Yamana Gold Reports Second Quarter 2020 Financial Results; Strong Cash Flow Generation; a Further Reduction of $101 Million in Net Debt; Jacobina Phase 1 Expansion Complete; Increasing Dividend by a Further 12% to $0.07 Per Share
Press Release
TORONTO, July 23, 2020 — YAMANA GOLD INC. (TSX:YRI; NYSE:AUY) (“Yamana” or “the Company”) is herein reporting its financial and operational results for the second quarter of 2020. The Company posted strong quarterly production and free cash flow while further reducing net debt.
SECOND QUARTER HIGHLIGHTS
Strong Adjusted Net Earnings and Cash Flows, Further Reduction in Net Debt
- Adjusted net earnings(1) of $63.3 million or $0.07 per share basic and diluted compared to adjusted net earnings of $19.8 million or $0.02 per share basic and diluted a year earlier.
- Net earnings were nil or nil per share basic and diluted compared to net earnings of $14.1 million or $0.01 per share basic and diluted a year earlier.(1)
- Strong quarterly cash flows from operating activities of $92.2 million and cash flow from operating activities before net change in working capital of $118.1 million, reflecting the impact of strong production, strong precious metal prices, and the positive impact of foreign exchange movements on costs.
- Normalized for the $19.2 million in outflows associated with COVID-19 related temporary suspensions, standby and other incremental costs, cash flows from operating activities before net change in working capital would have been $137.3 million. While cash flows were lower than in the first quarter, the difference is mostly accounted for by the lower production from mines whose operations were temporarily suspended. On a per unit of production basis, more margin and cash flows were generated in the second quarter than in the first quarter.
- Net free cash flow(2) of $60.3 million and free cash flow before dividends and debt repayments(2) of $38.3 million, adjusted for the costs incurred in association with COVID-19. Without normalizing for the impact of temporary suspensions, standby and other incremental COVID-19 cost outflows, net free cash flow(2) and free cash flow before dividends and debt repayments would have been $41.1 million and $19.1 million respectively.
- Net debt(3) decreased by $101.1 million in the quarter. As of June 30, 2020, net debt(3) was $768.0 million.
- In June, the Company repaid $100.0 million of the $200.0 million drawn during the first quarter out of its $750.0 million revolving credit facility. The draw during the first quarter was performed as a precaution due to the uncertainty around the COVID-19 pandemic. The Company currently has no plans to utilize the remaining $100.0 million drawn on its revolving credit facility, and expects to repay these funds by the end of the year.
- As of June 30, 2020, the Company had cash and cash equivalents of $324.8 million.
| Three months ended June 30 | ||||||
| (In millions of United States Dollars) | 2020 | 2019 | ||||
| Net Free Cash Flow(2) | $ | 60.3 | $ | 119.5 | ||
| Free Cash Flow before Dividends and Debt Repayments(2) | $ | 38.3 | $ | 50.6 | ||
| Decrease in Net Debt(3) | $ | (101.1 | ) | $ | (9.3 | ) |
| (All amounts are expressed in United States Dollars unless otherwise indicated) (See end notes at the end of this press release) |
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Production Exceeds Plan at Jacobina, El Peñón, Minera Florida and Canadian Malartic
- Gold production of 164,141 ounces was above plan, following exceptional performances from Jacobina, El Peñón, Minera Florida, and Canadian Malartic, which all exceeded their production plan, and despite the government-mandated temporary suspension of operations at Canadian Malartic.
- Silver production of 2,007,809 ounces was also above plan, following a strong performance from El Peñón.
- Gold equivalent ounce (“GEO”)(4) production of 183,582 ounces exceeded plan, at costs also better than plan, despite the GEO ratio being higher at 105.14 than that guided at 98.85.
Costs Better Than Plan
- As a result of the strong performances from Jacobina, El Peñón, Minera Florida and Canadian Malartic, second quarter unitary costs were better than plan, with total cost of sales and cash costs of $1,146 and $715 per GEO, respectively, compared to $1,146 and $696 per GEO in 2019.
- All-in sustaining costs (“AISC”)(3) for the quarter were $1,125 per GEO sold, compared to $986 per GEO sold in the same period in 2019. While cash costs were relatively unchanged, higher planned sustaining capital per ounce year-over-year resulted in an increase in AISC over the comparative period.
- Costs were positively impacted by foreign exchange movements as a result of the Canadian Dollar, Brazilian Real, Argentine Peso and Chilean Peso all weakening against the US Dollar.
ILR4
