Mexico’s Mining Industry

44 Negocios ProMéxico Negocios ProMéxico 45
yaMana:
delIverIng value
through relIabIlIty
Yamana Gold is a Canadian-based gold producer with
a primary focus in the Americas. Its Mercedes mine in
Mexico’s northern state of Sonora –250 km from Hermosillo–
is its only operation in the country and a significant part of
a portfolio of operating assets that contribute to Yamana’s
expansion as a leading mid-tier gold producer.
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photos courtesy of yamana
As a growth-oriented company targeting sustainable production
of approximately 1.75 million gold equivalent
ounces (GEO) while maintaining low costs and following
a portfolio approach to asset management, yamana
looks for projects that allow it to utilize in-house expertise to effectively
and efficiently develop and operate gold mines.
In Mexico, particularly in Sonora, yamana found the ideal conditions
to establish: stable jurisdictions with a well-known mining infrastructure
and history, clear permitting processes, and stakeholders
convinced of the benefits and positive impact generated by mining.
“The development, construction and ramp up of Mercedes were
ideal,” says Gerardo Fernández, yamana Gold Vice President and
Country Manager for Chile and Mexico. “Jurisdiction played a
key role in the launching of the project, as we have access to good
infrastructure and resources. Also, the permitting processes from
development to construction to production were stable, predictable
and navigated within a very reasonable and expected timeframe.”
These stable conditions allowed the company to progress seamlessly
from defining drilling in 2007 to deciding on a construction
date in 2010 to beginning commercial production in early 2012.
The underground mine where gold is produced by agitated
leaching with counter current decantation and Merrill-
Crowe processing under the highest international standards was
brought to production ahead of schedule and on budget.
In 2012, its first year of production, the mine churned out approximately
125,000 GEO, and expectations are that in 2013 the
mine will reach at least 130,000 GEO. This is a modest 10% of
yamana’s current production but it puts the mine in line with the
company’s strategic niche of reliable and predictable low-cost
mines producing between 100,000 and 200,000 GEO. Mercedes
fits well within this category and has created tremendous value
for yamana and its shareholders.
Employing local labor is also a priority for the company.
yamana has filled most of its 500 direct employment positions
through the local workforce, which with the auxiliary employment
created provides the community with the opportunity
to share in the benefits associated with the successes of the
Mercedes mine.
Sourcing local labor isn’t the company’s only commitment to
the community. yamana has on site managers in each area of expertise
that ensure both the protection of employees and the environment
and the surrounding communities. yamana releases
an annual Corporate Social Responsibility report that explains
and quantifies the success of these programs and initiatives.
Mercedes has had a first full year of productive success with an
expected 10 year mine lifespan. Aggressive exploration at the site
continues with the goal to grow mineral resources and enhance
Mercedes’ value and lifetime. yamana views this kind of organic
growth as an effective way to deliver significant value. The company
has already expanded Mercedes’ output by approximately 20% with
very little capital based on the anticipated growth in mineral resources
expected through successful exploration.
“We have identified five mineral veins at Mercedes and exploration
continues with the goal to increase mineral reserves and
resources,” states Fernández. “A good example of the potential upside
at the operation is the Lagunas Norte vein, a higher grade vein,
which wasn’t included in the original mine plan and represents a
significant opportunity to upgrade mineral resources and potentially
increase production.”
yamana has targeted increasing company-wide sustainable
production to approximately 1.75 million GEO beginning in
2014 -approximately 46% above 2012 levels. This growth will
come from the addition of new operations in other countries and
planned expansions of existing operations.
The company has three assets at various stages of development
and ramp up expected to begin commercial production in 2013,
which will contribute to achieving the sustainable production
target. The strategies employed in the development of Mercedes
are being applied to those new projects with the expectation of a
similar outcome. The same strategy will be used in the development
of earlier stage projects in yamana’s pipeline, with the most
notable being Cerro Moro, in Argentina.
yamana will continue to focus on delivering value through reliability
of operational and financial results and organic growth. Mexico
and the Mercedes mine are an important part in that delivery and
have provided a successful entry into a prospective jurisdiction that
could contribute to further growth for yamana in years to come. n
www.yamana.com
In Mexico, particularly
in Sonora, Yamana found
the ideal conditions to
establish: stable jurisdictions
with a well-known mining
infrastructure and history,
clear permitting processes,
and stakeholders convinced
of the benefits and positive
impact generated by mining.