Canadian gold and silver miner Yamana Gold will sell its Gualcamayo mine, in San Juan, Argentina, to Colombia-based Latin American gold producer Mineros and has granted that company an option to acquire up to 51% of its La Pepa project in Chile.
Yamana will receive $30-million in cash upon closing the transaction and an additional $30-million upon the declaration of commercial production at the Deep Carbonates project. It will also receive a 2% capped net smelter return royalty (NSR) at Gualcamayo and a 1.5%, uncapped NSR on the Deep Carbonates project.
In terms of the option agreement for La Pepa, Mineros has to spend $5-million over a two-year period for a 20% interest and pay Yamana $5-million in cash on completion of an additional $15-million of spending over another two-year period. Once Mineros has earned the 51% interest, Mineros could acquire the remaining 49% interest at fair market value.
Meanwhile Yamana also reported its third-quarter results on Thursday, booking a 19% drop in adjusted earnings. The company, which owns mines in Canada, Brazil, Chile and Argentina, reported adjusted earnings of $23.6-million, or $0.02 a share, for the September quarter, compared with $29.1-million in the prior-year period.
Revenue fell from $493.4-million in the third quarter of 2017 to $416.8-million in the quarter under review.
Gold production, excluding Gualcamayo, increased to 246 788 oz, from 223 272 oz in the corresponding quarter, while silver production increased to 2.55-million ounces, from 1.09-million ounces a year earlier.
The company also produced a total of 28.6-million pounds of copper, which is a decrease on the 37.1-million produced in the third quarter of September.
Total gold equivalent ounce (GEO) production from Yamana mines for the third quarter was 279 646 oz.
The company increased its guidance for production to 920 000 oz of gold, from the initially guided 900 000 oz of gold for Yamana mines, based on the strong production through the first nine months of 2018. Notably, Cerro Moro, which had its first full quarter of commercial production in the third quarter of 2018, provided significant contributions to the overall performance with production run-rates already at the levels needed to meet guidance both for 2018 and 2019 and, also with costs in line with the levels guided for both years.
The full-year silver production guidance was lowered to 7.55-million ounces, from 8.15-million ounces, mainly attributed to lower than planned silver production from El Peñón.
Despite the lower silver guidance, the company still expects to achieve its original GEO guidance.