TIDMAUY
RNS Number : 1755U
Yamana Gold Inc.
29 July 2022
YAMANA GOLD REPORTS SECOND QUARTER 2022 RESULTS WITH STANDOUT
PRODUCTION AND LOW-COST PERFORMANCE DRIVING STRONG CASH FLOW
GENERATION
TORONTO, July 28, 2022 - YAMANA GOLD INC. (TSX:YRI; NYSE:AUY;
LSE:AUY) ("Yamana" or the "Company") is herein reporting its
financial and operational results for the second quarter of 2022.
Production totalled 260,960 gold equivalent ounces ("GEO")(2) at
total cost of sales, cash costs(1) and all-in sustaining costs
("AISC")(1) of $1,168, $734 and $1,084 per GEO(2) sold
respectively. The standout production results, combined with the
low-cost performance, delivered strong cash flow generation,
including $187.8 million in cash flows from operating activities
and $195.9 million in cash flows from operating activities before
net change in working capital. With solid results across its
operations, the Company is well positioned to achieve its guidance
for the year in both production and AISC(1) .
SECOND QUARTER HIGHLIGHTS
Financial Results - Strong Earnings and Cash Flow Generation
Strengthening Balance Sheet
-- Second quarter net earnings (3) of $72.1 million or $0.07 per
share basic and diluted. Adjusted net earnings(1) (3) of $85.8
million or $0.09 per share basic and diluted.
-- C ash flows from operating activities of $187.8 million and
cash flows from operating activities before net change in working
capital of $195.9 million, representing sharp increases from the
prior year comparative quarter of 22.3% and 16.7%,
respectively.
-- Net free cash flow(1) and free cash flow before dividends and
debt repayments(1) of $136.6 million and $53.0 million,
respectively.
-- Cash and cash equivalents totalled $545.1 million(6) . The
Company has $750.0 million in available credit.
Production Results - Exceptional Performance Across Entire
Portfolio
-- Production of 260,960 GEO (2) was in line with plan, despite
the gold to silver ratio being near an all-time high and
significantly above that anticipated in the plan and guidance.
Assuming the budget gold equivalent ratio, GEO (2) production would
have exceeded plan. Quarterly GEO (2) production increased
year-over-year, underpinned by strong gold production and an
exceptional performance from Cerro Moro which produced 51,906
GEO(2) , an increase of 105% year over year.
-- Gold production of 232,542 ounces exceeded plan and the prior
year comparative quarter, following standout performances from
Jacobina with 49,662 ounces, El Peñón with 46,627 ounces and Cerro
Moro with 30,929 ounces.
-- Silver production of 2,356,853 ounces was in line with plan,
following an exceptional performance from Cerro Moro.
Cost Results - Maintaining Solid Margins Against Inflationary
Backdrop
-- Second quarter total cost of sales, cash costs(1) and AISC(1)
of $1,168, $734, and $1,084 per GEO(2) , respectively, were in line
with plan and substantially unchanged versus the prior year
comparative period. Productivity gains along with stable and, in
some cases, better than expected costs, offset inflationary impacts
on certain consumables, notably diesel. By the end of the quarter,
the costs of several commodity-based consumables appeared to have
peaked with prices meaningfully below recent levels. Strong cash
flows, free cash flows and increasing cash balances in the
following quarters will support the modest planned increases to
capital spending.
Capital Allocation and Free Cash Flow
-- The Company employs a balanced approach to capital
allocation, which is expected to generate significant and growing
cash balances during the guidance period. The cash balances are
expected to be more than sufficient to finance and support the
Company's planned growth opportunities, while maintaining financial
strength, and strengthening and increasing returns of capital to
shareholders. To achieve this, the Company employs a disciplined
capital spend framework during the guidance period with a target of
$150 per GEO (2) of sustaining capital and net expansionary capital
to not exceed $175.0 million per year on average.
-- Free cash flow is expected to steadily increase
quarter-over-quarter, with the strongest free cash flow generation
expected in the second half of the year, and in particular during
the fourth quarter. The Company expects cash balances to increase
steadily throughout the year with the strongest contribution in the
latter half of the year, also aided by the fact that higher income
tax installments have been paid, as customary, in the first half of
the year.
Health, Safety and Sustainable Development
-- The Company's Total Recordable Injury Rate ("TRIR") for the
first six months of 2022 was 0.81(4) . We have modified our TRIR
reporting to align with our financial reporting standards which
include our wholly-owned operations, exploration projects,
development projects (Wasamac and MARA), proportional consolidation
of Canadian Malartic (50%), and closed projects. For comparison,
the corresponding full-year 2021 result was 1.11(4) .
-- As of July 5, 2022 more than 98%(5) of the Company's
employees and contractors at its wholly-owned operations and
exploration projects have received at least one dose of a COVID-19
vaccine, more than 96%(5) have received two doses and more than
84%(5) have received a third dose booster shot. Approximately
32%(5) of workers have received a fourth dose booster shot.
-- The Company continued the implementation of its Climate
Action Strategy during the quarter, including advancing analysis of
converting approximately 50% of Cerro Moro's electricity
requirements from diesel to wind power to meet the greenhouse gas
("GHG") emission reductions required between now and 2030 to
achieve the Company's 1.5 C science-based target, reduce operating
costs, expand mineral reserves and mine life. Work also continued
to progress on other climate action objectives, including advancing
the evaluation of other operational projects to reduce GHG
emissions and estimation of our Scope 3 emissions.
-- Yamana was named as one of Canada's Best 50 Corporate
Citizens by Corporate Knights Magazine for the second consecutive
year, based on the assessment of a range of ESG criteria. The
Company's ranking improved one position to 30(th) overall and the
Company remained the top-ranked mining company on the list. The
Company is proud of this exceptional recognition, achieved by the
dedication and hard work of all employees and business
partners.
-- On July 26, 2022, the Company's ESG rating, as determined by
MSCI, was upgraded to "A", further demonstrating the Company's deep
commitment to ESG excellence.
OPERATING RESULTS SUMMARY
For the three months ended June 30, 2022
-------------------
Total cost
of sales Cash Cost(1) AISC(1)
Gold Silver GEO(2) per GEO(2) per GEO(2) per GEO(2)
Production Production Production Sold Sold Sold
------------------- ----------- ----------- ----------- ----------- ------------ -----------
Canadian Malartic
(50%) 87,186 - 87,186 $1,205 $724 $915
Jacobina 49,662 - 49,662 $856 $559 $775
Cerro Moro 30,929 1,736,872 51,906 $1,250 $842 $1,181
El Peñón 46,627 619,981 54,068 $1,091 $712 $988
Minera Florida 18,138 - 18,138 $1,718 $1,041 $1,503
----------- ----------- ----------- ----------- ------------ -----------
Total 232,542 2,356,853 260,960 $1,168 $734 $1,084
------------------- ----------- ----------- ----------- ----------- ------------ -----------
For the three months ended June 30, 2021
-------------------
Total cost
of sales Cash Cost(1) AISC(1)
Gold Silver GEO(2) per per GEO(2) per GEO(2)
Production Production Production GEO(2) Sold(7) Sold Sold
------------------- ----------- ----------- ----------- --------------- ------------ -----------
Canadian Malartic
(50%) 92,106 - 92,106 $1,147 $632 $911
Jacobina 47,503 - 47,503 $941 $660 $824
Cerro Moro 14,488 736,823 25,313 $1,802 $1,025 $1,499
El Peñón 39,492 891,255 52,607 $1,183 $740 $1,053
Minera Florida 23,813 - 23,813 $1,409 $798 $1,147
----------- ----------- ----------- --------------- ------------ -----------
Total 217,402 1,628,078 241,341 $1,222 $720 $1,081
------------------- ----------- ----------- ----------- --------------- ------------ -----------
OPERATIONS UPDATE
Canadian Malartic
Canadian Malartic had a strong second quarter, producing 87,186
ounces, which was higher than plan. Canadian Malartic recovery
rates have trended higher than comparative periods, as anticipated
from the processing of softer Barnat ore. As previously guided, to
optimize cash flow, the mine is expected to have lower production
and throughput in 2022, relative to 2021.
Total cost of sales, cash costs (1) and AISC (1) on a per GEO
(2) basis for the quarter were $1,205, $724 and $915, respectively,
with AISC (1) largely flat versus the prior year comparative period
and better than plan.
Jacobina
Jacobina had an exceptional second quarter and delivered record
quarterly gold production of 49,662 ounces. The production results
exceeded plan and the comparative quarter, driven by higher ore
tonnes mined. Underground mine development work is in line with the
mine plan at 1,500 metres per month to gain access to new mining
panels, and together with the higher ore tonnes mined, provides
additional flexibility through the development of stockpiles
supporting the higher throughput expected from the ongoing phased
expansion. As previously guided, production for 2022 is expected to
increase for the ninth consecutive year, a trend that is expected
to continue in the coming years, as a result of the phased
expansion strategy and the exploration programs aimed at generating
significant value from the remarkable geological upside of the
property.
Total cost of sales, cash costs(1) and AISC(1) on a per GEO(2)
basis for the second quarter of $856, $559 and $775, respectively,
were significantly lower than the comparative prior year quarter.
Costs benefited from higher production as a result of the
aforementioned increased mill throughput, and fixed production
costs being distributed over less ounces in the prior year.
Cerro Moro
Cerro Moro had a standout quarter, producing 51,906 GEO (2)
comprising 30,929 ounces of gold and 1,736,872 ounces of silver,
significantly exceeding plan and production from the comparative
period. Production continued to benefit from access to additional
mining faces, which supported the increase in mill feed coming from
higher-grade underground ore, which accounts for nearly 80% of the
stabilized throughput.
The opening of more mining faces and resultant increase in mill
feed coming from higher-grade underground ore continued in the
second quarter with Zoe contributions becoming more prevalent.
During the second quarter, most of the ore delivered to the plant
came from Escondida Far West, Zoe, Escondida Central and Escondida
West. Over the past year, Cerro Moro has optimized the operation of
the processing plant to increase daily throughput to approximately
1,100 tonnes per day ("tpd"). With improvements to mine development
and flexibility, and modifications to the mining sequence for the
year, the Company anticipates more balanced quarterly production
profile over the second half of year, with production reflecting
reserve grades. This positions Cerro Moro well to meet guidance for
the year.
Total cost of sales, cash costs (1) and AISC (1) on a per GEO
(2) basis during the second quarter were $1,250, $842, and $1,181,
respectively, better than plan and all well below the comparative
quarter, as a result of the exceptional production in the
quarter.
El Peñón
El Peñón had a strong quarter, with GEO(2) production of 54,068,
comprising gold production of 46,627 ounces, and 619,981 ounces of
silver. June production of 19,077 GEO(2) benefited from access to
the Chiquilla Chica zone which entered into production at the
beginning of the month. Optimized mine sequencing, bringing forward
zones with a higher gold-to-silver ratio in the first half of the
year, has put El Peñón in an excellent position to achieve
full-year GEO(2) production guidance. The Company expects higher
silver production in the second half of 2022, due to the mining
sequence and the mining of the Providencia Sur, Dorada SW and Flat
zones, where an increase in higher-grade silver ore is anticipated.
The first step to unlock the opportunity to leverage the currently
existing processing capacity at the mine and increase production
was to establish additional mining sectors. The development of La
Paloma, Quebrada Colorada Sur and Pampa Campamento Deep was an
important component of that strategy; accessing these new areas has
now provided increased mining flexibility. With improved access now
in place, and development rates able to support throughput, the
Company expects higher production to come in the following quarters
predominantly driven by higher grades.
Quarterly total cost of sales, cash costs (1) and AISC (1) on a
per GEO (2) basis of $1,091, $712, and $988, respectively, were all
well below the comparative period, as a result of the
previously-disclosed higher development rates, that facilitated
access to additional mining areas during the quarter. Mine
development is currently occurring at a rate that exceeds 3,000
metres per month.
Minera Florida
Minera Florida reported gold production of 18,138 ounces during
the quarter, and remains on target for its annual production
guidance range. During the past year, Minera Florida has seen
improved operational efficiency and reduced haulage distances as a
result of re-establishing ore passes. Internalization of mining
activities, ongoing optimization of the haulage infrastructure, and
increasing disposal storage of development waste into underground
voids will further improve mine productivity going forward. A
review of the processing plant in the first quarter identified
several opportunities to increase recovery. Management is
prioritizing these opportunities, focusing on the initiatives that
can be implemented quickly with minimal investment.
Total cost of sales, cash costs (1) and AISC (1) on a per GEO
(2) basis during the quarter were $1,718, $1,041, and $1,503
respectively. AISC (1) was impacted by several factors during the
quarter, including mining sequence which saw extraction from a
higher number of mining zones in preparation for the second half of
the year, with both linear development and exploration expenses
being in line with plan, despite the lower production profile.
Costs per GEO (2) are expected to improve throughout the year due
to higher grades, and higher silver and zinc by-product
credits.
CONSTRUCTION, DEVELOPMENT AND ADVANCED STAGE PROJECTS
Wasamac Advancing Bulk Sample Permitting and Optimized
Life-of-Mine Plan
During 2021, the Company made a positive development decision on
its wholly-owned Wasamac project in the Abitibi-Témiscamingue
region of Quebec, Canada. Wasamac solidifies the Company's
long-term growth profile with a top-tier gold project in a region
where Yamana has deep operational and technical expertise and
experience.
During the second quarter, the Company continued to advance
preparations for its board-approved bulk sample program. The
initiative would allow construction to commence on the ramp,
enabling earlier access to the deposit to increase the level of
confidence in metallurgical and geotechnical variables and optimize
the processing flow sheet and mining sequence. Construction of
surface facilities to support the ramp development activity and
associated environmental requirements would also be advanced.
With a high level of continuity and regular geometry, combined
with a relatively simple structural setting and average mineralized
widths of 13 metres, Wasamac is well positioned for high-production
and low-cost underground mining methods given the project's low
level of geological risk and favourable geological environment.
Results since mid-2021 continue to confirm or exceed expected
grades and widths within the resource area, suggesting good
opportunities to increase reserves within and adjacent to the known
mineralized envelope. Similarly, the metallurgical and
geomechanical assumptions used in the feasibility study are based
on rigorous lab testing from drill hole samples. Bulk sampling and
industrial-scale tests will build on these results, enabling
development of production-ready models for the grade, recovery, and
geotechnical aspects of the project, to support the first three
years of production.
Additionally, the bulk sample program will allow the Company to
capture opportunities to optimize the processing performance by
testing multiple flowsheet options and confirm stope stability
parameters to optimize stope dimensions, backfilling strategy and
mining sequence while contributing to ensuring a safe working
environment. The accelerated development of the ramp will also
establish drilling platforms to perform both delineation and
exploration drilling at Wasamac main zones, Wildcat and potential
new zones from underground.
Preparation of the documentation for the bulk sample permits is
underway and scheduled for submission in the third quarter of 2022,
with the approval process expected to take less than 6 months.
Permit approvals are expected in early 2023 and ramp development
could begin in spring 2023. While the permit application is in
progress, select site works, including construction of an access
road, a temporary 25 kV power line and temporary buildings are
scheduled to commence in the second half of 2022.
The bulk sample will not require additional costs above what was
included in the feasibility study, rather a fraction of the costs
will be advanced slightly. A modest capital expenditure of
approximately $7 million is planned for the second half of 2022, in
preparation for development to commence in the first half of
2023.
Opportunities Providing Upside
During the second quarter, the Company completed an update of
the Wasamac strategic life-of-mine (LOM) plan, building on the 2021
feasibility study and incorporating the results of several
value-adding studies that were advanced throughout the first half
of 2022. The strategic plan demonstrates an improved gold
production profile compared to the feasibility study, while
continuing to establish Wasamac as a modern, low-cost, responsible
underground mine.
Extension of the processing plant site through land acquisition
and additional geotechnical drilling have allowed optimization of
the underground mine design and processing plant layout. The
revised layout avoids environmentally-sensitive areas, improves the
plant configuration, and provides additional space for ore
stockpiling, while continuing to minimize impacts to the
surrounding property holders. Using the revised mine designs, the
mining sequence has been optimized to increase feed grades in the
first two years, resulting in a faster production ramp-up to
200,000 ounces in 2027 and up to 250,000 ounces in 2028.
Furthermore, the ongoing mine design and sequence optimizations
could position the Wasamac mine with the option for a future
incremental expansion from 7,000 tpd to 9,000 tpd in year 3 of
operations, to extend the gold production profile of 250,000 ounces
per year until at least 2030. The results of a comminution
trade-off study indicate that the higher throughput of 9,000 tpd
could be achieved with limited additional mechanical equipment at
modest capital expenditures and without increasing the plant
footprint.
The strategy to start production at 7,000 tpd, with a later
incremental expansion to 9,000 tpd, balances the mining equipment
fleet and workforce requirements while minimizing any impact to the
ongoing permitting process. As a result, the Company continues to
expect to receive the required permits to commence project
construction in mid-2024 and the initial capital cost estimate from
the feasibility study of $416 million also remains unchanged.
Positive infill and exploration drilling results to date
indicate the potential for a strategic mine life of 10 to 15 years
at 200,000 to 250,000 ounces of gold per year, compared to the LOM
average of 169,000 ounces in the feasibility study. The Wasamac
deposit is not only open at depth and along strike but the
underexplored secondary zones such as Wildcat are showing promising
drilling results. Additional exploration targets on the property,
including the adjacent Francoeur, Arntfield, and Lac Fortune
properties, provide further upside. For highlights of the ongoing
exploration program at Wasamac please see the July 27, 2022 press
release 'Yamana Gold Announces Positive Exploration Results
Underpinning Strategic Upside at Odyssey and Wasamac'.
As a result of the improved production profile in the updated
strategic LOM plan, unit costs are expected to be lower than the
feasibility study LOM average AISC (1) of $828 per ounce and, at
the feasibility study gold price of US$1,550, the net present value
would approximately double, assuming the strategic mine life is
extended through 2036 at 9,000 tpd.
Other opportunities that continue to be evaluated but are not
yet included in the strategic plan include the processing flow
sheet optimization to increase metallurgical recoveries by
approximately 3% (for which metallurgical testing is ongoing),
optimized configuration of the tailings filter plant and paste
backfill plant, and increased levels of electrification, automation
and renewable energy usage in the project.
The Odyssey Project Advancing on Schedule and Continues
Exploration Success
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, announced a positive construction
decision for the Odyssey underground project at Canadian Malartic
on February 11, 2021.
Following significant advancement of the project in 2021, the
Odyssey team is focusing on two key milestones:
I. Initiation of shaft sinking by the fourth quarter of 2022
II. First gold production from Odyssey South in the first quarter of 2023
The project continues to be on budget, and on schedule. Notable
developments on progress as follows:
-- The concrete pour to construct the 93-metre-tall headframe
was completed on schedule in the fourth quarter of 2021, in
preparation for shaft sinking slated to begin in the fourth quarter
of 2022. Structural steel installation inside the headframe is
ongoing and progressed during the second quarter. The production
shaft will be 6.5 metres in diameter and 1,800 metres deep, with
the first of two loading stations at 1,135 metres below surface.
Construction of the temporary hoist building and waste silo is on
schedule.
-- The first underground ore from Odyssey South is on track to
be processed through the existing Canadian Malartic plant in early
2023. Underground development continues to progress with the
opening of additional headings.
-- Ventilation is now provided directly through a fresh-air
raise to surface and two bays in the maintenance garage are now
available. The garage is fully functional and occupied by the
maintenance team.
-- As an employer of choice in the Abitibi, the Odyssey project
continues to successfully build a highly skilled team and
development rates are planned to continue increasing throughout the
year.
-- Priority continues to be placed on the main ramp and also the
level 16 exploration drift for infill drilling of the Odyssey South
and Internal zones.
-- Concrete, structural steel and architecture has been
completed for both the compressor building and the fire-water
pumping station. These are expected to be operational in the third
quarter.
-- The fuel distribution station foundation began in May, with
piping installation ongoing and a start-up planned for
September.
-- The construction of the paste fill plant and 120 KV power
distribution line is on schedule to support the Odyssey South
stoping sequence.
-- In early July, the Company received notice that the Decree
amendment was approved, a significant milestone in the permitting
process, and all required permits to commence production from
Odyssey South are expected by the end of 2022.
With a significant production platform, material cash flow
generation and a prominent position within Quebec's Abitibi
District, Canadian Malartic will remain one of the Company's
cornerstone assets and one of the more prolific and generational
mines in the world, particularly as the Odyssey mine is developed
and comes into production. The Company is taking a disciplined
approach to the development of Odyssey with a conservative outlook
for initial throughput and production. While the Odyssey mine is
expected to initially process 20,000 tonnes per day and produce
500,000 to 600,000 ounces per year, based on the current mine plan,
the Company recognizes that there is a large inventory of ounces
that is not currently in the mine plan. Odyssey ores will be
processed through a plant with an original design capacity of over
55,000 tonnes per day, processing closer to 60,000 tonnes per day,
which far exceeds the initial expected throughput of Odyssey. The
plant was designed for the larger open pit operations that will end
later this decade, and while the Company will scale the plant to
the level required for the underground operation, that plant
capacity will always be there. The Company's approach at its other
mines has been to conduct extensive exploration which provides
flexibility to maximize and increase throughput, and a similar
approach will be taken with Odyssey, where delineation of
extensions of underground mineralized zones and new zones of
mineralization is already occurring. The extension of East Gouldie
and discovery of Titan are examples of these underground
exploration successes and opportunities. The Company's efforts at
East Amphi, Rand and Camflo also provide potential to add tonnage
and production. The Camflo property, which was added to the
Partnership in 2021, covers the past producing Camflo mine which
had historical production of approximately 1.6 million ounces of
gold. An initial evaluation of the Camflo property has identified
porphyry and diorite hosted gold mineralization that could
potentially be mined via an open pit. Additional studies are
underway to initiate an aggressive exploration program in 2023. The
Company firmly believes that in its 10-year outlook period, these
efforts will lead to more mining areas that will allow the Company
to take advantage of available plant capacity, resulting in ore
processing that will exceed 20,000 tonnes per day, and sustainable
production will then significantly exceed the initial production
plan of 500,000 to 600,000 ounces per year.
Infill Drilling and Exploration
Infill drilling in 2022 continues to demonstrate remarkable
grade and width continuity in the East Gouldie mineralized zone,
with indicated resource drilling meeting or exceeding the grade and
width of the reported inferred resource, validating the inferred
resource estimate. With twelve surface diamond drill rigs active on
East Gouldie, as well as four underground drill rigs on Odyssey
South, ongoing drilling is expected to convert a significant
portion of the 2021 year-end inferred mineral resource to indicated
mineral resources for 2022 year-end reporting. As well, drilling is
expected to significantly expand the inferred resource envelope. Up
to four drill rigs worked during the second quarter on exploration
of the eastern extension of the East Gouldie structure from the
Rand property, completing 14,600 metres on East Gouldie Extension,
4,600 metres of exploration at East Amphi and 690 metres on the
Midway project. During the third quarter, exploration will continue
with one drill rig working on exploration testing further targets
on the consolidated property.
The new indicated mineral resources will provide the basis for
updated technical studies in 2023 that will allow definition of
mineral reserves for the Odyssey underground project over the next
few years, starting at the end of 2022. For highlights of the
ongoing exploration program at Odyssey please see the July 27, 2022
press release 'Yamana Gold Announces Positive Exploration Results
Underpinning Strategic Upside at Odyssey and Wasamac'.
Jacobina Expansion Strategy
The Company's expansion strategy at Jacobina is well advanced
and the Company anticipates that the low-cost operation will have a
mine life that exceeds several decades, taking reserves and high
conviction mineral resources into consideration. Production is
expected to materially increase with phased expansions providing a
pathway to sustainable production of 350,000 ounces per annum. This
will increase the already excellent cash flow generation of the
mine and deliver meaningful value. With well-below average costs at
Jacobina, cash flows exceed those from mines that produce
significantly, and as much as fifty per cent, more ounces. The mine
currently has a reserve life of over 15 years plus a pipeline of
resources and exploration targets that we believe will further
extend mine life. Work performed since 2019 has allowed for the
systematic exploration of the Company's large land package in the
Jacobina district, which covers 155 kilometres of exploration
potential, allowing for the definition of a fourteen-kilometre long
belt of gold-bearing conglomerate located north of the mine complex
and also extending the known mineralized reefs south of João Belo
in a continuous area extending 2,200 metres. Further areas have
been identified during reconnaissance exploration programs. Work
will continue to define mineralized reefs exposed on surface and
follow up with drill testing targeting both extensions of the mine
complex and new standalone mine targets. Consequently, the Company
sees significant opportunities to grow its regional presence and
continue to build the world-class Jacobina Complex.
The Phase 2 expansion at Jacobina continued to successfully
ramp-up during the quarter, with the mine achieving a sustained
throughput rate of over 8,400 tpd in June. Yamana expects the
throughput objective of 8,500 tpd to be achieved in July,
establishing Jacobina's sustainable production profile at 230,000
ounces of gold per year.
With the Phase 2 expansion completed ahead of schedule, the
Company is now pursuing the Phase 3 expansion to 10,000 tpd through
continued incremental debottlenecking. With the permit to 10,000
tpd already in hand, Phase 3 is expected to increase gold
production to approximately 270,000 ounces per year by 2025 with a
modest capital expenditure of $20 million to $30 million.
The Phase 4 expansion, of up to 15,000 tpd, would increase gold
production in excess of 350,000 ounces per year. To achieve the
target throughput rates, a third grinding line would be added, as
well as an expansion of the leaching and CIP circuits. As the third
ball mill was originally planned as part of the Phase 2 Feasibility
Study, engineering for Phase 4 is well advanced. A comprehensive
plan, aligning the processing plant, underground mine, and tailings
management strategy, while managing capital expenditures and cash
flow, is underway.
The Company is further evaluating the strategic options and
direction related to Jacobina and the significant exploration that
is available along the greenstone belt which hosts the mine.
Jacobina is being envisioned as a complex of multiple mines, and
more emphasis is being placed on regional and generative
exploration.
Cerro Moro Scalable Plant and Heap Leaching Upside
Opportunities
Cerro Moro has a significant inventory of lower-grade veins that
are not fully reflected in the current mineral reserve and mineral
resource statements, many of which are wider than the veins
currently being mined. Drilling of these lower-grade veins was not
typically followed up with infill drilling in the past as the
mineralization is below the current cut-off grade. Cerro Moro was
developed as a high-grade, low-tonnage operation but, from the
beginning, the Company has considered alternative processing
options to allow for economic extraction of lower-grade
mineralization, including:
a. a scalable plant, where the front end of the plant
anticipates higher 2,000 tpd tonnage, with the expectation of a
modest capital requirement to achieve this objective,
b. heap leaching of near-surface, lower-grade material to supplement other production.
Year to date, the Company has advanced the plant expansion
study. Similar to the approach that has proven successful at
Jacobina, the Company is considering a low-risk, phased expansion
for Cerro Moro with quick payback from the initial phase used to
fund subsequent phases. As such, the Company is considering using
fine screens instead of cyclones for classification to improve the
efficiency of the existing ball mill. Combined with a slightly
coarser grind size, this initial phase is expected to increase
throughput to at least 1,500 tpd, a 40% to 50% increase in
capacity, without impacting gold and silver recoveries. The
incremental capacity could be used for processing of lower-grade
mineralization, which is expected to increase annual gold and
silver production, and in turn reduce fixed costs per unit at the
mine, as those costs would be distributed over additional ounces.
Preliminary analysis based on current operating data indicates that
the existing crushing and flotation circuits are adequate for the
higher throughput rate and reconfiguration of the leaching circuit
could achieve the target throughput without requiring additional
leach tanks. Upgrades to the concentrate thickener, clarifying
filters, flocculant make-up system, and pumping would likely be
required. The capital cost of this initial phase is estimated at a
modest $15 million to $20 million. Many of the upgrades in phase 1
expansion would be sufficient for a second expansion phase to
increase plant throughput to approximately 2,200 tpd, double the
existing capacity, further increasing production and reducing
operating unit costs. Capital estimates for the phase 2 expansion
are also $15 million to $20 million, for a total capital investment
over the two expansion phases estimated at $30 million to $40
million. The Company is currently evaluating two options for phase
2 expansion, the addition of a high-pressure grinding rolls
("HPGR") unit before the existing ball mill or the addition of a
regrind unit. An expansion of the flotation circuit would also be
required. The Company is undertaking additional test work to
confirm the optimal flow sheet option and will advance the selected
phase 1 and phase 2 expansion options to a pre-feasibility study
level, expected for completion in early 2023.
In parallel, a technical study on the potential heap leach
project was conducted, and while the results obtained in the second
quarter of 2022 were positive, the Company has elected to
prioritize the plant expansion project, as it provides a more
immediate high-return growth prospect, similar to the phased
expansion successfully deployed at Jacobina. As previously
disclosed, a four-month cyanide column leach test program was
conducted on eight samples with gold grades of 0.71 to 3.22 g/t.
and at three different sizes of feed materials, -25 mm, -19 mm and
-9.5 mm. The results indicated good potential for leaching of both
oxidized near-surface vein material, zones with hypogene oxides
(hematite) and some low sulphide gold-bearing veins, with
extractions from column leaching varying from 32.5% to 96.9%,
averaging 68.6%. Gold recoveries at the Domos La Union and Michelle
zones were particularly impressive, averaging 85.6% from the four
samples. Conceptual engineering was conducted for a 5,000 tpd heap
leach operation and the configuration was envisaged with three
stages of crushing to a crushed size P80 of 12.5 mm, followed by
agglomeration and retreat conveyor stacking in a multiple lift,
single-use pad with a design capacity of approximately 14 million
tonnes. The leach pad, solution storage ponds, and Merrill-Crowe
plant would be conceptually planned to be located approximately 2
kilometres east of the current tailings storage facility. Average
feed grade would be estimated at approximately 1.0 to 1.4 g/t of
gold, adding 45,000 to 65,000 ounces of gold production per year in
addition to gold and silver production from the existing processing
plant.
Positive exploration results achieved throughout 2021
successfully replaced depletion of mineral reserves for the first
time, as reflected in increased mineral reserves and mineral
resources at year-end, turning the corner for the operation.
Significantly, the expansion of higher-grade veins, both within the
core mine at Zoe and Martina, and outside the core mine at Naty,
extends the Cerro Moro mine life at the current gold equivalent
feed grade and existing throughput rate of approximately 1,100
tonnes per day. Additional high-grade targets identified in 2021
provide a pipeline of opportunities for continued mineral reserves
replacement going forward which supports the plant expansion
opportunity. Lastly, at a higher level of throughput, the Company
may be able to create a greater inventory of mineral resources.
Current exploration budgets are designed to allow for the
replacement of not only mining depletion but the annual addition of
inferred mineral resources for a constant pipeline of high-quality
mineral resources for an ongoing annual conversion to mineral
reserves.
As Cerro Moro's mineral inventory increases, the Company will
evaluate its options for alternative sources of power, which
include a connection to the grid and wind power. Both options are
expected to improve costs and further reduce GHG emissions, thereby
accelerating the achievement of the Company's 1.5 C science-based
carbon emissions reduction target.
The transition of Cerro Moro from high-cost, diesel-generated
electricity to wind power is the most attractive and compelling of
several viable GHG reduction options. The conversion of
approximately 50% of Cerro Moro's electricity requirements from
diesel to wind power would meet the GHG emission reductions
required between now and 2030 to achieve the Company's 1.5 C
science-based target. Further, it is expected that the transition
to wind power would reduce operating costs, expand mineral reserves
and mine life. A detailed evaluation, including a third-party
feasibility study of this opportunity is underway. The third-party
study to finalize the Company's evaluation of wind power indicates
there should be a sufficient and sustainable supply of power as the
Cerro Moro area of southern Argentina is considered one of the best
on-shore locations in the world for wind energy. The results of the
alternative power analysis will be considered in the plant
expansion pre-feasibility and heap leach studies to explore
synergies between the projects.
The objective at Cerro Moro is to create a sustainable ten-year
production runway of at least 160,000 GEO(2) per year, and up to
200,000 GEO(2) per year. If the Company were to develop both the
plant expansion and heap leach projects, which represent
significant upside opportunities, along with conversion of the
exploration targets to mineral resources, Cerro Moro could produce
at least 200,000 GEO(2) per year.
MARA Project Advances
The MARA Joint Venture held by the Company (56.25%), Glencore
International AG (25%) and Newmont Corporation (18.75%) continues
to advance engagement with local communities and stakeholders, and
progress the feasibility study and the permitting process. The
pending feasibility study will provide updated mineral reserves,
production and project capital cost estimates, and is being
overseen by the Technical Committee comprised of members of the
three joint venture companies. The engineering effort for the
feasibility study is expected to be substantially completed by the
end of 2022 and the finalized report in the first half of 2023.
MARA is the combined project comprised of the Agua Rica site,
Alumbrera site, as well as the Alumbrera plant and ancillary
buildings and facilities, and will rely on processing ore from the
Agua Rica mine at the Alumbrera plant. The project design minimizes
the environmental footprint of the project, incorporating the input
of local stakeholders. MARA is planned to be a multi-decade,
low-cost copper-gold operation with annual production in the first
ten years of 556 million pounds of copper equivalent(8) and a life
of mine annual production of 469 million pounds of copper
equivalent on a 100% basis. MARA will be among the top 25 copper
producers in the world when in production, and is one of the lowest
capital-intensity copper projects globally.
Work during the second quarter of 2022 focused on continuing the
progress made during 2021: advancing the feasibility study
engineering, mine design and planning, metallurgical test-work and
geotechnical drilling campaigns, other fieldwork at site, baseline
social and environmental studies, as well as permitting and working
with local stakeholders. The work continues, with the drilling
campaign and other fieldwork now covering the Agua Rica mine
infrastructure and is expected to be completed by the end of fourth
quarter of 2022.
The Company is also planning to perform deep drill holes in 2022
to check the extension of high-grade chalcopyrite mineralization
that could potentially unlock a pit expansion of Agua Rica, as well
as to test for deep extensions of mineralization in the hypogene
area of the porphyry, given the deposit is open at depth and
relatively unexplored beyond the supergene zone.
The metallurgical test program is now concluding and the results
are well aligned with previous results and expectations, with
indicative improvements to concentrate grades and mass pull. Pilot
plant investigations have also been completed and have generated
samples of final concentrate and process plant tailings for third
party testing and equipment sizing by the various major equipment
vendors.
The MARA project represents a significant strategic value
opportunity and a solid development and growth project. The Company
intends to pursue all available avenues to continue to advance and
unlock its value through its controlling interest.
EXPLORATION
During the second quarter, exploration drilling and other field
activities were carried out as planned, with only minor
COVID-related impacts to activities, most notably analytical
laboratory delays, which are expected to improve in the coming
months as COVID-related backlogs are expected to decrease.
The Company is continuing to advance its regional exploration
projects, with particular focus being placed on Jacobina and Lavra
Velha, which currently represent the best opportunities for
advancement of the goals of the generative exploration program.
Drilling activities continued in the second quarter in Brazil at
Lavra Velha and Jacobina Norte, as well as at Ivolândia and
Borborema. Field activities also advanced at the Company's Colider
and Arenopolis projects, with collection of soil and rock samples
and geological mapping at several targets.
Exploration in Chile in the second quarter included surface
evaluation and target development on several early-stage Yamana
projects in several mineral belts, evaluation of select third-party
opportunities, and ongoing regional targeting efforts in a number
of districts. Surface samples collected during the quarter across
all projects in Chile totaled 744 rock and 130 soil samples.
Ninety-six days of geological mapping and field activities related
to property reviews were completed. Two new areas have been covered
by exploration concessions based on the generative work.
In Argentina, field work in the second quarter continued at the
Companies Las Flechas property, including collection of 426 soil
and 39 rock samples, geological mapping and alteration studies of
key areas associated with breccia-related high-sulphidation
epithermal gold and porphyry copper-gold targets. Soil and rock
anomalies have defined excellent targets in preparation for
drilling planned for the first quarter 2023. Additional exploration
work conducted in Argentina during the second quarter included
surface evaluation and target development on several early-stage
Yamana projects, regional targeting programs in select mineral
belts and mining-friendly jurisdictions, and evaluation of third
party properties.
At Monument Bay, Manitoba, results from the recently-completed
deep drilling program are being evaluated with planning for the
next steps for the project ongoing. Exploration drilling continued
at the recently-acquired, advanced Wasamac property, in the
Abitibi-Témiscamingue region, Quebec, where ongoing infill drilling
continues to improve confidence and demonstrate the wide,
consistent nature of mineralization at the Wasa deposit, and
ongoing exploration drilling continues to intercept important zones
of mineralization outside of known resources. Drilling and other
field activities on the Francoeur property are planned to begin in
the third quarter. The 2022 planned field program was initiated on
the recently developed Orogen Royalties Inc. Nevada Alliance and
Raven-Callaghan property option. Data compilation work was started
on Yamana's Quito property, Nevada.
BUSINESS COMBINATION WITH GOLD FIELDS
On May 31, 2022, Gold Fields and Yamana announced that they had
entered into a definitive arrangement agreement (the "Arrangement
Agreement"), under which Gold Fields will acquire all of the
outstanding common shares of Yamana ("Yamana Shares") pursuant to a
plan of arrangement under the Canada Business Corporations Act (the
"Transaction").
Under the terms of the Transaction, among other things, all of
the outstanding Yamana Shares will be exchanged at a ratio of 0.6
of an ordinary share in Gold Fields (each whole share, a "Gold
Fields Share") or 0.6 of a Gold Fields American depositary share
(each whole American depositary share, a "Gold Fields ADS") for
each Yamana Share.
The Transaction implies a valuation for Yamana of US$6.7 billion
and represents a premium of 33.8% to the 10-day Volume-Weighted
Average Price ("VWAP") of Yamana's Shares of US$ 5.201 on Friday,
May 27, 2022, being the last trading day on the NYSE prior to the
date of the announcement, based on the 10-day VWAP of Gold Fields
ADSs of US$ 11.592. Upon closing of the Transaction, it is
anticipated that Gold Fields Shareholders and Yamana Shareholders
will own approximately 61% and 39% of the combined company,
respectively.
For further information, please refer to the May 31, 2022 press
release "Gold Fields to acquire Yamana Gold - a combination for
long-term value creation focused on quality growth, financial
discipline and shareholder returns" and the full text of the
Arrangement Agreement, both available under Yamana's profile on
SEDAR at www.sedar.com. Further details will be provided upon the
filing of the Management Information Circular related to Yamana's
proposed shareholder meeting to seek approval for the Transaction,
which is expected to be filed during the third quarter, with the
Transaction expected to close in the fourth quarter.
FINANCIAL SUMMARY AND KEY STATISTICS
Key financial and operating statistics for the second quarter
2022 are outlined in the following tables.
Three months ended
June 30
--------------------------------------------------------
(In millions of United States Dollars, except for
per share and per unit amounts) 2022 2021
-------------------------------------------------------- ------------------------ ------------------------
Revenue $ 485.6 $ 437.4
Cost of sales excluding depletion, depreciation and
amortization(7) (192.7) (186.5)
Depletion, depreciation and amortization (110.8) (108.6)
Total cost of sales(7) (303.5) (295.1)
Mine operating earnings 182.1 142.3
General and administrative expenses (23.4) (17.0)
Exploration and evaluation expenses (11.5) (7.8)
Net earnings (loss) attributable to Yamana equity
holders 72.1 (43.9)
Net earnings (loss)(3) per share - basic and diluted(i) 0.07 (0.05)
Cash flow from operating activities 187.8 153.5
Cash flow from operating activities before changes
in non-cash working capital(ii) 195.9 167.8
Revenue per ounce of gold $ 1,869 $ 1,817
Revenue per ounce of silver $ 22.25 $ 25.96
Average realized gold price per ounce (1) $ 1,869 $ 1,817
Average realized silver price per ounce (1) $ 22.25 $ 26.05
-------------------------------------------------------- ------------------------ ------------------------
(i) For the three months ended June 30, 2022, the weighted
average number of shares outstanding was 961,060 thousand (basic)
and 962,403 thousand (diluted).
(ii) Net change in working capital movement was a cash outflow
of $8.1 million for the three months ended June 30, 2022.
Reconciliation of Net Earnings (Loss) (3) to Adjusted Net
Earnings (1)(3)
Three months ended
June 30
-------------------------------------------------------------
(In millions of United States Dollars, except per
share amounts, totals may not add due to rounding) 2022 2021
------------------------------------------------------------- ------------------------ -----------------------
Net earnings (loss)(3) $ 72.1 $ (43.9)
Adjustments(3)
Non-cash net foreign exchange (gains) losses $ (12.0) $ 11.4
Share-based payments/mark-to-market of deferred share
units 3.4 1.2
Mark-to-market losses (gains) on derivative contracts,
investments and other assets and liabilities 0.4 (0.3)
Gain on discontinuation of the equity method of accounting - (9.2)
Standby and other incremental COVID-19 costs 1.8 12.7
Other provisions, write-downs and adjustments 5.8 5.3
Non-cash tax on unrealized foreign exchange (gains)
losses 16.8 (13.4)
Income tax effect of adjustments (1.2) (1.5)
One-time tax adjustments (1.3) 110.7
------------------------ -----------------------
Total adjustments(3) $ 13.7 $ 116.9
Adjusted net earnings(1)(3) $ 85.8 $ 73.0
------------------------------------------------------------- ------------------------ -----------------------
Net earnings (loss) (3) per share $ 0.07 $ (0.05)
Total adjustments(3) per share $ 0.01 $ 0.12
Adjusted net earnings (1)(3) per share $ 0.09 $ 0.08
------------------------------------------------------------- ------------------------ -----------------------
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
Condensed Consolidated Interim Financial Statements for the three
and six months ended June 30, 2022, and the Company's Management's
Discussion & Analysis for the year ended December 31, 2021,
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.
Second Quarter 2022 Conference Call
The Company will host a conference call and webcast on Friday,
July 29, 2022, at 9:00 a.m. EDT.
Toll Free (North America): 1-800-806-5484
Toronto Local and International: 416-340-2217
Toll Free (UK): 00-80042228835
Passcode: 1817985#
Webcast: www.yamana.com
Conference Call Replay
Toll Free (North America): 1-800-408-3053
Toronto Local and International: 905-694-9451
Toll Free (UK): 00-80033663052
Passcode: 6565448#
The conference call replay will be available from 12:00 p.m. EDT
on July 29, 2022, until 11:59 p.m. EDT on August 29, 2022.
Qualified Persons
Scientific and technical information contained in this news
release has been reviewed and approved by Sébastien Bernier (P. Geo
and Senior Director, Reserves and 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
416-815-0220
1-888-809-0925
Email: investor@yamana.com
FTI Consulting (UK Public Relations)
Sara Powell / Ben Brewerton
+44 7931 765 223 / +44 203 727 1000
Email: Yamana.gold@fticonsulting.com
NOTES
(1) This is a non-GAAP financial performance measure. Refer to the
Non-GAAP Financial Performance Measures section at the end of
this news release.
(2) GEO is calculated as the sum of gold ounces and the gold equivalent
of silver ounces using a ratio of 82.93 for the three months ended
June 30, 2022, and 68.01 for the three months ended June 30, 2021.
GEO calculations for actuals are based on an average market gold
to silver price ratio for the relevant period. Guidance and forward-looking
GEO assumes gold ounces plus the equivalent of silver ounces using
a ratio of 72.00.
(3) Net earnings and adjustments to net earnings represent amounts
attributable to Yamana Gold Inc. equity holders.
(4) Calculated on a 200,000 exposure hour basis, including employees
and contractors.
(5) Vaccination rates are exclusive of Canadian Malartic, in which
we hold a 50% interest. Vaccination rates at Canadian Malartic
are in line with the high Abitibi-Témiscamingue regional
rates.
(6) Cash balances include $213.8 million available for utilization
by the MARA Project.
(7) In the prior year, standby and other incremental costs associated
with the COVID-19 pandemic were presented in the financial statement
line item "Temporary suspension, standby and other incremental
COVID-19 costs" on the Statement of Operations in the Company's
Consolidated Financial Statements. During the first quarter of
2022, the Company considered that such costs would be presented
in the financial statement line item "Cost of sales excluding
depletion, depreciation and amortization" going forward, and included
in the calculation of "Gross Margin excluding depletion, depreciation
and amortization". Comparatives have been reclassified to conform
to the change of presentation adopted in the current period, with
the $12.7 million and $20.9 million of COVID-19-related costs
incurred in the three and six months ended June 30, 2021, respectively,
reclassified from "Temporary suspension, standby and other incremental
COVID-19 costs" to "Cost of sales excluding depletion, depreciation
and amortization". This change also affected the prior year calculation
of the GAAP metrics "Total Cost of Sales per GEO Sold" and "Cost
of Sales excluding DDA per GEO sold", both of which have been
recalculated based on standby and other incremental COVID-19 costs
being included in the numerator. This change did not affect the
calculation of prior year non-GAAP metrics "Cash costs per GEO
sold" and "AISC per GEO sold", as the Company's policy is for
standby and other incremental COVID-19 costs to be excluded from
the calculation of such metrics. The "Temporary suspension, standby
and other incremental COVID-19 costs" financial statement line
item has been renamed "Temporary suspension costs" to reflect
the fact that COVID-19 related costs are no longer included in
this cost account.
(8) Copper equivalent metal includes copper with gold, molybdenum,
and silver converted to copper-equivalent metal based on the following
metal price assumptions: $6,614 per tonne of copper, $1,250 per
ounce for gold, $24,250 per tonne for molybdenum, and $18.00 per
ounce for silver.
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, updates regarding mineral reserves and mineral
resources and information with respect to the Transaction with Gold
Fields. 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, , 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, risks associated with Gold Fields'
and Yamana's ability to obtain the requisite shareholder approval
of the Transaction; risks associated with not the timing for
completion of the Transaction, including the risk that the
conditions to the Transaction are not satisfied on a timely basis
or at all and the failure of the Transaction to close for any other
reason; the risk that a consent or authorization that may be
required for the Transaction is not obtained or is obtained subject
to conditions that are not anticipated; risks relating to Gold
Fields' and Yamana's business and future performance including,
without limitation, volatility in the price of gold and other
metals, currency fluctuations, operational risks, supply chain
shortages, rising inflation, increased production costs and
variances in ore grade or recovery rates from those assumed in
mining plans, political and country risk, community relations,
increased regulation of environmental and sustainability matters,
the impact of climate change on Gold Fields' and Yamana's
operations, conflict resolution governmental regulation and
judicial outcomes, the inherent risks and uncertainty associated
with financial or other projections; the risk that the Combined
Group is unsuccessful in promptly and effectively integrating the
business of Gold Fields and Yamana, the risk of ; unanticipated
difficulties or expenditures relating to the Transaction, the risk
of unexpected responses of business partners and retention as a
result of the announcement and pendency of the Transaction;
potential volatility in the price of the Gold Fields Shares or Gold
Fields ADSs due to the Transaction; the anticipated size of the
markets and continued demand for Gold Fields' and Yamana's
resources and the impact of competitive responses to the
announcement of the Transaction, and the diversion of management
time on Transaction-and related issues, 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 RESOURCES
This 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 promulgated by the Securities and Exchange Commission
(the "SEC"). For example, the terms "mineral reserve", "proven
mineral reserve", "probable mineral reserve", "mineral resource",
"measured mineral resource", "indicated mineral resource" and
"inferred mineral resource" are Canadian mining terms as defined in
accordance with Canadian National Instrument 43-101 Standards of
Disclosure for Mineral Projects 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 SEC.
Accordingly, information contained in this news release may not be
comparable to similar information made public by U.S. companies
reporting pursuant to SEC disclosure requirements.
NON-GAAP FINANCIAL PERFORMANCE MEASURES
The Company has included certain non-GAAP financial 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 Free Cash Flow and Free Cash Flow Before Dividends and Debt Repayment
-- Average Realized Price per ounce of gold/silver sold; and
-- Adjusted Net Earnings and Adjusted Net Earnings per Share
The Company believes that these financial performance 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 performance 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.
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 performance
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 non-GAAP
financial performance measures employed by other companies.
Non-GAAP financial performance 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 and standby and other incremental COVID-19 costs, net
of treatment and refining charges. The attributable cost is
calculated net of by-products by applying zinc net revenues, which
are incidental to the production of precious metals, as a credit to
GEO sold, thereby allowing the Company's management and
stakeholders to assess net costs of precious metal sales. These
costs are then divided by GEO sold.
AISC figures are calculated in accordance with a standard
developed by the World Gold Council ("WGC", a non-regulatory,
market development organization for the gold industry). Adoption of
the standard is voluntary, and the standard is an attempt to create
uniformity and a standard amongst the industry and those that adopt
it. Nonetheless, the cost measures presented herein may not be
comparable to other similarly titled measures of other
companies.
AISC 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 (as 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 does 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 are computed on a weighted average basis as
follows:
-- 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 components to the GEO production and sales
activities but net of by-product revenue credits from sales of
zinc.
The full announcement can also be found here:
http://www.rns-pdf.londonstockexchange.com/rns/1755U_1-2022-7-29.pdf
Reconciliation of Total Cost of Sales to Cash Costs and AISC
Cash Cost & AISC For the three months For the three months
Reconciliation ended ended
- Total June 30, 2022 June 30, 2021
----------------------- ------------------------------------------------------------------------------ -------------------------------------------------------------------------------
(In millions of US
Dollars
except GEO sold and per
GEO Total Total
sold amounts) Total GEO Non-Sustaining Total GEO Non-Sustaining
----------------------- ------------------------- ------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Cost of sales excluding
DDA(7) $ 192.7 $ 192.7 $ - $ 186.5 $ 186.5 $ -
DDA 110.8 110.8 - 108.6 108.6 -
----------------------- ------------------------- ------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Total cost of sales(7) $ 303.5 $ 303.5 $ - $ 295.1 $ 295.1 $ -
DDA (110.8) (110.8) - (108.6) (108.6) -
Standby and other
incremental
COVID-19 costs(7) (1.8) (1.8) - (12.7) (12.7) -
----------------------- ------------------------- ------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Total cash costs $ 190.9 $ 190.9 $ - $ 173.8 $ 173.8 $ -
AISC adjustments:
General and
administrative
expenses 23.4 23.4 - 17.0 17.0 -
Community costs in
other operating
expenses 2.2 2.2 - 1.1 1.1 -
Reclamation &
remediation -
accretion &
amortization 8.6 6.2 2.4 9.0 7.1 1.8
Exploration capital
expenditures 19.2 9.2 10.0 17.2 9.6 7.6
Exploration and
evaluation expenses 11.5 0.9 10.6 7.8 0.7 7.2
Sustaining capital
expenditures 42.1 42.1 - 46.1 46.1 -
Leases (IFRS 16
Adjustment) 7.0 7.0 - 5.7 5.7 -
----------------------- ------------------------- ------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Total AISC $ 281.9 $ 261.0
GEO sold(2) 259,989 241,481
Cost of sales excluding
DDA
per GEO sold(7) $ 741 $ 772
DDA per GEO sold $ 426 $ 450
Total cost of sales per
GEO
sold(7) $ 1,168 $ 1,222
Cash costs per GEO sold $ 734 $ 720
AISC per GEO sold $ 1,084 $ 1,081
----------------------- ------------------------- ------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Cash Cost & AISC For the six months For the six months
Reconciliation ended ended
- Total June 30, 2022 June 30, 2021
----------------------- ---------------------------------------------------------------------------- ------------------------------------------------------------------------------
(In millions of US
Dollars except
GEO and per GEO Total Total
amounts) Total GEO Non-sustaining Total GEO Non-Sustaining
----------------------- ------------------------ ------------------------ ------------------------ ------------------------- ------------------------- ------------------------
Cost of sales excluding
DDA(7) $ 371.9 $ 371.9 $ - $ 358.6 $ 358.6 $ -
DDA 219.6 219.6 - 209.1 209.1 -
----------------------- ------------------------ ------------------------ ------------------------ ------------------------- ------------------------- ------------------------
Total cost of sales(7) $ 591.5 $ 591.5 $ - $ 567.7 $ 567.7 $ -
DDA (219.6) (219.6) - (209.1) (209.1) -
Standby and other
incremental
COVID-19 costs(7) (6.5) (6.5) - (20.9) (20.9) -
----------------------- ------------------------ ------------------------ ------------------------ ------------------------- ------------------------- ------------------------
Total cash costs $ 365.4 $ 365.4 $ 0.0 $ 337.7 $ 337.7 $ 0.0
AISC adjustments:
General and
administrative
expenses 46.5 46.5 - 35.3 35.3 -
Community costs in
other operating
expenses 3.9 3.9 - 2.3 2.3 -
Reclamation &
remediation -
accretion
& amortization 16.7 12.8 3.9 17.1 13.4 3.7
Exploration capital
expenditures 35.1 16.9 18.2 33.2 17.7 15.5
Exploration and
evaluation expenses 16.6 1.7 14.9 13.9 1.3 12.6
Sustaining capital
expenditures 78.2 78.2 - 88.3 88.3 -
Leases (IFRS 16
Adjustment) 14.0 14.0 - 10.4 10.4 -
----------------------- ------------------------ ------------------------ ------------------------ ------------------------- ------------------------- ------------------------
Total AISC $ 539.4 $ 506.4
GEO sold(2) 497,599 476,215
Cost of sales excluding
DDA
per GEO sold(7) $ 747 $ 753
DDA per GEO sold $ 441 $ 439
Total cost of sales per
GEO
sold(7) $ 1,189 $ 1,192
Cash costs per GEO sold $ 734 $ 709
AISC per GEO sold $ 1,084 $ 1,064
----------------------- ------------------------ ------------------------ ------------------------ ------------------------- ------------------------- ------------------------
Cash Cost & AISC
Reconciliation For the three months ended June 30,
- Operating Segments 2022
----------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------
(In millions of US
Dollars except Canadian Cerro Minera
GEO sold and per GEO Malartic Jacobina Moro El Peñón Florida Corporate
sold amounts) Total GEO GEO GEO GEO GEO & Non-Sustaining
----------------------- -------------------- ------------------- ------------------- -------------------- -------------------- ---------------- ---------------------
Cost of sales excluding
DDA $ 192.7 $ 64.9 $ 27.5 $ 41.8 $ 40.1 $ 18.4 $ -
DDA 110.8 41.9 14.6 19.8 20.1 11.9 2.5
----------------------- -------------------- ------------------- ------------------- -------------------- -------------------- ---------------- ---------------------
Total cost of sales $ 303.5 $ 106.8 $ 42.1 $ 61.6 $ 60.2 $ 30.3 $ 2.5
DDA (110.8) (41.9) (14.6) (19.8) (20.1) (11.9) (2.5)
Standby and other
incremental
COVID-19 costs(7) (1.8) (0.7) - (0.3) (0.8) - -
----------------------- -------------------- ------------------- ------------------- -------------------- -------------------- ---------------- ---------------------
Total cash costs $ 190.9 $ 64.2 $ 27.5 $ 41.5 $ 39.3 $ 18.4 $ -
AISC adjustments:
General and
administrative
expenses 23.4 1.0 0.2 0.2 0.3 0.3 21.4
Community costs in
other operating
expenses 2.2 0.1 - 1.9 - - 0.2
Reclamation &
remediation -
accretion
& amortization 8.6 3.2 0.6 0.5 0.5 1.2 2.6
Exploration capital
expenditures 19.2 - 2.3 1.6 3.7 1.5 10.1
Exploration and
evaluation expenses 11.5 0.1 - - - - 11.4
Sustaining capital
expenditures 42.1 12.3 4.7 11.1 9.4 4.4 0.2
Leases (IFRS 16
Adjustment) 7.0 0.2 2.8 1.3 1.3 0.8 0.6
----------------------- -------------------- ------------------- ------------------- -------------------- -------------------- ---------------- ---------------------
Total AISC $ 81.1 $ 38.1 $ 58.1 $ 54.5 $ 26.6
GEO sold(2) 88,600 49,238 49,285 55,193 17,672
Cost of sales excluding
DDA per
GEO sold $ 732 $ 559 $ 848 $ 727 $ 1,043
DDA per GEO sold $ 473 $ 297 $ 401 $ 365 $ 675
Total cost of sales per
GEO sold $ 1,205 $ 856 $ 1,250 $ 1,091 $ 1,718
Cash costs per GEO sold $ 724 $ 559 $ 842 $ 712 $ 1,041
AISC per GEO sold $ 915 $ 775 $ 1,181 $ 988 $ 1,503
----------------------- -------------------- ------------------- ------------------- -------------------- -------------------- ---------------- ---------------------
Cash Cost & AISC
Reconciliation For the three months ended June 30,
- Operating Segments 2021
----------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions of US
Dollars except Canadian Cerro Minera
GEO sold and per GEO Malartic Jacobina Moro El Peñón Florida Corporate
sold amounts) Total GEO GEO GEO GEO GEO & Non-Sustaining
----------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------
Cost of sales excluding
DDA(7) $ 186.5 $ 60.5 $ 32.0 $ 36.6 $ 38.4 $ 19.0 $ -
DDA 108.6 47.8 12.9 12.8 20.9 11.8 2.4
----------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------
Total cost of sales(7) $ 295.1 $ 108.2 $ 44.9 $ 49.4 $ 59.3 $ 30.8 $ 2.4
DDA (108.6) (47.8) (12.9) (12.8) (20.9) (11.8) (2.4)
Standby and other
incremental
COVID-19 costs(7) (12.7) (0.8) (0.5) (8.5) (1.3) (1.6) -
----------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------
Total cash costs $ 173.8 $ 59.6 $ 31.5 $ 28.1 $ 37.1 $ 17.5 $ -
AISC adjustments:
General and
administrative
expenses 17.0 0.9 0.2 0.2 0.2 0.3 15.2
Community costs in
other operating
expenses 1.1 0.1 0.1 0.7 - - 0.2
Reclamation &
remediation -
accretion
& amortization 9.0 4.3 0.4 0.5 0.6 1.2 2.0
Exploration capital
expenditures 17.2 - 2.1 1.8 4.8 1.0 7.5
Exploration and
evaluation expenses 7.8 0.1 - - - - 7.8
Sustaining capital
expenditures 46.1 20.8 3.3 8.4 9.1 4.2 0.3
Leases (IFRS 16
Adjustment) 5.7 0.2 1.6 1.4 1.0 1.0 0.5
----------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------
Total AISC $ 85.9 $ 39.3 $ 41.1 $ 52.8 $ 25.1
GEO sold(2) 94,335 47,696 27,443 50,136 21,871
Cost of sales excluding
DDA per
GEO sold(7) $ 641 $ 670 $ 1,335 $ 766 $ 869
DDA per GEO sold $ 507 $ 271 $ 467 $ 417 $ 540
Total cost of sales per
GEO sold(7) $ 1,147 $ 941 $ 1,802 $ 1,183 $ 1,409
Cash costs per GEO sold $ 632 $ 660 $ 1,025 $ 740 $ 798
AISC per GEO sold $ 911 $ 824 $ 1,499 $ 1,053 $ 1,147
----------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------
Cash Cost & AISC
Reconciliation
- Operating Segments For the six months ended June 30, 2022
----------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------
(In millions of US
Dollars except Cerro Minera
GEO and per GEO Malartic Jacobina Moro El Peñón Florida Corporate
amounts) Total GEO GEO GEO GEO GEO & Non-Sustaining
----------------------- ---------------- -------------------- -------------------- ------------------- ------------------- ------------------- ----------------------
Cost of sales excluding
DDA $ 371.9 $ 126.6 $ 53.5 $ 82.6 $ 77.5 $ 31.7 $ -
DDA 219.6 83.8 28.7 40.4 38.9 22.9 4.9
----------------------- ---------------- -------------------- -------------------- ------------------- ------------------- ------------------- ----------------------
Total cost of sales $ 591.5 $ 210.4 $ 82.2 $ 123.0 $ 116.4 $ 54.6 $ 4.9
DDA (219.6) (83.8) (28.7) (40.4) (38.9) (22.9) (4.9)
Standby and other
incremental
COVID-19 costs(7) (6.5) (1.2) (1.3) (1.4) (2.4) (0.2) -
----------------------- ---------------- -------------------- -------------------- ------------------- ------------------- ------------------- ----------------------
Total cash costs $ 365.4 $ 125.4 $ 52.2 $ 81.2 $ 75.1 $ 31.5 $ -
AISC adjustments:
General and
administrative
expenses 46.5 1.9 0.4 0.2 0.3 0.3 43.4
Community costs in
other operating
expenses 3.9 0.4 0.1 3.4 - - -
Reclamation &
remediation -
accretion
& amortization 16.7 7.1 1.3 0.8 1.1 2.2 4.2
Exploration capital
expenditures 35.1 - 4.4 3.1 6.3 3.1 18.2
Exploration and
evaluation expenses 16.6 0.2 - - - - 16.4
Sustaining capital
expenditures 78.2 21.5 9.2 20.0 19.6 7.4 0.5
Leases (IFRS 16
Adjustment) 14.0 0.3 5.4 2.7 2.7 1.7 1.2
----------------------- ---------------- -------------------- -------------------- ------------------- ------------------- ------------------- ----------------------
Total AISC $ 156.8 $ 73.0 $ 111.4 $ 105.1 $ 46.2
GEO sold(2) 166,914 95,928 96,653 105,852 32,252
Cost of sales excluding
DDA per
GEO sold $ 759 $ 558 $ 855 $ 732 $ 982
DDA per GEO sold $ 502 $ 299 $ 417 $ 368 $ 711
Total cost of sales per
GEO sold $ 1,260 $ 858 $ 1,272 $ 1,099 $ 1,693
Cash costs per GEO sold $ 751 $ 545 $ 840 $ 709 $ 974
AISC per GEO sold $ 939 $ 761 $ 1,152 $ 992 $ 1,430
----------------------- ---------------- -------------------- -------------------- ------------------- ------------------- ------------------- ----------------------
Cash Cost & AISC
Reconciliation
- Operating Segments For the six months ended June 30, 2021
----------------------- --------------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions of US
Dollars except Minera
GEO and per GEO Malartic Jacobina Cerro Moro El Peñón Florida Corporate
amounts) Total GEO GEO GEO GEO GEO & Non-Sustaining
----------------------- ------------------- -------------------- ------------------- --------------------- --------------------- -------------------- --------------------------
Cost of sales excluding
DDA(7) $ 358.6 $ 113.5 $ 59.9 $ 68.8 $ 75.9 $ 40.5 $ -
DDA 209.1 89.6 24.5 26.1 40.9 23.2 4.8
----------------------- ------------------- -------------------- ------------------- --------------------- --------------------- -------------------- --------------------------
Total cost of sales(7) $ 567.7 $ 203.1 $ 84.4 $ 94.9 $ 116.8 $ 63.7 $ 4.8
DDA (209.1) (89.6) (24.5) (26.1) (40.9) (23.2) (4.8)
Standby and other
incremental
COVID-19 costs(7) (20.9) (1.4) (0.8) (13.3) (2.7) (2.7) -
----------------------- ------------------- -------------------- ------------------- --------------------- --------------------- -------------------- --------------------------
Total cash costs $ 337.7 $ 112.1 $ 59.1 $ 55.5 $ 73.2 $ 37.8 $ -
AISC adjustments:
General and
administrative
expenses 35.3 1.7 0.3 0.2 0.2 0.3 32.6
Community costs in
other operating
expenses 2.3 0.2 0.2 1.7 - - 0.2
Reclamation &
remediation -
accretion
& amortization 17.1 7.9 0.8 1.1 1.1 2.4 3.8
Exploration capital
expenditures 33.2 - 3.4 3.6 8.6 2.1 15.5
Exploration and
evaluation expenses 13.9 0.1 0.1 - - - 13.7
Sustaining capital
expenditures 88.3 40.3 6.0 15.2 18.2 8.1 0.5
Leases (IFRS 16
Adjustment) 10.4 0.4 2.6 2.7 2.1 1.7 0.9
----------------------- ------------------- -------------------- ------------------- --------------------- --------------------- -------------------- --------------------------
Total AISC $ 162.7 $ 72.4 $ 80.0 $ 103.5 $ 52.4
GEO sold(2) 182,528 90,655 62,319 96,144 44,569
Cost of sales excluding
DDA per
GEO sold(7) $ 622 $ 660 $ 1,104 $ 790 $ 909
DDA per GEO sold $ 491 $ 270 $ 419 $ 426 $ 520
Total cost of sales per
GEO sold(7) $ 1,113 $ 930 $ 1,523 $ 1,215 $ 1,429
Cash costs per GEO sold $ 614 $ 652 $ 890 $ 762 $ 849
AISC per GEO sold $ 892 $ 798 $ 1,283 $ 1,077 $ 1,175
----------------------- ------------------- -------------------- ------------------- --------------------- --------------------- -------------------- --------------------------
NET FREE CASH FLOW AND FREE CASH FLOW BEFORE DIVIDS AND DEBT
REPAYMENTS
The Company uses the financial measures "Net Free Cash Flow" and
"Free Cash Flow Before Dividends and Debt Repayment", which are
non-GAAP financial performance 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.
Three months ended
June 30
(In millions of United States Dollars) 2022 2021
----------------------------------------------------- ------------------------------ ------------------------------
Cash flows from operating activities $ 187.8 $ 153.5
Adjustments to operating cash flows:
Amortization of deferred revenue 4.3 4.5
Standby and other incremental COVID-19 costs(7) 1.8 12.7
Non-discretionary items related to the current
period
Sustaining capital expenditures (42.1) (46.1)
Interest paid (8.4) (21.8)
Payment of lease liabilities (5.6) (4.3)
Cash used in other financing activities (1.2) (2.2)
------------------------------ ------------------------------
Net free cash flow $ 136.6 $ 96.3
Discretionary and other items impacting cash flow
available for dividends and debt repayments
Expansionary and exploration capital expenditures (79.8) (47.3)
Cash (used in) from other investing activities (2.0) 2.0
Effect of foreign exchange of non-USD denominated
cash (1.8) 0.3
----------------------------------------------------- ------------------------------ ------------------------------
Free cash flow before dividends and debt repayments $ 53.0 $ 51.3
===================================================== ============================== ==============================
AVERAGE REALIZED METAL PRICES
The Company uses the financial measures "average realized gold
price" and "average realized silver price", which are non-GAAP
financial performance 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 and silver, divided by the quantity of the
respective units of metals sold, i.e. gold ounce and silver ounce.
Reconciliations of average realized metal prices to revenue are
provided below.
Reconciliation of average realized metal prices to revenue
For the three months
ended June 30, 2022 2021
--------------------- ------------------------------------------------ -------------------------------------------
Revenue Revenue
Revenue (In millions Revenue (In millions
Quantity per ounce/ of US Quantity per ounce/ of US
sold pound Dollars) sold pound Dollars)
--------------------- ------------- --- ------------ -------------- ---------- ----------- --------------
Gold 232,418 oz $ 1,869 $ 434.5 216,039 oz $ 1,817 $ 392.5
Silver 2,296,791 oz $ 22.25 51.1 1,731,620 oz $ 25.96 44.9
-------------- --------------
Revenue $ 485.6 $ 437.4
--------------------- ------------- --- ------------ -------------- ---------- ----------- --------------
For the three
months
ended June 30, 2022 2021
-------------- ------------------------------------------------ --------------------------------------------------
Revenue Revenue
Average (In millions Average (In millions
Quantity Realized of US Quantity Realized of US
sold Price Dollars) sold Price Dollars)
-------------- ------------- --- --------- ----------------- ------------- --------- --------------------
Gold 232,418 oz $ 1,869 $ 434.5 216,039 oz $ 1,817 $ 392.5
Silver 1,996,791 oz $ 22.34 44.6 1,431,620 oz $ 26.73 38.3
Silver subject
to metal
sales
agreement* 300,000 oz $ 21.60 6.5 300,000 oz $ 22.77 6.8
------------- --------- ------------- ---------
2,296,791 oz $ 22.25 1,731,620 oz $ 26.05
----------------- --------------------
Gross revenue $ 485.6 $ 437.6
(Deduct) add:
Other
adjustments - (0.2)
Revenue $ 485.6 $ 437.4
-------------- ------------- --- --------- ----------------- ------------- --------- --------------------
For the six
months ended
June 30, 2022 2021
----------------- --------------------------------------------------- --------------------------------------------
Revenue Revenue
(In millions Revenue (In millions
Quantity Revenue of US Quantity per ounce/ of US
sold per ounce/pound Dollars) sold pound Dollars)
----------------- ------------ --- ---------------- -------------- ------------ ----------- -------------
Gold 439,746 oz $ 1,873 $ 823.8 419,579 oz $ 1,805 $ 757.5
Silver 4,663,342 oz $ 22.23 103.7 3,861,806 oz $ 26.43 102.0
-------------- -------------
Revenue $ 927.5 $ 859.5
----------------- ------------ --- ---------------- -------------- ------------ ----------- -------------
For the six
months ended
June 30, 2022 2021
--------------- ------------------------------------------------- ------------------------------------------------
Revenue Revenue
Average (In millions Average (In millions
Quantity Realized of US Quantity Realized of US
sold Price Dollars) sold Price Dollars)
--------------- ------------ --- ---------- ------------------ ------------ ---------- ------------------
Gold 439,746 oz $ 1,873 $ 823.8 419,579 oz $ 1,805 $ 757.5
Silver 3,985,254 oz $ 23.27 92.8 3,226,107 oz $ 26.46 85.4
Silver subject
to metal
sales
agreement* 678,088 oz $ 21.25 14.4 635,699 oz $ 22.72 14.4
------------ ---------- ------------ ----------
4,663,342 oz $ 22.98 3,861,806 oz $ 25.84
------------------ ------------------
Gross revenue $ 931.0 $ 857.3
(Deduct) add:
Deferred
revenue
adjustment** (3.5) 2.4
Other
adjustments 0.0 (0.2)
------------------ ------------------
Revenue $ 927.5 $ 859.5
--------------- ------------ --- ---------- ------------------ ------------ ---------- ------------------
*Balance represents metal sold under the metal sales
agreement.
**Consideration from the Company's metal sales agreement is
considered variable. Revenue can be subject to cumulative
adjustments when the number of ounces to be delivered under the
agreement changes. During the three months ended March 31, 2022 and
2021, the Company recognized an adjustment to revenue and finance
costs due to a change in the Company's reserve and resource
estimates, and therefore, the number of ounces expected to be
delivered under the life of the agreement.
ADJUSTED NET EARNINGS OR LOSS AND ADJUSTED NET EARNINGS OR LOSS
PER SHARE
The Company uses the financial measures "Adjusted Net Earnings
or Loss" and the non-GAAP ratio "Adjusted Net 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
and ratios 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 Net Earnings or Loss and Adjusted Net 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 Net Earnings or Loss" and "Adjusted Net
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 Net Earnings or Loss and Adjusted
Net 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 periods' 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 Net Earnings or
Loss and Adjusted Net 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. A reconciliation of Net Earnings to Adjusted Net
Earnings is included earlier in this news release.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR FIFFIDAIAFIF
(END) Dow Jones Newswires
July 29, 2022 02:02 ET (06:02 GMT)
Yamana Gold (LSE:AUY)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Yamana Gold (LSE:AUY)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024