An anonymous director reports

YAMANA GOLD ANNOUNCES PRELIMINARY THIRD QUARTER 2017 OPERATIONAL RESULTS AND PROVIDES UPDATE ON BRAZILIAN TAX MATTERS

Yamana Gold Inc. is herein reporting preliminary operational results for the third quarter and for the first nine months of 2017. Production from the company's mines in the third quarter was 257,000 ounces of gold, 1.43 million ounces of silver and 37.1 million pounds of copper. Production by mine for the third quarter and by mine and in total for the first nine months of 2017 is shown in the table. All amounts are expressed in United States dollars unless otherwise indicated.

Production for the third quarter and first nine months of 2017 is ahead of guidance and budget. The company risk adjusts its budget when providing guidance as its budget contains certain stretch objectives for internal measures of performance. In this case, production is presently ahead of guidance and budget highlighting the strong operational performance of the company's mines.

With an expected strong fourth quarter, and in light of an expected stronger second half to first half of the year, the company is evaluating whether or not to increase guidance relating to production for gold, silver and copper. Guidance was previously increased only for gold production once before earlier this year to the current level.

The company's costs are also expected to be within the previously provided guidance range although presently, costs are trending well below the top end of the range.

In addition, the company plans to reintroduce, after consultation with market participants, a byproduct measure for costs applying copper and other credits for gold and silver costs. For the third quarter, such all-in sustaining cash costs (AISC) (1) for gold and silver are not expected to exceed $735 and $12.50 per ounce, respectively. Further, the company is discussing with industry and market participants the other items that should be included or considered in AISC reporting.

While production and costs are important factors in determining financial performance, they alone will not be determinative of financial performance. Measures of financial performance such as increases or decreases of cash balances, cash flows, free cash flows and earnings will be impacted by certain non-operational items, such as the treatment of contingencies, accruals and reversals, and certain operational items, such as the creation of stockpiles which may also affect working capital.

As previously disclosed in its second quarter financial results, the company elected in the third quarter to participate in a program in Brazil to settle certain tax contingencies. Since that time, the legislative branch of the Brazilian government has approved the program and a final approval by the President of Brazil is anticipated by Oct. 31, 2017, a time frame which was extended from the originally planned decision date of Oct. 11, 2017.

As Presidential approval may occur following the company's third quarter 2017 release date of Oct. 26, 2017, the company expects to recognize the financial impact of its adherence to the amnesty program in the third or fourth quarter reporting. The planned accounting treatment is in line with prior guidance. While this will affect earnings, it will be an adjustment item.

Further, as the company has begun payments under the program, cash flows, free cash flows and cash balances will be affected in the third and fourth quarters. The company has paid $30.5-million year to date, and has allocated another $14.8-million for a payment it plans to make in the next few weeks, and thereafter plans to pay $29.3-million by end of year. Notwithstanding the payments in the third quarter and underpinned by strong operating performance, cash balances and net debt have not meaningfully changed as compared to the second quarter. Cash balances as at the end of the third quarter are approximately $125-million.

The final program adopted in the legislation is a mix of the original provisional measure suggested by the executive branch and the proposed amendments by certain members of the legislative branch.

The final program does not change the amount payable this year and creates an option to either pay one lump sum next year or much smaller payments per year for approximately 12 years. The company has elected to proceed with the latter option, the result of which is that the company will pay $8.6-million per year for the stipulated period.

The amount payable under the program beginning next year is substantially less than under the original provisional measure although more than in the proposed amendments by certain members of the legislative branch. The company can advance any payment at any time without penalty.

Further, as suggested in the proposed amendments by certain members of the legislative branch, certain deductions are expected to be allowed under the program which could reduce tax otherwise payable in subsequent periods. The company expects to rely on these allowances beginning next year should they be enacted.

Yamana will provide additional detail on its full operational and financial results for the third quarter of 2017 after close of markets on Thursday, Oct. 26, 2017. The attached table presents a mine by mine summary of preliminary third quarter 2017 production.

                            Three months ending Sept. 30,   Nine months ending Sept. 30,
Gold ounces                         2017            2016            2017           2016

Chapada                           39,000          29,000          83,000         67,000
El Penon                          44,000          54,000         121,000        164,000
Canadian Malartic (50%)           82,000          76,000         236,000        223,000
Gualcamayo                        34,000          43,000         109,000        119,000
Minera Florida                    23,000          29,000          67,000         79,000
Jacobina                          35,000          29,000         101,000         88,000
Total, Yamana mines              257,000         260,000         717,000        740,000
                                                                                       
Silver ounces                                                                          
Chapada                           68,000          69,000         181,000        181,000
El Penon                       1,089,000       1,436,000       3,230,000      4,566,000
Minera Florida                   274,000          87,000         423,000        334,000
Total                          1,431,000       1,592,000       3,834,000      5,082,000
                                                                                       
Copper pounds (millions)                                                               
Chapada                             37.1            29.6            92.7           78.7

About Yamana Gold Inc.

Yamana is a Canadian-based gold producer with significant gold production, gold development stage properties, exploration properties and land positions throughout the Americas including Canada, Brazil, Chile and Argentina. Yamana plans to continue to build on this base through existing operating mine expansions, throughput increases, development of new mines, the advancement of its exploration properties and, at times, by targeting other gold consolidation opportunities with a primary focus in the Americas.

(1) Refers to a non-GAAP (generally accepted accounting principles) financial measure or an additional line item or subtotal in financial statements. Reconciliations for all non-GAAP financial measures will be provided with the company's third quarter 2017 management's discussion and analysis, which is expected to be filed on SEDAR on Oct. 26, 2017.

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