Executive chair Peter Marrone told Mining Journal that there is nothing unusual in making such an arrangement. "It is not a war chest. A shelf prospectus provides us with flexibility in the event that there is a need to raise funds in the future. It may never be utilised. We have done this in the past and never utilised it. We are organically funded for everything we are doing, but it is good to have many arrows in the quiver," he said.
Having met its 2021 guidance and produced 1.01 million ounces of gold equivalent, Yamana is now setting its sights on producing 1.5Moz/y through the expansion of its Jacobina operation in Brazil, the development of its Wasama project in Quebec, Canada and additional optimisation at other operations.
"We have organic growth in the next couple of years of roughly 6%, which increases to 25% over the course of the next handful of years outlined in a very responsible plan called Yamana 1.5," said Marrone.
Yamana currently has a cash balance of about US$500 million which it expects to grow by $50-100 million each year after funding of its capital allocation plan.
"Our capital allocation plan tries to balance how much we pay as dividends, the resilience of the balance sheet and organic growth. We are not expecting to spend more than $170 million a year on growth, which is a very manageable number for a company our size. This means we will have a lot of money left over for other things," said Marrone.
Shares in Yamana Gold are trading at C$6.90, valuing the company at $6.8 billion.