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Yamana Gold Reports Fourth Quarter and Year End Results-Record 2007 Revenue and Earnings, Increased Mineral Reserves, Operational and Exploration Update TORONTO, ONTARIO--(MARKET WIRE)--Mar 25, 2008 -- YAMANA GOLD INC. (Toronto:YRI.TO - News)(NYSE:AUY - News)(LSE:YAU.L - News) today announced
its financial and operating results for the fourth quarter
and year ended December 31, 2007 and provided a progress
update on its strategic plan. Financial results reflect
the activities of Meridian Gold and Northern Orion only
since their acquisition in October, 2007 and not for the
full quarter or year. All dollar amounts are expressed in
US dollars unless otherwise specified.
2007 FOURTH QUARTER AND FULL YEAR HIGHLIGHTS Financial(1) - Fourth quarter sales of $218.6 million, an increase of 9% over the third quarter. Annual sales of $747.1 million, an increase of 342% over the prior year. - Net earnings were $47.1 million for the fourth quarter, an increase of 57% over the third quarter. For the year, net earnings of $157.2 million, an increase of 324% over the prior year. - Adjusted earnings for the year of $259.1 million before income tax effects and $227.6 million after income tax effects or $0.55 per share, representing an increase of 686% over the prior year. - Mine operating earnings of $384.6 million for the year, an increase of approximately 1,000% over the prior year. - Cash and short-term investments of approximately $330 million as at December 31, 2007 compared to $69.7 million as at December 31, 2006. - Cash flow from operations of $145.8 million for the fourth quarter after changes in non-cash working capital items. For the year, cash flow from operations of $293.9 million after changes in non-cash working capital items, representing $0.71 per share. - Declared quarterly dividends of $0.01 per share per quarter. (1) Not included in sales, receivables, earnings or cash flow for the quarter or year end are concentrate sales pricing adjustments payable before April 30, 2008 for concentrate sold in the fourth quarter. Estimated additional amounts due to the Company are approximately $30 million of which $9.2 million has already been received. Operational - Commercial production declared at the Chapada copper-gold project in February 2007, on budget and ahead of schedule. - Total production from all mines of 1,023,855 gold equivalent ounces (GEO) for the twelve month period ended December 31, 2007 including pre-acquisition production of 426,552 gold equivalent ounces from the El Penon, Minera Florida, Rossi and Alumbrera mines. GEO includes gold and silver only. - Total attributable production (not including pre-acquisition production) of 597,304 GEO for the year, an increase of 90% over the year ended December 31, 2006 at an average cash cost after by-product credits of $(182) per GEO. Total attributable production of 229,488 GEO during the fourth quarter at average cash costs after by-products of $(9) per ounce. Development and Exploration - Continued exploration efforts with significant successes, including an exploration program at El Penon to identify and define further high grade veins. - Mineral resources at El Penon increased by more than 1 million ounces of gold during the year. - Completed a positive feasibility study for the C1 Santa Luz gold project in Brazil. - New discovery at Pilar de Goias. - Continued construction at Sao Vicente. - Continued construction of Gualcamayo with targeted start up in Q3 2008. - Received a scoping study for the Amelia Ines and Magdalena (AIM) deposits at Gualcamayo indicating that the deposits are higher grade, larger than initially projected, remain open for expansion and are expected to significantly contribute to production levels at Gualcamayo. - Expansion program at the Jacobina mine well underway with 8,500 tpd throughput expected by the end of 2008. - Positive scoping study results for Chapada pyrite project, sulphuric acid market study. - Proven and probable gold reserves increased by 11.1 million ounces or 163% from 6.8 million ounces on December 31, 2006 to 17.9 million ounces on December 31, 2007. Corporate activities - Completed the acquisition of Meridian Gold Inc. and Northern Orion Resources Inc. for total consideration of $4.8 billion. - Secured a credit facility for up to $700 million. - Increased copper hedging program and secured an accelerated payback of one year at the Chapada copper-gold project. - Completed currency hedges for 280 million Reais. "This year has been a transformative year," commented Peter Marrone, Yamana's Chairman and CEO. "We have progressed from a dominant intermediate gold producer to the premier gold producer. Further, we have diversified our operating profile by adding another world class asset, El Penon, to our portfolio and by strengthening our operating base in Argentina and securing a strong operating base in Chile. If we compare our current production, growth, sustainability and low costs, we rank amongst the best gold producers in the world. With seven operating mines, and five in development, Yamana has a unique offering of growth, sustainability and value." "In the current environment of significantly escalating capital costs, Yamana's strategic view is that it is prudent to purchase or increase existing production or develop more modest development stage projects as it mitigates capital risk particularly with large scale development projects," added Mr. Marrone. "With last year's acquisition, Yamana has fortified the base for subsequent phases of organic growth from a robust exploration, and smaller scale, near infrastructure development portfolio, and continue to grow cash flow and earnings throughout 2008." STRATEGIC PLAN AND OUTLOOK The Company's strategic plan is focused on organic growth through increases in mineral reserves and targeting production of 1.3 million GEO in 2008 and progressively increasing to a sustainable level of 2.2 million ounces of gold starting in 2012. Production at these levels will be driven from optimizing operations, enhancements, expansions, improvements and development of existing assets and completion of the construction of projects currently under development. Investments in high target exploration areas and successes from Yamana's robust exploration portfolio will support and supplement these levels. In addition to Yamana's goal of replacing mined ounces in 2008, particular focus will be placed on operational developments and opportunities to maximize value at Chapada, El Penon, Jacobina and Gualcamayo, and on exploration developments at El Penon, QDD Lower West zone at Gualcamayo and Mercedes. In addition to production growth, Yamana remains committed to growing earnings and cash flow, maintaining our low cost production as demonstrated by our industry-leading low cash costs and returning value to shareholders. The Company expects capital investments over the next three years to be in the range of $1.3 billion, which will be funded by existing cash and operating cash flow. Yamana's financial strategy involves ensuring there are sufficient resources available to bring the Company's development projects into production and fund an exploration program focused on high priority targets. Upcoming events include the release of initial resource estimates for La Pepa, Jeronimo and Amancaya in the first half of 2008; updated resource estimates for El Penon based on ongoing drilling; a feasibility study for the Mercedes project in Mexico by the end of 2008; a feasibility study update for Gualcamayo by the end of 2008; and additional upside from Yamana's advanced exploration portfolio during the year. Continuing Developments - Operations El Penon, Chile Yamana has advanced its plans to increase production at the El Penon mine, now anticipating increasing production to an annual rate of approximately 500,000 GEO per year by the fourth quarter of 2008. Yamana has prepared a detailed mine plan and is advancing development work to further increase production at El Penon to approximately 600,000 GEO per year by 2010. Further, Yamana is now determining if production can be increased to more than 650,000 GEO per year including ore from the development of Amancaya. Yamana has sufficiently advanced mine development and a mine plan which would see ore processing increase to a sustainable level of approximately 3,500 tpd by the fourth quarter this year, increasing the production rate to 500,000 GEO per year. Yamana has also developed a plan to increase plant throughput to 5,000 tpd and is now continuing development work primarily at the Bonanza and Al Este veins in order to develop sufficient ore to meet the increased plant capacity. This would result in production increasing to 600,000 GEO per year by 2010 subject to completion of development work. Existing mineral resources and an historical 72% conversion rate of resources to reserves at El Penon support the Company's view that production can be increased initially to 500,000 GEO per year and then to 600,000 GEO per year for a sustainable period of at least 10 years. Further exploration efforts in the North Block area would further increase resources and reserves. Upgrade of equipment and improvements in mine production and efficiency are now underway. Expected capital costs of approximately $91 million for 2008 and 2009 are included in Yamana's previously announced capital costs for these years. With the advancement of the mine plans for these increases in progress, Yamana is now investigating the merits of further increasing production through the integration and implementation of Amancaya ore with El Penon which would see production increase to 650,000 GEO per year. Chapada, Brazil Expansion Plan Yamana has continued to advance its plan to double throughput at Chapada. Yamana is now targeting processing 20 million tonnes of ore in 2009, increasing to approximately 32 million tonnes of ore in 2010. This would result in increased total production in the first five years (2008 to 2010) to approximately 930 million pounds of copper and 740,000 ounces of gold. Total average production from 2008 through to 2015 would be approximately 192 million pounds of copper and 133,000 ounces of gold per year. Capital expenditures for this expansion are estimated at $230 million over 2009 and 2010, all of which has been assumed in Yamana's previously announced capital expenditures for 2008 through to 2010 of approximately $1.3 billion. A complete expansion plan is expected to be completed by the end of the year with increase in throughput expected to begin in 2009. Chapada Pyrite The original scoping study released in May 2007 concluded that additional gold and copper can be recovered from the pyrite concentrate taken from the tailings at the Chapada Mine and, in addition, a total of over 560,000 tonnes of sulphuric acid would be produced. By treating approximately 580,000 tonnes per year of pyrite concentrate over the Chapada mine life, about 10.6 million tonnes of sulphuric acid would be produced and an additional 320,000 ounces of gold and 94 million pounds of copper would be recovered. The original scoping study assumed hydrometallurgy for processing and on that basis capital expenditures were estimated at $60 to $80 million for ore processing. Yamana is investigating the merits of heap leaching, which would be a more modest capital expenditure estimate at approximately $20 million. Yamana continues to advance discussions with potential manufacturers and purchasers of sulphuric acid including agriculture/fertilizer businesses. The supply alternative to these businesses is costly in part due to significant transportation costs that would be associated with importing sulphuric acid. Yamana expects to complete an internal study by the end of 2008 and to complete processing facilities for gold and copper recovery in the pyrite in late 2010. Chapada Oxide Material The Chapada mine has an oxide material reserve of approximately 6 million tonnes of ore at an average grade of 0.5 g/t Au and 0.5% Cu. Yamana has now begun to implement plans to process the oxide material, which would yield an additional 7 million pounds of copper and 10,200 ounces of gold over an eight year mine life. Capital expenditure is estimated at approximately $30 million. Yamana continues to conduct metallurgical testing to improve recovery and is targeting production of gold and copper from the oxide material in 2010. Beginning in late 2010, total additional annual production from the pyrite and oxide material would be approximately 27,200 ounces of gold and 12 million pounds of copper for an initial six to eight year period. Additional revenues would come from a royalty on sulphuric acid or the sale of sulphur in the pyrite. Jacobina, Brazil In mid-April, Jacobina will be producing at full capacity following the plant shut down during February and March of this year due to upgrades to the mills in order to accommodate the increase in production and longer mine life. Engineering and construction continued to advance in 2007 and early 2008 with throughput capacity increasing to 6,500 tpd in mid-April. Production at Jacobina is expected to increase quarter over quarter in 2008 as the mine ramps up to 8,500 tpd by year end. Plant capacity is expected to increase to 8,500 tpd by a series of further improvements to the plant. At 8,500 tpd, annual production is projected at approximately 190,000 ounces of gold per year. Gualcamayo, Argentina Yamana continues to progress its plan at Gualcamayo to reach 300,000 ounces of annual sustainable gold production. The Gualcamayo mine will be comprised of three main mining opportunities - Quebrada Del Diablo (QDD), Amelia Ines and Magdalena (AIM) and QDD Lower West. Construction is expected to be completed in the third quarter of 2008 for the main QDD deposit with ore production start-up this summer. Mine development work at the Amelia Ines and Magdalena satellite deposits is expected to begin in the second half of 2008, with production start-up targeted for mid-2009. An initial resource estimate for QDD Lower West is outlined below in the Continuing Developments - Exploration section. Metallurgical testwork supports the integration of QDD Lower West into the overall operations. Planned production from all three main areas of mineralization combined is expected to be approximately 300,000 ounces of sustainable gold per year beginning in late 2010 when production from QDD Lower West begins. Minera Florida, Chile Yamana continues to advance its mine and mill expansion at Minera Florida which is expected to increase milling capacity to over 2,600 tpd and annual production to 65-70,000 GEO by November 2008, increasing to 125-135,000 GEO in 2009. Based on exploration potential and the history of replacing reverves, a new plan is in place to increase plant capacity to 3,500 tpd in 2009. Continuing Developments - Exploration El Penon, Chile Exploration drilling recommenced at El Penon in late February. Approximately 130,000 metres of drilling is planned for 2008 primarily in the North Block area where the high grade Bonanza vein was discovered in 2007. Drilling will focus on extending the known vein structures, Bonanza, Al Este and Esmeralda in addition to identifying new structures. The potential for identifying new structures was confirmed in late 2007 when drilling approximately 800 metres east of Bonanza intersected significant gold and silver mineralization. Hole SNX0012 returned 0.46 metres true width of 12.4 g/t Au and 1,028 g/t Ag, and 0.92 metres true width of 14.6 g/t Au and 1,597 g/t Ag from down hole depths of 397 and 402 metres respectively. Drilling in 2008 will test the strike and dip extensions of this structure to verify its continuity. Qualified Persons Mr. William H. Wulftange, P. Geo., Corporate Director, Technical Compliance of Yamana Gold Inc., has supervised the preparation of the El Penon technical data contained within this press release and serves as the Qualified Person as defined by National Instrument 43-101. Gualcamayo, Argentina - QDD Lower West The recently defined QDD Lower West mineral resource is part of a WNW trending, subhorizontal, westerly plunging tensional gash, hosted by carbonate breccias, marble and karsted limestones. Drilling indicates that the dilational structure is still open down plunge and along strike. More than 75% of the mineral resource in QDD Lower West is oxide and therefore amenable to heap leaching. The mineral resource for the QDD Lower West zone was estimated by ordinary kriging constrained by a 3D solid model based on a 1 g/t gold grade shell. The zone has been intersected by 16 core holes drilled between 2005 and December 2007. Drilling and underground development is continuing to test for expansion of the zone and to upgrade inferred resources to the measured and indicated category. Dimensions of this continuous zone of mineralization are currently 300 metres of strike, 100 metres thickness and minimum down dip length of 160 metres. The QDD Lower West mineral resource using all available data to the end of 2007 is summarized below:
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MEASURED INDICATED MEASURED+INDICATED
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Tonnes Tonnes Tonnes
greater greater greater
Cutoff than Au in-situ than Au in-situ than Au in-situ
g/t Au Cutoff g/t ounces Cutoff g/t ounces Cutoff g/t ounces
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1.0 100,600 3.54 11,400 4,358,500 2.61 365,300 4,459,100 2.63 376,800
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1.2 98,900 3.58 11,400 4,333,100 2.62 364,400 4,432,000 2.64 375,800
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1.4 91,900 3.75 11,100 4,269,900 2.64 361,700 4,361,800 2.66 372,800
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1.6 86,200 3.90 10,800 4,082,000 2.69 352,600 4,168,200 2.71 363,400
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1.8 79,900 4.07 10,500 3,695,200 2.79 331,300 3,775,100 2.82 341,800
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2.0 74,200 4.24 10,100 3,167,100 2.94 299,000 3,241,300 2.97 309,100
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INFERRED
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Tonnes
greater
Cutoff than Au in-situ
g/t Au Cutoff g/t ounces
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1.0 2,808,600 2.59 234,100
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1.2 2,808,600 2.59 234,100
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1.4 2,806,300 2.59 233,900
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1.6 2,786,500 2.60 232,900
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1.8 2,696,800 2.63 228,000
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2.0 2,462,800 2.70 213,600
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----------------------------The previously published feasibility study for Gualcamayo in August 2007 did not incorporate any of these resource ounces into the economic analysis for the project. Qualified Person Yamana retained Mr. Ronald Simpson, P. Geo. of GeoSim Services Inc. to complete a mineral resource update of the QDD Lower West deposit at the Gualcamayo project in San Juan, Argentina. Mr. Simpson has extensive experience with the Gualcamayo project having visited various times in the last four years and also having completed resource estimates on the QDD deposit in 2001, 2004 and 2006 and on the Amelia and Magdalena deposits in 2007. Mr. Simpson has supervised the preparation of the QDD Lower West technical data contained within this press release and serves as the Qualified Person as defined by National Instrument 43-101. Mercedes, Mexico Mineral Resource Estimate Preliminary inferred mineral resource calculations have been completed through drill hole M08-212 using an ID3 method. The cutoff date for the mineral resources was the end of January. The AuEq was calculated using a conversion of 150:1 for the Ag:Au which includes the recovery for silver.
Inferred Mineral Resource Estimate (2.0 g/t AuEq cutoff)
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Tonnes Au g/t Ag g/t Oz Au Oz Ag AuEq
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Mercedes Zone 2,095,000 8.31 91.4 559,000 6,156,000 600,040
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Klondike Zone 671,000 6.18 33.5 133,000 724,000 137,827
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Total 2,766,000 7.78 77.4 692,000 6,880,000 737,867
----------------------------------------------------------------------------Continuing Exploration Drilling is on-going at Mercedes with 5 core rigs currently on-site. Exploration during the fourth quarter of 2007 and first quarter of 2008 has focused primarily on the Mercedes Vein zone with a) 30-metre infill drilling above the 900-metre elevation, and b) wide spaced exploration drilling to the northwest of the Corona de Oro shoot. Since the October 16, 2007 press release announcing new drilling results, a total of 131 core holes totaling 34,844 metres have been completed (M07-137 to M08-267), bringing the total project drilling to 82,915 metres in 367 holes. Assay results have been received up to hole M08-212. Mercedes In-Fill Results In-fill drill results to-date continue to confirm the presence of a zone of contiguous +2.0 g/t AuEq mineralization along a 1,100-metre strike length of the Mercedes Vein zone, which encompasses the Corona de Oro, Centinela and Casa Blanca ore shoots. Gold-silver mineralization is contained within complex multi-stage epithermal low sulphidation quartz-carbonate vein, stockwork and breccia zones up to 15.0 metres in true width, hosted within a thick sequence of andesite flows and volcanic breccias. Ore grade values have been intersected locally over a vertical range of up to 440 metres (720 to 1,160 metre elevation). The presence of bonanza grade gold and silver values within the heart of the Corona de Oro ore shoot has been confirmed by 30-metre infill drilling, highlighted by the following intercepts: M07-172 14.79 metres (8.20 true width) @ 69.86 g/t Au and 427.6 g/t Ag M07-176 7.10 metres (4.90 true width) @ 73.69 g/t Au and 373.2 g/t Ag M07-184 13.18 metres (5.20 true width) @ 30.23 g/t Au and 191.5 g/t Ag M07-189 8.35 metres (3.00 true width) @ 123.74 g/t Au and 407.6 g/t Ag Mercedes in-fill drill results are shown on the attached Figure 1 and in Table 1. Mercedes Northwest Extension Exploration Drilling Limited wide-spaced exploration drilling was conducted along 300 metres of strike length to the northwest of the Corona de Oro ore shoot. Drilling intersected anomalous to local high grade Au-Ag values in epithermal quartz-carbonate veins along strike and at depth, as well as in the parallel Paloma Vein zone (located NE and parallel to the Mercedes Vein). Significant intercepts in this area include: M07-142 (Paloma) 13.11 metres (8.00 true width) @ 3.53 g/t Au and 109.0 g/t Ag M07-145 (Mercedes) 9.39 metres (4.90 true width) @ 14.66 g/t Au and 134.6 g/t Ag M07-152 (Mercedes) 3.43 metres (1.40 true width) @ 13.52 g/t Au and 165.3 g/t Ag Mercedes Northwest Extension drill results are attached in Table 2. Klondike Using a 0.5 g/t AuEq cutoff, core drilling at Klondike in 2007 identified a contiguous zone of mineralization nearly 400 metres long and up to 55.0 meters in width, covering a vertical range of 240 metres (1,000 to 1,240 metre elevation). Gold-silver mineralization is contained within complex multi-stage epithermal low sulphidation quartz-carbonate vein, stockwork and breccia zones, hosted within a thick sequence of andesite flows and volcanic breccias. Exploration drilling at Klondike was temporarily placed on hold in November 2007, to focus on Mercedes Vein in-fill drilling. Exploration drilling will resume in the second quarter, focusing on both the western extension of the Klondike Vein zone, which is covered by post-mineral volcanic and sedimentary rocks, and a series of at least four sub-parallel epithermal vein zones that have been identified in the andesite basin to the south of the Klondike Vein zone. Outlook Exploration drilling in the second quarter of 2008 will focus on these two structural trends, particularly to the northwest of the Aida Mine, where the highly prospective projections of both of these structures are covered by post-mineral sedimentary rocks. M3 Engineering, with offices in Hermosillo and Tucson, has been contracted to lead a scoping study which is ongoing and includes water, geotechnical, siting, environmental, and metallurgical investigations. Permitting is underway for an exploration ramp which is planned to start in the second quarter. This production sized ramp will be 1,700 metres long, at -15%, and will facilitate underground in-fill drilling, and bulk sampling along cross-cuts. Quality Assurance and Control All samples were collected through diamond drilling, which is being conducted by Major Drilling. The samples are collected by splitting the core in half using hydraulic splitters. The average sample size is approximately 0.9 metres and weighs approximately 2.9 kilograms and the second half of the core is maintained in secure locked warehouses. The Mercedes project uses ALS Chemex in Mexico for sample preparation and ALS Chemex in Vancouver for sample analysis. The core samples are picked up directly at the project site by ALS Chemex and sent to the Chemex prep facility in Hermosillo, Mexico. The total sample is cruzad to +75% passing a 2 mm screen. A smaller portion, up to 250 grams is then pulverized so plus 85% passes a -200 mesh. The pulps are sent to the Vancouver laboratory where both Au and Ag are analyzed by fire assay/gravimetric finish (50-gram pulp). Some samples are also assayed by metallic screen methods when visible gold is noted, to verify fire assay gold grades. Yamana operates a QA/QC program at Mercedes that includes the insertion of a series of professionally prepared certified standards and blanks, as well as locally prepared sterile samples, into the sample stream. A number of reject samples are systematically forwarded to ACME Laboratory in Vancouver, for comparison of Au and Ag grades. Qualified Persons Mr. Mark A. Hawksworth, P. Geo, Senior Geologist, Mercedes Project, of Yamana Gold Inc., and Mr. Greg Walker, P. Geo, Senior Manager, Resource Estimation of Yamana Gold Inc., have supervised the preparation of the Mercedes technical data contained within this press release and serve as the Qualified Persons as defined by National Instrument 43-101. Pilar de Goias, Brazil Exploration drilling resulted in a new discovery at the Pilar de Goias project in the Archean Greenstone Belt in November 2007. Mineral resources at Pilar are detailed in the Mineral Reserves and Resources section of this press release. Yamana's targeted drilling program will continue in 2008. Pilar de Goias is an underexplored gold belt with significant potential for discovery of new gold deposits. FIRST QUARTER 2008 OUTLOOK Production for the first quarter of 2008 is expected to be approximately 220,000 GEO. Copper production from Chapada for the first quarter of 2008 is expected to be approximately 30 million pounds of copper. This is in line with budget expectations and production is expected to increase quarter over quarter during the year. FINANCIAL AND OPERATING SUMMARY Financial results reflect the activities of Meridian and Northern Orion only since their acquisition in October 2007 and not for the full quarter or year. Earnings adjusted for certain non-cash and non-recurring transactions for the fourth quarter ended December 31, 2007 were $35.2 million or $0.06 per share, compared to $0.5 million or $nil per share for the prior year. Adjusted earnings for the year were $227.6 million, compared to $19.5 million for the prior comparative year. The increase in earnings is primarily due to commencement and ramp up of operations at the Chapada Mine. For the year, adjusted earnings were $0.55 per share. This compares to adjusted earnings per share of $0.07 for the previous comparative year, representing an increase of 686% year over year. Consolidated net earnings for the fourth quarter were $47.1 million, compared to $6.1 million for the same quarter ended in 2006. Net earnings for the year were $157.2 million. This compares to a loss of $70.2 million and $4.1 million for the years ended 2006 and 2005, respectively. Basic and diluted earnings per share for the quarter were $0.08, compared to $0.02 for the same period last year. For the year, basic earnings were $0.38 per share. Diluted earnings per share were $0.36 per share for the year. This compares to a basic and diluted loss per share of $(0.25) for 2006 and $(0.03) per share for 2005. Fourth quarter revenues were $218.6 million, compared to $60 million for the same period last year. Revenue for the year was $747.1 million, an increase of 342% over the preceding year. The increase in revenue is attributable to an increase in sales volume due to production from operations previously under construction, the impact from the acquisition of Meridian, the addition of copper sales and an increase in both the gold and copper prices over the prior year. Revenues for the fourth quarter included sales of 161,753 ounces of gold, 28.4 million pounds of copper and 1.8 million ounces of silver. The average realized price for the quarter was $795 per ounce of gold, $3.19 per pound of copper and $14.14 per ounce of silver. Revenues for the year included 532,531 ounces of gold and 117 million pounds of payable copper and 1.8 million ounces of silver. The average realized price for the year was $707 per ounce of gold, $3.32 per pound of copper and $14.14 per ounce of silver. The Company's average realized gold price during the year of $707 per ounce compares to an average realized price of $613 and $448 per ounce during the prior years ended 2006 and 2005. All gold sales were transacted in the spot market. The spot price itself increased 15% relative to the year ended December 31, 2006. The higher gold price positively affected the Company's revenues. The impact of a higher average gold price on mine operating earnings was partially offset by a strengthening of the Brazilian Real relative to the US Dollar and higher operating costs. Higher local operating costs before the impact of foreign exchange movements were a result of increases in maintenance costs, the price of fuel, the price of power, and other consumables. The average realized copper price from Chapada was $3.32 per pound for the year which compares to an average spot price of $3.23 per pound for the year. Mine operating earnings for the fourth quarter were $76.6 million, compared to $8.9 million for the fourth quarter of 2006 and compared to $124.9 million for the third quarter of 2007. Mine operating earnings for the fourth quarter were impacted by the decline in the copper price during the quarter. For the year, mine operating earnings were $384.6 million. This compares to $35.1 million for the year ended 2006 and $8.6 million for the year ended 2005. Earnings do not include concentrate sales pricing adjustments payable before April 30, 2008 for concentrate sold in the fourth quarter. Estimated additional amounts due to the Company of approximately $30 million, of which $9.2 million has already been received, are not included as receivables or in earnings and cash flow for the fourth quarter or year end. These results represent tremendous growth over the past two years resulting from commercial production at the Chapada mine and Sao Francisco mine commencing February 2007 and August 2006, respectively, the acquisition of the Jacobina mine as of April 6, 2006, the acquisition of the San Andres mine as of February 28, 2006 and the acquisition of the El Penon and Minera Florida mines as of October 12, 2007. Total production for the fourth quarter was 262,352 GEO including Yamana's proportionate interest from the Alumbrera mine. Production attributable to Yamana for the quarter was 229,488 GEO. In 2007, total production from all mines was approximately 1.0 million gold equivalent ounces including pre-acquisition production. For 2007, Yamana produced 576,908 GEO excluding production from its equity interest from the Alumbrera mine and pre-acquisition production from other acquired mines. Total production including Alumbrera was 597,304 GEO. This compares to total production of 313,591 ounces of gold in 2006 and 115,572 ounces of gold in 2005. Average cash costs after by-products for the fourth quarter were $(9) per GEO. For the year, average cash costs after by-products were $(182) per GEO, including Alumbrera. This compares to cash costs of $326 per ounce of gold in 2006 and $289 per ounce of gold for 2005. Copper production for the fourth quarter was 30.5 million pounds from the Chapada mine. An additional 11.4 million pounds of copper were produced from the Alumbrera mine attributable to Yamana. Copper production for the year was 122.9 million pounds from the Chapada mine. Co-product cash costs per pound of copper were $0.78 for the fourth quarter and $0.72 for the year from the Chapada mine. Co-product cash costs, including Yamana's interest in the Alumbrera mine, were $0.97 per pound for the fourth quarter and $0.79 per pound for the year. Inventory as at December 31, 2007 was $97.6 million, compared to $51.3 million as at December 31, 2006. Inventory increased as a result of the acquisitions and ramp up of recently constructed mines. Proven and probable mineral reserves were 17.9 million ounces of contained gold,182 million ounces of contained silver and 11.4 billion pounds of contained copper as of December 31, 2007 based on a gold price of $550-$575 per ounce, a silver price of $10.75 per ounce and a copper price of $1.75 per pound. This represents an increase of approximately 11.1 million ounces of gold or 163% from the prior year. General and administrative expenses for the fourth quarter were $37.7 million. General and administrative expenses for the year were $68.5 million (2006 - $24.4 million; 2005 - $10.4 million) and include $16 million of non-recurring internal transaction related costs. The Company recorded an earnings pick-up from its 12.5% interest in the Alumbrera Mine of $3.8 million for the fourth quarter and the year, which was adversely affected by fair value adjustments on inventory as of the date of acquisition. Had the Company not been required to fair value inventory as of the acquisition date, the equity pick-up would have been approximately $10.0 million net of additional amortization expense of $5.1 million on the amount of the purchase price allocation in excess of Northern Orion's carrying value of Alumbrera. Cash and short-term investments as at December 31, 2007 were approximately $330 million compared to $69.7 million as at December 31, 2006. Working capital as at December 31, 2007 was $177.9 million compared to $76.3 million as at December 31, 2006. The increase in cash and working capital is a result of the increase in operation activities primarily from the Chapada mine. Cash flow from operations before changes in non-cash working capital items was $28.0 million for the fourth quarter, compared to $8.8 million for the comparative quarter ended December 31, 2006. Cash flow from operations after changes in non-cash working capital items was $145.8 million for the fourth quarter, compared to $8.8 million for the comparative quarter ended December 31, 2006. Cash flow from operations before changes in non-cash working capital items was $292.8 million for the year compared to $40.2 million and $6.4 million for the years ended 2006 and 2005, respectively. The increase in cash flow from operations for the twelve months is primarily due to the start-up of operations at the Chapada Mine and the acquisition of El Penon and Minera Florida mines. Cash flow from operations for the year after changes in non-cash working capital was $293.9 million compared to an outflow of $3.2 million and an inflow of $3.4 million for the years ended 2006 and 2005, respectively.
OPERATIONS REVIEW AND UPDATE
Three months ended December 31, 2007(1)
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Total Gold Total Gold Cash costs per
Equivalent Equivalent Gold
Production (oz) Sales (oz.) Equivalent
ounce
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(in US$ millions) Q4 Q4 Q4
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Chapada 45,428 38,852 ($969)
El Penon(i) 101,692 101,205 $ 262
Sao Francisco 21,244 21,057 $ 455
Jacobina 18,264 19,996 $ 626
San Andres 8,139 7,718 $ 648
Fazenda Brasileiro 22,506 18,228 $ 460
Fazenda Nova - - -
Minera Florida(i) 16,705 14,969 $ 259
Rossi (40% interest)(i) 4,828 4,226 $ 410
-------------------------------------------------
Total before equity
interest 238,806 226,251 $ 107
-------------------------------------------------
Alumbrera
(12.5% interest)(i) 23,546 29,718 ($886)
-------------------------------------------------
-------------------------------------------------
Total 252,352 255,969 ($3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Gold equivalent ounces include silver ounces converted to gold on the
ratio of 55:1 for 2007.
(i) Including pre-acquisition production.
Year Ended December 31, 2007(1)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total Gold Total Gold Cash costs
Equivalent Equivalent per Gold
Production (oz) Sales (oz.) Equivalent
ounce
-------------------------------------------------
-------------------------------------------------
(in US$ millions) 2007 2007 2007
-------------------------------------------------
-------------------------------------------------
Chapada 178,125 168,135 ($1,360)
El Penon(i) 383,448 373,478 $ 225
Sao Francisco 104,764 104,672 $ 373
Jacobina 54,076 54,458 $ 541
San Andres 51,538 53,692 $ 410
Fazenda Brasileiro 87,969 86,959 $ 388
Fazenda Nova 6,925 8,712 $ 551
Minera Florida(i) 68,297 65,692 $ 249
Rossi (40% interest)(i) 11,820 11,204 $ 426
-------------------------------------------------
Total before equity
interest 946,962 927,002 ($7)
-------------------------------------------------
Alumbrera
(12.5% interest)(i) 76,893 75,586 ($926)
-------------------------------------------------
-------------------------------------------------
Total 1,023,855 1,002,588 ($75)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Gold equivalent ounces include silver ounces converted to gold on the
ratio of 55:1 for 2007.
(i) Including pre-acquisition production.
MINERAL RESERVES AND RESOURCES (Mineral resources exclude proven and
probable mineral reserves)
Mineral Reserves (Proven and Probable)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Gold Proven Reserves Probable Reserves
------------------------------------------------------
------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (g/t) oz. (000's) (000's) (g/t) oz. (000's)
------------------------------------------------------
Alhue/ Minera
Florida (2) 680 4.25 93 3,469 4.57 509
Alumbrera
(12.5%) (1) 46,250 0.45 669 1,250 0.35 14
Chapada (1) 17,331 0.33 184 293,489 0.23 2,170
C1-Santa Luz (1) 10,491 1.76 592 6,782 1.50 328
El Penon (2) 1,490 7.03 337 7,554 6.57 1,595
Fazenda Brasileiro (1) 1,746 2.91 164 974 3.20 100
Gualcamayo (1) 7,523 0.98 237 59,332 0.80 1,534
Jacobina (1) 3,559 1.98 227 15,270 2.03 997
San Andres (1) 27,171 0.69 606 6,302 0.67 135
------------------------------------------------------
Sao Francisco
- Main Ore (1) 17,955 1.21 696 8,026 1.41 364
Sao Francisco
- ROM Ore (1) 11,323 0.28 102 5,962 0.27 52
Total Sao
Francisco (1) 29,277 0.85 798 13,988 0.93 417
------------------------------------------------------
Sao Vicente
- Main Ore (1) 6,580 1.06 225 2,854 0.90 82
Sao Vicente
- ROM Ore (i) (1) 1,694 0.27 15 1,932 0.33 20
Total Sao Vicente (1) 8,274 0.90 239 4,786 0.67 103
------------------------------------------------------
Rossi (40%) (2) - - - 209 14.36 97
Sub Total Gold
Reserves 153,791 0.84 4,146 413,406 0.60 7,998
------------------------------------------------------
Agua Rica (1) 347,831 0.25 2,818 449,892 0.205 2,965
Total Gold Reserves 501,622 0.43 6,964 863,089 0.40 10,963
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Gold Total - Proven and Probable
----------------------------------
----------------------------------
Tonnes Grade Contained
(000's) (g/t) oz. (000's)
----------------------------------
Alhue/ Minera Florida (2) 4,149 4.51 602
Alumbrera (12.5%) (1) 47,500 0.45 683
Chapada (1) 310,820 0.24 2,354
C1-Santa Luz (1) 17,272 1.66 920
El Penon (2) 9,045 6.64 1,931
Fazenda Brasileiro (1) 2,720 3.02 264
Gualcamayo (1) 66,855 0.82 1,771
Jacobina (1) 18,829 2.02 1,224
San Andres (1) 33,473 0.69 741
----------------------------------
Sao Francisco - Main Ore (1) 25,980 1.27 1,061
Sao Francisco - ROM Ore (1) 17,285 0.28 154
Total Sao Francisco (1) 43,266 0.87 1,215
----------------------------------
Sao Vicente - Main Ore (1) 9,434 1.01 307
Sao Vicente - ROM Ore (i) (1) 3,626 0.30 35
Total Sao Vicente (1) 13,060 0.81 342
----------------------------------
Rossi (40%) (2) 209 14.36 97
Sub Total Gold Reserves 567,198 0.67 12,144
----------------------------------
Agua Rica (1) 797,723 0.23 5,771
Total Gold Reserves 1,364,921 0.41 17,915
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Sao Vicente ROM Probable Reserves include 1.26mm tonnes at 0.36 g/t Au
of Tailings material not considered in the Resource numbers below.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Silver Proven Reserves Probable Reserves
------------------------------------------------------
------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (g/t) oz. (000's) (000's) (g/t) oz. (000's)
------------------------------------------------------
Alhue/ Minera
Florida (2) 680 28.40 621 3,469 38.83 4,330
El Penon (2) 1,491 315.26 15,108 7,554 272.55 66,215
San Andres (1) 27,171 2.60 2,273 6,302 2.68 543
Sub Total Silver
Reserves 29,342 19.08 18,002 17,325 127.62 71,088
------------------------------------------------------
Agua Rica (1) 347,831 3.83 42,775 449,892 3.46 49,989
Total Silver Reserves 377,172 5.01 60,777 467,218 8.06 121,077
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Silver Total - Proven and Probable
---------------------------------
---------------------------------
Tonnes Grade Contained
(000's) (g/t) oz. (000's)
---------------------------------
Alhue/ Minera Florida (2) 4,149 37.12 4,952
El Penon (2) 9,045 279.65 81,323
San Andr,s (1) 33,473 2.62 2,816
Sub Total Silver Reserves 46,667 59.38 89,091
---------------------------------
Agua Rica (1) 797,723 3.62 92,767
Total Silver Reserves 844,390 6.70 181,857
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Copper Proven Reserves Probable Reserves
------------------------------------------------------
------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
------------------------------------------------------
Alumbrera (12.5%) (1) 46,250 0.38% 387 1,250 0.43% 12
Chapada (1) 17,331 0.42% 161 293,489 0.33% 2,135
Sub Total Copper
Reserves 63,581 0.39% 548 294,739 0.33% 2,147
------------------------------------------------------
Agua Rica (1) 347,831 0.57% 4,386 449,892 0.43% 4,285
Total Copper Reserves 411,412 0.54% 4,934 744,631 0.39% 6,432
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Copper Total - Proven and Probable
---------------------------------
---------------------------------
Tonnes Grade Contained
(000's) (%) lbs (mm)
---------------------------------
Alumbrera (12.5%) (1) 47,500 0.38% 399
Chapada (1) 310,820 0.34% 2,296
Sub Total Copper Reserves 358,320 0.34% 2,695
---------------------------------
Agua Rica (1) 797,723 0.49% 8,670
Total Copper Reserves 1,156,043 0.45% 11,365
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Zinc Proven Reserves Probable Reserves
------------------------------------------------------
------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
------------------------------------------------------
Alhue/ Minera
Florida (2) 680 1.17% 18 3,469 1.08% 83
Total Zinc Reserves 680 1.17% 18 3,469 1.08% 83
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Zinc Total - Proven and Probable
---------------------------------
---------------------------------
Tonnes Grade Contained
(000's) (%) lbs (mm)
---------------------------------
Alhue/ Minera Florida (2) 4,149 1.09% 100
Total Zinc Reserves 4,149 1.09% 100
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Molybdenum Proven Reserves Probable Reserves
------------------------------------------------------
------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
------------------------------------------------------
Alumbrera (12.5%) (1) 46,250 0.013% 13 1,250 0.019% 1
Sub Total Moly
Reserves 46,250 0.013% 13 1,250 0.019% 1
------------------------------------------------------
Agua Rica (1) 347,831 0.035% 268 449,892 0.033% 327
Total Moly Reserves 394,081 0.032% 282 451,142 0.033% 328
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Molybdenum Total - Proven and Probable
---------------------------------
---------------------------------
Tonnes Grade Contained
(000's) (%) lbs (mm)
---------------------------------
Alumbrera (12.5%) (1) 47,500 0.013% 14
Sub Total Moly Reserves 47,500 0.013% 14
---------------------------------
Agua Rica (1) 797,723 0.034% 598
Total Moly Reserves 845,223 0.033% 612
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Mineral Resources (Measured, Indicated and Inferred)(i)
(Mineral Resources have been categorized as Resources that remain after
removal of Reserves)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Gold Measured Resources Indicated Resources
----------------------------------------------------------
----------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (g/t) oz. (000's) (000's) (g/t) oz. (000's)
----------------------------------------------------------
Alhue/ Minera
Florida (2) 580 4.46 83 2,088 4.86 326
Amancaya (2) - - - - - -
C1-Santa Luz (1) 10,973 1.45 512 13,063 1.41 591
Chapada (1) 731 0.10 2 119,086 0.13 502
El Penon (2) 470 13.07 198 2,918 8.01 751
Ernesto (1) - - - 1,520 3.66 179
Esquel (2) - - - 4,700 15.00 2,286
Fazenda
Brasileiro (1) 1,107 3.19 114 697 2.83 63
Jeronimo (2) - - - 1,110 7.90 284
Pau a Pique (1) - - - 159 3.84 20
Pilar (1) - - - - - -
Rossi (40%) (2) - - - - -
San Andres (1) 31,040 0.58 578 11,886 0.55 209
----------------------------------------------------------
Sao Francisco
- Main Ore 11,069 0.77 274 13,420 0.86 372
Sao Francisco
- ROM Ore 10,014 0.17 56 18,044 0.22 126
Total Sao
Francisco (1) 21,083 0.49 330 31,464 0.49 498
----------------------------------------------------------
Jacobina (1) 7,962 2.23 571 19,388 2.49 1,554
Sao Vicente (1) 7,910 0.52 133 8,138 0.63 166
Gualcamayo (1) 661 2.81 60 22,615 1.65 1,202
---------------------------------------------------------
Sub Total Gold
Resources 51,509 1.56 2,580 238,830 1.12 8,630
Agua Rica (1) 64,169 0.17 361 248,108 0.16 1,299
Total Gold
Resources 115,678 0.64 2,941 486,938 0.63 9,929
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Gold Total - Measured and Indicated Inferred Resources
-----------------------------------------------------------
-----------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (g/t) oz. (000's) (000's) (g/t) oz. (000's)
-----------------------------------------------------------
Alhue/ Minera
Florida (2) 2,668 4.77 409 2,416 5.18 402
Amancaya (2) - - - 1,390 7.90 351
C1-Santa Luz (1) 24,036 1.43 1,103 4,638 1.40 208
Chapada (1) 119,817 0.13 504 304,861 0.11 1,078
El Penon (2) 3,388 8.71 949 4,425 10.63 1,513
Ernesto (1) 1,520 3.66 179 2,144 2.61 180
Esquel (2) 4,700 15.00 2,286 900 9.90 274
Fazenda
Brasileiro (1) 1,805 3.05 177 442 5.30 75
Jeronimo (2) 1,110 7.90 284 3,100 7.10 701
Pau a Pique (1) 159 3.84 20 3,384 5.09 554
Pilar (1) - - - 12,400 2.42 965
Rossi (40%) (2) - - - 224 10.08 72
San Andres (1) 42,962 0.57 787 249 0.62 5
-----------------------------------------------------------
Sao Francisco
- Main Ore 24,489 0.82 646 23,904 0.82 630
Sao Francisco
- ROM Ore 28,058 0.20 182 39,847 0.24 307
Total Sao
Francisco (1) 52,547 0.49 828 63,751 0.46 937
-----------------------------------------------------------
Jacobina (1) 27,350 2.42 2,125 47,398 2.61 3,975
Sao Vicente (1) 16,048 0.58 298 3,623 0.87 101
Gualcamayo (1) 23,275 1.69 1,261 15,586 1.38 692
-----------------------------------------------------------
Sub Total Gold
Resources 278,464 1.25 11,210 470,931 0.80 12,083
Agua Rica (1) 312,277 0.17 1,660 651,000 0.12 2,512
Total Gold
Resources 590,741 0.64 12,870 1,121,931 0.41 14,595
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Silver Measured Resources Indicated Resources
--------------------------------------------------------
--------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (g/t) oz. (000's) (000's) (g/t) oz. (000's)
--------------------------------------------------------
Alhue/ Minera
Florida (2) 580 26.27 490 2,088 40.35 2,708
Amancaya (2) - - - - - -
El Penon (2) 470 258.80 3,914 2,918 219.22 20,563
Esquel (2) - - - 4,700 23.00 3,523
San Andres (1) 31,040 1.96 1,956 11,886 1.46 558
--------------------------------------------------------
Sub Total Silver
Resources 32,090 6.16 6,360 21,592 39.33 27,352
Agua Rica (1) 64,169 2.38 4,911 248,108 2.74 21,823
Total Silver
Resources 96,260 3.64 11,271 269,699 5.67 49,175
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Silver Total - Measured and Indicated Inferred Resources
-----------------------------------------------------------
-----------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (g/t) oz. (000's) (000's) (g/t) oz. (000's)
-----------------------------------------------------------
Alhue/ Minera
Florida (2) 2,668 37.30 3,198 2,416 46.50 3,612
Amancaya (2) - - - 1,390 73.00 3,270
El Penon (2) 3,388 224.72 24,477 4,425 291.07 41,411
Esquel (2) 4,700 23.00 3,523 900 21.00 575
San Andres (1) 42,926 1.82 2,512 249 1.32 11
-----------------------------------------------------------
Sub Total Silver
Resources 53,682 19.51 33,710 9,380 162.16 48,878
Agua Rica (1) 312,277 2.66 26,734 651,000 2.30 48,139
Total Silver
Resources 365,959 5.13 60,444 660,380 4.57 97,017
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Copper Measured Resources Indicated Resources
--------------------------------------------------------
--------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
--------------------------------------------------------
Chapada (1) 731 0.18% 3 119,086 0.22% 578
731 0.18% 3 119,086 0.22% 578
--------------------------------------------------------
Agua Rica (1) 64,169 0.11% 716 248,108 0.09% 2,178
Total Copper
Resources (2) 64,900 0.11% 718 367,194 0.20% 2,756
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Copper Total - Measured and Indicated Inferred Resources
-----------------------------------------------------------
-----------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
-----------------------------------------------------------
Chapada (1) 119,817 0.22% 581 304,861 0.19% 1,277
119,817 0.22% 581 304,861 0.19% 1,277
-----------------------------------------------------------
Agua Rica (1) 312,277 0.09% 2,894 651,000 0.34% 4,880
Total Copper
Resources (2) 432,094 0.19% 3,475 955,861 0.35% 6,157
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Zinc Measured Resources Indicated Resources
--------------------------------------------------------
--------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
--------------------------------------------------------
Alhue/ Minera
Florida (2) 580 1.09% 14 2,088 1.19% 55
Total Zinc Resources 580 1.09% 14 2,088 1.19% 55
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Zinc Total - Measured and Indicated Inferred Resources
-----------------------------------------------------------
-----------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
-----------------------------------------------------------
Alhue/ Minera
Florida (2) 2,668 1.16% 69 2,416 1.16% 62
Total Zinc Resources 2,668 1.16% 69 2,416 1.16% 62
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Molybdenum Measured Resources Indicated Resources
--------------------------------------------------------
--------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
--------------------------------------------------------
Agua Rica (1) 64,169 0.01% 40 248,108 0.01% 165
Total Moly Resources 64,169 0.01% 40 248,108 0.01% 165
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Molybdenum Total - Measured and Indicated Inferred Resources
-----------------------------------------------------------
-----------------------------------------------------------
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
-----------------------------------------------------------
Agua Rica (1) 312,277 0.01% 206 651,000 0.03% 488
Total Moly
Resources 312,277 0.01% 206 651,000 0.03% 488
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Mineral resources do not include the Mercedes resource estimate or the
QDD Lower West resource estimate at Gualcamayo reported on March 25, 2008.Mineral reserve and resource estimates presented were prepared by or under the supervision of external consultants or by internal qualified persons as indicated in the table below in accordance with NI 43-101. In estimating the mineral reserves and mineral resources, such persons made assumptions, and used parameters and methods appropriate for each property, and verified the data disclosed, including sampling, analytical and test data underlying such estimates. These estimates have been reviewed by Evandro Cintra (1), Vice-President Technical Services, and William H. Wulftange (2), Corporate Director, Technical Compliance, who are both "qualified persons", as that term is defined in NI 43-101. These figures are estimates, however, and no assurance can be given that the indicated amounts of quantities will be produced. Price fluctuations may render mineral reserves containing relatively lower grades of gold mineralization uneconomic. Moreover, short-term operating factors relating to the mineral reserves could affect the Company's profitability in any particular accounting period. The Company is not aware of any environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues which may materially affect the Company's mineral reserve and resource estimates, other than factors discussed above and in "Risks and Uncertainties" in the Management Discussion and Analysis section of the annual report and "Risk Factors" in the annual information form of the Company.
Mineral Reserves and Resources
----------------------------------------------------------------------------
Property Qualified Persons for Qualified Persons for
Mineral Reserves Mineral Resources
----------------------------------------------------------------------------
Fazenda Brasileiro Beau Nicholls, B.Sc. Beau Nicholls, B.Sc.
(Geo) MAIG, (Geo) MAIG
Geoexplore Consultoria Geoexplore Consultoria
e Servicos Ltda. e Servicos Ltda.
----------------------------------------------------------------------------
C-1 Santa Luz Enrique Munoz Gonzalez, Marco Antonio Alfaro
MAusIMM, Metalica Sironvalle, MAusIMM,
Consultores S.A. Metalica Consultores S.A.
----------------------------------------------------------------------------
Jacobina Juan Pablo Gonzalez, Dr. Marcelo Godoy, MAusIMM,
MAusIMM IIMCH, Golder & SME, IAMG, Golder &
Associates S.A. (Chile) Associates S.A. (Chile)
----------------------------------------------------------------------------
Pindobacu Not applicable Evandro Cintra, Ph.D., P.Geo.
Vice President,
Technical Services,
Yamana Gold Inc.
----------------------------------------------------------------------------
Sao Francisco Renato Petter, P. Eng., Rodrigo B. Mello, P.Geo,
Technical Services, NCL Brasil Ltda.
Yamana Gold Inc.
----------------------------------------------------------------------------
Sao Vicente Karl M. Kolin, P. Eng., Mario E. Rossi, P.Eng.,
Gustavson Associates LLC Principal Geostatiscian,
Geosystems International
Inc.
----------------------------------------------------------------------------
Ernesto Not applicable Rodrigo B. Mello, P.Geo.,
NCL Brasil Ltda.
----------------------------------------------------------------------------
Pau a Pique Not applicable Rodrigo B. Mello, P.Geo.,
NCL Brasil Ltda.
----------------------------------------------------------------------------
Chapada Michael G. Hester, Michael G. Hester,
FAusIMM, Vice President, FAusIMM, Vice President,
Principal Mining Engineer, Principal Mining Engineer,
Independent Mining Independent Mining
Consultants Inc. Consultants Inc.
----------------------------------------------------------------------------
San Andres Renato Petter, P. Eng., Evandro Cintra, Ph.D., P.Geo.
Technical Services, Vice President,
Yamana Gold Inc. Technical Services,
Yamana Gold Inc.
----------------------------------------------------------------------------
Gualcamayo Annoush Ebrahimi, P. Eng., Ronald G. Simpson, P.Geo.,
of Wardrop Engineering GeoSim Services Inc.
Inc.
----------------------------------------------------------------------------
Pilar de Goias Not applicable Pamela L. De Mark, BAppSc
(App Geo), MAusIMM,
Senior Consultant, Snowden
Mining Industry Consultants
Inc.
----------------------------------------------------------------------------
El Penon Greg Walker, P.Geo., Greg Walker, P.Geo.,
Senior Manager, Senior Manager,
Resource Estimation, Resource Estimation,
Yamana Gold Inc. Yamana Gold Inc.
----------------------------------------------------------------------------
Alhue/ Minera Greg Walker, P.Geo., Greg Walker, P.Geo.,
Florida Senior Manager, Senior Manager
Resource Estimation, Resource Estimation,
Yamana Gold Inc. Yamana Gold Inc.
----------------------------------------------------------------------------
Amancaya Not applicable Chester M. Moore, P.Eng.,
Scott Wilson Roscoe Postle
Associates Inc.
----------------------------------------------------------------------------
Agua Rica Gerrit Vox, P. Eng., Gary H. Giroux, P. Eng., of
Principal Mining Engineer Giroux Consultants Ltd.
of AMEC plc
----------------------------------------------------------------------------
Alumbrera Luis A. Rivera, MAusIMM, Luis A. Rivera, MAusIMM,
Xstrata Plc Xstrata Plc
----------------------------------------------------------------------------
Jeronimo Not applicable Chester M. Moore, P. Eng.,
Scott Wilson Roscoe Postle
Associates Inc.
----------------------------------------------------------------------------
Esquel Not applicable Robin J. Young, P. Geo.,
Western Services
Engineering, Inc.
----------------------------------------------------------------------------
--------------------------------------------------------------------------
Mineral
Mineral Reserve Resources
Cut-off Grade Cut-off Grade
Mine (g/t gold; Price Price (g/t gold;
% copper) % copper)
--------------------------------------------------------------------------
Fazenda Brasileiro 1.50 US$575 n/a 1.50
C1-Santa Luz 0.50 US$575 n/a 0.50
Fazenda Nova 0.40 US$575 n/a 0.40
Jacobina 1.49 US$575 n/a 0.50
Sao Francisco 0.36 and 0.15 US$575 n/a 0.36 and 0.15
Sao Vicente 0.35 and 0.22 US$427.5 n/a 0.20
Ernesto US$575 n/a 1.5 and 1.0
PAP US$575 n/a 1.0
Chapada 0.17% Cu US$575 US$1.75 0.17% Cu
San Andres 0.41 and 0.64 US$575 n/a 0.4
Gualcamayo 0.3; 0.5; 1.0 US$575 n/a 0.3; 0.5; 1.0
Pilar US$575 n/a 0.5 and 1.5
El Penon 4.5 to 6.5 GEO US$575 n/a 3.9 GEO
Alhue/Minera Florida 3.70 US$575 n/a 2.5 GEO
Amancaya US$550 n/a 1.0 open pit:
3.4 underground
Agua Rica 0.20% Cu US$425 US$1.10/lb 0.20% Cu
Alumbrera 0.26% Cu US$500 US$1.25/lb 0.26% Cu
EquivalentCONFERENCE CALL A conference call and audio webcast is scheduled for March 26, 2008 at 11:00 a.m. E.T. to discuss the 2007 fourth quarter and year end results. Conference Call Information: Local and Toll Free (North America): 866-540-8136 International: 416-340-8010 Participant Audio Webcast: http://www.yamana.com Conference Call REPLAY: Replay Call: 416-695-5800 Passcode 3249602# Replay Toll Free Call: 800-408-3053 Passcode 3249602# The conference call replay will be available from 1:00 p.m. E.T. on March 26, 2008 until 11:59 p.m. E.T. on April 2, 2008. For further information on the Conference Call or audio webcast, please contact the Investor Relations Department or visit our website, www.yamana.com. About Yamana Yamana is a Canadian-based gold producer with significant gold production, gold development stage properties, exploration properties, and land positions in Brazil, Argentina, Chile, Mexico, Central America and the United States. Yamana is producing gold and other precious metals at intermediate company production levels in addition to significant copper production. Company management plans to continue to build on this base through existing operating mine expansions and throughput increases, the advancement of its exploration properties and by targeting other gold consolidation opportunities in Brazil, Argentina, Chile and elsewhere in the Americas. FORWARD-LOOKING STATEMENTS: This news release contains certain "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended and "forward-looking information" under applicable Canadian securities laws. Except for statements of historical fact relating to the company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include possible variations in ore grade or recovery rates, fluctuating metal prices, prices for sulphiric acid and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life of Chapada, availability of a local market for the sale of sulphiric acid, unanticipated results of future studies, as well as those risk factors discussed or referred to in the Company's annual Management's Discussion and Analysis and Annual Information Form filed with the securities regulatory authorities in all provinces of Canada and available at www.sedar.com, and the Company's Annual Report on Form 40-F filed with the United States Securities and Exchange Commission. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements. CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED MINERAL RESOURCES This news release uses the terms "Measured", "Indicated" and "Inferred" Mineral Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. NON-GAAP MEASURES The Company has included certain non-GAAP measures including cash cost per ounce data, adjusted net earnings (loss) and adjusted net earnings (loss) per share to supplement its financial statements, which are presented in accordance with Canadian GAAP. Non-GAAP measures do not have any standardized meaning prescribed under Canadian GAAP, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP. The Company has included cash cost per ounce information data because it understands that certain investors use this information to determine the Company's ability to generate earnings and cash flow for use in investing and other activities. The Company believes that conventional measures of performance prepared in accordance with Canadian GAAP do not fully illustrate the ability of its operating mines to generate cash flow. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under Canadian GAAP. Cash costs are calculated on a by-product and co-product basis. Cash costs are determined in accordance with the Gold Institute's Production Cost Standard. By-product cash costs are computed by deducting from operating cash costs by-product revenues. Cash costs on a co-product basis are computed by allocating operating cash costs separately to metals based on an estimated or assumed ratio. Where cost per ounce data is computed by dividing GAAP operating cost components by ounces sold, the Company has not provided formal reconciliations of these statistics. Cash costs are reconciled by the following: non-cash movements in net working capital items and provisions for losses on inventory. The Company uses the financial measures "adjusted net income (loss)" and "adjusted earnings (loss) per share" to supplement information in its consolidated financial statements. The presentation of adjusted measures are not meant to be a substitute for net earnings (loss) or net earnings (loss) per share presented in accordance with GAAP, but rather should be evaluated in conjunction with such GAAP measures. Adjusted net earnings (loss) and adjusted net earnings (loss) per share are calculated as net earnings excluding (a) stock options expense, (b) foreign exchange loss, (c) future income tax expense (recovery) on the translation of foreign currency inter corporate debt, (d) unrealized gains (losses) on commodity contracts, (e) debt repayment expense, (f) impairment losses, (g) non-controlling interest and (h) internal transaction costs. The terms "adjusted net earnings (loss)" and "adjusted net earnings (loss) per share" do not have a standardized meaning prescribed by Canadian GAAP, and therefore the Company's definitions are unlikely to be comparable to similar measures presented by other companies. Management believes that the presentation of adjusted net earnings (loss) and adjusted net earnings (loss) per share provide useful information to investors because they exclude non-cash and other charges and are a better indication of the Company's profitability from operations. The items excluded from the computation of adjusted net earnings (loss) and adjusted net earnings (loss) per share, which are otherwise included in the determination of net earnings (loss) and net earnings (loss) per share prepared in accordance with Canadian GAAP, are items that the Company does not consider to be meaningful in evaluating the Company's past financial performance or the future prospects and may hinder a comparison of its period to period profitability. The Company uses the financial measure "cash flow from operations before changes in non-cash working capital" or "cash flow from operating activities before changes in non-cash working capital" to supplement its consolidated financial statements. The presentation of cash flow from operations before changes in non-cash working capital is not meant to be a substitute for cash flow from operations or cash flow from operating activities presented in accordance with GAAP, but rather should be evaluated in conjunction with such GAAP measures. Cash flow from operations before changes in non-cash working capital excludes the non-cash movement from period to period in working capital items including accounts receivable, advances and deposits, inventory, accounts payable and accrued liabilities. The terms "cash flow from operations before changes in non-cash working capital" or "cash flow from operating activities before changes in non-cash working capital" do not have a standardized meaning prescribed by Canadian GAAP, and therefore the Company's definitions are unlikely to be comparable to similar measures presented by other companies. The Company's management believes that the presentation of cash flow from operations before changes in non-cash working capital provides useful information to investors because it excludes the non-cash movement in working capital items is a better indication of the Company's cash flow from operations and considered to be meaningful in evaluating the Company's past financial performance or the future prospects. The Company believes that conventional measure of performance prepared in accordance with Canadian GAAP does not fully illustrate the ability of its operating mines to generate cash flow.
Table 1
Mercedes Vein: Total Drill Intercepts
---------------------------------------------------------------------------
Year Hole AREA From Interval True Width Au Ag
(m) (m) (m) g/t g/t
---------------------------------------------------------------------------
2007 (i) M07-140 Paloma 165.10 4.38 2.67 6.51 75.3
M07-142 Aida 428.24 7.86 4.30 3.06 74.0
M07-145 C.de Oro 455.73 9.39 4.90 14.66 134.6
M07-152 C.de Oro 276.86 3.43 1.40 13.52 165.3
M07-162 C.de Oro 170.69 7.22 5.80 8.00 106.3
M07-163 C.de Oro 184.90 7.62 5.50 5.82 122.3
M07-166 C.de Oro 195.77 9.30 4.90 4.59 91.6
M07-168 C.de Oro 98.55 1.88 1.00 28.14 250.1
M07-169 C.de Oro 168.77 3.48 2.25 17.42 162.0
M07-170 C.de Oro 233.70 24.27 12.90 8.80 159.6
M07-171 C.de Oro 117.86 5.89 3.60 9.12 115.0
M07-172 C.de Oro 193.28 14.79 8.20 69.68 427.6
M07-173 C.de Oro 272.79 15.91 7.30 8.95 193.8
M07-174 C.de Oro 158.90 4.70 3.10 5.73 75.6
M07-175 C.de Oro 137.61 2.78 1.80 5.99 77.2
M07-176 C.de Oro 139.20 7.10 4.90 73.69 373.2
M07-178 C.de Oro 186.54 8.78 5.00 14.78 129.1
M07-179 C.de Oro 188.93 8.48 4.90 3.29 102.0
M07-180 C.de Oro 103.14 9.05 6.80 7.19 116.0
M07-181 C.de Oro 207.20 6.77 4.50 3.19 139.0
M07-182 C.de Oro 169.47 3.73 2.5 11.89 147.0
M07-183 C.de Oro 121.92 11.52 8.20 5.84 122.0
M07-184 C.de Oro 224.35 13.18 5.20 30.23 191.5
M07-185 C.de Oro 196.78 12.72 9.00 13.04 207.0
M07-186 C.de Oro 156.60 13.87 6.80 10.41 126.0
M07-187 C.de Oro 166.02 15.95 9.00 12.61 142.9
M07-188 C.de Oro 218.24 7.19 5.70 6.26 84.5
M07-189 C.de Oro 239.67 8.35 3.00 123.74 407.6
M07-190 C.de Oro 127.10 3.70 2.40 8.50 144.7
M07-191 C.de Oro 238.42 7.25 5.70 4.47 77.0
M08-194 C.de Oro 267.80 24.81 12.00 7.51 99.9
M08-195 C.de Oro 267.00 1.80 1.10 7.84 72.5
M08-196 C.de Oro 176.50 6.97 3.10 6.06 60.4
---------------------------------------------------------------------------
2008 M08-197 C.de Oro 193.95 9.10 5.25 6.18 172.0
M08-198 C.de Oro 195.34 7.76 5.20 4.18 61.2
M08-200 C.de Oro 147.56 3.01 1.70 6.21 113.6
M08-202 C.de Oro 250.51 4.27 2.25 5.90 39.5
M08-203 C.de Oro 181.41 6.26 3.10 2.33 96.7
M08-204 C.de Oro 127.30 6.55 4.40 11.40 147.4
M08-205 C.de Oro 138.08 6.62 4.50 5.28 116.7
M08-207 Casa Blanca 226.00 3.40 2.40 14.57 398.9
M08-208 Casa Blanca 198.97 16.46 9.70 5.83 71.1
M08-209 C.de Oro 166.42 9.14 4.75 3.67 80.6
M08-210 C.de Oro 198.95 10.75 4.04 4.98 47.4
---------------------------------------------------------------------------
(i)Assay results since last press release in 2007
Table 2
Mercedes: Northwest Extension drill results
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year Hole AREA From To Interval True Width Au Ag
(m) (m) (m) (m) g/t g/t
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2007 M07-140 Paloma 165.10 169.48 4.38 2.67 6.51 75.3
M07-140 Paloma 171.66 174.00 2.34 1.44 2.84 159.9
M07-140 Paloma 163.10 176.21 13.11 8.00 3.53 109.0
---------------------------------------------------------------------------
M07-148 Paloma 47.24 47.85 0.61 0.40 14.45 55.0
---------------------------------------------------------------------------
M07-152 Paloma 126.70 134.18 7.48 3.70 2.38 30.9
---------------------------------------------------------------------------
---------------------------------------------------------------------------To view Figure 1: Mercedes Vein: Total Drill Intercepts; please visit the following link: http://media3.marketwire.com/docs/yamanafigure1.pdf
Summary Fourth Quarter Statement of Operations
For the Three Months Ended
----------------------------
(in thousands of U.S. Dollars, unaudited) December 31, December 31,
2007 2006
Revenues $ 218,597 $ 59,951
Cost of sales (107,885) (36,193)
Depreciation, amortization and depletion (32,276) (14,708)
Accretion of asset retirement obligations (1,827) (146)
Mine operating earnings 76,609 8,904
Expenses
General and administrative and other expenses (37,692) (10,610)
Other losses (14,338) (12,264)
Operating earnings (loss) 24,579 (13,970)
Other business income (11,203) (393)
Unrealized gain on derivatives 50,417 1,229
Earnings (loss) before income taxes 63,793 (13,134)
Income tax (expense) recovery (14,667) 19,276
Non-controlling interest (2,017) -
Net earnings $ 47,109 $ 6,141
Non-GAAP Adjustments:
Stock-based compensation 28 2,798
Foreign exchange loss 33,359 5,790
Unrealized gain on derivatives (50,417) (1,229)
(Recovery) loss on impairment of Fazenda Nova
and sill pillar failure expenses (13,783) 3,675
Recovery of loss on tax credits (4,931) -
Future income tax expense (recovery) on foreign
currency translation of inter corporate debt 1,197 6,439
Internal transaction costs 15,799 -
Debt repayment or extinguishment expense 1,957 -
Non-controlling interest 2,017 -
Adjusted earnings (loss) before income tax
Effects 32,335 23,614
Income tax effect of adjustments 2,886 (23,110)
Adjusted net earnings (a non-GAAP measure) $ 35,221 $ 504
Basic earnings (loss) per share $ 0.08 $ 0.02
Diluted earnings (loss) per share $ 0.08 $ 0.02
Adjusted net earnings per share $ 0.06 $ 0.00
(a non-GAAP measure)
Yamana Gold Inc.
Consolidated Balance Sheets
For the Years Ended December 31, 2007
(In thousands of U.S. Dollars)
2007 2006
----------------------------------------------------------------------------
Assets
Current
Cash and cash equivalents $ 284,894 $ 69,680
Restricted cash and short-term investments 57,982 -
Accounts receivable 81,774 6,036
Advances and deposits 75,626 24,244
Inventory 97,626 51,252
Income taxes recoverable 23,347 2,248
Current portion of derivative related assets 10,560 -
Future income tax assets 8,322 -
Other current assets 10,373 -
----------------------------------------------------------------------------
650,504 153,460
Capital
Property, plant and equipment 486,669 134,792
Assets under construction 82,662 224,650
Mineral properties 8,137,353 1,496,732
----------------------------------------------------------------------------
8,706,684 1,856,174
Other
Available-for-sale securities 23,201 28,009
Share purchase warrants held 140 313
Equity investment in Minera Alumbrera Ltd 240,622 -
Derivative related assets 7,654 -
Long-term investments 30,113 -
Other assets 57,584 34,452
Future income tax assets 124,422 53,784
Goodwill 55,000 55,000
----------------------------------------------------------------------------
538,736 171,558
$ 9,895,924 $ 2,181,192
----------------------------------------------------------------------------
Liabilities
Current
Accounts payable $ 136,355 $ 39,467
Accrued liabilities 126,487 10,722
Income taxes payable 56,288 3,922
Current portion of derivative related liabilities 53,954 21,163
Current portion of credit facilities 83,245 -
Current portion of long term liabilities - 1,927
Other current liabilities 16,305 -
----------------------------------------------------------------------------
472,634 77,201
Long term
Credit facilities 539,179 -
Asset retirement obligation 63,444 18,720
Derivative related liabilities 27,933 23,260
Future income tax liabilities 2,696,387 328,372
Long term liabilities 142,716 17,049
----------------------------------------------------------------------------
3,469,659 387,401
----------------------------------------------------------------------------
3,942,293 464,602
----------------------------------------------------------------------------
Non-controlling interest 46,810 -
Shareholders' Equity
Capital Stock
Issued and outstanding 668,416,987 common shares
(December 31, 2006 - 344,595,212 shares) 5,502,518 1,619,850
Shares to be issued - 42,492
Share purchase warrants 270,805 73,004
Contributed surplus 77,393 61,578
Accumulated other comprehensive loss (3,855) -
Retained earnings (deficit) 59,960 (80,334)
----------------------------------------------------------------------------
5,906,821 1,716,590
----------------------------------------------------------------------------
$ 9,895,924 $ 2,181,192
----------------------------------------------------------------------------
YAMANA GOLD INC.
Consolidated Statements of Operations
For the Years Ended December 31, 2007
(In thousands of U.S. Dollars) 2007 2006 2005
----------------------------------------------------------------------------
Revenues $ 747,091 $ 169,206 $ 46,038
Cost of sales (287,640) (100,004) (30,371)
Depreciation, amortization and depletion (71,815) (33,510) (6,740)
Accretion of asset retirement obligations (3,056) (636) (358)
----------------------------------------------------------------------------
Mine operating earnings 384,580 35,056 8,569
Expenses
General and administrative (68,525) (24,350) (10,415)
Foreign exchange (loss) gain (40,385) 343 369
Stock-based compensation (726) (41,099) (2,298)
Other recoveries (losses) 1,051 (3,675) -
----------------------------------------------------------------------------
Operating earnings (loss) 275,995 (33,725) (3,775)
Investment and other business income 11,503 5,328 4,049
Interest and financing expense (22,034) (28,846) (94)
Equity earnings from Minera Alumbrera 3,820 - -
Realized loss on derivatives (17,082) - -
Unrealized loss on derivatives (29,068) (35,773) (8,615)
Loss on sale of assets - (2,186) -
----------------------------------------------------------------------------
Earnings (loss) before income taxes and
non-controlling interest 223,134 (95,202) (8,435)
Income tax (expense) recovery (63,872) 25,039 4,324
Non-controlling interest (2,017) - -
----------------------------------------------------------------------------
Net earnings (loss) $ 157,245 $ (70,163) $ (4,111)
----------------------------------------------------------------------------
Basic earnings (loss) per share $ 0.38 $ (0.25) $ (0.03)
----------------------------------------------------------------------------
Diluted earnings (loss) per share $ 0.36 $ (0.25) $ (0.03)
----------------------------------------------------------------------------
Basic weighted average number of shares
outstanding (in thousands) 415,232 276,617 144,888
----------------------------------------------------------------------------
Diluted weighted average number of shares 431,917 276,617 144,888
outstanding (in thousands)
YAMANA GOLD INC.
Consolidated Statements of Changes in Shareholders' Equity
For the Years Ended December 31, 2007
(In thousands of U.S. Dollars) 2007 2006 2005
----------------------------------------------------------------------------
Common shares (in thousands)
Balance, beginning of year 344,595 191,342 122,287
Issued on exercise of stock options, share
appreciation 10,507 15,540 43,055
rights and warrants
Issued on business acquisitions 312,465 119,874 -
Public offering - 17,400 26,000
Other (including acquisition of Maria
Preta Property) 850 439 -
----------------------------------------------------------------------------
668,417 344,595 191,342
----------------------------------------------------------------------------
Common shares
Balance, beginning of year $ 1,619,850 $ 310,409 $ 147,407
Issued on exercise of stock options,
share appreciation rights and
warrants 99,091 82,594 57,713
Issued on business acquisitions 3,772,313 1,053,071 -
Public offering - 170,030 105,289
Other (including acquisition of Maria
Preta Property) 11,264 3,746 -
----------------------------------------------------------------------------
$ 5,502,518 $ 1,619,850 $ 310,409
Shares to be issued
Balance, beginning of year $ 42,492 $ - $ -
(Issued) exercise of stock options,
share appreciation rights and warrants (3,009) 3,009 -
Issued on business acquisitions (39,483) 39,483 -
----------------------------------------------------------------------------
$ - $ 42,492 $ -
----------------------------------------------------------------------------
Share purchase warrants
Balance, beginning of year $ 73,004 $ 3,737 $ 10,864
Warrants issued - 13,111 1,374
Expiry or exercise of warrants (4,906) (18,355) (8,501)
Value of warrants issued on business
acquisitions 202,707 74,511 -
----------------------------------------------------------------------------
$ 270,805 $ 73,004 $ 3,737
----------------------------------------------------------------------------
Contributed surplus
Balance, beginning of period $ 61,578 $ 4,676 $ 1,775
Transfer of stock-based compensation
on the exercise of stock options and
share appreciation rights (36,789) (35,657) (324)
Stock-based compensation on the grant
or vesting of stock options 437 38,516 2,298
Value of options acquired on business
acquisitions 52,167 54,041 -
Expiry of warrants - 2 927
----------------------------------------------------------------------------
$ 77,393 $ 61,578 $ 4,676
----------------------------------------------------------------------------
Total capital stock, share purchase
warrants and contributed surplus $ 5,850,716 $ 1,796,924 $ 318,822
----------------------------------------------------------------------------
Retained earnings (deficit)
Balance, beginning of period $ (80,334) $ (3,848) $ 263
Opening adjustments 249 - -
Net earnings (loss) 157,245 (70,163) (4,111)
Dividends declared (17,200) (6,323) -
----------------------------------------------------------------------------
Retained earnings (deficit), end of
period 59,960 (80,334) (3,848)
Accumulated other comprehensive income (3,855) - -
Total retained earnings (deficit) and
accumulated other comprehensive
income $ 56,105 $ (80,334) $ (3,848)
Total shareholders' equity $ 5,906,821 $ 1,716,590 $ 314,974
Consolidated Statements of Comprehensive Income
For the Years Ended December 31, 2007
(In thousands of U.S. Dollars) 2007 2006 2005
Net earnings (loss) $ 157,245 $ (70,163) $ (4,111)
Other comprehensive loss, net of tax (345) - -
Comprehensive income (loss) $ 156,900 $ (70,163) $ (4,111)
YAMANA GOLD INC.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2007
(In thousands of U.S. Dollars) 2007 2006 2005
----------------------------------------------------------------------------
Operating Activities
Net earnings for the year $ 157,245 $ (70,163) $ (4,111)
Asset retirement obligations paid (4,710) (358) (309)
Non-operating financing fee - 5,000 -
Realized foreign exchange losses on
financing activities 26,962 - -
Items not involving cash:
Depreciation, amortization and depletion 71,815 33,510 6,740
Stock-based compensation 726 41,099 2,298
Future income taxes (15,607) (31,077) (4,447)
Accretion of asset retirement obligations 3,056 636 358
Unrealized foreign exchange 17,765 (343) (3,252)
Unrealized loss on commodity contracts 29,068 35,773 8,615
Impairment of the Fazenda Nova Mine and
other asset write-offs 4,206 3,675 -
Equity earnings from Minera Alumbrera (3,820) - -
Non-controlling interest 2,017 - -
Financing charges 3,352 19,744 -
Other 769 2,675 553
----------------------------------------------------------------------------
292,844 40,171 6,445
Net change in non-cash working capital 1,030 (43,386) (3,035)
----------------------------------------------------------------------------
293,874 (3,215) 3,410
----------------------------------------------------------------------------
Financing Activities
Issue of common shares, options and
warrants for cash (net of issue costs) 37,912 221,209 155,099
Dividends paid (17,200) (2,883) -
Proceeds of notes payable and long term
Liabilities 654,174 - 100,000
Repayment of notes payable and long term
Liabilities (53,278) (115,414)
Financing costs - (5,000) -
Deferred financing charges (7,264) - (4,630)
----------------------------------------------------------------------------
614,344 97,912 250,469
----------------------------------------------------------------------------
Investing Activities
Expenditures on mineral properties (131,926) (64,829) (23,199)
Acquisition of property, plant and
equipment (90,999) (27,762) (5,752)
Expenditures on assets under
construction (50,227) (126,710) (132,031)
Corporate acquisitions, net of cash
acquired (416,668) 66,815 -
Loan receivable - - (18,986)
Cash distributions from Minera Alumbrera
Ltd 19,375 - -
Settlement of hedges (16,565) - -
Other assets and investments (15,582) (26,543) (12,584)
----------------------------------------------------------------------------
(702,592) (179,029) (192,552)
----------------------------------------------------------------------------
Effect of foreign exchange on non-US
dollar denominated 9,588 2,379 3,252
cash and cash equivalents
Increase (decrease) in cash and cash
equivalents 215,214 (81,953) 64,579
Cash and cash equivalents, beginning of
year 69,680 151,633 87,054
----------------------------------------------------------------------------
Cash and cash equivalents, end of year $ 284,894 $ 69,680 $ 151,633
----------------------------------------------------------------------------
Cash and cash equivalents are comprised
of the following:
Cash at bank and bank term deposits $ 200,751 $ 69,680 $ 151,633
Short-term money market securities 84,143 - -
----------------------------------------------------------------------------
$ 284,894 $ 69,680 $ 151,633Contact: Contacts:
MEDIA INQUIRIES:
Mansfield Communications Inc.
Hugh Mansfield
(416) 599-0024
YAMANA GOLD INC.
Jodi Peake
Vice President, Public & Investor Relations
(416) 815-0220
Email: investor@yamana.com
YAMANA GOLD INC.
Letitia Wong
Director, Investor Relations
(416) 815-0220
Email: investor@yamana.com
Website: http://www.yamana.com
Source: Yamana Gold Inc.
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