Gold producing stocks are well and truly in the dog box with Yamana Gold Incorporated suffering more than most, so we contacted Yamana regarding their performance and they replied this morning. Their reply is printed here in full, exactly as we received it.
Thank you for your interest in Yamana Gold. We encourage looking at stock performance on a relative basis. When comparing our performance with that of our peers, it is clear that there has been significant pressure across the board. Stock performance is a reaction to the recent state of the market; gold equities have been trading quite closely to the markets, and less closely to the commodity. Having said that, Yamana has been sold off slightly more than most and we are just as frustrated as you are, as we are shareholders as well. A possible reason for this may be the effect of the large transaction we completed last year. Some have a view that it takes one year for full integration of operations and people, and though we don’t agree, as we have fully integrated already, this may have an effect. We have also heard that the transaction resulted in more hedge funds and momentum players holding our stock. With current market conditions, hedge funds are liquidating their positions, which impacts Yamana’s share price.
We remain committed to delivering value to our shareholders. Yamana continues to be one of the lowest cash cost companies in the industry and we are uniquely positioned with a declining cost structure and increasing production all in gold. We have the stability of the jurisdictions in which we mine. Most of our 2009 and 2010 production estimates are based on mines that are or will be built by the end of this year. We are well positioned with cash, cash equivalents, and growth both in production and cash flow, and other valuable assets. We have many upcoming positive events expected for the end of this year and we are currently on track to deliver on these milestones.
We hope this answers your questions.
Yamana Gold Inc.
Yamana Gold has a market capitalisation of $2.52 billion, a P/E ratio of 8.26, with 699.21 shares outstanding and closed yesterday at $3.60.
Yamana Gold Incorporated trades as AUY on the New York Stock Exchange and as YRI on Toronto Stock Exchange and as YAU on the London Stock Exchange.
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