TORONTO, Oct. 24, 2019 (GLOBE NEWSWIRE) -- YAMANA GOLD INC. (TSX:YRI; NYSE:AUY) (“Yamana” or “the Company”) is herein reporting its financial and operational results for the third quarter of 2019. The Company posted strong quarterly earnings and free cash flow and significantly improved financial flexibility with the retirement of $800.0 million of debt during the quarter. GEO ("gold equivalent ounces") production was in line with plan at costs in line with expectations.
Third quarter highlights:
•Net earnings attributable to Yamana equity holders of $201.3 million or $0.21 per share basic and diluted compared to a net loss of $81.3 million or $(0.09) per share basic and diluted a year earlier.(1)
•Adjusted net earnings(2) of $49.5 million or $0.05 per share basic and diluted compared to adjusted net earnings of $23.6 million or $0.02 per share basic and diluted a year earlier.
•Cash flows from operating activities of $157.4 million, cash flow from operating activities before net change in working capital(2) of $152.4 million, and net free cash flow(3) of $99.9 million.
•Cash flows exceeded the average of the three preceding quarters as follows:
° Cash flows from operating activities exceeded the average by 72%.
° Cash flows from operating activities before net change in working capital exceeded the average by 22%.
° Net free cash flow(3) exceeded the average by 36%.
•GEO(2)(4) production from Total Yamana(5) of 238,623, including 209,923 ounces of gold and 2.48 million ounces of silver.
•Total Yamana cash costs(2) were $678 per GEO and all-in sustaining costs (“AISC”)(2) were $1,039 per GEO.
•Gross debt decreased by $800.6 million in the quarter, resulting in a decrease in net debt(6) of $810.3 million, to $948.9 million.
•Significantly increased mineral reserves and mineral reserve grade at Jacobina and reported strong growth in total contained and future potential ounces.
•Discovery of East Gouldie, a new mineralized zone at the Canadian Malartic mine.
Three months ended September 30
(In millions of United States Dollars) 2019 2018
Net Free Cash Flow(2) $ 99.9 $ 49.1
Free Cash Flow before Dividends and Debt Repayments(2) $ 29.4 $ (19.7 )
Decrease (Increase) in Net Debt(2) $ 810.3 $ (73.9 )
(All amounts are expressed in United States Dollars unless otherwise indicated.)
(See end notes on page 10)
“Our operations continued to show strong performance during the third quarter," said Daniel Racine, President and Chief Executive Officer of Yamana. "We expect that to continue through the fourth quarter — historically our strongest — and beyond. This will have added financial benefits, including increased free cash flow, a stronger balance sheet, and greater financial flexibility to reinvest in the business, deliver growth, and increase returns.”
Net earnings attributable to the Company's equity holders in the quarter were $201.3 million or $0.21 per share basic and diluted, compared to a net loss of $81.3 million or $0.09 per share basic and diluted a year earlier. Net earnings during the quarter were impacted by certain items that management believes may not be reflective of current and ongoing operations and which may be used to adjust or reconcile input models in consensus estimates. The most notable item is a $273.1 million gain related to the sale of the Chapada mine. A summary of these items can be found on page 3 of this press release.
Cash flow from operating activities increased markedly during the quarter to $157.4 million, a 72% increase over the previous three quarter average. Cash flows from operating activities before net change in working capital rose to $152.4 million, a 22% increase from the previous three quarter average, while net free cash flow(3) of $99.9 million was 36% higher than the previous three quarter average and more than double the $49.1 million generated in the third quarter of 2018. The change was largely driven by higher gross margins due to favourable metal price increases with stable costs across Yamana mines and a positive net change in working capital.
Cash costs during the quarter of $678 per GEO were relatively stable in relation to the first half of 2019, while AISC increased to $1,039 per GEO. The higher AISC was driven by the Company's decision to increase exploration spend and concentrate sustaining capital spend in the second half of the year. The increase in exploration spend allows the Company to build on the robust drilling results being obtained across the Company's operations while the increase in sustaining capital spend supports the highest quarterly rates of mining and production during the fourth quarter, and it improves access and flexibility in mining operations for 2020. Quarterly production from Yamana mines(7) is historically strongest during the fourth quarter — a trend that is expected to continue in the fourth quarter of 2019 and bring costs into line with the Company's annual guidance.
In particular, operating costs are expected to be favourably impacted by strong fourth quarter performance from the El Peñón and Minera Florida mines, primarily from grade improvements compared to prior quarters. In addition, at Cerro Moro, four underground mines are expected to be in development and production during the fourth quarter, including the commencement of stope production from the Zoe high-grade underground mine. These underground mines are expected to also enhance mine flexibility and efficiency. Furthermore, Jacobina, which exceeded its production plan once again in the latest quarter, is well positioned to meet or modestly exceed increased annual production guidance of 152,000 GEO.
Unitary costs were in line with expectations of plan and guidance, with AISC for the nine months ended September 30, 2019, at $967 per GEO.
Net debt(6) decreased by $810.3 million during the quarter to $948.9 million. The decline primarily reflects the retirement of $800.0 million of debt announced in August 2019. This debt retirement was concluded ahead of schedule providing a catalyst for further debt reduction from interest savings and free cash flow generation. The Company’s primary focus is now on further increasing free cash flows and building its cash balance.
The Company's balance sheet as of September 30, 2019, included cash and cash equivalents of $99.9 million and available credit of $750.0 million, for total available liquidity of $849.9 million.
(See endnotes on page 10)
Summary of Certain Non-Cash and Other Items Included in Net Earnings
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Yamana Declares Second Quarterly Dividend at New 100% Increased Level
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TORONTO, Oct. 24, 2019 (GLOBE NEWSWIRE) -- YAMANA GOLD INC. (TSX:YRI; NYSE:AUY) (“Yamana” or the “Company”) declares a fourth quarter dividend of $0.01 per share (annual $0.04 per share). Shareholders of record at the close of business on December 31, 2019, will be entitled to receive payment of this dividend on January 14, 2020. The dividend is an “eligible dividend” for Canadian tax purposes.
The dividend reflects the level increased in the third quarter, which was a 100% increase over the previous level. Yamana will continue to evaluate its dividend policy as it increases free cash flow and cash balances with the potential for further increases to its dividend.
Yamana has a more than thirteen-year track record of having paid a dividend, having first declared a dividend in late 2006, which was just over three years after the inception of the Company and as its first phase of mine development was completed, which led to the generation of steady and increasing cash flow.