Yamana Gold Inc. (AUY) is set to release its third-quarter 2014 results after the market closes on Oct 29. Last quarter, the mining company delivered a 66.67% positive surprise.

Yamana has beaten the Zacks Consensus Estimate in 2 of the trailing 4 quarters with an average positive surprise of 4.17%. The Zacks Consensus Estimate for Yamana for the third quarter has declined 16.7% to 5 cents per share over the last 7 days.

Let’s see how things are shaping up for this announcement.

Factors to Watch For

Yamana remains focused on containing costs, protecting and preserving margins and increasing production to generate, maximize and sustain cash flow. By focusing on approaches and measures that best contribute to cash flow generation, and by demonstrating strong financial performance driven by cash flow generation, the company is expected to deliver value to shareholders.

In Jun 2014, Yamana added another high quality, high margin cornerstone asset, the Canadian Malartic mine (Canadian Malartic), along with prospective exploration assets to its portfolio through a joint acquisition with Agnico Eagle of Osisko Mining Corporation. This transaction is in line with the company's goal of cash flow generation and maximization.

Canadian Malartic is expected to generate significant cash flow while continuing to be self-funding of its capital and other requirements. The mine is estimated to produce 510,000 ounces to 530,000 ounces in 2014.

Consistent with the company's operating focus in the Americas, the joint operation provides Yamana a low risk entry into the established mining friendly jurisdictions of Quebec and Ontario. It also firmly positions the company as an Americas-based company with operations and opportunities not only in South America, the company's roots, but also in North America.

Exploration at Yamana continues to be a key to unlocking value at existing operations. The 2014 program will continue to focus on finding higher quality ounces, those with the greatest potential to most quickly generate cash flow, allowing the company to grow prudently and profitably.
Earnings Whispers

Our proven model does not conclusively show that Yamana will beat the Zacks Consensus Estimate in the third quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Ranks #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Yamana is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate currently stand at 5 cents.

Zacks Rank #4 (Sell): Yamana's Zacks Rank #4 when combined with an ESP of 0.00% makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions.

Stocks That Warrant a Look

Here are some other mining companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

U.S. Silica Holdings, Inc. (SLCA) has an earnings ESP of +4.41% and a Zacks Rank #2 (Buy).

Newmont Mining Corp. (NEM) has an earnings ESP of +11.11% and a Zacks Rank #3 (Hold).

Cameco Corp. (CCJ) has an earnings ESP of +40% with a Zacks Rank #3 (Hold).

Read the Full Research Report on AUY
Read the Full Research Report on NEM
Read the Full Research Report on SLCA
Read the Full Research Report on CCJ


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