Lower metal prices push Yamana to 2nd-quarter loss

Wed Jul 31, 2013 8:11pm EDT
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July 31 (Reuters) - Yamana Gold reported a loss in the second quarter, hit by lower realized commodity prices, and it reduced its production target for the year to reflect a drop in metal prices and cost-cutting.

The midtier gold miner's net loss was $7.9 million, or 1 cent per share, compared with a profit of $42.9 million, or 6 cents a share, in the year-earlier period.

Adjusted to remove one-time items, earnings were 7 cents a share, compared with 18 cents a share a year earlier. Revenue dropped 20 percent to $430.5 million.

Analysts, on average, had expected earnings of 10 cents a share on a revenue of $488 million, according to Thomson Reuters I/B/E/S.

Yamana, which in April outlined extensive plans to cut costs, said on Wednesday that about $115 million of reductions to the overall cost structure are being realized. It also reduced its exploration spending for this year by $10 million to $105 million.

Production of 295,545 gold equivalent ounces (GEO) was up about 2 percent in the second quarter.

Yamana, which in April forecast production of 1.44 million GEO, on Wednesday said it now expects to produce between 1.32 and 1.37 million GEO.

The company's 2014 production target is 1.4 to 1.5 million GEO, while for 2015 it expects to produce over 1.55 million GEO.

Gold miners have announced billions in writedowns over the last two years, as ill-advised deals, underperforming assets and the plunging gold price have wreaked havoc on their books.

Gold prices have fallen sharply this year, hitting a near three-year low around $1,180 an ounce in late June. Spot gold was trading around $1,325 an ounce on Wednesday.

The average realized gold price in the quarter fell 14 percent to $1,385 an ounce in the quarter, Yamana said.