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Yamana Issues Preliminary Q1 Results, to Resume Cerro Moro

Yamana Gold Inc. AUY has announced preliminary production results for first-quarter 2020.

In the first quarter, the company produced 192,238 ounces of gold and 2.73 million ounces of silver. Total gold equivalent ounces (GEO) produced in the quarter were 221,746 GEO.

Per the company, Jacobina, Minera Florida and El Penon have delivered better-than-expected production in the first quarter. Production at Brazil-based Jacobina was 43,938 ounces of gold in the first quarter. Average throughput surpassed 6,500 tons per day, which was a full quarter ahead of schedule. 

Minera Florida also maintained its momentum and recorded 22,563 ounces of gold production in the first quarter. El Penon produced 42,230 ounces of gold and 1.355 million ounces of silver. 

Production at Canadian Malartic (50% interest) remained strong in the quarter prior to putting the operations under care and maintenance on Mar 24, per the Quebec Government’s directives to temporarily suspend all non-essential operations. It is likely to resume operations once all temporary restrictions expire.

Operations at Cerro Moro were transitioned to a reduced production schedule on March 19, in compliance with the Argentina government’s mandate of social isolation. On Apr 3, the government declared mining an essential service and allowed the mine to resume normal operations. The company stated that Cerro Moro is now in the process of remobilization.

Costs of operations in the first quarter were in line with the company’s targets. Moreover, costs were favorably impacted in the quarter by foreign exchange swings. Overall, sales of gold and silver in the first quarter were roughly equal to production figures.  

Further, the company had strong financial performance in the to-be-reported quarter partly stemming from net debt reduction.

The company earlier projected that 46% of full-year production will occur in the first half of 2020. It achieved production targets for the first quarter. However, due to the impact of coronavirus, Yamana expects second-quarter figures to be weaker than what it had expected earlier. The company expects operations to resume to normal in the second half of 2020.

Shares of Yamana have rallied 25.2% in the past year compared with 23.5% growth of its industry.

Zacks Rank & Key Picks

Yamana currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are Franco-Nevada Corporation FNV, Novagold Resources Inc. NG and Barrick Gold Corporation GOLD, all currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Franco-Nevada has an expected earnings growth rate of 22% for 2020. Its shares have returned 46.1% in the past year.   

Novagold has an expected earnings growth rate of 11.1% for fiscal 2020. The company’s shares have surged 100.2% in the past year.

Barrick has an expected earnings growth rate of 41.2% for 2020. The company’s shares have gained 52% in the past year.

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