YAMANA GOLD INC. (TSX:YRI; NYSE:AUY) (“Yamana” or “the Company”) is
herein reporting its financial and operational results for the
fourth quarter and full year 2019, and mineral reserve and mineral
resource estimates as at December 31, 2019.
FOURTH QUARTER AND FULL YEAR
HIGHLIGHTS
Exceeded Production
Guidance
- Fourth quarter gold and silver production was 221,595 ounces
and 2.97 million ounces, respectively, in line with plan. Gold
equivalent ounce ("GEO")(1) production comprised 256,288
GEO(1).
- Exceeded gold production guidance for the year with annual
production of 900,339 ounces.
- Exceeded silver production guidance for the year with annual
production of 10.6 million ounces.
- GEO(1) production of 1.02 million exceeded guidance,
notwithstanding a higher GEO ratio(1) than that assumed when 2019
guidance was set.
Costs in Line
- Total Yamana(2) cash costs(5) for the quarter and full year
were $656 and $667 per GEO(1), respectively, in line with prior
year comparative costs, as were Total Yamana(2) all-in sustaining
costs ("AISC")(5) for the quarter and full year of $1,012 and $978
per GEO(1), respectively.
Financial Results - Strong Cash Flow
Growth
- Fourth quarter net earnings attributable to Yamana equity
holders were $14.6 million or $0.02 per share basic and diluted
compared to a net loss of $61.4 million or $0.06 per share basic
and diluted a year earlier.
- Fourth quarter adjusted net earnings(5) in the latest quarter
were $26.7 million or $0.03 per share basic and diluted compared to
$26.2 million or $0.03 per share basic and diluted a year
earlier.
- Full year cash flows from operating activities were $521.8
million; cash flows from operating activities before net change in
working capital(5) were $590.5 million; net free cash flow was
$358.4 million.
- Fourth quarter cash flows from operating activities were $201.7
million; cash flows from operating activities before net change in
working capital were $176.6 million; and net free cash flow(5) was
$136.5 million.
- Cash flows exceeded the average of the three preceding quarters
as follows:
- Cash flows from operating activities exceeded the average by
91%.
- Cash flows from operating activities before net change in
working capital(5) exceeded the average by 29%.
- Net free cash flow(5) exceeded the average by 87%.
(All amounts are expressed in United States
Dollars unless otherwise indicated.) (See end notes above
cautionary note.)
|
|
Three months ended December 31 |
| (In millions of United
States Dollars) |
2019 |
|
2018 |
|
|
|
Net Free Cash Flow (5) |
$ |
136.5 |
|
$ |
106.0 |
|
|
| Free Cash Flow before Dividends
and Debt Repayments (5) |
$ |
73.4 |
|
$ |
9.5 |
|
|
|
Decrease (Increase) in Net Debt (5) |
$ |
59.8 |
|
$ |
(2.4 |
) |
|
Significantly Reduced Debt
- Net debt(5) decreased by an additional $59.8 million in the
fourth quarter as a result of increased cash balances largely due
the significant increase in free cash flow.
- Total debt decreased by $710.8 million during 2019 while net
debt(5) fell by $771.1 million due to increased cash balances
resulting from significantly higher free cash flow. As of
December 31, 2019, net debt(5) was $889.1 million.
Increased Dividend
- Increased annual dividend by 25% to $0.05 per share, effective
in the first quarter of 2020. The increase follows a 100% increase
to the annual dividend in the third quarter of 2019 to $0.04 per
share from $0.02.
Increased Mineral Resources
- Mineral reserves replaced depletion on a consolidated basis,
excluding assets disposed of in 2019, more than replacing 2019
mineral depletion.
- Inferred mineral resources increased by 27%(4) from year-end
2018 while measured and indicated mineral resources were relatively
unchanged.
- Jacobina increased gold mineral reserves by 19% over and above
2019 depletion based on updated models from the Morro do Vento,
João Belo, Canavieiras Central, and Serra do Córrego mines.
- El Peñón mineral reserves increased by 15% for gold and 21% for
silver in 2019 over and above depletion due to positive infill
drilling and mine design optimization.
Maiden Resource for East Gouldie
Discovery
- The Company is disclosing a maiden mineral resource estimate
for East Gouldie, a new mineralized zone at the Canadian Malartic
mine that contributed significantly to inferred mineral resources
of the mine at year end(4).
- On a 50% basis, the zone added 12.8 million tonnes
of inferred resources at 3.34 grams per tonne ("g/t") for
a total of approximately 1.37 million ounces of gold.
- The zone continues to be open in all directions.
Evaluating Scenarios to Optimize Canadian Malartic
Underground
- The Partnership is evaluating scenarios to optimize the
project, which includes discussions with royalty holders and other
stakeholders to enhance the economics of the project.
- Given the Company's robust pipeline of development projects,
the Company does not currently anticipate approving the project for
development unless these discussions are successful and the project
economics are improved.
Daniel Racine, President and Chief Executive
Officer, commented: “Our fourth quarter capped off an exceptional
year for Yamana. We significantly strengthened our balance sheet by
lowering debt and increasing free cash flow. Our operations
executed extremely well, with Jacobina posting record fourth
quarter and full year production and El Peñón enjoying its
strongest quarter since we rightsized the operation three years
ago. Minera Florida also performed well, particularly in the month
of December, something we believe is a sign of things to come. We
are carrying this momentum into 2020 using our improved financial
flexibility to further reduce debt, advance our organic growth
projects and exploration program, and continue to increase
shareholder returns.”
Free Cash Flow, Cash Balance, and
Liquidity Rise Sharply
The Company’s primary objective is to maximize
free cash flow, and 2019 was a particularly strong year in this
regard. Full year cash flow from operating activities increased 29%
to $521.8 million while net free cash flow(5) rose 63% to $358.4
million from $219.8 million.
The growth in free cash flow contributed to a
sharp rise in Yamana’s cash balance, which increased to $158.8
million at the end of the fourth quarter compared to $98.5 million
a year earlier. As of December 31, 2019, Yamana had available
credit of $750.0 million which, when combined with the Company’s
cash balance, brings total available liquidity to $908.8 million,
up from $803.5 million a year earlier.
Free Cash Flow Growth Enabled Further
Significant Net Debt Reduction
The Company nearly halved its net debt(5) in
2019, significantly strengthening its balance sheet and financial
flexibility. The debt reduction primarily reflects the retirement
of $800.0 million of debt announced in August 2019 and,
importantly, growth in free cash flow has allowed the Company to
use its rising cash balance to continue to meaningfully lower debt.
During the fourth quarter, the Company's net debt(5) further
decreased by $59.8 million as a result of increased cash flows from
operations. As of December 31, 2019, Yamana's net debt(5) was
$889.1 million, down 46% from $1,660.2 billion a year earlier.
Increased Annual Dividend Cumulatively
by 150%
Effective in the first quarter of 2020, the
Company will have increased its annual dividend cumulatively by
150% to $0.05 per share from $0.02 per share in the third quarter.
The Company has adopted a policy of treating dividends on a per
ounce basis and established a program pursuant to which it would
create a reserve fund to protect the dividend for a minimum of
three years. Given the significant increase in free cash flow,
which Yamana believes is sustainable, the Company is targeting the
payment of a dividend between the current rate of approximately $50
per GEO(1) and $100 per GEO(1). The Company will continue to
maintain a balance between the payment of sustainable dividends,
reinvestment in the business, and further improvements to its
balance sheet.
Costs in Line with Previous Guidance and
Adjustments
Total Yamana(2) cash costs(5) for the quarter
and full year of $656 and $667 per GEO(1), respectively, were in
line with previous guidance and adjustments, as were Total
Yamana(2) AISC(5) for the quarter and full year of $1,012 and $978
per GEO(1), respectively. Strong production and cost performance
were observed, particularly at El Peñón and Jacobina in the fourth
quarter.
Costs were in line with expectations
notwithstanding a higher GEO(1) ratio relative to initial guidance,
the removal of production from Chapada in the second half of the
year, which increased costs by $30 per GEO(1), and a decision to
spend more on exploration to further advance the robust drilling
results being obtained across the Company's operations. The
additional spend did not impact margins, which improved due to the
rise in metal prices.
The decision to concentrate sustaining capital
spending in the second half of the year further impacted AISC(5) in
the fourth quarter. In particular, additional capital development
at Jacobina and El Peñón in the second half supported high
quarterly rates of mining and production in 2019, and is expected
to improve access and flexibility in mining operations during
2020.
Jason LeBlanc, Chief Financial Officer, commented: “Our free
cash flow and cash balances have grown to a point where we are now
able to meaningfully reduce debt, as we did during the fourth
quarter, while supporting a substantially higher dividend and
continuing to grow the business. We are confident that this is
sustainable and, as our free cash profile continues to improve,
that we will be an in even better position to generate growth and
increase returns.”
Summary of Certain Non-Cash and Other Items Included in
Net Earnings
| (In
millions of United States Dollars, except per share amounts, totals
may not add due to rounding) |
Three Months Ended December 31 |
Twelve Months Ended December 31, |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
Non-cash unrealized foreign exchange losses |
$ |
0.6 |
|
|
$ |
3.2 |
|
|
$ |
29.0 |
|
|
$ |
9.5 |
|
|
| Share-based
payments/mark-to-market of deferred share units |
3.2 |
|
|
(0.5 |
) |
|
15.0 |
|
|
5.3 |
|
|
| Mark-to-market losses (gains)
on derivative contracts, investments and other assets |
(0.9 |
) |
|
(1.7 |
) |
|
0.1 |
|
|
0.4 |
|
|
| Gain on sale of subsidiaries
and other assets |
— |
|
|
(2.7 |
) |
|
(273.1 |
) |
|
(73.7 |
) |
|
| Gain on sale of Gold Price
Instrument |
— |
|
|
— |
|
|
(11.5 |
) |
|
— |
|
|
| Share of one-off provision
recorded against deferred income tax assets of associate |
— |
|
|
— |
|
|
13.0 |
|
|
— |
|
|
| Net impairment of mining and
non-operational mineral properties |
— |
|
|
(13.0 |
) |
|
— |
|
|
250.0 |
|
|
| Impairment of goodwill |
— |
|
|
45.0 |
|
|
— |
|
|
45.0 |
|
|
| Financing costs paid on early
note redemption |
— |
|
|
— |
|
|
35.0 |
|
|
14.7 |
|
|
| Other provisions, write-downs
and adjustments |
7.5 |
|
|
18.9 |
|
|
42.0 |
|
|
57.9 |
|
|
| Non-cash tax on unrealized
foreign exchange losses |
(3.9 |
) |
|
(43.2 |
) |
|
17.9 |
|
|
151.9 |
|
|
| Income tax effect of
adjustments |
(0.2 |
) |
|
(6.3 |
) |
|
(0.5 |
) |
|
(5.0 |
) |
|
| One-time tax adjustments |
5.8 |
|
|
87.9 |
|
|
26.9 |
|
|
(59.4 |
) |
|
| Total adjustments
(i) |
$ |
12.1 |
|
|
$ |
87.6 |
|
|
$ |
(106.1 |
) |
|
$ |
396.5 |
|
|
|
Total adjustments - increase (decrease) to earnings per
share attributable to Yamana equity holders |
$ |
0.01 |
|
|
$ |
0.09 |
|
|
$ |
(0.11 |
) |
|
$ |
0.42 |
|
|
- For the three months ended December 31, 2019, net earnings
attributable to Yamana equity holders would be adjusted by an
increase of $12.1 million (2018 - increase of $87.6 million). For
the twelve months ended December 31, 2019, net earnings
attributable to Yamana equity holders would be adjusted by a
decrease of $106.1 million (2018 - increase of $396.5
million).
STRATEGIC DEVELOPMENTS
Jacobina, Brazil
During the year, the Company announced
significant increases to mineral reserves at Jacobina of 8.6%
versus year-end 2018. The operation also reported an all-time high
for full-year production of 159,499 ounces of gold, which was also
well above guidance of 152,000 ounces.
With continued improvements to the sustainable
cost structure and development productivity at the mine, Jacobina
was able to incorporate ore previously categorized as mineral
resources in the mineral reserve category. The conclusion to
include lower grade supplemental ore, encountered as a halo to the
core mineral reserves, had the impact of slightly decreasing total
mineral reserve grade but significantly increasing economical
mineral reserve ounces. This supplemental ore halo has been
effectively and profitably mined over the past few
quarters.
The updated mineral reserves of Jacobina
comprise:
- 29.17 million tonnes at a grade of 2.40 g/t in the core zone,
for a total of 2.25 million ounces
- 5.01 million tonnes at a grade of 1.53 g/t in the supplemental
halo zone, for a total of 246 thousand ounces
- For a total mineral reserve of 34.18 million tonnes at a grade
of 2.27 g/t, for a total of 2.49 million ounces
The Company’s mine plan prioritizes the mining
of the core mineral reserves with a grade of 2.40 g/t, and defers
the majority of the mining and processing of the supplemental halo
mineral reserves until late in the mine life. The observed
increase in mineral reserves and mineral reserves grade during the
mid-year and year-end update supports annual gold production above
170,000 ounces, which was previously guided as the target after the
completion in mid-2020 of Phase 1, a modest plant optimization with
a sustainable level of 6,500 tonnes per day ("tpd").
The increase also further supports the potential
for Phase 2, where production is expected to increase to between
200,000 and 225,000 ounces per year, with a likely scenario for
plant throughput in the range of 7,500 tpd to 8,500 tpd, while
maintaining gold recoveries of between 96%-97%.
A pre-feasibility study (“PFS”) to identify
optimum mining and processing expansion scenarios, evaluate project
economics, and determine a project development schedule, including
the timing for permit applications, is expected to be completed in
the first quarter of 2020. Investment for Phase 2 is expected to
occur mostly in 2021 and 2022 with the objective of being at the
higher throughput level at the beginning of 2023. No expansionary
capital will be committed to the plant expansion until the PFS is
completed. The Company’s hurdle requirement for expenditure on the
Phase 2 expansion is an after-tax internal rate of return exceeding
15%. The decision to proceed with the investment will be driven by
the expansion of the plant throughput, thus bringing forward cash
flows, but also an extension of mine life from continued
exploration success and improvements to Jacobina’s average mineral
reserve grade, which would support the investment decision.
Agua Rica, Argentina
During the year, the Company announced an
integration agreement with Glencore International AG and Newmont
Corporation (collectively the “Parties”), pursuant to which the
Agua Rica project would be developed and operated using the
existing infrastructure and facilities of Minera Alumbrera Limited
(“Alumbrera”) in the Catamarca Province of Argentina. The Company
would own 56% of the integrated project. The Parties established a
Technical Committee to direct the advancement of the Integrated
Project.
The integration is expected to significantly
de-risk the development of Agua Rica due to the ability to rely on
the current Alumbrera plant and infrastructure. The Integrated
Project is also expected to generate significant synergies by
bringing together the extensive mineral reserves of Agua Rica with
the existing infrastructure of Alumbrera to create a unique,
high-quality, low-risk brownfield project with an optimized
environmental footprint that is expected to bring significant value
to shareholders, local communities and stakeholders.
On July 19, 2019, the Company announced positive
PFS results that underscored Agua Rica as a long-life, low-cost
project with robust economics and opportunities to realize further
value, including the opportunity to convert economic-grade inferred
mineral resources and expanding throughput scenarios to increase
metal production and returns, among other opportunities.
The PFS highlights include a long mine life of
28 years, annual production for the first 10 full years increased
to 533 million pounds of copper equivalent(i) production, cash
costs(5) decreased to $1.29 per pound, AISC(5) decreased to $1.52
per pound for the first ten years of production, net present value
increased to $1.935 billion and an increased internal rate of
return of 19.7%(ii). Furthermore, proven and probable copper
mineral reserves increased by 21% from year-end 2018 to 11.8
billion pounds and gold mineral reserves increased by 13% to 7.4
million ounces.
The Company believes Agua Rica represents one of
the lowest capital intensity copper development projects in the
world, with capital intensity measured based on the amount of
copper produced and the amount of copper in the
ground.
- Copper equivalent metal includes copper with gold, molybdenum,
and silver converted to copper-equivalent metal based on the
following metal price assumptions: $6,614 per tonne of
copper ($3 per pound), $1,250 per ounce for gold, $24,250 per tonne
for molybdenum, and $18.00 per ounce for silver.
- Assuming metal prices of $3.00 per pound of copper, $1,300 per
ounce of gold price, $18.00 per ounce of silver, $11.00 per pound
of molybdenum and using an 8% discount rate.
Expansion opportunities at Canadian
Malartic, Canada
Exploration programs are ongoing to evaluate
several deposits and prospective exploration areas to the east of
the Canadian Malartic open pit, including the new mineralized zone
discovery of East Gouldie, as well as the Odyssey, East Malartic,
Sladen, Sheehan and Rand zones. These discoveries have the
potential to provide new, mostly underground sources
of mineralization for the Canadian Malartic mill, replacing a
portion of the lower grade open pit ores, and thereby increasing
production and extending mine life. Access for additional
underground drilling and possible mining would be by ramp extending
from the Odyssey zone. The permit allowing for the development of
an underground ramp was received in December 2018.
Drilling at East Gouldie has yielded a number of
positive intercepts and results indicate that the East Gouldie,
East Malartic and Sladen zones are converging at depth, increasing
the level of confidence in the economic potential of overall
mineral resources below 1,000 meters.
East Gouldie contributed to the meaningful
increase in inferred mineral resource figures for East Malartic at
year-end 2019. This increase comes after only one year of
exploration, since the initial discovery hole in November 2018. The
East Gouldie zone remains open and exploration continues to
investigate probable extensions of the known mineral envelope.
See further details in the Company's September
9, 2019, press release: "Yamana Gold Provides Exploration Update on
the Canadian Malartic Mine; Announces Discovery of East Gouldie
Zone" available on SEDAR.
Sale of Chapada, Brazil and Related
Consideration
On July 5, 2019, the Company completed the sale
of the Chapada mine. The Company received total consideration of
$865.5 million, including initial upfront cash consideration of
$800.0 million on closing. In addition, consideration includes a
$100 million cash payment contingent on the development of a pyrite
roaster at Chapada and a 2% net smelter return (“NSR”) royalty on
the Suruca gold project in the Chapada complex.
With regards to the Suruca NSR, the Company is considering a
possible monetization of the royalty, which would allow the
significant gain on realization on the sale of Chapada to have
further upside potential and add to the already monetized $865.5
million in cash obtained on sale.
EXPLORATION
The 2019 exploration program focused on finding
higher quality ounces, improving mine grade, infill drilling to
replace production by upgrading existing mineral resources, and
exploring the Yamana property portfolio as well as several joint
venture opportunities.
The Company continues its exploration programs
at existing operations. The Company increased its exploration
spending in 2019 with a goal of further building mineral reserves
and mineral resources at key operations as well as building a
pipeline of exploration opportunities to ensure future growth.
Exploration plans are focused on extending mine life at Cerro Moro,
El Peñón and Minera Florida, while increasing grade, mineral
resources and mine life at Jacobina and Canadian Malartic to allow
increases in production at low costs. Over the course of the year,
exploration spending at Jacobina was allocated to support the
planned expansion and the program added new mineral reserves at a
grade of 3.0 g/t or better.
Henry Marsden, Senior Vice President of Exploration, commented:
“All five of our mines issued positive exploration updates in the
second half of 2019. I would like to highlight El Peñón, our most
mature mine, which increased gold and silver mineral reserves well
beyond depletion for the third consecutive year. Given this ability
to consistently grow mineral reserves beyond depletion, the mine
life of this, our most resilient operation, is expected to be
considerably longer than suggested by its mineral reserves
inventory at any given point in time.”
Generative Exploration
Program
The Company believes that it is important to
invest prudently and responsibly today to lay the foundation for
the Yamana mines of tomorrow. To that end, a generative exploration
program is in progress to advance several highly prospective
opportunities in the Company's existing portfolio. The key
objectives of the program are as follows:
- Target the Company’s most advanced exploration projects while
retaining the flexibility to prioritize other projects in the
portfolio as and when merited by drill results.
- Advance one or more projects to an inferred mineral resource of
at least 1.5 million ounces of gold within the next three
years.
- On a long-term basis, advance at least one project to a mineral
inventory that is large enough to support a mine with annual gold
production of approximately 150,000 ounces for at least eight
years.
- Advance both gold-only and copper-gold projects and, in the
latter case, consider joint venture agreements aimed at increasing
mineral resource and advancing the project to development while
Yamana maintains an economic interest in the project.
The Company is budgeting $14 million in 2020,
the first year of what will initially be a three-year program. The
Company expects most of the remaining budget for the program to be
derived from monetizations of non-cash producing assets that are
currently in progress, creating an optimum balance between
investing in new projects and maximizing free cash flow. The
generative exploration program targets advanced and advancing
exploration projects in Yamana's existing portfolio, particularly
Canada and Brazil. These projects include:
Lavra VelhaLavra Velha is a
near surface advanced exploration project located in the Lavra
Velha district in Brazil’s Bahia state. There are significant drill
targets on the 55,000-hectare property, and Lavra Velha is highly
prospective to meet the Company’s long-term objectives, as it is
near to surface, open pittable, and as a possible heap leach
operation, it can more easily be put into production with low
capital costs.
Monument BayYamana is actively
exploring its 31,000-hectare Monument Bay project, which is located
in northeast Manitoba. The project covers the Twin Lakes shear
zone, a strongly developed regional structure that hosts gold
mineralization along a three-kilometre strike length. Drilling on
the core Twin Lakes shear zone will continue and exploration has
recently expanded to other targets within the existing exploration
permit, using reverse circulation drilling to collect basal till
and top-of-bedrock samples.
Jacobina NorteThe Jacobina
Norte project, located in Brazil’s Bahia state just a few
kilometres away from the Jacobina mine, is one of Yamana’s most
promising advancing exploration projects. The 78,000-hectare
property covers over 150 kilometres of strike extent of the Serra
do Corrego Formation, which hosts paleoplacer gold mineralization
at the Jacobina mine. Surface exploration along strike has defined
mineralization at Jacobina Norte along a 15-kilometre trend with
significant gold grades.
BorboremaThe Borborema project
is a 25,000-hectare land package in the Borborema district in
Brazil’s Pernambuco state. The project is located in a Proterozoic
magmatic arc environment that is similar to the belt hosting the
Chapada mine, a large copper-gold mine developed by Yamana and put
into production in 2007. Originally explored for narrow high grade
veins, exploration also identified strong copper–gold anomalies in
both rocks and soils. Initial drill testing of the São Francisco
target in 2019 generated near to surface, very high grade copper
intercepts from massive sulphide mineralization.
IvolandiaThe Ivolandia project is located in
Brazil’s Goias state, south of the Chapada mine. Gold-in-soil
anomalies and surface gold mineralization were drill tested in
wide-spaced exploration holes in 2011-12 and more recently in 2019.
Results to date suggest lower grade although very near to surface
oxide mineralization with large tonnage potential.
DomainThe Domain project is
located near Oxford Lake in northeast Manitoba. The land position
consists of a 20,000-hectare property 100%-controlled by Yamana
that is largely unexplored. Interpretation of regional airborne
magnetics together with government geological survey till
geochemistry support a highly prospective environment for folded
iron formation hosted gold.
HEALTH, SAFETY, ENVIRONMENT, AND
CORPORATE RESPONSIBILITY
The Company's Total Recordable Injury Frequency
Rate in 2019 was 0.57(i), a 5% decrease from 2018 and a 24% decline
over the past three years. The El Peñón mine completed 2019 without
a Lost Time Injury, the second consecutive calendar year it
has achieved this milestone. All sites(ii) have now completed at
least one year with the Social License to Operate Index. The index
is based on quarterly community perception surveys that rate the
Company's environmental, social, and governance (ESG) performance.
Index ratings for the Jacobina and Minera Florida mines have
improved by 10.87% and 47.8%, respectively, since the program was
instituted, while Cerro Moro's rating has remained consistent.
- Calculated on 200,000 hours worked and includes employees and
contractors. Does not include Canadian Malartic.
- Does not include El Peñón, which has no specific communities of
interest, or Canadian Malartic, which reports its own publically
available, sustainability metrics.
YEAR END MINERAL RESERVES AND MINERAL
RESOURCES SUMMARY
As at December 31, 2019
|
Proven and probable mineral reserves |
|
|
|
|
|
Tonnes (000's) |
|
Grade (g/t) |
Contained oz. (000's) |
|
|
Gold |
122,397 |
|
2.00 |
7,859 |
|
|
Silver |
12,636 |
|
157.1 |
63,824 |
|
|
Measured and indicated mineral resources |
|
|
|
|
|
Tonnes (000's) |
|
Grade (g/t) |
Contained oz. (000's) |
|
|
Gold |
263,433 |
|
1.50 |
12,672 |
|
|
Silver |
19,080 |
|
72.8 |
44,632 |
|
|
Inferred mineral resources |
|
|
|
|
|
Tonnes (000's) |
|
Grade (g/t) |
Contained oz. (000's) |
|
|
Gold |
200,323 |
|
1.87 |
12,075 |
|
|
Silver |
25,717 |
|
54.9 |
45,421 |
|
Additional details relating to the Company’s mineral
reserve and mineral resource estimates as at December 31, 2019 are
presented below.
Jacobina, Brazil
Jacobina increased gold mineral reserves by 19%
over and above 2019 production depletion based on updated models
from Morro do Vento, João Belo, Canavieiras South, Canavieiras
Central, and Serra do Córrego mines. The conversion of measured and
indicated mineral resources to mineral reserves is partially
responsible for a modest decrease in gold measured and indicated
mineral resources. Inferred mineral resources increased by
398,000 ounces of gold, up 39% from year-end 2018.
In the exploration update provided in the third
quarter of 2019, the Company announced increases to mineral
reserves and mineral reserve grades at Jacobina of 8.6% and 2.6%,
respectively, versus year-end 2018, which added to overall mineral
reserve grade growth in 2018, which when combined with the mid-year
update, represents a 5.3% increase from year-end 2017.
At year end, the Company further increased
mineral reserves by 22%, or 490,000 ounces, from the mid-year
update. Such increase is related to mineral reserves with a lower
average grade of 1.41 g/t. The Company anticipates that it would
defer mining of these low grade reserves until late in the mine
life, and instead mining and processing would be in association
with the mineral reserves at a grade of 2.40 g/t.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/dc4195b8-62e3-4eca-b0f3-5d069417e341
- Adjustments are the inclusion of lower grade halo
reserves.
- Additions from infill drilling and mine design
optimization.
Canadian Malartic including Odyssey,
Canada (50%)
Gold mineral reserves reflect depletion
associated with 2019 production at Canadian Malartic. The objective
of the 2019 exploration program at Canadian Malartic was to define
and increase underground mineral resources, with a focus on
Odyssey, East Malartic, and the newly discovered East Gouldie zone.
The drilling performed, particularly at East Malartic and East
Gouldie, resulted in a 111% increase in inferred mineral resources.
At East Malartic, mineral resources below 1,000 metres in depth
were reported for the first time. At East Gouldie, inferred mineral
resources are relatively high grade at 3.34 g/t diluted. On a 100%
basis, the overall underground project has increased by more than
5,000,000 ounces of inferred mineral resources, significantly
improving the economic potential of the project. Additional
exploration in these areas is planned for 2020.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a41ae9b1-e7c9-477d-80b0-542c8b6c8b6e
- Adjustments to pit design modifications and increased cut-off
grade.
El Peñón, Chile
El Peñón's mineral reserves both replaced 2019
depletion and further increased such mineral reserves by 15% and
21% for gold and silver, respectively, as the result of positive
infill drilling and mine design optimization. It is the third
consecutive year that El Peñón has replaced mineral reserves above
and beyond depletion. Gold measured and indicated mineral resources
increased by 66% while silver increased by 70% compared to the
prior year, due to the positive exploration results from numerous
secondary vein structures in the east mine. Lower gold and silver
inferred mineral resources reflect the conversion to indicated
mineral resources and adjustments to mineral resource
classification criteria. In a recent exploration update, the
Company indicated that new structural interpretations of faulting
of the mine’s Deep Orito vein helping to define new high grade
mineralization. The use of machine learning technology to improve
exploration targeting is also yielding meaningful increases in
mineral resource inventory.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a1fd6320-fdfd-4274-a0dd-298277ed9fdd
- Adjustments to mineral resource classification criteria.
- Additions through infill drilling and mine design
optimization.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/63c7b7c3-9061-4000-b6e2-b7046b85e1ad
- Adjustments to mineral resource classification criteria.
- Additions through infill drilling and mine design
optimization.
Cerro Moro, Argentina
At Cerro Moro, mineral reserves changed due to
2019 depletion, and, given the Company’s expanded experience with
mining Cerro Moro ore bodies over the past year and a half, the
Company was able to further refine its geological understanding and
incorporate that understanding into the geological model, improving
model predictability. Inferred mineral resources increased by 29%
and 10% for gold and silver, respectively, compared to the
prior year, from the addition of promising new structures. The main
increases came from the new Naty discovery, and Agostina. Naty is a
recent discovery, made late last year, and exploration is expected
to continue to expand this mineralized zone. The structures
of Naty, Michelle Extension, Martina, Tres Lomas, Deborah Link and
other zones are expected to undergo further drilling in 2020, as
part of the aggressive exploration budget allocation to the
mine.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/762488cf-7690-4dfd-8f85-0a307f440fcf
- Adjustments to block models.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/51bb77f0-68d0-45ed-a36f-a9a2ab553fb1
- Adjustments to block models.
Minera Florida, Chile
At Minera Florida, the increase in mineral
reserves reflects an increase due to positive drilling results at
Pataguas, Don Leopoldo, Fantasma and PVO Sur, amongst others, and
block model revisions. These increases were partially offset by
mine depletion. Mineral resources remained relatively unchanged as
infill drilling resulted in conversion from inferred mineral
resources to measured and indicated mineral resources. Other
changes to calculation parameters also had the impact of modestly
decreasing inferred mineral resources, which was partially offset
by new discoveries.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/43e5df61-7f9d-4fbb-b907-1f98ed797aae
- Additions due to infill drilling.
KEY STATISTICS
Key operating and financial statistics for the
fourth quarter and full year 2019 are outlined in the following
tables.
Financial Summary
| (In
millions of United States Dollars, except for per share and per
unit amounts) |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
Revenue |
$ |
383.8 |
|
|
$ |
483.4 |
|
|
$ |
1,612.2 |
|
|
$ |
1,798.5 |
|
|
| Cost of sales excluding
depletion, depreciation and amortization |
(169.4 |
) |
|
(266.2 |
) |
|
(782.8 |
) |
|
(1010.0 |
) |
|
| Depletion, depreciation and
amortization |
(119.0 |
) |
|
(130.9 |
) |
|
(471.7 |
) |
|
(438.3 |
) |
|
| Total cost of sales |
(288.4 |
) |
|
(397.1 |
) |
|
(1254.5 |
) |
|
(1448.3 |
) |
|
| Mine operating earnings |
95.4 |
|
|
40.3 |
|
|
357.7 |
|
|
201.2 |
|
|
| General and administrative
expenses |
(19.3 |
) |
|
(21.0 |
) |
|
(79.4 |
) |
|
(91.8 |
) |
|
| Exploration and evaluation
expenses |
(3.3 |
) |
|
(3.6 |
) |
|
(10.3 |
) |
|
(13.0 |
) |
|
| Net earnings (loss) |
14.6 |
|
|
(61.4 |
) |
|
225.6 |
|
|
(297.7 |
) |
|
| Net earnings (loss)
attributable to Yamana equity holders |
14.6 |
|
|
(61.4 |
) |
|
225.6 |
|
|
(284.6 |
) |
|
| Net earnings (loss) per share
- basic and diluted (i) |
0.02 |
|
|
(0.06 |
) |
|
0.24 |
|
|
(0.30 |
) |
|
| Cash flow generated from
operations after changes in non-cash working capital |
201.7 |
|
|
114.7 |
|
|
521.8 |
|
|
404.2 |
|
|
| Cash flow from operations
before changes in non-cash working capital (ii) |
176.6 |
|
|
115.8 |
|
|
590.5 |
|
|
566.3 |
|
|
| Revenue per ounce of gold |
1,486 |
|
|
1,223 |
|
|
1,392 |
|
|
1,263 |
|
|
| Revenue per ounce of
silver |
17.55 |
|
|
14.59 |
|
|
16.39 |
|
|
15.37 |
|
|
| Average realized gold price
per ounce |
$ |
1,484 |
|
|
$ |
1,226 |
|
|
$ |
1,387 |
|
|
$ |
1,267 |
|
|
| Average
realized silver price per ounce |
$ |
17.50 |
|
|
$ |
14.59 |
|
|
$ |
16.26 |
|
|
$ |
15.37 |
|
|
- For the three and twelve months ended December 31, 2019, the
weighted average numbers of shares outstanding was 950,433 thousand
(basic) and 952,315 thousand (diluted), and 950,266 thousand
(basic) and 951,924 thousand (diluted), respectively.
- Refers to a non-GAAP financial measure or an additional line
item or subtotal in financial statements. Please see the
discussion included at the end of this press release under the
heading “Non-GAAP Financial Measures and Additional Line Items and
Subtotals in Financial Statements”. Reconciliations for
all non-GAAP financial measures are available at
www.yamana.com/Q42019 and in Section 11 of the Company’s
Management’s Discussion & Analysis for the year ended December
31, 2019, which is available on the Company's website and on
SEDAR.
Production, Financial and Operating Summary
|
Costs |
Three Months Ended December 31 |
Twelve Months Ended December 31 |
| (In United States
Dollars) |
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
Per GEO sold - Yamana mines (i) |
|
|
|
|
|
Total cost of sales |
$ |
1,117 |
|
$ |
1,101 |
|
$ |
1,142 |
|
$ |
1,109 |
|
|
Cash Costs (5) |
$ |
656 |
|
$ |
653 |
|
$ |
679 |
|
$ |
692 |
|
|
AISC (5) |
$ |
1,011 |
|
$ |
939 |
|
$ |
999 |
|
$ |
998 |
|
|
Per GEO sold - Total Yamana (ii) |
|
|
|
|
|
Total cost of sales |
$ |
1,118 |
|
$ |
1,027 |
|
$ |
1,109 |
|
$ |
1,047 |
|
|
Cash Costs (5) |
$ |
656 |
|
$ |
657 |
|
$ |
667 |
|
$ |
692 |
|
|
AISC (5) |
$ |
1,012 |
|
$ |
921 |
|
$ |
978 |
|
$ |
971 |
|
- Yamana Mines includes those mines in the Company's portfolio as
of December 31, 2019: Canadian Malartic, Jacobina, Cerro Moro, El
Peñón and Minera Florida.
- Total Yamana includes Yamana Mines; and Chapada, and
Gualcamayo, which were divested in July 2019 and December 2018,
respectively.
|
|
Three Months Ended December 31 |
Twelve Months Ended December 31 |
|
Gold Ounces |
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
Canadian Malartic (50%) |
85,042 |
|
84,732 |
|
334,596 |
|
348,600 |
|
| Jacobina |
41,774 |
|
37,071 |
|
159,499 |
|
144,695 |
|
| Cerro Moro |
26,568 |
|
45,066 |
|
120,802 |
|
92,793 |
|
| El Peñón |
48,131 |
|
37,956 |
|
159,515 |
|
151,893 |
|
| Minera Florida |
20,080 |
|
24,526 |
|
73,617 |
|
81,635 |
|
| Chapada |
— |
|
40,841 |
|
52,311 |
|
121,003 |
|
| Gualcamayo |
— |
|
22,291 |
|
— |
|
92,285 |
|
|
TOTAL |
221,595 |
|
292,483 |
|
900,340 |
|
1,032,904 |
|
|
|
Three Months Ended December 31 |
Twelve Months Ended December 31 |
|
Silver Ounces |
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
Cerro Moro |
1,584,904 |
|
2,077,906 |
|
6,322,864 |
|
4,119,085 |
|
| El Peñón |
1,382,963 |
|
1,186,789 |
|
4,317,292 |
|
3,903,961 |
|
|
TOTAL |
2,967,867 |
|
3,264,695 |
|
10,640,156 |
|
8,023,046 |
|
For a full discussion of Yamana’s operational
and financial results and mineral reserve and mineral resource
estimates, please refer to the Company’s Management’s Discussion
& Analysis and Consolidated Financial Statements for the year
ended December 31, 2019, which are available on the Company's
website at www.yamana.com, on SEDAR at www.sedar.com and on EDGAR
at www.sec.gov.
MINERAL RESERVE AND MINERAL RESOURCE
ESTIMATES
Mineral Reserves (Proven and Probable)
The following table sets forth the Mineral Reserve estimates for
the Company’s mineral projects as at December 31, 2019.
|
Gold |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana
Gold Projects |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
|
Canadian Malartic (50%) |
23,847 |
|
0.83 |
635 |
|
43,057 |
|
1.27 |
1,754 |
|
66,904 |
|
1.11 |
2,389 |
|
| Cerro Moro |
12 |
|
5.99 |
2 |
|
1,518 |
|
10.79 |
526 |
|
1,530 |
|
10.75 |
529 |
|
|
El Peñón Ore |
577 |
|
5.03 |
93 |
|
5,078 |
|
4.85 |
792 |
|
5,655 |
|
4.87 |
885 |
|
|
El Peñón Stockpiles |
18 |
|
3.03 |
2 |
|
724 |
|
1.23 |
29 |
|
742 |
|
1.28 |
31 |
|
| Total El Peñón |
595 |
|
4.97 |
95 |
|
5,802 |
|
4.40 |
821 |
|
6,397 |
|
4.45 |
916 |
|
| Jacobina |
20,720 |
|
2.29 |
1,525 |
|
13,456 |
|
2.24 |
968 |
|
34,176 |
|
2.27 |
2,493 |
|
| Jeronimo (57%) |
6,350 |
|
3.91 |
798 |
|
2,331 |
|
3.79 |
284 |
|
8,681 |
|
3.88 |
1,082 |
|
| Minera Florida Ore |
1,275 |
|
3.61 |
148 |
|
2,186 |
|
3.76 |
264 |
|
3,461 |
|
3.71 |
413 |
|
| Minera Florida
Tailings |
— |
|
— |
— |
|
1,248 |
|
0.94 |
38 |
|
1,248 |
|
0.94 |
38 |
|
| Total Minera Florida |
1,275 |
|
3.61 |
148 |
|
3,434 |
|
2.74 |
302 |
|
4,709 |
|
2.98 |
450 |
|
| Total Gold Mineral
Reserves |
52,799 |
|
1.89 |
3,204 |
|
69,598 |
|
2.08 |
4,656 |
|
122.397 |
|
2.00 |
7,859 |
|
|
Agua Rica* |
587,200 |
|
0.25 |
4,720 |
|
517,600 |
|
0.16 |
2,663 |
|
1,104,800 |
|
0.21 |
7,382 |
|
|
Alumbrera (12.5%) |
8,435 |
|
0.39 |
105 |
|
294 |
|
0.37 |
3 |
|
8,728 |
|
0.39 |
109 |
|
*An agreement has been signed by Agua Rica, which is owned by
Yamana Gold, and the owners of Alumbrera that would see the
integration of the two projects.
|
Silver |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
|
Cerro Moro |
12 |
|
1158.5 |
456 |
|
1,518 |
|
614.8 |
30,005 |
|
1,530 |
|
619.2 |
30,461 |
|
|
El Peñón Ore |
577 |
|
169.9 |
3,153 |
|
5,078 |
|
163.4 |
26,679 |
|
5,655 |
|
164.1 |
29,832 |
|
|
El Peñón Stockpiles |
18 |
|
121.7 |
70 |
|
724 |
|
14.4 |
335 |
|
742 |
|
17.0 |
406 |
|
| Total El Peñón |
595 |
|
168.5 |
3,224 |
|
5,802 |
|
144.8 |
27,014 |
|
6,397 |
|
147.0 |
30,238 |
|
| Minera Florida Ore |
1,275 |
|
24.7 |
1,014 |
|
2,186 |
|
21.7 |
1,528 |
|
3,461 |
|
22.8 |
2,542 |
|
| Minera Florida
Tailings |
— |
|
— |
— |
|
1,248 |
|
14.5 |
584 |
|
1,248 |
|
14.5 |
584 |
|
| Total Minera Florida |
1,275 |
|
24.7 |
1,014 |
|
3,434 |
|
19.1 |
2,112 |
|
4,709 |
|
20.6 |
3,125 |
|
| Total Silver Mineral
Reserves |
1,882 |
|
77.6 |
4,694 |
|
10,754 |
|
171.0 |
59,131 |
|
12,636 |
|
157.1 |
63,824 |
|
|
Agua Rica |
587,200 |
|
3.0 |
57,014 |
|
517,600 |
|
2.6 |
43,766 |
|
1,104,800 |
|
2.8 |
100,781 |
|
|
Copper |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
Agua Rica |
587,200 |
|
0.57 |
7,379 |
|
517,600 |
|
0.39 |
4,450 |
|
1,104,800 |
|
0.49 |
11,829 |
|
|
Alumbrera (12.5%) |
8,435 |
|
0.40 |
75 |
|
294 |
|
0.38 |
2 |
|
8,728 |
|
0.40 |
77 |
|
|
Zinc |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
Minera Florida Ore |
1,275 |
|
1.29 |
36 |
|
2,186 |
|
1.18 |
57 |
|
3,461 |
|
1.22 |
93 |
|
| Minera Florida
Tailings |
— |
|
— |
— |
|
1,248 |
|
0.58 |
16 |
|
1,248 |
|
0.58 |
16 |
|
| Total
Zinc Mineral Reserves |
1,275 |
|
1.29 |
36 |
|
3,434 |
|
0.96 |
73 |
|
4,709 |
|
1.05 |
109 |
|
|
Molybdenum |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
Agua Rica |
587,200 |
|
0.030 |
388 |
|
517,600 |
|
0.030 |
342 |
|
1,104,800 |
|
0.030 |
731 |
|
|
Alumbrera (12.5%) |
8,435 |
|
0.013 |
2 |
|
294 |
|
0.014 |
— |
|
8,728 |
|
0.013 |
3 |
|
Mineral Resources (Measured, Indicated, and
Inferred)
The following tables set forth the Mineral
Resource estimates for the Company’s mineral projects as at
December 31, 2019.
|
Gold |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana
Gold Projects |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
|
Arco Sul |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
|
|
Canadian Malartic Open Pit (50%) |
2,020 |
|
1.42 |
|
92 |
|
6,720 |
|
1.57 |
|
339 |
|
8,740 |
|
1.54 |
431 |
|
|
Odyssey Underground (50%) |
— |
|
— |
|
— |
|
1,011 |
|
2.10 |
|
68 |
|
1,011 |
|
2.10 |
68 |
|
|
East Malartic Underground (50%) |
— |
|
— |
|
— |
|
4,962 |
|
2.18 |
|
347 |
|
4,962 |
|
2.18 |
347 |
|
|
East Gouldie Underground (50%) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
|
| Canadian Malartic (50%) |
2,020 |
|
1.42 |
|
92 |
|
12,693 |
|
1.85 |
|
755 |
|
14,713 |
|
1.79 |
847 |
|
| Cerro Moro |
18 |
|
9.02 |
|
5 |
|
1,234 |
|
4.33 |
|
172 |
|
1,252 |
|
4.40 |
177 |
|
|
El Peñón Mine |
627 |
|
4.53 |
|
91 |
|
5,631 |
|
2.93 |
|
530 |
|
6,257 |
|
3.09 |
621 |
|
|
El Peñón Tailings |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
|
|
El Peñón Stockpiles |
— |
|
— |
|
— |
|
1,019 |
|
1.13 |
|
37 |
|
1,019 |
|
1.13 |
37 |
|
| El Peñón Total |
627 |
|
4.53 |
|
91 |
|
6,650 |
|
2.65 |
|
567 |
|
7,276 |
|
2.81 |
658 |
|
| Jacobina |
27,705 |
|
2.26 |
|
2,014 |
|
14,765 |
|
2.27 |
|
1,076 |
|
42,470 |
|
2.26 |
3,090 |
|
| Jeronimo (57%) |
772 |
|
3.77 |
|
94 |
|
385 |
|
3.69 |
|
46 |
|
1,157 |
|
3.74 |
139 |
|
| La Pepa |
15,750 |
|
0.61 |
|
308 |
|
133,682 |
|
0.57 |
|
2,452 |
|
149,432 |
|
0.57 |
2,760 |
|
| Lavra Velha |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
|
| Minera Florida |
2,377 |
|
5.15 |
|
394 |
|
3,475 |
|
4.79 |
|
535 |
|
5,852 |
|
4.93 |
928 |
|
| Monument Bay |
— |
|
— |
|
— |
|
36,581 |
|
1.52 |
|
1,787 |
|
36,581 |
|
1.52 |
1,787 |
|
| Suyai |
— |
|
— |
|
— |
|
4,700 |
|
15.00 |
|
2,286 |
|
4,700 |
|
15.00 |
2,286 |
|
| Total Gold Mineral
Resources |
49,268 |
|
1.89 |
|
2,998 |
|
214,165 |
|
1.41 |
|
9,675 |
|
263,433 |
|
1.50 |
12,672 |
|
|
Agua Rica |
53,600 |
|
0.13 |
|
224 |
|
206,300 |
|
0.11 |
|
730 |
|
259,900 |
|
0.11 |
954 |
|
|
Alumbrera (12.5%) |
6,737 |
|
0.34 |
|
74 |
|
1,916 |
|
0.53 |
|
33 |
|
8,653 |
|
0.38 |
107 |
|
|
Silver |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
|
Cerro Moro |
18 |
|
1012.2 |
587 |
|
1,234 |
|
333.3 |
13,222 |
|
1,252 |
|
343.0 |
13,809 |
|
|
El Peñón Mine |
627 |
|
123.3 |
2,484 |
|
5,631 |
|
102.1 |
18,485 |
|
6,257 |
|
104.2 |
20,969 |
|
|
El Peñón Tailings |
— |
|
— |
— |
|
— |
|
— |
— |
|
— |
|
— |
— |
|
|
El Peñón Stockpiles |
— |
|
— |
— |
|
1,019 |
|
28.8 |
942 |
|
1,019 |
|
28.8 |
942 |
|
| El Peñón Total |
627 |
|
123.3 |
2,484 |
|
6,650 |
|
90.9 |
19,427 |
|
7,276 |
|
93.7 |
21,911 |
|
| Minera Florida |
2,377 |
|
32.3 |
2,467 |
|
3,475 |
|
26.2 |
2,922 |
|
5,852 |
|
28.6 |
5,389 |
|
| Suyai |
— |
|
— |
— |
|
4,700 |
|
23.0 |
3,523 |
|
4,700 |
|
23.0 |
3,523 |
|
| Total Silver Mineral
Resources |
3,021 |
|
57.0 |
5,538 |
|
16,059 |
|
75.7 |
39,095 |
|
19,080 |
|
72.8 |
44,632 |
|
|
Agua Rica |
53,600 |
|
1.6 |
2,671 |
|
206,300 |
|
1.9 |
12,337 |
|
259,900 |
|
1.8 |
15,008 |
|
|
Copper |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
Agua Rica |
53,600 |
|
0.22 |
260 |
|
206,300 |
|
0.30 |
1,364 |
|
259,900 |
|
0.28 |
1,624 |
|
|
Alumbrera (12.5%) |
6,737 |
|
0.33 |
49 |
|
1,916 |
|
0.23 |
10 |
|
8,653 |
|
0.31 |
58 |
|
|
Zinc |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
Minera Florida |
2,377 |
|
1.41 |
74 |
|
3,475 |
|
1.41 |
108 |
|
5,852 |
|
1.41 |
182 |
|
| Total
Zinc Mineral Resources |
2,377 |
|
1.41 |
74 |
|
3,475 |
|
1.41 |
108 |
|
5,852 |
|
1.41 |
182 |
|
|
Molybdenum |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
Agua Rica |
53,600 |
|
0.020 |
24 |
|
206,300 |
|
0.030 |
136 |
|
259,900 |
|
0.030 |
160 |
|
|
Alumbrera (12.5%) |
6,132 |
|
0.016 |
2 |
|
462 |
|
0.013 |
— |
|
6,593 |
|
0.015 |
2 |
|
|
Gold |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
| Yamana
Gold Projects |
(000's) |
(g/t) |
oz. (000's) |
|
Arco Sul |
5,000 |
|
4.02 |
646 |
|
|
Canadian Malartic Open Pit (50%) |
2,354 |
|
1.22 |
92 |
|
|
Odyssey Underground (50%) |
11,684 |
|
2.22 |
833 |
|
|
East Malartic Underground (50%) |
39,382 |
|
2.05 |
2,596 |
|
|
East Gouldie Underground (50%) |
12,760 |
|
3.34 |
1,369 |
|
| Canadian Malartic (50%) |
66,180 |
|
2.30 |
4,890 |
|
| Cerro Moro |
2,175 |
|
3.91 |
273 |
|
|
El Peñón Mine |
4,510 |
|
3.38 |
490 |
|
|
El Peñón Tailings |
13,767 |
|
0.55 |
245 |
|
|
El Peñón Stockpiles |
— |
|
— |
— |
|
| El Peñón Total |
18,276 |
|
1.25 |
735 |
|
| Jacobina |
18,528 |
|
2.36 |
1,406 |
|
| Jeronimo (57%) |
1,118 |
|
4.49 |
161 |
|
| La Pepa |
37,900 |
|
0.50 |
620 |
|
| Lavra Velha |
3,934 |
|
4.29 |
543 |
|
| Minera Florida |
4,365 |
|
5.32 |
747 |
|
| Monument Bay |
41,946 |
|
1.32 |
1,781 |
|
| Suyai |
900 |
|
9.90 |
274 |
|
| Total Gold Mineral
Resources |
200,323 |
|
1.87 |
12,075 |
|
|
Agua Rica |
742,900 |
|
0.09 |
2,150 |
|
|
Alumbrera (12.5%) |
849 |
|
0.46 |
13 |
|
|
Silver |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(g/t) |
oz. (000's) |
|
Cerro Moro |
2,175 |
|
222.2 |
15,542 |
|
|
El Peñón Mine |
4,510 |
|
120.0 |
17,406 |
|
|
El Peñón Tailings |
13,767 |
|
18.9 |
8,380 |
|
|
El Peñón Stockpiles |
— |
|
— |
— |
|
| El Peñón Total |
18,276 |
|
43.9 |
25,786 |
|
| Minera Florida |
4,365 |
|
25.1 |
3,517 |
|
| Suyai |
900 |
|
21.0 |
575 |
|
| Total Silver Mineral
Resources |
25,717 |
|
54.9 |
45,421 |
|
|
Agua Rica |
742,900 |
|
1.6 |
38,693 |
|
|
Copper |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(% ) |
lbs (mm) |
|
Agua Rica |
742,900 |
|
0.23 |
3,767 |
|
|
Alumbrera (12.5%) |
849 |
|
0.21 |
4 |
|
|
Zinc |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(% ) |
lbs (mm) |
|
Minera Florida |
4,365 |
|
1.20 |
116 |
|
| Total
Zinc Mineral Resources |
4,365 |
|
1.20 |
116 |
|
|
Molybdenum |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
| Yamana Gold Projects |
(000's) |
(% ) |
lbs (mm) |
|
Agua Rica |
742,900 |
|
0.030 |
491 |
|
|
Alumbrera (12.5%) |
85 |
|
0.014 |
— |
|
Mineral Reserve and Mineral Resource Reporting
Notes
1. Metal Price, Cut-off Grade, Metallurgical Recovery:
|
Mine |
Mineral Reserves |
Mineral Resources |
|
Yamana Gold Projects |
|
|
|
Arco Sul |
N/A |
Price assumption: $1,500 gold |
| |
|
2.5 g/t gold cut-off |
|
Canadian Malartic (50%) |
Price assumption: $1,200 gold |
Price assumption: $1,200 gold |
| |
Open pit cut-off grades range
from 0.40 to 0.43 g/t gold |
Cut-off grades range from 0.40 to
0.43 g/t gold inside pit to 1.0 g/t gold outside or below pit |
| |
Metallurgical recoveries for gold
averaging 90.2% |
Underground Cut-off grade at
Odyssey is 1.15 to 1.35 g/t gold (stope optimized) |
| |
|
Underground Cut-off grade at East
Malartic is 1.30 to 1.60 g/t gold (stope optimized) |
| |
|
Underground Cut-off grade at East
Gouldie is 1.35 to 1.55 g/t gold (stope optimized) |
|
Cerro Moro |
Price assumption: $1,250 gold and $18.00 silver |
|
| |
Open pit cut-off at 123 NSR $/ton
and Underground cut-off at 215 NSR $/ton |
Cut-off grade at 3.0 g/t
Aueq. |
| |
Metallurgical recoveries average
95% for gold and 93% for silver |
|
|
El Peñón |
Price Assumption: $1,250 gold, $18.00 silver |
Price Assumption: $1,250 gold, $18.00 silver |
| |
Open Pit cut-off at $43.15/t |
Underground cut-off at $95.93/t,
which corresponds to 75% of the cut-off value used to estimate the
mineral reserves |
| |
Underground cut-off at
$127.90/t |
Mineral Resources contained in
tailings and stockpiles reported at cut-offs of 0.50 g/t and 0.79
g/t gold equivalent respectively |
| |
Low grade stockpiles cut-off 0.90
g/t gold equivalent |
Metallurgical recoveries for
underground ores range from 77.0% to 96.9% for gold and from 63.0%
to 94.4% for silver |
| |
Metallurgical recoveries for open
pit ores range from 86.56% to 90.29% for gold and from
83.53% to 86.95% for silver |
Metallurgical recoveries for
tailings estimated to be 60% for gold and 30% for silver |
| |
Metallurgical recoveries for
underground ores range from 77.0% to 96.9% for gold and
from 63.0% to 94.4% for silver |
Metallurgical recoveries for
stockpiles estimated to be 88.0% for gold and 80.8% for silver |
| |
Metallurgical recoveries for low
grade stockpiles are 95.2% for gold and 83.0% for
silver |
|
|
Jacobina |
Price assumptions: $1,250 gold |
|
| |
Underground reserves are reported
at variable cut-off grades by zone ranging from 1.12 g/t gold to
1.30 g/t gold |
Underground cut-off grade is 1.00
g/t gold, which corresponds to 75% of the cut-off used to estimate
the mineral reserves |
| |
Mineral reserves includes lower
grade supplemental ore which is incorporated into the life of mine
plan, and which was previously categorized as mineral
resources |
Minimum mining width of 1.5
meters, considering internal waste and dilution |
| |
Metallurgical recovery is
96% |
|
|
Jeronimo (57%) |
Price Assumption:$900 gold |
|
| |
Cut-off grade at 2.0 g/t
gold |
Cut-off grade at 2.0 g/t
gold |
| |
Metallurgical recovery for gold
is 86%. |
|
|
La Pepa |
N/A |
Price Assumption: $780 gold |
| |
|
cut-off grade at 0.30 g/t
gold |
|
Lavra Velha |
N/A |
Price assumption: $1,300 gold and $3.50 copper |
| |
|
cut-off grade at 0.2 g/t gold
and 0.1% copper |
|
Minera Florida |
Price assumption: $1,250/oz gold, $18.00/oz silver and
$1.25/lb Zn. |
Price assumption: $1,250/oz gold, $18.00/oz silver and
$1.25/lb Zn. |
| |
Underground cut-offs for Las
Petaguas Zone $91.48/t and for the Core Mine Zones $92.86/t |
Underground Mineral Resources are
estimated at a cut-off grade of 2.50 g/t gold equivalent |
| |
Metallurgical recoveries are
91.36% for gold, 62.93% for silver and 75.38% for zinc |
Metallurgical recoveries are
91.36% for gold, 62.93% for silver and 75.38% for zinc |
|
Monument Bay |
N/A |
Price Assumption: $1,200 gold |
| |
|
Cut-off grades are 0.4 g/t gold
and 0.7 g/t gold for the open pits and 4.0 g/t gold for
underground |
|
Suyai |
N/A |
5.0
g/t gold cut-off inside mineralized wireframe modeling |
|
Agua Rica |
Mineral Reserves are estimated using a variable metallurgical
recovery. |
Mineral Resources are estimated using a variable metallurgical
recovery. |
| |
Average metallurgical recoveries
of 86% Cu, 35% Au, 43% Ag, and 44% Mo were considered. |
LOM average metallurgical
recoveries of 86% Cu, 35% Au, 43% Ag, and 44% Mo were
considered. |
|
|
Open pit Mineral Reserves are reported at a variable cut-off value
averaging $8.42/t, based on metal price assumptions of US$3.00/lb
Cu, $1,250/oz Au, $18/oz Ag, and $11/lb Mo. A LOM average open pit
costs of $1.72/t moved, processing and G&A cost of $6.70/t of
run of mine processed. The strip ratio of the mineral
reserves is 1.7 with overall slope angles varying from 39° to 45°
depending on the geotechnical sector. |
Mineral Resources are constrained by an optimized pit shell based
on metal price assumptions of $4.00/lb Cu, $1,600/oz Au, $24/oz Ag,
and $11/lb Mo. Open pit Mineral Resources are reported at a
variable cut-off value which averages $8.42/t milled with overall
slope angles varying from 39° to 45° depending on the geotechnical
sector. |
| Alumbrera Projects
(12.5%) |
|
|
| Alumbrera
Deposit |
Price assumption: $1,250 gold,
$2.91 copper |
Price assumption: $1,250 gold,
$2.95 copper. |
| |
Underground cut-off at 0.5%
copper equivalent |
Underground cut-off at 0.43%
copper equivalent |
| |
Metallurgical recoveries average
87.85% for copper and 72.31% for gold |
|
| Bajo El Durazno
Deposit |
N/A |
Price assumption: $1,250 gold,
$2.95 copper. |
|
|
|
0.74 g/t Aueq cut-off within underground economic envelope |
2. All Mineral Reserves and Mineral Resources have been
calculated in accordance with the standards of the Canadian
Institute of Mining, Metallurgy and Petroleum and National
Instrument 43-101, other than the estimates for the Alumbrera mine
which have been calculated in accordance with the JORC Code which
is accepted under NI 43-101.
3. All Mineral Resources are reported
exclusive of Mineral
Reserves.
4. Mineral Resources which are not Mineral Reserves do
not have demonstrated economic
viability.
5. Mineral Reserves and Mineral Resources are reported
as of December 31,
2019.
6. For the qualified persons responsible for the
Mineral Reserve and Mineral Resource estimates at the Company’s
material properties, see the qualified persons list below.
|
Property |
Qualified Persons for Mineral Reserves |
Qualified Persons for Mineral Resources |
|
| |
|
Canadian Malartic |
Sylvie Lampron, Eng., Canadian Malartic Corporation |
Pascal Lehouiller, P. Geo, Canadian Malartic Corporation |
|
| El
Peñón |
Sergio Castro, Registered Member of the Chilean Mining Commission,
Yamana Gold Inc. |
Dominic Chartier, P. Geo, Yamana Gold Inc. |
|
|
Jacobina |
Esteban Chacon, Registered Member of the Chilean Mining Commission,
Yamana Gold Inc. |
Renan Garcia Lopes, MAusIMM CP (Geo), Yamana Gold Inc. |
|
The Company will host a conference call and
webcast on Friday, February 14, 2020, at 9:00 a.m. ET.
Fourth 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: |
5849142 |
The conference call replay will be available
from 12:00 p.m. ET on February 14, 2020, until 11:59 p.m. ET on
March 6, 2020.
Qualified Persons
Scientific and technical information contained
in this news release has been reviewed and approved by Sébastien
Bernier (P. Geo and Senior Director, Geology and Mineral
Resources). Sébastien Bernier is an employee of Yamana Gold Inc.
and a "Qualified Person" as defined by Canadian Securities
Administrators' National Instrument 43-101 - Standards of
Disclosure for Mineral Projects.
About Yamana
Yamana is a Canadian-based precious metals
producer with significant gold and silver production, development
stage properties, exploration properties, and land positions
throughout the Americas, including 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 and Corporate Communications
416-815-02201-888-809-0925Email: investor@yamana.com
END NOTES
(1) GEO assumes gold ounces plus the gold
equivalent of silver ounces using a ratio of 85.54 and 86.02 for
the three months and year ended December 31, 2019, respectively,
and 81.30 and 79.60 for the three months and year ended December
31, 2018, respectively.
(2) Total Yamana includes production from all
Yamana mines (which includes mines in the Company's portfolio as of
December 31, 2019: Canadian Malartic, Jacobina, Cerro Moro, El
Peñón, and Minera Florida), and production from Chapada prior to
divestment on July 5, 2019.
(3) Included in fourth quarter and full year
2019 production figures are 3,137 gold ounces of pre-commercial
production, related to the Company's 50% interest in the Canadian
Malartic mine's Barnat deposit.
(4) Refer to 'Section 4: Operating Segments
Performance and Section 6: Mineral Reserve and Mineral Resource
Estimates in the Company's Management's Discussion and Analysis
("MD&A") for the year ended December 31, 2019 for additional
details on how Yamana's exploration programs continue to deliver on
mineral resources discovery and mineral reserve replacement and
growth.
(5) A cautionary note regarding non-GAAP
performance measures and their respective reconciliations, as well
as additional line items or subtotals in financial statements is
included in Section 11: Non-GAAP Performance Measures in the
Company's MD&A for the year ended December 31, 2019 and in the
'Non-GAAP Performance Measures' section below.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS: This news release contains or incorporates by reference
“forward-looking statements” and “forward-looking information”
under applicable Canadian securities legislation and within the
meaning of the United States Private Securities Litigation Reform
Act of 1995. Forward-looking information includes, but is not
limited to information with respect to the Company’s strategy,
plans or future financial or operating performance, results of
pre-feasibility studies, repayment of debt or updates regarding
mineral reserves and mineral resources. 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 outcome of
various planned technical studies, 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, changes in national and local government
legislation, taxation, controls or regulations and/or change in the
administration of laws, policies and practices, 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 and the Argentine Peso versus the United States Dollar), the
impact of inflation, possible variations in ore grade or recovery
rates, changes in the Company’s hedging program, changes in
accounting policies, changes in mineral resources and mineral
reserves, risks related to asset dispositions, risks related to
metal purchase agreements, risks related to acquisitions, changes
in project parameters as plans continue to be refined, changes in
project development, construction, production and commissioning
time frames, 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
timelines, government regulation and the risk of government
expropriation or nationalization of mining operations, risks
related to relying on local advisors and consultants in foreign
jurisdictions, environmental risks, unanticipated reclamation
expenses, risks relating to joint venture operations, title
disputes or claims, limitations on insurance coverage, timing and
possible outcome of pending and outstanding litigation and labour
disputes, risks related to enforcing legal rights in foreign
jurisdictions, as well as those risk factors discussed or referred
to herein and in the Company's 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
RESOURCESThis news release has been prepared in accordance with the
requirements of the securities laws in effect in Canada, which
differ in certain material respects from the disclosure
requirements of United States securities laws contained in Industry
Guide 7. The terms “mineral reserve”, “proven mineral reserve”
and “probable mineral reserve” are Canadian mining terms as defined
in accordance with Canadian National Instrument 43-101 Standards of
Disclosure for Mineral Projects (“NI 43-101”) and the Canadian
Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended. These definitions differ
from the definitions in the disclosure requirements promulgated by
the Securities and Exchange Commission (the “Commission”) contained
in Industry Guide 7. Under Industry Guide 7 standards, a
“final” or “bankable” feasibility study is required to report
mineral reserves, the three-year historical average price is used
in any mineral reserve or cash flow analysis to designate mineral
reserves and the primary environmental analysis or report must be
filed with the appropriate governmental authority.
In addition, 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. 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, issuers reporting pursuant to Industry Guide 7 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 reporting pursuant to Industry Guide 7.
NON-GAAP PERFORMANCE MEASURES
The Company has included certain non-GAAP
performance measures to supplement its Consolidated Financial
Statements, which are presented in accordance with IFRS, including
the following:
- Cash Costs per GEO sold;
- All-in Sustaining Costs per GEO sold;
- Net Debt;
- Net Free Cash Flow and Free Cash Flow;
- Average Realized Price per ounce of gold/silver sold;
- Average Realized Price per pound of copper; and
- Adjusted Earnings
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 financial 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.
Management's determination of the components of non-GAAP and
additional measures are evaluated on a periodic basis influenced by
new items and transactions, a review of investor uses and new
regulations as applicable. Any changes to the measures are duly
noted and retrospectively applied as applicable.
For definitions and descriptions of the non-GAAP
measures, other than those noted and reconciled below and
additional subtotals in financial statements, refer to Section 11
of the Company's MD&A for the year ended December 31, 2019,
which is available on the Company's website and on SEDAR.
GEO PRODUCTION AND SALES
Production and sales of silver are treated as a
gold equivalent in determining a combined precious metal production
or sales unit, commonly referred to as gold equivalent ounces
("GEO"). Specifically, guidance GEO produced are calculated 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. Actual GEO production and sales calculations
are based on an average realized gold to silver price ratio for the
relevant period.
CASH COSTS AND ALL-IN SUSTAINING 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 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 operating activities.
The measure of Cash Costs and All-in Sustaining
Costs (AISC), along with revenue from sales, is considered to be a
key indicator of a company’s ability to generate operating earnings
and cash flows from its mining operations. This data is furnished
to provide additional information and is a non-GAAP financial
measure. The terms Cash Costs per GEO sold, Cash Costs per pound of
copper sold, AISC per GEO sold and AISC per pound of copper sold do
not have any standardized meaning prescribed under IFRS, and
therefore they may not be comparable to similar measures employed
by other companies. Non-GAAP financial measures should not be
considered in isolation as a substitute for measures of performance
prepared in accordance with IFRS and are not necessarily indicative
of operating costs, operating profit or cash flows presented under
IFRS.
Cash Costs include mine site operating costs
such as mining, processing, administration, production taxes and
royalties which are not based on sales or taxable income
calculations, but are exclusive of amortization, reclamation,
capital, development and exploration costs. The Company believes
that such measure provides useful information about its underlying
Cash Costs of operations. Cash Costs are computed on a weighted
average basis as follows:
- Cash Costs per GEO sold - The total costs used as the numerator
of the unitary calculation represent Cost of Sales excluding DDA,
net of treatment and refining charges. These costs are then divided
by GEO sold. In the case of Chapada, costs directly attributable to
GEO and copper will be allocated on that attributable basis.
Non-attributable costs will be allocated based on the relative
value of revenues for each metal, which will be determined annually
at the beginning of each year.
- Cash Costs of copper - Attributable copper sales costs, divided
by commercial copper pounds sold.
AISC figures are calculated in accordance with a
standard developed by the World Gold Council (“WGC”) (a
non-regulatory, market development organization for the gold
industry). Adoption of the standard is voluntary and the cost
measures presented herein may not be comparable to other similarly
titled measures of other companies.
AISC per sold seeks to represent total
sustaining expenditures of producing and selling GEO from current
operations. The total costs used as the numerator of the unitary
calculation represent Cash Costs (defined above) and includes cost
components of mine sustaining capital expenditures including
stripping and underground mine development, corporate and mine-site
general and administrative expense, sustaining mine-site
exploration and evaluation expensed and capitalized and accretion
and amortization of reclamation and remediation. AISC do not
include capital expenditures attributable to projects or mine
expansions, exploration and evaluation costs attributable to growth
projects, income tax payments, borrowing costs and dividend
payments. Consequently, this measure is not representative of all
of the Company's cash expenditures. In addition, the calculation of
AISC does not include depletion, depreciation and amortization
expense as it does not reflect the impact of expenditures incurred
in prior periods.
- AISC per GEO sold - reflect allocations of the aforementioned
cost components on the basis that is consistent with the nature of
each of the cost component to the GEO production and sales
activities.
- AISC per pound of copper - reflect allocations of the
aforementioned cost components on the basis that is consistent with
the nature of each of the cost component to GEO or copper
production activities.
NET DEBT
The Company uses the financial measure "Net
Debt", which is a non-GAAP financial measure, 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 non-GAAP financial measure of net debt does not
have any standardized meaning prescribed under IFRS, and therefore
it 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.
Net Debt is calculated as the sum of the current
and non-current portions of long-term debt net of the cash and cash
equivalents balance as at the balance sheet date. A reconciliation
of Net Debt at December 31, 2019 and 2018 is provided in Section 11
of the Company's MD&A for the year ended December 31, 2019,
which is available on the Company's website and on SEDAR.
NET FREE CASH FLOW AND FREE CASH FLOW
The Company uses the financial measure "Net Free
Cash Flow" and "Free Cash Flow", which are non-GAAP financial
measures, to supplement information in its Consolidated Financial
Statements. Net Free Cash Flow and Free Cash Flow do not have any
standardized meaning prescribed under IFRS, and therefore may not
be comparable to similar measures employed by other companies. 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
with respect to its operating cash flow capacity to meet
non-discretionary outflows of cash or to meet dividends and debt
repayments. The presentation of Net Free Cash Flow and Free Cash
Flow are not meant to be substitutes for the cash flow information
presented in accordance with IFRS, but rather should be evaluated
in conjunction with such IFRS measures. Net Free Cash Flow is
calculated as cash flows from operating activities adjusted for
advance payments received pursuant to metal purchase agreements,
non-discretionary expenditures from sustaining capital expenditures
and interest paid related to the current period. Free Cash Flow
further deducts remaining capital expenditures and payments for
lease obligations. Reconciliations of Net Free Cash Flow and Free
Cash Flow are provided below.
| Net
Free Cash Flow Reconciliation |
Three months ended December 31 |
| (In millions of United States
Dollars) |
2019 |
|
|
2018 |
|
|
|
Cash flows from operating activities |
$ |
201.7 |
|
|
$ |
114.8 |
|
|
| Adjustments to operating cash
flows: |
|
|
| Deferred revenue recognized on
copper prepay, streaming arrangements and other net of advance
payments received |
4.2 |
|
|
37.5 |
|
|
| Other payments |
— |
|
|
33.2 |
|
|
| Non-discretionary items
related to the current period |
|
|
| Sustaining capital
expenditures |
(46.6 |
) |
|
(52.5 |
) |
|
| Interest paid |
(22.8 |
) |
|
(27.0 |
) |
|
| Net
free cash flow |
$ |
136.5 |
|
|
$ |
106.0 |
|
|
|
Free Cash Flow before Dividends and Debt Repayment
Reconciliation |
Three months ended December 31 |
| (In millions of United States
Dollars) |
2019 |
|
|
2018 |
|
|
|
Cash flows from operations |
$ |
201.7 |
|
|
$ |
114.8 |
|
|
|
Cash flows used in capital expenditures |
(85.7 |
) |
|
(108.4 |
) |
|
|
Cash flows used in other investing activities |
(11.1 |
) |
|
(10.2 |
) |
|
|
Interest and other finance expenses paid |
(22.8 |
) |
|
(27.0 |
) |
|
|
Payment of lease liabilities |
(4.8 |
) |
|
— |
|
|
|
Cash (used in) from other financing activities |
(8.5 |
) |
|
2.5 |
|
|
|
Effect of foreign exchange of non-USD denominated cash |
0.4 |
|
|
0.3 |
|
|
|
Payments or inflows not reflective of current period
operations: |
|
|
|
Unearned revenue recognized on copper prepay, streaming
arrangements and other net of advance payments received |
4.2 |
|
|
37.5 |
|
|
|
Free Cash Flow before Dividends and Debt Repayments |
$ |
73.4 |
|
|
$ |
9.5 |
|
|
AVERAGE REALIZED METAL PRICES
The Company uses the financial measures "average
realized gold price", "average realized silver price" and "average
realized copper price", which are non-GAAP financial measures, to
supplement in its Consolidated Financial Statements. Average
realized price does not have any standardized meaning prescribed
under IFRS, and therefore may not be comparable to similar measures
employed by other companies. 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 vis-à-vis average market prices
of metals for the period. The presentation of average realized
metal prices is not meant to be a substitute for the revenue
information presented in accordance with IFRS, but rather should be
evaluated in conjunction with such IFRS measure.
Average realized metal price represents the sale
price of the underlying metal before deducting treatment and
refining charges, and other quotational and pricing adjustments.
Average realized prices are calculated as the revenue related to
each of the metals sold, i.e. gold, silver and copper, divided by
the quantity of the respective units of metals sold, i.e. gold
ounce, silver ounce and copper pound. Reconciliations of average
realized metal prices to revenue are provided in Section 11 of the
Company's MD&A for the year ended December 31, 2019, which is
available on the Company's website and on SEDAR.
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 Annual
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 non-recurring items, items
not related to or having a disproportionate effect on results for a
particular periods and/or not directly related to the core mining
business such as (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
derivatives, (e) impairment losses and reversals on mineral
interests and other assets, (f) deferred income tax expense
(recovery) on the translation of foreign currency inter-corporate
debt, (g) mark-to-market (gains) losses on other assets, (h)
one-time tax adjustments to historical deferred income tax balances
relating to changes in enacted tax rates, (i) reorganization costs,
(j) non-recurring provisions, (k) (gains) losses on sale of assets,
(l) any other non-recurring adjustments and the tax impact of any
of these adjustments calculated at the statutory effective rate for
the same jurisdiction as the adjustment. 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 or Loss” and
“Adjusted Earnings or 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 uses these measures for internal
valuation of the core mining performance for the period and to
assist with planning and forecasting of future operations.
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-recurring items,
items not related to or not indicative of current or future
period's results and/or not directly related to the core mining
business and are a better indication of the Company’s profitability
from operations as evaluated by internal management and the board
of directors. 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.
ADDITIONAL LINE ITEMS OR SUBTOTALS IN FINANCIAL
STATEMENTS
The Company uses the following additional line
items and subtotals in the Consolidated Financial Statements as
contemplated in IAS 1: Presentation of Financial Statements:
- Gross margin excluding depletion, depreciation and
amortization - represents the amount of revenue in excess
of cost of sales excluding depletion, depreciation and
amortization. This additional measure represents the cash
contribution from the sales of metals before all other operating
expenses and DDA, in the reporting period.
- Mine operating earnings/loss - represents the
amount of revenue in excess of cost of sales excluding depletion,
depreciation and amortization and depletion, depreciation and
amortization.
- Operating earnings/loss - represents the
amount of earnings/loss before net finance costs, other
income/costs and income tax expense/recovery. This measure
represents the amount of financial contribution, net of all
expenses directly attributable to mining operations and overheads.
Finance costs and other income/costs are not classified as expenses
directly attributable to mining operations.
- Cash flows from operating activities before income
taxes paid and net change in working capital - excludes
the payments made during the period related to income taxes and tax
related payments and the movement from period-to-period in working
capital items including trade and other receivables, other assets,
inventories, trade and other payables. Working capital and income
taxes can be volatile due to numerous factors, such as the timing
of payment and receipt. As the Company uses the indirect method
prescribed by IFRS in preparing its statement of cash flows, this
additional measure represents the cash flows generated by the
mining business to complement the GAAP measure of cash flows from
operating activities, which is adjusted for income taxes paid and
tax related payments and the working capital change during the
reporting period.
- Cash flows from operating activities before net change
in working capital - excludes the movement from
period-to-period in working capital items including trade and other
receivables, other assets, inventories, trade and other payables.
Working capital can be volatile due to numerous factors, such as
the timing of payment and receipt. As the Company uses the indirect
method prescribed by IFRS in preparing its statement of cash flows,
this additional measure represents the cash flows generated by the
mining business to complement the GAAP measure of cash flows from
operating activities, which is adjusted for the working capital
change during the reporting period.
The Company’s management believes that this
presentation provides useful information to investors because gross
margin excluding depletion, depreciation and amortization excludes
the non-cash operating cost item (i.e. depreciation, depletion and
amortization), cash flows from operating activities before net
change in working capital excludes the movement in working capital
items, mine operating earnings excludes expenses not directly
associated 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 operating activities and are considered
to be meaningful in evaluating the Company’s past financial
performance or the future prospects.
Grafico Azioni Yamana Gold (NYSE:AUY)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Yamana Gold (NYSE:AUY)
Storico
Da Apr 2023 a Apr 2024
