Yamana Reports $2.8 Million Profit.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- (all figures in US$ unless otherwise stated) Yamana Gold Yamana Gold Inc. (TSX: YRI) is a Toronto, Canada based producer of gold at various sites in South and Central America. The company began in 1980 as Yamana Resources Inc., changing to its present name in 2003. Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :YRI YRI Yum Restaurants International (Dallas, TX) YRI Yaw Rate Indicator (aviation) YRI You Recall Incorrectly (chat) )(AMEX AMEX See: American Stock Exchange :AUY)(LSE LSE - Language Sensitive Editor AIM:YAU Yau is the Cantonese transcription of the Chinese lastname 邱 (traditional chinese) or 丘 (simplified chinese). Its mandarin transcription (pinyin) is Qiu. Persons surnamed Yau
Yamana produced 84,231 ounces of gold of which 78,168 ounces was produced from the Fazenda Fazenda is a Portuguese word for 'farm', but is used in the English language for the coffee estates that spread within the interior of Brazil between 1840 and 1896, which created major export commodities for Brazilian trade, but also led to intensification of slavery in Brazil. Brasileiro Mine, 2,849 ounces from the Fazenda Nova Fazenda Nova is a small town and municipality in central-west Goiás state, Brazil. The population was 7,048 (2005 estimate) in a total area of 1,285.7 km².
A river of eastern Brazil flowing about 2,896 km (1,800 mi) generally north-northeast and east to the Atlantic Ocean. Noun 1. pilot plant during the fiscal year ended December 31, 2004 (ten months). A total of 101,295 ounces were produced for the twelve month period ended December 31, 2004 and a total of 24,445 ounces were produced during the quarter ended December 31, 2004. Yamana sold 84,434 ounces of gold of which 79,822 ounces were sold from Fazenda Brasileiro and are reflected in operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the December year end. The remaining 4,587 ounces were sold from the Fazenda Nova Mine and the Sao Francisco pilot plant for which proceeds have been capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. as pre-operating and mine development costs. Expenses for the year include a non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) of $2.2 million of stock-based compensation ($0.02 per share). Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the fiscal year was $8.5 million or $0.09 per share. Cash flow from the operations for the quarter was $3.6 million representing $0.03 per share and pro-forma cash flow from operations for January January: see month. and February 2004, excluding movements in working capital is an additional $0.03 per share. During the fiscal year ended December 31, 2004, Yamana completed a financing commitment for $100 million for the construction and development of the Chapada A chapada is a flat-topped upland found in the Brazilian Highlands. The chapadas, which are usually described as mountain ranges, are capped by horizontal strata of sandstone and show the original surface, which has been worn away by the rivers, leaving here and there broad project. In December 2004 Yamana closed an equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. for gross proceeds of Cdn $91.0 million. The cash balance as of December 31, 2004 was $87.1 million. The company had a working capital surplus of $89.2 million. Pro-forma results and information are provided primarily for financial market reference to show a full year of operations given the change in year end this year. Pro-forma results assume the combination of earnings and cash flow for the ten month period ending December 31, 2004 with the normalized earnings Normalized Earnings 1. Earnings adjusted for cyclical ups and downs in the economy. 2. On the balance sheet, earnings adjusted to remove unusual or one-time influences. Notes: An example would be removing a land sale in which a large capital gain was realized. and cash flow of January and February, 2004 that exclude year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. adjustments made in February that did not relate to the January and February period. The pro-forma results are a non-GAAP (Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ) measure and are unaudited. Please see the note on non-GAAP Measures contained at the end of Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial for the quarter ended December 31, 2004 and contained in the December 2004 annual report. The interim unaudited financial statements for the ten month period and quarter ended December 31, 2004 follow this announcement. Change in Year End The year end of the Company was changed from February 28/29 to December 31. Below is a summary of the quarterly periods for the current fiscal year and comparative periods: For the Period Ending Comparative Period --------------------------------------------------------------------- June Quarter June 30, 2004(i) May 31, 2003 September Quarter September 30, 2004 August 31, 2003 December Year End December 31, 2004 February 29, 2004 (i) The June quarter is for a four month period. Yamana is a Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. gold producer with significant gold production, gold and copper-gold development stage properties, exploration properties and land positions in all major mineral areas in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. . Yamana expects to produce gold at intermediate company production levels by 2006 in addition to significant copper production by 2007. Yamana also holds gold exploration properties in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. . Company management plans to build on this base by targeting other gold consolidation opportunities in Brazil and elsewhere in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This news release contains certain "forward-looking statements" within the meaning of Section 21E of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . All statements, other than statements of historical fact, included in this release, and Yamana's future plans are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and Yamana does not undertake any obligation to update forward-looking statements should conditions or management's estimates or opinions change. DECEMBER 2004 QUARTERLY REPORT (Based on Canadian GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and expressed in U.S. dollars, unless otherwise noted) Highlights 1. Production for the quarter ended December 31, 2004 from the Fazenda Brasileiro Mine was 20,854 ounces of gold. Average cash costs per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. for the quarter ended December 31, 2004 at the Fazenda Brasileiro Mine were $246 per ounce and $218 per ounce for the ten month period there ended. Additionally, a total of 2,745 ounces of gold were produced from the Fazenda Nova Mine and 846 ounces were produced from the Sao Francisco pilot plant for total production of 24,445 ounces of gold for the quarter ended December 31, 2004. Production for the quarter ended February 29, 2004 from the Fazenda Brasileiro Mine consisted of 25,944 ounces of gold at an average cash cost of $216 per ounce and 283 ounces from the Sao Francisco pilot plant. In addition, inventory as at December 31, 2004, included 13,307 ounces of gold of which 7,050 ounces of contained gold were on the heap leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. pads at the Fazenda Nova Mine. 2. Revenue for the December quarter was $10.3 million from the sale of 23,982 ounces of gold from Fazenda Brasileiro. Revenue for the fiscal year was $32.3 million from the sale of 79,822 ounces of gold. 3. Net earnings for the December quarter were $0.8 million consisting of operating earnings from Fazenda Brasileiro. Net earnings for the fiscal year were $2.8 million. 4. Cash flow from operations for the December quarter was $3.6 million or $0.03 per share. Cash flow from operations for the fiscal year end was $8.5 million or $0.09 per share. 5. The Company raised gross proceeds of $76.1 (Cdn$91.1) million from a share equity offering of 26.4 million common shares at a price of Cdn$3.45 per share on November November: see month. 9, 2004. 6. The Company completed a debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay commitment for $100 million for the construction and development of the Chapada project on December 21, 2004. Funding had not occurred as at the year ended December 31, 2004. 7. Cash on hand as at December 31, 2004 was $87.1 million. Production and Costs Production from the Fazenda Brasileiro Mine for the December 2004 quarter consisted of 20,854 ounces of gold at a cash cost of $246 per ounce. A total of 255,000 tonnes were milled through the CIP (1) (Common Isochronous Packet) The packet format used in time-based (real time) FireWire transmission. See FireWire, IEC 61883 and mLAN. (2) (Common Industrial P circuit during the December quarter at an average recovery rate of 90.5% at the Fazenda Brasileiro Mine. For the twelve month period ending December 31, 2004, Yamana produced 95,080 ounces of gold at an average cash cost of $218 per ounce at the Fazenda Brasileiro Mine. A total of 825,000 tonnes were milled from underground operations Underground Operations is a Toronto-based independent punk rock record label. Operated by Mark Spicoluk, former Closet Monster member, this label is one of the most cutting edge independent labels in Canada. and 195,000 tonnes from the open pit for the twelve month period ended December 31, 2004. Cash costs per ounce of gold produced at Fazenda Brasileiro increased from the September September: see month. quarter ($225 per ounce) to $246 per ounce largely due to lower head grades from processing lower grade ore ore, metal-bearing mineral mass that can be profitably mined. Nearly all rock deposits contain some metallic minerals, but in many cases the concentration of metal is too low to justify mining the ore. from underground operations. Mining of the lower grade material will continue throughout 2005 and part of 2006. Throughout 2005 and 2006 the Company will be gaining access to higher grade ore bodies beneath the existing mine workings. In addition, tonnes sourced from the Canto can·to n. pl. can·tos One of the principal divisions of a long poem. [Italian, from Latin cantus, song; see canticle. open pit during the quarter had the effect of lowering recovery rates due to carbonaceous car·bo·na·ceous adj. Consisting of, containing, relating to, or yielding carbon. carbonaceous Adjective of, resembling, or containing carbon Adj. 1. ore. Net Earnings Net earnings for the December quarter were $0.8 million. Sales for the fourth quarter consisted of 23,982 ounces of gold and for the ten month period ended December 31, 2004 consisted of 79,822 ounces of gold. Sales for the December quarter were $10.3 million. Inventory as at December 31, 2004 was $5.9 million, an increase in inventory compared to September 30, 2004 of $0.3 million. The average sale price realized during the quarter was $434 per ounce for net revenue of $10.3 million for the quarter. Operations from the Fazenda Nova Mine have been credited against mineral properties as pre-operating activities. Commercial production from Fazenda Nova is expected early fiscal 2005.
Reserves
Summary Reserve and Resource Table (1)
---------------------------------------------------------------------
Gold M&I Reserve Inferred
Ounces Ounces Ounces
(000s) (000s) (000s)
-------------------------------------
Fazenda Brasileiro (underground) 291 178 81
Fazenda Brasileiro (open pit) 119 55 -
-------------------------------------
410 233 81
Fazenda Nova 168 147 2
Sao Francisco (Main ore) 1,164 888 503
Sao Francisco (ROM ore) 223 151 304
-------------------------------------
1,387 1,039 807
Sao Vicente 161 161 297
Chapada 3,046 2,493 1,226
Santa Cruz / Argentina 90 - 48
-------------------------------------
Total Ounces 5,262 4,073 2,461
-------------------------------------
-------------------------------------
---------------------------------------------------------------------
Copper M&I Reserve Inferred
Pounds Pounds Pounds
(millions) (millions) (millions)
-------------------------------------
Chapada 2,809 2,273 1,394
-------------------------------------
-------------------------------------
---------------------------------------------------------------------
(1) Reserve ounces are a subset of M&I ounces. Inferred ounces are in
addition to M&I ounces.
A table providing a breakdown of reserves and resources is
attached.
As at December 31, 2004, Fazenda Brasileiro had proven and probable PROBABLE. That which has the appearance of truth; that which appears to be founded in reason. reserves containing 233,000 ounces of gold of which 178,400 ounces are underground reserves and 54,600 ounces are from open pit. The Company replaced 69% of the 78,000 ounces of gold mined during the fiscal year ended December 2004. Reserves and resources are currently expected to support the operation for an additional four years, producing between 90,000 and 105,000 ounces annually. Through additional near mine exploration efforts, management anticipates the mine life of Fazenda Brasileiro will be increased. Total reserves and resources (excluding inferred resources) at Fazenda Brasileiro as at December 31, 2004 were 410,200 ounces of gold. Proven and probable reserves for Sao Francisco contain 1,038,400 ounces of gold. Given the coarse gold effect at Sao Francisco, there is potential for actual mined grade of ore to exceed the reserve grade in the feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. . Proven and probable reserves for Sao Vicente São Vi·cen·te A city of southeast Brazil on an offshore island in the Atlantic Ocean west of Santos. Founded in 1532, it was sacked by English pirates in 1591. Population: 327,000. contain 161,000 ounces of gold. Yamana is currently undergoing a new feasibility study for Sao Vicente. A higher reserve estimate might indicate that Sao Vicente could support a stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." mine. Under the original mine plan for Sao Vicente, treating it on a combined basis with Sao Francisco, total production is expected to exceed 300,000 ounces of gold in 2006. Remaining proven and probable reserves for the Fazenda Nova Mine are 147,000 ounces of gold following mining activity since the start of operations. The mine life of Fazenda Nova is currently over 4 years. Proven and probable reserves for Chapada are 2,493,500 ounces of gold and 2.27 billion pounds of contained copper as at December 31, 2004. The current mine life for the Chapada project is expected to be 19 years. Reserve and resource estimates are calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with National Instrument 43-101 issued by the Canadian Securities Regulatory Authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . Future Outlook The long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. plan of the Company includes reaching an annual production level in excess of 400,000 ounces of gold per year by 2007 plus over 100 million pounds of annual copper production. During fiscal 2005 it is estimated that the Company will produce between 145,000 - 160,000 ounces of gold at an average total cash cost between $215- 230 per ounce. These estimates exclude any potential production from Sao Vicente, which is currently subject to a feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. . Forecast cash costs have assumed a Reais to U.S. Dollar exchange rate of 3.0 to 1.0 which is a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. U.S. Dollar exchange rate than the current rate, but inline with Brazilian consensus estimates for the year. If the Reais averages a rate that is stronger than 3:1, this could increase our operating and capital costs expressed in U.S. dollars. In addition, increasing costs of consumables would increase costs above estimates and while this estimate is provided on an annual basis, on a quarter by quarter basis costs may be higher than the annual average. The Company plans to pursue further mining and exploration opportunities in the mining industry. The Company intends to move swiftly swift adj. swift·er, swift·est 1. Moving or capable of moving with great speed; fast. See Synonyms at fast1. 2. to become a major Brazilian gold producer and explorer and believes that its existing Brazilian properties, together with further acquisitions in Latin America, will give the Company the critical mass necessary to become a mid-tier global gold producer with good exploration prospects. Development Projects Update Construction of the Fazenda Nova Mine was completed during the year at a cost of $6.5 million before capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. of pre-operating costs. Construction was funded from the Company's existing cash resources. Leaching leaching, method of extraction in which a solvent is passed through a mixture to remove some desired substance from it. A simple example is the passage of boiling water through ground coffee to dissolve and carry out the chemicals necessary for producing the beverage. and smelting smelting, in metallurgy, any process of melting or fusion, especially to extract a metal from its ore. Smelting processes vary in detail depending on the nature of the ore and the metal involved, but they are typified in the use of the blast furnace. of the first gold bar occurred in September 2004. The Fazenda Nova Mine is expected to produce more than 140,000 ounces of gold over the next four years. The construction of Chapada and Sao Francisco is underway. The Company is on schedule with contracts for the mine fleet, site preparation and engineering for Chapada. The mills have been ordered and tenders for the EPC (1) (Entertainment PC) See HTPC. (2) (Electronic Product Code) A standard code for RFID tags administered by EPCglobal Inc. (www.epcglobalinc.org). contracts are underway. The Company closed a $100 million debt financing commitment in December 2004 for the construction and development of Chapada but this remains undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely . The remaining capital cost requirements of $78 million for the construction of Chapada will be funded by the company's existing financial resources. The construction of Sao Francisco will be funded by the Company's existing cash resources and cash flow from operations. Capital costs for the construction of Sao Francisco are estimated at $46.1 million. Production from Sao Francisco is expected late 2005 and from Chapada in 2007. Exploration Rio See RapidIO and MP3. Itapicuru Greenstone Belt Greenstone belts are zones of variably metamorphosed mafic to ultramafic volcanic sequences with associated sedimentary rocks that occur within Archaean and Proterozoic cratons between granite and gneiss bodies. (RIGB RIGB Royal Institution of Great Britain (UK organisation for scientific research and communication) ) During 2004 Yamana spent approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.5 million on exploration and doubled the size of its land holdings to 150,000 hectares in the RIGB. Exploration included 375 drill holes totaling more than 15,000 m and the excavation excavation In archaeology, the exposure, recording, and recovery of buried material remains. The techniques employed vary by the type of site, but all forms of archaeological excavation require great skill and careful preparation. of 70 trenches totaling more than 24,123 m. This work has led to the discovery of eight high priority targets, the Mandacaru, Sapateira, Serra Branca The name Branca may refer to: Places
self-righteous abbot of the Capuchins at Madrid. [Br. Lit.: Ambrosio, or The Monk] See : Hypocrisy , Rio de Peixe-Treado, Encantado Encantado is a word in Brazilian Portuguese that roughly translates as "enchanted one." The term is used for creatures who come from a paradiasical underwater realm called the Encante. , Mari and Bonsucesso. Santa Elina Gold Belt The Santa Elina Gold Belt is a major crustal crust·al adj. Of or relating to a crust, especially that of the earth or the moon. Adj. 1. crustal - of or relating to or characteristic of the crust of the earth or moon shear shear: see strength of materials. Shear A straining action wherein applied forces produce a sliding or skewing type of deformation. zone which extends for approximately 600 km in western Brazil and eastern Bolivia Bolivia (bōlĭv`ēə, Span. bōlē`vyä), officially Republic of Bolivia, republic (2005 est. pop. 8,858,000), 424,162 sq mi (1,098,581 sq km), W South America. . There are some 38 known gold deposits along a 200 km section of the belt which reportedly have historic production totalling more than 2.2 million ounces. Yamana holds approximately 750,000 hectares in the belt and efforts are currently focused in the area between its two operating mines particularly at our Longa Longa can refer to any of the following:
conglomerate, corporation whose asset growth, often very rapid, comes largely through the acquisition of, or merger with, other firms whose products are largely unrelated to each other or to that of the parent company. and Sao Francisco Deep targets. The Longa Vida target, just 800 m from the Sao Francisco mine, is a 2 km-long zone that includes a 1 km-long zone with coarse gold-bearing Adj. 1. gold-bearing - containing gold; "auriferous quartz veins" auriferous metal, metallic - containing or made of or resembling or characteristic of a metal; "a metallic compound"; "metallic luster"; "the strange metallic note of the meadow lark, quartz quartz, one of the commonest of all rock-forming minerals and one of the most important constituents of the earth's crust. Chemically, it is silicon dioxide, SiO2. veins. Initial chip samples ranged up to 600 g/t gold and several veins with visible gold were observed ob·serve v. ob·served, ob·serv·ing, ob·serves v.tr. 1. To be or become aware of, especially through careful and directed attention; notice. 2. . A second chip sampling program included 182 samples over a 1.25 km-section of the zone and assayed up to 46 g/t gold. Plans for Longa Vida include excavating 12 trenches to total approximately 2,000 m and bulk sampling to better define the grade of the mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. . A 2,400 m diamond drill program to fully define the extent of the zone is also planned.
Key Statistics
(Based on Canadian GAAP and expressed in U.S. dollars, unless
otherwise noted)
(Unaudited) (Unaudited)
For the For the
three months fiscal year
ended ended
Dec. 31, Feb. 29, Dec. 31, Feb. 29,
2004 2004 2004 2004
(10 months)
------------------------------------
Gold production (ounces):
Fazenda Brasileiro 20,854 25,944 78,168 56,794
Fazenda Nova 2,745 - 2,849 -
Sao Francisco pilot plant 846 283 3,214 283
------------------------------------
24,445 26,227 84,231 57,077
------------------------------------
Fazenda Brasileiro gold sales
(ounces) 23,982 26,617 79,822 49,989
Fazenda Brasileiro per ounce data:
Average realized gold price $ 434 $ 407 $ 409 $ 396
Cash costs per ounce produced $ 246 $ 213 $ 218 $ 216
Fazenda Brasileiro average ore
grade (g/t) 2.82 3.50 3.13 3.42
Fazenda Brasileiro average
recovery rate (%) 90.5 95.3 91.9 95.5
Financial Results (thousands)
Gold sales $ 10,305 $ 10,453 $ 32,298 $ 19,811
Net earnings $ 804 $ 639 $ 2,783 $ 1,008
Operating cash flow $ 3,621 $ 3,205 $ 8,536 $ 5,491
Per share data:
Net earnings (basic) $ 0.01 $ 0.01 $ 0.03 $ 0.02
Net earnings (diluted) $ 0.01 $ 0.01 $ 0.02 $ 0.02
Operating cash flow $ 0.03 $ 0.04 $ 0.09 $ 0.13
Weighted average number of
common shares (thousands) 111,737 92,870 100,036 43,674
Financial Position (thousands) Dec. 31, 2004 Feb. 29, 2004
------------------------------
Cash and cash equivalents $ 87,054 $ 34,603
Working capital $ 88,936 $ 35,803
Shareholders' equity $ 160,309 $ 81,261
Non-GAAP Measures The Company has included cost per ounce information data because it understands that certain investors use this information to determine the Company's ability to generate earnings as cash flow for use in investing and other activities. The Company believes that conventional measures of performance prepared in accordance with Canadian GAAP do not fully illustrate the ability of its operating mine to generate cash flow. Non-GAAP measures do not have any standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). under Canadian GAAP, and therefore they may not be comparable to similar measures employed by other companies. The data are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP. The measures are not necessarily indicative indicative: see mood. of operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. or cash flow from operations as determined under Canadian GAAP. Where cost per ounce data is computed by dividing GAAP operating cost components by ounces sold, the Company has not provided formal reconciliations of these statistics. Cash costs are determined in accordance with the Gold Institute's Production Cost Standard. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Except for statements of historical fact relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by words such as "plan," "expect," "project," "intend," "believe," "anticipate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting in·ter·pret v. in·ter·pret·ed, in·ter·pret·ing, in·ter·prets v.tr. 1. To explain the meaning of: interpreted the ambassador's remarks. See Synonyms at explain. drilling results and other ecological ecological emanating from or pertaining to ecology. ecological biome see biome. ecological climax the state of balance in an ecosystem when its inhabitants have established their permanent relationships with each data, fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. metal prices, the possibility of project cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and other factors. The Company undertakes no obligation to update forward-looking statements if circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.
Reserves and Resources
December 31, 2004
Mineral Reserves (Proven and Probable)
Proven Probable
Reserves Reserves
Gold
Tonnes Grade Contained Tonnes Grade Contained
(000's) (g/t) oz.(000's) (000's) (g/t)oz.(000's)
---------------------------------------------------------------------
Fazenda Brasileiro
(U/G) 990 2.970 94.5 946 2.758 83.9
Fazenda Brasileiro
(O/P) 695 2.440 54.6
---------------------------------------------------------------------
Total Fazenda
Brasileiro 1,685 2.751 149.1 946 2.758 83.9
Fazenda Nova 4,986 0.914 146.6
---------------------------------------------------------------------
Sao Francisco
(Main Ore) 8,928 0.999 286.8 18,728 0.998 600.9
Sao Francisco
(ROM Ore) 6,762 0.231 50.2 13,414 0.233 100.5
---------------------------------------------------------------------
Total Sao Francisco 15,690 0.668 337.0 32,142 0.679 701.4
Sao Vicente 5,220 0.960 161.1
---------------------------------------------------------------------
Chapada 17,341 0.324 180.6 279,807 0.257 2,312.9
---------------------------------------------------------------------
Total Gold
Reserves 34,716.3 0.597 666.7 323,101 0.328 3,405.8
---------------------------------------------------------------------
Copper
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
---------------------------------------------------------------------
Chapada 17,341 0.418% 160.0 279,807 0.343% 2,113.2
---------------------------------------------------------------------
Total - Proven
and Probable
Gold
Tonnes Grade Contained
(000's) (g/t) oz.(000's)
---------------------------------------------------------------------
Fazenda Brasileiro (U/G) 1,936 2.866 178.4
Fazenda Brasileiro (O/P) 695 2.440 54.6
---------------------------------------------------------------------
Total Fazenda Brasileiro 2,631 2.755 232.9
Fazenda Nova 4,986 0.914 146.6
---------------------------------------------------------------------
Sao Francisco (Main Ore) 27,656 0.998 887.7
Sao Francisco (ROM Ore) 20,176 0.232 150.7
---------------------------------------------------------------------
Total Sao Francisco 47,832 0.675 1,038.4
Sao Vicente 5,220 0.960 161.1
---------------------------------------------------------------------
Chapada 297,148 0.261 2,493.5
---------------------------------------------------------------------
Total Gold Reserves 357,817 0.354 4,072.5
---------------------------------------------------------------------
Copper
Tonnes Grade Contained
(000's) (%) lbs (mm)
---------------------------------------------------------------------
Chapada 297,148 0.347% 2,273.2
---------------------------------------------------------------------
Mineral Resources (Measured, Indicated and Inferred) (Measured and
Indicated include Reserves as outlined above)
Measured Indicated
Resources Resources
---------------------------------------------------------------------
Gold Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
---------------------------------------------------------------------
Fazenda Brasileiro
(U/G) 990 2.969 94.5 1,901 3.218 196.7
Fazenda Brasileiro
(O/P) 2,019 1.833 119.0 - - -
---------------------------------------------------------------------
Total Fazenda
Brasileiro 3,009 2.207 213.5 1,901 3.218 196.7
Fazenda Nova - - - 6,053 0.866 168.5
Sao Francisco
(Main Ore) 11,522 0.978 362.3 26,062 0.957 801.9
Sao Francisco
(ROM Ore) 9,559 0.226 69.4 21,177 0.225 153.2
---------------------------------------------------------------------
Total Sao Francisco 21,081 0.637 431.7 47,239 0.629 955.1
Sao Vicente 5,220 0.960 161.1
Chapada 25,200 0.300 243.1 396,200 0.220 2,802.4
Santa Cruz/Argentina - - - 206 13.620 90.2
---------------------------------------------------------------------
Total Gold
Resources 49,290 0.561 888.3 456,819 0.298 4,374.0
---------------------------------------------------------------------
Copper
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
---------------------------------------------------------------------
Chapada 25,200 0.34% 188.9 396,200 0.30% 2,620.4
---------------------------------------------------------------------
Total - Measured Inferred
and Indicated Resources
---------------------------------------------------------------------
Gold Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
---------------------------------------------------------------------
Fazenda Brasileiro
(U/G) 2,891 3.133 291.2 489 5.150 81.0
Fazenda Brasileiro
(O/P) 2,019 1.833 119.0 - - -
---------------------------------------------------------------------
Total Fazenda
Brasileiro 4,910 2.599 410.2 489 5.152 81.0
Fazenda Nova 6,053 0.866 168.5 95 0.500 1.5
Sao Francisco
(Main Ore) 37,584 0.963 1,164.2 22,529 0.695 503.4
Sao Francisco
(ROM Ore) 30,736 0.225 222.6 42,394 0.223 304.4
---------------------------------------------------------------------
Total Sao Francisco 68,320 0.631 1,386.8 64,923 0.387 807.8
Sao Vicente 5,220 0.960 161.1 11,400 0.810 296.9
Chapada 421,400 0.225 3,045.5 250,870 0.152 1,226.0
Santa Cruz/
Argentina 206 13.620 90.2 141 10.600 48.2
---------------------------------------------------------------------
Total Gold
Resources 506,109 0.323 5,262.3 327,918 0.233 2,461.4
---------------------------------------------------------------------
Copper
Tonnes Grade Contained Tonnes Grade Contained
(000's) (%) lbs (mm) (000's) (%) lbs (mm)
---------------------------------------------------------------------
---------------------------------------------------------------------
Chapada 421,400 0.302% 2,809.3 250,870 0.252% 1,393.7
---------------------------------------------------------------------
Mineral Reserves and Resources Chapada's inferred resources were taken from a Micon International Limited NI 43-101 compliant
natural resource, natural resources - resources (actual and potential) supplied by nature , such persons made assumptions, and used parameters and methods appropriate for each property, and verified ver·i·fy tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies 1. To prove the truth of by presentation of evidence or testimony; substantiate. 2. the data disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). , including sampling, analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. and test data underlying such estimates. These external reserve reports have been reviewed by Mel Klohn, Exploration Consultant as "qualified person", as that term is defined in NI 43-101. These figures are estimates, however, and no assurance can be given that the indicated amounts of quantities of gold will be produced. Gold price fluctuations may render (1) To make visible; to draw. The term comes from the graphics world where a rendering is an artist's drawing of what a new structure would look like. In computer-aided design (CAD), a rendering is a particular view of a 3D model that has been converted into a realistic image. mineral reserves containing relatively lower grades of gold mineralization uneconomic. Moreover, short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. operating factors relating to the mineral reserves could affect the Company's profitability in any particular accounting period. The corporation is not aware of any environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues which may materially affect the Corporation's mineral reserve and resource estimates, other than factors discussed above and in "Risks and Uncertainties" in the Management Discussion and Analysis section of the annual report. Mineral resources which are not mineral reserves have not demonstrated economic viability.
Mineral Reserves Mineral Resources Date Report
---------------------------------------------------------------------
Fazenda Porfirio Cabaleiro Porfirio Cabaleiro Jan-05 Estimate
Brasileiro Rodriguez, Rodriguez, of
Geostatistician Geostatistician Mineral
Geoexplore Geoexplore Reserves
Consultoria e Consultoria e
Servicos Ltd. Servicos Ltd.
Chapada Independent Mining Independent Mining Aug-04 Feasibi-
Consultants Inc. Consultants lity
Study
Sao
Francisco Independent Mining Independent Mining Dec-04 Feasibi-
Consultants Inc. Consultants Inc. lity
Study
Sao Vicente Watts, Griffis and Watts, Griffis and Jul-03 Prelimi-
McOuat Limited McOuat Limited nary
Feasibi-
lity
Study
Fazenda Moreno & Associados Kappes, Cassiday Jan-05/ Reserve
Nova & Associates Nov-03 Estimate
Update /
Feasibi-
lity
Study
Santa Cruz Cia Minas, Jun-04 Internal
/Argentina Buenaventura S.A.A. Resource
Study
Mine Mineral Reserve Gold Copper Mineral Resources
Cut-off Price Price Cut-off Grade
(g/t gold; % copper) (g/t gold; % copper)
---------------------------------------------------------------------
Fazenda 1.5 US$350 n/a 1.5
Brasileiro
Chapada $2.43 (1) US$325 US$0.85 0.15% (2)
Sao
Francisco 0.32 and 0.16 US$350 n/a 0.32 and 0.16
Sao
Vicente 0.30 US$325 n/a 0.30
Fazenda
Nova 0.30 US$345 n/a 0.30
(1) Breakeven NSR cutoff vs grade cutoff used. Internal NSR cutoff
of $1.93.
(2) copper equivalent equals (copper (%) + 0.56 x gold (g/t))
YAMANA GOLD INC.
CONSOLIDATED BALANCE SHEETS
Prepared by management
(In thousands of U.S. dollars)
December 31, 2004 February 29, 2004
(Unaudited) (Unaudited)
---------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents $ 87,054 $ 34,603
Accounts receivable 1,177 1,488
Inventory (Note 3) 5,862 3,848
Advances and deposits 2,068 819
---------------------------------------------------------------------
96,161 40,758
Capital
Property, plant and equipment (Note 4) 18,315 18,237
Assets under construction (Note 5) 12,085 250
Mineral properties (Note 6) 43,292 34,628
---------------------------------------------------------------------
73,692 53,115
Other
Other assets (Note 7) 5,797 75
Further income tax assets (Note 12) 1,456 -
---------------------------------------------------------------------
$ 177,106 $ 93,948
---------------------------------------------------------------------
---------------------------------------------------------------------
LIABILITIES
Current
Accounts payable and accrued liabilities $ 7,225 $ 5,030
---------------------------------------------------------------------
Long Term
Asset retirement obligation (Note 8) 4,972 4,943
Future income tax liabilities (Note 12) 4,600 2,714
---------------------------------------------------------------------
16,797 12,687
---------------------------------------------------------------------
---------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock
Authorized
Unlimited number of first preference
shares without par value issuable in series
Unlimited number of common shares without par value
Issued and outstanding
122,286,716 common shares (Note 9)
(February 29, 2004 - 95,060,749 shares) 147,407 74,427
Share purchase warrants and other (Note 10) 10,864 8,721
Continued surplus 1,775 633
Refined Earnings (deficit) 263 (2,520)
---------------------------------------------------------------------
160,309 81,261
---------------------------------------------------------------------
$ 177,106 $ 93,948
---------------------------------------------------------------------
(Unaudited) (Unaudited)
Three months ended Fiscal year ended
December February December February
31, 2004 29, 2004 31, 2004 29, 2004
(10 months)
SALES $ 10,305 $ 10,453 $ 32,298 $ 19,811
COST OF SALES (5,930) (6,336) (17,755) (10,916)
DEPRECIATION, AMORTIZATION
AND DEPLETION (1,506) (1,303) (4,541) (2,430)
ACCRETION OF ASSET RETIREMENT
OBLIGATION (Note 8) (174) (162) (364) (162)
---------------------------------------------------------------------
MINE OPERATING EARNINGS 2,695 2,652 9,638 6,303
EXPENSES
General and administrative (2,314) (1,311) (5,487) (3,432)
General exploration - (3) - (6)
Mineral property and other
asset write-offs - (2) - (76)
Stock-based compensation
(Note 11) - (227) (2,191) (612)
Foreign exchange gain (loss) 519 (663) 1,848 157
Severance costs - (6) - (716)
---------------------------------------------------------------------
OPERATING EARNINGS (LOSS) 900 440 3,808 1,618
Investment and other business
income 367 289 792 483
Interest and financing
(expense) recovery - 3 - (255)
---------------------------------------------------------------------
EARNINGS BEFORE TAX 1,267 732 4,600 1,846
INCOME TAX EXPENSE (Note 12) (463) (93) (1,817) (838)
---------------------------------------------------------------------
NET EARNINGS 804 639 2,783 1,008
DEFICIT, BEGINNING OF THE PERIOD (541) (3,159) (2,520) (3,491)
INTEREST ON CONVERTIBLE NOTES - - - (37)
---------------------------------------------------------------------
RETAINED EARNINGS (DEFICIT),
END OF THE PERIOD $ 263 $ (2,250) $ 263 $ (2,250)
---------------------------------------------------------------------
---------------------------------------------------------------------
BASIC EARNINGS PER SHARE $ 0.01 $ 0.01 $ 0.03 $ 0.02
DILUTED EARNINGS PER SHARE $ 0.01 $ 0.01 $ 0.02 $ 0.02
---------------------------------------------------------------------
Weighted average number of
Shares outstanding (in
thousands) 111,737 92,870 100,036 43,674
---------------------------------------------------------------------
---------------------------------------------------------------------
Note: In the opinion of management of Yamana, all adjustments of a normal recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. nature have been included in these financial statements to provide a fair statement of results for the periods presented. The results of those periods are not necessarily indicative of the results for the full year.
YAMANA GOLD INC.
CONSOLIDATED STATEMENTS
OF CASH FLOWS
Prepared by management
(In thousands of U.S. dollars)
(Unaudited) (Unaudited)
Three months ended Fiscal year ended
December February December February
31, 2004 29, 2004 31, 2004 29, 2004
(10 months)
---------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings for the period $ 804 $ 639 $ 2,783 $ 1,008
Asset retirement obligations
realized (82) - (237) -
Items not involving cash
Services paid in common
shares (adjustment) - (566) - 272
Depreciation, amortization
and depletion 1,506 1,303 4,541 2,430
Stock-based compensation - 227 2,191 612
Mineral property and other
asset write-offs - - - 74
Future income taxes 14 495 430 (324)
Accretion of asset retirement
obligation 174 162 364 162
Foreign exchange (692) 794 (1,792) (100)
Other 901 - 1,013 819
---------------------------------------------------------------------
2,625 3,054 9,293 4,953
Net change in non-cash
working capital 996 151 (757) 538
---------------------------------------------------------------------
3,621 3,205 8,536 5,491
---------------------------------------------------------------------
---------------------------------------------------------------------
FINANCING ACTIVITIES
Issue of common shares and
warrants for cash 76,167 21,630 76,167 61,105
Issue costs (4,236) (1,488) (4,236) (4,756)
Deferred financing charges
(Note 7) (2,007) - (3,049) -
Interest expense on
convertible notes - 37 - -
---------------------------------------------------------------------
69,924 20,179 68,882 56,349
---------------------------------------------------------------------
INVESTING ACTIVITIES
Business acquisition of
Fazenda Brasileiro - (933) - (22,098)
Expenditures on mineral
properties (4,749) (2,848) (11,512) (4,191)
Acquisition of property,
plant and equipment (627) (466) (3,079) (1,770)
Expenditures on assets under
construction (5,711) - (11,965) -
Other (354) - (531) -
---------------------------------------------------------------------
(11,441) (4,247) (27,087) (28,059)
---------------------------------------------------------------------
INCREASE IN CASH AND CASH
EQUIVALENTS 62,104 19,137 50,331 33,781
EFFECT OF FOREIGN EXCHANGE ON
NON-U.S DOLLAR DENOMINATED
CASH AND CASH EQUIVALENTS 984 (794) 2,120 100
CASH AND CASH EQUIVALENTS
BEGINNING OF THE PERIOD 23,966 16,260 34,603 722
---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS END
OF THE PERIOD $ 87,054 $ 34,603 $ 87,054 $ 34,603
---------------------------------------------------------------------
---------------------------------------------------------------------
Notes to the Unaudited Interim Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge As at December 31, 2004 and for the ten month period ended December 31, 2004 and for the twelve month period ended February 29, 2004 (Tabular tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. amounts in thousands of U.S. dollars)(Unaudited) 1. Basis of presentation The accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted ("GAAP") in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . These interim financial statements do not contain all the information required by generally accepted accounting principles for annual financial statements and therefore should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the most recent annual financial statements of the Company. These financial statements follow the same accounting policies and methods of their application as the most recent annual financial statements. On August 12, 2003, the outstanding common shares then outstanding were consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: on the basis of one new common share for 27.86 existing common shares. The share and per share information for the comparative period ended February 29, 2004 is presented as if the consolidation took place March 1, 2003. Certain amounts for fiscal 2004 have been reclassified to conform with the current year's presentation. 2. Change in year end The Company changed its year end from February 28/29 to December 31. As such year to date figures are for the ten month period ended December 31, 2004 with comparative figures for the twelve month period ended February 29, 2004 and quarterly figures are for the three month period ended December 31, 2004 with comparative figures for the three month period ended February 29, 2004.
3. Inventory
December 31, February 29,
2004 2004
-----------------------------------------------------------
Metal in circuit and gold in
process $ 2,729 $ 155
Ore stockpiles - 364
Dore inventories 996 1,721
Materials and supplies 2,137 1,608
-----------------------------------------------------------
$ 5,862 $ 3,848
-----------------------
4. Property, plant and equipment
December 31, February 29,
2004 2004
---------------------------------------------------------------------
Accumulated Net Book Net Book
Cost Amortization Value Value
---------------------------------------------------------------------
Land $ 1,053 $ - $ 1,053 $ 875
Buildings 8,500 2,061 6,439 7,096
Machinery and equipment 9,196 1,890 7,306 6,616
Vehicles 2,677 543 2,134 2,344
Furniture and office
equipment 1,262 304 958 1,033
Computer equipment and
software 515 90 425 273
---------------------------------------------------------------------
$ 23,203 $ 4,888 $ 18,315 $ 18,237
-----------------------------------------------
5. Assets under construction
December 31, February 29,
2004 2004
-----------------------------------------------------------
Fazenda Nova $ 6,949 $ 250
Sao Francisco 1,915 -
Chapada 3,221 -
-----------------------------------------------------------
$ 12,085 $ 250
---------------------------
Construction costs and preproduction pre·pro·duc·tion adj. 1. Taking place or existing before production: preproduction planning. 2. revenues and expenses will be transferred to property, plant and equipment and mineral properties for each project upon commencement of commercial production.
6. Mineral properties
December 31, February 29,
2004 2004
-----------------------------------------------------------
Fazenda Brasileiro (i) $ 13,158 $ 9,212
Santa Elina (ii) 13,319 11,237
Chapada properties 11,523 9,197
Argentine properties 5,036 4,975
Other 256 7
-----------------------------------------------------------
$ 43,292 $ 34,628
---------------------------
(i) Fazenda Brasileiro Balance is net of accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. amortization in the amount of $2.77 million (February 29, 2004 - $1 million). (ii)Santa Elina Properties Balance is net of accumulated amortization in the amount of $0.7 million (February 29, 2004 - $NIL NIL - /nil/ 1. New Implementation of Lisp. A language intended to be the successor of MacLisp. A large Lisp, implemented mostly in VAX assembly language. A forerunner of Common LISP. ["NIL: A Perspective", Jon L. White, MACSYMA Users' Conf Proc, 1979]. 2. ).
7. Other assets
December 31, February 29,
2004 2004
-----------------------------------------------------------
Deferred financing charges (i) $ 5,191 $ -
Other 606 75
-----------------------------------------------------------
$ 5,797 $ 75
---------------------------
(i) Deferred financing changes relate to a $100 million debt financing commitment for the development of the Chapada Gold and Copper project that closed in December 2004. The secured notes are for a term of 6 years and bear interest at an annual rate of 10.95%. Principal is repayable re·pay v. re·paid , re·pay·ing, re·pays v.tr. 1. To pay back: repaid a debt. 2. upon maturity of the notes and covenants under the facility have characteristics comparable to high yield debt. The Company may also elect to defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. interest payments for the first three years. Under this scenario A scenario (from Italian, that which is pinned to the scenery) is a synthetic description of an event or series of actions and events. In the Commedia dell'arte , the interest note is subject to an additional 150 basis points during the first two years during which the interest is accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. . The Company must drawdown Drawdown The peak to trough decline during a specific record period of an investment or fund. It is usually quoted as the percentage between the peak to the trough. Notes: the full $100 million within 180 days of closing. As at March 7, 2005, the Company had not drawn down any monies from this facility. During the year, total fees in the amount of $1.35 million were paid and 2.5 million warrants were issued resulting in the recognition of $2.1 million of deferred financing charges were recognized. The fair value of the warrants was calculated using the Black-Scholes pricing model with the following assumptions: (i) dividend yield of 0%, (ii) expected volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of 30%, (iii) risk free interest rate of 3.0% and (iv) expected life of 5 years. Additional fees of $850,000 and 2.5 million warrants are payable only on funding. Additional expenditures of $1.7 million have also been deferred as financing charges for total cash expenditures of $3.049 million incurred in connection with the debt facility for the ten month period ended December 31, 2004. Financing charges will be amortized over the life of the loan upon funding. 8. Asset retirement obligation Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. The asset retirement obligation for reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. and closure costs relates to the costs on acquisition of Fazenda Brasileiro mine, Sao Vicente project and the Fazenda Nova project calculated as the net present value of estimated future cash flows at a discount rate of 7%. The following is an analysis of the beginning and year end balance of the asset retirement obligation as at December 31, 2004:
Balance as at February 29, 2004 $ 4,943
Accretion incurred in the current year 364
Liabilities accrued on Fazenda Nova 316
Liabilities accrued on Fazenda Brasileiro 175
Reduction of estimated liabilities of
Fazenda Brasileiro (920)
Foreign exchange 331
Expenditures in the current year (237)
-------
Balance as at December 31, 2004 $ 4,972
-------
-------
9. Capital stock
(i) Common share s issued and outstanding
Number of
Common Shares Amount
(000's)
---------------------------------------------------------------------
Balance as at February 29, 2004 95,061 $ 74,427
Exercise of options and share
appreciation rights (1) 41 101
Public offering, net of issue costs (2) 26,377 71,858
Issue of common shares (3) 808 1,021
--------------------------
Balance as at December 31, 2004 122,287 $ 147,407
--------------------------
1. The Company issued 41,000 shares to optionees on the exercise of their share options and appreciation rights. Previously recognized compensation expense in the amount of $25,200 on options exercised during the year was charged to share capital with a corresponding decrease to contributed surplus. 2. In November, 2004, the Company closed a public offering for 26,377,000 common shares at a price of C$3.45 per share for aggregate gross proceeds of $76.1 million (C$91 million) net of $4.2 million of issue costs. 3. In July, 2004, the Company issued 808,000 common shares to management in connection with previous subscriptions that were approved by the shareholders at the February 2004 annual general meeting. 10. Share purchase warrants As at December 31, 2004 there were 43.4 million share purchase warrants outstanding with an average exercise price of Cdn$1.78 and an average outstanding life of 3.87 years. 11. Stock-based compensation There were no stock options issued during the three month period ended December 31, 2004. Yamana accounts for all stock options granted using the fair value based method of accounting, estimating at the time of grant using the Black-Scholes option pricing model option pricing model A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on with the following assumptions for the options issued during the current fiscal year: (i) dividend yield of 0%, (ii) expected volatility of 50.5%, (iii) risk free interest rate of 3.5% and (iv) expected life of 3 years. The Company has assumed no forfeiture The involuntary relinquishment of money or property without compensation as a consequence of a breach or nonperformance of some legal obligation or the commission of a crime. The loss of a corporate charter or franchise as a result of illegality, malfeasance, or Nonfeasance. rate as adjustments for actual forfeitures are made in the year they occur. As at December 31, 2004, there were 6.66 million stock options outstanding with an average exercise price of Cdn$2.04 and an average outstanding life of 8.28 years. A total of 6.54 million stock options were exercisable as at December 31, 2004. 12. Income taxes The following table reconciles income taxes calculated at statutory rates with the income tax expense in the fiscal year financial statements:
December 31, February 29,
2004 2004
(10 months)
-----------------------------------------------------------
Earnings before income taxes $ 4,600 $ 1,846
Statutory rate 36.12 % 38.00 %
-----------------------------------------------------------
Expected income tax expense
(recovery) $ 1,662 $ 701
Effect of lower tax rates in
foreign jurisdictions (154) (503)
Unrecognized tax benefits in
Canada and United States 19 1,364
Non-taxable items 106 (724)
Change in valuation allowance 184 -
-----------------------------------------------------------
Income tax expense $ 1,817 $ 838
-----------------------------------------------------------
Less: current income tax expense 1,387 1,162
-----------------------------------------------------------
Future income tax expense
(recovery) $ 430 $ (324)
------------------------
(i) Future income taxes
The temporary differences that give rise to future income
tax assets are presented below:
December 31, February 29,
2004 2004
-----------------------------------------------------------
Amounts related to tax loss and
credit carry-forwards in
Canada and United States $ 7,175 $ 6,988
Financing costs 3,126 1,474
-----------------------------------------------------------
Net future tax asset 10,301 8,462
Valuation allowance (8,845) (8,462)
-----------------------------------------------------------
Future income tax assets $ 1,456 $ -
--------------------------
The temporary differences that give rise to future income tax
liabilities are presented below:
December 31, February 29,
2004 2004
-----------------------------------------------------------
Mineral properties and property,
plant and equipment $ (3,992) $ (3,512)
Asset retirement obligation 621 631
Unrealized foreign exchange gains
on inter-company loans (1,317) -
Other 88 167
-----------------------------------------------------------
Future income tax liabilities $ (4,600) $ (2,714)
--------------------------
13. Supplementary cash flow information
(i) Supplementary information regarding other non-cash transactions:
Three months ended Fiscal year ended
December 31, February 29, December 31, February 29,
2004 2004 2004 2004
(10 months)
---------------------------------------------------------------------
Financing Activities
Issue of common
shares on exercise
of options and
share appreciation
rights $ 25 $ - $ 28 $ -
Stock-based
compensation on the
exercise of options
and share
appreciation rights $ - $ - $ (3) $ -
Reversal of
contributed surplus
on previously
recognized stock-based
compensation on
exercise of options $ (25) $ - $ (25) $ -
Issue of warrants $ 2,142 $ - $ 2,142 $ -
Deferred financing
charges on the
issue of warrants $ (2,142) $ - $ (2,142) $ -
Issue of common
shares for interest
and principal due
on convertible
notes $ - $ - $ - $ 1,529
Issue of common
shares for Santa
Elina assets $ - $ 171 $ - $ 18,496
Equity component of
convertible notes:
Payment of interest
in common shares $ - - $ - $ (49)
Payment of principal
in common shares $ - - $ - $ (1,480)
Investing Activities
Expenditures on mineral
properties, net of tax $ - $ (171) $ - $ (18,496)
14. Segmented information The Company considers its business to consist of three geographical ge·o·graph·ic also ge·o·graph·i·cal adj. 1. Of or relating to geography. 2. Concerning the topography of a specific region. ge segments primarily in Brazil, Argentina and corporate head office in Canada. Capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) referred to below consist of land, buildings and equipment, and mineral properties.
(i)
December 31, February 29,
2004 2004
-----------------------------------------------------------
Mineral properties and property,
plant and equipment
Brazil $ 68,163 $ 47,617
Argentina 5,413 5,376
Canada 116 122
-----------------------------------------------------------
$ 73,692 $ 53,115
-----------------------------------------------------------
(ii)
Three months ended Fiscal year ended
December 31, February 29, December 31, February 29,
2004 2004 2004 2004
(10 months)
Mine Revenues
Brazil $ 10,305 $ 10,453 $ 32,298 $ 19,811
Argentina - - - -
Canada - - - -
---------------------------------------------------------------------
$ 10,305 $ 10,453 $ 32,298 $ 19,811
---------------------------------------------------
15. Related party transactions
The Company had the following transactions with related parties:
December 31, February 29,
2004 2004
(10 months)
-----------------------------------------------------------
Pursuant to the reimbursement
of third party costs relating
to the Company's financing and
property acquisitions incurred
on behalf of the Company $ - $ 438
Legal fees paid to a law firm
that had partners who are either
a former director or a former
officer of the Company $ - $ 295
Directors fees and consulting
fees to associates thereof (i) $ 179 $ 117
Consulting fees paid to an
officer prior to becoming
an officer $ - $ 72
-----------------------------------------------------------
(i) Included in accounts payable and accrued liabilities is
39,133 (February 29, 2004 -$21,586) in this regard.
These transactions occurred in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties based on their estimate of fair market value.
16. Commitments
Year 2005 2006 2007 2008 2009
Office leases $ 333 $ 298 $ 261 $ 148 $ -
Fazenda Brasileiro
Operating leases and
service contracts 3,161 515 - - -
Fazenda Nova
Operating leases and
service contacts 2,736 2,481 618 - -
Sao Francisco
Construction and
service contacts 13,707 - - - -
Chapada
Construction and
service contacts 26,999 1,883 - - -
-----------------------------------------
$ 46,936 $ 5,177 $ 879 $ 148 $ -
-----------------------------------------
Yamana Gold Inc. (TSX:YRI) (AMEX:AUY) (LSE:YAU) |
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