UPDATE 2-Yamana Gold to focus on Canada asset, Argentina project
(Recasts with CEO interview)
April 29 (Reuters) - Yamana Gold Inc's main focus in coming months will be on squeezing higher returns from a recent acquisition in Canada and the development of its Cerro Moro gold and silver project in Argentina, Chief Executive Peter Marrone said on Tuesday.
The Canadian-based miner, whose other mines are in South America and Mexico, is also on track to bring two gold projects in Brazil, C1 Santa Luz and Pilar, into commercial production in the third quarter. But these have diminished in importance over time, Marrone said in an interview.
"These new mines have increasingly become less important than the other aspects of the company when we look at it across various measures from cash flow to value," he said after Yamana reported its first-quarter results.
Earlier this month, Yamana triumphed in its joint bid for Canadian-based Osisko Mining Corp, which owns the mid-sized, low-cost Canadian Malartic gold mine in Quebec. Yamana's C$3.9 billion (US$3.56 billion) white-knight bid for Osisko, in concert with partner Agnico-Eagle Mines Ltd, topped a bid for Osisko from another Canadian gold miner Goldcorp Inc..
Several analysts have said the acquisition helps Yamana diversify its operations into a lower-risk jurisdiction.
"We are going to focus on the optimizations that we think are there for the Canadian Malartic mine, the exploration and then likely development of the Kirkland Lake assets that are part of Osisko," Marrone said.
Yamana has started a detailed engineering study on the Cerro Moro project, which a feasibility study indicated could be built for a low capital investment and would have low operating costs.
Earlier on Tuesday Yamana reported a sharp drop in adjusted earnings to $12.1 million, or 2 cents a share on the back of weaker gold, silver and copper prices, lower metal sales and higher sale costs.
That compared with earnings of $116.1 million, or 16 cents a share, a year earlier and analysts' expectations for earnings of 5 cents a share, according to Thomson Reuters I/B/E/S.
Yamana said it produced 271,908 ounces of gold equivalent ounces in the first quarter, down from 291,312 ounces in the same period in 2013. Gold equivalent ounces are calculated using gold output plus the gold equivalent of silver using a ratio of 50:1.
Yamana's all-in sustaining costs per gold equivalent ounce were $820 an ounce on a by-product basis in the quarter, down from $856 per ounce in the same quarter a year ago.
The average gold price the miner realized fell to $1,300 an ounce in the quarter from $1,620 per ounce a year ago.
($1 = 1.0966 Canadian Dollars) (Reporting by Nicole Mordant in Vancouver; Editing by Steve Orlofsky)
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