UPDATE 2-Yamana Gold's profit drops, could miss 2013 output target
Oct 29 (Reuters) - Yamana Gold Inc reported a 28 percent fall in third-quarter profit on Tuesday due to weaker metals prices and lower earnings from the company's stake in the Alumbrera mine in Argentina.
The Canadian-based gold miner did not cut its forecast for 2013 production, as some analysts had expected it might. But Yamana Chairman and Chief Executive Peter Marrone said it was possible the company could fall short of its forecast as the ramp up of two new mines made it difficult to know exactly what production would be.
"Give us a few more weeks and we would be able to better determine whether or not we would meet the production expectations for 2013," he told Reuters in an interview. "I am confident with what we have done in Q3 and how it bodes for Q4."
Yamana, which has mines in Brazil, Mexico and Argentina, cut its 2013 production forecast in July to between 1.32 million and 1.37 million gold equivalent ounces (GEO) from a previous forecast of 1.44 million ounces. Yamana defines gold equivalent ounces as gold plus the gold equivalent of silver using a ratio of 50:1.
In the third quarter, Yamana produced a total of 306,935 gold equivalent ounces, down 1 percent on the third quarter of 2012. Total production consisted of 263,830 ounces of gold and 2.2 million ounces of silver.
Marrone said that while the company was striving for increased production its main focus was reducing costs, a mantra echoed by other miners as the sector tries to recover from major cost blow-outs at a time of weaker metals prices.
To that end, the company has no immediate plans for its $1 billion in cash and undrawn credit, he said.
Yamana said by-product all-in sustaining cash costs were $730 per GEO for the third quarter, below the company's target of $850 an ounce and helped by cost-reduction initiatives implemented since the second quarter of this year. Continued...