* Adjusted EPS $0.24 v Street-view $0.23
* Reports record revenue at $612 million
* Development project on track, on budget
By Julie Gordon
TORONTO, Oct 29 Canadian miner Yamana Gold Inc
reported a 6 percent fall in third-quarter adjusted
profit on Monday as lower metal prices and higher production
costs outweighed strong gold sales volumes.
The mid-tier gold miner, which is in the process of building
three new mines, maintained its production outlook for the year
and said its development projects are on time and on budget.
While cash costs rose compared with the third quarter of
2011, chief executive Peter Marrone noted that costs are
trending downward as the company ramps up output at new mines
and as cost inflation in the mining sector eases.
"The truth is that there is a lessening of the pressures on
the metal sector, or perhaps extractive industries generally,"
he told Reuters. "But costs sometimes can be sticky, so it takes
a bit of time before that starts to reflect itself in better
operating costs and better capital costs."
Yamana expects to finish construction at its
Ernesto/Pau-a-Pique and C1 Santa Cruz mines in Brazil by the end
of the year, with commercial production by mid-2013. A third
Brazilian development, Pilar, is set to start up in mid 2013.
That will help ramp up output from 1.2 million-1.3 million
ounces this year to 1.5 million-1.7 million ounces in 2013.
Yamana is eyeing Cerro Moro, a project in Argentina it
acquired as part of its C$413 million ($412.81 million) takeover
of Extorre Gold Mines Ltd earlier this year, as its next major
development project. An exploration and development plan for
that project is due in early 2013.
The company has $1.15 billion in available funds, including
$400 million in cash.
Yamana's adjusted earnings were $178 million, 24 cents a
share, for the quarter ended Sept 30. That compared with $190
million, or 26 cents a share, in the year-earlier period.
Analysts, on average, had expected earnings of 23 cents a
share, according to Thomson Reuters I/B/E/S.
Net earnings, which included a charge related to tax changes
in Chile, were $60 million, or 8 cents a share. That compared
with $116 million, or 16 cents a share, in the year-before
Revenue rose 10 percent to $612 million on record production
of 310,490 gold equivalent ounces, while total cash costs,
including by-product credits, rose to $201 an ounce, from $94 an
ounce a year ago.
Total cash costs were affected by lower copper and silver
prices, along with lower grades and higher input costs at
certain mines. The company produced 39.4 million lbs of copper
and 2.2 million ounces of silver in the quarter.
While realized gold prices were relatively flat at $1,680 an
ounce compared with $1,697 an ounce in the third quarter of
2011, copper prices fell to $3.54 a lb from $3.98 a lb and the
silver price dropped to $30.76 an ounce from $37.52.