BUILDING ON
FOUNDATIONS
Annual Report 2021
YAMANA GOLD is a Canadian-based
precious metals producer with significant
gold and silver production, 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 expansion
and optimization initiatives at existing
operating mines, development of new
mines, the advancement of its exploration
properties and, at times, by targeting
other consolidation opportunities with a
primary focus in the Americas.
1
Executive Chairman Message
10
President and CEO Message
17
Mineral Reserves and Mineral Resources
27
2021 Financial Review
169 Corporate Governance & Committees of the Board
170 Corporate Information
“ Building on
Foundations”
Leaders understand that anticipating change and
evolving to meet new challenges are necessary for
long-term success. While they learn from the past, they
look to the future. We plan for the long term and adapt
and optimize to meet the ever-changing needs and
demands of our business, stakeholders, and employees.
We are focused on building on our strong foundations
and delivering longer-term value to our shareholders
and the communities in which we operate.
Executive Chairman Message
This has been a very strong year for Yamana
Gold, in ways that begin with strong production
and low costs although extend beyond that to
exploration successes, to positive climate action
developments, and beyond.
We have continued to grow in value-enhancing
ways, increasing our reserves and the lifetime
of our mines in a targeted, considered manner.
Thankfully, across much of the world, the
COVID-19 pandemic has been receding, and
as communities and economies recover, we
are proud that our commitment to employee
health and exceptional asset quality have
allowed us to remain resilient through this
challenging period.
Focus on Financial Flexibility
We have said for some time that creating financial
flexibility allows us to effectively manage all our
capital allocation priorities without compromise,
highlighting not only our short-term resilience
and strong business foundations, but also
positioning us to take advantage of opportunities
that support our long-term strategy.
This flexibility comes from our robust cost control,
which leads to operations that continue to
generate significant free cash flow – our net free
cash flow was more than 20% higher in 2021 than
2020. Coupled with our redemption of near-term
outstanding senior notes and the extension of
our debt tenor at significantly lower interest rates,
Annual Report 2021
1
together with our increasing cash balances at year
end, our balance sheet continues to afford us the
financial flexibility we require.
Our robust balance sheet and available liquidity
position us well to fully fund and deliver on our
optimization initiatives at our existing operations,
as well as to deliver on our exciting pipeline of
organic growth projects whose annual and total
capital requirements are well within our financial
tolerance. We are able to do this while continuing
to strengthen capital returns to shareholders
through increasing dividends and a new share
repurchase program.
A Sustainable Platform for Growth
Our strong foundation provides us with a
stable base from which to grow. While detailed
commentary on our asset level operating results
are more fulsomely covered in Daniel’s CEO letter,
I think it’s worth repeating to highlight some of
the significant achievements that underpin our
sustainable production platform.
First, I am particularly proud of the company-wide
efforts which delivered record annual production
from Yamana mines in 2021. Secondly, given
that replacing reserves is the key to running a
successful business in our industry, it is fantastic
that we have successfully replaced reserves at
each of our wholly-owned operations thanks to
our ongoing exploration successes. Indeed, we
have done more than that as gold equivalent
reserves at our wholly-owned assets increased
by 39% this year. While overall our reserves
replaced what we deleted at all operations, it
is a remarkable accomplishment as we made
up for Canadian Malartic at which, as expected,
we did not replace reserves as the open pit is
depleted. In the case of Canadian Malartic, we
recognize that we have an impressively large
inventory of resources which over time, we
expect beginning this year, will begin to upgrade
to reserves. Consider what impressive reserves
growth will occur as the trend at our wholly-
owned mines continues AND we upgrade the
inventory of ounces at Canadian Malartic. There is
a lot of growth pending and a lot to look forward
to. Lastly, I am pleased with our successful
stakeholder and government engagement
efforts companywide. Such engagement is
crucial to securing future expansion projects, like
at Jacobina, where we received the necessary
permits for both Phase 2 and Phase 3 of our
future expansions well ahead of schedule.
All of these factors together showcase our ability
to deliver on our strategic initiatives and meet
market and other stakeholder expectations.
They also clearly demonstrate that we have the
mineral resources, operational expertise and
management focus to deliver on our ten-year
outlook, which pointed to a decade of strong
production above 1 million gold equivalent
ounces (GEO).
Yamana Gold
2
Executive Chairman Message (cont.)
Building on Foundations
Our 10-year outlook outlined our aim to achieve a
long-term presence and as our production occurs
in well-defined mining-supportive regions, we
see ourselves as regionally dominant during that
outlook period and beyond. We want to be able to
make a positive difference and create long-term
value for our stakeholders. I have consistently
used the term “generational assets” in the past
to encapsulate these ideas. Generational assets
are mines that produce at meaningful levels for
several decades, often with district potential.
These are the mines that provide stability in
revenues and growth projections, and we have
dedicated considerable effort to ensuring we
have proportionally more generational mines in
our portfolio than many of our peers. We want to
punch above our weight class.
While our existing operations continue to be
optimized and represent significant value in and
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Actual
Guidance
Outlook
1M GEO
(2)
6% growth
25% growth
10-YEAR PRODUCTION OUTLOOK
(1)
1. See Cautionary Note Regarding Forward-Looking Information
2. GEO assumes gold ounces plus the gold equivalent of silver ounces. GEO calculations for actuals are based on an average market gold to
silver price ratio of 72.55 for the year-ended December 31, 2021; guidance GEO assumes gold ounces plus the equivalent of silver ounces
using a ratio of 72.00
9.2M oz
silver
885k oz
gold
Annual Report 2021
3
of themselves, I am particularly excited by our
internal growth projects all of which have the
potential to drive significant long-term production
upside towards the end of the current decade and
beyond, presenting the opportunity for further
growth and significant value creation.
Given its current position as the largest open
pit gold mine in Canada, and its future position
as the largest underground gold mine in the
country, I would be remiss not to spend some
time on the Odyssey project at Canadian Malartic.
Our Odyssey project will extend the mine life to
at least 2039 – and we currently expect the first
underground ore to reach our mill in 2023, in line
with our projected schedule and budget.
This mine is truly a generational asset and with
continued exploration success, it showcases how
we have a disproportionate number of world class
assets for a company our size. The current mine
plan only accounts for roughly half of the resource
base and we continue to grow this with exciting
discoveries, most recently at East Gouldie where
we added 1.5 million gold ounces to inferred
mineral resources, on a 100% basis.
We continue to see exciting exploration drill
results up to 1.3kms from known deposits,
providing a hint of the enormous potential
of the site. It is no surprise that the Canadian
Malartic team was awarded the “Discovery of the
Year” Award by the Quebec Mineral Exploration
Association for their work at East Gouldie.
Congratulations! These successes also support
the longer term potential to add a second shaft
and to take advantage of excess plant capacity,
neither of which are currently incorporated into
our base case outlook.
The Wasamac project in the Abitibi-
Témiscamingue region is another flagship
generational asset for Yamana. When we
delivered the feasibility report on the project this
past June, I sought to emphasize its potential
to be a cornerstone mine for decades to come,
given its significant resource potential and
footprint within a prolific mining district. There
is a temptation in our industry to focus solely on
the minutiae of current operations, on present
data and details. But this would be missing the
forest for the trees. As gold miners, the value
we provide is predominantly in our ability to
repeatedly find, operationalize and optimize
high-quality assets. Focusing only on current
reserves and production and ignoring potential
does a disservice to the expertise on which
our industry is built. This focus on the future
underpins the additions to Wasamac’s footprint
we made this year, by acquiring the Francoeur,
Arntfield and Lac Fortune gold properties. These
strategic acquisitions recognize the importance
of developing additional core assets, located in
Canada, with the potential to provide significant
upside and attractive returns.
We are already starting to demonstrate some
of this longer-term upside present at Wasamac.
Exploration has defined an entirely new shear
zone which highlights the excellent exploration
The Wasamac project
has the potential to
support a production
platform of 200oz/yr.
Yamana Gold
4
Executive Chairman Message (cont.)
Our Odyssey project
at Canadian Malartic
positions Canada’s
largest open pit
mine to transition
underground,
extending the life of
mine to at least 2039.
potential and opportunity to further grow the
mineral inventory and support a production
platform of 200,000 ounces per year over a mine
life of at least 15 years. The approved development
plan estimates 169,000 ounces per year over
10 years – so our focus on exploration and creating
generational assets has already resulted in a
projected increase of over 1.3 million ounces.
That is true value generation. Not only have we
produced over a million gold-equivalent ounces in
2021, but we have, from one mine alone, managed
to grow mineral inventory by over that amount.
The MARA project offers another example of our
pursuit of strategic value opportunities. Through
our 56.25% ownership interest, we have the lion’s
share of what will be a multi-decade, low-cost
copper-gold operation with life-of-mine annual
production of 469 million pounds of copper
equivalent on a 100% basis, underpinned by one
of the lowest capital intensities of comparable
projects globally. At a time when the world is
pursuing the electrification of the global power
grid, our ownership interest in what will be
among the top 25 copper producing mines
in the world offers generational upside that is
frankly not reflected in our share price today. The
significant investments being made by mining
companies across the world into high-quality
copper deposits offer an estimate of the value
that we gain from MARA.
Given its scale, unique attributes and strong
financial returns, the Company concluded that
MARA represents an excellent development and
growth project after a strategic review in 2020. As
such, the Company intends to continue to advance
MARA through the development and permitting
processes via the Company’s controlling interest
while considering strategic alternatives that could
unlock significant value along the way. During
the last year, several proposals were presented to
the Company for its interest in MARA, and after
consideration, the board determined that any
strategic initiatives will be considered closer to the
completion of the feasibility study and application
for permitting later this year as the certainty of the
project from these events is expected to create
more value for the project.
El Peñón and Jacobina
have consistently
delivered increasing
resources and reserves.
We cannot overlook El Peñón and Jacobina.
We have consistently delivered increasing
resources and reserves at these mines, steady
and increasing production growth and significant
exploration successes. At El Peñón, it is more
than resources and reserves increases. We now
have several areas that show extensions of
historical high grade wide veins, the result of
which is the potential to not only increase mine
The MARA project to
be a multi-decade,
low-cost copper-gold
operation.
Yamana Gold
6
Executive Chairman Message (cont.)
life, but take advantage of plant capacity allowing
more ore processing, greater production and
more cash flow. This is similarly true at Jacobina.
Its resources and reserves support a considerable
mine life along with several planned plant
expansions that significantly increase production
and cash flow.
A Return to Basics
These generational assets underpin the
value of our portfolio by delivering strong cash
flow generation across commodity price cycles.
Further, they give our shareholders an embedded
option on our proven track record of converting
mineral resources to mineral reserves and
efficiently and effectively exploring across our
large land packages across the Americas.
It is with this in mind that I encourage investors
and industry participants to get back to basics,
revisiting our earlier focus on net asset value along
with shorter term cash flows and cash returns, to
attract the valuations that once were the measure
of a mining company. Near-sighted valuation
heuristics miss much of the value inherent in
a portfolio such as ours and the potential for
significant mineral resources to be economically
mined. The claim that gold mining companies are
destroyers of value is not true. This thinking does
a disservice to the mining investing ecosystem.
Industry and mining market participants should
formulate the thesis of why investing in gold
mining companies makes sense and encourage
the broader investor community to better
understand our industry and invest.
I firmly believe that value is driven by the potential
that comes from exploration, increasing resources,
broader growth, and operational expertise, not
from what dividend one can pay or other near-
term valuation metrics. We need to focus our
energy on how to properly value our companies,
which requires a shift back to net asset value as
the defining metric of success. That isn’t to say
cash returns are not relevant. Of course they are,
but not so much in the amount, or the yield, as in
the financial discipline required by management
to pay it, increase it and maintain it, make it
sustainable.
A Responsible Approach To Mining Through
Our Generational Assets
Our generational outlook applies as much to our
corporate behaviour as it does to our business
strategy. As we look to build assets that we
plan to operate well into the late 2030s, it is
imperative that we continue to be a responsible
and sustainable business. This means we need to
more extensively use the constructive channels of
engagement with stakeholders that we developed
some time ago. We must also be as transparent
in detailing our progress on sustainability matters
as we are in our operating results. Transparency
puts a welcome focus on our activities and
pushes us to consistently enhance the way we do
business. Greater transparency, through enhanced
disclosure and open engagement with a more
extended stakeholder community, will become
more and more critical to accessing capital and
achieving overall business success.
Annual Report 2021
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Holding ourselves to high environmental,
social and governance (ESG) and sustainability
standards underpins our social license to
operate, creates positive social outcomes for
the communities in which we serve, and is fully
aligned with running a profitable business and
attracting investment. For some, the idea of a
social license to operate is a notional one. For us,
it is quantified and integrated into our strategy
and operations through our Social License to
Operate Index. We are proud to have developed
this industry-leading approach of measuring how
responsibly we are operating and will continue to
tailor this to ensure it remains market leading.
On track to produce
~85% of our GEO using
renewable energy by
the end of 2022.
It is with that same forward-looking approach
to our business that we have established our
transparent, quantitative approach to our ESG
and health, safety and sustainable development
(HSSD) commitments. During the fourth quarter,
we completed foundational work on our Climate
Action Strategy. We raised our climate action
ambition from a 2ºC-aligned target in early 2021
to a 1.5ºC target by 2030. That will require us to
reduce emissions by between 4% to 5% annually
and is expected to require only a modest,
incremental amount of investment. We are
already on track to produce approximately 85%
of our GEO using renewable energy by the end
of 2022. We will continue to assess opportunities
to further improve greenhouse gas abatement
efforts, including adopting new technologies for
our new mines.
We have already established a new HSSD
Performance Index that instils a sense of
ownership and accountability for key ESG
metrics and is something that everyone has a
responsibility for, no matter where they sit within
our business.
With generational mines come generational
responsibilities. For Yamana to meet its targets
and projections, we need to deliver on our ESG
commitments, ensuring we provide real value
to the communities we are operating in. Our
strategy demands that we continue to strive
better and remain industry leaders, and we are
already leading the way in many areas.
In Conclusion
We are moving forward with a clear, well-
executed, long-term strategy to optimize
operations, advance projects and create long-
term value for our stakeholders. 2021 has shown
that this strategy does not sacrifice near-term
performance for future potential, instead
Climate Action Strategy
requires us to reduce
emissions by between
4% to 5% annually.
Yamana Gold
8
Executive Chairman Message (cont.)
allowing for stable and continuous growth for
our business.
The senior executive group is comprised of
outstanding individuals whose expertise
encompasses all areas that are crucial to our
business - our board of directors is comprised of
an equally outstanding and diverse group that
provides invaluable perspective and guidance.
Together with senior management, the Board and
I will continue to shape the vision and values that
underpin our culture.
I would like to personally thank them and
all Yamana employees across the Americas
whose talent, commitment and hard work has
contributed to our success this past year, allowing
us to build on our strong foundation.
Peter Marrone
Executive Chairman
Performance
Highlights
• Strong performance across core asset
portfolio, particularly Canadian Malartic,
Jacobina and El Peñón
• Full year production of 1.01 million GEO(1)
comprised of 884,793 ounces of gold,
exceeded annual guidance of 1.00 million
GEO(1) and 862,000 ounces of gold
• Built upon exploration success and
replaced mineral gold reserves at each
wholly-owned operation and by a total
of 130% of depletion
• Maintained balance sheet flexibility to
fund internal growth initiatives, with cash
and cash equivalents of $525.0 million
as at December 31, 2021
• Expect to increase outlook for
sustainable production profile to at
least 1.05M GEO(1) from 2025(2)
1. GEO assumes gold ounces plus the gold equivalent of silver
ounces. GEO calculations for actuals are based on an average
market gold to silver price ratio of 72.55 for the year-ended
December 31, 2021; guidance GEO assumes gold ounces plus
the equivalent of silver ounces using a ratio of 72.00
2. See Cautionary Note Regarding Forward Looking Information
Annual Report 2021
9
“ Delivering today,
for Tomorrow”
Operational excellence lays the path for future
success. At Yamana, we are committed to
delivering today – for tomorrow.
President and CEO Message
Yamana has clearly defined its strategic priorities,
and in 2021, we continued to execute against those
strategies to deliver excellent results – not only for
this year, but to ensure we are positioned for the
long term. We’re focused on advancing growth
opportunities at our existing operations, investing
in exploration to replenish our mineral reserve
and mineral resource base, expanding our
project pipeline, whilst continuing to prioritize
our balanced approach to responsible capital
allocation. These strategies are funded internally,
thanks to the financial flexibility afforded by a track
record of operational excellence across our mines.
We closed out the year in outstanding fashion
with exceptional performances at several
of our mines. We increased production and
lowered costs, and simultaneously continued to
prioritize the health and safety of our people and
communities. We’re pleased to report that as of
February 2022, more than 99% of our employees
and contractors at our wholly owned operations
and exploration projects have received at least
one dose of a COVID-19 vaccine and more than
94% have received two doses. Approximately 55%
of workers have received a third dose booster shot.
We have maintained our stringent focus on
environmental protection, exemplified by the
completion of our Climate Action Strategy, which
sets clear targets and demonstrates Yamana’s
commitment to operating sustainably.
Record operational and financial results
We produced 1,011,180 GEO last year, exceeding
our guidance of 1,000,000 GEO. Our operational
success was underpinned by record full-year gold
production at Jacobina and strong momentum
at Canadian Malartic and El Peñón, all of which
exceeded guidance.
Our high-quality portfolio, optimized operating
footprint, and focused procurement practices
helped us achieve these results at an all-in
sustaining cost (AISC) of $1,030 per GEO, lower
year-over-year.
The impressive operational results and favourable
cost performance helped generate significant
cash flow, with cash flows from operating
activities increasing by over 20% year-over-year
to $742.3 million. With cash and equivalents of
$525 million, including $217.3 million available for
Yamana Gold
10
use by the MARA project, we are well positioned to
internally fund our growth initiatives and maintain
our focus on shareholder returns, whether
through our increased annual dividend or our
share buyback program.
Five-year track record of resources growth
Mineral resource growth is fundamental to
long-term value creation. We’ve distinguished
ourselves among our peers through our efforts
to replace the depletion of mineral reserves. As
a result, we’ve seen a very significant increase of
mineral reserves. Since 2017, we have recorded
a 32% increase in GEO mineral reserves and
mineral resources at our five operating mines.
With the addition of Wasamac, our underground
gold project located in Quebec’s prolific Abitibi-
Témiscamingue region and 100 kilometres west
of Yamana’s 50%-owned Canadian Malartic mine,
GEO mineral reserves and mineral resources
increased by 45%. Increases in mineral reserves are
concurrent with significant increases in mineral
resources, and we expect upgrades to mineral
resources in the future. Odyssey is expected to
contribute significantly to this future growth.
In addition, the discovery of new inferred mineral
resources at existing mines already represents an
excellent source of future proven and probable
mineral reserves. Our operations continue to
demonstrate our ability to add value through
drilling, ensuring the sustainability of our mines
and creating opportunities to increase production
and ultimately increase free cash flow. In recent
years, results have exceeded expectations,
with operations not only replacing depletion
but also increasing mineral reserves, mineral
resources, and the pipeline of exploration targets
for future conversion.
Operational excellence fuels performance
Our 2021 year-end mineral reserves and mineral
resources demonstrate the robustness of our
operations to maintain a production base of at
least 1 million GEO. We replaced gold mineral
reserves at each of our wholly owned operations
and by 130% over mined depletion, highlighting
the sustainability and longevity of our existing
asset base. Company-wide mineral reserves
and mineral resources show significant scale,
underpinning upside potential within our
existing portfolio.
Jacobina: permit received, Phase 2
ramp-up begins
Turning to our individual assets, Jacobina
continues to be a standout performer, consistently
exceeding expectations with year-over-year
production and cash flow growth. The operation
posted record full-year production in 2021 and
increased year-on-year production for the eighth
year in a row. Jacobina also had another year of
mineral reserve growth, adding 324,000 ounces of
gold mineral reserves. Gold mineral resources in
measured and indicated and inferred categories
also increased last year, increasing by 294,000
and 411,000 ounces respectively. One of the
lowest-cost mines in the Americas, Jacobina is
Annual Report 2021
11
expected to increase production of higher-margin
ounces moving forward. Its exceptional geological
endowment, underpinned by exploration
discoveries, proves Jacobina to be a generational
asset where we can demonstrate several decades
of mine life and value creation.
Jacobina continues
to be a standout
performer, consistently
exceeding expectations
The track record of growth in mineral reserves
and mineral resources at Jacobina underpins its
significant prospects that support our phased
expansion strategy. We received the necessary
permit in early December, allowing for throughput
to increase to 10,000 tonnes per day (tpd).
Receipt of the permit not only marks a significant
milestone in the Phase 2 ramp-up to 230,000
ounces of gold per year, but also facilitates the
future Phase 3 expansion to bring production up
to 270,000 ounces per year. With the production
increases, combined with the mine’s low-cost
profile, we expect to materially increase margin
and cash flow growth and generate strong returns
on our investment in this world-class asset.
We see a great opportunity to grow our regional
presence here and continue to build on the
outstanding Jacobina Complex, and we look
forward to keeping shareholders updated on our
Phase 4 expansion plans.
Continued operational excellence at Canadian
Malartic sets the stage for Odyssey
Canadian Malartic delivered yearly production of
357,392 ounces of gold on a 50% basis, exceeding
our guidance of 350,000 ounces. Cash costs and
AISC for the year were largely in line with the
guided ranges and lower year-over-year.
Based on technical study results we completed in
February 2021, we made a positive construction
decision on the Odyssey project, the large
underground development which transitions the
mine into its next phase. The project advanced
significantly this past year, with several milestones
achieved in the fourth quarter. Construction
continues to be on budget, and on schedule.
Ongoing exploration drilling continues to show
increased underground mineral resources for
the Odyssey project. Production of over 900,000
ounces from the underground mine during
construction makes Odyssey mostly self-funding,
with only modest capital requirements in any
given year. We expect that Odyssey will produce
between 500,000 and 600,000 ounces per year on
a 100% basis, with exploration and available plant
capacity providing additional upside potential.
Cash flows from
operating activities
increased by over 20%
year over year.
Yamana Gold
12
President and CEO Message (cont.)
This is a generational asset in a premier mining
jurisdiction that will allow us to demonstrate at
least several decades of mine life.
Drilling also expanded the resource envelope at
Odyssey, with 2.35 million ounces of indicated
gold mineral resources and 13.15 million ounces
of inferred gold mineral resources (100% basis)
reported at year-end. Notably, infill drilling at East
Gouldie confirmed the deposit grades and widths
and converted 1.5 million ounces to gold indicated
resources on a 100% basis. Expansion of the
mineral resource envelope on all sides added new
inferred resources with a high potential for future
conversion in the mine plan.
El Peñón replaces gold mineral reserves for
fourth straight year
El Peñón is a consistent performer with low costs
and strong free cash flow generation. Successful
drilling this past year resulted in the operation
achieving a fourth consecutive year of adding new
mineral reserves in excess of mining depletion. For
the full year, production of 226,330 GEO exceeded
guidance of 222,000 GEO. December was a
particularly strong month, delivering 25,642 GEO.
The ongoing drilling success, combined with new
exploration discoveries, support the continued
extension of the El Peñón mine life. The new
South Deeps discovery presents similar geology to
the core mine veins. These exploration results and
excess plant capacity provide us with operational
flexibility and the potential to increase annual
production to levels over 300,000 GEO per year.
Establishing positive momentum at Cerro Moro
For our newest operation, 2021 was a pivotal
year for Cerro Moro. The operation successfully
replaced depletion of GEO mineral reserves
and mineral resources, largely as a result of
exploration and expansion of high-grade veins
at the main ore bodies of Zoe, Martina, and Naty.
These results establish what we expect to be
an ongoing trend of year-over-year mineral
reserve and mineral resource growth, similar
to the reserves replacement cycle established
at our more mature operations, extending the
mine life at a production rate of 150,000 to
165,000 GEO annually. We foresee an upside
production profile of more than 200,000 GEO
per year through exploration success, heap leach
and plant expansion opportunities.
Optimizing Minera Florida
Minera Florida is a consistent performer with
a clear path for production growth. The plant
de-bottlenecking study is advancing and will
increase throughput from 2,500 tpd to 3,300 tpd,
resulting in annual production of 120,000 ounces.
The environmental and social impact assessment
(ESIA) was submitted in the fourth quarter
of 2021. We expect approval to take about
18 months, with another 12 months to receive
secondary permits.
Annual Report 2021
13
Creating long-term value, today
In addition to the mineral reserves and mineral
resources increases at our current operations,
there are several compelling development and
exploration stage projects in our pipeline, all
of which have the potential to drive significant
long-term production upside towards the end of
the current decade and beyond, presenting the
opportunity for further growth and significant
value creation.
In July, we announced a positive development
decision on Wasamac, and expect to receive all
permits and certificates of authorization required
for project construction by the third quarter of
2024. First production is planned for the fourth
quarter of 2026, and we have already identified
opportunities to accelerate the production
ramp-up and decrease the processing plant
construction period, which would improve timing
significantly over the feasibility study’s base case
production profile.
Wasamac’s excellent exploration opportunities
position it to become a generational asset. The
Wasamac deposit is open at depth and strike, but
it also presents unexplored parallel structures like
the Wildcat zone and the newly discovered South
Wildcat zone. In addition, the adjacent Francoeur
acquisition added significant exploration potential
along strike in the same shear zone.
We expect that average annual production for
the first five years of operation at Wasamac to
be 184,000 ounces, with a strategic mine life of
15 years.
The excellent long-term upside potential we
see from our robust project pipeline also
includes MARA, as well as our Suyai gold project
in Argentina.
Suyai is a development-ready project that is
projected to produce up to 250,000 ounces of
gold in its first eight years. MARA is one of the
lowest capital intensity copper projects in the
world. With its de-risked profile and smaller
environmental footprint, the project represents a
significant opportunity for value creation. The full
feasibility study results and completion of the ESIA
for MARA is expected in 2022. At the same time,
we are working to strengthen our social license to
operate in the jurisdiction.
Sustainability for a better tomorrow
We’re taking a forward-looking approach to our
business. Not only in our operations, but in all
the measures that contribute to our social
license to operate. We have established a
transparent, quantitative approach to our
environment, social and governance (ESG)
and health, safety and sustainable development
(HSSD) commitments. We measure them through
our Social License to Operate Index and fully
integrate these performance indicators into our
strategy and operations.
Wasamac first
production planned
for fourth quarter
of 2026.
Yamana Gold
14
President and CEO Message (cont.)
This past year, we completed foundational
work on our Climate Action Strategy. It sets
out our commitment to a low carbon future
and was approved by our Board of Directors in
February. This foundational work included the
determination of base-year emissions, emissions
forecasts, greenhouse gas (GHG) abatement
strategies, and physical and transition risks
aligned with the Task Force on Climate-related
Financial Disclosures (TCFD).
We have raised our climate action ambition by
adopting a 1.5ºC target compared to pre-industrial
levels. This will require us to reduce emissions by
between 4% to 5% annually until 2030, and we’re
committed to achieving that goal.
We are on track to produce approximately
85% of our GEO with renewable energy by
the end of 2022. As part of our growth plans
at Wasamac, Odyssey and Jacobina, we are
evaluating opportunities to further reduce its GHG
emissions by investing in battery-electric vehicles,
automation, and other emerging technologies
and we will continue to assess all opportunities
to further improve GHG abatement efforts.
Hydroelectric and other forms of non-fossil fuel
energy constitute more than 99.9% of the
Quebec grid energy, and our near-term growth
in both Quebec and Brazil will leverage electrical
grids that have a high proportion of green,
renewable energy.
We are proud of the work we completed on our
Climate Action Strategy this past year. It has set
us on a positive trajectory toward meeting our
climate action commitments and we will continue
to explore other opportunities to improve the
sustainability of our operations.
Built to perform for the long term
In 2021, we delivered on every measure. Most
importantly, we have consolidated on our
solid platform for long-term value creation –
a platform founded on our first-rate asset
portfolio, internally-funded growth, and strong
social license to operate. This is all thanks to the
hard work, talent, and passion of our people.
I want to acknowledge and thank them for their
outstanding contributions this past year, and
their continued commitment as we look forward
to the opportunities that lie ahead.
Daniel Racine
President and Chief Executive Officer
This past year, we
completed foundational
work on our Climate
Action Strategy.
Annual Report 2021
15
Operations
Development
Projects
Abitibi-Témiscamingue
Wasamac
CANADA (100%)
1
Odyssey
CANADA (50%)
3
Canadian Malartic
CANADA (50%)
2
Jacobina Belt
Jacobina
BRAZIL (100%)
5
Deseado Massif
Cerro Moro
ARGENTINA (100%)
9
MARA
ARGENTINA (56.25%)
7
Suyai
ARGENTINA
8
Operations
Atacama-Alhué Districts
El Peñón
CHILE (100%)
4
Minera Florida
CHILE (100%)
6
1
2
3
5
9
4
6
7
8
Yamana Gold
16
Mineral
Reserves
and Mineral
Resources
Proven Mineral Reserves
Probable Mineral Reserves
Total – Proven and Probable
Gold
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Canadian Malartic &
Barnat Open Pit (50%)
21,466
0.84
580
28,758
1.28
1,188
50,225
1.09
1,767
Canadian Malartic
Underground (50%)
0
0.00
0
0
0.00
0
0
0.00
0
Canadian Malartic Total (50%)
21,466
0.84
580
28,758
1.28
1,188
50,225
1.09
1,767
Jacobina
28,910
2.17
2,015
13,101
2.19
923
42,011
2.18
2,938
Cerro Moro
365
9.27
109
1,384
7.82
348
1,749
8.12
457
El Peñón Ore
421
6.70
91
4,996
5.09
817
5,417
5.21
908
El Peñón Stockpiles
8
2.64
1
607
1.24
24
615
1.26
25
El Peñón Total
429
6.62
91
5,603
4.67
841
6,032
4.81
933
Minera Florida Ore
662
3.08
65
2,905
3.49
326
3,567
3.42
392
Minera Florida Tailings
0
0.00
0
1,248
0.94
38
1,248
0.94
38
Minera Florida Total
662
3.08
65
4,153
2.73
364
4,815
2.78
430
Wasamac
0
0.00
0
23,168
2.56
1,910
23,168
2.56
1,910
Jeronimo (57%)
6,350
3.91
798
2,331
3.79
284
8,681
3.88
1,082
MARA (56.25%)
330,300
0.25
2,655
291,150
0.16
1,498
621,450
0.21
4,152
Total Gold Mineral Reserves
388,482
0.51
6,314
369,648
0.62
7,355
758,131
0.56
13,669
Silver
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Cerro Moro
365
593.5
6,964
1,384
342.0
15,215
1,749
394.5
22,180
El Peñón Ore
421
225.5
3,055
4,996
162.1
26,036
5,417
167.0
29,091
El Peñón Stockpiles
8
140.0
35
607
13.2
257
615
14.8
292
El Peñón Total
429
224.0
3,090
5,603
146.0
26,293
6,032
151.5
29,383
Minera Florida Ore
662
20.2
430
2,905
21.4
1,998
3,567
21.2
2,428
Minera Florida Tailings
0
0.0
0
1,248
14.6
584
1,248
14.6
584
Minera Florida Total
662
20.2
430
4,153
19.3
2,582
4,815
19.5
3,011
MARA (56.25%)
330,300
3.0
32,070
291,150
2.6
24,618
621,450
2.8
56,689
Total Silver Mineral Reserves
331,757
4.0
42,555
302,289
7.1
68,708
634,046
5.5
111,264
Totals may not add due to rounding
Mineral Reserves (Proven and Probable)
Yamana Gold
18
Proven Mineral Reserves
Probable Mineral Reserves
Total – Proven and Probable
Copper
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Yamana Gold Projects
MARA (56.25%)
330,300
0.57
4,151
291,150
0.39
2,503
621,450
0.49
6,654
Total Copper Mineral Reserves
330,300
0.57
4,151
291,150
0.39
2,503
621,450
0.49
6,654
Zinc
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Yamana Gold Operations
Minera Florida Ore
662
1.44
21
2,905
0.94
60
3,567
1.03
81
Minera Florida Tailings
0
0.00
0
1,248
0.58
16
1,248
0.58
16
Minera Florida Total
662
1.44
21
4,153
0.83
76
4,815
0.91
97
Total Zinc Mineral Reserves
662
1.44
21
4,153
0.83
76
4,815
0.91
97
Molybdenum
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Yamana Gold Projects
MARA (56.25%)
330,300
0.030
218
291,150
0.030
192
621,450
0.030
411
Total Molybdenum Mineral Reserves
330,300
0.030
218
291,150
0.030
192
621,450
0.030
411
Totals may not add due to rounding
Annual Report 2021
19
Mineral Resources (Measured, Indicated and Inferred)
(exclusive of Mineral Reserves)
Measured Mineral Resources
Indicated Mineral Resources
Gold
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Canadian Malartic, Barnat & Other Zones (50%)
130
0.72
3
2,174
1.31
92
Odyssey Underground (50%)
0
0.00
0
1,075
1.92
66
East MalarticUnderground (50%)
0
0.00
0
5,539
2.04
364
East Gouldie Underground (50%)
0
0.00
0
5,974
3.88
745
Canadian Malartic Total (50%)
130
0.72
3
14,762
2.67
1,267
Jacobina
30,281
2.40
2,339
19,372
2.36
1,468
Cerro Moro Mine
177
5.26
30
760
3.58
87
Cerro Moro Heap Leach
0
0.00
0
0
0.00
0
Cerro Moro Total
177
5.26
30
760
3.58
87
El Peñón Mine
761
5.28
129
5,651
3.20
581
El Peñón Tailings
0
0.00
0
0
0.00
0
El Peñón Stockpiles
0
0.00
0
1,019
1.13
37
El Peñón Total
761
5.28
129
6,670
2.88
618
Minera Florida
1,425
5.24
240
6,108
4.15
816
Wasamac
0
0.00
0
5,769
1.76
326
Jeronimo (57%)
772
3.77
94
385
3.69
46
Agua Rica (56.25%)
30,150
0.13
126
116,044
0.11
411
Alumbrera (56.25%)
65,297
0.31
660
5,154
0.29
48
MARA Total (56.25%)
95,447
0.26
786
121,198
0.12
459
Arco Sul
0
0.00
0
0
0.00
0
La Pepa (80%)
47,053
0.61
920
52,324
0.49
831
Lavra Velha
0
0.00
0
0
0.00
0
Monument Bay
0
0.00
0
36,581
1.52
1,787
Suyai
0
0.00
0
4,700
15.00
2,286
Total Gold Mineral Resources
176,046
0.80
4,541
268,629
1.16
9,992
Totals may not add due to rounding
NOTE: Mineral Resources are exclusive of Mineral Reserves. Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability.
Yamana Gold
20
Total – Measured and Indicated
Inferred Mineral Resources
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
2,304
1.28
95
2,790
0.80
72
1,075
1.92
66
13,382
2.07
891
5,539
2.04
364
42,635
1.92
2,639
5,974
3.88
745
30,825
3.07
3,046
14,893
2.65
1,270
89,632
2.31
6,647
49,652
2.38
3,807
25,018
2.37
1,904
937
3.89
117
1,071
4.91
169
0
0.00
0
416
4.28
57
937
3.89
117
1,488
4.73
226
6,412
3.45
710
5,115
3.87
636
0
0.00
0
13,767
0.55
245
1,019
1.13
37
0
0.00
0
7,430
3.13
748
18,882
1.45
881
7,533
4.36
1,056
4,167
4.91
658
5,769
1.76
326
3,984
2.01
258
1,157
3.74
139
1,118
4.49
161
146,194
0.11
537
417,881
0.09
1,209
70,451
0.31
708
1,708
0.23
13
216,645
0.18
1,245
419,590
0.09
1,222
0
0.00
0
6,203
3.08
615
99,377
0.55
1,751
20,019
0.46
293
0
0.00
0
3,934
4.29
543
36,581
1.52
1,787
41,946
1.32
1,781
4,700
15.00
2,286
900
9.90
274
444,675
1.02
14,532
636,880
0.76
15,463
Annual Report 2021
21
Measured Mineral Resources
Indicated Mineral Resources
Silver
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Yamana Gold Projects
Cerro Moro Mine
177
234.0
1,328
760
266.1
6,506
Cerro Moro Heap Leach
0
0.0
0
0
0.0
0
Cerro Moro Total
177
234.0
1,328
760
266.1
6,506
El Peñón Mine
761
150.9
3,691
5,651
113.5
20,625
El Peñón Tailings
0
0.0
0
0
0.0
0
El Peñón Stockpiles
0
0.0
0
1,019
28.8
942
El Peñón Total
761
150.9
3,691
6,670
100.6
21,568
Minera Florida
1,425
34.0
1,557
6,108
21.8
4,287
Agua Rica (56.25%)
30,150
1.6
1,502
116,044
1.9
6,940
Alumbrera (56.25%)
0
0.0
0
0
0.0
0
MARA Total (56.25%)
30,150
1.6
1,502
116,044
1.9
6,940
Suyai
0
0.0
0
4,700
23.0
3,523
Total Silver Mineral Resources
32,513
7.7
8,079
134,282
9.9
42,823
Copper
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Yamana Gold Projects
Agua Rica (56.25%)
30,150
0.22
146
116,044
0.30
767
Alumbrera (56.25%)
65,297
0.31
445
5,154
0.21
24
MARA Total (56.25%)
95,447
0.28
591
121,198
0.30
791
Total Copper Mineral Resources
95,447
0.28
591
121,198
0.30
791
Zinc
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Yamana Gold Operations
Minera Florida
1,425
1.90
60
6,108
1.38
185
Total Zinc Mineral Resources
1,425
1.90
60
6,108
1.38
185
Molybdenum
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Yamana Gold Projects
Agua Rica (56.25%)
30,150
0.020
14
116,044
0.030
77
Alumbrera (56.25%)
65,297
0.012
16
5,154
0.010
1
MARA Total (56.25%)
95,447
0.014
30
121,198
0.029
78
Total Molybdenum Mineral Resources
95,447
0.014
30
121,198
0.029
78
Totals may not add due to rounding
NOTE: Mineral Resources are exclusive of Mineral Reserves. Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability.
Yamana Gold
22
Mineral Resources (cont.)
Total – Measured and Indicated
Inferred Mineral Resources
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
Tonnes
(000’s)
Grade
(g/t)
Contained
oz. (000’s)
937
260.0
7,834
1,071
213.4
7,351
0
0.0
0
416
60.4
808
937
260.0
7,834
1,488
170.6
8,159
6,412
118.0
24,316
5,115
125.3
20,604
0.00
0.0
0
13,767
18.9
8,380
1,019
28.8
942
0
0.0
0
7,430
105.7
25,259
18,882
47.7
28,984
7,533
24.1
5,844
4,167
23.4
3,138
146,194
1.8
8,442
417,881
1.6
21,765
0
0.0
0
0
0.0
0
146,194
1.8
8,442
417,881
1.6
21,765
4,700
23.0
3,523
900
21.0
575
166,795
9.5
50,902
443,317
4.4
62,621
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
146,194
0.28
914
417,881
0.23
2,119
70,451
0.30
469
1,708
0.17
6
216,645
0.29
1,383
419,590
0.23
2,125
216,645
0.29
1,383
419,590
0.23
2,125
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
7,533
1.48
245
4,167
1.20
111
7,533
1.48
245
4,167
1.20
111
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
Tonnes
(000’s)
Grade
(%)
Contained
lbs (mm)
146,194
0.030
90
417,881
0.030
276
70,451
0.011
17
1,708
0.008
1
216,645
0.022
107
419,590
0.030
277
216,645
0.022
107
419,590
0.030
277
Annual Report 2021
23
Year End 2021 Mineral Reserves and Mineral Resource Reporting Notes
Final December 31, 2021
1. Metal Price, Cut-off Grade, Metallurgical Recovery
Project
Mineral Reserves
Mineral Resources
Yamana Gold Operations
Canadian Malartic (50%)
Price assumption: $1,250 gold
Price assumption: $1,250 gold
Open pit cut-off grades range from 0.41 to
0.42 g/t gold
Canadian Malartic, Barnat and other zones cut-off
grades range from 0.31 to 0.42 g/t gold inside pit,
and from 1.15 to 1.20 g/t gold outside or below pit
(stope optimized)
Metallurgical recoveries for gold averaging 90.6%
Underground cut-off grade at Odyssey is 1.15 to
1.30 g/t gold (stope optimized)
Underground cut-off grade at East Malartic is
1.15 to 1.40 g/t gold (stope optimized)
Underground cut-off grade at East Gouldie is
1.10 to 1.25 g/t gold (stope optimized)
Jacobina
Price assumption: $1,250 gold
Price assumption: $1,250 gold. Cut-off grades
correspond to 75% of the cut-off used to estimate
the mineral reserves
Underground reserves are reported at variable
cut-off grades by zone ranging from 0.92 g/t gold to
1.01 g/t gold
Underground resources are reported at variable
cut-off grades by zone ranging from 0.69 g/t gold
to 0.76 g/t gold
Metallurgical recovery is 96.2%
Reported within optimized underground mining
shapes with minimum mining width of 1.5 metres
and considering internal waste and dilution
Cerro Moro
Price assumptions: $1,250 gold and $18.00 silver
Price assumptions: $1,250 gold and $18.00 silver.
NSR cut-off values correspond to 75% of reserves
cut-off
Underground NSR cut-off at $210.71/t and open pit
NSR cut-off at $124.72/t
Underground NSR cut-off at $158.04/t and open pit
NSR cut-off at $93.54/t
Metallurgical recoveries average 93% for gold and
93% for silver
Heap leach resource reported at NSR cut-off value
of $90.5/t (underground) and $26.0/t (open pit)
Constrained in optimized stopes and pit shells
El Peñón
Price assumptions: $1,250 gold, $18.00 silver
Price assumptions: $1,250 gold, $18.00 silver
Open Pit cut-off at $48.27/t
Underground cut-off at $96.86/t, which
corresponds to 75% of the cut-off value used to
estimate the mineral reserves
Underground cut-off at $129.15/t
Tailings and stockpiles reported at cut-offs of
0.50 g/t and 0.79 g/t gold equivalent respectively
Low grade stockpiles cut-off 0.86 g/t gold equivalent
Metallurgical recoveries for underground ores
range from 84.39% to 96.12% for gold and from
68.76% to 91.03% for silver
Metallurgical recoveries for open pit ores are 89.39%
for gold and 80.70% for silver
Metallurgical recoveries for tailings estimated to
be 60% for gold and 30% for silver
Metallurgical recoveries for underground ores range
from 84.39% to 96.12% for gold and from 68.76% to
91.03% for silver
Metallurgical recoveries for stockpiles estimated
to be 88.0% for gold and 80.8% for silver
Metallurgical recoveries for low grade stockpiles are
95.2% for gold and 83.0% for silver
Yamana Gold
24
1. Metal Price, Cut-off Grade, Metallurgical Recovery
Project
Mineral Reserves
Mineral Resources
Yamana Gold Operations
Minera Florida
Price assumptions: $1,250/oz gold, $18.00/oz silver
and $1.25/lb zinc
Price assumptions: $1,250/oz gold, $18.00/oz silver
and $1.25/lb zinc
Underground cut-off at $92.07/t
Underground mineral resources are estimated at
a cut-off value of $69.05/t, corrseponding to 75% of
the cut-off used to estimate mineral reserves, for
the Las Pataguas, PVS, and Cucaracha zones which
are constrained to underground mining shapes.
The remaining zones are reported unconstrained at
a NSR cut-off value of $92.07/t.
Metallurgical recoveries of 91.99% for gold, 62.75% for
silver, and 79.89% for zinc
Metallurgical recoveries of 91.99% for gold, 62.75%
for silver, and 79.89% for zinc
Yamana Gold Projects
Wasamac
Price assumption: $1,250/oz gold
Price assumption: $1,250 gold. Cut-off grades
correspond to 75% of the cut-off used to estimate
the mineral reserves
Underground cut-off grade from 1.45 to 1.68 g/t gold
(stope optimized)
Underground cut-off grades range from at 1.10 to
1.30 g/t gold
The external dilution is estimated to be 11%.
The average mining recovery factor was set
at 93.6%.
Mineral resources are below a 32 m surface crown
pillar and outside a 5 m buffer around historical
underground workings
Constrained by potentially mineable shapes based
on a minimum mining width of 2 m considering
internal waste and dilution
Jeronimo (57%)
Price assumption: $900 gold
Cut-off grade at 2.0 g/t gold
Cut-off grade at 2.0 g/t gold
Metallurgical recovery for gold is 86%.
MARA:
Agua Rica (56.25%)
Mineral Reserves are estimated using a variable
metallurgical recovery
Mineral Resources are estimated using a variable
metallurgical recovery
Average metallurgical recoveries of 86% Cu, 35% Au,
43% Ag, and 44% Mo were considered
LOM average metallurgical recoveries of 86% Cu,
35% Au, 43% Ag, and 44% Mo were considered
Open pit mineral reserves are reported at a variable
cut-off value averaging $8.42/t, based on metal price
assumptions of $3.00/lb Cu, $1,250/oz Au, $18/oz Ag,
and $11/lb Mo. A LOM average open pit costs of
$1.72/t moved, processing and G&A cost of $6.70/t of
run of mine processed. The strip ratio of the mineral
reserves is 1.7 with overall slope angles varying from
39° to 45° depending on the geotechnical sector
Mineral resources are constrained by an optimized
pit shell based on metal price assumptions
of $4.00/lb Cu, $1,600/oz Au, $24/oz Ag, and
$11/lb Mo. Open pit Mineral Resources are reported
at a variable cut-off value which averages $8.42/t
milled with overall slope angles varying from 39° to
45° depending on the geotechnical sector
MARA:
Alumbrera (56.25%)
N/A
Price assumptions: $1,300 gold, $2.83 copper.
Alumbrera deposit: Whittle pit shell cut-off at 0.22%
copper equivalent
Bajo El Durazno deposit: 0.2 g/t Au cut-off within
pit shell
Annual Report 2021
25
1. Metal Price, Cut-off Grade, Metallurgical Recovery
Project
Mineral Reserves
Mineral Resources
Yamana Gold Projects
Arco Sul
N/A
Price assumption: $1,250 gold
Underground cut-off grade at 2.00 g/t, which
corresponds to 75% of the cut-off that would be
used for mineral reserves
Mineral resources reported within optimized
underground mining shapes
La Pepa (80%)
N/A
Price assumption: $1,650 gold
Cut-off grade of 0.20 g/t gold for oxides and 0.26 g/t
gold for sulphides, inside optimized pit envelope
Lavra Velha
N/A
Price assumptions: $1,300 gold and $3.50 copper
Cut-off grade at 0.2 g/t gold and 0.1% copper
Monument Bay
N/A
Price assumption: $1,200 gold
Cut-off grades are 0.4 g/t gold and 0.7 g/t gold for
the open pits and 4.0 g/t gold for underground
Suyai
N/A
5.0 g/t gold cut-off inside mineralized wireframe
modeling
2. All Mineral Reserves and Mineral Resources have been estimated in accordance with the standards of the Canadian Institute of Mining,
Metallurgy and Petroleum and National Instrument 43-101.
3. All Mineral Resources are reported exclusive of Mineral Reserves.
4. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
5. Mineral Reserves and Mineral Resources are reported as of December 31, 2021.
6. For the qualified persons responsible for the Mineral Reserve and Mineral Resource estimates at the Company’s material properties, see
the qualified persons list below.
Property
Qualified Persons for Mineral Reserves
Qualified Persons for Mineral Resources
Canadian Malartic
Guy Gagnon, Eng.,
Canadian Malartic Corporation
Pascal Lehouiller, P. Geo,
Canadian Malartic Corporation
Jacobina
Eduardo de Souza Soares, MAusIMM CP (Min),
Yamana Gold Inc.
Luiz Carlos Damasceno dos Santos,
MAusIMM CP (Geo), Yamana Gold Inc.
El Peñón
Jimmy Avendaño Gonzalez, Registered Member of
the Chilean Mining Commission, Yamana Gold Inc.
Marco Velásquez Corrales, Registered Member of the
Chilean Mining Commission, Yamana Gold Inc.
Yamana Gold
26
Year End 2021 Mineral Reserves and Mineral Resource Reporting Notes (cont.)
2021
Financial
Review
28
Management’s Discussion and Analysis
28
Highlights and Relevant Updates
40
Core Business, Strategy and Outlook
49
Review of Financial Results
53
Operating Segments Performance
63
Construction, Development
and Other Initiatives
74
Mineral Reserve and
Mineral Resource Estimates
81
Exploration
87
Financial Condition and Liquidity
91
Economic Trends, Business Risks
and Uncertainties
94
Contingencies
94
Critical Accounting Policies and Estimates
95
Non-GAAP Financial Performance
Measures
102 Disclosure Controls and Procedures
107 Management’s Responsibility for
Financial Reporting
108 Reports of Independent Registered
Public Accounting Firm
111
Consolidated Financial Statements
116 Notes To The Consolidated
Financial Statements
MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
This Management’s Discussion and Analysis of Operations and Financial Condition ("MD&A") should be read in conjunction with
Yamana Gold Inc.'s (the "Company" or "Yamana") most recently issued annual consolidated financial statements for the year
ended December 31, 2021, ("Consolidated Financial Statements"). All figures are in United States Dollars ("US Dollars") unless
otherwise specified and are in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board (“IFRS”).
The Company has included certain non-GAAP financial performance measures, which the Company believes, that together with
measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance
of the Company. Non-GAAP financial performance measures do not have any standardized meaning prescribed under IFRS, and
therefore they may not be comparable to similar non-GAAP financial performance measures employed by other companies. The
data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. The non-GAAP financial performance measures included in this MD&A include:
•
Cash costs per gold equivalent ounce ("GEO") sold;
•
All-in sustaining costs ("AISC") per GEO sold;
•
Net free cash flow; and
•
Average realized price per ounce of gold/silver sold
Reconciliations and descriptions associated with the above financial performance measures can be found in Section 12: Non-
GAAP Financial Performance Measures in this MD&A. In addition, each non-GAAP financial performance measure in this MD&A
has been annotated with a reference to endnote (1).
Cautionary statements regarding forward-looking information and mineral reserves and mineral resources can be found in Section
13: Disclosure Controls and Procedures in this MD&A.
Endnotes can be found on the final page of this MD&A.
1.
HIGHLIGHTS AND RELEVANT UPDATES
For the three months ended December 31, 2021 unless otherwise noted
Operational, Earnings and Cash Flow Highlights:
•
Gold production of 240,718 ounces significantly exceeded plan and the prior year comparative quarter, following standout
performances from Canadian Malartic with 88,933 ounces, Jacobina with 48,228 ounces, El Peñón with 55,282 ounces
and Cerro Moro with 30,028 ounces. As expected, fourth quarter gold production from Yamana mines(4) marks the highest
all-time total production, with the record-breaking production a result of the planned sequential quarter-over-quarter
increases. Within the quarter, the planned sequential month-over-month increase in production resulted in December
being a standout month. Of note, is the milestone on December 27, 2021 of the 6 millionth ounce poured at Canadian
Malartic since the initial mill start-up in 2011.
•
Silver production of 3,142,781 ounces, with both El Peñón and Cerro Moro recording their highest quarterly silver
production totals of the year.
•
Record quarterly GEO(2) production from Yamana mines(4) of 281,388 GEO(2) significantly exceeded the planned 270,000
GEO(2) and prior year comparative quarter production of 255,361 GEO(2), on the back of exceptional gold production. As
previously guided, the Company's production was weighted at 53% for the second half of the year, with the fourth quarter
being the strongest quarter.
•
Record annual GEO(2) production from Yamana mines(4) of 1,011,180 GEO(2) exceeded the guided 1,000,000 GEO(2), and
prior year's 901,155 GEO(2). The full-year GEO(2) record comprised 884,793 ounces of gold and 9,169,289 ounces of
silver.
Yamana Gold
28
•
Quarterly total cost of sales, cash costs(1) and AISC(1) on a per GEO(2) basis of $1,091, $642, and $962 respectively, which
on a consolidated basis were the lowest cost quarter of the year, and lower than the comparative period. Total cost of
sales, cash costs(1) and AISC(1) of $1,132, $689 and $1,030 respectively, for the year ended December 31, 2021, were
also lower than the comparative period. Full year costs include inflation impacts of approximately $20 per GEO(2) which
were not included in original guidance, as previously disclosed.
•
Cash flows from operating activities reached an all-time quarterly record of $238.2 million, increasing by 25% compared
to the prior quarter and 31% compared to prior year comparative quarter. Cash balances excluding MARA increased by
$67.7 million or 28% compared to the prior quarter.
•
As at December 31, 2021, the Company had cash and cash equivalents of $525.0 million, including $217.3 million
available for utilization by the MARA Project. Further, the Company has available credit of $750.0 million from its undrawn
revolving credit facility.
•
Net earnings(3) for the three months ended December 31, 2021 were $109.7 million or $0.11 per share basic and diluted,
compared to net earnings(3) of $103.0 million or $0.11 per share basic and diluted for the three months ended December
31, 2020. Adjusting items of $8.2 million(3), that management believes may not be reflective of current and ongoing
operations, and which may be used to adjust or reconcile input models in consensus estimates, decreased net earnings(3)
for the current period. For a complete list of adjustments attributable to Yamana Gold Inc. equity holders, refer to the
Financial highlights section below.
Capital Allocation Highlights:
•
The Company has a conservative capital structure that provides for the focus on its capital allocation priorities including:
the development, expansion, and exploration of prioritized low capital cost growth projects; and the return of capital to
shareholders. The details of those priorities are as follows:
◦
Development, expansion and exploration are self-funding with modest and well sequenced growth capital
projects including:
▪
Wasamac, and the positive development decision announced in mid-2021 for this wholly owned project.
Capital costs for Wasamac are not expected to be incurred until 2025, in the meantime the Company
will continue to increase cash balances, some of which will be earmarked for project construction, to
fully fund the project;
▪
Development of the Odyssey underground project at Canadian Malartic, where the cash flow derived
from initial gold production during the ramp-up phase will fund development of the lower zones;
▪
The Jacobina phased plant expansion, which is expected to have a modest $15 million to $20 million
capital requirement;
▪
Advancement of the MARA copper/gold project through feasibility and permitting;
▪
Determining the merits of the advancement of the Suyai project, in collaboration with our partner, and;
▪
The generative exploration portfolio.
◦
Strengthening Return of Capital to Shareholders
▪
As part of the Company's progressive approach to its dividend policy and returns to shareholders, an
increased quarterly dividend of $0.03 per share (annual $0.12 per share) was approved during the
second quarter of 2021, representing the sixth dividend increase since the second quarter of 2019, for
a cumulative increase of 500%.
▪
On July 29, 2021, the Company announced a normal-course issuer bid (“NCIB”) to purchase up to
48,321,676 common shares of the Company, representing up to 5% of the Company’s then current
issued and outstanding common shares, in open-market transactions through the facilities of the
Toronto Stock Exchange, the New York Stock Exchange and alternative Canadian trading systems.
The Company believes that from time to time the market price of its common shares does not represent
their full value and growth prospects and views purchases of common shares as an attractive
investment comparable to its investments in its portfolio of exploration and development stage assets.
Since the commencement of the NCIB in July, the Company has repurchased, and subsequently
cancelled, a total of 6,672,628 common shares for approximately C$35.6 million.
Annual Report 2021
29
▪
For further information on the Company's approach to maximizing cash returns to shareholders, refer
to Section 2: Core Business, Strategy and Outlook.
◦
Strengthening the Company's Financial Position, Improving Financial Resilience and Increasing Financial
Flexibility
▪
Yamana believes that a strong financial position and financial resilience also requires a manageable
debt maturity profile. During the third quarter, the Company took advantage of market conditions to
improve the terms of its outstanding notes by extending maturity and reducing carrying costs, by
completing an offering of $500 million aggregate principal amount of its 2.630% Senior Notes due
August 15, 2031. The Senior 2031 Notes are unsecured, senior obligations of Yamana and are
unconditionally guaranteed by certain of Yamana’s subsidiaries that are also guarantors under
Yamana’s credit facility.
▪
Yamana used the net proceeds from the offering, together with cash on hand, to fund the redemptions
of its 4.76% Series C Senior Notes due 2022, its 4.91% Series D Senior Notes due 2024, its 4.78%
Series B Senior Notes due 2023 and its 4.950% Senior Notes due 2024.
▪
The completion of the offering of the Senior 2031 Notes and the subsequent redemption of the shorter-
term maturity notes represents the culmination of significant debt reduction efforts initiated in 2019.
Yamana’s outstanding gross debt was reduced by $222.1 million during the year to $772.8 million,
which compares to $1.85 billion outstanding in the second quarter of 2019.
▪
Interest on the Senior 2031 Notes is set at 2.630% as compared to a weighted average interest of
4.83% for the existing notes, which reduces the Company’s annual interest carrying charges by
approximately $21.6 million per annum compared to the second quarter of 2021, or roughly $60 million
per annum lower compared to the second quarter of 2019.
Strategic Developments, Construction Developments and Advanced Stage Projects:
•
Positive Development Decision and Positive Study Results on the Wasamac Project, Quebec
◦
During the second half of the year the Company made a positive development decision on its wholly owned
Wasamac project in the Abitibi-Témiscamingue Region of Quebec, Canada, purchased early in 2021. Wasamac
solidifies the Company’s long-term growth profile with a top-tier gold project in a region where Yamana has deep
operational and technical expertise and experience. Yamana’s average annual gold production in Quebec,
including production from Wasamac and the Odyssey underground at Canadian Malartic, has the potential to
increase to approximately 500,000 ounces by 2028, and continue at this level through 2041.
◦
Yamana expects to receive all permits and certificates of authorization required for project construction by the third
quarter of 2024. Construction time to processing plant commissioning is estimated at two and a half years, with
the underground crusher and conveyor system scheduled for commissioning six months later. First gold production
is scheduled for the fourth quarter of 2026, with commercial production planned for the fourth quarter of 2027,
however, the Company has already identified opportunities to accelerate the production ramp-up and decrease
the processing plant construction period, which would improve timing significantly over the feasibility study's base
case production profile. As previously disclosed, the initial capital cost is expected to be relatively modest for a
7,000 tpd underground operation, at approximately $416 million.
◦
Exploration drilling at Wasamac in the fourth quarter continued to deliver promising results. On December 1, 2021,
the Company issued the press release “Yamana Gold Announces the Discovery of New Mineralized Zones at
Wasamac and Provides an Update on Its Growth Projects”, which included drill results south of the Wildcat zone
which intersected two new mineralized zones, referred to as South Wildcat. These results demonstrate the
excellent exploration potential and opportunity to further grow the mineral inventory and are expected to support a
production platform of 200,000 ounces per year with AISC(1) below $850 per ounce over a mine life of at least 15
years. An exploration budget of $10.0 million is planned for 2022. This production level would significantly improve
the approved development plan of an average of 169,000 ounces per year over a mine life of 10 years, thereby
meaningfully increasing overall value.
◦
The Company has decided to advance the bulk sample permitting process for Wasamac and expects to obtain the
required approvals in the first quarter of 2023. The bulk sample permit would allow construction to commence on
Yamana Gold
30
the ramp, enabling earlier access to the deposit to increase the level of confidence in metallurgical and
geotechnical assumptions and optimize the processing flow sheet and mining sequence. Construction on surface
facilities to support the ramp development activity and associated environmental requirements would also advance.
•
Canadian Malartic Underground Construction Decision; Drilling Identifies A Potentially Significant Extension To
The East Gouldie Zone
◦
Technical study results were obtained in early 2021, and the Company and its partner made a positive construction
decision of the Odyssey project at Canadian Malartic. A National Instrument ("NI") 43-101 technical report
completed in March 2021 included a full summary of the Odyssey underground project and demonstrated robust
economics, a significant increase in mineral resources, first production from the Odyssey South deposit expected
in 2023, and a mine life extension to at least 2039. As Canadian Malartic transitions from open pit to underground
mining, underground production will offset a significant portion of the corresponding decline in open pit production.
On a 100% basis, production from open pit mining from 2021 through 2028 is expected to be approximately 3.9
million ounces; the Odyssey underground mine plan supports annual gold production of 500,000 to 600,000 ounces
when fully ramped up on a 100% basis. Furthermore, the Odyssey underground mine plan currently only includes
about half of the project’s 2.4 million ounces of Indicated Mineral Resources and 13.2 million ounces of Inferred
Mineral Resources (on a 100% basis). Further upside from grade improvements and underground mine life
extensions are expected to be realized through infill drilling to improve geological confidence, exploration drilling
to extend known deposits and make new discoveries and engineering efforts, especially close to historical
underground excavations and at depth at East Malartic.
◦
The project advanced significantly in 2021, with several milestones achieved in the fourth quarter. The project
continues to be on budget, and on schedule. In October, the concrete pour to construct the 93-metre-tall headframe
was completed on schedule, in preparation for shaft sinking slated to begin in the fourth quarter of 2022. Structural
steel installation inside the headframe and construction of the fresh air intake is ongoing. The production shaft will
be 6.5 metres in diameter and 1,800 metres deep, with the first of two loading stations at 1,135 metres below
surface. The sinking hoist and auxiliary hoist are expected to be delivered mid-2022.
◦
In parallel, underground development is advancing according to plan and, as of the end of 2021, the ramp from
surface to the upper zones has reached the elevation of the third production level and the base of the first stoping
horizon.
◦
Underground development rates increased in the fourth quarter of 2021 to approximately 400 metres per month
with the opening of additional headings and implementation of automated scoops to operate between shifts,
achieving a total of 2,081 linear metres for the year. Development rates are planned to increase further in 2022
with the addition of the Canadian Malartic development crews.
◦
The first development jumbo drill is scheduled to be delivered in February and, as an employer of choice in the
Abitibi, the Odyssey project is successfully building a highly skilled team. Priority will continue to be placed on the
main ramp and also the level 16 exploration drift for infill drilling of the Odyssey South and Internal zones. The first
underground ore from Odyssey South is on track to be processed through the existing Canadian Malartic plant in
early 2023.
◦
Construction of surface infrastructure is advancing on schedule with critical preparation works completed in the
fourth quarter to allow construction to continue as planned throughout the winter. Construction of the surface
workshop, warehouse and compressor buildings are ongoing and construction of the paste fill plant is scheduled
to commence in February. Most long-lead items have been secured.
◦
Decree amendment and the mining lease process continue to be on target for the first quarter of 2022 and fourth
quarter of 2022 respectively.
Annual Report 2021
31
•
Jacobina Processing Capacity Optimization and Expansion
◦
The Company’s expansion strategy at Jacobina is well advanced and the Company anticipates that the mine will
be a multi-decade, low-cost operation. The Phase 2 expansion is progressing ahead of schedule and the mine is
now expected to achieve the Phase 2 throughput objective approximately one year ahead of schedule, although
higher throughput will be supported by stockpiles during the year. During the fourth quarter, Jacobina received the
expansion permit, allowing throughput to increase to 10,000 tpd, as announced in the December 6 press release
“Yamana Gold Receives Permit at Jacobina, Initiating Ramp Up of Phase 2 Expansion, Expects Fourth Quarter
Company Wide Production to Exceed 270,000 GEO With Costs Tracking to Be the Lowest of the Year”. Receipt of
the permit not only marks a significant milestone in the Phase 2 ramp up to 230,000 ounces of gold per year, but
also facilitates the future Phase 3 expansion to increase production up to 270,000 ounces per year.
◦
Engineering for the Phase 3 expansion to 10,000 tpd will advance in parallel with the Phase 2 expansion, and the
processing model will continue to be updated to integrate operational data from Phase 2, with a feasibility study
for Phase 3 scheduled for completion in 2023.
◦
The Company is further evaluating the strategic options and direction related to Jacobina and the significant
exploration that is available along the greenstone belt which hosts the mine. Jacobina is being envisioned as a
complex of multiple mines, and more emphasis is being placed on regional and generative exploration, to work
towards the strategic plan of Jacobina being a 400,000 ounce-plus mining complex.
◦
The Jacobina mine is part of the Jacobina district, for which geological evidence and tectonic reconstruction
suggest strong affinities with similar gold districts in West and South Africa, which host exceptionally large gold
deposits, including those of the prolific Witwatersrand Basin and the Tarkwa mine. Gold mineralization at Jacobina
is hosted by the Serra do Corrego Formation, preserved within the Jacobina belt, for a strike length of over ninety
kilometers. The mine complex consists of six mining areas exploiting economic mineralization within a nine-
kilometer long mineralized belt extending from João Belo in the south to Canavieiras Norte in the north. As at
December 31, 2021, past gold production from the mine complex was well over two million ounces, with mineral
reserves of 2.94 million ounces of gold and total mineral resources of approximately 5.7 million ounces of gold,
indicating the world class size of the current known deposit. Since 2019, the Company has started systematic
exploration of its 77,800 hectare land package that covers 155 kilometers of exploration potential along the north-
south trending belt. This work has defined a fourteen-kilometer long belt of gold-bearing conglomerate located
north of the mine complex and has also extended the known mineralized reefs south of João Belo in a continuous
area extending 2,200 metres south of the limits of the João Belo mine. Further areas have been identified both to
the north and further south during reconnaissance exploration programs. Work will continue to define mineralized
reefs exposed on surface and follow up with widely spaced drill testing targeting both extensions of the mine
complex and new standalone mine targets. Consequently, the Company sees significant opportunities to grow its
regional presence and continue to build the world-class Jacobina Complex.
•
Cerro Moro Scalable Plant and Heap Leaching Upside Opportunities
◦
During the fourth quarter, Yamana advanced the plant expansion study with a trade-off of various comminution
circuit configurations to optimize the expansion processing flow sheet. Similar to the approach that has proven
successful at Jacobina, the Company is considering a low-risk, phased expansion for Cerro Moro with quick
payback from the initial phase used to fund subsequent phases. As such, the Company is considering using fine
screens instead of cyclones for classification to improve the efficiency of the existing ball mill. Combined with a
slightly coarser grind size, this initial phase is expected to increase throughput to at least 1,500 tpd, a 40% to 50%
increase in capacity, without impacting gold and silver recoveries. The incremental capacity could be used for
processing of lower grade mineralization, which is expected to increase annual gold and silver production and
reduce unit processing and G&A operating costs. Preliminary analysis based on current operating data indicates
that the existing crushing and flotation circuits are adequate for the higher throughput rate and reconfiguration of
the leaching circuit could achieve the target throughput without requiring additional leach tanks. Upgrades to the
concentrate thickener, clarifying filters, flocculant make-up system, and pumping would likely be required. The
capital cost of this initial phase is estimated at a modest $15 million to $20 million dollars. Many of the upgrades in
phase 1 expansion would be sufficient for a second expansion phase to increase plant throughput to approximately
2,200 tpd, double the existing capacity, further increasing production and reducing operating unit costs. The
Yamana Gold
32
Company is currently evaluating two options for phase 2 expansion, the addition of a high pressure grinding rolls
("HPGR") unit before the existing ball mill or the addition of a regrind unit. An expansion of the flotation circuit would
also be required. The selected option will depend on the results of testwork that is currently underway and expected
to be completed by the end of the first quarter, after which cost estimates and economic evaluation will be
completed. The Company will advance the selected phase 1 and phase 2 expansion options to a pre-feasibility
study level, expected for completion in early 2023.
◦
Positive exploration results achieved throughout 2021 successfully replaced depletion of mineral reserves for the
first time, as reflected in increased mineral reserves and mineral resources at year-end, turning the corner for the
operation. Significantly, the expansion of higher-grade veins, both within the core mine at Zoe and Martina, and
outside the core mine at Naty, extends the Cerro Moro mine life at the current gold equivalent feed grade and
existing throughput rate of approximately 1,100 tonnes per day. Additional high-grade targets identified in 2021
provide a pipeline of opportunities for continued mineral reserves replacement going forward which supports the
plant expansion opportunity. Lastly, at a higher level of throughput, the Company may be able to create a greater
inventory of mineral resources, focused on a balance between high grade and more mineral resources, rather than
grade alone.
◦
In parallel, a technical study on the potential heap leach project is underway following promising results from
metallurgical testing conducted in 2021. A four-month cyanide column leach test program was conducted on eight
samples with gold grades of 0.71 to 3.22 g/t. and at three different sizes of feed materials, -25 mm, -19 mm and -
9.5 mm. The results indicate good potential for leaching of both oxidized near-surface vein material, zones with
hypogene oxides (hematite) and some low sulphide gold-bearing veins, with extractions from column leaching
varying from 32.5% to 96.9%, averaging 68.6%. Gold recoveries at the Domos La Union and Michelle zones were
particularly impressive, averaging 85.6% from the four samples. As a result, exploration is focusing on these zones,
with an objective of defining a heap leachable inventory of 5 million tonnes. Conceptual engineering for a 5,000
tpd heap leach operation commenced in the fourth quarter. A conventional heap leach configuration is envisaged
with three stages of crushing to a crushed size P80 of 12.5 mm, followed by agglomeration and retreat conveyor
stacking in a multiple lift, single use pad with a design capacity of approximately 14 million tonnes. The leach pad,
solution storage ponds, and Merrill-Crowe plant are conceptually planned to be located approximately 2 kilometres
east of the current tailings storage facility. Average feed grade is estimated at approximately 1.0 to 1.4 g/t of gold,
adding 45,000 to 65,000 ounces of gold production per year in addition to gold and silver production from the
existing processing plant. Conceptual capital and operating cost estimation is expected to be completed in the
second quarter, and an initial mineral inventory estimate, based on results from 2021 drilling, is planned for mid-
2022.
◦
As Cerro Moro’s mineral inventory increases, the Company will evaluate its options for alternative sources of
power, which include a connection to the grid and wind power. Both options are expected to improve costs and
further reduce GHG emissions, thereby accelerating the achievement of the Company’s carbon emissions
reduction goal. This area of southern Argentina is one of the most prospective areas in the world for wind-based
energy generation; the Company’s third-party process to evaluate wind power indicates there should be a sufficient
and sustainable supply of power. The results of the alternative power analysis will be considered in the plant
expansion pre-feasibility and heap leach studies to explore synergies between the projects. Based on preliminary
analysis, the Company believes that the conversion of approximately twenty-five per cent of Cerro Moro's power
sources to wind would significantly contribute to the carbon reduction goals of the Company to achieve net zero
emissions.
◦
The objective at Cerro Moro is to create a sustainable ten-years of production of at least 160,000 GEO(2) per year,
and up to 200,000 GEO(2) per year. If the Company successfully develops both the plant expansion and heap leach
projects, which represent significant upside opportunities, along with conversion of the exploration targets to
mineral resources, Cerro Moro could produce at least 200,000 GEO(2) per year. This upside would be beyond the
current ten-year outlook that assumes Cerro Moro as a 150,000 to 165,000 GEO(2) per year operation, which is
Annual Report 2021
33
expected to be sustainable from mineral reserves mine life, ongoing exploration successes and mineral reserve
replacement.
•
MARA Project Advances
◦
The MARA Project represents a significant strategic value opportunity and a solid development and growth project.
The Company intends to pursue all available avenues to continue to advance and unlock its value through its
controlling interest while also considering strategic alternatives that could unlock significant value along the way.
During the last year, several proposals were presented to the Company for its interest in MARA and, after
consideration, the board determined that any strategic initiatives will be considered closer to the completion of the
feasibility study and application for permitting later this year as the certainty of the project from these events is
expected to create more value for the project. The pending feasibility study, which is being overseen by the
Technical Committee comprised of members of the three Companies, will provide updated mineral reserves,
production and project capital cost estimates. MARA full feasibility study results and completion of the
Environmental and Social Impact Assessment ("ESIA") are expected in 2022, however a considerable amount of
information in the pre-feasibility study is already at feasibility study level as a result of the Integration.
◦
Work during 2021 focused on advancing the feasibility study engineering, mine design and planning, metallurgical
and geotechnical drilling campaigns and field work at site. MARA has also been advancing baseline social and
environmental studies, as well as permitting and working with local stakeholders. During 2021, field work
progressed well with the ongoing drilling campaign completing more than 50% of the drill holes planned, totaling
6,190 meters. All the geometallurgical and geotechnical drill holes in the pit area have been completed, as well as
extensive field surveys and technical assessments from different engineering disciplines. Preliminary results are
positive and aligned with the expected parameters, confirming grade distribution on existing models. The field work
plan continues, with the drilling campaign now covering the Agua Rica infrastructure and is expected to be
completed by mid-2022.
◦
MARA is the combined project comprised of the Agua Rica site, Alumbrera site as well as the Alumbrera plant and
ancillary buildings and facilities, and will rely on processing ore from the Agua Rica mine at the Alumbrera plant.
The MARA Joint Venture is held by the Company (56.25%), Glencore International AG (25%) and Newmont
Corporation (18.75%). The project design minimizes the environmental footprint of the project incorporating the
input of local stakeholders. MARA will be a multi-decade, low cost copper-gold operation with annual production
of 556 million pounds of copper equivalent during the first ten years of production, and life-of-mine annual
production of 469 million pounds of copper equivalent on a 100% basis. MARA will be among the top 25 copper
producers in the world when in production, and one of the lowest capital intensity of the comparable projects
globally.
•
Minera Florida ESIA Submission
◦
Consistent with the 10-year outlook, the plant de-bottlenecking study is advancing on schedule, with the objective
to increase throughput from 74,500 to 100,000 tonnes per month, thereby increasing annual gold production to
approximately 120,000 ounces. The Company submitted the ESIA for the expansion during the fourth quarter, with
the timeline expected to be approximately 18 months for approval, with another 12 months to receive sectoral
permits. With the expected permitting timelines, the mine could begin operating at a planned 100,000 tonnes per
month level in 2025. Preliminary studies indicate that the capacity of the processing plant can be increased to
approximately 90,000 tonnes per month with incremental adjustments. An upgrade of the crushing circuit would be
required to achieve 100,000 tonnes per month.
For full details on the aforementioned updates, please refer to Section 5: Construction, Development and Other Initiatives.
Yamana Gold
34
Mineral Reserve and Mineral Resource Highlights:
•
The Company successfully replaced gold mineral reserves depleted during the year at each of its wholly-owned operations,
in addition to increasing mineral resources and identifying new areas of mineralization at all the mines, highlighting the
sustainability and longevity of its operations.
•
As at December 31, 2021, the Company reports 13.7 million ounces of gold mineral reserves, 111 million ounces of silver
mineral reserves, and 6.7 billion pounds of copper mineral reserves, relatively unchanged from the prior year. Further,
largely consistent with the prior year, the Company reports measured and indicated mineral resources of 14.5 million ounces
of gold, 51 million ounces of silver, and 1.4 billion pounds of copper exclusive of mineral reserves and inferred mineral
resources of 15.5 million ounces of gold, 63 million ounces of silver, and 2.13 billion pounds of copper.
For full details on the aforementioned updates, please refer to the February 8, 2022 press release "Yamana Gold Reports Updated
Mineral Reserves and Mineral Resources Underpinning Increasing Mine Lives Across Its Portfolio" and to Section 6. Mineral
Reserve and Mineral Resource Estimates of this MD&A.
OPERATING
Fourth quarter GEO production of 281,388 ounces significantly exceeded both planned production of 270,000 GEO and prior year
fourth quarter production of 255,361 GEO, as anticipated and guided. Standout GEO production performances were delivered by
Canadian Malartic, Jacobina, El Peñón, and Cerro Moro, all of which exceeded plan. GEO is calculated as the sum of gold ounces
and the gold equivalent of silver ounces using a ratio of 77.28 for the three months ended December 31, 2021, and 76.82 for the
three months ended December 31, 2020. GEO calculations are based on an average market gold to silver price ratio for the
relevant period.
Fourth quarter total cost of sales, cash costs(1), and AISC(1) on a per GEO basis were $1,091, $642, and $962 respectively, and
better than the prior year comparative period costs and third quarter costs per GEO. In particular, the Company recorded standout
December performance at several mines with per GEO costs for those mines being the lowest month of the quarter by a
considerable margin.
GEO production of 1,011,180 ounces during the year ended December 31, 2021 exceeded the guided 1,000,000 ounces and
greatly exceeded prior year production of 901,155 ounces. The standout yearly production was underpinned by strong momentum
at Canadian Malartic, Jacobina, El Peñón, and Cerro Moro, all of which exceeded guidance, with Minera Florida in line with the
previously guided range. GEO is calculated as the sum of gold ounces and the gold equivalent of silver ounces using a ratio of
72.55 for the year ended December 31, 2021, and 88.86 for the year ended December 31, 2020. GEO calculations are based on
an average market gold to silver price ratio for the relevant period.
For the year ended December 31, 2021, total cost of sales, cash costs(1), and AISC(1) on a per GEO basis were $1,132, $689, and
$1,030 respectively, which are lower than the comparative period. These costs include inflation impacts of approximately $20 per
GEO, which were not included in original guidance, as previously disclosed, and the excluding those the Company was within its
guidance range for the year.
Annual Report 2021
35
For the three months ended December 31,
For the year ended December 31,
2021
2020
2021
2020
GEO(2)
Production(5)
281,388
255,361
1,011,180
901,155
Sales(5)
280,409
246,955
1,009,262
876,520
Per GEO sold data
Total cost of sales
$
1,091
$
1,131
$
1,132 $
1,151
Cash costs(1)
$
642
$
675
$
689 $
701
AISC(1)
$
962
$
1,076
$
1,030 $
1,080
Gold
Production (ounces)(5)
240,718
221,659
884,793
779,810
Sales (ounces)(5)
242,486
213,439
885,293
754,970
Revenue per ounce
$
1,796 $
1,875 $
1,799 $
1,777
Average realized price per ounce(1)
$
1,796 $
1,875 $
1,799 $
1,777
Average market price per ounce*
$
1,795 $
1,873 $
1,800 $
1,770
Silver
Production (ounces)
3,142,781
2,586,662
9,169,289
10,365,662
Sales (ounces)**
2,937,805
2,563,166
8,976,269
10,382,085
Revenue per ounce
$
23.24 $
24.02 $
24.85 $
21.11
Average realized price per ounce(1)
$
23.24 $
24.02 $
24.59 $
20.93
Average market price per ounce*
$
23.32 $
24.39 $
25.17 $
20.51
*
Source of information: Bloomberg.
** Included in the three months and year ended December 31, 2021 silver sales ounces are 228,553 and 1,024,883 ounces respectively, delivered under the
silver streaming arrangement (2020: 268,620 and 1,001,135 ounces, respectively).
HEALTH, SAFETY, AND SUSTAINABLE DEVELOPMENT
Health, safety and sustainable development ("HSSD") approaches are guided by the Company's corporate-level standards and
programs; these are integrated into all operations, development projects, and exploration activities. Yamana recognizes the
importance of striving to meet and exceed its HSSD responsibilities and objectives, and the role these efforts have in delivering on
the overall objective of creating value for all stakeholders. Since early 2020, one of the most important considerations, in addition
to the on-going priorities of safeguarding worker health and safety, protecting the environment and building privilege to operate
with host communities has been the Company's response to the global COVID-19 pandemic.
Through the Company's active responses to COVID-19, the Company has demonstrated its commitment to environmental, social
and governance ("ESG") excellence in action and resilience. Consistent with the mission to mine precious metals profitably and
responsibly, the Company is prepared to forego production to safeguard its efforts to promote health, safety and well-being of its
workforce and host communities.
Since the emergence of the global COVID-19 pandemic, the Company’s Corporate Crisis Management team, the members of
which are its senior executives and operational leaders, has taken quick and decisive action to respond to the pandemic during a
fluid and fast-moving environment. The Company has adjusted and managed its business effectively during this period, mitigating
risks and further advancing opportunities, while ensuring the health and safety of employees, contractors and host communities.
The Company responded rapidly to the COVID-19 pandemic and has been successful in limiting the spread of COVID-19. There
have been confirmed worker cases at sites and in the communities surrounding the Company's operations; with the implementation
of prevention, monitoring, testing, quarantine and contact tracing protocols, the Company has been able to isolate incidents of
infection and limit their spread. Overall, the number of infected persons is not significant at sites and the Company continues to
monitor the recoveries of those infected. In the fourth quarter of 2021 host countries began to experience significant increases in
the number of reported COVID-19 cases, caused by the rise of the Omicron variant. There has been a corresponding increase in
cases of COVID-19 at our operations; the number of active cases at the end of 2021 was not significant, thanks to on-going
prevention and control efforts, coupled with fully-vaccinated rates approaching 100 percent for employees and contractors at the
Company’s wholly-owned operations and exploration projects. Confirmed infected people are being isolated successfully with no
operational impact. The Company is also seeing an uptick in third vaccine dose administration, particularly in Chile.
Yamana Gold
36
The Company continues to actively monitor Omicron-related caseloads and healthcare system capacity in South America,
government responses, vaccination availability and to work closely with local and regional governments to ensure prevention
procedures are adhered to. The Company is also continuing our offers of healthcare and other assistance which, in some cases,
includes vaccination assistance to local governments, if required. Staff at offices continue to primarily work remotely and the
Company is undergoing a phased re-opening of offices, in line with government mandates, while monitoring COVID-19 caseloads
and vaccination rates.
The Company is committed to supporting local health services in vaccination efforts and is working to promote vaccination of
employees and host communities where possible. The Company continues working with local governments and healthcare
services to build capacity to manage vaccination logistics now that vaccines have become more available in the locations where
we operate.
The Company continues to manage our business in a way that respects, and is mindful of, the impact that COVID-19 has had and
could have on host communities.
The Company successfully completed the first year of its board-approved climate action strategy by establishing the emissions
baseline year (2019) and evaluating of three science-based temperature targets; a 2°C scenario, a well-below 2°C scenario and a
1.5°C scenario compared to pre-industrial levels and the abatement pathways required to reach each scenario by 2030. As a result
of the Company's work it increased its climate ambition by committing to a 1.5°C scenario compared to pre-industrial levels; this
is the most challenging target assessed and the recognized gold standard to help make sure the objectives of the Paris climate
accord are achieved. Preliminary analysis indicates that the Company needs to achieve an additional reduction of 13,000 tonnes
CO2 equivalent before 2030 and is well positioned to achieve this reduction of approximately 4% to 5% annually with modest
capital investments that will not have significant impacts on costs. In fact, preliminary analysis indicates that one potential emissions
reduction project could actually lower costs. The Company's work in 2022 will involve further study of the identified projects to
refine schedules and cost estimates. The Company is proud of the work undertaken in 2021 and looks forward to continuing its
journey to net zero 2050. The Company is on track to produce approximately 85% of its GEO(2), from its wholly-owned mines,
using renewable energy by the end of 2022. Yamana will continue to assess opportunities to further improve GHG abatement
efforts, including adoption of evolving technologies for its new mines.
Other recent highlights relating to HSSD are as follows:
•
The Company's Total Recordable Injury Rate in 2021 was 0.73* for our wholly-owned operations and exploration projects.
The change from the full year 2020 results primarily reflect an increase in low-energy incidents. In response, the Company
initiated campaigns across all operations focused on reducing the most common injuries that have occurred in 2021.
•
As of February 11, 2022 more than 99%(7) of the Company's employees and contractors at its wholly-owned operations
and exploration projects have received at least one dose of a COVID-19 vaccine and more than 94%(7) have received
two doses. Approximately 55%(7) of workers have received a third dose booster shot.
•
The Company successfully completed the second year of a three-year implementation of the Mining Association of
Canada’s Towards Sustainable Mining program and the World Gold Council’s Responsible Gold Mining Principles. The
results of self-assessments confirm that significant progress was achieved in 2021 and the Company is well positioned
to achieve conformance by Year 3.
•
In December the MARA project was recognized at the Silver and Gold Summit in Buenos Aires for their public participation
program and efforts to engage and introduce communities to mining.
•
With heavy rainfall and flooding affecting certain parts of the Bahia State of Brazil, the Company initiated a community
support campaign making various donations to municipalities that have been most impacted.
*
Calculated on a 200,000 exposure hours basis including employees and contractors. This rate is exclusive of Canadian Malartic, in which we hold a 50%
interest.
Annual Report 2021
37
FINANCIAL
Net earnings(3) for the three months ended December 31, 2021 were $109.7 million or $0.11 per share basic and diluted, compared
to net earnings(3) of $103.0 million or $0.11 per share basic and diluted for the three months ended December 31, 2020. Net
earnings(3) for the three months ended December 31, 2021 were positively impacted by $8.2 million of items that management
believes may not be reflective of current and ongoing operations attributable to Yamana Gold Inc. equity holders and which may
be used to adjust or reconcile input models in consensus estimates.
Net earnings(3) for the year ended December 31, 2021 were $147.5 million or $0.15 per share basic and diluted, compared to net
earnings(3) of $203.6 million or $0.21 per share basic and diluted for the year ended December 31, 2020. Net earnings(3) for the
year ended December 31, 2021 were negatively impacted by $161.6 million of items that management believes may not be
reflective of current and ongoing operations attributable to Yamana Gold Inc. equity holders and which may be used to adjust or
reconcile input models in consensus estimates.
For the three months ended December 31,
For the year ended December 31,
(In millions of US Dollars; except per share amounts)
2021
2020
2021
2020
Net foreign exchange (gains) losses(3)
$
(8.9) $
21.9 $
(12.2) $
21.6
Share-based payments/mark-to-market of deferred share units
2.2
3.4
3.2
31.5
Mark-to-market losses (gains) on derivative contracts,
investments and other assets and liabilities
0.2
(5.8)
0.3
(6.9)
Gain on sale of subsidiaries, investments and other assets
—
(3.0)
—
(1.4)
Gain on discontinuation of the equity method of accounting
—
—
(10.2)
(21.3)
Temporary suspension, standby and other incremental
COVID-19 costs
8.7
9.2
37.4
40.5
Net pre-tax impairment reversal of mining properties
—
(191.0)
—
(191.0)
Early note redemption premium
—
—
53.3
—
Other provisions, write-downs and adjustments*(3)
(0.1)
6.7
9.9
17.9
Non-cash tax on unrealized foreign exchange losses
1.7
1.8
1.9
52.8
Income tax effect of adjustments(3)
(1.4)
(2.4)
(19.0)
(19.7)
One-time tax adjustments(3)
(10.6)
163.9
97.0
183.6
Total adjustments - (decrease)/increase to net earnings(3)
$
(8.2) $
4.7 $
161.6 $
107.6
Total adjustments - (decrease)/increase to net earnings(3)
per share
$
(0.01) $
— $
0.17 $
0.11
*
This balance includes, among other things, revisions in estimates and write-downs & provisions, or reversals of provisions, for items such as tax credits and
legal contingencies.
COVID-19 costs are disclosed as part of mine operating earnings within temporary suspension, standby and other incremental
COVID-19 costs. The Company anticipates that temporary suspension and standby costs will continue to be minimized
prospectively. With increasing numbers of the population receiving the vaccine, the Company expects to see increasing immunity
and corresponding decreasing caseloads. As of February 11, 2022 more than 99%(7) of the Company's employees and contractors
at its wholly-owned operations and exploration projects have received at least one dose of a COVID-19 vaccine and more than
94%(7) have received two doses. Approximately 55%(7) of workers have received a third dose booster shot. This will allow for a
gradual easing of our COVID-19-related controls and a reduction in associated costs. However, there remains considerable
uncertainty relating to COVID-19 which may lead to costs remaining at these levels or increasing rather than decreasing as
currently contemplated. The breakdown of the periodic expenditures are as follows:
For the three months ended December 31,
For the year ended December 31,
(In millions of US Dollars; unless otherwise noted)
2021
2020
2021
2020
Canadian Malartic
$
0.6 $
0.8 $
2.5 $
4.5
Jacobina
0.2
0.5
1.2
2.0
Cerro Moro
3.2
4.7
20.8
19.2
El Peñón
1.0
2.0
4.9
7.0
Minera Florida*
3.7
1.2
8.0
7.7
Other Regional Costs
—
—
—
0.1
Total temporary suspension, standby and other incremental
COVID-19 costs
$
8.7 $
9.2 $
37.4 $
40.5
Yamana Gold
38
*
This balance includes approximately $3.5 million of costs related temporary suspensions during the three months and year ended December 31, 2021,
respectively (2020: $nil), related to a strike that began in December and ended in January, when the Company entered into a long term collective bargaining
agreement with its unions.
Summary of Financial Results
For the three months ended December 31,
For the year ended December 31,
(In millions of US Dollars; unless otherwise noted)
2021
2020
2021
2020
2019
Revenue
$
503.8 $
461.8 $
1,815.4 $
1,561.0 $
1,612.2
Cost of sales excluding DDA
(180.0)
(166.8)
(695.0)
(614.1)
(782.8)
Gross margin excluding DDA
$
323.8 $
295.0 $
1,120.4 $
946.9 $
829.4
Depletion, depreciation and amortization
("DDA")
(125.7)
(112.5)
(447.9)
(395.0)
(471.7)
Net Impairment reversal on mining properties
—
191.0
—
191.0
—
Temporary suspension, standby and other
incremental COVID-19 costs
(8.7)
(9.2)
(37.4)
(40.5)
—
Mine operating earnings
$
189.4 $
364.3 $
635.1 $
702.4 $
357.7
General and administrative
(20.0)
(23.4)
(74.8)
(85.9)
(79.4)
Exploration and evaluation
(6.8)
(6.0)
(31.6)
(15.1)
(10.3)
Share of earnings (loss) of associates
—
—
0.9
(1.0)
(16.3)
Other operating expenses, net
(12.1)
(1.5)
(37.4)
(14.6)
222.4
Operating earnings
$
150.5 $
333.4 $
492.2 $
585.8 $
474.1
Finance costs
(15.9)
(19.3)
(134.4)
(77.0)
(144.2)
Other income (costs), net
14.3
(21.6)
26.7
(18.7)
(19.6)
Earnings before taxes
$
148.9 $
292.5 $
384.5 $
490.1 $
310.3
Income tax expense, net
(44.2)
(189.5)
(295.7)
(286.5)
(84.7)
Net earnings
$
104.7 $
103.0 $
88.8 $
203.6 $
225.6
Attributable to:
Yamana Gold Inc. equity holders
$
109.7 $
103.0 $
147.5 $
203.6 $
225.6
Non-controlling Interests
$
(5.0) $
— $
(58.7) $
— $
—
Per share data (Yamana Gold Inc. equity
holders)
Net earnings(3) per share - basic and diluted
$
0.11 $
0.11
$
0.15 $
0.21 $
0.24
Dividends declared per share
$
0.0300 $
0.0263 $
0.1125 $
0.072 $
0.030
Dividends paid per share
$
0.0300 $
0.0175 $
0.1088 $
0.056 $
0.025
Weighted average number of common
shares outstanding (thousands)
Basic
961,185
952,435
963,393
951,818
950,266
Diluted
962,695
954,565
964,932
953,846
951,924
Cash flows
Cash flows from operating activities
$
238.2 $
181.5 $
742.3 $
617.8 $
521.8
Cash flows from operating activities before
net change in working capital
$
230.8 $
207.4 $
784.6 $
688.7 $
590.5
Cash flows (used in) from investing activities
$
(117.5) $
136.3 $
(399.7) $
51.4 $
432.0
Cash flows used in financing activities
$
(55.7) $
(141.0) $
(467.5) $
(175.9) $
(892.5)
Net free cash flow(1)
$
188.4 $
118.9
$
547.4 $
455.6 $
321.5
Annual Report 2021
39
Capital Expenditures
For the three months ended December 31,
2021
2020
2021
2020
2021
2020
2021
2020
(In millions of US Dollars)
Sustaining
Expansionary
Exploration
Total
Canadian Malartic(5)
$
17.3 $
18.6 $
22.7 $
5.1 $
4.4 $
7.0 $
44.4 $
30.7
Jacobina
4.2
5.4
10.5
4.8
1.8
2.0 $
16.5 $
12.2
Cerro Moro
12.4
9.0
0.5
4.4
1.3
3.5 $
14.2 $
16.9
El Peñón
7.1
9.9
1.6
0.5
2.3
4.7 $
11.0
$
15.1
Minera Florida
2.9
4.4
6.3
9.1
3.1
1.8 $
12.3 $
15.3
Other
0.5
0.5
12.4
2.5
6.7
2.0 $
19.6 $
5.0
Total
$
44.4 $
47.8 $
54.0 $
26.4 $
19.6 $
21.0 $
118.0
$
95.2
For the year ended December 31,
2021
2020
2021
2020
2021
2020
2021
2020
(In millions of US Dollars)
Sustaining
Expansionary
Exploration
Total
Canadian Malartic(5)
$
69.2 $
52.5 $
50.1 $
12.2 $
15.7 $
10.1 $
135.0 $
74.8
Jacobina
14.0
21.6
28.1
15.8
7.2
6.0 $
49.3 $
43.4
Cerro Moro
39.8
29.5
1.2
6.9
5.6
12.5 $
46.6 $
48.9
El Peñón
34.6
31.4
7.8
0.5
15.6
15.9 $
58.0 $
47.8
Minera Florida
15.2
12.6
22.6
19.9
6.5
7.0 $
44.3 $
39.5
Other
0.9
1.7
33.0
11.5
17.5
6.1 $
51.4 $
19.3
Total
$
173.7 $
149.3 $
142.8 $
66.8 $
68.1 $
57.6 $
384.6 $
273.7
2.
CORE BUSINESS, STRATEGY AND OUTLOOK
Yamana Gold Inc. (“Yamana” or the “Company”) is a Canadian-based precious metals producer with significant gold and silver
production, development stage properties, exploration properties, and land positions throughout the Americas' mining friendly
jurisdictions, including Canada, Brazil, Chile and Argentina. The Company is primarily focused on gold, but has exposure to green
metals from silver and copper exposure. Yamana plans to continue to build on this base through expansion and optimization
initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by
targeting other consolidation opportunities with a primary focus in the Americas. Yamana has a strong 10-year base case outlook
with a sustainable production platform of 1 million GEO(2) per year through 2030, based on proven and probable mineral reserves,
high conviction mineral resource and exploration results, and as such, the Company is not reliant on new exploration success to
maintain this base case outlook. Production will be underpinned by continued operational success at the Company’s existing
operations, which have consistently replaced mineral reserves above depletion.
The Company is listed on the Toronto Stock Exchange (trading symbol "YRI"), the New York Stock Exchange (trading symbol
"AUY"), and the London Stock Exchange (trading symbol "AUY").
The Company’s principal mining properties comprise the Jacobina mine in Brazil, the Canadian Malartic mine (50% interest) in
Canada, the El Peñón and Minera Florida mines in Chile and the Cerro Moro mine in Argentina. On January 21, 2021 the Company
completed the acquisition of the Wasamac property, a high-quality project with a significant mineral reserve and mineral resource
base and excellent potential for further expansion, adding to Yamana’s pipeline of organic opportunities, significantly enhancing
the Company’s future growth prospects for which a positive development decision has been made during the year. The Company
is focused on the regional approach being taken in the Abitibi-Témiscamingue Region of Quebec, Canada, and the similar
approach taken in Jacobina, Brazil, to reach a strategic goal of a production platform in the regions of 500,000 and 400,000 ounces,
respectively. Additionally, following the finalization of the integration agreement in the fourth quarter of 2020, the Company also
owns a 56.25% interest in the MARA Project, a large-scale copper, gold, silver and molybdenum project located in the province of
Catamarca, Argentina. For full details on the Wasamac property acquisition and the MARA Project integration agreement, please
refer to Section 5: Construction, Development and Other Initiatives.
Yamana Gold
40
Over the years, the Company has grown and generated value through strategic acquisitions and portfolio optimizations, and by
pursuing organic growth to increase cash flows and unlock value at existing mines and development assets. Looking ahead, the
Company’s primary objectives include the following:
•
Continued focus and commitment regarding the Company’s high quality operational excellence program, advancing near-
term and ongoing optimizations related to production, operating costs, and key performance objectives in health, safety,
and sustainable development, generally ESG. Underpinning this performance is our "One Team, One Goal: Zero" vision,
which reflects the Company's commitment to zero harm to employees, the environment and host communities near its
operations.
•
Increasing mine life at the Company’s existing operating mines through exploration targeted on the most prospective
properties. The Company does not rely exclusively on proven and probable mineral reserves at any point to determine
mine life as that would undervalue and misrepresent the potential of its operations. Similarly, the Company does not rely
solely on a reserve life index to the exclusion of other measures to determine mine life, as the Company believes there
are other considerations that determine mine life; where possible, the Company endeavours to increase mineral reserves
early in the mine life, although the Company recognizes that often it is more cost effective and technically efficient to
progressively extend mine life as, and when, mine development is advancing. This is particularly true for underground
mines and prospects. The Company believes that to rely exclusively at any given point on proven and probable mineral
reserves does not give sufficient allowance for discovery of new mineral resources, history of conversion of mineral
resources to mineral reserves and exploration potential. For El Peñón and Minera Florida, the Company gives
considerable allowance for mine life that is well in excess of mineral reserves, given the aforementioned factors of new
discovery of mineral resources, historical conversion of mineral resources to mineral reserves and significant exploration
potential.
•
Maximizing the overall value of the Company as an enterprise, cash flows and free cash flows, and cash returns on
invested capital, first on producing and then non-producing assets. Within the producing portfolio, attention is focused on
per share measures related to the growth and quality of mineral reserves and mineral resources for mine life extensions
and scope for throughput increases, metal grade and recovery improvements, and cost reductions that are expected to
improve margins and cash flows.
•
For strategic assets in the portfolio, the focus is to assess the best path to create value for shareholders, including
advancing development projects through exploration, technical/financial reviews, studies and optimizations, permitting
and community engagement, and/or considering strategic alternatives to realize returns from these strategic assets. This
may include developing the assets through a joint venture or other strategic arrangements, or through monetization.
•
Disciplined and progressive approach to capital allocation. The Company has a conservative capital structure that
provides for the focus on its capital allocation priorities including: the development, expansion, and exploration of
prioritized low capital cost growth projects; and the return of capital to shareholders. The details of those priorities are as
follows:
◦
Development, expansion and exploration self-funding with modest and well sequenced growth capital projects
including:
▪
Advancement of the Wasamac project, the Odyssey underground project at Canadian Malartic,
Jacobina phased expansion, the MARA Project, and along with our partner determining the merits of
the advancement of the Suyai Project. Please refer to Section 5: Construction, Development and Other
Initiatives for further details on the status and advancement plans for these assets and others.
▪
Additionally, advancing the Company’s generative exploration program for the next generation of
Yamana mines:
▪
Move the Company’s most advanced exploration projects forward;
▪
Pursue exploration and drilling programs at highly-prospective, early stage projects in the
Company’s existing portfolio;
▪
Expand the Company’s exploration portfolio through evaluations and targeted land acquisition.
Annual Report 2021
41
◦
Strengthening Return of Capital to Shareholders:
▪
As part of the Company's progressive approach to its dividend policy and returns to shareholders, an
increased quarterly dividend of $0.03 per share (annual $0.12 per share) was approved during the
second quarter of 2021, representing the sixth dividend increase since the second quarter of 2019, for
a cumulative increase of 500%. The Company considers dividends an important component of returns
on investment for shareholders, and previously indicated that its policy is that as its cash flows and
cash balances increase, as its balance sheet continues to improve, and as debt service decreases, the
Company would evaluate further increases of its dividend. While the Company has relied over the last
several years on maintaining certain levels of cash on hand to secure payment of the dividend
independently of changes in gold price, with cash flow improvements, certainty of modest and
manageable annual capital expenses for its growth projects and completion of various definitive studies
relating to those projects, the Company has concluded that it is able to fund its dividend at current or
substantially lower gold prices. The Company conducts sensitivities on its capital allocations, including
ability to fund and pay dividends, at various gold prices as low as $1,350.
▪
On July 29, 2021, the Company announced a normal-course issuer bid (“NCIB”) to purchase up to
48,321,676 common shares of the Company, representing up to 5% of the Company’s then current
issued and outstanding common shares, in open-market transactions through the facilities of the
Toronto Stock Exchange, the New York Stock Exchange and alternative Canadian trading systems.
The Company believes that from time to time the market price of its common shares does not represent
their full value and growth prospects and views purchases of common shares as an attractive
investment comparable to its investments in its portfolio of exploration and development stage assets.
Since the commencement of the NCIB in July, the Company has repurchased, and subsequently
cancelled, a total of 6,672,628 common shares for approximately C$35.6 million.
▪
The Company will continue to engage regularly with investors to ensure it is maintaining an optimal
balance between the dividend amount payable and dividend sustainability, along with other methods of
return of capital to shareholders, such as stock buybacks.
▪
Following the Company's initial capital spending and development phase from 2003 to 2006, the
Company has consistently paid dividends since 2007, and dividends have aggregated to over $1 billion
paid over 14 years.
•
Strengthening the Company's Financial Position, Improving Financial Resilience and Increasing Financial Flexibility:
▪
Yamana believes that a strong financial position and financial resilience also requires a manageable
debt maturity profile. During the third quarter, the Company took advantage of market conditions to
improve the terms of its outstanding notes by extending maturity and reducing carrying costs, by
completing an offering of $500 million aggregate principal amount of its 2.630% Senior Notes due
August 15, 2031. The Senior 2031 Notes are unsecured, senior obligations of Yamana and are
unconditionally guaranteed by certain of Yamana’s subsidiaries that are also guarantors under
Yamana’s credit facility. Summarized financial information for Yamana Gold Inc. and the guarantor
subsidiaries (together, the "Obligor Group") is included in Section 8: Financial Condition and Liquidity.
▪
Yamana used the net proceeds from the offering, together with cash on hand, to fund the redemptions
of its 4.76% Series C Senior Notes due 2022, its 4.91% Series D Senior Notes due 2024, its 4.78%
Series B Senior Notes due 2023 and its 4.950% Senior Notes due 2024.
▪
The completion of the offering of the Senior 2031 Notes and the subsequent redemption of the shorter-
term maturity notes represents the culmination of significant debt reduction efforts initiated in 2019.
Yamana’s outstanding gross debt was reduced by $222.1 million to $772.8 million during the third
quarter, which compares to $1.85 billion outstanding in the second quarter of 2019.
Investment and Exploration Strategy
A further primary objective of the Company, although one with an intermediate to longer-term time horizon, is the advancement of
its generative exploration program, a key component of Yamana’s overall organic growth strategy, designed to advance the
Company’s most prospective properties and lay the foundation for the next generation of Yamana mines. The Company has an
extensive exploration portfolio with well-defined exploration prospects and organic growth opportunities in all jurisdictions, with
more advanced opportunities in Canada and Brazil, and recently introduced two new projects to the program where ongoing
surface exploration has shown promising results: the Falcon project, a Tier 2 project in Santa Cruz, Argentina; and Las Flechas, a
Tier 3 project in San Juan, Argentina. The objective of the generative exploration program is to advance at least one project to
Yamana Gold
42
achieve mineral reserve and mineral resource inventories of at least 1.5 million gold equivalent ounces which the Company
considers large enough to support a mine plan with annual gold production of approximately 150,000 ounces for at least eight
years.
As noted, the Company is continually reviewing its capital allocation strategy, and exploring options for funding such projects that
do not draw on free cash flows. Funding strategies include, but are not limited to, proceeds from the monetization of non-cash
producing assets or non-core assets that do not meet the Company's precious metal and scale requirements and, where
applicable, flow-through funding arrangements. Funds are allocated to develop promising internal opportunities for organic growth
through exploration and provide long term growth.
To assess these opportunities, the Company relies on an experienced local exploration team that operates in its established
jurisdictions and other favourable districts in North and South America.
The Company is refocusing its efforts on regional exploration projects, with greater efforts being placed on Jacobina and Lavra
Velha, which represent the best opportunities for advancement of the goals of the generative exploration program. Every project
in the generative exploration program has had some drilling, with some projects more advanced than others and as an example,
Lavra Velha in Brazil. There are a number of significant drill targets on the 55,000-hectare property, and Lavra Velha represents
one of the most immediate, shorter-term opportunities to achieve the Company’s stated exploration goals given the mineral
resource to date and drilling following the initial mineral resource estimate. Further, Lavra Velha is well-placed to meet the
Company’s long-term objectives, as it is a shallow, flat-dipping orebody, making it ideal for open pit mining with a low strip ratio,
and oxide mineralization, with potential to be processed as a heap leach operation. Therefore, the project has potential as a low
capital cost, low operating cost operation. Additionally, the property hosts higher-grade gold and copper potential, as recently
demonstrated by positive drilling results at Lavra Velha SW target, and the Company is exploring for Iron Oxide Copper Gold
("IOCG") mineralization. For more details, please refer to Section 7: Exploration.
The Company will also, from time to time, make investments to advance prospective exploration projects and more mature projects
where it can provide value-added guidance either from the Company's exploration or technical services groups.
As a complement to the advancement of the internal exploration opportunities, the Company will consider the acquisition of earlier-
stage development assets or companies that align with Yamana's objectives for capital allocation and financial results, jurisdiction,
geology and operational expertise. Such opportunities will typically be funded through internal resources, meet minimum return
levels that far exceed the cost of capital and would meet the Company's minimum requirements to achieve mineral reserve and
mineral resource inventories, mine life and per year production rate. Furthermore, preference would be given to geological and
operational characteristics where the Company has an identified expertise and excellent opportunities for value enhancement, and
where the Company can deploy its corporate knowledge to provide value-added support. As part of its corporate approach, the
Company shares information and best practices among its operations. Such opportunities would also extend an existing regional
presence or lead to that longer-term objective. Although the Company has an established portfolio of early-to-later-stage organic
growth projects, the Company also considers it prudent to consider opportunities to extend regional presences in quality
jurisdictions that offer geological and operational synergies and similarities to its current portfolio of assets.
As part of this strategy, on June 21, 2021, the Company acquired the Francoeur, Arntfield and Lac Fortune properties from Globex.
This acquisition adds six kilometres of highly prospective strike length for exploration efforts to increase overall resources adjacent
to a major asset and to extend the Wasamac mine life.
From time to time, the Company’s strategy includes holding investments in prospective companies. This may be for several reasons
such as the disposition of certain assets for shares or in other cases, resulting from an investment for portfolio purposes. The
ownership of shares in the Nomad Royalty Company is an example of the former. An investment may also give the Company an
opportunity to further evaluate related opportunities. Normally, these investments are held through a cycle; otherwise they are
treated as any other portfolio investments. The acquisition by the Company of 24 million shares of Ascot Resources Ltd. ("Ascot")
during the second quarter, representing 6.4% of the outstanding shares, for aggregate consideration of $16.5 million is an example
of the latter. In line with its investment strategy, the Company also holds interests in other exploration-stage companies in Canada
including Quebec and British Columbia, amongst other prominent areas.
Abitibi-Témiscamingue and the province of Quebec, where the Wasamac project is located, represent high-quality regions and
jurisdictions for mining which have a long mining pedigree, impressive mining workforces and skilled human capital, and support
responsible mining. Furthermore, excellent infrastructure and local and provincial support of mining allows the Company to contain
Annual Report 2021
43
costs, find optimization opportunities, and manage its operations confidently and with an eye on health, safety, environment and
community engagement. The focus of the Company in this geographical area is another step in its Canadian and regional strategy,
and focus on this region in particular. The geologic nature of Abitibi-Témiscamingue is prolific, with an impressive mineral
endowment, where new interpretations of geology and mining skills continue to lead to new, large discoveries.
With Wasamac, Canadian Malartic and Odyssey, the Company will become one of the larger regional and national mining
companies in Canada, with a threshold production of approximately 500,000 ounces of gold per year, at costs well below the
Company’s and industry average. With the Company’s emphasis on free cash flow(1) generation, and focus on returns, Wasamac
fits well into the Company’s corporate portfolio. As a stand-alone asset in that portfolio, the project carries a fraction of the overall
value of the Company, although the Company believes there is significant upside that will increase that value and portfolio
contribution. Wasamac creates an optimized, more established and prolific Canadian company with impressive cash flow present
and future and a dominant regional presence in one of the best jurisdictions for mining in the world, which management believes
supports a premium valuation for the Company.
Ten-Year Production Outlook
On January 25, 2021, the Company introduced its longer-term, ten-year production outlook to demonstrate the confidence it has
in the sustainability of its production platform and in the long mine lives of its assets. In its inaugural outlook the Company
announced a baseline annual production of 1,000,000 GEO(2) from current operations and with growth to 1,200,000 GEO(2) by
approximately 2028 from its Wasamac development project.
Opportunities for Further Growth from Operating Assets and Wasamac
Since the announcement of its inaugural ten-year outlook, exploration successes have provided significant support for the outlook
and those successes underpin that outlook this year with a greater certainty than when it was first introduced. The Company
expects to provide a more formal update on its longer-term ten-year outlook every other year to allow more time for exploration,
mineral resource conversion and evaluation of the foregoing to longer-term production plans. and anticipates delivering this again
in 2023 subsequent to further analysis on several longer-term growth opportunities. In its next updated outlook, the Company
expects it will increase its sustainable baseline annual production at current operations from 1,000,000 GEO(2) to at least 1,050,000
GEO(2) from 2025. Further, the growth potential of 1,200,000 GEO(2) outlined in the previously announced ten-year outlook remains
a conservative target as the Company has significant production upside at its operating mines and at its Wasamac project.
Preliminary evaluations have identified a number of opportunities for further growth, including the potential for a Phase 4 expansion
at Jacobina, the potential plant expansion and heap leach project at Cerro Moro, the addition of the new South Deeps discovery
into the mine plan at El Peñón and the possible addition of a second shaft and further production from upper ore-bodies accessed
by the ramp at Odyssey. At Wasamac there remains the potential for higher production levels from Wildcat, Wildcat South and the
highly prospective Francoeur, Arntfield and Lac Fortune properties. Assuming all of these identified opportunities are advanced,
the Company's production potential could reach up to 1,500,000 GEO within the ten-year outlook horizon, and meaningfully extend
that production profile beyond the ten-year timeframe.
Additional Opportunities Not Included in the Ten-Year Outlook
The Company has additional compelling development projects in its pipeline with the potential to drive significant long-term
production upside towards the end of the current decade and beyond. These include the MARA Project, one of the largest copper-
gold projects in the world which Yamana owns 56.25% and which has an average annual production of 556 million pounds of
copper equivalent (100% basis) during its first ten years. In addition, the Suyai Project is a large gold project in Chubut Province,
Argentina, that is projected to reach production of up to 250,000 ounces annually in its first eight years. In Brazil, the Company is
expanding the known oxide mineral resource base at Lavra Velha, and the deposit is being evaluated as a potential open pit
prospect relying on heap leaching for recovery. Further, Jacobina Norte is a highly-prospective property that lies contiguous to and
north of the Company’s prolific Jacobina mine, with preliminary results showing excellent potential for the discovery of standalone
Jacobina-type mineralization and the addition of a new mine along the greenstone basin. These opportunities remain outside of
the growth outlined in the ten-year outlook.
For full details on the aforementioned updates and additional details on each operation and project, please refer to the February
17, 2022 press release "Yamana Gold Provides 2022-2024 Guidance and an Update To Its Ten-Year-Outlook Highlighting A
Sustainable Production Platform With Significant Growth".
Yamana Gold
44
2022 - 2024 Guidance
The Company is maintaining its 2022 production guidance and expects production not to be less than 1,000,000 GEO(2). For 2023,
the Company is increasing its production guidance from 1,000,000 GEO(2) to 1,030,000 GEO(2). The Company sees further near-
term growth continuing in 2024 with production increasing to 1,060,000 GEO(2).
For 2022, the Company expects total cost of sales, cash costs(1) and AISC(1) not to exceed $1,215, $725 and $1,080 per GEO(2)
respectively. Over the three-year guidance period, the Company is expecting the increase in GEO(2) production to have a positive
impact on costs. In particular, the Company's lowest-cost operation, Jacobina, is a significant contributor to the increase in
production over the guidance period, and consequently the Company anticipates this will drive down the average cost of
production, improving overall margins and cash flow.
Three-Year Production Guidance
The following table presents the Company's total gold, silver and GEO production expectation in 2022, 2023 and 2024, which
demonstrates sequential growth in production, starting at 1,000,000 GEO and increasing to 1,060,000 GEO by 2024. This 3%
and 6% production growth exceeds the guidance provided last year and the budgets on which that guidance was based.
The Company notes that it guides on GEO production and costs based on a particular assumption of gold and silver prices.
Although underlying gold and silver production does not change with the fluctuation in gold and silver prices, the change in the
GEO ratio from such fluctuations may result in a different GEO production than that guided. For comparability, the Company kept
the GEO ratio for the guidance period at 72.00, consistent with what was used in last year's guidance, in line with 2021 actuals,
and because the Company expects that silver will perform at least as well as gold in 2022. At the spot GEO ratio of approximately
80.00, the calculation of expected 2022 production would be modestly lower, although the underlying production of gold and silver
would not change. Further, at the spot GEO ratio, costs on a per GEO basis would be modestly higher. Please refer to the sensitivity
write-up at the end of this section for further details and calculations.
Due to mine development and sequencing for 2022, the Company expects an evenly weighted production profile between the first
half and the second half of the year, instead of a stronger second half weighting as was customary in prior years. However, the
first quarter is expected to be the lowest production quarter of the year, as Jacobina ramps up to 8,500 tpd and due to the temporary
disruption to operations during the first three weeks of January at Minera Florida.
The following tables present actual production for 2021 and production guidance for 2022, 2023 and 2024. While the Company
provides production guidance within a range of +/- 3% by mine and overall, the following presents the production levels by year
in that range which management expects to meet or exceed for the particular year.
(000's ounces)
2021 Actual
2022 Guidance
2023 Guidance
2024 Guidance
Total gold production
885
870
910
930
Total silver production
9,169
9,500
8,650
9,400
Total GEO production(2)
1,011
1,000
1,030
1,060
(000's ounces)
Gold
2021 Actual
2022 Guidance
2023 Guidance
2024 Guidance
Canadian Malartic (50%)
357
320
330
340
Jacobina
186
195
230
230
Cerro Moro
80
95
95
95
El Peñón
176
170
165
165
Minera Florida
85
90
90
100
Total
885
870
910
930
(000's ounces)
Silver
2021 Actual
2022 Guidance
2023 Guidance
2024 Guidance
Cerro Moro
5,582
5,300
4,400
4,450
El Peñón
3,587
4,200
4,250
4,950
Total
9,169
9,500
8,650
9,400
Annual Report 2021
45
(000's ounces)
GEO(2)
2021 Actual
2022 Guidance
2023 Guidance
2024 Guidance
Canadian Malartic (50%)
357
320
330
340
Jacobina
186
195
230
230
Cerro Moro
156
169
156
157
El Peñón
226
228
224
234
Minera Florida
85
90
90
100
Total
1,011
1,000
1,030
1,060
2022 Cost Guidance
The Company has assumed an expected average year-over-year consolidated cost impact in the range of 3% at its wholly owned
operations, including the impact of inflation. At Canadian Malartic, costs are expected to increase over 2021 as reflected in the
previously disclosed longer term mine plan, mostly due to lower production and increased strip ratio.
Cost pressures from inflation are expected to be moderate as the transitory impacts of commodity-linked consumables and COVID-
related supply chain disruptions ease. At the Company’s operations, the impact of inflation on costs is expected to be partially
offset by the related devaluation of local currencies, in which the majority of expenses are incurred. Furthermore, the Company
has experienced a more modest exposure to inflation given the lower relative exposure to consumables at its portfolio of primarily
lower tonnage underground operations and access to lower cost renewable energy versus carbon-based sources of power. At this
time, the Company is not experiencing any significant inflationary pressure on capital costs, and the Company believes that its
assumptions relating to forecast capital costs remain valid.
Over the three-year guidance period, the Company is expecting a 6% increase in GEO production that is anticipated to have a
positive impact on consolidated costs. In particular, the Company's lowest-cost operation, Jacobina, is a significant contributor to
the increase in production over the guidance period, and consequently the Company anticipates this will drive down the average
cost of production, improving overall margins and cash flow.
The Company anticipates that it will continue to incur some costs in relation to COVID-19 in the near future. Total costs are expected
to be approximately $10.0 million for 2022, or approximately $10 per GEO(2) sold on a consolidated basis. The bulk of the COVID-
19 costs are expected at Cerro Moro and El Peñón, in relation to additional transportation, testing and sanitation requirements, at
approximately $4.0 million and $3.0 million, respectively. COVID-19 costs are not included in the below disclosure as they are
currently excluded from total cost of sales per GEO sold(2), cash costs(1) per GEO sold(2) and AISC(1) per GEO sold(2).
The following table presents cost of sales, cash costs(1) and AISC(1) results in 2021 and cost guidance for 2022. While the
Company provides cost guidance within a range of +/- 1.5% overall, with some mines having slightly wider and narrower ranges,
the following presents the cost levels in those ranges which management expects to meet or be below for 2022.
(In US Dollars)
Total cost of sales
per GEO sold(2)
Cash costs(1)
per GEO sold(2)
AISC(1)
per GEO sold(2)
2021 Actual
2022 Guidance
2021 Actual
2022 Guidance
2021 Actual
2022 Guidance
Canadian Malartic (50%)
$
1,135
$
1,320
$
647
$
760
$
901
$
1,030
Jacobina
$
863
$
845
$
566
$
555
$
738
$
760
Cerro Moro
$
1,332
$
1,420
$
848
$
940
$
1,228
$
1,285
El Peñón
$
1,054
$
1,170
$
673
$
660
$
932
$
885
Minera Florida
$
1,434
$
1,280
$
881
$
740
$
1,224
$
1,135
Total*
$
1,132
$
1,215
$
689
$
725
$
1,030
$
1,080
*
Total AISC includes additional non-mine site specific costs primarily comprised of corporate G&A and exploration expenditures.
Yamana Gold
46
The following table presents expansionary capital, sustaining capital, and total exploration spend results for 2021 and expectations
by mine for 2022:
Expansionary capital
Sustaining capital
Total exploration
(In millions of US Dollars)
2021 Actual
2022 Guidance
2021 Actual
2022 Guidance
2021 Actual
2022 Guidance
Canadian Malartic (50%)
$
50.1 $
114.0 $
69.2 $
70.0 $
15.9 $
14.0
Jacobina
28.1
37.0
14.0
24.0
9.5
15.0
Cerro Moro
1.2
1.0
39.8
41.0
17.3
18.0
El Peñón
7.8
3.0
34.6
28.0
18.8
20.0
Minera Florida
22.6
11.0
15.2
20.0
10.0
12.0
MARA*
14.3
13.0
—
—
—
—
Wasamac
6.7
15.0
—
—
6.9
10.0
Other capital
0.8
3.0
0.9
2.0
—
—
Other exploration expense
—
—
—
—
10.7
6.0
Other capitalized exploration
—
—
—
—
10.6
15.0
Total
$
131.6 $
197.0 $
173.7 $
185.0 $
99.7 $
110.0
* MARA actuals for 2021 and guidance for 2022 in this table are disclosed at the Company's 56.25% interest, and not at 100%, as consolidated and disclosed
in other CAPEX tables. MARA expansionary capital is related to work associated with the advancement of the project, including the feasibility study and EIA
among others.
Approximately 60% of the Company’s expected exploration investment is capital in nature.
The following table presents other expenditure results in 2021 and expectations for 2022:
(In millions of US Dollars)
2021 Actual
2022 Guidance
Total DDA
$
447.9 $
500 - 520
Cash based G&A*
$
70.8 $
75.0
Cash income taxes paid**
$
151.0 $
145 - 165
*
Cash based G&A excludes $4.0 million of non-cash stock based compensation expense, included in G&A as reported in the Consolidated Statements of
Operations for 2021 actuals.
** 2022 guidance is based on $1,800 gold price and $25.00 silver price as per guidance assumption table below.
Cash taxes paid consider payments made in relation to withholding tax and prior years, as in certain jurisdictions, final payments
related to a fiscal year’s taxes are settled in the next fiscal year.
Guidance Assumptions and 2022 Sensitivity Impact
Key assumptions, in relation to the above guidance, are presented in the table below.
Impact of Change to 2022 Guidance Assumptions
2021 Actual*
2022 Guidance
Change to 2022
Guidance
Assumptions
AISC/GEO
Earnings before
Taxes ($Ms)
Change in Cash
($Ms)
GEO Ratio
72.55
72.00
Gold
$
1,800 $
1,800 $
50
$
5 $
43.0 $
32.0
Silver
$
25.17 $
25.00 $
1.00
$
(6) $
8.0 $
6.0
USD-CAD**
1.25
1.26
5 % $
(16) $
12.0 $
19.0
USD-BRL**
5.40
5.50
5 % $
(4) $
3.0 $
4.0
USD-CLP**
759.07
825.00
5 % $
(6) $
4.0 $
6.0
USD-ARS**
95.10
130.00
5 % $
(3) $
2.0 $
2.0
*
Metal prices and exchange rates shown in the table above are the average metal prices and exchange rates for the year ended December 31, 2021
** Change represents a US Dollar appreciation in relation to the foreign currency.
Annual Report 2021
47
MINE BY MINE NEAR-TERM OUTLOOK
Canadian Malartic (50%)
At Canadian Malartic, the mine is transitioning from the Canadian Malartic pit to the Barnat pit and consequently, production level
for 2022 is not expected to be less than 320,000 ounces. This represents a decrease in relation to 2021, as per previously
disclosed guidance and the 2021 Technical Report. At Canadian Malartic, costs are expected to increase over last year as reflected
in the previously disclosed longer term mine plan, mostly due to lower production and increased strip ratio. As previously disclosed,
the Company expects that the average strip ratio will normalize over the following years as the mine transitions from the Malartic
pit to the Barnat pit, and then decrease as the Barnat pit goes deeper.
Jacobina
At the Jacobina mine, which continues to be a standout performer, production in 2022 is not expected to be less than 195,000
ounces. The guided production mid-point would represent record annual production at the operation. With the accelerated
permitting and 2021 out-performance, the mine is now expected to achieve the Phase 2 throughput objective of 8,500 tpd by the
second quarter of 2022, approximately one year earlier than planned, with the higher throughput supported by stockpiles during
the year.
El Peñón
At El Peñón, GEO production in 2022 is not expected to be less than 228,000 GEO and is in line with production in 2021. The
mine’s current production rate—the result of the right-sizing of the operation initiated in late 2016—increased cash flow while
ensuring the long-term sustainability of the mine. Exploration successes over the last three years has resulted in an increase in
mineral reserves, unlocking opportunities to incrementally increase production by leveraging excess processing capacity at El
Peñón. The operation can process approximately 4,200 tpd, which represents upside of 20-30% above currently budgeted levels,
with no additional capital expenditures required. District-scale exploration work completed during the year and the fourth quarter
yielded positive results, and opens up a new, large area of high exploration potential, suggesting a significant expansion of the
highly productive El Peñón vein system south of the existing mine. Such expansion of the vein system could in turn meet the
objective of increasing production at a site that, as aforementioned, has significant excess plant capacity.
Minera Florida
At Minera Florida, gold production for 2022 is not expected to be less than 90,000 ounces, slightly above that of 2021. The strategy
at Minera Florida is to extend mine life and unlock opportunities for increased annual gold production following an approach similar
to the approach taken at Jacobina. This includes focusing on mineral reserve development and generating an inventory of prepared
mining areas to increase operational flexibility. Consistent with the 10-year outlook, the plant de-bottlenecking study is advancing
on schedule, with the objective to increase throughput from 74,500 to 100,000 tonnes per month, thereby increasing annual gold
production to approximately 120,000 ounces. The Company submitted the ESIA during the fourth quarter, with the timeline
expected to be approximately 18 months for approval, with another 12 months to receive sectorial permits. With the expected
permitting timelines, the mine could begin operating at a planned 100,000 tonnes per month level in 2025. Preliminary studies
indicate that the capacity of the processing plant can be increased to approximately 90,000 tonnes per month with incremental
adjustments. An upgrade of the crushing circuit would be required to achieve 100,000 tonnes per month.
Cerro Moro
At Cerro Moro, the Company envisions a modest increase in production for 2022 in relation to 2021, and is not expected to be less
than 169,000 GEO, as the mine was catching up development, which has now stabilized. Notably, Cerro Moro replaced depletion
of mineral reserves for the first time. Cerro Moro was developed as a high grade, low tonnage operation but, from the beginning,
the Company has considered alternative processing options to allow for economic extraction of lower grade mineralization,
including a scalable plant and heap leaching. For further information on the Cerro Moro scalable plant and heap leach project and
other initiatives please refer to Section 5: Construction, Development and Other Initiatives.
Yamana Gold
48
3.
REVIEW OF FINANCIAL RESULTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2021
Revenue
In the three months ended December 31, 2021, revenue was $503.8 million compared to $461.8 million in the same period in
2020. The 9% increase was primarily driven by higher gold sales volumes in the current quarter, which more than offset the lower
realized prices(1) compared to the fourth quarter of 2020. The average realized gold price for the quarter ended December 31,
2021 was $1,796 per ounce versus $1,875 per ounce for the comparative quarter. Higher sales volumes were most notable at El
Peñón, which had a standout quarter, as well as Canadian Malartic where the transition to, and ramp-up of the Barnat deposit
were taking place in the comparative period; Cerro Moro, which was impacted by COVID-19 related travel restrictions, which
impacted work availability in the comparative quarter; and Jacobina, which had record production in the fourth quarter of 2021.
For a cautionary note on non-GAAP financial performance measures and a reconciliation to average realized prices, refer to
Section 12: Non-GAAP Financial Performance Measures.
Cost of Sales Excluding DDA
Cost of sales excluding DDA increased $13.2 million or 8%, compared with the same quarter in prior year, as result of higher
GEO(2) production and sales levels, as discussed above, and in line with plan.
Depletion, Depreciation and Amortization ("DDA")
DDA expense increased $13.2 million or 12%, compared with the same quarter in the prior year. The increase in DDA expense
was primarily attributable to the overall higher sales volumes in the current period, in particular, at Canadian Malartic, Jacobina,
Cerro Moro and El Peñón, given the notable increase in sales volumes from the comparative period.
General and Administrative
General and administrative ("G&A") expenses include expenses related to management of the business that are not part of direct
mine operating costs. In the three months ended December 31, 2021, G&A expenses were $3.4 million lower than in the same
period in 2020, primarily due to higher stock-based compensation expense in the comparative quarter related to the significant
increase in the Company's share price during 2020, which resulted in the Company recording a higher expense as the value of
the stock-based compensation granted in previous years increased (particularly performance share units).
Exploration and Evaluation
Exploration and evaluation expenses of $6.8 million for the three months ended December 31, 2021 were higher than in 2020 due
to increased expenditures resulting from the generative exploration program. The program is focused on advancing projects in
Yamana’s portfolio, while continuing drilling activity at a number of the Company’s highly prospective earlier stage projects. For
more information refer to Section 7: Exploration.
Other Operating Expenses
In the three months ended December 31, 2021, the Company recorded net other operating expenses of $12.1 million compared
to net other operating expenses of $1.5 million for the same period in 2020. Operating expenses are comprised primarily of
contributions to social and infrastructure development priorities in jurisdictions where the Company is active, business development
related costs, care and maintenance expenses, changes in provisions, and mark-to-market adjustments on financial assets and
liabilities. The largest expense component in the current period is related to care and maintenance expenditures at the MARA
project in relation to the Alumbrera facilities of $6.8 million, of which, only 56.25% is attributable to Yamana shareholders. Yamana
has consolidated Alumbrera since the completion of the Agua Rica Alumbrera Integration Transaction on December 17, 2020, and
accordingly, there was no equivalent meaningful expense in the comparative period.
Annual Report 2021
49
Finance Costs
Finance costs decreased $3.4 million in the three months ended December 31, 2021 compared to the same period in 2020,
primarily due to the decrease in the Company's interest expense, which has decreased from 2020 due to both lower outstanding
gross debt, and more favourable interest rates following the senior notes transactions in the third quarter of 2021. Further
information on the redemption/issuance of the senior notes can be found in Section 1: Highlights and Relevant Updates.
Other Income/Costs
Other income was $14.3 million in the three months ended December 31, 2021, compared to other costs of $21.6 million in the
comparative period. Other income/costs is comprised primarily of realized and unrealized gains and losses on derivatives and
foreign exchange and, given the nature of these items, is expected to fluctuate from period to period. The income position in the
current period was primarily comprised of foreign exchange gains.
Income Tax Expense
The Company recorded an income tax expense of $44.2 million for the three months ended December 31, 2021 compared to an
income tax expense of $189.5 million for the three months ended December 31, 2020. The income tax provision reflects a current
income tax expense of $57.2 million and a deferred income tax recovery of $13.0 million, compared to a current income tax
expense of $24.4 million and a deferred income tax expense of $165.1 million for the three months ended December 31, 2020.
Included in the income tax expense for the three months ended December 31, 2021 are mining taxes of $19.7 million for the three
months ended December 31, 2021 compared to $8.3 million for the three months ended December 31, 2020.
FOR THE YEAR ENDED DECEMBER 31, 2021
Revenue
For the year ended December 31, 2021, revenue was $1,815.4 million compared to $1,561.0 million for the same period in 2020.
The 16% increase was primarily attributable to higher gold sales volumes in the current period as well as higher realized prices(1)
for both gold and silver compared to 2020. Higher sales volumes were seen across all of the Company's mines and were most
notable at Canadian Malartic and Cerro Moro, given prior period volumes were impacted by the government-mandated suspension
of operations in March and April 2020 and subsequent ramp up throughout the remainder of the period.
For a cautionary note on non-GAAP financial performance measures and a reconciliation to average realized prices, refer to
Section 12: Non-GAAP Financial Performance Measures.
Cost of Sales Excluding DDA
Cost of sales excluding DDA increased $80.9 million or 13% for the year ended December 31, 2021 compared to 2020, primarily
due to the increase in sales volumes as discussed above, and in line with plan.
Depletion, Depreciation and Amortization ("DDA")
Total DDA expense increased $52.9 million or 13% for the year ended December 31, 2021 compared to 2020, primarily due to the
overall higher sales volumes in the current period, as discussed above.
General and Administrative
G&A expenses include costs related to the overall management of the business that are not part of direct mine operating costs. In
the year ended December 31, 2021, G&A expenses decreased $11.1 million or 13% compared to 2020. This was predominantly
due to the significant increase in the Company's share price in the second and third quarters of 2020, impacting non-cash shared-
based compensation valuation in the prior year.
Yamana Gold
50
Exploration and Evaluation
Exploration and evaluation expenses of $31.6 million for the year ended December 31, 2021 were significantly higher than the
$15.1 million of expenses in 2020 due to increased expenditures resulting from the generative exploration program. The program
is focused on advancing projects in Yamana’s portfolio, while continuing drilling activity at a number of the Company’s highly
prospective earlier stage projects. For more information please refer to Section 7: Exploration.
Share of Earnings/Loss of Associates
The Company's share of net earnings related to its associates totalled $0.9 million for the year ended December 31, 2021, and
was comprised of the Company's share of earnings/loss of Nomad Royalty Company and Monarch Gold prior to ceasing to account
for these investments as associates. In 2020, the Company recorded losses of $1.0 million, being the Company's share of net loss
related to its former associate Leagold Mining Corporation, for the period up to March 10, 2020 when Leagold merged with Equinox
Gold and Yamana ceased to have significant influence in the investee, and therefore, discontinued equity accounting for the
investment using the equity method from this date. This loss was partially offset by the Company's share of net earnings in Nomad
Royalty Company and Monarch Gold. As at December 31, 2021, Yamana no longer has any investments accounted for as
associates.
Other Operating Expenses
In the year ended December 31, 2021, the Company recorded other operating expenses of $37.4 million (2020: $14.6 million).
Operating expenses are comprised primarily of contributions to social and infrastructure development priorities in jurisdictions
where the Company is active, business development related costs, care and maintenance expenses, changes in provisions, and
mark-to-market adjustments on financial assets and liabilities. The largest expense component in the current period is related to
care and maintenance expenditures at the MARA project in relation to the Alumbrera facilities of $25.6 million, of which, only
56.25% is attributable to Yamana shareholders. Yamana has consolidated Alumbrera since the completion of the Agua Rica
Alumbrera Integration Transaction on December 17, 2020, and accordingly, there was no equivalent meaningful expense in 2020.
Total other expenses incurred in 2021 were largely offset by $10.2 million in gains on discontinuation of the equity method of
accounting, associated with the change in the status of the Company's investments in Nomad Royalty Company ("Nomad") and
Monarch Gold during the year. The investments in Nomad and the newly formed Monarch Mining are now accounted for at fair
value, and Monarch Gold is consolidated. In the prior year, the most significant expense components related to a $10.9 million
mark to market loss on deferred share unit compensation due to the increase in the Company's share price, contributions to social
and infrastructure development causes in jurisdictions where the Company is active, and various other individually insignificant
operating expenses. These expenses were partially offset by a $21.3 million gain recognized upon the discontinuation of the equity
method on the Company's investment in Leagold in the first quarter of 2020.
Finance Costs
Finance costs increased $57.4 million in the year ended December 31, 2021 compared to 2020, primarily due to the $53.3 million
expense incurred in the third quarter of 2021 relating to the early redemption of certain of the Company's senior notes, partially
offset by the decrease in the Company's interest expense, which has decreased from 2020 due to lower outstanding gross debt,
and in the latter part of the year, more favourable interest rates following the senior notes transactions in the third quarter of 2021.
Further information on the redemption/issuance of the senior notes can be found in Section 1: Highlights and Relevant Updates.
Other Income/Costs, Net
Other income was $26.7 million in the year ended December 31, 2021, compared to other costs of $18.7 million in 2020. Other
income/costs is comprised primarily of realized and unrealized gains and losses on derivatives and foreign exchange and, given
the nature of these items, is expected to fluctuate from year to year. The income position in the current period was primarily
comprised of foreign exchange gains.
Annual Report 2021
51
Income Tax Expense
The income tax provision for the year ended December 31, 2021 reflects a current income tax expense of $159.8 million and a
deferred income tax expense of $135.9 million. This compares to a current income tax expense of $116.2 million and a deferred
income tax expense of $170.3 million for the year ended December 31, 2020.
The effective tax rate is subject to a number of factors including the source of income between different countries, different tax
rates in the various jurisdictions, the non-recognition of tax assets, foreign currency exchange movements, mining taxes, changes
in tax laws and the impact of specific transactions and assessments. The consolidated effective tax rate was 76.9% on the earnings
before tax for the year ended December 31, 2021, compared to an effective tax rate of 58.5% for the prior year.
The following items have the most significant impact on the difference between the Company's Canadian statutory tax rate of
26.5% and our effective rate for the years ended December 31, 2021 and 2020:
•
On June 16, 2021, the Argentina government enacted legislation to increase the tax rate from 25% to 35% retroactive to
January 1, 2021. As a result, the deferred tax liability relating to the carrying value of certain non-producing assets (namely
Suyai and MARA) were revalued at the higher tax rate. An expense of $146.92 million was recognized during the year
relating to this change in income tax rate.
•
Mining tax in the amount of $58.5 million for the year ended December 31, 2021 and $28.9 million for the year ended
December 31, 2020 was recorded in income tax expense. Mining taxes in Chile and Canada are calculated based on
taxable income and are considered an income tax.
•
The tax provision was also impacted by inflation gains in Argentina in the amount of $23.0 million for the year ended
December 31, 2021 compared to a net inflation loss of $1.3 million for the year ended December 31, 2020.
•
Permanent differences of $28.8 million increased the income tax expense for the year ended December 31, 2020, mainly
relating to the sale of Chapada in 2019, compared to a decrease in income tax expense of $2.6 million in December 31,
2021
The deferred tax liabilities relating to the operating mines will reverse in the future, as the assets are depreciated or depleted. The
capitalized exploration expenditures on non-producing mineral properties will not reverse until the property becomes a mine subject
to depletion, is written off or sold. The deferred income taxes would only be paid on a direct disposition of the asset that may never
occur.
The Company operates in the following tax jurisdictions: Brazil, where the statutory tax rate is 34%; Argentina, where the statutory
tax rate is 35%; Chile, where the statutory tax rate is 27%; and Canada, where the federal statutory tax rate is 15% with varying
provincial tax rates. There is a proposal in Brazil to decrease the income tax rate and impose a tax on dividends, with an overall
increase to the combined rate. This change could have an impact on the current or deferred tax expense relating to dividends if it
is passed. The newly elected president in Chile will take office in March 2022 and it is anticipated that there will be changes to the
income and mining tax regimes. The Company does not anticipate the statutory tax rates to change in the other jurisdictions in the
foreseeable future; therefore, there should be no impact on the calculation of the current or deferred tax expense in the period.
The largest components of the net deferred tax liabilities relate to:
As at December 31, (In millions of US Dollars)
2021
2020
Canadian Malartic
283.3
296.6
Jacobina
180.6
188.7
El Peñón
234.7
234.6
MARA
372.4
266.0
Exploration potential
182.1
171.1
QUARTERLY FINANCIAL SUMMARY
For the three months ended
Dec. 31,
Sep. 30,
Jun. 30,
Mar. 31,
Dec. 31,
Sep. 30,
Jun. 30,
Mar. 31,
(In millions of US Dollars, except per share amounts)
2021
2021
2021
2021
2020
2020
2020
2020
Financial results
Revenue
$
503.8 $
452.2 $
437.4 $
422.0 $
461.8 $
439.4 $
303.4 $
356.5
Net earnings (loss)(3)
$
109.7 $
27.0 $
(43.9) $
54.7 $
103.0 $
55.6 $
— $
45.0
Net earnings (loss)(3) per share - basic and diluted
$
0.11 $
0.03 $
(0.05) $
0.06 $
0.11 $
0.06 $
— $
0.05
Yamana Gold
52
4.
OPERATING SEGMENTS PERFORMANCE
CANADIAN MALARTIC (50% interest), CANADA
Canadian Malartic is an open pit gold mine, located in the Abitibi-Témiscamingue region of Quebec, Canada. The Company and
its partner, Agnico Eagle Mines Limited ("Agnico"), each own 50% of Canadian Malartic General Partnership (the "Partnership").
For the three months ended December 31,
For the year ended December 31,
Key Performance Information (50% basis)
2021
2020
2021
2020
Operating
Ore mined (tonnes)
2,868,178
3,285,723
10,470,005
12,012,693
Waste mined (tonnes)
4,219,169
2,718,493
11,785,087
10,649,407
Ore processed (tonnes)
2,764,921
2,868,329
11,130,195
10,399,882
GEO(2) (Gold)
Production (ounces)(5)
88,933
86,371
357,392
284,317
Sales (ounces)(5)
91,589
84,348
357,667
264,198
Feed grade (g/t)
1.12
1.06
1.11
0.97
Recovery rate (%)
89.5
88.0
89.7
87.4
Total cost of sales per GEO sold
$
1,171 $
1,126 $
1,135 $
1,207
Cash costs per GEO sold(1)
$
676 $
634 $
647 $
702
AISC per GEO sold(1)
$
931 $
898 $
901 $
945
DDA per GEO sold
$
496 $
493 $
488 $
505
Financial (millions of US Dollars)
Revenue
$
164.7 $
158.4 $
643.2 $
471.0
Cost of sales excluding DDA
(61.8)
(53.4)
(231.3)
(185.4)
Gross margin excluding DDA
$
102.9 $
105.0 $
411.9 $
285.6
DDA
(45.4)
(41.5)
(174.7)
(133.4)
Temporary suspension, standby and other incremental
COVID-19 costs
(0.6)
(0.8)
(2.5)
(4.5)
Mine operating earnings
$
56.9 $
62.7 $
234.7 $
147.7
Capital expenditures (millions of US Dollars)
Sustaining and other
$
17.3 $
18.6 $
69.2 $
52.5
Expansionary(5)
$
22.7 $
5.1 $
50.1 $
12.2
Exploration
$
4.4 $
7.0 $
15.7 $
10.1
Canadian Malartic had a strong fourth quarter in line with plan, and exceeded both the comparative prior year quarter and prior
quarter by producing 88,933 ounces. Canadian Malartic delivered annual production of 357,392 ounces of gold, exceeding the
guidance of 350,000 ounces. Fourth quarter results benefited from higher grade and recoveries compared to the fourth quarter of
2020 from ore deeper in the Malartic pit. During 2021, the mine continued the transition from the Malartic pit to the Barnat pit, and
the mine completed the final 7,000 meters of topographic drilling at Barnat during October, while overburden removal was
completed earlier in the year as planned. As previously disclosed, the Company expects that the average strip ratio will normalize
over the coming years as the mine transitions from the Malartic pit to the Barnat pit, and then decrease as the Barnat pit goes
deeper. Further optimizations as part of the budgeting process this year, including a more controlled contribution from stockpiles,
have resulted in improved cash flows in the near term, despite the previously guided and disclosed lower production and throughput
in 2022, relative to 2021, as noted in the 2021 Technical Report.
Total cost of sales, cash costs(1) and AISC(1) on a per GEO(2) basis for the quarter were impacted by the increased tonnes moved
as contemplated by the mine plan, in addition to the modest inflationary pressures observed during 2021. Total cost of sales and
cash costs(1) on a per GEO(2) basis for the year were within the guided range and lower than the comparative period.
For further information on the planned Odyssey project and other Malartic initiatives, please refer to Section 5: Construction,
Development and Other Initiatives.
Annual Report 2021
53
Canadian Malartic Exploration
The main focus of exploration during the fourth quarter was to provide support for an aggressive infill drill program at East Gouldie,
a new zone discovered in late 2018 at depth approximately 1.5 kilometres east of the Canadian Malartic and Barnat open pits, and
south of the underground East Malartic and Odyssey zones. East Gouldie currently has a strike length of approximately 1,400
metres in an east-west direction and dips 60 degrees to the north, extending from 700 metres to 1,900 metres depth below surface.
Mineralization remains open to depth and to the east. The zone dips toward the East Malartic zone, and may converge with East
Malartic at depth. As of December 31, 2020, East Gouldie was estimated to contain inferred mineral resources of 6.4 million ounces
of gold, with Yamana’s 50% interest representing 3.2 million ounces of gold contained in 31.5 million tonnes grading 3.17 g/t of
gold.
Twelve diamond drill rigs have completed 133,399 metres to year end. The main objective of the 2021 drilling program is to infill
the core area of the inferred resource to 75 metre drill spacing from the current 150 metres spacing, convert a part of the inferred
resource to indicated, complete some infill and delineation drilling on the Odyssey zones as well as further exploration drilling.
Results to date suggest very high conversion rates for both grade and tonnes with excellent continuity and predictability and a
modest increase in total resources.
Exploration of the eastern extension of the East Gouldie structure from the Rand property continues, with four drill rigs working.
This program included 32,200 metres of drilling with 23,536 metres completed from the Rand property generating seven new
pierce points in the eastern extension of the East Gouldie plane. This will allow for a better evaluation of the mineral inventory
potential of the eastern extension and provide a solid basis for planning a 2022 drill delineation program.
Infill holes continue to define the East Gouldie main zone. Additionally, step out drilling has encountered lateral extensions of the
main mineral envelope; positive results have been encountered from drilling located 150 metres east of the reported resource
area. These results, when combined with the east extension exploration drilling, are expected to provide a large potential envelope
for drilling in 2022.
The infill program continues to generate excellent results demonstrating consistent grades and widths throughout the mineralized
zone, further demonstrating the high quality nature of the reported inferred resource. Drilling beyond the inferred resource to the
east is currently testing areas 500 metres east and west respectively of previously reported hole RD21-4680A, the initial hole into
this target. This step-out drilling generated excellent results, intersecting 2.7 g/t of gold over an estimated true width of over 10.9
metres at 1,995 metres depth, including 3.1 g/t over 7.2 metres at 1,993 metres depth.
The Partnership acquired a 100% interest in the 262-hectare Rand Malartic property in March 2019 from NSR Resources for $5.0
million, with NSR Resources retaining a 2% net smelter return royalty that can be bought back in its entirety by the Partnership for
$7.0 million prior to March 26, 2022.
Yamana Gold
54
JACOBINA, BRAZIL
Jacobina is a complex of underground gold mines located in Bahia state, Brazil.
For the three months ended December 31,
For the year ended December 31,
Key Performance Information
2021
2020
2021
2020
Operating
Ore mined (tonnes)
775,087
610,257
2,647,979
2,470,091
Ore processed (tonnes)
700,103
580,287
2,657,590
2,425,886
GEO(2) (Gold)
Production
48,228
44,165
186,206
177,830
Sales
48,732
42,789
186,534
175,561
Feed grade (g/t)
2.22
2.44
2.26
2.36
Recovery rate (%)
96.7
96.9
96.4
96.5
Total cost of sales per GEO sold
$
763 $
907 $
863 $
844
Cash costs per GEO sold(1)
$
452 $
590 $
566 $
544
AISC per GEO sold(1)
$
643 $
807 $
738 $
746
DDA per GEO sold
$
312 $
317 $
297 $
300
Financial (millions of US Dollars)
Revenue
$
87.6 $
80.7 $
336.2 $
312.1
Cost of sales excluding DDA
(22.0)
(25.2)
(105.5)
(95.5)
Gross margin excluding DDA
$
65.6 $
55.5 $
230.7 $
216.6
DDA
(15.2)
(13.6)
(55.4)
(52.6)
Temporary suspension, standby and other incremental
COVID-19 costs
(0.2)
(0.5)
(1.2)
(2.0)
Mine operating earnings
$
50.2 $
41.4 $
174.1 $
162.0
Capital expenditures (millions of US Dollars)
Sustaining and other
$
4.2 $
5.4 $
14.0 $
21.6
Expansionary
$
10.5 $
4.8 $
28.1 $
15.8
Exploration
$
1.8 $
2.0 $
7.2 $
6.0
Jacobina had an exceptional fourth quarter and delivered record quarterly gold production of 48,228 ounces, and record full-year
gold production of 186,206 ounces, exceeding guidance of 175,000 ounces. The record production results were driven by tonnes
mined, which also reached all-time highs, providing additional flexibility through the development of stockpiles supporting the higher
throughput expected from the ongoing phased expansion. Underground mine development work is in line with the mine plan at
1,500 metres per month, gearing up for the higher production rate and to access new mining panels. Production in 2021 increased
for the eighth consecutive year, a trend that is expected to continue in the coming years, as a result of the phased expansion
strategy and the exploration programs aimed at generating significant value from the remarkable geological upside of the property.
During the fourth quarter, Jacobina received the expansion permit, allowing throughput to increase to 10,000 tpd, as announced
in the December 6 press release “Yamana Gold Receives Permit at Jacobina, Initiating Ramp Up of Phase 2 Expansion, Expects
Fourth Quarter Company Wide Production to Exceed 270,000 GEO With Costs Tracking to Be the Lowest of the Year”. The
successful result is the culmination of a two-year process during which the Company worked closely with government agencies to
ensure that Jacobina continues to operate in a responsible, sustainable way to the benefit of all stakeholders. The Company has
strategically elected to operate in the Americas in rules based jurisdictions with a mining pedigree providing certainty for conducting
its operations which has been exemplified with the Brazilian permitting process for Jacobina. Receipt of the permit not only marks
a significant milestone in the Phase 2 ramp up to 230,000 ounces of gold per year, but also facilitates the future Phase 3 expansion
to increase production up to 270,000 ounces per year.
The underground mining rate continues to increase and with the accelerated permitting and 2021 outperformance, the mine is now
expected to achieve the Phase 2 throughput objective of 8,500 tpd by the second quarter of 2022, approximately one year ahead
of schedule, although higher throughput will be supported by stockpiles during the year. Following receipt of the permit, Jacobina
increased throughput to 7,771 tpd in December, achieving an average throughput of 7,610 tpd for the fourth quarter. Grade
normalizes in 2023 when production is expected to reach 230,000 ounces. Since May 2021, throughput has been stable at the
previously-permitted rate of 7,500 tpd and the mine is well positioned to immediately start ramping up to 8,500 tpd. Over the same
time frame, Jacobina has continued with incremental improvements to increase mining and processing capacity in anticipation of
Annual Report 2021
55
receiving the expansion permit. As such, the Company intends to progressively increase throughput over the next six to seven
months.
For further information on the planned Jacobina processing plant capacity optimization and expansion initiatives, as well a
comprehensive tailings management strategy for long-term sustainability, please refer to Section 5: Construction, Development
and Other Initiatives.
Total cost of sales, cash costs(1) and AISC(1) on a per GEO(2) basis were all well below the guided range in the fourth quarter of
2021, and significantly lower than the comparative prior year period, a result of higher production in the current year resultant from
the aforementioned increased mill throughput, and fixed production costs being distributed over less ounces in the prior year. Full
year total cost of sales, cash costs(1) and AISC(1) on a per GEO(2) basis were all within the guided range for 2021.
Jacobina Exploration
Exploration continued to ramp up in the fourth quarter in support of the phased expansion plan with results continuing to increase
mineral inventory in Canavieiras, Morro do Vento and João Belo, adding high-quality mineralization close to mine infrastructure.
Results also demonstrate the mine’s ability to continue to significantly grow mineral reserves and mineral resources beyond
depletion, notwithstanding increasing production, underscoring Jacobina’s exceptional long-term growth potential and remarkable
geological upside, and ability to further extend strategic mine life.
During the fourth quarter, approximately 12,236 metres of drilling were completed at Jacobina, including 37 drill holes totaling
11,487 metres of infill drilling to convert inferred mineral resources to indicated mineral resources, and 4 drill holes totaling 749
metres of exploratory drilling, dedicated to defining new potential resources in the near mine setting.
The infill program focused on delineation of new indicated resources, targeting inferred resource areas, located around the current
development. Infill drilling during the fourth quarter was executed at the Main Reef at Morro do Vento, at João Belo South Extension
(LMPC Reef) and at João Belo mine. Results obtained at Morro do Vento continue to confirm grades at Morro do Vento Sul, while
drilling results at the north end of Morro do Vento continue to establish the higher grade nature of this sector. Infill drilling at João
Belo South Extension also returned positive results, while at João Belo mine drilling is extending mineralization both to the north
and south, with good results indicating that mineralization remains open for expansion at shallow levels and close to existing mine
development north of João Belo mine.
Exploration drilling activity at Jacobina in the fourth quarter continued to focus on testing and drill delineation of new zones in near-
mine areas at Morro do Vento Main Reef down-dip, while exploratory drilling was initiated at Serra do Corrego Norte sector. Positive
results returned from the initial test of Morro do Vento Main Reef down-dip in the third quarter, which extended mineralization
approximately 675 metres along strike south of historic drill hole MVTEX22 (9.72 g/t of gold over 1.80 metres), is being follow-up
utilizing 3 drill rigs, testing a potential strike length of greater than 2,300 metres. The eastern most hole along this trend,
encountered visible gold in the hanging wall conglomerate, with final results anticipated in early 2022. At Serra do Corrego Norte,
where historic drilling intersected higher grades in drill holes SCO1 (8.09 g/t of gold over 5.23 metres) and SCO461 (18.17g/t of
gold over 2.44 metres) associated with LU Reef, one drill hole has been completed and a second drill is in progress, with local
concentrations of visible gold reported in both holes. Assay results are pending.
At Canavieiras, exploratory and conversion drilling programs have confirmed the presence of all mineralized reefs south of
Canavieiras Central, expanding the mineral envelope continuously more than 500 metres southward to the northern limit of
Canavieiras Sul. Drilling results from this sector have been impressive, with both the LU and MU reefs generating higher grade
intercepts over wide intervals and defining high-quality mineralization close to the current mine infrastructure. Drilling completed
at Canavieiras in 2021 has been modelled, and new mineral resources calculated have been included in the year end mineral
resource mineral reserve statement.
The Main Reef zone at Morro do Vento has demonstrated continuity of mineralization over a large area with 2.5 kilometers of strike
length and positive drilling intercepts up to 1,100 metres down dip of mine infrastructure, representing one of the most important
mineralized zones of the Jacobina district. In the northern portion of Morro do Vento, the delineation drilling program has provided
strong results at Main Reef, indicating high grade mineralization continues down dip and remains open for growth.
Over the last two years, the Company has prioritized exploration of the southern portion of the Jacobina district, the delineation of
the recently discovered João Belo Sul sector, located two kilometres south of João Belo, and to exploring extensions of João Belo,
Yamana Gold
56
historically the most productive mine in the complex with more than one million ounces of past production. João Belo Sul drilling
has generated significant results and defined a continuous mineral envelope in the LMPC Reef over a 900-meter north-south strike
length and 600 metres down dip. Further drilling has been completed at João Belo Sul and has been modelled and included in the
year end inferred resources.
Overall, exploration continues to demonstrate success in identifying and defining new extensions of current producing sectors of
the Jacobina mine, with exceptional results replacing depletion with high-quality mineral reserves and mineral resources close to
current mine infrastructure. Infill and exploration drilling continued in the fourth quarter as additional drill rigs were added to achieve
planned drilling production. Currently, fifteen drill rigs are operating at Jacobina, including five underground and three surface rigs
completing infill drilling and seven rigs executing exploration drilling. Aggressive step out exploration drilling is opening up new,
extensive frontier areas available for mineral resource growth in new sectors of the property, as exemplified by recent successes
at João Belo Sul and Morro do Vento Main Reef down-dip. These discoveries support a strategic mine life of several decades at a
production level well above the planned Phase 2 expansion annual production level of 230,000 ounces, expected to be achieved
in 2023, and likely 270,000 ounces, which is the planned annual production level for the Phase 3 expansion as described above.
Please refer to the press release issued on July 29, 2021 by the Company, entitled "Yamana Gold Reports Significant Progress
On Phase 2 Expansion At Jacobina And Strong Exploration Results For The Operation; Costs To Complete Phase 2 Significantly
Reduced Compared To Original Estimate; Phase 3 Evaluation Advancing" for further details.
Annual Report 2021
57
CERRO MORO, ARGENTINA
Cerro Moro is an underground and open pit gold-silver mining operation, located in the province of Santa Cruz, Argentina.
For the three months ended December 31,
For the year ended December 31,
Key Performance Information
2021
2020
2021
2020
Operating
Ore mined (tonnes)
100,855
69,189
339,584
277,040
Waste mined (tonnes)
892,408
817,001
3,789,892
3,655,450
Ore processed (tonnes)
102,016
97,096
376,557
320,701
GEO(2)
Production
58,078
42,943
156,484
132,415
Sales
56,087
44,101
153,882
133,358
Total cost of sales per GEO sold
$
1,224 $
1,343 $
1,332 $
1,513
Cash costs per GEO sold(1)
$
726 $
768 $
848 $
868
AISC per GEO sold(1)
$
1,044 $
1,139 $
1,228 $
1,280
DDA per GEO sold
$
498 $
576 $
485 $
645
Gold
Production (ounces)
30,028
21,259
79,988
66,995
Sales (ounces)
29,706
22,194
79,001
68,542
Feed grade (g/t)
9.67
7.18
7.19
6.91
Recovery rate (%)
94.6
94.9
91.9
94.0
Silver
Production (ounces)
2,165,785
1,663,708
5,582,197
5,448,561
Sales (ounces)
2,043,439
1,674,308
5,456,296
5,441,868
Feed grade (g/t)
692.14
575.94
505.11
565.06
Recovery rate (%)
95.4
92.5
91.3
93.5
Financial (millions of US Dollars)
Revenue
$
100.5 $
81.2 $
276.5 $
241.3
Cost of sales excluding DDA
(40.7)
(33.8)
(130.5)
(115.8)
Gross margin excluding DDA
$
59.8 $
47.4 $
146.0 $
125.5
DDA
(27.9)
(25.4)
(74.6)
(86.1)
Temporary suspension, standby and other incremental
COVID-19 costs
(3.2)
(4.7)
(20.8)
(19.2)
Impairment
—
(369.0)
—
(369.0)
Mine operating earnings
$
28.7 $
(351.7) $
50.6 $
(348.8)
Capital expenditures (millions of US Dollars)
Sustaining and other
$
12.4 $
9.0 $
39.8 $
29.5
Expansionary
$
0.5 $
4.4 $
1.2 $
6.9
Exploration
$
1.3 $
3.5 $
5.6 $
12.5
Cerro Moro had its strongest quarter of the year, producing 58,078 GEO(2) comprising 30,028 ounces of gold and 2,165,785 ounces
of silver. Production continued to benefit from access to additional mining faces, which supported the increase in mill feed coming
from higher-grade underground ore and stable throughput. Gold and silver recoveries improved significantly in the fourth quarter
over the prior quarter, and while gold recovery remained relatively stable over the comparative quarter, silver recovery improved
significantly. The recovery increases were the result of actions to improve the counter-current decantation ("CCD") circuit
performance late in the third quarter, which included the implementation of a feed blending control system, drilling of new wells to
improve processing water quality, and trials of new and improved reagents.
The opening of more mining faces and resultant increase in mill feed coming from higher-grade underground ore continued in the
fourth quarter with Zoe contributions becoming more prevalent, and this trend is expected to continue during 2022. During the
fourth quarter, most of the ore delivered to the plant came from Escondida Far West, Zoe, Escondida Central and Escondida West.
Over the past year, Cerro Moro has optimized the operation of the processing plant to increase daily throughput to approximately
1,100 tpd. With improvements to mine development and flexibility, the Company anticipates a more balanced quarterly production
profile over the year.
Yamana Gold
58
Total cost of sales, cash costs(1) and AISC(1) on a per GEO(2) basis during the fourth quarter were $1,224, $726, and $1,044,
respectively, all well below the guided ranges provided and the comparative period, as a result of the strong production observed.
Total cost of sales, cash costs(1) and AISC(1) on a per GEO(2) basis during the year were $1,332, $848 and $1,228 respectively, all
below the comparative period.
The mine has a significant inventory of lower-grade veins that are not fully reflected in the current mineral reserves and mineral
resource statements, many of which are wider than the veins currently being mined. Drilling of these lower grade veins was not
typically followed up with infill drilling in the past as the mineralization is below the current cut-off grade. Cerro Moro was developed
as a high grade, low tonnage operation but, from the beginning, the Company has considered alternative processing options to
allow for economic extraction of lower grade mineralization, including:
a.
a scalable plant, where the front-end of the plant anticipates higher 2,000 tpd tonnage, with the expectation of modest
capital requirement to achieve this objective,
b.
heap leaching near surface, lower-grade material, to supplement other production.
The objective at Cerro Moro is to create a sustainable ten-years of production of at least 160,000 GEO(2) per year, and up to
200,000 GEO(2) per year. If the Company successfully develops both the plant expansion and heap leach projects, which represent
significant upside opportunities, along with conversion of the exploration targets to mineral resources, Cerro Moro could produce
at least 200,000 GEO(2) per year. This upside would be beyond the current ten-year outlook that assumes Cerro Moro as a 150,000
to 165,000 GEO(2) per year operation, which is expected to be sustainable from mineral reserves mine life, ongoing exploration
successes and mineral reserve replacement.
For further information on the Cerro Moro scalable plant and heap leach project and other initiatives please refer to Section 5:
Construction, Development and Other Initiatives.
As Cerro Moro’s mineral inventory increases, the Company will evaluate its options for alternative sources of power, which include
a connection to the grid and wind power. Both options are expected to improve costs and further reduce GHG emissions, thereby
accelerating the achievement of the Company’s carbon emissions reduction goal. This area of southern Argentina is one of the
most prospective areas in the world for wind-based energy generation; the Company’s third-party process to evaluate wind power
indicates there should be a sufficient and sustainable supply of power. The results of the alternative power analysis will be
considered in the plant expansion pre-feasibility and heap leach studies to explore synergies between the projects. Based on
preliminary analysis, the Company believes that the conversion of approximately twenty-five per cent of Cerro Moro's power
sources to wind would significantly contribute to the carbon reduction goals of the Company to achieve net zero emissions.
Cerro Moro Exploration
Exploration during the fourth quarter included completion of approximately 15,246 metres of drilling in 207 drill holes, including
2,111 metres of infill drilling in 36 holes, 3,626 metres of exploration drilling in 18 drill holes and 9,509 metres of regional diamond,
RC and RAB (Rotary Air Blast) drilling in 153 holes testing multiple regional targets and including definition drilling of resources at
Domos La Union in support of the evaluation of heap leach potential at Cerro Moro.
Infill drilling in the fourth quarter was conducted at Escondida Far West, Veronica, Michelle and Naty sectors, targeting high quality
inferred underground and open pit resources. Positive results have been returned from Escondida Far West, Veronica and Michelle,
while notable high-grade gold and silver intercepts were returned over significant estimated true widths in deeper drilling below
current resources at Naty.
Exploration drilling in the fourth quarter continued to focus on the core mine Escondida-Zoe structural corridor, targeting extensions
of known ore shoots to depth and laterally and to test new sectors. Drilling in the quarter was completed at Escondida West,
Escondida Central and Escondida Far East. At Escondida West, exploration drilling returned positive intercepts along a
northwestern plunge, confirming continuation to depth along this ore shoot, which remains open for expansion. Significant
mineralization with visible gold was intercepted down plunge of inferred resources at Escondida Far East, continuing to expand
the mineral envelope at depth, where mineralization remains open for further expansion. Exploration drilling will continue to test
this area during the upcoming period. Positive results were also received in the fourth quarter from exploration drilling completed
at Zoe, Veronica and Martina. At Veronica, positive intercepts were returned in the shallow down-plunge direction, indicating that
the zone remains open for further exploration.
Annual Report 2021
59
Drill testing of several regional targets continued during the fourth quarter, as the regional drilling program continued to ramp up.
Scout drilling completed during the quarter totaled 9,509 metres in 153 diamond, RC and RAB drill holes. Drilling was completed
at targets in the Bahia Laura area (Naty NE, Domos La Union, Ocular), with most assay results pending. Positive results were
returned from scout drilling at Naty NE, where mineralization remains open for further testing. Drilling at Domos La Union totaled
1,829 metres, were a Phase 1 resource definition drilling program was completed as part of an ongoing evaluation of heap leach
potential at Cerro Moro. Definition of a mineral inventory of heap leachable material at Cerro Moro has the potential to increase
resources and potentially increase production at the mine. At the Mosquito project, RAB drilling totaling 673 metres was completed
in the fourth quarter testing a high-potential target under post-mineral gravels and sedimentary cover. Assay results are pending.
This target area will be advanced in 2022. Further positive results were obtained at Cassius along the main Escondida-Zoe trend,
defining a new structure parallel to Escondida, where follow up step out drilling is ongoing. Additional work completed during the
quarter included ongoing geological mapping, collection of 1,078 soil and 892 rock samples, and alteration characterization in the
regional Bahia Laura, Lucia, Mosquito and Nevado sectors. Positive drill results from these programs generated new resources to
replace mining depletion and provide a basis for inferred resources that may be amenable to heap leach extraction by mid-year
2022.
EL PEÑÓN, CHILE
El Peñón is a gold-silver mine located approximately 160 kilometres southeast of Antofagasta in northern Chile.
For the three months ended December 31,
For the year ended December 31,
Key Performance Information
2021
2020
2021
2020
Operating
Ore mined (tonnes)
301,246
332,247
1,098,888
1,129,036
Ore processed (tonnes)
326,807
357,096
1,304,807
1,266,829
GEO(2)
Production
67,901
55,529
226,330
216,749
Sales
63,943
51,738
223,375
215,667
Total cost of sales per GEO sold
$
929 $
1,023 $
1,054 $
980
Cash costs per GEO sold(1)
$
582 $
696 $
673 $
657
AISC per GEO sold(1)
$
761 $
1,025 $
932 $
922
DDA per GEO sold
$
347 $
327 $
381 $
323
Gold
Production (ounces)
55,282
43,512
176,439
160,824
Sales (ounces)
52,401
40,129
174,288
158,933
Feed grade (g/t)
5.69
4.07
4.49
4.22
Recovery rate (%)
94.7
93.7
94.3
93.7
Silver
Production (ounces)
976,996
922,954
3,587,092
4,917,101
Sales (ounces)
894,366
888,858
3,519,973
4,940,217
Feed grade (g/t)
113.26
92.53
100.60
138.94
Recovery rate (%)
88.0
86.8
86.7
86.7
Financial (millions of US Dollars)
Revenue
$
115.1
$
96.5 $
401.5 $
381.1
Cost of sales excluding DDA
(37.2)
(36.0)
(150.3)
(141.8)
Gross margin excluding DDA
$
77.9 $
60.5 $
251.2 $
239.3
DDA
(22.2)
(16.9)
(85.0)
(69.6)
Temporary suspension, standby and other incremental
COVID-19 costs
(1.0)
(2.0)
(4.9)
(7.0)
Reversal of impairment
—
560.0
—
560.0
Mine operating earnings
$
54.7 $
601.6 $
161.3 $
722.7
Capital expenditures (millions of US Dollars)
Sustaining and other
$
7.1 $
9.9 $
34.6 $
31.4
Expansionary
$
1.6 $
0.5 $
7.8 $
0.5
Exploration
$
2.3 $
4.7 $
15.6 $
15.9
Yamana Gold
60
El Peñón had its strongest production quarter of the year, with GEO(2) production of 67,901 exceeding plan, including gold
production of 55,282 ounces, and 976,996 ounces of silver. El Peñón's annual production of 226,330 GEO(2) exceeded guidance
of 222,000 GEO(2). As planned, operations entered higher-grade zones at the La Paloma and Pampa Campamento mining sectors,
which contributed to the higher production results in the fourth quarter. The first step to unlock the opportunity to leverage the
existing processing capacity at the mine and increase production was to establish additional mining sectors. The development of
La Paloma, Quebrada Colorada Sur and Pampa Campamento Deep was an important component of that strategy; accessing
these new areas has now provided increased mining flexibility. With improved access now in place, and development rates able
to support throughput, the Company expects more consistent quarter-over-quarter production in 2022 as compared to 2021.
Quarterly total cost of sales, cash costs(1) and AISC(1) on a per GEO(2) basis of $929, $582, and $761, respectively, were all well
below guidance and the comparative period, as a result of the current period's planned and previously disclosed higher
development rates, that facilitated access to additional mining areas in the second half of the year. Total cost of sales, cash costs(1)
and AISC(1) on a per GEO(2) basis for the year to date period were $1,054, $673, and $932, respectively. With the ongoing focus
on increasing mine development rates, El Peñón has increased the number of available underground production zones which are
expected to support the current level of mine production and feed grades going forward. Mine development is currently occurring
at a rate that exceeds 3,000 metres per month.
El Peñón Exploration
District-scale exploration work completed during the year and the fourth quarter yielded positive results, and opens up a new, large
area of high exploration potential, suggesting a significant expansion of the highly productive El Peñón vein system south of the
existing mine. Such expansion of the vein system could in turn meet the objective of increasing production at a site that has
significant excess plant capacity. While drilling is ongoing and results will be presented in the next exploration update, fourth quarter
work included 2,499 metres of reverse-circulation and diamond drilling in six deeper drill holes, targeting the favorable rhyolite
stratigraphy at depth south of the core mine at 500 to 700 metres below surface. All targets drilled intercepted the rhyolite unit and
two wide-spaced sections intercepted epithermal vein mineralization with significant gold and silver grades. One section is located
1,000 metres south of the southernmost development on the Martillo vein system while the second section is located 600 metres
south of the end of the Orito development. Drilling on both sections cut altered and mineralized rhyolite with El Peñón style
alteration including widespread adularia and El Peñón style epithermal veins with gold and silver mineralization.
During the fourth quarter approximately 19,408 metres of drilling were completed at El Peñón, including 34 drill holes totaling
16,699 metres of infill drilling to convert inferred mineral resources to indicated mineral resources, one drill holes totaling 210
metres of exploratory drilling dedicated to defining new inferred mineral resources, and 2,499 metres in 6 reverse-circulation and
diamond drill holes testing regional targets.
Infill drilling during the fourth quarter was completed in four sectors of the mine, with positive results returned from the Pampa
Campamento, Paloma and Sorpresa Este sectors. Success in the quarter continued to be driven in large part by testing deeper
parts of known main veins within the lower dacitic stratigraphy, where drilling continues to highlight the potential in down-dip
segments of known structures, which remain open for expansion.
Exploration drilling at El Peñón during the fourth quarter included one drill hole completed at Abundancia Oeste in the northern
most sector of the mine, returning positive results. Targeting has benefited from analysis of ore shoot trends, which is helping to
target higher grade sectors, as ore zones are extended to depth toward the lower dacitic unit.
The positive infill and near mine exploration results received in 2021 have generated new resources, replacing mining depletion
over the year, and have provided new inferred resources for further conversion drilling.
Annual Report 2021
61
MINERA FLORIDA, CHILE
Minera Florida is an underground gold mine located south of Santiago in central Chile.
For the three months ended December 31,
For the year ended December 31,
Key Performance Information
2021
2020
2021
2020
Operating
Ore mined (tonnes)
180,462
233,374
817,842
810,294
Ore processed (tonnes)
201,003
260,199
940,923
892,286
GEO(2) (Gold)
Production
18,247
26,352
84,768
89,843
Sales
20,058
23,979
87,804
87,735
Feed grade (g/t)
3.05
3.36
3.03
3.37
Recovery rate (%)
92.5
93.7
92.6
92.9
Total cost of sales per GEO sold
$
1,535 $
1,279 $
1,434 $
1,366
Cash costs per GEO sold(1)
$
911
$
760 $
881 $
862
AISC per GEO sold(1)
$
1,313 $
1,087 $
1,224 $
1,152
DDA per GEO sold
$
624 $
519 $
553 $
503
Financial (millions of US Dollars)
Revenue
$
35.9 $
44.9 $
158.0 $
155.5
Cost of sales excluding DDA
(18.3)
(18.2)
(77.4)
(75.6)
Gross margin excluding DDA
$
17.6 $
26.7 $
80.6 $
79.9
DDA
(12.5)
(12.5)
(48.5)
(44.2)
Temporary suspension, standby and other incremental
COVID-19 costs
(3.7)
(1.3)
(8.0)
(7.7)
Mine operating earnings
$
1.4 $
12.9 $
24.1 $
28.0
Capital expenditures (millions of US Dollars)
Sustaining and other
$
2.9 $
4.4 $
15.2 $
12.6
Expansionary
$
6.3 $
9.1 $
22.6 $
19.9
Exploration
$
3.1 $
1.8 $
6.5 $
7.0
Minera Florida reported gold production of 18,247 ounces during the fourth quarter, and 84,768 ounces for the year, in line with
the previously provided guidance range. Production was partially affected in December by a strike which ended in January when
the Company entered into a long term collective bargaining agreement with its unions. During the year, Minera Florida has seen
improved operational efficiency and reduced haulage distances as a result of re-establishing ore passes. Widening of the final ore
pass at Fantasma/Polvorin was completed during October, which will further reduce haulage distances and possibly allow for
optimizing the hauling fleet. Internalization of mining activities, ongoing optimization of the haulage infrastructure, and increasing
disposal storage of development waste into underground voids will further improve mine productivity going forward. A review of
the processing plant in the first quarter identified several opportunities to increase recovery. Management is prioritizing these
opportunities, focusing on the initiatives that can be implemented quickly with minimal investment.
Consistent with the 10-year outlook, the plant de-bottlenecking study is advancing on schedule, with the objective to increase
throughput from 74,500 to 100,000 tonnes per month, thereby increasing annual gold production to approximately 120,000 ounces.
The Company submitted the ESIA for the expansion during the fourth quarter, with the timeline expected to be approximately 18
months for approval, with another 12 months to receive sectoral permits. With the expected permitting timelines, the mine could
begin operating at a planned 100,000 tonnes per month level in 2025. Preliminary studies indicate that the capacity of the
processing plant can be increased to approximately 90,000 tonnes per month with incremental adjustments. An upgrade of the
crushing circuit would be required to achieve 100,000 tonnes per month.
Total cost of sales, cash costs(1) and AISC(1) on a per GEO(2) basis during the fourth quarter were $1,535, $911, and $1,313
respectively. Total cost of sales, cash costs(1) and AISC(1) on a per GEO(2) basis during the year were $1,434, $881 and $1,224
respectively. Costs are expected to improve in 2022 due to higher grades, and higher silver and zinc by-product credits. In addition
to the aforementioned plant improvements, the Company completed a processing plan earlier in the year, which identified
opportunities to implement cost control initiatives; these are currently under consideration and may positively impact future costs.
Yamana Gold
62
Minera Florida Exploration
Exploration results continued to identify extensions of known mineralized zones and generate new discoveries. Exploration
activities at Minera Florida during the fourth quarter included completion of approximately 14,154 metres of drilling in 87 diamond
drill holes, including 29 drill holes totaling 4,582 metres of infill drilling to convert inferred mineral resources to indicated mineral
resources, 44 drill holes totaling 7,141 metres of exploratory drilling dedicated to defining new inferred mineral resources and 2,431
metres in 14 drill holes testing regional targets.
Infill drilling in the quarter was completed in six areas, including Cantillana, Don Leopoldo, Fantasma, Hallazgo, Patagua and
Circular. Positive results were received in the quarter from Patagua Norte, Bandolera 1 Vein, Fantasma, Mila Maqui, Don Leopoldo,
VCN and Falla Hallazgo veins, including high-grade intercepts returned from Patagua Norte, Don Leopoldo, Fantasma and
Bandolera 1.
Exploration drilling in the fourth quarter included approximately 7,141 metres completed in 44 drill holes, testing ten targets,
including Cantillana, Circular, Polvorin, Don Leopoldo, Patagua, Mila, VCN, Paco, Ricky and Satelites (Mina Este vein system).
Drill highlights include high-grade intercepts generated at Polvorin Oeste, Satelite Paco, VCN, and Mila Maqui, where high grades
were intercepted 150 metres below the current ore zone, where mineralization remains open for further expansion, and at the
intersection between Patagua Norte and Don Leopoldo veins, generating wide, high-grade intercepts.
District-scale exploration activity, focused on the discovery of new deposits, included 2,431 metres of scout drilling in 14 drill holes,
targeting five sectors, including the Cucaracha, Quemazon, Patagua Norte Oeste, Peumo Oeste and Mejias Oeste veins. High-
grade intercepts over good widths were returned at Patagua Norte Oeste, defining new areas for further exploration. Mineralization
at Patagua Norte Oeste occurs within a down-dropped structural block, where mineralization is likely to be well preserved. Good
grades were also intercepted at Peumo Oeste vein (west of La Flor fault). Work is ongoing in these sectors. Additional district
exploration during the fourth quarter included the collection of over 700 surface rock and soil samples, and geological mapping, to
define select target areas which may be drill tested in the future.
5.
CONSTRUCTION, DEVELOPMENT AND OTHER INITIATIVES
CONSTRUCTION, DEVELOPMENT AND ADVANCED STAGE PROJECTS
The Company has several construction, development and advanced stage projects underway. Notable progress relating to some
of these key initiatives include, but are not limited to the following:
Wasamac Project, Canada
Project Summary
The wholly owned Wasamac underground gold project is located 15 kilometres west of Rouyn-Noranda in the Abitibi-
Témiscamingue Region of Quebec adjacent to the Trans-Canada highway and Ontario Northland rail line, and just 100 kilometres
west of Yamana’s 50%-owned Canadian Malartic mine. Yamana acquired the project in January 2021, further expanding its
footprint in Quebec and significantly enhancing the Company’s long-term growth prospects.
On July 19, 2021, the Company issued the press release "Yamana Gold Announces Positive Development Decision On Its Wholly
owned Wasamac Project Based on Positive Results From Several Studies Showing Higher Average Daily Throughput, Increased
Mineral Reserves, Increased Average Annual Production And Strong, Increased Cash Flows". In the press release, the Company
announced the results of several studies on Wasamac, intended to corroborate diligence reviews conducted by the Company on
its purchase of Wasamac in early 2021 and update a historical feasibility study. These studies updated the baseline technical and
financial aspects of Wasamac that now underpin the decision to advance the project to production. The results from all studies
were consistent with the Company’s conclusions in its diligence reviews relating to the purchase of Wasamac and, in some cases,
are better than the conclusions from those reviews.
Wasamac is designed as a modern underground operation with a small footprint and almost all surface infrastructure located on
the north of Route 117 highway, away from the neighbouring community. Use of an underground conveyor, electric mining
equipment and high-efficiency ventilation fans to minimize energy use and carbon emissions, with further electrification planned
Annual Report 2021
63
as new technology becomes commercially available between now and project execution. Ore will be processed through a new
processing plant at a planned average throughput of 7,000 tpd and tailings will be deposited underground as paste fill and in a
filtered dry-stack tailings storage facility.
Following a rapid production ramp-up in first year, Wasamac will sustain gold production of approximately 200,000 ounces per
year for at least the following four years. Including the ramp-up phase, average annual production for the first five years of operation
is expected to be 184,000 ounces.
Yamana expects to receive all permits and certificates of authorization required for project construction by the third quarter of 2024.
Construction time to processing plant commissioning is estimated at two and a half years, with the underground crusher and
conveyor system scheduled for commissioning six months later. First gold production is scheduled for the fourth quarter of 2026,
with commercial production planned for the fourth quarter of 2027, however, the Company has already identified opportunities to
accelerate the production ramp-up and decrease the processing plant construction period, which would improve timing significantly
over the feasibility study's base case production profile.
As previously disclosed, the initial capital cost is expected to be relatively modest for a 7,000 tpd underground operation, at
approximately $416 million. The Company undertook extensive due diligence relating to the acquisition of Wasamac and identified
several opportunities for optimizations and improvements; the updated studies confirmed the opportunities. The Company plans
to fully fund development with available cash and cash flows. The Company anticipates building significant cash balances over the
upcoming years, which will be allocated to the project in time for its formal development, once the required permits are received.
Total LOM sustaining capital estimated at $318 million primarily for underground mine development and mobile equipment. LOM
cash costs(1) and AISC(1) of $640 per ounce and $828 per ounce, respectively, remaining well below the Company average,
reflecting the application of more conservative cost assumptions to de-risk the project and align with benchmark costs from
Yamana’s other operations.
Robust project economics with an after-tax IRR of 16.1% at $1,550 per ounce of gold and an after-tax IRR of 24% at $1,850 per
ounce of gold, based on mineral reserves and excluding future upside potential from encouraging exploration prospects. There is
potential for a significant increase in NPV and after-tax IRR with an increase in mineral inventory and increase in mine life. An
increase in mine from the presently contemplated 10 years to 15 years doubles the NPV of the project.
Yamana’s average annual gold production in Quebec, including production from Wasamac and the Odyssey underground at
Canadian Malartic, has the potential to increase to approximately 500,000 ounces by 2028, and continue at this level through at
least 2041.
Fourth Quarter Progress Update
Exploration drilling at Wasamac in the fourth quarter continued to deliver promising results. On December 1, 2021, the Company
issued the press release “Yamana Gold Announces the Discovery of New Mineralized Zones at Wasamac and Provides an Update
on Its Growth Projects”, which included drill results south of the Wildcat zone which intersected two new mineralized zones, referred
to as South Wildcat. The first is a zone of shearing and quartz carbonate stockwork in altered mafic volcanic rocks and the second
intersected zone is a wide zone of shearing and strong alteration. This drill hole demonstrates the excellent potential of the area
south of the Wasamac shear and north of the Cadillac Tectonic zone; follow-up drilling is planned for early 2022. These results
demonstrate the excellent exploration potential and opportunity to further grow the mineral inventory and are expected to support
a production platform of 200,000 ounces per year with AISC(1) below $850 per ounce over a mine life of at least 15 years. An
exploration budget of $10.0 million is planned for 2022. This production level would significantly improve the approved development
plan of an average of 169,000 ounces per year over a mine life of 10 years, thereby meaningfully increasing overall value.
The Company has decided to advance the bulk sample permitting process for Wasamac and expects to obtain the required
approvals in the first quarter of 2023. The bulk sample permit would allow construction to commence on the ramp, enabling earlier
access to the deposit to increase the level of confidence in metallurgical and geotechnical assumptions and optimize the processing
flow sheet and mining sequence. Construction on surface facilities to support the ramp development activity and associated
environmental requirements would also advance.
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The bulk sample was not considered in the feasibility study base case and initiating the process has the potential to further enhance
the economics and mitigate risks of the project. Additional benefits of the bulk sample include:
a.
Build production-ready models for the grade, recovery, and geotechnical aspects of the project, to support the first three
years of production.
b.
Capture opportunities to optimize the processing performance, as preliminary results of optimization studies indicate the
potential to improve average gold recovery by 3%, and up to 5.5% for certain zones of the deposit.
c.
Confirm stope stability parameters to optimize stope dimensions, backfilling strategy and mining sequence while
contributing to ensuring a safe working environment.
d.
Establish drilling platforms to perform delineation and exploration drilling at Wasamac, Wildcat and new zones from
underground.
Substantial work is also underway to select the leading technologies available for the development and operation of Wasamac.
The key objectives remain to increase worker safety, minimize impact on the environment and the community, and reduce
consumption of non-renewable energy and greenhouse gases. Technologies under evaluation include electric production vehicles,
autonomous vehicles, bio-lubricants and ventilation on demand.
The Company relies on a collaborative approach to ensure the success of Wasamac. In this regard, our environmental assessment
process is conducted in collaboration with our stakeholders, including neighbors, and First Nations. A community relations office
has now been established to further facilitate ongoing engagement with local residents and accessibility to the Company's team,
as well as providing up-to-date information on the project. A campaign of environmental baseline data collection is currently
underway. Completion of all work for the submission of the Environmental Impact Assessment (“EIA”) is expected in the second
quarter of 2022, with the filing expected by the end of 2022.
For additional information on the planned Wasamac exploration initiatives, please refer to Section 7: Exploration.
Opportunities Providing Upside
The Company believes that the discovery of the two new parallel mineralized structures in between the Wasamac shear and the
Cadillac Tectonic zone is further evidence of the excellent geological upside on the large Wasamac property, and it plans to continue
the drilling programs to grow the mineral inventories with an accelerated program. These results are aligned with the Company’s
strategic objective and are expected to support a production platform of 200,000 ounces per year with AISC(1) below $850 per
ounce over a mine life of at least 15 years.
A concurrent exploration effort will focus on expanding the current mineral resource envelopes to depths below the established
mineral resource, with testing for mineralization to target poorly explored gaps between mineralized zones. The Francoeur,
Arntfield, and Lac Fortune gold deposits, located just six kilometres from the planned Wasamac milling facilities, represent
additional potential exploration upside. Mineralization on the Francoeur property and that exposed in recent trenching at Arntfield
by the property’s previous owner consists of mylotinized, albite-carbonate altered rocks with pyrite mineralization very similar to
Wasamac. This shear zone can be traced a further six kilometres from the Wasamac-Francoeur property boundary to the west of
the historic Francoeur mine. Several parallel shear zones located south of Francoeur with significant known mineralization,
including Lac Fortune, and an interpreted southern splay of the Wasa Shear in the Arntfield area are excellent further targets for
drilling and potential mineral resource expansion.
Exploration success also unlocks the opportunity to utilize the full design capacity of the processing plant of 2.74 million tonnes
per year, or 7,500 tpd, which could increase annual gold production. Furthermore, future potential incremental expansions to the
processing plant will be considered in the engineering phase in the event that ongoing exploration success provides additional
production sources.
A program has been implemented to improve recovery, simplifying the process and to better understand the metallurgy of the
different areas of the deposit. Preliminary testing indicates that average gold recovery could potentially increase by approximately
3% as compared to the feasibility study.
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Odyssey Project, Canadian Malartic, Canada (50% interest)
Project Summary
The underground Odyssey project is located east of the current Canadian Malartic open pit operation and is comprised of the East
Gouldie, Odyssey South, Odyssey North and East Malartic mining zones with a combined mining rate of approximately 19,500
tonnes per day when operating at full capacity. Ore will be transported to surface using a combination of shaft hoisting, from the
lower zones, and truck haulage, from the upper zones; all ore will be processed at the existing Canadian Malartic processing plant.
Tailings will be deposited underground as paste fill and in the Canadian Malartic pit, once the pit is depleted.
A NI 43-101 technical report for Canadian Malartic was completed in March 2021, and includes a full summary of the Odyssey
underground project. The project demonstrates robust economics, a significant increase in mineral resources, and a mine life
extension to at least 2039. First production from the Odyssey South deposit is expected in 2023. As Canadian Malartic transitions
from open pit to underground mining, underground production will offset a significant portion of the corresponding decline in open
pit production. Whereas the Company had originally considered a production platform for the new underground mine conservatively
in the range of 450,000 ounces per year, the mine plan now supports annual gold production of 500,000 to 600,000 ounces when
fully ramped up on a 100% basis.
As of December 31, 2021, the Odyssey Project contains 2.35 million ounces of gold in Indicated Mineral Resources and 13.15
million ounces of gold in Inferred Mineral Resources of which 7.3 million ounces, or approximately 47%, is included in the technical
study mine plan. The Odyssey project will utilize a transverse long hole stoping mining method with primary and secondary stopes
and paste backfill to fill the voids, a proven mining method in the region. The mineralization geometry and very good rock quality
are ideal for bulk mining. The East Gouldie zone in particular is at least one kilometre in height, one kilometre in strike length and
typically 15 metres wide, with maximum widths of up to 80 metres. Infill drilling confirms excellent grade continuity throughout the
deposit. As such, large stopes of 30 to 50 metres high by 20 metres wide are achievable.
On a 100% basis, average annual payable gold production is expected to be approximately 545,400 ounces from 2029 to 2039
with total cash costs per ounce of approximately $630 per ounce. Sustaining capital from 2029 to 2039 is expected on a 50% (and
100%) basis to average approximately $27.9 million ($55.8 million) per year.
The Odyssey project has modest capital requirements in any given year which are manageable and fully funded using Canadian
Malartic's cash on hand and free cash flow generation, with no external funding required. With work in 2022 and 2023 related to
the shaft sinking and the focus on surface infrastructure as further described below, capital costs are highest in 2022, and as
previously disclosed, begin to decline in 2023.
Fourth Quarter Progress Update
The Company and its partner made a positive construction decision of the Odyssey project following technical study results in
February of 2021. The project advanced significantly in 2021, with several milestones achieved in the fourth quarter. The project
continues to be on budget, and on schedule.
In October, the concrete pour to construct the 93-metre-tall headframe was completed on schedule, in preparation for shaft sinking
slated to begin in the fourth quarter of 2022. Structural steel installation inside the headframe and construction of the fresh air
intake is ongoing. The production shaft will be 6.5 metres in diameter and 1,800 metres deep, with the first of two loading stations
at 1,135 metres below surface. The sinking hoist and auxiliary hoist are expected to be delivered mid-2022.
In parallel, underground development is advancing according to plan and, as of the end of 2021, the ramp from surface to the
upper zones has reached the elevation of the third production level and the base of the first stoping horizon. Underground
development rates increased in the fourth quarter of 2021 to approximately 400 metres per month with the opening of additional
headings and implementation of automated scoops to operate between shifts, achieving a total of 2,081 linear metres for the year.
Development rates are planned to increase further in 2022 with the addition of the Canadian Malartic development crews. The first
development jumbo drill is scheduled to be delivered in February and, as an employer of choice in the Abitibi, the Odyssey project
is successfully building a highly skilled team. Priority will continue to be placed on the main ramp and also the level 16 exploration
drift for infill drilling of the Odyssey South and Internal zones. The first underground ore from Odyssey South is on track to be
processed through the existing Canadian Malartic plant in early 2023.
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Construction of surface infrastructure is advancing on schedule with critical preparation works completed in the fourth quarter to
allow construction to continue as planned throughout the winter. Construction of the surface workshop, warehouse and compressor
buildings are ongoing and construction of the paste fill plant is scheduled to commence in February. Most long-lead items have
been secured. Decree amendment and the mining lease process continue to be on target for the first quarter of 2022 and fourth
quarter of 2022 respectively.
Opportunities Providing Upside
The intention of the Partnership was always to build upon the base case scenario presented in the technical study by realizing
value enhancement opportunities improving the production profile and extending mine life. Throughout 2021, these opportunities
have increased in confidence and definition as a result of the ongoing exploration success and the rapid advancement of the
project.
Extension of the mine life beyond 2039 provides additional upside, with several opportunities under evaluation. The upside from
grade improvements and underground mine life extensions are expected to be realized through infill drilling to improve geological
confidence, exploration drilling to extend known deposits and make new discoveries and engineering efforts, especially close to
historical underground excavations and at depth at East Malartic. Drilling in 2021 added 1.1 million ounces of total gold mineral
resources as a result expanding the resource envelope at East Gouldie and infill drilling of East Gouldie confirmed the deposit
grades and widths and converted 1.5 million ounces to gold indicated resources on a 100% basis.
In the near-term, Canadian Malartic has the opportunity to improve the gold production profile during the transition from open pit
to underground mining, especially from 2026 to 2028. As a first step, the Barnat pit design was optimized, adding 290,000 ounces
(100% basis) to year-end 2020 open pit mineral reserves. Processing of the marginal grade stockpile also remains an opportunity,
especially if the gold price remains at current levels. Furthermore, infill drilling of the Odyssey Internal zones from the underground
ramp in 2021 has defined potentially mineable zones that are currently not included in the technical study mine plan and could
potentially be mined from the Odyssey South ramp within the next five years.
In the technical study, gold production during the 2021 to 2028 construction period is expected at 932,000 ounces (100% basis),
with net proceeds from the sale of these ounces significantly reducing the capital requirements for the construction of the project.
Assuming a gold price of $1,550 per ounce, the projected initial expansionary capital of $1.14 billion over this eight-year period
would be reduced in half. Proceeds from additional underground production, from Odyssey Internal zones or other, would further
reduce capital requirements.
The Canadian Malartic mill is currently planned to be downsized from approximately 60,000 tpd to 20,000 tpd in 2026 as open pit
feed declines, with one ball mill and two crushers planned to be put in care-and-maintenance. However, if additional ore sources
are identified in future, this equipment could remain in operation or be re-started at a later date for possible throughput increases.
Exploration drilling of the East Gouldie Extension and parallel structures, while widely spaced, indicate that a corridor of
mineralization extends at least 1.3 kilometres to the east of East Gouldie. Although at the very early stages, these results suggest
the potential for a second production shaft that could increase throughput over the longer term. Open pit and underground
exploration targets within the Canadian Malartic land package present additional potential ore sources.
For further details on the Odyssey Project, please refer to Yamana's February 11, 2021 press release entitled 'Yamana Gold
Reports Strong Fourth Quarter and Full Year 2020 Results; Impressive Technical Study Results Delivered for the Odyssey
Underground Project at Canadian Malartic With Construction Decision Approved; Adopts Climate Change Strategy'.
Jacobina, Brazil
Project Summary
Phased expansion of the Jacobina operation in Brazil is expected to establish a gold production platform of up to 270,000 ounces
per year. Jacobina’s large inventory of mineral reserves and mineral resources continues to grow faster than mining depletion,
providing the basis for a multi-decade strategic mine life at low costs and high cash flow.
In 2021, the Company initiated a simplified approach to the Phase 2 expansion to continue incremental debottlenecking and
operational improvements, without requiring an expansion of the grinding circuit as originally contemplated. The simplified
expansion approach is a continuation of the strategy that has been the basis for the quarter-over-quarter success of Jacobina over
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the past several years, and is expected to de-risk the project and require significantly lower capital than originally planned in the
Phase 2 pre-feasibility study, an amount not expected to exceed $15 million to $20 million.
With the Phase 2 expansion advancing ahead of schedule, the Company is now pursuing the Phase 3 expansion as part of a
comprehensive plan which aligns the processing plant, underground mine, and tailings management strategy, while managing
capital expenditures and cash flow. Engineering for the Phase 3 expansion to 10,000 tpd will advance in parallel with the Phase 2
expansion, and the processing model will continue to be updated to integrate operational data from Phase 2, with a feasibility study
for Phase 3 scheduled for completion in 2023.
Fourth Quarter Progress Update
During the fourth quarter, Jacobina received the expansion permit, allowing throughput to increase to 10,000 tpd, as announced
in the December 6 press release “Yamana Gold Receives Permit at Jacobina, Initiating Ramp Up of Phase 2 Expansion, Expects
Fourth Quarter Company Wide Production to Exceed 270,000 GEO With Costs Tracking to Be the Lowest of the Year”. The
successful result is the culmination of a two-year process during which the Company worked closely with government agencies to
ensure that Jacobina continues to operate in a responsible, sustainable way to the benefit of all stakeholders. The Company has
strategically elected to operate in the Americas in rules-based jurisdictions with a mining pedigree providing certainty for conducting
its operations which has been exemplified with the Brazilian permitting process for Jacobina. Receipt of the permit not only marks
a significant milestone in the Phase 2 ramp up to 230,000 ounces of gold per year, but also facilitates the future Phase 3 expansion
to increase production up to 270,000 ounces per year.
The underground mining rate continues to increase and with the accelerated permitting and 2021 outperformance, the mine is now
expected to achieve the Phase 2 throughput objective of 8,500 tpd by the second quarter of 2022, approximately one year ahead
of schedule, although higher throughput will be supported by stockpiles during the year. Following receipt of the permit, Jacobina
increased throughput to 7,771 tpd in December, achieving an average throughput of 7,610 tpd for the fourth quarter. Grade
normalizes in 2023 when production is expected to reach 230,000 ounces. Since May 2021, throughput has been stable at the
previously-permitted rate of 7,500 tpd and the mine is well positioned to immediately start ramping up to 8,500 tpd. Over the same
time frame, Jacobina has continued with incremental improvements to increase mining and processing capacity in anticipation of
receiving the expansion permit. As such, the Company intends to progressively increase throughput over the next six to seven
months.
The ramp up to 8,500 tpd will be achieved through a continuation of incremental improvements to de-bottleneck the processing
plant. Optimization of the crushing circuit which did not require the installation of new equipment is already complete. During the
first half of 2022 several additional initiatives are expected to be completed including optimizing the grinding process with the
installation of ultrasonic density meters to optimize ore feed control to the mills and increasing the capacity of the electrowinning
circuit. In 2023, further initiatives could be undertaken to support recovery rates at the higher throughput level but depending on
performance, some of these initiatives may have the flexibility to be deferred until the Phase 3 expansion.
To support the higher processing rates, Jacobina continues to increase underground mining capacity and has prepared an
inventory of lower grade stopes and stockpiled ore on surface to provide supplementary mill feed during the ramp up phase. With
the higher than planned processing rates that are now anticipated, the Company expects to continue drawing from this
supplementary ore into the first half of 2022. New mobile mining equipment has been delivered to Jacobina with additional
equipment planned to be received in the first quarter of 2022 to facilitate the increased mining capacity. A modest increase in
underground development is also expected in 2022. The accelerated mine plan shows mill feed grades increasing over the next
two years.
The tailings storage strategy is aligned with the accelerated expansion timeline. Construction of the latest phase of the tailings
storage facility was recently completed, providing tailings storage capacity at 8,500 tpd until the end of 2023. Further permitted
phases of the tailings storage facility provide adequate storage capacity to support the life of mine plan. A comprehensive tailings
storage strategy is well advanced to provide additional storage solutions including hydraulic backfill, paste fill, and a dry-stack
tailings storage facility.
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Opportunities Providing Upside
The Company is further evaluating the strategic options and direction related to Jacobina and the significant exploration that is
available along the greenstone belt which hosts the mine. Jacobina is being envisioned as a complex of multiple mines, and more
emphasis is being placed on regional and generative exploration, to work towards the strategic plan of Jacobina being a 400,000
ounce-plus mining complex.
The Jacobina mine is part of the Jacobina district, for which geological evidence and tectonic reconstruction suggest strong
affinities with similar gold districts in West and South Africa, which host exceptionally large gold deposits, including those of the
prolific Witwatersrand Basin and the Tarkwa mine. Gold mineralization at Jacobina is hosted by the Serra do Corrego Formation,
preserved within the Jacobina belt, for a strike length of over ninety kilometers. The mine complex consists of six mining areas
exploiting economic mineralization within a nine-kilometer long mineralized belt extending from João Belo in the south to
Canavieiras Norte in the north. As at December 31, 2021, past gold production from the mine complex was well over two million
ounces, with mineral reserves of 2.94 million ounces of gold and total mineral resources of approximately 5.7 million ounces of
gold, indicating the world class size of the current known deposit. Since 2019, the Company has started systematic exploration of
its 77,800 hectare land package that covers 155 kilometers of exploration potential along the north-south trending belt. This work
has defined a fourteen-kilometer long belt of gold-bearing conglomerate located north of the mine complex and has also extended
the known mineralized reefs south of João Belo in a continuous area extending 2,200 metres south of the limits of the João Belo
mine. Further areas have been identified both to the north and further south during reconnaissance exploration programs. Work
will continue to define mineralized reefs exposed on surface and follow up with widely spaced drill testing targeting both extensions
of the mine complex and new standalone mine targets. Consequently, the Company sees significant opportunities to grow its
regional presence and continue to build the world-class Jacobina Complex.
Cerro Moro, Argentina
Project Summary
The mine has a significant inventory of lower-grade veins that are not fully reflected in the current mineral reserves and mineral
resource statements, many of which are wider than the veins currently being mined. Drilling of these lower grade veins was not
typically followed up with infill drilling in the past as the mineralization is below the current cut-off grade. Cerro Moro was developed
as a high grade, low tonnage operation but, from the beginning, the Company has considered alternative processing options to
allow for economic extraction of lower grade mineralization, including:
a.
a scalable plant, where the front-end of the plant anticipates higher 2,000 tpd tonnage, with the expectation of modest
capital requirement to achieve this objective,
b.
heap leaching near surface, lower-grade material, to supplement other production.
The objective at Cerro Moro is to create a sustainable ten-years of production of at least 160,000 GEO(2) per year, and up to
200,000 GEO(2) per year. If the Company successfully develops both the plant expansion and heap leach projects, which represent
significant upside opportunities, along with conversion of the exploration targets to mineral resources, Cerro Moro could produce
at least 200,000 GEO(2) per year. This upside would be beyond the current ten-year outlook that assumes Cerro Moro as a 150,000
to 165,000 GEO(2) per year operation, which is expected to be sustainable from mineral reserves mine life, ongoing exploration
successes and mineral reserve replacement.
Fourth Quarter Progress Update
During the fourth quarter, Yamana advanced the plant expansion study with a trade-off of various comminution circuit configurations
to optimize the expansion processing flow sheet. Similar to the approach that has proven successful at Jacobina, the Company is
considering a low-risk, phased expansion for Cerro Moro with quick payback from the initial phase used to fund subsequent phases.
As such, the Company is considering using fine screens instead of cyclones for classification to improve the efficiency of the
existing ball mill. Combined with a slightly coarser grind size, this initial phase is expected to increase throughput to at least 1,500
tpd, a 40% to 50% increase in capacity, without impacting gold and silver recoveries. The incremental capacity could be used for
processing of lower grade mineralization, which is expected to increase annual gold and silver production and reduce unit
processing and G&A operating costs. Preliminary analysis based on current operating data indicates that the existing crushing and
flotation circuits are adequate for the higher throughput rate and reconfiguration of the leaching circuit could achieve the target
throughput without requiring additional leach tanks. Upgrades to the concentrate thickener, clarifying filters, flocculant make-up
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system, and pumping would likely be required. The capital cost of this initial phase is estimated at a modest $15 million to $20
million dollars. Many of the upgrades in phase 1 expansion would be sufficient for a second expansion phase to increase plant
throughput to approximately 2,200 tpd, double the existing capacity, further increasing production and reducing operating unit
costs. The Company is currently evaluating two options for phase 2 expansion, the addition of a high pressure grinding rolls
("HPGR") unit before the existing ball mill or the addition of a regrind unit. An expansion of the flotation circuit would also be
required. The selected option will depend on the results of testwork that is currently underway and expected to be completed by
the end of the first quarter, after which cost estimates and economic evaluation will be completed. The Company will advance the
selected phase 1 and phase 2 expansion options to a pre-feasibility study level, expected for completion in early 2023.
Positive exploration results achieved throughout 2021 successfully replaced depletion of mineral reserves for the first time, as
reflected in increased mineral reserves and mineral resources at year-end, turning the corner for the operation. Significantly, the
expansion of higher-grade veins, both within the core mine at Zoe and Martina, and outside the core mine at Naty, extends the
Cerro Moro mine life at the current gold equivalent feed grade and existing throughput rate of approximately 1,100 tonnes per day.
Additional high-grade targets identified in 2021 provide a pipeline of opportunities for continued mineral reserves replacement
going forward which supports the plant expansion opportunity. Lastly, at a higher level of throughput, the Company may be able to
create a greater inventory of mineral resources, focused on a balance between high grade and more mineral resources, rather
than grade alone.
In parallel, a technical study on the potential heap leach project is underway following promising results from metallurgical testing
conducted in 2021. A four-month cyanide column leach test program was conducted on eight samples with gold grades of 0.71 to
3.22 g/t. and at three different sizes of feed materials, -25 mm, -19 mm and -9.5 mm. The results indicate good potential for leaching
of both oxidized near-surface vein material, zones with hypogene oxides (hematite) and some low sulphide gold-bearing veins,
with extractions from column leaching varying from 32.5% to 96.9%, averaging 68.6%. Gold recoveries at the Domos La Union
and Michelle zones were particularly impressive, averaging 85.6% from the four samples. As a result, exploration is focusing on
these zones, with an objective of defining a heap leachable inventory of 5 million tonnes. Conceptual engineering for a 5,000 tpd
heap leach operation commenced in the fourth quarter. A conventional heap leach configuration is envisaged with three stages of
crushing to a crushed size P80 of 12.5 mm, followed by agglomeration and retreat conveyor stacking in a multiple lift, single use
pad with a design capacity of approximately 14 million tonnes. The leach pad, solution storage ponds, and Merrill-Crowe plant are
conceptually planned to be located approximately 2 kilometres east of the current tailings storage facility. Average feed grade is
estimated at approximately 1.0 to 1.4 g/t of gold, adding 45,000 to 65,000 ounces of gold production per year in addition to gold
and silver production from the existing processing plant. Conceptual capital and operating cost estimation is expected to be
completed in the second quarter, and an initial mineral inventory estimate, based on results from 2021 drilling, is planned for mid-
2022.
Opportunities Providing Upside
As Cerro Moro’s mineral inventory increases, the Company will evaluate its options for alternative sources of power, which include
a connection to the grid and wind power. Both options are expected to improve costs and further reduce GHG emissions, thereby
accelerating the achievement of the Company’s carbon emissions reduction goal. This area of southern Argentina is one of the
most prospective areas in the world for wind-based energy generation; the Company’s third-party process to evaluate wind power
indicates there should be a sufficient and sustainable supply of power. The results of the alternative power analysis will be
considered in the plant expansion pre-feasibility and heap leach studies to explore synergies between the projects. Based on
preliminary analysis, the Company believes that the conversion of approximately twenty-five per cent of Cerro Moro's power
sources to wind would significantly contribute to the carbon reduction goals of the Company to achieve net zero emissions.
MARA Project, Argentina (56.25% interest)
Project Summary
On December 17, 2020, the Company completed the integration with Glencore and Newmont and a new joint venture, the MARA
Joint Venture, was formed to manage, develop and operate the project. MARA is the combined project comprised of the Agua Rica
site, Alumbrera site as well as the Alumbrera plant and ancillary buildings and facilities. Under the integration, Yamana, the former
100% holder of Agua Rica and the former partners of Alumbrera have created the MARA Joint Venture pursuant to which Yamana
holds a controlling ownership interest in the MARA Project at 56.25%. Glencore holds a 25.00% interest and Newmont holds an
18.75% interest in the MARA Project. Yamana has been appointed manager of the MARA Joint Venture and will continue to lead
the engagement with local, provincial, and national stakeholders, and completion of the feasibility study and ESIA for the MARA
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Project. Among other governance committees, a MARA Joint Venture Technical Committee was formalized, comprised of
representatives of the three shareholder companies, to provide oversight and guidance to the advancement of the feasibility study.
The integration creates significant synergies by combining existing substantive infrastructure which was formerly used to process
ore from the Alumbrera mine during its mine life, including processing facilities, a fully permitted TSF, pipeline, logistical
installations, ancillary buildings, and other infrastructure, with the future open pit Agua Rica mine. The result is a de-risked project
with a smaller environmental footprint and improved efficiencies, creating one of the lowest capital intensity projects in the world
as measured by pound of copper produced and in-situ copper mineral reserves, and creating significant benefits for the host
communities, the province of Catamarca and Argentina.
The MARA Project has Mineral Reserves and Mineral Resources in the Agua Rica and the Alumbrera ore bodies. Agua Rica is a
large-scale copper, gold, silver and molybdenum deposit and it has Proven and Probable Mineral Reserves of 11.8 billion pounds
of copper and 7.4 million ounces of gold contained in 1.1 billion tonnes of ore. Mineral Resources include 259.9 million tonnes of
Measured and Indicated Mineral Resources, containing more than 1.6 billion pounds of copper and 954,000 ounces of gold.
Additionally, Inferred Mineral Resources of 742.9 million tonnes represent significant upside potential to further define an increase
in Mineral Reserves and life of mine. The MARA Project also has Mineral Resources in the Alumbrera deposit which consist of
125.2 million tonnes of Measured and Indicated Mineral Resources containing more than 800 million pounds of copper and 1.2
million ounces of gold on a 100% basis.
On July 19, 2019, the Company announced the positive results of pre-feasibility study (A) ("PFS(A)"), underscoring that the MARA
Project is a long life (with an initial life of 28 years) and low-cost asset with robust economics and opportunities to realize further
value, including converting economic-grade Inferred Mineral Resources and expanding throughput scenarios aimed to increase
metal production and returns, among other opportunities. The Joint Venture Technical Committee advanced optimization studies
in late 2019 and early 2020, the results of which were compiled as pre-feasibility study (B) ("PFS(B)"), and is now advancing a full
feasibility study on the MARA Project, with updated Mineral Reserve, production and project cost estimates.
The pre-feasibility study for the MARA Project considers the Agua Rica deposit will be mined using a conventional high tonnage
truck and shovel open pit operation. Average life of mine material moved is expected to be approximately 108 million tonnes per
year, with ore feed of 42 million tonnes per year and average life of mine strip ratio of 1.66.
Ore extracted from the Agua Rica mine will be transported from the open pit by truck to the primary crusher area and then
transported via a conventional conveyor to the existing Alumbrera processing plant. To route the overland conveyor system,
approximately 5.2 kilometres of tunnel development will be required over the total 35 kilometre conveyor right-of-ways to the
Alumbrera processing plant, where it will feed the existing stacker conveyor via a new transfer station.
Relatively modest modifications to the circuit are needed to process the Agua Rica ore at the Alumbrera plant. The copper and by-
products concentrates will be transported by the existing pipeline to Tucuman and then by railway to the port for commercialization.
An in-situ blending strategy has been defined to manage the concentrate quality over certain years of the mine life, which will allow
the project to achieve the desired targets. Further optimizations to this strategy are studied as part of current design phase.
These previously completed studies provide the framework for the preparation and submission of a new ESIA to the authorities of
the Catamarca Province and for the continued engagement with local stakeholders and communities. The shareholders of the
MARA Joint Venture began the ESIA process in 2019, given the significant level of environmental baseline data required for such
studies.
The 2020 PFS(B) highlights include:
•
Annual ore feed increased to 42 million tonnes per year.
•
Annual production for the first 10 full years increased to 556 million pounds of copper equivalent* production;
•
Cash costs(1) of $1.32 per pound and AISC(1) of $1.44 per pound for the first 10 years of production;
•
Initial capital of $2.78 billion. Initial capital reduced to $2.39 billion if first year of owner mine fleet purchases are
reclassified as sustaining capital, as was assumed for PFS(A). Total LOM capital spending the same under both PFS(A)
and PFS(B);
•
NPV of $1.906 billion and an increased IRR of 21.2%**; and
•
PFS(B) reflects the inclusion of a progressive Argentina export tax with a long-term assumption of 4.3%.
Annual Report 2021
71
*
Copper equivalent metal includes copper with gold, molybdenum, and silver converted to copper-equivalent metal based on the following metal price
assumptions: $6,614 per tonne of copper, $1,250 per ounce for gold, $24,250 per tonne for molybdenum, and $18.00 per ounce for silver.
** Assuming metal prices of $3.00 per pound of copper, $1,300 per ounce of gold price, $18.00 per ounce of silver, $11.00 per pound of molybdenum and using
an 8% discount rate.
After obtaining all the permits required for local authorities, work during 2021 focused on advancing the feasibility study
engineering, mine design and planning, metallurgical and geotechnical drilling campaigns and other field work at site. MARA has
also been advancing social and environmental baseline studies as well as permitting and engaging with local stakeholders to
strengthen the project’s social license.
The MARA Project represents both a significant strategic value opportunity and a solid development and growth project, which the
Company intends to continue to advance through the development and permitting processes via Yamana’s controlling interest,
while considering strategic alternatives that could unlock significant value along the way. The project design minimizes the
environmental footprint of the project, incorporating the input of local stakeholders. MARA is planned to be a multi-decade, low
cost copper gold operation with annual production in the first ten years of 556 million pounds of copper equivalent and a life of
mine annual production of 469 million pounds of copper equivalent on a 100% basis. MARA will be among the top 25 copper
producers in the world when in production, and will be one of the lowest capital intensity projects globally.
During the last year, several proposals were presented to the Company for its interest in MARA and, after consideration, the board
determined that any strategic initiatives will be considered closer to the completion of the feasibility study and application for
permitting later this year as the certainty of the project from these events is expected to create more value for the project.
Fourth Quarter Progress Update
Work during 2021 focused on advancing the feasibility study engineering, mine design and planning, metallurgical and geotechnical
drilling campaigns and field work at site. MARA has also been advancing baseline social and environmental studies, as well as
permitting and working with local stakeholders. During 2021, field work progressed well with the ongoing drilling campaign
completing more than 50% of the drill holes planned, totaling 6,190 meters. All the geometallurgical and geotechnical drill holes in
the pit area have been completed, as well as extensive field surveys and technical assessments from different engineering
disciplines. Preliminary results are positive and aligned with the expected parameters, confirming grade distribution on existing
models. The field work plan continues, with the drilling campaign now covering the Agua Rica infrastructure and is expected to be
completed by mid-2022.
The Company is also planning to perform deep drill holes in 2022 to check the extension of high-grade chalcopyrite mineralization
that could potentially unlock a pit expansion of Agua Rica, as well as to test for deep extensions of mineralization in the hypogene
area of the porphyry, given the deposit is open at depth and relatively unexplored beyond the supergene zone.
The metallurgical field drilling program has been completed and all metallurgical drill core samples have been shipped for
metallurgical test work in Canada. Assaying of all samples has been completed with the metallurgical test program now underway.
The initial test work results received are well aligned with previous results and expectations. The current bench-scale work will be
followed by pilot plant investigations that will also generate samples of final concentrate and process plant tailings required for third
party testing and equipment sizing by the various major equipment vendors. The program is planned to be completed in the second
quarter of 2022.
Opportunities Providing Upside
The most recent technical studies indicate that the processing facility at Alumbrera is capable of processing up to 44.0 million
tonnes per year, with minor additional capital expenditures, which represents a significant upside to the pre-feasibility study results.
Further tests and studies are being advanced for the feasibility study stage to confirm and optimize these results. Mine engineering
work completed to date includes mine design and mine sequencing optimizations, and an updated preliminary production plan at
the higher throughput rate. Efforts on the mining area during 2022 will be focused on updates of the resource model with the new
field information and subsequent updates to the mine plan, as well as to continue advancing the engineering of the mine
infrastructure.
Project engineering work has advanced on many fronts to a full feasibility study-level of definition. These include the mining area
interface, primary crushing and overland conveying system to the existing Alumbrera plant. Mechanical layouts and process and
instrumentation diagrams have been completed and detailed earthworks, foundation and structural steel designs are underway.
Yamana Gold
72
Supplemental geotechnical drilling for the ore transportation tunnel access started recently and the detailed tunnel design will be
advanced upon availability of updated field information.
Parallel to the exploration program, MARA is conducting field campaigns to complement the ESIA baseline data. Preliminary results
and advancement of the project are being shared with the Intergovernmental Commission of Catamarca, prior to filing the full ESIA.
The Company plans to complete the ESIA for MARA in the second half of 2022. The estimated remaining expenses for the
Company to advance the project through the feasibility study and ESIA are approximately $13.0 million (Yamana's 56.25% interest),
representing a manageable and modest investment in relation to the value creation of advancing the MARA Project to the next
phases of development.
OTHER INITIATIVES - STRATEGIC, OPTIMIZATION AND MONETIZATION
A number of projects are underway with a goal of surfacing value from non-producing assets. Notable progress relating to some
of these initiatives include, but are not limited to the following:
Suyai, Argentina
On April 28, 2020, the Company announced it entered into a definitive option agreement pursuant to which it granted CAM, a
privately held portfolio management and capital markets company based in Argentina, owned by Messrs. Eduardo Elsztain and
Saul Zang, the right to acquire up to a maximum 40% interest in a joint venture formed to hold the Suyai Project. CAM's portfolio
includes the largest real estate company in the country, NASDAQ-listed international agricultural companies, along with banking
and mining investments. CAM has successfully led the development of significant construction projects across the country.
An initial amount of $2.0 million was received by the Company to secure the option. CAM will assume responsibility for all ESG
matters, including leading the permitting efforts aimed to advance the project through its different stages of development. As noted,
CAM has the right to earn a maximum 40% interest in the resulting joint venture formed to hold the Suyai Project by fulfilling certain
obligations and achieving certain milestones, mostly relating to ESG matters, and by paying $31.6 million in various installments
in addition to the proportionate expenses, on or before December 31, 2024. The Company believes there is considerable value,
far in excess of cash value, in fulfilling the obligations and achieving the milestones relating to ESG matters which would advance
the Suyai project. Through certain of its holding companies, Yamana would hold the remaining 60% of the joint venture.
In the event the project receives approval to proceed, Yamana would oversee its development, applying best industry mining and
HSSD/ESG practices and its experience in project development and operations in southern Argentina. Development of the project
would occur under the oversight of a board of directors of the holding company that owns the project with CAM nominating two out
of the five directors. Yamana would nominate the other directors. The joint venture would entitle each party to its proportion of gold
production from the project.
The Company previously completed studies that in addition to redesigning Suyai as a small scale high-grade underground project,
evaluated different options for ore processing, which provided favourable project economics.
The preferred option envisages the construction of a processing facility for on-site production of gold and silver contained in a high-
grade flotation concentrate, which would be transported by land and by sea to one or more gold smelters world-wide. As only a
flotation concentrate would be produced at Suyai, no cyanide or other deleterious chemicals would be used at site. Gold production
is expected to reach up to 250,000 ounces annually for an initial eight years.
Annual Report 2021
73
Agua de la Falda, Chile
The Company continues to pursue development and strategic initiatives for the 56.7% position held in the Agua de la Falda joint
venture with Codelco, located El Salvador in the Atacama region of northern Chile. While the historical Jeronimo Feasibility Study
focused on maximizing gold production from the sulphide deposits, the Company completed the study of a low-capital starter-
project based on the remaining oxide inventory in heap leach pads and open pits; the study demonstrated positive results and
quick payback. The Company is also evaluating strategic alternatives for the asset, including the highly prospective claims
surrounding the mine, where early-stage targets for both gold and copper mineralization have been identified. Re-logging of
historical holes and exploratory drilling support the potential to extend the gold oxide mineralization, as well as the potential for
copper/gold deposits within the joint venture claims and in the areas the Company owns 100%. Agua de la Falda has processing
capacity and infrastructure already installed, and it is in the vicinity of the El Salvador Division of Codelco.
6.
MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES
Mineral reserves and mineral resources are determined in accordance with National Instrument 43-101- Standards of Disclosure
for Mineral Projects, issued by the Canadian Securities Administrators ("NI 43-101"). NI 43-101 sets out the standards of disclosure
for mineral projects including rules relating to the determination of mineral reserves and mineral resources. This includes a
requirement that a “qualified person” (as defined under the NI 43-101) supervises the preparation of the mineral reserves and
mineral resources reports. The Company's mineral reserve and mineral resource reports are reviewed by Sébastien Bernier, P.Geo
(Senior Director, Geology and Mineral Resources), who is an employee of Yamana Gold Inc. and a "Qualified Person" as defined
by NI 43-101.
For details, refer to the mineral reserve and mineral resource tables contained in the Company's 2021 annual report.
For mineral reserve estimation purposes, the gold price assumption for Yamana operating mines of $1,250 is consistent with prior
year. The Company believes that increases in mineral reserves as result of exploration and drilling are a more meaningful
representation of an orebody rather than the reporting of additional mineral reserves resulting from an increase in mineral reserve
estimation gold prices.
The Company's mineral reserves and mineral resources as at December 31, 2021 are summarized in the following tables.
Complete information relating to mineral reserves and mineral resources including a complete listing of metal price assumptions,
tonnage, grade and recoveries is contained in a complete mineral resource and mineral reserve table accompanying the 2021
annual report available on the Company's website, www.yamana.com.
Yamana Gold
74
(i) Other is related to La Pepa.
Annual Report 2021
75
(i) Other is related to La Pepa.
Yamana Gold
76
Mineral Reserves & Mineral Resources Estimates*
Contained Gold
Contained Silver
Contained Copper
(in 000's ounces)
(in 000's ounces)
(in million pounds)
Proven & probable mineral reserves
2021
2020
2021
2020
2021
2020
Canadian Malartic (50%)
1,767
2,214
—
—
—
—
Jacobina
2,938
2,807
—
—
—
—
Cerro Moro
457
431
22,180
23,897
—
—
El Peñón
933
921
29,383
29,214
—
—
Minera Florida
430
428
3,011
2,979
—
—
Wasamac
1,910
1,767
—
—
—
—
Jeronimo (56.7%)
1,082
1,082
—
—
—
—
MARA (56.25%)
4,152
4,152
56,689
56,689
6,654
6,654
Total proven & probable mineral reserves
13,669
13,803
111,264
112,780
6,654
6,654
Measured & indicated mineral resources
Canadian Malartic (50%)
1,270
535
—
—
—
—
Jacobina
3,807
3,514
—
—
—
—
Cerro Moro
117
90
7,834
6,220
—
—
El Peñón
748
765
25,259
25,541
—
—
Minera Florida
1,056
959
5,844
5,279
—
—
Wasamac
326
525
—
—
—
—
Jeronimo (56.7%)
139
139
—
—
—
—
MARA (56.25%)
1,245
1,245
8,442
8,442
1,383
1,383
La Pepa (80%)**
1,751
2,208
—
—
—
—
Monument Bay
1,787
1,787
—
—
—
—
Suyai
2,286
2,286
3,523
3,523
—
—
Total measured & indicated mineral resources
14,532
14,053
50,902
49,004
1,383
1,383
Inferred mineral resources
Canadian Malartic (50%)
6,647
6,883
—
—
—
—
Jacobina
1,904
1,494
—
—
—
—
Cerro Moro
226
254
8,159
8,786
—
—
El Peñón
881
850
28,984
28,138
—
—
Minera Florida
658
755
3,138
3,596
—
—
Wasamac
258
263
—
—
—
—
Jeronimo (56.7%)
161
161
—
—
—
—
MARA (56.25%)
1,222
1,222
21,765
21,765
2,125
2,125
Arco Sul
615
615
—
—
—
—
La Pepa (80%)**
293
496
—
—
—
—
Lavra Velha
543
543
—
—
—
—
Monument Bay
1,781
1,781
—
—
—
—
Suyai
274
274
575
575
—
—
Total inferred mineral resources
15,463
15,591
62,621
62,859
2,125
2,125
*
The assumptions used for mineral reserve and mineral resource estimates as at December 31, 2021 for all operating mines reported in this MD&A were
$1,250 per ounce gold, $18.00 per ounce silver, and $1.25 per pound of zinc. Mineral resources are reported exclusive of mineral reserves, using a cut-off
grade (or cut-off value) 75% of the one used for mineral reserves. The Arco Sul project mineral resource estimate uses $1,250 per ounce of gold. The Jeronimo
project mineral reserve and mineral resource estimates use $900 per ounce of gold. The La Pepa project mineral resource estimate uses $1,650 per ounce
of gold. The Lavra Velha project mineral resource estimate uses $1,300 per ounce of gold, and $3.50 per pound of copper. The Agua Rica project (MARA)
mineral reserve estimate uses $1,250 per ounce of gold, $18.00 per ounce of silver, $11.00 per pound of molybdenum, and $3.00 per pound of copper. The
Agua Rica project (MARA) mineral resource estimate uses $1,600 per ounce of gold, $24.00 per ounce of silver, $11.00 per pound molybdenum, and $4.00
per pound of copper. The Alumbrera project (MARA) mineral resource estimate uses $1,300 per ounce of gold and $2.83 per pound of copper. The Monument
Bay project mineral resource estimate uses $1,200 per ounce of gold. The Suyai project mineral resource estimate uses a 5.0 g/t gold cut-off grade assumption.
The Wasamac project mineral reserve estimate uses $1,250 per ounce of gold. The Wasamac project mineral resource estimate uses $1,250 per ounce of
gold.
** During December 2021, Mineros Atacama SpA was issued shares representing a 20% interest in Minera Cavancha SpA, the legal entity that holds the La
Pepa property. The 2021 mineral resource estimates for La Pepa reflect Yamana's 80% post-issuance interest. The 2020 mineral resource estimates have
been recast to reflect Yamana's 80% post-issuance interest. Prior to the issuance of shares, Yamana owned 100% of La Pepa.
Annual Report 2021
77
5-Year Mineral Reserves and Mineral Resources Growth
Yamana has attempted to differentiate itself over the last several years by replacing depletion of mineral reserves and has been
mostly successful at such differentiation. The result of which is that when looked at over several years, there has been a very
significant increase of mineral reserves and corresponding extension of mine lives. This differentiation is expected to continue in
the next several years and in most cases, the discovery of new inferred mineral resources at existing mines already represents an
excellent source of future proven and probable mineral reserves. Characterized by large land packages in prospective geological
districts, Yamana’s operations continue to demonstrate the ability to add value through drilling which, at a minimum, ensures
sustainability of mine lives at current production rates. This also, creates opportunities to increase production and ultimately
increase free cash flow generation. In recent years, results have exceeded expectations with operations not only replacing
depletion but also increasing mineral reserves, mineral resources, and the pipeline of exploration targets for future conversion.
Last year is a continuation of the Company’s track record of successful brownfield exploration strategy, highlighted by the significant
growth in mineral reserves and mineral resources within the five existing operations over the past five years. The acquisition, and
subsequent optimization, of the Wasamac project in 2021 further enhances this growth profile.
Over the past five years, total gold equivalent mineral reserves and mineral resources at the five operating mines have increased
by 32%, net of the 4.6 million GEO(2) produced by the operations over that period. This brownfield exploration success extends the
lives of the existing operations and presents opportunities for growth within the portfolio. As a result, the Company is able to add
value through the drill bit, at a low cost per ounce, with low risk and with minimal disturbance to the environment.
With the addition of Wasamac, the mineral reserves and mineral resources growth rate increases to 45% over five years. Wasamac,
a small-footprint underground project located 100 kilometres from Canadian Malartic, is already showing the exploration potential
to replicate the mineral reserves and mineral resources replacement cycle demonstrated at the Company’s operating mines.
At Canadian Malartic, the Odyssey project’s continued exploration success has grown indicated mineral resources to 2.35 million
ounces of gold and inferred mineral resources to 13.15 million ounces of gold on a 100% basis. Only 7.3 million ounces, or
approximately 47% of these mineral resources are included in the mine plan outlined in the March 2021 technical study, providing
significant upside potential to a mine life already expected to last until at least 2039.
Jacobina has significantly grown its inventory of mineral reserves and mineral resources to support a low-risk, phased expansion
strategy that has allowed the mine to sustainably increase production by 54% over the last five years. The growth in mineral
reserves and mineral resources now supports further sustainable growth to 230,000 ounces per year in Phase 2 and a target of
270,000 ounces per year in Phase 3.
El Peñón, now in its 23rd year of production, continues to replace mineral reserve depletion which was achieved again in 2021,
with further exploration successes advancing the objective of increasing production from the significant excess plant capacity.
The approach to replace depletion is also now delivering positive results at Cerro Moro which, for the first time in 2021, replaced
depletion of mineral reserves, a foundation of targets and geological knowledge continues to support further exploration plans for
the asset.
Year-End Mineral Reserves and Mineral Resources Summary
During the year, the Company's wholly-owned operations successfully replaced depletion. At Odyssey, delineation drilling
highlighted the strong geological and grade continuity and underground mineral resources continued to grow in advance of future
conversion to mineral reserves. For 2021, the Company reports 13.7 million ounces of gold mineral reserves and 111 million
ounces of silver mineral reserves, relatively unchanged from the prior year.
Mineral reserves of 7.1 million ounces of gold, 57 million ounces of silver, and 6.7 billion pounds of copper at the Company’s
development projects represents significant upside potential within the existing portfolio. In particular, the wholly-owned Wasamac
project in Quebec, advancing towards first production in 2026, is expected to add approximately 200,000 ounces of gold to the
Company’s production platform. The MARA project currently at the feasibility study stage, is expected to produce an average of
556 million pounds of copper equivalent in the first 10 years, on a 100% basis, with an initial mine life of 28 years.
Yamana Gold
78
Largely consistent with the prior year, the Company reports measured and indicated mineral resources of 14.5 million ounces of
gold, 51 million ounces of silver, and 1.4 billion pounds of copper exclusive of mineral reserves. Significant increases in measured
and indicated mineral resources at Canadian Malartic, Jacobina and Minera Florida more than offset the change in measured and
indicated mineral resources at Wasamac and La Pepa. At Wasamac mineral reserves and mineral resources were updated in mid-
2021, providing the foundation for the optimized mine plan and feasibility study update. Yamana successfully increased conversion
of mineral resources to mineral reserves through the optimization of the mining method and mine design following an in-depth
geotechnical analysis. As a result, mineral reserves increased by 231,000 ounces to 1.91 million ounces with an unchanged
average gold grade of 2.56 g/t. At La Pepa, pursuant to the terms of the option agreement with Mineros Atacama SpA (“Mineros”)
dated December 14, 2018, in December 2021 Mineros acquired a 20% interest in Minera Cavancha SpA, the legal entity that holds
the La Pepa property. The 2021 mineral resource estimate for La Pepa reflects Yamana's current 80% interest (previously 100%).
In addition, an updated structural model was used to constrain the mineralization in addition to updated metal price assumptions
which were revised to be in-line with Yamana's projects and mining parameters being adjusted to reflect benchmarked costs.
The Company reports inferred mineral resources of 15.5 million ounces of gold, 63 million ounces of silver, and 2.13 billion pounds
of copper. The large base of mineral resources provides the pipeline for future conversion to mineral reserves at existing operations
and development projects and represents further growth opportunities at the Company’s generative exploration projects.
Major discovery potential at each operation continues to provide game-changing upside, as achieved with the discovery of the
East Gouldie deposit in 2018, which was recognized in October 2021 with the "Discovery of the Year" Award at the Quebec Mineral
Exploration Association virtual 2021 Xplor Convention. The discovery of East Gouldie has significantly changed the Odyssey
project by ensuring its economic viability and providing a long term production profile beyond the life of the open pit.
Further information by mine is detailed below.
Canadian Malartic including Odyssey, Canada (50%)
At Canadian Malartic on a 50% basis, open pit gold mineral reserves of 1.77 million ounces, reflects depletion from 2021 production
and an adjustment of approximately 48,000 ounces due to a slight increase in cut-off grade, which will be added to the marginal
stockpile, and a localized adjustment in the lower benches of the Canadian Malartic pit. For the Barnat pit, drill hole datasets from
the former East Malartic and Sladen underground mines were incorporated into the resource model, increasing confidence in the
Barnat grade estimation and without significantly changing mineral reserves or mineral resources. Underground mineral resources
for the Odyssey project continue to grow as a result of ongoing exploration drilling, with a total of 2.35 million ounces of indicated
mineral resources and 13.15 million ounces of inferred mineral resources reported at year-end. At East Gouldie, drilling added 82
new pierce points in the mineralized zones, confirming estimated grades and widths and resulting in the first gold indicated mineral
resources for the deposit of 1.5 million ounces, on a 100% basis. The ongoing infill drilling program continues to increase the
inventory of indicated mineral resources to support the planned conversion of mineral resources to mineral reserves. Expansion
of the mineral resource envelope on all sides added new inferred mineral resources with a high potential for future conversion in
the mine plan, while step out drilling extended the mineralized zone 1,260 metres beyond the reported East Gouldie mineral
resource and identified a new subparallel zone, located 400 metres in the footwall of the East Gouldie zone. These exploration
holes are still widely spaced and therefore not yet considered in the mineral resource statement.
Jacobina, Brazil
Jacobina had another successful year of exploration, adding 324,000 ounces of gold mineral reserves, a 5% increase compared
to the prior year above depletion of mining. Gold mineral reserves have grown by 55% or more than 1 million ounces over the past
four years to 2.94 million ounces. Mineral resources have increased by 69% over the same period. Mineral reserves average gold
grade is unchanged from the previous year at 2.18 g/t and the Company continues to sequence lower grade stopes later in the
mine life. Importantly, the rate of growth in mineral reserves and mineral resources exceeds annual depletion, supporting the
Company’s strategy to sustain a multi-decade mine life and facilitating the future Phase 3 expansion to increase production up to
270,000 ounces per year. Highlights from 2021 include the addition of inferred mineral resources at João Belo Sul, which represents
a potential new mining sector, and the continued expansion of the Morro do Vento, Canavieiras, and João Belo mines at depth.
Annual Report 2021
79
Cerro Moro, Argentina
Cerro Moro successfully replaced depletion of GEO(2) mineral reserves and mineral resources, largely as a result of expansion of
high grade veins at the main ore bodies of Zoe, Martina, and Naty, which remain open at depth. The significance of the result is
that it establishes what the Company expects to be an ongoing trend of year-over-year mineral reserve and mineral resource
growth, similar to the mineral reserves replacement cycle established at the Company’s more mature operations, extending the
mine life at a production rate of 150,000 to 165,000 GEO(2) per year. Cerro Moro is a high-grade operation with an average mineral
reserves grade of 13.6 g/t gold equivalent. New mineral reserves added in 2021 at a higher average gold to silver ratio and higher
silver grade targets will be followed up with drilling in 2022. A high level of geological understanding incorporated into the resource
models is resulting in excellent reconciliation and confidence in mine plans, as reflected in improved operational performance.
Additionally, Cerro Moro has a significant inventory of lower-grade veins that are not fully reflected in the current mineral reserves
and mineral resource statements, which could potentially be processed with an expansion of the processing plant or through a
parallel heap leach operation. The Company has initiated an infill drilling program to expand and define the most promising lower-
grade heap leach targets.
El Peñón, Chile
Successful drilling at El Peñón resulted in the operation achieving a fourth consecutive year of adding new mineral reserves in
excess of mining depletion, with mineral reserves growing 23% to 1.3 million GEO(2) over that period. Drilling continues to expand
the mineral resource envelopes to depths below several producing sectors, most notably Paloma, Pampa Campamento and
Sorpresa. New mineral reserves added in 2021 are typically higher than average grade, resulting in the average gold and silver
mineral reserves grades increasing by 3%. The significance of the result is the continued extension of the El Peñón mine life at a
production rate of 220,000 to 230,000 GEO(2) per year, while replacement of mineral resources provides an inventory for future
mineral reserves development. The year-end mineral reserve and mineral resource estimates do not include results from deep
exploratory drilling intercepts targeting extensions of the major producing vein systems at depth and to the south of the mine. Initial
drill results show significant potential for discovery of blind continuations of the main vein system which will be followed up with
drilling in 2022 to support planned production increases at El Peñón.
Minera Florida, Chile
At Minera Florida, new mineral reserves replaced mining depletion extending mine life. Drilling in key production sectors of the
mine, most notably Don Leopoldo and Fantasma, continued to expand mineralization along strike and down dip. Targets remain
open in both directions, underscoring the potential for expansion of the mineral envelope in both sectors. Exploratory drilling at
Minera Florida has generated new discoveries in the core mine area, including VNC, providing increased optionality for the mining
operation and demonstrating the geological potential in the central Alhué block. The recent discovery of veins such as Cucaracha
in new areas beyond the eastern and western limits of the central Alhué block, the historic focus of exploration and mining at
Minera Florida, underscores the potential for further near-mine discoveries. The robust exploration results and replacement of
mineral reserves and mineral resources at Minera Florida support the plan for production increases at the operation.
Wasamac, Canada
Wasamac mineral reserves and mineral resources were updated in mid-2021, providing the foundation for the optimized mine plan
and feasibility study update. Yamana successfully increased conversion of mineral resources to mineral reserves through the
optimization of the mining method and mine design following an in-depth geotechnical analysis. As a result, mineral reserves
increased by 231,000 ounces to 1.91 million ounces with an unchanged average gold grade of 2.56 g/t. Mineral resource
classification was updated using revised criteria, with measured mineral resources being reclassified as indicated mineral
resources to align with Yamana’s prerequisite that measured mineral resources must be supported by underground development
sampling with the required quality assurance and quality control. Additionally, mineral resources are now constrained within
potentially mineable shapes to demonstrate reasonable prospects for eventual economic extraction and to align with the reporting
standard at other Yamana operations. Year-end mineral reserves and mineral resources do not yet include positive drill results
from the second half of 2021, which expanded the Wildcat zone and discovered two new mineralized zones, referred to as South
Wildcat. The initial drilling results further align with the objective to sustain 200,000 ounces per year of production at Wasamac
and achieve a strategic mine life of more than 15 years.
Yamana Gold
80
La Pepa, Chile (80%)
Since the signing of the agreement with Yamana in 2018, Mineros S.A. completed extensive surface mapping at La Pepa, followed
by 18 RC holes in 2019-2020. This new information allowed the refinement of the lithological model and the understanding of the
controls on the porphyritic gold mineralization. An updated structural model that includes the Cavancha and the Azufre faults was
used to constrain the mineralization. Metal price assumptions were revised to be in-line with Yamana's projects. Mining parameters
were adjusted to reflect benchmarked costs. Additional work is ongoing to evaluate the mineralization east of the Cavancha fault,
which represents an opportunity for further expansion of the deposit since it is not currently included in the updated mineral
resource estimate.
7.
EXPLORATION
Exploration on the most prospective properties is a key to unlocking and creating value for shareholders. The Company has built
significant land positions including projects that are at different stages of advancement in prospective mineral districts in all
countries where it has producing assets, and is actively advancing this portfolio of exploration projects in these countries. This
effort allows for the rapid advancement of the highest value projects, while at the same time moving the most promising early-
stage properties up the exploration pipeline. The following are key elements and objectives of the generative exploration program:
•
Target the Company’s most advanced exploration projects while retaining the flexibility to prioritize other projects in the
portfolio as and when merited by drill results.
•
Advance at least one project to achieve mineral reserve and mineral resource inventories of at least 1.5 million gold
equivalent ounces within the next three years to move at least one project towards a preliminary economic assessment.
•
On a longer-term basis, advance at least one project to a mineral inventory that is large enough to support a mine plan
demonstrating positive economics with annual gold production of approximately 150,000 ounces for at least eight years.
•
Advance both gold-only and copper-gold projects and, in the latter case, consider joint venture agreements aimed at
increasing mineral resource and advancing the project to development while Yamana maintains an economic interest in
the project.
•
Evaluate the acquisition or investment on prospective exploration opportunities companies that align with Yamana’s
objectives for capital allocation and financial results, jurisdiction quality, geology and operational expertise.
The generative exploration program is first focusing on the most advanced projects in Yamana’s portfolio while continuing drilling
activity at a number of the Company’s highly prospective earlier stage projects. These project stages are categorized and defined
as follows:
•
Tier One - Projects with well-defined gold mineral resources and opportunities to grow to a potentially economic threshold
in the next three years.
•
Tier Two - Projects that have achieved significant drill intercepts and whose geology along with other factors support rapid
resource growth.
•
Tier Three - Highly prospective projects with known mineralization defined with rock and soil geochemistry that warrant
future drill testing.
The Company is confident that its exploration pipeline includes projects that can meet its shorter-term objective of at least one
project achieving 1.5 million ounces of gold in the inferred mineral resource category within three years as well as its longer-term
objective of building at least one gold mineral resource that can support a mine with annual production of approximately 150,000
ounces per year for at least eight years.
The Company is focusing its exploration activities in part on the large land positions held within the Company, including projects
that are at different stages of advancement in prospective mineral districts in all countries where it has producing assets and can
leverage its technical and operational expertise, and it is pursuing advancing this portfolio through exploration projects in these
countries. This effort will allow for the rapid advancement of the highest value projects, while at the same time moving the most
promising early-stage properties up the exploration pipeline. In the current high market valuation environment of high-profile gold
exploration projects, the Company feels it is timely and prudent to advance its in-house exploration assets.
As a complement to the advancement of the internal exploration opportunities, the Company will consider the acquisition of earlier-
stage development assets or companies that align with Yamana's objectives for capital allocation and financial results, jurisdiction,
Annual Report 2021
81
geology and operational expertise. Such opportunities will typically be funded through internal resources, meet minimum return
levels that far exceed the cost of capital and would meet the Company's minimum requirements to achieve mineral reserve and
mineral resource inventories, mine life and per year production rate. Furthermore, preference would be given to geological and
operational characteristics where the Company has an identified expertise and excellent opportunities for value enhancement, and
where the Company can deploy its corporate knowledge to provide value-added support. As part of its corporate approach, the
Company shares information and best practices among its operations. Such opportunities would also extend an existing regional
presence or lead to that longer-term objective. Although the Company has an established portfolio of early-to-later-stage organic
growth projects, the Company also considers it prudent to consider opportunities to extend regional presences in quality
jurisdictions that offer geological and operational synergies and similarities to its current portfolio of assets.
Exploration Expenditures
For exploration updates relating to operating mines during the quarter, refer to Section 4: Operating Segments Performance. The
following is a summary of the exploration and evaluation expenditures for the current and comparative periods:
For the three months ended December 31,
For the year ended December 31,
(In millions of US Dollars)
2021
2020
2021
2020
Exploration and evaluation capitalized*
$
19.6 $
21.0 $
68.1 $
57.6
Exploration and evaluation expensed**
6.8
6.0
31.6
15.1
Total exploration and evaluation expenditures
$
26.4 $
27.0 $
99.7 $
72.7
*
Capitalized exploration and evaluation costs are reflected in property, plant and equipment in the Consolidated Balance Sheets. Details by mine can be found
in the Capital Expenditures table in Section 1: Highlights and Relevant Updates.
** Expensed exploration and evaluation costs are reported in the Consolidated Statements of Operations for the respective period.
During the fourth quarter, exploration drilling and other field activities continued as planned in most jurisdictions, as successful
COVID-19 prevention, monitoring, testing and quarantine, and contact tracing protocols, as well as further increases to the high
levels of employee and contractor vaccination rates, continued across the Company’s operations. The Company is currently
refocusing its efforts on regional exploration projects, with greater efforts being placed on Jacobina and Lavra Velha, which
represent the best opportunities for advancement of the goals of the generative exploration program. Drilling activities continued
in the fourth quarter in Brazil at Lavra Velha and Jacobina Norte. Targets were advanced at the Company’s Ivolandia, Colider and
Arenopolis projects, with collection of soil and rock samples and geological mapping at several targets. An airborne geophysical
survey will be flown over a 210 square kilometre area at Ivolandia in early 2022. Exploration in Chile in the fourth quarter included
surface evaluation and target development on several early-stage Yamana projects near the El Peñón mine and elsewhere.
Surface samples collected during the quarter across all projects in Chile totaled 1,243 rock and 932 soil and stream sediment
samples. 147 days of geological mapping were completed. Preliminary assay results have been received for several projects which
will determine which projects are advanced in 2022. In Argentina, permitting and contracting work continued in preparation for
drilling on the Company’s Las Flechas property, where a 1,500-2,000 metre drill program to test breccia-related high-sulphidation
epithermal gold and porphyry copper gold targets has been rescheduled for late in 2022 with an aggressive geological and
geochemical program planned. At Monument Bay, Manitoba, results from the recently completed deep drilling program are being
evaluated with planning for the next steps for the project. Further, exploration drilling continued at the recently acquired advanced
Wasamac property, in the Abitibi-Témiscamingue Region, Quebec, where ongoing exploration drilling has identified new zones of
mineralization at the Wildcat South target. Initial field work continued on the recently developed Orogen Royalties Inc. Nevada
Alliance and Raven-Callaghan property option.
Monument Bay, Canada
The Monument Bay deposit is hosted in the Stull Lake Greenstone Belt, comprising three volcanic-sedimentary assemblages
ranging in age from 2.85 to 2.71 billion years. Gold mineralization occurs along the steeply north-dipping, regional-scale Twin
Lakes Shear Zone and the lesser-explored, adjacent AZ Shear Zone.
The focus of the current exploration program has been the advancement of the Twin Lakes resource. Beyond the Twin Lakes
target, the large Monument Bay land package is under-explored and hosts potential for additional discovery. A smaller but important
component of recent exploration at Monument Bay has been the continued evaluation and advancement of secondary targets on
the property.
Most recent exploration at Monument Bay has been to advance the evaluation and definition of high-grade ore shoots at depth at
the Twin Lakes resource as part of assessing the project as an underground mine. Approaching the Twin Lakes target as a potential
Yamana Gold
82
underground project is an economically attractive alternative to the open pit scenario with lower capital (due to the higher
investment required to develop a large tonnage, low grade, open pit mine), reduced environmental footprint, and clear upside
exploration potential. The recently completed winter 2021 drill program provided an initial test of the depth extent and potential of
several well-defined high-grade steeply plunging mineralized shoots along a four kilometre strike length of the deposit. Shallow
diamond drilling during the first half of 2020 confirmed the continuation and orientation of higher-grade mineralization and provided
targets for follow up drilling at depth. Highlights from the winter 2021 program included the following core length intercepts: 6.52
g/t of gold over 2.14 metres (TL-21-732) and 4.20 g/t of gold over 6.28 metres, including 2.58 metres grading 7.48 g/t of gold (TL-
21-727B) as previously reported in the September 13, 2021 press release 'Yamana Gold Reports Positive Initial Exploration Drill
Results at Wasamac; Provides an Update on Its Generative Exploration Program'. These and other results are being evaluated as
next steps are being determined.
Domain, Canada
The Domain project is located near Oxford Lake in northeast Manitoba, comprising a 20,000-hectare property that is 100%-
controlled by the Company. Interpretation of regional airborne magnetics, together with results from government geological survey
geochemical results collected from glacial till, support a highly prospective environment for folded iron formation hosted gold
occurrences. The Company's property surrounds three claims totaling 576 hectares that are under a joint venture agreement with
Capella Minerals Limited, which holds a 29.6% interest. The joint venture claims cover an area of historic drilling with significant
gold intercepts hosted by iron formation that includes intervals reported by Rolling Rock Resources in 2008 and New Dimension
Resources in 2017.
The Company recently signed an exploration agreement with the Bunibonibee Cree Nation (“BCN”) that provides a framework for
a cooperative, mutually respectful agreement supporting the advancement of exploration within the Traditional Territory of the BCN
while providing employment and business opportunities to the BCN. Yamana is in the planning stages of a work program for the
property, and pending conclusion of community consultation, completion of an archeology study, and permitting, exploration work
is anticipated to be completed in 2022. Data compilation and drill target refinement have been recently completed.
Wasamac, Canada
The addition of the Wasamac project to Yamana’s portfolio further solidifies the Company’s long-term growth profile with a top-tier
gold project in Quebec’s Abitibi-Témiscamingue region, a prolific mining district where Yamana has deep operational and technical
expertise and experience. Please refer to Section 5: Construction, Development and Other Initiatives for details on the Wasamac
(Monarch Gold) acquisition, which closed during the first quarter of 2021.
Exploration activities continued to ramp up during the fourth quarter, with a focus on infill drilling on the Wasamac resource, with
19,466 metres in 19 drill holes completed. Total infill drilling completed in 2021 was 21,649 metres in 31 drill holes. Three drill rigs
are currently operating to advance the infill drilling program, and a fourth rig is planned to be added in the first quarter of 2022.
Drilling completed in the fourth quarter also included 2,293 metres of geotechnical drilling in 28 drill holes in the ramp area, bringing
total geotechnical drilling completed in 2021 to 6,463 metres in 36 drill holes. No additional exploration drilling was completed in
the fourth quarter, as pending results are forthcoming. Exploration drilling completed in 2021 totaled 7,291 metres in 22 holes,
divided between the West Wasa Shear offset, Wildcat, Wildcat South and West 117 Wasa targets.
Exploration drilling results received during the fourth quarter included a high-grade intercept over underground mining widths at
the newly defined Wildcat South target, located approximately 300 metres south of Wildcat. Wildcat South is a magnetic anomaly
generated from a recently completed, property wide high-resolution (25 metre) helicopter-borne magnetic survey covering 2,992
line-kilometres. As previously reported in the December 1, 2021 press release 'Yamana Gold Announces The Discovery Of New
Mineralized Zones At Wasamac And Provides An Update On Its Growth Projects', drill hole WS-21-524 intercepted two new
mineralized zones, including an upper mineralized interval that returned 7.31 g/t of gold over an estimated true width of 3.37 metres
at a downhole depth of 402.93 metres. This high-grade zone was followed further down hole by two mineralized intervals within a
30 metre wide chlorite-sericite-pyrite altered shear zone returning assays of 2.3 g/t of gold over a core length of 0.60 metres and
1.3 g/t of gold over a core length of 0.30 metres. Results from Wildcat South will be integrated into exploration models and followed
up as exploration drilling is restarted in early 2022. Drilling completed at West 117 Wasa intersected mostly narrow, rhyolite-hosted
shear zones. Assay results are pending for these drill holes. Additional results from exploration drilling are expected in the first
quarter 2022.
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83
Additional ongoing exploration work completed during the fourth quarter included integration of the merged high-resolution
magnetic survey data over the Wasamac and Francoeur properties with project wide data compilation and targeting. A two year
schedule and long-term exploration strategy for the combined properties is being developed. Positions of senior project geologist,
project geologist and surface exploration geologist have been filled. Additional, ongoing work included continued sampling of select,
previously unassayed, historic drill hole intervals hosting stockwork style mineralization, to assess for their potential to contribute
to the mineral resource base.
Francoeur, Canada
The Wasamac property was expanded during the second quarter of 2021 with the acquisition in June, 2021 of the adjoining
Francoeur, Arntfield and Lac Fortune properties (the “Francoeur” property), located to the west and along strike of the Wasamac
property, as well as additional claims in the Beauchastel township to the east of Wasamac, from Globex Mining Enterprises Inc.
Project consolidation and integration of exploration data from Wasamac and the acquired properties continued during the fourth
quarter. The acquisition of the Globex claims will significantly add to the exploration upside of the Wasamac project, and it is
consistent with Yamana’s strategy to expand its presence in the Abitibi-Témiscamingue Region of Quebec. Historical drilling,
previous production from Francoeur and Arntfield, both former operating mines, and recent trenching and exploration work by
Globex has defined a six-kilometre western continuation of the Wasa shear - located immediately north of the prolific Cadillac
Break - with mineralization similar to that at Wasamac. Exploration drilling is expected to begin during the first quarter of 2022,
following completion of data compilation and integration and target definition, with objectives of adding mineral resources that could
extend mine life or enhance production scenarios at the proposed Wasamac mine.
Lavra Velha, Brazil
Lavra Velha is a near surface advanced Tier 1 exploration project located in the Lavra Velha district in Brazil’s Bahia state. Surface
work and drilling has defined significant gold mineralization, building on the 2013 inferred mineral resource of 3.93 million tonnes
at 4.29 g/t for 543,000 ounces of gold. The defined Lavra Velha deposit consists of shallowly dipping, stacked near surface
mineralization that may be amenable to low capital intensity open pit mining and heap leaching. Metallurgical studies are ongoing.
Exploration has defined numerous additional gold-(copper) anomalies in soil and rock which are being advanced and drill tested
as part of the ongoing exploration program. There are a number of significant drill targets on the 55,000-hectare property, and
Lavra Velha represents one of the most immediate, shorter-term opportunities to achieve the Company’s stated exploration goals
given the mineral resource to date and drilling following the initial mineral resource estimate. Further, Lavra Velha is well-placed to
meet the Company’s long-term objectives, as it is a shallow, flat-dipping orebody, making it ideal for open pit mining with a low strip
ratio, and oxide mineralization, with potential to be processed as a heap leach operation. Therefore, the project has potential as a
low capital cost, low operating cost operation. Additionally, the property hosts higher-grade gold and copper potential, as recently
demonstrated by positive drilling results at Lavra Velha SW target, and the Company is exploring for Iron Oxide Copper Gold
("IOCG") mineralization.
Exploration activity at Lavra Velha during the fourth quarter included the completion of 2,344 metres of exploration drilling in 10
drill holes, including four drill holes completed at Anomalia Central, five holes completed at Lavra Velha SW (LVSW) and one drill
hole completed at Lavra Velha SW Extension (LVSW Ext.). Drilling in the fourth quarter at LVSW and LVSW Ext. tested the NE
and SSW extensions of shallow gold bearing structures at these targets. Drilling at LVSW targeting the SE footwall to the LVSW
target intersected a zone of high-grade gold (copper) mineralization associated with iron oxide and iron sulphide mineralization.
These results may be followed up with additional drilling in early 2022. Additional generative work completed during the fourth
quarter included collection of 1,291 soil samples, 20 rock samples and 18 stream sediment samples, and 42 days of geological
mapping, advancing several targets, including Bananeiras (Alvinopolis block), Baiza Funda NW, Novo Horizonte and Santa
Quiteria. To support ongoing exploration activities, alteration indices are being assessed as an aid to targeting the differing styles
of mineralization encountered to date on the property.
Jacobina Norte, Brazil
The Jacobina Norte project, located in Brazil’s Bahia state just nine kilometres north of the Jacobina mine, is one of Yamana’s
most promising, wholly owned advanced exploration projects. The Company controls 78,000 hectares that cover over 150
kilometres of strike extent of the Serra do Corrego Formation, which hosts paleoplacer gold mineralization at the Jacobina mine.
Surface exploration along strike has defined mineralization at Jacobina Norte where surface sampling and historic shallow drilling
of mineralized reefs along a 15-kilometre trend have defined significant gold grades.
Yamana Gold
84
Historic drill results in a restricted part of the Jacobina Norte area reported four intercepts with grades and widths that indicate a
strong exploration target. Once a mineral resource is identified for Jacobina Norte, the Company will evaluate if the area is best
developed as a standalone mine or as a source of additional mine feed to the existing Jacobina plant. The southernmost section
of Jacobina Norte (the Serra Branca target) is located just nine kilometres north of Canavieiras Norte within the existing Jacobina
mine infrastructure.
The experience at the Jacobina mine leads the Company to conclude that there is a strong possibility of developing a second
Jacobina-type mine along the concession owned by Yamana near the current Jacobina mine over the next decade. Further, the
concessions extend well beyond the Jacobina mine and Jacobina Norte, which creates excellent opportunities for further
discoveries.
Exploratory drilling completed during the fourth quarter at Jacobina Norte totaled 1,186 metres in seven drill holes, including one
hole completed at the Barrocão Velho target and one hole at the Santa Cruz target, while five drill holes targeted the Arapongas
sector, with three holes ongoing. During 2021, a total of 3,613 metres of drilling was completed. Drilling at the Barrocão Velho and
Santa Cruz targets continued to define a low-grade mineral envelope, extending this zone 500 metres northward into the Santa
Cruz sector, where initial drilling intersected MSPC layer hosting a narrow strongly hematite altered mineralized zone hosting minor
visible gold. These results are considered encouraging and drilling has now outlined a 1,250 metre strike length of the Rubio Reef
mineral envelope which may be followed up in 2022. Exploratory drilling at Arapongas returned narrow zones of gold mineralization
in both the Cafeeiro and Rubio reefs, displaying strong oxidation and hematite, fuchsite alteration and pyrite, similar in appearance
to the Main Reef at Morro do Vento. Additional drilling is planned at this target.
Additional exploration activity completed in the fourth quarter included collection of 1,741 surface soil and rock samples and 40
days of geological mapping, advancing other targets, including the Curralinho target, a largely covered area located between Serra
Branca and Arapongas, where anomalous values ranging up to 1.0 g/t of gold in soil samples has outlined a 3.2 kilometre long
anomalous trend associated with conglomerate occurrences mapped in the field.
Borborema, Brazil
The Borborema project is a 25,000-hectare land package in the Borborema district in Brazil’s Pernambuco state. The project is
located in a Proterozoic magmatic arc environment that is similar to the belt hosting the Chapada mine, a large copper-gold mine
developed by Yamana, put into production in 2007 and disposed of in 2019.
Originally explored for narrow high-grade gold veins, exploration at Borborema also identified strong copper–gold anomalies in
both rocks and soils. Initial drill testing of the São Francisco anomaly in 2019 led to the discovery of very high grade near surface
copper (gold) intercepts from massive sulphide mineralization. Notable drill intercepts, previously reported in the February 20, 2020
press release 'Yamana Gold Provides Update on Its Generative Exploration Program', with greater than 5% copper include: 3.66
metres at 0.58 g/t of gold and 7.14% copper (12.33 g/t gold equivalent) (starting at 90 metres down hole, SF-08); 2.97 metres at
0.40 g/t of gold and 7.20% copper (12.25 g/t gold equivalent) (starting at 44.18 metres down hole, SF-05); and 7.50 metres at 0.35
g/t of gold and 6.41% copper (10.90 g/t gold equivalent) (starting at 70.37 metres down hole, SF-06).
Subsequent drilling results were reported in the December 03, 2020 press release ‘Yamana Gold Advances Projects in Its
Generative Exploration Program’, including several intercepts demonstrating grades greater than 5% copper, include the following
core length intercepts (estimated to approximately equal true widths): 7.53 metres at 3.80% of copper, 0.36 g/t of gold, and 0.26%
of zinc, including 3.42 metres at 7.40% of copper, 0.75 g/t of gold, and 0.50% of zinc (starting at 76.80 metres downhole, SF-12);
4.37 metres at 2.15% of copper, 0.13 g/t of gold, and 0.34% of zinc, including 1.30 metres at 5.54% of copper, 0.29 g/t of gold, and
0.70% of zinc (starting at 45.26 metres downhole, SF-09); and 5.65 metres at 1.83% of copper, 0.18 g/t of gold, and 0.17% of zinc,
including 1.65 metres at 5.50% of copper, 0.50 g/t of gold, and 0.53% of zinc (starting at 116.35 metres downhole, SF-16). The
latest round of drilling results, reported in the September 13, 2021 press release 'Yamana Gold Reports Positive Initial Exploration
Drill Results at Wasamac; Provides an Update on Its Generative Exploration Program’, included the following core length
intercepts: 0.26% of copper over 40.15 metres, including 1.02% of copper over 5.16 metres (SF-026); and 0.20 g/t of gold, 1.81%
of copper and 0.19% of zinc over 5.00 metres (SF-020). Disseminated and massive sulfide mineralization at the São Francisco
target is now defined semi-continuously along a 2.3-kilometre east-west corridor, which remains open for expansion along strike
and down dip.
Exploration activities completed at Borborema during the fourth quarter included continued development of regional targets with
collection of 1,075 soil and rock samples and continued geological mapping at the Atoleiro target, located 20 kilometres northeast
Annual Report 2021
85
of São Francisco, where historic surface rock samples range up to greater than 30 g/t of gold, 1,000 ppm of zinc and 250 ppm of
copper within a geological setting similar to that defined at São Francisco, and at the Tigre target, located 30 kilometres northeast
of São Francisco where historical surface rock samples range up to greater than 5 g/t of gold occur along a 7 km trend. A planned
high-resolution airborne magnetics and radiometric geophysical surveys over a 200-square kilometre area at Borborema has been
completed and is being integrated into the property database. The results of this survey are anticipated to significantly improve
targeting of gold-bearing massive and disseminated copper (zinc) and iron sulphide targets at São Francisco and on the wider
Borborema property.
While the Company will continue to advance Borborema, the project is primarily a high-grade copper deposit with some gold and
zinc. As such, Borborema represents an excellent opportunity for a joint venture pursuant to which Yamana would continue to
benefit and create value while it maintains its focus on its precious metals opportunities. Several other well-defined copper gold
soil and rock anomalies and significant areas of alteration associated with anomalous gold and copper values occur on the property.
Colíder, Brazil
Colíder is an early stage project located in Mato Grosso state in the newly developing Alta Floresta district, which is being explored
for porphyry copper and porphyry gold deposits by Anglo American and Aura Minerals. Yamana has completed soil and rock
geochemistry surveys on parts of its 19,700-hectare property, with several drill-ready gold and polymetallic targets defined. Initial
drill testing of targets began late in the second quarter, and was completed in the third quarter. Drilling completed totaled 1,460
metres distributed amongst eight drill holes, which tested two target areas. Three drill holes were completed at the Aruanã target,
where extensive gold in soil and rock anomalies are hosted by volcanic rocks and volcaniclastic sandstone, and four holes tested
large gold and base-metal soil anomalies at Cambará target, centred approximately three kilometres northeast of Aruanã. Most
results have now been received, with the best results returned from the Cambará target, including low-grade gold and base-metal
(copper, lead and zinc) intercepts in two holes along a 100 metre zone at the contact between granite and volcaniclastic host rocks.
Exploration work completed at Colíder in the fourth quarter included follow-up to phase I drilling, including collection of an additional
531 soil and rock samples and 20 days of mapping at the central Bororo target, Inaja and Cambará targets. At Bororo, soil sample
results define a 1.4 kilometre long silver and gold anomaly, where historical surface rock chip sample results range up to 3.97 g/t
of gold. Further exploration work will include soil sampling at the newly acquired Peixotinho target, 10 kilometres south of Colider.
Ivolandia, Brazil
Exploration activities completed at Ivolandia in the fourth quarter included a regional soil sampling program, initiated at the
Arenopolis property where anomalous gold and copper in rock samples define a 12 kilometre trend, rock sampling, field reviews
and core re-logging at the Ivolandia target in anticipation of a first quarter 2022 drilling program, collection of surface soil and rock
samples and completion of 20 days of mapping at Ivolandia Esemeril, Partida and Boa Vista targets on Ivolandia. In total, 890 soil
and rock samples were collected during the quarter at Ivolandia and Arenopolis. An airborne magnetic survey encompassing a
210 km2 area at Ivolandia, covering main NW – SE trend from Boa Vista - Ivolandia to Esmeril - Matrinxão corridor, is anticipated
to be completed in early 2022.
Yamana Gold
86
8.
FINANCIAL CONDITION AND LIQUIDITY
BALANCE SHEET REVIEW
As at, (In millions of US Dollars)
December 31, 2021
December 31, 2020
December 31, 2019
Cash and cash equivalents
$
525.0 $
651.2 $
158.8
Current assets (including cash and cash equivalents)
835.5
917.9
401.6
Non-current assets
7,547.2
7,504.9
6,715.6
Total assets
$
8,382.7 $
8,422.8 $
7,117.2
Current liabilities (excluding current portion of debt)
445.8
441.8
352.2
Non-current liabilities (excluding long-term debt)
1,960.9
1,814.9
1,497.2
Debt (current and long-term)
772.8
993.8
1,047.9
Total liabilities
$
3,179.5 $
3,250.5 $
2,897.3
Equity attributable to Yamana Gold Inc. equity holders
4,395.9
4,346.3
4,185.2
Non-controlling interests
807.3
826.0
34.7
Total equity
$
5,203.2 $
5,172.3 $
4,219.9
Working capital(6)
$
389.7 $
476.2 $
(6.7)
Total assets were $8.4 billion as at December 31, 2021, compared to total assets of $8.4 billion as at December 31, 2020. The
Company’s asset base is primarily comprised of non-current assets such as property, plant and equipment and goodwill, reflecting
the capital-intensive nature of the mining business and previous growth through acquisitions. Other significant assets include:
inventories, indirect taxes recoverable (consisting of value-added taxes in the jurisdictions in which the Company operates),
advances and deposits, and cash and cash equivalents.
Total liabilities as at December 31, 2021, were $3.2 billion compared to $3.3 billion as at December 31, 2020. The Company's
liability base is primarily comprised of non-current liabilities such as long-term debt, deferred tax liabilities, and decommissioning
and reclamation liabilities. Other significant liabilities include: trade payables, current income taxes payable and provisions.
Cash and Working Capital
Cash and cash equivalents were $525.0 million as at December 31, 2021, compared to $651.2 million as at December 31,
2020. The Company has sufficient cash on hand, available credit and liquidity to fully manage its business. Cash balances include
cash acquired as part of MARA transaction, with a December 31, 2021 balance of $217.3 million, and a December 31, 2020
balance of $223.1 million. The Company had working capital of $389.7 million as at December 31, 2021, compared to a working
capital of $476.2 million at December 31, 2020.
Net change in working capital movement was a cash inflow of $7.4 million for the three months ended December 31, 2021. Working
capital for the quarter was impacted by several items including:
•
An increase related to higher trade and other payables and employee related accruals, partially offset by
•
Net increases in finished goods, stockpile and material and supplies inventories at certain mines, and
•
A decrease related to the timing of collection of indirect tax credit recoverables and payments related to prepaids and
advances
Net change in working capital movement was a cash outflow of $42.3 million for the year ended December 31, 2021. Working
capital for the year was impacted by several items including:
•
Net increases in materials and supplies inventories at certain mines;
•
Net repayments of previous draw downs of working capital facilities;
•
Partially offset by a decrease in trade and other receivables, and prepaids and advances.
Total Debt
Total debt was $772.8 million as at December 31, 2021, a decrease of $221.0 million when compared to $993.8 million at December
31, 2020. Yamana believes that a strong financial position and financial resilience also requires a manageable debt maturity profile.
During the third quarter, the Company took advantage of market conditions to improve the terms of its outstanding notes by
extending maturity and reducing carrying costs, by completing an offering of $500 million aggregate principal amount of its 2.630%
Senior Notes due August 15, 2031. The Senior 2031 Notes are unsecured, senior obligations of Yamana and are unconditionally
Annual Report 2021
87
guaranteed by certain of Yamana’s subsidiaries that are also guarantors under Yamana’s credit facility. Yamana used the net
proceeds from the offering, together with cash on hand, to fund the redemptions of its 4.76% Series C Senior Notes due 2022, its
4.91% Series D Senior Notes due 2024, its 4.78% Series B Senior Notes due 2023 and its 4.950% Senior Notes due 2024. The
completion of the offering of the Senior 2031 Notes and the subsequent redemption of the existing notes represents the culmination
of significant debt reduction efforts initiated in 2019.
LIQUIDITY
Planned growth, development activities, expenditures and commitments are expected to be sufficiently funded by recent and
potential monetization and financing transactions, future operating cash flows and available credit facilities. As at December 31,
2021, the financial resources available to the Company for meeting its financial obligations include $750.0 million from its revolving
credit facility.
The Company’s near-term financial obligations include financial commitments of $145.2 million. The Company remains committed
to maintaining amongst the strongest financial position in the industry and continues with its objective of achieving a positive net
cash position.
SOURCES AND USES OF CASH
The following table summarizes cash inflows and outflows for the following periods:
For the three months ended December 31,
For the year ended December 31,
(In millions of US Dollars)
2021
2020
2021
2020
Cash flows from operating activities
$
238.2 $
181.5 $
742.3 $
617.8
Cash flows from operating activities before net change
in working capital
$
230.8 $
207.4 $
784.6 $
688.7
Cash flows (used in) from investing activities
$
(117.5) $
136.3 $
(399.7) $
51.4
Cash flows used in financing activities
$
(55.7) $
(141.0) $
(467.5) $
(175.9)
Net free cash flow(1)
$
188.4 $
118.9
$
547.4 $
455.6
Operating Activities
The increase in net cash flows from operating activities for both the three months and year ended December 31, 2021 compared
to the comparative periods in 2020 is largely attributable to higher gross margins recognized on sales as a result of increased
production.
Investing Activities
For the three months ended December 31, 2021, net cash outflows from investing activities were $117.5 million compared to net
cash inflows of $136.3 million in the comparative quarter. Net cash outflows in the current quarter were comprised primarily of
capital expenditures of $117.9 million (2020: $95.2 million). The increase in capital expenditures from the comparative quarter was
most significant at Canadian Malartic, where the Company has begun development work on the Odyssey project, and normalized
levels of capital expenditures across all of the Company's other mines, which were lower than plan in the comparative prior year
quarter due to COVID-19 related restrictions.
For the year ended December 31, 2021, net cash outflows from investing activities were $399.7 million compared to net cash
inflows of $51.4 million in 2020. Net cash outflows in the current period were comprised primarily of capital expenditures of $384.6
million (2020: $273.7 million), and $44.8 million being the net cash consideration in the acquisition of Monarch Gold in the first
quarter of 2021, partially offset by the proceeds received on the sale of investments (primarily shares in other companies held by
Yamana) of $61.5 million (2020: $137.2 million). Cash inflows in 2020 were also attributable to $222.5 million of cash acquired on
the acquisition of Alumbrera pursuant to the Agua Rica-Alumbrera Integration Transaction. Consistent with the three month period
above, the increase in capital expenditures from 2020 was attributable to Canadian Malartic and normalized levels of capital
expenditures across the Company's mines.
Details on capital expenditures by mine can be found in Section 1: Highlights and Relevant Updates.
Yamana Gold
88
Financing Activities
In the three months ended December 31, 2021, net cash outflows from financing activities were $55.7 million compared to net
cash outflows of $141.0 million in the comparative quarter. Cash outflows from financing activities in the quarter included dividend
payments of $28.8 million (2020: $16.6 million), payments for the repurchase of certain of the Company's shares of $14.1 million
(2020: nil), and interest payments on long-term debt of $8.3 million (2020: $21.3 million), partially offset by cash contributions
received from MARA non-controlling interests of $4.8 million (2020: $3.4 million). The comparative quarter also included a
repayment of $100.0 million on the revolving credit facility - the final repayment of the $200.0 million drawn down in the first quarter
of 2020 as a precaution due to the uncertainty around COVID-19 at the time.
In the year ended December 31, 2021, net cash outflows from financing activities were $467.5 million compared to net cash
outflows of $175.9 million in 2020. Cash outflows from financing activities in 2021 were largely driven by the net repayments of
$223.7 million on the Company's senior notes in the third quarter of 2021, along with the associated $53.3 million in early
redemption fees. In 2020, the Company repaid $56.2 million of senior notes that became due in March 2020. Other financing cash
flows in the year included interest payments of $47.2 million (2020: $54.9 million), dividend payments of $104.1 million (2020:
$53.0 million) and lease payments of $19.2 million (2020: $17.1 million), partially offset by cash contributions received from MARA
non-controlling interests of $18.6 million (2020: $3.4 million). Other financing cash flows in 2021 also included payments for the
repurchase of certain of the Company's shares of $28.3 million (2020: nil).
Net Free Cash Flow(1)
The Company generated net free cash flow(1) of $188.4 million in the fourth quarter of 2021, compared to net free cash flow(1) of
$118.9 million in the fourth quarter of 2020. The Company generated net free cash flow(1) of $547.4 million in the year ended
December 31, 2021, compared to net free cash flow(1) of $455.6 million in the same period of 2020. The positive change is largely
attributable to higher gross margins recognized on sales as a result of higher production.
For a cautionary note on non-GAAP financial performance measures and a reconciliation from cash flows from operating activities
to net free cash flow, refer to Section 12: Non-GAAP Financial Performance Measures.
CAPITAL RESOURCES
The capital of the Company consists of items included in shareholders’ equity and debt obligations, net of cash and cash
equivalents, as follows:
As at, (In millions of US Dollars)
December 31, 2021
December 31, 2020
Shareholders’ equity
$
5,203.2 $
5,172.3
Debt
772.8
993.8
5,976.0
6,166.1
Less: Cash and cash equivalents
(525.0)
(651.2)
$
5,451.0 $
5,514.9
To maintain or adjust its capital structure, the Company may, upon approval from its Board of Directors, issue shares, pay dividends,
or undertake other activities as deemed appropriate under the specific circumstances.
Annual Report 2021
89
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments.
The following table summarizes the remaining contractual maturities of the Company’s financial liabilities and operating and capital
commitments at December 31, 2021, shown on an undiscounted basis:
(In millions of US Dollars)
Within
1 year
Years
2 and 3
Years
4 and 5
After
5 years
Total*
Debt
Repayment of principal
$
— $
— $
— $
782.9 $
782.9
Interest
28.7
56.4
52.5
73.4
211.0
Capital and other financial commitments
89.7
54.4
18.1
—
162.2
Environmental rehabilitation provisions
26.8
51.7
34.4
434.1
547.0
Total contractual obligations and commitments
$
145.2 $
162.5 $
105.0 $
1,290.4 $
1,703.1
*
Additionally, as at December 31, 2021, the Company had outstanding letters of credit totalling $71.4 million (C$90.5 million) representing guarantees for
reclamation obligations and road construction relating to the Company’s share of mining interest in Canadian Malartic, $34.1 million and $13.6 million
representing reclamation guarantees related to the Company's Chilean mines and US properties respectively, $24.4 million representing security guarantees
in Brazil, $2.0 million representing guarantees for fuel supply at Cerro Moro, and $0.7 million (C$0.9 million) representing surety bonds for reclamation
obligations acquired as part of the Company's acquisition of Monarch Gold Corporation.
OUTSTANDING SHARE DATA
The Company is authorized to issue an unlimited number of common shares at no par value and a maximum of eight million first
preference shares. There are no first preference shares issued or outstanding. The table below summarizes the Company's
common shares and securities convertible into common shares as at the following dates:
As at, (thousands of units)
February 17, 2022
December 31, 2021
Common shares issued and outstanding
959,840
959,806
Share options outstanding
—
256
Restricted share units
2,748
2,210
SUPPLEMENTAL OBLIGOR GUARANTOR INFORMATION
The following summarized financial information has been prepared in accordance with Rules 3-10 and 13-01 of Regulation S-X.
Certain of the Company’s subsidiaries, Jacobina Mineração e Comércio Ltda., Minera Meridian Limitada, Minera Florida Limitada
and Yamana Santa Cruz Holdings B.V. (the “Guarantor Subsidiaries” and, together with Yamana Gold Inc., the “Obligor Group”),
have fully and unconditionally guaranteed, on a joint and several basis, the obligations under (a) the Company's Revolving Credit
Facility, and (b) the $300.0 million, 10-year 4.625% notes issued December 2017 and the $500.0 million, 10-year 2.63% notes
issued August 2021, both issued by the Company on a senior unsecured basis. The guarantee of any Guarantor Subsidiary will
be terminated if the Guarantor Subsidiary is no longer a guarantor or otherwise an obligor under the Credit Facility. Refer to Note
28 in the Company’s Consolidated Financial Statements for the year ended December 31, 2021 for further information.
The following presents the summarized financial information on a combined basis for the Obligor Group. Transactions between
entities in the Obligor Group have been eliminated. Information for the non-Guarantor Subsidiaries has been excluded from the
combined summarized financial information of the Obligor Group, except as noted below, and therefore amounts provided do not
represent the Company’s total consolidated amounts.
Yamana Gold
90
Condensed Combined Statement of Operations
Yamana Gold Inc. (as Parent and Issuer) and Guarantor Subsidiaries
(Unaudited)
For the years ended December 31,
2021
2020
Revenue*
$
1,789.8 $
1,539.1
Mine operating earnings
$
397.4 $
355.2
Earnings before taxes**
$
314.3 $
195.2
Net earnings**
$
233.1 $
99.6
Net earnings attributable to Yamana equity holders**
$
233.1 $
99.6
*
The Obligor Group acquired and subsequently sold precious metals produced by non-Guarantor Subsidiaries in the amount of $894.2 million and $690.3
million for the years ended December 31, 2021 and December 31, 2020, respectively.
** Includes intercompany income from non-Guarantor Subsidiaries of $91.5 million and $4.7 million for the years ended December 31, 2021 and December 31,
2020, respectively.
Condensed Combined Balance Sheets
Yamana Gold Inc. (as Parent and Issuer) and Guarantor Subsidiaries
(Unaudited)
As at December 31,
2021
2020
Current assets*
$
628.2 $
686.9
Non-current assets*
$
2,408.4 $
2,003.3
Current liabilities*
$
401.8 $
409.9
Non-current liabilities*
$
2,919.3 $
3,433.8
*
Includes amounts due from and to non-Guarantor Subsidiaries. For each of the balances as at December 31, 2021 and December 31, 2020, respective
amounts included are as follows; current assets of $188.6 million and $149.3 million, non-current assets of $991.8 million and $595.6 million, current liabilities
of $144.5 million and $138.6 million, non-current liabilities of $1,854.5 million and $2,158.2 million.
9.
ECONOMIC TRENDS, BUSINESS RISKS AND UNCERTAINTIES
Exploration, development and mining of precious metals involve numerous risks as a result of the inherent nature of the business,
global economic trends, and the influences of local social, political, environmental and economic conditions in the various
geographical areas of operation. As such, the Company is subject to several financial and operational risks that could have a
significant impact on its profitability and levels of operating cash flows.
Below is a summary of the principal financial risks and related uncertainties facing the Company. Readers are also encouraged to
read and consider the risk factors and related uncertainties as described in the Company’s latest available Annual Information
Form. Such risk factors could materially affect the future operating results of the Company and could cause actual events to differ
materially from those described in forward-looking statements. There were no significant changes to those risks or to the
Company's management of exposure during the three months ended December 31, 2021, except as noted below:
METAL PRICE RISK
The Company's profitability and long-term viability depend, in large part, upon the market price of metals that may be produced
from the Company's properties, primarily gold and silver. Market price fluctuations of these precious metals could adversely affect
profitability of operations and lead to impairments of mineral properties. Metal prices fluctuate widely and are affected by numerous
factors beyond the Company's control including but not limited to supply and demand, consumption patterns, macroeconomic
factors (interest, exchange, inflation), banking and political conditions, nature and climate condition risks, and mining specific
factors.
Annual Report 2021
91
The following chart summarizes one-year movements in the US Dollar price of gold (source: LBMA PM gold price):
Gold Price - Market Update
For the quarter ended December 31, 2021, spot gold prices averaged $1,795 per ounce, representing a decrease of 4% compared
to $1,874 per ounce in the fourth quarter of 2020. Prices ranged between $1,753 and $1,865 per ounce during the fourth quarter
of 2021. As at December 31, 2021, the closing price was $1,806 per ounce.
On average, gold prices were higher in the fourth quarter of 2021, compared to the previous quarter. In November, prices reached
their highest level since June before decreasing moderately into year-end. Prices continue to be driven by inflation expectations,
nominal rates and US Federal Reserve policy signals. Declining investor interest was evident as global exchange-traded fund
("ETF") holdings saw a reduction in the fourth quarter. In the short-term, gold prices are likely to continue to be driven by the US
dollar and real yields, global monetary policy and fiscal stimulus, and financial market volatility. Going forward, accommodative
global monetary policies, combined with rising money supply and further inflationary pressures, should continue to be supportive
of gold over the longer term.
Central banks have been net buyers of gold in 2021, however purchases have eased somewhat, following a heavy purchasing
period earlier in the year. Thailand, Japan and India have been notable buyers in 2021. Higher oil prices, inflationary concerns and
geopolitical trends should continue to support central bank purchases.
CURRENCY RISK
Currency fluctuations may affect the Company’s capital costs and the costs that the Company incurs at its operations. Gold is sold
throughout the world based principally on a US Dollar price, but a portion of the Company’s operating and capital expenses are
incurred in Brazilian Reais, Argentine Pesos, Chilean Pesos and Canadian Dollars. The appreciation of these foreign currencies
against the US Dollar would increase the costs of production at such mining operations, which could materially and adversely
affect the Company’s earnings and financial condition. The Company may enter into forward contracts or other risk management
strategies, from time to time, to hedge against the risk of an increase in the value of foreign currencies in the jurisdictions in which
the Company operates.
Yamana Gold
92
US Dollar - Market Update
The following chart summarizes one-year movements in key currencies vis-à-vis the US Dollar (source: Bloomberg):
The Brazilian Real, Argentinian Peso and Chilean Peso weakened against the US Dollar, while the Canadian Dollar strengthened,
during the three months ended December 31, 2021, compared to the same quarter of 2020. In the short term, these currencies
will continue to be impacted by specific regional events and central bank monetary policies. As a flight to safety, the performance
of the US Dollar will be driven by economic and financial market shocks.
Average Exchange Rate
Period-end Exchange Rate
For the three months ended December 31,
For the year ended December 31,
As at December 31,
2021
2020
% *
2021
2020
% *
2021
2020
% *
USD-CAD
1.2600
1.3030
(3.3) %
1.2537
1.3412
(6.5)%
1.2678
1.2732
(0.4)%
USD-BRL
5.5827
5.3964
3.5 %
5.3950
5.1558
4.6 %
5.5805
5.1967
7.4 %
USD-ARS
100.496
80.081
25.5 %
95.096
70.6514
34.6 %
102.720
84.150
22.1 %
USD-CLP
825.23
761.96
8.3 %
759.07
792.17
(4.2)%
844.69
710.95
18.8 %
*
Positive variance represents a US Dollar appreciation in relation to the foreign currency.
As at December 31, 2021, the Company had zero-cost collar contracts, which allow the Company to participate in exchange rate
movements between two strikes, as follows:
Average call price*
Average put strike price*
Total (millions)**
Brazilian Real to USD
January - December 2022
R$5.25
R$5.71
R$192.0
Chilean Peso to USD
January - December 2022
CLP$750.00
CLP$850.75
CLP$62,400.0
*
R$ = Brazilian Reais, CLP$ = Chilean Pesos.
** Evenly split by month.
In addition, as at December 31, 2021, the Company had forward contracts as follows:
Average forward price*
Total (millions)**
Brazilian Real to USD
January - December 2022
R$5.4925
R$192.0
Chilean Peso to USD
January - December 2022
CLP$798.69
CLP$62,400.0
*
R$ = Brazilian Reais, CLP = Chilean Pesos
** Evenly split by month.
Annual Report 2021
93
INFECTIOUS DISEASE RISK
Emerging infectious diseases or the threat of outbreaks of viruses or other contagions or epidemic diseases, including the COVID-
19 outbreak, could have a material adverse effect on the Company by causing operational and supply chain delays and disruptions
(including as a result of government regulation and prevention measures), labour shortages and shutdowns, social unrest, breach
of material contracts and customer agreements, government or regulatory actions or inactions, increased insurance premiums,
decreased demand or the inability to sell and deliver precious metals, declines in the price of precious metals, delays in permitting
or approvals, governmental disruptions, capital markets volatility, or other unknown but potentially significant impacts. In addition,
governments may impose strict emergency measures in response to the threat or existence of an infectious disease. The full extent
and impact of the COVID-19 pandemic is unknown and to date has included extreme volatility in financial markets, a slowdown in
economic activity, extreme volatility in commodity prices (including precious metals) and has raised the prospect of a global
recession. The international response to COVID-19 has led to significant restrictions on travel, temporary business closures,
quarantines, global stock market volatility and a general reduction in global consumer activity. The estimates of management are
considered reasonable at this time, however, the full impact of the effects these conditions on mining operations or financial results
may vary significantly due to uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the
duration of the outbreak, and the length of the travel restrictions and business closures that have been or may be imposed by the
governments of impacted countries. In addition, a significant outbreak of contagious diseases in the human population, such as
COVID-19, could result in a widespread health crisis that could adversely affect the economies and financial markets of many
countries, resulting in an economic downturn that could result in a material adverse effect on commodity prices, demand for metals,
investor confidence, and general financial market liquidity, all of which may adversely affect the Company’s business and the
market price of the Company’s common shares. Accordingly, any outbreak or threat of an outbreak of an epidemic disease or
similar public health emergency, including COVID-19, could have a material adverse effect on the Company’s business, financial
condition and results of operations.
10.
CONTINGENCIES
The Company may be involved in disputes with other parties in the future that may result in litigation. If the Company is unable to
resolve these disputes favourably, it may have a material adverse impact on the Company's financial condition, cash flow and
results of operations.
11.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
BASIS OF PREPARATION
The Company's consolidated financial statements are prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board ("IFRS"). The significant accounting policies applied are described in Note
3 to the Company's consolidated financial statements for the year ended December 31, 2021.
CRITICAL JUDGEMENTS AND ESTIMATES
In preparing the consolidated financial statements in accordance with IFRS, management is required to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Critical accounting estimates represent
estimates that are uncertain and for which changes in those estimates could materially impact the Company's consolidated financial
statements. Actual future outcomes may differ from present estimates. Management reviews its estimates and assumptions on an
ongoing basis using the most current information available.
The critical judgements and key sources of estimation uncertainty in the application of accounting policies during the year ended
December 31, 2021 are disclosed in Note 4 to the Company's consolidated financial statements for the year ended December 31,
2021.
Yamana Gold
94
12.
NON-GAAP FINANCIAL PERFORMANCE MEASURES
GEO PRODUCTION AND SALES
Production and sales of silver are treated as a gold equivalent in determining a combined precious metal production or sales unit,
commonly referred to as gold equivalent ounces ("GEO"). Specifically, guidance GEO produced are calculated by converting silver
production to its gold equivalent using relative gold/silver metal prices at an assumed ratio and adding the converted silver
production expressed in gold ounces to the ounces of gold production. Actual GEO production and sales calculations are based
on an average realized gold to silver price ratio for the relevant period.
NON-GAAP FINANCIAL PERFORMANCE MEASURES
The Company has included certain non-GAAP financial performance measures to supplement its Consolidated Financial
Statements, which are presented in accordance with IFRS, including the following:
•
Cash costs per gold equivalent ounce ("GEO") sold;
•
All-in sustaining costs ("AISC") per GEO sold;
•
Net free cash flow; and
•
Average realized price per ounce of gold/silver sold
The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with
an improved ability to evaluate the underlying performance of the Company. Non-GAAP financial performance measures do not
have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed
by other companies. The data is intended to provide additional information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with IFRS. Management's determination of the components of
non-GAAP financial performance measures and other financial measures are evaluated on a periodic basis influenced by new
items and transactions, a review of investor uses and new regulations as applicable. Any changes to the measures are duly noted
and retrospectively applied as applicable. Subtotals and per unit measures may not calculate based on amounts presented in the
following tables due to rounding.
CASH COSTS AND ALL-IN SUSTAINING COSTS PER GEO SOLD
The Company discloses “cash costs” because it understands that certain investors use this information to determine the
Company’s ability to generate earnings and cash flows for use in investing and other activities. The Company believes that
conventional measures of performance prepared in accordance with IFRS do not fully illustrate the ability of its operating mines to
generate cash flows. The measures, as determined under IFRS, are not necessarily indicative of operating profit or cash flows
from operating activities.
The measure of cash costs and all-in sustaining costs ("AISC"), along with revenue from sales, is considered to be a key indicator
of a company’s ability to generate operating earnings and cash flows from its mining operations. This data is furnished to provide
additional information and is a non-GAAP financial performance measure. The terms "cash costs per GEO sold" and "AISC per
GEO sold" do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar
non-GAAP financial performance measures employed by other companies. Non-GAAP financial performance measures should
not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and are not
necessarily indicative of operating costs, operating profit or cash flows presented under IFRS.
Cash costs include mine site operating costs such as mining, processing, administration, production taxes and royalties which are
not based on sales or taxable income calculations, but are exclusive of amortization, reclamation, capital, development and
exploration costs. The Company believes that such measure provides useful information about its underlying Cash costs of
operations. Cash costs are computed on a weighted average basis as follows:
•
Cash costs per GEO sold - The total costs used as the numerator of the unitary calculation represent cost of sales
excluding DDA, net of treatment and refining charges. The attributable cost is calculated net of by-products by applying
zinc net revenues, which are incidental to the production of precious metals, as a credit to GEO sold, thereby allowing
the Company’s management and stakeholders to assess net costs of precious metal sales. These costs are then divided
by GEO sold.
Annual Report 2021
95
AISC figures are calculated in accordance with a standard developed by the World Gold Council (“WGC”, a non-regulatory, market
development organization for the gold industry). Adoption of the standard is voluntary, and the standard is an attempt to create
uniformity and a standard amongst the industry and those that adopt it. Nonetheless, the cost measures presented herein may not
be comparable to other similarly titled measures of other companies.
AISC seeks to represent total sustaining expenditures of producing and selling GEO from current operations. The total costs used
as the numerator of the unitary calculation represent cash costs (as defined above), and includes cost components of mine
sustaining capital expenditures including stripping and underground mine development, corporate and mine-site general and
administrative expense, sustaining mine-site exploration and evaluation expensed and capitalized and accretion and amortization
of reclamation and remediation. AISC does not include capital expenditures attributable to projects or mine expansions, exploration
and evaluation costs attributable to growth projects, income tax payments, borrowing costs and dividend payments. Consequently,
this measure is not representative of all of the Company's cash expenditures. In addition, the calculation of AISC does not include
depletion, depreciation and amortization expense as it does not reflect the impact of expenditures incurred in prior periods. AISC
are computed on a weighted average basis as follows:
•
AISC per GEO sold - reflect allocations of the aforementioned cost components on the basis that is consistent with the
nature of each of the cost components to the GEO production and sales activities but net of by-product revenue credits
from sales of zinc.
The following tables provide detailed reconciliations from total costs of sales to cash costs and AISC, for the years ended December
31, 2021, and December 31, 2020. Subtotals and per unit measures may not calculate based on amounts presented in the following
tables due to rounding.
Yamana Gold
96
Reconciliation of Total Cost of Sales to Cash Costs and AISC
Cash Cost & AISC Reconciliation - Total
For the three months ended
December 31, 2021
For the three months ended
December 31, 2020
(In millions of US Dollars except GEO sold and per GEO sold amounts)
Total
Total
GEO
Non-
Sustaining
Total
Total
GEO
Non-
Sustaining
Cost of sales excluding DDA
$
180.0 $
180.0 $
—
$
166.8 $
166.8 $
—
DDA
125.7
125.7
—
112.5
112.5
—
Total cost of sales
$
305.7 $
305.7 $
—
$
279.3 $
279.3 $
—
DDA
(125.7)
(125.7)
—
(112.5)
(112.5)
—
Total cash costs
$
180.0 $
180.0 $
—
$
166.8 $
166.8 $
—
AISC adjustments:
General and administrative expenses
20.0
20.0
—
23.4
23.4
—
Community costs in other operating expenses
2.7
2.7
—
1.9
1.9
—
Reclamation & remediation - accretion & amortization
8.7
6.8
1.8
5.8
5.8
—
Exploration capital expenditures
19.6
8.4
11.1
21.0
11.8
9.2
Exploration and evaluation expenses
6.8
0.7
6.1
6.0
3.5
2.5
Sustaining capital expenditures
44.4
44.4
—
47.8
47.8
—
Leases (IFRS 16 Adjustment)
6.7
6.7
—
4.8
4.8
—
Total AISC
$
269.7
$
265.8
GEO sold(2)
280,409
246,955
Cost of sales excluding DDA per GEO sold
$
642
$
675
DDA per GEO sold
$
448
$
455
Total cost of sales per GEO sold
$
1,091
$
1,131
Cash costs per GEO sold
$
642
$
675
AISC per GEO sold
$
962
$
1,076
Cash Cost & AISC Reconciliation - Total
For the year ended
December 31, 2021
For the year ended
December 31, 2020
(In millions of US Dollars except GEO and per GEO amounts)
Total
Total
GEO
Non-
sustaining
Total
Total
GEO
Non-
Sustaining
Cost of sales excluding DDA
$
695.0 $
695.0 $
—
$
614.1 $
614.1 $
—
DDA
447.9
447.9
—
395.0
395.0
—
Total cost of sales
$
1,142.9 $
1,142.9 $
—
$
1,009.1 $
1,009.1 $
—
DDA
(447.9)
(447.9)
—
(395.0)
(395.0)
—
Total cash costs
$
695.0 $
695.0 $
—
$
614.1 $
614.1 $
—
AISC adjustments:
General and administrative expenses
74.8
74.8
—
85.9
85.9
—
Community costs in other operating expenses
6.5
6.5
—
6.4
6.4
—
Reclamation & remediation - accretion & amortization
34.6
27.2
7.4
20.1
20.1
—
Exploration capital expenditures
68.1
34.9
33.2
57.6
41.2
16.4
Exploration and evaluation expenses
31.6
2.7
28.9
15.1
9.6
5.5
Sustaining capital expenditures
173.7
173.7
—
149.3
149.3
—
Leases (IFRS 16 Adjustment)
24.3
24.3
—
20.3
20.3
—
Total AISC
$
1,039.1
$
946.9
GEO sold(2)
1,009,262
876,520
Cost of sales excluding DDA per GEO sold
$
689
$
701
DDA per GEO sold
$
444
$
451
Total cost of sales per GEO sold
$
1,132
$
1,151
Cash costs per GEO sold
$
689
$
701
AISC per GEO sold
$
1,030
$
1,080
Annual Report 2021
97
Cash Cost & AISC Reconciliation - Operating Segments
For the three months ended December 31, 2021
(In millions of US Dollars except GEO sold and per GEO sold amounts)
Total
Malartic
GEO
Jacobina
GEO
Cerro
Moro
GEO
El Peñón
GEO
Minera
Florida
GEO
Corporate
& Non-
Sustaining
Cost of sales excluding DDA
$
180.0 $
61.8 $
22.0 $
40.7 $
37.2 $
18.3 $
—
DDA
125.7
45.4
15.2
27.9
22.2
12.5
2.5
Total cost of sales
$
305.7 $
107.2 $
37.2 $
68.6 $
59.4 $
30.8 $
2.5
DDA
(125.7)
(45.4)
(15.2)
(27.9)
(22.2)
(12.5)
(2.5)
Total cash costs
$
180.0 $
61.8 $
22.0 $
40.7 $
37.2 $
18.3 $
—
AISC adjustments:
General and administrative expenses
20.0
1.3
0.2
0.3
0.3
0.4
17.5
Community costs in other operating expenses
2.7
0.9
0.3
1.3
—
—
0.2
Reclamation & remediation - accretion & amortization
8.7
3.9
0.3
1.2
0.4
0.8
2.1
Exploration capital expenditures
19.6
—
1.8
1.3
2.3
3.1
11.1
Exploration and evaluation expenses
6.8
—
—
—
—
—
6.8
Sustaining capital expenditures
44.4
17.3
4.2
12.4
7.1
2.9
0.5
Leases (IFRS 16 Adjustment)
6.7
0.2
2.4
1.4
1.3
0.9
0.5
Total AISC
$
85.4 $
31.2 $
58.6 $
48.6 $
26.4
GEO sold(2)
91,589
48,732
56,087
63,943
20,058
Cost of sales excluding DDA per GEO sold
$
676
$
452 $
726
$
582 $
911
DDA per GEO sold
$
496
$
312 $
498
$
347 $
624
Total cost of sales per GEO sold
$
1,171 $
763 $
1,224 $
929 $
1,535
Cash costs per GEO sold
$
676
$
452 $
726
$
582 $
911
AISC per GEO sold
$
931
$
643 $
1,044 $
761 $
1,313
Cash Cost & AISC Reconciliation - Operating Segments
For the three months ended December 31, 2020
(In millions of US Dollars except GEO sold and per GEO sold amounts)
Total
Malartic
GEO
Jacobina
GEO
Cerro Moro
GEO
El Peñón
GEO
Minera
Florida
GEO
Corporate
& Non-
Sustaining
Cost of sales excluding DDA
$
166.8 $
53.4 $
25.2 $
33.8 $
36.0
$
18.2 $
—
DDA
112.5
41.5
13.6
25.4
16.9
12.5
2.6
Total cost of sales
$
279.3 $
94.9 $
38.8 $
59.2 $
52.9
$
30.7 $
2.6
DDA
(112.5)
(41.5)
(13.6)
(25.4)
(16.9)
(12.5)
(2.6)
Total cash costs
$
166.8 $
53.4 $
25.2 $
33.8 $
36.0
$
18.2 $
—
AISC adjustments:
General and administrative expenses
23.4
1.0
0.2
0.3
0.3
0.2
21.4
Community costs in other operating expenses
1.9
0.1
0.1
1.6
—
—
0.1
Reclamation & remediation - accretion & amortization
5.8
2.4
0.5
0.7
0.6
1.0
0.6
Exploration capital expenditures
21.0
—
2.0
3.5
4.7
1.8
9.0
Exploration and evaluation expenses
6.0
0.1
0.1
—
—
—
6.0
Sustaining capital expenditures
47.8
18.6
5.4
9.0
9.9
4.4
0.5
Leases (IFRS 16 Adjustment)
4.8
0.2
1.0
1.3
1.5
0.4
0.4
Total AISC
$
75.8 $
34.5 $
50.2 $
53.0
$
26.0
GEO sold(2)
84,348
42,789
44,101
51,738
23,979
Cost of sales excluding DDA per GEO sold
$
634 $
590
$
768 $
696
$
760
DDA per GEO sold
$
493 $
317
$
576 $
327
$
519
Total cost of sales per GEO sold
$
1,126 $
907
$
1,343 $
1,023
$
1,279
Cash costs per GEO sold
$
634 $
590
$
768 $
696
$
760
AISC per GEO sold
$
898 $
807
$
1,139 $
1,025
$
1,087
Yamana Gold
98
Cash Cost & AISC Reconciliation - Operating Segments
For the year ended December 31, 2020
(In millions of US Dollars except GEO and per GEO amounts)
Total
Malartic
GEO
Jacobina
GEO
Cerro Moro
GEO
El Peñón
GEO
Minera
Florida
GEO
Corporate
& Non-
Sustaining
Cost of sales excluding DDA
$
614.1 $
185.4 $
95.5 $
115.8 $
141.8 $
75.6 $
—
DDA
395.0
133.4
52.6
86.1
69.6
44.2
9.1
Total cost of sales
$ 1,009.1 $
318.8 $
148.1 $
201.8 $
211.4 $
119.8 $
9.1
DDA
(395.0)
(133.4)
(52.6)
(86.1)
(69.6)
(44.2)
(9.1)
Total cash costs
$
614.1 $
185.4 $
95.5 $
115.8 $
141.8 $
75.6 $
—
AISC adjustments:
General and administrative expenses
85.9
2.5
0.7
0.5
0.5
0.4
81.3
Community costs in other operating expenses
6.4
0.3
0.7
4.6
—
—
0.8
Reclamation & remediation - accretion & amortization
20.1
8.2
2.2
2.8
2.2
3.6
1.1
Exploration capital expenditures
57.6
—
6.0
12.6
15.9
7.0
16.1
Exploration and evaluation expenses
15.1
0.1
0.1
—
—
—
14.9
Sustaining capital expenditures
149.3
52.5
21.6
29.5
31.4
12.6
1.7
Leases (IFRS 16 Adjustment)
20.3
0.7
4.1
5.0
7.0
1.8
1.7
Total AISC
$
249.7 $
130.9 $
170.8 $
198.8 $
101.0
GEO sold(2)
264,198
175,561
133,358
215,667
87,735
Cost of sales excluding DDA per GEO sold
$
702
$
544 $
868
$
657 $
862
DDA per GEO sold
$
505
$
300 $
645
$
323 $
503
Total cost of sales per GEO sold
$
1,207 $
844 $
1,513 $
980 $
1,366
Cash costs per GEO sold
$
702
$
544 $
868
$
657 $
862
AISC per GEO sold
$
945
$
746 $
1,280 $
922 $
1,152
Cash Cost & AISC Reconciliation - Operating Segments
For the year ended December 31, 2021
(In millions of US Dollars except GEO and per GEO amounts)
Total
Malartic
GEO
Jacobina
GEO
Cerro
Moro
GEO
El Peñón
GEO
Minera
Florida
GEO
Corporate
& Non-
Sustaining
Cost of sales excluding DDA
$
695.0 $
231.3 $
105.5 $
130.5 $
150.3 $
77.4 $
—
DDA
447.9
174.7
55.4
74.6
85.0
48.5
9.7
Total cost of sales
$ 1,142.9 $
406.0 $
160.9 $
205.1 $
235.3 $
125.9 $
9.7
DDA
(447.9)
(174.7)
(55.4)
(74.6)
(85.0)
(48.5)
(9.7)
Total cash costs
$
695.0 $
231.3 $
105.5 $
130.5 $
150.3 $
77.4 $
—
AISC adjustments:
General and administrative expenses
74.8
4.0
0.7
0.4
0.5
0.7
68.5
Community costs in other operating expenses
6.5
1.2
0.9
4.0
—
—
0.4
Reclamation & remediation - accretion & amortization
34.6
15.7
1.5
3.2
2.0
4.4
7.8
Exploration capital expenditures
68.1
—
7.2
5.6
15.6
6.5
33.2
Exploration and evaluation expenses
31.6
0.2
0.2
—
—
—
31.2
Sustaining capital expenditures
173.7
69.2
14.0
39.8
34.6
15.2
0.9
Leases (IFRS 16 Adjustment)
24.3
0.7
7.6
5.4
5.1
3.3
2.2
Total AISC
$
322.3 $
137.6 $
188.9 $
208.1 $
107.5
GEO sold(2)
357,667
186,534
153,882
223,375
87,804
Cost of sales excluding DDA per GEO sold
$
647 $
566
$
848 $
673
$
881
DDA per GEO sold
$
488 $
297
$
485 $
381
$
553
Total cost of sales per GEO sold
$
1,135 $
863
$
1,332 $
1,054 $
1,434
Cash costs per GEO sold
$
647 $
566
$
848 $
673
$
881
AISC per GEO sold
$
901 $
738
$
1,228 $
932
$
1,224
Annual Report 2021
99
NET FREE CASH FLOW
The Company uses the financial measure "net free cash flow", which is a non-GAAP financial performance measure, to supplement
information in its consolidated financial statements. Net free cash flow does not have any standardized meaning prescribed under
IFRS, and therefore it may not be comparable to similar measures employed by other companies. The Company believes that in
addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use this
information to evaluate the Company’s performance with respect to its operating cash flow capacity to meet non-discretionary
outflows of cash. The presentation of net free cash flow is not meant to be a substitute for the cash flow information presented in
accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. Net free cash flow is calculated
as cash flows from operating activities adjusted for advance payments received pursuant to metal purchase agreements and other
cash flows not related to current period production, less non-discretionary items such as sustaining capital expenditures, interest
paid, payment of lease liabilities, and cash used in other financing activities.
For the three months ended December 31,
For the year ended December 31,
(In millions of US Dollars)
2021
2020
2021
2020
Cash flows from operating activities
$
238.2 $
181.5 $
742.3 $
617.8
Adjustments to operating cash flows:
Amortization of deferred revenue
3.5
3.8
18.0
16.1
Temporary suspension, standby and other incremental
COVID-19 costs
8.7
9.2
37.4
40.5
Legal contingencies included in other cash payments
—
—
—
8.0
Non-discretionary items related to the current period
Sustaining capital expenditures
(44.4)
(47.8)
(173.7)
(149.3)
Interest paid
(8.3)
(21.3)
(47.2)
(54.9)
Payment of lease liabilities
(5.8)
(4.2)
(19.2)
(17.1)
Cash used in other financing activities
(3.5)
(2.3)
(10.2)
(5.5)
Net free cash flow
$
188.4 $
118.9
$
547.4 $
455.6
AVERAGE REALIZED PRICE PER OUNCE OF GOLD & SILVER
The Company uses the financial measures "average realized gold price" and "average realized silver price", which are non-GAAP
financial performance measures, to supplement its consolidated financial statements. Average realized price does not have any
standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures employed by other
companies. The Company believes that in addition to conventional measures prepared in accordance with IFRS, the Company
and certain investors and analysts use this information to evaluate the Company’s performance vis-à-vis average market prices of
metals for the period. The presentation of average realized metal prices is not meant to be a substitute for the revenue information
presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measure.
Average realized metal price represents the sale price of the underlying metal before deducting treatment and refining charges,
and other quotational and pricing adjustments. Average realized prices are calculated as the revenue related to each of the metals
sold, i.e. gold and silver divided by the quantity of the respective units of metals sold, i.e. gold ounce and silver ounce.
Reconciliations of average realized metal prices to revenue are provided below:
For the three months ended December 31,
2021
2020
Quantity
sold
Revenue
per ounce
Revenue
(In millions of
US Dollars)
Quantity
sold
Revenue
per ounce
Revenue
(In millions of
US Dollars)
Gold
242,486 oz
$
1,796 $
435.5
213,439 oz
$
1,875 $
400.2
Silver
2,937,805 oz
$
23.24
68.3
2,563,166 oz
$
24.02
61.6
Revenue
$
503.8
$
461.8
Yamana Gold
100
For the three months ended December 31,
2021
2020
Quantity
sold
Average
Realized
Price
Revenue
(In millions of
US Dollars)
Quantity
sold
Average
Realized
Price
Revenue
(In millions of
US Dollars)
Gold
242,486 oz
$
1,796 $
435.5
213,439 oz
$
1,875 $
400.2
Silver
2,709,252 oz
$
23.35
63.3
2,294,546 oz
$
24.32
55.8
Silver subject to metal sales agreement*
228,553 oz
$
21.94
5.0
268,620 oz
$
21.44
5.8
2,937,805 oz
$
23.24
2,563,166 oz
$
24.02
Gross revenue
$
503.8
$
461.8
(Deduct) add:
Deferred revenue adjustment**
—
—
Other adjustments
—
—
Revenue
$
503.8
$
461.8
For the year ended December 31,
2021
2020
Quantity
sold
Revenue
per ounce
Revenue
(In millions of
US Dollars)
Quantity
sold
Revenue
per ounce
Revenue
(In millions of
US Dollars)
Gold
885,293 oz
$
1,799 $
1,592.4
754,970 oz $
1,777 $
1,341.8
Silver
8,976,269 oz
$
24.85
223.0
10,382,086 oz $
21.11
219.2
Revenue
$
1,815.4
$
1,561.0
For the year ended December 31,
2021
2020
Quantity
sold
Average
Realized
Price
Revenue
(In millions of
US Dollars)
Quantity
sold
Average
Realized
Price
Revenue
(In millions of
US Dollars)
Gold
885,293 oz
$
1,799 $
1,592.4
754,970 oz $
1,777 $
1341.8
Silver
7,951,386 oz
$
24.85
197.6
9,380,951 oz $
21.04
197.4
Silver subject to metal sales agreement*
1,024,883 oz
$
22.59
23.2
1,001,135 oz $
19.91
19.9
8,976,269 oz
$
24.59
10,382,086 oz $
20.93
Gross revenue
$
1,813.2
$
1,559.1
(Deduct) add:
Deferred revenue adjustment**
2.4
1.9
Other adjustments
(0.2)
—
Revenue
$
1,815.4
$
1,561.0
*
Balances represent the metals sold under the metal sales agreement.
** Consideration from the Company's metal sales agreement is considered variable. Revenue can be subject to cumulative adjustments when the number of
ounces to be delivered under the agreement changes. During the three months ended March 31, 2021 and 2020, the Company recognized an adjustment to
revenue and finance costs due to a change in the Company's reserve and resource estimates, and therefore, the number of ounces expected to be delivered
under the life of the agreement.
Annual Report 2021
101
13.
DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is gathered and
reported to senior management, including the Company’s President and Chief Executive Officer and Senior Vice President,
Finance and Chief Financial Officer, on a timely basis so that appropriate decisions can be made regarding public disclosure. The
Company’s system of disclosure controls and procedures includes, but is not limited to, our Timely Disclosure and Confidentiality
Policy, our Code of Conduct, our Insider Trading Policy, our Corporate Controls Policy, the effective functioning of our Audit
Committee and procedures in place to systematically identify matters warranting consideration of disclosure by the Audit
Committee.
As at the end of the period covered by this Management’s Discussion and Analysis, management of the Company, with the
participation of the President and Chief Executive Officer and the Senior Vice President, Finance and Chief Financial Officer,
evaluated the effectiveness of the Company’s disclosure controls and procedures as required by applicable rules of the Canadian
Securities Administrators (or Canadian securities regulatory authorities) and the U.S. Securities and Exchange Commission (or
the SEC). The evaluation included documentation review, inquiries and other procedures considered by management to be
appropriate in the circumstances. Based on that evaluation, the President and Chief Executive Officer and the Senior Vice
President, Finance and Chief Financial Officer have concluded that, as of the end of the period covered by this Management’s
Discussion and Analysis, the disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act
of 1934) were effective to provide reasonable assurance that information required to be disclosed in the Company’s annual filings
and interim filings and other reports filed or submitted under applicable securities laws, is recorded, processed, summarized and
reported within time periods specified by those laws and that material information is accumulated and communicated to
management of the Company, including the President and Chief Executive Officer and the Senior Vice President, Finance and
Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of the Company is responsible for establishing and maintaining effective "internal control over financial reporting" as
such term is defined in the rules of the Canadian Securities Administrators and the SEC. The Company’s internal control over
financial reporting is designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting for
external purposes in accordance with IFRS. The Company’s internal control over financial reporting includes:
•
Maintaining records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of the assets
of the Company;
•
Providing reasonable assurance that transactions are recorded as necessary for preparation of our Consolidated
Financial Statements in accordance with generally accepted accounting principles;
•
Providing reasonable assurance that receipts and expenditures are made in accordance with authorizations of
management and the directors of the Company; and
•
Providing reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a
material effect on the Company’s Consolidated Financial Statements would be prevented or detected on a timely basis.
The Company’s internal control over financial reporting may not prevent or detect all misstatements because of inherent
limitations. Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate due to changes in conditions or deterioration in the degree of compliance with the Company’s policies and
procedures.
The Company's management, with the participation of its President and Chief Executive Officer, and Senior Vice President,
Finance and Chief Financial Officer, assessed the effectiveness of the Company's internal control over financial reporting. In
making this assessment, management used the criteria set forth in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management and the President
and Chief Executive Officer and Senior Vice President, Finance and Chief Financial Officer, have concluded that, as of December
31, 2021, the Company’s internal control over financial reporting was effective. The effectiveness of the Company’s internal control
over financial reporting as of December 31, 2021 has been audited by Deloitte LLP, the Company’s independent registered public
accounting firm, as stated in their report immediately preceding the Company’s audited consolidated financial statements for the
year ended December 31, 2021.
Yamana Gold
102
CHANGES IN INTERNAL CONTROLS
During the three months and year ended December 31, 2021, there has been no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting.
LIMITATIONS OF CONTROLS AND PROCEDURES
The Company’s management, including the President and Chief Executive Officer and the Senior Vice President, Finance and
Chief Financial Officer, believe that any disclosure controls and procedures or internal controls over financial reporting, no matter
how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls
must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute
assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These
inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because
of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by unauthorized override of the control. The design of any systems of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system,
misstatements due to error or fraud may occur and not be detected.
This report provides a discussion and analysis of the financial condition and results of operations (“Management’s Discussion and
Analysis”) to enable a reader to assess material changes in financial condition between December 31, 2021, and December 31,
2020, and results of operations for the periods ended December 31, 2021, and December 31, 2020.
This Management’s Discussion and Analysis has been prepared as of February 17, 2022. The consolidated financial statements
prepared in accordance with IFRS as issued by the IASB follow this Management’s Discussion and Analysis. This Management’s
Discussion and Analysis is intended to supplement and complement the annual audited consolidated financial statements and
notes thereto as at and for the year ended December 31, 2021 (collectively the “Financial Statements”). You are encouraged to
review the Financial Statements in conjunction with your review of this Management’s Discussion and Analysis. This Management’s
Discussion and Analysis should be read in conjunction with both the Financial Statements and the most recent Annual Information
Form on file with the Securities Commissions of all of the provinces in Canada and with the United States Securities and Exchange
Commission. Certain notes to the Financial Statements are specifically referred to in this Management’s Discussion and Analysis.
All Dollar amounts in the Management’s Discussion and Analysis are in US Dollars, unless otherwise specified.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Management’s Discussion and Analysis contains or incorporates by reference “forward-looking statements” and “forward-
looking information” under applicable Canadian securities legislation and within the meaning of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking information includes, but is not limited to information with respect to the Company’s
strategy, plans or future financial or operating performance, results of feasibility studies, repayment of debt or updates regarding
mineral reserves and mineral resources. Forward-looking statements are characterized by words such as “plan", “expect”,
“budget”, “target”, “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, assumptions and estimates of
management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and
uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those
projected in the forward-looking statements. These factors include the Company’s expectations in connection with the production
and exploration, development and expansion plans at the Company's projects discussed herein being met, the impact of proposed
optimizations at the Company's projects, changes in national and local government legislation, taxation, controls or regulations
and/or change in the administration of laws, policies and practices, and the impact of general business and economic conditions,
global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future
conditions, fluctuating metal prices (such as gold, silver, copper and zinc), currency exchange rates (such as the Canadian Dollar,
the Brazilian Real, the Chilean Peso and the Argentine Peso versus the United States Dollar), the impact of inflation, possible
variations in ore grade or recovery rates, changes in the Company’s hedging program, changes in accounting policies, changes in
mineral resources and mineral reserves, risks related to asset dispositions, risks related to metal purchase agreements, risks
related to acquisitions, changes in project parameters as plans continue to be refined, changes in project development,
Annual Report 2021
103
construction, production and commissioning time frames, risks associated with infectious diseases, including COVID-19,
unanticipated costs and expenses, higher prices for fuel, steel, power, labour and other consumables contributing to higher costs
and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes
in mine life, final pricing for concentrate sales, unanticipated results of future studies, seasonality and unanticipated weather
changes, costs and timing of the development of new deposits, success of exploration activities, permitting timelines, government
regulation and the risk of government expropriation or nationalization of mining operations, risks related to relying on local advisors
and consultants in foreign jurisdictions, environmental risks, unanticipated reclamation expenses, risks relating to joint venture
operations, title disputes or claims, limitations on insurance coverage, timing and possible outcome of pending and outstanding
litigation and labour disputes, risks related to enforcing legal rights in foreign jurisdictions, as well as those risk factors discussed
or referred to herein and in the Company's Annual Information Form filed with the securities regulatory authorities in all provinces
of Canada and available at www.sedar.com, and the Company’s Annual Report on Form 40-F filed with the United States Securities
and Exchange Commission. Although the Company has attempted to identify important factors that could cause actual actions,
events or results to differ materially from those described in forward-looking statements, there may be other factors that cause
actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The
Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates,
assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance
on forward-looking statements. The forward-looking information contained herein is presented for the purpose of assisting investors
in understanding the Company’s expected financial and operational performance and results as at and for the periods ended on
the dates presented in the Company’s plans and objectives and may not be appropriate for other purposes.
CAUTIONARY STATEMENT REGARDING MINERAL RESERVES AND MINERAL RESOURCES
Scientific and technical information contained in this Management’s Discussion and Analysis has been reviewed and approved by
Sébastien Bernier, P. Geo (Senior Director, Geology and Mineral Resources). Sébastien Bernier, P. Geo is an employee of Yamana
Gold Inc. and a "Qualified Person" as defined by Canadian Securities Administrators' National Instrument 43-101 - Standards of
Disclosure for Mineral Projects.
Readers should refer to the Company's most recent Annual Information Form and other continuous disclosure documents filed by
the Company since January 1, 2021 available at www.sedar.com, for further information on mineral reserves and mineral
resources, which is subject to the qualifications and notes set forth therein.
CAUTIONARY STATEMENT TO UNITED STATES INVESTORS CONCERNING ESTIMATES OF MINERAL RESERVES AND
MINERAL RESOURCES
This Management’s Discussion and Analysis has been prepared in accordance with the requirements of the securities laws in
effect in Canada, which differ in certain material respects from the disclosure requirements promulgated by the Securities and
Exchange Commission (the “SEC”). For example, the terms “mineral reserve”, “proven mineral reserve”, “probable mineral
reserve”, “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are
Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral
Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM Definition Standards on
Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions
in the disclosure requirements promulgated by the SEC. Accordingly, information contained in this Management’s Discussion and
Analysis may not be comparable to similar information made public by U.S. companies reporting pursuant to SEC disclosure
requirements.
*************
Yamana Gold
104
ENDNOTES
(1)
A cautionary note regarding non-GAAP financial performance measures, along with detailed reconciliations and
descriptions, can be found in Section 12: Non-GAAP Financial Performance Measures.
(2)
GEO is calculated as the sum of gold ounces and the gold equivalent of silver ounces using a ratio of 77.28 and 72.55
for the three months and year ended December 31, 2021, respectively, and 76.82 and 88.86 for the three months and
year ended December 31, 2020, respectively. GEO calculations for actuals are based on an average market gold to
silver price ratio for the relevant period. Guidance GEO assumes gold ounces plus the equivalent of silver ounces using
a ratio of 72.00.
(3)
Net earnings and adjustments to net earnings are those attributable to Yamana Gold Inc. equity holders.
(4)
Yamana mines is defined as Yamana's currently held mines, which are Canadian Malartic, Jacobina, Cerro Moro, El
Peñón and Minera Florida.
(5)
Included in the year ended December 31, 2020 gold production figure is 18,929 of pre-commercial production ounces,
related to the Company's 50% interest in the Canadian Malartic mine's Barnat pit which achieved commercial production
on September 30, 2020. Pre-commercial production ounces are excluded from sales figures, however pre-commercial
production ounces that were sold during their respective period of production had their corresponding revenues and
costs of sales capitalized to mineral properties, captured as a reduction to expansionary capital expenditures.
(6)
Working capital is defined as the excess of current assets over current liabilities.
(7)
Vaccination rates are exclusive of Canadian Malartic, in which we hold a 50% interest. Vaccination rates at Canadian
Malartic are in line with the high Abitibi-Témiscamingue regional rates.
Annual Report 2021
105
TABLE OF CONTENTS
Page
Management's Responsibility for Financial Reporting
Reports of Independent Registered Public Accounting Firm (PCAOB ID 1208)
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Earnings
Consolidated Statements of Cash Flows
Consolidated Balance Sheets
Consolidated Statements of Changes in Equity
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS:
Note 1:
Description of Business and Nature of Operations
Note 2:
Basis of Preparation and Presentation
Note 3:
Significant Accounting Policies
Note 4:
Critical Judgements and Estimation Uncertainties
Note 5:
Recent Accounting Pronouncements
Note 6:
Business Transactions
Note 7:
Segment Information
Note 8:
Revenue
Note 9:
Employee Compensation and Benefits Expenses
Note 10:
Other Operating Expenses, Net
Note 11:
Other (Income) Costs, Net
Note 12:
Finance Costs
Note 13:
Impairment and Reversal of Impairment
Note 14:
Income Taxes
Note 15:
Earnings Per Share
Note 16:
Supplementary Cash Flow Information
Note 17:
Financial Instruments
Note 18:
Financial Risk Management
Note 19:
Inventories
Note 20:
Other Financial Assets
Note 21:
Other Assets
Note 22:
Property, Plant and Equipment
Note 23:
Goodwill and Other Intangible Assets
Note 24:
Investments in Associates
Note 25:
Trade and Other Payables
Note 26:
Other Financial Liabilities
Note 27:
Other Provisions and Liabilities
Note 28:
Long-Term Debt and Credit Facility
Note 29:
Environmental Rehabilitation Provision
Note 30:
Share Capital
Note 31:
Share-Based Payments
Note 32:
Non-Controlling Interests
Note 33:
Capital Management
Note 34:
Leases
Note 35:
Commitments and Contingencies
Note 36:
Related Party Transactions
107
108
111
112
113
114
115
116
116
117
130
134
135
142
144
144
145
145
145
145
147
149
150
151
155
157
157
158
158
159
160
161
161
161
162
163
164
164
165
166
166
167
168
Yamana Gold
106
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying consolidated financial statements of Yamana Gold Inc. and subsidiaries ("Yamana Gold Inc." or the "Company")
and all the information in this annual report are the responsibility of management and have been approved by the Board of
Directors.
The consolidated financial statements have been prepared by management on a going concern basis in accordance with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). When
alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances. Financial
statements are not exact since they include certain amounts based on estimates and judgements. Management has determined
such amounts on a reasonable basis in order to ensure that the financial statements are presented fairly, in all material respects.
Management has prepared the financial information presented elsewhere in the annual report and has ensured that it is consistent
with that in the consolidated financial statements.
Yamana Gold Inc. maintains systems of internal accounting and administrative controls in order to provide, on a reasonable basis,
assurance that the financial information is relevant, reliable and accurate and that the Company's assets are appropriately
accounted for and adequately safeguarded. The Company's internal control over financial reporting as of December 31, 2021, is
based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately
responsible for reviewing and approving the financial statements. The Board carries out this responsibility principally through its
Audit Committee ("Committee").
The Audit Committee is appointed by the Board, and all of its members are independent directors. The Committee meets at least
four times a year with management, as well as the external auditors, to discuss internal controls over the financial reporting process,
auditing matters and financial reporting issues, to satisfy itself that each party is properly discharging its responsibilities, and to
review the quarterly and the annual reports, the consolidated financial statements and the external auditors' reports. The
Committee reports its findings to the Board for consideration when approving the consolidated financial statements for issuance
to the shareholders. The Committee also considers, for review by the Board and approval by the shareholders, the engagement
or reappointment of the external auditors. The consolidated financial statements have been audited by Deloitte LLP, Chartered
Professional Accountants, Licensed Public Accountants, in accordance with the standards of the Public Company Accounting
Oversight Board (United States) on behalf of the shareholders. Deloitte LLP has full and free access to the Audit Committee.
“Daniel Racine”
“Jason LeBlanc”
President and
Senior Vice President, Finance and
Chief Executive Officer
Chief Financial Officer
February 17, 2022
Annual Report 2021
107
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Yamana Gold Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Yamana Gold Inc. and subsidiaries (the "Company") as of
December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive earnings, cash flows and
changes in equity, for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred
to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position
of the Company as of December 31, 2021 and 2020, and its financial performance and its cash flows for each of the two years in
the period ended December 31, 2021, in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal
Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and
our report dated February 17, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are
material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the
accounts or disclosures to which they relate.
Mining Properties – Assessment of Whether Indicators of Impairment or Impairment Reversal Exist – Refer to Notes 4, 13
and 22 of the Financial Statements
Critical Audit Matter Description
The Company’s determination of whether an indicator of impairment or impairment reversal exists requires significant management
judgment.
While there are several inputs that are required to determine whether or not an indicator of impairment or impairment reversal
exists, the judgments with the highest degree of subjectivity are future commodity prices (gold and silver), inputs to the Company’s
market capitalization deficiency assessment (specifically, control premiums, industry specific factors and company performance),
future foreign exchange rates and the discount rate. Auditing these estimates and inputs required a high degree of subjectivity in
applying audit procedures and in evaluating the results of those procedures. This resulted in an increased extent of audit effort,
including the involvement of fair value specialists.
Yamana Gold
108
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to future commodity prices (gold and silver), inputs to the market capitalization deficiency assessment
(specifically, control premiums, industry specific factors and company performance), future foreign exchange rates and the discount
rate considered in the assessment of indicators of impairment or impairment reversal included the following, among others:
•
Evaluated the effectiveness of controls over management’s assessment of indicators of impairment or impairment
reversal, including the determination of future commodity prices (gold and silver), future foreign exchange rates and the
discount rate.
•
With the assistance of fair value specialists;
◦
Evaluated the reasonableness of the forecasts of future gold and silver prices and future foreign exchange rates
by comparing management’s forecasts to third party forecasts.
◦
Evaluated management’s assessment of the market capitalization deficiency to the carrying value of the
Company’s net assets which included assessing control premiums, industry specific factors and company
performance.
◦
Evaluated the reasonableness of the discount rate by testing the source information underlying the determination
of the discount rate.
Impairment assessment – Canadian Malartic Cash-Generating Unit (CGU) Goodwill – Refer to Notes 4, 13, 22 and 23 of
the Financial Statements
Critical Audit Matter Description
The Company has goodwill associated with its investment in the Canadian Malartic CGU. The Company performs an annual
assessment of impairment for goodwill, or more frequently if any event or change in circumstances indicates that the carrying value
of the CGU may be above its recoverable amount using the higher of fair value less costs of disposal and value in use. In addition,
at each reporting date, the Company reviews the carrying amounts of its mining properties and plant and equipment at a CGU
level to determine whether there is an indication that these assets might be impaired, or that previously recognized impairment
losses may no longer exist or may have decreased. If any such indicators exist, the recoverable amount of the relevant CGU is
estimated based on the higher of its fair value less costs of disposal and value in use, to determine the extent of the impairment
loss or impairment loss reversal.
While there are several inputs that are required to determine the recoverable amount for this CGU, the estimates and assumptions
with the highest degree of subjectivity and judgment uncertainty are forecasts of future revenues (specifically future gold and silver
prices and potential ounces), future foreign exchange rates and discount rate. Performing audit procedures to evaluate the
reasonableness of such estimates and assumptions required a high degree of auditor judgment and an increased extent of audit
effort, including the involvement of fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the forecasts of future revenues (specifically future gold and silver prices and potential ounces),
future foreign exchange rates and discount rate used in determining the recoverable value of the CGU included the following,
among others:
•
Evaluated the effectiveness of controls over management’s determination of the future commodity prices (gold and silver),
in-situ value assigned to the potential ounces, future foreign exchange rates, and the discount rate.
•
With the assistance of fair value specialists;
◦
Evaluated the reasonableness of the forecasts of future gold and silver prices and future foreign exchange rates
by comparing management’s forecasts to third party forecasts.
◦
Obtained third party information surrounding in-situ values to assess the reasonableness of the value assigned
to the potential ounces.
◦
Evaluated the reasonableness of the discount rate by testing the source information underlying the determination
of the discount rate and developed a range of independent estimates for the discount rate and compared to the
discount rate selected by management.
"/s/ Deloitte LLP”
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
February 17, 2022
We have served as the Company's auditor since 1995.
Annual Report 2021
109
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Yamana Gold Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Yamana Gold Inc. and subsidiaries (the “Company”) as of December
31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated
Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021 of the Company and our report
dated February 17, 2022, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal
Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
"/s/ Deloitte LLP"
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
February 17, 2022
Yamana Gold
110
YAMANA GOLD INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
(In millions of US Dollars except for shares and per share amounts)
2021
2020
Revenue (Note 8)
$
1,815.4 $
1,561.0
Cost of sales excluding depletion, depreciation and amortization
(695.0)
(614.1)
Gross margin excluding depletion, depreciation and amortization
$
1,120.4 $
946.9
Depletion, depreciation and amortization
(447.9)
(395.0)
Temporary suspension, standby and other incremental COVID-19 costs
(37.4)
(40.5)
Reversal of impairment of mining properties, net (Note 13)
—
191.0
Mine operating earnings
$
635.1 $
702.4
Expenses
General and administrative
(74.8)
(85.9)
Exploration and evaluation
(31.6)
(15.1)
Share of earnings (loss) of associates (Note 24)
0.9
(1.0)
Other operating expenses, net (Note 10)
(37.4)
(14.6)
Operating earnings
$
492.2 $
585.8
Finance costs (Note 12)
(134.4)
(77.0)
Other income (costs), net (Note 11)
26.7
(18.7)
Earnings before taxes
$
384.5 $
490.1
Current income tax expense (Note 14)
(159.8)
(116.2)
Deferred income tax expense (Note 14)
(135.9)
(170.3)
Income tax expense, net
$
(295.7) $
(286.5)
Net earnings
$
88.8 $
203.6
Attributable to:
Yamana Gold Inc. equity holders
$
147.5 $
203.6
Non-controlling interests (Note 32)
(58.7)
—
Net earnings
$
88.8 $
203.6
Earnings per share attributable to Yamana Gold Inc. equity holders (Note 15)
Basic and diluted
$
0.15 $
0.21
Weighted average number of shares outstanding (in thousands) (Note 15)
Basic
963,393
951,818
Diluted
964,932
953,846
The accompanying notes are an integral part of the consolidated financial statements.
Annual Report 2021
111
YAMANA GOLD INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
FOR THE YEARS ENDED DECEMBER 31,
(In millions of US Dollars)
2021
2020
Net earnings
$
88.8 $
203.6
Other comprehensive earnings, net of taxes
Items that may be reclassified subsequently to net earnings:
Cash-flow hedges
- Effective portion of changes in fair value of cash flow hedges (Note 17)
(11.8)
(24.0)
- Reclassification of losses recorded in earnings (Note 17)
9.7
16.9
- Tax Impact on fair value of hedging instruments (Note 14)
1.9
2.0
- Time value of options contracts excluded from hedge relationship (Note 17)
(4.9)
(0.2)
Investment in associate
- Share of other comprehensive loss from investment in associate (Note 24)
—
(1.6)
- Reclassification of accumulated other comprehensive losses from investment in associate
to net earnings upon discontinuation of the equity method (Note 6)
—
11.1
$
(5.1) $
4.2
Items that will not be reclassified to net earnings:
Changes in the fair value of equity investments at FVOCI
(11.0)
13.9
Income tax relating to items that will not be reclassified subsequently to net earnings
1.5
(1.5)
Re-measurement of employee benefit plan
(1.3)
(0.7)
Total other comprehensive (loss) earnings
$
(15.9) $
15.9
Total comprehensive earnings
$
72.9 $
219.5
Attributable to:
Yamana Gold Inc. equity holders
$
131.6 $
219.5
Non-controlling interests
(58.7)
—
Total comprehensive earnings
$
72.9 $
219.5
The accompanying notes are an integral part of the consolidated financial statements.
Yamana Gold
112
YAMANA GOLD INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
(In millions of US Dollars)
2021
2020
Operating activities
Earnings before taxes
$
384.5 $
490.1
Adjustments to reconcile earnings before taxes to net operating cash flows:
Depletion, depreciation and amortization
447.9
395.0
Share-based payments
3.2
31.5
Other (income) costs, net
(4.9)
18.7
Finance costs (Note 12)
134.4
77.0
Mark-to-market on financial instruments
0.3
(6.9)
Share of (earnings) loss of associates (Note 24)
(0.9)
1.0
Reversal of impairment of mining properties, net (Note 13)
—
(191.0)
Amortization of deferred revenue (Note 27)
(18.0)
(16.1)
Gain on discontinuation of the equity method (Note 6)
(10.2)
(21.3)
Other non-cash expenses, net (Note 16)
20.7
28.7
Environmental rehabilitation obligations paid (Note 29)
(16.2)
(3.2)
Other cash payments
(5.2)
(15.5)
Cash flows from operating activities before income taxes paid and net change
in working capital
$
935.6 $
788.0
Income taxes paid
(151.0)
(99.3)
Cash flows from operating activities before net change in working capital
$
784.6 $
688.7
Net change in working capital (Note 16)
(42.3)
(70.9)
Cash flows from operating activities
$
742.3 $
617.8
Investing activities
Acquisition of property, plant and equipment
$
(384.6) $
(273.7)
Cash acquired in Agua Rica integration transaction (Note 6)
—
222.5
Acquisition of Monarch Gold, net of cash acquired (Note 6)
(44.8)
—
Net cash used on acquisition of investments and other assets
(25.0)
—
Net proceeds on disposal of investments and other assets
61.5
137.2
Cash used in other investing activities
(6.8)
(34.6)
Cash flows (used in) from investing activities
$
(399.7) $
51.4
Financing activities
Dividends paid
$
(104.1) $
(53.0)
Cash paid on acquisition of own shares (Note 30)
(28.3)
—
Interest paid
(47.2)
(54.9)
Early note redemption premium (Note 12)
(53.3)
—
Repayment of senior notes and credit facility (Note 28)
(719.0)
(256.2)
Net proceeds from senior notes and credit facility (Note 28)
495.2
200.0
Payment of lease liabilities
(19.2)
(17.1)
Proceeds from issuance of flow-through shares (Note 30)
—
7.4
Cash contributions from non-controlling interests
18.6
3.4
Cash used in other financing activities
(10.2)
(5.5)
Cash flows used in financing activities
$
(467.5) $
(175.9)
Effect of foreign exchange of non-US Dollar denominated cash and cash equivalents
(1.3)
(0.9)
(Decrease) Increase in cash and cash equivalents
$
(126.2) $
492.4
Cash and cash equivalents, beginning of period
$
651.2 $
158.8
Cash and cash equivalents, end of period
$
525.0 $
651.2
Supplementary Cash Flow Information (Note 16).
The accompanying notes are an integral part of the consolidated financial statements.
Annual Report 2021
113
YAMANA GOLD INC.
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31,
(In millions of US Dollars)
2021
2020
Assets
Current assets:
Cash and cash equivalents (Note 16)
$
525.0 $
651.2
Trade and other receivables
3.0
4.2
Inventories (Note 19)
167.2
152.1
Other financial assets (Note 20)
27.0
14.3
Other assets (Note 21)
113.3
96.1
$
835.5 $
917.9
Non-current assets:
Property, plant and equipment (Note 22)
$
6,775.2 $
6,684.8
Goodwill and other intangible assets (Note 23)
391.8
396.4
Investments in associates (Note 24)
—
34.3
Deferred tax assets (Note 14)
96.2
98.1
Other financial assets (Note 20)
81.0
88.7
Other assets (Note 21)
203.0
202.6
Total assets
$
8,382.7 $
8,422.8
Liabilities
Current liabilities:
Trade and other payables (Note 25)
$
274.7 $
240.4
Income taxes payable
37.4
45.0
Other financial liabilities (Note 26)
76.0
78.8
Other provisions and liabilities (Note 27)
57.7
77.6
$
445.8 $
441.8
Non-current liabilities:
Long-term debt (Note 28)
$
772.8 $
993.8
Environmental rehabilitation provision (Note 29)
352.9
363.5
Deferred tax liabilities (Note 14)
1,364.2
1,229.1
Other financial liabilities (Note 26)
121.9
109.7
Other provisions and liabilities (Note 27)
121.9
112.6
Total liabilities
$
3,179.5 $
3,250.5
Equity
Share capital (Note 30)
$
7,689.9 $
7,648.9
Contributed surplus
24.9
22.7
Accumulated other comprehensive (loss) income
(22.4)
(6.5)
Deficit
(3,296.5)
(3,318.8)
Attributable to Yamana Gold Inc. equity holders
$
4,395.9 $
4,346.3
Non-controlling interests (Note 32)
807.3
826.0
Total equity
$
5,203.2 $
5,172.3
Total liabilities and equity
$
8,382.7 $
8,422.8
Commitments and Contingencies (Note 35)
The accompanying notes are an integral part of the consolidated financial statements
Approved by the Board
“Peter Marrone”
“Richard Graff”
PETER MARRONE
RICHARD GRAFF
Director
Director
Yamana Gold
114
YAMANA GOLD INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31,
(In millions of US Dollars)
Share
capital
Contributed
surplus
Accumulated
other
comprehensive
(loss) income
Deficit
Attributable
to Yamana
Gold Inc.
equity
holders
Non-
controlling
interests
Total
equity
As at January 1, 2020
$ 7,639.9 $
21.0 $
(21.9) $ (3,453.8) $
4,185.2 $
34.7 $ 4,219.9
Total comprehensive earnings
Net earnings
—
—
—
203.6
203.6
—
203.6
Other comprehensive earnings
—
—
15.9
—
15.9
—
15.9
$
— $
— $
15.9 $
203.6 $
219.5 $
— $ 219.5
Transactions with owners
Issued on vesting of restricted share units
(Note 30)
3.4
(3.4)
—
—
—
—
—
Vesting restricted share units
—
4.2
—
—
4.2
—
4.2
Issued on exercise of share options (Note 30)
0.9
(0.2)
—
—
0.7
—
0.7
Flow through share issuance, net of issue costs
(Note 30)
5.3
—
—
—
5.3
—
5.3
Non-controlling interests arising on Agua Rica
Alumbrera integration (Note 6)
—
—
—
—
—
787.9
787.9
Cash contributions from non-controlling
interests in MARA
—
—
—
—
—
3.4
3.4
Share cancellations and other adjustments
(Note 30)
(1.1)
1.1
—
—
—
—
—
Dividend reinvestment plan (Note 30)
0.5
—
—
—
0.5
—
0.5
Dividends (Note 30)
—
—
—
(69.1)
(69.1)
—
(69.1)
As at December 31, 2020
$ 7,648.9 $
22.7 $
(6.5) $ (3,318.8) $
4,346.3 $
826.0 $ 5,172.3
As at January 1, 2021
$ 7,648.9 $
22.7 $
(6.5) $ (3,318.8) $
4,346.3 $
826.0 $ 5,172.3
Total comprehensive earnings
Net earnings (loss)
—
—
—
147.5
147.5
(58.7)
88.8
Other comprehensive loss
—
—
(15.9)
—
(15.9)
—
(15.9)
$
— $
— $
(15.9) $
147.5 $
131.6 $
(58.7) $
72.9
Transactions with owners
Issued on acquisition of Monarch Gold (Note 6)
61.2
—
—
—
61.2
—
61.2
Issued on acquisition of exploration properties
(Note 6)
3.1
—
—
—
3.1
—
3.1
Issued on vesting of restricted share units
(Note 30)
4.5
(4.5)
—
—
—
—
—
Vesting restricted share units
—
4.9
—
—
4.9
—
4.9
Issued on exercise of warrants
0.1
—
—
—
0.1
—
0.1
Cash contributions from non-controlling
interests in MARA
—
—
—
—
—
18.6
18.6
Vesting of Mineros option on La Pepa (Note 6)
—
2.0
—
—
2.0
—
2.0
Issued on exercise of Mineros option on La
Pepa (Note 6)
—
—
—
(16.4)
(16.4)
21.4
5.0
Acquisition of own shares, share cancellations
and other adjustments (Note 30)
(28.6)
(0.2)
—
—
(28.8)
—
(28.8)
Dividend reinvestment plan (Note 30)
0.7
—
—
—
0.7
—
0.7
Dividends (Note 30)
—
—
—
(108.6)
(108.6)
—
(108.6)
As at December 31, 2021
$ 7,689.9 $
24.9 $
(22.4) $ (3,296.5) $
4,395.9 $
807.3 $ 5,203.2
The accompanying notes are an integral part of the consolidated financial statements.
Annual Report 2021
115
YAMANA GOLD INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2021 and December 31, 2020
(Tabular amounts in millions of US Dollars, unless otherwise noted)
1.
DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS
Yamana Gold Inc. is the ultimate parent company of its consolidated group ("Yamana" or "the Company”). The Company,
incorporated and domiciled in Canada, is a precious metals producer with significant gold and silver production, development stage
properties, and exploration properties and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina.
Yamana plans to continue to build on this base through expansion and optimization initiatives at existing operating mines,
development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation
opportunities with a primary focus in the Americas.
The Company’s registered office is Royal Bank Plaza, North Tower, Suite 2200 - 200 Bay Street, Toronto, Ontario, M5J 2J3. The
Company is listed on the Toronto Stock Exchange (Symbol: YRI), the New York Stock Exchange (Symbol: AUY) and the London
Stock Exchange (Symbol: AUY).
The Company's principal producing mining properties are comprised of the Canadian Malartic mine in Canada (50% interest); the
Jacobina mine in Brazil; the El Peñón and Minera Florida mines in Chile; and the Cerro Moro mine in Argentina. The Company's
significant projects include the MARA project in Argentina (56.25% interest), and the Wasamac project in Canada.
2.
BASIS OF PREPARATION AND PRESENTATION
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board (“IFRS”), effective as of December 31, 2021.
The consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and
liabilities (including derivative instruments) measured at fair value as explained in Note 3. Accounting policies are consistently
applied to all years presented, unless otherwise stated.
The functional and presentation currencies of the Company and all its subsidiaries is the United States Dollar ("US Dollar"), and
all values herein are rounded to the nearest million except where otherwise indicated. References to ARS, BRL, C$, and CLP are
to Argentine Pesos, Brazilian Reais, Canadian Dollars and Chilean Pesos, respectively.
The consolidated financial statements were authorized for issuance by the Board of Directors on February 17, 2022.
Impact of COVID-19 Pandemic
The Company continues to actively monitor the impact of the COVID-19 pandemic, including the impact on economic activity and
financial reporting. Throughout the pandemic the Company has taken a number of measures to safeguard the health of its
employees and their local communities while continuing to operate safely and responsibly. During 2021, the Company continued
to incur standby charges associated with the underutilization of labour and contractors related to delays caused by COVID-19, as
well as other incremental directly attributable costs including those associated with community support, the acquisition of additional
personal protective equipment, higher transportation costs, and overtime costs resulting from lower headcount levels on site to
accommodate social distancing. These costs are included in "Temporary Suspension, standby and other incremental COVID-19
costs" in the consolidated statement of operations.
As the pandemic continues to progress and evolve, it is difficult to predict the full extent and duration of resulting operational and
economic impacts for the Company, which are expected to impact a number of reporting periods. This uncertainty impacts
judgements made by the Company, including those relating to determining the recoverable values of the Company’s non-current
assets as discussed in Note 4.
Yamana Gold
116
3.
SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies used in the preparation of these consolidated financial statements are as follows:
(a)
Basis of Consolidation
These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities
controlled by the Company. Control exists when the Company has power over an investee, when the Company is exposed, or has
rights, to variable returns from the investee and when the Company has the ability to affect those returns through its power over
the investee. Subsidiaries are included in the consolidated financial statements from the date control is obtained until the date
control ceases. Where the Company’s interest in a subsidiary is less than 100%, the Company recognizes non-controlling interests.
Intercompany assets and liabilities, equity, income, expenses, and cash flows between the Company and its subsidiaries are
eliminated on consolidation.
The principal subsidiaries of the Company and the Company's ownership interest in these subsidiaries are as follows:
Legal Entity
Mine/Project
Location
December 31,
2021
December 31,
2020
Mining properties
and projects owned
Minera Meridian Ltda.
Chile
100.00 %
100.00 %
El Peñón mine
Jacobina Mineração e Comércio Ltda.
Brazil
100.00 %
100.00 %
Jacobina mine
Estelar Resources S.A.(i)
Argentina
100.00 %
100.00 %
Cerro Moro mine
Minera Florida Ltda.
Chile
100.00 %
100.00 %
Minera Florida mine
Minera Agua Rica Alumbrera Ltd.
Argentina
56.25 %
56.25 %
MARA project
Yamana Gold Quebec Inc.(ii)
Canada
100.00 %
See (b) below
Wasamac project
Suyai del Sur S.A.U.
Argentina
100.00 %
100.00 %
Suyai project
Agua De La Falda S.A.
Chile
56.70 %
56.70 %
Jeronimo project
(i)
Refer to discussion at Note 32.
(ii)
On January 21, 2021, Yamana completed a transaction with Monarch Gold Corporation ("Monarch Gold") pursuant to which, Yamana acquired the Wasamac
property and the Camflo property and mill through the acquisition of all of the outstanding shares of Monarch Gold not owned by Yamana, under a plan of
arrangement (the "Arrangement"). In connection with the Arrangement, Monarch Gold completed a spin-out to its shareholders, through newly formed
Monarch Mining Corporation ("Monarch Mining") of its other mineral properties and certain other assets and liabilities. Subsequent to the completion of the
transaction, Yamana renamed the new subsidiary Yamana Gold Quebec Inc. Refer to Note 6 for further details.
(b)
Investments in Associates and Joint Arrangements
These consolidated financial statements also include the following joint arrangement and investments in associates:
Associates and
joint arrangements
Location
December
31, 2021
December 31,
2020
Classification and
accounting method
Mining properties
and projects owned
Canadian Malartic
Canada
50.00 %
50.00 %
Joint operation,
consolidate Yamana's share
Canadian Malartic mine
Nomad Royalty Company(i)
Canada
7.72 %
7.75 %
Associate, equity method
(now financial asset at
FVOCI)
Portfolio of royalty interests
Monarch Gold
Corporation(ii)
Canada
See (a)
above
6.92 %
Associate, equity method
(now subsidiary, see above)
Wasamac project and other
exploration properties
located in Quebec
(i)
During the second quarter of 2021, Yamana concluded that it ceased to have significant influence over its investee, Nomad Royalty Company ("Nomad"),
due to no longer having representation on Nomad's board of directors, and therefore, discontinued accounting for the investment using the equity method.
The investment is now accounted for as a financial asset at FVOCI. Refer to Note 6 for further details.
(ii)
Upon completion of the Monarch Gold plan of arrangement, Monarch Gold became a subsidiary of the Company, and therefore, the Company discontinued
accounting for the investment using the equity method. Refer to discussion on the Monarch Gold transaction under (a) above.
Annual Report 2021
117
A joint arrangement is an arrangement in which two or more parties have joint control. Joint control is the contractually agreed
sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of
the parties sharing the control. A joint operation is classified as either a joint operation or a joint venture, subject to the terms that
govern each investor's rights and obligations in the arrangement. A joint operation is a joint arrangement whereby the parties have
joint control of the arrangement and have rights to the assets and obligations for the liabilities relating to the arrangement. For a
joint operation, the Company recognizes its share of the assets, liabilities, revenues and expenses of the joint arrangement. The
Company's 50% interest in each of Canadian Malartic Corporation and Canadian Malartic GP, the general partnership that holds
the Canadian Malartic mine located in Quebec (collectively "Canadian Malartic"), has been accounted for as a joint operation.
An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not control or joint control over those decisions. The Company is
presumed to have significant influence if it holds, directly or indirectly, 20% or more of the voting power of the investee, unless it
can be clearly demonstrated that the Company does not have significant influence.
The Company accounts for its investment in associate using the equity method. Under the equity method, the Company’s
investment in associate is initially recognized at cost and subsequently increased or decreased to recognize the Company's share
of net earnings/loss and other comprehensive earnings/loss of the associate, after any adjustments necessary to give effect to
uniform accounting policies, any other movement in the associate's reserves, and for impairment losses after the initial recognition
date. The total carrying amount of the Company's investment in associate also includes any long-term debt interests which, in
substance, form part of the Company's net investment. The Company’s share of the associate's losses that are in excess of its
investment are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments
on behalf of the associate. The Company's share of earnings or losses of its associate are recognized in net earnings during the
period. Dividends and repayment of capital received from the associate are accounted for as a reduction in the carrying amount of
the Company’s investment. Unrealized gains and losses between the Company and its associate are recognized only to the extent
of unrelated investors’ interests in the associate. Intercompany balances and interest expense and income arising on loans and
borrowings between the Company and its associate are not eliminated.
At the end of each reporting period, the Company assesses whether there is any objective evidence that an investment in an
associate is impaired. Objective evidence includes observable data indicating there is a measurable decrease in the estimated
future cash flows of the investee’s operations. When there is objective evidence that an investment is impaired, the carrying amount
of such investment is compared to its recoverable amount, being the higher of its fair value less costs of disposal ("FVLCD") and
value-in-use ("VIU"). If the recoverable amount of an investment is less than its carrying amount, the carrying amount is reduced
to its recoverable amount and an impairment loss, being the excess of carrying amount over the recoverable amount, is recognized
in the period in which the relevant circumstances are identified. When an impairment loss reverses in a subsequent period, the
carrying amount of the investment is increased to the revised estimate of recoverable amount to the extent that the increased
carrying amount does not exceed the carrying amount that would have been determined had an impairment loss not been
previously recognized. A reversal of an impairment loss is recognized in net earnings/loss in the period in which the reversal occurs.
(c)
Foreign Currency Translation
The functional and presentation currency of the Company and each of its subsidiaries, associates and joint operation is the US
Dollar. In preparing the financial statements of the individual companies, transactions in currencies other than the Company’s
functional currency ("foreign currencies") are recognized at the rates of exchange prevailing on the dates of the transactions.
At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated. Income statement items denominated in foreign currencies are translated at the average
exchange rates prevailing during the year, with the exception of depletion, depreciation and amortization which is translated at
historical exchange rates. Foreign exchange gains and losses are included in net earnings/loss. Foreign exchange gains and
losses related to income taxes, if any, are reported within the income tax expense line in the Company's consolidated statement
of operations.
Yamana Gold
118
(d)
Business Combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by
the Company, liabilities incurred by the Company to the former owners of the acquiree and the equity interest issued by the
Company in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value at the
acquisition date.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-
date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date
amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount
of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any),
the excess is recognized immediately in profit or loss as a bargain purchase gain.
When the consideration transferred by the Company in a business combination includes contingent consideration arrangement,
the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in
a business combination. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are
adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that
arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition
date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period
adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not
remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Other contingent
consideration is remeasured to fair value at subsequent reporting dates with changes in fair value recognized in earnings.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs,
the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are
adjusted during the measurement period (see above), or additional assets or liabilities are recognized, to reflect new information
obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts
recognized as of that date.
(e)
Goodwill
Goodwill is initially recognized and measured as set out above.
Goodwill is not amortized but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is
allocated to each of the Company’s cash-generating units ("CGUs") expected to benefit from the synergies of the combination.
CGUs to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that
the unit may be impaired. If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss
is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata
on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in
a subsequent period. On disposal of a CGU, the attributable amount of goodwill is included in the determination of the gain or loss
on disposal.
(f)
Impairment and Reversal of Impairment of Non-Current Assets
At each reporting date, the Company reviews the carrying amounts of its mining properties and plant and equipment at the CGU
level to determine whether there is any indication that these assets may be impaired. If any such indication exists, the recoverable
amount of the relevant CGU is estimated in order to determine the extent of the impairment loss (if any). A CGU is the smallest
identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups
of assets. The Company's CGUs are its significant mine sites and significant development projects. In certain circumstances,
where the recoverable amount of an individual asset can be determined, impairment is performed at the individual asset level.
Annual Report 2021
119
The recoverable amount of a mine site is the greater of its fair value less costs of disposal ("FVLCD") and value in use ("VIU"). In
the absence of market related comparative information, FVLCD is estimated as the discounted future after-tax cash flows expected
to be derived from a mine site, less an amount for costs to sell estimated based on similar past transactions. When discounting
estimated future after-tax cash flows, the Company uses its after-tax weighted average cost of capital. Estimated cash flows are
based on expected future production, metal selling prices, operating costs and capital expenditures. If the recoverable amount of
a mine site is estimated to be less than its carrying amount, the carrying amount is reduced to its recoverable amount. The carrying
amount of each mine site includes the carrying amounts of mining properties, plant and equipment, goodwill (if applicable) and
related deferred income tax balances, net of the mine site environmental rehabilitation provision. In addition, the carrying amounts
of the Company’s corporate assets are allocated to the relevant mine sites for impairment purposes. Impairment losses are
recognized in the statement of operations in the period in which they are incurred. The allocation of an impairment loss, if any, for
a particular mine site to its mining properties and plant and equipment is based on the relative carrying amounts of those assets
at the date of impairment.
At each reporting date an assessment is made to determine whether there is an indication that previously recognized impairment
losses may no longer exist or may have decreased. A previously recognized impairment loss is reversed only if there has been a
change in the assumptions used to determine the CGU’s recoverable amount since the last impairment loss was recognized. This
reversal is recognized in the consolidated statements of operations and is limited to the carrying value that would have been
determined, net of any depreciation, depletion and amortization where applicable, had no impairment charge been recognized in
prior years. When an impairment reversal is undertaken, the recoverable amount is assessed by reference to the higher of VIU
and FVLCD.
(g)
Assets and Liabilities Held for Sale and Discontinued Operations
Non-current assets and disposal groups are classified as held for sale if their carrying value will be recovered principally through
a sale transaction rather than through continuing use. The criteria for held for sale classification is regarded as met only when the
sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to
complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will
be withdrawn. Management must be committed to the plan to sell the asset or disposal group and the sale expected to be
completed within one year from the date of the classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair
value less costs to sell ("FVLCS"). If the FVLCS is lower than the carrying amount, an impairment loss is recognized in the
consolidated statement of operations. Costs to sell are the incremental costs directly attributable to the disposal of an asset or
disposal group, excluding finance costs and income tax expense. Non-current assets are not depreciated or amortized once
classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the
Company's consolidated balance sheet.
A disposal group qualifies as a discontinued operation if it is a component of the Company that either has been disposed of, or is
classified as held for sale, and: (i) represents a separate major line of business or geographical area of operations; (ii) is part of a
single coordinated plan to dispose of a separate major line of business or geographical area of operations; or (iii) is a subsidiary
acquired exclusively with a view to resale. A component of the Company comprises an operation and cash flows that can be clearly
distinguished, operationally and for financial reporting purposes, from the rest of the Company.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or
loss after tax from discontinued operations in the consolidated statement of operations.
(h)
Revenue Recognition
Gold and Silver
The Company sells gold and silver in bullion and doré form to customers, which are all major financial institutions.
Revenue is recognized when control of the gold or silver has transferred to the customer. For bullion sales, this is typically at the
point in time when the bullion has been pledged to the customer in writing, which is often at the time it is credited to the metal
account of the customer. For doré sales, this is typically at the point in time when the customer has received all required
confirmations from the Company, which is at the time the doré is shipped from the mine. Following gold or silver being pledged to
Yamana Gold
120
a customer or the shipment of doré, the customer has the ability to direct the use of, and obtain substantially all of the remaining
benefits from, the metal.
Revenue is measured at the transaction price agreed under the contract and excludes any amounts collected on behalf of third
parties. Payment of the transaction price is due immediately when the metal is transferred to the customer. A receivable is
recognized when the metal is transferred to the customer, as this is the point in time that the consideration is unconditional because
only the passage of time is required before the payment is due.
Streaming Arrangements
From time to time, the Company enters into arrangements with customers pursuant to which, the Company receives consideration
in advance of the delivery of metals.
Under streaming arrangements, the Company receives advanced consideration against the delivery of a portion of future metal
production referenced to the mine(s) of the Company specified in the contract. In addition to the advanced consideration, the
Company may also receive a cash payment as metals are delivered to the customer.
The Company recognizes the advanced consideration as deferred revenue and recognizes the amounts in revenue as it satisfies
its performance obligations to deliver metal to the customer over the life of the contract. In contracts for the delivery of gold or silver
bullion, this is typically at the point in time when the metal is credited to the metal account of the customer. Following the crediting
of gold or silver to a customer’s metal account, the customer has legal title to, physical possession of, and the risks and rewards
of ownership of the metal, and therefore, the ability to direct the use of, and obtain substantially all of the remaining benefits from,
the metal.
The Company determines the amortization of deferred revenue to the consolidated statement of operations on a per unit basis. In
streaming arrangements, the estimated total quantity of metal expected to be delivered to the customer over the term of the contract
is used. Subsequent changes to expected deliveries result in an adjustment to revenue in the year of change to retroactively adjust
for the new number of ounces expected to be delivered under the contract.
Where consideration is received in advance of the Company’s performance of its obligation, there is an inherent financing
component in the transaction. When the period between receipt of consideration and revenue recognition is greater than one year,
the Company determines whether the financing component is significant to the contract.
Where a contract is determined to have a significant financing component, the transaction price is adjusted to reflect the financing.
The discount rate used in adjusting the promised amount of consideration is the rate that would be reflected in a separate financing
transaction between the Company and the customer at contract inception. This rate is not subsequently adjusted for any other
changes over the contract term.
The accretion of the interest expense is recognized in the finance expense line in the consolidated statement of operations, unless
capitalized to assets under construction in accordance with the Company’s policy on capitalized borrowing costs.
The Company estimates the current portion of deferred revenue based on quantities anticipated to be delivered over the next
twelve months.
Other Income
Other income arising from the use by others of the Company's assets yielding interest, royalties and dividends are recognized
when it is probable that the economic benefits associated with the transaction will flow to the Company and the amount of the
income can be measured reliably, on the following bases:
•
Interest is recognized using the effective interest method.
•
Royalties are recognized on an accrual basis in accordance with the substance of the agreement.
•
Dividends are recognized when the shareholder's right to receive payment is established.
Annual Report 2021
121
(i)
Leases
Identifying a Lease
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
•
the contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically
distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;
•
the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period
of use; and
•
the Company has the right to direct the use of the asset. The Company has this right when it has the decision-making
rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where all the decisions
about how and for what purpose the asset is used are predetermined, the Company has the right to direct the use of the
asset if either:
◦
the Company has the right to operate the asset; or
◦
the Company has designed the asset in a way that predetermines how and for what purpose it will be used.
At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the
contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of real estate, in which
it is a lessee, the Company has elected not to separate non-lease components and account for the lease and non-lease
components as a single lease component.
The Company as a Lessee
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are
determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental
borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise:
◦
fixed payments, including in-substance fixed payments;
•
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;
•
amounts expected to be payable under a residual value guarantee; and
•
the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an
optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early
termination of a lease unless the Company is reasonably certain not to terminate early.
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in
future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount
expected to be payable under a residual value guarantee or if the Company changes its assessment of whether it will exercise a
purchase, extension or termination option.
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When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Company presents right-of-use assets in 'property, plant and equipment' and lease liabilities in 'other financial liabilities' in the
consolidated balance sheet.
The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of
12 months or less and leases of low-value assets, such as certain IT equipment. The Company recognizes the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
(j)
Financial Instruments
Classification and Measurement of Financial Assets and Financial Liabilities
i)
Financial Assets
On initial recognition, a financial asset is classified as measured at: amortized cost, FVOCI, or FVTPL. The classification of financial
assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.
Derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead,
the hybrid financial instrument as a whole is assessed for classification.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
•
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
•
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
•
it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets; and
•
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent
changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This
includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that
otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction
price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its
acquisition.
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The following accounting policies apply to the subsequent measurement of financial assets:
Financial assets at amortized
cost
These assets are subsequently measured at amortized cost using the effective interest
method. The amortized cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss
on derecognition is recognized in profit or loss.
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any
interest or dividend income, are recognized in profit or loss. Refer below for derivatives
designated as hedging instruments.
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognized as income
in profit or loss unless the dividend clearly represents a recovery of part of the cost of the
investment. Other net gains and losses are recognized in OCI and are never reclassified to
profit or loss.
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated using the
effective interest method, foreign exchange gains and losses and impairment are recognized
in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains
and losses accumulated in OCI are reclassified to profit or loss.
ii)
Financial Liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is
classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are
measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial
liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange
gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss. See below
for financial liabilities designated as hedging instruments.
Impairment
Non-Derivative Financial Assets
The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At
each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected
credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the
credit risk on the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance
for the financial asset at an amount equal to twelve month expected credit losses. Impairment losses on financial assets carried at
amortized cost are reversed in subsequent periods if the financial asset is no longer credit-impaired and the improvement can be
related objectively to an event occurring after the impairment was recognized (such as an improvement in the counterparty's credit
rating).
For trade receivables that are classified as financial assets at amortized cost, the Company applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
Derivative Instruments and Hedge Accounting
The Company uses derivative financial instruments to hedge its exposure to exchange rate fluctuations on foreign currency
operating expenses and capital expenditures.
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management
objectives and strategies for undertaking hedge transactions. This process includes linking all derivative hedging instruments to
forecasted transactions. Hedge effectiveness is assessed based on the degree to which the cash flows from the derivative
contracts are expected to offset the cash flows of the underlying transaction being hedged.
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When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in fair value is recognized in
other comprehensive income, net of tax. For hedged items other than the purchase of non-financial assets, the amounts
accumulated in other comprehensive income are reclassified to the consolidated statements of operations when the underlying
hedged transaction, identified at contract inception, affects profit or loss. When hedging a forecasted transaction that results in the
recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity are transferred
from equity and included in the measurement of the initial carrying amount of the asset or liability.
Any ineffective portion of a hedge relationship is recognized immediately in the consolidated statements of operations. The
Company has elected to exclude the time value component of options and the forward element of forward contracts from the
hedging relationships, with changes in these amounts recorded in other comprehensive income and treated as a cost of hedging.
For hedged items other than the purchase of non-financial assets, the cost of hedging amounts is reclassified to the consolidated
statements of operations when the underlying hedged transaction affects profit or loss. When hedging a forecasted transaction
that results in the recognition of a non-financial asset, the cost of hedging is added to the carrying amount of the non-financial
asset.
When derivative contracts designated as cash flow hedges are terminated, expired, sold or no longer qualify for hedge accounting,
hedge accounting is discontinued prospectively. Any amounts recorded in other comprehensive income up until the time the
contracts do not qualify for hedge accounting remain in other comprehensive income. Amounts recognized in other comprehensive
income are recognized in the consolidated statements of operations in the period in which the underlying hedged transaction is
completed. Gains or losses arising subsequent to the derivative contracts not qualifying for hedge accounting are recognized in
the period incurred in the consolidated statements of operations.
If the forecasted transaction is no longer expected to occur, then the amounts accumulated in other comprehensive income are
reclassified to the consolidated statement of operations immediately.
(k)
Share-Based Payments
The fair value of the estimated number of share options and restricted share units ("RSUs") awarded to employees, officers and
directors that will eventually vest, determined as of the date of grant, is recognized as share-based compensation expense within
General and Administrative expenses in the consolidated statements of operations over the vesting period of the share options
and RSUs, with a corresponding increase to equity. The fair value of share options is determined using the Black-Scholes option
pricing model with market related inputs as of the date of grant. The fair value of RSUs is the market value of the underlying shares
as of the date of grant. Share options and RSUs with graded vesting schedules are accounted for as separate grants with different
vesting periods and fair values. Changes to the estimated number of awards that will eventually vest are accounted for
prospectively. The Company's share option plan includes a share appreciation feature. If and when the share options are ultimately
exercised, the applicable amount in the equity reserve is transferred to share capital.
Performance share units ("PSUs") and deferred share units ("DSUs") are settled in cash. PSUs are recognized as share-based
compensation expense within general and administrative expenses in the consolidated statement of operations ("G&A") over the
vesting period, which includes the remeasurement of those PSUs that have partially vested. DSUs are recognized as share-based
compensation expense within G&A on the date of grant, as these instruments vest immediately. Mark to market adjustments on
DSUs subsequent to vesting are recognized as share-based compensation in other operating expenses.
Transactions entered into with third parties whereby the Company issues shares of the parent or of a subsidiary in exchange for
goods or services received, are accounted for as share-based payment transactions. The Company recognizes the goods or
services received when it obtains the goods or as the services are received, and recognizes a corresponding increase in equity.
The Company measures the goods or services received at the fair value of the goods or services received, unless that fair value
cannot be estimated reliably.
(l)
Income Taxes
Income tax expense or recovery comprises of current and deferred tax. Income tax expense or recovery is recognized in the
consolidated statements of operations except to the extent it relates to items recognized directly in equity or in OCI, in which case
the related taxes are recognized in equity or OCI.
Current income tax is the expected tax payable or receivable on the taxable income or loss for the year, which may differ from
earnings reported in the consolidated statements of operations due to items of income or expenses that are not currently taxable
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or deductible for tax purposes, using tax rates substantively enacted at the reporting date, penalties and interest on income taxes,
and any adjustment to tax payable in respect of previous years.
Deferred income tax is recognized based on the balance sheet method in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognized for the following temporary differences:
•
Goodwill or the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss, and
•
Investments in subsidiaries and jointly controlled entities to the extent they can be controlled and that it is probable that
they will not reverse in the foreseeable future.
Deferred income tax is recognized on the movement in foreign exchange rates on non-monetary assets denominated in foreign
currencies. Foreign exchange gains or losses relating to deferred income taxes are included in the deferred income tax expense
in the consolidated statements of operations.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
(m)
Inventories
Metal inventories - ore in stockpiles (ore extracted from the mine and available for further processing), work in process (metal in
the processing circuit that has not completed the production process), and product inventories (metal in saleable form) are
measured at the lower of the cost of production and net realizable value. Cost is determined on a weighted average basis and
includes all costs incurred, based on a normal production capacity, in bringing each product to its present location and condition.
Cost of inventories comprises direct labor, materials and contractor expenses, including non-capitalized stripping costs;
depreciation, depletion and amortization including capitalized stripping costs; and an allocation of general and administrative costs.
Costs are added to ore in stockpiles at the current mining cost per tonne. As ore is removed for processing, costs are removed
based on the accumulated average cost per tonne. Net realizable value is calculated as the estimated selling price at the time of
sale based on prevailing and long-term metal prices, less estimated future costs to convert the inventories into saleable form and
estimated costs to sell.
Ore in stockpiles not expected to be processed in the next twelve months is classified as long-term.
Materials and supplies include consumables and other raw materials yet to be used in the production process, as well as spare
parts and other maintenance supplies that are not classified as capital items, and are valued at the lower of cost and net realizable
value. Provisions are recorded to reduce materials and supplies to net realizable value, which is generally calculated by reference
to its salvage or scrap value, when it is determined that the materials or supplies are obsolete. Provisions are reversed to reflect
subsequent recoveries in net realizable value where the inventory is still on hand.
Write downs of inventory and reversals of write downs are reported as a component of current period costs.
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(n)
Property, Plant and Equipment
Land, Building, Plant and Equipment
Land, building, plant and equipment are recorded at cost, less accumulated depreciation and accumulated impairment losses. The
cost is comprised of the asset's purchase price, any costs directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management and the estimated environmental rehabilitation
costs associated with the asset.
The depreciable amount of building, plant and equipment is amortized according to either the units of production method or on a
straight-line basis, to the residual value of the asset over the lesser of mine life or estimated useful life of the asset. Each part of
an item of building, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately
if its useful life differs. Useful lives of building, plant and equipment items range from two to thirty years, but do not exceed the
related estimated mine life based on proven and probable mineral reserves and the portion of mineral resources that management
expects to become mineral reserves in the future and be economically extracted.
Depreciation Method
Useful Life
Building
Straight Line
4 to 30 years
Machinery and equipment
Straight Line
2 to 7 years
Vehicles
Straight Line
3 to 5 years
Furniture and office equipment
Straight Line
2 to 10 years
Computer equipment and software
Straight Line
3 to 5 years
Land
Not depreciated
N/A
The Company reviews the useful life, depreciation method, residual value and carrying value of its building, plant and equipment
at least annually. Where the carrying value is estimated to exceed the estimated recoverable amount, which is the higher of the
asset's fair value less costs of disposal or value in use, a provision for impairment is measured and recorded.
Expenditures that extend the useful lives of existing facilities or equipment are capitalized and depreciated over the remaining
useful lives of the assets or useful life of the component (e.g. major overhaul) of an asset. Repairs and maintenance expenditures
are expensed as incurred.
Exploration and Evaluation Assets, and Depletable Producing Properties
The Company's tangible exploration and evaluation assets are comprised of mineral resources and exploration potential. The value
associated with mineral resources and exploration potential is the value beyond proven and probable mineral reserves.
Exploration and evaluation assets acquired as part of an asset acquisition or a business combination are recorded as tangible
exploration and evaluation assets and are capitalized at cost, which represents the fair value of the assets at the time of acquisition
determined by estimating the fair value of the property's mineral reserves, mineral resources and exploration potential at such
time.
The value of such assets when acquired is primarily a function of the nature and amount of mineralized materials contained in
such properties. Exploration and evaluation stage mineral interests represent interests in properties that potentially contain
mineralized material consisting of measured, indicated and inferred mineral resources; other mine exploration potential such as
inferred mineral resources not immediately adjacent to existing mineral reserves but located around and near mine or project
areas; other mine-related exploration potential that is not part of measured, indicated and inferred mineral resources; and any
acquired right to explore and develop a potential mineral deposit.
Expenditures incurred before the Company has obtained legal rights to explore a specific area of interest are expensed. Costs
incurred for general exploration that are either not-project-specific or do not result in the acquisition of mineral properties are
considered greenfield expenditures and charged to expense. Brownfield expenditures, which typically occur in areas surrounding
known deposits and/or re-exploring older mines using new technologies to determine if greater mineral reserves and mineral
resources exist, are capitalized. Brownfield activities are focused on the discovery of mineral reserves and mineral resources close
to existing operations, including around mine or near-mine, mineral reserve and mineral resource extension and infill drilling.
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Exploration expenditures include the costs incurred in either the initial exploration for mineral deposits with economic potential or
in the process of obtaining more information about existing mineral deposits.
Evaluation expenditures include the costs incurred to establish the technical feasibility and commercial viability of developing
mineral deposits identified through exploration activities or by acquisition. Evaluation expenditures include the cost of:
•
Acquiring the rights to explore;
•
Establishing the volume and grade of deposits through drilling of core samples, trenching and sampling activities in an
ore body that is classified as either a mineral resource or a proven and probable mineral reserve;
•
Determining the optimal methods of extraction and metallurgical and treatment processes;
•
Studies related to surveying, transportation and infrastructure requirements;
•
Permitting activities; and
•
Economic evaluations to determine whether development of the mineralized material is commercially justified, including
scoping, pre-feasibility and final feasibility studies.
The values assigned to the tangible exploration and evaluation assets (which may include acquired plant and equipment) are
carried at acquired costs until such time as the technical feasibility and commercial viability of extracting mineral resource from the
assets is demonstrated, which occurs when the activities are designated as a development project and advancement of the project
is considered economically feasible. At that time, the property and the related costs are reclassified as part of the development
costs of a producing property not yet subject to depletion, and remain capitalized. Assessment for impairment is conducted before
reclassification.
Depletion commences once a property has reached commercial production. Depletion of mining properties and development costs
are calculated and recorded on a units of production basis over the estimated tonnage or recoverable ounces of proven and
probable mineral reserves of the mine, and the portion of mineral resources expected to be classified as mineral reserves and
economically extracted, which may include mineral resources in each of the measured, indicated and/or inferred mineral resources
categories.
The Company assesses and tests its exploration and evaluation assets and mining properties for impairment, and subsequent
reversal of impairment, at least annually or when events or changes in circumstances indicate that the related carrying amounts
may not be recoverable or that an impairment may be reversed. Costs related to areas of interest abandoned are written off when
the decision of abandonment is made. Refer to (f) Impairment and Reversal of Impairment of Non-Current Assets for details of the
policy. An impairment assessment of the exploration and evaluation assets is conducted before the reclassification or transfer of
exploration and evaluation assets to depletable producing properties.
Stripping Costs
In open pit mining operations, it is necessary to remove overburden and other waste materials in order to access ore from which
minerals can be extracted economically. The process of mining overburden and waste materials is referred to as stripping.
Stripping costs incurred in order to provide initial access to the ore body (referred to as pre-production stripping) are capitalized as
open pit mine development costs.
During the production phase of a mine, stripping is generally considered to create two distinct benefits: (i) the production of
inventory and (ii) improved access to ore that is expected to be mined in the future. Where the benefits are realized in the form of
inventory produced in the period, the stripping costs are accounted for as part of the cost of producing those inventories. Where
the benefits are realized in the form of improved access to ore to be mined in the future, the costs are recognized as a non-current
asset, referred to as a “stripping activity asset,” if the following criteria are met: (a) future economic benefits (that is, improved
access to the ore body for future extraction) are probable; (b) the component of the ore body for which access will be improved
can be accurately identified; and (c) the costs associated with the improved access can be reliably measured. If any of these
criteria are not met, the production stripping costs are charged to profit or loss as operating costs as they are incurred.
The stripping activity asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the stripping
activity that improves access to the identified component of ore, plus an allocation of directly attributable overhead costs. If
incidental operations occur at the same time as the production stripping activity, but are not necessary for the production stripping
activity to continue as planned, these costs are not included in the cost of the stripping activity asset. If the costs of the inventory
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produced and the stripping activity asset are not separately identifiable, a production measure is used to allocate the production
stripping costs between the inventory produced and the stripping activity asset. This production measure is calculated for the
identified component of the ore body, which is based on the specific development phases determined when designing the
development plan for the pit. This measure is then used as a benchmark to identify the extent to which the stripping activities have
created a future benefit. The Company uses the expected volume of waste extracted for a volume of ore production compared
with the actual volume extracted for such volume of ore production to calculate each component. The stripping activity asset is
then accounted for as an addition to, or an enhancement of, the applicable mine asset, and is presented as part of “Mining
properties” in the Company’s consolidated balance sheets.
Assets Under Construction
Assets under construction are capitalized as 'Construction in Progress' until the asset is capable of operating at levels intended by
management. Costs incurred prior to this point, including depreciation of related plant and equipment, are capitalized and proceeds
from sales during this period are offset against costs capitalized. Borrowing costs, including interest, associated with projects that
are actively being prepared for production are capitalized to Construction in Progress. These costs are elements of the historical
cost of acquiring an asset when a period of time is required to bring it to the condition and location necessary for its intended use.
The borrowing costs eligible for capitalization are determined by applying a capitalization rate, which is the weighted average of
the borrowing costs applicable to the borrowings of the Company that are outstanding during the period, to the expenditures on
the asset. Capitalized interest costs are amortized on the same basis as the related qualifying asset.
(o)
Environmental Rehabilitation and Other Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Where the effect
of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the liability that have
not been reflected in the estimate of the expenditure. The unwinding of the discount is recognized as a finance expense.
Environmental rehabilitation obligations are a type of provision associated with the retirement of a long-lived asset that the
Company has acquired, constructed, developed and/or used in operations. These include the dismantling and demolition of
infrastructure and the removal of residual materials and remediation of disturbed areas. These estimated obligations are provided
for in the accounting period when the related disturbance occurs, whether during the mine development or production phases at
the present value of estimated future costs to settle the obligations, or when a constructive obligation arises. The costs are
estimated based on the Company’s mine closure plan. The cost estimates are updated annually during the life of the operation to
reflect known developments, (e.g. revisions to cost estimates and to the estimated lives of operations, or changes in legal or
regulatory requirements), and are subject to review at regular intervals.
Environmental rehabilitation provisions are initially recorded with a corresponding increase to the carrying amounts of property,
plant and equipment, with any subsequent changes to the liability accounted for as changes in the carrying amounts of the related
property, plant and equipment. The capitalized costs are amortized over the life of the mine on a unit-of-production basis.
(p)
Intangible Assets
Intangible assets acquired by way of an asset acquisition or business combination are recognized if the asset is separable or
arises from contractual or legal rights and the fair value can be measured reliably on initial recognition. Intangible assets must be
identifiable, controlled by the Company and with future economic benefits expected to flow from the assets. Intangible assets that
are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and accumulated
impairment losses. Intangible assets with finite useful lives are amortized on a straight-line basis over the lesser of mine life or
estimated useful life of the intangible asset. The Company reviews the useful life, amortization method and carrying value on a
regular basis.
(q)
Flow-Through Shares
Under Canadian income tax legislation, a company is permitted to issue flow-through shares whereby the company agrees to incur
qualifying expenditures and renounce the related income tax deductions to the investors. The Company allocates the proceeds
from the issuance of these shares between the offering of shares and the sale of tax benefits. The allocation is made based on the
difference between the quoted price of the shares and the amount the investors pay for the shares, with a deferred flow-through
premium liability recognized for the difference. The liability is reversed and a tax provision recognized upon filing of the appropriate
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renunciation forms with the Canadian taxation authorities for qualifying expenditures previously incurred. The spending also gives
rise to a deferred tax temporary difference between the carrying value and tax value of the qualifying expenditure.
(r)
Asset acquisitions
Upon the acquisition of an asset or a group of assets and liabilities that does not constitute a business, the Company identifies
and recognizes the individual identifiable assets acquired and liabilities assumed. The cost of the group is allocated to the individual
identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction or event does
not give rise to goodwill.
When the acquisition of an asset or a group of assets and liabilities is achieved in stages, the Company’s previously held interests
in the acquired assets and liabilities are not remeasured to their acquisition-date fair values and instead, continue to be measured
at their carrying values.
When the Company acquires a controlling, but less than 100% interest in an entity that does not constitute a business, and the
transaction is therefore, accounted for as the acquisition of an asset or group of assets and liabilities, the Company consolidates
the entity and recognizes a non-controlling interest for the portion of the entity it did not acquire. The Company recognizes non-
controlling interests that arise in an asset acquisition either at fair value or at the non-controlling interests’ proportionate share of
the acquired entity’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis.
4.
CRITICAL JUDGEMENTS AND ESTIMATION UNCERTAINTIES
The preparation of the Company’s consolidated financial statements in accordance with IFRS requires management to make
judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses, and the
accompanying disclosures. These assumptions, judgements and estimates are based on management’s best knowledge of the
relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts
included in the consolidated financial statements. Management reviews its estimates and underlying assumptions on an ongoing
basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only
that period, or in the period of revision and future periods if the revision affects both current and future periods.
The most significant judgements and key sources of estimation uncertainty that management believes could have a significant risk
of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year are:
Mineral Reserve and Mineral Resource Estimates
Key Sources of Estimation Uncertainty
The figures for mineral reserves and mineral resources are determined in accordance with National Instrument 43-101 Standards
of Disclosure for Mineral Projects, issued by the Canadian Securities Administrators. This National Instrument lays out the
standards of disclosure for mineral projects including rules relating to the determination of mineral reserves and mineral resources.
There are numerous uncertainties inherent in estimating mineral reserves and mineral resources, including many factors beyond
the Company's control. Such estimation is a subjective process, and the accuracy of any mineral reserve or mineral resource
estimate is a function of the quantity and quality of available data and of the assumptions made and judgements used in engineering
and geological interpretation. Short-term operating factors relating to the mineral reserves, such as the need for orderly
development of the ore bodies or the processing of new or different ore grades, may cause the mining operation to be unprofitable
in any particular accounting period. Lower market prices, increased production costs, reduced recovery rates and other factors
may result in a revision of its mineral reserve estimates from time to time or may render the Company’s mineral reserves
uneconomic to exploit, which may materially and adversely affect the results of operations or financial condition. Mineral reserve
data are not indicative of future results of operations. Evaluation of mineral resources is conducted from time to time and mineral
resources may change depending on further geological interpretation, drilling results and metal prices. The Company regularly
evaluates its mineral resources and it often determines the merits of increasing the reliability of its overall mineral resources.
Differences between management's assumptions, and actual events including economic assumptions such as metal prices and
market conditions, could have a material effect in the future on the Company's financial position and results of operations.
Estimates of the quantities of proven and probable mineral reserves and mineral resources form the basis for the Company’s LOM
("LOM") plans, which are used for a number of important business and accounting purposes, including: determination of the useful
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life of property, plant and equipment and measurement of the depreciation expense, capitalization and amortization of stripping
costs, exploration and evaluation of mineral resources and determination of technical feasibility and commercial viability, and
forecasting the timing of the payments related to the environmental rehabilitation provision. In addition, the underlying LOM plans
are used in the impairment tests for goodwill and non-current assets.
Estimated Recoverable Ounces
Key Sources of Estimation Uncertainty
The carrying amounts of the Company’s mining properties are depleted based on recoverable ounces contained in proven and
probable mineral reserves plus a portion of mineral resources. The Company includes a portion of mineral resources where it is
considered probable that those mineral resources will be economically extracted. Changes to estimates of recoverable ounces
and depletable costs including changes resulting from revisions to the Company’s mine plans and changes in metal price forecasts
can result in a change to future depletion rates.
Economic Recoverability and Probability of Future Economic Benefits of Exploration, Evaluation and Development Costs
Critical Judgements in Applying Accounting Policies
Management has determined that exploration and evaluation costs incurred during the year and costs associated with projects
under construction have future economic benefits and are economically recoverable. In making this judgement, management has
assessed various sources of information including but not limited to the geologic and metallurgic information, history of conversion
of mineral deposits to proven and probable mineral reserves, scoping and feasibility studies, proximity of operating facilities,
operating management expertise, existing permits and life of mine plans.
Indicators of Impairment and Reversal of Impairment
Critical Judgements in Applying Accounting Policies
The Company considers both external and internal sources of information in assessing whether there are any indications that
CGUs are impaired or reversal of impairment is needed. External sources of information the Company considers include changes
in the market, economic and legal environment in which the Company operates that are not within its control and are expected to
affect the recoverable amount of CGUs. Internal sources of information include the manner in which mining properties and plant
and equipment are being used or are expected to be used and indicators of the economic performance of the assets, historical
exploration and operating results. The primary external factors considered are changes in spot and forecast metal prices, changes
in laws and regulations and the Company’s market capitalization relative to its net asset carrying amount. Primary internal factors
considered are the Company’s current mine performance against expectations, changes in mineral reserves and resources, life of
mine plans and exploration results.
Impairment and Reversal of Impairment
Key Sources of Estimation Uncertainty
In determining the recoverable amounts of the Company’s mining interests and goodwill, management makes estimates of the
discounted future after-tax cash flows expected to be derived from the Company’s mining properties, costs to sell the mining
properties and the appropriate discount rate. The projected cash flows are significantly affected by changes in assumptions related
to metal selling prices, changes in the amount of recoverable reserves, resources, and exploration potential, production cost
estimates, future capital expenditures, discount rates and exchange rates. Significant changes in metal price forecasts, estimated
future costs of production, capital expenditures, the amount of recoverable reserves, resources, and exploration potential, and/or
the impact of changes in current economic conditions may result in an impairment write-down or reversal of a previous impairment
on the carrying amounts of the Company’s mining interests and/or an impairment write-down of goodwill.
No impairment losses or reversals of previous impairments were recognized during the year ended December 31, 2021. During
the year ended December 31, 2020, the Company recognized a net impairment reversal of $191.0 million in respect of the carrying
amounts of certain mineral properties. Refer to Note 13.D
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131
Environmental Rehabilitation Provision
Key Sources of Estimation Uncertainty
Given the nature of its operations, the Company incurs obligations to close, restore and rehabilitate its sites. Closure and
rehabilitation activities are governed by a combination of legislative requirements and Company policies. The Company’s
environmental rehabilitation provision represents management’s best estimate of the present value of the future cash outflows
required to settle the liabilities, which reflects estimates of future costs, inflation, movements in foreign exchange rates and
assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discounting the future
cash outflows. Changes in the above factors can result in a change to the provision recognized by the Company. The actual future
expenditures may differ from the amounts currently provided if the estimates made are significantly different than actual results or
if there are significant changes in environmental and/or regulatory requirements in the future.
Revenue Recognition: Application of Variable Consideration Constraint
Key Sources of Estimation Uncertainty
The Company determines the amortization of deferred revenue to the consolidated statement of operations on a per unit basis
using the expected quantity of metal that will be delivered over the term of the contract, which is based on geological reports and
the Company’s LOM plan at contract inception. As subsequent changes to the expected quantity of metal to be delivered triggers
a retrospective adjustment to revenue, management is required to estimate the metal ounces to be included in the denominator
that will be sufficient such that subsequent changes are not expected to result in a significant revenue reversal. Accordingly,
management includes mineral reserves and a portion of mineral resources, which management is reasonably confident are
transferable to reserves, in the calculation. With this approach, the Company considers that it is highly probable that changes in
subsequent mineral reserve and mineral resource estimates will not result in a significant revenue reversal of previously recognized
revenue.
Deferred Revenue
Critical Judgements in Applying Accounting Policies
Significant judgements are required in determining the appropriate accounting treatment for metal transactions entered into by the
Company. With respect to the Company's current streaming arrangement, management has determined that based on the
agreement, the counterparty assumes significant business risk and rewards associated with the timing and amount of metals being
delivered. As such, the deposits received from the counterparty have been recorded as deferred revenue in the consolidated
balance sheet. Additionally, the Company has determined that the transaction is not a financial liability as; based on the specific
rights and obligations set out in the agreement, under no circumstances will the delivery obligations be satisfied with cash. Refer
to Note 27 for additional information.
Joint Arrangements
Critical Judgements in Applying Accounting Policies
Judgement is required to determine when the Company has joint control of a contractual arrangement, which requires a continuous
assessment of the relevant activities and when the decisions in relation to those activities require unanimous consent. Judgement
is also required to classify a joint arrangement as either a joint operation or a joint venture when the arrangement has been
structured through a separate vehicle. Classifying the arrangement requires the Company to assess its rights and obligations
arising from the arrangement. Specifically, the Company considers the legal form of the separate vehicle, the terms of the
contractual arrangement and other relevant facts and circumstances. This assessment often requires significant judgement, and
a different conclusion on joint control, or whether the arrangement is a joint operation or a joint venture, may have a material impact
on the accounting treatment.
Management evaluated its joint arrangement with Agnico Eagle Mines Limited, whereby both parties acquired 50.0% of the shares
of Osisko (now Canadian Malartic) in accordance with the requirements in IFRS 11 Joint Arrangements. The Company concluded
that the arrangement qualified as a joint operation upon consideration of the following significant factors: (i) The requirement that
the joint operators purchase all output from the investee and investee restrictions on selling the output to any third party; (ii) The
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parties to the arrangement are substantially the only source of cash flow contributing to the continuity of the arrangement; and (iii)
If the selling price drops below cost, the joint operators are required to cover any obligations Canadian Malartic cannot satisfy.
Income Taxes
Key Sources of Estimation Uncertainty
Income taxes and recoverability of deferred tax assets: In assessing the probability of realizing income tax assets recognized,
management makes estimates related to expectations of future taxable income, applicable tax planning opportunities, expected
timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination
by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence
that can be objectively verified. Estimates of future taxable income are based on forecasted cash flows from operating activities
and the application of existing tax laws in each jurisdiction. The Company considers relevant tax planning opportunities that are
within the Company's control, are feasible, and within management's ability to implement. Examination by applicable tax authorities
is supported based on individual facts and circumstances of the relevant tax position examined in light of all available evidence.
Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible
that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. Also, future changes
in tax laws could limit the Company from realizing the tax benefits from the deferred tax assets. The Company reassesses
unrecognized income tax assets at each reporting period.
Inventory Valuation
Key Sources of Estimation Uncertainty
The measurement of inventory including the determination of its net realizable value, especially as it relates to ore in stockpiles,
involves the use of estimates. Estimation is required in determining the tonnage, recoverable gold contained therein, and in
determining the remaining costs of completion to bring inventory to its saleable form. Changes in these estimates can result in a
change in mine operating costs of future periods and carrying amounts of inventories
Further, in determining the net realizable value of ore in stockpiles, the Company estimates future metal selling prices, production
forecasts, realized grades and recoveries, timing of processing, and future costs to convert the inventories into saleable form.
Reductions in metal price forecasts, increases in estimated future costs to convert, reductions in the amount of recoverable ounces,
and a delay in timing of processing can result in a write down of the carrying amounts of the Company’s work in process and ore
in stockpiles inventory.
Non-monetary Exchanges
Critical Judgements in Applying Accounting Policies
In accounting for assets (or a group of assets and liabilities) that are acquired in a non-monetary exchange, the Company records
the acquired assets at cost. The cost of such assets is measured at the fair value of the other consideration given to acquire the
assets at the time of their acquisition, unless the exchange transaction lacks commercial substance or the fair value of neither the
assets received nor the assets given up can be reliably measured. If the Company is able to measure reliably the fair value of
either the assets received or the assets given up, then the fair value of the assets given up is used to measure the cost of the
assets received unless the fair value of the assets received is more clearly evident.
The 2020 Integration Transaction, pursuant to which the Company relinquished a non-controlling interest in Agua Rica for an
increased interest in Alumbrera, was a non-monetary exchange of assets and liabilities, with the consideration paid for the
additional interest in Alumbrera being a 43.75% interest relinquished in Agua Rica. The Company determined that the fair value of
both what was being given up in Agua Rica and what was being acquired (the Alumbrera assets and liabilities) could be measured
reliably; however, concluded that the fair value of the Alumbrera assets and liabilities was more clearly evident. Refer to Note 6 for
further details on the Integration Transaction and the valuation approach.
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133
Asset acquisition vs. Business combination
Critical Judgements in Applying Accounting Policies
To be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive
process that together significantly contribute to the ability to create outputs. While businesses usually have outputs, outputs are
not required for an integrated set of activities and assets to qualify as a business.
The set of activities and assets acquired in the acquisition of Alumbrera in 2020 included inputs such as plant and other
infrastructure assets and limited mineral resources, but did not include an organized workforce. Alumbrera had no outputs at the
acquisition date as mining ceased in the third quarter of 2018 at the end of the mine life. Given the absence of an organized
workforce, the Company determined that no substantive processes had been acquired and therefore, Alumbrera did not meet the
definition of a ‘business’ in IFRS, and the acquisition was accounted for as an acquisition of assets and liabilities. Refer to Note 6
for further details on the Integration Transaction.
Determination of technical feasibility and commercial viability
Critical Judgements in Applying Accounting Policies
IFRS 6 specifies the accounting for exploration and evaluation expenditures, defined as “expenditures incurred by an entity in
connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of
extracting a mineral resource are demonstrable”. Once the technical feasibility and commercial viability of extracting a mineral
resource are demonstrable, the recording of exploration and evaluation expenditures ceases for that mineral project, capitalized
exploration and evaluation assets are tested for impairment, and those exploration and evaluation assets are reclassified to other
applicable development-stage accounts.
In January 2021, following the completion of an internal PEA-level technical study in late 2020, the Canadian Malartic partnership
approved the construction of a new underground mining complex at the Odyssey project. At this point in time, an assessment was
performed to determine whether the technical feasibility and commercial viability of extracting a mineral resource were
demonstrable. Based on factors including the results of the recently completed PEA-level study (which was incorporated into a NI
43-101 report filed in March 2021) demonstrating the financial viability of the project and the approval of both the Yamana and
Agnico Eagle Boards of Directors to proceed, it was determined that technical feasibility and commercial viability were
demonstrable, and the Odyssey project was reclassified to an asset under construction within property, plant and equipment.
On July 19, 2021, the Company announced a positive development decision on the Wasamac Project. At this point in time, an
assessment was performed to determine whether the technical feasibility and commercial viability of extracting a mineral resource
were demonstrable. Based on factors such as the established mineral reserves and resources of the project, the expected financial
viability of the project based on the most recently completed feasibility study, and the decision by the Company's Board of Directors
to advance the project, it was determined that technical feasibility and commercial viability were demonstrable, and the Wasamac
project was reclassified to an asset under construction within property, plant and equipment.
5.
RECENT ACCOUNTING PRONOUNCEMENTS
Adoption of Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform – Phase 2
The Company adopted Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
16) on January 1, 2021. The amendments address the financial reporting impact from reform of the London Interbank Offered Rate
(LIBOR) and other benchmark interest rates (collectively “IBOR reform”).
As at December 31, 2021, these amendments have not affected the Company’s consolidated financial statements as the Company
has not yet transitioned any agreements that are exposed to the London Inter-bank Offered Rate (LIBOR) to an alternative
benchmark interest rate. While there remains some uncertainty around the timing of adoption and the precise nature of an
alternative benchmark rate, the replacement of the rate is not expected to result in a significant change in the Company’s interest
rate risk management strategy or interest rate risk. The Company’s revolving credit facility (currently undrawn) is the most
significant financial instrument exposed to LIBOR. The Company continues to monitor developments on alternative benchmark
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interest rates and expects to transition to alternative rates as widespread market practice is established. The revolving credit facility
also includes language to replace LIBOR with a suitable alternative benchmark rate once that matter is resolved.
Other Narrow Scope Amendments to IFRSs and IFRS Interpretations
The Company adopted various amendments to IFRSs, which were effective for accounting periods beginning on or after January
1, 2021. The impact of adoption was not significant to the Company's consolidated financial statements.
New and Revised IFRSs, Narrow Scope Amendments to IFRSs and IFRS Interpretations not yet Effective
Certain pronouncements have been issued by the IASB that are mandatory for accounting periods after December 31, 2021. There
are currently no such pronouncements that are expected to have a significant impact on the Company's consolidated financial
statements upon adoption; however, the pronouncement below may have a significant impact in future periods.
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16).
These amendments clarify the accounting for the net proceeds from selling any items produced while bringing an item of property,
plant and equipment to the location and condition necessary for it to be capable of operating in the manner intended by
management. The amendments prohibit entities from deducting amounts received from selling items produced from the cost of
property, plant and equipment while the Company is preparing the asset for its intended use. Instead, sales proceeds and the cost
of producing these items will be recognized in the consolidated statements of operations. The amendments are effective for annual
reporting periods beginning on or after January 1, 2022, with earlier application permitted. The amendments apply retrospectively,
but only to assets brought to the location and condition necessary for them to be capable of operating in the manner intended by
management on or after the beginning of the earliest period presented in the financial statements in which the Company first
applies the amendments.
6.
BUSINESS TRANSACTIONS
Acquisition of Monarch Gold Corporation
In June 2020, pursuant to a private placement offer by Monarch Gold Corporation ("Monarch Gold") (TSX: MQR), Yamana
subscribed for $3.1 million (C$4.2 million) worth of units of Monarch Gold at a price of C$0.24 per unit and was issued 17,500,000
common shares of Monarch Gold, along with 8,750,000 warrants. Each warrant entitled Yamana to purchase one common share
of Monarch Gold at a price of C$0.29 until June 10, 2023.
As Yamana’s shareholding was above 5%, the Company was entitled to name a representative to Monarch Gold’s Board of
Directors. As Yamana was represented on Monarch Gold's Board of Directors, the Company concluded that it had significant
influence over Monarch Gold, and the investment was accounted for as an investment in associate using the equity method.
Yamana acquired additional shares in Monarch Gold during the third quarter of 2020, increasing the Company's shareholding from
6% to 7.1% of Monarch Gold's issued and outstanding shares. Yamana's shareholding was subsequently reduced to 6.92% due
to the exercise of options/warrants by other option/warrant holders.
On November 2, 2020, Yamana announced that it had entered into a definitive agreement with Monarch Gold whereby Yamana
would acquire the Wasamac property and the Camflo property and mill through the acquisition of all of the outstanding shares of
Monarch Gold not owned by Yamana, under a plan of arrangement (the "Arrangement"). In connection with the Arrangement,
Monarch Gold would complete a spin-out to its shareholders, through newly formed Monarch Mining Corporation ("Monarch
Mining") of its other mineral properties and certain other assets and liabilities.
On January 21, 2021, the Company announced the completion of the Arrangement.
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135
Pursuant to the terms of the Arrangement, each former holder of Monarch Gold shares received the following consideration per
Monarch Gold share held immediately prior to the effective time of the Arrangement:
a.
0.0376 of a Yamana share;
b.
C$0.192 in cash from Yamana; and
c.
0.2 of a share of the newly formed Monarch Mining.
Yamana also issued replacement warrants to holders of outstanding Monarch warrants, to purchase from Yamana 0.0376 of a
Yamana share.
As Monarch Gold became a wholly owned subsidiary of Yamana, the Monarch Gold shares were de-listed from the TSX on January
25, 2021 and Monarch Gold ceased to be a reporting issuer.
The set of activities and assets acquired in the acquisition of Monarch Gold included inputs such as certain mining permits and
mineral resources, but did not include an organized workforce. Monarch Gold had no outputs at the acquisition date as the
properties acquired are exploration stage properties. Given the absence of an organized workforce, the Company determined that
no substantive processes had been acquired and therefore, Monarch Gold did not meet the definition of a ‘business’ under IFRS,
and the acquisition was accounted for as an acquisition of assets and liabilities.
IFRS requires a cost-based approach to be applied in accounting for an asset acquisition. The consideration paid for the acquisition
of Monarch Gold was comprised of share consideration, cash consideration and the replacement of certain outstanding Monarch
Gold warrants with Yamana warrants. Given the consideration paid included Yamana shares exchanged for Monarch Gold shares;
the cost of the transaction for accounting purposes was determined in accordance with IFRS 2, which requires an entity to measure
the goods (assets and liabilities) received, and the corresponding increase in equity, directly at the fair value of the goods received,
unless that fair value cannot be estimated reliably. Accordingly, the acquisition cost was measured based on the fair value of the
Monarch Gold assets acquired and liabilities assumed as the Company concluded that the fair value of such assets and liabilities
could be estimated reliably.
The fair value of the Monarch Gold assets acquired and liabilities assumed for accounting purposes was determined to be equal
to the value of the consideration paid. Yamana issued 11,608,195 Yamana Shares (with a fair value of $61.2 million), paid
$46.9 million (C$59.3 million) in cash, and issued 383,764 replacement warrants (with a fair value of $0.6 million) for total
consideration paid of $108.6 million.
Given the transaction resulted in Yamana’s previously held 6.92% interest in Monarch Gold being comprised of a portion that is
now part of the Company’s 100% interest in Monarch Gold, and a portion that is now an interest in Monarch Mining (discussed
below); in accounting for the transaction, the Company bifurcated the carrying value of the previously held interest between the
two new investments.
In accounting for the Company's existing 6.92% interest that continued as Monarch Gold, the interest was accounted for at its
carrying amount of $3.2 million (and not remeasured to fair value) in line with the Company’s accounting policy whereby existing
interests are not remeasured when accounting for an asset acquisition.
Upon completion of the Arrangement, the net book value of Monarch Gold was $113.5 million, including capitalized transaction
costs.
The Company acquired cash and cash equivalents of $2.0 million in the acquisition of Monarch Gold.
Fair Value Measurement
The Company obtained independent valuations for the property, plant and equipment of Monarch Gold, and management's
assessment of fair value of such assets took into account the independent valuations obtained. Different approaches were used
in valuing the different asset groups. Where the fair value of an asset was able to be determined by reference to market-based
evidence, such as sales of comparable assets, the fair value was determined using this information. Where fair value of the asset
was not able to be reliably determined using market-based evidence, discounted cash flows were used to determine fair value.
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136
The valuation techniques used for measuring the fair value of the material assets acquired was as follows.
Assets acquired
Fair value at
January 21, 2021
Fair value
measurement
category
Valuation techniques
Exploration
properties
$
105.8
Level 3(i)
Income approach: Development of a discounted cash flow
("DCF") model that takes into account the mining plan produced in
a technical report ("LOM").
Market comparison technique: The valuation model considers
observed transaction multiples (based on a per hectare range of
$6,080 - $9,425), determined after analyzing precedent
transactions in Québec from 2018 to 2020, for land packages
under 2,000 hectares and with an acquisition price greater than
USD$5.0 million, and making appropriate adjustments to reflect
differences between the transaction and comparable transactions.
(i)
For further detail regarding the hierarchy used in determining and disclosing fair value, refer to Note 17.
Interest in Monarch Mining
As noted above, Monarch Gold shareholders (including Yamana) received shares of Monarch Mining under the Arrangement.
Accordingly, Yamana now owns 4,450,000 common shares of Monarch Mining, or approximately 6.7% of the outstanding common
shares of Monarch Mining and is entitled to acquire an additional 2,225,000 common shares of Monarch Mining upon the exercise
of previously held Monarch Gold warrants, representing a partially diluted share ownership in Monarch Mining of approximately
9.8%.
Yamana's interest in the former Monarch Gold that was exchanged for shares in Monarch Mining was accounted for using the
equity method. Given the relatively low shareholding and the fact that Yamana has no right to representation on the Board of
Directors of Monarch Mining, the Company concluded that it no longer had significant influence with respect to this investment,
and therefore, discontinued accounting for the investment using the equity method from the date of the completion of the
transaction. Yamana recorded a gain on discontinuation of the equity method of $1.1 million, which is included in other operating
expenses, net in the consolidated statement of operations for the year ended December 31, 2021. The gain was calculated as the
difference between the fair value of Yamana's new interest in Monarch Mining and the carrying amount of the part of the investment
in former Monarch Gold that became an investment in Monarch Mining at the date the equity method was discontinued, adjusted
for the loss previously recognized in other comprehensive income that was reclassified to profit or loss on discontinuation of the
equity method. The investment in Monarch Mining is accounted for as a financial asset at FVOCI. Monarch Mining shares
commenced trading on the TSX on January 26, 2021 under the symbol "GBAR".
During the second quarter of 2021, the Camflo property was sold to the Canadian Malartic General Partnership in which, the
Company has a 50% interest. The value of the Camflo Assets acquired and the proceeds for which they were subsequently
disposed were consistent with each other and not material.
The Wasamac property was added to Yamana's Canadian exploration portfolio at the time of acquisition, and was included in the
"Corporate and other" reporting segment in Note 7.
On July 19, 2021, the Company announced a positive development decision on the Wasamac property. Given technical feasibility
and commercial viability of extracting mineral resources are now demonstrable, the Wasamac property was reclassified from an
exploration and evaluation asset to a development stage asset during the third quarter of 2021.
La Pepa Option Exercise
In December 2018, the Company entered into an Option Agreement with respect to the Company's La Pepa gold project with
Mineros Atacama SpA ("Mineros"). The Option Agreement granted Mineros the right and option to acquire up to a 51% interest in
Minera Cavancha SpA, the legal entity that directly holds the La Pepa project, through satisfaction of certain requirements over
two option (earn-in) periods, and then the remaining 49% interest pursuant to a call option.
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137
The first option period, during which Mineros was granted the right to acquire a 20% interest by making expenditures aggregating
$5.0 million, ended on July 2, 2021 and Mineros provided notice of its intention to exercise the first option before the end of the
first option period.
Given the transaction resulted in Yamana issuing shares in a subsidiary company in exchange for services received from Mineros
(in the form of exploration work performed on the La Pepa property), the transaction was accounted for as a share-based payment
transaction. Specifically, the Company recognized the services as received, along with a corresponding increase in equity. The
services received were measured at the fair value of the services, being the $5.0 million in expenditures incurred by Mineros.
During the fourth quarter of 2021, Mineros was issued shares representing a 20% interest in Minera Cavancha SpA. Yamana
recognized the non-controlling interest in Minera Cavancha SpA at the non-controlling interest's proportionate share of the net
identifiable assets of Minera Cavancha SpA, being $21.4 million.
The second option period, during which Mineros has the right to acquire a further 31% interest, commenced upon issuance of the
20% interest shares for a 24-month period. The services received in the second option period will be recognized as the services
are received, along with a corresponding interest in equity, consistent with the accounting for the services received during the first
option period.
Acquisition of Exploration Properties Adjoining the Wasamac Project
On June 14, 2021, the Company announced that it had entered into a Definitive Purchase Agreement ("Agreement") with Globex
Mining Enterprises Inc. (“Globex”) (TSX: GMX) to acquire the Francoeur, Arntfield and Lac Fortune gold properties adjoining the
Company’s Wasamac project as well as additional claims in the Beauchastel township to the east of the Wasamac project. The
transaction was completed on June 21, 2021.
The purchase price for the purchased assets was $11.9 million (C$14.8 million). Pursuant to the terms of the Agreement, Yamana
paid an initial amount of $3.1 million (C$3.8 million) on closing in the form of Yamana shares. The remaining payment of
C$11.0 million is payable over four years in either cash or shares at the election of Globex, and is accounted for as deferred
consideration and included in other financial liabilities. In addition, Globex received a 2% Gross Metal Royalty from Yamana, of
which 0.5% may be bought back at any time by Yamana for C$1.5 million, following which the royalty would be reduced to a 1.5%
Gross Metal Royalty.
Agua Rica-Alumbrera Integration ("MARA Project")
On March 7, 2019, Yamana, Glencore International AG (“Glencore”) and Goldcorp Inc., now Newmont Corporation (“Newmont”)
(collectively “the Parties”) entered into a definitive Integration Agreement with the purpose of seeking to integrate the Agua Rica
project with the Alumbrera mine, plant and infrastructure (the “Integration Project”) through an Integration Transaction.
On December 17, 2020, the Parties announced the completion of the Integration Transaction, with the Integration Project to be
known as the MARA Project. Under the MARA Project, Agua Rica will be developed and operated using the existing infrastructure
and facilities from the Alumbrera mine, approximately 35 kilometres away.
The Integration Transaction resulted in Yamana relinquishing a non-controlling interest in Agua Rica for an increased interest in
Alumbrera. The below sets out the ownership percentages before and after the completion of the Integration Transaction:
Before Transaction
After Transaction
Alumbrera(i)
Agua Rica
MARA Project
Yamana
12.50 %
100.00 %
56.25 %
Glencore
50.00 %
— %
25.00 %
Newmont
37.50 %
— %
18.75 %
100.00 %
100.00 %
100.00 %
(i)
Although Yamana’s investment in Alumbrera was less than 20% of the issued and outstanding shares, after consideration of other relevant factors including
the proportion of seats on Alumbrera’s board assigned to Yamana, the nature of the business decisions that required unanimous consent of the directors,
and Yamana’s ability to influence the operating, strategic and financing decisions concerning Alumbrera; the Company determined that it had significant
influence over Alumbrera, and therefore, accounted for Alumbrera as an investment in associate using the equity method.
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138
Upon closing of the Integration Transaction, the Company acquired an additional 43.75% interest in Alumbrera. As a result, the
Company’s equity interest in Alumbrera increased from 12.50% to 56.25%. The consideration paid for the additional interest in
Alumbrera was a 43.75% interest in Agua Rica, taking the Company’s interest in Agua Rica down to 56.25%. The Company
determined that it controlled the MARA Project through its 56.25% voting interest, and therefore, in accounting for the Integration
Transaction the Company was required to consolidate Alumbrera, and recognize the non-controlling interests in both Agua Rica
and Alumbrera.
The set of activities and assets acquired in the acquisition of Alumbrera included inputs such as plant and other infrastructure
assets and limited mineral resources, but did not include an organized workforce. Alumbrera had no outputs at the acquisition date
as mining ceased in the third quarter of 2018 at the end of the mine life. Given the absence of an organized workforce, the Company
determined that no substantive processes had been acquired and therefore, Alumbrera did not meet the definition of a ‘business’
in IFRS, and the acquisition was accounted for as an acquisition of assets and liabilities.
IFRS requires a cost-based approach to be applied in accounting for an asset acquisition. The Integration Transaction was a non-
monetary exchange of assets, with the consideration paid for the additional interest in Alumbrera being a 43.75% interest
relinquished in Agua Rica. The acquisition cost was measured based on the fair value of the Alumbrera assets and liabilities as it
was determined that the fair value of these assets and liabilities was more clearly evident than the fair value of the interest being
given up in Agua Rica. The net fair value of the Alumbrera assets acquired and liabilities assumed was estimated to be $787.9
million. (The net fair value of Alumbrera on a 100% basis was estimated to be $900.5 million).
Prior to the Integration Transaction, Yamana’s existing 12.5% interest in Alumbrera was carried at nil due to previous impairment
write downs largely associated with the Alumbrera mine coming to the end of its life. The Company assessed whether the potential
Integration Transaction was an indicator of impairment reversal for the equity accounted investment given the integration of the
Alumbrera assets with the Agua Rica assets would have a favourable effect on and increase the estimated service potential of the
underlying Alumbrera assets. However, the Company concluded that there was no indicator of impairment reversal as there was
no certainty that the value of Alumbrera had changed until the Integration Transaction was completed, at which point in time the
equity investment in Alumbrera, which had been historically impaired, was derecognized.
In accounting for the Company's existing 12.5% interest in the Integration Transaction, the interest was accounted for at its carrying
amount of nil (and not remeasured to fair value) in line with the Company’s accounting policy whereby existing interests are not
remeasured when accounting for an asset acquisition.
The Company recognizes non-controlling interests that arise in an asset acquisition either at fair value or at the non-controlling
interests’ proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition-by-acquisition
basis. For the non-controlling interests in the MARA Project, the Company elected to recognize the non-controlling interests at the
non-controlling interests' proportionate share of the acquired entity's net identifiable assets.
The net book value of Agua Rica immediately before the Integration Transaction was $889.3 million.
Upon completion of the Integration Transaction, the book value of the MARA Project was $1,677.2 million, of which $889.3 million
was attributable to Yamana, and $787.9 million attributable to the non-controlling interests.
The Company acquired cash and cash equivalents of $222.5 million in the acquisition of Alumbrera.
Fair Value Measurement
The Company obtained independent valuations for the property, plant and equipment and mineral resources of Alumbrera, and
management's assessment of fair value of such assets took into account the independent valuations obtained. Different
approaches were used in valuing the different asset groups. Where the fair value of an asset was able to be determined by
reference to market-based evidence, such as sales of comparable assets, the fair value was determined using this information.
Where fair value of the asset was not able to be reliably determined using market-based evidence, discounted cash flows or
optimized depreciated replacement cost was used to determine fair value.
Annual Report 2021
139
The valuation techniques used for measuring the fair value of the material non-cash assets acquired were as follows.
Assets acquired
Fair value at
December 17,
2020 (100%)
Fair value
measurement
category
Valuation technique
Property, plant
and equipment
$
696.7
Level 3
Cost technique: The valuation model considers market prices for
similar items when they are available, and depreciated
replacement cost when appropriate. Depreciated replacement
cost reflects adjustments for physical deterioration as well as
functional and economic obsolescence.
Mineral resources
$
72.0
Level 3
Market comparison technique: The valuation model considers
observed transaction multiples using transactions of majority
interests in development stage copper projects in North and South
America over the past 10 years. In arriving at a selected multiple,
appropriate adjustments were made to take into account the
availability of existing infrastructure relative to comparable
transactions, while being cognizant of the initial capital costs that
will still need to be incurred.
Environmental
rehabilitation
provision
$
(85.7)
Level 3
Present-value technique using the entity’s own data about the
future cash outflows to be paid to fulfil the obligation and other
inputs including the credit adjusted risk-free interest rate.
The Company believes the methodologies and estimates used to determine fair value are similar to what a market participant
would use in similar circumstances.
Leagold Mining Corporation and Equinox Gold Corp. merger, and subsequent sale of Equinox Units
On May 24, 2018, Yamana completed the disposal of its 53.6% controlling interest in Brio Gold to Leagold Mining Corporation
("Leagold"). Pursuant to the terms of the sale, the Company received 20.5% of Leagold's issued and outstanding shares. The
Company concluded that it had significant influence over Leagold, and therefore, the investment in Leagold was accounted for as
an investment in an associate using the equity method.
On December 16, 2019, Leagold and Equinox Gold Corp. ("Equinox") jointly announced that the companies had entered into a
definitive agreement to combine in an at-market merger. On March 10, 2020, the companies announced that the merger had been
completed. The combined company continues as Equinox Gold under the ticker symbol “EQX” on both the Toronto Stock Exchange
and the New York Stock Exchange.
Pursuant to the transaction, Leagold shareholders received 0.331 of an Equinox share for each Leagold share held. This resulted
in Yamana owning approximately 9% of the combined company at the date of the completion of the merger.
Yamana concluded that, as a result of its reduced shareholding, it no longer had significant influence in the investee, and therefore,
discontinued accounting for the investment using the equity method from the date of the completion of the merger. Yamana
recorded a gain on discontinuation of the equity method of $21.3 million, which is included in other operating expenses, net in the
consolidated statement of operations for the year ended December 31, 2020. The gain was calculated as the difference between
the fair value of Yamana's retained interest (in the form of Equinox shares) and the carrying amount of the investment in Leagold
at the date the equity method was discontinued, adjusted for the loss previously recognized in other comprehensive income that
was reclassified to profit or loss on discontinuation of the equity method. The investment in Equinox is accounted for as a financial
asset at FVOCI.
On April 13, 2020 Yamana announced it had entered into an agreement with Stifel GMP and Cormark Securities Inc. (collectively,
the “Dealers”) to sell 12,000,000 units (each, a “Unit”) at a price of C$10.00 per Unit for gross proceeds to Yamana of $85.2 million
(C$120.0 million) (the “Sale Transaction"). Each Unit consisted of one (1) common share of Equinox owned by Yamana and one-
half (0.5) of a common share purchase warrant of Yamana (each whole warrant a “Warrant”). Each Warrant entitles the holder
thereof to acquire one (1) additional common share of Equinox owned by Yamana (a “Warrant Share”) at an exercise price of
C$13.50 for a term of 9 months from the date of issue. The Sale Transaction closed on April 15, 2020.
Yamana Gold
140
During the third quarter of 2020, Yamana disposed of 1,200,000 Equinox shares for proceeds of approximately $15.6 million
(C$20.5 million).
As at December 31, 2020, Yamana held 6,000,000 Equinox shares, representing approximately 2.5% of the issued and outstanding
Equinox shares, on a non-diluted basis.
In early January 2021, 405,000 of the 6,000,000 outstanding purchase warrants to acquire Equinox common shares held by
Yamana were exercised and the same number of shares disposed of at the exercise price of C$13.50, for total proceeds of
$4.2 million (C$5.5 million). The remainder of the purchase warrants expired on January 15, 2021.
Sale of the Royalty Portfolio
On February 23, 2020, the Company announced that it had entered into a definitive purchase agreement (the “Purchase
Agreement”) to sell a portfolio of royalty interests and the contingent payment to be received upon declaration of commercial
production at the Deep Carbonates Project (“DCP”) at the Gualcamayo gold mine (together, the “Royalty Portfolio”) to Guerrero
Ventures Inc. (TSX-V:GV) (“Guerrero”).
The assets in the Royalty Portfolio being sold pursuant to the transaction were:
•
A 1% net smelter return royalty (“NSR”) on gold production and 2% NSR on base metals from the Riacho dos Machados
(“RDM”) gold mine operating in Minas Gerais, Brazil;
•
A 2% NSR on oxide gold production from the Gualcamayo gold mine operating in San Juan, Argentina, once the operation
produces approximately 275,000 ounces from January 1, 2020;
•
A 1.5% NSR on production from the DCP at the Gualcamayo gold mine;
•
A $30.0 million cash payment receivable upon declaration of commercial production at the DCP at the Gualcamayo gold
mine; and
•
A 2% NSR on production from the Suruca project in Goiás, Brazil.
On May 25, 2020, Guerrero announced that it had formally changed its corporate name to Nomad Royalty Company Ltd.
(“Nomad”).
On May 27, 2020, the transaction was completed and Yamana received $64.2 million in consideration as follows:
•
$10.0 million in cash;
•
$10.8 million, being the fair value of the $10.0 million deferred cash payment. The deferred cash payment is measured
at fair value due to the convertible nature of the financial instrument. Pursuant to the terms in the Deferred Payment
Agreement, Yamana will receive interest on the deferred cash payment of 3% calculated and payable on a quarterly basis,
and the deferred cash payment may be converted at any time, in whole or in part, by Yamana into shares of Nomad at
C$0.90 per share. The deferred cash payment will be due for payment in full at the end of two years. However, Nomad
may pay the deferred cash payment in full at the end of one year, subject to additional payment by Nomad equal to 5%
of the deferred cash payment, and the right of Yamana to convert the deferred cash payment into shares of Nomad at a
price of C$0.90 per share. The instrument creating the deferred cash payment can be transferred at any time. The
deferred cash payment is accounted for as a financial asset at fair value through profit or loss; and
•
$43.4 million in Nomad common shares at a price of C$0.90 per share, representing approximately 13% of Nomad's
issued and outstanding shares. These shares were subject to a lockup period of six months.
In conjunction with the acquisition of Yamana’s Royalty Portfolio, Guerrero also entered into an agreement to acquire a portfolio of
precious metals royalty, stream and gold loan assets from funds related to Orion Resource Partners (USA) LP (collectively, “Orion”)
for total consideration of $268.0 million.
The purchase price payable to Orion was satisfied through the issuance of $268.0 million in Nomad common shares at a price of
C$0.90 per share, representing approximately 77% of Nomad's issued and outstanding shares. These shares are subject to a
lockup period of 12 months.
On May 29, 2020, Nomad's shares commenced trading on the TSX under the ticker symbol "NSR".
On December 11, 2020, Yamana disposed of 22,750,000 Nomad shares through a secondary offering at a price of C$1.10 per
share for total gross proceeds of approximately $19.7 million (C$25.0 million).
Annual Report 2021
141
As at December 31, 2020, Yamana held 43,750,000 Nomad shares, representing approximately 7.75% of the issued and
outstanding Nomad shares on a non-diluted basis (approximately 10% on a partially-diluted basis).
As Yamana was represented on Nomad's board of directors, the Company concluded that it had significant influence over Nomad,
and the investment in Nomad was accounted for as an investment in associate using the equity method.
During the second quarter of 2021, Yamana concluded that it ceased to have significant influence over Nomad due to no longer
having representation on Nomad's board of directors, and therefore, discontinued accounting for the investment using the equity
method. Yamana recorded a gain on discontinuation of the equity method of $9.2 million, calculated as the difference between the
fair value and the carrying value of the investment at the date significant influence was lost. The investment is now accounted for
as a financial asset at FVOCI.
7.
SEGMENT INFORMATION
The Company bases its operating segments on the way information is reported and used by the Company's chief operating
decision maker ("CODM"), being the Company's Senior Executive Group. The results of operating segments are reviewed by the
CODM in order to make decisions about resources to be allocated to the segments and to assess their performance.
The Company considers each of its individual operating mine sites as reportable segments for financial reporting purposes. Further,
the results of operating mines that the Company does not intend to manage in the long-term, and for which a disposal plan has
been initiated, are reviewed as one segment. In addition to these reportable segments, the Company aggregates and discloses
the financial results of other operating segments with similar economic characteristics as reviewed by the CODM, including
exploration properties and corporate entities, under "corporate and other".
Significant information relating to the Company's reportable segments is summarized in the tables below:
Canadian
Malartic
Jacobina
Cerro
Moro
El Peñón
Minera
Florida
Corporate
and other(i)
Total
Property, plant and equipment at December 31, 2021
$ 1,013.9 $
926.2 $
419.2 $ 1,081.2 $
295.3 $
3,039.4 $ 6,775.2
Total assets at December 31, 2021
$ 1,613.5 $
973.4 $
507.9 $ 1,139.4 $
327.8 $
3,820.7 $ 8,382.7
Total liabilities at December 31, 2021
$
466.4 $
287.5 $
87.0 $
384.0 $
96.6 $
1,858.0 $ 3,179.5
Capital expenditures for the year ended December 31,
2021
$
135.0 $
49.3 $
46.6 $
58.0 $
44.3 $
51.3 $
384.6
Canadian
Malartic
Jacobina
Cerro
Moro
El Peñón
Minera
Florida
Corporate
and other(i)
Total
Property, plant and equipment at December 31, 2020
$ 1,059.5 $
897.7 $
457.8 $ 1,111.0
$
296.1 $
2,862.7 $ 6,684.8
Total assets at December 31, 2020
$ 1,638.1 $
936.4 $
550.0 $ 1,168.0 $
322.2 $
3,808.1 $ 8,422.8
Total liabilities at December 31, 2020
$
458.3 $
273.1 $
79.2 $
407.3 $
108.6 $
1,924.0 $ 3,250.5
Capital expenditures for the year ended December 31,
2020
$
74.8 $
43.4 $
48.9 $
47.8 $
39.5 $
19.3 $
273.7
(i)
"Corporate and other" includes advanced stage development projects, exploration properties, corporate entities, the Company's investments in associates
and the MARA Project with property, plant and equipment of $1,883.4 million, total assets of $2,134.7 million and total liabilities of $549.3 million (December
31, 2020: $1,856.4 million, $2,109.7 million, and $429.2 million, respectively).
Yamana Gold
142
For the year ended December 31, 2021
Canadian
Malartic
Jacobina
Cerro
Moro
El Peñón
Minera
Florida
Corporate
and other
Total
Revenue
$
643.2 $
336.2 $
276.5 $
401.5 $
158.0 $
— $ 1,815.4
Cost of sales excluding DDA(i)
(231.3)
(105.5)
(130.5)
(150.3)
(77.4)
—
(695.0)
Gross margin excluding DDA
$
411.9 $
230.7 $
146.0 $
251.2 $
80.6 $
— $ 1,120.4
DDA
(174.7)
(55.4)
(74.6)
(85.0)
(48.5)
(9.7)
(447.9)
Temporary suspension, standby and other incremental
COVID-19 costs
(2.5)
(1.2)
(20.8)
(4.9)
(8.0)
—
(37.4)
Segment income (loss)
$
234.7 $
174.1 $
50.6 $
161.3 $
24.1 $
(9.7) $
635.1
Other expenses(ii)
(250.6)
Earnings before taxes $
384.5
Income tax expense
(295.7)
Net earnings $
88.8
For the year ended December 31, 2020
Canadian
Malartic
Jacobina
Cerro
Moro
El Peñón
Minera
Florida
Corporate
and other
Total
Revenue
$
471.0 $
312.1 $
241.3 $
381.1 $
155.5 $
— $ 1,561.0
Cost of sales excluding DDA(i)
(185.4)
(95.5)
(115.8)
(141.8)
(75.6)
—
(614.1)
Gross margin excluding DDA
$
285.6 $
216.6 $
125.5 $
239.3 $
79.9 $
— $
946.9
DDA
(133.4)
(52.6)
(86.1)
(69.6)
(44.2)
(9.1)
(395.0)
Temporary suspension, standby and other incremental
COVID-19 costs
(4.5)
(2.0)
(19.2)
(7.0)
(7.7)
(0.1)
(40.5)
(Impairment) reversal of impairment of mining
properties and goodwill
—
—
(369.0)
560.0
—
—
191.0
Segment income (loss)
$
147.7 $
162.0 $ (348.8) $
722.7 $
28.0 $
(9.2) $
702.4
Other expenses(ii)
(212.3)
Earnings before taxes $
490.1
Income tax expense
(286.5)
Net earnings $
203.6
(i)
Depletion, depreciation and amortization ("DDA").
(ii)
Other expenses are comprised of general and administrative expenses, exploration and evaluation expenses, share of earnings (loss) of associates, other
operating expenses, net, finance costs and other income (costs), net, as per the consolidated statement of operations.
Information about Geographical Areas
Revenue is attributed to regions based on the source location of the product sold.
For the years ended December 31,
2021
2020
Canada
$
643.2 $
471.0
Chile
559.5
536.6
Brazil
336.2
312.1
Argentina
276.5
241.3
Total revenue
$
1,815.4 $
1,561.0
Non-current assets for this purpose exclude deferred tax assets.
As at December 31,
2021
2020
Canada
$
1,854.8 $
1,784.4
Chile
1,864.2
1,891.2
Brazil
957.6
927.0
Argentina
2,740.8
2,769.4
United States
33.6
34.7
Total non-current assets
$
7,451.0 $
7,406.7
Annual Report 2021
143
Information about Major Customers
The Company sells its metals through the corporate office to major metal exchange markets or directly to major Canadian financial
institutions and to smelters. Given the nature of the Company's products, there are always willing market participants ready to
purchase the Company's products at the prevailing market prices.
The following table presents sales to individual customers that exceeded 10% of annual metal sales for the following periods:
For the years ended December 31,
2021
2020
Customer
1
$
504.5
$
394.6
2
346.0
365.6
3
297.6
334.7
4
287.4
199.7
5
233.5
158.9
Total sales to customers exceeding 10% of annual metal sales
$
1,669.0
$
1,453.5
Percentage of total metal sales
91.9 %
93.1 %
8.
REVENUE
Disaggregation of Revenue
The following table disaggregates revenue by metal:
For the years ended December 31,
2021
2020
Gold
$
1,592.4 $
1,341.8
Silver
223.0
219.2
Total revenue
$
1,815.4 $
1,561.0
Transaction Price Allocated to the Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which
includes deferred revenue amounts relating to the Company's streaming arrangement that will be invoiced and recognized as
revenue in future periods. The Company applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose
information about remaining performance obligations that have original expected durations of one year or less.
At December 31, 2021 the aggregate amount of the revenue allocated to unsatisfied performance obligations was $64.2 million.
The Company expects to recognize approximately $12.6 million of this revenue over the next 12 months and the remainder over
a period of approximately 7 years.
9.
EMPLOYEE COMPENSATION AND BENEFITS EXPENSES
Employee compensation and benefits expense included in the statement of operations is as follows:
For the years ended December 31,
2021
2020
Wages and salaries
$
175.8 $
176.2
Social security, pension and government-mandated programs(i)
76.0
79.0
Other benefits(ii)
17.0
29.2
Total employee compensation and benefits expenses
$
268.8 $
284.4
(i)
Included in this item are defined contribution pension plan contributions for all full-time qualifying employees of the Company. Contributions by the Company
are based on a contribution percentage using the annual salary as the base and are made on a quarterly basis or as otherwise determined by the Company.
The assets of the plans are held separately from those of the Company and are managed by independent plan administrators. The total expense recognized
in the consolidated statement of operations of $7.3 million (2020: $6.4 million) represents contributions payable to these plans by the Company at rates
specified in the rules of the plans. As at December 31, 2021, contributions of $3.1 million due in respect of the 2021 reporting period (2020: $2.6 million)
had not been paid over to the plans but were paid subsequent to the end of the year.
(ii)
Included in Other benefits are share-based payment transactions. Refer Note 31 for further information.
Yamana Gold
144
10.
OTHER OPERATING EXPENSES, NET
For the years ended December 31,
2021
2020
Changes in provisions(i)
$
10.4 $
9.1
Recovery of tax recoverables and other assets
(1.3)
(2.1)
Gain on discontinuation of the equity method (Note 6)
(10.2)
(21.3)
Care and maintenance costs(ii)
25.6
1.2
(Gain)/Loss on sale of other assets
(1.4)
3.8
Mark-to-market (gain)/loss on deferred share compensation
(0.9)
10.9
Net mark-to-market loss/(gain) on financial assets and financial liabilities
0.3
(6.9)
Other expenses(iii)
14.9
19.9
Other operating expenses, net
$
37.4 $
14.6
(i)
Amount represents the recording (reversal) of certain existing provisions based on management's best estimate of the likely outcome.
(ii)
Amount relates to care and maintenance expenditures incurred on the Alumbrera facilities component of the MARA project, of which 43.75% are attributable
to the non-controlling interests. Yamana has consolidated Alumbrera since the completion of the Agua Rica Integration Transaction (Note 6) on December
17, 2020.
(iii)
Other expenses is comprised primarily of contributions to social and infrastructure development causes in jurisdictions where the Company is active, and
business and professional transaction costs.
11.
OTHER (INCOME) COSTS, NET
For the years ended December 31,
2021
2020
Finance income
$
(2.8) $
(1.1)
Net gain on derivatives
—
(1.8)
Net foreign exchange (gain) loss
(23.9)
21.6
Other (income) costs, net
$
(26.7) $
18.7
12.
FINANCE COSTS
For the years ended December 31,
2021
2020
Unwinding of discounts on provisions
$
13.9 $
9.0
Interest expense on long-term debt
41.8
51.9
Early note redemption premium (Note 28)
53.3
—
Interest expense on lease liabilities (Note 34)
6.7
3.5
Amortization of deferred financing, bank, financing fees and other finance costs(i)
18.7
12.6
Finance costs
$
134.4 $
77.0
(i)
Included in other finance costs for the years ended December 31, 2021 and 2020 is $4.6 million and $4.5 million, respectively, of non-cash interest expense
related to the financing component of deferred revenue contracts.
13.
IMPAIRMENT AND REVERSAL OF IMPAIRMENT
In the fourth quarter of 2021, the Company reviewed its cash-generating unit's ("CGUs") for indicators of impairment or impairment
reversal and performed the annual impairment test for the Canadian Malartic CGU to which goodwill has been allocated. No
indicators of impairment or impairment reversal were identified at any of the Company's CGUs, and no impairment was identified
based on the impairment test performed for the Canadian Malartic CGU.
For the year ended December 31, 2020, the Company's net impairment reversal in respect of the following CGUs was as follows:
For the year ended December 31,
2020
El Peñón
$
560.0
Cerro Moro
(369.0)
Net impairment reversal
$
191.0
Annual Report 2021
145
2020 Indicators of Impairment and Impairment Reversal
El Peñón
The Company recorded impairments at the El Peñón mine in 2015 and 2016. The impairment in 2015 was a result of the Company
downward adjusting its macroeconomic assumptions, which negatively impacted future estimated cash flows, and the Company's
updated view on value beyond mineral reserves and mineral resources. During 2016, the Company determined that the
sustainable, long-term optimal production level for the mine was a production expectation of 140,000 ounces of gold and 4,150,000
ounces of silver per annum, which negatively impacted future cash flows.
Following a standout year and solid fourth quarter from El Peñón in 2020, where sustained production and costs were in line with
an improved LOM and budget, the mine demonstrated its ability to maintain its current production and cost profile. The Company
considered the following factors to be an indicator of reversal of the previous impairment charge:
•
Prolonged and sustained high production levels, which have led to significantly higher production for both gold and silver
than that envisioned in the mine plan developed in 2016 at the time of rightsizing of the operation. This was the result of
both plant improvements to increase throughput, and higher grade ores being mined.
•
A sustained reduction in costs benefiting from the higher production and continuous cost reduction initiatives carried out
over the past year.
•
Significant exploration successes throughout the year, which lead to increased mineral resources for December 31, 2020,
which both extended the life of the mine and improved the life of mine models.
The Company concluded that the recoverable amount for the El Peñón CGU, representing the CGU’s FVLCD, exceeded the
carrying amount. This resulted in a non-cash accounting reversal of the impairment charges previously recorded in 2015 and 2016
on mineral properties subject to depletion, which was limited to the carrying amount of the El Peñón CGU that would have been
determined had no impairment charge been recognized in prior years, net of depletion, depreciation and amortization charges,
totalling $560.0 million.
Cerro Moro
During 2020, the Cerro Moro mine experienced lower production at higher than expected unit costs. The following considerations
were taken into account while developing the new LOM plan:
•
Country-specific matters including the announcement on December 30, 2020 of the change to the export tax in Argentina
to 4.3%, and its indefinite extension.
•
Expected lower annual production in comparison with prior year guidance and expectations, particularly for 2021.
•
A higher cost structure than previously anticipated and consistent with current costs being observed in the operation,
which have exceeded those in the Company’s budget and guidance due to general cost pressures, inefficiencies and
general operational challenges in relation to COVID-19.
•
Delays in reaching previously targeted exploration results and mineral reserve and mineral resource additions. Despite
promising recent results in core areas of the mine and newly discovered areas, the Company has been delayed in its
goal of increasing mineral reserves and mineral resources in the operation.
Given the decrease in the overall Cerro Moro CGU profitability as identified in the latest LOM plan, the impact of the LOM plan on
the value of exploration potential and land interest, and the impact of a reduction in reserves and resources, the Company
concluded that these factors represent an indicator of impairment for Cerro Moro as of December 31, 2020. The Company
concluded that the recoverable amount for the Cerro Moro CGU, representing the CGU’s FVLCD, was below the carrying amount.
In consideration of the above, a non-cash accounting impairment of $369.0 million was recognized.
Impairment Testing: Key Assumptions
The determination of FVLCD, with level 3 input of the fair value hierarchy, includes the following key applicable assumptions:
•
Production volumes: In calculating the FVLCD, the production volumes incorporated into the cash flow models based
on detailed life of mine plans and take into account development plans for the mines agreed by management as part of
the long-term planning process. Production volumes are dependent on a number of variables, such as: the recoverable
quantities; the production profile; the cost of the development of the infrastructure necessary to extract the reserves; the
Yamana Gold
146
production costs; the contractual duration of mining rights; and the selling price of the commodities extracted. As each
producing mine has specific reserve characteristics and economic circumstances, the cash flows of the mines are
computed using appropriate individual economic models and key assumptions established by management. The
production profiles used were consistent with the reserves and resource volumes approved as part of the Company’s
process for the estimation of proven and probable reserves, resource estimates and in certain circumstances, include
expansion projects. These are then assessed to ensure they are consistent with what a market participant would estimate.
•
Commodity prices: Forecast commodity prices are based on management’s estimates and are derived from forward
price curves and long-term views of global supply and demand, building on past experience of the industry and consistent
with external sources. Estimated long-term gold, silver and copper prices of $1,550 per ounce (2020: $1,550 per ounce),
$20.00 per ounce (2020: $20.00 per ounce) and $3.00 per pound (2020: $3.00 per pound) respectively, have been used
to estimate future revenues.
•
Discount rates: In calculating the FVLCD, a real post-tax discount rate of 3.50% (2020: 3.50%) based on the Company's
weighted average cost of capital (“WACC”). The WACC used in the models is in real terms, consistent with the other
assumptions in the models.
•
Exchange rates: Foreign exchange rates are estimated with reference to external market forecasts and based on
observable market data including spot and forward values. In the current year, there was a depreciation in the long-term
rates of the local currencies in which the Company operates.
The Company performed a sensitivity analysis on key assumptions and determined that no reasonably possible change in any of
the key assumptions would cause the carrying value of the Canadian Malartic CGU to exceed its recoverable amount.
14.
INCOME TAXES
Income Tax Expense (Recovery)
For the years ended December 31,
2021
2020
Current tax expense (recovery)
Current tax expense in respect of the current year
$
146.9 $
119.5
Adjustment for prior periods
11.3
(4.5)
Impact of foreign exchange
(0.3)
0.1
Interest and penalties
2.0
1.1
$
159.8 $
116.2
Deferred income tax expense (recovery)
Deferred income tax recovery recognized in the current year
$
135.1 $
114.1
Adjustment for prior periods
(1.0)
3.4
Impact of foreign exchange
1.7
52.8
$
135.9 $
170.3
Net income tax expense
$
295.7 $
286.5
Annual Report 2021
147
The following table reconciles income taxes calculated at statutory rates with the income tax expense in the consolidated
statements of operations:
For the years ended December 31,
2021
2020
Earnings before income taxes
$
384.5
$
490.1
Canadian statutory tax rate (%)
26.5 %
26.5 %
Expected income tax expense
101.9
129.9
Impact of higher foreign tax rates(i)
(37.3)
28.8
Impact of change in enacted tax rates(ii)
146.9
2.8
Permanent differences
(2.6)
29.4
Change in recognition of deferred tax assets
(16.2)
53.4
Foreign exchange and other translation amounts
(3.6)
(3.4)
Inflation adjustments
23.0
(1.3)
True-up of tax provisions in respect of prior years
12.1
(1.1)
Withholding taxes
7.2
8.4
Mining taxes on profit
58.5
28.9
Planned distribution of foreign earnings of the company
6.5
10.1
Other
(0.8)
0.6
Net income tax expense
$
295.7
$
286.5
Income tax expense (recovery) is represented by:
Current income tax expense
$
159.8
$
116.2
Deferred income tax expense
135.9
170.3
Net income tax expense
$
295.7
$
286.5
Certain of the comparative numbers have been reclassified to conform with the current year presentation.
(i)
The Company operates in multiple foreign tax jurisdictions that have tax rates that differ from the Canadian statutory rate.
(ii)
On June 16, 2021, the Argentine government enacted legislation that increased the corporate tax rate from 25% to 35% effective January 1, 2021.
Deferred Income Taxes
The following is the analysis of the deferred income tax assets (liabilities) presented in the consolidated balance sheets:
As at December 31,
2021
2020
The net deferred income tax assets (liabilities) are classified as follows:
Deferred income tax assets
$
96.2 $
98.1
Deferred income tax liabilities
(1,364.2)
(1,229.1)
$
(1,268.0) $
(1,131.0)
For the year ended December 31, 2021
Opening
balance
Recognized in
profit or loss
Recognized
in OCI
Flow-Through
Shares
Closing
balance
Deductible temporary differences
$
13.2 $
15.9 $
— $
— $
29.1
Amounts related to tax losses
114.4
(58.7)
—
—
55.7
Financing costs
61.1
(46.1)
—
—
15.0
Environmental rehabilitation provision
41.7
19.2
—
—
60.9
Derivative liability
2.4
(0.4)
1.9
—
3.9
Property, plant and equipment
(1,363.0)
(62.6)
—
(4.4)
(1,430.0)
Equity securities at FVOCI
(1.8)
(1.1)
1.5
—
(1.5)
Other
1.0
(2.1)
—
—
(1.1)
Net deferred income tax liabilities
$
(1,131.0) $
(135.9) $
3.4 $
(4.4) $
(1,268.0)
Yamana Gold
148
For the year ended December 31, 2020
Opening
balance
Recognized in
profit or loss
Recognized
in OCI
Closing
balance
Deductible temporary differences
$
11.8
$
1.4 $
— $
13.2
Amounts related to tax losses
102.6
11.8
—
114.4
Financing costs
71.7
(10.6)
—
61.1
Environmental rehabilitation provision
14.1
27.6
—
41.7
Derivative liability
0.5
(0.1)
2.0
2.4
Property, plant and equipment
(1,160.1)
(202.9)
—
(1,363.0)
Equity securities at FVOCI
—
0.4
(2.2)
(1.8)
Other
(1.1)
2.1
—
1.0
Net deferred income tax liabilities
$
(960.5) $
(170.3) $
(0.2) $
(1,131.0)
Certain of the prior year numbers have been reclassified to conform with the current year presentation.
A deferred income tax asset in the amount of $93.9 million has been recorded in Canada (2020: $95.8 million). The deferred
income tax asset consists mainly of unused tax losses and deductible temporary differences which arose primarily from financing
costs and general and administrative expenses. Projections of taxable profits from various sources and tax planning were used to
support the recognition of the losses. The future projected income could be affected by metal prices and quantities of proven and
probable reserves. If these factors or other circumstances change, we would reassess our ability to record the deferred income
tax asset relating to the unused tax losses.
Unrecognized Deductible Temporary Differences and Unused Tax Losses
Deferred tax assets have not been recognized in respect of the following items:
As at December 31,
2021
2020
Deductible temporary differences (no expiry)
$
59.3 $
71.5
Capital losses (no expiry)
119.4
120.2
Operating losses
135.2
101.2
$
313.9 $
292.9
Operating losses at December 31, 2021 will expire as follows:
Canada
U.S.
Brazil
Chile
Argentina
Other
Total
2022
$
— $
18.8 $
— $
— $
— $
— $
18.8
2023
—
34.2
—
—
—
— $
34.2
2024
—
15.0
—
—
28.7
— $
43.7
2025
—
7.3
—
—
96.1
4.7 $
108.1
2026
—
12.4
—
—
—
2.4 $
14.8
2027 and onwards
220.6
127.4
—
—
—
2.8 $
350.9
Unlimited
909.7
3.3
60.6
108.0
—
0.6 $
1,082.3
$
1,130.4 $
218.4 $
60.6 $
108.0 $
124.8 $
10.5 $
1,652.8
Unrecognized Taxable Temporary Differences Associated with Investments and Interests in Subsidiaries
As at December 31, 2021, an aggregate temporary difference of $3.5 billion (2020: $3.2 billion) related to investments in
subsidiaries was not recognized because the Company is able to control the timing of the reversal of the temporary difference and
it is probable that the temporary difference will not reverse in the foreseeable future.
15.
EARNINGS PER SHARE
Earnings per share for the years ended December 31, 2021 and 2020 was calculated based on the following:
2021
2020
Attributable to Yamana Gold Inc. equity holders
Net earnings
$
147.5 $
203.6
Annual Report 2021
149
Earnings per share is based on the weighted average number of common shares of the Company outstanding during the period.
The diluted earnings per share reflects the potential dilution of common share equivalents, such as outstanding share options, in
the weighted average number of common shares outstanding during the period, if dilutive.
The weighted average number of shares used in the calculation of earnings per share for the years ended December 31 was
based on the following:
(in thousands of units)
2021
2020
Weighted average number of common shares - basic
963,393
951,818
Weighted average number of dilutive share options
15
74
Weighted average number of dilutive restricted share units
1,524
1,954
Weighted average number of common shares - diluted
964,932
953,846
The following securities could potentially dilute basic earnings per share in the future, but were not included in the computation of
diluted earnings per share because they were anti-dilutive:
(in thousands of units)
2021
2020
Potential dilutive securities
Share options
241
182
Restricted share units
686
541
926
722
16.
SUPPLEMENTARY CASH FLOW INFORMATION
Net Change in Working Capital
For the years ended December 31,
2021
2020
Net (increase) decrease in:
Trade and other receivables
$
6.0 $
3.0
Inventories
(12.1)
(21.6)
Other assets
2.8
(16.8)
Net increase (decrease) in:
Trade and other payables
(2.8)
(10.7)
Other liabilities
(27.2)
(6.7)
Movement in above related to foreign exchange
(9.0)
(18.1)
Net change in working capital(i)
$
(42.3) $
(70.9)
(i)
Change in working capital is net of items related to Property, Plant and Equipment.
Cash and Cash Equivalents
As at December 31,
2021
2020
Cash at bank
$
523.8 $
485.8
Bank short-term deposits
1.2
165.4
Total cash and cash equivalents(i)(ii)
$
525.0 $
651.2
(i)
Cash and cash equivalents consist of cash on hand, cash on deposit with banks, bank term deposits and highly liquid short-term investments with terms of
less than 90 days from the date of acquisition.
(ii)
The cash and cash equivalents disclosed above and in the consolidated statement of cash flows include $217.3 million (December 31, 2020: $223.1 million)
that are held by the MARA Project. These deposits are to be used specifically by the MARA Project and are therefore, not available for general use by the
other entities within the consolidated Company.
Other Non-Cash Expenses, net
For the years ended December 31,
2021
2020
Loss on disposal and write-down of assets
$
2.1 $
13.7
Amortization of union negotiation bonuses
11.1
11.4
Provision on indirect taxes
(3.4)
(5.9)
Other expenses
10.9
9.5
Total non-cash expenses, net
$
20.7 $
28.7
Yamana Gold
150
Changes in Liabilities Arising from Financing Activities
The table below details changes in the Company’s liabilities arising from financing activities. Liabilities arising from financing
activities are those for which cash flows were, or future cash flows will be, classified in the Company’s consolidated statement of
cash flows as cash flows from financing activities.
2021
2020
Debt
Accrued
interest(i)
Lease
liabilities
Debt
Accrued
interest(i)
Lease
liabilities
At January 1,
$
993.8 $
4.1 $
35.2
$
1,047.9 $
4.0 $
43.5
Changes from financing cash flows
Debt issued
495.2
—
—
200.0
—
—
Debt repayments
(719.0)
—
—
(256.2)
—
—
Interest paid
—
(40.5)
(6.7)
—
(51.4)
(3.5)
Payment of lease liabilities
—
—
(19.2)
—
—
(17.1)
Other changes
Interest expense
—
42.7
6.7
—
51.9
3.5
Capitalized interest
—
(0.9)
—
—
—
—
New leases
—
—
52.2
—
—
8.6
Other
2.8
0.4
(4.4)
2.1
(0.4)
0.2
At December 31,
$
772.8 $
5.8 $
63.8
$
993.8 $
4.1 $
35.2
(i)
Included in Note 25: Trade and Other Payables.
Non-cash investing and financing activities
Key non-cash investing and financing activities disclosed in other notes are:
•
Full or partial settlement of asset acquisition transactions – Note 6
•
Full or partial consideration received on disposal transactions – Note 6
•
Exchange of non-monetary assets (Agua Rica – Alumbrera Integration transaction) – Note 6
•
Dividends satisfied by the issue of shares under the dividend reinvestment plan – Note 30
•
Acquisition of right-of-use assets – Note 34
17.
FINANCIAL INSTRUMENTS
(a)
Financial Assets and Financial Liabilities by Categories
As at December 31, 2021
Amortized cost
FVOCI - equity
instruments
Mandatorily at
FVTPL - others
FV - Hedging
instruments
Total
Financial assets
Cash and cash equivalents
$
— $
— $
525.0 $
— $
525.0
Trade and other receivables
3.0
—
—
—
3.0
Convertible loan receivable(ii)
—
—
10.0
—
10.0
Investments in equity securities(i)
—
74.1
—
—
74.1
Warrants
—
—
1.4
—
1.4
Other financial assets
22.5
—
—
—
22.5
Total financial assets
$
25.5 $
74.1 $
536.4 $
— $
636.0
Financial liabilities
Total debt
$
772.8 $
— $
— $
— $
772.8
Trade and other payables
274.7
—
—
—
274.7
Derivative liabilities - Hedging instruments
—
—
—
14.5
14.5
Derivative liabilities - Non-hedge
—
—
11.0
—
11.0
Other financial liabilities
172.4
—
—
—
172.4
Total financial liabilities
$
1,219.9 $
— $
11.0 $
14.5 $
1,245.4
Annual Report 2021
151
As at December 31, 2020
Amortized cost
FVOCI - equity
instruments
Mandatorily at
FVTPL - others
FV- Hedging
instruments
Total
Financial assets
Cash and cash equivalents
$
— $
— $
651.2 $
— $
651.2
Trade and other receivables
4.2
—
—
—
4.2
Convertible loan receivable(ii)
—
—
11.7
—
11.7
Investments in equity securities(i)
—
68.7
—
—
68.7
Warrants
—
—
2.5
—
2.5
Derivative assets - Non-hedge
—
—
0.4
—
0.4
Other financial assets
19.7
—
—
—
19.7
Total financial assets
$
23.9 $
68.7 $
665.8 $
— $
758.4
Financial liabilities
Total debt
$
993.8 $
— $
— $
— $
993.8
Trade and other payables
240.4
—
—
—
240.4
Derivative liabilities - Hedging instruments
—
—
—
9.0
9.0
Derivative liabilities - Non-hedge
—
—
6.1
—
6.1
Other financial liabilities
173.4
—
—
—
173.4
Total financial liabilities
$
1,407.6 $
— $
6.1 $
9.0 $
1,422.7
(i)
Investments in publicly quoted equity securities that are neither subsidiaries nor associates are categorized as FVOCI pursuant to the irrevocable election
available in IFRS 9 for these instruments. The Company’s portfolio of equity securities is primarily focused on the mining sector. These are strategic
investments and the Company considers this classification to be more relevant. The balance at December 31, 2020 included the Company's remaining
investment in Equinox Gold. During the year ended December 31, 2021, the Company disposed of its remaining interest in Equinox Gold for total net
proceeds of $51.2 million. As noted above, equity securities in the Company's investment portfolio are considered to be strategic investments. For such
investments, the Company's focus is to assess the best path for creation of value for shareholders, which may include monetization of said investments,
which was the case in the sale of the Equinox shares. The fair value of the Equinox shares at the date of derecognition was $51.4 million and the Company
recorded a cumulative gain of $5.5 million on disposal. The balance at December 31, 2021 includes the Company's investments in Nomad, which was
previously accounted for as an investment in an associate, and Ascot. Refer to Note 6 and 20.
(ii)
Represents the Deferred Cash Payment receivable from the Nomad transaction. Refer to Note 6.
(b)
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. In assessing the fair value of a particular contract, the market participant
would consider the credit risk of the counterparty to the contract. Consequently, when it is appropriate to do so, the Company
adjusts its valuation models to incorporate a measure of credit risk.
i)
Fair Value Measurements of Financial Assets and Financial Liabilities Measured at Fair Value
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments that are measured
at fair value:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at
the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Yamana Gold
152
The levels in the fair value hierarchy into which the Company’s financial assets and liabilities that are measured and recognized
on the consolidated balance sheets at fair value on a recurring basis were categorized as follows:
December 31, 2021
December 31, 2020
Level 1
input
Level 2
input
Aggregate
fair value
Level 1
input
Level 2
input
Aggregate
fair value
Assets
Cash and cash equivalents
$
525.0 $
— $
525.0 $
651.2 $
— $
651.2
Convertible loan receivable
—
10.0
10.0
—
11.7
11.7
Investments in equity securities
74.1
—
74.1
68.7
—
68.7
Warrants
—
1.4
1.4
—
2.5
2.5
Derivative related assets
—
—
—
—
0.4
0.4
$
599.1 $
11.4 $
610.5 $
719.9 $
14.6 $
734.5
Liabilities
Derivative related liabilities
$
— $
25.5 $
25.5 $
— $
15.1 $
15.1
$
— $
25.5 $
25.5 $
— $
15.1 $
15.1
At December 31, 2021, there were no financial assets and liabilities measured and recognized at fair value on a non-recurring
basis.
At December 31, 2021 and December 31, 2020, there were no financial assets or liabilities measured and recognized on the
consolidated balance sheets at fair value that would be categorized as Level 3 in the fair value hierarchy.
There were no transfers between any levels of the fair value hierarchy during the year ended December 31, 2021.
ii)
Valuation Methodologies Used in the Measurement of Fair Value for Level 2 Financial Assets and Financial
Liabilities
Warrants and Convertible loan receivable
The fair value of warrants, and the convertible loan receivable are determined using a Black-Scholes model based on relevant
assumptions including risk free interest rate, expected dividend yield, expected volatility and expected warrant life which are
supported by observable current market conditions.
Derivative assets and liabilities
The fair value of derivative instruments is determined using either present value techniques or option pricing models that utilize a
variety of inputs that are a combination of quoted prices and market-corroborated inputs. The Company continues to monitor the
potential impact of the recent instability of the financial markets, and will adjust its derivative contracts for credit risk based upon
the credit default swap spread for each of the counterparties as warranted.
iii)
Carrying Value versus Fair Value
Set out below is a comparison by class of the carrying amounts and fair value of the Company's financial instruments, other than
those whose carrying amounts are a reasonable approximation of fair value:
December 31, 2021
December 31, 2020
Financial instrument
classification
Carrying amount
Fair value(i)
Carrying amount
Fair value(i)
Debt
Senior notes
Amortized cost
$
775.9 $
797.5 $
996.5 $
989.3
(i)
The Company's senior notes are accounted for at amortized cost, using the effective interest method. The fair value required to be disclosed is determined
using quoted prices (unadjusted) in active markets where available, and is otherwise determined by discounting the future cash flows by a discount factor
that reflects the Company's own credit risk.
Management assessed that the fair values of trade and other receivables, trade and other payables, and other financial assets
and liabilities approximate their carrying amounts, largely due to the short-term maturities of these instruments. Derivative assets
and liabilities are already carried at fair value.
Annual Report 2021
153
(c)
Derivative Instruments ("Derivatives")
Summary of derivatives at December 31, 2021
Notional Amount
Average call
strike price
(per USD)
Average put
strike price
(per USD)
Remaining term
Cash flow
hedge
Non-hedge
Fair value
(USD)
Currency contracts
Option contracts
BRL option contracts (millions)(i)
R$5.25
R$5.71
January - December 2022
R$192.0
— $
(1.6)
CLP option contracts (billions)(i)
CLP$750.00
CLP$850.75
January - December 2022
CLP62.4
— $
(3.9)
Forward contracts
Average FX/USD forward
rate
BRL forward contracts (millions)(ii)
R$5.4925
January - December 2022
R$192.0
— $
(2.1)
CLP forward contracts (billions)(iii)
CLP$798.69
January - December 2022
CLP62.4
— $
(6.9)
Other
Per share value (C$)
DSU contracts (millions of DSUs)(iv)
$7.26
January - November 2022
—
DSU 4.2 $
(6.0)
(i)
The Company has designated zero cost collar option contracts as cash flow hedges for its highly probable forecasted BRL and CLP expenditure
requirements. The Company has elected to only designate the change in the intrinsic value of options in the hedging relationships. The change in fair value
of the time value component of options is recorded in OCI as a cost of hedging. The BRL cash flow hedges are expected to cover approximately. 32% of
the BRL denominated forecasted costs from January to December 2022. The CLP cash flow hedges are expected to cover approximately 36% of the CLP
denominated forecasted costs from January to December 2022.
(ii)
In January 2021, the Company entered into forward contracts totalling BRL 288.0 million (approximately US$54.3 million) split evenly from July 2021 to
December 2022 at a weighted average BRL to US Dollar forward rate of BRL 5.4925 per US Dollar. These forward contracts are expected to cover
approximately 32% of the BRL denominated forecasted costs from January to December 2022.
(iii)
In August 2021, the Company entered into forward contracts totalling CLP62.4 billion (approximately US$79.1 million) split evenly from January to December
2022, at a weighted average CLP to US Dollar forward rate of CLP798.69 per US Dollar. These forward contracts are expected to cover approximately 36%
of the CLP denominated forecasted costs from January to December 2022.
(iv)
During the fourth quarter of 2020, the Company entered into a derivative contract to mitigate the volatility of its share price on DSU compensation, effectively
locking in the exposure of the Company for 4.2 million DSUs (approximately 88% outstanding DSUs at the time) at a value of C$7.26 per share.
As at December 31, 2021, the Company also had derivative liabilities relating to option agreements of $4.7 million.
Fair Values of Derivatives
Asset derivatives
Liability derivatives
At as December 31,
2021
2020
2021
2020
Derivatives designated as hedging instruments
Currency contracts
$
— $
—
$
14.5 $
9.0
Total derivatives designated as hedging instruments
$
— $
—
$
14.5 $
9.0
Derivatives not designated as hedging instruments
Warrants and options contracts
—
—
5.0
6.1
DSU contracts
—
0.4
6.0
—
Total derivatives not designated as hedges
$
— $
0.4
$
11.0
$
6.1
Total derivative instruments (Note 20 and Note 26)
$
— $
0.4
$
25.5 $
15.1
Cash Flow Hedge Gains (Losses) in Accumulated Other Comprehensive Income (“AOCI”)
Gain (loss) recognized in cash flow
hedge reserve
Gain (loss) reclassified or adjusted
from cash flow hedge reserve
For the year ended December 31,
2021
2020
2021
2020
Exchange rate risk
Currency option contracts
$
(11.8) $
(24.0) $
9.7 $
16.9
$
(11.8) $
(24.0) $
9.7 $
16.9
Time value of option contracts excluded from
hedge relationship
(4.9)
(0.2)
—
—
$
(16.7) $
(24.2) $
9.7 $
16.9
Yamana Gold
154
Gains (Losses) on Non-hedge Derivatives
The net gain (loss) on derivatives not designated as hedging instruments was comprised of the following:
For the years ended December 31,
2021
2020
Realized gains (losses)
DSU contracts
—
1.8
$
— $
1.8
Unrealized gains (losses)
DSU contracts
(6.5)
(3.4)
$
(6.5) $
(3.4)
18.
FINANCIAL RISK MANAGEMENT
Exploration, development and mining of precious metals involve numerous risks as a result of the inherent nature of the business,
global economic trends and the influences of local social, political, environmental and economic conditions in the various
geographical areas of operation. As such, the Company is subject to several financial and operational risks that could have a
significant impact on its profitability, financial instruments and levels of operating cash flows. In particular, financial risks include
market risk (including currency risk, commodity price risk and interest rate risk), credit risk, and liquidity risk.
Market Risk
Market risk is the risk that changes in market factors, such as foreign exchange, commodity prices or interest rates will affect the
value of the Company's financial instruments. Market risks are managed by either accepting the risk or mitigating it through the
use of derivatives and other economic hedges.
(a)
Currency Risk
The Company’s sales are predominantly denominated in US Dollars. The Company is primarily exposed to currency fluctuations
relative to the US Dollar as a portion of the Company’s operating costs and capital expenditures are denominated in foreign
currencies; predominantly the Brazilian Real, the Argentine Peso, the Chilean Peso, and the Canadian Dollar. Monetary assets
denominated in foreign currencies are also exposed to foreign currency fluctuations. These potential currency fluctuations could
have a significant impact on production costs and affect the Company’s earnings and financial condition. To limit the variability in
the Company’s expected operating and capital expenditures denominated in foreign currencies, the Company enters into forward
contracts and zero-cost collar option contracts.
Details of outstanding derivative instruments can be found in Note 17.
The following table outlines the Company's exposure to currency risk and the pre-tax effects on net earnings and other
comprehensive income at the end of the reporting period of a 10% change in the foreign currency for the foreign currency
denominated monetary items. The sensitivity analysis includes cash and cash equivalents and trade payables. The number below
indicates an increase or decrease in net earnings or other comprehensive income where the US Dollar strengthens or weakens
by 10% against the relevant foreign currency.
Effect on net
earnings, before tax
Effect on other comprehensive
income, before tax
(On 10% change in US Dollars exchange rate)
2021
2020
2021
2020
BRL
$
0.2 $
0.3 $
0.6 $
1.0
ARS
$
1.3 $
0.5 $
— $
—
CAD
$
1.3 $
4.2 $
0.1 $
0.1
CLP
$
1.6 $
2.3 $
1.3 $
0.1
The sensitivity analysis included in the tables above should be used with caution as the results are theoretical, based on
management's best assumptions using material and practicable data which may generate results that are not necessarily indicative
of future performance. In addition, in deriving this analysis, the Company has made assumptions based on the structure and
relationships of variables as at the balance sheet date which may differ due to fluctuations throughout the year with all other
Annual Report 2021
155
variables assumed to remain constant. Actual changes in one variable may contribute to changes in another variable, which may
amplify or offset the effect on earnings.
(b)
Commodity Price Risk
The Company's profitability and long-term viability depend, in large part, upon the market price of metals that may be produced
from the Company's properties, primarily gold, silver and copper. Market price fluctuations of these commodities could adversely
affect profitability of operations and lead to impairments of mineral properties. Metal prices fluctuate widely and are affected by
numerous factors beyond the Company's control including but not limited to supply and demand, consumption patterns,
macroeconomic factors (interest, exchange and inflation), banking and political conditions, and mining specific factors. The
Company periodically uses forward contracts to economically hedge against the risk of declining metal prices for a portion of its
forecast sales.
There were no derivatives to hedge metal sales outstanding at December 31, 2021 or December 31, 2020.
(c)
Interest Rate Risk
Interest rate risk is the risk that the fair values and future cash flows of the Company’s financial instruments will fluctuate because
of changes in market interest rates. The Company monitors its exposure to interest rates and its exposures with a mix of fixed-and
floating-rate debt. As at December 31, 2021, all of the Company’s long-term debt was at fixed rates. The Company's revolving
credit facility, which is subject to floating rates of interest, was not drawn at December 31, 2021.
A 10% increase or decrease in the interest earned from financial institutions on deposits held would result in a nominal increase
or decrease in the Company’s net earnings. There was no significant change in the Company’s exposure to interest rate risk during
the year ended December 31, 2021.
Credit Risk
Credit risk is the risk that a third party might fail to discharge its obligations under the terms of a financial instrument. The Company
is exposed to various counterparty risks including, but not limited to: (i) financial institutions that hold the Company’s cash and
short-term investments; (ii) companies that have payables to the Company, including bullion customers; (iii) providers of risk
management services (including hedging arrangements); (iv) shipping service providers that move the Company’s material; (v) the
Company’s insurance providers; (vi) refineries contracted that hold and process the Company's precious metals; and (vii) the
Company’s lenders. The Company seeks to limit counterparty risk by entering into business arrangements with high credit-quality
counterparties, limiting the amount of exposure to each counterparty and monitoring the financial condition of counterparties. In
addition, credit risk is further mitigated in specific cases by maintaining the ability to novate contracts from lower quality credit
counterparties to those with higher credit ratings. For cash and cash equivalents and trade and other receivables, credit risk is
represented by the carrying amount on the consolidated balance sheets.
Cash and cash equivalents are deposited with highly rated corporations and the credit risk associated with these deposits is low.
The Company sells its products to large international financial institutions and other organizations with high credit ratings. Historical
levels of receivable defaults and overdue balances over normal credit terms are both negligible, thus the credit risk associated with
trade receivables is also considered to be negligible. The assessment of recoverability of trade receivables at December 31, 2021
considered the impacts of COVID-19 and no recoverability issues were identified. For derivatives, the Company assumes no credit
risk when the fair value of the instruments is negative. When the fair value of the instruments is positive, this is a reasonable
measure of credit risk. The Company does not have any assets pledged as collateral.
The Company's maximum credit exposure to credit risk is as follows:
As at December 31,
2021
2020
Cash and cash equivalents
$
525.0 $
651.2
Trade and other receivables
3.0
4.2
Derivative assets (Note 17)
—
0.4
Convertible loan receivable (Note 6)
10.0
11.7
Loans and other receivables
22.5
19.7
$
560.5 $
687.2
Yamana Gold
156
Liquidity Risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company
has in place a rigorous planning, budgeting and forecasting process to help determine the funds required to support the Company’s
normal operating requirements on an ongoing basis, its expansionary plans and its dividend distributions. The Company ensures
that sufficient committed loan facilities exist to meet its short-term business requirements, taking into account its anticipated cash
flows from operations and its holdings of cash and cash equivalents. Details of the undrawn credit facility are included in Note 28.
The following table summarizes the remaining contractual maturities of the Company's significant financial liabilities, shown in
contractual undiscounted cash flows.
2021
2020
As at December 31,
Within 1
year
2 - 3
years
4 - 5
years
Over 5
years
Total
Total
Trade and other payables
$
274.7 $
— $
— $
— $
274.7 $
240.4
Debt repayments
—
—
—
782.9
782.9
1,001.8
Interest payments on debt
28.7
56.4
52.5
73.4
211.0
187.3
Lease liabilities
27.6
37.8
8.1
12.5
86.0
54.0
Derivative liabilities
23.5
2.0
—
—
25.5
15.1
Other financial liabilities
29.9
10.8
2.4
65.5
108.6
139.2
Total
$
384.4 $
107.0 $
63.0 $
934.3 $ 1,488.7 $ 1,637.8
At December 31, 2021, the Company had letters of credit and guarantees outstanding in the amount of $146.2 million (December
31, 2020: $178.9 million) of which $119.8 million (December 31, 2020: $155.9 million) represented guarantees for reclamation
obligations. These letters of credit are automatically extended for one year periods from their expiration dates.
19.
INVENTORIES
As at December 31,
2021
2020
Product inventories
$
22.9 $
26.6
Work in process
13.0
9.9
Ore stockpiles
189.2
168.5
Materials and supplies
109.4
96.5
$
334.5 $
301.5
Less: non-current ore stockpiles included in other non-current assets (Note 21)
(167.3)
(149.4)
$
167.2 $
152.1
During the year ended December 31, 2021, a charge of $1.6 million (2020: $6.2 million) was recorded within cost of sales excluding
depletion, depreciation and amortization to reduce the carrying value of materials and supplies inventories to their net realizable
value.
20.
OTHER FINANCIAL ASSETS
As at December 31,
2021
2020
Derivative assets (Note 17)
$
— $
0.4
Loans and other receivables
22.5
19.7
Investments in equity securities and warrants(i)(ii)(iii)
75.5
71.2
Convertible loan receivable(iv)
10.0
11.7
$
108.0 $
103.0
Current
$
27.0 $
14.3
Non-current
81.0
88.7
$
108.0 $
103.0
(i)
The balance at December 31, 2020 included the Company's investment in Equinox Gold. During the year ended December 31, 2021, the Company disposed
of its interest in Equinox Gold for total proceeds of $51.2 million. The balance at December 31, 2021 includes the Company's investments in Nomad Royalty
Company, which was previously accounted for as an investment in an associate, and Ascot Resources Ltd. Refer to (ii) below.
(ii)
On April 12 2021, pursuant to a private placement offer by Ascot Resources Ltd. ("Ascot") (TSX: AOT), Yamana subscribed for $16.5 million (C$20.6 million)
worth of common shares of Ascot at an issue price of C$0.86 per share. The offering closed on April 20, 2021. Upon closing, Yamana held approximately
Annual Report 2021
157
6.4% of Ascot's basic shares outstanding. Yamana has no right to representation on Ascot's Board of Directors and the investment is accounted for as a
financial asset at FVOCI.
(iii)
On November 26, 2021, pursuant to a private placement offer by Benchmark Metals Inc. ("Benchmark") (TSX-V: BNCH), Yamana subscribed for 8 million
Units at a price of C$1.00 per unit for a total cost of $6.3 million (C$8.0 million). Each Unit consisted of one Benchmark common share and one-half of one
transferable common share purchase warrant. Upon closing, Yamana held 3.99% of Benchmark on a non-diluted basis. Yamana has no right to
representation on Benchmark's Board of Directors and the investment is accounted for as a financial asset at FVOCI.
(iv)
As part of the sale of the Royalty Portfolio in March 2020, the Company received a deferred cash payment that is convertible into shares of Nomad. Refer
to Note 6 for further details.
21.
OTHER ASSETS
As at December 31,
2021
2020
Non-current portion of ore stockpiles (Note 19)(i)
$
167.3 $
149.4
Income tax recoverable and installments
6.9
2.8
Tax credits recoverable(ii)
70.6
77.4
Advances, deposits and prepaids
67.4
64.1
Other
4.1
5.0
$
316.3 $
298.7
Current
$
113.3
$
96.1
Non-current
203.0
202.6
$
316.3 $
298.7
(i)
Non-current ore stockpiles represent material not scheduled for processing within the next twelve months at the Company's Canadian Malartic and Jacobina
mines.
(ii)
Tax credits recoverable consist of sales taxes which are recoverable either in the form of a refund from the respective jurisdictions in which the Company
operates or against other taxes payable and value-added tax.
22.
PROPERTY, PLANT AND EQUIPMENT
Land, building,
plant & equipment
Operating mine
mineral interests(iv)(v)
Development
projects and
Exploration &
evaluation
Total
Cost
At January 1, 2021
$
1,912.4 $
7,294.1 $
3,475.1 $
12,681.5
Additions
73.1
257.7
51.6
382.4
Reclassifications, transfers and other non-cash
movements(ii)
63.3
(19.2)
129.0
173.1
Disposals
(33.0)
(0.1)
(3.5)
(36.6)
At December 31, 2021
$
2,015.8 $
7,532.5 $
3,652.2 $
13,200.4
Accumulated depletion, depreciation and
amortization ("DDA") and impairment
At January 1, 2021
$
(1,258.6) $
(3,965.3) $
(772.7) $
(5,996.7)
DDA
(123.0)
(333.1)
—
(456.1)
Disposals
27.6
—
—
27.6
At December 31, 2021
$
(1,354.0) $
(4,298.4) $
(772.7) $
(6,425.2)
Carrying amount, December 31, 2021
$
661.8 $
3,234.1 $
2,879.5 $
6,775.2
Amounts included above as at December 31, 2021
Assets under construction(i)
$
2.2 $
120.5 $
131.1 $
253.8
Assets not being depreciated
$
— $
690.0 $
2,879.5 $
3,569.5
Yamana Gold
158
Land, building,
plant & equipment
Operating mine
mineral interests(iv)(v)
Development
projects and
Exploration &
evaluation
Total
Cost
At January 1, 2020
$
1,868.9 $
7,066.6 $
2,839.2 $
11,774.6
Additions
68.7
187.4
17.8
273.9
Reclassification, transfers and other non-cash
movements(ii)
19.4
40.1
681.6
741.1
Reclassified as held for sale and disposals
(44.6)
—
(63.5)
(108.1)
At December 31, 2020
$
1,912.4 $
7,294.1 $
3,475.1 $
12,681.5
Accumulated depletion, depreciation and
amortization ("DDA") and impairment
At January 1, 2020
$
(1,042.6) $
(4,006.3) $
(772.7) $
(5,821.7)
DDA
(139.7)
(264.0)
—
(403.7)
Impairment and impairment reversal(iii)
(114.0)
305.0
—
191.0
Disposals
37.7
—
—
37.7
At December 31, 2020
$
(1,258.6) $
(3,965.3) $
(772.7) $
(5,996.7)
Carrying amount, December 31, 2020
$
653.8 $
3,328.8 $
2,702.4 $
6,684.8
Amounts included above as at December 31, 2020
Assets not being depreciated
$
— $
655.8 $
2,702.4 $
3,358.2
(i)
During 2021, the Company capitalized interest of $0.9 million related to qualifying capital expenditures at its Canadian assets under construction at a
weighted average capitalization rate of 3.8%. There was no interest capitalized in 2020.
(ii)
Reclassifications, transfers and other non-cash movements includes PPE acquired as part of the acquisition of Monarch Gold Corporation, non-cash
additions to PPE and changes in the environmental rehabilitation provision as per Note 29. Also includes non-cash additions acquired as part of the MARA
transaction in 2020. Refer to Note 6 for additional details.
(iii)
During the year ended December 31, 2020, the Company recognized an impairment charge totalling $369.0 million related to Cerro Moro and an impairment
reversal of $560.0 million related to El Peñón. Refer to Note 13 for additional details.
(iv)
At December 31, 2021, $495.1 million of E&E assets related to assets in production were included in operating mine mineral interests (December 31, 2020
- $509.6 million). During the year ended December 31, 2020, the Company impaired $15.0 million of such E&E costs at Cerro Moro.
(v)
At December 31, 2021, the carrying amount of stripping costs capitalized and included in mining properties was $39.4 million (December 31, 2020:
$37.2 million).
23.
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill(i)
Other intangible
assets(ii)
Total
Cost
At January 1, 2021
$
403.7 $
85.3 $
489.0
Additions
—
0.2
0.2
At December 31, 2021
$
403.7 $
85.5 $
489.2
Accumulated amortization and impairment
At January 1, 2021
$
(45.0) $
(47.6) $
(92.6)
Amortization
—
(4.8)
(4.8)
At December 31, 2021
$
(45.0) $
(52.4) $
(97.4)
Net book value at December 31, 2021
$
358.7 $
33.1 $
391.8
Annual Report 2021
159
Goodwill(i)
Other intangible
assets(ii)
Total
Cost
At January 1, 2020
$
403.7 $
76.0 $
479.7
Additions
—
9.6 $
9.6
Dispositions
—
(0.3)
(0.3)
At December 31, 2020
$
403.7 $
85.3 $
489.0
Accumulated amortization and impairment
At January 1, 2020
$
(45.0) $
(42.5) $
(87.5)
Amortization
—
(5.1)
(5.1)
At December 31, 2020
$
(45.0) $
(47.6) $
(92.6)
Net book value at December 31, 2020
$
358.7 $
37.7 $
396.4
(i)
Goodwill represents the excess of the purchase cost over the fair value of net assets acquired in a business acquisition. On June 16, 2014, the Company
acquired a 50% interest in Canadian Malartic. Goodwill of $427.7 million was recognized on the excess of the purchase consideration over the fair value of
the assets and liabilities acquired. In March 2018, the Company sold certain jointly owned exploration properties of the Canadian Malartic Corporation, and
derecognized $24.0 million of goodwill allocated to the exploration properties.
(ii)
Other intangible assets primarily comprise capitalized system development costs.
24.
INVESTMENTS IN ASSOCIATES
The Company had no investments in associates as at December 31, 2021. Details of the Company's investments in associates
during the years ended December 31, 2021 and 2020 are as follows:
Leagold Mining Corporation
On January 1, 2020, Yamana held approximately 20% of Leagold Mining Corporation ("Leagold"). On March 10, 2020 Leagold
completed a merger transaction with Equinox Gold Corp., which resulted in Yamana owning approximately 9% of the combined
company. Yamana concluded that, as a result of its reduced shareholding, it no longer had significant influence in the investee,
and therefore, discontinued accounting for the investment using the equity method from the date of the completion of the merger.
Refer to Note 6 for further details on the merger transaction.
The following table summarizes the change in the carrying amount of the Company's investment in Leagold:
2020
Balance as at January 1
$
120.3
Company's share of net loss of Leagold
(4.1)
Company's share of other comprehensive loss of Leagold
(1.6)
Derecognition of investment in Leagold upon discontinuation of the equity method (Note 6)
(114.6)
Balance as at December 31
$
—
Summarized financial information in respect of the Company’s investment in Leagold is set out below. The summarized financial
information includes the results of Leagold for the period from January 1 to March 10, 2020, because Yamana ceased to have
significant influence in the investee as of March 10, 2020.
Summarized Consolidated Statement of Operations and Comprehensive (loss) Income Information
For the year ended December 31,
2020
Net loss
$
(20.0)
Other comprehensive loss
(8.1)
Total comprehensive loss
$
(28.1)
Yamana Gold
160
Immaterial Associates
The Company acquired interests in two individually immaterial associates during the year ended December 31, 2020 (Nomad
Royalty Company and Monarch Gold Corporation). The Company acquired its interest in both of these associates as the result of
transactions entered into by the Company. The Company's interest in both associates was below 20%; however, the Company
determined that it had significant influence because it had representation on the boards of both investees.
During the year ended December 31, 2021, the Company ceased accounting for both investments as investments in associates.
In January 2021 the Company acquired all of the remaining shares of Monarch Gold that it did not already own and began
accounting for Monarch Gold as a subsidiary. During the second quarter of 2021, Yamana concluded that it ceased to have
significant influence over Nomad due to no longer having representation on Nomad's board of directors, and therefore, discontinued
accounting for the investment using the equity method. Refer to Note 6 for further details.
The following table analyzes, in aggregate, the carrying amount and share of net earnings of these associates.
2021
2020
Aggregate carrying amount of individually immaterial associates
$
— $
34.3
Aggregate amounts of the Company's share of:
Net earnings
$
0.9 $
3.1
25.
TRADE AND OTHER PAYABLES
As at December 31,
2021
2020
Trade payables
$
173.1 $
154.2
Other payables(i)
101.6
86.2
$
274.7 $
240.4
(i)
Other payables include dividends, salaries, bonuses, pension, and interest payable, among other accruals.
26.
OTHER FINANCIAL LIABILITIES
As at December 31,
2021
2020
Lease liabilities (Note 34)
$
63.8 $
35.2
Royalty payable
12.0
16.5
Severance accrual
38.5
39.7
Deferred share units/performance share units liability (Note 31)
25.1
38.4
Accounts receivable and value added tax financing credit(i)
10.0
27.6
Derivative liabilities (Note 17)
25.5
15.1
Other
23.0
16.0
$
197.9 $
188.5
Current
$
76.0 $
78.8
Non-current
121.9
109.7
$
197.9 $
188.5
(i)
Accounts receivable and value added tax ("VAT") financing credits are payable within 30 days from the receipt of proceeds on doré sales, or payable in the
month of approval of the VAT credit, respectively.
27.
OTHER PROVISIONS AND LIABILITIES
As at December 31,
2021
2020
Other taxes payable
$
17.4 $
19.7
Provision for repatriation taxes payable(i)
14.8
18.5
Provision for taxes
18.4
3.9
Deferred revenue on metal streaming arrangement(ii)
64.2
77.6
Other provisions and liabilities(iii)
64.9
70.5
$
179.6 $
190.2
Current
$
57.7 $
77.6
Non-current
121.9
112.6
$
179.6 $
190.2
Annual Report 2021
161
(i)
The Company is subject to additional taxes in Chile on the repatriation of profits to its foreign shareholders. Total taxes in the amount of $14.8 million (2020:
$18.5 million) have been accrued on the assumption that the profits will be repatriated.
(ii)
On October 27, 2015 the Company entered into three metal streaming agreements with Sandstorm pursuant to which, the Company received advanced
consideration of $170.4 million against future deliveries of silver production from Cerro Moro, Minera Florida and Chapada, copper production from Chapada,
and gold production from Agua Rica. The advanced consideration is accounted for as deferred revenue, with revenue recognized when the metals are
delivered to the counterparty. The liabilities associated with the deferred revenue balances referenced to production from the Chapada mine were
derecognized as part of the sale of the Chapada mine in July 2019. The following table summarizes the changes in deferred revenue from the metal
streaming arrangements during 2021:
2021
As at December 31, 2020
$
77.6
Recognition of revenue during the year net of interest accretion
(11.9)
Variable consideration adjustment
(1.5)
$
64.2
Current portion
$
12.6
Non-current portion
51.6
As at December 31, 2021
$
64.2
(iii)
Other provisions and liabilities include the current portion of environmental rehabilitation provisions, and other contingent provisions.
28.
LONG-TERM DEBT AND CREDIT FACILITY
As at December 31,
2021
2020
Senior notes
$500 million notes issued August 2021
2.63% 10-year notes due August 2031
$
495.1
$
—
$300 million notes issued December 2017
4.625% 10-year notes due December 2027
280.8
280.4
$500 million notes issued June 2014
4.95% 10-year notes due July 2024
—
149.8
$300 million notes issued June 2013
Series B - 4.78% 10-year notes due June 2023 ($265 million)
—
240.4
$500 million notes issued March 2012
Series C - 4.76% 10-year notes due March 2022 ($200 million)
—
190.5
Series D - 4.91% 12-year notes due March 2024 ($140 million)
—
135.4
$
775.9
$
996.5
Revolving credit facility
Revolving credit facility (net of capitalized debt issuance costs)
(3.1)
(2.7)
Total debt(i)
$
772.8
$
993.8
(i)
Balances are net of unamortized discounts and capitalized transaction costs of $10.0 million (2020: $8.0 million).
Senior Notes
The Company's senior notes are unsecured and interest is payable semi-annually. Each series of senior notes is redeemable, in
whole or in part, at the Company's option, at any time prior to maturity, subject to make-whole provisions. The senior notes are
accreted to the face value over their respective terms.
During the third quarter of 2021, the Company completed the offering of $500 million, 10-year 2.63% unsecured senior notes
("Senior 2031 Notes"). The Company used the proceeds from the issuance of the Senior 2031 Notes, together with available cash
on hand, to redeem all outstanding senior notes due in 2022, 2023, and 2024. The Company paid an early redemption premium
of $53.3 million on the early redemption of these series of senior notes.
The Company's next repayment on the senior notes is now due December 2027.
Yamana Gold
162
Revolving Credit Facility
During the third quarter of 2021, the Company extended the term of the revolving credit facility ("the Facility") from July 2024 to
August 2026, under existing terms and conditions. The maximum amount available under the Facility remains at $750.0 million.
The Facility is unsecured and has an interest rate on drawn amounts of LIBOR plus an interest margin of between 1.20% and
2.25% depending on the Company's credit rating, and a commitment fee of between 0.24% and 0.45% depending on the
Company's credit rating. The Facility is currently undrawn.
Covenants
The senior notes and revolving credit facility are subject to various financial and general covenants. The principal covenants are
maximum net total debt (debt less cash) to tangible net worth of 0.75; and leverage ratio (net total debt/EBITDA) to be less than
or equal to 3.5:1. The Company was in compliance with all covenants as at December 31, 2021.
29.
ENVIRONMENTAL REHABILITATION PROVISION
The Company incurs environmental rehabilitation liabilities relating to its operating and closed mines and development projects.
Significant rehabilitation activities include land rehabilitation, demolition of buildings and mine facilities, and ongoing care and
maintenance and monitoring.
The Company estimates future rehabilitation costs based on the level of current mining activity and estimates of costs required to
fulfill the Company’s future obligations. Changes in environmental rehabilitation provision estimates during the year reflect changes
in cash flow estimates as well as assumptions including discount and inflation rates.
At December 31, 2021, the present value of the environmental rehabilitation provision relating to the Company's mining properties
was estimated at $377.2 million (December 31, 2020: $392.7 million) using discount rates ranging between 0.37% and 131.96%
(December 31, 2020: 0.08% and 52.76%). The undiscounted value of these liabilities was $547.0 million (December 31, 2020:
$527.1 million).
The following table reconciles the beginning and ending carrying amounts of the Company's environmental rehabilitation provision.
The majority of the expenditures are expected to take place over the next 100 years. Certain obligations related to post closure
monitoring and maintenance at the Company's Chilean mines are expected to continue in perpetuity.
2021
2020
Balance, beginning of year
$
392.7 $
220.4
Environmental rehabilitation provisions acquired during the year (Note 6)
3.0
85.7
Accretion expense included in finance costs
13.9
9.0
Revisions in estimates and obligations
6.0
82.4
Expenditures during the current year
(16.2)
(3.2)
Foreign exchange impact
(20.7)
(1.6)
Environmental rehabilitation provisions disposed of during the year
(1.5)
—
Balance, end of year
$
377.2 $
392.7
Current(i)
$
24.3 $
29.2
Non-current
352.9
363.5
$
377.2 $
392.7
(i)
The current portion of the environmental rehabilitation provision is included in the current portion of Other Provisions and Liabilities. Refer to Note 27.
Regulatory authorities in certain jurisdictions require that security be provided to cover the estimated environmental rehabilitation
obligations. As at December 31, 2021, the Company had outstanding letters of credit in the amount of $71.4 million (C$90.5 million)
(December 31, 2020: $66.4 million (C$84.6 million)) representing guarantees for reclamation obligations and road construction
relating to the Company's share of mining interest in Canadian Malartic, and $34.1 million (December 31, 2020: $20.1 million) and
$13.6 million (December 31, 2020: $13.7 million) representing guarantees for reclamation obligations relating to the Company's
Chilean mines and US properties, respectively. These letters of credit are automatically extended for one year periods from their
expiration dates. The Company's MARA Project also had outstanding bank guarantees for reclamation obligations totalling $55.6
million as at December 31, 2020, for which an equivalent amount of cash collateral had been posted at the time.one
Annual Report 2021
163
30.
SHARE CAPITAL
Common Shares Issued and Outstanding
The Company is authorized to issue an unlimited number of common shares at no par value and a maximum of eight million first
preference shares. There were no first preference shares issued or outstanding as at December 31, 2021 (2020: nil).
For the years ended December 31,
2021
2020
Number of
common shares
Number of
common shares
Issued and outstanding - 959,805,965 common shares
Amount
Amount
(December 31, 2020 - 952,620,947 common shares):
(In thousands)
(In millions)
(In thousands)
(In millions)
Balance, beginning of year
952,621 $
7,648.9
950,435 $
7,639.9
Issued on vesting of restricted share units
1,353
4.5
1,100
3.4
Dividend reinvestment plan
147
0.7
70
0.5
Issued as consideration in Monarch acquisition (Note 6)
11,608
61.2
—
—
Issued as consideration in acquisition of exploration properties
(Note 6)
706
3.1
—
—
Exercise of warrants
44
0.1
—
—
Exercise of options and share appreciation rights
—
—
167
0.9
Issuance of flow-through shares(i)
—
—
1,000
5.3
Acquisition of own shares, share cancellations and other
adjustments(ii) (iii)
(6,673)
(28.6)
(151)
(1.1)
Balance, end of year
959,806 $
7,689.9
952,621 $
7,648.9
(i)
On July 3, 2020, the Company closed a flow-through financing for proceeds of $7.4 million (C$10.0 million) consisting of the issue and sale of 1,000,000
flow-through common shares at a price of C$10.00 per share. The proceeds were allocated between the offering of shares and the sale of tax benefits. The
allocation was made based on the difference between the quoted price of the shares and the amount the investors paid for the shares, with a deferred flow-
through premium liability recognized for the difference. Accordingly, the Company recorded share capital of $5.3 million (C$7.2 million) and a deferred flow-
through premium liability of $2.0 million (C$2.7 million). During the first quarter of 2021, the company fulfilled its obligation and derecognized the liability.
(ii)
Under the Company's normal-course issuer bid ("NCIB"), the Company is able to purchase up to 48,321,676 of its common shares no later than August 3,
2022. During the year of 2021, the Company purchased 6,672,628 of its common shares under the NCIB, which were subsequently cancelled.
(iii)
Prior year includes the cancellation of 150,456 common shares that were not exchanged by holders of Osisko common shares pursuant to the terms of the
Plan of Arrangement related to the acquisition of the Canadian Malartic mine in 2014. Holders of Osisko common shares were to exchange their shares for
common shares of Yamana within a time period of six years following the closing of the transaction. As certain Osisko shareholders failed to surrender their
certificates representing Osisko common shares by June 16, 2020, non-certificated positions representing 150,456 Yamana common shares were cancelled
during the third quarter of 2020.
Dividends Paid and Declared
For the years ended December 31,
2021
2020
Dividends paid
$
104.8 $
53.0
Dividends declared in respect of the year
$
108.6 $
69.1
Dividend paid (per share)
$
0.109 $
0.056
Dividend declared in respect of the year (per share)
$
0.113
$
0.072
The Company's dividend reinvestment plan resulted in $0.7 million (2020: $0.5 million) being reinvested into the Company.
31.
SHARE-BASED PAYMENTS
The total expense relating to share-based payments includes accrued compensation expense related to plans granted in the
current period, plans granted in the prior period and adjustments to compensation associated with mark-to-market adjustments on
cash-settled plans, as follows:
For the years ended December 31,
2021
2020
Expense related to equity-settled compensation plans
$
5.0 $
4.4
Expense related to cash-settled compensation plans
(1.8)
27.1
Total expense recognized as compensation expense
$
3.2 $
31.5
As at December 31,
2021
2020
Total carrying amount of liabilities for cash-settled arrangements (Note 26)
$
25.1 $
38.4
Yamana Gold
164
The following table summarizes the equity instruments outstanding related to share-based payments.
As at December 31, (In thousands)
2021
2020
Share options outstanding(i)(ii)(iii)
256
256
Restricted share units ("RSU")(iv)
2,210
2,494
Deferred share units ("DSU")(v)(vi)
5,061
4,751
Performance share units ("PSU")(vii)
2,020
2,119
(i)
The aggregate maximum number of common shares that may be reserved for issuance under the Company's Share Incentive Plan is 24.9 million (2020:
24.9 million).
(ii)
As at December 31, 2021, 256,348 share options with a weighted average exercise price of C$5.30 were outstanding and exercisable (December 31, 2020:
256,348 share options with a weighted exercise price of C$5.30 outstanding and exercisable).
(iii)
During the year ended December 31, 2021, no share options were granted, excised or expired.
(iv)
During the year ended December 31, 2021, the Company granted 1,078,361 RSUs with a weighted average grant date fair value of C$6.38 per RSU; a
total of 1,352,628 RSUs vested and the Company credited $4.5 million (2020: $3.4 million) to share capital in respect of RSUs that vested during the year.
There were a total of 10,095 RSUs cancelled during the year ended December 31, 2021.
(v)
During the year ended December 31, 2021, the Company granted 309,858 DSUs and recorded an expense of $1.4 million, and no DSUs were settled.
(vi)
During the fourth quarter of 2020, the Company entered into a derivative contract to mitigate the volatility of share price on DSU compensation, effectively
locking in the exposure of the Company for 4.2 million DSUs (approximately 88% of outstanding DSUs at the time) at a value of C7.26 per share. For the
year ended December 31, 2021, the Company recorded a mark-to-market gain on DSUs of $7.4 million and a mark-to-market loss on the DSU hedge of
$6.5 million.
(vii) During the year ended December 31, 2021, 981,698 PSU units were granted with an expiry date of December 11, 2023 and a fair value of C$3.55 per unit
at December 31, 2021. There were payouts of 1,080,433 PSU units and no cancellations of PSU units during the year ended December 31, 2021.
32.
NON-CONTROLLING INTERESTS
As at December 31,
2021
2020
Agua De La Falda S.A.(i)
$
18.7 $
18.7
Estelar Resources S.A.(ii)
16.0
16.0
Minera Agua Rica Alumbrera Ltd.(iii)
751.1
791.3
Minera Cavancha SpA(iv)
21.5
—
$
807.3 $
826.0
(i)
The Company holds a 56.7% interest in the Agua De La Falda ("ADLF") project along with Corporación Nacional del Cobre de Chile ("Codelco"). The ADLF
project is an exploration project that includes the Jeronimo Deposit and is located in northern Chile.
(ii)
During the second quarter of 2018, the Company entered into an arrangement with Fomento Minero de Santa Cruz S.E. ("FOMICRUZ") pursuant to which,
FOMICRUZ is entitled to certain subordinated shares in the legal entity that directly owns the Cerro Moro mine, Estelar Resources S.A. These subordinated
shares entitle FOMICRUZ to a 5% interest in future dividends after the Company's investment in Cerro Moro, which includes construction and development
along with acquisition costs, has been recovered in full. As part of the arrangement and as further consideration to the Company, the right to use the land
related to the Bahía Laura properties, a significant land package to the west and south west of Cerro Moro, was obtained at an approximate value of $16.0
million.
(iii)
On December 17, 2020, the Company, along with partners Glencore and Newmont, completed the integration of the Agua Rica project with the Alumbrera
plant and infrastructure, pursuant to which, Yamana relinquished a non-controlling interest in Agua Rica for an increased interest in Alumbrera. Upon
completion of the integration transaction, Yamana owned 56.25%, with Glencore and Newmont owning 25.00% and 18.75%, respectively, of Minera Agua
Rica Alumbrera Ltd., the legal entity that indirectly holds the integrated MARA project. The following table summarizes the information relating to the MARA
subsidiary, before any intra-group eliminations:
As at December 31,
2021
2020
Current assets
$
237.4 $
241.9
Non-current assets
1,897.4
1,867.7
Current liabilities
26.8
45.8
Non-current liabilities
522.5
383.3
Net assets
$
1,585.5 $
1,680.5
Net assets attributable to NCI
$
693.7 $
735.2
For the year ended December 31,
2021
2020*
Net loss and comprehensive loss
$
(134.2) $
—
Net loss and comprehensive loss allocated to NCI
$
(58.7) $
—
* Net loss (and therefore, net loss attributable to non-controlling interests) and cash flows for the 14 day period between completion of the integration
transaction and December 31, 2020 were negligible.
Key cash flows related to MARA during the year ended December 31, 2021 were net outflows of $12.7 million related to care and maintenance costs and
servicing of environmental rehabilitation provisions, net outflows of $25.6 million related to capital expenditures, and net inflows of $42.4 million related to
contributions from shareholders.
(iv)
In December 2018, the Company entered into an Option Agreement with Mineros, with respect to the Company's wholly-owned La Pepa gold project. The
Option Agreement granted Mineros the right and option to acquire up to a 51% interest in Minera Cavancha SpA, the legal entity that directly holds the La
Annual Report 2021
165
Pepa project. During 2021, Mineros exercised the first option in the Option Agreement, and was issued shares representing a 20% interest in Minera
Cavancha SpA. Refer to Note 6 for further details.
33.
CAPITAL MANAGEMENT
The Company’s objectives in managing capital are to ensure sufficient liquidity to pursue its strategy of organic growth combined
with strategic acquisitions, to ensure the externally imposed capital requirements relating to its long-term debt are being met, and
to provide returns to its shareholders. The Company defines capital that it manages as net worth, which is comprised of total
shareholders’ equity and debt obligations (net of cash and cash equivalents). Refer to Notes 30 and 28, respectively, for a
quantitative summary of these items.
The Company manages its capital structure and makes adjustments to it in light of general economic conditions, the risk
characteristics of the underlying assets and the Company’s working capital requirements. In order to maintain or adjust its capital
structure, the Company, upon approval from its Board of Directors, may issue shares, pay dividends, or undertake other activities
as deemed appropriate under the specific circumstances. The Board of Directors reviews and approves any material transactions
out of the ordinary course of business, including proposals on acquisitions or other major investments or divestitures, as well as
capital and operating budgets. The Company has not made any changes to its policies and processes for managing capital during
the year.
34.
LEASES
A significant proportion of the Company’s lease arrangements, by value, relate to equipment and vehicles used at the Company's
mine sites. Other leases include offices and various IT equipment. The majority of lease terms are negotiated through the
Company’s procurement function, although agreements contain a wide range of different terms and conditions. Information about
leases for which the Company is a lessee is presented below.
(a)
Right-of-use assets
Buildings
Vehicles
Machinery and
Equipment
Total
Balance at December 31, 2020
$
13.4 $
5.4 $
14.1 $
32.9
Additions
2.0
12.2
38.0
52.2
Depreciation charge for the year
(2.6)
(5.6)
(14.4)
(22.6)
Balance at December 31, 2021
$
12.8 $
12.0 $
37.7 $
62.5
Buildings
Vehicles
Machinery and
Equipment
Total
Balance at January 1, 2020
$
7.1 $
13.5 $
22.7 $
43.3
Additions
7.6
2.2
0.6
10.4
Depreciation charge for the year
(1.3)
(10.3)
(9.2)
(20.8)
Balance at December 31, 2020
$
13.4 $
5.4 $
14.1 $
32.9
(b)
Lease liabilities
2021
2020
Maturity analysis - contractual undiscounted cash flows
Less than one year
$
27.6 $
11.7
Two to three years
37.8
17.4
Four to five years
8.1
9.7
More than five years
12.5
15.2
Total undiscounted lease liabilities at December 31
$
86.0 $
54.0
Lease liabilities included in the balance sheet at December 31 (Note 26)
$
63.8 $
35.2
Current
$
22.6 $
12.9
Non-current
$
41.2 $
22.3
Yamana Gold
166
(c)
Amounts recognized in net earnings
2021
2020
Depreciation expense on right-of-use assets
$
22.6 $
20.8
Interest expense on lease liabilities (Note 12)
$
6.7 $
3.5
Variable lease payments not included in the measurement of lease liabilities(i)
$
86.0 $
61.2
Expenses relating to short-term leases
$
21.8 $
13.7
Expenses relating to leases of low value assets, excluding short-term leases of low value assets
$
0.9 $
0.9
(i)
Certain of the equipment leases in which the Company is the lessee contain variable lease payment terms that are linked to the usage of the equipment
(i.e. tonnes mined), either for the contract as a whole or only when a fixed minimum is exceeded. Variable payment terms are used to link rental payments
to usage and reduce fixed costs. The Company expects the level of variable lease payments to remain broadly consistent in future years.
(d)
Amounts recognized in the consolidated statement of cash flows
For the year ended December 31, 2021, the Company had total cash outflows for leases of $134.6 million (2020: $96.4 million).
35.
COMMITMENTS AND CONTINGENCIES
In addition to entering into various operational commitments in the normal course of business, the Company had commitments of
approximately $34.5 million at December 31, 2021 (December 31, 2020: $8.7 million) for construction activities at its sites and
projects.
Annual Report 2021
167
36.
RELATED PARTY TRANSACTIONS
Related Parties and Transactions
The Company’s related parties include its subsidiaries, associates, joint arrangement in which the Company is a joint operator,
and key management personnel. During its normal course of operations, the Company enters into transactions with its related
parties for goods and services. Transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in this note. There were no other related party transactions for the
years ended December 31, 2021 and 2020.
Compensation of Key Management Personnel
Key management personnel compensation comprises:
For the years ended December 31,
2021
2020
Short-term employee benefits(i)
$
14.8 $
14.5
Post-employment benefits
2.0
1.9
Share-based payment expense(ii)
3.3
17.5
$
20.0 $
33.9
(i)
Short-term employee benefits include salaries, bonuses payable within 12 months of the balance sheet date and other annual employee benefits.
(ii)
Relates to share option, RSU, DSU and PSU grants. Balances exclude the periodic fair value adjustment on the DSUs.
*************
Yamana Gold
168
Corporate Governance
Yamana and the board recognize the importance of
corporate governance to the effective management of
the Company and to the protection of its employees
and shareholders. The Company’s approach corporate
governance is designed with a view to ensuring that
Yamana’s business and affairs are effectively managed
so as to enhance shareholder value.
The Company’s corporate governance practices meet
the Canadian, United States and United Kingdom legal
requirements and best practices that apply to the
Company. The Company continues to monitor governance
developments to ensure our practices continue to be
current and appropriate, and support our high standards
of governance and stewardship.
Our governance practices meet the corporate governance
requirements for a company with a listing on the standard
segment of the Main Market of the London Stock Exchange
(LSE), and most of our practices also meet the corporate
governance listing standards of the New York Stock
Exchange (NYSE) even though we are not required to as a
foreign private issuer. You can find details about how our
practices differ from the NYSE standards on our website
(www.yamana.com).
Code of Conduct
The board has adopted a Code of Conduct (the “Code”) for
its directors, officers, employees and any third party acting
on our behalf or representing Yamana such as contractors,
agents and consultants. The board encourages and
promotes an overall culture of ethical business conduct
by promoting compliance with applicable laws, rules
and regulations in all jurisdictions in which the Company
conducts business; providing guidance to directors, officers,
employees and third parties to help them recognize and
deal with ethical issues; promoting a culture of open
communication, honesty and accountability; and ensuring
awareness of disciplinary action for violations of ethical
business conduct.
Yamana has established a toll-free compliance call line
and website to allow for anonymous reporting of any
suspected Code violations, including concerns regarding
accounting, internal controls over financial reporting or
other auditing matters.
Committees of the Board
The board has the following four standing committees:
Audit Committee
The Audit Committee provides assistance to the board in
fulfilling its financial reporting and control responsibilities
to the shareholders of the Company and the investment
community. The external auditors of the Company report
directly to the Audit Committee.
Compensation Committee
The Compensation Committee, which is composed
entirely of independent directors, among other things
may determine appropriate compensation for the
Company’s directors and senior officers. The process by
which appropriate compensation is determined is through
periodic and annual reports from the Compensation
Committee on the Company’s overall compensation and
benefits philosophies.
Corporate Governance and Nominating Committee
This committee is responsible for conducting an annual
review of the board’s relationship with management
to ensure the board is able to, and in fact does,
function independently of management; develops and
recommends to the board for approval a long-term plan
for board composition that takes into consideration the
independence of directors, competencies and skills of
the board as a whole; reviews retirement dates and the
appropriate size of the board with a view to facilitating
effective decision making and the strategic direction
of the Company; and develops and implements a process
to handle any director nominees who are recommended
by security holders.
Sustainability Committee
The board also has a Sustainability Committee to assist in
oversight of sustainability, environmental, health and safety
matters, including monitoring the implementation and
management of the Company’s policies, procedures and
practices relating to sustainability, environmental, health
and safety matters.
To view Yamana’s board and committee charters, code
of conduct, corporate governance practices as well as
how they compare to the NYSE standards, please visit
www.yamana.com/Governance. More information can also
be found in Yamana’s Management Information Circular.
Corporate Governance & Committees of the Board
Annual Report 2021
169
Board of Directors
John Begeman(1)(4)
Company Director
Christiane Bergevin(2)(3)
Company Director
Alex Davidson(4)
Company Director
Richard Graff(1)(2)
Lead Director
Kimberly Keating(2)(4)
Company Director
Peter Marrone*
Executive Chairman
Daniel Racine
President and Chief Executive Officer
Jane Sadowsky(1)(3)
Company Director
Dino Titaro(2)(3)(4)
Company Director
* Non-independent Board Member
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Corporate Governance and
Nominating Committee
(4) Member of the Sustainability Committee
Senior Management
Peter Marrone
Executive Chairman
Daniel Racine
President and Chief Executive Officer
Jason LeBlanc
Senior Vice President,
Finance and Chief Financial Officer
Yohann Bouchard
Senior Vice President and
Chief Operating Officer
Richard Campbell
Senior Vice President,
Human Resources
Gerardo Fernandez
Senior Vice President,
Corporate Development
Craig Ford
Senior Vice President,
Health, Safety and Sustainable
Development
Henry Marsden
Senior Vice President, Exploration
Sofia Tsakos
Senior Vice President,
General Counsel and
Corporate Secretary
Corporate Information
Yamana Gold
170
Capitalization
(millions of common shares)
Outstanding at December 31, 2021
959.8
Weighted average 2021
Basic
963.4
Fully diluted
964.9
Share Listings
Toronto Stock Exchange: YRI
New York Stock Exchange: AUY
London Stock Exchange: AUY
Shareholder Information
2020 Common Share Trading Information
Ticker
Location
Closing price
High
Low
YRI
AUY
AUY
Toronto (C$)
New York (US$)
London (GB£)
5.32
4.22
300.00
7.79
6.09
446.00
4.86
3.80
280.00
Dividends
Yamana currently pays a quarterly dividend of US $0.02625 per share
2020 Dividend Schedule
Anticipated 2021 Dividend Schedule
Record Date
Payment Date
Record Date
Payment Date
March 31, 2021
June 30, 2021
September 30, 2021
December 31, 2021
April 14, 2021
July 14, 2021
October 14, 2021
January 14, 2022
March 31, 2022
June 30, 2022
September 30, 2022
December 30, 2022
April 14, 2022
July 14, 2022
October 14, 2022
January 13, 2023
Annual Report 2021
171
Electronic Delivery of Shareholder Documents
If you would like to receive your shareholder and financial
documents electronically, please enroll in Yamana’s
electronic delivery program through Computershare Trust
Company at www.computershare.com/mailinglist
Transfer Agent
For information regarding shareholdings, dividends,
certificates, change of address, electronic delivery, or
exchange of share certificates due to an acquisition
please contact:
Computershare Trust Company of Canada
100 University Avenue, 8th Floor
Toronto, Ontario, Canada M5J 2Y1
Phone: 1 800 564 6253
Computershare Trust Company N.A.
462 S. 4th Street
Louisville, Kentucky
USA 40202
Phone: 1 800 962 4284
From all other countries
Phone: 1 514 982 7555
www.computershare.com
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol, BS99 6ZZ
United Kingdom
Phone: +44 0 370 702 000
www-uk.computershare.com/Investor
Investor Contact
For additional financial information,
industry developments,
latest news and corporate updates:
Phone: 1 416 815 0220
Email: investor@yamana.com
Website: www.yamana.com
Auditors
Deloitte LLP
FTI Consulting (UK Public Relations)
+44 7974 201 715 / +44 203 727 1000
Email: yamana.gold@fticonsulting.com
Executive Office
200 Bay Street
Royal Bank Plaza, North Tower
Suite 2200
Toronto, Ontario
M5J 2J3
Phone: 1 416 815 0220
Fax: 1 416 815 0021
Annual General Meeting
Thursday, April 28, 2022
11:00 a.m. Eastern DST
Meeting to be held in person and via live webcast.
Information is available on Yamana’s website
at www.yamana.com
Yamana Gold
172
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