Yamana Gold CEO Discusses Q3 2010 Results - Earnings Call Transcript
Yamana Gold, Inc. (
)
Q3 2010 Earnings Call
November 4, 2010 11:00 a.m. ET
Executives
Peter Marrone - Chairman and CEO
Ludovico Costa - President and COO
Charles Main - CFO
Analysts
Dan Rollins - UBS
Brian Christie - Desjardins Securities
Anita Soni - Credit Suisse
David Haughton - BMO Capital Markets
Steve Butler - Canaccord Genuity
Presentation
Operator
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Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Yamana Gold's Third Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time.
This conference call will contain forward-looking statements that involve a number of risks and uncertainties concerning the business, operations and financial performance and condition of Yamana Gold. Forward-looking statements include but are not limited to, statements with respect to the estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, future metal prices, and the cost and timing of the development of new deposits.
For a complete discussion of the risks, uncertainties and factors, which may lead to our actual financial results and performance being different from the estimates contained in our forward-looking statements, please refer to our press release of yesterday announcing our third quarter results and our management's discussion and analysis for the same period. As well as other regulatory filings in Canada and the United States.
Accordingly, you should not place undue reliance on forward-looking statements. I would like to remind everyone that this conference call is being recorded, and will be available for replay today at 2.45 PM Eastern Time. The replay number is 416-849-0833, or toll free 1-800-642-1687 both with the passcode 14351681. As well the presentation slides accompanying the conference call are available on Yamana's website www.yamana.com.
I will now turn the conference over to Mr. Peter Marrone, Chairman and CEO. Please go ahead, sir.
Peter Marrone
Good morning. Thank you, Beth, for the introduction and thank you to everyone for your attendance. We will begin with the brief overview and I will then pass the conference over to our President and Chief Operations Officer, Ludovico Costa who will discuss our operations. Chuck Main, our CFO, is here also and he will discuss our third quarter financial results.
I will then provide an update on our development stage projects. Although, we do have Evandro Cintra, our Senior Vice President of Technical Services and Darcy Marud, our Senior Vice President of Exploration in attendance on this call to answer any questions you may have.
Darcy is remote although on our conference line, so there may be a modest delay in his ability to answer any questions. Also with us, is Lisa Doddridge, whom we welcome as our new Vice President of Investor Relations and Communications.
Just before I elaborate on our record third quarter results. I would like to reiterate some of the key objectives of this company. We have four core themes of growth in other words what growth means to us, which is growth in cash flow, growth in production, in resources and ultimately growth in net asset value. The starting point is our steady focus on operations, development stage projects and on our exploration program.
We are well on tack to achieve these four objectives and indeed we just achieved a record cash flow in the quarter, which represents an increase of 24% over the same period last year and 42% higher for the comparable nine month period.
Our cash balances are increasing and all of this is in advance of significant resource growth this year and production growth to follow, which will further contribute to our cash flow and increases in cash position. Our overall mission is to build on our existing base significant gold production through optimization of operating mines, expansions and developing new mines. In addition, we will continue to advance our very promising exploration opportunities and properties.
As we have indicated during 2010, we expect this year to be a strong year for reserve and resource increases, which is the second of those core themes for growth. This will underpin the significant production growth, which is now just around the corner for us. Although, please bare in mind that we mentioned that this year's effort was efficiencies and optimization at existing mines, which as already shown on over 5% growth in production quarter-over-quarter.
We have a philosophy of building two tiers of gold mines. Those that produce above 200,000 gold equivalent ounces per year from our flagship mines and those that produce over 120,000 ounces of gold and gold equivalent per year from those other mines.
In either of these tiers, we look at where there is a reasonable expectation for expansions that will lift those thresholds. We have a solid track record of expansions that we intend to rely on for further evaluation of increases in those thresholds.
With the discovery of new resources, our mines and projects provide us with an excellent opportunity to pursue such expansions. We will provide later this year an exploration update as part of this progression toward the discovery of new ounces at our mines and projects that will soon become mines.
We are geographically focused and concentrated by country and by region as shown on this map, and that is very deliberate on our part. It has been part of our strategic plan from the inception of this company.
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