June 17, 2009 / 12:26 PM / in 8 years

UPDATE 1-Yamana says may soon raise gold resource estimates

* Plans feasibility study for Mercedes by Q1 2010

* To make construction decision on Pilar in Q1 2010

TORONTO, June 17 (Reuters) - Canada’s Yamana Gold Inc YRI.TO said work at its early-stage and development-stage projects in Mexico, Brazil and Chile has advanced further, and it may soon raise its gold resource estimates at certain sites.

The gold miner said drill results at its Mercedes project in Mexico continue to show a high geological potential. Yamana said it plans a feasibility study and construction decision for Mercedes by the first quarter of 2010, with completion of mine construction and commencement of commissioning within 24 to 30 months.

Yamana has already conducted a pre-feasibility study at the site, which yielded positive results and indicated an initial mine life of six years. The company is conducting further drilling at Mercedes in a bid to increase minable gold ounces and thereby extend the mine life above the initial estimate.

Toronto-based Yamana also said it has budgeted $4.1 million for exploration at its Pilar project in Brazil this year.

Pilar is an important near-development-stage project for the company with the potential to be accelerated, Yamana said. A feasibility study and construction decision is expected in the first quarter of 2010.

The company said it plans to continue drilling at its Centenario and Polvorin deposits in Chile. It expects to have a resource estimate for these targets before the end of 2009. (Reporting by Euan Rocha; editing by John Wallace)

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