UPDATE 2-Yamana Gold profit falls, targets major cost cuts

Tue Apr 30, 2013 8:20pm EDT
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* Adjusted Q1 EPS $0.16 v Street view $0.18

* Revenue falls 4 percent to $534.9 million

* Company targets cost cuts of $150/ounce by year-end

* Reducing sustaining capital, head count

By Julie Gordon

TORONTO, April 30 (Reuters) - Yamana Gold Inc is aiming to sharply reduce its all-in sustaining costs this year, as the growing Canadian gold producer adjusts to a recent drop in bullion prices, its chief executive said on Tuesday.

The cost-cutting plan comes after the Toronto-based miner, which owns mines in Mexico and South America, reported a 40 percent drop in first-quarter profit, as lower gold prices and higher costs outweighed a boost in production.

"As we've seen the metal prices come down, we're going to reclaim some of that lost margin," CEO Peter Marrone told Reuters. "We anticipate that we should be able to get at least an improvement of $100 per ounce by midyear and trending toward $150 per ounce by the end of the year."

Yamana plans to cut sustaining capital, reduce head count, revamp how it manages inventories, and improve its equipment maintenance cycle, in an effort to bring down cash costs on an all-in co-product basis.   Continued...