Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE) announced in a news release its revised guidance for Jacobina in Brazil and an update on its plan to boost production there.
Management increased production guidance for 2019 to 152,000 ounces of gold from 145,000 ounces. Guidance for 2020 and 2021 remain 160,000 and 170,000 ounces, respectively.
In terms of 2019 costs, the company forecasts a cash cost of $700 and an all-in sustaining cost of $890, both per gold equivalent ounce sold. The remaining capital costs to complete the phase 1 expansion are about $3.4 million, with around $2 million to be spent in 2019 and the rest in 2020.
These numbers only reflect upside from the phase 1 expansion, a modest plant optimization that is underway. The goal is to increase sustainable production at Jacobina to 6,500 tons per day. Because the project is ahead of schedule and, consequently, throughput already is now up to an average of 6,182 tons per day, Yamana was able to increase its production guidance for this year.
The company intends to release an updated mineral reserve estimate for Jacobina in Q3/19, which could reflect increased grades. If it does, production in phase 1 could exceed the annual 170,000 gold ounces guided to for 2021.
Subsequently, Yamana will carry out its planned phase 2 expansion program for Jacobina.
In other news, the producer expects to lower its 2019 general and administrative (G&A) expenses to $68 million versus previous guidance of $75 million, resulting from the sale of Chapada (closing in the next few weeks) and a subsequently smaller presence in Brazil. G&A expenses in 2020 should stay at about $60 million, thereby yielding $15 million of per-year savings.
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