Please ensure Javascript is enabled for purposes of website accessibility

Yamana Gold to Resume Full Operations at Cerro Moro After Shutting Down Due to COVID-19

By Scott Levine - Apr 7, 2020 at 10:07AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Operations will soon return to normal at one of the company's two projects affected by the novel coronavirus.

Following its mid-March transitioning of Cerro Moro to a reduced production schedule, Yamana Gold (AUY 0.50%) announced yesterday that it plans to return the Argentine mine to full production. The company had limited operations at Cerro Moro in order to comply with a government directive meant to foster social distancing. On April 3, however, the government identified mining as an essential business, and the company began to remobilize the asset.

It plans to "resume operations in an orderly and gradual manner with attention to health and safety requirements," the company said.

Cerro Moro isn't the only one of Yamana's assets that has been affected by the novel coronavirus outbreak. On March 24, Yamana placed Canadian Malartic on care and maintenance following the Quebec government's order suspending all non-essential business. Originally set to expire on April 13, the order was recently extended to May 4. The company says it is "seeking clarification if the extension applies to mining companies."

Coronavirus is written on a road sign.

Image source: Getty Images.

As a result of the disruptions in operations at Cerro Moro and Canadian Malartic, management believes the company's second quarter will be less lustrous than it had originally expected. Investors will have to wait until April 30, when the company reports Q1 earnings, for management to provide updated guidance for 2020.

Although Yamana recognizes that the second quarter will be weaker than it had originally expected, the company's first quarter was surprisingly strong. According to its preliminary Q1 results, Jacobina, El Penon, and Minera Florida all exceeded production expectations, contributing to Yamana's overall production of 221,746 gold equivalent ounces. Additionally, Yamana reported that it "had strong financial performance in the first quarter, the result of which was an improved balance sheet, including further net debt reductions."

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Yamana Gold Inc. Stock Quote
Yamana Gold Inc.
$5.07 (0.50%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.