TORONTO (miningweekly.com) – South America-focused gold producer Yamana Gold has reported a significant net loss for the second consecutive quarter, as impairment charges for Brazilian mines and charges for newly enacted Chilean taxes have weighed on the bottom line.
For the three months ended December 31, Toronto-based Yamana, which recently acquired half of the Canadian Malartic mine, in Quebec, reported a net loss of $1.2-billion, or $1.46 a share, compared with a net loss from continuing operations of $446.2-million, or $0.59 a share, for the comparable period in 2013.
The Chilean government enacted a tax reform package in September, which accounted for a $329.5-million charge and impairment charges on certain mines of $752.9-million in the quarter.
Yamana last year said it would spin out some of its noncore Brazilian assets into a new subsidiary and continue to consider strategic alternatives for these assets, including their possible outright sale. The company had already made significant progress in separating its noncore assets, including Fazenda Brasileiro, Pilar and C1 Santa Luz, as well as some related exploration concessions, into a new entity called Brio Gold.
Excluding special items, Yamana reported an adjusted loss of $16.2-million, or $0.02 a share, compared with adjusted earnings of $36.7-million, or $0.05 a share, for the same 2013 period.
Wall Street analysts had on average forecast earnings of $0.03 a share on revenue of $532.5-million.
Revenue for the three months came in at $542.9-million, higher than the $420.7-million booked in the same period of 2013, as higher sales volumes offset lower metal prices.
In the quarter, Yamana sold 346 588 oz of gold, 2.8-million ounces of silver and 33.8-million pounds of copper, excluding attributable sales from Alumbrera, which was accounted for as an equity investment. This compared with sales, excluding Alumbrera, of 218 223 oz of gold, 2.1-million ounces of silver and 34.5-million pounds of copper for the three months ended December 2013.
The average realised price of gold in the quarter was 6% lower year-on-year at $1 199/oz compared with $1 277/oz for the same quarter in 2013, while the average realised silver price was 21% lower at $16.39/oz compared with $20.63/oz for the same quarter in 2013. The average realised copper price was $2.99/lb, 11% lower than the $3.37/lb achieved in the fourth quarter in 2013.
Yamana produced 405 615 oz of gold equivalent in the quarter, up 33.5% year-on-year from 303 768 oz in the same period a year earlier. Gold equivalent ounces assumed gold and the gold equivalent of silver using a ratio of 50:1.
All-in sustaining costs rose to $774/oz of gold equivalent, up from $754/oz in the same quarter a year ago.
Despite the turbulence experienced at its South American mines, on Wednesday Yamana also announced that it would proceed with construction of the $398-million Cerro Moro gold/silver project, a high-grade, low-cost endeavour in Santa Cruz province, Argentina.
Yamana forecast a 9% increase in gold output this year to 1.3-million ounces, as well as 9.7-million ounces of silver and 120-million pounds of copper.