Update On Riacho Dos Machados Mine In Brazil

TORONTO, ON - Yamana Gold Inc. reported on an update to the Company's consolidated guidance incorporating 2016 to 2018 production estimates and 2016 costs for the Riacho dos Machados mine (RDM) in Brazil. The Company continues to focus on operational execution in the first quarter of 2016 with production of approximately 308,000 ounces of gold, 1.9 million ounces of silver and 26.0 million pounds of copper, all of which meet or exceed budget and previously provided guidance. In the quarter, there were three debits that offset the copper credit which resulted in higher by-product ASICs as compared to co-product ASICs which were lower. These debits relate to i) a one-time change in approach to intra-quarter quotational period hedging; ii) an intra-quarter copper in concentrate quantity adjustment; and iii) a one-time buildup of physical copper for delivery of copper pursuant to the Sandstorm Gold Ltd. copper purchase agreement. Co-product ASICs for gold and silver were less than $795 per ounce and $10.60 per ounce, respectively. Both by-product ASIC and co-product ASIC for the quarter are in line with guidance expectations with by-product ASIC expected to further improve throughout the year. Despite local currencies in the first quarter of 2016 being stronger, on average, than assumed in guidance, costs were in line with first quarter expectations.

The acquisition of RDM will increase the production profile of the Brio Gold division to an initial annualized production at full capacity of approximately 250,000 gold ounces, which would further increase to approximately 350,000 gold ounces assuming the recommissioning of C1 Santa Luz. For 2016, the Company is focused on optimizing production and costs from and value for RDM, thereby improving the production and value of the Brio Gold division. Among the efforts toward that optimization, a new water storage facility will be built this year to allow for sustained production at RDM. A critical limitation to full scale mine and plant operation until now has been limited water availability due to insufficiency of funds for a water storage facility. Completion of the facility by end of year will increase production from 55,000 ounces in 2016, with the portion attributable to the Company of 30,000 ounces, to over 104,000 ounces in 2018 increasing significantly the cash flow contribution to the Company.

With the addition of the RDM mine to Yamana's portfolio, the Company is updating its 2016, 2017 and 2018 gold production guidance and 2016 gold cash cost guidance.

Production guidance does not include production from C1 Santa Luz, which would not begin until 2017, subject to completion of technical studies by mid-2016, increased production at Canadian Malartic from the Barnat extension, which would not begin until 2018, subject to receipt of required permits which are in progress, and any further increases in production at other mines as a result of optimizations that are under review. Further information will be provided as these technical studies are completed for C1 Santa Luz and receipt of permits for Canadian Malartic.