• Print
• Email
• Share
• Comments (0)
• Text Size

DENVER -(Dow Jones)- Canada-based Latin American mining company Yamana Gold Inc. (AUY, YRI.T) will shell out $650 million on expansion projects over the next two and a half years, hoping to boost its production by more than half in a bet gold prices will remain strong.

Investor jitters about the global financial system and worries about inflation from government spending to deal with the economic downturn have created "a perfect recipe" for higher gold prices, Yamana Chairman and Chief Executive Peter Marrone told Dow Jones Newswires in an interview late Monday afternoon.

"Gold is a safe haven," Marrone said on the sidelines of the Denver Gold Forum mining conference.

Gold futures Monday settled at their third consecutive record high on speculation about further stimulative U.S. government action ahead of Tuesday's meeting of the Federal Reserve's rate-setting committee. The most actively traded gold contract, for December delivery, settled $3.30, or 0.3%, higher at $1,280.80 an ounce on the Comex division of the New York Mercantile Exchange.

To take advantage of such prices, Yamana will spend $300 million this year and next and a smaller amount after that to raise its annual gold production to 1.7 million ounces by the end of 2013, Marrone said. It currently produces 1.1 million ounces, including equivalent ounces of silver.

Yamana has no plans for acquisitions, Marrone said. Instead, it is focusing on this so-called "organic growth."

(Matt Day contributed to this article.)

Copyright © 2010 Dow Jones Newswires