TORONTO (miningweekly.com) – Canadian miner Yamana Gold on Tuesday reported a 40% drop in net profit as lower realised commodity prices combined with inflationary impacts on costs and lower equity earnings from the company's 12.5% interest in Xstrata Copper’s Alumbrera mine, in Argentina.

Net earnings for the first quarter were $102.1-million or $0.14 a share, compared with net earnings of $170-million or basic and diluted earnings a share of $0.23 for the three months ended March 31, 2012.

Adjusted earnings were $117-million or $0.16 a share in the first quarter, compared with $184.3-million or $0.25 per share in the first quarter of 2012. Analysts had expected earnings of $0.19 a share on revenue of $570.83-million.

Revenues of $534.9-million in the quarter were 5% lower when compared with $559.7-million in the first quarter of 2012. Mine operating earnings were $208-million, compared with $280.1-million in the first quarter of 2012.

Lower revenues and mine operating earnings were the result of lower metal prices offset by the higher volume of metal sales combined with cost inflation. Higher cost of sales, including depletion, depreciation and amortisation expenses, was mainly related to higher sales volumes of gold and copper and higher cash costs.

Revenues for the first quarter were generated from the sale of 284 872 gold-equivalent ounces (GEO), consisting of 241 259 oz of gold, 2.2-million ounces of silver and 29.1-million pounds of copper, excluding Alumbrera. This compared with sales, excluding Alumbrera, of 273 494 GEO that consisted of 228 763 oz of gold, 2.2-million ounces of silver and 27.3-million pounds of copper in the first three months of 2012.

The average realised gold price in the first quarter of 2013 was $1 620/oz compared with $1 696/oz in the same quarter of 2012, the average realised copper price was $3.58/lb versus $3.73/lb in the first quarter of last year and the average realised silver price was $29.81/oz compared with $32.94/oz in the first quarter of 2012.

The average market price for copper in the first quarter was 5% lower than the average of the first three months of 2012.

The cost of sales excluding depletion, depreciation and amortization for the period was $230.7-million, compared with $191.8-million in same period of 2012, owing to the increased volume of gold and copper sales and higher cash costs as a result of inflationary pressures in the countries where the company operates.

Yamana said total production for the company was 291 312 GEO for the quarter, representing an increase of 4% over the same quarter of 2012. Total production included the company's attributable production from the Alumbrera mine of 8 222 GEO and production during commissioning of Ernesto/Pau-a-Pique of 4 109 GEO, compared with total production of 278 832 GEO, including commissioning production of 8 959 GEO from Mercedes in the same quarter a year earlier.

Yamana’s TSX-listed stock closed 2.47% higher on Tuesday at C$12.47 apiece.