Yamana Gold Announces Strong Preliminary Second Quarter 2019 Operational Results and Updates 2019 Production Guidance
Press Release
TORONTO, July 10, 2019 — YAMANA GOLD INC. (TSX:YRI; NYSE:AUY) (“Yamana” or “the Company”) announces second quarter 2019 production of 257,556 gold equivalent ounces (“GEO”). Production exceeded plan and preliminary costs are within the previous guidance range for the quarter. The Company continues to anticipate a strong second half and remains on track to meet its full-year 2019 guidance. Consistent with previous guidance, the Company expects to report positive free cash flow in the second quarter. Free cash flow is expected to increase in the second half of the year, as operating results will be aided by recently announced reductions in general and administrative expenses and lower interest expense due to anticipated debt reduction. The Company will also have less investment in long-term stockpile following the disposition of the Chapada mine.
The Company reports gold and silver on a GEO basis and by individual metal. Both gold and silver production were above plan. GEO was also above plan despite a higher gold to silver ratio than presented in guidance, mostly the result of strong gold and silver production compared to plan.
SECOND QUARTER 2019 PRODUCTION RESULTS
| Yamana Mines | Second Quarter 2019 Preliminary Production |
| GEO(1) Production (oz.) | 257,556 |
| Gold Production (oz.) | 232,863 |
| Silver Production (m oz.) | 2,171,836 |
| Copper Production (M lbs.) | 31,230 |
1. GEO includes gold plus silver with silver converted to a gold equivalent at a ratio of 87.98:1 for the second quarter. The GEO ratio is calculated based on average market prices prevalent during the quarter.
SECOND QUARTER 2019 PRODUCTION BY MINE
| Mine-by-Mine | Second Quarter 2019 Preliminary Production | |
| Gold (oz.) | ||
| Chapada | 29,019 | |
| El Peñón | 34,646 | |
| Canadian Malartic (50%) | 84,311 | |
| Jacobina | 38,951 | |
| Cerro Moro | 29,643 | |
| Minera Florida | 16,293 | |
| Yamana Mines | 232,863 | |
| Silver (oz.) | ||
| El Peñón | 843,585 | |
| Cerro Moro | 1,328,251 | |
| Yamana Mines | 2,171,836 | |
| Copper (M lbs.) | ||
| Chapada | 31,230 | |
Jacobina recorded its eleventh straight quarter of production of well over 30,000 ounces of gold and second straight quarter of record production. The mine continues to emerge as a leading operation on production, costs, and safety. Canadian Malartic, Cerro Moro, and El Peñón all posted strong second-quarter results, underscoring the Company’s focus on operational excellence and efficiency. Production at Minera Florida was impacted by a period of reduced productivity during the quarter as the Company negotiated new collective bargaining agreements with several unions. Agreements have since been reached with all unions. At Chapada, gold production exceeded plan and copper production was in line with plan mostly as a result of accessing ores in the Corpo Sul pit at mineral reserve grade for copper although with higher gold grades.
SECOND QUARTER HIGHLIGHTS
- Announced the sale of Chapada on April 15, 2019. Consideration included an initial upfront cash payment of $800 million, a $100 million cash payment contingent on the development of a pyrite roaster at Chapada by Lundin, a two per cent net smelter return royalty on the Suruca gold project in the Chapada complex, and the right to receive up to $125 million in additional cash consideration based on the price of gold over the five-year period from the date of close.
- Increased three-year guidance for Jacobina and provided an update on the mine’s phased plan to increase production to up to 225,000 ounces per year by 2023.
- Implemented corporate overhead reductions and streamlined the Company’s organizational structure to reflect its current portfolio of assets. These reductions are expected to generate $15 million in annualized savings thereby reducing corporate overhead on a cash basis to $60 million per year.
SUBSEQUENT TO QUARTER END
- The Chapada sale was completed after which the Company used the $800 million in upfront cash proceeds to repay the amount outstanding under its revolving credit facility and launch tender offers to repay certain near and medium-term fixed term debt maturities.
UPDATED 2019 PRODUCTION GUIDANCE
As a result of the sale of Chapada, which closed July 5, 2019, the Company is adjusting its full-year 2019 guidance as follows:
| Previous 2019 Guidance | Revised 2019 Guidance | |
| Total GEO Production (oz.)1 | 1,060,000 | 1,010,000 |
| Gold Production (oz.) | 940,000 | 899,000 |
1. GEO includes gold plus silver with silver converted to a gold equivalent at a ratio of 85.87:1 for the first half of 2019 and an assumed ratio of 93:1 for the second half of 2019, reflecting approximate gold and silver prices on July 10, 2019, for purposes of the revised 2019 guidance.
UPDATED 2019 PRODUCTION GUIDANCE BY MINE
| Mine-by-Mine | Previous 2019 Guidance | Updated 2019 Guidance | ||
| Gold (oz.) | ||||
| Chapada | 100,000 | 52,000 | ||
| El Peñón | 150,000 | 150,000 | ||
| Canadian Malartic (50%) | 330,000 | 330,000 | ||
| Jacobina | 145,000 | 152,000 | (1) | |
| Cerro Moro | 130,000 | 130,000 | ||
| Minera Florida | 85,000 | 85,000 | ||
| Yamana Mines | 940,000 | 899,000 | ||
| Silver (oz.) | ||||
| El Peñón | 4,000,000 | 4,000,000 | ||
| Cerro Moro | 6,000,000 | 6,000,000 | ||
| Yamana Mines | 10,000,000 | 10,000,000 | ||
| Copper (M lbs.) | ||||
| Chapada | 120 | 61 | ||
1. Jacobina 2019 production guidance previously increased. Please see press release titled ‘Yamana Gold Increases Gold Production Guidance and Updates Improved Strategic Life of Mine Plan and Phased Expansion for Its Jacobina Mine’ dated June 27, 2019.
UPCOMING EVENTS AND CATALYSTS
- The release of second quarter financial and operational results on July 25.
- Results of the Agua Rica pre-feasibility study.
- Delivery of updated mineral reserve and mineral resource estimates for Jacobina along with an exploration update for the operation during the third quarter of 2019.
- Delivery of a broader exploration update on various operations in the third quarter of 2019.
- Investor tour of the Jacobina mine from October 1-3.
- Results of Jacobina pre-feasibility study in the first quarter of 2020.
- Results of East Malartic and Odyssey pre-feasibility study in the first quarter of 2020.
SECOND QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS RELEASE
The Company will release its complete second quarter 2019 operational and financial results after market close on Thursday, July 25, 2019, followed by a conference call and webcast on Friday, July 26, 2019, at 9:00 a.m. ET.
Second Quarter 2019 Conference Call
| Toll Free (North America): | 1-800-273-9672 |
| Toronto Local and International: | 416-340-2216 |
| Webcast: | www.yamana.com |
| Conference Call Replay | |
| Toll Free (North America): | 1-800-408-3053 |
| Toronto Local and International: | 905-694-9451 |
| Passcode: | 6784586# |
The conference call replay will be available from 12:00 p.m. ET on July 26, 2019, until 11:59 p.m. ET on August 16, 2019.
About Yamana
Yamana is a Canadian-based gold, silver and copper producer with a significant portfolio comprised of operating mines, development stage projects, and exploration and mineral properties throughout the Americas, mainly in Canada, Brazil, Chile and Argentina. Yamana plans to continue to build on this base through expansion and optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation opportunities with a primary focus in the Americas.
FOR FURTHER INFORMATION PLEASE CONTACT:
Investor Relations
416-815-0220
1-888-809-0925
Email: investor@yamana.com
IBF4
