UPDATE 1-Yamana Gold slumps to quarter loss on impairment charge

Tue Feb 18, 2014 8:09pm EST

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Feb 18 (Reuters) - Yamana Gold Inc reported a net loss for the fourth quarter on Tuesday due to a $535.8 million after-tax impairment charge it booked on several exploration and producing properties partly caused by the drop in metals prices.

The Canadian gold miner reported a loss of $583.9 million, or 78 cents a share, in the three months to end-December compared with a profit of $169.2 million, or 23 cents a share, in the year-ago period.

After adjusting for one-time and non-cash items of $620.7 million, earnings came in at $36.7 million, or 5 cents per share, down from $197.4 million or 26 cents a share a year ago due to lower realized metal prices, lower metal sales volumes, higher cash costs and an equity loss from the company's stake in the Alumbrera mine in Argentina.

Analysts, on average, expected the company to report earnings of 7 cents a share, according to Thomson Reuters I/B/E/S.

Yamana, which has mines in Brazil, Mexico, Chile and Argentina, said that it took a $168.2 million after-tax impairment charge against the value of its Ernesto/Pau-a-Pique mine in Brazil because of a delay in starting operations and a decline in metal prices.

It also took a $182.8 million after-tax impairment charge on several exploration properties, a $55 million impairment for goodwill at its Jacobina mine in Brazil and a $70 million after-tax impairment at Alumbrera, in which it owns a 12.5 percent stake.

The Toronto-based miner reported on Feb. 10 that it had produced 1.2 million gold-equivalent ounces in 2013, below the company's own forecast. But it said the problems that caused the shortfall had been resolved.

Yamana had also reported all-in sustainting costs that were higher than what the market had been expecting and said it expects to produce 1.4 million gold-equivalent ounces in 2014.

Yamana defines gold-equivalent ounces as gold plus the gold equivalent of silver using a ratio of 50:1.

Yamana's shares ended down 1 percent at C$11.52 on the Toronto Stock Exchange on Tuesday before the results were released. They are down around 26 percent in the past year, in line with other large and mid-sized miners.

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