Wednesday, June 6, 2012

Exploration may yield new mine at Yamana Gold's Chapada operation

Yamana Gold believes it is in a strong position to grow its reserves and resources by year-end 2012 through its exploration program

Yamana Gold reported Tuesday its 2012 exploration program could significantly extend mine life at its El Peñón and Mercedes operations, and create a new mine at Chapada.

The company's exploration budget this year is US$125 million. The exploration program will continue to focus on mineral resource discovery and development as well as reserve growth at existing mines, development projects and on new discoveries. A total of 390,000 meters of drilling at 16 projects will be completed as part of this year's program.

In its mid-year 2012 exploration update, Yamana noted, "New discoveries are being advanced through exploration and accelerated through development as they represent an opportunity to significantly extend mine life and further enhance production at, or above, a 440,000-ounce sustainable production level" at the El Peñón gold and silver underground mine in Chile.

El Peñón's $29 million exploration program for 2012 includes 140,000 meters of surface and underground drilling. During the first five months of this year the drilling has resulted in the discovery of the Fortuna Este mineralized vein structure and the advancement of two new targets "that will provide mineral reserve and mineral resource growth for 2012," Yamana said.

Meanwhile, mineralization identified at the Chapada gold-copper operation in Brazil has the potential to enhance throughput through the blending of higher grade ores, Yamana advised, "and possibly allow further development in size and scale to potentially result in an entirely new mine."

A new discovery at Barrancas and infill drilling at Lupita are expected "to enhance the mineral resource base, extend mine life and maintain higher throughput and sustainable production levels" at the Mercedes gold-silver mine in northern Sonora State in Mexico, according to the company.

Discoveries at the Pilar Gold Project in Brazil "continue to confirm a cluster of mineralized zones for contribution to production at Pilar although the area has the potential to become a multi-mine complex," Yamana suggested.