Yamana Gold forecast a significant increase in gold production in 2008, yet cash constraints could dampen those plans if the company is unable to raise additional capital.
Yamana just completed a three-way business combination with Meridian Gold and Northern Orion and at the time of the deal, Meridian was flush with cash - $500 million in cash and cash equivilent.
Today, Yamana Gold said it it had $300 million in cash and cash equivilent, yet incurred costs related to the acquisitions of approximately $650 million, which would leave the Toronto-based precious metals mining company low on actual cash on hand.
Yet Yamana said this morning that it was ''fully financed for its strategic gold growth plan'', which pegs 2008 gold production at 1.3 million ounces.
According to a source at InsideMetals.com, which tracks precious metals stocks, assigning its own unique rating system to their values, the combined companies (Yamana, Meridian and Orion) produced between 756,000 to 773,000 ounces of gold in 2007. If those estimates are even close to accurate, Yamana is forecasting a 68%+ increase in gold production in 2008.
Gold investors flocked to the bullish forecasts Yamana released this morning, pushing its common stock on the Toronto Stock Exchange to with 4 cents of its 52-week high of $17.86 for a gain of $1.11 or 6.5% in late morning trading in Toronto.
Gold futures this morning in New York reached a record high of $915 an ounce over growing weakness in the U.S. currency. Higher gold prices helped boost gold mining stocks across the board.
