January 13, 2009 / 12:01 AM / in 9 years

UPDATE 1-Yamana to spend up to $350 mln in '09, cuts dividend

CALGARY, Alberta, Jan 12 (Reuters) - Yamana Gold Inc (YRI.TO) said on Monday it would spend up to $350 million this year and $400 million in 2010 to boost production, while cutting its dividend by half to help fund its expenditures.

Yamana said its production is expected to be 1.3 million to 1.4 million gold equivalent ounces in 2009 and 1.4 million to 1.5 million in 2010 from mines now in production.

Co-product costs are estimated at $345-$375 an ounce this year and $350-$375 next. Exploration expenses this year are expected to be at least $56 million, and efforts will be concentrated in Chile, Brazil, Mexico and Argentina.

“Yamana remains well financed to fund its strategic growth plan where enhancements, expansions, improvements and development of existing assets are expected to drive production towards the company’s objective to produce 2 million GEO in 2012,” it said in a statement.

Meanwhile, Yamana is cutting its dividend by two-thirds to 1 cent per quarter, from 1 cent per month to bring its dividend yield more in line with its rivals, it said.

The company plans to reallocate the $58 million in savings to development and exploration, it said.

Yamana shares fell 57 Canadian cents to C$7.76 on the Toronto Stock Exchange. They have fallen by 43 percent in the past 12 months. ($1=1.22 Canadian) (Reporting by Jeffrey Jones; editing by Carol Bishopric)

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