3 Min Read
TORONTO, Feb 10 (Reuters) - Yamana Gold Inc reported 2013 production that missed its forecasts on Monday, but said the problems that caused the shortfall were resolved by the end of the year and its shares jumped after the news.
The Toronto-based miner, which has operations in Mexico, Brazil, Chile and Argentina, had warned in October that it could miss its 2013 production target but did not give a revised forecast.
Yamana said issues at some of its new mines weighed on output. It produced about 1.2 million gold equivalent ounces in 2013, below its July forecast of between 1.32 and 1.37 million gold equivalent ounces.
Gold stocks were broadly higher on Monday as last week's weak U.S. jobs report pushed the precious metal up for a second trading day, but Yamana outperformed its peers.
"It had underperformed peers over the last couple weeks, so it looks like some of the negative news had been priced in," said Dundee Capital Markets analyst Josh Wolfson.
Along with the disappointing production figure, Wolfson said Yamana's costs were higher than he had expected. Yamana said its all-in sustaining cash costs were about $814 per gold equivalent ounce in 2013 on a by-product basis.
Spot bullion traded near $1,275 an ounce on Monday.
The miner emphasized that its performance had improved at several sites during the fourth quarter.
"All mines are now producing which should significantly improve the reliability of production and cost estimates going forward beginning in 2014," the company said in the release.
At the Pilar mine in Brazil, which began commissioning in July 2013, delayed equipment has now arrived, Yamana said, and production improved significantly in the fourth quarter.
Production also improved at Ernesto/Pau-a-Pique, another mine in Brazil that is ramping up to commercial production, and in Argentina, Gualcamayo's underground expansion began contributing to output in early December, later than expected.
For 2014, Yamana expects to produce 1.4 million gold equivalent ounces, at the low end of its previous forecast of between 1.4 million and 1.5 million gold equivalent ounces.
Yamana defines gold equivalent ounces as gold plus the gold equivalent of silver using a ratio of 50:1.
Shares rose 6.0 percent to C$10.72 on the Toronto Stock Exchange.