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Yamana (AUY) Boosts Balance Sheet, Sees Higher Output in 2H20

Zacks Equity Research
·3-min read

Yamana Gold Inc. AUY recently announced preliminary production results for second-quarter 2020.

In the second quarter, the company produced 164,141 ounces of gold and 2.01 million ounces of silver. Total gold equivalent ounces (GEO) produced in the quarter were 183,582 GEO. The company stated that overall production as well as production from most mines surpassed planned levels.

Notably, the second quarter highlights exceptional operational performances from El Penon, Jacobina, Canadian Malartic and Minera Florida, which have all surpassed planned production targets.

Yamana also expects to generate higher production, improved costs and significant cash flows in the second half of 2020, which is in line with prior guidance. It sees sequentially increasing production over the third and fourth quarters. The company also reiterated its 2020 outlook, which was revised in April.

Yamana is also strengthening its balance sheet. It lowered net debt by around $100 million during the quarter. The company also repaid $100 million borrowed in March 2020 associated with the coronavirus pandemic. Net debt at the end of the second quarter was less than $769 million.

Jacobina continued to demonstrate strong operational performance during the second quarter. It delivered sixth-consecutive quarter of record gold production at 45,646 ounces.

El Penon witnessed a strong quarter as both gold and silver production exceeded planned levels. Production benefitted from processing of higher-grade ore.

Operations at Canadian Malartic were temporary suspended due to the government restrictions stemming from the coronavirus pandemic. The ramping up of operations was faster than expected during the second quarter.

Production at Cerro Moro was affected by interprovincial travel restrictions, which led to Cerro Moro operating with considerably lower workforce during the second quarter.

At Minera Florida, production in the second quarter was better than planned. Results benefitted from increased feed grade and higher tons processed thanks to the continued improvements in productivity.

Shares of Yamana have skyrocketed 112.7% in the past year compared with 50.2% surge of its industry.



Zacks Rank & Key Picks

Yamana currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space include Sandstorm Gold Ltd. SAND, Harmony Gold Mining Company Limited HMY and Northern Dynasty Minerals Ltd. NAK, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Sandstorm Gold has an expected earnings growth rate of 55.6% for 2020. The company’s shares have surged 65.3% in the past year.

Harmony Gold has an expected earnings growth rate of 264.3% for fiscal 2020. Its shares have returned 147.9% in the past year.

Northern Dynasty has an expected earnings growth rate of 28.6% for 2020. The company’s shares have gained 207.5% in the past year.

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Sandstorm Gold Ltd (SAND) : Free Stock Analysis Report
 
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