Yamana Gold — Investor Day (October 2007)
26 slides from Yamana Gold's investor day presentation, Oct 18, 2007
Slide 1: The New Yamana Analyst Day
The New Yamana Analyst Day October 18, 2007
Slide 2: Cautionary Statement
Cautionary Statement All monetary amounts in U.S. dollars unless otherwise stated This presentation contains certain “forward-looking statements” and “forward-looking information” under applicable securities laws concerning the proposed transaction and the business, operations and financial performa
Slide 3: Important Notice
IMPORTANT NOTICE: This presentation does not constitute an offer to buy or an invitation to sell, any of the securities of Yamana or Meridian. Such an offer may only be made pursuant to a registration statement and prospectus filed with the U.S. Securities and Exchange Commission and an offer to pur
Slide 4: Cautionary Note to U.S. Investors Concerning Resources
CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES This presentation uses the terms “Measured”, “Indicated” and “Inferred” Resources as defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects. United State
Slide 5: The New Yamana
The New Yamana Peter Marrone, Chairman & CEO
Slide 6: Agenda
Agenda 9:15 - 9:45 am Welcome introduction - Peter Marrone Strategic Plan - Peter Marrone 9:45 - 10:15 am Company overview - Antenor Silva 10:15 - 10:30 am Break 10:30 - 11:30 am Producing project update - Ludovico Costa / Antenor Silva 11:30 - 12:00 pm Producing project update - Edgar Smith 12:00 -
Slide 7: Our strategic plan
Our strategic plan Focus on organic growth Development of properties Exploration opportunities Results driven management style Develop strategic targets with concurrence of groups Deliver results according to expectations of strategic plan Entrepreneurial mining company approach in the context of a
Slide 8: Our strategic plan: Targets
Our strategic plan TARGETS Sustainable 2.2 M oz of gold production by 2012 Low cost production before and after by-products Growth in resources, production, cash flow and earnings Delivering value to shareholders
Slide 9: Today you will hear about...
Today you will hear about . . . Management depth Management integration and reliance on talented people in various disciplines: human synergies at various levels Enhancements to improve production, reduce costs, maximize cash flow and earnings How we will increase production at Chapada up to a susta
Slide 10: Today you will hear about...
Today you will hear about . . . Increase production at Gualcamayo to over 300,000 ounces of gold per year from the initial plan of 160,000 ounces of gold and then 200,000 ounces of gold largely as satellite deposits grow and we better understand the underground potential at QDD Lower West Intercepts
Slide 11: Today you will hear about...
Today you will hear about . . . Manageable capital costs with projects near infrastructure as part of our combined and collective strategic plan Entirely organic growth for sustainable 2.2 million ounces per year by 2012 from current mines and projects under evaluation and development Targeted cumul
Slide 12: Corporate structure
Corporate structure Successful integration of corporate, operations and exploration cultures and teams Antenor Silva President & COO Peter Marrone Chairman & CEO Chuck Main Sr. VP Finance & CFO Greg McKnight Sr. VP Business Development Jodi Peake VP Public & Investor Relations Jacqueline Jones VP Le
Slide 13: Investment highlights
Investment highlights A leader in production growth Annual production growth from approximately 1.0 M oz in 2007 to 1.5 Moz in 2009 to 2.2 Moz in 2012 Low cost cash producer Sustainable cash cost below zero Growth in resources, production, cash flow and earnings On a per share and aggregate basis Fu
Slide 14: One of the largest gold resource bases amongst intermediates
Source: Company filings and public equity research (does not include any non-gold resources) Gold Reserves and Resources (Moz) One of the largest gold resource bases amongst intermediates Eldorado Centerra Agnico-Eagle IAMGOLD Kinross 0 10 20 30 40 50 Reserves M&I Resources Inferred Resources 60 Yam
Slide 15: A leading gold producer amongst intermediates
A leading gold producer amongst intermediates Annual gold production 2007 & 2008 (Moz) Source: Company filings and public equity research 1.7 1.0 1.0 0.6 0.3 0.2 2.2 1.2 1.0 0.8 0.5 0.5 0.0 0.5 1.0 1.5 2.0 2.5 Kinross IAMGOLD Centerra Eldorado Agnico-Eagle Yamana
Slide 16: Strategic growth plan
Strategic growth plan Development projects drive production growth to 2.2 million ounces of gold by 2012 Gold production (ounces) 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 2008 2009 2010 2011 2012
Slide 17: One of the lowest cash cost profiles
And, one of the lowest cash cost profiles Source: Equity research 2007E By-product cash costs ($per ounce of gold) ($500) ($400) ($300) ($200) ($100) $0 $100 $200 $300 $400 $500 Agnico- Eagle Yamana Goldcorp Barrick Eldorado Newmont Kinross IAMGOLD Centerra
Slide 18: Operating cash flow growth
Operating cash flow growth Assumes gold price of $600/oz, copper prices of $3.40 in 2007, $3.20 in 2008, $2.85 in 2009, $12/oz Ag, $1.25/lb Zn in 2007 and then $0.65/lb Zn onward, $25/lb Mo in 2007, $20 in 2008 and then $10 onward Operating cash flow ($ million) $500 $600 $700 $800 2007 2008 2009 SU
Slide 19: Approximately $2 billion of cumulative cash by end of 2010
Approximately $2 billion of cumulative cash by end of 2010 Assumes gold price of $600/oz, copper prices of $3.40 in 2007, $3.20 in 2008, $2.85 in 2009, $12/oz Ag, $1.25/lb Zn in 2007 and then $0.65/lb Zn onward, $25/lb Mo in 2007, $20 in 2008 and then $10 onward; assumes exercise of all warrants/opt
Slide 20: Price / Cash Flow value proposition
Source: Bloomberg estimates Peer group includes Agnico-Eagle, Centerra, IAMGOLD, Eldorado and Kinross Price / Cash Flow 2007 Value proposition: superior investment 2008 12.8x 29.5x 25.2x 0x 5x 10x 15x 20x 25x 30x Yamana Peer Group Leader Peer Group Average 9.6x 26.2x 17.0x 0x 5x 10x 15x 20x 25x 30x
Slide 21: Price / Earnings value proposition
Source: Bloomberg estimates Peer group includes Agnico-Eagle, Centerra, IAMGOLD, Eldorado and Kinross Price / Earnings 2007 Value proposition: superior investment 2008 16.7x 46.9x 37.1x 0x 10x 20x 30x 40x 50x Yamana Peer Group Leader Peer Group Average 11.4x 41.3x 25.7x 0x 10x 20x 30x 40x 50x Yamana
Slide 22: Price / NAV value proposition
Source: Bloomberg estimates Peer group includes Agnico-Eagle, Centerra, IAMGOLD, Eldorado and Kinross Price / NAV Value proposition: superior investment 1.8x 2.3x 1.8x 1.0x 1.2x 1.4x 1.6x 1.8x 2.0x 2.2x 2.4x Yamana Peer Group Leader Peer Group Average
Slide 23: Future leverage to gold
Future leverage to gold Yamana future growth – 100% gold Pipeline of significant gold only development Average annual exploration budget of $75 million targeted at gold only exploration Estimated annual gold production increasing by approximately 120% from 2008 to 2012 Yamana has consistently hedged
Slide 24: Cash flow sensitivity
Cash flow sensitivity Yamana provides significant leverage to the gold price $0 $50 $100 $150 $200 $400 $800 $1,200 $1,000 $600 Cash flow per $1,000 invested at gold prices of $400 to $1,200 per ounce 1 Calculated as 2008E operating cash flow per $1,000 invested
Slide 25: Favourable operating jurisdictions
Favourable operating jurisdictions Fazenda Brasileiro San Andrés São Vicente São Francisco Ernesto C1 Santa Luz Jacobina Fazenda Nova Chapada HONDURAS BRAZIL ARGENTINA El Peñón Alumbrera (12.5%) Rossi (40%) Minera Florida Agua Rica NEVADA Gualcamayo CHILE Focus on: Production increases Resource expa
Slide 26: Mission statement
Mission statement Yamana is committed to delivering value by sustainable low cost gold production maintaining best practices for mining and environmental, health and safety compliance