Yamana Announces 44% Increase to Mineral Resources at Cerro Moro

Wed Feb 13, 2013 8:00am EST

* Reuters is not responsible for the content in this press release.


    (All amounts are expressed in United States dollars unless otherwise

    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.


    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 Moro.

    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

    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 base.


    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.

    Qualified Person 

    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.

    About Yamana 

    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.

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.


    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.

Yamana Gold Inc.
Lisa Doddridge
Vice President, Corporate Communications
and Investor Relations
416-945-7362 or 1-888-809-0925

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