(Recasts with CEO interview)
April 29 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
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
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