In the second quarter, Yamana Gold (AUY) reported a net loss of $0.01 per share – a bit lower than market estimates. The company presented a gain of 16% in its gold production, which is still a bit off it’s the annual guidance pace. This means, Yamana will need to ramp up its production to meet its yearly goals. Yamana Gold continues to increase its precious metals production, which is mostly stemmed from its coronership in the Canadian Malartic mine. The decision of AUY to purchase this project with Agnico Eagle Mines (AEM) may not turn a profit given the price it had paid.
Source: Yamana Gold
Nonetheless, the rise in gold sales in ounces more than offset the drop in gold prices.
In terms of AISC per ounce of gold (on co-product basis) remained nearly unchanged at $949, which is still well above its annual guidance of around $900. If AISC doesn’t come down, it will be harder for the company to turn a profit on its operations.
Bottom line
The company will have to make more improvements to adjust for the prevailing low gold prices.
For further reading see:
- Financial Market Preview for August 17-21
- Predictable Currencies vs. Unpredictable Central Banks – MM #63
- The Fed Keeps Policy Unchanged – Shocker!
- U.S. GDP Grew by 2.3% in Q2 – Slightly Less Than Expected
No position in the above stocks. This is only market commentary and should be considered as such.