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Yamana's (AUY) Preliminary 2019 Production Exceeds Guidance

Zacks Equity Research

Yamana Gold Inc. AUY has recently announced preliminary production results for the fourth quarter and 2019.

In fourth-quarter 2019, the company produced 256,288 gold equivalent ounces (GEO) that comprises 221,595 ounces of gold and 2.97 million ounces of silver. In 2019, the company produced 1.02 million GEO, which includes 900,339 ounces of gold. The updated preliminary data surpassed the previous guidance of 1.01 million GEO. The projected figure included 899,000 ounces of gold. Total silver production of 10.6 million ounces for 2019 also exceeded the earlier projection of 10 million ounces.

Jacobina produced 41,774 ounces of gold during the fourth quarter with an all-time high annual production of 159,499 ounces. The figure also exceeded the revised guidance issued in June 2019.

El Penon also produced its highest quarterly and yearly production since 2016. Fourth-quarter gold production amounted to 48,131 ounces and the same for 2019 totaled 159,515 ounces. Also, the figures surpassed the company’s prior guidance.  

During the fourth quarter, Cerro Moro produced 26,568 ounces of gold and 1,584,904 ounces of silver. In 2019, gold and silver production amounted to 120,802 ounces and 6,322,864 ounces, respectively.

Canadian Malartic (50% basis) produced 85,042 ounces of gold during the fourth quarter and 334,596 ounces of gold for 2019.

Yamana’s overall production in December 2019 was 87,441 GEO, up more than 5% from the budget for the month.

Yamana expects costs to be in line with earlier guidance and adjustments, including around $30 per GEO stemming from the removal of production from Chapada in second-half 2019. Moreover, higher exploration spending and increased GEO ratio are likely to exert pressure on the company’s operational costs.  

Moreover, Yamana will implement its earlier announced 25% increase in dividend payout, effective from first-quarter 2020. This will mark the second hike in annual dividends in the past six months. This will bring its annual dividend to 5 cents per share.

Yamana is slated to release its fourth quarter and 2019 results on Feb 13, after the closing bell.

The stock has surged 59.3% in the past year compared with the industry’s rally of 34.3%.



 

Zacks Rank & Key Picks

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

Few better-ranked stocks in the basic materials space are Daqo New Energy Corp DQ, Royal Gold, Inc RGLD and Commercial Metals Company CMC, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has projected earnings growth rate of 326.3% for 2020. The company’s shares have surged 82.8% in the past year.

Royal Gold has an estimated earnings growth rate of 83.5% for fiscal 2020. Its shares have returned 36.9% in the past year.    

Commercial Metals has an expected earnings growth rate of 17.3% for fiscal 2020. The company’s shares have rallied 28.3% in the past year.

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