TORONTO - YAMANA GOLD INC. (TSX: YRI; NYSE: AUY; LSE: AUY) ('Yamana' or 'the Company') is herein reporting its financial and operational results for the third quarter of 2021.
With strong results from operations, the Company remains well positioned to achieve guidance for the year of 1,000,000 gold equivalent ounces ('GEO')(2), underpinned by momentum at Canadian Malartic, Jacobina and El Penon, as well as a strong fourth quarter performance expected at El Penon and Cerro Moro, as previously guided.
THIRD QUARTER HIGHLIGHTS
Financial Results - Strong Cash Flows, Increase to Mine Operating Earnings
Net earnings(3) were $27.0 million or $0.03 per share basic and diluted. Adjusted net earnings(1, 3) were $69.7 million or $0.07 per share basic and diluted.
Mine operating earnings were $154.0 million and increased quarter-over-quarter by 8%.
Cash flows from operating activities were $190.6 million and cash flows from operating activities before net change in working capital(1) were $202.9 million, representing sharp increases from second quarter results of 24% and 21% respectively.
Free cash flow before dividends and debt repayments(1) was $81.6 million and increased 59% quarter-over-quarter.
Cash and cash equivalents totalled $460.2 million(8) and the Company has $750.0 million in available credit.
Operating Results - Standout Quarters from Canadian Malartic, Jacobina and El Penon, Exceptional Quarter from Cerro Moro
As previously guided, production is weighted at 53% for the second half of the year, with the fourth quarter being the strongest quarter, expected to exceed 270,000 GEO(2) produced. Consequently, with a strong third quarter, the Company remains well positioned to achieve guidance for the year of 1,000,000 GEO(2), underpinned by the momentum at Canadian Malartic, Jacobina and El Penon, as well as a strong fourth quarter performance expected at El Penon and Cerro Moro.
GEO(2) production was 256,464, including 225,556 ounces of gold, and 2.27 million ounces of silver. This marks the second highest all-time GEO(2) production total for Yamana mines(4), on the back of exceptional gold production. The Company expects record-breaking GEO(2) production in the fourth quarter, as gold is expected to reach an all-time quarterly high.
Standout gold production from Canadian Malartic with 86,803 ounces, Jacobina with 47,373 ounces and El Penon with 50,229 ounces. Further, Cerro Moro had an exceptional quarter producing 19,261 ounces of gold which increased approximately 33% from the second quarter and with stronger production expected in the fourth quarter from higher grades.
Silver production was 2,273,183 ounces with both El Penon and Cerro Moro recording their highest quarterly silver production totals of the year, with stronger production expected in the fourth quarter from higher grades at both mines anticipated.
El Penon third quarter GEO(2) production was 62,545, a 19% increase above its second quarter GEO(2) production. As previously guided, El Penon is well positioned to meet its annual production guidance with approximately 31% of annual gold production for the operation expected for the fourth quarter.
Cerro Moro produced 37,853 GEO(2) during the quarter with 98,406 GEO(2) produced year to date, a significant increase versus the comparative prior year-to-date period of 89,472 GEO(2).
Minera Florida produced 21,890 ounces of gold, and is expected to meet its annual production guidance with a strong fourth quarter underpinned by a strong start in October.
Cash costs(1) and all-in sustaining costs ('AISC')(1) for the quarter were $702 and $1,041 per GEO(2), respectively, which on a consolidated basis were lower than the second quarter and the comparative period. The Company recorded standout September performances at several mines with per GEO(2) costs for those mines during the month being the lowest month of the quarter by a considerable margin. Further, consolidated AISC(1) on a per GEO(2) basis for September was approximately 10% lower than the quarterly average, which positions the Company to deliver its lowest per GEO(2) cost of the year during the fourth quarter.
Year-to-date costs have had a modest impact from inflationary pressures, which are expected to continue during the fourth quarter. For the full year, the Company expects upwards of $20 per GEO(2) of inflationary pressure on costs not originally anticipated at the start of the year.(2) Nonetheless, costs for the fourth quarter will be well below the average costs experienced on a year-to-date basis due to the strong production anticipated.
Strengthening the Company's Financial Position, Improving Financial Resilience and Increasing Financial Flexibility
Yamana believes that a strong financial position and financial resilience also requires a manageable debt maturity profile, and the Company has taken advantage of current market conditions to improve terms of its outstanding notes by increasing tenor and reducing carrying costs. As such, during the quarter, Yamana completed its offering of $500 million aggregate principal amount of its 2.630% Senior Notes due August 15, 2031.
Yamana used the net proceeds from the offering, together with cash on hand, to fund the redemptions of its 4.76% Series C Senior Notes due 2022, its 4.91% Series D Senior Notes due 2024, its 4.78% Series B Senior Notes due 2023 and its 4.950% Senior Notes due 2024.
The completion of the offering of the Senior 2031 Notes and the subsequent redemption of the shorter-term maturity notes represents the culmination of significant debt reduction efforts initiated in 2019. Yamana's outstanding gross debt was reduced by $222.1 million during the quarter to $772.8 million, which compares to $1.85 billion outstanding in the second quarter of 2019.
Interest on the Senior 2031 Notes is set at 2.630% as compared to a weighted average interest of 4.83% for the existing notes, which reduces the Company's annual interest carrying charges by approximately $21.6 million per annum compared to the second quarter of 2021, or roughly $60 million per annum lower compared to the second quarter of 2019.
About Yamana
Yamana is a Canadian-based precious metals producer with significant gold and silver production, development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina. Yamana plans to continue to build on this base through expansion and optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation opportunities with a primary focus in the Americas.
Contact:
Tel: 416-815-0220
Email: investor@yamana.com
YAMANA GOLD INC. 
