Yamana Gold reports 78% increase in net income of $170 million in first half

South and North American gold producer to develop Pilar project, underground mine at Gualcamayo

By Dorothy Kosich, Mineweb.com

Yamana Gold announced Wednesday it has made construction decisions to develop the underground orebody at its Gualcamayo mine in Argentina and to develop the Pilar project in Goias, Brazil into a gold mine.

In a statement, Yamana CEO Peter Marrone said the supplement production at Gualcamayo, along with the development of Pilar "provides us with our next stage of growth into 2013 which will be beyond our initial production target of 1.5 million gold equivalent ounces."

Total proven and probable reserves at Gualcamayo are 2,479,498 gold ounces with total measured and indicated resources inclusive of mineral reserves of 3,510,418 ounces.

Current mineral reserves and minerals resources for the Jordino deposit at Pilar increased 32% since the end of last year. Proven and probable mineral reserves are 1,144,894 ounces of gold while measured and indicated resources are believed to be 1,215,846 ounces.

Meanwhile, Yamana also reported total production of 253,264 gold equivalent ounces (gold and silver production of 208,399 ozs and 2.5mn ozs respectively) for the second quarter of this year and 493,100 GEO ( gold production of 399,062 ozs and silver production of 5.2mn ozs) for the first six months of this year. Production for the first half of the year increased 6% over the same period of 2009.

Chapada copper production was 37 million pounds during the second quarter and 66.7 million pounds for the first half of this year.

Yamana said annual production this year is expected to be in line with guidance. The company had previously provided production guidance in the range of 1.03 million GEO to 1.145 million GEO this year.

FINANCIALS

Yamana reported net earnings of $90.79 million or 12-cents per share for the second-quarter 2010, up from $9.64 million or one-cent per share during the second quarter of 2009.

Adjusted net earnings were reported at $85.82 million or 12-cents per share during the second quarter, down from $95.81 million and one-cent per share in adjusted net earnings for the second-quarter 2009.

For the first six months of this year, Yamana reported net earnings of $170.3 million or 23-cents per share, up 78% from $95.63 million or 13-cents/sh for the first half of 2009.

Adjusted net earnings for the first half of the year were reported at $159.02 million or 22-cents per share, down slightly from $160.07 million or 13-cents per share in adjusted net earnings reported for the first half of 2009.

Capital expenditures for this year are expected to be $550 million, due to the accelerated development of the Mercedes project in Mexico and increasing exploration expenditures mostly for Mercedes and Gualcamayo.