Yamana shares down more than 15 per cent after posting loss and cutting dividend

TORONTO – Shares of Yamana Gold Inc. (TSX:YRI) were hammered Thursday after it reported a US$1.02-billion loss in its latest quarter and slashed its dividend.

The stock dropped $1.02 or nearly 17 per cent at $4.99 on the Toronto Stock Exchange.

After the close of markets Wednesday, Yamana cut its quarterly dividend to 1.5 cents per share compared with its most recent payment of 3.75 cents per share.

The company, which keeps its books in U.S. dollars, reported a loss of $1.17 per share in its latest quarter compared with a profit of $43.4 million or six cents per share a year ago.

The loss included a $329.5-million non-tax charge related to Chilean tax changes and a $668.3 million impairment charge related to its C1 Santa Luz, Ernesto/Pau-a-Pique and Pilar projects in Brazil.

The company also had $17.9 million in one-time charges related to a decision to place its C1 Santa Luz project on care and maintenance.

RBC Capital Markets said the weaker financial results and lower dividend overshadowed a solid quarter operationally for the company.

RBC noted that while some investors may view the dividend cut as a negative for the company, it isn’t a bad move.

“We believe the move is a prudent decision given the low metal price environment, current debt levels and expected development of Cerro Moro,” the investment firm wrote in a note to clients.

Yamana has mines and operations in Brazil, Argentina, Chile, Mexico and Canada.