TORONTO, March 25, 2013 /CNW/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") today reported its updated Reserves and
Resources, as at December 31, 2012.
Mineral Reserves and Resources (as at December 31, 2012)
(Detailed Mineral Reserve and Resource tables can be found at the end of
this press release)
Highlights
As at December 31, 2012, the Company is reporting:
-
Proven and Probable Mineral Gold Reserves of 6.8 million gold ounces, a
1.69 million ounce increase over 2011, primarily driven through reserve
additions reported from the Kemess Underground Project.
-
Reserves were essentially unchanged at the Young-Davidson mine with
grades increasing by 1.6%.
-
Reserves decreased by 6% at the El Chanate mine, however reserve grades
increased by 3.1%.
Gold Reserves by asset are summarized in the table below:
|
Proven and Probable Mineral Reserves1
|
|
|
Gold ounces (000's)1
|
g/t
|
|
December 31
|
2012
|
2011
|
Change
(%)
|
2012
|
2011
|
Change
(%)
|
|
Young-Davidson
|
3,804
|
3,831
|
(0.7%)
|
2.60
|
2.56
|
1.6%
|
|
El Chanate
|
1,204
|
1,284
|
(6.2%)
|
0.67
|
0.65
|
3.1%
|
|
Kemess Underground
|
1,805
|
-
|
100%
|
0.56
|
-
|
100%
|
|
Total
|
6,813
|
5,115
|
33%
|
1.05
|
1.47
|
(29%)
|
|
1. Detailed mineral reserve and mineral resource tables follow at the end
of this press release.
|
In addition to gold reserves, the Company has also reported copper
reserves of:
-
619 million pounds at the Kemess Underground Project at a reserve grade
of 0.28%, using a copper price of $3.00 per pound.
"The Company's efforts have been focused on improving the quality of our
asset base and this focus extended to improving the quality of our
reserve base as well. We have adopted a conservative approach by
holding cutoff grades constant, which has resulted in higher grade and
higher margin reserve ounces," stated
Scott Perry
, President and Chief
Executive Officer. He continued, "The Company will continue to adopt
this conservative view going forward and will balance exploration
efforts with mine life to ensure we optimize value for those additional
ounces, particularly at the long-life Young-Davidson mine."
As at December 31, 2012 the Company is also reporting the following
mineral resources:
-
Measured and Indicated gold resources of 1.8 million gold ounces, at a grade of 0.71 g/t; and
-
Inferred gold resources of 1.4 million gold ounces, at grades of 1.78 g/t.
Gold mineral resources by asset are summarized in the table below:
|
Gold Resources (in thousands of gold ounces)1
|
|
December 31, 2012
|
Measured & Indicated
|
Inferred
|
|
Young-Davidson
|
855
|
1,260
|
|
El Chanate
|
41
|
6
|
|
Kemess Underground
|
854
|
125
|
|
Orion (50%)
|
65
|
10
|
|
Total
|
1,815
|
1,400
|
|
1. Detailed mineral reserve and mineral resource tables follow at the end
of this press release.
|
The Company is also reporting by-product mineral resources:
-
Indicated by-product resources including:
-
5.5 million silver ounces from the Orion Project (50% basis) at a grade
of 309 g/t; and
-
346 million pounds of copper from the Kemess Underground Project at a
grade of 0.24%.
-
Inferred by-product resources including:
-
275,000 ounces of silver from the Orion Project (50% basis) at a grade
of 95 g/t; and
-
46 million pounds of copper from the Kemess Underground Project at a
grade of 0.21%.
Kemess Underground Feasibility Study
The results from the Kemess Underground feasibility study outline the
development of an underground block cave operation with average annual
production of 105,000 ounces of gold and 44 million pounds of copper at
cash costs of $213 per ounce of gold, net of by-product credits, over a
mine-life of approximately 12 years.
Feasibility Study Highlights
Highlights of the feasibility study, which employs base case commodity
price assumptions of $1,300 per ounce for gold, $3.00 per pound for
copper and $23 per ounce for silver and an exchange rate of
US$/CDN$1.00, are as follows:
-
Average annual production of 105,000 ounces of gold and 44 million
pounds of copper at a net cash cost of $213 per ounce of gold, net of
by-product credits
-
A total of 1.3 million ounces of gold and 563 million pounds of copper
production over an approximate 12-year mine-life.
-
Pre-commercial production capital cost of $452 million.
-
Sustaining capital costs of $181 million during the life of the mine,
including $35 million in closure costs.
-
Pre-tax operating cash flow of $1.1 billion.
-
After-tax net present value ("NPV") of $134 million based on a 5%
discount rate.
-
After-tax internal rate of return ("IRR") of approximately 10% with a
3.5-year payback on the initial capital cost from the start of
commercial production.
-
The project has significant leverage to higher metal prices. At $1,650
per ounce gold and $3.67 per pound copper, Kemess Underground is
expected to generate an after-tax IRR of 18%.
-
The envisaged Kemess Underground block cave operation would leverage the
existing infrastructure and mill facilities at the Kemess South mine
including an area previously permitted for tailings storage in the
Kemess South Pit.
The after-tax, NPV and IRR for the Kemess Underground Project, using a
range of gold and copper prices, are shown below.
|
|
|
Base Case Prices
|
3-Year Trailing Prices
|
Spot Prices
|
|
Au
|
$/oz
|
1,300
|
1,488
|
1,650
|
|
Cu
|
$/lb
|
3.00
|
3.68
|
3.67
|
|
Ag
|
$/oz
|
23.00
|
28.80
|
30.75
|
|
NPV 0% (After tax)
|
$MM
|
390
|
769
|
891
|
|
NPV 5%
|
$MM
|
134
|
372
|
449
|
|
NPV 10%
|
$MM
|
(7)
|
151
|
202
|
|
IRR
|
%
|
10%
|
16%
|
18%
|
The Company intends to pursue strategies at Kemess that enhance
intrinsic value, such as permitting and additional exploration outside
existing reserves, to further develop the optionality of this asset.
The feasibility study was prepared by SRK Consulting (Canada) Inc.
("SRK") and a technical report in compliance with National Instrument
43-101 will be filed on SEDAR at www.sedar.com within the next 45 days and will also be available on AuRico's website
at www.auricogold.com.
Chris Bostwick
, Senior Vice President, Technical Services for AuRico
Gold Inc. has reviewed the scientific and technical information
contained within this press release and serves as the Qualified Person
as defined by National Instrument 43-101.
Reserves and Resources (as of December 31, 2012)
|
|
Proven Reserves
|
Probable Reserves
|
Total Proven and Probable
Reserves
|
|
|
Tonnes
|
Gold
|
Gold oz.
|
Tonnes
|
Gold
|
Gold Oz.
|
Tonnes
|
Gold
|
Gold Oz.
|
|
|
(000's)
|
(g/t)
|
(000's)
|
(000's)
|
(g/t)
|
(000's)
|
(000's)
|
(g/t)
|
(000's)
|
|
El Chanate
|
36,845
|
0.68
|
801
|
19,015
|
0.66
|
403
|
55,859
|
0.67
|
1,204
|
|
Young-Davidson - Surface
|
3,934
|
1.28
|
162
|
2,491
|
1.36
|
109
|
6,425
|
1.31
|
271
|
|
Young-Davidson - Underground
|
4,547
|
2.97
|
434
|
34,490
|
2.80
|
3,100
|
39,037
|
2.82
|
3,534
|
|
Total Young-Davidson
|
8,481
|
2.19
|
596
|
36,981
|
2.70
|
3,209
|
45,462
|
2.60
|
3,804
|
|
Kemess Underground (KUG)
|
-
|
-
|
-
|
100,373
|
0.56
|
1,805
|
100,373
|
0.56
|
1,805
|
|
AuRico - Total
|
45,326
|
0.96
|
1,397
|
156,369
|
1.08
|
5,417
|
201,695
|
1.05
|
6,813
|
|
|
Measured Resources
|
Indicated Resources
|
Total Measured and Indicated
Resources
|
|
|
Tonnes
|
Gold
|
Gold oz.
|
Tonnes
|
Gold
|
Gold Oz.
|
Tonnes
|
Gold
|
Gold Oz.
|
|
|
(000's)
|
(g/t)
|
(000's)
|
(000's)
|
(g/t)
|
(000's)
|
(000's)
|
(g/t)
|
(000's)
|
|
El Chanate
|
1,233
|
0.31
|
12
|
2,235
|
0.40
|
29
|
3,468
|
0.37
|
41
|
|
Young-Davidson - Surface
|
98
|
1.60
|
5
|
193
|
1.76
|
11
|
291
|
1.70
|
16
|
|
Young-Davidson - Underground
|
877
|
4.17
|
118
|
8,654
|
2.59
|
722
|
9,531
|
2.74
|
839
|
|
Total Young-Davidson
|
975
|
3.91
|
123
|
8,846
|
2.58
|
733
|
9,821
|
2.71
|
855
|
|
Kemess Underground (KUG)
|
-
|
-
|
-
|
65,432
|
0.41
|
854
|
65,432
|
0.41
|
854
|
|
Orion (50%)
|
-
|
-
|
-
|
554
|
3.66
|
65
|
554
|
3.36
|
65
|
|
AuRico - Total
|
2,208
|
1.90
|
135
|
77,067
|
0.68
|
1,680
|
79,274
|
0.71
|
1,815
|
|
|
Inferred Resources
|
|
|
Tonnes
|
Gold
|
Gold oz
|
|
|
(000's)
|
(g/t)
|
(000's)
|
|
El Chanate
|
409
|
0.48
|
6
|
|
Young-Davidson - Surface
|
31
|
0.99
|
1
|
|
Young-Davidson - Underground
|
13,983
|
2.80
|
1,259
|
|
Total Young-Davidson
|
14,014
|
2.80
|
1,260
|
|
Kemess Underground (KUG)
|
9,969
|
0.39
|
125
|
|
Orion (50%)
|
91
|
3.33
|
10
|
|
AuRico - Total
|
24,483
|
1.78
|
1,400
|
|
|
Copper Reserves & Resources
|
|
|
Tonnes
|
Copper
|
Copper
lbs
|
|
Kemess
|
(000's)
|
(%)
|
(000's)
|
|
Probable Reserves
|
100,373
|
0.28
|
619,151
|
|
Indicated Resources
|
65,432
|
0.24
|
346,546
|
|
Inferred Resources
|
9,969
|
0.21
|
46,101
|
|
|
Silver Resources
|
|
|
Tonnes
|
Silver
|
Silver Oz.
|
|
Orion
|
(000's)
|
(g/t)
|
(000's)
|
|
Indicated Resources
|
554
|
309
|
5,503
|
|
Inferred Resources
|
91
|
95
|
275
|
Notes:
-
Mineral Reserves and Resources have been stated as at December 31, 2012.
-
Mineral Resources are in addition to Mineral Reserves. Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability when calculated using Mineral Reserve assumptions. Reserves
have been reported in accordance with NI 43-101, as required by
Canadian securities regulatory authorities. In addition, while the
terms "Measured", "Indicated and "Inferred" Mineral Resources are
required pursuant to NI 43-101, the SEC does not recognize such terms.
Canadian standards differ significantly from the requirements of the
SEC, and mineral resource information contained herein is not
comparable to similar information regarding mineral reserves disclosed
in accordance with the requirements of the SEC. Investors should
understand that "Inferred" Mineral Resources have a great amount of
uncertainty as to their existence and great uncertainty as to their
economic and legal feasibility. In addition, investors are cautioned
not to assume that any part or all of AuRico's Mineral Resources
constitute or will be converted into Reserves.
-
Following the completion of a joint venture agreement,
Minera Frisco
has
a 50% interest in the Orion Project.
-
Mineral resource tonnage and contained metal have been rounded to
reflect the accuracy of the estimate, and numbers may not add due to
rounding.
The following metal prices were used for the calculation of Reserves and
Resources:
|
|
Reserves
|
Resources
|
|
USD
|
Au $/oz
|
Ag $/oz
|
Cu $/lb
|
Au $/oz
|
Ag $/oz
|
Cu $/lb
|
|
El Chanate
|
$1,400
|
-
|
-
|
$1,600
|
-
|
-
|
|
Young Davidson
|
$1,400
|
-
|
-
|
$1,600
|
-
|
-
|
|
Kemess Underground
|
$1,300
|
$23.00
|
$3.00
|
$13.00 NSR
|
|
Orion
|
-
|
-
|
-
|
$850
|
$13.00
|
-
|
Reserves and Resources were prepared under the supervision of the
following Qualified Persons:
|
|
Resources
|
Reserves
|
|
El Chanate
|
Jeffrey Volk, CPG, FAusIMM,
Director Reserves and Resources,
AuRico Gold Inc.
|
Chris Sharpe, P.Eng, Manager
Mining, AuRico Gold Inc.
|
|
Young Davidson - Open Pit
|
Jeffrey Volk, CPG, FAusIMM,
Director Reserves and Resources,
AuRico Gold Inc.
|
Chris Sharpe, P.Eng, Manager
Mining, AuRico Gold Inc.
|
|
Young Davidson - Underground
|
Jeffrey Volk, CPG, FAusIMM,
Director Reserves and Resources,
AuRico Gold Inc.
|
Chris Bostwick, FAusIMM, SVP
Technical Services, AuRico Gold Inc.
|
|
Kemess Underground
|
Jeffrey Volk, CPG, FAusIMM,
Director Reserves and Resources,
AuRico Gold Inc.
|
Chris Bostwick, FAusIMM, SVP
Technical Services, AuRico Gold Inc.
|
|
Orion
|
Jeffrey Volk, CPG, FAusIMM,
Director Reserves and Resources,
AuRico Gold Inc.
|
|
About AuRico Gold
AuRico Gold is a leading Canadian gold producer with mines and projects
in North America that have solid production growth and exploration
potential. The Company is focused on its core operations including the
Young-Davidson gold mine in northern Ontario and the El Chanate mine in
Sonora State, Mexico. AuRico's project pipeline also includes advanced
development opportunities in Canada and Mexico. AuRico's head office is
located in Toronto, Ontario, Canada.
Cautionary Statement
Certain information included in this news release constitutes
forward-looking statements, including any information as to our
projects, plans and future financial and operating performance. All
statements, other than statements of historical fact, are
forward-looking statements. The words "expect", "believe",
"anticipate", "will", "intend", "estimate", "forecast", "budget",
"schedule" and similar expressions identify forward-looking statements.
Forward-looking statements are necessarily based upon a number of
factors and assumptions that, while considered reasonable by
management, are inherently subject to significant business, economic
and competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking statements. Such factors include, but
are not limited to: changes to current estimates of mineral reserves
and resources; fluctuations in the price of gold; changes in foreign
exchange rates (particularly the Canadian dollar, Mexican peso and U.S.
dollar); the impact of inflation; changes in our credit rating; any
decision to declare a quarterly dividend; employee relations;
litigation; disruptions affecting operations; availability of and
increased costs associated with mining inputs and labor; development
delays at the Young-Davidson mine; operating or technical difficulties
in connection with mining or development activities; inherent risks
associated with mining and mineral processing; the risk that the
Young-Davidson, and El Chanate mine and may not perform as planned;
uncertainty with the Company's ability to secure capital to execute its
business plans; the speculative nature of mineral exploration and
development, including the risks of obtaining necessary licenses and
permits; contests over title to properties; changes in national and
local government legislation in Canada, Mexico and other jurisdictions
in which the Company does or may carry on business in the future; risk
of loss due to sabotage and civil disturbances; the impact of global
liquidity and credit availability and the values of assets and
liabilities based on projected future cash flows; risks arising from
holding derivative instruments; business opportunities that may be
pursued by the Company. Many of these uncertainties and contingencies
can affect our actual results and could cause actual results to differ
materially from those expressed or implied in any forward-looking
statements made by, or on behalf of, us. Readers are cautioned that
forward-looking statements are not guarantees of future performance.
All of the forward-looking statements made in this press release are
qualified by these cautionary statements. Specific reference is made to
the most recent Form 40-F/Annual Information Form on file with the SEC
and Canadian provincial securities regulatory authorities for a
discussion of some of the factors underlying forward-looking
statements. The Company disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
applicable law.
Cautionary Note to U.S. Investors Concerning Measured, Indicated and
Inferred Resources
This press release uses the terms "measured," "indicated " and
"inferred" resources. We advise readers that while those terms are
recognized and required by Canadian regulations, the United States
Securities and Exchange Commission does not recognize them. Under
Canadian rules, estimates of inferred mineral resources may not form
the basis of feasibility or other economic studies. United States
investors are cautioned not to assume that all or any part of measured
or indicated mineral resources will ever be converted into mineral
reserves. United States investors are also cautioned not to assume that
all or any part of an inferred mineral resource exists, or is
economically or legally mineable.
For further information please visit the AuRico Gold website at www.auricogold.com or contact:
Scott Perry
President & Chief Executive Officer
AuRico Gold Inc.
1-647-260-8880