YAMANA GOLD INC. (TSX:YRI.TO – News)(AMEX:AUY – News)(AIM: YAU) is pleased to provide an update on the start-up of its Chapada copper-gold mine and a production update for its Sao Francisco and Jacobina mines, its two other principal gold mines in Brazil. Yamana operates six mines in Latin America, five of which are in Brazil including the Chapada, Sao Francisco and Jacobina mines. The Chapada mine is Yamana’s largest mine. The period ended September 30, 2006 is the first quarter of commercial production at the Sao Francisco mine and the first full quarter in which Yamana has owned the Jacobina mine. Yamana is also in the process of assuming ownership of the advanced stage Gualcamayo project in Argentina resulting from its successful take-over bid of Viceroy Exploration Ltd.
Yamana is also providing a production update. Milestones achieved and events occurring in the three month period ended September 30, 2006 include the following:
– Total production for the third quarter of approximately 89,000 ounces of gold from its five other producing gold mines, consistent with mine plans.
– Upward trend in production at its Sao Francisco mine with monthly production increasing from approximately 8,800 ounces of gold in July to over 10,600 ounces of gold in September for total quarterly production of approximately 29,600 ounces of gold (including pre-commercial production in July).
– Production at the Jacobina mine of approximately 19,300 ounces of gold which is consistent with the mine plan.
– Initiation of cost improvements at the Sao Francisco mine primarily related to elimination of duplicated costs as the mine undergoes the transition from construction to operations.
– Initiation of production and cost improvements at the Jacobina mine including a change in mining method to reduce dilution, and the start of the initial phase of the Jacobina expansion which will result in throughput capacity increasing to approximately 5,000 tpd in the fourth quarter of this year. This is being achieved through the installation of an additional crusher and screening circuit. Yamana will continue to expand at Jacobina with capacity rising to 6,500 tpd by mid to late 2007 and up to 8,500 tpd by late 2008.
– Continuing development at Morro do Vento and other areas of the Jacobina mine to accommodate the increase in throughput at the plant.
Analysis: Good news here with rising production and lower costs as we move forward. This company is a buy.