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Yamana Gold reports $42.9-million profit as revenue slips

Peter Marrone, CEO of Yamana Gold Inc., in 2006.

Glenn Lowson/The Globe and Mail

Yamana Gold Inc. reported a profit of $42.9-million (U.S.) in its latest quarter as revenues and mine operating earnings were down, mainly due to lower metal prices and lower volumes of copper concentrate sales.

The gold miner said Wednesday it earned $42.9-million or 18 cents per share, for the quarter ended June 30, compared with a profit of $194.7-million or 26 cents per share a year ago.

Revenue totalled $535.7-million, down from $573.3-million.

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During the quarter, the company sold 268,441 gold equivalent ounces, up from 261,926 a year ago, while copper sales fell to 37.4 million pounds from 41.6 million in the second quarter of 2011.

The average realized gold price was $1,605 per ounce, up from $1,509 a year ago, while copper prices fell to $3.60 per pound from $4.22.

In June, Yamana announced a $400-million cash-and-stock deal to buy junior miner Extorre Gold Mines and a promising gold-silver Cerro Moro project in Argentina.

Under the deal, Yamana will pay $3.50 in cash and 0.467 of a Yamana share for each Extorre Gold share. Holders of Extorre options are eligible for 0.2648 of a Yamana share for each Extorre share that would have been issuable.

The junior company has a number of exploration and development stage precious metals projects, the most advanced is the Cerro Moro project, in which it holds a 95 per cent stake.

Investors have been cautious about Argentina since the government moved earlier this year to nationalize YPF, the Argentine oil unit of Spanish energy firm Repsol.

Yamana already owns the Gualcamayo open-pit mine and holds a stake in the massive Alumbrera copper-and-gold mine in Argentina.

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The Canadian-based gold producer owns gold mines, gold development stage properties, exploration properties and land positions in Brazil, Argentina, Chile, Mexico and Colombia.

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