If you came across an advertisement offering gold bullion at $79 per ounce, you would be justified in your skepticism. What continues to vex this Fool, however, is the market's apparent failure to embrace the one gold miner that procures the metal from the ground at such an insanely low cost.

Shares of Yamana Gold (NYSE:AUY) have nearly tripled since I laid out a value-based rationale for selecting this miner just over a year ago. Some might presume I've lost hold of my senses when I suggest the miner remains significantly undervalued, but take a gander at these operational achievements. Year over year, Yamana's adjusted earnings rose 180%. Cash flow from operations rose 155%, while revenue increased by 50% amid a mere 12% jump in the average realized gold price. Sure, derivative losses and future tax expenses again roiled the bottom line, but I believe that Yamana's operational excellence far outweighs the unwelcome drag from derivatives.

At a time when multiple miners from Kinross Gold (NYSE:KGC) to Agnico-Eagle Mines (NYSE:AEM) are reminding investors just how many obstacles a production growth spurt can present, Yamana has delivered the goods with a ramp-up at the new Gualcamayo mine that has exceeded expectations. Production volume increased 34% over prior-year levels to 314,700 GEOs (gold equivalent ounces), and the company expects overall 2009 production to approach the new baseline of sustainable production at 1.1 million ounces annually. Plenty of competitors produce as much gold, so what makes Yamana this Fool's shining star of the gold patch?

On the strength of huge copper reserves at the Chapada mine, where capacity has just been expanded to process 20 million tonnes of ore per year, Yamana consistently yields the lowest operating costs in the gold mining sector. Expending only $79 to retrieve each ounce from the ground, Yamana logged an incredible gross margin of $792 for each GEO mined in the third quarter. For context, consider that Barrick Gold (NYSE:ABX) incurred a cost of $371 per ounce despite that company's unrivaled economies of scale. As Yamana pursues its longer-term target of 1.7 million ounces of annual production, I will leave it for Fools to imagine the leverage that shares could ultimately deliver atop further gains in the prices of gold and copper.

Although a near-term pullback for gold is certainly a possibility, I believe that gold remains a coiled spring. I have brought Fools' attention to smaller mid-tier miners like IAMGOLD (NYSE:IAG) and sung the praises of low-cost majors like Goldcorp (NYSE:GG), but Yamana continues to earn a top spot on this Fool's short list of golden standouts. I look forward to viewing your thoughts in the comments section below.

My selection of Yamana Gold for my silverminer CAPS portfolio has outperformed the S&P 500 by roughly 165 percentage points since November 2008. The stock has earned four stars out of five, with more than 3,400 investors expecting further outperformance. Join the free Motley Fool CAPS community today, and share your own outlook for Yamana Gold.

Fool contributor Christopher Barker can be found blogging actively and acting Foolishly in the CAPS community under the user name TMFSinchiruna. He tweets. He owns shares of Agnico-Eagle Mines, IAMGOLD, Kinross Gold, and Yamana Gold. The Motley Fool has a gilded disclosure policy.