Yamana Gold Incorporated: Improving Reserves

A news release issued by Yamana Gold Incorporated today may be of interest to you as the company increased both proven and probable reserves as stated below:

proven and probable gold reserves increased to 19.4 million ounces as of December 31, 2008. Total new discovered proven and probable gold reserves totaled 2.5 million ounces in 2008. With approximately 1.0 million ounces having been mined in 2008, net gold reserves increased by approximately 1.5 million ounces, representing a net increase of eight percent. Total measured and indicated gold resources increased significantly to 15.7 million ounces, up 22 percent from 12.9 million ounces a year earlier. Approximately 7.9 million new ounces of gold were added across all categories before production, which exceeds the Company's previous expectation of 7.0 million new ounces. Discovery costs for proven and probable plus measured and indicated gold ounces were approximately US$12.00 per gold ounce which compares well to the industry average.

Yamana was trading at the $4.00 level back in November 2008 so it is good to see that it has doubled since then and closed today at $8.04. We expect Yamana to do well as and when gold prices make a challenge and beat their historic highs in US dollar terms. However in the short term gold producing stocks appear to remain under the spell of the DOW and are less influenced by gold prices at the moment. The US dollar remains strong so we think that Yamana will take a breather for now.

Yamana Gold has a market capitalization of $5.90 billion, a P/E ratio of 18.45, with 733.49 shares outstanding and closed yesterday at $8.04.

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, giving it lots of exposure to investors.

Got a comment, then fire it in!

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

Comments

[John Ell]

Help me out here. I am having trouble with the idea that the gold stocks are under the spell of the DOW. It is not supposed to work that way, and I don't believe that it really is even though the situation sure looks that way.

As the economy gets worse the attraction of holding precious metals, especially gold, should be on the increase.
Correspondingly, the best miners' stocks should be in demand.

Don't you think that possibly part of the explanation of why it is not happening might be due in large part to the fact that buyers have been cajoled, intimidated, or sold on the idea that the best route is the actual metal? Add to that fact the enormous amount of cash going to the gold ETF's. What remains is not a heck of a lot to dabble in the gold stocks.

What say you.

John

[Gold Prices]

John,

We agree with the above, the factors you mention are indeed playing a big part in determining the amount of funds that are actually available to be invested in mining stocks. However there still appears to be some sort of correlation between the HUI and the DOW, it may be temporary, but for now it does cause us some irritation!