Bank of America Merrill Lynch 2014 Global Metals, Mining & Steel Conference

Transcription

1 Bank of America Merrill Lynch 2014 Global Metals, Mining & Steel Conference TSX: YRI NYSE: AUY

2 Cautionary Note Regarding Forwardlooking Statements CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This presentation contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Except for statements of historical fact relating to the Company, information contained herein constitutes forward-looking statements, including any information as to the Company s strategy, plans or future financial or operating performance. 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 expected 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, the impact of the proposed new mining law in Brazil 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, copper, silver and zinc), currency exchange rates (such as the Brazilian Real, the Chilean Peso, the Argentine Peso, and the Mexican Peso versus the United States Dollar), 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, risk related to non-core mine dispositions, risks related to acquisitions, changes in project parameters as plans continue to be refined, changes in project development, construction, production and commissioning time frames, risk related to joint venture operations, the possibility of project cost overruns or 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 time lines, government regulation and the risk of government expropriation or nationalization of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation and labour disputes, as well as those risk factors discussed or referred to in the Company s current and annual Management s Discussion and Analysis and the Annual Information Form for the year ended December 31st, 2013 filed with the securities regulatory authorities in all provinces of Canada and available at and the Company s Annual Report on Form 40-F for the year ended December 31 st, 2013 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. Please note that GEO means gold equivalent ounces throughout this presentation. Silver production is treated as a gold equivalent converted at a ratio of 50:1. All amounts are expressed in United States dollars unless otherwise indicated. 2

3 Business Philosophy A Balanced Approach Strategic Direction Growth top line and bottom line Capital and cost discipline Maximizing investment and returns Risk and reward Value creation Cash distributions to shareholders Focus on Cash Flow Production growth is important but not at the expense of costs and cash flow 3

4 Focus on Cornerstone Assets Building for the Future Other Cerro Moro Canadian Malartic Jacobina Minera Florida Gualcamayo Mercedes Chapada El Peñón Core assets contribute 1.5+ M GEO 2 high quality, high margin assets adding to production base 8 assets the cornerstones of production and cash flow generation Future Production Outlook Core assets expected to continue contributing most to cash flow 4

5 2014 Production Growth Stronger second half production growth Established trend of production Production growth accelerates in the second half Q1 production within budget expectation Year to date production ~380,000 GEO Q2 average monthly production planned for a 16% increase over Q1 average monthly production April Production at 105,000 GEO Production growth to unfold throughout 2014 H1 12 H2 12 H1 13 H2 13 Q1 14 Q2 14E Q3 14E Q4 14E Stronger second half production with quarter over quarter growth 5

6 Consistent Performance from Core Assets Production & Cash Flow Q1 Production By Asset Production in line with budget Minera Florida 10% Other 23% Gualcamayo 14% Chapada 8% Mercedes 9% El Peñón 35% Costs in line with budget Stable and improving production initially expected from core and by year end all assets Core assets contribute most to the generation of cash flow Core assets delivered 80% of production & 98% of cash flow in 2013 Larger contribution expected in

7 Delivering on Production Growth Throughout M 1.4M Budgeted production of M GEO* in 2014 * 70,000 GEO of budgeted production is deemed to have a lower level of relative certainty Range: 1.33M to 1.4M GEO in M GEO Production Budget for 2014 Total production for first four months of the year totaled approximately 380,000 GEO Q2 average monthly production expected to be 16% higher than average monthly production in Q1 Improved grades and production expected at El Peñón, Chapada, Mercedes, and Jacobina Gualcamayo performing ahead of budget with record production in April E Continued production growth expected 7

8 Status of Mines Achieving budgeted production Chapada El Peñón Grade improving Now in dry season Corpo Sul advancing Budgeted production 2014: 103,000 GEO 134M lbs. Cu Normal mine sequencing Grade improvements expected for gold Budgeted production 2014: 448,000 GEO Mercedes Minera Florida Normal mine sequencing Grade improvements by Q4 to 2013 grades Budgeted production 2014: 129,000 GEO Cash costs down 15% year-over-year Continuous execution of cost improvement initiatives Budgeted production 2014: 114,000 GEO 8

9 Status of Mines Achieving budgeted production Gualcamayo Jacobina Other Canadian Malartic (Pro forma) 28% increase in production year-over-year 10% increase over Q Record monthly production in April ~ 20,000 oz. Installation of conveyor belt expected to decrease costs Average grades expected similar to Q1 Budgeted production 2014: 170,000 oz. Mine sequencing results in increasing grades Remediation plan to improve production in effect by Q314 Grades at higher levels from Q2 and over 2.0 g/t in Q4 Budgeted production 2014: 89,000 oz. Includes Fazenda Brasileiro and Alumbrera Budgeted production 2014: 109,000 oz. Subject to completion of acquisition Attributable production 2014: 266,000 oz. 9

10 Status of New Projects Continuing to Advance Pilar Large mineral inventory Multiple satellite deposits Fully operational in summer Budgeted production 2014: 90,000 oz. Pilar Tonnes (M) Grade (g/t) Contained (Moz) P&P M&I Inferred C1 Santa Luz Large mineral inventory Conventional open pit Fully operational in summer Opportunity for significant longer term recovery improvements Budgeted production 2014: 90,000 oz. C1 Tonnes (M) Grade (g/t) Contained (Moz) P&P M&I Inferred More than fifty per cent of lower certainty ounces were from these mines 10

11 Lower AISC Cost Structure Established & Improving All-in Sustaining Cash Costs Co-product By-product $1,014 $975 $856 $820 Cost structure successfully contained over 2013 Newly established average lower AISC structure sustainable Costs are expected to be in line with average AISC expected below $925/GEO Co-product & Q Q Q Q G&A Exploration Sustaining Op costs $850/GEO By-product New cost structure sustainable, longer term initiatives underway 1. A non-gaap measure. A reconciliation of can be found at in accordance with previous Canadian GAAP for public entities. 2. Includes co-product cash costs, sustaining capital, corporate general and administrative expense, and exploration expense. 11

12 Cash Flow Focus Cash Flow Generation Capacity Increasing $0.20 $0.22 Cash flow is expected to increase over the remainder of 2014 Capital spending declining Exploration spending declining Cash costs contained and stabilizing Other costs continuing at newly established lower levels Increasing production Cash flow in 2014 is expected to exceed baseline average cash flow level established in 2013 Established Baseline Q2 - Q Average $94M generated in cash flow in Q1 $0.12 cash flow per share Continued focus on balancing production growth & costs to sustain & grow cash flow 12

13 Acquisition Strategy - A Balanced Approach Mining friendly jurisdiction with proven mining competency Located in Quebec, a mining friendly jurisdiction Focus on mid-size projects/acquisitions Adding initial 300,000 ounces of annual production Maintain low cost structure Costs consistent with current cost structure Maximize sustainable cash flow Immediate cash flow contribution Conventional operations Open pit with convention processing Potential to enhance value through exploration Significant potential with Canadian Malartic and Kirkland Lake On April 16, 2014, Yamana Gold and Agnico Eagle Mines announced they will jointly acquire Osisko Mining for total apportioned transaction value of C$1.67 billion. Yamana and Agnico Eagle will jointly own the Canadian Malartic mine, Kirkland Lake assets, and Hammond Reef project. 50% Canadian Malartic adds +4.7M oz. P&P reserves Adding another high quality, high margin cornerstone asset Canadian Malartic Mine 13 Note: The transaction is subject to the approval of Osisko shareholders by a two thirds vote at a meeting to be held by the end of May

14 Accretive Across Key Per Share Metrics The Addition of a New Cornerstone Increasing sustainable production level Maintaining 2014E AISC per GEO Creating another cornerstone asset expected to contribute significantly to cash flow 14

15 Cerro Moro, Argentina - Updated feasibility study Mining and Processing Methods Small open pits for first 3 years, followed by development of underground areas Phase one: crushing, grinding, and gravity recovery, producing a gold/silver doré Phase two: addition of flotation circuit and Merrill-Crowe plant to enhance recovery rates Operating and Economic Highlights Estimated initial capital cost: $126M Detailed engineering to confirm Estimated sustaining capital cost: $174M or $116 per GEO $133M for underground development Annual production: 150,000 GEO LOM cash costs: $352 per GEO LOM AISC: $525 per GEO Mine life: 10 years Expected to generate significant cash flow and robust returns Over 40% Internal rate of return Disciplined capital allocation driving robust rate of return 15

16 Looking Forward The excitement we feel this year with our production growth balanced with low costs, acquisition in Canada and the impressive prospects that come with it, advancing development of our high grade, high margin Cerro Moro project and our next high grade, high margin Suyai project through the permitting phase, defies description. - Peter Marrone A balanced approach to deliver top line and bottom line growth to create and unlock value Canadian Malartic Cerro Moro 16

17 200 Bay Street, Suite 2200 Toronto, Ontario M5J 2J /

18 Cautionary Note Regarding Mineral Reserves and Mineral Resources CAUTIONARY NOTE REGARDING MINERAL RESERVES AND MINERAL RESOURCES: Readers should refer to the Annual Information Form of the Company for the year ended December 31, 2013 and other continuous disclosure documents filed by the Company since January 1, 2013 available at for further information on mineral reserves and mineral resources, which is subject to the qualifications and notes set forth therein. CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING ESTIMATES OF MINERAL RESERVES AND MINERAL RESOURCES This Presentation 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 of United States securities laws. The terms mineral reserve, proven mineral reserve and probable mineral reserve are Canadian mining terms as defined in accordance with Canadian National Instrument Standards of Disclosure for Mineral Projects ( NI ) 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 Securities and Exchange Commission (the Commission ) and contained in Industry Guide 7 ( Industry Guide 7 ). Under Industry Guide 7 standards, a final or bankable feasibility study is required to report mineral reserves, the three-year historical average price is used in any mineral reserve or cash flow analysis to designate mineral reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. In addition, the terms mineral resource, measured mineral resource, indicated mineral resource and inferred mineral resource are defined in and required to be disclosed by NI However, these terms are not defined terms under Industry Guide 7 and are not permitted to be used in reports and registration statements of United States companies filed with the Commission. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves. Inferred mineral resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of contained ounces in a mineral resource is permitted disclosure under Canadian regulations. In contrast, the Commission only permits U.S. companies to report mineralization that does not constitute mineral reserves by Commission standards as in place tonnage and grade without reference to unit measures. Accordingly, information contained in this Presentation may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations of the Commission thereunder. 18