Yamana Gold profit falls short, stock dips

By Susan Taylor

OTTAWA (Reuters) - Yamana Gold (YRI.TO: Quote, Profile, Research) said 2008 marks the "unveiling" of a bigger, more powerful producer created from last year's acquisition push, but investors appeared impatient for proof on Wednesday.

Yamana, which last October acquired Meridian Gold and Northern Orion Resources for $4.8 billion, said its fourth-quarter results reflect a "transformational" period.

It reported earnings late on Tuesday that fell well shy of estimates, reflecting higher operating costs and a stronger Brazilian currency.

The Toronto-based company, whose mine operating costs rose to $76.6 million from $8.9 million, also said it had not yet received $20.8 million from the sale of copper concentrate in the quarter. It expects payment in the first quarter.

"We created a company that had significantly more assets in different parts of the Americas, parts that we wanted to be in, Chief Executive Peter Marrone said on a conference call. "2008 is the unveiling of that transformation and what that does in terms of our performance."

Yamana fourth-quarter profit rose to $47.1 million, or 8 cents a share, from $6.1 million, or 2 cents a share, in the year-before quarter.

Analysts expected a profit of 20 cents a share according to Reuters Estimates.

"The issue with the company is that they've got to deliver and people are looking for them to be able prove that they can operate," said an analyst who asked not to be named. "There wasn't really much in this quarter that alleviates peoples' concerns on that front."