Yamana Gold started operations at its Mercedes mine. The Mercedes mine, located in Sonora, Mexico, is Yamana’s newest mine and represents the first of a number of new mines to begin production into 2013. With mine development and plant commissioning well advanced, and a sufficient stockpile having been created during the mine development period, a first gold pour occurred, which marks the formal start-up of production at the mine. The company has been working on the commissioning of various components of the operation since October.

Yamana announced in August it was six months ahead of schedule and would be starting operations by the end of year instead of the middle of 2012. With further progress and advancements, the company is again ahead of schedule with start-up occurring well before year end.

To date, there has been more than 11,000 m of underground development completed, including the start of development of the Barrancas zone, which includes the higher grade Lagunas Norte vein, one of the newest discoveries at the mine, which was not included in the original mine plan and represents a significant opportunity to increase production. Mining is at a rate consistent with the original plan and the plant is ramping up to the rate of 1,500 metric tons per day (mt/d) as contemplated in the feasibility study.

During the mine development period, 114,000 mt of ore were stockpiled with an average gold grade of 7.84 g/mt and 114.9 g/mt of silver which represents approximately 30,000 gold equivalent oz (GEO) in stockpile. Production is initially planned at 120,000 GEO per year although the company is evaluating the potential to increase throughput to 1,800 mt/d through modest plant modifications and optimizations. With increased plant capacity along with the additional ore from Barrancas, and as accelerated underground development work advances during 2012, the Yamana expects production to increase to more than 130,000 GEOs in 2013.

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