TORONTO, Feb. 20, 2020 (GLOBE NEWSWIRE) -- YAMANA GOLD INC. (TSX:YRI; NYSE:AUY) (“Yamana” or “the Company”) today provided an update on its generative exploration program whose primary objective is to advance the Company’s pipeline of highly prospective exploration projects.

The Company has built large land positions in all countries where it has producing assets, and it is pursuing exploration projects in these countries that are at different stages of advancement. Investing prudently and responsibly in these projects today will ensure Yamana maintains its status as a dominant gold company while continuing to grow and meet its corporate objective to maximize free cash flow.

The Company will also continue to invest in near-mine exploration to extend the lives of its current operations, including the Canadian Malartic underground project, and advance the Agua Rica project to feasibility study. The generative exploration program will allow the Company to target a number of other advanced and advancing opportunities in its portfolio and help lay the foundation for the next generation of Yamana mines in the coming decade.

“Yamana has always taken a long-term strategic perspective,” said Henry Marsden, Senior Vice President of Exploration at Yamana. “We believe that investing in a generative exploration program today will secure our future tomorrow. We have strong prospects in mine-friendly jurisdictions that we know well, and we are confident that they will become a cornerstone of Yamana’s next generation of mines.”

The following are key elements and objectives of the generative exploration program:
•Target the Company’s most advanced exploration projects while retaining the flexibility to prioritize other projects in the portfolio as and when merited by drill results.
•Add new inferred mineral resources of at least 1.5 million ounces of gold equivalent within the next three years to move at least one project towards a preliminary economic assessment.
•On a longer term basis, advance at least one project to a mineral inventory that is large enough to support a mine plan demonstrating positive economics with annual gold production of approximately 150,000 ounces for at least eight years.
•Advance both gold-only and copper-gold projects and, in the latter case, consider joint venture agreements aimed at increasing mineral resource and advancing the project to development while Yamana maintains an economic interest in the project.

The Company expects to invest approximately $53 million in the program over the next three years, with $14 million budgeted for 2020, $18 million budgeted for 2021, and $21 million for 2022. Funding will be derived primarily from proceeds from monetizations of non-cash producing assets and, where applicable, flow-through funding agreements. The Company also expects to derive funding from expected joint venture opportunities, particularly for copper-gold projects. For information on exploration budgeting related to the Company’s core assets, please refer to the press release issued February 13, 2020, titled: ‘Yamana Gold Provides 2020-2022 Outlook.’

The generative exploration program will at first focus on the most advanced projects in Yamana’s portfolio while continuing drilling activity at a number of the Company’s highly prospective earlier stage projects. These projects are categorized as Tier One, Tier Two, or Tier Three projects, which are defined as follows:

Tier One Projects with well-defined gold mineral resources and opportunities to grow to a potentially economic threshold in the next three years
Tier Two Projects that have achieved significant drill intercepts and whose geology along with other factors support rapid resource growth
Tier Three Highly prospective projects with known mineralization defined with rock and soil geochemistry that warrant future drill testing

The Company is confident that its exploration pipeline includes projects that can meet its shorter-term objective of at least one project achieving 1.5 million ounces of gold in the inferred mineral resource category within three years as well as its longer-term objective of building at least one gold mineral resource that can support a mine with annual production of approximately 150,000 ounces per year for at least eight years. Further, the Company is very confident that the allocated exploration budget will be sufficient to achieve these goals.

While the Company is prioritizing its most advanced exploration projects, a key element of the generative exploration program is to build in the flexibility and agility to shift focus quickly if a Tier Two or Tier Three project shows the greatest potential to meet the Company’s objectives. The Company is currently prioritizing projects in Brazil and Canada, but it also holds large land packages in Chile and Argentina that it continues to explore and evaluate.

SOURCES OF FUNDING

The Company does not intend to fund the program from its free cash flow. Yamana holds a number of assets in its portfolio that do not currently generate cash. The Company is currently evaluating the monetization of some of these assets, and it anticipates using the proceeds to fund the $53 million investment in the generative exploration program. Where applicable, the Company will also consider flow-through funding as an alternative source of capital, and it will also consider joint venture or similar arrangements to advance projects with large prospective copper mineral resources.

By funding the generative exploration program in this manner, the Company is aiming to ensure the program’s long-term viability regardless of fluctuations in metal prices. In addition, monetizing assets that are not generating free cash is consistent with the Company’s primary objectives of turning non-cash flow generating assets into assets that generate cash flow, maximizing free cash flow, and returning cash to shareholders.

The following is an overview of Yamana’s Tier One projects along with select Tier Two and Tier Three projects.
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