Fri Oct 28, 2005 03:36 PM ET

RIO DE JANEIRO, Brazil, Oct 28 (Reuters) - Canada's Yamana Gold Inc. (YRI.TO: Quote,Profile, Research) is advancing three new Brazilian gold projects, which will raise output by
nearly 500,000 ounces in 2008, company president Peter Marrone said on Friday. Yamana expects to produce between 120,000 and 125,000 ounces of gold from its Fazenda
Brasileiro mine in Bahia state and Fazenda Nova mine in Goias state in 2005.

Production is due to start at the Sao Francisco mine in Mato Grosso at the end of 2005 and at the Chapada mine in Goias state by the end of 2006, five months ahead of schedule.

The two mines will raise total output by 265,000 ounces next year and by 400,000 ounces in 2007.

"We are ahead of schedule and on budget," Marrone told Reuters by phone from the company's Toronto headquarters.

He added that Yamana will be producing 100 million pounds of copper byproduct in 2007 and 185 million pounds in 2008.

Yamana has been spending just over $1 million monthly on exploration this year to ensure production growth.

Scoping and feasibility studies are envisaged at the C1 Santa Luz and Ernesto mining properties and the feasibility study will be updated at Sao Vicente in Mato Grosso state, Marrone said.

"The three projects would produce 200,000 ounces of gold annually from 2008 and help achieve sustainable production of at least 500,000 ounces a year through 2015," Marrone said.

Further exploration work showed extra reserves at Sao Francisco so that mine's life could be extended by 2-1/2 years at the existing average output of 108,000 ounces of gold annually.

Yamana also now aims to produce some 90,000 ounces of gold a year at the Fazenda Brasileiro mine for at least another seven years.