* Q4 adjusted EPS $0.26 v Street-view $0.25
* Revenue up 11 percent at $629.5 million
* CEO remains growth focused, says no M&A for now
TORONTO, Feb 20 Canadian gold miner Yamana Gold
Inc reported a boost in quarterly profit on Wednesday
as strong gold production and sales outweighed higher operating
The Toronto-based mining company, which produced a record
1.2 million gold equivalent ounces in 2012, said it plans to
boost output by at least 20 percent in 2013 as it ramps up
production at its newest mines.
With gold prices slipping and capital costs still climbing,
many mining companies are shifting away from growth to focus
instead on boosting margins and increasing shareholder returns.
For Yamana, the focus remains on building up the production
base. The strategy is to move forward with projects that deliver
growth, maximize cash flows and demonstrate efficient use of
capital, said Chief Executive Peter Marrone.
"Growth is growth. I think the challenge is always, what do
we mean by growth? It can't just be about production," he told
Reuters. "Ultimately it also has to be about cash flow and it
has to be about earnings and about revenue and about all the
As its new mines ramp up, the midtier producer expects cash
flows to exceed capital needs, leading to more free cash flow.
Yamana is ramping up production at its Ernesto/Pau a Pique
mine in Brazil, and has two other Brazilian mines, C1 Santa Luz
and Pilar, under construction, with first output at both
expected later this year.
The company has also started development work on the Cerro
Moro project in Argentina, which was acquired last year through
its takeover of Extorre Gold.
While Yamana is open to future strategic acquisitions, the
focus for now is on internal growth, said Marrone.
"We're not at the stage of considering acquisitions at this
point," he said. "We have two mines that start operations this
year, three that reach commercial production this year and we
have Cerro Moro."
Yamana plans to spend $470 million in 2013 on expansionary
capital projects, including $40 million on Cerro Moro, and $445
million on sustaining capital.
Net earnings rose to $169.2 million, or 22 cents a share, in
the quarter ended Dec. 31, compared with $89.6 million, or 12
cents, in the year-before period.
Adjusted to remove one-time items, earnings came in at
$197.4 million, or 26 cents a share. That was in line with
analysts' average expectation of 25 cents a share, according to
Thomson Reuters I/B/E/S.
Revenue rose 11 percent to $629.5 million as fourth-quarter
output jumped 17 percent to 322,990 gold equivalent ounces.
The average realized gold price rose slightly to $1,692 an
ounce, from $1,670 an ounce in the year-ago period, while
operating costs climbed on lower gold grades and higher input
costs at certain mines.
Full-year production rose 9 percent to 1.2 million gold
equivalent ounces in 2012. Yamana said it expects 2013 output in
the range of 1.44 million to 1.60 million ounces, an increase of
at least 20 percent.
Yamana also announced on Wednesday a quarterly dividend of
$0.065 a share.