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Is Yamana Gold (NYSE:AUY) Stock A Buy?


Gold is likely to have another solid year again in 2018 as global money printing continues, albeit at a slower pace. Current sentiment towards gold is somewhat unenthusiastic, perhaps due to the current cryptocurrencies (“cryptos”) debate. Hence the elephant in the room is will investors buy gold or cryptos, such as Bitcoin, in 2018. If gold has a good year, so should AUY stock. 

Yamana Gold Inc. (NYSE:AUY) is a gold producer company, which engages in production, development and exploration of gold properties and land positions in Argentina, Mexico, Brazil, and Columbia. The company was founded by Peter J. Marrone on July 31, 2003 and is headquartered in Toronto, Canada. 

Yamana Gold (NYSE:AUY) operates with 6 gold mines. The company has a total cost of production of around $905/oz (AISC), which is set to fall going forward.  Most of Yamaha Gold's all-in-sustainig-costs (AISC) are falling.  



Their flagship asset is the Cerro Moro gold-silver project in Argentina. It is due to commence production about April 2018 and ramp up from there. Operating costs are forecast to be very low at around $600/oz for a production estimate of 80,000 ounces in FY 2018. The main issue right now for the company is increased capital expenditure (and reduced cash flow) as they construct the new Cerro Moro mine.
 

Yamana Gold Inc. has a market cap of $2.9 Billion and an enterprise value of $4.6 Billion. 2018 PE is 21.5. Net profit margins for 2017 are forecast to be 0.80% and 7.55% in 2018. Company debt is $1.7 Billion. Dividend yield is 0.64%. Analyst consensus estimates are for a target price of $3.70, with a hold rating. I would rate Yamana Gold (NYSE:AUY) an accumulate based on a rising production profile and falling operating costs.