Yamana Gold returns to profit in fourth quarter
21/03/07
globeinvestor.com
OTTAWA (Reuters) - Yamana Gold Inc. said on Wednesday that it returned to profit in the fourth quarter, as higher gold prices and increased production from acquisitions overcame rising costs.
The company, which acquired RNC Gold , Desert Sun Mining, and Viceroy Exploration in 2006, reported net earnings of $6.1 million, or 2 cents a share, in the quarter ended December 31. That reverses a net loss of $73,000, or nil per share, in the year-prior period.
Analysts expected, on average, earnings of 4 cents a share before exceptions, according to Reuters Estimates.
"The primary reason for the earnings per share shortfall was higher than expected general and administrative and depreciation expenses and slightly higher cash costs," Blackmont Capital analyst Richard Gray said in a note.
"Guidance for 2007 was reiterated at 585,000-650,000 ounces gold at negative cash costs of $114 an ounce and 130-145 million pounds copper."
Total gold production increased to 112,444 ounces from 31,762 ounces in the year-prior period. The cash cost for commercial production rose to $321 an ounce from $282 and the average realized gold price rose to $619 an ounce from $485.
Yamana, which now has six mines in commercial production and four advanced exploration and development projects, repeated its target for gold production of at least 1 million ounces annually by the end of 2008.
Total gold production in 2006 was 359,272 ounces. The average cash cost for 283,460 ounces of commercial production was $326 an ounce, compared with 103,350 ounces at a cost of $289 an ounce in 2005.
The average realized gold price rose to $613 an ounce from $448 in 2005.
At year-end, Yamana had proven and probable reserves of 6.78 million ounces of gold, an increase of 1.55 million contained ounces.
For the full year, Yamana's net loss ballooned to $70 million, or 25 cents a share, from a loss of $4 million, or 3 cents a share, in 2005.
"Earnings were negatively impacted by lower than expected commercial production and higher start-up operating costs, plus a series of charges," Wellington West analyst Catherine Gignac said in a note.
Shares of Yamana, which has properties and mines in Brazil, Argentina, and Central America, added 2 Canadian cents to C$16.65 on the Toronto Stock Exchange and 3 cents to $14.374 on New York on Wednesday.
($1=$1.16 Canadian) |
