Yamana produces 1.2 million gold equivalent oz in 2009
2010-01-12 16:41 ET - News Release
Ms. Letitia Wong reports
YAMANA GOLD PROVIDES 2010 AND 2011 OPERATING OUTLOOK
Yamana Gold Inc. has released its operating outlook including production, cash costs and capital expenditure guidance for 2010 and 2011. All amounts are expressed in U.S. dollars unless otherwise indicated.
"Our objective has been to create consistency and reliability in our operations with a sustainable production platform of approximately 1.1 million gold equivalent ounces at consistent cash costs," said Peter Marrone, Yamana's chairman and chief executive officer. "Our outlook for the next few years maintains that objective. Going forward, our development stage and exploration projects, in addition to further value-enhancing opportunities, will provide Yamana with a superior organic growth profile and value proposition."
2010 and 2011 operating outlook
Production from continuing operations is expected to be in the range of 1.03 million to 1,145,000 gold equivalent ounces (GEO) in 2010 and 1,045,000 to 1.15 million GEO in 2011, representing an overall increase of up to 12 per cent in production from continuing operations in 2009. Production from discontinued operations is expected to be approximately 40,000 GEO in the first quarter of 2010, which is not included in the estimated production ranges set forth above. No further production from discontinued operations is expected after the first quarter of 2010.
Estimated gold and copper production on a mine-by-mine basis for 2010 and 2011 is detailed in an attached table.
GOLD AND COPPER PRODUCTION ESTIMATES
Gold production estimates (GEO) 2010E 2011E
Chapada 140,000-155,000 135,000-145,000
El Penon (GEO) 400,000-420,000 410,000-430,000
Gualcamayo 165,000-180,000 165,000-180,000
Jacobina 105,000-125,000 110,000-130,000
Minera Florida (GEO) 100,000-125,000 110,000-130,000
Fazenda Brasileiro 70,000-85,000 70,000-85,000
Alumbrera (12.5%) 50,000-55,000 45,000-50,000
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Total GEO(1) 1,030,000-1,145,000 1,045,000-1,150,000
=================== ===================
Copper (lb) (Chapada) 150 million to 135 million to
160 million 145 million
(1) GEO calculations are based on an assumed gold-to-silver ratio of 55:1
which is a long-term historical average. Silver production of
approximately 10 million ounces for 2010 and 2011 is treated as a
gold equivalent on this basis.
Growth is expected to ramp up substantially in 2012 as four development-stage projects including C1 Santa Luz, Mercedes and Minera Florida tailings project, where construction decisions have already been made, in addition to Ernesto/Pau-a-pique, where a feasibility study is pending, are expected to begin production. These four projects are expected to contribute an additional approximately 390,000 GEO annually. Production in 2012 is expected to be approximately 1.3 million GEO as these projects commence operations and begin to ramp up, with production by the end of 2012 expected to be at a planned annual run rate of approximately 1.5 million GEO, which represents a 46-per-cent increase in production from 2009.
A summary of expected gold production on a year by year basis is shown in an attached table.
EXPENDED GOLD PRODUCTION
Year Production (GEO)
2010 Approx. 1.1 million
2011 Approx. 1.1 million
2012 Approx. 1.3 million
2013 Approx. 1.5 million
These estimates do not include any additional production from Agua Rica or new discoveries at El Penon, where updates are expected in the first quarter of 2010, or QDD Lower West, where an update is expected in the second half of 2010.
Byproduct cash costs from continuing operations (excluding Alumbrera) are expected to be below $200 per GEO in each of 2010 and 2011 based on assumed metal prices set forth. Co-product cash costs from continuing operations (excluding Alumbrera) are expected to be in the range of $360 to $400 per GEO in 2010 and $370 to $400 per GEO in 2011. Co-product cash costs per pound of copper at Chapada are expected to be $1 to $1.10 in 2010 and $1.10 to $1.20 in 2011.
Estimated cash costs for gold on a mine-by-mine basis for 2010 and 2011 are detailed in an attached table.
ESTIMATED CASH COSTS
Co-product cash cost estimates per GEO 2010E 2011E
Chapada $280-$300 $320-$350
El Penon (per GEO) $350-$390 $340-$360
Gualcamayo $340-$380 $350-$390
Jacobina $500-$525 $500-$550
Minera Florida (per GEO) $350-$390 $340-$370
Fazenda Brasileiro $500-$550 $500-$550
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Byproduct cash costs Below $200 Below $200
Chapada, Brazil
Production at Chapada is expected to be in the range of 140,000 to 155,000 ounces of gold per year in 2010 and 135,000 to 145,000 ounces of gold in 2011. Co-product cash costs are expected to be $280 to $300 per ounce in 2010 and $320 to $350 per ounce in 2011. Yamana has begun with plant optimizations scheduled to increase throughput to up to 22 million tonnes per year before 2012.
El Penon, Chile
Production at El Penon is expected to be in the range of 400,000 to 420,000 GEO in 2010 with production in the first quarter of 2010 expected to be lower than production in the fourth quarter of 2009, but higher than levels in the first quarter of 2009. Production is anticipated to ramp up quarter over quarter in 2010 similar to the trend in 2009. Grade is also expected to improve throughout 2010 with a significant increase expected in the fourth quarter of 2010 and into 2011 as the development of Bonanza is completed and begins to contribute to production. Production at El Penon in 2011 is expected to be 410,000 to 430,000 GEO.
Exploration results to date at Bonanza have been better than expected and continuing exploration efforts in 2010 will focus on extending the known deposits, infill drilling to upgrade certain inferred mineral resources, continuing with efforts at new discoveries and a broader regional exploration program.
Cash costs are expected to average between $350 and $390 per GEO in 2010. Cash costs are expected to be higher in the first quarter of 2010 and to decline throughout the year as production ramps up.
In the fourth quarter of 2009, the company began a transition to owner mining at El Penon. This is expected to modestly impact production and cash costs in the fourth quarter of 2009 and the first quarter of 2010 as the transition to owner mining is completed. Cash costs and production are then expected to improve going forward.
Yamana had contemplated transitioning to owner mining for some time as all other mines operated by Yamana are owner mined. Cash costs are expected to decline substantially in the fourth quarter of 2010 and cash costs in 2011 are expected to average between $340 and $360 per GEO as Bonanza begins to contribute to production and the longer-term benefits of owner mining are realized.
Gualcamayo, Argentina
Production at Gualcamayo is expected to be in the range of 165,000 to 180,000 ounces of gold in each of 2010 and 2011. Going forward, the company believes sustainable production at Gualcamayo will be approximately 180,000 ounces. Production in 2010 and 2011 is expected to come solely from the main QDD open-pit deposit. Further production increases are expected to come from Yamana's continued plans to increase throughput to 1,500 tonnes per hour and processing ore from AIM and QDD Lower West. The expansion to 1,500 tonnes per hour is planned to be completed by the end of 2010.
Metallurgical testwork continues at the AIM deposit to create more reliability and certainty in the ore metallurgy. In addition, QDD Lower West feasibility study results are expected in the second half of 2010.
The company is currently also conducting metallurgical testwork at Salamanca, which is the newest discovery at Gualcamayo. Positive drill results in 2009 support Yamana's view that Salamanca may represent an important source of further gold ounces for Gualcamayo. Drilling continues in 2010 with the objective of providing a mineral resource estimate for Salamanca in the first half of 2010.
Cash costs at Gualcamayo are expected to be in the range of $340 to $380 per ounce in 2010 and $350 and $390 per ounce in 2011.
Jacobina, Brazil
Production at Jacobina is expected to be in the range of 105,000 to 125,000 ounces of gold in 2010 increasing to 110,000 to 130,000 ounces in 2011. Yamana expects to process ore at 6,000 tonnes per day in 2010, consistent with the fourth quarter of 2009 and at the increased rate of 6,200 tonnes per day by early 2011. Yamana continues with drilling to increase certainty of grade and better layout of the drilling stopes.
The company remains focused on improving dilution and recovery as well as exploring, discovering and developing higher-grade areas including Canavieiras. Jacobina will have a period of lower grades in 2010 and 2011 as compared with 2009. Production in these years is expected to come mostly from Joao Belo with modest contributions from Basal.
Positive drill results continue to confirm the high grade at Canavieiras and the significant sample results at Moro do Vento show the potential for new inferred mineral resource ounces.
Exploration upside is in areas with grade higher than the current mine grade. With the new discovery of Serra da Lagartixa in 2009, exploration efforts in 2010 will be focused on near-mine drilling in this target and more aggressively pursuing higher-grade areas of mineralization for future mining.
Cash costs in 2010 are expected to be $500 to $525 per ounce of gold and $500 to $550 per ounce of gold in 2011.
Minera Florida, Chile
Production at Minera Florida is expected to be in the range of 100,000 to 125,000 GEO in 2010, an increase of up to 35 per cent from 2009 production levels reflecting the first full year of production following the expansion. Production in 2011 is expected to be 110,000 to 130,000 GEO. Cash costs are expected to be $350 to $390 per GEO in 2010 and $340 to $370 per GEO in 2011.
Fazenda Brasileiro, Brazil
Production at Fazenda Brasileiro is expected to be 70,000 to 85,000 ounces of gold for each of 2010 and 2011. Cash costs are expected to be $500 to $550 per ounce for each of 2010 and 2011. As Fazenda Brasileiro reaches the end of its known mine life based on mineral reserves, exploration efforts continue to focus on two newly discovered areas, CLX2 and Lagoa do Gato, which Yamana believes represent significant potential to increase the mine life. Yamana's exploration focus at Fazenda Brasileiro has been the replacement of mineral reserves and mineral resources and the company intends to continue these efforts to meaningfully increase mineral reserves and mineral resources in these new areas.
Fully funded growth
Capital expenditures for 2010 and 2011 are expected to be approximately $515-million and $455-million, respectively. This includes sustaining capital expenditures of $230-million in 2010, which includes the purchase of machinery and equipment as Yamana transitions to owner mining at El Penon (representing approximately $60-million). Sustaining capital expenditures in 2011 are expected to be $155-million. The majority of the expansionary capital costs for the two years are allocated to the development of Yamana's growth projects, C1 Santa Luz, Mercedes, the Minera Florida tailings project and Ernesto/Pau-a-pique (feasibility study to follow in January, 2010), all of which are expected to begin production in 2012.
With approximately $600-million of available cash and immediate and undrawn credit available in addition to expected robust cash flow, Yamana is fully financed for its growth.
Yamana continues to focus on exploration with an exploration budget in 2010 of between $75-million to $80-million (approximately half of which is capitalized). Yamana's 2010 exploration program will focus on increasing mineral reserves and mineral resources while continuing with its near-mine exploration program and its efforts to look for new opportunities and on the ground purchases elsewhere in the Americas. The company is focused on developing its future based on its exploration successes and organic growth.
Assumptions
Assumptions for metal prices and exchange rates are as shown in an attached table.
ASSUMPTIONS
2010 2011
Gold (US$/oz) 1,050 1,050
Silver (US$/oz) 18.80 18.80
Copper (US$/lb) 2.75 2.75
Zinc (US$/lb) 1.00 1.00
BRL real/US$ 1.80 1.80
ARG peso/US$ 4.00 4.25
CLP peso/US$ 500 500
Fourth-quarter and 2009 operational update
Yamana provided the following operational update for the fourth quarter and full year of 2009. Total production during the fourth quarter of 2009 continued to increase to a record level of approximately 325,300 GEO of which approximately 289,600 GEO was from continuing operations, representing an increase of 8 per cent from the third quarter of 2009. Production at Gualcamayo continued to ramp up to 59,000 ounces in the fourth quarter of 2009 and continues to meet and exceed expectations. At El Penon, Yamana has undergone a transition to owner mining in the quarter, which will modestly and temporarily cause a decrease in production and increase in costs affecting the fourth quarter of 2009 and the first quarter of 2010. Production in December at El Penon with the completion of the plant upgrade, although during this owner-mining transition period, was in excess of 44,000 GEO and over 109,000 GEO for the quarter. For the full year ended Dec. 31, 2009, total production for Yamana was approximately 1,201,200 GEO, of which approximately 1,026,000 GEO was from continuing operations.
Production on a mine-by-mine basis for the fourth quarter of 2009 and for the full year is summarized in an attached table.
PRODUCTION (GEO)
Q4 2009 2009
Chapada 42,200 156,200
El Penon (GEO) 109,900 394,400
Gualcamayo 59,000 143,400
Jacobina 24,800 110,500
Minera Florida (GEO) 24,700 92,400
Fazenda Brasileiro 17,500 76,400
Alumbrera (12.5%) 11,500 52,700
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Total production from
continuing operations 289,600 1,026,000
Discontinued operations 35,700 175,200
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Total production 325,300 1,201,200
In the fourth quarter of 2009 and for the full year of 2009, every ounce of gold from continuing operations (excluding Alumbrera) was produced at below $100 per GEO and below $190 per GEO, respectively, after byproduct credits, realizing a significant margin to the gold price. Cash costs on a co-product basis from continuing operations (excluding Alumbrera) for the fourth quarter of 2009 and for the full year of 2009 were $360 per GEO, in line with original guidance of $345 to $375 per GEO.
Financial results
Yamana will release its full fourth-quarter financial results including mineral reserve and mineral resource data after the close of business on March 3, 2010. A conference call will follow on March 4, 2010, at 11 a.m. Eastern Time.
Conference call information
Toll-free (North America): 1-888-231-8191
International: 647-427-7450
Participant audio webcast: Yaman's website
Conference call replay
Toll-free replay call (North America): 800-642-1687, passcode 46908469
Replay call: 416-849-0833, passcode 46908469
The conference call replay will be available from 2 p.m. Eastern Time on March 4, 2010, until 11:59 p.m. Eastern Time on March 18, 2010.
For further information on the conference call or audio webcast, please contact the investor relations department or visit Yamana's website,
Upcoming events
This news release is a part of a series of announcements and will be followed by results from the Ernesto/Pau-a-pique feasibility study and an update on Agua Rica. The following summarizes the upcoming events:
* Ernesto/Pau-a-pique feasibility study: January, 2010;
* Update on Agua Rica: first-quarter 2010;
* Update on El Penon exploration: first-quarter 2010;
* Update to Yamana's mineral reserves and mineral resources: first-quarter 2010;
* Pilar feasibility study: mid-2010;
* Caiamar mineral resource estimate: mid-2010;
* Salamanca mineral resource estimate: first-half 2010.
We seek Safe Harbor.
Yamana to spend up to $80-million (U.S.) in 2010
2010-01-07 18:14 ET - News Release
Ms. Letitia Wong reports
YAMANA PROVIDES EXPLORATION UPDATE
Yamana Gold Inc. has released an exploration update and has provided its exploration objectives for 2010.
Highlights from the 2009 exploration program included:
- New gold mineralized zone, Suruca, discovered at Chapada, traced along strike by at least 500 metres and average thickness of 70 metres. The discovery hole SU-11 returned 81.0 metres of 1.2 grams per tonne gold;
- New mineralized zone discovered at Fazenda Brasileiro, Lagoa do Gato, traced along strike for 1,200 metres and open in all directions with three separate gold mineralized zones. Lagoa do Gato exhibits substantially higher grade than the current mineral reserve grade at Fazenda Brasileiro. Drilling indicated economic grades and widths: FLG-010 -- 12.4 metres of 3.33 g/t Au; FLG-016 -- 22.0 metres of 3.62 g/t Au; FLG-017 -- 37.0 metres of 2.34 g/t Au; FLG-022 -- 22.0 metres of 5.50 g/t Au; FLG-026 -- 14.8 metres of 7.04 g/t Au;
- New mineralized zone discovered at Jacobina, Lagartixa, which is the displaced northern continuation of the Canavieiras deposit. Lagartixa exhibits substantially higher grade than the current mineral reserve grade at Jacobina. Drilling has tested the gold mineralized reefs for 600 metres of strike length. The discovery hole LGX-02 returned three metres of 6.03 g/t Au;
- Positive drill results confirmed and extended the Jordino deposit at Pilar. Drill holes have extended the Pilar deposit down dip. Selected deep holes include: JD123 -- four metres of 6.67 g/t Au; JD125 -- 0.7 metre of 6.56 g/t Au; JD129 -- one metre of 16.35 g/t Au;
- New gold mineralized zone, Salamanca, discovered within 10 kilometres of Gualcamayo. Drilling has delineated mineralization along a strike length of at least 250 metres which is still open along strike. The best results received from latest drilling include: 09S-01 -- 30.0 metres of 1.72 g/t Au; 09S-03 -- 52.75 metres of 2.9 g/t Au; 09S-14 -- 63.7 metres of 1.1 g/t Au;
- Two new vein deposits, Centenario and Polvorin, discovered at Minera Florida. Both deposits are located near current mine infrastructure. Selected results include: ALH0075 -- Centenario, 5.15 metres of 11.39 g/t Au, 17 g/t silver and 2.21 per cent zinc; ALH0686 -- Centenario, 13.65 metres of 9.02 g/t Au, 18 g/t Ag and 0.76 per cent Zn; ALH0739 -- Centenario, 6.72 metres of 11.14 g/t Au, 179 g/t Ag and 1.05 per cent Zn; ALH0006 -- Polvorin, 7.39 metres of 5.50 g/t Au, nine grams per tonne silver and 1.66 per cent Zn; ALH0674 -- Polvorin, 2.25 metres of 11.60 g/t Au, 49 g/t Ag and 1.94 per cent Zn; ALH0810 -- Polvorin, 2.05 metres of 12.79 g/t Au, nine grams per tonne silver and 1.55 per cent Zn.
Yamana's 2010 exploration budget is expected to be approximately $75-million (U.S.) to $80-million (U.S.), with the goal of increasing mineral reserves and mineral resources.
Main areas of focus in 2010 include:
- Define size potential of new mineralized zone, Suruca, at Chapada;
- Focus Jacobina exploration toward discovery and extension of higher grades at Canavieiras and new mineralized zones;
- Extend Pilar's mineral resource;
- Complete resource estimate at Caiamar in Brazil by mid-2010 with further update by end of year;
- Expand the resource at QDD Lower West in Argentina and continue exploration efforts at Salamanca;
- Extend known deposits at El Penon and upgrade inferred resource;
- Expand footprint of Minera Florida with successful exploration at Chancon-Membrillo.
Yamana continues with its near-mine exploration program and its efforts to look for new opportunities and on the ground purchases elsewhere in the Americas. The company is focused on developing its future based on its exploration successes and organic growth.
Brazil
Suruca -- Chapada, Brazil
Yamana has intersected a new mineralized zone at Suruca, located approximately six kilometres northeast of Yamana's Chapada mine in central Brazil.
Drilling intersections show two mineralized levels: the upper level has an average thickness of 70 metres and the lower level has an average thickness of approximately 20 metres. Exploration drilling to date has defined significant mineral intercepts with continuity along a 500-metre strike length. This mineral trend is wholly within a much larger soil geochemical gold anomaly that extends for over five kilometres on the surface.
Yamana has completed 15 holes totalling 2,866 metres to date.
SIGNIFICANT DRILL INTERSECTIONS FROM SURUCA Gold grade Hole From (m) To (m) Interval (m) (g/t) SU-04 7.0 24.7 17.7 0.22 17.1 23.0 5.9 0.35 SU-08 255.5 256.3 0.8 0.42 112.0 193.0 81.0 1.20 147.0 148.0 1.0 48.90 158.0 159.0 1.0 9.21 186.0 187.4 1.3 3.98 SU-11 190.0 191.0 1.0 3.17 203.0 231.0 28.0 1.26 210.0 211.0 1.0 21.30 225.0 225.6 0.6 5.00 7.0 13.0 6.0 1.35 7.0 8.0 1.0 7.32 SU-13 83.6 139.0 55.4 0.44 84.3 86.0 1.7 6.46 52.5 127.2 74.7 0.89 59.0 60.0 1.0 9.36 72.0 73.0 1.0 3.05 76.0 77.0 1.0 3.67 87.3 88.7 1.3 4.50 SU-15 116.3 117.1 0.8 16.40 140.3 188.0 39.7 0.37 176.0 177.0 1.0 8.18 203.0 233.0 30.0 0.54 218.0 219.0 1.0 9.56 248.0 268.0 20.0 0.35
These drilling results demonstrate the potential to add ounces from the areas surrounding the mine further extending Chapada's already long mine life of 17 years. Chapada has historically shown the ability to increase its mineral reserve base as demonstrated in 2008 when mineral reserves increased a full 50 per cent from the previous year. The company's efforts have not only been to increase mineral reserves and resources at Chapada, but to use it as a launching point for a regional exploration program. Suruca represents real potential and is a result of these efforts. Objectives for Chapada in 2010 include defining a mineral resource in the Suruca target by 2011.
Fazenda Brasileiro, Brazil
At Yamana's Fazenda Brasileiro mine, the company continues to outline significant exploration potential. The mine was originally acquired in 2003 with 2.5 years of mine life remaining based on known mineral reserves. Yamana has since been mining at Fazenda Brasileiro for six years. Recently two new areas have been discovered, CLX(2) and Lagoa do Gato, which give Yamana high confidence that significant potential remains at Fazenda Brasileiro. Historical efforts have been to consistently increase the mine life. Current efforts and recent discoveries are intended to redefine Fazenda Brasileiro with the possibility, relating to CLX(2) and Lagoa do Gato, of discovering a new mine. Yamana's exploration focus has been the replacement of mineral reserves and resources at Fazenda Brasileiro. The objective in 2010 will continue these efforts, focusing on meaningfully increasing mineral reserves and resources in these new areas.
Lagoa do Gato
Geophysical interpretation suggests that the Weber structure, which hosts Yamana's Fazenda Brasileiro mine, may continue to the northeast through the Rio Itapicuru greenstone belt in a zone called Lagoa do Gato, which is located four kilometres northeast from Fazenda Brasileiro. This zone consisted of a series of small open pits mined earlier in the 1980s during Fazenda Brasileiro's heap leach operation. Deeper exploration drilling beneath those pits has intersected mafic lenses with significant high-grade mineralization.
Drilling to date has identified three mineralized levels and has been traced for 1,200 metres, all still open along strike. The Lagoa do Gato trend is at least eight kilometres long, defined by a high magnetic signature. A total of 4,000 metres of diamond drilling have been completed to date.
MOST SIGNIFICANT LAGOA DE GATO INTERSECTIONS Gold grade Hole From (m) To (m) Length (m) (g/t) FLG-003 123.00 125.05 2.05 0.98 155.60 168.00 12.40 3.33 FLG-010 157.30 159.00 1.70 8.95 215.00 227.00 12.00 1.00 118.45 120.00 1.55 1.04 125.00 129.00 4.00 0.68 FLG-011 132.00 136.00 4.00 0.88 138.00 140.00 2.00 0.58 FLG-014 105.00 117.00 12.00 1.22 FLG-015 84.00 87.00 3.00 1.57 77.75 80.35 2.60 2.74 87.00 109.00 22.00 3.62 FLG-016 87.00 98.00 11.00 6.48 104.00 109.00 5.00 1.32 283.00 310.00 27.00 2.34 FLG-017 283.00 288.00 5.00 3.63 290.00 307.00 17.00 2.28 76.00 79.00 3.00 1.75 FLG-018 106.00 108.00 2.00 1.78 53.70 55.55 1.85 0.76 64.00 67.00 3.00 1.00 FLG-019 76.00 78.00 2.00 0.93 97.50 108.00 10.50 1.34 47.00 48.00 1.00 2.00 93.00 96.00 3.00 0.66 FLG-021 145.00 153.00 8.00 3.99 164.00 168.80 4.80 0.64 127.00 149.00 22.00 5.50 137.35 139.00 1.65 63.82 169.00 174.00 5.00 0.54 FLG-022 176.00 181.00 5.00 0.67 189.00 191.00 2.00 1.44 203.00 206.00 3.00 6.83 10.00 26.00 10.00 1.47 FLG-024 30.00 32.00 2.00 1.22 41.00 42.00 1.00 2.54 119.00 122.00 3.00 1.23 FLG-025 137.70 138.85 1.00 1.64 105.00 108.00 3.00 3.68 FLG-026 156.65 171.45 14.80 7.04 166.00 168.00 2.00 20.52 116.00 124.00 8.00 1.48 142.00 143.00 1.00 10.25 FLG-027 150.00 151.00 1.00 5.75 179.00 182.20 3.20 1.24 199.00 203.00 4.00 1.03 104.85 114.10 9.25 1.12 161.00 163.00 2.00 1.20 FLG-028 170.00 176.00 6.00 1.28 181.00 185.00 4.00 1.48 FLG-029 107.00 110.45 3.45 0.96 FLG-030 103.60 106.00 2.40 2.05 FLG-031 126.00 128.40 2.40 2.68 FLG-032 208.00 209.00 1.00 1.19
Yamana has 20,000 metres of drilling planned for 2010 to continue efforts at these two new areas. At CLX(2), 10,000 metres of infill drilling is planned to focus on upgrading the mineral resource and 10,000 metres of exploration drilling is planned for extending Lagoa do Gato. Objectives at Fazenda Brasileiro for 2010:
- Continue to extend the Lagoa do Gato mineral resource;
- Further extend the mine life at Fazenda Brasileiro;
- Continue defining new near-mine targets;
- Upgrade mineral resources to support future production
Jacobina, Brazil
Exploration at Jacobina in 2009 focused on near-mine efforts and has provided a promising new discovery. Although most of the proven and probable mineral reserves at Jacobina are in areas that are comparatively lower grade, exploration upside is in areas with grade higher than the current mine grade. With the discoveries in 2009, exploration efforts in 2010 will be to more aggressively pursue higher-grade areas of mineralization for future mining.
A structural and stratigraphic analysis undertaken in 2008 concludes that the Serra da Lagartixa area (Lagartixa Hill), located 2.5 kilometres from the mine site, possibly consists of the north continuity of the Canavieiras block displaced by a main listric fault. Canavieiras is the most significant resource of the Jacobina mine and the possibility that it continues to the north opens important exploration upside for this mine.
The Lagartixa block is 1,500 metres long with 300 metres of outcropping mineralized conglomerate reef confirmed by old artisanal mining workings and chip samples. This reef is thought to be the reef called Maneira, which represents the topmost reef of Canavieiras.
Three holes have been completed to date and the positive results to date are confirming the continuity of the Maneira reef 700 metres down dip and 600 metres along strike. More drilling is necessary to confirm if there is a gap along such continuity. Yamana considers these results significant and will concentrate most of 2010 on near-mine drilling in this target.
SIGNIFICANT SERRA DA LAGARTIXA INTERSECTIONS Gold grade Hole From (m) To (m) Length (m) (g/t) LGX-02 801 804 3 6.03 216.5 217 0.5 3.14 LGX-03 234.72 235.2 1 5.17
Objectives at Jacobina for 2010:
- Upgrade most of the inferred mineral resource to the measured and indicated category;
- Rapidly accelerate the definition of higher-grade areas by 2012;
- Continue to focus on Canavieiras to develop Canavieiras North;
- Regional development and identification of new orebodies in a regional exploration plan between Jacobina and Pindobasu.
Pilar, Brazil
In April, 2009, Yamana delivered an update to Pilar's inferred mineral resource estimate of 12.6 million tonnes grading 3.61 grams per tonne gold containing 1.4 million gold ounces, which was a substantial increase in inferred mineral resource of 51 per cent and a grade increase of 48 per cent year over year.
In 2009, Yamana completed 26,000 metres of infill drilling spacing 50 by 50 metres and 7,000 metres of exploration drilling. The company also commenced construction of an exploration ramp to determine the continuity of grade.
Drilling in 2009 was focused on extending the main Jordino mineralization down dip and the company continues to report positive results. Extension drilling results, plus the results presented in the previous June, 2009, news release, continue to show positive drill intercepts between 100 and 300 metres down dip from the mineral resource update provided in April, 2009. A total of 12,000 metres of extension drilling has been completed since the last mineral resource.
BEST INTERSECTIONS AT PILAR SINCE THE JUNE, 2009, NEWS RELEASE Gold grade Hole From (m) To (m) Length (m) (g/t) 353 357 4 6.67 353 354 1 19.95 JD123 379 380 1 5.65 390 391 1 3.23 307 309 2 3.02 JD125 272.32 275 2.68 2.28 272.32 273 0.68 6.56 270.66 276 5.34 3.48 JD126 273 274 1 14.25 300 300.87 0.87 8 JD129 319 320 1 3.1 345 346 1 16.35 167 168 1 2.09 171 172 1 2.81 JD213 203 204 1 4.52 215 216 1 4.21 251.22 251.93 0.71 3.4 JD216 280 281.23 1.23 24.6 57.98 58.75 0.77 263 62 63 1 2.97 JD222 202.89 205.49 2.6 2.74 204.96 205.49 0.53 3.43 215.72 217 1.28 4.29
The drilling program for 2010 includes 18,000 metres of extension drilling, of which 50 per cent is expected to be completed by the end of the first quarter of 2010. Drilling continues to be at the main high-grade Jordino deposit and the area between Jordino and Tres Buracos as it continues to appear open down plunge and along strike.
Objectives for Pilar in 2010:
- Upgrade inferred mineral resource to the indicated category;
- Determine continuity of grade;
- Increase total overall mineral resource.
Caiamar, Brazil
Since its purchase in July, 2009, Yamana has completed 28 holes totalling 14,000 metres of exploration drilling at the Caiamar target.
Caiamar is located approximately 38 kilometres from Yamana's Pilar project and just east of the Crixas greenstone belt, in the northern portion of a regional shear zone within the Guarinos greenstone belt. Mineralization consists of arserno-pyrite-rich quartz breccias hosted in metagreywacke layers.
A total of $3.4-million (U.S.) has been budgeted for regional exploration and 25,000 metres of drilling at Caiamar. The objective of the drill program for the first year will be to assess the potential of the deposit and evaluate the regional potential inside the Caiamar concessions, in addition to defining the orebodies.
Drilling to date has confirmed the occurrence of mineralized shoots along an area of 2.5 kilometres in length and 700 metres in width. The holes CA-007, CA-004 and CA-014 have already confirmed the continuity of central mineralized shoot 500 metres down dip.
POSITIVE DRILLING INTERSECTIONS FROM CAIAMAR Gold grade Hole From (m) To (m) Length (m) (g/t) 391.50 392.00 0.50 1.94 CA-001 394.00 394.50 0.50 1.43 414.00 414.50 0.50 1.37 375.00 376.00 1.00 1.13 CA-002 397.00 399.00 2.00 1.64 418.84 419.60 0.76 2.09 CA-003 679.35 680.36 1.01 1.68 CA-004 614.00 614.50 0.50 4.74 242.00 243.00 1.00 1.9 CA-006 260.58 262.24 1.66 1.43 554.71 555.21 0.50 5.94 CA-007 556.23 556.72 0.49 7.52 369.00 370.00 1.00 5.83 CA-011 397.00 399.00 2.00 1.23 410.52 411.00 0.48 1.12 465.46 466.00 0.54 3.14 CA-013 469.00 469.50 0.50 2.11 471.47 471.92 0.45 1.32 564.30 565.00 0.70 2.00 CA-014 569.00 570.00 1.00 3.04 146.00 147.00 1.00 2.69 CA-022 256.00 257.00 1.00 6.28 CA-023 393.00 394.00 1.00 1.50 CA-025 487.00 488.00 1.00 0.96 573.09 573.59 0.50 3.36 573.59 574.09 0.50 2.04 CA-040 575.07 575.55 0.48 2.36 575.55 576.00 0.45 2.68 161.00 162.00 1.00 1.19 CA-082-A 217.09 218.00 0.91 2.54 230.00 231.00 1.00 0.98 CA-093 220.00 220.50 0.50 7.99 93.00 94.00 1.00 1.25 CA-105 151.00 151.50 0.50 9.26 156.50 157.00 0.50 7.99 215.35 215.84 0.49 1.61 CA-107 223.06 223.85 0.79 1.14 242.00 242.50 0.50 13.6 244.00 244.50 0.50 2.02 277.20 278.00 0.80 3.12 CA-120 283.00 283.50 0.50 1.29 291.48 292.00 0.52 5.28 293.50 294.00 0.50 7.23
A total of approximately 15,000 metres of drilling has been completed in 2009 with a total of 15,000 metres planned for 2010.
Objectives for Caiamar in 2010:
- Confirm mineral resource based on historical drilling through infill drilling;
- Provide a mineral resource estimate by mid-2010;
- Provide a subsequent update to the midyear mineral resource estimate by extension drilling by the end of 2010.
Argentina
Salamanca -- Gualcamayo, Argentina
Exploration efforts continued at the Salamanca area located approximately 10 kilometres north of Yamana's Gualcamayo gold mine within the Gualcamayo mine area in Argentina.
Yamana recently completed a core drilling campaign comprising 17 drill holes for a total of 3,000 metres concentrating on the Salamanca mineralized tensional gash. The high-grade gold values encountered support the interpretation that the main intercepted structure might continue deeper and maintain the robust gold tenor.
Results to date continue to compare favourably with results from the three known mineral deposits at Gualcamayo, which have mineral resource grades of 1.08 grams per tonne gold at QDD and 2.6 g/t gold at both QDD Lower West and AIM. The sediment-hosted mineralization at Salamanca is consistent with the other known mineral deposits at Gualcamayo.
NEW RESULTS FROM SALAMANCA (IN ADDITION TO THOSE RELEASED IN STOCKWATCH ON SEPT. 30, 2009) Gold grade Hole From (m) To (m) Interval (m) (g/t) 42 72 30 1.72 09S-01 80 108 28 1.03 80 96 16 1.4 41 92 51 1.1 09S-02 41 54 13 2.22 85 92 7 1.61 80 132.75 52.75 2.9 09S-03 98 130 32 4.07 43.3 62 18.7 1.01 09S-10 137 148 11 1.08 24.3 88 63.7 1.1 09S-14 34 42 8 2.14 50 62 12 1.24
A subsequent 2,000-metre drill program is scheduled to commence in early 2010 and will continue to explore the deeper levels as well as to test the strike continuation of the mineralized dilational bend at Salamanca.
These drilling results continue to confirm Yamana's view that Salamanca represents an important source of further gold ounces for Gualcamayo with the potential to extend the mine life. These results will be used to support a mineral resource estimate in the first half of 2010.
Objectives for Gualcamayo in 2010:
- Drill program of 2,000 metres of drilling at Salamanca;
- Provide a mineral resource estimate for Salamanca in the first half of 2010;
- Extend the QDD Lower West high-grade deposit along strike and down plunge;
- Expand the resource at QDD Lower West through upgrading inferred mineral resource ounces to the measured and indicated category and adding new ounces.
Chile
El Penon, Chile
Exploration efforts in 2009 were principally focused on replacing ounces at El Penon and focusing on new areas of mineralization for exploration. With that objective completed, 2010 exploration will focus on extending the known deposits, infill drilling to upgrade certain inferred mineral resources to the indicated resource category and a broader regional exploration program. The 2010 exploration program is to include 69,500 metres of exploration drilling and 24,550 metres of infill drilling with a budget of $18.4-million (U.S.), $5.8-million (U.S.) higher than the original budgeted amount for 2009.
Objectives for El Penon in 2010:
- Upgrade 500,000 gold equivalent ounces to the indicated mineral resource category;
- Identify 500,000 ounces of new mineral resource;
- Identify new vein zones that can sustain a longer mine life.
Minera Florida, Chile
In 2009, two new zones of mineralization were discovered, Centenario and Polvorin.
At Centenario, 49 diamond drill holes totalling 7,594 metres were completed and outlined mineralization along a strike length of 250 metres and a dip length of 100 metres. The mineralization consists of quartz veins, veinlets and stockworks in andesite flows with widths varying from 0.25 metre to eight metres but averaging between one metre and three metres.
At Polvorin, 43 diamond drill holes totalling 8,090 metres have outlined mineralization along 400 metres of strike length and up to 200 metres of dip length, with an average width of approximately two metres. The mineralization is typified by zones of hydrothermal breccia with zones of massive quartz veins. Sulphide mineralization consists of disseminations of pyrite, sphalerite and magnetite with traces of galena.
CENTENARIO VEIN Hole From (m) To (m) Length Au (g/t) Ag Zn (%) AuEq (g/t) (m) (g/t) ALH0075 293.2 298.35 5.15 11.39 17 2.21 12.13 ALH0664 123.95 128.00 4.05 2.54 17 1.50 3.11 ALH0666 44.23 45.89 1.66 1.51 2 0.09 1.56 ALH0667 48.44 53.11 4.67 2.26 9 0.17 2.42 ALH0669 126.9 136.20 9.30 9.53 13 0.67 9.86 ALH0670 40.83 43.16 2.33 15.91 12 0.35 16.14 ALH0675 79.45 88.84 9.39 6.94 12 1.21 7.38 ALH0677 71.36 77.09 5.73 5.07 13 1.06 5.49 ALH0686 150.74 164.39 13.65 9.02 18 0.76 9.45 ALH0691 109.68 113.78 4.10 9.66 10 0.59 9.93 ALH0695 99.64 101.78 2.14 4.91 11 0.92 5.27 ALH0698 99.98 102.50 2.52 6.65 4 0.88 6.91 ALH0700 133.08 133.33 0.25 1.08 1 0.39 1.18 ALH0704 170.36 181.01 10.65 5.18 14 0.83 5.56 ALH0708 153.4 154.36 0.96 2.12 4 0.30 2.24 ALH0711 50.41 52.60 2.19 2.41 2 0.06 2.45 ALH0714 40.18 41.24 1.06 4.96 30 0.25 5.43 ALH0716 83.23 92.55 9.32 5.14 13 0.68 5.47 ALH0717 90.44 107.66 17.22 1.29 10 0.95 1.64 ALH0719 165.86 167.84 1.98 15.99 21 2.03 16.75 ALH0722 94.84 95.22 0.38 2.59 5 0.19 2.71 ALH0726 173.72 174.15 0.43 1.96 1 0.03 1.98 ALH0729 119.56 123.80 4.24 5.54 9 0.49 5.77 ALH0732 139.87 144.50 4.63 1.00 5 0.21 1.13 ALH0736 96.76 98.62 1.86 2.16 5 0.73 2.40 ALH0739 159.78 166.50 6.72 11.14 179 1.05 13.84 ALH0751 104.87 105.85 0.98 11.84 14 0.72 12.20 ALH0754 108.78 114.64 5.86 2.96 7 1.39 3.37 ALH0758 94.15 95.51 1.36 1.26 6 0.40 1.42 ALH0760 80.02 82.36 2.34 9.52 18 1.09 10.01 ALH0763 76.34 79.82 3.48 1.04 2 0.94 1.28 ALH0766 58.69 61.48 2.79 1.15 6 2.42 1.77 ALH0796 103.8 105.71 1.91 3.19 10 0.66 3.47 ALH0802 110.3 113.41 3.11 2.12 5 0.55 2.32 ALH0809 166.54 166.92 0.38 3.03 361 0.46 8.11
POLVORIN VEIN Hole From (m) To (m) Length Au (g/t) Ag Zn (%) AuEq (g/t) (m) (g/t) ALH0006 217.56 224.95 7.39 5.50 9 1.66 6.00 ALH0008 386.95 390.78 3.83 3.43 7 1.61 3.90 ALH0210 26.71 31.50 4.79 5.71 17 1.69 6.33 ALH0672 198.18 199.58 1.31 7.95 8 2.76 8.68 ALH0674 201.51 203.76 2.25 11.60 49 1.94 12.71 ALH0676 189.27 190.90 1.63 9.08 12 1.59 9.60 ALH0678 199.88 202.57 2.69 5.91 12 2.50 6.64 ALH0681 199.17 202.81 3.64 7.53 17 0.73 7.93 ALH0689 132.74 133.92 1.18 7.33 1293 1.15 25.40 ALH0707 187.93 188.63 0.70 1.73 14 0.12 1.95 ALH0712 100.32 101.61 1.29 2.13 11 1.25 2.57 ALH0715 207.89 210.09 2.20 4.55 24 3.21 5.61 ALH0720 195.93 198.00 2.07 5.94 6 0.33 6.10 ALH0723 232.17 232.92 0.75 2.13 5 0.40 2.29 ALH0788 229.47 230.40 0.93 2.86 7 4.08 3.87 ALH0794 205.77 206.25 0.48 5.80 7 1.03 6.13 ALH0800 197.55 198.51 0.96 6.85 34 5.20 8.50 ALH0807 96.41 98.20 1.79 4.27 6 0.15 4.40 ALH0810 91.01 93.06 2.05 12.79 9 1.55 13.27 ALH0811 133.01 135.05 2.04 4.33 6 0.43 4.50
The exploration program for Minera Florida in 2010 includes 12,900 metres of exploration drilling for near-mine targets and 18,000 metres of infill drilling to recategorize inferred mineral resources to the indicated category. Multiple veins are to be explored with two new regional targets. Exploration also continues in the areas surrounding Minera Florida with the objective to identify new ounces.
Objectives for Minera Florida in 2010:
- Upgrade 150,000 gold equivalent ounces from the inferred mineral resource category to the indicated resource category;
- Identify a minimum of 100,000 ounces of new mineral resource;
- Identify new vein zones that can sustain a longer mine life.
Other areas
Solferino, Colombia
Yamana has recently acquired an exploration concession and project called Solferino located in the district of Anori, in the province of Antioquia, in the central part of Colombia.
Solferino is a mesothermal vein system of quartz veins and veinlets, which form a stockwork with a width of more than 20 metres. Previous and more recent underground workings have defined a system with a length of 200 metres and a minimum vertical expression of 70 metres. Yamana has identified and sampled two main high-grade quartz veins.
Yamana has budgeted approximately $1.0-million (U.S.) for exploration in 2010 for 5,000 metres of drilling. The exploration program at Solferino will be focused on defining mineral resource potential.
Colombia remains within Yamana's geographical focus on stable jurisdictions in the Americas. Yamana believes Colombia has significant exploration potential.
Upcoming events
This press release which is one of a series of announcements to come, will be followed initially by Yamana's 2010 and 2011 operational outlook and update, results from the Ernesto/Pau-a-pique feasibility study, and an update on Agua Rica. The following summarizes the upcoming events:
- Operational outlook and update -- January, 2010;
- Ernesto/Pau-a-pique feasibility study -- January, 2010;
- Update on Agua Rica -- January, 2010;
- Update to Yamana's mineral reserves and resources -- February, 2010;
- Pilar feasibility study -- mid-2010;
- Caiamar mineral resource estimate -- mid-2010;
- Salamanca mineral resource estimate -- H1-2010.
Quality assurance and quality control
Yamana incorporates a rigorous quality assurance and quality control program for all of its mines and exploration projects which conforms to industry best practices as outlined by the CSE and National Instrument 43-101. This includes the use of independent third party laboratories and the use of professionally prepared standards and blanks and analysis of sample duplicates with a second independent laboratory.
Qualified persons
Walter Soechting, PGeo, senior geologist for Yamana Gold, has reviewed and confirmed the data contained within this press release relating to Gualcamayo and Salamanca and serves as the qualified person as defined in National Instrument 43-101.
Greg Walker, PGeo, senior geologist for Yamana Gold, has reviewed and confirmed the data contained within this press release relating to Minera Florida and serves as the qualified person as defined in National Instrument 43-101.
Sergio Brandao, PGeo, senior geologist for Yamana Gold, has reviewed and confirmed the data contained within this press release relating to Suruca (Chapada), Jacobina, Fazenda Brasileiro, Pilar and Caiamar and serves as the qualified person as defined in National Instrument 43-101.
We seek Safe Harbor.
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