According to an Oct. 16 research note, Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE) produced 257 Koz gold in Q3/17 from six of its seven mines (excluding Brio). The quantity achieved surpassed BMO Capital Markets' expected 240 Koz "based on better-than-expected production from Chapada, Malartic and El Peñón, offset by lower production at Minera Florida," indicated analyst Andrew Kaip.
As for other metals, Yamana produced 37.1 Mlb copper, which beat BMO's anticipated 33.9 Mlb, Kaip added. It generated 1.43 Moz silver, which was in line with BMO's estimate.
About the Canadian miner's Q3 performance, Kaip concluded that "incorporating the stronger-than-expected production results is expected to have a positive impact to earnings."
Yamana's gold production for the first three quarters of 2017 is 717 Koz, Kaip noted. This represents about 76% of its 940 Koz gold production guidance for this year. Although the company increased its guidance for gold once already in 2017, it is "currently evaluating whether or not to increase production guidance for gold, silver and copper based on year-to-date production and an expected strong Q4/17," he wrote.
Kaip also noted that as of Sept. 30, Yamana had "approximately $125 million in cash."
This metals producer will report complete Q3/17 operational and financial results on Oct. 26 followed by a conference call on Oct. 27.
BMO Capital has a Market Perform rating and $3.25 per share price target for Yamana, whose shares are trading at around $2.64 per share.
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Disclosures from BMO Capital Markets, Yamana Gold, Oct. 16, 2017
Analyst's Certification: I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures
Disclosure 8C: BMO Capital Markets or an affiliate has a financial interest in 0.5% or more in the issued share capital of Yamana Gold.
Disclosure 9: BMO Capital Markets makes a market in Yamana Gold.
Disclosure 16: A BMO Nesbitt Burns Inc. research analyst has extensively viewed the material operations of Yamana Gold.
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