Yamana Gold Inc.’s (AUY, YRI.T) third-quarter earnings sank 48% as the mining company saw costs and expenses rise.
The Canadian mining company has generally posted stronger revenue over the past three years as gold prices improved, though sales slipped in the second quarter.
“We delivered record revenue and production in the third quarter and year to date, which also resulted in strong cash flow,” Chief Executive Peter Marrone said Tuesday.
In June, Yamana unveiled a plan to buy Extorre Gold Mines Ltd. (XG) for cash and stock worth around 413 million Canadian dollars (US$404 million), giving it access to the major Cerro Moro gold and silver development project in Argentina. Yamana operates mainly in South America.
Yamana posted a profit of $60 million, or eight cents in basic earnings a share, down from $115.8 million, or 16 cents a share, a year earlier. Excluding special items, per-share earnings fell to 24 cents from 26 cents.
Yamana noted that earnings were affected by an increase in the Chilean tax rate, enacted in late September which affects the tax rates on both current and deferred income taxes.
Revenue climbed 10% to $611.8 million.
Analysts polled by Thomson Reuters had expected a per-share profit of 23 cents on revenue of $613.9 million.
Gross margin narrowed to 62.1% from 65.9 % as input costs-excluding depreciation, amortization and depletion–rose 23%.
Exploration expenses climbed 98%, while general and administrative expenses were up 36%.
Production reached 310, 490 gold-equivalent ounces, up 11% from a year ago.
Average realized gold price per ounce edged down 1% from a year earlier, while the average realized silver price per ounce sank 18%. Meanwhile, the average realized copper price per pound fell 11%.
Total payable copper sold fell 4.1%.
Shares closed Friday at $18.68 and have risen 23% in the past three months through Friday’s close. The markets remained closed Tuesday due to Hurricane Sandy.
Write to Saabira Chaudhuri at [email protected]
