UPDATE 1-Yamana Gold profit rises on higher output, prices
* Q1 EPS $0.23 vs $0.20 a year earlier
* Revenue rises 18 percent
* CEO sees changes to open-pit mine ban
TORONTO, May 1 (Reuters) - Yamana Gold Inc said on Tuesday its quarterly profit rose 15 percent as revenue was boosted by higher production and stronger gold prices.
The miner said net income for the first quarter was $170 million, or 23 cents per share. That compared with $148 million, or 20 cents per share, in the year-earlier period.
On an adjusted basis, profit was $184 million, or 25 cents a share, up from $152 million, or 21 cents a share, in the same quarter of 2011.
Analysts, on average, had expected earnings of 24 cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose 18 percent to $560 million, as the average realized gold price increased to $1,696 an ounce, up from $1,387 an ounce in the year-ago period. Cash costs were $518 an ounce, up from $449 an ounce.
Yamana's gold output increased 4 percent in the quarter to 278,832 equivalent ounces, as production was boosted by the newly commissioned Mercedes mine in Mexico.
The higher gold output in the quarter was offset by a drop in silver and copper production. Copper output fell to 38.3 million pounds from 45.6 million pounds, while silver production was 2.2 million ounces compared with 2.3 million ounces in first quarter of 2011.
The company said it is on track to produce 1.2 million to 1.3 million gold equivalent ounces in 2012, a 13 percent increase over 2011 production.
Yamana is in the process of building three new mines, and is in advanced development on two other projects, as it targets output of 1.75 million gold equivalent ounces by 2014.
A feasibility study for its Jeronimo project in Chile is due in June. Yamana is also developing the Suyai project in Chubut, Argentina, where a law banning open pit mining has delayed numerous major gold and silver mines.
Chubut elected a new governor last year and the company expects changes to that law to be introduced later this year, Chief Executive Peter Marrone told Reuters.
If the ban is lifted, development of the gold project could be fast-tracked, he added. Suyai has the potential produce in the range of 190,000 to 250,000 ounces a year.
"It's advanced enough to come to feasibility study very quickly," said Marrone. "We're carrying just under 2.5 million ounces of resources, almost all of which would convert to proven and probable reserves."
Yamana is spending some $665 million on construction and development this year and expects to start production at its two new Brazilian mines, Ernesto and C1 Santa Luz, before year end.
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