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Brazil-Jacobina

Jacobina is an underground mine in Brazil, acquired from Desert Sun Mining. Yamana is developing a number of underground mines on the Jacobina property to supplement ore feed currently coming from Joao Belo Mine to feed a centralized mill.

Morro do Vento, Morro do Vento Extension and Canavieiras will come on stream as production capacity increases from current levels of approximately 5,000 tonnes per day to target levels of 8,500 tonnes per day by late 2008.

Jacobina was commissioned in the first quarter of 2005 and commercial production was declaredon July 1, 2005.

It is expected that Jacobina will be producing at theannualized level of 135,000 to 145,000 ounces per year in 2008, increasingto 180,000 to 190,000 ouncesin2009.

Overview

Location

The Jacobina property is located in the state of Bahia in northeastern Brazil approximately 340 kilometres northwest of the city of Salvador. The property is comprised of 5,996 hectares of mining concessions, 129,572 hectares of granted exploration concessions and 6,012 hectares of filed exploration claims. The property encompasses upwards of 155 kilometres of exploration concessions along historical gold occurrences in the Bahia Gold Belt.

Type of Operation

Underground mines serving a central CIP processing plant

Proven and Probable Reserves

(at December 31, 2006)
17,181,000 tonnes at 2.14 grams/tonne gold = 1,185,000 ounces gold

Measured and Indicated Resources

(inclusive of reserves)
40,236,000 tonnes at 2.26 grams/tonne gold = 2,924,300 ounces gold

Inferred Resources

45,657,000 tonnes at 2.84 grams/tonne gold = 4,164,400 ounces gold

Expected Annual Production

135,000 to 145,000 ounces of gold in 2008
180,000 to 190,000 ounces of gold in 2009

Expected Mine Life

12+ years

project history

The Serra do Jacobina mountains have been mined for gold since the late 17th century. Numerous old workings from artisinal miners can be seen along thd ridges of the mountain chain and garimpeiro activity, on a small scale, has taken place sporadically up to present day. Yamana acquired Jacobina when it completed the acquisition of Desert Sun Mining in April 2006. When Yamana acquired the project, the plant was operating near its design capacity of 4,300 tonnes per day and an expansion plan was being formulated to increase annual production from less than 100,000 ounces per year to more than 200,000 ounces per year.

operating plan

As part of a two phase expansion, Yamana plans to complete an expansion of the Jacobina processing plant to a capacity of 8,500 tonnes per day by late 2008. The final throughput rate will be dependent to a significant extent on converting the large inferred and indicated resource at Canavieiras to reserves and determining the full potential at Canavieiras. The Company continues to evaluate the impact on production as a result of the collapse of certain sill pillars at historical ming workings at Joao Belo. Production shortfalls in Jacobina are expected as the Company conducts health and safety checks of other areas and improves air blast and ventilation procedures for the health and safety of its mine workers. Development work continues unaffected by this and it is expected that Jacobina will be producing at the expected annualized level.

value enhancing initiatives

One of the most promising opportunities to enhance value at Jacobina is to continue delineating resources at the higher grade Canavieirasproject and to convert these resources to reserves. Canavieiras is only four kilometres from the Jacobina mill and its grades are upwards of 1.5 to 2.0 times the grade currently being mined and processed from Joao Belo.

Significant value and economies of scale will also be created as the Company continues with the expansion plan to ultimately double production from the Jacobina property.

 

Argentina-Gualcamayo

Gualcamayo is a construction stage project which received positive results in its most recent feasibility study, and received environmental approval in August 2007. Based on recent drilling results, Yamana is of the view that the project will ultimately also include an underground mining operation. Yamana is targeting production from Gualcamayo inthe second half of2008 at a sustainable rate of 200,000 ounces of gold production annually with the potential to increase to 300,000 ounces of gold per year with the inclusion of QDD Lower West. The Gualcamayo project includes the QDD and Amelia Ines/Magdalena deposits.

Overview

Location

The Gualcamayo Property is located in northern San Juan Province, Argentina, approximately 279 kilometres north of the provincial capital of San Juan. The main Gualcamayo block consists of one Cateo (exploration concession) and 57 Minas (mining property interests), covering 7,128 hectares of ground.

Type of Operation

Open pit heap leach

Measured and Indicated Resources

(inclusive of reserves)
76,084,000tonnes at0.93 grams/tonne gold =2,284,400 ounces gold

Inferred Resources

16,765,000tonnes at1.29 grams/tonne gold =698,000 ounces gold

Expected Annual Gold Production

200,000 ounces in 2009

Expected Mine Life

10+years

PROJECT HISTORY

The general area of the Gualcamayo gold project has been sporadically prospected by local miners for at least the last 60 years. Viceroy acquired the project in 2003 and in January 2005, they completed a Preliminary Economic Assessment of the Quebrada del Diablo (QDD) deposit. The study concluded that the QDD project had the potential to be economically viable and should proceed to the next phases of feasibility study. Yamana acquired Gualcamayo through the acquisition of Viceroy Exploration which closed in early 2007 and a final feasibility for the open pit project at QDD is targeted for mid year 2007.

The project is located within a three hour drive of the provincial capital of San Juan province and is situated within 10 kilometres of paved highways. The mine has a readily available source of water and the elevation of approximately 2,000 metres should pose no difficulties for personnel or equipment. San Juan provincial authorities are very supportive of the project.

OPERATING PLAN

The preliminary economic assessment that was completed for Viceroy Exploration assumed an average production rate of approximately 150,000 to 160,000 ounces of gold per year. Since then, a significant amount of drilling has occurred and resources have increased significantly. An October 2006 resource estimate by GeoSim Services Inc. on QDD calculated a measured and indicated resource of 2.1 million ounces of gold with an additional 0.5 million ounces of inferred at a cut-off grade of 0.3 grams per tonne gold. Yamana now expects that a larger scale project may be feasible, incorporating a future underground mining operation in addition to the open pit.

Yamana is targeting production from Gualcamayo to be200,000 ounces per year and is targeting an ultimate mine life well in excess of 10 years.

To further support sustainable long life gold production, Yamana plans to release a resource estimate for QDD Lower West by the end of March 2008 and a complete feasibility study by the end of 2008. Yamana has made a positive construction decision to begin mine development work at the Amelia Ines/Magdalena mine in the second half of 2008 with production expected in mid-2009.

 

Chile-El Peñón

The high-gradegold/silver El Peñón mineis located in the Atacama Desert in Region II of northern Chile. El Peñón is expected to produce 425,000 to 435,000gold equivalent ouncesfor 2008 and 2009at an averagegold only cash cost of approximately $240 to $275 per ounce of gold. The mine began commercial production in January 2000 and has replaced reservesevery year since.

OVERVIEW

Location

El Penon is located In the Atacama Desert in Region II of northern Chile. It is approximately 160 km southeast of the port city of Antofagasta at an elevation of 1,800 meters above sea level. The climate is ideal for year round operations, the setting ideal for mining infrastructure and the operation has had limited impact on the extremely arid environment of the area.

Type of operation

Operations are currently 100% underground vein mining using the bench and fill method. By 2007 mine and plant production is expected to be at 2800 tonnes per day. Processing includes single stage crushing and grinding, followed by tank leaching followed by a Merrill Crowe circuit with on-site dore production. Tailings are filtered and final deposition through a patented dry process.

Proven and probable reserves

(at December 31, 2006)
9.3M tonnes at 6.6 grams per tonne gold = 1,967,000 ounces gold
9.3M tonnes at 275 grams per tonne silver = 82M ounces silver

Measured and Indicated Resources

(excluding reserves)
3.6M tonnes at 8.1 grams per tonne gold= 935,000 ounces gold
3.6M tonnes at 208 grams per tonne silver = 24M ounces of silver

Inferred Resources

2.5M tonnes at 7.9 grams per tonne gold = 626,000 ounces of gold
2.5M tonnes at 263 silver = 20M ounces of silver

* January 2008 updated new resources of over 1M ounces of gold and 27M ounces of silver at average grades of 13 to 18 grams per tonnegold, and 250 to 400 grams per tonne silver identified.

Expected Annual Metal Production

425,000 to 435,000 gold equivalent ounces for both 2008 and 2009

PROJECT HISTORY

El Peñón was a grassroots discovery by Meridian geologists in an area that had no previously recorded precious metal occurrences. The discovery resulted from a regional exploration program that concentrated initially on volcanic-hosted targets in the Paleocene-Eocene and Miocene-Pliocene belts in northern Chile. The initial reconnaissance visit to the El Peñón area was in November 1992. The area was acquired in June 1993.

A trenching program in September 1993 was followed by a 13-hole drill program in November of the same year. Six of these drill holes encountered greater than 3.0 grams/tonne gold. The true discovery hole, however, was the first hole of the second drill program, which began in February of 1994. The hole hit the major ore shoot of the Quebrada Orito deposit, encountering 100 meters of 10.9 grams/tonne gold and 123.4 grams/tonne silver from 110 to 210 meters in depth. This ore zone eventually extended over three kilometers along a continuous vein zone referred to as Quebrada Orito and Orito Sur.

On July 9, 1998, Meridian Gold's Board of Directors approved the development and construction of the El Peñón mine, based on the positive results of a final feasibility study for the Quebrada Orito and Cerro Martillo deposits and early estimates of Quebrada Colorada.

This El Peñón mine was projected to produce 130,000 ounces of gold and 1.9 million ounces of silver annually from a 2000 tonne per day processing facility employing a crushing circuit, a Semi-Autogenous Grinding (SAG) mill, a gravity circuit , and a Merrill Crowe circuit. Construction of the processing facilities began in the fourth quarter of 1998, start up in September 1999 and commercial production commencing January 2000. It was planned that contract mining would initially be employed for both the open pit and underground mines.

The mine life in the feasibility study was projected at approximately 8 ½ years. At a constant gold price of $300 per ounce and a constant silver price of $5.00 per ounce, the project generated a double-digit internal rate of return.

VALUE ENHANCING INITIATIVES

Recent new discoveries at El Penon include Bonanza, Esperanza, and Al Este. Operational excellence initiatives are underway in all areas through Six-Sigma. Expansion plans to increase tonnage from themine and plant to 3,500 tonnes per day with expected increase in production of 500,000 to 600,000 of gold equivalent ounces per year.

 

Chile-Minera Florida

Minera Florida began operations in 1986 at a processing rate of 10,000 tonnes per month producing a gold,silver and zinc concentrate for off-site treatment and by 2003 through process improvement increasing the treatment rate to 35,000 tonnes with on site dore production and production of a zinc concentrate for off-site treatment. Meridian Gold purchased Minera Florida from a private Chilean company in July 2006. In November of 2007, fifty-six flotation cells in two circuits will be replaced with one circuit of eight new cells improving gold, silver and zinc recoveries. The Company is currently working on mine and plant expansion projects increasing monthly treatment to 65,000 tonnes and annual gold production to over 120,000 gold equivalent ounces. This project is expected to be completed by year-end 2008.

OVERVIEW

Location

Located on an area of approximately 120 square kilometers within the Alhue District, situated 73 kilometers south of Santigao in Region Metropolitana, central Chile.

Type of operation

100% of the ore is from underground operations using open stoping mining method. Process includes three stages of crushing, single stage grinding, flotation followed by leaching of the flotation concentrates and dore production through electrowinning. The leached flotation concentrate is filtered and then treated in a flotation circuit to produce and zinc concentrate for shipment. The INCO process is utilized for cyanide destruction with tailings pumped to a lined facility.

Proven and probable reserves

(at December 31, 2006)
2.2M tonnes at 5.3 grams per tonne gold = 369,000 ounces gold
2.2M tonnes at 27 grams per tonne silver = 1.9M ounces silver

Measured and Indicated Resources

(excluding reserves)
2.0M tonnes at 4.6 grams per tonne gold= 1M ounces gold
2.0M tonnes at 17 grams per tonne silver = 1M ounces of silver

Inferred Resources

2.9M tonnes at 5.5 grams per tonne gold = 504,000 ounces of gold
2.9M tonnes at 30grams per tonne silver = 2.75M ounces of silver

Expected Annual Metal Production

65,000 to 70,000 gold equivalent ounces for 2008
125,000 to 130,000 gold equivalent ounces for 2009

LOCATION HISTORY

Historically, the area has been mined for over 100 years as a vein district. The geology of the Alhué District consists of low sulfidation veins and mesothermal stockwork systems emplaced in a volcanic sequence known as Lo Valle Formation of Cretaceous age. The mineralogy is mainly native gold, electrum, galena and sphalerite.

VALUE ENHANCING INITIATIVES

By the end of 2008, the Company expects its mine and mill expansion projects to be complete. This project will increase milling capacity to over 65,000 tonnes per month and increase annual gold production to over 120,000 ounces.

With the recent acquisition of the Membrillo and Chancon districts, the Company has expanded its exploration potential, as both districts are past gold producing regions.
Numerous operational excellence initiatiaves are under way using Six-Sigma.

 

Honduras-San Andrés

San Andrés is an open pit gold mine in Honduras with expected annual production of approximately 100,000 ounces, for 2012.

Overview

Location

San Andrés is located in the Department of Copán in the interior highlands of western Honduras approximately 150 kilometres from San Pedro Sula. It is within the Municipality of La Union and approximately 18 kilometres due west of the town of Santa Rosa de Copán, the capital of the Department of Copán.

Type of Operation

Open pit, heap leach

Proven and Probable Reserves

(atOctober 31, 2006)
21,745,000tonnes at 0.71 grams/tonne gold =499,400 ounces gold

Measured and Indicated Resources

(inclusive of Reserves)
62,298,000tonnes at 0.66 grams/tonne gold = 1,290,000 ounces gold

Inferred Resources

1,339,000tonnes at 0.53 grams/tonne gold =22,000 ounces gold

Expected Annual Gold Production

75,000 to 85,000 ounces of gold for 2008
90,000 to 100,000 ounces of gold for 2009

Expected Mine Life

5+ years

Project History

The San Andrés mine lies in the Trifmio District, a 7,500 square kilometre area that straddles the borders between Honduras, El Salvador and Guatemala known for its gold, silver antimony, copper, lead, zinc and iron resources.

The San Andrés area is reported to be the first Spanish gold discovery in Honduras, with initial production in the early 1500s. The mine has been in production since 1983 and has well developed infrastructure. Total annual production is approximately 70,000 ounces.

operating plan

Yamana has initiated an aggressive exploration program including drilling, sampling and mapping to better define the pit boundaries, test areas between the pits and assess potential mineralization in other areasof the mining lease. There is significant reserve upside as drilling indicates thatthe high sulphidation epithermal gold mineralization system ismuch more extensive than previously recognized.

In addition to proven and probable reserves of 499,400 ounces (Oct. 31, 2006), there is a large measured and indicated resource of 790,000 ounces outside of the current planned pit boundary. Yamanaplans to conduct testwork and study the feasibility of dump leaching which may take this large resource economic. Annual production is expected to be approximately 100,000 ounces of gold for 2012.

 

Brazil-Fazenda Brasileiro

Fazenda Brasileirois an underground gold mine in Brazil producing approximately 80,000 ounces per year. The property also includes a small open pit mine and approximately 197,000 hectares of adjacent exploration properties.

Overview

Location

Fazenda Brasileiro is located in northeast Brazil in the eastern portion of Bahia state, 180 kilometres Northwest of the state capital city of Salvador.

Type of Operation

Underground operation withCIP plant

Proven and Probable Reserves

(atDecember 31, 2006)
2,447,000tonnes at3.24 grams/tonne gold =254,900 ounces gold

Measured and Indicated Resources

(inclusive of Reserves)
4,252,000tonnes at3.18 grams/tonne gold =434,900 ounces gold

Inferred Resources

686,000tonnes at4.30 grams/tonne gold =94,900 ounces gold

Expected Annual Gold Production

85,000 to 90,000ounces of gold for 2008
95,000 to 100,000 ounces of gold for 2009

Expected Mine Life

4-6years

project history

The Fazenda Brasileiro mine began production in 1984 as an open pit, heap leach operation, however, in 1988, production began from underground operations with processing in thenewly constructed CIP plant and has been in continuous operations since such time. Total production for 2006 was 76,413 ounces. CIP mill recoveries have averaged 92.1% and have been very consistent on a year-by-year basis.

Operating Plan

The property lies in the Rio Itapicuru Greenstone Belt (RIGB), an area in which Yamana is actively exploring. Since August 2003, Yamana has conducted an exploration and infill drilling program at the Fazenda Brasileiro mine designed to upgrade the current probably mineral reserves to proven mineral reserves, replace mined mineral reserves and a deeper drilling program designed to extend the mine's underground mineral resources at depth and to the east. Drilling has been focused on orebodies adjacent to the mine,underground orebodies at or near the level of existing mine workings and orebodies beneath the existing mine workings. Definition drilling is currently underway at the E-Deep target. Annual gold production is expected to be approximately 100,000 ouncesfor 2012.

 

USA-Rossi/Storm

The Rossi/Storm project is a joint venture (40% Yamana) with Barrick Gold Exploration Inc. (60%). Barrick is the operator of the mining operations.

OVERVIEW

Location

Property spans 28 kilometers on the northern end of the Carlin Trend, Nevada, USA.

Type of operation

100% of the ore is mined from underground operations using drift and fill method. The ore is processed at near-by Barrick treatment facilities (both autoclaving and roasting).

Measured and Indicated Resources (40% share)

0.2M tonnes at 15.4 grams per tonne = 109,000 ounces gold

Inferred Resources

0.3M tonnes at 12.9 grams per tonne gold = 133,000 ounces of gold

Expected Annual Metal Production

30,000 - 40,000 equivalent gold ouncesfor both2008 and 2009

Geologic History

The STORM resource is a high-grade, structurally controlled refractory gold deposit occurring at depths of 200 to 650 meters. It is hosted primarily by silty carbonate and carbonate breccia bodies within the Devonian Popovich Formation. The local geology consists of chert, siltstone and mudstone of the Vinini Formation in thrust contact with limestone, calcareousmudstone, carbonate breccia, dolomite and carbonaceous mudstone.

Intruding the sedimentarysequence are Jurassic to Tertiary age dikes and sills occurring predominantly as north to northwest trending dikes and dike swarms, with occasional silling along low angle structures and contacts. These high-angle north to northwest structures acted as conduits for mineralizing fluids.

Silicification and pyritization are the dominant alteration types associated with gold mineralization.

Collapse breccia bodies, found within the STORM resource, are interpreted as products of decarbonatization and resultant volume loss of underlying limestone. Collapse brecciation occurred prior to, during and following gold deposition. Although collapse breccias occasionally are hosts to ore-grade gold mineralization, and high-grade clasts are often found in the breccia bodies, more typically gold is lower grade and disseminated throughout the breccia. Higher grade gold (+ 6.8 g/t) associated with fine-grained arsenical pyrite is generally confined to the common footwall of intersecting structures within favorable horizons of the Popovich Formation.

In 1998 Meridian entered into a mining agreement after Barrick completed their earn-in requirement with Meridian holding a non-operating 40% of the venture. A cooperative mining agreement is in place between Meridian, Barrick and Gold Corp and an ore sale agreement in place between Meridian and Barrick for Meridian's interest. Commercial production began in April of 2007.

Exploration upside includes extension of the Discovery Zone down dip and to the north; potential connection of the End and Discovery Zones; and from new deposits discovered from either underground or surface exploration.

 

Argentina - Alumbrera

2006 Sustainability Report

Quick Facts

• Ownership interests: Yamana Gold 12.5%, Xstrata Plc. 50%, Goldcorp 37.5%
• Located in northwest Argentina at a 2600m (8500 ft) elevation,
• Commenced open pit mining operations in 1997
• One of the world's largest copper and gold mining operations, and among the world's lowest cash cost copper producers
• Production: 12.5% share of production from June 24, 2003 through March 2007: 189,713,600 pounds of copper and 291,165 ounces of gold, representing an annual average of approximately 50 million pounds of copper and 78,000 ounces of gold
• Proven and probable reserves (December 2006): 3.79 billion pounds of copper and 5.84 million ounces of gold
• Forecasted annual gold production (Yamana's 12.5% share): 60,000 to 65,000 ounces in 2008
• 55,000 to 60,000 ounces in 2009

 

Overview

The operating company is Minera Alumbrera Limited (MAA). MAA has the right to mine the deposit by agreement with Yacimientos Mineros de Agua de Dionisio (YMAD), an Argentine statutory entity which has title to the deposit and which now receives 20% of the net before tax proceeds since project capital plus interest has now been recovered.



The project consists of five facilities in three provinces, namely:

• The open pit mine and processing facilities at Alumbrera, Catamarca
• A 316-km concentrate slurry pipeline through Catamarca and Tucumán provinces
• A 202-km, 220kV power line from El Bracho, Tucumán
• The filter plant and rail loading facilities at Cruz del Norte, Tucumán
• The port and handling facilities at San Martín near Rosario, Santa Fe
• The project also has support offices in Tucumán, Catamarca and Buenos Aires

Geology

The Alumbrera area has been known since the 1800s for its veins of copper and gold ore as well as alum, which appeared by pyrite oxidation. The presence of this mineralization gave rise to small-scale mining activity in the late 1800s and early 1900s, and these works were situated at the southern sector of the edges of the present "Bajo" area. The Alumbrera alkalic porphyries were intruded some 8 million years ago into the roots of the Farallon Negro volcano. The intrusion generated large-scale hydrothermal circulation, which resulted in alteration and mineralization of the porphyry itself, and its volcanic host rocks. Subsequent erosion has exposed the upper part of the volcano and its porphyry system at a level that is favourable to mining.

Topographically, the Alumbrera deposit is a bowl-shaped, northeast to southwest oriented ellipsoidal depression surrounded by ridges formed mostly by andesitic breccia of the Farallon Negro volcano. The floor of the bowl covers an area of 2.5 square kilometres.

The primary mineralized rocks of Bajo de la Alumbrera consist of a series of porphyritic intrusions into the andesites of the Farallon Negro complex. A total of seven distinctive porphyritic intrusions have been recognised, which form stocks (earliest units) and dyke-like bodies (youngest units) that extend to the outer edge of the deposit with some of the dykes forming a radial pattern around the central stocks.

The ore grades correlate with alteration with the highest copper-gold grades associated with intense Potassic (quartz-magnetite) alteration of two of the earliest mineralized porphyritic intrusions, and in adjacent biotised or potassium feldspar altered andesites. Younger porphyries are less mineralized or barren. The majority of the copper is primary and occurs as chalcopyrite in disseminated grains, and in veinlets.

Copper and gold are positively correlated with gold occurring in association with early pyrite - chalcopyrite - magnetite as free gold grains in the 10 to 50 micron range and as inclusions within chalcopyrite crystals.

Mining and Milling Operations

• Standard truck and shovel mining techniques operations - 42 m 3 shovels and 220 t haul trucks
• Mining carried out on 17 m benches, with 2 m sub-drill
• Current mineral reserves have a low waste to ore ratio of an average of 1.8:1
• Average reserve grade is 0.51 % copper and 0.58 Au g/t
• Total material mined averaged 355,000 tpd, for the fiscal years 2004 to 2007
• Projected throughput is estimated to average approximately 40 million tonnes of ore per annum for the remaining mine life to 2016
• MAA employs approximately 1,100 permanent staff and 800 contractors

 

Production Processes

The Alumbrera mine produces a copper-gold concentrate and a gold-silver rich dore on-site. The concentrator uses contemporary equipment and is designed to treat 100,000 tonnes of primary ore per day through two identical grinding and flotation lines. Tailings are pumped to an engineered tailings storage facility for long-term containment. The copper and gold concentrates are pumped with added water through a 316-km, 175-mm diameter pipeline over the Nevados del Aconquija mountains to the province of Tucumán, where concentrates are de-watered to obtain an almost dry product (less than 8% moisture content).

From Tucumán, concentrates are railed through the Nuevo Central Argentino railway, on Minera Alumbrera Limited's (MAA's) privately owned trains, to its port facility in Puerto General San Martín, located near Rosario in the province of Santa Fe, where vessels are loaded and shipped to international markets.

Some of the gold in the Alumbrera deposit is "free gold," not chemically dissolved in the other minerals, but freely liberated as discrete gold particles. The particles are very small, averaging about 10 microns, but a significant fraction of the gold can be separated from the other material by gravity processes. The high density of gold allows a centrifuge-type device (called a Knelson concentrator) to separate the gold from other particles of lower density. The Knelson concentrate, which contains about 500 grams per tonne of gold, is transferred to the gold room for further upgrading to dore bullion.

 

Environment

The operator, Xstrata (formerly MIM Holdings) is committed to conducting business responsibly and in a manner designed to protect employees, the community's health, and the environment. MIM Holdings developed an Environmental Policy and Standards in 1997 for all sites to follow to ensure minimal impact of its operations on the surrounding environment.

The design, development and operation of the facilities is managed with a view to reducing the impact of the operations; ensuring efficient use of energy, water and other resources; minimising waste generation and disposal; and where waste must be disposed of, doing so responsibly. A high standard of environmental protection across all sites is maintained through site-specific Environmental Management Systems (EMS). A key requirement of the EMS is the ongoing development of comprehensive Compliance Registers for all sites, which is an internal audit of sites' compliance with environmental commitments.

Environmental Initiatives

Since commissioning the Alumbrera operation, the operator has implemented several environmental initiatives to mitigate environmental risk:

• Approximately 75% of the water in the tailings storage facility is recycled for use in the concentrator.
• A tailings pumpback system has been implemented to maximize the amount of water returned to the tailings storage facility from seepage. The design, modelling and ongoing performance of this system, has been openly communicated with the provincial authorities and local communities.
• A joint water monitoring programme has been established with representatives from the provincial government to monitor the area of influence of the minesite, freshwater borefield and below the mining lease.
• The operator has quarterly presentations to provincial government representatives to provide information on the mine s acid rock drainage prediction programme.

The following appeared in the July 17, 2003 issue of Mining Environmental Management, published by Mining Communications Ltd. of London England: "Minera Alumbrera has opened an urban waste recycling plant in Tafi del Valle, in the Argentina's northwest Tucumán province. The plant separates organic and inorganic waste, converting organic waste into fertilisers, and setting aside inorganic waste for recycling. It will take all of the Tafi del Valle's domestic waste and is part of the compensation offered by Alumbrera to the village for the right to run a transmission line through the municipality. Other sustainable development projects include support for more than 150 primary schools, 18 secondary schools, 70 hospitals and clinics, 50 heath centre, and sports clubs throughout northwest Argentina. It also helps local agricultural producers carry out crop diversification programmes, irrigation works, greenhouse projects and farming schools."

 

Community Relations

From the early stages of Alumbrera's development, local communities were kept informed regarding the progress of the operation. Since commissioning, Alumbrera has had considerable impact as a direct and indirect employer and provider of infrastructure. The project has helped fund roads, including heavy vehicle by-passes around the towns of Aimogasta, Santa Maria, Londres and Belen, so that the movement of trucks transporting supplies to the mine does not compromise people's safety and quality of life. Minera Alumbrera Limited (MAA) works closely with Government at the national, provincial, and municipal levels to resolve the inevitable problems arising as a consequence of the development of a large-scale mining industry in its infancy in Argentina.

MAA recognises its responsibility to the communities in which it operates and provides a range of support, including sponsorship. MAA has concentrated community assistance in the Alumbrera neighbourhood on training, education and health, and buying supplies locally where available to encourage regional business development.

 

Brazil - São Vicente

São Vicente is a gold development project located in Brazil. A construction decision was approved in Q4 2006, and production is targeted for 2008 at an expected rate of 45,000 to 55,000 ounces per year.

Location

The São Vicente property is located in the extreme western portion of Mato Grosso State in West Central Brazil, very close to the Bolivian frontier and some 560 kilometres west-northwest of the capital city of Cuiaba. It is approximately 58 kilometres north of São Francisco. São Vicente consists of three contiguous mining permits totalling 28,980 hectares in area.

Project Status

In construction with target production in late 2008

Type of Operation

Open pit, heap leach and gravity concentration

Proven and Probable Reserves

(at December 31, 2006) (includes main ore and run-of-mine ore)
13,060,000 tonnes at 0.81 grams/tonne gold = 341,900 ounces gold

Measured and Indicated Resources

(inclusive of Reserves)
25,482,000 tonnes at 0.74 grams/tonne gold = 605,100 ounces gold

Inferred Resources

3,623,000 tonnes at 0.87 grams/tonne gold = 101,200 ounces gold

Expected Mine Life

5.3 years

Expected Annual Production

55,000 ounces per year

A production decision was approved in the fourth quarter of 2006, based on a favourable feasibility study, with targeted production in late 2008. The operation will be an open pit, heap leach and gravity concentration project with annual production estimated to be 55,000 to 65,000 ounces in 2009.

Gold mineralization at São Vicente occurs for more than 1,000 metres in two parallel northwest trending zones. There is potential for further upside through continued mine exploration down dip.

 

Brazil-C1 Santa Luz

C1 Santa Luz is a development stage gold project in Brazil on the Rio Itapicuru Greenstone Belt (RIGB), with positive results received from its initial feasibility study.

Location

The C1 Santa Luz property is located near Maria Preta in Brazil, approximately 60 kilometres north of the Fazenda Brasileiro mine.

Project Status

Development
Start up construction approved with targeted production in 2010

Type of Operation

Open pit

Proven and Probable Reserves

(at December 31, 2007)
16,400,000tonnes at1.7 grams/tonne gold =904,316 ounces gold

Measured and Indicated Resources

(inclusive of Reserves)
41,502,285 at1.57 grams/tonne gold =2,295,161ounces gold

Inferred Resources

4,825,094tonnes at1.40 grams/tonne gold =217,309 ounces gold

Expected Mine Life

10+ years

Expected Annual Production

100,000+/- ounces

C1 Santa Luz is the most advanced targets on the Company's 180,000 hectares of mineral claims on the Rio Itapicuru Greenstone Belt, and is located near Maria Preta which was a series of open pit heap leach operations.C1 is a breccia-hosted gold deposit that dips downward at 35-55 degrees.

In December 2005, the Company announced the results of a Phase 1 scoping study, which included anopen pit probable reserve containing 556,000 ounces of gold. The purpose of the study was to provide an initial economic assessment of the project and assess the merits of undertaking a formal feasibility study. The results were positive and the Company is continuing to assess the development of the project as a stand alone mine.

Yamana hascompleted an initialfeasibility study for C1 Santa Luz and has received start up construction approval. Targetproduction is expected to be 100,000 ounces of gold per year. The first full year of production is expected tobeapproximately 120,000 ounces, and is planned to commence in early 2010.

The Company is continuing to drill on the project and believes that it can add to the current resource base, assisting in improved project economics as exploration potential appears excellent.