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« Kinrosss Gold Corporation: Revenues Up, However… | Main | Despite recent events gold prices remain a dollar play »

Yamana Gold Inc Good Results, But!

AUY Chart 04 May 2011.JPG

Going back a few moons we were fans of Yamana Gold Incorporated (AUY) but our patience ran out and we reduced our exposure to this stock. As we can see from the above table AUY did well until 2008, however since then it has failed to make a new high despite gold setting new records. Maybe this set of results will provide the catalyst to give this gold producer a boost and better days are ahead. We apologize for not being more enthusiastic about Yamana Gold, but that is how we feel at the moment.

The first quarter results for 2011 are as follows:




- Production of 267,368 per gold equivalent ounce (GEO)(1)(3)at cash
costs of $14/GEO(1)(2)
- Gold production of 221,489 ounces
- Silver production of 2.3 million ounces
- Generated cash margin of $1,373 per ounce(4)

- Significant financial and operational increases over the first
quarter of 2010
- Production increased 11% to 267,368 GEO with record production
from El Penon
- Revenues up 37% to $476 million
- Net earnings up 11% to $0.20 per share
- Adjusted earnings(1) up 110% to $0.21 per share
- Cash flow generated from operations(1) up 73% to $0.38 per share

- Cash balance increased to $460 million from $330 million, a 39%
increase since 2010 year end

- Announced value enhancing deal with respect to Agua Rica with Xstrata
and Goldcorp

"Yamana's first quarter results continued to demonstrate our commitment to, and focus on, the delivery of predictable and reliable production and costs. We delivered production growth in the first quarter and record production from El Penon. Our cash costs continued to be one of the lowest in the industry" commented Peter Marrone, Chairman and CEO. "We continue to advance our new projects, the first of which, Mercedes, is expected to start production by the middle of 2012. C1 Santa Luz and Ernesto Pau-a-Pique will begin contributing by the end of 2012 and Pilar is expected to be in production in early 2013. All of the projects can be fully funded directly from our cash flow. These projects will contribute to our 60% production growth expected in the next three years."

To read this news release in full please click this link.


Yesterday we reported that had closed another two trades for profits of 108.52% and 116.67% respectively, well today we closed two more profitable trades and have updated the chart and stats accordingly.

Over in the Options pit, our model portfolio has achieved an average return of 41.92% per trade, 78 closed trades, 76 closed at a profit, or a 97.43% success rate. Average trade open for 46.45 days.

sk chart 04 May 2011.JPG

The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

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Reader Comments (4)

Pity you did not draw the uptrend line showing the stock is making higher lows. Also you then see it close to breakout . True it could break either way but all the indications are up

May 4, 2011 | Unregistered Commentergold bug

Point taken. Maybe our expectations were a tad too high for this stock...

May 4, 2011 | Unregistered CommenterGold Prices

You guys were exactly correct from a trading perspective. SLW massively outperformed AUY. From a value perspective, AUY is a low risk mini GG that's absurdly underpriced. That value will be realized someday. I still don't own any after selling at $14 and $17.50, but I will be putting on some debit spreads here soon as the smackdown progresses.

AUY was punished for having added so much copper to the mix. The ratio is headed back to emphasizing gold more. That will likely be reflected in the price. One of the best pure value plays in the market today...and it might trade like a slug for a while longer. One never knows. Momo begets more momo.

May 4, 2011 | Unregistered Commenterfallingman

The ease of trading that ETFs offer is also taking investment capital away from the mining sector, as you well know. A clearer ID for AUY as much more of a gold miner would help.

May 4, 2011 | Unregistered CommenterGold Prices

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