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Yamana Gold narrows Q4, FY'16 loss on higher metals prices, lower impairments

Yamana Gold Inc. on Feb. 16 said that for the fourth quarter of 2016, it continued to narrow its net loss to US$355.4 million, or 38 cents per share, from US$1.45 billion, or US$1.53 per share, in the year-ago period.

Revenue for the three months rose to US$484.4 million, compared to US$439.1 million in the year ago quarter, on higher metal prices, partly offset by lower copper sales.

The company sold 324,197 ounces of gold, 1.6 million ounces of silver and 34.2 million pounds of copper, lower than the year-ago figures of 342,194 ounces of gold, 1.9 million ounces of silver and 38.6 million pounds of copper.

However, revenue per ounce of gold rose to US$1,196, silver to US$17.11 per ounce, and copper to US$2.02 per pound.

Yamana recorded an operating loss of US$639.3 million, narrowing from US$1.42 billion for the fourth quarter of 2015.

Total cost of sales per ounce of gold in the fourth quarter of 2016 rose to US$1,004, from US$959 in the year-ago quarter. Co-product cash cost for the quarter also rose to US$667 per gold ounce, from US$609 for the year-over-year comparable period. Co-product all-in sustaining costs rose to US$928 per ounce of gold, from US$782 per gold ounce in the fourth quarter of 2015.

For full-year 2016, net loss from continuing operations narrowed to US$290.8 million, or 31 cents per share, from US$1.69 billion, or US$1.80 per share, in 2015.

The net loss for the full year included US$381.6 million in after-tax, non-cash impairment charges, mostly related to an optimization being carried out at the El Penon gold mine in Chile that is expected to reduce the annual output. In 2015, the company booked US$2.6 billion in impairments.

Revenues rose to US$1.79 billion in 2016, from US$1.72 billion for the year before. The operating loss for 2016 also narrowed to US$414.9 million, from US$1.27 billion in 2015.

Output of silver in 2016 fell by 22% to 7.0 million ounces. Copper production was also lower at 116.0 million pounds. Gold output remained steady at 1.3 million ounces.

In a separate same-day announcement, the company announced production guidance for gold of 920,000 ounces this year, 1.03 million ounces in 2018 and 1.1 million ounces in 2019.

Silver output will reach 6.71 million ounces this year, 10 million ounces in 2018 and 14.5 million ounces in 2019, while copper production will hit 120 million pounds for the current year and both 2018 and 2019.

Consolidated total cost of sales per unit sold is expected to be in the range of US$945 to US$965 per gold ounce, US$14.2 per silver ounce and US$1.92 per pound of copper.

Yamana also expects co-product cash costs per unit of between US$665 to US$675 per gold ounce, US$10.55 per silver ounce and US$1.6 per pound of copper and co-product all-in sustaining costs per unit produced to be between US$890 to US$910 per gold ounce, US$14.3 per silver ounce, and US$2 per pound of copper.