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Yamana impresses in Q2

Preliminary second quarter operating results from Canada-based Yamana Gold have come in better than analyst expectations and have set the company up well to meet its 2022 guidance.
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Yamana Gold

For Q2, Yamana reported production of 260,960 gold equivalent ounces, with gold production of 232,542oz and silver production of 2.36 million oz.

National Bank of Canada Financial Markets analyst Mike Parkin the results beat their forecasts of 239,500 GEO and 211,300oz Au.

Likewise, Canaccord Genuity Capital Markets analyst Carey MacRury said the GEO, Au, and Ag results beat CG's forecasts of 247,000oz, 218,000oz and 2.31 million oz, respectively.

"The beat vs our forecasts was driven by better-than-expected performance at Cerro Moro and Canadian Malartic with Jacobina and El Penon in line and Minera Florida slightly lower," MacRury said.

Yamana said all-in sustaining costs for the quarter are expected to be less than US$1,090/oz which also beat CG's and NBC's forecast of US$1,132/oz and US$1,165/oz, respectively.

"[Year-to-date] production of 500,000oz and AISC of $1,087/oz are tracking well to the company's 2022 guidance of 1 million oz and $1,080/z respectively, particularly given management's expectations for improving production over the balance of the year," MacRury noted.

Yamana noted that during the quarter, the company completed an update of the Wasamac strategic life of mine plan which views the potential for a mine life of 10-15 years at 200,000-250,000oz Au per year, which compares to the LOM average of 169,000oz in the feasibility study.

The strong operating results, lower-than-expected AISC and "encouraging" project update could potentially support the Gold Fields acquisition passing shareholder approval, Parkin said.

MacRury said: "the industrial logic of this transaction continues to make sense; the combined company would be the world's fourth-largest gold producer and offer investors a larger, more liquid, diversified global platform with near-term growth and a solid balance sheet".

Yamana's share price was C$6.05 (US$4.65) on July 7. The company has a market capitalization of C$5.81 billion.

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