In addition to this new cost reduction initiative, the Company will continue with other margin expansion plans such as the automation of operations that have been ongoing over a longer period. The Company is committed to deliver positive results at every operation in the portfolio and will consider other alternatives at those operations that deliver the least improvement. Over the longer term, as current commodity price levels are better reflected in input costs and currencies, the Company will strive to reflect this through further margin expansion. The Company remains focused on the preservation and increase in margins to generate stronger free cash flow.
Silver production is expected to be consistent at between 8 million to 9 million ounces in each of 2013 and 2014. Silver production is reported as gold equivalent ounces and included in the above forecasts at a ratio of 50:1.
Copper production is expected to be in the range of 120 million to 135 million pounds in 2013 and 130 million to 145 million pounds in 2014. These estimates reflect the production from Chapada and do not include the attributable production from the Company's 12.5% interest in Alumbrera.
By 2015, production is targeted to be at a sustainable level of approximately 1.75 million GEO. This includes production from the existing mines and development projects. Planned sustainable production will be augmented by additional production from the projects that are now being evaluated, particularly from the Cerro Moro project for which an exploration program as well as a feasibility study are being advanced. Expected production from these projects is not included in the projected total but could increase sustainable production levels.
Cash costs for 2013 are forecast to be below $365 per GEO assuming base metal by-product credits at a price of $4.00 per pound of copper.
The 2013 exploration program will continue to focus on increasing mineral reserves and mineral resources with its near-mine and regional exploration programs, as well as continuing to explore identified greenfield targets and identify new targets.
In addition to $1.0 billion of available cash and undrawn credit available at March 31, 2013, the Company expects significant increases in cash flows by the fourth quarter of 2013 after completion of the current development projects. The Company continues to evaluate additional growth projects with the objective of maximizing cash flows. Net free cash flow is expected to increase as the Company's capital requirements decrease into 2014 and cash flow from operations increases.
Further details of the 2013 first quarter results can be found in the Company's unaudited Management's Discussion and Analysis and unaudited Consolidated Financial Statements at http://www.yamana.com/Investors/FinancialCorporateReports.
FIRST QUARTER CONFERENCE CALL
Q1 Conference Call Information for Wednesday May 1, 2013, 8:30 a.m. ET
Toll Free (North America): 1-800-355-4959Toronto Local and International 416-695-6616International: Participant Audio Webcast: www.yamana.com
Q1 Conference Call REPLAY:
Toll Free Replay Call (North America): 1-800-408-3053 Passcode 9088417Toronto Local and International: 905-694-9451 Passcode 9088417