YAMANA GOLD INC. (TSX: YRI) (NYSE: AUY) (LSE: YAU) today announced its mineral reserves and mineral resources for the year ended December 31, 2010.
The Company's total proven and probable mineral gold reserves increased by 4.5 million ounces to 22.1 million ounces, which represents a 26% increase over the previous year. Measured and indicated gold resources increased by 12% from 2009 to 14.5 million ounces. Silver and copper proven and probable mineral reserves increased by 3% and 9%, respectively.
HIGHLIGHTS:
- Total proven and probable gold equivalent(1) mineral reserves increased to 25.1 million ounces, a 23% increase from 2009 and includes: - Total gold mineral reserves of 22.1 million ounces, an increase of 26% - Total silver mineral reserves of 167.3 million ounces, an increase of 3% - Total measured and indicated gold equivalent mineral resources increased to 15.3 million ounces, an increase of 9% over 2009 and includes: - Total gold mineral resources of 14.5 million ounces, an increase of 12% - Total silver mineral resources of 46.0 million ounces, a decrease of 23% - Initial reserve estimate was declared at Jeronimo of over 1.6 million ounces (on a 100% ownership basis). A pre-feasibility has recently been completed on Jeronimo with a feasibility expected at the end of 2011 - Initial reserve estimate was declared at the Suruca gold area of Chapada, which was previously announced, a feasibility study expected by year end - Jacobina's total mineral resources and grade increased significantly. The Company will continue evaluating options to increase production. - Pilar's mineral reserves to 1.4 million gold ounces, supporting the Company's earlier decision to develop the project with a 30% throughput increase for higher production levels.
"Growth in mineral reserves and mineral resources became a key focus of this Company in the past year. An increased resource base allows us to consider production increases and longer mine life which will build further value in the Company," said Yamana's Chairman and Chief Executive Officer, Peter Marrone. "We have clearly demonstrated our ability to grow resources through the increases in the past and the significant increases this year. Our exploration budget for 2011 of $85 million is similar to last year's budget. Part of the focus of this year's program is to continue to show substantial growth in resources. We expect to deliver on our track record of doing so and of building sustainable and predictable production and growth by continuing our aggressive exploration program throughout 2011."
On a gold equivalent basis, and excluding Agua Rica, proven and probable reserves are 16.6 million gold equivalent ounces (GEO) for the year ending December 31, 2010, an increase of over 28% from 2009 at 13.0 million GEO. This is comprised of 15.6 million ounces of proven and probable gold reserves and 65.0 million ounces of proven and probable silver reserves. Proven and probable copper reserves were 12.2 billion pounds of copper, and excluding Agua Rica, would be 2.5 billion pounds. Reserves and resources were calculated based on a gold price of $900 per ounce, a silver price of $15.00 per ounce and a copper price of $2.50 per pound (except where noted).
Measured and indicated gold equivalent resources excluding Agua Rica were 14.1 million ounces at the end of 2010, an increase of 19% from 2009. This includes gold resources of 13.6 million ounces and silver mineral resources of 27.8 million ounces when Agua Rica is excluded. Copper mineral resources for the year end were 3.1 billion pounds, a slight decline from 2009, excluding Agua Rica these resources would be 1.4 billion pounds.
In addition, inferred gold mineral resources declined slightly to 9.0 million ounces, silver inferred resources increased slightly to 97.8 million ounces and resources of copper declined to 5.2 billion pounds.
The pre-feasibility (on 100% basis) contemplates:
- Approximately $310 million in pre-production capital - 145,000 oz - approximate average annual production - 185,000 oz - approximate average annual production for the first four years - 10 years of initial mine life - Cash costs of approximately $550/oz - Approximate cash costs for the first four years are expected to be below $500/oz - 4,200 tonnes per day throughput - Recovery of approximately 85% based on pressure oxidation
The Company is evaluating other processing methods for better recoveries, which are anticipated to further optimize the project economics. The Company will also be incorporating the impact of credits from the sale of manganese which was not included in the pre-feasibility, as well as the positive impact of other off-take products. The resource remains open at depth and has potential to add significantly to resources.
Results of the evaluation of these different processing options and optimizations will be part of the feasibility study which is expected to be delivered at the end of 2011. The decision to proceed, after that time, will be based on continued positive results from a full feasibility and further consolidation of the ownership of Jeronimo, both of which are expected to occur.
Total proven and probable mineral reserves increased to 1.4 million ounces, this includes an initial reserve that was announced on August 4, 2010. Additional exploration drilling suggests that growth in mineral reserves and resources should continue in 2011.
The total mineral resources at Pilar do not include Caiamar, a deposit located 38 kilometres from Pilar which is being evaluated under various scenarios. The Pilar project, which is currently in development and expected to be in production in 2013, is already being built at capacity levels that are 30% higher than those contemplated in the feasibility study. This extra capacity demonstrates the confidence in the Company's ability to continue to develop this high quality resource base.
Mineral reserves at Jacobina increased by 8% to 1.7 million ounces. Measured and indicated mineral resources also increased to 1.66 million ounces, a 16% increase over 2009. Of even greater significance, is the increase of 16% in mineral reserve grade, to 2.48 g/t and the 10% increase in resource grade. These grade increases will facilitate higher future production levels. The Company is currently evaluating options to increase plant capacity, which could further enhance production at Jacobina.
Early in January 2011, the Company announced the revised Chapada production life-of-mine plan that incorporated the new resources at Suruca, a satellite deposit located six kilometers from Chapada. These resources were part of the overall increase in mineral reserves of 45% to 3.1 million ounces. Mineral resources increased by close to 240% to 2.5 million ounces.
The additional reserves and resources at Chapada have already been worked into a revised production plan announced earlier this year that will result in production in excess of 140,000 ounces per year for the life of the mine at Chapada.
These significant increases to reserves and resource are a direct result of a well planned and executed exploration plan, which will be continued into 2011.
In August 2010, the Company delivered an updated production plan for its Gualcamayo mine which included the additional mineral reserves and mineral resources discovered at its QDD Lower West deposit. This initial resource contributed to the 4% increase in reserves to 2.4 million ounces and a 16% increase in mineral resources, to 0.9 million ounces. Further development of the QDD Lower West zone is expected as part of the 2011 exploration program. Continued success at this deposit will make additional positive contributions to reserves and resources in 2011.
Total mineral resources at Fazenda Brasileiro more than doubled to 472,000 ounces, while mineral reserves declined modestly. This increase in resources was attributable to an entirely new area of mineralization, CLX2, within the mining complex that was only recently discovered. Given the positive impact of this new discovery, the Company will be spending $5M in exploration at Fazenda Brasileiro in 2011, to further develop and define this resource.
Total proven and probable mineral reserves at El Penon increased by 4% to 2.0 million ounces, due to the conversion of resources. Silver reserves and gold equivalent reserves declined slightly. However, gold reserve grade increased to 7.29 g/t from 7.05 g/t in 2009. The 2011 program will renew efforts on resource growth with a significant portion of the $15 million to be spent in areas expected to increase resources.
In early 2010, the Company elected to switch to sub-level open stoping mining method on the areas previously considered as cut and fill. This change in mining method allows for more certainty of mining, consistency between mine and plant grades, and a more realistic dilution estimation. It also required a mine plan redesign and a lower cut-off grade used in the estimation of mineral reserves. As a result, Minera Florida mineral reserves were marginally increased and now total 668,000 ounces in proven and probable mineral reserves. The tonnage increased by 36% and the grade decreased to 4.18 g/t. This grade is expected to improve as new areas are discovered and developed.
Yamana continues to build on its successful 2010 exploration program with plans to spend approximately $85 million in 2011. The exploration program will focus on several new areas of mineralization discovered in 2009 and 2010 as well as increasing mineral reserves and mineral resources. Yamana anticipates the continuation of growth in mineral reserves and mineral resources in 2011.
Source: YAMANA GOLD INC.