Spot gold prices stumbled in the fourth quarter of 2012, but that didn’t stop Yamana Gold Inc. (AUY) from posting record numbers. The Toronto, Ontario-based precious metal miner reported greater production and higher realized prices, helping it top analyst predictions for earnings after the closing bell on Tuesday.
Revenue during the October through December period increased to a quarterly record $629.5 million, up 10.7 percent fro $568.8 million in the fourth quarter of 2011. Net earnings surged to $169.2 million, or 22 cents per share, an 88.8 percent increase over $89.6 million, or 12 cents per share, in the year prior quarter. Excluding items, adjusted earnings were $197.4 million, or 26 cents per share, in the latest quarter, versus $184.2 million, or 25 cents per share, in Q4 2011.
Wall Street was expecting earnings per share of 25 cents on revenue of $665 million.
"For 2012, we achieved record annual production, partially as a result of the first full year of production at Mercedes, expanded our mineral reserves, expanded our mineral resources most notably through the addition of Cerro Moro, and delivered strong financial results on behalf of shareholders,” said Peter Marrone, chief executive at Yamana.
Production at the Mercedes mine was 126,010 gold equivalent ounces for the year, 20 percent above the company’s guidance. Across all its operations, Yamana produced more gold in a year than ever before with 1.2 million gold equivalent ounces, or GEO, consisting of 1.01 million ounces of gold, 9.0 million ounces of silver and 139.0 million pounds of copper.
Compared to the year prior, average realized gold price per ounce increased 1.3 percent, average realized silver price per ounce rose 0.26 percent and average realized copper price per pound jumped ahead 5.4 percent.
Revenue for the full year hit an all-time high of $2.34 billion, outpacing 2011’s $2.17 billion by about 8 percent. Adjusted net earnings for all of 2012 slipped, however, from $712.9 million, or 96 cents per share, to $694.3 million, or 93 cents per share.
Carving out some of the profits was an 80 percent increase in exploration costs (to $58.1 million) and a 20 percent hike (to $145.9 million) in general and administrative expenses.
Looking forward, Yamana said it expects production in 2013 to increase about 20 percent from 2012 and to be in the range of 1.44 million to 1.60 million GEO with a target level of 1.48 million GEO. Increased production at Mercedes and ramp-ups at several other corporate mines in South America were named as key growth drivers.
Much like other miners, shares of Yamana have been on the slide for the past three months as gold has fallen out of investors’ favor. Spot gold is down from October highs of $1,798.1 per ounce to $1,564.10 at the closing bell on Wednesday. Yamana shares are down about 26 percent in that same time, closing Wednesday at $14.40. The earnings beat after the bell did little to change the value of a share, inching it upward to $14.47 in extended trading.