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Yamana Gold Inc. (USA) (NYSE:AUY): What The Future Holds?

Boston, MA 06/05/2014 (wallstreetpr) – Yamana Gold Inc. (USA) (NYSE:AUY) in association with Agnico Eagle Mines Ltd (USA) (NYSE:AEM) was finally successful in defeating Goldcorp Inc. (USA) (NYSE:GG). They managed to acquire Osisko Mining. Both the companies will have an equal share of Osisko’s assets.

The future bright or dim

Yamana Gold Inc. (USA) (NYSE:AUY) struggled hard to outpace Goldcorp Inc. in acquiring Osisko Mining. However, the question here is of the future time. Before it, the first financial quarter numbers of Yamana needs some attention. The first quarter results of Yamana failed to impress investors. There was a sharp decline in the production. The drop in production was one of the main reasons behind the poor revenues and dismal situation of cash flow.

The concerns

At that moment, Yamana management came up with the excuse that the first quarter comparatively stays a weaker quarter. The management, however, failed to explain the poor performance of the first quarter as compared to the first quarter of year 2013. The production declined and at the same time there was a significant increase in the costs affecting the overall performance of the company. The spending figures were more than the operational cash flow.

The shadows in light

If overall picture is studied, the acquiring of Osisko Mining might seem a good deal for Yamana Gold Inc. (USA) (NYSE:AUY). But the need is to analyze the deal in detail. The new deal will help Yamana to enhance its contribution by 300,000 ounces of gold annually. It is good news for the company as it was suffering from the decline in production. With the Malartic mine, the production will grow by more than 25%.

The pricey purchase

At the same time, the price of growth for Yamana Gold Inc. (USA) (NYSE:AUY) will be better than Agnico that poses the main concern. When both the companies have an equal share then how come Yamana can benefit from the higher prices? The only answer is the company will use more number of shares so as to reach the value of the offer. So, higher growth is coming on the term of higher shares.

Published by Nicholas Maithya

Nicholas is a Financial Analyst by profession, who enjoys writing about investments, technological developments, business, economics and other financial topics at various financial publications. Join him here on as he endeavors to deliver to you the latest breaking news on the above mentioned fronts. Contact him by email at [email protected] or follow Nicholas Kitonyi @nmaithyak on Twitter.

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