Yamana Gold hikes dividend by 63% on strong third quarter

South America-focused Yamana Gold (TSE:YRI) increased production and revenue targets for the third quarter, and rewarded shareholders with a 63% dividend increase.

Toronto-based Yamana boosted production 4% to 279,274 gold-equivalent ounces (GEO) and brought in $555 million for the quarter — a 22% increase. Operating cash flow rose 57% to $330 million.

The higher output came despite lower production at some of Yamana’s mines in Brazil, Chile and Argentina. The best production figures came out of the El Peñón mine in Chile, which posted a 15% increase in GEO, and the Gualcamayo mine in Argentina, which marked a 17% improvement.

Yamana Gold stock rose 2.63% today to close at $15.60 on the  Toronto main board.

“We continued to focus on delivering growth across all measures, enhancing shareholder value and generating significant cash flow in the third quarter.  We continued to make progress at our four development projects and we will see a first gold pour at Mercedes before year end,” said Yamana Gold Chairman Peter Marrone.

Looking ahead to the next three years, Yamana Gold said its 2011 guidance of 1.14 million GEO still holds. The company anticipates ramping up production to 1.7 million ounces by 2014 as four development projects come online and a tailings expansion project adds to its output.

Copper production is expected to be in the range of 145-160 million pounds in 2011 and 140-160 million pounds in 2012. Annual silver production is expected to be approximately 9 million ounces in 2011 and 2012.

Image of the Chapada open-pit gold-copper mine in Brazil, by Yamana Gold Inc.

Read the full news release here

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