Yamana Gold announced the first pour of gold and silver doré at Cerro Moro occurred on May 15. Located in the Santa Cruz province of Argentina, Cerro Moro is a high-grade gold and silver operation extracting ore from a combination of underground and open-pit mining. The company said the production ramp up at Cerro Moro continues to track according to plan with commercial production expected in the second quarter of 2018.

Most of Cerro Moro’s 2018 production will occur in the second half of the year. With the ramp up of production under way, Yamana is focusing on ensuring mill throughput rates reach nameplate capacity of 1,000 metric tons per day (mt/d), and that grades and recoveries reconcile to plan. The company said ramp up of mining and milling is well on track, with the major equipment performing to design during usual performance tests and commencement of operations. While the ramp up remains the primary focus, efforts are already shifting to optimize the operation and, in particular, ensure that operating costs reach guidance levels.

The stockpile at Cerro Moro has continued to increase since year-end 2017 and through the first quarter of 2018. As of May 6, the stockpile was estimated at 42,300 mt at 21.5 grams per mt (g/mt) of gold and 995 g/mt of silver, providing added flexibility to the mine plan for 2018. The operation has reached the planned six weeks of stockpiled ore, ahead of schedule, which was originally the end of this quarter, and the grades are higher than planned.

For 2018 and 2019, the company expects average co-product cash costs of $500 per ounce (oz) gold and $6.70/oz silver, and co-product AISC of $650/oz gold and $8.85/oz silver.

Yamana has also set an exploration objective of adding 1 million gold equivalent ounces (GEO) to the mineral inventory at Cerro Moro in the next several years. Achieving this goal should provide further options for mine development including the potential to add a dedicated power line. The company has allocated $11.2 million for exploration in 2018.

The objectives for the 2018 exploration program are to convert 110,000 GEO of inferred mineral resources to measured and indicated mineral resources; discover 250,000 GEO of new inferred mineral resources; and define future drill targets through scout drilling, soil and rock sampling, and mapping.

Drilling relating to the mineral resource conversion objective began in the second quarter as planned and the company believes that this objective is achievable by year-end.