Yamana Gold provides Update as related to the Canadian Malartic Mine
TORONTO, March 24, 2020 — YAMANA GOLD INC. (TSX:YRI; NYSE:AUY) (“Yamana” or “the Company”) herein announces that pursuant to the order by the Government of Quebec in relation to COVID-19 to temporarily restrict all non-essential business until April 13, 2020, it has made the decision to ramp down operations at its Canadian Malartic mine. The decision follows discussions held today with representatives of the Government of Quebec to obtain additional clarity in regard to the order. The operation will be on care and maintenance and minimal work will be taking place until the date specified in the order.
Canadian Malartic, a 50-50 joint venture with Agnico Eagle Mines Ltd., is demobilizing employees and contractors in a safe and orderly manner leaving a small number of employees on site to maintain property and equipment and oversee all environmental responsibilities and obligations. The operation remains in close communication with the workforce and local communities, and it is taking all necessary steps to ensure that all safety and environmental protocols and procedures will be followed during the care and maintenance period. The Company is supportive of the province’s action and hopes to work with the province in managing this process effectively.
A return to full capacity at Canadian Malartic is expected to occur in an expedited manner as soon as the temporary restriction is lifted.
Canadian Malartic is the largest gold mine in Canada and a significant economic engine in northern Quebec. The mine is a conduit of large employment and infrastructure that can help the province in managing this very challenging situation. The operation maintains rigorous health and safety protocols to protect the workforce and local communities from the impact of COVID-19. These health and safety protocols are similar to those established with local communities at the Company’s South American mines.
Yamana has implemented heightened levels of health screening, along with support services at all of its mines. These actions include temporarily restricting all employee travel, temporarily shifting to remote work arrangements at our corporate and regional offices, enhanced sanitization and disinfecting at our mines and offices, and implementing rigid requirements around social distancing.
The Company is in regular contact with medical experts and government authorities in every country where it operates. If at any point the Company determines that continuing operations poses an increased risk to our workforce or local communities, the Company will reduce operational activities up to and including care and maintenance and management of critical environmental systems. There are currently no suspected or confirmed cases of COVID-19 at Canadian Malartic or any Yamana operation. The Company continues to take every precaution to ensure the safety of its employees, families, and communities, and it is working closely with its host communities to support their needs through this difficult period.
As previously announced, the Government of Argentina imposed a temporary mandatory self-isolation period and travel restriction until March 30, 2020. The Company has temporarily demobilized operations at the Cerro Moro mine during this period. Underground operations have been reduced and Cerro Moro is provisionally operating largely from its open pit operations and stockpiled material.
Guidance Update and Liquidity
With reduced production coming from suspended or reduced operations, along with other present day uncertainties, the Company is withdrawing its 2020 guidance for production and costs. The Company will update guidance once it has a better understanding of the actual duration and impact of these uncertainties. The Company expects that any suspended operation is well positioned to safely and efficiently ramp-up in a timely manner once temporary suspensions cease. The Company’s long-term value proposition remains unchanged, despite these shorter-term disruptions.
The Company’s other mines, representing approximately 67 percent of the Company’s production outlook for 2020, continue operating in line with production targets for the year.
The Company expects to meet its production targets for the first quarter, which is typically its lowest production quarter. The Company expects to produce approximately 190,000 gold ounces and approximately 2.7 million silver ounces in the first quarter, representing approximately 220,000 gold equivalent ounces (based on a gold equivalent ratio which is above the ratio assumed for guidance), which are above the Company’s production targets. As previously guided, production is expected to be weighted to the second half of 2020 although previous guidance indicating a weighting of 54 percent in the second half will now likely be higher.
As a precaution and given the current uncertainty around the global pandemic, the Company drew down $200 million of its $750 million revolving credit facility in March 2020. The Company currently has no plans to utilize these funds. The Company has sufficient cash on hand, available credit and liquidity to fully manage its business. At the present time, the Company has no pending scheduled debt repayment or significant capital commitments.
Yamana Gold Inc. is a Canadian-based precious metals producer with significant gold and silver production, development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina. Yamana plans to continue to build on this base through expansion and optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation opportunities with a primary focus in the Americas.
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