margin growth -

TORONTO, Nov. 3 /CNW/ - YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:YAU) today announced its financial and operating results for the third quarter ended September 30, 2009. All dollar amounts are expressed in United States dollars unless otherwise specified.

THIRD QUARTER HIGHLIGHTS

Financial and Operating Highlights

Highlights for the three- and nine-month periods ended September 30, 2009

include:

- Total production from all mines of 314,707 gold equivalent ounces

(GEO) and 875,763 GEO, respectively;

- Average co-product cash costs(1) from continuing operations excluding

Alumbrera of $349 per GEO and $350 per GEO, respectively. By- product

cash costs from continuing operations excluding Alumbrera of $79 per

GEO and $195 per GEO, respectively;

- Revenues of $332.2 million and $783.5 million, respectively;

- Mine operating earnings of $136.4 million and $283.2 million,

respectively;

- Net earnings of $60.8 million or $0.08 per share (Net earnings and

adjusted earnings(1) were impacted by a deferred tax provision

impacting only the third quarter $0.03 per share that does not impact

operating profit or future periods) and $156.5 million or $0.21 per

share, respectively;

- Adjusted earnings of $88.3 million or $0.12 per share and $248.4

million or $0.34 per share, respectively;

Three months Nine months

ended ended

Sept 30, Sept 30,

(In millions of United States Dollars) 2009 2009

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Net earnings $ 60.8 $ 156.5

Stock-based compensation 1.8 7.0

Foreign exchange gain including discontinued

operations (6.7) (57.0)

Unrealized loss on derivatives including

discontinued operations 21.0 102.9

Future income tax expense on foreign currency

translation of inter-company debt 18.9 54.0

Non-recurring future income tax adjustment - 20.6

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Adjusted Earnings before income tax effects 95.8 284.0

Income tax effect of adjustments (7.5) (35.6)

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Adjusted Earnings $ 88.3 $ 248.4

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- Cash flow from continuing operations before changes in non- cash

working capital items(1) of $167.9 million or $0.23 per share (cash

flow from continuing operations after changes in non-cash working

capital items of $144.4 million), and $340.6 million or $0.46 per

share (Cash flow from continuing operations after changes in non- cash

working capital items of $317.0 million), respectively.

Development, Exploration and Corporate Highlights

Highlights for the three-month period ended September 30, 2009 include:

- Completed the 20 million tonnes per year expansion at Chapada with

the new mine fleet expected to commence operation in the fourth

quarter

- Completed first full quarter of commercial production at Gualcamayo

subsequent to declaring commercial production on July 1, 2009 with

production increasing 62 percent from the second quarter at cash

costs well below guidance

- Continued to accelerate development work on new veins and exploration

efforts in the North Block at El Penon with grade and throughput

improvements anticipated

- Accelerated development activities at QDD Lower West with a

conceptual study in progress

- Acquired extensive exploration concession, Caiamar, located in Brazil

- Made construction decisions for the development of C1 Santa Luz,

Mercedes and the tailings reprocessing project at Minera Florida, for

start-up in 2012.

Highlights subsequent to the quarter include:

- Announced positive exploration results at Mercedes in Mexico

- Provided update on Agua Rica in Argentina including optimization

initiatives currently underway, continued focus on updating

components of the original feasibility study, and evaluating

potential strategic partners for development

- Provided exploration update on new area 10 kilometres north of

Gualcamayo, Salamanca, where drilling results support Yamana's view

that the area represents an important source of further gold ounces

for Gualcamayo.

"Yamana again achieved record quarterly production at industry low cash costs," said Yamana's chairman and chief executive officer, Peter Marrone. "We focused on our newest mine, Gualcamayo, this quarter, as we continue to put steps in place to optimize the mine. We declared commercial production on time and in its first full quarter of commercial production the mine is meeting our expectations and exceeding guidance. We also focused on our robust development stage and value enhancing projects this quarter such as Agua Rica as we continue with optimization studies and evaluating potential strategic partners."

FINANCIAL AND OPERATING SUMMARY

Revenues for the three-month period ended September 30, 2009 were $333.2 million, representing a 50 percent increase from the comparative quarter last year, and for the nine-month period ended were $783.5 million. Approximately 10,000 GEO were produced but not sold during the third quarter due to timing and will be sold during the fourth quarter.

Mine operating earnings for the three-month period ended September 30, 2009 were $136.4 million, representing a 138 percent increase from the comparative quarter last year, and for the nine- month period ended were $283.2 million.

Net earnings for the three-month period ended September 30, 2009 were $60.8 million, or $0.08 per share, and for the nine-month period ended were $156.5 million, or $0.21 per share. Net earnings and adjusted earnings were impacted by a deferred tax provision impacting only the third quarter of $0.03 per share that does not impact operating profit or future periods. Adjusted earnings for the three-month period ended September 30, 2009 were $88.3 million, representing a 180 percent increase from the comparative quarter last year, or $0.12 per share. Adjusted earnings for the nine-month period ended were $248.4 million, or $0.34 per share.

Cash flow from operations after changes in non-cash working capital items for the three-month period ended September 30, 2009 was $144.4 million, representing a 155 percent increase from the comparative period last year, and for the nine-month period ended was $317.0 million. Cash flow from operations before changes in non- cash working capital items for the three-month period ended September 30, 2009 was $167.9 million or $0.23 per share, representing a 67 percent increase from the comparative period last year. Cash flow from operations before changes in non-cash working capital items for the nine-month period ended June 30, 2009 was $340.6 million or $0.46 per share.

Cash and cash equivalents for the three-month period ended September 30, 2009 were $97.5 million, representing a five percent increase from the second quarter of 2009. Consistent with the business plan of the Company and as the Company had previously indicated, the majority of the build-out would be capital by mid 2009 with a corresponding use of available cash. Increases in cash flow would then increase available cash. Current cash and cash equivalents as at the end of October 31, 2009 is approximately $130 million.

Total production for all mines for the three-month period ended September 30, 2009 was 314,707 GEO (comprised of 261,789 ounces of gold and 2.9 million ounces of silver) representing a nine percent and 16 percent increase from the second quarter and first quarter of 2009, respectively. Total production for the nine-month period ended was 875,763 GEO (comprised of 736,369 ounces of gold and 7.7 million ounces of silver).

Average co-product cash costs for the three-month period ended September 30, 2009 for continuing operations excluding Alumbrera were $349 per GEO and for the nine-month period ended were $350 per GEO. By-product cash costs for continuing operations excluding Alumbrera for the three-month period ended September 30, 2009 were $79 per GEO and for the nine-month period were $195 per GEO. Co- product cash costs per pound of copper at Chapada for the three- month period ended September 30, 2009 were $1.07 per pound and for the nine-month period ended were $0.97 per pound.

Gross margins(1) per GEO sold for the three-month period ended September 30, 2009 were $792 per GEO, representing a 55 percent increase from the comparative period last year, and for the nine- month period ended were $703 per GEO.

"We continued to focus on cost containment and margin expansion this quarter, which has been reflected in our double digit revenue, cash flow and margin growth," said Chuck Main, Yamana's executive vice president finance and chief financial officer. "We remain focused on building on our strong track record of growth, sustainability and industry low cash costs."

Chapada, Brazil

The Company anticipated changes in the mill liners and motor replacement at Chapada during the third quarter of 2009. Production was in line with expectations given maintenance activities. With the expansion to 20 million tonnes per year completed in the third quarter, fourth quarter production is expected to increase.

El Penon, Chile

El Penon production in the third quarter of 2009 increased to 108,054 GEO, representing a 17 percent and 28 percent increase compared to the second quarter and first quarter of 2009, respectively. Grade at El Penon also increased in the third quarter by 13 percent and 22 percent compared to the second and first quarter of 2009, respectively. Co-product cash costs declined at El Penon by $15 and $42 per GEO, or 4% and 11%, compared to the second quarter and first quarter of 2009, respectively.

Jacobina, Brazil

Jacobina continued to perform and produce at record levels. Jacobina production of 30,978 ounces in the third quarter of 2009 increased by 12 percent and 14 percent compared to the second and first quarter of 2009, respectively.

Gualcamayo, Argentina

Yamana continued to focus on its newest mine, Gualcamayo, to ensure optimization of the mine. The Company declared commercial production on time and Gualcamayo is currently meeting expectations and exceeding guidance. Third quarter production at Gualcamayo increased to 39,523 ounces of gold, representing a 62 percent and 93 percent increase compared to the second quarter and first quarter of 2009, respectively. Gualcamayo continues to ramp up with production in the month of October of approximately 18,900 ounces. Gualcamayo cash costs for the third quarter were $316 per ounce, which is below previous guidance of below $350 per ounce.

Minera Florida, Chile

Minera Florida production continued to increase quarter over quarter subsequent to the completion of the expansion in the first quarter of 2009. Production of 25,411 GEO in the third quarter of 2009 increased by 11 percent and 32 percent compared to the second and first quarter of 2009, respectively. A construction decision for re-treating tailings work at Minera Florida has been made, which is to add an additional 40,000 GEO per year expected to begin in early 2012.

Fazenda Brasileiro, Brazil

Third quarter production at Fazenda Brasileiro increased to 20,464 ounces of gold, representing an 11 percent and two percent increase compared to the second quarter and first quarter of 2009, respectively.