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Update On C1 Santa Luz In Brazil

TORONTO, ON - Brio Gold Inc., a subsidiary of Yamana Gold Inc. reported modified process flow sheet and results from the recently completed metallurgical testwork at the C1 Santa Luz project, located in the Bahia State of Brazil. The results of the work to date have been incorporated into a Preliminary Economic Assessment Report (PEA) in accordance with National Instrument 43-101, which includes an updated mine design and production schedule based on a new mineral resource in connection with the current operating cost estimates and recovery parameters. The PEA is being completed by Roscoe Postle Associates Inc (RPA).
"We have reached a major milestone toward the restart of C1 Santa Luz," said Gil Clausen, Brio Gold's President and Chief Executive Officer. "The modified plant flowsheet is expected to achieve average recoveries of about 83% with the mine plan designed to separate the carbonaceous minerals from the clean dacite minerals. Given the results of this metallurgical testwork and pilot plant success, we are moving onto the next stage of analysis in our re-commissioning plan. C1 Santa Luz is expected to contribute approximately 100,000 ounces per year when in full production and will bring our annual production profile to over 230,000 ounces of gold per year. This combined with the operational turnaround at Pilar and the recent exploration success at Fazenda Brasileiro point to a very robust production and cost profile in the future."
The C1 Santa Luz PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Therefore, there is no certainty that the C1 Santa Luz PEA will be realized. As a result of the PEA, there are no mineral reserves reported in connection with C1 Santa Luz at this stage. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Brio Gold, in cooperation with Yamana management, completed a five month metallurgical testwork program to develop an updated flowsheet for the processing of carbonaceous minerals at C1 Santa Luz. Three metallurgical composite samples, totaling 17 tonnes and representing the carbonaceous high to low sulphur minerals, were used for the testing program.
The testwork was performed in Australia by Gekko Systems Pty Ltd, in Brazil by Yamana and Brio Gold, and in the USA by Hazen Research Inc, utilizing batch scale and pilot plant testing methods. Both Gekko and Hazen are independent firms from Yamana and Brio Gold. The resulting flowsheet (see Appendix 1) was designed in collaboration with Gekko and Ausenco Limited ("Ausenco") and demonstrated that it is potentially viable to process the carbonaceous minerals. The new flowsheet eliminates the flotation circuit and the leaching of sulphide concentrate, and is now a "whole ore leach" of the total plant feed of carbonaceous and non-carbonaceous mineral types. This accommodates the variability in the "preg-robbing" organic carbon and sulphur concentrations in the plant feed.