Its hard to believe that only a few months ago Yamana Gold Incorporated (AUY) was trading as low $3.31 and it looked all over for gold producers regardless of the fundamentals or technical analysis. Fast forward to today and we find that Yamana is fit and well and making excellent progress as demonstrated by their recent quarterly results.
Highlights for the three-month period ended March 31, 2009 include:
- Revenues of $224.3 million
- Net earnings of $86.0 million, or $0.12 per share
- Cash flow from operations of $78.0 million before changes in non-cash
working capital items and $66.4 million after changes in non-cash
working capital items
- Total production from all mines of 271,482 gold equivalent ounces
- Average co-product cash costs of $379 per GEO
Development and Exploration
- Provided an update to QDD Lower West showing positive economic
results and an increase in gold resources
- Announced positive results from Mercedes pre-feasibility study
supporting development of Mercedes as a mine
- Provided Ernesto/Pau-a-Pique scoping study and further update
indicating considerable potential exists for increasing resources at
- Completed Pilar mineral resource estimate demonstrating substantial
increase in contained ounces and significant improvement in grade
To read the report in full please click here.
Peter Marrone, Yamana's chairman and CEO. "Production was in line with previous guidance. Costs were in line with expectations and continued to decline".
Its good to see that the current deflationary environment has produced some benefits which are working their way through to cost reductions for miners. With further cost reductions and improving gold prices, Yamana's stock price is well positioned to make some seriously good progress.
We would also like to draw your attention to the P/E ratio which is 13.71 and extremely low when compared with Agnico-Eagle at 74.59, Randgold at 96.76 and Barrick at 45.44. This is just one metric but it indicates that Yamana has room to grow. For disclosure purposes we do own Yamana and it forms part of our core position. If you are looking to add a few gold producers to your portfolio you could do a lot worse than acquiring Yamana which should be acquired on dips as and when they present themselves.
Yamana Gold Incorporated trades on the following Stock Exchanges:
AUY on the New York Stock Exchange
YRI on Toronto Stock Exchange
YAU on the London Stock Exchange, giving it global exposure to investors.
Yamana Gold has a market capitalization of $6.46 billion, a P/E ratio of 13.71, with 732.92 shares outstanding, has a 52 week high of $17.00 and 52 week low of $3.31 and closed today at $8.81.
Have a good one.
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