Overview - The Jacobina project is located in the state of Bahia in northeastern Brazil approximately 340 km northwest of the city of Salvador. Salvador, the state capital of Bahia, has a population of 2.5 million.

The property consists of 5,996 ha of mining concessions, 129,572 ha of granted exploration concessions and 6,012 ha of filed exploration claims for a total of 141,580 ha.

Keywords   Brazil   gold   underground

The Serra do Jacobina mountains have been mined for gold since the late 17th century. Numerous old workings from artisanal miners (garimpeiros) can be seen along a 15 km strike length, following the ridges of the mountain chain. Garimpeiro activity, on a small scale, has taken place sporadically up to the present day, mining mostly weathered ores.

The modern production history of the Jacobina mine began when the processing plant was commissioned in late 1982. Low metal prices forced the closure of the mine during the 1999-2004 period, after which production began again in mid-2005.

Yamana's land package includes the Joao Belo and Morro do Vento mines - collectively known as the Jacobina Complex - and the Canavieiras, Morro do Vento Extension and Serra do Corrego development projects.

As of December 31, 2008 proven and probable reserves stood at 17.2 Mt grading 2.14g/t gold for 1.185Moz gold.

The mining method that is used at the Jacobina underground mine is the sub-level retreat open stoping method.

Ownership Summary  Name: Yamana Gold Inc    Interest: 100%    Note: by acquiring Desert Sun Mining in April 2006 Reference: 30 Sep 2007

The metallurgical process involves grinding of the run of mine material into a pulp, leaching the pulp in a conventional cyanide leaching process and then gold extraction of the enriched solution in a Carbon-In-Pulp (CIP) circuit.

Location - Brazil is bounded by the Atlantic Ocean on the east and other nations of the South American continent. It is the world's fifth largest country - larger than Australia. The official language is Portuguese and Catholicism is the predominant religion.

Location Summary Nearest Landmark: SALVADOR Distance from Landmark: 340km Direction from Landmark: NW Latitude: 11 deg 15 min S Longitude: 40 deg 31 min W Satellite Image: <click to view>

The project is located in the state of Bahia in northeastern Brazil approximately 340 km northwest of the city of Salvador. The 2.5 million people city is a key commercial centre in Brazil and is serviced by an international airport with numerous daily flights, as well as by a large port facility.

Access to the property from Salvador is via paved secondary highway to the town of Jacobina approximately 330 km north-northwest and by a well-maintained paved road from the town to the mine site and the Jacobina mine. Travel times are typically 4 to 5 hours from the mine to Salvador and less than 20 minutes from the mine to Jacobina. The town of Jacobina was founded in 1722 and is a regional agricultural centre with an official population of 76,484.

Telephone and high speed internet service have been installed at both the mine site and at the exploration offices in the town of Jacobina.

The Jacobina project is located in a region of sub-tropical, semi-arid climate with generally flat to low rolling hills - the Bahian sertao, which is largely covered with scrubby upland forests. Precipitation is somewhat higher that the regional average, likely due to the quartzite mountain range which hosts the deposits. Average annual precipitation is 84 cm with the May to October period being somewhat drier than the rest of the year. Temperatures vary little throughout the year. July is the coldest month with average daytime highs of 26 C and nightly lows of 17 C. February is the warmest month with average daily highs of 32 C and nightly lows of 20 C.

Property - The project forms a contiguous elongated rectangle extending 155 km in a north-south direction, and varying from 2.5 to 4 km in width. This shape is a reflection of the underlying geology with the gold-mineralized host rocks trending along the property's north-south axis.

Anglo American was attracted to the area in the early 1970's by what it believed was the remarkable similarity of the local gold-bearing conglomerates to the well-known Witwatersrand reefs in South Africa.

The gold mineralization of the Jacobina mine is hosted almost entirely within quartz pebble conglomerates of the Serra do Corrego Formation, the lowermost sequence of the Proterozoic-aged Jacobina Group. This formation is typically 500 m thick but locally achieves thicknesses of up to one kilometer.

The host rocks to the Jacobina gold mineralization are highly sorted and rounded quartz pebble conglomerate reefs of the Serra de Corrego Formation. Gold occurs as fine grains of 20 to 50 microns in size predominantly within well packed conglomeratic layers in which medium- to larger-sized quartz pebbles are present. The gold occurs within the matrix and often in association with pyrite and fuchsite. However, these accessory minerals also occur in the absence of gold. Gold-rich reefs show a characteristic greenish aspect because of the presence of the chromium-rich muscovite, fuchsite. Intra-reef quartzites typically contain low gold grades (less than 0.70 g/t Au). Higher concentrations of gold are often encountered within the foreset beds, adjacent to topset beds, within a cross-bedded reef although this may also reflect structural upgrading.

Reserves Summary Name: Jacobina Commodity: gold Class: Measured + Indicated Tonnage: 23.25 Mt Grade: 1.85 g/t Note: containing 1.38Moz gold Reference: 28 Feb 2007

An important example of this style of mineralization is the Canavieiras mine, an important exploration targets. The gold-bearing reefs range in size from 1.5 to 25 m wide and can be followed along strike for hundreds of meters, and in some cases for kilometers. Some contacts between reefs and the later crosscutting mafic and ultramafic intrusives are enriched in gold.

Not all conglomerates of the Serra do Corrego Formation are mineralized, and many are completely barren of gold. Although they are quite homogeneous along their strike and dip extensions, the mineralized conglomerates differ from one another in stratigraphic position and mineralization patterns. The differences are likely due to changes in the depositional environment, and possibly also in the source areas. Structure and hydrothermal solutions have had a more important role in localizing gold mineralization than previously recognized.

Despite the extensive exposure of the mine sequence most of the exploration and all of the non-artisanal mining activities have been concentrated along a 10-km long central zone.

Operation - The Joao Belo Mine was rehabilitated in 2004. The antiquated rail haulage system was removed, the drifts enlarged to accommodate mechanized equipment and new ramp development started, and in July 2004 ore development commenced. A complete fleet of new equipment was purchased from Atlas Copco and Volvo, which included 15-tonne LHDs (Load Haul Dump), 2 Volvo 35-tonne and 7 Caterpillar 45-tonne haulage trucks, electric hydraulic 2-boom jumbos, and electric hydraulic ITH (in-the-hole) production drills.

New ventilation, compressed air, and electrical systems were installed. Mine offices, heavy equipment mechanical shops, warehouses, staff facilities and a haulage road were completed by October 2004. DSM poured the first gold bar at the Joao Belo Mine in March 2005 and declared commercial production effective July 1, 2005.

The mining method that is used at the Jacobina Mine is the sub-level retreat open stoping method. Rib pillars will be left along strike where required but optimized in sections of unpay or low grade zones within the ore body. Sill pillars and stope access pillars are temporary left and removed once the mining above has been completed.

Mine Production Summary  Mine - Jacobina    Capacity: unknown     Rate: 2,500,000 t/y    Note: ore Reference: 14 Jan 2008

Mining recovery was calculated to be 88 percent. Generally, the layout provides for two parallel drill drives to be established in both the footwall contact and hanging wall contact at intervals that generally limit longhole drilling to approximately 30 m.

The drilling is by electric hydraulic tire-mounted, ITH hammer drill rigs and takes place from the sublevel to the drill drift or undercut drift. Six Atlas Copco and eight Tamrock drills are deployed in the underground.

The 2005 - 2009 development program works toward the expansion of annual production through development of additional mining areas within the immediate vicinity of the existing plant facilities to over 250,000 ounces per annum - planning included the Morro de Vento mine. There is potential for developing four additional mining areas in order to successfully achieve this goal - e.g. the higher grade Canavieiras project is located only four kilometers from the Jacobina mill.

Process - The metallurgical process at the Jacobina Mine Complex uses a simple and efficient milling process. The process involves the following activities: grinding of the run of mine material into a pulp, leaching the pulp in a conventional cyanide leaching process and then gold extraction of the enriched solution in a Carbon-In-Pulp (CIP) circuit.

The run of mine (ROM) material is hauled by trucks from the mine to the crushing facility adjacent to the processing plant. The ROM is initially sized by a 50 x 80 cm opening grizzly / rock breaker system located at the top of the primary jaw crusher. The primary jaw crusher, which is fed by an 80 tonne hopper, is 1,200 mm x 900 mm in size and has a 350 tonne per hour throughput capacity.

The product from the jaw crusher, which is smaller than 200 mm, is fed into two storage silos. The material is then feed into semi autogenous grinding mills and is ground to a nominal size of 80 percent passing 200 mesh. The No.1 Mill has the dimensions of 3,658 mm x 6,706 mm and features a single 1,342 kW motor. The No.2 Mill is 4,572 mm x 9,144 mm in size and is equipped with two 1,342 kW motors.

The pulp from the grinding circuit is then pumped to the leaching tanks. The leaching circuit consists of four 9.5 m diameter x 10.25 m high mechanically agitated leach tanks and twelve 212 m3 Pachucas. The leach residence time is 24 hours.

The pulp is then sent to the CIP circuit. The CIP circuit consists of six 5.6 m diameter x 7.8 m high, 180 m3 capacity mechanically agitated CIP tanks. The enriched carbon from the CIP circuit is removed and striped of its gold. From here, the pregnant solution is circulated through electrowinning cells and a doré gold is produced consisting of 96 percent gold and 3 percent silver.

The milling process is fully automated using modern Siemens instrumentation and automation technology for better process control.

Approximately 200 m3/hr of the 450 m3/hr make up water is reclaimed from the tailings pond. A new tailings dam will be completed in 2008 and a new pumping system was added to handle the increased throughput.

In 2006 the implementation of the expansion has begun with the installation of a cone crushing circuit which has increased plant capacity to 5,000 tonnes per day from the original 4,000 - 4,200 tonnes per day and reduced power consumption at the mills. As well, Yamana has begun engineering and mine planning to increase production to 6,500 tonnes per day by early 2008 and to 8,500 tonnes per day by the end of 2008.

Environment and Community - The mine laboratory carries out a number of analyses for process control in the plant as well as for environmental monitoring. All environmental issues are strictly monitored. The plant has a zero discharge criteria for its effluent into the environment. All the water used in the milling process is recycled. There is an environmental engineer on staff who continually monitors and evaluates the mill and mines performance

Jacobina's workforce consists of 839 employees and 363 contractors providing for a positive economic impact on local communities. The company also signed a technical cooperation agreement with BAEPA and Federal Mining Agency to support small-scale Miners Associations to promote social benefits.