Yamana Gold anticipates gold production of 1.4-1.5 million ounces in 2010

Yamana Gold Inc. is a Canadian-based gold producer with significant gold production including other precious metals and copper, gold development stage properties, exploration properties, and land positions in Brazil, Argentina, Chile, Mexico, Central America and the United States. Yamana has seven operating mines and five development projects providing direct employment opportunities to over 8,700 individuals. 

The company is targeting sustainable production of approximately 2.2 million gold equivalent ounces in 2012.

Yamana Gold Inc reiterated its gold production forecast for 2009 made in October 2008 of a range of 1.3 million to 1.4 million gold equivalent ounces (GEO) in 2009 at declining cash costs, and production is projected to increase to approximately 1.4 million to 1.5 million GEO in 2010 from mines currently in production. 

Capital expenditures for 2009 and 2010 are expected to be approximately US$350 million and US$400 million, respectively, including sustaining capital of approximately US$130 million each year. 

The majority of capital costs in 2009 is allocated for the expansion at Chapada, for development work at El Penon, for development of the satellite deposits Amelia Ines and Magdalena and initial work on QDD Lower West at Gualcamayo, for the purchase of certain additional mining concessions and for further development at Jacobina. 

The decision to develop each of C1 Santa Luz and Mercedes is expected to be made mid-year pending a cost review for improved economics at C1 Santa Luz and an initial feasibility study and further exploration at Mercedes. 


The current capex forecasts assume a modest amount for these projects and would increase mostly in 2010 once a construction decision is made. 

Exploration expenses in 2009 are expected to total a minimum US$56 million.


Yamana's exploration program in 2009 will focus on mine and near-mine exploration
primarily in Chile, Brazil, Mexico and Argentina as the company concentrates in 2009 on expansions and advanced projects for near development.

Yamana remains well financed to fund its strategic growth plan.

In the fourth quarter of 2008, total production was approximately 255,000 GEO at cash costs of approximately US$385 per GEO which compares very favourably to costs in the third quarter of 2008. 


For the year ended December 31 2008, production totaled approximately 1 million GEO at
cash costs of approximately US$385 per GEO.

Yamana expects production to increase from the first quarter in 2009 with costs trending lower as production increases and input costs continue to decline. Aggregate production for the first quarter is expected to be approximately 290,000 GEO, with cash costs of approximately US$345-US$375 per GEO for 2009.


Total production at Chapada, Brazil, in 2009 is expected to be between 140,000 and 155,000 ounces of gold and 145 to 150 million pounds of copper at a cash cost of between US$275-305 per ounce of gold and between US$0.90 -1.00 per pound of copper, respectively.

At , El Penon, Chile, Yamana expects to be mining at an effective rate of 500,000 GEO per year in 2009, targeting production of approximately 435,000 to 460,000 GEO and the creation of a stockpile. It intends to mine at a rate of 3,600 tonnes per day for the next two years before further increasing plant capacity although it will evaluate the further expansion as the proven and probable reserves increase. Cash costs at El Penon are expected to be between US$280-310 per GEO in 2009. 

At Jacobina in Brazil, the company remains on track to increase the mining
rate from developed stopes and expects to produce approximately 115,000 to 125,000 ounces of gold in 2009 at a cash cost of between US$380-US$410 per ounce.

Start-up and commissioning commenced at Gualcamayo in Argentina in December 2008 with the first gold pour at the end of 2008. Completion of the primary crusher is expected by the end of February as planned. Total production for the year at Gualcamayo is expected to be approximately 195,000 to 210,000 ounces of gold at a cash cost of between US$380-400 per ounce.

At Minera Florida, Chile, Yamana expects to produce approximately 105,000 to 110,000 GEO in 2009 at a cash cost of approximately US$340-350 per GEO. The company will assess the potential increase to a 150,000 GEO throughput after two years of mining at the current rate.

Operations began at Sao Vicente, Brazil, with the first gold pour at the end of 2008, and the mine remains on track for commercial production in the second quarter of 2009. Total production from Sao Vicente is expected to be between 55,000 to 60,000 ounces of gold in 2009.

At Gualcamayo, Yamana expects to release a feasibility study update at QDD Lower West by the end of January 2009 with a construction decision expected by the end of the year. 

The company's Pilar project in Brazil was virtually unexplored when acquired but has since advanced to be an important development project for Yamana. An initial feasibility study is expected to be released for Mercedes in mid-February, the company added.

by Andre Lamberti; source: http://www.proactiveinvestors.com/companies/news/886/yamana-gold-anticipates-gold-production-of-14-15-million-ounces-in-2010-0886.html

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Pulp and paper firms plan mergers

A plunge in global prices and weakening demand have forced local pulp and paper companies to cut output and plan for mergers. 

Indonesian Pulp and Paper Association chairman M. Mansyur said Monday that global demand had plunged to its lowest point ever, forcing local manufacturers to run at an average 44 percent of capacity.

He said the industry’s installed capacity now stood at 8 million tons a year for pulp and 12 million tons for paper.  

In 2007, the industry was operating at an average output of 80 to 90 percent of capacity, according to Industry Minister Fahmi Idris.

Mansyur said the global economic downturn had not only affected local manufacturers, but also those overseas, with manufacturers in Europe and North America having to shut down as demand for their products dried up.

A drop in selling prices also discouraged manufacturers from producing and selling their products over fears of mounting losses rather than profits, he added. 

According to the association, for example, the prices of short-fiber pulp has dropped to around US$450 to $500 a ton from $1,000 a ton in mid 2008. 

“Paper prices have also declined to around $700 to $800 a ton,” said Mansyur, adding that paper prices peaked at between $1,000 and $1,150 a ton during last year’s fourth quarter. 

Citing the current situation, Mansyur said local manufacturers were beefing up efforts to weather the storm, including looking at mergers with rival companies. “National pulp and paper manufacturers have to consolidate to adapt to weakening global demand,” he said. 

“They are considering mergers now otherwise they will (have to) shut down,” he added.

In response to low output, pulp and paper manufacturer PT Riau Andalan Pulp and Paper (Riaupulp), a subsidiary of Sukanto Tanoto’s Raja Garuda Mas Group, has already discharged 1,000 workers and temporarily laid off another 1,000 out of a total of 4,000. 

Aside from lower demand, the company has also been facing a shortage of raw material since the last two years. 

Riaupulp director Rudi Fajar said earlier the company had taken a number of efficiency measures to offset a drop in production and rising production costs.

He said the raw material shortage had resulted in a decline in Riaupulp production, from 6,000 to 7,000 tons of pulp to 3,000 tons per day. 

Indonesia hosts the world’s largest pulp and paper companies under the umbrella of Sinar Mas Group, owned by tycoon Eka Tjipta Widjaja.  

Sinar Mas’s PT Indah Kiat has a total annual production capacity of 3.8 million tons of pulp, paper and packaging. Its other subsidiary PT Tjiwi Kimia produces around 1.5 million tons of paper, packaging and stationery. 

PT Pindo Deli, another Sinar Mas subsidiary, can produce 1.1 million tons of output, while PT Lontar Papyrus produces 750,000 tons.

Sinar Mas Group executive director Gandhi Sulistianto currently believes the industry might need some rationalization.

However, when asked about possibilities of a merger affecting Sinar Mas subsidiaries, Gandhi said there was nothing to announce yet. 

During their heyday, Riaupulp and Indah Kiat together produced 4.2 million tons of pulp per year, or 63 percent of the 6.7 million tons produced annually at national level.

Every year, the industry earns about US$5 billion in export revenues. 

Indah Kiat corporate secretary Yan Partawijaya said in late November the company had cut production by 10 to 20 percent in line with what he said was the company’s annual overhaul program. The company normally produces 2.7 million tons of paper per year.

Pulp and paper companies have been widely blamed by environmental non-government organizations for contributing to the acceleration of forest destruction.

With its massive installed capacity, the industry can only procure about 50 percent of its required raw materials, according to Indonesian Forest Watch (IFW). 

The IFW believes that most of companies are taking timber from outside their concessions, including production forests, to offset their supply shortages and maintain their levels of production.

According to the Ministry of the Environment, the deforestation rate between 1987 and 1997 was 
recorded at 1.8 million hectares per year including the period up to and during the 1998 economic crisis. 

Subsequently from 1998-2000, it rose sharply to 2.8 million hectares per year because of severe forest fires, before falling back to an average of 1.8 million hectares per year between 2000 and 2006, reflecting that forest resources were already being depleted.

Source: Mustaqim Adamrah , The Jakarta Post , Jakarta | Tue, 01/20/2009 2:44 PM | Business 

Stumble or fall?

Will the global financial crisis halt the rise of emerging economies?

Source: http://www.economist.com/finance/displayStory.cfm?story_id=12896793&source=hptextfeature


NOBODY talks about “decoupling” any more. Instead, emerging economies are sinking alongside developed ones. In 2008 emerging stockmarkets fell by more than those in the rich world, and financial woes forced countries such as Hungary, Latvia and Pakistan to go cap in hand to the IMF. Taiwan’s exports have plunged by 42% over the past year, and South Korea’s by 17%; even China’s have shrunk. Singapore’s GDP fell by an annualised 12.5% in the fourth quarter of 2008, its biggest drop on record. Is this the end of the emerging-market boom?

Over the five years to 2007, emerging economies grew by an annual average of more than 7%. But in the past three months their total output may have fallen slightly, according to JPMorgan, as the fall in exports was exacerbated by a sudden drying up in trade finance. For 2008 as a whole, average growth in emerging economies was still above 6%, but recent private-sector forecasts suggest that this could slip to less than 4% this year. That is grim compared with the recent past, though still robust set against an expected 2% decline in the GDP of the G7 countries. 

Short-term pain is only to be expected. But some economists argue that emerging markets’ longer-term prospects have been badly hurt by the global financial crisis. From Brazil to China, they claim, the boom was driven largely by exports to American consumers, easy access to cheap capital and high commodity prices. All three props have now collapsed. In particular, as America’s housing bust causes households to save more, they will import less over the coming years. This could reduce emerging economies’ future growth rates. 


Yet emerging economies’ reliance on America is often exaggerated. The surge in their total exports as a share of GDP since 2000 might, on the face of it, suggest that their boom was powered by rich-world demand. But their dependence on exports to developed countries has barely budged, at just under 20% of GDP (see chart 1). Most of the growth in exports has been within the developing world. 

For sure, emerging economies will not return to their exceptional growth rates in 2007 (no bad thing either, since many of them were overheating). But it is equally wrong to assume that they cannot recover until America rebounds. There are good reasons to believe that emerging markets’ share of world growth will continue to climb (see chart 2).

Gerard Lyons, chief economist at Standard Chartered, argues that most emerging economies are not plagued by America’s deep structural problems, such as an overhang of debt, which could cramp growth for several years. Although 2009 will be a painful year for poorer countries, those with high savings and modest debt could recover fairly quickly. On many measures, such as government and external balances, emerging economies look much sounder than the big rich ones.


Unfortunately, aggregate numbers conceal many horrors, most notably in eastern Europe. Countries such as Hungary, Estonia, Latvia and Turkey have huge current-account deficits and foreign debts. Between 2000 and 2008, the ratio of foreign debt to GDP dropped from 37% to 20% in Latin America and from 28% to 17% in emerging Asia, but jumped from 45% to 51% in central and eastern Europe. 

As foreign capital dried up, GDP fell by 4.6% in Latvia and by 3.5% in Estonia in the year to the third quarter of 2008. Capital Economics, a research consultancy, expects another 5% drop this year. Hungary’s economy is expected to contract in 2009. Turkey may also be heading for trouble. Its debt-service payments due in 2009 amount to 80% of its foreign reserves, the highest ratio of any big emerging economy. 

Russia has run current-account surpluses for many years, yet it has also been badly hit by an outflow of capital and a credit freeze. Banks and companies are finding it hard to roll over their foreign debt. Official reserves have fallen by $160 billion, or 25%, since August. As a result of lower oil prices, Russia is likely to run its first current-account and budget deficits in a decade, and its economy may well contract in 2009. 
 

Asia’s export-led economies have been hurt by the collapse in global demand. Output is already falling in Singapore, Hong Kong and Taiwan. However, current-account surpluses and modest domestic debts mean that most of the region is much less exposed to the credit crunch than eastern Europe is. Asia has two other advantages. First, as a large net importer of raw materials it will benefit from the plunge in commodity prices, unlike Latin America. And second, with the exception of India, Asian countries have low public-debt-to-GDP ratios, giving them more room for fiscal stimulus than other emerging economies. Such policies take time to work, but after a nasty 2009, Asia is well placed to be the first region in the world to recover.

China is crucial to Asia’s fortunes. Many economists expect GDP growth to slow to around 7% in 2009, down from almost 12% in 2007 and its slowest rate for almost two decades. Thousands of factories have closed in southern China, triggering concerns that rising unemployment will cause social unrest. This prompted the government to unveil a large fiscal stimulus in late 2008, which should help to boost growth in the second half of this year. With debts of only 18% of GDP, the government has plenty more room to boost spending. And if China has to rely more on domestic demand, this will help to steer it onto a more sustainable path. 

A comparison of China with India in any case shows that exports are not the main thing that determines how vulnerable economies are to the global crisis. India’s exports as a share of GDP are much smaller than China’s, so one might expect it to be holding up better. But a big chunk of Indian investment—the main driver of recent growth—has been financed by overseas borrowing or new equity issuance. Both have dried up. The government’s huge budget deficit also limits its room for fiscal easing. On January 2nd India announced its second monetary and fiscal stimulus package within a month, but the extra spending is tiny. Standard Chartered thinks that GDP growth will dip to 5% in 2009, well below its recent 9% pace.

Latin America’s prospects lie somewhere between those of Asia and emerging Europe. Weak commodity prices could push the region into running a large current-account deficit, just as private-capital inflows decline sharply. Latin America also has less scope for fiscal stimulus than Asia, because many governments (including Argentina and Brazil) used the windfall from higher commodity prices to boost spending rather than cut debt. Goldman Sachs forecasts that Brazil will grow by only 1.5% in 2009, whereas Mexico’s GDP could fall by 0.5% because of its stronger trade links with America. The bank reckons that both should recover fairly quickly. Argentina is another matter. Credit-default-swap spreads on its government debt have surged to horrifying levels, signalling that investors see a high risk of default. 

During the past five years virtually all emerging economies boomed. Now their fortunes will diverge much more. The most important factor determining how they cope with the recession in the rich world will be whether they are high savers, able to stimulate their own economies, or big borrowers. If international investors continue to shun risk and rich-world governments swamp markets with their own borrowing, it will be hard for emerging-market governments to issue bonds and for banks and firms to roll over debts. Some developing countries will therefore remain sluggish for longer than others. 

Overall, however, their long-term prospects remain good, thanks to structural reforms and better macroeconomic policies over the past decade. In December the World Bank forecast that GDP per head in poorer countries would rise at an annual pace of 4.6% during 2010–15, similar to that during the past decade, and more than twice as fast as in the 1990s. That word “decoupling” may yet get dusted off again.