Mr. William Wulftange reports
YAMANA GOLD ANNOUNCES SECOND QUARTER 2016 RESULTS
Yamana Gold Inc. is releasing its financial and operational results for the second quarter of 2016, including total gold production of 313,086 ounces, revenue of $466.5-million, net earnings of $32.9-million or three cents per share, and adjusted earnings of $5.4-million or one cent per share. Additional highlights are provided below.
All dollar amounts are expressed in U.S. dollars unless otherwise indicated.
In addition, the company is herein providing an exploration update for its 50-per-cent-owned Odyssey deposit, which is located east of the main open pit at Canadian Malartic. The exploration program at Odyssey continues to return positive results and an inferred mineral resource for the Odyssey North zone is expected by year-end 2016. The company expects to provide an exploration update with further details in the coming weeks on several of its properties, in particular, Chapada, Jacobina, Gualcamayo and C1 Santa Luz.
Operational highlights:
-
Total gold production of 313,086 ounces at byproduct cash costs and
all-in sustaining costs (AISC) per ounce of $664 and $964,
respectively;
- Silver production of approximately 1.8 million ounces at co-product cash
costs and AISC per ounce of $8.50 and $12.31, respectively;
- Copper production of 23.2 million pounds at co-product cash costs and
AISC per pound of $1.80 and $2.43, respectively.
Financial highlights:
- Revenue of $466.5-million, an increase of $11.5-million compared with the
second quarter of 2015, due to increased gold sales, partly offset by
lower silver and copper production, and significantly lower realized
copper price;
- Net earnings of $32.9-million or three cents per share, an increase of
$39.9-million or four cents per share, compared with the second quarter of 2015;
-
Adjusted earnings of $5.4-million or one cent per share, an increase
of $13.7-million or two cents per share, compared with the second quarter of
2015;
- Mine operating earnings of $63.7-million, an increase of $7.5-million
compared with the second quarter of 2015;
- Cash flows from operating activities after net change in working
capital of $202.0-million, an increase of $78.6-million compared with
the second quarter of 2015;
- Cash flows from operating activities before net change in working
capital of $202.0-million, an increase of $52.7-million compared with
the second quarter of 2015;
- Net free cash flow of $37.4-million, an increase of $15.2-million
compared with the second quarter of 2015;
- General and administrative expenses of $23.6-million, a decrease of $6.2-million compared with the second quarter of 2015.
KEY STATISTICS
(in millions of U.S. dollars, except per-share and per-unit amounts)
Three months Six months
ending June 30, ending Jun 30,
2016 2015 2016 2015
Net earnings (loss) from
continuing operations $ 32.9 $ (7.0) $ 71.4 $(142.3)
Per share $ 0.03 $ (0.01) $ 0.08 $ (0.15)
Adjusted earnings (loss) from
continuing operations 5.4 (8.3) 34.3 (45.8)
Per share $ 0.01 $ (0.01) $ 0.04 $ (0.05)
Revenue 466.5 455.0 896.8 913.0
Cost of sales excluding
depletion, depreciation and
amortization (283.5) (274.5) (516.3) (556.8)
Depletion, depreciation and
amortization (119.3) (124.3) (226.8) (262.2)
Mine operating earnings 63.7 56.2 153.7 94.0
General and administrative
expenses (23.6) (29.8) (45.4) (56.9)
Cash flow from operating
activities from continuing
operations 202.0 123.4 325.0 137.8
Per share $ 0.21 $ 0.13 $ 0.34 $ 0.15
Cash flow from operating
activities before net change in
working capital 202.0 149.3 330.5 245.3
Average realized gold price per
ounce $ 1,267 $ 1,195 $ 1,229 $ 1,206
Average realized silver price
per ounce $ 16.82 $ 16.28 $ 15.85 $ 16.51
Average realized copper price
per pound $ 2.12 $ 2.75 $ 2.12 $ 2.70
PRODUCTION SUMMARY -- FINANCIAL AND OPERATING SUMMARY
Three months Six months
ending June 30, ending Jun 30,
2016 2015 2016 2015
Gold produced 313,086 293,707 621,146 592,814
Gold sold 312,356 292,181 612,234 588,348
Silver produced (millions of
ounces) 1.79 2.37 3.72 4.85
Silver sold (millions of ounces) 1.78 2.33 3.67 4.77
Copper produced, Chapada
(millions of pounds) 23.2 33.6 49.0 60.5
Copper sold, Chapada (millions
of pounds) 26.0 31.5 48.7 58.2
Three months Six months
ending June 30, ending Jun 30,
2016 2015 2016 2015
Gold
Cash costs per ounce $664 $577 $627 $615
Co-product cash costs per ounce $699 $705 $652 $702
All-in sustaining costs per
ounce $964 $860 $884 $875
All-in sustaining costs per
ounce, co-product basis $949 $941 $868 $919
Silver
Cash costs per ounce $7.98 $7.14 $7.70 $7.30
Co-product cash costs per ounce $8.50 $9.30 $8.09 $8.68
All-in sustaining costs per
ounce $12.31 $11.71 $11.45 $11.35
All-in sustaining costs per
ounce, co-product basis $12.08 $13.12 $11.22 $12.06
Copper
Cash costs per pound of copper,
Chapada $1.80 $1.40 $1.66 $1.58
All-in sustaining costs per
pound of copper, Chapada $2.43 $1.69 $2.12 $1.89
PRODUCTION BREAKDOWN
Three months Six months
ending June 30, ending Jun 30,
2016 2015 2016 2015
Gold ounces
Chapada 17,299 30,172 38,338 52,532
El Penon 54,123 55,404 110,570 115,931
Canadian Malartic (50%) 72,502 68,441 146,115 136,334
Gualcamayo 40,264 37,558 76,867 83,734
Mercedes 22,948 19,306 47,252 43,576
Minera Florida 24,211 26,298 49,923 54,411
Jacobina 29,002 21,318 58,972 39,908
Pilar 22,806 21,237 44,654 40,390
Fazenda Brasiliero 16,873 13,974 35,397 25,998
RDM (i) 13,058 - 13,058 -
------- ------- ------- -------
Continuing operations 313,086 293,708 621,146 592,814
------- ------- ------- -------
Ernesto/Pau-a-Pique - - - 460
------- ------- ------- -------
Total 313,086 293,708 621,146 593,274
======= ======= ======= =======
Three months Six months
ending June 30, ending Jun 30,
2016 2015 2016 2015
Silver ounces
Chapada 52,642 72,978 112,157 134,920
El Penon 1,522,242 2,028,975 3,130,479 4,194,176
Mercedes 103,262 78,932 227,883 192,371
Minera Florida 112,760 191,162 247,036 333,489
------- ------- ------- -------
Total 1,790,906 2,372,047 3,717,555 4,854,956
======= ======= ======= =======
(i) These figures are for the period from the acquisition on April 29, 2016,
to June 30, 2016.
Outlook and strategy
Since its inception, the company has taken a portfolio approach to managing its business in which every mine and asset in its portfolio is evaluated based on production, costs, potential and planned returns. In general, the company looks at a balance among variables, including size and scale, cost, location, and opportunity for development and improvement. In addition, the company evaluates the amount of management time required by a given asset, compared with its inherent value, potential and opportunities associated with the asset.
The company continues to focus on operational execution, namely tracking or exceeding operational guidance, as it advances efforts to create further value within its portfolio, including the ramp-up of RDM toward expected steady-state production in early 2017, and development of C1 Santa Luz toward production in 2018, and Cerro Moro earlier that year. The company is targeting continuous production growth, and will continue to evaluate opportunities for optimizations and other operational improvements across its portfolio to further increase its production profile. The company will pursue these and other organic production growth opportunities, the latter including Canadian Malartic developments such as Odyssey, the Monument Bay project, Kirkland Lake opportunities and the Deep Carbonates project at Gualcamayo. Additionally, the company will pursue internal initiatives to surface value from dormant assets, including Agua Rica, Jeronimo, La Pepa, Suyai and Don Sixto, all of which have well-defined delineated mineral reserves or mineral resources.
Second quarter operational performance was in line with expectations for all mines except for Chapada. At Chapada, several factors impacted production, including a mechanical failure with its in-pit gyratory crusher and weather-related issues which made access to higher-grade ores more difficult. Mine management believed throughout the quarter that the operation would be able to compensate for the disabled in-pit crusher while it was under repair by mining higher-grade, softer ores. These softer ores could be processed directly at the plant, bypassing the in-pit crusher, which creates more efficient management for harder and lower-grade ores. However, those higher-grade, softer ores required significantly more development work, the access to which was meaningfully delayed because of restrictions created by the adverse weather. Exacerbating the issue, the in-pit crusher was idled further, as operational management developed and initiated a plan to repair and improve reliability, with the intent of avoiding similar issues in the future. The in-pit crusher is now operating as expected. In order to further optimize the in-pit crusher's performance, management is planning to replace the mantle and concave during the next planned maintenance shutdown, scheduled during the fourth quarter.
As a result of the production shortfall in the second quarter, production at Chapada is now expected to be 110 million pounds of copper and 106,000 ounces of gold in 2016. While the size and scale of Chapada implies that now at full operation, more production is possible, the company believes the foregoing is a reasonable baseline level of production for 2016. Production expectations for Chapada remain unchanged for 2017 and 2018.
On a consolidated basis, the company continues to be well positioned to deliver on gold and silver production guidance for the full year, based on current assumptions, as other mines have exceeded and continue to exceed expectations. Additionally, second-half production for all metals, as customary, is expected to be higher than first-half production.
Cash costs were impacted by the anomalous events at Chapada during the quarter and by foreign exchange rates. Given the strengthening of local currencies, primarily the Brazilian real, Canadian dollar and Chilean peso, as compared with the company's budgeted assumptions in early 2016, cash costs have increased in the second quarter compared with the first quarter. Some of the cost increases in the second quarter were foreseeable, although the local currency strengthened more than anticipated, which increased costs more than expected. The impact from real-denominated expenditures is partially mitigated as a hedge against the variability of the U.S. dollar was executed during the quarter. The company entered into zero-cost collar contracts totalling 510.0 million reais, with average call and put strike prices of 3.40 and 4.13, respectively.
The company's cost structure has been impacted by certain local currencies strengthening against budgeted assumptions. The company also notes that both spot and analyst consensus foreign exchange rates for the remainder of the year are stronger than the company's budgeted assumptions. Based on actual year-to-date results, the current business plan that includes the revised expectations for Chapada, and using a range of current spot and analyst consensus foreign exchange rates for the remainder of the year, the company has a revised cost guidance.
REVISED 2016 CONSOLIDATED CO-PRODUCT CASH COST AND CO-PRODUCT AISC GUIDANCE
Gold Silver Copper
2016
Consolidated co-product cash
costs (per ounce) (i) $635 to $675 $8.50 to $9.00 $1.55 to $1.75
Consolidated co-product AISC
(per ounce) (i) $880 to $920 $12.00 to $12.50 $1.95 to $2.15
2015
Consolidated co-product cash
costs (per ounce) $662 $8.28 $1.46
Consolidated co-product AISC
(per ounce) $868 $11.35 $1.77
(i) These figures are based on the updated spot foreign exchange rate assumptions.
2016 FOREIGN EXCHANGE RATE ASSUMPTIONS
Analyst Original
Spot consensus budget
U.S. dollar-Canadian dollar 1.30 1.32 1.35
U.S. dollar-Brazilian real 3.25 3.45 4.20
U.S. dollar-Argentine peso 15.00 15.50 15.00
U.S. dollar-Chilean peso 660.00 680.00 725.00
U.S. dollar-Mexican peso 18.50 18.70 17.00
The company remains committed to balance sheet and cost improvements. Efforts to decrease net debt by at least $300-million by the end of 2017 continue. The debt maturity profile remains very manageable and well positioned, especially in the short to medium term, with a total of $113-million scheduled debt payments by the end of 2017. The company continues to target a net-debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) ratio of between 1.5 to 2.0 times, which it believes to be prudent financial policy and planning.
The company expects to achieve its target debt levels through organic generation of cash flow from the growing production profile in the second half of the year, underpinned by higher prevailing gold prices that have improved to an average of $1,260 per ounce during quarter. Further improvements in the gold price, as evidenced during July of 2016, with the average monthly price in excess of $1,335 per ounce, will advance and accelerate these goals.
Net free cash flow increased by over 68 per cent, compared with the same quarter of 2015, and is expected to increase in the second half of the year, strengthening the balance sheet and reducing net debt. This will position the company for the anticipated increase in expansionary capital as a result of the construction expenditures budgeted for Cerro Moro in 2017. In 2018, the expected commissioning of Cerro Morro will start to add to the operating and free cash flows of the company.
Second quarter financial and operational results
Financial results for the three months ended June 30, 2016
Net earnings from continuing operations attributable to Yamana equityholders for the three months ended June 30, 2016, were $32.9-million, or three cents per share basic and diluted, compared with net loss of $7.0-million, or one cent per share basic and diluted, for the three months ended June 30, 2015. Earnings for the period were higher due to higher gold sales and prices, partly offset by lower sales of silver and copper, lower realized metal prices for copper, and due to lower depletion, depreciation and amortization (DDA).
Adjusted earnings (a non-GAAP (generally accepted accounting principles) measure) from continuing operations were $5.4-million or one cent per share for the three months ended June 30, 2016, compared with adjusted loss of $8.3-million or one cent per share for the same period of 2015. Mine operating earnings for the three months ended June 30, 2016, were $63.7-million, compared with $56.2-million for the same period in 2015.
Income tax recovery for the three months ended June 30, 2016, was $32.9-million, compared with an income tax recovery of $25.1-million for the same period in 2015. Income tax recovery for the period includes a $38.8-million unrealized foreign exchange gain in tax.
Revenue for the three months ended June 30, 2016, was $466.5-million, compared with $455.0-million in the same period of 2015, resulting from increased gold sales, by lower silver and copper sales, and a significantly lower price for copper. Revenue for the second quarter was generated from the sale of 312,356 ounces of gold, 1.8 million ounces of silver and 26.0 million pounds of copper. This compares with sales of 292,181 ounces of gold, 2.3 million ounces of silver and 31.5 million pounds of copper for the three months ended June 30, 2015.
The average realized price of gold for the quarter was $1,267 per ounce, compared with $1,195 per ounce for the same quarter in 2015, or 6 per cent higher, and the average realized silver price was $16.82 per ounce, compared with $16.28 per ounce for the same quarter in 2015, or 3 per cent higher. The average realized price of copper was $2.12 per pound, compared with the $2.75 per pound for the second quarter in 2015, or 23 per cent lower.
Cost of sales, excluding depletion, depreciation and amortization, for the three months ended June 30, 2016, was $283.5-million, compared with $274.5-million for the same period in 2015. Cost of sales, excluding DDA, for the second quarter was higher than that of the same period in 2015, reflecting increased volume of gold sales, partly offset by lower silver and copper sales volume, and the devaluation of foreign currencies of countries in which the company operates.
DDA expense for the three months ended June 30, 2016, was $119.3-million, compared with $124.3-million for the same period of 2015. DDA expense was lower than the comparative period due to lower silver and copper sales volume, and reflecting lower asset book values due to the impairment charges recorded in the fourth quarter of 2015, a portion of which related to producing properties. This is partly offset by higher gold production and the DDA associated with the newly acquired RDM mine.
Other expenses and income include general and administrative, exploration and evaluation, other expenses, and net finance expense, totalling $63.7-million for the three months ended June 30, 2016, compared with $88.3-million for the same period in 2015:
-
General and administrative expenses were $23.6-million, 20 per cent lower
compared with $29.8-million for the same period in 2015. Results reflect
the cost containment initiatives undertaken by the company.
-
Exploration and evaluation expenses were $5.3-million, compared with $4.0-million for the same period in 2015. Higher exploration and evaluation
expenses, relative to 2015, are the result of higher district
exploration with an end goal of mineral reserve and mineral resource
expansion, particularly at El Penon.
- Other expenses were $6.2-million, compared with $10.0-million for the same
period of 2015. Other expenses in 2015 include an equity loss from
associate of $6.6-million with no current period comparative balance.
Additionally, other expenses in the current period also reflect a mark-to-market loss on the DSUs following the increase in share price, offset
by a mark-to-market gain on the warrants received as part of the
Sandstorm metal sales agreement.
- Net finance expense was $28.6-million, compared with net finance expense
of $44.5-million for the same period in 2015. Lower net finance expense
is mainly due to a predominately non-cash unrealized foreign exchange
loss of $9.7-million, compared with a loss of $22.3-million for the
comparative period in 2015, and lower interest expense on long-term debt.
Operating results for the three months ended June 30, 2016
Gold production for the second quarter of 2016 was higher than the comparative period in 2015, higher than the first quarter of 2016, and in line with expectations at all mines except at Chapada. At Chapada, several factors impacted production, including a mechanical failure with its in-pit gyratory crusher, which is now repaired, and weather-related issues that made access to higher-grade ores more difficult.
Gold
Second quarter production was 313,086 ounces of gold, higher by 7 per cent, compared with 293,707 ounces of gold produced in the second quarter of 2015. Individual mine quarterly results represent increases over the second quarter of 2015, including an increase of 36 per cent at Jacobina, 19 per cent at Mercedes, 7 per cent at Gualcamayo, 6 per cent at Canadian Malartic, 7 per cent at Pilar and 21 per cent at Fazenda Brasileiro, in addition to the 13,058 ounces from the recently acquired RDM. These increases were partly offset by decreases at Chapada of 43 per cent and Minera Florida of 8 per cent.
Notable increases in production from the previous quarter in 2016 include increases of 10 per cent at Gualcamayo and 4 per cent at Pilar.
Cash costs from continuing operations for the second quarter of 2016 averaged $664 per ounce of gold, compared with $577 per ounce of gold in the second quarter of 2015. Cash costs were 15 per cent higher than the comparative period in 2015, due to lower by-product copper credit, as a result of significantly lower copper prices and lower quantities sold, partly offset by higher gold production and the devaluation of local currencies. Co-product cash costs from continuing operations for the second quarter were $699 per ounce of gold, compared with $705 per ounce of gold for the second quarter of 2015, representing a 1-per-cent decrease.
All-in sustaining costs from continuing operations were $964 per ounce of gold, higher by 12 per cent compared with $860 per ounce of gold in the second quarter of 2015. On a co-product basis, AISC from continuing operations was $949 per ounce of gold for the second quarter, compared with $941 per ounce of gold for the second quarter of 2015, representing a 1-per-cent increase. AISC increased, compared with the first quarter of 2016, due to higher anticipated sustaining capital expenditures and mine development, in line with plans, and the appreciation of certain currencies in the jurisdictions in which the company operates. AISC was higher than co-product AISC due to a decrease in copper margins and the planned higher sustaining capital expenditures associated with copper, both of which negatively impacted byproduct credits. The decrease in copper margins was a result of lower prices, and the additional costs related to the anomalous second quarter production and costs at Chapada.
Silver
Second quarter silver production was 1.8 million ounces, compared with the 2.4 million ounces in the same quarter of 2015. Mine sequencing at certain locations continues to extract from areas with lower silver grades. Production was in line with expectations for silver. Continuing improvements at Mercedes also resulted in higher-than-expected silver production, which was 31 per cent higher, compared with the second quarter of 2015.
Cash costs for the second quarter of 2016 were $7.98 per ounce of silver, representing an increase over the $7.14 per ounce of silver in the second quarter of 2015. However, cash costs on a co-product basis for the second quarter were $8.50 per ounce of silver, compared with $9.30 per ounce of silver in the second quarter of 2015, or 9 per cent lower. Co-product cash costs per ounce of silver were also 10 per cent lower during the quarter, compared with the first quarter of 2016. Cash costs for silver were lower due to the lower cost allocation to silver based on the relative production contribution between gold and silver during the period at El Penon and Minera Florida.
Copper
Total copper production for the second quarter of 2016 was 23.2 million pounds, compared with 33.6 million pounds for the same period of 2015, impacted by the poor weather conditions and the unplanned shutdown of the primary gyratory crusher during the quarter at Chapada.
Co-product cash costs per pound of copper were $1.80 per pound from the Chapada mine, compared with $1.40 per pound of copper in the first quarter of 2015, representing a 29-per-cent increase.
Chapada, Brazil
At Chapada, several factors impacted production, including a mechanical failure with its in-pit gyratory crusher and weather-related issues, which made access to higher-grade ores more difficult. Mine management believed throughout the quarter that the operation would be able to compensate for the disabled in-pit crusher while it was under repair by mining higher-grade, softer ores. These softer ores could be processed directly at the plant, bypassing the in-pit crusher, which creates more efficient management for harder and lower-grade ores, and is less effective with softer, oxidized ore with a higher moisture content. However, those higher-grade, softer ores required significantly more development work, the access to which was meaningfully delayed because of restrictions created by the adverse weather. Exacerbating the issue, the in-pit crusher was idled further, as operational management initiated a plan to repair and improve its performance, with the intent of avoiding similar issues in the future. The in-pit crusher is now operating as expected. In order to further optimize the in-pit crusher's performance, operational management is planning to replace the mantle and concave during the next planned maintenance shutdown, scheduled during the fourth quarter. Development work is progressing normally.
Chapada produced 17,299 ounces of gold and 52,642 ounces of silver for the second quarter of 2016, compared with 30,172 ounces of gold and 72,978 ounces of silver in the second quarter of 2015. Co-product cash costs were $521 per ounce of gold and $3.81 per ounce of silver in the second quarter of 2016, compared with $324 per ounce of gold and $2.97 per ounce of silver in the second quarter of 2015.
Changes to the flotation circuit including modifications to the flow chart were completed in the second quarter as planned, and are expected to improve recoveries for copper and gold to more than 78 per cent and 56 per cent, respectively for the second half of the year. During July, recoveries had a steady increase over the second quarter, and trended up from the first-half-the-year level of 74.2 per cent and 51.8 per cent, respectively. In the last two weeks of July, average recoveries for copper and gold were 83 per cent and 56 per cent, respectively.
Operation of the primary gyratory crusher is now normalized, resulting in the processing of higher-grade ore and decreasing reliance on stockpiles. As a result of the production shortfall in the second quarter, the crushing circuit back to nameplate capacity and the positive impacts of initiatives to improve recoveries, full-year 2016 production at Chapada is now expected to be at or above 106,000 ounces of gold and 110 million pounds of copper. As the company begins to see the improvements in the operation of the gyratory crusher and benefits from planned recovery improvements, there is a possibility that the mine may perform over and above this nominal guidance. Production expectations and guidance for 2017 and 2018 remain unchanged. Due to the aforementioned remediations and improvements that have occurred early in the third quarter, the items that affected production for the period are not expected to continue or impact the production for the upcoming years.
The company continues to advance plans for a study at Suruca, which updates historical technical work to current economic inputs, which is expected to be completed in the first half of 2017, with start-up of production targeted now for the first quarter of 2019, rather than 2021. Suruca is expected to add additional gold production at Chapada in the range of 45,000 to 60,000 ounces per year.
Cash costs and all-in sustaining cash costs for the second quarter, compared with the same quarter of 2015, were impacted by the lower production and higher waste movement costs. Cash costs were also impacted by lower byproduct copper credit as a result of significantly lower copper prices and lower quantities sold.
Chapada produced 38,338 ounces of gold and 112,157 ounces of silver in the first half of 2016, compared with 52,532 ounces of gold and 134,920 ounces of silver in the same period of 2015. Cash costs were $47 per ounce of gold and negative $9.73 per ounce of silver in the first half of 2016, compared with negative $606 per ounce of gold and negative $46.1 per ounce of silver in the same period of 2015.
Copper production was 23.2 million pounds in the second quarter of 2016, compared with production of 33.6 million pounds of copper in the same quarter of 2015. Co-product cash costs for copper were $1.80 per pound in the second quarter of 2016, compared with $1.40 per pound in the same quarter in 2015. For the first half of the year, copper production was 49.0 million pounds, compared with production of 60.5 million pounds of copper in the same period of 2015. Co-product cash costs for copper were $1.66 per pound in the first half of 2016, compared with $1.58 per pound in the same period in 2015.
El Penon, Chile
El Penon continues to be positioned to meet production guidance for the full year as it focuses on improving operational efficiency and near-mine exploration, despite unanticipated poor ground conditions at Orito and lower grades in narrow vein areas, which resulted in lower production at El Penon during the second quarter. Lower gold production in the second quarter, compared with the second quarter of 2015, was caused by lower throughput, partly offset by higher recovery. Lower silver production, compared with the second quarter of 2015, was anticipated due to lower planned feed grade. Compared with the first quarter of 2016, production for both gold and silver was lower due to the aforementioned delay in ore production from the stopes of Orito.
Mine development increased significantly compared with the first quarter, in line with the mine plan, as additional metres were needed to support production from narrow vein areas. Mine development metres improvements continued with an over-13-per-cent increase compared with the base line at the beginning of the year. Other improvement initiatives in the mine continue to advance, including a review of the mining method and mineral reserves, with the objective of improving ore recovery and dilution in the narrow veins areas.
El Penon produced 54,123 ounces of gold and 1.5 million ounces of silver in the second quarter of 2016, compared with 55,404 ounces of gold and 2.0 million ounces of silver in the same period of 2015. Cash costs were $686 per ounce of gold and $8.54 per ounce of silver in the second quarter of 2016, compared with $658 per ounce of gold and $9.21 per ounce of silver in second quarter of 2015.
Cash costs for gold were impacted by lower production, compared with the second quarter of 2015, offset by cost reductions implemented and the devaluation of the Chilean peso. Cash costs for silver were lower due to the lower cost allocation to silver based on the relative production contribution between gold and silver during the period.
El Penon produced 110,570 ounces of gold and 3.1 million ounces of silver in the first half of 2016, compared with 115,931 ounces of gold and 4.2 million ounces of silver in the same period of 2015. Cash costs were $635 per ounce of gold and $8.10 per ounce of silver in the first half of 2016, compared with $626 per ounce of gold and $8.56 per ounce of silver in same period of 2015.
Canadian Malartic (50-per-cent interest), Canada
At Canadian Malartic, second quarter production results met expectations and continue to position the operation to deliver on full-year guidance. Second quarter production exceeded the second quarter of 2015, by 6 per cent, resulting from higher throughput as the mill averaged 55,481 tonnes per day, which is a quarterly record. Total mill throughput in the first half of the year was also a record, totalling, 9,809,278 tonnes (at 100 per cent), mainly attributable to the optimization of planned maintenance shutdowns. Slightly lower feed grade, compared with the second quarter of 2015, is due to mining less tonnes from the higher-grade north zone. Mining from the higher-grade north zone is expected to increase during the third quarter, in line with the mining sequence.
In the second quarter of 2016, Canadian Malartic produced 72,502 ounces of gold on a 50-per-cent basis, compared with 68,441 ounces of gold in the second quarter of 2015. Cash costs were $621 per ounce of gold in the second quarter, compared with $609 per ounce in the second quarter of 2015.
Cash costs in the second quarter were 2 per cent higher than the second quarter of 2015, resulting from higher contractor costs, partly offset by higher production and the devaluation of the Canadian dollar.
Canadian Malartic produced 146,115 ounces of gold on a 50-per-cent basis at cash costs of $589 per ounce in the first half of 2016, compared with 136,334 ounces of gold at cash costs of $621 for the same period of 2015.
Canadian Malartic is continuing to evaluate opportunities with a focus on cost and production improvements within the mine and processing plant. In order to increase mining from the higher-grade north zone, a new remote shovel was commissioned at the end of the second quarter and has since provided more operational stability with higher-grade ore from the north zone. As at the end of July, 2016, feed grade has averaged 1.05 grams per tonne (g/t) and it is expected to be at this level for the remainder of the year. In addition to optimizing planned maintenance shutdowns, a new secondary crusher configuration for increased SAG capacity and process improvements at the main crusher contributed to the record year-to-date throughput performance. The company is also continuing to evaluate opportunities to optimize the returns from this cornerstone asset, including the opportunities available from the Odyssey project.
Gualcamayo, Argentina
Gualcamayo continued its strong performance in the second quarter and exceeded expectations, well positioning it to meeting both annual production expectations and costs targets. Increased production is expected to continue in the following periods, according to plan, due to higher grades in the second half of the year, and supported by higher throughput from the buildup of ore inventory placed on the leach pad and the ramp-up of the sublevel caving in the underground mine, which is progressing into higher grade areas. Production increased quarter over quarter as expected, and was higher than the second quarter of 2015, by 7 per cent, due to higher throughput and recoveries from inventories, partly offset by lower feed grades, in line with mine sequencing, and as a result of the unexpected rain, snow and fog during the second quarter.
In the second quarter of 2016, Gualcamayo produced 40,264 ounces of gold, compared with 37,558 ounces of gold in the same quarter of 2015. Cash costs were $828 per ounce of gold in the second quarter of 2016, compared with $818 per ounce of gold in the second quarter of 2015.
Cash costs were slightly higher in the second quarter of 2016, compared with the second quarter of 2015, due to local inflationary pressures on manpower-related costs and camp services, partly offset by the devaluation of the Argentinian peso and reductions in external mine contractors. Cash cost were higher than the first quarter of 2016, due to higher consumption rate of reagents to improve recoveries.
Gualcamayo produced 76,867 ounces of gold in the first half of 2016, compared with 83,734 ounces of gold in the same period of 2015. Cash costs were $814 per ounce of gold in the first half of 2016, compared with $783 per ounce of gold in the same period of 2015.
The Deep Carbonates project is a potential large-scale, bulk-tonnage underground operation beneath the current QDD pit limits with recoverable gold currently estimated at more than 1.1 million ounces. The project has advanced with the detailed review of a number of mining method alternatives to improve the capital spend profile, as well as seeking to identify an economically viable arsenic abatement process. The mining consultants have completed their optimization work on three throughput scenarios and the work of the Arsenic specialist has also been completed. The development of the economic model is progressing using the outputs received from the aforementioned technical review process. The mineralization is open in almost every direction and continued exploration is expected to improve the project economics. The results of the aforementioned work will be evaluated during the course of 2016, whereupon a decision will be made as to whether to advance to a more detailed phase of study later in the year.
Mercedes, Mexico
Mercedes continued to deliver improved performance during the second quarter of 2016, resulting from the revised mine plan along with operational improvements and revisions to the mine's cost structure. Mercedes is also exploring initiatives that are expected to positively impact the mining rate. At the processing plant, Mercedes began commissioning an oxygen injection system targeting to increase recoveries for gold by 1 per cent and silver by 4 per cent, beginning in the fourth quarter. With a continued focus on business optimization and operating efficiencies, Mercedes is well positioned to continue delivering on expectations in the second half of 2016.
In the second quarter of 2016, Mercedes produced 22,948 ounces of gold and 103,262 ounces of silver, compared with 19,306 ounces of gold and 78,932 ounces of silver in the same quarter of 2015. Cash costs were $720 per ounce of gold and $9.05 per ounce of silver in the second quarter of 2016, compared with $1,033 per ounce of gold and $14.56 per ounce of silver in the same quarter of 2015.
Gold and silver production in the second quarter were higher, compared with the second quarter of 2015, by 19 per cent and 31 per cent, respectively. Increased production was due to significantly higher gold and silver grades, and impacted positively by higher recoveries. Second quarter production is lower than the first quarter of 2016, consistent with the mine plan.
Lower cash costs, compared with the second quarter of 2015, are attributed to the devaluation of the local currency and the benefits from the cost control initiatives, in addition to higher grades and recoveries.
Mercedes produced 47,252 ounces of gold and 227,883 ounces of silver in the first half of 2016, compared with 43,576 ounces of gold and 192,371 ounces of silver in the same period of 2015. Cash costs were $676 per ounce of gold and $8.61 per ounce of silver in the first half of 2016, compared with $925 per ounce of gold and $12.58 per ounce of silver in the same period of 2015.
Minera Florida, Chile
At Minera Florida, gold and silver production were in line with plan, and production is expected to increase over the remainder of 2016. Higher production is expected in the second half of the year from higher planned throughput at both plants, reducing overall costs.
Lower gold production, compared with the second quarter of 2015, was due to lower throughput, partly offset by higher grade. Silver production was also impacted by lower throughput in addition to feed grades and recoveries. Minera Florida experienced severe weather in the beginning of the second quarter, impacting production and ore haulage at the mine and the tailings reprocessing facilities.
In the second quarter of 2016, Minera Florida produced 24,211 ounces of gold and 112,760 ounces of silver, compared with 26,298 ounces of gold and 191,162 ounces of silver in the same quarter of 2015. Cash costs were $785 per ounce of gold and $9.70 per ounce of silver in the second quarter of 2016, compared with $748 per ounce of gold and $10.45 per ounce of silver in the same quarter of 2015.
Higher cash costs for gold, compared with the second quarter of 2015, was due to lower production, partly offset by cost reduction initiatives and the depreciation of the Chilean peso. Cash costs for silver were lower due to the lower cost allocation to silver based on the relative production contribution between gold and silver during the period.
Minera Florida produced 49,923 ounces of gold and 247,036 ounces of silver in the first half of 2016, compared with 54,411 ounces of gold and 333,489 ounces of silver in the same period of 2015. Cash costs were $758 per ounce of gold and $9.67 per ounce of silver in the first of 2016, compared with $739 per ounce of gold and $10.11 per ounce of silver in the same period of 2015.
Progress on reducing downtime in the underground mine, in addition to the initiatives relating to the processing plant to improve metal recoveries, continued during the second quarter with the results of these efforts expected to be realized in the second half of the year.
Jacobina, Brazil
Jacobina continued to exceed expectations in the second quarter with further improvements in production and costs. Consistent with the mine plan, development and production from higher-grade areas continued to advance. Jacobina is well positioned to meet or exceed annual production expectations given the flexibility available to increase throughput and grade.
In the second quarter of 2016, Jacobina produced 29,002 ounces of gold, compared with 21,318 ounces of gold in the same quarter of 2015. Cash costs were $714 per ounce of gold in the second quarter of 2016, compared with $988 per ounce of gold in the second quarter of 2015.
Production in the second quarter of 2016 exceeded the second quarter of 2015 by 36 per cent, as the mine benefited from higher throughout and feed grade. Cash costs in the second quarter were lower, compared with the second quarter of 2015, by 28 per cent, due to higher production and the devaluation of the Brazilian real, which also positively impacted the AISC.
Jacobina produced 58,972 ounces of gold in the first half of 2016, compared with 39,908 ounces of gold in the same period of 2015. Cash costs were $626 per ounce of gold in the first half of 2016, compared with $980 per ounce of gold in the same period of 2015.
Pilar, Brazil
Pilar had another record quarter for production in the second quarter of 2016, producing 22,806 ounces of gold, which is 7 per cent higher than the 21,237 ounces in the same period of 2015, and higher than the previous record in the first quarter of 2016. Higher production was the result of the contribution of production from Maria Lazarus, which commenced production in August, 2015, and higher feed grades and recoveries. Pilar is on track to meet production guidance of 85,000 to 90,000 ounces in 2016.
Cash costs were $679 per ounce of gold in the second quarter of 2016, compared with $772 per ounce of gold in the second quarter of 2015. Cash costs were favourably impacted by the higher production, feed grade and recoveries.
Pilar produced 44,654 ounces of gold in the first half of 2016, compared with 40,390 ounces of gold in the same period of 2015. Cash costs were $656 per ounce of gold in the first half of 2016, compared with $804 per ounce of gold in the same period of 2015.
Fazenda Brasileiro, Brazil
At Fazenda Brasileiro, the second quarter production was 21 per cent higher and cash costs were 11 per cent lower compared with the second quarter of 2015. Fazenda Brasileiro produced a total of 16,873 ounces of gold, compared with 13,974 ounces of gold in the same quarter of 2015. Cash costs were $726 per ounce of gold in the second quarter, compared with $820 per ounce of gold in the second quarter of 2015. Improved production and cash costs in the quarter were the result of increased throughput, feed grades and recoveries. Fazenda Brasileiro is on track to meet production guidance of 63,000 to 68,000 ounces in 2016.
Fazenda Brasileiro produced 35,397 ounces of gold in the first half of 2016, compared with 25,998 ounces of gold in the same period of 2015. Cash costs were $627 per ounce of gold in the first half of 2016, compared with $824 per ounce of gold in the same period of 2015.
Riacho dos Machados (RDM), Brazil
RDM is an open-pit gold mine with a CIL processing plant located in Minas Gerais state, Brazil. The project was acquired by the company through the acquisition of MRDM on April 29, 2016. Production from the closing date of the acquisition of April 29, 2016, to June 30, 2016, was 13,058 ounces of gold and co-product cash costs were $807 per ounce.
The company believes that there is good potential to refine and improve the current RDM mining operation. Studies are currently under way to fully explore opportunities for optimization of the asset. Among the efforts toward that optimization, a water storage facility is planned to be built this year to allow for consistent and sustained production at RDM, as the primary constraint to full-scale mine and plant operation is limited water availability. Current production is expected to be approximately 55,000 ounces in 2016, with the portion attributable to the company expected to be approximately 30,000 ounces.
The company has two potential sources for obtaining water in 2017 and beyond, the first of which is the temporary pumping of water from a nearby creek during the rainy season to existing water storage areas in the tailing impoundment to satisfy 2017 requirements, and the second is the construction of the permanent water dam and reservoir. The company is advancing both options concurrently and is considering the postponement of the construction of the water dam into 2017, which would defer required capital of construction in 2016, thereby improving the cash flow of RDM for 2016. With the resolution of past water shortfalls, production is expected to increase to an annual average of 100,000 ounces per year.
RDM increases the company's production profile in a mining-friendly jurisdiction, and is expected to contribute to cash flow and net free cash flow. The acquisition provides mineral reserve growth and a mineral resource base with additional growth potential. Updated future guidance will be provided early in 2017.
Construction and development
Cerro Moro, Argentina
Cerro Moro is a high-grade gold and silver deposit, currently in the development stage and with expected planned production in early 2018, at which time, Cerro Moro will begin having a positive impact on the company's cash flow.
Following the formal decision to proceed with the construction of Cerro Moro in 2015, and the updated project parameters with respect to timing and capital investment, the 2016 work program includes the ramp-up of site construction activities, the continuation of detailed engineering, as well as the advancement of underground mining in order to gain a better understanding of in situ mining conditions. The company is controlling planned expenditures, which, for 2016, are expected to be approximately $53-million, leaving $224-million in total for 2017 and 2018, with the majority of the spend predominantly in 2017, which continues to reflect the previously reported execution schedule. This approach allows for further exploration drilling in order to increase the size of the Cerro Moro mineral resources, in addition to improving the current mineral resource categorization. The company believes that the Cerro Moro project also offers significant opportunities for the conversion of mineral resources into mineral reserves and for further discoveries on the property. This will serve to significantly improve the returns and value from this high-grade project.
The Cerro Moro project contains a number of high-grade epithermal gold and silver deposits, some of which will be mined via open-pit and some via underground mining. The feasibility study is based on annual production in the first three years of approximately 150,000 ounces of gold and 7.2 million ounces of silver, with annual production averaging approximately 130,000 ounces of gold and 6.4 million ounces of silver over an initial six-year mine life at a throughput of 1,000 tonnes per day. The concentrator will consist of a standard crushing, grinding and flotation circuit with a counter current decantation and a Merrill Crowe circuit included.
During the second quarter, the company continued to show good progress on its development objectives. The company has completed 325 metres of total planned underground development for 2016, of 617 metres, which positions the company ahead of schedule providing additional time to develop the competency for underground mining in the local work force. Ramp-up of site construction continues safely with bulk earthworks nearing completion and the concrete contractor having mobilized to site. Consistent with the baseline plan, detailed engineering progress is 73 per cent complete and advancing to a target of 85 per cent by the end of the year. This increases the comfort level on the construction process and details related to the plant eliminating ambiguities in construction schedule and potential delays. Procurement progress is also tracking well, upgrade of existing mine truck facility advanced, and phase 2 construction camp installation, as well as tailings dam design, were concluded.
Canadian Malartic odyssey exploration update
The Odyssey deposit is located approximately 1.5 kilometres east of the current limit of the Canadian Malartic open pit in northwestern Quebec. The Canadian Malartic property is owned and operated by the Canadian Malartic General Partnership, in which Yamana and Agnico Eagle Ltd. each have an indirect 50-per-cent ownership interest. The Odyssey target represents an entirely new mineralized structure that was not previously considered in the valuation when Canadian Malartic was acquired.
Since the asset was acquired in June, 2014, drilling and geologic understanding of the Odyssey deposit have advanced and continue to support the potential of the deposit. The Odyssey deposit appears to have similarities to Agnico Eagle's Goldex deposit in terms of grade and potential amenability to underground bulk mining. Additional drilling and economic studies are continuing to better assess these opportunities.
An initial 2016 budget of $8.0-million (Canadian) (on a 100-per-cent basis) was approved to conduct approximately 60,000 metres of drilling to infill and expand the known mineralized zones on the Odyssey deposit. A supplemental budget increase of $5.5-million (Canadian) (on a 100-per-cent basis) was recently approved, which will expand the total 2016 program to approximately 95,000 metres of core. To the end of June, 53,417 metres in 57 holes have been completed, with nine core rigs currently active on site.
Odyssey overview
The Odyssey zone is composed of multiple mineralized bodies spatially associated with a porphyritic intrusion, porphyry 12, close to the contact of the Pontiac Group sediments and the Piche Group of volcanic rocks. They are grouped into two elongated zones -- the Odyssey North and Odyssey South zones -- that strike east-southeast and dip steeply south. Odyssey North has been traced from a depth of 600 to 1,300 metres below surface along a strike length of approximately 1.5 kilometres. Odyssey South has a strike length of 0.5 kilometre, and has been located between approximately 200 and 550 metres depth.
Gold occurs preferentially along lithological contacts but also within the porphyry. The Odyssey mineralization appears to be controlled by structures associated with the Sladen fault or its splay. The gold mineralization is associated with an alteration halo of feldspar-hematite-sericite and local silica with 1 to 3 per cent disseminated pyrite. Grades are in the range of 1.5 to 3.0 g/t gold, but higher grades are observed locally as coarse visible gold within quartz veins, stockwork and silicified breccia zones.
Selected drill results and hole co-ordinates from 2014 to 2016 Odyssey drilling are highlighted in this news release. Drill hole collars are also shown on the Odyssey deposit local geology map. All intercepts reported for the Odyssey project show capped grades over estimated true widths, based on a preliminary geological interpretation that is being updated as new information becomes available with further drilling.
RECENT EXPLORATION DRILL RESULTS FROM ODYSSEY NORTH AND ODYSSEY SOUTH ZONES
Depth
of Gold
midpoint Estimated Gold grade
below true grade (g/t)
From To surface width (g/t) (capped)
Drill hole Location (metres) (metres) (metres) (metres) (uncapped) (i)
ODY11-
2404 (iii) North 1,223.0 1,333.2 1,136 78.1 3.66 3.06
ODY14-2480 South 546.0 587.7 480 41.1 2.55 2.55
ODY14-
2480 (iii) North 1,111.0 1,124.5 936 10.6 4.64 4.64
ODY14-2480A North 1,056.0 1,065.9 838 8.6 2.46 2.46
ODY14-
2482 (iii) North 1,163.4 1,169.3 996 4.7 9.61 9.61
ODY14-
2483 (iii) North 1,170.0 1,212.5 988 33.0 2.37 2.37
ODY14-
2486 (iii) North 1,205.5 1,224.1 959 16.8 2.29 2.29
ODY14-
2491BExt South 518.9 533.8 471 14.6 5.44 5.44
and North 1,165.7 1,185.0 1,034 13.6 1.60 1.60
ODY14-
2492Ext North 1,188.2 1,211.0 988 18.3 5.22 5.04
including 1,196.6 1,204.7 6.5 10.22 9.73
ODY14-
2493Ext North 1,261.5 1,281.2 1,151 13.4 3.81 3.81
ODY15-
2494Ext North 1,298.9 1,324.0 1,213 15.6 3.31 3.31
including 1,308.4 1,315.8 4.6 6.92 6.92
ODY15-2495 South 520.6 537.8 449 17.3 2.73 2.73
ODY15-2498 South
Contact 367.9 384.0 272 12.3 2.50 2.50
ODY15-2500 North 1,148.5 1,157.8 998 7.3 2.16 2.16
ODY15-5003 South
Contact 344.8 360.4 292 13.4 2.28 2.28
ODY15-5004 North 1,309.0 1,334.0 1,139 18.4 2.13 2.13
including 1,319.5 1,328.2 6.4 3.73 3.73
ODY15-5007 North 1,359.0 1,377.0 1,104 14.8 2.22 2.22
including 1,368.9 1,375.5 5.4 4.62 4.62
ODY15-5008 South 436.9 452.9 340 15.8 3.36 3.36
including 436.9 445.4 8.4 4.62 4.62
ODY15-5010 North 1,222.9 1,232.8 1,000 7.8 2.55 2.55
ODY15-5023 South 529.0 547.5 410 17.5 1.63 1.63
ODY15-5024 North 1,153.0 1,166.2 899 11.2 5.12 5.12
ODY15-5025 North 1,129.3 1,144.5 936 12.2 2.25 2.25
ODY15-5026 South 463.5 474.8 316 (ii) 11.3 3.52 3.52
including 466.0 474.8 (ii) 8.8 4.13 4.13
ODY15-5029 North 1,036.2 1,042.6 781 5.6 2.83 2.83
ODY16-5033 South 473.9 491.5 427 17.6 1.50 1.50
ODY16-5039 North 1,355.5 1,398.3 1138 33.5 2.63 2.63
including 1,380.8 1,393.6 10.0 4.63 4.63
ODY16-5040A North 1,236.8 1,268.0 1,018 27.7 1.93 1.93
including 1,258.4 1,268.0 8.5 3.50 3.50
ODY16-5042 North 995.5 1019.5 822 18.4 1.11 1.11
ODY16-5043 North 1,380.0 1,388.0 1,236 5.4 3.40 3.40
ODY16-5044 North 1,404.2 1,417.8 1,299 8.6 1.95 1.95
ODY16-5051 North 1,260.2 1,285.5 1,135 17.8 1.76 1.76
ODY16-5054 North 1,312.5 1,366.8 1,234 33.2 1.54 1.54
(i) The holes at the Odyssey deposit use a capping factor of 20 g/t gold.
(ii) True thickness is not determined; these values are core length.
(iii) The drill hole results were previously reported by former owners. Some
were reviously reported with different grades and thicknesses.
Odyssey North zone
Three main mineralized areas have been outlined in the Odyssey North zone. The estimated true thickness of the mineralized bodies varies from 5.0 to 35.0 metres, with local wider intercepts. Grades generally ranging from 1.5 to 3.0 g/t gold. Additional drilling is currently under way to better define areas where mineralization appears to be more consistent and displays better continuity.
Intercepts in the western, shallower part of the zone include hole ODY14-2482, which intersected 9.61 g/t gold over 4.7 metres at 996 metres depth. Approximately 200 metres to the west, hole ODY14-2483 intersected 2.37 g/t gold over 33.0 metres at 988 metres depth. Other intercepts in this region were in holes ODY14-2480, ODY15-5024 and ODY16-5040A.
The central part of the zone is somewhat deeper. Intercepts in this area include hole extension ODY14-2492Ext, which intersected 5.04 g/t gold over 18.3 metres at 988 metres depth, including 9.73 g/t gold over 6.5 metres. Approximately 200 metres below this, hole extension ODY14-2493Ext intersected 3.81 g/t gold over 13.4 metres at 1,151 metres depth.
Intercepts in the deepest, eastern part of the zone include hole ODY16-5039, which intersected 2.63 g/t gold over 33.5 metres at 1,171 metres depth, including 4.63 g/t gold over 10.0 metres. Approximately 100 metres west of this, hole ODY16-5054 intersected 1.54 g/t gold over 33.2 metres at 1,234 metres depth. Other intercepts in this region are in holes ODY14-2494Ext and ODY15-5004.
Odyssey South zone
The Odyssey South zone is located at the southern contact of the upper portion of porphyry 12, at depths varying from 200 to 550 metres. It ranges from 5.0 to 15.0 metres thick, with grades from 1.5 to 5.0 g/t gold. It remains open to the east along the south contact near the apex of the porphyry.
The Odyssey South zone extends eastward as shown by hole ODY14-2491BExt, which intersected 5.44 g/t gold over 14.6 metres at a depth of 471.0 metres. Approximately 300 metres east of this hole, ODY15-5008 returned 3.36 g/t gold over an estimated thickness of 15.8 metres at 340.0 metres depth.
Second-half 2016 plans at Odyssey
Drilling will continue at the Odyssey deposit in the second half of 2016, with nine core rigs currently on site and a total of approximately 41,500 metres planned. An initial inferred mineral resource estimate for the Odyssey North zone is expected as of year-end 2016.
Second quarter 2016 conference call information
The company will host a conference call and webcast to discuss second quarter 2016 results on July 29, 2016, at 9 a.m. ET.
Toll-free (North America): 1-866-223-7781
Toronto local and international: 416-340-2218
Webcast: at the company's website
Conference call replay
Toll-free (North America): 1-800-408-3053
Toronto local and international: 905-694-9451
Passcode: 1170048
The conference call replay will be available from 12 p.m. ET on July 29, 2016, until 11:59 p.m. ET on Aug. 12, 2016.
For further information on the conference call or webcast, please contact the investor relations department or visit the company's website.
Qualified person
William Wulftange, PGeo, senior vice-president, exploration, for Yamana Gold, has reviewed and confirmed the scientific and technical information related to the Odyssey deposit contained within this news release, and serves as the qualified person as defined in National Instrument 43-101. He has also reviewed and verified that the technical information related to the Odyssey deposit contained in this news release is accurate.
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