FORM
6-K
UNITED
STATES
SECURITIES
AND
EXCHANGE COMMISSION
Washington,
D.C.
20549
Report
of Foreign
Private Issuer
Pursuant
to Rule 13a-16 or 15d-16
of
the
Securities Exchange Act of 1934
For
the month
of October 2005
Commission
File
Number 001-31880
|
Yamana
Gold
Inc.
(Translation
of registrant's name into English)
|
|
150
York
Street
Suite
1902
Toronto,
Ontario M5H 3S5
(Address
of
principal executive offices)
|
Indicate
by check
mark whether the registrant files or will file annual reports under cover Form
20-F or Form 40-F.
|
Form
20-F
|
....[ ]..... | Form 40-F | ....[X].... |
Indicate
by check
mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1): ____
Note:
Regulation S-T Rule 101(b)(1) only permits the submission
in
paper of a Form 6-K if submitted solely to provide an attached annual
report to security holders.
Indicate
by check
mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7): ____
Note:
Regulation S-T Rule 101(b)(7) only permits the submission
in
paper of a Form 6-K if submitted to furnish a report or other document
that
the registrant foreign private issuer must furnish and make public under the
laws of the jurisdiction in which the registrant is incorporated, domiciled
or
legally organized (the registrant’s “home country”), or under the rules of the
home country exchange on which the registrant’s securities are traded, as long
as the report or other document is not a press release, is not required to
be
and has not been distributed to the registrant’s security holders, and, if
discussing a material event, has already been the subject of a Form 6-K
submission or other Commission filing on EDGAR.
Indicate
by check
mark whether by furnishing the information contained in this Form, the
registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
|
Yes
|
....[ ].... |
No
|
....[X].... |
If
"Yes" is marked, indicate below the file number assigned to the registrant
in
connection with Rule 12g3-2(b): 82- ________
| News Release |
October
11,
2005
|
YAMANA
ANNOUNCES UPDATED STRATEGIC VISION
YAMANA
GOLD
INC. (TSX: YRI; AMEX: AUY; LSE (AIM): YAU) is pleased to announce
an
updated strategic vision which includes plans to:
| · |
Achieve
target production from internal growth of at least 500,000
ounces of gold
per year for a sustainable period extending to 2015 and
beyond;
|
| · |
Advance
three
of its most advanced exploration properties to
development;
|
| · |
Pursue
potential acquisition targets that will further increase production
targets by adding a further possible 250,000 ounces of gold
per year with
the objective that in 2008 the Company’s production would be 750,000
ounces per year;
|
| · |
Increase
mine
life primarily at Fazenda Brasileiro and Sao
Francisco;
|
| · |
Continue
aggressive exploration of its extensive exploration portfolio;
and
|
| · |
Take
advantage of the current strength in the copper market by monetizing
a
portion of its copper production at robust prices thereby adding
to the
financial strength of the Company and increasing value to
shareholders.
|
The
program is
underway now and will continue through to 2008.
Target
Production from Internal Growth
Yamana
presently
has two mines in operation with annualized gold production of 120,000
to 125,000
ounces. With the Sao Francisco mine scheduled for completion late this
year and
Chapada in the fourth quarter of 2006, the Company is currently targeting
production from operating mines and mines in the advanced stages of construction
of approximately 265,000 ounces of gold in 2006 and 400,000 ounces of
gold in
2007. In addition to this, copper production of 105 million pounds is
projected
for 2007 and is expected to average 130 million pounds over the initial
five
years of its 19 year mine life.
The
Company’s
exploration program has advanced rapidly since it began early this year.
Three
new properties, C1 Santa Luz, Sao Vicente and Ernesto have advanced to
the point
where management believes they merit scoping and feasibility studies
in the case
of C1 Santa Luz and Ernesto and an updated feasibility study in the case
of Sao
Vicente. The Company’s goal is to achieve production from these properties of
more than 200,000 ounces per year for at least 10 years beginning in
2008. This
production target would be over and above production as currently projected
from
existing mines and from Sao Francisco and Chapada which are under construction.
The Company’s goal is to achieve overall production of more than 600,000 ounces
in 2008, 2009 and 2010.
2
The
Company has set
its sustainable target production level from current mines and mines
under
construction along with these new properties at 500,000 ounces per year
from
2008 through to 2015. This represents an initial minimum increase of
100,000 of
ounces of gold per year from forecast production levels of 400,000 ounces
of
gold in 2007.
Project
Development of New Mines
The
Company’s
exploration program has resulted in the advancement of three potential
mineral
properties, C1 Santa Luz on the Itapicuru greenstone belt North of
the Company’s
Fazenda Brasileiro mine and the other two on the Santa Elina Gold
Belt to the
North (Sao Vicente) and South (Ernesto) of the Company’s Sao Francisco mine. The
targeted production increase from these mineral properties would
be
approximately 200,000 ounces per year beginning in 2008. The strategic
plan
contemplates the construction of two new mines as construction at
Chapada is
completed next year and a third mine in 2007 once the construction
of the first
two is well under way.
(1)
C1 Santa Luz
C1
Santa Luz (near Maria Preta which was a series of small open
pit heap leach operations before the Company acquired the area
and began
exploration) is one of 8 priority targets on the Itapicuru greenstone
belt. It
is located 60 kilometres North of the Company’s Fazenda Brasileiro mine. Areas
of mineralization include and are adjacent to the historical high
grade open
pits.
Drilling
to date totals 40 holes for almost 7,000 metres. Results
include 8.9m @ 6.11g/t Au, 29.4m @ 9.71g/t Au, 19.9m @ 3.56g/t
Au, 27.6m @
3.11g/t AU, 12m @ 4.84g/t Au and 10m @ 5.35g/t Au and support the
Company’s view
that this property contains a mineral resource that would be sufficient
to
support a stand alone mine. Resource estimation and metallurgical
testwork is
now underway. The conceptual mine plan contemplates a stand alone
mine and plant
although certain administrative, accounting and personnel functions
would be
carried out at Fazenda Brasileiro thereby reducing operating costs
at C1 Santa
Luz. The development plan for C1 Santa Luz is as follows.
| Resource Estimate (initial) | Early November, 2005 |
| Scoping Study | End November, 2005 |
| Feasibility Study | June, 2006 |
| Construction (assuming a positive feasibility study) | (By) Summer, 2007 |
(2)
Sao Vicente
Sao
Vicente drilling and bulk sample results continue to support the
view of a larger open pit operation than contemplated in the original
feasibility study completed in May 2005 and a new concurrent underground
operation at Sao Vicente. This previous feasibility study confirmed
that Sao
Vicente has the reserves and resources to support a stand alone
smaller open pit
operation. Mineral reserves were estimated at 203,000 ounces with
3
recoverable
reserves of 174,000 ounces over an initial period of three years. A program
of
surface drilling, drift excavation and bulk sampling and underground drilling
from drill stations established from the drift and extending into the ore body
began earlier in 2005 to determine the merits of a larger potential at Sao
Vicente.
Drilling
results to
date include 18m @ 1.70g/t Au, 8m @ 2.25g/t Au, 4m @ 30.56g/t Au and 2m @
55.27g/t Au. Further, the results of the first 22-tonne bulk samples taken
from
the underground exploration drift expedited into the mineralized zone are quite
encouraging as shown in the table below.
Based
on these
results, Sao Vicente is now proposed as a larger open pit operation than
contemplated in the original feasibility study along with a concurrent
underground operation. The development plan for Sao Vicente is as
follows.
Feasibility
Study (including new reserve
estimate) April, 2006
Construction
(assuming a positive feasibility
study) (By) Late Summer, 2007
Sao
Vicente has a
significant course gold effect similar to Sao Francisco. Bulk sampling and
underground drilling has been undertaken to better understand the true grade
at
Sao Vicente based on experience learned at Sao Francisco. Evidence from bulk
samples to date suggest grades that will exceed drill indicated and reserve
grades. Sao Vicente is approximately 50 kilometres north of Sao
Francisco.
4
(3)
Ernesto
A
previously
disclosed resource estimate at Ernesto demonstrates a measured and indicated
resource of 845,566 tonnes at 8.07 g/t Au with 219,253 ounces of gold and
an
inferred resource of 510,646 tonnes at 5.98 g/t Au with 98,253 ounces of
gold.
This estimate is based on historical drilling before the Company acquired
Ernesto. A drilling program at Ernesto is continuing with results consistent
with those obtained from prior drilling that resulted in the foregoing resource
estimate. The Company believes Ernesto has the potential to be a high grade
very
shallow underground mine. Ernesto is nearby existing infrastructure and is
approximately 60 kilometres South of Sao Francisco. The development plan
for
Ernesto is as follows.
| Scoping Study | March, 2006 |
| Feasibility Study | Late Summer, 2006 |
| Construction (assuming a positive feasibility study) | (By) Early 2008 |
While
current mine
plans contemplate a stand alone mine and plant for each of Sao Francisco,
Sao
Vicente and Ernesto, certain administrative, accounting, supply chain and
personnel functions would be carried out at Pontes e Lacerda, a nearby town
of
45,000 people, thereby reducing G&A costs for all these
operations.
Acquisitions
The
Company is
committed to its internal growth which is substantial. It also intends to
supplement that growth with additional acquisitions of producing and/or
development stage projects. The principal focus will be Latin
America.
With
a cash balance
of over US$225 million and with the cash flow from its mines, the Company
is
well positioned to take advantage of accretive acquisition
opportunities.
The
Company plans
to pursue acquisition opportunities that in 2008 would deliver production,
together with production from existing operating mines, mines under construction
and exploration properties, that exceed 750,000 ounces per year.
Increasing
Mine Life
Significant
efforts
are being made to increase mine life at the Company’s two larger gold mines
Fazenda Brasileiro and Sao Francisco.
(1)
Fazenda Brasileiro
Fazenda
Brasileiro
began 2005 with measured and indicated resources (including reserves) of
410,200
ounces plus inferred resources of 81,000 ounces.
The reserve estimate at Fazenda Brasileiro
as at
August 31, 2005 shows an increase in resources from the beginning of the
year with measured and indicated resources (including
reserves) of 509,300 ounces plus inferred resources of 103,600 ounces. This
represents an increase of
5
approximately 122,000 ounces despite having mined approximately 50,200 ounces so far this year. Current reserves and resources support a mine life of another 6 years at current mining levels. Fazenda Brasileiro demonstrates the potential to continue production for a considerable period of time. The Company’s goal is to have at least another 7 years of mine life at Fazenda Brasileiro with production levels of approximately 90,000 ounces per year. The complete mid-year reserve and resource estimate for Fazenda Brasileiro may be found attached to the release and on the Company’s website at www.yamana.com.
(2)
Sao
Francisco
The
Company began a
15,000 metre infill drilling program this year largely along strike from the
Sao
Francisco mine. Sao Francisco’s initial mine life is planned for approximately 7
1/2 years with average production of 108,000 ounces per year. The proven and
probable reserves at Sao Francisco currently total 1,038,400 ounces from
measured and indicated resources of 1,386,800 ounces. Inferred resources of
amount to 807,800 ounces in addition to this. The majority of the resources
over
and above reserves are along strike to the North and South of the open pit
mine
now under construction. The Company believes a considerable portion of the
along
strike resources can be upgraded with the current program, thereby increasing
reserves and mine life. The Company’s goal is to establish a new mine life
estimated for at least 10 years representing the addition of 2 ½ years on the
initial mine life at estimated production rates contemplated in the feasibility
study and mine plan for Sao Francisco. Completion of drilling is expected by
the
end of 2005 and a new reserve estimate is scheduled for early February
2006.
Continued
Exploration
The
advancement of
three projects to the point where they have the potential to be mines is based
primarily on drilling and bulk sampling programs started only in early 2005.
The
Company will continue to explore priority targets on its mineral concessions.
The Company is currently spending approximately US$1,000,000 per month on
exploration and plans to continue spending at this rate.
Further,
the
location scope and elevation of mineralization of Sao Vicente, Sao Francisco
and
Ernesto suggest a major gold district with the Company controlling an area
covering approximately a half million hectares of exploration concessions.
Near
term exploration plans in this district include drilling for expansion of
Ernesto resources and developing a drill target at Pau-a-pique, located 40
kilometres South of Ernesto.
The
Itapicuru
Greenstone Belt north of Fazenda Brasileiro hosts a number of interesting
targets including Mari, Serra Branca, M1, Vereda Grande, Sapateira and
Bonsucesso, all included in the current year exploration program. C1 Santa
Luz
is only the first and most advanced target and the Company believes it supports
a substantial resource.
Copper
Hedge Program
6
The
Company has
implemented a copper hedging program that is intended to help secure a less
than
two year payback at its Chapada copper-gold mine. Chapada is under construction
and is scheduled for completion by October, 2006.
The
Company has
entered into a program that provides a forward price of $1.37 per pound of
copper for a total of 50.2 million pounds of copper in 2007, representing
about
one half of planned copper production that year. This program includes long
call
options at an average strike price of approximately $1.67 per pound of copper
thereby providing further upside in the event that copper prices exceed that
threshold level. No cash has been paid for the call options as the price
has
been deducted from the hedge price, providing a net hedge price of $1.27
per
pound. The program requires no cash margin, collateral or other security
from
the Company. Moreover, the remaining 55 million pounds of copper production
forecast for 2007 and all gold and remaining copper production remain
unhedged.
The
benefits of
this program include the following.
| · |
Provides
support for the payback of Chapada which at $1.00 per pound of copper
price and $400 per ounce of gold price has a two year payback
;
|
| · |
Increases
the
value of Chapada and thereby the net asset value per share of the
Company;
|
| · |
Ensures
that
the Company participates in higher copper prices especially for the
balance of its copper production;
|
| · |
Ensures
that
the Company fully participates in any increase in gold prices from
its
significant gold production at Chapada as no gold is being
hedged;
|
| · |
Better
positions the Company and Chapada as a significant gold producer
as copper
is monetized into cash; and
|
| · |
As
copper is
monetized, that cash flow would be available for development and
acquisition of other gold projects.
|
This
program
increases the cash flow from Chapada from feasibility study levels without
removing the upside from higher copper prices. As such, it also mitigates
against certain cost increases primarily resulting from the appreciation
of the
Brazilian currency to the United States dollar as it increases forecast revenue.
It ensures that revenue from copper at the Chapada mine will be at much higher
levels than assumed in the feasibility study and mine plan for the Chapada
mine.
Gold
production
from Chapada is expected to be approximately 1.3 million ounces of gold over
its
mine life with 700,000 ounces of gold of that total in the first 5 years
and
365,000 ounces of gold in the first two years alone. Total copper production
over the 19 year mine life at Chapada is expected to be 2 billion pounds
of
copper.
Conclusions
7
Yamana
is committed
to building a production profile of at least 750,000 ounces of gold per year
by
2008. The Company has also implemented cost reduction measures at its existing
mines with the objective of delivering gold at low cash costs from all its
current, future and prospective operations.
Excess
cash
balances will also be invested in Brazil to take advantage of an interest
rate
environment that delivers the highest real interest rates in the world. Interest
income from these investments will further offset some of the effects of
the
appreciating Brazilian currency against the United States dollar that have
recently impacted all businesses in Brazil.
With
most of the
Company’s capital costs incurred in Brazilian currency, the Company will also
mitigate the effects of further currency appreciation against the United
States
dollar by holding cash in local currency to fund the Company’s planned capital
expenditures.
Commenting
on the
foregoing, Peter Marrone, President and Chief Executive Officer, stated:
“Two
years ago we created this Company with an ambitious business plan that targeted
three mines by the end of 2005 and a fourth mine one year later. We are now
embarking on an equally ambitious plan for the next few years that will sustain
and expand on our growing production. We intend to develop into a major gold
producer with more than 750,000 ounces of annual gold production well into
the
next decade resulting in strong cash flow, profitability and returns to our
shareholders and we are well funded. Our recent financing positions us with
significant available cash to pursue our goals and carry out our strategic
plan”.
The
Company
cautions that production targets from the foregoing exploration properties
are
based on internal estimates only and from known information at this time.
Mineral resources are not mineral reserves and do not have demonstrated economic
viability. Whether or not any of the Company’s properties support a resource, or
one that is economically viable, and whether or not any of these projects
will
become a mine or support mining activities, will be determined only after
the
applicable feasibility studies are completed and production decisions are
made.
There is no assurance that feasibility studies will support current internal
estimates nor that production decisions will be made. Further, the initial
production targets may not be consistent with production parameters set forth
in
applicable feasibility studies if any production is supported at
all.
Yamana
commissioned
Geoexplore Consultoria Serviços and Mel Klohn to prepare the updated estimate of
Fazenda Brasileiro’s current resources as outlined above. Mr. Klohn reviewed the
reserve and resource update and is a Qualified Person as defined under National
Instrument Policy 43-101. Mr. Klohn has verified the data disclosed and have
reviewed the contents of this press release.
For
further
information on the Company’s mineral reserves, reserve estimates and quality
assurance and quality control measures used by Yamana in conducting exploration
programs, please see the annual information form of Yamana for the year ended
8
December
31, 2004
available at www.sedar.com and the various technical reports prepared on
behalf of Yamana filed under National Instrument 43-101 also available at
www.sedar.com.
Yamana
is a
Canadian gold producer with significant gold production, gold and copper-gold
development stage properties, exploration properties and land positions in
all
major mineral areas in Brazil. Yamana expects to produce gold at intermediate
company production levels by 2006 in addition to significant copper production
by 2007. Company management plans to build on this base through the advancement
of its exploration properties and by targeting other gold consolidation
opportunities in Brazil and elsewhere in Latin America.
For
further
information, contact
|
Peter
Marrone
President
&
Chief Executive Officer
(416)
815-0220
E-mail:
investor@yamana.com
|
MINERAL
RESERVE and RESOURCE ESTIMATE, FAZENDA BRASILEIRO MINE
(As
of August 31,
2005)
|
August
31, 2005
|
|||||||||||
|
Proven
Reserves
|
Probable
Reserves
|
P
& P Reserves
|
|||||||||
|
area
|
tonnes
|
grade
|
ounces
|
tonnes
|
grade
|
ounces
|
tonnes
|
grade
|
Ounces
|
||
|
(000’s)
|
(g/t)
|
(000’s)
|
(000’s)
|
(g/t)
|
(000’s)
|
(000’s)
|
(g/t)
|
(000’s)
|
|||
|
UG
|
974
|
2.88
|
90.20
|
1385.70
|
2.87
|
127.98
|
2359.70
|
2.88
|
218.2
|
||
|
OP
|
393.6
|
2.36
|
29.86
|
393.60
|
2.36
|
29.9
|
|||||
|
Total
P&P:
|
2753.30
|
2.80
|
248.0
|
||||||||
|
Measured
Resources
|
Indicated
Resources
|
M
& I Resources (*)
|
|||||||||
|
area
|
tonnes
|
grade
|
ounces
|
tonnes
|
grade
|
ounces
|
tonnes
|
grade
|
Ounces
|
||
|
(000’s)
|
(g/t)
|
(000’s)
|
(000’s)
|
(g/t)
|
(000’s)
|
(000’s)
|
(g/t)
|
(000’s)
|
|||
|
UG
|
2008.7
|
3.32
|
214.66
|
2008.7
|
3.32
|
214.7
|
|||||
|
OP
|
898.1
|
1.62
|
46.67
|
898.1
|
1.62
|
46.7
|
|||||
|
Total
M&I:
|
2906.8
|
2.80
|
261.3
|
||||||||
|
Inferred
Resources
|
|||||||||||
|
area
|
tonnes
|
grade
|
ounces
|
||||||||
|
(000’s)
|
(g/t)
|
(000’s)
|
|||||||||
|
UG
|
|
695.1
|
4.63
|
103.6
|
|||||||
|
Total
INF:
|
695.1
|
4.63
|
103.6
|
||||||||
(*)
M&I -
Measured and Indicated Resources are EXCLUSIVE of Proven and Probable
Reserves
9
FORWARD-LOOKING
STATEMENTS: This news release contains certain "forward-looking statements"
within the meaning of Section 21E of the United States Securities Exchange
Act
of 1934, as amended. Except for statements of historical fact relating to
the
company, certain information contained herein constitutes forward-looking
statements. Forward-looking statements are frequently characterized by words
such as “plan,”“expect,”“project,”“intend,”“believe,”“anticipate”,
“estimate” and other similar words, or statements that certain events or
conditions “may” or “will” occur. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are made,
and
are subject to a variety of risks and uncertainties and other factors that
could
cause actual events or results to differ materially from those projected
in the
forward-looking statements. These factors include the inherent risks involved
in
the exploration and development of mineral properties, the uncertainties
involved in interpreting drilling results and other ecological data, fluctuating
metal prices, the possibility of project cost overruns or unanticipated costs
and expenses, uncertainties relating to the availability and costs of financing
needed in the future and other factors. The Company undertakes no obligation
to
update forward-looking statements if circumstances or management’s estimates or
opinions should change. The reader is cautioned not to place undue reliance
on
forward-looking statements.