Yamana says Brazilian gold mine on the verge of becoming a “world-class” operation

Canadian bullion producer Yamana Gold (TSX:YRI) (NYSE:AUY) has lifted production guidance for its Brazil-based Jacobina mine, which the company believes is on the cusp of becoming a “world-class” operation.

The current Phase 1 expansion is expected to increase the mine’s output to about 170,000 ounces a year by 2021 at the current reserve grade, compared with the present annual guidance of 152,000 ounces.

The Jacobina gold mine is now one of the company’s higher quality, top value operations.

The Toronto-based miner also said it was considering a further expansion of Jacobina, located in Bahia state, which would include increasing the plant to between 7,500 to 8 500 tonnes a day.

A prefeasibility study is under way to identify expansion scenarios.

“Jacobina has improved significantly in the last several years across all measures, and it is now one of our higher quality, high value operations,” Daniel Racine, president and chief executive officer of Yamana, said in a statement.

The ongoing and planned expansions at Jacobina are the continuation of a series of incremental improvements Yamana has implemented over the past four years. In that period, the mine’s gold production increased from 75,000 ounces in 2014 to 145,000 ounces last year.

The company, which also has mines in Chile, Mexico and Canada, also owned the Chapada gold-copper mine in Brazil, which Yamana agreed in April to sell to fellow Canadian miner Lundin Mining (TSX:LUN)for $1 billion.