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Yamana Reports 4Q Loss, Projects Higher Gold Output

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(Kitco News) -Yamana Gold Inc. (TSX: YRI; NYSE: AUY) late Thursday reported a net loss for the fourth quarter, due to a large impairment charge, and listed guidance calling for higher gold output over the next three years.

The company posted a fourth-quarter net loss from continuing operations, attributable to shareholders, of $191 million, or 20 cents per share. This compares to a loss of $367.6 million, or 37 cents, in the same period a year earlier.

The company listed adjustments to income, attributable to shareholders, totaling $244.2 million (versus $362.1 million in the year-ago period). The most notable adjustment in the fourth quarter was a non-cash impairment for the re-measurement of Gualcamayo and related exploration properties due to their reclassification as assets held for sale, Yamana said.

Cash flow from operating activities was $158.5 million.

Fourth-quarter production was 259,606 ounces of gold from Yamana's six producing mines, excluding the company’s share in Brio Gold Inc. This was down from 268,788 in the fourth quarter of 2016.

Yamana also produced 1.17 million ounces of silver, down from 1.63 million a year ago, and 34.7 million pounds of copper.

In the October-December period, all-in sustaining costs on a co-product basis were $899 per ounce. On a by-product basis, AISC were $829 per ounce.

The company listed an average realized gold price of $1,286 an ounce in the fourth quarter, up from $1,210 in the year-ago period. The silver price was $16.49 an ounce, down from $17.17, while the average copper price rose to $3.02 per pound from $2.48.

“In 2017 we exceeded our production guidance for all metals and did so at costs in line with expectations,” said Peter Marrone, chairman and chief executive officer. Full-year output includes 977,316 ounces of gold, 5 million ounces of silver and 127.3 million pounds of copper.

Marrone said the company is looking forward to the addition of the “low-cost, high-margin” production from Cerro Moro in Argentina. The project remains on schedule and on budget for completion at the end of the first quarter, Yamana said.

Excluding Brio and Gualcamayo output, the company projected 2018 guidance of 900,000 gold ounces, 8.15 million silver ounces and 120 million copper ounces. Precious-metals output is expected to increase over the next two years to 970,000 gold ounces and 12.95 million silver ounces in 2020.

Gold production is expected to rise mostly as a result of increases at Canadian Malartic, Jacobina, Minera Florida, and with new production from Cerro Moro, Yamana said.  Silver production is expected to increase more significantly, in percentage terms, than gold almost entirely as a result of the ramp-up of Cerro Moro.  Copper production is expected to remain constant over the next three years, Yamana said.

For full-year 2017, Yamana reported a loss of $194.4 million, or 21 cents per share, compared to a loss of $307.9 million, or 31 cents, in 2016. Special charges in 2017 totaled $263.8 million, while these were $334.1 million in 2016.

Yamana declared a first-quarter dividend of $0.005 per share to be paid around April 13 to shareholders of record at the close of business on March 29.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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