AUY puts up impressive Q3 headline, but revenues appear to be about 10 mil below estimates. (50 mil vs 60 mil expected).
Yamana Gold Reports Third Quarter 2006 Results: Significant Milestones Met With Year-to-Date Mine Operating Earnings Increase of 626% and Commissioning of Largest Mine
Tuesday November 7, 6:25 pm ET
TORONTO, ONTARIO--(MARKET WIRE)--Nov 7, 2006 -- Yamana Gold Inc. (Yamana) (TSX:YRI.TO - News)(AMEX:AUY - News)(AIM: YAU) is pleased to announce its financial and operating results for the quarter ended September 30, 2006.
Third Quarter Highlights:
Highlights from the period of June 30, 2006 to September 30, 2006 include the following:
- Mine operating earnings of $9.5 million for the quarter and $26.2 million on a year-to-date basis - an increase of approximately 545% from comparative year quarter and 626% for the corresponding year-to-date comparative.
- Revenue of $50.3 million, an increase of 20% from the prior quarter and 368% over the prior year quarter and $109.3 million year-to-date.
- Non-GAAP earnings of $4.7 million for third quarter or $0.02 per share.
- Net loss of $12.1 million for third quarter or $0.04 per share after accounting for certain non-cash and non-recurring items.
- Cash flow before working capital of $14.6 million.
- Total gold production of 88,781 ounces for the quarter, representing an increase of 167% for the corresponding quarter of 2005.
- Completed construction of Chapada mine, the Company's largest mine, and commissioned the mill processing plant. The mine and mill commenced continuous operations in early November 2006 with concentrate production expected by mid November.
- Declared commercial production on August 1, 2006 at Sao Francisco with commercial production for August and September of Q3 of 20,789 ounces.
- Negotiated terms and conditions for $200 million revolving line of credit.
- Completed acquisition of Viceroy Exploration Ltd subsequent to quarter end.
- Continued with feasibility studies on current projects and provided the feasibility study for Sao Vicente and the expansion plan for Jacobina.
"During this quarter we realized major corporate milestones with mine operating earnings increasing more than six times over the comparative nine month period in 2006 versus 2005, cash flow that has more than doubled over the same period last year, the completion of our largest mine, Chapada, and Sao Francisco reaching commercial production," said Peter Marrone, President and Chief Executive Officer of Yamana Gold Inc. "The significant improvements in our year-over-year growth in the areas of production, revenue, earnings and growth clearly demonstrate our unwavering commitment to offering value to our shareholders."
Financial and Operating Summary:
A total of 88,781 ounces of gold were produced during the quarter of which 79,912 ounces were from operations in full commercial production at an average cash cost of $337 per ounce. Commercial production for the quarter increased by 167% relative to the comparative quarter ended September 30, 2005 both through internal growth and acquisitions. Commercial production for the quarter includes three months production from the San Andres Mine and the Jacobina Mine, both acquired during the year and two months for Sao Francisco.
A total of 246,829 ounces of gold were produced on a year to date basis which includes pre-acquisition production from the San Andres Mine and Jacobina Mine beginning January 1, 2006. Of this total, 178,897 ounces are accounted for in the Company's revenues, as pre-commercial and pre-acquisition production ounces are not reported in the Company's operating results.
The Company reported non-GAAP net earnings of $4.7 million for the quarter ended September 30, 2006 adjusted for certain non-cash or non-recurring items which have occurred in 2006 including foreign exchange gains, an unrealized loss on commodity contracts, stock based compensation and future income tax expense on foreign currency translations.
Mine operating earnings for the quarter were $9.5 million, an increase of approximately 545% from mine operating earnings of $1.5 million for the comparative quarter ended September 30, 2005. Mine operating earnings for the comparative quarter reflect earnings from the Fazenda Brasileiro and Fazenda Nova mines. Mine operating earnings on a year to date basis was $26.2 million. This compares to $3.6 million for the comparative nine month period ended September 30, 2005. Mine operating earnings for the quarter and the nine months ended September 30, 2006 include operations from the Sao Francisco mine from August 1, 2006 (date of commercial production).
Net earnings for the quarter included a foreign exchange gain in the amount of $0.5 million, investment and other business income of $1.2 million, general and administrative expenses of $5.1 million and an income tax expense of $0.9 million. Net earnings for the nine month period included a foreign exchange gain in the amount of $6.1 million, investment and other business income of $4.3 million, general and administrative expenses of $13.7 million and income tax recovery of $5.8 million.
Cash flow generated from operations was $14.6 million before reductions from changes in non-cash working capital items of $36.9 million for the quarter ended September 30, 2006 resulting in an outflow of $22.3 million after adjustments for changes in non-cash working capital items. This compares to an inflow of $6.5 million for the comparative quarter ended September 30, 2005 before a decrease in cash flow of $3.0 million for changes in non-cash working capital items.
Capital expenditures for the quarter on property, plant and equipment and mineral properties were $41.5 million, of which $17.6 million was spent on the construction net of changes in non-cash working capital items. Capital expenditures for the nine months were $162.4 million of which $111.2 million was spent of construction net of changes in non-cash working capital items.
Cash and cash equivalents at the end of the quarter were $70.7 million (December 31, 2005 - $151.6 million) before cash and cash equivalents of C$69.1 million from Viceroy (total of $132.3 in cash and cash equivalents).
The complete financial statements and management and discussion analysis for the third quarter ended September 30, 2006 follows this announcement.
A conference call and audio webcast has been scheduled for November 8, 2006 at 11:00 a.m. E.T. to discuss the third quarter results.
Viceroy Exploration Acquisition
Yamana mailed a notice of compulsory acquisition to all remaining holders of Viceroy Exploration Ltd. common shares (the "Viceroy Shares"). As a result of Yamana's offer to acquire all of the Viceroy Shares, Yamana now owns approximately 95% of the outstanding Viceroy Shares.
Since the Yamana offer was accepted by holders of more than 90% of the Viceroy Shares, Yamana is now exercising its right under the compulsory acquisition provisions of the Business Corporations Act (British Columbia) to acquire all outstanding Viceroy Shares not already owned by Yamana at the Offer price of 0.97 of a Yamana common share for each Viceroy Share. All Viceroy Shares that have not been duly submitted prior to 5:00 p.m. on January 2, 2007 will automatically be purchased by Yamana, subject to any court ordering otherwise.
About Yamana
Yamana is a Canadian gold producer with significant gold production, gold and copper gold development stage properties, exploration properties, and land positions in Brazil, Argentina and Central America. Yamana expects to produce gold at intermediate company production levels in 2006 in addition to significant copper production by 2007. Company management plans to continue to build on this base through the advancement of its exploration properties and by targeting other gold consolidation opportunities in Brazil, Argentina and elsewhere in Latin America.
For further information:
Yamana Gold Inc. Yamana Gold Inc.
Peter Marrone Charles Main
President and Chief Executive Officer Chief Financial Officer
+1 416 815-0220 +1 416 815-0220
AI
