TORONTO, ONTARIO--(Marketwired - Oct. 26, 2017) - YAMANA GOLD INC. (TSX:YRI)(NYSE:AUY) ("Yamana" or "the Company") is herein reporting its financial and operational results for the third quarter 2017. The Company had a strong third quarter, building on the operational results delivered in the first half of the year.

THIRD QUARTER 2017 OVERVIEW

Total production - 257,455 ounces of gold from Yamana's six producing mines (281,315 ounces of gold including attributable production(1) from Brio Gold Inc. ("Brio Gold")). Production from the Company's six producing mines increased by 5% compared to the second quarter of 2017. The Company also produced 1.43 million ounces of silver, representing an increase of 8% compared to the second quarter of 2017, and 37.1 million pounds of copper, representing an increase of 27% compared to the second quarter of 2017.

Costs - Total cost of sales applicable to gold of $999 per ounce ($1,022 per ounce, including Brio Gold), cash costs on a co-product basis(2) of $672 per ounce ($689 per ounce, including Brio Gold), cash costs on a by-product basis(2)of $496 per ounce, all-in sustaining costs ("AISC")(2) on a co-product basis of $874 per ounce ($905 per ounce, including Brio Gold) and AISC on a by-product basis(2) of $729 per ounce.

Outlook - full year production guidance for the Company's six producing mines has been increased to 960,000 ounces of gold, 5.0 million ounces of silver and 125.0 million pounds of copper, representing increases since the beginning of the year of 40,000, 260,000 and 5.0 million, respectively. Cost guidance is unchanged as cash costs and AISC for all metals are trending to within previous expectations. For total cost of sales, the Company expects to be within guidance for silver and copper, while gold is expected to be above guidance due to higher depletion, depreciation and amortization.

(All amounts are expressed in United States dollars unless otherwise indicated.)
(1) Attributable production includes production commensurate to the Company's interest in Brio Gold, which for the third quarter of 2017 was a weighted average of 55.6% (2016 - 100%).
(2) Refers to a non-GAAP financial measure or an additional line item or subtotal in financial statements. Reconciliations for all non-GAAP financial measures are available at www.yamana.com/Q32017 and in Section 13 of the Company's third quarter 2017 Management's Discussion & Analysis, which has been filed on SEDAR.

Net earnings from continuing operations for the three months ended September 30, 2017, was $38.3 million, with $43.5 million or $0.05 per share basic and diluted attributable to Yamana equity holders. The following table presents a Summary of Certain Non-Cash and Other Items Included in Net Earnings.

Summary of Certain Non-Cash and Other Items Included in Net Earnings

(In United States Dollars, per share amounts may not add due to rounding, unaudited) Three Months Ending
Sep 30, 2017 Three Months Ending Sep 30, 2016 Million $ Per share Million
$ Per share
Non-cash unrealized foreign exchange losses 11.5 0.01 5.4 0.01
Share-based payments/mark-to-market of deferred share units 3.4 - (1.1 ) -
Mark-to-market on derivative contracts (0.1 ) - 6.1 0.01
Mark-to-market on investment and other assets 0.3 - 8.7 0.01
Revision in estimates and liabilities including contingencies (3.2 ) - 1.7 -
Other provisions, write-downs and adjustments (27.6 ) (0.03 ) 10.6 0.01
Non-cash tax unrealized foreign exchange losses 0.5 - 2.0 -
Income tax effect of adjustments 1.8 - (14.3 ) (0.02 )
TOTAL ADJUSTMENTS - increase/(decrease) to net earnings and net earnings per share (13.4 ) (0.01 ) 19.1 0.02

Note: Net earnings from continuing operations, attributable to Yamana Gold Inc. equity holders, would be adjusted by a decrease of $16.1 million (2016 - $nil), while an increase of $2.7 million (2016 - $nil) would adjust the earnings attributable to non-controlling interests.

Metal sales and operating cash flow for the third quarter were derived from revenue from metal sales of $493.4 million. Cash flows from operating activities was $149.8 million and cash flows from operating activities before income taxes paid and net change in working capital(2) was $171.5 million. The net change in working capital was positive $14.0 million, net change in working capital excluding Brio Gold was approximately positive $19.0 million. Net free cash flow(2) was $117.0 million.

Balance sheet as at September 30, 2017, includes cash and cash equivalents of $125.4 million. Yamana's cash and cash equivalents, and available credit are $115.7 million and $768.2 million, respectively, for total liquidity to the Company of $883.9 million.

Cerro Moro: The project remains on schedule and budget as construction advanced toward mechanical completion by the end of 2017 and start-up of production in early 2018.

Kirkland Lake: In the third quarter, the Company completed a strategic evaluation of its 50%-owned Kirkland Lake exploration and development assets, and considered among other things the possible sale of 100% of the assets. Following a successful price discovery process, which surfaced values well in excess of what the Company believes the market is ascribing to the jointly owned Kirkland Lake assets, and given recent positive exploration results, the Company with its partner has elected to suspend monetization initiatives and move forward with further studies on the exploration and development opportunities at Kirkland Lake.

Suruca: Development efforts continue to advance at the Suruca oxides project. However, now with the additional consideration of recent drill results at Suruca Southwest and the Suruca Sulphide deposit (located underneath the oxide deposit), the Company is assessing the synergy of a broader Suruca complex, and expects to complete further studies in this regard in 2018.

Agua Rica: The project continues to be assessed following the initial studies relating to a smaller scale underground sub-level caving operation that contemplates a fully standalone operation. A feasibility study relating to the sub-level scenario will follow for completion by either just the Company or, potentially, in conjunction with one or more partners. The Company has retained two financial advisers to advise on strategic alternatives that consider both the underground and open pit development options, with the goal of finding the right third party or partner to advance the project towards development.

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