TORONTO (miningweekly.com) – Canadian miner Yamana Gold on Wednesday said fourth-quarter profit soared on higher gold production, which overshadowed an increase in operating costs.
Net earnings for the quarter ended December 31 were $169.2-million or 22c a share, an 88.8% increase year-on-year when compared with net earnings of $89.6-million or 12 c a share in the same quarter of 2011. Higher net earnings for the fourth quarter of 2012 were mainly owing to higher mine operating earnings, partly offset by higher operating expenses and higher income tax expenses.
The company’s adjusted earnings for the quarter were $197.4-million or 26c a share, compared with $184.2 million or $0.25 per share in the same quarter of 2011. Wall Street analysts on average had expected adjusted earnings of 25c a share on revenue of $665.25-million.
Higher adjusted earnings in the fourth quarter of 2012 were mainly owing to higher mine operating earnings, partly offset by higher general and administrative expense, and exploration and evaluation expense in the fourth quarter of 2012.
Revenues were a record $629.5-million in the fourth quarter, 11% higher when compared with $568.8-million in the same quarter of 2011. Mine operating earnings were $322.1-million in the quarter, compared with $296.8-million in the fourth quarter of 2011.
Higher revenues and mine operating earnings were mainly owing to higher sales volumes of gold from the production of the new Mercedes mine, in Mexico, which was under construction during the comparative period, higher volumes of silver sales and higher metal prices, partly offset by lower volumes of sales of copper at Chapada mine in Brazil.
Revenues for the quarter were generated from the sale of 304 070 gold-equivalent ounces (GEO), which comprised 258 978 oz of gold and 2.3-million ounces of silver, and 37.1-million pounds of copper. This compared to sales of 262 782 GEO in the fourth quarter of 2011.
For the 2012 fourth quarter, average realised prices for gold, copper and silver were marginally higher than the average realised prices for the same quarter in 2011. Average realised prices for the quarter were $1 692/oz of gold, $3.54/lb of copper and $31.37/oz of silver, compared with average realised prices of $1 670/oz of gold, $3.36/lb of copper and $31.29/oz of silver in the fourth quarter of 2011.
The company said it expects to produce in the range of 1.44-million to 1.6-million GEO with a target level of 1.48-million GEO. This would represent an increase of at least 20% on 2012 production, most of which would come from a full year of production at Mercedes; the ramp-up of the expansion project at Minera Florida, in Chile; the ramp-up of production at the two new mines, Ernesto/Pau-a-Pique and C1 Santa Luz, in Brazil; and the start-up of production at another new mine, Pilar, also located in Brazil.
Yamana plans to spend $470-million in 2013 on capital projects and $445-million on sustaining capital. The company also announced a quarterly dividend of $0.065 a share.
The company’s NYSE-listed stock closed down 4.32% at $14.40 apiece on Wednesday.