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http://biz.yahoo.com/iw/080507/0394877.html

Yamana Gold Reports First Quarter Results and Increased Dividend-Strong Earnings and Cash Flow, With Solid Growth
Wednesday May 7, 4:30 pm ET

TORONTO, ONTARIO--(MARKET WIRE)--May 7, 2008 -- YAMANA GOLD INC. (Toronto:YRI.TO - News)(NYSE:AUY - News)(LSE:YAU.L - News) today announced its financial and operating results for the first quarter ended March 31, 2008. All dollar amounts are expressed in US dollars unless otherwise specified.

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2008 FIRST QUARTER HIGHLIGHTS

Highlights from the period of January 1, 2008 to March 31, 2008 include the following:

- Mine operating earnings of $195.2 million.

- Adjusted earnings of $134.7 million or $0.20 per share.

- Cash flow from operations of $140.0 million before changes in non-cash working capital representing $0.21 per share.

- Total revenue of $356.1 million.

- Total production of 237,495 gold equivalent ounces (GEO) at an average cash cost after by-product credits of $(124) per GEO.

This quarter is the first fully integrated quarter following Yamana's acquisition of Meridian and Northern Orion at the end of 2007.

Financial and Operating Summary

Revenue and mine operating earnings both reached record levels for the quarter. Revenue increased to $356.1 million, representing a 145% increase from the first quarter last year, and a 63% increase from the preceding quarter. Revenue is comprised of $121.9 million from gold sales, $192.4 million from concentrate sales, and $41.7 million from silver sales. Mine operating earnings for the quarter were $195.2 million, a 156% increase from the first quarter last year and 155% from the preceding quarter.

Adjusted earnings for the quarter of $134.7 million ($0.20 per share) represents a 185% increase from the first quarter last year and a 282% increase from the preceding quarter. Net earnings of $63.1 million are adjusted to reflect the economic impact of copper hedges. Adjusted earnings best compares to analyst consensus estimates for earnings as the non-cash loss or gain impact of mark-to-market for future delivery of copper sold forward do not impact the particular quarter for which financial results are given. Adjusted earnings takes into account only the gain or loss actually realized in the period. Certain non-recurring items for the quarter and in particular the one-time positive adjustment of approximately $2.7 million related to the impairment of certain fixed assets are not included in adjusted earnings.

Cash flow from operations of $140.0 million ($0.21 per share) before changes in non-cash working capital items for the quarter represents a 103% increase from the first quarter last year, and a 399% increase from the preceding quarter. The increase in cash flow from operations is primarily due to a full quarter of operations from mines acquired during the fourth quarter last year and the continuing operations of Yamana's legacy mines.

Total production of 237,495 gold equivalent ounces (GEO) for the quarter represents a 97% increase from the first quarter of 2007. In addition, the Company produced 41 million pounds of copper. Production in Q1 2008 was in part impacted by the seasonality of certain mines and the integration of operations following recent acquisitions which is now complete. Production is expected to increase quarter over quarter.