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Thank you for all for joining us for the morning. Before I turn the call over, I need to advise that certain statements made during this call today may contain forward-looking information and actual results could differ from the conclusions or projection in that forward-looking information, which include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, future metal prices and the cost and timing of the development of new projects.For a complete discussion of the risks, uncertainties and factors which may lead to actual financial results and performance being different from the estimates contained in the forward-looking statements, please refer to Yamana's press release issued yesterday announcing first quarter 2018 results as well as the management's discussion and analysis for the same period and other regulatory filings in Canada and the United States.I would like to remind everyone that this conference call is being recorded and will be available for replay today at 12:00 p.m. Eastern time. Replay information and the presentation slides accompanying this conference call and webcast are available on Yamana's website at yamana.com.I will now turn the call over to Mr. Peter Marrone, Chairman and CEO.
Ladies and gentlemen, good morning. Thank you for attending our Q1 conference call. With me here today is Daniel Racine, our Executive Vice President and Chief Operations Officer; Jason LeBlanc, who you've met before, our Senior Vice President and Chief Financial Officer. With us here this morning also are Yohann Bouchard and Gerardo Fernandez. They are our 2 senior vice presidents managing our operations; and Henry Marsden, who manages our exploration effort is with us also.Let me begin this call by touching on a few points of our first quarter progress. We delivered on our production and cost guidance for this quarter. In my view, just as importantly, through the quarter and into the current date, we have transitioned Cerro Moro to operations, we are feeding ore to the plant, the plant is running at capacity, the mining rate is matching plant capacity and we have established a very high-grade stockpile of roughly 40,000 tonnes already, heading towards 60,000 tonnes by the end of the current quarter, Q2.We've improved our balance sheet through the first quarter of this year. We've advanced our exploration efforts. That exploration effort will culminate into an exploration update that we plan to deliver in this quarter, so roughly at the time of our second quarter results. Our focus will be on Cerro Moro and the potential for increasing resources at Cerro Moro, Chapada and some of the higher grade areas at Chapada that we have been exploring and will continue to explore, Minera Florida and El Peñón. We've demonstrated the potential for further optimizations and improvement [ to those ] assets. This is clearly true at Canadian Malartic, it is particularly true at Jacobina. We now have a clear path forward to 150,000 ounces of gold production per year, off of a platform of roughly 130,000 to 140,000 ounces presently. And Jacobina is performing well and on a good path, we're increasing production. Most importantly, as we indicated in our quarterly results last evening, Chapada -- Chapada has significant -- we've identified at least 5 high-quality opportunities for improvement in production. And what I mean by improvement is not just the increase in production, but the increase in production likely expected to be at better cost and delivering better returns.We continued the effort of right-sizing operations. Gualcamayo is the most recent. We had excellent experience at El Peñón last year, in Jacobina several years before, to bring us to where Jacobina is today, in terms of its production platform and we're taking the same approach on Gualcamayo. Now Gualcamayo is our mine with at least the shortest mine life left, at least in our oxides. We have a significant sulfide area that we've identified and called Deep Carbonates. We have a parallel path of sale and continued ownership. There is considerable optionality that is either captured in a sale price or we will continue to hold it. We focused our efforts toward longer-term cash flow growth and maximization of cash returns on invested capital.Just a bit more highlight on the first quarter. We produced 199,500 ounces, so just under 200,000 ounces of gold, that was above budget. We produced just under 9,000 ounces of silver. That was close to budget but improving and we produced 30.4 million pounds of copper in the quarter and that again was above budget. All the byproduct, all-in sustaining costs for gold at $703 per ounce, which is below our cost estimate in budget and for silver below $11.60, again, which is below our cost estimates in our budgets.And with that introduction, let me pass the call to Daniel Racine for an update on our operations.
Thank you, Peter. Good morning, everyone. We got off to a good start with the first quarter production just under 200,000 ounces of gold for Yamana's mine, beating our guidance and budget. This represents an increase of 11% compared to 2017. Notable increases by mine compared to last year include 20% at El Peñón, 19% at Chapada, 17% at Canadian Malartic and 7% at Jacobina. The decrease at Minera Florida compared to last year is consistent with our plan to throttle back production and the operation in the near term. I previously commented that we expect similar production rate for 2018 and 2019 compared to 2017, as we focus on development in newer and higher grade areas. We also produced 899,000 ounces of silver and 30.4 million pounds of copper. This position us well for our full year guidance when considering that we expect 47% and 46% of gold and copper production, respectively, to be produced in the first quarter -- in the first half of the year. We have a track record of second half production increases and we expect this to hold for our production again in 2018.On the cost side, we delivered a production at lower year-over-year all-in sustaining cost for all metals. For the remainder of this year, we expect production increases with the addition of Cerro Moro and our all-in sustaining cost will trend lower over the course of 2018.I will now turn the call over to Yohann and Gerardo to discuss mine-by-mine results.
Thank you, Daniel. Well, at Chapada we exceed expectation for both gold and copper production in the quarter. The strong performance is mainly due to significant higher recoveries. Modifications to the flotation circuits made in 2017 had delivered on the objective of improving recoveries for both gold and copper. It is important to note that the improvements are tangible across different ore types and with higher pyrite content.We [ already see ] that additional optimizations to further improve recoveries. So we expect to continue seeing processing improvement at Chapada. Our gold and copper production are expected to be higher in the second half of the year, which is in line with seasonal trends and our guidance. Heavier rain than expected in the quarter resulted in lower mining rate, due to adverse effect on drill and blast activities. Last night, we released detail on our phased approach to optimize value at Chapada. This is providing some clarity on the ongoing evaluation process to optimize the value of this asset. I will touch on this plan in more detail in a moment, but one of the key takeaway is that we see the potential to support annual production in the range of 100,000 to 110,000 ounces of gold and 150 million to 160 million pounds of copper until at least 2034.So looking at the phased plan for Chapada, we have completed studies and evaluation on several of the development opportunities. We looked at plant optimization initiatives to further increase copper and gold recoveries, tonne expansion to bring forward cash flows and pit wall pushback to expose higher grade zones.Capital requirement has been estimated by a third-party and are included -- and are including a significant contingency. Even with this conservative approach, the results have been really positive and justify progressing this opportunity to the next level. Well, please keep in mind that we are presenting this as a phased approach, but the individual initiative can be considered on their own.Well, the Phase 1 began with a pilot plant flotation test conducted in 2017. The test indicated the potential for additional 1.5% to 2% increase in gold and copper recoveries. This will be achieved through modification of the cleaner tailing stream and the addition of new cells in the rougher/scavenger circuits. We're planning to spend no more than $9 million beginning in 2018 on these optimizations.Phase 2 is consisting -- considering the expansion of processing plant capacity up to 32 million tonnes per year from the current capacity of 23 million tonnes. Altogether, we are looking at the installation of an additional ball mill, an HPGR, a pebble crusher, a Vertimill and extend our flotation circuits [ to continue to bring ] on the higher recoveries.Completing a feasibility study is the next step for Phase 2 with our plant, calling for this review to be completed in early 2019. Well, no significant CapEx is expected before 2021 on Phase 2 and we'll provide more certainty with feasibility study, but the plant expansion is currently estimated at about $140 million.Our Phase 3 is related to the Sucupira higher grade zones. Mining can be undertaken with a series of pushbacks on the north wall of the Chapada pit. Further production as -- future production as disclosed in the recent 43-101 for Chapada includes 46 million tonnes of mineral reserve from Sucupira, but we think there is an additional 43 million tonnes at 0.24 grams per tonne gold and 0.36% copper that can be added to the mine plan. Well, the pushback to access these mineralizations require moving certain surface construction. We're not looking at significant increase with the mobile fleet, because the extraction notice is aligned with the actual mining rate. Feasibility study for Phase 3 will be done [ concurrently ] with Phase 2 and will be completed in 2019 as well.Our current estimate for phase -- capital estimates for Phase 3 is estimated at about $100 million. Spending is scheduled for 2024 and 2025, with first ore from Sucupira expected in 2026. So in parallel, development of the gold-only Suruca oxide is being evaluated at a standalone heap leach operation. We are also assessing broader integrative plan, which is including the sulfide gold-only mineralization.At Canadian Malartic, we had another quality production record. Higher mill feed rate is mainly driven by a strong mining production. All our cost in the quarter were in line with our budget and expectation. The higher year-over-year costs can be explained by higher contractor and fuel costs and a stronger Canadian dollar. The expansion project is advancing according to plan and it's on budget. We have about $37 million of expansionary capital budgeted for the full year and on a 50% basis. We're still expecting production activities to begin at Barnat in late 2019.So in addition to the extension project, we're continuing to see significant upside opportunity in Malartic. A portion of the 2018 exploration spend is $8.6 million and we expect this to support 140,000 meters of drilling with a focus on East Malartic and Odyssey. While this is prospective ground and I would like to remind you that in 2017, on a 50% basis, we had 1.2 million ounces of inferred resources at East Malartic and Odyssey has 838,000 ounces of inferred resources.Well, based on the success that we have so far, including the result from the first quarter, we are moving forward with permitting activities and activities for the exploration ramp that will provide underground access to East Malartic and the shallower portion of Odyssey South. We are expecting that -- we are expecting the 2018 program to increase confidence in the result and transfer ounces from inferred resources to indicated resources category.Well, Jacobina continued with the same momentum, delivering quarter-over-quarter. Production was a record for the first quarter, up 7% from the last year, due to higher processing rate. One of the key of our success at Jacobina has been staying on top of development and we continue to have about 8 to 10 months of inventory developed underground, plus a surface stockpile of roughly 60,000 tonnes and growing. We continue to target the objective of 150,000 ounces per year, and we think we can get there with minor modifications to the processing plant.I will now turn the presentation to Gerardo to discuss the Southern operation.
Thank you, Yohann, good morning, everyone. We exceeded production expectation for gold in the first quarter at El Peñón. Processing rates and gold grades were consistent with the average of the last 3 quarters. [ Our own plants ] silver grades were lower than previous quarters due to the mine sequence and which makes silver production to increase progressively as the mine transition to higher grade zones as planned. Compared to the same quarter last year, gold cost were impacted approximately by $58 per ounce, as a result of an 8% appreciation of the Chilean peso relative to be U.S. dollar. Exploration continues to progress, testing the deepest stages of the main veins as well as the secondary structures near the infrastructure.At Cerro Moro, we are in this cusp of production, as first ore was fed to the mill on April 25. This startup exploration well with first dore production expected in May. Throughput and feed grades will ramp up through the second quarter. [ Progressively ] the Cerro Moro has operation well positioned to deliver on its production expectation for 2018. As we advance through first production, we also have been advancing our exploration program. Henry will comment on our efforts in exploration in the first quarter.
Thanks, Gerardo. We continue to target 1 million gold equivalent ounces at Cerro Moro. Based on some encouraging results from the core mine at Veronica and some other secondary structures, we've expanded the budgeted at Cerro Moro by $2 million. That $2 million will give us a much stronger district effort, will expand our core processing facilities and give us more scale drilling in the core mine. But this should lead to a very strong program in 2019 and I expect to see a significant increase in inferred resources by the end of 2019. Thanks. Gerardo?
Thanks, Henry. I would like to give you a little bit more detail of the work we did in the first quarter at Cerro Moro. The cold commissioning of the mill was completed in March and then we conducted water tests [indiscernible] through the different areas of the plant, through late March and into April, leading to the startup I mentioned on the 25th. The underground and open-pit mining operations continue to track according to plan with ore being stockpiled.[indiscernible] effort also is a very important aspect developed in the later stages of the project, especially in the first quarter, with all functional areas performing really well, including hiring and training of our people, the supply chain function and maintenance, and other functions to support the operation. Construction was on budget through the end of the quarter with approximately $47 million of the planned $61 million of construction capital for 2018 expensed during the quarter.Minera Florida continued to advance the strategy we implemented last year, in which mining operation are transitioning from the historic core mine to the new high-grade zones recently disclosed. These high grade zones are expected to provide the foundation to achieve a long-term production objective of 130,000 ounces per year. But for now the plan calls for the focus on development and exploration on the new areas. In the first half of 2018, the production will be lower compared to second half 2018. This is the main driver for the lower production in the quarter compared to the prior year and this has -- as Daniel mentioned, has already been reflected in our guidance for the operation.The 2018 program for exploration, I mean there's a realized focus on expanding measure and indicated [indiscernible] resources, following the 2018 program for exploration at Minera Florida is focused on expanding measure and indicated [indiscernible] resources, following the recent success at Las Pataguas, PV Sur and Tribuna vein. We are also advancing the regional program to identify new veins near the mine.In the first quarter for Gualcamayo, the operations continue rightsizing plans for the mine. Despite this, the production in the quarter exceeded expectations. Overall production reflect the high grade offset by lower processing rate, which is in line with the strategy for the operation. One of the objectives of the rightsizing plan is to provide more time for the development and exploration of the new oxide target. In the quarter, the majority of our exploration effort was [ to exit our ] testing targets with the potential to expand the current inferred oxide -- mineral resources at Target D and exploratory drilling at Pirrotina and the Sierra Alaya area.I will now turn the call over to Jason.
Thank you, Gerardo. Good morning everyone. Before going into our financial performance, I would like to provide some additional commentary on our plans at Gualcamayo. We are taking a rightsizing approach, not unlike what we've done at some of our other operations, to lower our overhead and our costs. We looked at what needs to be spent on the exploration prospects near the mine and in the district at Gualcamayo. And we are implementing a plan that provides us more time to develop these prospects. More specifically, rightsizing production will extend the mine life and contain costs as we advance these exploration efforts. This approach should maximize cash flows through the remainder of the current oxide mineral reserve life. On a parallel course, we continue to evaluate a potential sale as a strategic alternative at Gualcamayo. However, any sale must capture the value and optionality presented by Gualcamayo's existing resources, its exploration potential and the Deep Carbonate project.Turning now to financial performance for the first quarter. We delivered just under $450 million of revenue in the quarter, up $46 million from 2017. This led to a $25 million increase in gross margin before DD&A. We expect further gross margin increases, both in dollar and percentage terms as the year progresses, as we see volumes increase and our unit cost decrease. This trend is amplified by the contribution of low cost ounces from Cerro Moro this year.Net loss attributable to Yamana equity holders for the quarter was $160 million or $0.17 per share. The loss was attributable mainly to a non-cash carrying value reduction recorded on Brio Gold. Earnings per share would be impacted positively by $0.18 after taking into account this and other adjusting type items during Q1.Operating cash flows were also up year-over-year. It's worth noting, though, that cash flows included a $68 million payment to settle certain tax matters in Brazil and a $125 million received as part of our copper advanced sales program. Normalizing for these items, we generated approximately $147 million in operating cash flows before change in working capital during the quarter.As it relates to working capital, we tend to see above-average working capital outflows during Q1, given the normal production and expenditure sequence of our mines. We have higher activity and expense accrual in the second half of the year, which then results in accounts payable reversing to start the year in Q1. This was similar to years past, most recently in 2017. Over the course of the year, this pattern will start reversing itself.On the previous slide, you saw that we spent approximately $75 million on expansionary CapEx in the quarter. A significant portion of this was associated with the final push at Cerro Moro. The final Cerro Moro construction spending of approximately $15 million will be in Q2. During Q2, we also expect to see a one-time working capital outflow at Cerro Moro as accruals and payables associated with the construction effort and physical progress reverse during that quarter. I'd expect something in the range of about $25 million for working capital associated with this item in Q2. Over the longer term, we are expecting expansionary CapEx to normalize on a much lower annual run rate, once Cerro Moro is producing and the Malartic expansion project is complete.The planned production increases, our cost flow -- our average cost structure and our declining CapEx profile form the basis for us to move into a cash flow and free cash flow growth phase. The contribution of Cerro Moro is a significant part of that cash flow improvement and this is expected to accentuate our historical trend of back-end loaded cash flows this year. But Cerro Moro isn't the only contributor to the expected increase in cash flows and free cash flows. Improvements at Malartic and Jacobina will also contribute meaningfully. You heard from our operations management about some of the improvements we've made at those mines and the opportunities to enhance returns further. We expect improving cash flows this year, but the more pronounced step change is expected into 2019 when we get a full year of contribution from Cerro Moro and contributions from other improvements we are making across the portfolio.I will now turn the call back over to Peter.
So thank you, Jason. So just to complete the presentation then, ladies and gentlemen. Daniel touched on our guidance. We reiterate that guidance. We expect our production -- gold production to increase by just under 6% over the course of the next several years, silver production will increase by 37%. Copper stays comparatively flat at 120 million pounds of copper.As we've done in the prior quarter, on a gold equivalent basis, and this is just to show size and scale and perhaps to simplify, if we look at silver as a gold equivalent and if we apply copper as a credit to our gold equivalent production, we see an almost 9% increase year-over-year in our production on a gold equivalency basis. Some of that from gold, as I mentioned, and the balance from silver. And our costs will decline, they will decline significantly as a result of the improved production and a lot of that will be coming from Cerro Moro beginning in this quarter and then continue through this year -- the balance of this year and into next year.In Q1, our production on a gold equivalency basis was 211,000 ounces and our byproduct all-in sustaining costs were $714 per ounce. So you should expect this year and into the next several years, significant precious metals production growth. We expect cost and margin improvements that will lead to increases in cash flow and in free cash flow.And with that ladies and gentlemen, perhaps if I can open the call to any of your questions.
[Operator Instructions] The first question is from Mike Parkin of National Bank.
A question on Cerro Moro. What's the number ore sources that you've got developed at this point and how will that kind of transition throughout the year?
The question Gerardo is that, it was a bit difficult to hear Mike, our apologies, but I think the question is the ore sources. So I think the starting point is how much is open pit and underground and then where is the ore coming from.
This year, 70% of the feed coming from open pit, okay. And in the open pit we have -- 3 open pits are active; Escondida Central, Escondida West, very high grade pits, and Zoe, which is starting. And in the underground we have one mine, which is Escondida Far West, high grade mine, which is in production as well.
Okay. And how will that change as we get to the end of the year? Will you be bringing on any additional mines or just…
This 4 I mentioned, the 3 open pits and the underground are the core of the life of mine actually, but there will be additions of, I would say, smaller mines, but still high grade [indiscernible] for open pit and in different corridors, if you look at the presentation from -- posted on the website, you can see that we have Nini, Nini 2, [ Cadillac-Larder pit ] coming in line in the next months, and those are mostly to provide a blend -- blending [indiscernible] lower grade to the mill. So we can control our intake into the precipitation and refinery.
And in terms of the ramp-up, has that gone in terms of the commissioning phase, has there been any surprises that [ released today ] or has everything been relatively in line with expectation?
It's been in line. If I can give you a little bit more detail, we completed our phase of 50% capacity successfully. We also have completed our 100% capacity test, as Peter mentioned. Now we are going through the inspection of the mill, according to the vendor warranties requirement. So the main equipment in the mill, the crushing plant, all that fit with -- the flotation circuit are performing really well, performing according to design. And we have seen the normal step for this stage, recalibration of sensors, some pipe we need to put together again, but minor things, we are really, really happy with the progress to-date.
Great. And then just maybe one kind of accounting question. If we assume the depreciation per ounce for each asset for Q1 on a go-forward basis, is that fair, or would there be any asset that would show any kind of significant difference as we progress through the year?
No, I think that looks pretty good Mike.
The next question is from Andrew Kaip of BMO Financial.
Thanks for the update on the future of Chapada. I guess one question I have is, is Chapada looks like there are opportunities that are larger than your knowledge base at this point in time. And maybe, Henry you can comment on this, but my sense is that the exploration needs to catch up or needs to provide more information for planning, and I'm wondering what your thoughts on exploration budgets for Chapada are over the next couple of years?
The exploration plan that we've developed over the last year is very strongly aligned with the life of mine plan and the ambitions for the mine. I think the budgets will increase slightly, but I think we can actually maintain the budgets as they are. The main efforts really are going to be try to help with the Sucupira pushback. So we're drilling now to try to improve the stripping ratios at Sucupira. And then we're also looking for new near-mine resources. So we'd really like to see an increase in that gold profile over the next couple of years. So looking for smaller but higher grade near-mine resources. But really it's a very efficient exploration operation. All told, the costs are low and I think we'll be able to work pretty much within the budget that we are seeing over the next few years.
Okay. And then the second question I have is just regarding Gualcamayo, and you've right-sized the operations, but I'm wondering can you give us an update on what you perceive to be the reclamation cost for Gualcamayo, if you were to continue to operate that mine to closure?
Yes, sure Andrew. I think it's around $20 million, $25 million.
The next question is from David Haughton of CIBC.
Maybe for Gerardo on the discussion for Cerro Moro, how has the grade reconciliation gone from what you've seen so far, from what [ modelists ] had said compared to what you have been able to [ SI ] or run through the mill in a preliminary way?
We've been tracking really well with the model. It's a little bit of history. Since the acquisition, we have dedicated our effort on drilling the high grade areas, even to a grid of 20 by 20 meters spacing and then further drilling to define the black silica high grade shoots within Escondido and 10 by 10 drilling in the open pit. So we have a very good basis for information and we're benefiting from that effort we did early on in the project now as we are seeing a very good reconciliation for grade, both underground and open pit. Dilution is tracking really well also for both mines.
That's excellent. And maybe for Jason, Mike had asked about the depreciation rate, but one that we are uncertain about at this stage and perhaps you can give some guidance on would be the depreciation for Cerro Moro?
Yes, I know. So David, at Cerro Moro, I think we'll be in the range of -- be a little bit higher than the average, $500 per unit.
Per ounce of gold?
Per ounce, yes.
Or gold equivalent?
For gold, yes.
Okay. Then over to Chapada, I mean we've have -- it's nice to see the multi-phased plan laid out, we have been hearing about it for quite some time, For the Phase 1 you had mentioned that with your $9 million outlay that you're expecting to have a few percent improvement on the recoveries. What is your target recoveries and would we see that come through in the second, third, fourth quarter?
So Yohann here on the line. So the target for recovery is about, I would say 1.5% to 2%, as I said, but we said we ran some pilot tests. We may expect slightly higher than that, but we are comfortable with the 2% that we disclosed. That's going to take about 9 months to do that phase and should be commissioned in the second quarter next year.
Okay. And to be specific about the percentage that you're looking at, it would be around the 60% to 62% for gold and around about the 80% for copper, is that reasonable?
Yes, it's about right. Yes.
Okay. And then you'd provided some guidance on the CapEx for Phase 1, 2 and 3, but we didn't see any sort of CapEx for what could be tied against the Suruca gold startup and I understand that you're trying to evaluate whether it's going to be strictly heap leach or heap leach and CIL. Can you give us an idea of about what you're thinking there is for the costs and also when it could come into production?
Yes, let me weight in a little bit David on that. We've already provided a feasibility study for the oxides. Now that's roughly 40,000 -- 45,000 ounces of gold per year. And the CapEx estimate was $60 million. We haven't provided any indication for the sulfides, it would require a CIL plant. We think it's a comparatively large number, but also comparatively large number of ounces of gold. If we're at 8,000 tonnes to 13,000 tonnes per day, it would imply that we will be getting several, perhaps as much as several hundreds of thousands of ounces of gold production coming from the Suruca sulfides. It's difficult at this point for us to say what's the CapEx expectation for that is. We have an internal view on what that CapEx is, but we have to take it through the normal course studies before we are ultimately in a position to say that. And one of the things that did not get caught that we will make sure that we catch more effectively on our exploration update is that Suruca sulfide is getting larger. So part of our drilling effort is on Suruca sulfides, and that will go to the question of what's the tonnage expectation, what's the reasonable prospect for Suruca sulfide. So it's premature for us at this point to say what the cost estimates would be for the sulfides. What we've done on the oxides is we've essentially said, if we're allocating our capital prudently, we can maximize our gold production, we can spend that $60 million. But we feel that we have opportunities at the existing operation with the expansion to the plant and the pushback with Sucupira and Sucupira likely getting better, as Henry mentioned, and with the addition of Baru into that, that will change the stripping ratio, that allows us to be able to deliver better returns and faster payback. And Suruca oxides continues to be there. So we're looking at it now more critically and saying, well, rather than a small heap leach operation, we have to go through the permitting process anyway for that. Let's look at it from the point of view of how would we develop Suruca as a complex and go through the permitting process for that in its entirety.
So I would expect, though, Peter that you've got some time before you'd have to address the sulfides there, correct me if I'm wrong on this, and effectively the oxides would be pre-stripping the sulfides at Suruca?
And that's correct. But the permitting process will be a similar timeline. Any land acquisitions there are -- there is some that we would have to consider, would be within the similar timeline. And while it is a good project, as Yohann mentioned, these other projects have -- if we were to queue the projects and prioritize and these other projects are coming in with better returns and at higher priority.
The next question is from Josh Wolfson of Desjardins.
First question related to Cerra Moro. I think earlier in the call it was mentioned that the mining rate is matching the processing rate. Could you discuss, I guess, what the current mining rates are and how that processing will ramp up in the second quarter?
Yes, good morning Josh. This is Gerardo. We have been -- we are starting the [ pit right ] started in the first of the year. So for April we've been targeting between 15,000 to 18,000 tonne per month and the makeup is from the underground. We expect to be at the commercial rate by the end of Q2 for both mine and underground -- sorry, and the plant.
And what we were referring to, Josh, was the 100% test. We were matching mining rates to processing rate.
Okay, thank you. And I think the earlier guidance implies something like 20,000 ounces for the first half of the year, which I guess will be the second quarter now. Is that still a comfortable target in light of the current status?
Yes, I'm not comfortable saying what the production by quarter is Josh. We -- this is a very high-grade operation and it's a tiny mining rate and plant. We said that we're going to produce 85,000 ounces for the year, that you can put high confidence on that, you can take that to the bank. But what the production is in the second quarter, we've just started operations, it would be very difficult to say if it's 20,000 ounces more than that or less than that.
Got it. And on the cash sort of side of things, the -- I guess the significant working capital outflow we saw in the first quarter, is there an expectation that any of that will reverse in upcoming quarters? And then on the long-term stockpile movement side of things, is there a number, I guess both between Chapada and Malartic for the year that you could guide us to for that requirements there?
Yes, the working capital, as I mentioned, it's normal sequence for us and if you look at our quarter-by-quarter, we have -- for Q1 and we call that back over the course of the year, because of some one-off things [ we didn't record ] all the way back, but I'd expect we did the majority of it over the course of the year. I did point out a unique situation at Cerro Moro and that's very, very common for the profile of construction spend and how that reverses that now that we're done. So that would be unique one in Q2. I've mentioned about $25 million. On the stockpiles, I think we were -- between 10 million tonnes and 15 million tonnes per quarter at Chapada stockpile.
Okay. And that was similar to the rate in the first quarter?
That would be similar.
Okay. And then For Malartic?
It was fairly small. It was less than 1 million tonnes in Q1. So not as significant there. I wouldn't focus on that.
Okay. I think it was $9 million or so for the first quarter. I have to check that. And then, sorry, last question relates to Sucupira, in the capital that was listed, it said $100 million for infrastructure. Were there additional capital requirements for the pushback or for other equipment or items that would be needed?
Well, Yohann here on the line. We're not planning to buy any other equipment. The mining rate will remain unchanged within our minor pushback. For mining, all the costs has been factorized on the model. The only capital factorized on that is we need to move all the [ infrastructure ] on surface.
Okay. And so how many -- I think it was -- I think there was the pushback that was associated with that. Do you have any idea what the quantity of tonnes that would be needed to…
I believe -- if I remember well, I believe that if we combine Baru with Sucupira, the stripping is about [ 2.8 ] at this moment.
[Operator Instructions] The next question is from Anita Soni of Crédit Suisse.
So my question is with regards to Cerro Moro, Do you have -- can you give a little bit of guidance about when you think you would go commercial and what are the kinds of tests you're looking at for commerciality?
Sure. Anita, yes, it's Jason here. I mean, it's something that we will assess over time. Like normal, we will look at the mechanical completion, are we reached sustainable production levels on throughput rate and recovery, are we generating positive cash flow. So all those things will be taken into account. I guess, we would expect a fairly quick startup and being able to achieve commercial production, given the status of the start-up that Peter and Gerardo have alluded to already, but that's something we have to assess in hindsight.
But we expect that commercial production point to be reached this quarter, Anita. So sometime in this quarter, it -- we've just started the month of May. As Gerardo touched on, this operation is going reasonably well. Likely in June, we would be hitting the commercial production point.
There are no further questions registered at this time, I would like to return the meeting back over to Mr. Marrone.
So ladies and gentlemen, let me conclude with a few thoughts. As I said on the formal part of this presentation, we're seeing significant precious metals production growth in the company. That coincides with the cost and margin improvements, clearly as a result of Cerro Moro, but other operations including Jacobina, that is performing at cost that are better than history, and of course, Canadian Malartic. That will lead to increases in cash flow and free cash flow.So we're well down the path of harvest mode, as we leave behind capital expenses and look forward to operations at Cerro Moro and increased and improved -- I emphasize the word improved production at Canadian Malartic, Jacobina, Minera Florida and other operations. We have well advanced opportunities to increase and again improve production, which similar to the development of Cerro Moro, will be looked at through the lens of high quality technical review, which is what Yohann is doing with our Chapada opportunities. And of course, as Jason mentioned, capital discipline, making sure that our balance sheet is secure, that we are adding a gating item of making sure that the balance sheet is secure before we consult with our shareholders on spending a capital on new projects. And we have several advanced options on our strategic initiatives to increase our cash balances as a complement to increasing free cash flows over the next several years and to improve our returns on invested capital.With that, ladies and gentlemen, let me conclude by saying that we have our annual meeting of shareholders, it is the 15th annual meeting of shareholders of Yamana Gold. We encourage your participation and attendance. Those of you that can attend in person, it is at the Design Exchange in Toronto at 11:00 AM. And those of you that cannot, it is being video and webcast. And thank you very much for participation on this call.
Thank you. The conference is now ended. Please disconnect your lines at this time and we thank you for your participation.