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Yamana Gold shares shine as 2018 production beats guidance

Last updated: 10:36 15 Feb 2019 EST, First published: 05:13 15 Feb 2019 EST

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One of Yamana Gold's production plants

Yamana Gold (NYSE:AUY)(TSE:YRI) shares shone higher Friday as the miner topped previous production guidance for 2018 and posted a surprise fourth-quarter earnings beat.

The Toronto-based gold miner, which has operations in Brazil, Argentina, Chile and Mexico, reported full-year gold equivalent ounce (GEO) output of 1,041,350 ounces, which included 940,619 ounces of gold and 8.02 million ounces of silver. 

Copper production for 2018 came in at 129.2 million pounds.

READ: Yamana Gold loses lustre with Q3 earnings; reports net loss of $81M

The firm's original forecasts set in February 2018 was for 900,000 ounces of gold, 120 million pounds of copper and 8.15 million ounces of silver.

Full-year costs for the group's mines including all-in-sustaining costs (AISC) of $699 per gold equivalent ounce (GEO); cash costs on a by-product basis of $448 per GEO; and total cost of sales of $1,028 per GEO, were all in line with or better than guided ranges, the firm added.

The miner also declared a first-quarter 2019 dividend of $0.005 per share, expected to be paid on April 12 this year.

"In 2018 we achieved another year of exceeding our production guidance for all metals and at costs better than or in line with our guidance," said Daniel Racine,

Yamana’s president and CEO.

"Gold and copper exceeded the increased guidance levels we announced in October, while silver production exceeded the guidance that was lowered at that time."

Racine said the operational performance would not have been possible without the success in delivering the Cerro Moro mine in Argentina on time and on budget and exceeding expectations on both production and costs through the first six months of commercial production.

Fourth-quarter profit

In its fourth quarter, Yamana reported a headline profit of US$26.2 million, or US$0.03 per share, which was better than Wall Street estimates of US$0.02 a share.

Looking ahead to 2019, Yamana estimates gold production of 940,000 ounces, comparable to last year, followed by 955,000 in 2020.

Silver output is seen rising to 10 million ounces next year, while copper output is seen dipping to 120 million pounds.

Shares in New York added 1.17% to US$2.60,  while in Toronto they added 0.58% to $3.44.

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