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A Look at Yamana’s Gualcamayo Exploration Opportunities

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Sep. 12 2016, Updated 7:04 a.m. ET

Gualcamayo exploration

Yamana Gold’s (AUY) Gualcamayo mine is located in the San Juan province of Argentina. This mine has been operational since 2008. It is an open pit as well as underground mine that is expected to contribute ~12% to Yamana’s gold production in 2016.

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Exploration opportunities

Yamana had approved an exploration budget of $4 million for mineral resource infill drilling. The program mainly focused on near mine targets. The company reported positive results from two areas immediately adjacent to the current open pit:

  • The Cerro Condor target is located on the Eastern rim of the QDD main pit wall.
  • The Potenciales target is located along the Western flank of the pit wall.

These new deposits have the potential to be brought into the near-term production profile. The positive results for these areas support the long-term outlook for the property due to the potential for extending the mine life by increasing the size of the oxide mineral resources. Such oxide minerals would be amenable to the current heap leach process the company employs at the mine.

The company also reported that the infill drilling at the Las Vacas deposit has returned positive results that support mineral resource growth.

Exploration among peers

Yamana Gold’s peers (RING) (GDX) are also exploring opportunities to increase their long-term production profile. Kinross Gold (KGC) received the requisite permits to increase exploration and expansion activities at Bald Mountain. In its 2Q16 results, Goldcorp (GG) also announced that it will go ahead with its expansion projects at Penasquito and Musselwhite mines. This is in keeping with its focus on growth. With its falling production forecast, Barrick Gold (ABX) is also looking at exploration targets including Alturas.

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