YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:AUY) (“Yamana” or “the
Company”) is herein reporting its financial and operational results
for the fourth quarter and full year 2020, providing three-year
mine-by-mine guidance, and updating mineral reserve and mineral
resource estimates as at December 31, 2020.
The Company is also announcing a positive
construction decision for the Odyssey underground project at the
Canadian Malartic mine following the impressive results of the
technical study, which outlines robust economics, a significant
increase in mineral resources, and a mine life extension to at
least 2039.
Further, as a continuation of Yamana’s climate
change actions, the Company today is also announcing that it has
formally adopted a climate strategy, approved by the Board of
Directors, to demonstrate the Company’s commitment to the
transition to a low-carbon future. The strategy is underpinned by
adoption of two targets: a 2° C science-based target (“SBT”) and an
aspirational net-zero 2050 target.
FOURTH QUARTER AND FULL YEAR
HIGHLIGHTS
Financial Results - Strong Earnings and
Cash Flows Further Strengthening Cash Balances and Balance
Sheet
- Fourth quarter net earnings were
$103.0 million or $0.11 per share basic and diluted compared to net
earnings of $14.6 million or $0.02 per share basic and diluted a
year earlier.
- Adjusted net earnings(2) were
$107.7 million or $0.11 per share basic and diluted.
- Fourth quarter cash flows from
operating activities were $181.5 million and net free cash flow(2)
was $118.9 million, exceeding the averages of the preceding three
quarters by 25% and 6%, respectively.
- Fourth quarter cash flows from
operating activities before net change in working capital were
$207.4 million, and free cash flow before dividends and debt
repayments(2) was $61.7 million.
- Net debt(2) decreased by an
additional $53.4 million in the fourth quarter as a result of
increased cash balances largely due the significant increase in
free cash flow.
- For the full year, net debt(2) fell
by $323.4 million to $565.7 million. The Company has achieved its
financial management objective of a leverage ratio of net debt to
EBITDA(2) of below 1.0x when assuming a bottom-of-cycle gold price
of $1,350 per ounce, underscoring the Company's significant
financial flexibility.
- As expected and planned, capital
expenditures during the fourth quarter were higher than the third
quarter as the result of timing delays caused by COVID-19, and
interest was paid, as interest payments are customarily made in the
second and fourth quarters. Further, a working capital outflow
occurred due to the timing delays of collection of recoverable
indirect tax credits, payments associated with prepaid expenditures
and advances, and an inventory buildup due to production exceeding
sales that will normalize in 2021.
- During the fourth quarter, the
Company announced a further 50% increase to its annual dividend to
$0.105 per share, driven by strong free cash flow generation.
(See end notes near end of release.)
|
|
Three months ended December 31 |
|
(In millions of United States Dollars) |
2020 |
2019 |
|
Net Free Cash Flow (2) |
$ |
118.9 |
|
$ |
123.2 |
|
| Free Cash Flow before
Dividends and Debt Repayments (2) |
$ |
61.7 |
|
$ |
73.3 |
|
|
Decrease in Net Debt (2) |
$ |
53.4 |
|
$ |
59.8 |
|
Fourth Quarter Operational Results
- Fourth quarter Gold Equivalent
Ounce ("GEO")(1) production was 255,361 GEO(1) including gold and
silver production of 221,659 ounces and 2.59 million ounces,
respectively. The strong gold production followed standout
performances from Jacobina and Minera Florida, and silver
production was underpinned by an exceptionally strong performance
from El Peñón.
- Full year GEO(1) production of
901,155 GEO(1), including 779,810 ounces of gold and 10.37 million
ounces of silver, exceeded original guidance for the year of
890,000 GEO, and was within the plus or minus three per cent
variance range of the Company's revised guidance. GEO(1) production
for the year at Jacobina, El Peñón, Canadian Malartic, and Minera
Florida were all well above plan. The entire difference was
attributable to further changes to COVID-19 restrictions imposed in
Argentina near the end of the year which impacted production at
Cerro Moro.
Costs Offset by Margin Generated from
Barnat Pre-Commercial Production
- Cash costs(2) for the quarter and
full year were $675 and $701 per GEO(1), respectively, and all-in
sustaining costs ("AISC")(2) for the quarter and full year were
$1,076 and $1,080 per GEO(1), respectively.
- Full year cash costs(2) and AISC(2)
were modestly higher than previously forecast, mostly impacted by
lower production at Cerro Moro resulting from the re-imposition of
national safety measures in Argentina in December. The Company had
also anticipated that more production from Barnat at Canadian
Malartic would be classified as commercial production, and as costs
for such production were expected to be lower than the Company's
average, overall costs would have been positively impacted. With
more pre-commercial production from Barnat, costs were not
positively impacted, but the margin generated from Barnat’s
pre-commercial production was treated as a reduction to
expansionary capital. This significant cash flow benefit resulted
in the reduction of expansionary capital for the year by a further
$14 million compared with plan. The net results of the modestly
higher costs and lower expansionary capital was neutral, and
consequently had little impact to overall generation of cash flows
for the year.
Increased Gold Mineral Reserves and
Mineral Resources
- Replaced mineral reserve depletion
on a consolidated basis at operating mines.
- Significant increase in mineral
resources:
- Notable increase in East Gouldie at
Canadian Malartic of 1.84 million ounces (at 50%) of inferred
mineral resources.
- Further, through the acquisition of
the Wasamac project the Company has been able to increase its
mineral inventory at a very advantageous purchase price.
- Lastly, inventory from the MARA
project, which has generally been shown outside of the Company's
subtotals has been added to inventory in the current year, given
its advanced stage in the development process and the completion of
the integration of the Agua Rica project and Minera Alumbrera plant
and infrastructure.
MARA Project Integration
- On December 17, 2020, the Company
completed the integration of the Agua Rica project with the Minera
Alumbrera plant and infrastructure. Going forward, the integrated
project will be known as the MARA project.
- Under the agreement, Yamana, as the
sole owner of Agua Rica, and the partners of Alumbrera have created
a new Joint Venture pursuant to which Yamana holds a controlling
ownership interest in the MARA Project at 56.25%. Glencore holds a
25.00% interest and Newmont holds an 18.75% interest. Yamana will
be the operator of the Joint Venture and will continue to lead the
engagement with local, provincial, and national stakeholders, and
completion of the Feasibility Study and Environmental Impact
Assessment for the project.
- The integration creates significant
synergies by combining existing substantive infrastructure that was
formerly used to process ore from the Alumbrera mine during its
mine life, including processing facilities; a fully permitted
tailings storage facility; pipeline; logistical installations;
ancillary buildings, and other infrastructure, with the future open
pit Agua Rica mine.
Acquisition of Wasamac Property and
Camflo Property and Mill (Acquisition of Monarch Gold)
- During the quarter, the Company
announced the acquisition of the Wasamac property and the Camflo
property and mill through the acquisition of all of the outstanding
shares of Monarch Gold not owned by Yamana. The Company completed
the acquisition on January 21, 2021.
- The Wasamac project, which has
existing proven and probable mineral reserves of 1.8 million ounces
of gold at 2.56 grams per tonne and excellent potential for future
exploration success, further solidifies the Company’s long-term
growth profile with a top-tier gold project in Quebec’s Abitibi
region, where the Company has deep operational and technical
experience and expertise.
Other Financial Updates: Impairment and Reversal of
Impairment
- During the fourth quarter, the
Company had a positive non-cash impact related to a net impairment
of $191 million on a pre-tax basis, or approximately $37.6 million
after-tax. The Company believes that its overall net asset value is
also further enhanced by the acquisition of the Wasamac project and
by the MARA project.
- After indicators of impairment
reversal were noted at the El Peñón mine in Chile, the Company
observed an increase in the recoverable amount of the unit, which
resulted in a reversal of impairment of $560.0 million pre-tax, or
$386.3 million after tax. This reversal was partially offset by a
calculated pre-tax impairment of $369.0 million, or $348.7 million
after tax, in respect of Cerro Moro, at which indicators of
impairment were identified. For additional details, please refer to
'Section 3: Review of Financial Results' in the Company's
Management Discussion & Analysis for the year ended December
31, 2020, available at www.yamana.com and on SEDAR.
CLIMATE CHANGE ACTION
As a continuation of Yamana’s climate change
actions, the Company has formally adopted a climate strategy,
approved by the Board of Directors, to demonstrate the Company’s
commitment to the transition to a low-carbon future. The strategy
is underpinned by adoption of two targets: a 2° C SBT and an
aspirational net-zero 2050 target. The targets are supported by
foundational work to be performed in 2021 to establish a
multi-disciplinary Climate Working Group, determine our emissions
baseline, develop the Greenhouse Gas (“GHG”) abatement pathways
required to achieve the 2° C SBT and establish preliminary,
operations-specific roadmaps that describe abatement projects,
estimated costs and schedules. These actions will help ensure that
our long-range GHG reduction efforts are supported by practical and
operationally focused short, medium and long-term actions to
achieve the targets.
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 EndedDecember 31 |
Year EndedDecember 31, |
|
2020 |
2019 |
2020 |
2019 |
|
Non-cash unrealized foreign exchange losses |
$ |
21.9 |
|
|
$ |
0.6 |
|
|
$ |
21.6 |
|
|
$ |
29.0 |
|
|
| Share-based
payments/mark-to-market of deferred share units |
3.4 |
|
|
3.2 |
|
|
31.5 |
|
|
15.0 |
|
|
| Mark-to-market (gains) losses
on derivative contracts, investments and other assets |
(5.8 |
) |
|
(0.9 |
) |
|
(6.9 |
) |
|
0.1 |
|
|
| Gain on sale of subsidiaries,
investments and other assets |
(3.0 |
) |
|
— |
|
|
(1.4 |
) |
|
(284.6 |
) |
|
| Gain on discontinuation of the
equity method of accounting |
— |
|
|
— |
|
|
(21.3 |
) |
|
— |
|
|
| Temporary suspension and
standby costs |
2.2 |
|
|
— |
|
|
18.4 |
|
|
— |
|
|
| Other incremental COVID-19
costs |
7.0 |
|
|
— |
|
|
22.1 |
|
|
— |
|
|
| Share of one-off provision
recorded against deferred income tax assets of associate |
— |
|
|
— |
|
|
— |
|
|
13.0 |
|
|
| Net reversal of impairment of
mining properties |
(191.0 |
) |
|
— |
|
|
(191.0 |
) |
|
— |
|
|
| Financing costs paid on early
note redemption |
— |
|
|
— |
|
|
— |
|
|
35.0 |
|
|
| Other provisions, write-downs
and adjustments |
6.7 |
|
|
7.5 |
|
|
17.9 |
|
|
42.0 |
|
|
| Non-cash tax on unrealized
foreign exchange losses |
1.8 |
|
|
(3.9 |
) |
|
52.8 |
|
|
17.9 |
|
|
| Income tax effect of
adjustments |
(2.4 |
) |
|
(0.2 |
) |
|
(19.7 |
) |
|
(0.5 |
) |
|
| One-time tax adjustments |
163.9 |
|
|
5.8 |
|
|
183.6 |
|
|
26.9 |
|
|
| Total adjustments
(i) |
$ |
4.7 |
|
|
$ |
12.1 |
|
|
$ |
107.6 |
|
|
$ |
(106.2 |
) |
|
|
Total adjustments - increase (decrease) to
earnings per share attributable to Yamana equity
holders |
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
0.11 |
|
|
$ |
(0.11 |
) |
|
(i) For the three months ended December
31, 2020, net earnings attributable to Yamana equity holders would
be adjusted by an increase of $4.7 million (2019 - increase of
$12.1 million). For the year ended December 31, 2020, net earnings
attributable to Yamana equity holders would be adjusted by an
increase of $107.6 million (2019 - decrease of $106.2 million).
IMPRESSIVE TECHNICAL STUDY RESULTS FOR
THE ODYSSEY UNDERGROUND PROJECT AT CANADIAN MALARTIC DRIVES
APPROVAL OF CONSTRUCTION DECISION
Yamana and Agnico Eagle Mines Ltd., who each
hold a 50% interest in the Canadian Malartic General Partnership,
owner and operator of the Canadian Malartic mine, have approved
construction of the Odyssey underground project. The decision
reflects positive technical study results and confirms the Odyssey
project as the next phase in the evolution of mining at Canadian
Malartic, which has served as an economic beacon in Quebec’s
Abitibi District for generations and will continue to do so for
decades to come. An NI 43-101 technical report for the Canadian
Malartic operation is expected to be filed in March 2021 and will
include a summary of the Odyssey underground project.
The construction decision is a milestone in the
ongoing evolution of the Canadian Malartic operation and is the
culmination of several years of exploration, mineral resource
development, and technical evaluation. It marks the transition
point of the Odyssey underground project from the project
definition phase to the construction and ramp-up phase, which will
extend to 2028. From 2029 to 2039, the underground operation will
be in full production, producing an expected 500,000 to 600,000
ounces per year. This represents an increase over the Company's
initial estimate for an annual production platform of approximately
450,000 ounces. Further extension of the mine life beyond 2039
provides additional upside, with several opportunities under
evaluation.
Odyssey Project Production Profile (100%
basis)
A chart accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/861adaad-1fb4-422b-888c-714ccda69ba4
About the Odyssey Project
Canadian Malartic has been a prolific mining
operation for decades. Since 2011, it has been an open pit mine,
but it has also been a successful underground operation in previous
iterations. One of the strategic rationales behind Yamana's
decision to jointly acquire Canadian Malartic from Osisko Mining in
2014 was the potential to significantly extend mine life by
transitioning the operation to a future underground mine. Initial
underground exploration drilling generated promising results, with
the discovery of the East Gouldie zone in 2018 confirming the
strong potential for a multi-hundred thousand ounce annual
production operation with a decades-long mine life. As of year-end
2020, underground mineral resources have grown to approximately
14.4 million ounces of gold (100% basis) in just six years,
including an increase of 4 million ounces from year-end 2019.
The Odyssey project hosts three main
underground-mineralized zones, which are East Gouldie, East
Malartic, and Odyssey, the latter of which is sub-divided into the
Odyssey North, Odyssey South and Odyssey Internal zones. For the
purpose of the technical study, mineable stope shapes were
generated using a gold price of $1,250 per ounce, consistent with
the price used for estimating Canadian Malartic open pit mineral
reserves. Mineral resources at East Malartic below 600 metres from
surface are not currently included in the technical study. A
breakdown of the mineral resources used in the technical study,
after dilution and mining recovery, is presented in the table
below. Further details on the mineral resources are set out in the
mineral reserve and mineral resource section of this news
release.
Mineral Resources Included in Odyssey
Project Technical Study as of December 31, 2020
| Zone |
Indicated Mineral Resources |
Inferred Mineral Resources |
|
Tonnes(millions) |
Grade(g/t Au) |
Contained oz.(millions) |
Tonnes(millions) |
Grade(g/t Au) |
Contained oz.(millions) |
|
East Gouldie |
— |
|
— |
|
— |
|
51.95 |
|
3.14 |
|
5.24 |
|
| East
Malartic |
4.59 |
|
2.13 |
|
0.31 |
|
7.84 |
|
2.15 |
|
0.56 |
|
|
Odyssey |
1.52 |
|
1.89 |
|
0.10 |
|
15.19 |
|
2.11 |
|
1.08 |
|
|
Total |
6.18 |
|
2.00 |
|
0.41 |
|
75.90 |
|
2.82 |
|
6.88 |
|
The shallow mineralized zones located above 600
metres below surface will be mined using a ramp from surface. The
deeper mineralized zones below 600 metres from surface will be
mined with a production shaft.
In December 2020, ramp development was started
on the Odyssey project in order to facilitate underground
conversion drilling in 2021 and provide access to the Odyssey and
East Malartic deposits. At year-end 2020, the ramp had progressed
102 metres, and an additional 2,850 metres of development is
planned in 2021, of which 1,500 metres is in the ramp.
The conceptual mine design in the technical
study includes a 1.8-kilometre deep production-services shaft
equipped with a Blair hoist for production, a single drum hoist for
services, and an auxiliary cage. The hoisting capacity is expected
to be approximately 20,000 tpd. The project will also benefit from
the existing infrastructure on site such as the tailing storage
facilities, the process plant, and the maintenance facilities.
The preliminary mining concept is based on a
sublevel open stoping mining method with paste backfill.
Longitudinal retreat and transverse primary-secondary mining
methods will also be used dependent on mineralization geometry and
stope design criteria.
The Odyssey project is expected to be one of the
most modernized electric underground mines. All major mobile
production equipment (such as trucks, scoop trams, jumbos, bolters,
and longhole drill rigs will be electric powered), greatly reducing
carbon footprint. On the two main levels with loading pockets,
trucks and hammers would be remotely operated 24 hours a day, 7
days a week from a surface control room, greatly increasing
equipment utilization.
Production via the ramp is expected to begin at
Odyssey South in late 2023, increasing to up to 3,500 tpd in 2024.
Collaring of the shaft and installation of the headframe is
expected to commence in the second quarter of 2021, with shaft
sinking activities expected to begin in late 2022. The shaft will
have an estimated depth of 1,800 metres and the first loading
station should be commissioned in 2027 with modest production from
East Gouldie. The East Malartic shallow area and Odyssey North
zones are scheduled to enter production in 2029 and 2030,
respectively.
The project is expected to mine 19,000 tpd from
the underground from four different mining zones:
- East Gouldie – 12,500 tpd
- Stope production starts in
2027;
- Three-year ramp up
(2027-2029);
- Full stope production in 2030 to
2038.
- Odyssey North – 3,500 tpd
- Stope production starts in
2030;
- Full stope production in
2031-2038.
- Odyssey South and East Malartic –
3,500 and 3,200 tpd, respectively
- Odyssey South stope production
starts in 2023;
- Odyssey South full stope production
in 2024 to 2027 (3,500 tpd);
- East Malartic stope production
starts in 2028;
- East Malartic full stope production
in 2030 to 2039 (3,200 tpd).
Run-of–mine ore from the open pit will start to
decrease in 2023, as the ore production from the underground starts
at a rate of 3,000 tpd. The underground should reach full
production of about 19,000 tpd by 2031.
Robust Project Economics
Initial expansionary capital of $1.14 billion is
expected to be spent over a period of eight years (100% basis),
with capital requirements in any given year manageable and fully
funded using the Company's cash on hand and free cash flow
generation. Additionally, other growth capital expenditures and
modest sustainable capital during the construction period total
$191.4 million. Gold production during the 2021 to 2028
construction period is expected at 932,000 ounces (on a 100% basis)
at cash costs of $800 per ounce. The net proceeds from the sale of
these ounces would significantly reduce the external cash
requirements for the construction of the project which, assuming
the gold price used in the financial analysis for the project,
would reduce the projected capital requirements in half.
Average annual payable production is expected to
be approximately 545,400 ounces (100% basis) from 2029 to 2039,
with total cash costs per ounce of approximately $630 per ounce.
Sustaining capital is expected to gradually decline from 2029 to
2039, with an expected average of approximately $55.8 million per
year.
The production profile is based on a ramp-up
period of six years (2023-2028) followed by 11 years of full
production (2029-2039), for a total of 82.1 million tonnes of
underground ore processed (100% basis) at an average gold grade of
2.76 g/t, representing approximately 50% of the contained mineral
resource gold ounces. On this basis, the after-tax net present
value (“NPV”) (at a 5% discount rate) and after-tax internal rate
of return (“IRR”) of the Odyssey project are shown at various gold
price assumptions in the table below. The cut-off grade used to
estimate the mineable inventory is based on a gold price of $1,250
per ounce, while the financial model uses a base case gold price
assumption of $1,550 per ounce. Costs are estimated using a
Canadian to U.S. dollar foreign exchange rate assumption of
1.30.
Odyssey Project Technical Study
Sensitives to Gold Price (100% Basis)
|
Gold Price (USD/oz) |
$1,085 |
|
$1,250 |
|
$1,395 |
|
$1,550 |
|
$1,705 |
|
$1,860 |
|
$2,015 |
|
| NPV 5% (USD millions,
after-tax) |
$82 |
|
$481 |
|
$801 |
|
$1,143 |
|
$1,494 |
|
$1,853 |
|
$2,212 |
|
| IRR (%,
after-tax) |
6% |
|
11% |
|
14% |
|
17.5% |
|
20% |
|
23% |
|
26% |
|
These results demonstrate the expected returns
of the Odyssey project after the first decade at full production,
highlighting Odyssey as a robust project with significant leverage
to higher gold prices and thus supporting the approval for project
construction. The results are not intended to reflect the full
value of the Odyssey project and extension of mine life beyond 2039
represents significant further upside.
Given the strong underground mining experience
of the partners and the experience gained from operating the
Canadian Malartic mine since 2014, there is a high degree of
confidence in many of the cost assumptions used for the project.
While the technical study is considered at a preliminary economic
assessment level, the partnership believes that estimates for such
things as underground development and mining costs, processing
costs, and equipment procurement are more advanced than what would
typically be estimated in a preliminary economic assessment level
study for a project of this scope. The capital allocation and
classification of costs will continue to be refined as the project
advances. A preliminary economic assessment is preliminary in
nature and includes inferred mineral resources that are considered
too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves and, therefore, there is no certainty that the preliminary
economic assessment will be realized.
The East Gouldie mineralization is the largest
and most profitable deposit due to higher grade and tonnage with
more than 70% of the total ounces produced. Exploration drilling at
East Gouldie in 2020 totalled 97,000 metres (100% basis), including
25,600 metres in the fourth quarter with multiple mother holes and
wedge cuts that resulted in 25 new pierce points in the zone, plus
several more in the Odyssey related zones. The intensive drilling
program in 2020 has allowed the partnership to increase the
inferred mineral resource of the East Gouldie zone by 134% to 6.4
million ounces of gold (100% basis), compared to the initial
inferred mineral resource declared at year-end 2019, with an
average grade of 3.17 g/t.
The focus of the ongoing diamond drilling
campaign from surface is to further define high quality mineral
resources by the beginning of 2023 with a drill hole spacing of 75
metres. Improving the geological confidence of the mineral
resources is expected to further de-risk future production. With
further exploration the Company believes that additional
mineralization will come into the mine plan in the coming
years.
| Odyssey
Project Summary |
| (All
numbers are approximate and on a 100% basis) |
|
Estimated Total Production |
6,932 |
|
thousands of gold ounces |
|
|
|
|
|
Average metallurgical recovery |
~95.2% |
|
gold |
|
|
|
|
| Average
Annual gold production |
|
2023 |
46,600 oz |
|
(825 k. tonnes, 1.84g/t
gold) |
|
2024 to 2026 (average per year) |
81,500 oz |
|
(1,344 k. tonnes, 1.98g/t
gold) |
|
2027 |
256,200 oz |
|
(2,810 k. tonnes, 2.98g/t
gold) |
|
2028 |
384,600 oz |
|
(3,333 k. tonnes, 3.79g/t
gold) |
|
2029 to 2039 (average per year) |
545,400 oz |
|
(6,463
k. tonnes, 2.76g/t gold) |
| Minesite
costs per tonne |
|
2023 |
$93.0 |
|
C$/t |
|
2024 to 2026 (average per year) |
$77.0 |
|
C$/t |
|
2027 |
$79.0 |
|
C$/t |
|
2028 |
$79.0 |
|
C$/t |
|
2029 to 2039 (average per year) |
$61.0 |
|
C$/t |
| Average
total cash costs on a by-product basis (including royalty and
refining costs) |
|
2023 to 2028 |
800 |
|
US$/oz |
|
2029 to 2039 |
630 |
|
US$/oz |
|
Royalty |
5.5% |
|
NSR |
|
Mine life |
17 |
|
years |
| Capital
Expenditures |
|
Initial capital Expenditures |
$1,143.7 |
|
million US$ (2021 to
2028) |
|
Gold production |
932.0 |
|
thousand ounces (2021 to
2028) |
|
Sustaining CAPEX |
$55.8 |
|
million
US$ (2029 - 2039 average per year) |
| Breakdown of
Capital Expenditures by year |
|
2021 |
$113.8 |
|
million US$ |
|
2022 |
$204.0 |
|
million US$ |
|
2023 |
$136.8 |
|
million US$ |
|
2024 to 2026 (average per year) |
$163.8 |
|
million US$ |
|
2027 |
$209.0 |
|
million US$ |
|
2028 |
$180.3 |
|
million
US$ |
| Breakdown of
Capital Expenditures by category |
|
Shaft & Surface |
$478.4 |
|
million US$ |
|
Mining Equipment |
$162.7 |
|
million US$ |
|
U/G Development & Construction |
$502.6 |
|
million
US$ |
|
Subtotal of Initial Capital Expenditures |
$1,143.7 |
|
million US$ |
|
Other Growth Capital Expenditures |
$191.4 |
|
million US$ |
|
|
|
|
|
|
Reclamation Costs |
$3.9 |
|
million US$ for Odyssey Project only |
The aforementioned costs do not include any
offsetting net proceeds from pre-commercial production.
Historically, any net proceeds from pre-commercial production were
deducted from development capital expenditures; however, due to
amendments to the relevant accounting standard that become
effective from 2022, this treatment will not be permitted when
accounting for the Odyssey project. Specifically, in May 2020, the
International Accounting Standards Board ("IASB") issued Property,
Plant and Equipment: Proceeds before Intended Use (Amendments to
IAS 16), which prohibits entities from deducting amounts received
from selling items produced from the cost of property, plant and
equipment while the Company is preparing the asset for its intended
use. Instead, sales proceeds and the cost of producing these items
will be recognized in the consolidated statements of
operations.
Permits for Odyssey North and South were granted
in 2020 to allow the first phase of the project to begin. At this
time, the Certificate of Authorization (“CofA”) for the shaft has
not yet been obtained and the CofA for the waste rock management
needs to be modified.
A request for a decree amendment, including
permits to develop the East Gouldie and East Malartic zones will be
sent to the Quebec Ministry of Environment and the Fight Against
Climate Change in the first quarter of 2021. If there are no
serious hurdles, the project could obtain the necessary approvals
from provincial regulators in approximately 12 months. The project
team has received a letter confirming that mining the additional
zones at the project does not trigger any additional Federal
permitting requirements.
Facilitating the Transition from Open
Pit Mining
Currently, in the open pit, mining is
transitioning from the Canadian Malartic pit to the Barnat pit,
which is now in commercial production. Seventy percent of the total
tonnes mined in 2021 are expected to come from Barnat. The Canadian
Malartic pit will be depleted in the first half of 2023 and waste
rock and tailings will be deposited into the pit beginning in
2023.
The operation will progressively shift from open
pit to underground mining between 2023 to 2028. To help facilitate
this transition, the Company optimized the design of the Barnat
pit, adding 290,000 ounces to mineral reserves (100% basis), which
will help fill the production gap between 2026 and 2029 as the
operation completes the transition to underground mining.
The Partnership is evaluating an additional
opportunity to increase production during the transition period by
processing low-grade stockpile that is not currently included in
mineral reserves. This stockpile is economic at current gold prices
and would add an extra 170,000 ounces to planned production on a
100% basis.
Odyssey and Wasamac Increase Company’s
Presence in Quebec’s Prolific Abitibi Region
The development of the Odyssey project coupled
with the recently acquired Wasamac project will significantly
enhance the Company’s long-term production profile and further
expand its presence in the Abitibi District, a prolific mining
district in which Yamana has extensive experience and expertise.
The Wasamac project, located 100 kilometres west of Canadian
Malartic, has existing proven and probable mineral reserves of 1.8
million ounces of gold at 2.56 grams per tonne and possesses many
parallels to the Odyssey project. There is excellent potential for
significant future exploration success and mineral resource
conversion at Wasamac, with the deposit remaining open at depth and
along strike.
2021 - 2023 PRODUCTION
GUIDANCE
The following table presents the Company's total
gold, silver and gold equivalent ounces ("GEO") production
expectations in 2021, 2022 and 2023. Actual production for the
year-ended December 31, 2020 includes comparative operations, which
comprise those mines in the Company's portfolio as of December 31,
2020. The Company notes that it guides on GEO production and costs
based on a particular assumption of gold and silver prices.
Although underlying gold and silver production does not change with
the fluctuation in gold and silver prices, the change in the GEO
ratio from such fluctuations may result in a different GEO
production than that guided.
The production profile for 2021 to 2023 shows
sequential growth in gold production. Several growth opportunities
are available, and in the near and medium-term the Company remains
focused on optimizing the existing portfolio of five operating
mines while also advancing studies for various expansion projects
and longer term development assets.
Production guidance for 2021 is slightly below
the Company's guidance for 2021 from last year, entirely related to
Cerro Moro. A more conservative production risk adjustment has been
applied to Cerro Moro during 2021 to reflect the continued impact
of Covid-19 related restrictions, as experienced in December. Costs
for the mine have also been commensurately risk-adjusted.
The Company expects to continue its established
trend of delivering stronger production in the second half of the
year, with approximately 53% of production slated for the second
half, along with quarterly sequential increases in production.
The Company looks at production within a normal
range of +/- 3%, and the guidance values reflect both the mid-point
and the range for the 2021-2023 period. With improved mine plans,
the Company is also providing its maiden three-year guidance by
mine as follows:
| (000's
ounces) |
2020 Actual |
2021 Guidance |
2022 Guidance |
2023 Guidance |
|
|
|
Mid-Point |
Range |
Mid-Point |
Range |
Mid-Point |
Range |
| Total gold production (3) |
780 |
862 |
836 - 888 |
870 |
844 - 896 |
889 |
862 - 916 |
| Total silver production |
10,366 |
10,000 |
9,700 - 10,300 |
9,400 |
9,118 - 9,682 |
8,000 |
7,760 - 8,240 |
| Total
GEO production (i) |
901 |
1,000 |
970 - 1,030 |
1,000 |
970 - 1,030 |
1,000 |
970 - 1,030 |
(i) GEO assumes
gold ounces plus the equivalent of silver ounces using a ratio of
88.86 for 2020, and a ratio of 72.00 for 2021, 2022 and 2023.The
following table presents mine-by-mine production results for Yamana
Mines for 2020 and updates guidance provided on January 25, 2021,
as the Company is now providing mine-by-mine guidance for the next
three years:
| (000's
ounces) |
Gold |
|
2020 Actual |
2021 Guidance |
2022 Guidance |
2023 Guidance |
|
|
|
Mid-Point |
Range |
Mid-Point |
Range |
Mid-Point |
Range |
| Canadian Malartic
(50%)(3) |
284 |
350 |
340 - 361 |
330 |
320 - 340 |
350 |
340 - 361 |
| Jacobina |
178 |
175 |
170 - 180 |
180 |
175 - 186 |
185 |
179 - 191 |
| Cerro Moro |
67 |
90 |
87 - 93 |
100 |
97 - 103 |
90 |
87 - 93 |
| El Peñón |
161 |
160 |
155 - 165 |
165 |
160 - 170 |
165 |
160 - 170 |
| Minera Florida |
90 |
87 |
84 - 90 |
95 |
92 - 98 |
99 |
96 - 102 |
|
Total |
780 |
862 |
836 - 889 |
870 |
844 - 897 |
889 |
862 - 916 |
|
|
|
|
|
|
|
|
|
| (000's
ounces) |
Silver |
|
2020 Actual |
2021 Guidance |
2022 Guidance |
2023 Guidance |
|
|
|
Mid-Point |
Range |
Mid-Point |
Range |
Mid-Point |
Range |
| Cerro Moro |
5,449 |
5,500 |
5,335 - 5,665 |
5,000 |
4,850 - 5,150 |
3,500 |
3,395 - 3,605 |
| El Peñón |
4,917 |
4,500 |
4,365 - 4,635 |
4,400 |
4,268 - 4,532 |
4,500 |
4,365 - 4,635 |
|
Total |
10,366 |
10,000 |
9,700 - 10,300 |
9,400 |
9,118 - 9,682 |
8,000 |
7,760 - 8,240 |
|
|
|
|
|
|
|
|
|
| (000's
ounces) |
GEO |
|
2020 Actual |
2021 Guidance |
2022 Guidance |
2023 Guidance |
|
|
|
Mid-Point |
Range |
Mid-Point |
Range |
Mid-Point |
Range |
| Canadian Malartic
(50%)(3) |
284 |
350 |
340 - 361 |
330 |
320 - 340 |
350 |
340 - 361 |
| Jacobina |
178 |
175 |
170 - 180 |
180 |
175 - 186 |
185 |
179 - 191 |
| Cerro Moro |
132 |
166 |
161 - 171 |
169 |
164 - 174 |
138 |
134 - 142 |
| El Peñón |
217 |
222 |
215 - 229 |
226 |
219 - 233 |
228 |
221 - 235 |
| Minera Florida |
90 |
87 |
84 - 90 |
95 |
92 - 98 |
99 |
96 - 102 |
|
Total |
901 |
1,000 |
970 - 1,030 |
1,000 |
970 - 1,030 |
1,000 |
970 - 1,030 |
Cost Outlook
The Company anticipates that it will continue to
incur some costs in relation to COVID-19 in the near future.
Current expectation of pandemic related costs is that those costs
will continue to be incurred during the first half of the year and
begin to decrease in the second half of the year with a rollout of
vaccinations expected in most countries in which the Company
operates. With increasing numbers of the population receiving the
vaccine, we would expect to see increasing immunity and decreasing
caseloads, allowing for gradual easing of our COVID-related
controls and associated costs toward the second half of 2021 as
noted. Total costs are expected to not exceed approximately $20
million for the year. Similar to 2020, COVID-19 costs are disclosed
as part of mine operating earnings as temporary suspension, standby
and other incremental COVID-19 costs and are excluded from cash
costs and all-in sustaining costs (“AISC”).
The expected decline in COVID-19 costs
throughout the upcoming year also corresponds to the Company’s
customary lower second half of the year costs, associated with
higher production levels. The following table presents cost of
sales, cash costs and AISC results in 2020 and guidance ranges for
2021.
| (In US
dollars) |
Total cost of sales per GEO
sold |
Cash costs per GEO sold (2) |
AISC per GEO sold (2) (i) |
|
2020 Actual |
2021 Guidance |
2020 Actual |
2021 Guidance |
2020 Actual |
2021 Guidance |
|
Canadian Malartic (50%) (i) |
$ |
1,207 |
|
1,100-1,145 |
$ |
702 |
|
635-675 |
$ |
945 |
|
850-885 |
| Jacobina |
$ |
844 |
|
850-885 |
$ |
544 |
|
565-600 |
$ |
746 |
|
735-765 |
| Cerro Moro |
$ |
1,513 |
|
1,450-1,510 |
$ |
868 |
|
790-835 |
$ |
1,280 |
|
1,175-1,225 |
| El Peñón |
$ |
980 |
|
1,140-1,180 |
$ |
657 |
|
620-660 |
$ |
922 |
|
835-870 |
| Minera Florida |
$ |
1,366 |
|
1,170-1,220 |
$ |
862 |
|
740-785 |
$ |
1,152 |
|
1,065-1,105 |
|
Total |
$ |
1,151 |
|
1,140-1,190 |
$ |
701 |
|
655-695 |
$ |
1,080 |
|
980-1,020 |
(i) Mine site AISC
includes cash costs, mine site general and administrative expense,
sustaining capital, capitalized exploration and expensed
exploration. Consolidated AISC incorporates additional non-mine
site costs including corporate general and administrative
expense.The following table presents expansionary capital,
sustaining capital, and total exploration spend results for 2020
and expectations by mine for 2021:
| |
Expansionary capital |
Sustaining capital |
Total exploration |
| (In
millions of US Dollars) |
2020 Actual |
2021 Guidance |
2020 Actual |
2021 Guidance |
2020 Actual |
2021 Guidance |
|
Canadian Malartic (50%) (i) |
$ |
12.2 |
|
$ |
63.0 |
|
$ |
52.5 |
|
$ |
73.0 |
|
$ |
10.1 |
|
$ |
15.0 |
|
| Jacobina |
15.8 |
|
29.0 |
|
21.6 |
|
19.0 |
|
6.0 |
|
12.0 |
|
| Cerro Moro |
6.9 |
|
1.0 |
|
29.5 |
|
40.0 |
|
12.5 |
|
18.0 |
|
| El Peñón |
0.5 |
|
1.0 |
|
31.4 |
|
31.0 |
|
15.9 |
|
18.0 |
|
| Minera Florida |
19.9 |
|
17.0 |
|
12.6 |
|
19.0 |
|
7.0 |
|
11.0 |
|
| MARA |
8.0 |
|
15.0 |
|
— |
|
— |
|
— |
|
— |
|
| Wasamac |
— |
|
5.0 |
|
— |
|
— |
|
— |
|
11.0 |
|
| Other capital |
3.5 |
|
1.0 |
|
1.7 |
|
1.0 |
|
— |
|
— |
|
| Generative exploration
(expensed) |
— |
|
— |
|
— |
|
— |
|
15.1 |
|
18.0 |
|
| Other exploration and
overhead |
— |
|
— |
|
— |
|
— |
|
6.1 |
|
7.0 |
|
|
Total |
$ |
66.8 |
|
$ |
132.0 |
|
$ |
149.3 |
|
$ |
183.0 |
|
$ |
72.7 |
|
$ |
110.0 |
|
(i) 2021 guided Expansionary Capital has
been revised to reflect the positive construction decision on
Odyssey at Canadian Malartic.
Approximately 70% of the Company’s expected
exploration spend is capital in nature.
Capital expenditure values for 2021 do not
include the cost to add to long-term ore stockpile balances at
Canadian Malartic. These costs are estimated at $15.0 million for
2021 compared to $5.9 million for 2020, both on a 50% basis.
The following table presents other expenditure
results in 2020 and expectations for 2021:
|
(In millions of US Dollars) |
2020 Actual |
|
2021 Guidance |
|
Total DDA |
$ |
395.0 |
|
$ |
470.0-500.0 |
|
| Cash based G&A |
$ |
65.8 |
|
$ |
72.0 |
|
| Cash
income taxes paid (i) |
$ |
99.3 |
|
$ |
180.0-200.0 |
|
(i) Cash taxes paid consider payments made in
relation to withholding tax and prior years, as in certain
jurisdictions, final payments related to a fiscal year’s taxes are
settled in the next fiscal year.
Guidance Assumptions
Key assumptions, in relation to the above
guidance, are presented in the table below.
|
|
2020 Actual (i) |
2021 Guidance |
|
GEO Ratio |
88.86 |
|
72.00 |
|
|
Gold |
$ |
1,770 |
|
$ |
1,800 |
|
| Silver |
$ |
20.51 |
|
$ |
25.00 |
|
| USD-CAD |
1.34 |
|
1.28 |
|
| USD-BRL |
5.16 |
|
5.25 |
|
| USD-CLP |
792.17 |
|
725.00 |
|
|
USD-ARS |
70.65 |
|
108.00 |
|
(i) Metal prices and exchange rates shown
in the table above are the average metal prices and exchange rates
for the year ended December 31, 2020.
10-YEAR OUTLOOK: ADDITIONAL
INFORMATION
The Company recently announced its 10-year
outlook, highlighting a strong and sustainable production platform
of at least 1 million GEO per year through 2030. As noted,
production will be underpinned by continued operational success at
the Company’s existing operations, which have consistently replaced
mineral reserves above depletion, including in 2020. In addition,
production will be driven by the now approved Odyssey underground
project at Canadian Malartic, incremental production growth at
Minera Florida, further expansions at Jacobina, and continued
exploration success and mine life extension at Cerro Moro.
The Company reiterates this outlook and, with
the benefit of its now completed mineral reserve and mineral
resource update, provides this additional information.
Jacobina replaced 2020 depletion of gold mineral
reserves and added approximately 300,000 ounces of additional
reserves, based on positive infill drilling results at all mines
and especially at Canavieiras Central, where drilling has added
indicated mineral resources in the high grade LUT reef and lower
grade parallel reefs. Average mineral reserve grade has modestly
decreased as a result of such parallel reefs that are considered
economical to mine. Operational costs will consequently not be
affected by the change in reserve grade. In the short term, the
Company expects to continue processing at a grade higher than
average mineral reserves grade, as reflected in the 2020 average
feed grade of 2.36 g/t. These lower grade mineral reserves also
provide opportunities for incremental lower-cost mill feed in
excess of the planned throughput rates, in the event that the
processing plant optimizations and expansions exceed targeted
throughput rates. Measured and indicated mineral resources and
inferred mineral resources both increased from year end 2019, with
total gold mineral resources and mineral reserves increasing by
823,000 ounces. The continued mineral reserve and mineral resource
growth establishes Jacobina as a multi-decade operation and
supports the ongoing production growth trend towards 230,000 ounces
of gold per year after the implementation of the Phase 2 expansion
project. As a result of the exploration success, the Company is now
considering further growth opportunities including a potential
Phase 3 expansion to 10,000 tpd.
At El Peñón, which recently completed its
twenty-first year of production, the Company has a high degree of
confidence that it will continue to replace mineral reserves
through new discoveries and infill drilling on several major veins,
thereby maintaining mine life visibility for at least another 10
years.
The Company further clarifies that El Peñón's
outlook is fully supported by mineral reserves and mineral
resources. Mineral resources are comprised of multiple veins at
different grades. The Company plans to draw into inventory higher
conviction mineral resources from veins which are at mineral
reserve grade and close to the existing mine. The Company notes an
increase in mineral reserve grade from 2019, highlighting that new
ounces being converted to mineral reserves are higher than average
mineral reserve grade. Moreover, the Company continues to make new
discoveries of mineral inferred ounces that are also at better
grades, as noted by an increase in mineral resource grade.
STRATEGIC DEVELOPMENTS
Jacobina, Brazil
The Phase 1 optimization project was completed
in June. The project has exceeded expectations, with a higher than
planned steady state of approximately 6,800 tpd achieved in both
the second and third quarters. The Company has identified
opportunities to further optimize the results and recoveries
achieved in Phase 1 with a modest investment. Consequently, works
commenced in the third quarter for the expansion of the gravity
concentration circuit, with commissioning scheduled and on-track
for mid-2021 and with an objective to optimize gold recovery at the
higher throughput rate.
In addition to the incremental optimization of
Phase 1, the Company is advancing the Phase 2 expansion at
Jacobina, for an increase in throughput to 8,500 tpd. The Company
is currently in the engineering phase, with permitting underway.
Included in the mine's expansionary budget in 2021 of $29.0
million, is approximately $18.0 million for the procurement of
long-lead items and expansionary development to support the higher
throughput to the mill. The throughput increase will be achieved
through the installation of an additional grinding line and
incremental upgrades to the crushing and gravity circuits. The
Phase 2 expansion is expected to increase annual gold production to
approximately 230,000 ounces per year, representing a 28% increase
from current levels, reduce costs, and generate significantly more
cash flow and attractive returns. The Company expects to provide an
update regarding capex and development schedule in mid-2021 once
studies are finalized to conclude permitting. The Company
anticipates that the updated capital costs will not exceed the
previously estimated and disclosed $57 million, and it has already
begun to incur these costs for long-lead time items. The estimated
capital costs of $57 million had been based on an assumed BRL:USD
rate of 4.0. The BRL:USD foreign exchange rates are currently
higher at over 5.0, and consequently, the Company anticipates that
the weaker rates will provide capital cost and operating cost
benefits.
Separately, Jacobina is studying the
installation of a backfill plant to allow up to 2,000 tpd of
tailings to be deposited in underground voids. A concept study was
completed in the second quarter, with preliminary results
indicating that the project would improve the way in which the
Company manages the environment and environmental impact, extend
the life of the existing tailings storage facility consequently
decreasing future capital investment intensity, and improve mining
recovery resulting in an increased conversion of mineral resources
to mineral reserves. The placement of backfill in empty stopes
would allow for greater recovery of mineralized pillars that
otherwise would have been left behind to ensure ground stability.
Backfill in strategic higher grade zones would increase mineral
reserves with the recovery of those mineralized pillars. In
addition, the improvement in ground stability would have a positive
impact on dilution. The current backfill system design includes a
tailings classification plant, located close to the existing
processing plant, and two backfill preparation plants at the João
Belo and Morro do Vento mines. The Company is advancing the
backfill project to a feasibility study, to be completed by the end
of the first quarter of 2021.
Lastly, the Company has also begun a conceptual
study on a Phase 3 expansion, which would increase throughput to
10,000 tpd, utilize the existing grinding line, while expanding
crushing and leaching circuits and adding additional mining
equipment and infrastructure.
MARA Project (Agua Rica and Alumbrera
Integration), Argentina
On December 17, 2020, the Company completed the
project integration (the "Integration Transaction") with Glencore
International AG and Newmont Corporation and a new partnership was
formed to manage, develop and operate the project. The development
will be pursuant to the plan contemplated in the agreement and by
the partners, and the Agua Rica project will be developed and
operated using the existing infrastructure and facilities of
Alumbrera in the Catamarca Province of Argentina. Going forward,
the integrated project will be known as the MARA Project.
Under the agreement, Yamana, as the sole owner
of Agua Rica, and the partners of Alumbrera have created a new
Joint Venture pursuant to which Yamana holds a controlling
ownership interest in the MARA Project at 56.25%. Glencore holds a
25.00% interest and Newmont holds an 18.75% interest. Yamana will
be the operator of the Joint Venture and will continue to lead the
engagement with local, provincial, and national stakeholders, and
completion of the Feasibility Study and Environmental Impact
Assessment ("EIA") for the MARA project. A MARA Joint Venture
Technical Committee has been formed and comprises representatives
of the three companies.
The Integration Transaction creates significant
synergies by combining existing substantive infrastructure which
was formerly used to process ore from the Alumbrera mine during its
mine life, including processing facilities, a fully permitted
tailings storage facility, pipeline, logistical installations,
ancillary buildings, and other infrastructure, with the future open
pit Agua Rica mine. The result is a significantly de-risked project
with a smaller environmental footprint and improved efficiencies,
creating one of the lowest capital intensity projects in the world
as measured by pound of copper produced and in-situ copper mineral
reserves.
The Pre-feasibility Study ("PFS") for the
Integrated Project considers the Agua Rica deposit mined via a
conventional high tonnage truck and shovel open pit operation.
Average life of mine material moved is expected to be approximately
108 million tonnes per year, with ore feed of 40 million tonnes per
year and average life of mine strip ratio of 1.66. This PFS
provides the framework for the preparation and submission of a new
EIA to the authorities of the Catamarca Province and for the
continued engagement with local stakeholders and communities. The
Companies began the EIA process in 2019, given the level of
significant detail in the PFS.
The Joint Venture Technical Committee advanced
optimization studies in late 2019 and early 2020, and is now
advancing a full Feasibility Study on the Integrated Project, with
updated mineral reserve, production and project cost estimates. It
has also obtained a provisional Permit for early exploration works
from the local authorities in order to conduct field work for the
Feasibility Study and collect additional information for the
Integrated Project EIA. COVID-19 has introduced uncertainty into
the timeline relating to the completion of the Feasibility Study,
mainly due to environmental permit approvals and field work,
although as the permit process is well advanced, work preparation
has begun in anticipation of receiving necessary authorizations in
normal course. Despite the aforementioned delays, Feasibility Study
work is ongoing and key technical results are expected during 2021.
While the Company continues to advance the Feasibility Study, it
notes that a considerable amount of information in the PFS is
already at Feasibility Study level mostly as a result of the
Integration Transaction. The full Feasibility report and EIA
completion are expected in 2022.
The most recent technical studies have confirmed
that the processing facility at Alumbrera is capable of processing
up to 44.0 million tonnes per year, with minor additional capital
expenditures, which represents a significant upside to the PFS
results. Further tests and studies are scheduled for the
Feasibility Study stage in order to confirm and optimize the
concentrate transportation capacity of the pipeline and the mining
plan to support higher throughput. In addition, upside
opportunities have already been identified by re-sequencing low
grade stockpile, and are expected to provide significant further
value for the integrated project. The estimated expenses for the
Company to advance the project through the Feasibility Study and
EIA are in the range of $20.0 million to $25.0 million for the next
three years (Yamana's 56.25% interest), representing a manageable
and modest investment in relation to the value creation of
advancing the Integrate Project to the next phases of
development.
After a strategic review, the Company has
concluded that MARA represents an excellent development and growth
project which the Company intends to continue to advance through
the development process through the Company's controlling interest
in the project.
The Company acquired cash and cash equivalents
of $222.5 million in the acquisition of Alumbrera.
For further details on the Integration
Transaction, critical accounting policies, and critical judgments,
please refer to the Company's consolidated financial statements for
the year ended December 31, 2020.
Acquisition of Wasamac Property and Camflo Property and
Mill (Monarch Gold Acquisition)
On January 21, 2021, the Company completed its
acquisition of the Wasamac property and the Camflo property and
mill (the “Acquisition Properties”) through the acquisition of all
of the outstanding shares of Monarch Gold Corporation (“Monarch”)
not owned by Yamana. Yamana previously announced that it had
entered into a definitive agreement with Monarch Gold on November
2, 2020, to acquire the properties, under a plan of
arrangement.
The addition of the Wasamac project to Yamana’s
portfolio further solidifies the Company’s long-term growth profile
with a top-tier gold project in Quebec’s Abitibi region, a prolific
mining district where Yamana has deep operational and technical
expertise and experience. The geological characteristics of the
Wasamac ore body suggest it holds the potential to be an
underground mine with the potential to achieve the same scale,
grade, production, and costs as Yamana’s successful Jacobina mine
in Brazil, and it possesses many parallels to the underground
project at Canadian Malartic.
Wasamac consists of a single, continuous shear
zone with a consistent grade distribution and wide mining widths,
making it amenable to simple, productive, and cost efficient
underground bulk mining methods. The deposit has existing proven
and probable mineral reserves of 21.45 million tonnes at 2.56 g/t
for total proven and probable mineral reserves of 1.8 million
ounces of gold. Mineral resources and proven and probable mineral
reserves are supported by a Feasibility Study previously completed
by Monarch in 2018 (the “Wasamac Feasibility Study”). The Wasamac
Feasibility Study outlined a 6,000 tonnes per day operation with
average gold production of 160,000 ounces per year. Costs are
expected to be at the lower end of the Company’s profile, providing
an improvement to consolidated costs.
There remains excellent potential for
significant future exploration success and mineral resource
conversion, with the Wasamac deposit remaining open at depth and
along strike. Yamana plans to build on the ongoing permitting and
social licensing effort carried out by Monarch, applying the
Company’s strong ESG framework and best practices, and leveraging
the Company’s extensive experience in permitting and proven track
record of building strong, respectful, and mutually beneficial
relationships with the communities and governments wherever it
operates. Building off the work completed to date, Yamana plans to
commence an exploration and infill drilling campaign and other
studies to refine and expand upon the potential of Wasamac and its
development alternatives, with an update on these plans to be
provided by the third quarter of 2021.
Prior to closing the acquisition of Wasamac, in
late 2020 the Company began the process of opening a regional
office in the Abitibi region, and hiring personnel to manage the
permitting process and related studies to update the Feasibility
Study.
GENERATIVE EXPLORATION PROGRAM AND
STRATEGY
The 2020 generative 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 following are key elements
and objectives of the program:
- 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.
- Add new inferred mineral resources
of at least 1.5 million ounces of gold equivalent within the next
three years to move at least one project towards a preliminary
economic assessment.
- On a longer term basis, advance at
least one project to a mineral inventory that is large enough to
support a mine plan demonstrating positive economics 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.
During the fourth quarter, exploration drilling
and other field activities continued to ramp up in most
jurisdictions as responses to COVID-19 restrictions were managed.
Drilling activities continued in Brazil at Ivolandia to expand the
near surface oxide targets, and drilling was reinitiated at Lavra
Velha and Borborema, as described in more detail below. Exploration
drilling was also initiated at Jacobina Norte during the fourth
quarter. Exploration in Chile in the fourth quarter included RC
scout drill testing at several early-stage projects near the El
Peñón mine. Exploration in Argentina was limited due to travel
restrictions, but drilling in 2021 is planned to test
breccia-related high-sulphidation epithermal gold targets on the
Company’s Las Flechas property. At Monument Bay, Manitoba, an
initial Phase I deep drilling program was completed, designed to
test the down plunge projections of modeled, plunging high-grade
zones at the Twin Lakes deposit.
The Company is budgeting $18.0 million of
generative exploration expenses in 2021. The generative exploration
program targets advanced and advancing exploration projects in
Yamana's existing portfolio, particularly Canada and Brazil.
YEAR END MINERAL RESERVES AND MINERAL
RESOURCES SUMMARY
As at December 31, 2020
|
Proven and probable mineral reserves |
|
|
|
|
|
Tonnes (000's) |
Grade (g/t) |
Contained oz. (000's) |
|
Gold |
765,505 |
|
0.56 |
13,803 |
|
|
Silver |
633,832 |
|
5.5 |
112,780 |
|
|
Measured and indicated mineral resources |
|
|
|
|
|
Tonnes (000's) |
Grade (g/t) |
Contained oz. (000's) |
|
Gold |
485,681 |
|
0.94 |
14,604 |
|
|
Silver |
165,889 |
|
9.2 |
49,004 |
|
|
Inferred mineral resources |
|
|
|
|
|
Tonnes (000's) |
Grade (g/t) |
Contained oz. (000's) |
|
Gold |
653,662 |
|
0.75 |
15,714 |
|
|
Silver |
444,541 |
|
4.4 |
62,859 |
|
Additional details relating to the
Company’s mineral reserve and mineral resource estimates as at
December 31, 2020 are presented below.
Jacobina, Brazil
Jacobina replaced 2020 depletion of gold mineral
reserves and added approximately 300,000 ounces of additional
reserves, based on positive infill drilling results at all mines
and especially at Canavieiras Central, where drilling has added
indicated mineral resources in the high grade LUT reef and lower
grade parallel reefs. Average mineral reserve grade has modestly
decreased as a result of such parallel reefs that are considered
economical to mine. Operational costs will consequently not be
affected by the change in reserve grade. In the short term, the
Company expects to continue processing at a grade higher than
average mineral reserves grade, as reflected in the 2020 average
feed grade of 2.36 g/t. These lower grade mineral reserves also
provide opportunities for incremental lower-cost mill feed in
excess of the planned throughput rates, in the event that the
processing plant optimizations and expansions exceed targeted
throughput rates. Measured and indicated mineral resources and
inferred mineral resources both increased from year end 2019, with
total gold mineral resources and mineral reserves increasing by
823,000 ounces. The continued mineral reserve and mineral resource
growth establishes Jacobina as a multi-decade operation and
supports the ongoing production growth trend towards 230,000 ounces
of gold per year after the implementation of the Phase 2 expansion
project. As a result of the exploration success, the Company is now
considering further growth opportunities including a potential
Phase 3 expansion to 10,000 tpd.
Jacobina Gold Mineral Reserves (000's of
ounces)
A chart accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/c454ea0c-c2de-4314-8825-0a2203072603
(i) Additions from infill drilling and
mine design optimization.
Canadian Malartic including Odyssey,
Canada (50%)
At Canadian Malartic, an optimized design of the
Barnat pit resulted in an increase in gold mineral reserves, which
significantly reduced depletion resulting from production. On a 50%
basis, while 325,000 ounces of mineral reserves were depleted
through production, the optimized pit design resulted in an
increase of approximately 150,000 ounces. This, combined with other
small additions, resulted in net depletion of only 175,000 ounces.
This allows for approximately half a year of additional mine life
from the open pit operation. Underground inferred mineral resources
at East Gouldie increased by 3.68 million ounces on a 100% basis as
a result of the infill drilling program conducted throughout 2020,
while the zone continues to expand at depth. On a 100% basis, the
overall underground project has increased to more than 14,000,000
ounces of gold mineral resources, of which approximately 7,300,000
ounces are included in a Preliminary Economic Assessment completed
in February 2021. The remaining mineral resources, together with
the potential extension of East Gouldie at depth, represents
further upside to extend mine life beyond 2040. Additional
exploration in the underground project is planned for 2020,
including the first drill holes from an underground drill bay off
the exploration ramp which commenced in the fourth quarter of
2020.
Canadian Malartic Gold Mineral Reserves
(50%) (000's of ounces)
A chart accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a80eb164-2049-4cff-a0ca-5ee889755105
(i) Additions through pit design
optimization.
El Peñón, Chile
El Peñón's gold mineral reserves replaced 2020
depletion as the result of positive infill drilling. This is the
third consecutive year that El Peñón gold mineral reserves have
replaced depletion of mining, increasing from 764,000 ounces in
year-end 2017 to 921,000 ounces in year-end 2020. Gold and silver
measured and indicated mineral resources increased by 16% and 17%
respectively, compared to the prior year, due to the positive
infill drilling results, especially at La Paloma, Pampa Campamento,
and Quebrada Colorada Sur, the latter of which is a new vein
discovered in early 2020, converted to inferred and then indicated
mineral resources throughout the year, and incorporated into the
mine plan in 2021. Inferred gold mineral resources also increased
by 16%, providing additional targets for infill drilling in 2021. A
subset of these inferred mineral resources, subjected to the same
economic and mining parameters as mineral reserves, are included in
the Company’s 10-year production outlook for El Peñón. Although the
average mineral resource grade is lower than mineral reserves
grade, the subset of mineral resources included in the mine plan is
of similar grades to mineral reserves. This process is demonstrated
in the year-end mineral reserves, where the inferred mineral
resources converted to mineral reserves in 2020 are higher than
average reserves grade and the new inferred mineral resources added
throughout the year are also higher than average grade. The ongoing
exploration success and mineral reserves replacement at El Peñón
continues to extend the mine life of the operation, which is
entering its 22nd year of production, and unlocks opportunities for
sustainable production growth with minimal capital investment.
El Peñón Gold Mineral Reserves
(000's of ounces)
A chart accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/34ce6609-bea6-481c-a0cb-d9cdbcfa1189
El Peñón Silver Mineral Reserves (000's
of ounces)
A chart accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/0d993d71-27ed-47c4-bd75-b4e085b18cfb
(i) Additions through infill drilling.
Cerro Moro, Argentina
At Cerro Moro, mineral reserves changed due to
2020 depletion and adjustments to the geological models, partly
offset by new mineral reserves at Naty. The model adjustments, as
an outcome of increased geological understanding gained from mining
of the deposits, together with addition of new lower grade open pit
mineral reserves, have resulted in a reduction of average mineral
reserves grade. Higher grade intercepts at depth at Zoe and
Escondida late in the year are not included in the year-end mineral
reserves and mineral resources but will be followed up with
drilling in 2021. Although COVID-19 related disruptions impacted
the Company’s ability to add new inferred mineral resources in
2020, approximately 56,000 ounces of gold inferred mineral
resources have been added as a potential heap leach inventory.
Promising metallurgical testing results and conceptual level
engineering completed in 2020 demonstrate the potential for a
parallel heap leach operation to provide supplementary production
to the existing plant and provides a lower cost processing
alternative to reduce cut-off grade and convert the expanding
inventory of lower grade mineralization that is sub-economic at the
current mineral reserves parameters. Drilling will follow up on
heap leach targets in 2021 with an objective to build inferred
mineral resources.
Cerro Moro Gold Mineral Reserves
(000's of ounces)
A chart accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/fba6d0a1-ddf5-4863-941b-29244afeb675
Cerro Moro Silver Mineral Reserves
(000's of ounces)
A chart accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/875f0e97-64e1-4f7b-8c17-7bff3c54561e
(i) Adjustments to block models.(ii)
Additions through drilling.
Minera Florida, Chile
At Minera Florida, mineral reserves changed due
to depletion from mining, partially offset by additions as a result
of positive drilling results at Pataguas and Don Leopoldo.
Indicated and inferred mineral resources increased by 30,000 ounces
and 9,000 ounces of gold respectively. Due to COVID-19 impacts,
drilling of several zones that was planned for earlier in the year
was postponed to the fourth quarter and is therefore not included
in the year-end mineral resource and mineral reserves
statements.
Minera Florida Gold Mineral
Reserves (000's of ounces)
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/35f86b1f-a1e9-4ec7-a786-48170095a770
(i) Additions due to infill drilling.
KEY STATISTICS
Key operating and financial statistics for the
fourth quarter and full year 2020 are outlined in the following
tables.
Financial Summary
| (In
millions of United States Dollars, except for per share and per
unit amounts) |
Three Months EndedDecember 31, |
Year EndedDecember 31, |
|
2020 |
2019 |
2020 |
2019 |
|
Revenue |
$ |
461.8 |
|
|
$ |
383.8 |
|
|
$ |
1,561.0 |
|
|
$ |
1,612.2 |
|
|
| Cost of sales excluding
depletion, depreciation and amortization |
(166.8 |
) |
|
(169.4 |
) |
|
(614.1 |
) |
|
(782.8 |
) |
|
| Depletion, depreciation and
amortization |
(112.5 |
) |
|
(119.0 |
) |
|
(395.0 |
) |
|
(471.7 |
) |
|
| Total cost of sales |
(279.3 |
) |
|
(288.4 |
) |
|
(1009.1 |
) |
|
(1254.5 |
) |
|
| Net reversal of impairment of
mining properties |
191.0 |
|
|
— |
|
|
191.0 |
|
|
— |
|
|
| Temporary suspension, standby
and other incremental COVID-19 costs |
(9.2 |
) |
|
— |
|
|
(40.5 |
) |
|
— |
|
|
| Mine operating earnings |
364.3 |
|
|
95.4 |
|
|
702.4 |
|
|
357.7 |
|
|
| General and administrative
expenses |
(23.4 |
) |
|
(19.3 |
) |
|
(85.9 |
) |
|
(79.4 |
) |
|
| Exploration and evaluation
expenses |
(6.0 |
) |
|
(3.3 |
) |
|
(15.1 |
) |
|
(10.3 |
) |
|
| Net earnings |
103.0 |
|
|
14.6 |
|
|
203.6 |
|
|
225.6 |
|
|
| Net earnings per share - basic
and diluted (i) |
0.11 |
|
|
0.02 |
|
|
0.21 |
|
|
0.24 |
|
|
| Cash flow generated from
operations after changes in non-cash working capital |
181.5 |
|
|
201.7 |
|
|
617.8 |
|
|
521.8 |
|
|
| Cash flow from operations
before changes in non-cash working capital (ii) |
207.4 |
|
|
176.6 |
|
|
688.7 |
|
|
590.5 |
|
|
| Revenue per ounce of gold |
1,875 |
|
|
1,486 |
|
|
1,777 |
|
|
1,392 |
|
|
| Revenue per ounce of
silver |
24.02 |
|
|
17.55 |
|
|
21.11 |
|
|
16.39 |
|
|
| Average realized gold price
per ounce |
$ |
1,875 |
|
|
$ |
1,484 |
|
|
$ |
1,777 |
|
|
$ |
1,387 |
|
|
| Average
realized silver price per ounce |
$ |
24.02 |
|
|
$ |
17.50 |
|
|
$ |
20.93 |
|
|
$ |
16.26 |
|
|
(i) For the three months and year ended
December 31, 2020, the weighted average number of shares
outstanding was 952,435 thousand (basic) and 954,565 thousand
(diluted), and 951,818 thousand (basic) and 953,846 thousand
(diluted), respectively.(ii) 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/Q42020 and in Section 12 of the Company’s
Management’s Discussion & Analysis for the year ended December
31, 2020, which is available on the Company's website and on
SEDAR.
Production, Financial and Operating
Summary
|
Costs |
Three Months Ended December 31 |
Year Ended December 31, |
| (In
United States Dollars) |
2020 |
2019 |
2020 |
2019 |
|
Per GEO sold (1) |
|
|
|
|
|
Total cost of sales |
$ |
1,131 |
|
$ |
1,117 |
|
$ |
1,151 |
|
$ |
1,143 |
|
|
Cash Costs (2) |
$ |
675 |
|
$ |
656 |
|
$ |
701 |
|
$ |
679 |
|
|
AISC (2) |
$ |
1,076 |
|
$ |
1,011 |
|
$ |
1,080 |
|
$ |
999 |
|
|
|
Three Months Ended December 31 |
Year Ended December 31, |
| Gold
Ounces |
2020 |
2019 |
2020 |
2019 |
|
Canadian Malartic (50%) (3) |
86,371 |
|
85,042 |
|
284,317 |
|
334,596 |
|
| Jacobina |
44,165 |
|
41,774 |
|
177,830 |
|
159,499 |
|
| Cerro Moro |
21,259 |
|
26,568 |
|
66,995 |
|
120,802 |
|
| El Peñón |
43,512 |
|
48,131 |
|
160,824 |
|
159,515 |
|
| Minera Florida |
26,352 |
|
20,080 |
|
89,843 |
|
73,617 |
|
|
TOTAL |
221,659 |
|
221,595 |
|
779,809 |
|
848,029 |
|
|
|
Three Months Ended December 31 |
Year Ended December 31, |
| Silver
Ounces |
2020 |
2019 |
2020 |
2019 |
|
Cerro Moro |
1,663,708 |
|
1,584,904 |
|
5,448,561 |
|
6,322,864 |
|
| El Peñón |
922,954 |
|
1,382,963 |
|
4,917,101 |
|
4,317,292 |
|
|
TOTAL |
2,586,662 |
|
2,967,867 |
|
10,365,662 |
|
10,640,156 |
|
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, 2020, 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, 2020.
|
Gold |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
| |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
|
Canadian Malartic, Barnat & Other Zones (50%) |
25,370 |
|
0.85 |
|
696 |
|
36,068 |
|
1.31 |
|
1,518 |
|
61,438 |
|
1.12 |
|
2,214 |
|
|
Canadian Malartic Underground (50%) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
| Canadian Malartic (50%) |
25,370 |
|
0.85 |
|
696 |
|
36,068 |
|
1.31 |
1,518 |
|
61,438 |
|
1.12 |
2,214 |
|
| Jacobina |
28,821 |
|
2.16 |
|
2,004 |
|
11,277 |
|
2.22 |
804 |
|
40,098 |
|
2.18 |
2,807 |
|
| Cerro Moro |
328 |
|
6.58 |
|
69 |
|
1,338 |
|
8.40 |
361 |
|
1,666 |
|
8.04 |
431 |
|
|
El Peñón Ore |
368 |
|
5.73 |
|
68 |
|
5,121 |
|
5.02 |
827 |
|
5,489 |
|
5.07 |
895 |
|
|
El Peñón Stockpiles |
9 |
|
1.40 |
|
— |
|
651 |
|
1.26 |
26 |
|
660 |
|
1.26 |
27 |
|
| El Peñón Total |
377 |
|
5.63 |
|
68 |
|
5,772 |
|
4.60 |
853 |
|
6,149 |
|
4.66 |
921 |
|
|
Minera Florida Ore |
1,215 |
|
3.60 |
|
141 |
|
2,104 |
|
3.70 |
250 |
|
3,319 |
|
3.66 |
391 |
|
|
Minera Florida Tailings |
— |
|
— |
|
— |
|
1,248 |
|
0.94 |
38 |
|
1,248 |
|
0.94 |
38 |
|
| Minera Florida Total |
1,215 |
|
3.60 |
|
141 |
|
3,352 |
|
2.67 |
288 |
|
4,567 |
|
2.92 |
428 |
|
| Yamana
Operations Gold Mineral Reserves |
56,112 |
|
1.65 |
|
2,978 |
|
57,807 |
|
2.06 |
3,824 |
|
113,918 |
|
1.86 |
6,802 |
|
|
Jeronimo (57%) |
6,350 |
|
3.91 |
|
798 |
|
2,331 |
|
3.79 |
284 |
|
8,681 |
|
3.88 |
1,082 |
|
| MARA Project (56.25%) |
330,300 |
|
0.25 |
|
2,655 |
|
291,150 |
|
0.16 |
1,498 |
|
621,450 |
|
0.21 |
4,152 |
|
| Wasamac |
1,028 |
|
2.66 |
|
88 |
|
20,427 |
|
2.56 |
1,679 |
|
21,455 |
|
2.56 |
1,767 |
|
| Total
Gold Mineral Reserves |
393,790 |
|
0.51 |
|
6,519 |
|
371,715 |
|
0.61 |
7,285 |
|
765,505 |
|
0.56 |
13,803 |
|
|
Silver |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
|
Cerro Moro |
328 |
|
390.0 |
|
4,109 |
|
1,338 |
|
460.0 |
|
19,788 |
|
1,666 |
|
446.3 |
|
23,897 |
|
|
El Peñón Ore |
368 |
|
213.4 |
|
2,526 |
|
5,121 |
|
160.2 |
|
26,378 |
|
5,489 |
|
163.8 |
|
28,904 |
|
|
El Peñón Stockpiles |
9 |
|
54.1 |
|
16 |
|
651 |
|
14.1 |
|
294 |
|
660 |
|
14.6 |
|
310 |
|
| El Peñón Total |
377 |
|
209.5 |
|
2,542 |
|
5,772 |
|
143.7 |
|
26,672 |
|
6,149 |
|
147.8 |
|
29,214 |
|
|
Minera Florida Ore |
1,215 |
|
23.4 |
|
915 |
|
2,104 |
|
21.9 |
|
1,481 |
|
3,319 |
|
22.4 |
|
2,396 |
|
|
Minera Florida Tailings |
— |
|
— |
|
— |
|
1,248 |
|
14.5 |
|
584 |
|
1,248 |
|
14.5 |
|
584 |
|
| Minera Florida Total |
1,215 |
|
23.4 |
|
915 |
|
3,352 |
|
19.2 |
|
2,065 |
|
4,567 |
|
20.3 |
|
2,979 |
|
| Yamana
Operations Silver Mineral Reserves |
1,921 |
|
122.5 |
|
7,566 |
|
10,461 |
|
144.3 |
|
48,525 |
|
12,382 |
|
140.9 |
|
56,091 |
|
|
MARA Project (56.25%) |
330,300 |
|
3.0 |
|
32,070 |
|
291,150 |
|
2.6 |
|
24,618 |
|
621,450 |
|
2.8 |
|
56,689 |
|
| Total
Silver Mineral Reserves |
332,221 |
|
3.7 |
|
39,636 |
|
301,611 |
|
7.5 |
|
73,143 |
|
633,832 |
|
5.5 |
|
112,780 |
|
|
Copper |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
MARA Project (56.25%) |
330,300 |
|
0.57 |
4,151 |
|
291,150 |
|
0.39 |
2,503 |
|
621,450 |
|
0.49 |
6,654 |
|
| Total
Copper Mineral Reserves |
330,300 |
|
0.57 |
4,151 |
|
291,150 |
|
0.39 |
2,503 |
|
621,450 |
|
0.49 |
6,654 |
|
|
Zinc |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
Minera Florida Ore |
1,215 |
|
1.22 |
|
33 |
|
2,104 |
|
1.17 |
54 |
|
3,319 |
|
1.19 |
87 |
|
|
Minera Florida Tailings |
— |
|
— |
|
— |
|
1,248 |
|
0.58 |
16 |
|
1,248 |
|
0.58 |
16 |
|
| Minera Florida Total |
1,215 |
|
1.22 |
|
33 |
|
3,352 |
|
0.95 |
70 |
|
4,567 |
|
1.02 |
103 |
|
| Total
Zinc Mineral Reserves |
1,215 |
|
1.22 |
|
33 |
|
3,352 |
|
0.95 |
70 |
|
4,567 |
|
1.02 |
103 |
|
|
Molybdenum |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total - Proven & Probable |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
MARA Project (56.25%) |
330,300 |
|
0.030 |
218 |
|
291,150 |
|
0.030 |
192 |
|
621,450 |
|
0.030 |
411 |
|
| Total
Molybdenum Mineral Reserves |
330,300 |
|
0.030 |
218 |
|
291,150 |
|
0.030 |
192 |
|
621,450 |
|
0.030 |
411 |
|
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, 2020.
|
Gold |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
|
Canadian Malartic, Barnat & Other Zones (50%) |
149 |
|
0.55 |
|
3 |
|
2,566 |
|
1.24 |
|
103 |
|
2,715 |
|
1.21 |
|
105 |
|
|
Odyssey Underground (50%) |
— |
|
— |
|
— |
|
1,000 |
|
1.90 |
|
61 |
|
1,000 |
|
1.90 |
|
61 |
|
|
East Malartic Underground (50%) |
— |
|
— |
|
— |
|
5,658 |
|
2.03 |
|
368 |
|
5,658 |
|
2.03 |
|
368 |
|
|
East Gouldie Underground (50%) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
| Canadian Malartic Total
(50%) |
149 |
|
0.55 |
|
3 |
|
9,225 |
|
1.79 |
|
532 |
|
9,373 |
|
1.77 |
|
535 |
|
| Jacobina |
28,777 |
|
2.44 |
|
2,257 |
|
17,070 |
|
2.29 |
|
1,257 |
|
45,847 |
|
2.38 |
|
3,514 |
|
| Cerro Moro |
77 |
|
5.22 |
|
13 |
|
647 |
|
3.70 |
|
77 |
|
725 |
|
3.86 |
|
90 |
|
|
El Peñón Mine |
667 |
|
4.81 |
|
103 |
|
6,355 |
|
3.06 |
|
625 |
|
7,022 |
|
3.22 |
|
728 |
|
|
El Peñón Tailings |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
El Peñón Stockpiles |
— |
|
— |
|
— |
|
1,019 |
|
1.13 |
|
37 |
|
1,019 |
|
1.13 |
|
37 |
|
| El Peñón Total |
667 |
|
4.81 |
|
103 |
|
7,374 |
|
2.79 |
|
662 |
|
8,041 |
|
2.96 |
|
765 |
|
| Minera Florida |
2,455 |
|
5.03 |
|
397 |
|
3,776 |
|
4.62 |
|
561 |
|
6,230 |
|
4.79 |
|
959 |
|
| Yamana Operations Measured
& Indicated Gold Mineral Resources |
32,124 |
|
2.68 |
|
2,773 |
|
38,092 |
|
2.52 |
|
3,089 |
|
70,216 |
|
2.60 |
|
5,862 |
|
|
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 |
|
| Suyai |
— |
|
— |
|
— |
|
4,700 |
|
15.00 |
|
2,286 |
|
4,700 |
|
15.00 |
|
2,286 |
|
| MARA Project (56.25%) |
95,447 |
|
0.26 |
|
786 |
|
121,198 |
|
0.12 |
|
459 |
|
216,645 |
|
0.18 |
|
1,245 |
|
| Monument Bay |
— |
|
— |
|
— |
|
36,581 |
|
1.52 |
|
1,787 |
|
36,581 |
|
1.52 |
|
1,787 |
|
| Wasamac |
2,770 |
|
2.46 |
|
219 |
|
4,180 |
|
2.28 |
|
306 |
|
6,950 |
|
2.35 |
|
525 |
|
| Total
Measured & Indicated Gold Mineral Resources |
146,864 |
|
0.89 |
|
4,180 |
|
338,818 |
|
0.96 |
|
10,426 |
|
485,681 |
|
0.94 |
|
14,604 |
|
|
Silver |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
(000's) |
(g/t) |
oz. (000's) |
|
Cerro Moro |
77 |
|
202.4 |
|
504 |
|
647 |
|
274.6 |
|
5,716 |
|
725 |
|
266.9 |
|
6,220 |
|
|
El Peñón Mine |
667 |
|
143.0 |
|
3,063 |
|
6,355 |
|
105.4 |
|
21,535 |
|
7,022 |
|
109.0 |
|
24,599 |
|
|
El Peñón Tailings |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
El Peñón Stockpiles |
— |
|
— |
|
— |
|
1,019 |
|
28.8 |
|
942 |
|
1,019 |
|
28.8 |
|
942 |
|
| El Peñón Total |
667 |
|
143.0 |
|
3,063 |
|
7,374 |
|
94.8 |
|
22,478 |
|
8,041 |
|
98.8 |
|
25,541 |
|
| Minera Florida |
2,455 |
|
30.7 |
|
2,422 |
|
3,776 |
|
23.5 |
|
2,857 |
|
6,230 |
|
26.4 |
|
5,279 |
|
| Yamana Operations Measured
& Indicated Silver Mineral Resources |
3,198 |
|
58.20 |
|
5,989 |
|
11,797 |
|
81.9 |
|
31,051 |
|
14,996 |
|
76.8 |
|
37,039 |
|
| MARA Project (56.25%) |
30,150 |
|
1.60 |
|
1,502 |
|
116,044 |
|
1.9 |
|
6,940 |
|
146,194 |
|
1.8 |
|
8,442 |
|
| Suyai |
— |
|
— |
|
— |
|
4,700 |
|
23.0 |
|
3,523 |
|
4,700 |
|
23.0 |
|
3,523 |
|
| Total
Measured & Indicated Silver Mineral Resources |
33,348 |
|
7.0 |
|
7,491 |
|
132,541 |
|
9.7 |
|
41,513 |
|
165,889 |
|
9.2 |
|
49,004 |
|
|
Copper |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
MARA Project (56.25%) |
95,447 |
|
0.28 |
591 |
|
121,198 |
|
0.30 |
791 |
|
216,645 |
|
0.29 |
1,383 |
|
| Total
Measured & Indicated Copper Mineral Resources |
95,447 |
|
0.28 |
591 |
|
121,198 |
|
0.30 |
791 |
|
216,645 |
|
0.29 |
1,383 |
|
|
Zinc |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
Minera Florida |
2,455 |
|
1.37 |
74 |
|
3,776 |
|
1.33 |
110 |
|
6,230 |
|
1.34 |
184 |
|
| Total
Measured & Indicated Zinc Mineral Resources |
2,455 |
|
1.37 |
74 |
|
3,776 |
|
1.33 |
110 |
|
6,230 |
|
1.34 |
184 |
|
|
Molybdenum |
Measured Mineral Resources |
Indicated Mineral Resources |
Total - Measured & Indicated |
| |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(% ) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
(000's) |
(%) |
lbs (mm) |
|
MARA Project (56.25%) |
95,447 |
|
0.014 |
30 |
|
121,198 |
|
0.029 |
78 |
|
216,645 |
|
0.022 |
107 |
|
| Total
Measured & Indicated Molybdenum Mineral Resources |
95,447 |
|
0.014 |
30 |
|
121,198 |
|
0.029 |
78 |
|
216,645 |
|
0.022 |
107 |
|
|
Gold |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(g/t) |
oz. (000's) |
|
Canadian Malartic, Barnat & Other Zones (50%) |
3,688 |
|
0.78 |
92 |
|
|
Odyssey Underground (50%) |
13,853 |
|
2.05 |
913 |
|
|
East Malartic Underground (50%) |
43,444 |
|
1.91 |
2,669 |
|
|
East Gouldie Underground (50%) |
31,469 |
|
3.17 |
3,209 |
|
| Canadian Malartic (50%) |
92,454 |
|
2.32 |
6,883 |
|
| Jacobina |
20,078 |
|
2.31 |
1,494 |
|
| Cerro Moro |
2,106 |
|
3.75 |
254 |
|
|
El Peñón Mine |
5,208 |
|
3.61 |
605 |
|
|
El Peñón Tailings |
13,767 |
|
0.55 |
245 |
|
|
El Peñón Stockpiles |
— |
|
— |
— |
|
| El Peñón Total |
18,975 |
|
1.39 |
850 |
|
| Minera Florida |
4,678 |
|
5.02 |
755 |
|
| Yamana
Operations Inferred Gold Mineral Resources |
138,292 |
|
2.30 |
10,235 |
|
|
Arco Sul |
6,203 |
|
3.08 |
615 |
|
| Jeronimo (57%) |
1,118 |
|
4.49 |
161 |
|
| La Pepa |
37,900 |
|
0.50 |
620 |
|
| Lavra Velha |
3,934 |
|
4.29 |
543 |
|
| MARA Project (56.25%) |
419,590 |
|
0.09 |
1,222 |
|
| Monument Bay |
41,946 |
|
1.32 |
1,781 |
|
| Suyai |
900 |
|
9.90 |
274 |
|
| Wasamac |
3,780 |
|
2.17 |
263 |
|
| Total
Inferred Gold Mineral Resources |
653,662 |
|
0.75 |
15,714 |
|
|
Silver |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(g/t) |
oz. (000's) |
|
Cerro Moro |
2,106 |
|
129.8 |
8,786 |
|
|
El Peñón Mine |
5,208 |
|
118.0 |
19,758 |
|
|
El Peñón Tailings |
13,767 |
|
18.9 |
8,380 |
|
|
El Peñón Stockpiles |
— |
|
— |
— |
|
| El Peñón Total |
18,975 |
|
46.1 |
28,138 |
|
| Minera Florida |
4,678 |
|
23.9 |
3,596 |
|
| Yamana
Operations Inferred Silver Mineral Resources |
25,759 |
|
48.9 |
40,520 |
|
|
MARA Project (56.25%) |
417,881 |
|
1.6 |
21,765 |
|
| Suyai |
900 |
|
21.0 |
575 |
|
| Total
Inferred Silver Mineral Resources |
444,541 |
|
4.4 |
62,859 |
|
|
Copper |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(% ) |
lbs (mm) |
|
MARA Project (56.25%) |
419,590 |
|
0.23 |
2,125 |
|
| Total
Inferred Copper Mineral Resources |
419,590 |
|
0.23 |
2,125 |
|
|
Zinc |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(% ) |
lbs (mm) |
|
Minera Florida |
4,678 |
|
1.42 |
147 |
|
| Total
Inferred Zinc Mineral Resources |
4,678 |
|
1.42 |
147 |
|
|
Molybdenum |
Inferred Mineral Resources |
| |
Tonnes |
Grade |
Contained |
|
|
(000's) |
(% ) |
lbs (mm) |
|
MARA Project (56.25%) |
419,590 |
|
0.030 |
277 |
|
| Total
Inferred Molybdenum Mineral Resources |
419,590 |
|
0.030 |
277 |
|
Mineral Reserve and Mineral Resource
Reporting Notes
1. Metal Price, Cut-off Grade, Metallurgical
Recovery:
|
Mine |
Mineral Reserves |
|
Mineral Resources |
|
Yamana Gold Operations |
|
|
Canadian Malartic (50%) |
Price assumption: $1,250 gold |
|
Price assumption: $1,250 gold. Cut-off grades correspond to 75% of
the cut-off used to estimate the mineral reserves |
|
|
|
|
|
|
|
Open pit cut-off grades range from 0.39 to 0.40 g/t gold |
|
Canadian Malartic, Barnat and other zones cut-off grades range from
0.29 to 0.40 g/t gold inside pit, and from 1.15 to 1.20 g/t gold
outside or below pit (stope optimized) |
|
|
|
|
|
|
|
Metallurgical recoveries for gold averaging 90.5% |
|
Underground cut-off grade at Odyssey is 1.00 to 1.30 g/t gold
(stope optimized) |
|
|
|
|
|
|
|
|
|
Underground cut-off grade at East Malartic is 1.10 to 1.40 g/t gold
(stope optimized) |
|
|
|
|
|
|
|
|
|
Underground cut-off grade at East Gouldie is 1.10 to 1.25 g/t gold
(stope optimized) |
|
Cerro Moro |
Price assumptions: $1,250 gold and $18.00 silver |
|
Price assumptions: $1,250 gold and $18.00 silver. NSR cut-off
values correspond to 75% of reserves cut-off |
|
|
|
|
|
|
|
Underground NSR cut-off at $215/t and open pit NSR cut-off at
$123/t |
|
Underground NSR cut-off at $161.25/t and open pit NSR cut-off at
$92.25/t |
|
|
|
|
|
|
|
Metallurgical recoveries average 95% for gold and 93% for
silver |
|
Heap leach resource reported at NSR cut-off value of $95/t
(underground) and $26/t (open pit) |
|
|
|
|
|
|
|
|
|
Constrained in optimized stopes and pit shells |
|
El Peñón |
Price assumptions: $1,250 gold, $18.00 silver |
|
Price assumptions: $1,250 gold, $18.00 silver |
|
|
|
|
|
|
|
Open Pit cut-off at $49.14/t |
|
Underground cut-off at $95.31/t, which corresponds to 75% of the
cut-off value used to estimate the mineral reserves |
|
|
|
|
|
|
|
Underground cut-off at $127.08/t |
|
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 84.13% to
97.38% for gold and from 56.47% to 92.33% for silver |
|
|
|
|
|
|
|
Metallurgical recoveries for open pit ores range from 84.13% to
89.22% for gold and from 79.71% to 81.67% for silver |
|
Metallurgical recoveries for tailings estimated to be 60% for gold
and 30% for silver |
|
|
|
|
|
|
|
Metallurgical recoveries for underground ores range from 84.13% to
97.38% for gold and from 56.47% to 92.33% 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 assumption: $1,250 gold |
|
Price assumption: $1,250 gold |
|
|
|
|
|
|
|
Underground reserves are reported at variable cut-off grades by
zone ranging from 0.99 g/t gold to 1.20 g/t gold |
|
Underground cut-off grade of 1.00 g/t gold, which corresponds to
75% of the cut-off used to estimate the mineral reserves |
|
|
|
|
|
|
|
Metallurgical recovery is 96.5% |
|
Underground mining shapes were subsequently excluded based on
evaluation for eventual conversion to mineral reserves based on
proximity to existing mined-out stopes and cut-off grade |
|
|
|
|
|
|
|
|
|
Minimum mining width of 1.5 metres, considering internal waste and
dilution |
|
Minera Florida |
Price assumptions: $1,250/oz gold, $18.00/oz silver and $1.25/lb
zinc |
|
Price assumptions: $1,250/oz gold, $18.00/oz silver and $1.25/lb
zinc |
|
|
|
|
|
|
|
Underground cut-off for the Core Mine Zones $92.86/t and for Las
Petaguas Zone $91.48/t |
|
Underground mineral resources are estimated at a cut-off value of
$92.86/t for the Core Mine Zone and $69.64/t for Las Pataguas Zone
which is constrained to underground mining shapes |
|
|
|
|
|
|
|
Metallurgical recoveries range between 91.36% and 92.17% for gold,
between 62.93% and 65.88% for silver and between 75.22% and 75.38%
for zinc |
|
Metallurgical recoveries are 92.17% for gold, 65.88% for silver and
75.22% for zinc |
|
Yamana Gold Projects |
|
|
Arco Sul |
N/A |
|
Price assumption: $1,250 gold |
|
|
|
|
|
|
|
|
|
Underground cut-off grade at 2.00g/t, which corresponds to 75% of
the cut-off that would be used for mineral reserves |
|
|
|
|
|
|
|
|
|
Mineral resources reported within optimized underground mining
shapes |
|
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 assumptions: $1,300 gold and $3.50 copper |
|
|
|
|
|
|
|
|
|
Cut-off grade at 0.2 g/t gold and 0.1% copper |
|
MARA Agua Rica (56.25%) |
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 $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 |
|
MARA Alumbrera (56.25%) |
N/A |
|
Price assumptions: $1,300 gold, $2.83 copper |
|
|
|
|
|
|
|
|
|
Alumbrera deposit: Whittle pit shell cut-off at 0.22% copper
equivalent |
|
|
|
|
|
|
|
|
|
Bajo El Durazno deposit: 0.2 g/t Au cut-off within pit shell |
|
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 |
|
Wasamac |
Price assumption: $1,300/oz gold |
|
Price assumption: $1,500 gold. Exchange rate of US$0.80 =
C$1.00 |
|
|
|
|
|
|
|
Underground cut-off grade 1.0 g/t gold (stope optimized) |
|
Underground cut-off grade at 1.0 g/t gold |
|
|
|
|
|
|
|
Average of 16.2% mine dilution and 86.4% mine recovery |
|
Minimum mining width of four metres |
2. All Mineral Reserves and Mineral Resources
have been estimated 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 estimated 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,
2020.
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 |
Guy Gagnon, 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. |
|
Marco Velásquez Corrales, Registered Member Chilean Mining
Commission, Yamana Gold Inc. |
|
Jacobina |
Eduardo de Souza Soares, MAusIMM CP (Min), Yamana Gold Inc. |
|
Dominic Chartier, P.Geo, Yamana Gold Inc. and Dr. Jean-François
Ravenelle, P.Geo., Yamana Gold Inc. |
The Company will host a conference call and
webcast on Friday, February 12, 2021, at 10:00 a.m. ET (3 pm
GMT).
Fourth Quarter 2020 Conference
Call
|
Toll Free (North America): Toronto Local and
International:Toll Free (UK):Passcode:Webcast: |
1-800-806-5484
416-340-221700-800422288353993987#www.yamana.com |
|
|
|
|
Conference Call Replay |
|
|
|
|
|
Toll Free (North America):Toronto Local and International:Toll Free
(UK): Passcode: |
1-800-408-3053905-694-9451 00-800336630523289901# |
The conference call replay will be available
from 12:00 p.m. ET on February 12, 2021, until 11:59 p.m. ET (4:59
pm GMT) on March 12, 2021.
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
FTI Consulting (UK Public Relations)Sara Powell
/ Ben Brewerton +44 7974 201 715 / +44 203 727 1000Email:
Yamana.gold@fticonsulting.com
Credit Suisse (Joint UK Corporate
Broker)Ben Lawrence / David Nangle Telephone: +44 (0) 20
7888 8888
Joh. Berenberg Gossler & Co. KG
(Joint UK Corporate Broker)Matthew Armitt / Jennifer
Wyllie / Detlir Elezi Telephone: +44 (0) 20 3207 7800
Peel Hunt LLP (Joint UK Corporate
Broker)Ross Allister / David McKeown / Alexander
AllenTelephone: +44 (0) 20 7418 8900
END NOTES
(1) GEO assumes gold ounces plus the gold
equivalent of silver ounces using a ratio of 76.82 and 88.86 for
the three months and year ended December 31, 2020, respectively,
and 85.54 and 86.02 for the three months and year ended December
31, 2019, respectively.
(2) 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 12: Non-GAAP Performance Measures in the
Company's MD&A for the year ended December 31, 2020 and in the
'Non-GAAP Performance Measures' section below.
(3) Included in the gold production figure for
the year ended December 31, 2020 is 18,929 of pre-commercial
production ounces (3,137 pre-commercial production ounces are
included in the three months and year ended December 31, 2019),
related to the Company's 50% interest in the Canadian Malartic
mine's Barnat pit which achieved commercial production on September
30, 2020. Pre-commercial production ounces are excluded from sales
figures, although pre-commercial production ounces that were sold
during their respective period of production had their
corresponding revenues and costs of sales capitalized to mineral
properties, captured as expansionary capital expenditures.
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
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 Company’s
expectations in connection with the 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, silver, copper and zinc),
currency exchange rates (such as the Canadian Dollar, 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, risks associated with infectious
diseases, including COVID-19, 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 Before Dividends and Debt Repayment
- Average Realized Price per ounce of
gold/silver sold; 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 10:
Non-GAAP Financial Measures and Additional Line Items or Subtotals
in Financial Statements of the Company's MD&A for the year
ended December 31, 2020.
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 and AISC per GEO 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. 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.
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.
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
equivalent balance as at the balance sheet date. Cash related to
the MARA Project is added back to the net debt calculation on the
basis that the cash is specific to the MARA Project, and not
available to the Company for the purposes of debt reduction.
When the cash and cash equivalent balance
exceeds the total debt, the Company is in a "net cash"
position.
A reconciliation of Net Debt at December 31,
2020 and 2019 is provided in Section 12 of the Company's MD&A
for the year ended December 31, 2020, which is available on the
Company's website and on SEDAR.
NET FREE CASH FLOW AND FREE CASH FLOW BEFORE
DIVIDENDS AND DEBT REPAYMENTS
The Company uses the financial measure "Net Free
Cash Flow" and "Free Cash Flow Before Dividends and Debt
Repayment", 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.
|
Reconciliation of Cash Flows from Operating Activities to
non-GAAP Measures |
Three months ended December 31 |
| (In
millions of United States Dollars) |
2020 |
2019 |
|
Cash flows from operating activities |
$ |
181.5 |
|
|
$ |
201.7 |
|
|
| Adjustments to operating cash
flows: |
|
|
| Amortization of deferred
revenue |
3.8 |
|
|
4.2 |
|
|
| Temporary suspension and
standby costs |
2.2 |
|
|
— |
|
|
| Other incremental COVID-19
costs |
7.0 |
|
|
— |
|
|
| Non-discretionary items
related to the current period |
|
|
| Sustaining capital
expenditures |
(47.8 |
) |
|
(46.6 |
) |
|
| Interest paid |
(21.3 |
) |
|
(22.8 |
) |
|
| Payment of lease
liabilities |
(4.2 |
) |
|
(4.8 |
) |
|
| Cash used in other financing
activities |
(2.3 |
) |
|
(8.5 |
) |
|
| Net free cash flow |
$ |
118.9 |
|
|
$ |
123.2 |
|
|
| Discretionary and other items
impacting cash flow available for dividends and debt
repayments |
|
|
| Expansionary and exploration
capital expenditures |
$ |
(47.5 |
) |
|
$ |
(39.2 |
) |
|
| Cash flows used in other
investing activities |
$ |
(10.0 |
) |
|
$ |
(11.1 |
) |
|
| Effect
of foreign exchange of non-USD denominated cash |
$ |
0.3 |
|
|
$ |
0.4 |
|
|
|
Free cash flow before dividends and debt
repayments |
$ |
61.7 |
|
|
$ |
73.3 |
|
|
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 12 of the
Company's MD&A for the year ended December 31, 2020, 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, depletion, depreciation and amortization, temporary
suspension, standby and other incremental COVID-19 costs, and net
impairment write-downs/reversals.
- 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.
(All amounts are expressed in United States Dollars unless
otherwise indicated.)
Yamana Gold (TSX:YRI)
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Yamana Gold (TSX:YRI)
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