(Corrects production target date in fourth paragraph.)

Nov. 4 (Bloomberg) -- Yamana Gold Inc., owner of the Chapada mine in Brazil, said it prefers to buy undeveloped mining properties, principally in Latin America, rather than seek corporate takeovers.

Acquisitions would be undeveloped projects or licenses, and “we have excellent prospects in the countries we’re in,” Chief Executive Officer Peter Marrone said today in a telephone interview. “It’s highly likely that it will be for at least a two-year horizon that we’re not looking for” corporate acquisitions.

Yamana and competitors including Barrick Gold Corp. and Agnico-Eagle Mines Ltd. are boosting output to take advantage of higher prices for gold, which reached a record $1,098.50 an ounce today in New York. Yamana said yesterday its third-quarter sales rose 35 percent from a year earlier to $333.2 million, while production increased 34 percent.

Projects under development, including C1 Santa Luz and Ernesto/Pau-a-Pique in Brazil and Mercedes in Mexico, will add about 400,000 ounces of production annually by the end of 2012, Marrone said.

“Our focus is organic growth,” Marrone said.

The company produced 314,707 ounces of gold or gold equivalent in the third quarter, compared with 235,406 a year earlier. Gold equivalent measures the value of byproduct metals. Total 2009 output will be 1.05 million to 1.1 million ounces, Yamana said yesterday.

Yamana rose 5 cents to C$12.59 at 4:16 p.m. in Toronto Stock Exchange trading. The shares have increased 33 percent this year.

Third-quarter net income dropped to $60.8 million, or 8 cents a share, because of a loss on derivative positions, Toronto-based Yamana said yesterday. A year earlier, the company reported a profit of $150.2 million, or 21 cents.

To contact the reporter on this story: Rob Delaney in Toronto at robdelaney@bloomberg.net.

Last Updated: November 4, 2009 16:44 EST