Weaker Local Currencies Should HelpThe average exchange rates in the primary gold-producing countries weakened significantly in Q4/08, which
should help producers with mines in these countries and who report costs in US dollars. On average, the
Canadian dollar decreased by 14% in Q4/08 from Q3/08, which benefits Agnico-Eagle (100% of production
from Canada in Q4), Northgate (52% of production from Canada in Q4), and Goldcorp (49% of production
from Canada in Q4). The decrease of the Australian dollar (24%) should help producers such as Newmont
Mining (NEM-NYSE) (19% of production from Australia in Q4) and Northgate (48% of production from Australia
in Q4). The Brazilian Real dropped 27% in the quarter and should benefit Jaguar (100% of production from
Brazil in Q4), Yamana (40% of production from Brazil in Q4), and Kinross Gold (K-TSX) (16% of production
from Brazil in Q4.
Yamana Gold announced Q4/08 production and costs of 255,000 AuEq oz at $385/oz. These results
compared with our expectations of 279,000 AuEq oz at $396/oz. In order to lock in costs going forward,
Yamana has hedged 70 million pounds of copper in 2009 and 435.9 million Brazilian Reais through 2010.
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