,848,501 105,245 104,873 $ 491
Q1 2012 72,742 1,896,604 110,675 108,011 $ 442
Total 2011 306,184 8,470,112 475,586 473,607 $ 400
Q4 2011 75,407 1,981,806 115,043 116,174 $ 413
Q3 2011 76,347 2,213,974 120,627 125,600 $ 407
Q2 2011 80,861 2,162,850 124,118 117,030 $ 382
Q1 2011 73,568 2,111,482 115,798 114,803 $ 397
=---------------------------------------------------------------------------
Minera Florida
Total 2012 89,163 825,812 105,679 107,198 $ 797
Q4 2012 27,889 245,393 32,797 33,244 $ 805
=---------------------------------------------------------------------------
Q3 2012 19,994 210,297 24,200 24,371 $ 826
Q2 2012 19,179 239,931 23,978 23,229 $ 811
Q1 2012 22,101 130,191 24,705 26,354 $ 748
Total 2011 86,914 791,173 102,738 101,565 $ 591
Q4 2011 18,326 241,208 23,151 23,219 $ 706
Q3 2011 22,569 200,399 26,577 28,717 $ 588
Q2 2011 22,034 167,114 25,376 22,831 $ 614
Q1 2011 23,986 182,453 27,635 26,798 $ 476
=---------------------------------------------------------------------------
=---------------------------------------------------------------------------
Brazil
By- Co-
Product Product
Gold Cash Cash
Gold Gold Gold Equiv Cost Cost
Ore Grade Recovery Ounces Ounces per per
Processed g/t (%) Produced Sold GEO (1) GEO
=---------------------------------------------------------------------------
Chapada
Total 2012 21,591,482 0.29 59.4 119,655 121,030 $ (1,865) $ 333
Q4 2012 5,734,592 0.28 59.4 30,121 29,331 $ (2,021) $ 349
=---------------------------------------------------------------------------
Q3 2012 5,566,744 0.30 58.6 31,281 29,883 $ (1,659) $ 341
Q2 2012 5,802,649 0.30 59.8 33,712 35,847 $ (2,207) $ 302
Q1 2012 4,487,496 0.29 59.6 24,542 25,970 $ (1,473) $ 348
Total 2011 20,581,385 0.32 63.8 125,839 134,483 $ (2,454) $ 319
Q4 2011 5,559,778 0.32 60.5 31,012 34,497 $ (1,715) $ 320
Q3 2011 5,075,556 0.33 66.0 33,781 30,236 $ (2,045) $ 329
Q2 2011 4,857,313 0.32 64.3 29,577 35,527 $ (3,555) $ 342
Q1 2011 5,088,739 0.32 64.7 31,469 34,223 $ (2,615) $ 286
=---------------------------------------------------------------------------
Jacobina
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
Total 2011 2,148,275 1.89 93.3 121,675 123,323 $ 643
Q4 2011 527,537 2.03 93.4 31,983 32,904 $ 646
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
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Fazenda
Brasileiro
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
Total 2011 936,459 2.07 88.4 55,163 56,907 $ 937
Q4 2011 234,767 2.33 88.1 15,568 16,430 $ 915
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
=---------------------------------------------------------------------------
=---------------------------------------------------------------------------
Argentina
Cash
Gold Gold Gold Gold Cost
Ore Grade Recovery Ounces Ounces per
Processed g/t (%) Produced Sold GEO (1)
=---------------------------------------------------------------------------
Gualcamayo
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
Total 2011 7,578,156 0.97 68.4 158,847 160,326 $ 441
Q4 2011 1,955,094 0.99 65.4 40,676 40,908 $ 424
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
=---------------------------------------------------------------------------
Alumbrera
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)
Total 2011 4,775,130 0.42 69.4 44,502 44,664 $ (1,448)
Q4 2011 1,176,148 0.30 68.3 7,746 9,709 $ (1,351)
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)
=---------------------------------------------------------------------------
=---------------------------------------------------------------------------
Mexico
Gold Silver Gold Silver
Ore Grade Grade Recovery Recovery
Processed g/t g/t (%) (%)
=---------------------------------------------------------------------------
Mercedes
Total 2012 603,188 6.43 78.42 94.8 32.0
Q4 2012 164,285 7.38 85.17 95.8 39.0
=---------------------------------------------------------------------------
Q3 2012 151,415 6.77 74.23 94.5 29.6
Q2 2012 151,425 5.53 70.63 94.9 30.8
Q1 2012 136,063 5.90 83.62 93.7 28.4
=---------------------------------------------------------------------------
=---------------------------------------------------------------------------
Mexico
Gold Gold Cash
Gold Silver Equivalent Equiv Cost
Ounces Ounces Ounces Ounces per
Produced Produced Produced Sold GEO (1)
=---------------------------------------------------------------------------
Mercedes
Total 2012 116,215 489,747 126,010 126,515 $ 485
Q4 2012 36,057 169,313 39,443 36,879 $ 435
=---------------------------------------------------------------------------
Q3 2012 31,497 110,817 33,713 31,835 $ 490
Q2 2012 26,646 112,729 28,900 28,760 $ 499
Q1 2012 22,016 96,887 23,953 28,841 $ 534
=---------------------------------------------------------------------------
/T/
/T/
=---------------------------------------------------------------------------
Copper Production
Copper Copper Copper Copper Cash costs
Ore Ore Recovery Produced Sold per pound
Processed Grade (%) (M lbs.) (M lbs.) of copper
=---------------------------------------------------------------------------
Chapada
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
Total 2011 20,581,385 0.42 87.4 166.1 153.6 $ 1.29
Q4 2011 5,559,778 0.43 86.7 45.4 43.6 $ 1.20
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
=---------------------------------------------------------------------------
Alumbrera
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
Total 2011 4,775,130 0.40 77.2 32.2 31.5 $ 1.82
Q4 2011 1,176,148 0.30 78.9 6.2 7.7 $ 2.59
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
=---------------------------------------------------------------------------
/T/
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), 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 annual Management's Discussion and Analysis and 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.
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:
/T/
=- 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 generated from operations 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.
/T/
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 generated
from operations 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.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Yamana Gold Inc.
Lisa Doddridge, Vice President,
Corporate Communications and Investor Relations
416-945-7362 or 1-888-809-0925
lisa.doddridge@yamana.com
www.yamana.com
Yamana Gold Inc.
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