FOR: YAMANA GOLD INC.
TSX SYMBOL: YRI
NYSE SYMBOL: AUY
LSE SYMBOL: YAU
February 13, 2013
Yamana Announces 44% Increase to Mineral Resources at Cerro Moro
Provides Detail on Plans to Advance the Project
TORONTO, ONTARIO--(Marketwire - Feb. 13, 2013) -
(All amounts are expressed in United States dollars unless otherwise indicated.)
YAMANA GOLD INC. (TSX:YRI)(NYSE:AUY)(LSE:YAU) ("Yamana" or "the Company") today provided an update on its Cerro Moro
gold project (the "Project" or "Cerro Moro") in Santa Cruz, Argentina. Cerro Moro is a development stage project that
was acquired in mid-2012 and is located in the Deseado area of the Santa Cruz Province, Argentina about 70 km southwest
of the port city of Puerto Deseado.
- Initial indicated mineral resource of 1.95 million gold equivalent ounces
(GEO)(1), an increase of 44% from the previous estimate before the
Company acquired the project, contained in 4.16 million tonnes with an
average GEO grade of 14.6 grams per tonne (g/t); and an inferred mineral
resource of 490,000 GEO contained in 3.60 million tonnes with an average
GEO grade of 4.2 g/t
- Initiation of the pre-development work and feasibility study leading
toward a planned construction decision expected in 2014 and a potential
start-up in 2016
- Evaluated as a combined open pit-underground operation with:
- 1,000 tonnes per day (tpd) throughput
- 70% from underground, 30% from open pit
- Average annual production of approximately 200,000 GEO
- Initiation of a further, extensive exploration plan in 2013 with one
drill hole in January intercepting three separate vein zones with
indications that two of these occur at mineable widths with the potential
for significant GEO grades
"Our objective is to produce high quality ounces with comparatively low costs to achieve growth in both production per
share and cash flow per share. With our initial mineral resource at Cerro Moro, along with the initial operation plan
and exploration potential, we are confident that this asset will contribute positively to that objective," commented
Peter Marrone, Chairman and Chief Executive Officer. "We have started pre-development work with a production ready ramp
into one of the ore bodies, the initial studies that will lead to a feasibility study and will continue with further
exploration to advance the project. All of these tools will be considered in our construction decision. We are committed
to deliver superior value to our shareholders and Cerro Moro will be a significant contributor to that."
(1) Silver is treated as a gold equivalent at a ratio of 50:1.
MINERAL RESOURCES & DEVELOPMENT PLAN
In 2012, the Company spent $5 million to drill over 100 holes with the goal of upgrading the inferred mineral resources
and grow the resource base. These results have been incorporated in the Company's mineral resource update for Cerro
The Project hosts an initial indicated mineral resource of 1.95 million GEO and an inferred mineral resource of 490,000
GEO both at a 1 g/t cut-off. This cut-off grade reflects a blend of underground and open pit mining consideration. As
mineral resources grow, with the expectation that the greatest potential is within those zones that will be mined from
underground, the cut-off grade may be revised as the proportion of underground and open pit mineral resources changes
and as the Project is further advanced. The table below shows the mineral resources at various cut-off grades.
Cut-Off Tonnes Au Ag AuEq Au oz Ag oz GEO
(g/t) (000's) (g/t) (g/t) (g/t) (000's) (000's) (000's)
1.0 4,157 6.6 400.3 14.6 884 53,497 1,953
1.5 3,311 8.2 491.6 18.0 874 52,328 1,921
Indicated 2.0 2,962 9.1 542.4 20.0 869 51,651 1,901
2.5 2,777 9.7 573.5 21.2 864 51,204 1,888
3.0 2,681 10.0 591.2 21.8 861 50,949 1,880
3.5 2,602 10.3 606.2 22.4 858 50,703 1,872
4.0 2,500 10.6 626.4 23.1 852 50,346 1,860
Cut-Off Tonnes Au Ag AuEq Au oz Ag oz GEO
(g/t) (000's) (g/t) (g/t) (g/t) (000's) (000's) (000's)
1.0 3,598 1.9 115.9 4.2 222 13,408 490
1.5 2,904 2.3 134.2 5.0 212 12,535 463
Inferred 2.0 2,617 2.4 143.5 5.3 205 12,071 447
2.5 2,340 2.6 154.7 5.7 194 11,642 427
3.0 2,106 2.7 166.3 6.0 181 11,260 406
3.5 1,921 2.8 175.1 6.3 171 10,817 387
4.0 1,725 2.9 184.9 6.6 158 10,255 363
Consistent with Yamana's focus on production that is more reliable and predictable, the Company will continue to
prioritize planning and rely on appropriate expertise and experience in the development of projects to ensure efficient
development while providing certainty of production and costs. The Company will use various tools including the
application of expertise and experience gained from similar operations.
In relation to Cerro Moro, the Company has engaged in pre-development work by way of a production ready decline into the
largest of the known ore bodies, Escondida. In addition to advancing the timeline for development, this pre-development
work will provide a platform for further exploration work and permit access to the ore body, providing greater certainty
and knowledge of its physical properties and grade continuity.
Technical and trade-off studies have been completed which support continuation to a feasibility level study for the
project. Based on these studies, the feasibility study will consider a mine plan combining both open pit (30%) and
underground (70%) mining operations to sustain a process plant with a throughput rate of approximately 1,000 tonnes per
day and an expected recovery of approximately 200,000 GEO per annum. The feasibility study is expected to be completed
sometime in 2014. The Company will then evaluate the results of the feasibility study together with current exploration
results and the knowledge gained through the pre-development work to make a construction decision. Depending on the
outcome of the studies and subsequent construction decision, production should begin in 2016.
The underground mine will be accessed by means of conventional decline haulages, the first of which will be developed as
part of the work completed prior to a construction decision and is consistent with the approach used at Mercedes. Since
the mineralization is broadly similar to the Company's Mercedes operation in Mexico, mining and processing operations at
Cerro Moro are expected to employ similar methods. Initial capital costs are expected to be below $400 million and
operating costs are expected to be below $450 per ounce.
The underground will be accessed through a conventional decline that will be developed as part of the work completed
prior to a construction decision and is consistent with the approach at Mercedes.
The 2013 exploration program at Cerro Moro will focus on drill testing eight priority target areas located on the
northern La Negrita block, an entirely new zone, and drill testing existing geologic targets, geochemical anomalies and
vein extensions within nine priority target areas in the southern Escondida block, which contains the majority of
current known mineral resources.
The 2013 exploration drilling program at Cerro Moro commenced in mid-January and is already demonstrating success. One
drill hole in January, which was intended to test the extension of an anomalous mineralization from prior holes,
intercepted three separate vein zones, and preliminary indications are that two of these occur at mineable widths with
the potential for significant GEO grades. Assays for these holes are still pending. This new discovery, the "Margarita"
vein is within the La Negrita zone, which is outside of the area containing the known mineral resources. Drilling of
this and all identified targets is expected to be ongoing throughout the year.
The Company is expecting to spend $12 million in 2013 on exploration to execute the 25,000 metres of drilling with the
goal of expanding the areas of mineralization to the La Negrita block and to add significantly to the mineral resource
ABOUT CERRO MORO
Cerro Moro comprises eighteen tenements covering an area of approximately 177 square kilometers. There are 8 sectors
(Escondida, Loma Escondida, Zoe, Martina, Carla, Esperanza-Nini, Gabriela, and Deborah), all of which are located within
the central portion of the Cerro Moro tenements, included in the current mineral resource. The Project consists of a
series of low- to intermediate-sulfidation epithermal-style veins with locally high grade gold-silver mineralization,
especially in the Escondida zone, which are hosted in sub-volcanic and volcanic rocks. This polymetallic gold-silver
mineralization is similar to Yamana's operating mines El Penon and Mercedes.
William Wulftange, Director, Exploration for Yamana Gold Inc. has reviewed and approved the scientific and technical
information contained within this press release relating to Cerro Moro and serves as the Qualified Person as defined in
National Instrument 43-101.
Yamana is a Canadian-based gold producer with significant gold production, gold development stage properties,
exploration properties, and land positions in Brazil, Argentina, Chile, Mexico and Colombia. Yamana plans to continue to
build on this base through existing operating mine expansions, throughput increases, development of new mines,
advancement of its exploration properties and by targeting other gold consolidation opportunities with a primary focus
in the Americas.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news release contains "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities
legislation. Except for statements of historical fact relating to the Company, information contained herein constitutes
forward-looking statements, including any information as to the Company's strategy, plans or future financial or
operating performance. Forward-looking statements are characterized by words such as "plan," "expect", "budget",
"target", "project", "intend," "believe", "anticipate", "estimate" and other similar words, or statements that certain
events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions, assumptions and
estimates of management considered reasonable at the date the statements are made, and are inherently subject to a
variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to
differ materially from those projected in the forward-looking statements.
These factors include the Company's expectations in connection with the expected production and exploration, development
and expansion plans at the Company's projects discussed herein being met, the impact of proposed optimizations at the
Company's projects, the impact of the proposed new mining law in Brazil and the impact of general business and economic
conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and
liabilities based on projected future conditions, fluctuating metal prices (such as gold, copper, silver and zinc),
currency exchange rates (such as the Brazilian Real, the Chilean Peso, the Argentine Peso, and the Mexican Peso versus
the United States Dollar), possible variations in ore grade or recovery rates, changes in the Company's hedging program,
changes in accounting policies, changes in mineral resources and mineral reserves, risk related to non-core mine
dispositions, risks related to acquisitions, changes in project parameters as plans continue to be refined, changes in
project development, construction, production and commissioning time frames, risk related to joint venture operations,
the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, steel, power,
labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant,
equipment or processes to operate as anticipated, unexpected changes in mine life, final pricing for concentrate sales,
unanticipated results of future studies, seasonality and unanticipated weather changes, costs and timing of the
development of new deposits, success of exploration activities, permitting time lines, government regulation and the
risk of government expropriation or nationalization of mining operations, environmental risks, unanticipated reclamation
expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending
litigation and labour disputes, as well as those risk factors discussed or referred to in the Company's current annual
Management's Discussion and Analysis and Annual Information Form filed with the securities regulatory authorities in all
provinces of Canada and available at www.sedar.com, and the Company's Annual Report on Form 40-F filed with the United
States Securities and Exchange Commission.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to
differ materially from those described in forward-looking statements, there may be other factors that cause actions,
events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future events could differ materially from those anticipated
in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or
management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is
cautioned not to place undue reliance on forward-looking statements. The forward-looking information contained herein is
presented for the purpose of assisting investors in understanding the exploration and development plans and objectives
and may not be appropriate for other purposes.
CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED MINERAL RESOURCES
This news release uses the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and
"inferred mineral resource" are defined in and required to be disclosed by NI 43-101. However, these terms are not
defined terms under Industry Guide 7 and are not permitted to be used in reports and registration statements of United
States companies filed with the Commission. Investors are cautioned not to assume that any part or all of the mineral
deposits in these categories will ever be converted into reserves. "Inferred mineral resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be
assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except
in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is
economically or legally mineable. Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian
regulations. In contrast, the Commission only permits U.S. companies to report mineralization that does not constitute
"reserves" by Commission standards as in place tonnage and grade without reference to unit measures. Accordingly,
information contained in this news release may not be comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and
regulations of the Commission thereunder.
FOR FURTHER INFORMATION PLEASE CONTACT:
Yamana Gold Inc.
Vice President, Corporate Communications
and Investor Relations
416-945-7362 or 1-888-809-0925
Yamana Gold Inc.