Daniel Racine - President & CEO Yohann Bouchard - SVP, Operations Jason LeBlanc - SVP, Finance & CFO Gerardo Fernandez - SVP, Southern Operations

Mike Parkin - National Bank Financial David Haughton - CIBC Capital Markets Michael Jalonen - Bank of America Merrill Lynch Carey MacRury - Canaccord Genuity Limited Mark Llanes - Credit Suisse Dan Rollins - RBC Capital Markets Steven Butler - JMP Securities

Thank you all for joining us this morning. Before I turn the call over, I need to advise that certain statements made during this call today may contain forward-looking information and actual results could differ from the conclusions or projections in that forward-looking information, which include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, future metal prices, and the cost and timing of the development of new projects. For a complete discussion of the risks, uncertainties and factors which may lead to actual financial results and performance being different from the estimates contained in the forward-looking statements, please refer to Yamana's press release issued yesterday, announcing third quarter 2018 results, as well as the management's discussion and analysis for the same period and other regulatory filings in Canada and the United States. I would like to remind everyone that this conference call is being recorded and will be available for replay today at 12:00 PM Eastern Time. Replay information and the presentation slides accompanying this conference call and webcast are available on Yamana's website at yamana.com. I will now turn the call over to Mr. Daniel Racine, President and Chief Executive Officer.

Thank you, operator. Good morning and welcome to our third quarter conference call. With me on the call today are Yohann Bouchard, our Senior VP, Operations; and Jason LeBlanc, our CFO. The rest of management is also with us in the room and will be available for the Q&A portion of the call. Talking about management during Q3, some changes have been made. Peter is now in the new role of Executive Chairman, mostly focusing on strategy and longer term planning on BF [ph] of our board. And I have assumed the President and CEO role with all the normal responsibilities that goes into that role. We have also simplified our operations oversight to have all GMs reporting directly to Yohann and move Gerardo to oversee our technical service and projects. Peter is not here today as he deals with some of these items, but we would be able to answer any questions. If we now look at our third quarter progress, I'm pleased to say that we have continued to execute. We maintain our focus on operation excellence by delivering production and improving our cost. Building on a strong first half we produced above our expectations with 279,000 gold ounces equivalent including 247,000 ounces of gold and 2.5 million ounces of silver. We also produced over 20 million pound of copper. On a byproduct basis, taking copper as a byproduct credit our GEO, cash costs and all-in sustaining costs were respectively $482 and $739 per ounces. This production was delivered at cost or lower than our guidance across all metrics. We saw strong production contribution from Chapada, El Peñón, Canadian Malartic, Jacobina and importantly, the first full quarter from our new mine Cerro Moro. With strong production through nine months we are increasing gold production guidance to 920,000 ounces, and copper guidance to 150 million pound. The increased gold production guidance more than offset our lighter than planned silver production. So we are still tracking well to our original gold equivalent guidance. Yohann will go through in more detail but I want to highlight that this increased guidance comes in part due to the performance at Cerro Moro; with the progress at this operation, we are confident that it will meet and exceed the original guidance. That confidence plus the above expectation production at many of our other mines led to the decision to increase portfolio guidance. On Cerro Moro I want to highlight that Q3 production was an impressive 38,000 ounces of gold at an average grade of 16.15 gram per tonne, and a recovery of 92.5%. On the cost front, increased production guidance is also contributing to an improving cost outlook; plus we are seeing currency tailwind which Jason will discuss in more detail. We are already in line with or below our cost metric, and with an expected strong Q4 we believe full year cost will be below the cost ranges we provided earlier this year. Our exploration program is advancing discoveries with a focus on our existing operation. We are having good success with our drill programs and we expect reserve and resources increase at many of our operation when we announced year-end results in February. As you saw last night, we announced the sale of Gualcamayo, an asset that we had already categorized as out-for-sale. We will receive $30 million in cash on closing with further upside to participate in medium to long-term term, a value creation at the asset. The participation include NSRs on production from Gualcamayo that might come through oxide exploration success and/or if the deep carbon production is billed [ph]. There are also a $30 million payment if deep carbonate is brought to commercial production. The total value of consideration for Gualcamayo is in line with recent market valuation for comparable asset. These valuation are reflective of the current commodity price which is approximately $100 per ounces of gold lower than it's December 31, 2017. The store [ph] old value is estimated at approximately to $85 million and as such the carrying value of Gualcamayo has been reduced to this amount. Separately the company has option ---- project in Chile. Also to minerals, both deal structure provided low-risk approach to surface while preserving exposure to upside value. Our view for some time has been to focus on operation and project where there is more certainty on production costs marginalized [ph] in capital requirements. These transactions are consistent with the company's focus. The operation for the third quarter were solid, both with respect to production and cost, yet decline in metal price weighted on the company's financial results. However, with the delivered adjusted earnings of $23.6 million or $0.02 per share, the most notable item was the after-tax, $75 million reduction in value related to Gualcamayo. Ultimately, we were able to deliver $49 million in net free cash flow when looking at our cash flow in the quarter, it is important to account for the impact of the copper prepay program which Jason will speak to in more detail. As I mentioned, we have updated guidance for all metals. For gold, we are now expecting 920,000 ounces from original guidance of 900,000 ounces. Year-to-date, we have produced 675,000 ounces which leave approximately 250,000 ounces to be produced in Q4, a minimal increase over Q2 production of 247,000 ounces. For silver, we have lightened our guidance to 7.55 million ounces compared to 8.15 million ounces. The reduction in silver guidance is attributable entirely to lower than planned silver production at El Peñón; we are on-track at Cerro Moro to achieve original guidance. For copper, we are expecting 125 million pound, up 5 million pound from original guidance. With 90 million pound produced year-to-date, we're expecting approximately 35 million pound in the fourth quarter. We have not updated our cost guidance but we are providing directional information that we're now expecting operating cost to be below previously provided guidance. Looking at this chart, we see that year-to-date cash costs and all-in sustaining costs are below guidance for all metals already, with the fourth quarter expected to be our highest production level of the year, we anticipated continued improvement to per unit costs. I will now turn the call over to Yohann to discuss our mine-by-mine result.

Thank you, Daniel. With Chapada we add another strong quarter with production exceeding expectation. Based on Chapada's performance to-date and our forecast for our production in the fourth quarter, full year copper production is now expected to be at above target, 25 million pounds, which is 5 million pounds more than the original guidance. We do more, we had a strong recoveries for both copper and gold in the quarter, despite processing a blend that's historically has been challenging to process. The blend include about 700,000 tons of lower grade and slightly oxidized material from the stockpile. And so, we're claiming from stockpile allowed us to focus on the waste tripping in the Corpu Sul pit. We expect to see the benefits of this movement in the fourth quarter as the mine sequence calls for higher proportion of fresh ore from Corpu Sul and the main Chapada pit. This should result in higher grade and recoveries that are in the fourth quarter. We continue to optimize and fuel the operation, our exploration program is advancing discoveries such as the close to surface higher-grade mineralization called Baru Northeast, located nearby the processing plant. From a mining perspective, Baru Northeast is presenting a very compelling short-term option to increase gold and copper production at significant lower cost due to low ratio and proximities to the crushing facility. Finally I'm pleased with the progress accomplished at Chapada through the first 9 months of the year. The team continued to advance the [indiscernible] study of our phasing approach that was announced earlier this year. Chapada is a large end, a long life asset with significant value that still beats to surface. El Peñón gold production was in line with expectation for the quarter and then we are positioned to meet gold production guidance for the year. We are transitioning to higher grade zones which was seen since the beginning of October. In addition, we are -- we expect the higher gold grade to continue through the fourth quarter. Silver production has been below expectation and we have revived full year guidance down to 3.8 million ounces. Silver recoveries have struck below plan; this is mainly the result of an increase in the proportion of silver sulfphides and silver sulphosalts from Venture and other higher-grade zones. We continue -- we anticipate mitigating the impact of these five [ph] in the fourth quarter with the increase with clean air development that should open additional working and have to blending flexibility. On other hand, the internalization of air development activities caused some delay in the sequence with a greater impact on silver grade. The operation has now reached the desired linear development rate which positions with positive results so far in October. Higher proportion of gold mine compared to silver impacted unit gold cost in the third quarter as proportionately more costs were allocated to gold. The impact of this allocation on gold cost was partially offset by the depreciation of the Chilean pesos. Lastly, higher than planned gold production through the first nine months is partially compensating for lower silver production on the gold basis. While Canadian market continued to be a solid and steady operation; higher than planned grade continue to drive higher than expected production and the operation is well positioned to exceed the 2018 guidance. The higher production and weaker Canadian dollar contribute to costs, that were lower than full year guidance. The Canadian Malartic expansion project is continuing according to plan, and we have revised to follow expansionary CapEx to $37.5 million on a 50% basis for 2018 which reflects certain deferral into 2019. $30 million of that is for the expansion project and from that amount, about $18 million has been invested to-date. Jacobina continued to exceed the production expectation and it's on-track to exceed the 2018 guidance of 135,000 ounces of gold. The third quarter milling rate were lower than the previous quarter due to planned maintenance. However, the higher grade from Canavieiras Central, Canavieiras Sul and João Belo offset the impact of lower tonne mills. We expect processing rate to normalize in the fourth quarter. Costs are benefiting from the higher gold production and the weaker local currency. In parallel, I'm doing optimization and cost control initiatives driven by our operation excellence teams or influencing cost positively. The exploration program is continuing to focus on infill drilling at João Belo, Canavieiras Sul; we're also testing potential target at Serra de Córrego. To be more specific, Canavieiras Sul drilling has discovered a new zone at Maneira Reef which opens up potential for future expansion of mineral resources. At João Belo, drilling has continuously intersected mineralization at higher grades than the current mine. And at the Serra do Corrego zone drilling confirmed a continuity for at least 500 in strike length. So Jacobina is delivering a solid and increasing production while we continue to reduce costs and expand known mineralization on the property. We are progressing with a target of achieving a production rate of 150,000 ounces a year at Jacobina and I'm very pleased that Jacobina has reached the milestone of being a sustainable producer of minimum of 140,000 ounces per year. At Florida, third quarter production was 31% higher than the second quarter, mainly due to the contribution of higher-grades from Pataguas and PVS. The fourth quarter production is expected to maintain the momentum reflecting the higher grades from Pataguas and PVS which in September averaged 4.2 grams per tonne. The operation is continuing at focusing on the development of the ventilation system in the Pataguas and PVS area with the effect of improving further productivities of higher grades workings. All per unit cost metrics were about 15% lower compared to the second quarter of 2018 due to higher production and the depreciation of the Chilean Peso. The costs for the balance of the year will continue to improve as mining is transitioning to more productive mining area in the new mine. This should also increase production due to higher grade mines. Cerro Moro had successful first quarter of commercial production as the slow cost operation is ramping up. We are well positioned to exceed on the 2018 production guidance with a third quarter production of 38,000 ounces of gold and 1.7 million ounces of silver. Cerro Moro is a strong contributor to the overall performance and we're seeing production run rate already at level needed to meet guidance for 2018 and 2019. We are delivering this strong production at cost in line with a level guide for both years. Inventory at quarter end was a bit high due to the timing of shipment, production exceeds sales by about 9,000 ounces and 640,000 ounces of silver. We expect inventory to normalize in the fourth quarter at roughly half the current levels. With the operation ramping up, we've been able to increase retention to the exploration potential on the property. We are focused on the conversion of inferred mineral resources with the majority of the work competed on the Veronica vein, Escondida Far West, Martina and the Nini Extension. The conversion number have exceeded internal expectations and will likely account for an increase in mineral resources at year end. Well, I will now turn the call to Jason.

Thank you, Yohann and good morning, everyone. Turning now to financial performance; we delivered $417 million of revenue in the quarter. Production in mine-based cost attained strong results at our operations as revenue and gross margins were impacted by lower prices for gold and silver compared to third quarter last year along with recent quarters. Revenue in the quarter was also impacted by the timing of shipments at Cerro Moro where production exceeded sales which was just mentioned by Yohann. Our G&A expense was roughly $19 million for the quarter and we are tracking well to come in below our full year guidance as we continue to focus on efficiencies. Net loss attributable to Yamana equityholders for the quarter was $81 million or $0.09 per share. Included in earnings are certain non-cash and other items not reflective of ongoing operations. And most notable being a $75 million after-tax reduction of the accounting carrying value of Gualcamayo. This reflects the consideration from the announced sale of this asset and a resulting carrying value of approximately $85 million. However, we think the structure of the sale consideration provides the meaningful opportunity to recognize value beyond this current level overtime. Taking the Gualcamayo adjustment among other items into consideration, earnings per share would be impacted positively by $0.11 resulting in adjusted earnings of $0.02 per share. Another item I would like to mention is the recently proposed export tax in Argentina that was set up for pesos per dollar of exports by cap to 12%. We accrued approximately $2.5 million of related tax expenses on exports during the quarter. However, we continue to discuss the proposed measuring country and pursue solutions to ensure our fiscal stability agreements which reflect the maximum rate of 5% as expected [ph]. In terms of cash flow, despite the strong operational performance, lower metal prices, compressed margins and negatively impacted cash flows in the quarter. However, as Yohann pointed out the effect that our copper advanced sales program had on our cash flow. We delivered about 13 million pounds of copper into that program in this quarter although the associated proceeds of about $41 million were received back in Q1 as part of an overall $125 million payment under the program. If not for that timing difference, cash flows would have been $41 million higher this quarter which is reflective of what the normalized cash flows look like at about $128 million. Q3 was the largest delivery quarter under this program with the client commitments over the next three quarters through Q2 of 2019. The rated cash flows, we had a negative working capital movement of about $22 million in the quarter. This was a little larger than expected from a quarter ago but was mainly impacted by the timing of sales at Gualcamayo. I still anticipate a positive working capital impact in Q4 in the range of about $30 million at the end of the year. For Q4 we're positioned to have our highest quarterly production levels of the year across all of our metals. Furthermore, we also expect Q4 to be the lowest unit cost quarter for the year and consequently will deliver higher cash flow generation. There has been a weakness in a number of our operating currencies relative to U.S. dollar throughout 2018 but we expect the most significant on our cost structure during Q4. The recent devaluation provided a strategic opportunity to lock-in the U.S. dollar of our in-country Brazilian operating cost for 2019. Consistent with our prior approach, we executed foreign exchange option contracts to lock-in some of these benefits while still providing flexibility and participation to weaker local currencies. In doing so, we have supplemented our increasing production profile and partly secured our cash flow generation during 2019. I'll wrap up with some final thoughts to put our Q3 performance in a broader perspective. We have right-sized our portfolio, which means we are focusing on assets that contribute most meaningfully to production and financial metrics. We have also right sized specific assets to ensure that production contributes to cash flow, and ultimately free cash flow. As we look to create value, we have a portfolio of producing assets that provides significant opportunities to build on the current production platform and either deliver more ounces and pounds or lower unit costs. Our production is diversified across four countries, each with a history of mining, and within some of the best mining areas of those countries. Furthermore, with production diversified across these countries and our three metals, we also have natural hedges to absorb commodity and input price volatility. The focus on core assets in allocating management time is the most prospective opportunities is supporting our ongoing delivery of operational performance. Yamana has a trend of operational performance going back many years. In 2017 and 2018 year-to-date demonstrates this approach particularly well. Finally, with the continued operational performance that's expected, we'll see this manifested in both, short and medium-term steep changes in our free cash flow and earnings growth. And with that, we'd like to now open the call to questions.

[Operator Instructions] And the first question is from [indiscernible].

So firstly, I'd like to dive a little bit more into Cerro Moro optimization and how it relates to the unit cost structure? I'm just wondering how much more can be done. For example, is there still higher labor and contractors on-site even as you transition to commercial production? And are there any labor productivity issues that could still be addressed?

I'd like to say that Cerro Moro just went through a start-up. I mean this is our first month of commercial production and for sure, there is always opportunities to do better. I have the chance to visit the mines, I would say six weeks ago for the first time and we have some very good exchange with the people in place there and we all see good opportunities. So from a purview, there is no doubt that we can do some change with maybe a little bit of the mining concept underground and be able to lower down our costs further.

Regarding the contractor there is no more construction, this is just limited; construction is done as basically our own people doing the operation underground. The only contractor basically the SST [ph] open pit contractor.

Yes, that's why we are pretty much old completing construction, just wrapping up BPCM [ph] contract, we're closing invoices pretty much and during Q3 there is maybe one, or two outstanding. As Daniel was saying, the open pit is mined by contractor, it's accompanied with lots of experience in the type of mining metal we do on surface. The team is very successful from the start, there is a running rate with very competitive cost. Please remember that most of the two -- over 60% of the first year and the second year -- 60% to 70% of the production for Cerro Moro comes from the open pit and there is hyperactivity low cost ore that gives time for then the ground to build a development and also build in training under people and increase the productivity which is what Yohann was referring to.

Maybe one for Jason, and -- can you address sort of the streamlined management structure? I'd like to get a little bit more flavor on what you think the view or the impact is going to be to annual SG&A?

I'll provide some initial thoughts and then maybe Daniel wanted to add anything else beyond the financial impact. But we're finding -- it's really an ongoing attempt, we've talked about this over the last number of years how we've streamlined our structure here in Torino [ph] and now that we've had this group here, we're really just building on that process over the last number of years. So literally, to talk about what the 2019 run rate would look like but I did mention in my notes that we're going to be below our guidance level for the quarter and I've put that in the context of plus or minus $5 million.

Your next question comes from Mike Parkin from National Bank Financial.

When do you expect the Gualcamayo sale to close?

Fourth quarter, probably mid-December or something like that.

And then, on Cerro Moro, can you just make a comment on -- grade has looked really good there. How are they trending relative to the block model? Are you seeing positive grade reconciliation, and if so, are you seeing it more with gold and silver? Similar or any comments would help.

Both are right in line, so reconciliation for both gold and silver right in line with our resources and reserve. The main differences are dilution is a bit lower than planned. On the grade itself, it's right on target.

And is that open pit contractor, does they have any kind of -- how are they kind of compensated? Is there any incentive plan for minimum dilution?

For the following, they are supervised by our own people; so they are following our mining plant we have. Then we have geologists on-site all the time to make sure that they follow our drilling patterns and the ground, both open pit underground and underground is a bit better quality than we were expecting. So all-in-all, they are paid by cubic meter or tonne move at the end of the day of ore and waste, but we make sure that they follow our instruction.

The next question is from David Haughton from CIBC.

A question on the Gualcamayo sale; I'm not familiar with Minera's as say, do they have the $30 million in cash or is the deal contingent upon some sort of financing at their end?

No, no, they have -- Minera is a private Colombian company, they are listed in Columbia. Their intent I think -- they said it in their release, and tend this to be listed in North America but it's an operator in Columbia and the Caragua [ph] and they have to cashing it.

So there is no financing as anticipated with the closure of this deal? So, just…

No, not for this deal, no.

Over to Cerro Moro; can you give us a sense as to what kind of production you're getting from the open pit compared to the underground? I didn't see any commentary on the source of ore, and I am just wondering how that mix will change through time here?

It's about 70/. 30 This our plan, David. And then it's going to go down with time as we -- our plan, David. And it's going to go down with time as we in the open pit has a shorter on mine life than the underground. It's going down a bit next year and then the year after, but you know with the success we have in exploration, that's changing all the time. Now we have the Veronica vein that's going to be put into production probably next year. So that you will maintain the open pit portion of it. But for this year, it's 70-30, and we are achieving that right now.

Okay because they are to open, at least on reserves is on really 600,000 tonnes available to it. Was slightly lower grade than the underground, so I'm just sort of factoring that in and the kind of number that we're seeing at 11 gray -- at 6 grams gold on average, what's your expectation of that moving forward? It's quite a bit better than what I would have anticipated and I presume that it's going to decreased through time.

Yes, we'll decrease during that with time because your average reserve grade is 11.6, if I remember right. We are mining above reserve grade is mostly we are mining Escondida Far West to are the greatest the highest on all the zones both on the ground underground in the open. And like I mentioned, David, the dilution is will lower underground and also in the open pit to that explain the better grade.

Okay. So we're still in Argentina. Two questions probably for Jason, if that's okay. How are you accounting for the Argentine export tax? Are we seeing that as a separate item somewhere in the P&L? Or is it going to be pushed down to the mine level? What's -- where is that reflected?

Yes, David, as we mentioned it's $3.5 million and as an tax recollect that is reduction in our revenues.

Leukocytes in the revenues. Keepers of for the build of our inventories in Cerro Moro, understand, given early stage, but do you expect for that to unwind in Q4? Or not a fit leave out of it in Q4?

Yes, that's exactly we have seen that process start already so I'd say an approximate have the that inventory to a normalized run rate so there's probably $10 million benefit to dramatic metal prices.

Okay. I do have two more questions, possibly for Yohann. Looking at Jacobina, your production rate was 5,200 per day around about in Q3. Do you still have a goal of moving that of to 6,000 tonnes a day in 2019? And what kind of trajectory should we be thinking about for that?

Yes, absolutely. In Q3, we have a bigger shutdown because we did some work on our bone notes. So basically, the gold is to be, I would say, pricing rate of about 6,200 tonnes per day for sure.

In the first half of '19, 2019?

We are going to ramp up, I would say. We are going to do some really investment in the processing plant really minor investment to gain on reliability, but it will not be a big deal. The goal would be to reach, I would say, a personal REIT of 150,000 ounces per year in Q3 or Q4 of next year.

Okay. And similar question for Florida, 2,200 tonnes a day in Q3. I had assumed that the goal was to get up to 2.5. Just wondering what the possibility of that right now.

Yes, absolutely. I mean, we're still pending our new mining zones, which is Pataguas and PVS, so we are still developing our ventilation circuit and as soon, and we have our ventilation, we'd be able to improve our productivity is in that area. And be able to feed the mill, I would say, with higher throughput.

The next question is from Michael Jalonen from Bank of America Merrill Lynch.

Two questions, Dan. One for you, one for Jason. Just wondered if Yamana looked at other asset sales. And then secondly, Jason, I noticed that debt increase in the quarter. Is it -- you mentioned free cash flow growth. Is there a debt reduction target you have for Yamana within the next year?

Mike, for your first question, we're looking for other asset sale, the answer is no. Everybody knows that we are looking at potential for Agua Rica. So that's mainly what we're working. We are working our technical service with charter, we are working on a standalone operation. But at the same time, the center parties that are interested, we'll see. But on now we have 6 operation and then we're pretty happy of all of them. And in Gualcamayo, we put it early this year for an asset for sale. It's a great asset, and we're really happy that Mineros is taking it over. [Indiscernible] are going to spend efforts on expiration on the oxide and on the deep carbonate and continue to run the mine as we have these plan for the next few years. Monotheists on the debts, Mike, that's definitely the plan we talked about we said we returned free cash leads in '18 with the completion of Cerro and then everything kind the lines up for 2019. So that's a more significant net reduction year for us. I do expect to see that in Q4 to start to kick in, as I mentioned, going to be our best production lowest-cost quarter. So what we talked about is that leverage basis on 1.5 turns over the next couple of years in an absolute that support in the range of plus or minus $300 million over the next several years that's going to be dependent on commodity prices and we'll try to adjust to those conditions in the market and stayed true to those targets.

The next question is from Carrie Macquarie from Canaccord Genuity.

Just question on the realized copper price for the quarter. Just understand just you have the edges forward sales just wondering are there any adjustments in their this quarter?

No, nothing realized prices have been impacted by the copper. We were able to significantly that reflected through 39 million pounds at about 3.15 per pond, which was quite a above the market price.

You realize presswood price was too late in?

Yes, that's impacted by market prices otherwise.

The next question is from Mark Llanes from Credit Suisse.

I believe most of my questions have already been asked. But just a housekeeping question on my and. Noticed I noticed of the new in the MD&A you have $58 million in sustaining CapEx that you are expecting for Q4. I believe your guidance for the year was $170 million. So if I think the year-to-date that the be tracking about that. And can you point me to which particular asset that driving that increase?

Yes, just, Mark, that would be two places that we made some smaller investments at both Chapada and in term of equipment that was initially planned and the mix of ore at Chapada over the course of the year was more to your capital versus OpEx. So in that case, no net change in the effect. It's just categorization, but basically those two assets you've had Chapada and Jacobina.

The next question is from Dan Rollins from RBC Capital Markets.

Dan, I was wondering if you could maybe touch base on some of the assets where you expect to see reserve growth this year? I know you guys are spending a lot of money building up the resources side of things, but I think Mark will be nice to see that converted to reserve the as well as your maybe touch base where you are seeing some upsides and then we are you see that potentially going over the next couple of years?

Yes, expiration. Our success and focus in increasing reserves has been in Brazil. We expect to see a really significant increase in Jacobina not only on reserves but also in the grade. We've been focusing on increasing grade with Cerro area as well as in the drilling at that kind of ERS. And Chapada as well we have really been looking to fill a gap include production, so we are going to see a significant increase in reserves, both at the new discovery we have Borough Northeast as well as an increase in reserves on Sucupira and Baru itself and continuing to increase reserves as well on our Suruca deposit. And the other success we're having is in Chile. We'll see an increasing reserves at La Florida we are building on the inferred that we discovered last year and declared last year, and we are converting. Was previous reserves this year.

And at El Peñón, have you had much success to the known outside about 1.5 years ago, you're starting to continue systems. But is that a system where you think you can continue to replenish reserves or do you really need to think you can continue to replenish reserves? Or do you really need to find a new productive discovery there?

I think at El Peñón, we're going to see probably a slight decrease. We are probably going to see more depletion replacement of reserves although we will have a significant number for new reserves in the year. And the other site, which I haven't mentioned, is Cerro Moro. We mentioned last year the end of last year the Veronica discovery. So at Cerro Moro, we have also going to see an increase in reserves replacing the 2018 production there.

Okay that's great. Jason, maybe just provide a little more color year-to-date at a fairly significant working capital draw down there. When we start to see that begin to unwind? Or expected we might have started to see that already here in Q3, but just with respect to that, there free cash flow generation that's supposed to be coming to try to get a little bit of clarity on that and also second question is when do you get to a point in time or you're not having to realize on drawing and paying down your revolver within the fiscal quarter? Because I think that would further strengthen the view that the free cash flow generation is here to stay for Yamana?

Yes, for sure, Dan. Yes, I think previously, I would have referenced 2H level of working at a little bit more backend loaded as we thought probably 3 months ago. And as I said, there's a few factors so that primarily with the Cerro Moro timing there. I also mentioned before, think of what happened this year, most significantly with Cerro Moro, new startup, so we are building inventory there, paying down the buildup all for the payables that the course over the course of the construction project. So that's $20 million to $30 million impact. VAT year-to-date probably $20 million. So those are the 2 I'll call it one-time events that we don't see and then also we said our payables are running a little bit how yes, we went into the year 2017. So we've normalized those. We are down about $70 million, $80 million year-to-date. So again, we are back to a more normalized level and as a referenced on the call, we'll see positive working capital inflow in Q4 and associated with the strong production quarter, yes, we don't expect to be relying on that for us.

The next question is from Steven Butler from JMP Securities.

Jason, you talked earlier in your remarks about your evaluation of local currencies. Obviously, Argentina and Brazil being are the latest corporates beneficiaries for you. How much of an impact should we expect maybe we can go from your financials or level of energy or FX options but while the maybe based on where we are today, what kind of impact would you expect to end your cost or impact from Q3 to Q4 for currency devaluation?

I think on a consolidated basis, Steve, hard to say somewhere in like $5 to $10 of consolidated impact.

There are no further questions at this time. I'd like to try turn the meeting back over to Mr. Daniel Racine.

Operator, thank you, everyone, for attending our third quarter conference call. I think we have a great quarter again on production and cost. Q4 is going to be even better for us. We are quite happy about the fact that we had an agreement, and we work hard to have an agreement and good partner coming to welcome with Mineros. So BC quarter 41st quarter for me. But a lot more interesting 1 to come. Thank you very much,.

Thank you. The conference has now ended. Please disconnect your lines at this time, and thank you for your participation.