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Can Yamana Focus More on Core Assets after the Brio Spin-Off?

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Focus on core assets

Yamana Gold (AUY) has been long trying to Monetize Brio Gold to realize its full value and sharpen its focus on the remaining core assets. Yamana said that spinning off Brio Gold will let it “better focus on its portfolio of six, soon to be seven, producing mines in top mining jurisdictions and on its organic growth pipeline.”

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Organic pipeline

Yamana Gold’s Cerro Morro mine development remains on schedule in Argentina. Exploration in 2016 is focused on discovering a new high-grade structure and expanding the current resource base. About 73% of detailed engineering has already been completed. It’s expected to reach 85% by the end of 2016. The company envisions initial production in 2Q18, and it could provide an update on the progress of this project with its 3Q16 results.

Near-mine exploration projects

Yamana’s near mine exploration projects at Chapada and Gualcamayo are expected to add to reserves and resources at the end of the year. At Gualcamayo, Argentina, two near pit targets have been identified for drilling. These pits provide a significant opportunity to increase oxide ore. For Chapada, Brazil, on-site testing has shown positive results at Sucupira. Results at other sites are also favorable and suggest that extensions to mineral bodies are possible to the southeast.

To read more about Yamana’s exploration opportunities, please see Yamana Explores More Gold Projects to Improve Its Valuation.

Yamana has a strong project pipeline. But Newmont Mining (NEM), Agnico-Eagle Mines (AEM), and Goldcorp (GG) have more robust project pipelines in the peer group (GDX) (SGDM).

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