Another green light to start mining.

Yamana might continue with Agua Rica with EIS now in hand - Argentina

Published: Thursday, March 19, 2009 17:45 (GMT-0400)

By Harvey Beltrán / Business News Americas

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Canadian miner Yamana Gold (TSX: YRI, NYSE: AUY, LSE:YAU) might not freeze works at the Agua Rica copper-gold-molybdenum project in Argentina's Catamarca province now that its EIS has been approved, an official from the local mining authority told BNamericas.

"The company said it was going to shut down and lay off several employees but that decision might be reversed now that the study has been approved," the official said.

Agua Rica will temporarily cut back normal works as of April, the company said in a statement.

The miner based its decision on falling copper prices, the global crisis and domestic problems within Argentina, the official said.

"Now that the company has earned its permits, there's a chance it will do everything possible to move ahead in order to avoid layoffs. We will have to wait and see if it reverses the decision," the official added.

In a feasibility study published in 2006, Agua Rica's capex amounts to US$2.05bn for an average output of 300Mlb/y (136,000t) copper, 125,000oz/y gold and 16Mlb/y molybdenum over 23 years.

Agua Rica is located 3,200m above sea level and lies roughly 25km north of the Andalgala community in Catamarca province.

The company tripled its profits in 4Q08 to US$179mn from US$47.1mn year-on-year.

Yamana registered annual net income of US$435mn in 2008 compared to US$157mn the previous year.

The miner holds operations in Chile, Brazil, Honduras and Nevada.