Yamana Gold goes ahead with expansion at Brazil mine

Yamana Gold (TSX: YRI; NYSE; LSE: AUY) is going ahead with a planned phase two expansion of its Jacobina mine in Brazil after authorities granted it a permit to increase throughput to 10,000 tonnes per day.

The authorization marks a significant milestone in Yamana’s plans to ramp-up production at Jacobina to 230,000 oz. of gold a year, the company said. It also facilitates the future Phase 3 expansion, which will bring production up to 270,000 oz. of gold a year, the Canadian miner noted.

Yamana plans to immediately begin increasing throughput to the Phase 2 rate of 8,500 tonnes per day, from the previously permitted rate of 7,500 tonnes per day. It expects to achieve the targeted throughput rate by the second quarter of 2022 – about a year earlier than originally planned.

The Toronto-based company also said it had simplified its approach for the second phase expansion, which reduced capital expenditure, increased energy efficiency and de-risked the project. Capital costs for Phase 2 are estimated at US$20 million, of which US$15 million will be spent next year, Yamana said.

Engineering for the potential Phase 3 expansion was advancing in parallel with Phase 2, with a feasibility study for Phase 3 to be completed in 2023.

Jacobina, in production since before Yamana took ownership of it in 2006, has more than doubled annual production since 2014 from 75,000 ounces gold to nearly 180,000 ounces a year.

The Jacobina mining complex, located in Bahia state in northeastern Brazil, consists of five underground gold mines: Canavieiras, João Belo, Morro do Cuscuz, Morro do Vento, and Serra do Córrego.

According to Yamana’s executive chairman and founder Peter Marrone, this conglomerate structure is very common in West Africa, but very unique to the Americas. 

The company owns three other mines in South America: Minera Florida and El Peñón in Chile, and Cerro Moro in Argentina.