Reports Sixth Consecutive Quarter of Production Growth
TORONTO, Jan. 14, 2014 /CNW/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") today announces preliminary fourth quarter
and annual operational results. All amounts are in U.S. dollars unless
otherwise indicated.
AuRico reported its sixth consecutive quarter of production growth, with
the Young-Davidson and El Chanate operations continuing to report solid
production results that are in-line with expectations.
The shaft hoisting infrastructure at the Young-Davidson underground mine
was commissioned in October, which facilitated the declaration of
commercial production on October 31. The shaft hoisting system has, and
will continue to, facilitate significant increases in underground
productivities and corresponding cost efficiency improvements. During
the first two months of commercial production, underground unit mining
costs were approximately $39 per tonne resulting in underground
production cash costs of $663 per ounce.
Preliminary 2013 Fourth Quarter Operational Results
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Q1
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Q2
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Q3
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Q4
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Year-end
Dec. 31/13
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2013 Guidance
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Young-Davidson
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Gold Ounces Produced3
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28,281
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29,252
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30,099
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33,106
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120,738
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120,000-140,000
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Underground Cash Costs per oz.
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-
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$663
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$663
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Open Pit Cash Costs per oz.
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$694
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$716
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$666
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$983
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$757
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-
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Total Cash Costs per oz.1,2
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$694
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$716
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$666
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$850
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$744
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$575-$675
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El Chanate
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Gold Ounces Produced
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17,889
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18,751
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18,804
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16,420
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71,864
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70,000-80,000
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Total Cash Costs per oz.2
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$563
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$602
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$588
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$615
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$592
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$550-$600
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Consolidated Results
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Gold Ounces Produced3
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46,170
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48,003
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48,903
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49,526
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192,601
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190,000-220,000
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Total Cash Costs per oz.1,2
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$635
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$655
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$628
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$766
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$676
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$565-$645
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1.
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Prior to commissioning the underground mine at Young-Davidson, cash
costs were calculated on ounces produced from the open pit only. All
underground costs were capitalized, and any revenue related to
underground ounces sold was credited against capital. Subsequent to
the declaration of commercial production in the underground mine, cash
costs are calculated on ounces produced from both the open pit and
underground mines, and revenue related to the sale of underground
ounces is recognized in the Company's Statement of Operations as
revenue.
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2.
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Cash costs are prior to inventory net realizable value adjustments &
reversals, and are estimates only and subject to change. See the
Non-GAAP Measures section on page 20 of the Management's Discussion and
Analysis for the nine months ended September 30, 2013. Underground
cash costs per ounce and open pit cash costs per ounce do not have a
standardized meaning prescribed by International Financial Reporting
Standards ("IFRS" or "GAAP"). They are therefore considered to be
non-GAAP measures and may not be comparable to similar measures
presented by other companies. Underground cash costs per ounce and
open pit cash costs per ounce are determined by allocating production
and refining costs to the underground and open pit tonnes mined and
processed, and then dividing by the relevant ounces produced.
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3.
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Includes pre-production gold ounces from the Young-Davidson underground
mine prior to the declaration of commercial production in the
underground mine on October 31, 2013.
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"We are pleased to report our sixth consecutive quarter of company-wide
production growth and annual production results that are in-line with
guidance estimates.
Young-Davidson
is well positioned to drive
continued growth in company-wide gold production as the underground
operations continue to ramp-up productivity levels over the coming
years," stated
Scott Perry
, President and CEO of AuRico. He continued,
"Underpinning our asset base is a strong balance sheet and a management
team that is focused on creating shareholder value."
Young-Davidson Update
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Commercial production of the underground mine was declared on October
31, 2013, following the commissioning of the shaft hoisting system,
which will facilitate significant increases in underground
productivities and ongoing unit operating cost improvements.
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During the quarter, the Company averaged 2,590 tpd from the underground
mine (approx. 3,000 tpd in November and December), exceeding the
year-end targeted level of 2,000 tpd with mine grades being in-line
with reserve grade estimates. Underground productivity for the first
quarter of 2014 is expected to remain in-line with overall fourth
quarter levels (approx. 2,500 tpd) and increase steadily throughout the
remainder of the year to reach a productivity target of 4,000 tpd by
the end of the year.
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The paste backfill plant has been commissioned and the first pour was
completed in early January. In 2011, the mine plan was re-engineered to
utilize paste backfill to allow for significantly improved mining
recovery and reduced dilution.
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During the first two months of commercial production, underground unit
mining costs were approximately $39 per tonne resulting in underground
production cash costs of $663 per ounce. In the first quarter of 2014,
unit mining costs are expected to average approximately $45 per tonne,
reflecting the inclusion of paste fill operations following the
commissioning of the paste backfill plant in early January. The unit
mining costs are then expected to decrease steadily throughout the
year, corresponding with planned quarter-over-quarter increases in
underground productivity.
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As at year end, development advance exceeded expectations with 75% of
the 2014 mine plan already laterally accessed and 100% vertically
accessed. In 2014, the Company will continue to advance underground
development to optimize available ore inventory and thereby position
the mine for sustainable, period-over-period, productivity increases in
2014 and beyond.
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Open pit cash costs were $983 per ounce due to the higher operating
strip ratio that resulted from waste movement in the quarter being
ineligible for capitalization given the open pit mine life of less than
one year. The stripping ratio during the quarter was 3.44:1 versus a
year-to-date strip ratio 1.49:1 and is scheduled to average 2:1 for the
remaining four to six months of open pit operations.
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Open pit mine productivities remained at targeted levels and averaged
35,299 tpd during the quarter. As anticipated in the mine plan, the
open pit will be fully depleted in coming months at which time
approximately 3.0 million tonnes of open pit ore will be stockpiled
ahead of the mill facility for future processing.
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The mill facility continued to operate above nameplate capacity and
averaged approximately 6,969 tpd during the fourth quarter.
El Chanate Update
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The El Chanate open pit mine returned to targeted material movement
levels, mining an average of 98,487 tpd during the quarter as compared
to 87,366 tpd in the prior quarter as contractor equipment availability
returned to normal levels.
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Crushing and stacking rates remained in-line with targeted levels and
averaged 17,462 tpd.
Fourth Quarter Dividend Declared
On January 3, 2014, the Board of Directors declared the Company's
quarterly dividend payment of $0.04 per share for the fourth quarter
ended December 31, 2013, payable on January 29, 2014 to shareholders of
record at the close of business on January 14, 2014. Further
information on the Company's dividend reinvestment plan (DRIP) is
available through the following link: www.auricogold.com/DRIP.
Net Realizable Value Adjustment and Impairment Charges
Due to the lower metal price environment currently being experienced,
the Company will be conducting net realizable value testing on ore
inventories. These tests may result in the need to recognize a net
realizable value adjustment on these inventories at December 31. In
addition, the Company will be performing its annual impairment test
utilizing updated economic and operational factors, which may result in
the need to record impairment adjustments.
The Company will complete a final assessment by its fourth quarter and
annual 2013 results release.
Upcoming News Flow
The Company expects to issue the following updates during the first
quarter of 2014:
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2014 Operational Guidance (first week of February)
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2013 Reserves and Resources (first week of March)
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Fourth Quarter and Annual Financial Results (March 3)
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
This press release contains forward-looking statements and
forward-looking information as defined under Canadian and U.S.
securities laws. All statements, other than statements of historical
fact, are forward-looking statements. The words "expect", "believe",
"anticipate", "will", "intend", "estimate", "forecast", "budget" and
similar expressions identify forward-looking statements.
Forward-looking statements include information as to strategy, plans or
future financial or operating performance, such as the Company's
expansion plans, project timelines, production plans, projected cash
flows or capital expenditures, cost estimates, projected exploration
results, reserve and resource estimates and other statements that
express management's expectations or estimates of future performance.
Forward-looking statements are necessarily based upon a number of
factors and assumptions that, while considered reasonable by
management, are inherently subject to significant uncertainties and
contingencies. Known and unknown factors could cause actual results to
differ materially from those projected in the forward-looking
statements, including: uncertainty of production and cost estimates;
fluctuations in the price of gold and foreign exchange rates; the
uncertainty of replacing depleted reserves; the risk that the
Young-Davidson shaft will not perform as planned; the risk that mining
operations do not meet expectations; the risk that projects will not be
developed accordingly to budgets or timelines, changes in laws in
Canada, Mexico and other jurisdictions in which the Company may carry
on business; risks of obtaining necessary licenses, permits or
approvals for operations or projects such as Kemess; disputes over
title to properties; the speculative nature of mineral exploration and
development; risks related to aboriginal title claims; compliance risks
with respect to current and future environmental regulations;
disruptions affecting operations; opportunities that may be pursued by
the Company; employee relations; availability and costs of mining
inputs and labor; the ability to secure capital to execute business
plans; volatility of the Company's share price; continuation of the
dividend and dividend reinvestment plan; the effect of future
financings; litigation; risk of loss due to sabotage and civil
disturbances; the values of assets and liabilities based on projected
future cash flows; risks arising from derivative instruments or the
absence of hedging; adequacy of internal control over financial
reporting; changes in credit rating; and the impact of inflation.
Actual results and developments are likely to differ, and may differ
materially, from those expressed or implied by the forward-looking
statements contained herein. Such statements are based on a number of
assumptions which may prove to be incorrect, including assumptions
about: business and economic conditions; commodity prices and the price
of key inputs such as labour, fuel and electricity; credit market
conditions and conditions in financial markets generally; revenue and
cash flow estimates, production levels, development schedules and the
associated costs; ability to procure equipment and supplies and on a
timely basis; the timing of the receipt of permits and other approvals
for projects and operations; the ability to attract and retain skilled
employees and contractors for the operations; the accuracy of reserve
and resource estimates; the impact of changes in currency exchange
rates on costs and results; interest rates; taxation; and ongoing
relations with employees and business partners. 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.
SOURCE AuRico Gold Inc.