TORONTO, Nov. 6, 2014 /CNW/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") reports financial results for the three and
nine months ended September 30, 2014. The Company will host a
conference call on Friday, November 7, 2014 beginning at 8:30 a.m.
Eastern Time (details below). (All amounts are in U.S. dollars, unless otherwise indicated.)
To view "Company Wide Quarterly Production Growth", please click:
http://files.newswire.ca/975/Q3FinancialResultsGraph.pdf
Financial Highlights
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(in thousands, except per share amounts)
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Quarter Ended
Sept. 30, 2014
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Quarter Ended
Sept. 30, 2013
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Nine Months Ended
Sept. 30, 2014
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Nine Months Ended
Sept. 30, 2013
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Revenue from mining operations
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$73,505
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$54,304
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$219,988
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$176,849
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Adjusted net (loss) / earnings(1)
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($5,585)
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$816
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($28,476)
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$18,536
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Adjusted net (loss) / earnings per share, basic(1)
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($0.02)
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$0.00
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($0.11)
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$0.07
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Net (loss) / earnings
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($15,722)
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$14,859
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($61,389)
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($70,358)
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Net (loss) / earnings per share, basic
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($0.06)
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$0.06
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($0.25)
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($0.28)
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Adjusted operating cash flow(1)
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$20,615
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$21,758
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$46,342
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$60,571
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Adjusted operating cash flow, per share(1)
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$0.08
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$0.09
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$0.19
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$0.24
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(1)
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See the tables at the end of this press release for a reconciliation of
adjusted net earnings and adjusted operating cash flow and refer
to the discussion of Non-GAAP measures below.
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Operational Highlights
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Quarter Ended Sept. 30, 2014
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Quarter Ended Sept. 30, 2013
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Young-
Davidson
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El Chanate
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Total
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Young-
Davidson
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El Chanate
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Total
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Gold ounces produced
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40,538
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16,499
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57,037
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19,652
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18,804
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38,456
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Gold ounces produced, pre-commercial production(3)
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-
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-
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-
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10,447
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-
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10,447
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Total gold ounces produced
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40,538
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16,499
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57,037
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30,099
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18,804
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48,903
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Underground cash costs per ounce(1)(2)(4)
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$656
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-
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$656
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-
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-
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-
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Open pit cash costs per ounce(1)(2)(4)
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$923
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$663
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$765
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$666
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$588
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$628
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Total cash costs per ounce(2)(4)
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$723
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$663
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$706
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$666
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$588
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$628
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Nine Months ended Sept. 30, 2014
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Nine Months ended Sept. 30, 2013
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Young-
Davidson
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El Chanate
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Total
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Young-
Davidson
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El Chanate
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Total
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Gold ounces produced
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115,808
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51,641
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167,449
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59,639
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55,444
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115,083
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Gold ounces produced, pre-commercial production(3)
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-
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-
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-
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27,993
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-
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27,993
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Total gold ounces produced
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115,808
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51,641
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167,449
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87,632
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55,444
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143,076
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Underground cash costs per ounce(1)(2)(4)
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$747
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-
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$747
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-
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-
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-
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Open pit cash costs per ounce(1)(2)(4)
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$1,086
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$621
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$830
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$692
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$586
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$640
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Cash costs per ounce(2)(4)
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$862
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$621
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$791
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$692
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$586
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$640
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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 on
October 31, 2013, cash costs are calculated on ounces 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,
where applicable. See the Non-GAAP Measures section on
page 18 of the Management's Discussion and Analysis for the three and
nine months ended September 30, 2014.
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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
on October 31, 2013.
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(4)
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For the three and nine months ended September 30, 2014, cash costs per
gold ounce are calculated using gold ounces sold at the
El Chanate and Young-Davidson mines. For 2013, cash costs per gold ounce
were calculated using gold ounces sold at the El Chanate
mine and gold ounces produced at the Young-Davidson mine.
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Recent Highlights
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On September 18, 2014, the Company announced the appointment of
Janice
Stairs
, LLB, MBA, to the Board of Directors of the Company. The
Company also announced that Dr.
Luis Chavez
resigned his position as
director of the Company, but remained the Company's Senior Vice
President, Mexico.
Young-Davidson Highlights
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At the end of the quarter, the Young-Davidson mine achieved 557 days of
lost time incident free operations.
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Production of 40,538 gold ounces for the quarter represented the ninth
consecutive quarter of record gold production with the operation
expected to deliver additional period-over-period production increases
going forward as the underground mine ramps-up to targeted levels.
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Underground cash costs for the quarter decreased to $656 per gold ounce,
an 18% decline over the prior quarter, primarily driven by increased
production, lower unit processing costs and lower underground unit
mining costs. Total cash costs for the quarter, which includes the
low-grade open pit stockpile, decreased by 17% to $723 per gold ounce.
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During the quarter, underground mine productivity exceeded planned
levels and averaged approximately 3,752 tonnes per day at grades
in-line with reserve grade estimates. With underground productivity at
approximately 94% of the year-end target, the operation is well
positioned to achieve the year-end target of 4,000 tonnes per day and
an ultimate productivity level of 8,000 tonnes per day at the end of
2016.
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For the third full quarter of underground commercial production, unit
mining costs declined to approximately $41 per tonne, in-line with the
year-end target of $40 per tonne.
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During the quarter, underground development advance continued at planned
levels with approximately 3,269 metres completed, an average of 36
metres per day. The Company will continue to focus on advancing
underground development to best position the mine for sustainable,
period-over-period, productivity increases in the fourth quarter and
beyond.
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During the quarter, the mill facility averaged 7,670 tonnes per day,
including 4-days of downtime for scheduled mill reline activities.
Recoveries increased over prior periods to a record 90%, which is
expected to be sustained going forward.
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As planned, the short life open pit mine was fully depleted in early
June and as a result, during the quarter higher grade underground mill
feed was supplemented with low grade open pit stockpiled ore to ensure
the mill processing facility was operating at peak capacity. The open
pit stockpile will continue to supplement underground ore feed to the
mill processing facility as the underground mine ramps up to targeted
levels and the remaining stockpile will be processed at the end of the
mine life.
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Currently, approximately 2.8 million tonnes of open pit ore, at an
average grade of approximately 0.75 grams per tonne, is stockpiled
ahead of the mill facility for future processing. As the related mining
costs associated with the stockpile were expended in prior periods, the
processing of this ore will favourably augment the mine's free cash
flow profile going forward.
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Capital investment for the quarter included a $6.9 million pay down of
prior period, construction related accounts payable balances. During
the second half of the year, the Company continues to expect
significant decreases in capital expenditures, which will result in
full year capital investments of up to $135 million.
El Chanate Update
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During the quarter, the open pit mining rate averaged 94,643 tonnes per
day with mined grades being in-line with plan.
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Mining operations in the third quarter reflected a transition from the
sequencing of lower grade mining areas to higher grade mining areas
during the latter part of the quarter.
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Production increased over the prior quarter while cash costs for the
quarter were $663 per ounce, which is in-line with guidance levels.
"Our operation teams continue to build on the successes achieved in
prior quarters and they have delivered the ninth consecutive quarter of
production growth as well as a significant 17% decrease in cash costs
at our cornerstone Young-Davidson mine," stated
Scott Perry
, President
and Chief Executive Officer. He continued, "The Company continues to
take a longer term view to position our operations for sustainable
growth and shareholder value creation that will drive long term
success. As we begin the fourth quarter the Company is very well
positioned to deliver another consecutive quarter of production growth
and we remain confident that in the current gold price environment the
Young-Davidson mine will be generating positive free cash flow by the
end of the year."
Adjusted Net Earnings Reconciliation
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Quarter Ended
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Quarter Ended
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(in thousands, except per share metrics)
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Sept. 30, 2014
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Sept. 30, 2013
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Net (loss) / earnings
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($15,722)
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$14,859
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Adjustments:
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Deferred income tax expense / (recovery) related to foreign exchange
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14,253
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(7,335)
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Foreign exchange (gain) / losses
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(11,230)
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2,482
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Loss on retained interest royalty
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2,977
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-
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Net realizable value adjustments on inventory
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7,097
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(7,372)
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Impairment charges
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616
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-
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Gain on transfer of litigation claim
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(3,177)
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-
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Unrealized and realized loss on investments
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-
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121
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Gain on option component of convertible notes
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-
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(3,875)
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Unrealized gain on derivatives
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-
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(301)
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Unrealized loss on contingent consideration
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-
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63
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Other (including tax effect of adjustments)
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(399)
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2,174
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Adjusted net (loss) / earnings
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($5,585)
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$816
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Adjusted net (loss) / earnings, per share
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($0.02)
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$0.00
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Nine Months Ended
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Nine Months Ended
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(in thousands, except per share metrics)
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Sept. 30, 2014
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Sept. 30, 2013
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Net loss
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($61,389)
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($70,358)
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Adjustments:
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Deferred income tax expense related to foreign exchange
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15,601
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5,218
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Foreign exchange gain
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(9,595)
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(7,195)
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Loss on retained interest royalty
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7,792
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-
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Net realizable value adjustments on inventory
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7,097
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4,873
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Impairment charges
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616
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98,688
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Gain on transfer of litigation claim
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(3,177)
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-
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Loss on convertible notes tender offer
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15,645
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-
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Corporate restructuring costs
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2,716
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-
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Unrealized and realized (gain) / loss on investments
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(6,589)
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437
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Gain on option component of convertible notes
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(413)
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(14,850)
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Unrealized gain on derivatives
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-
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(2,183)
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Unrealized loss on contingent consideration
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-
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6,912
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Other (including tax effect of adjustments)
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3,220
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(3,006)
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Adjusted net (loss) / earnings
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($28,476)
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$18,536
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Adjusted net (loss) / earnings, per share
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($0.11)
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$0.07
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Adjusted Operating Cash Flow Reconciliation
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Quarter Ended
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Quarter Ended
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(in thousands, except per share metrics)
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Sept. 30, 2014
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Sept. 30, 2013
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Operating cash flow
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$2,788
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$24,338
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Add back: Non-cash change in operating working capital
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17,827
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(2,580)
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Adjusted operating cash flow
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$20,615
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$21,758
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Adjusted operating cash flow, per share
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$0.08
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$0.09
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Nine Months Ended
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Nine Months Ended
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(in thousands, except per share metrics)
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Sept. 30, 2014
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Sept. 30, 2013
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Operating cash flow
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$31,928
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$51,312
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Add back: Non-cash change in operating working capital
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14,414
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9,259
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Adjusted operating cash flow
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$46,342
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$60,571
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Adjusted operating cash flow, per share
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$0.19
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$0.24
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Adjusted Earnings before Interest, Taxes, Depreciation and Amortization
("Adjusted EBITDA")
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Quarter Ended
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Quarter Ended
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(in thousands)
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Sept. 30, 2014
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Sept. 30, 2013
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EBITDA
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$34,778
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$24,719
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Add back:
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Exploration
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33
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3
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Non-cash items identified in supplemental cash flow note, excluding
amortization
and depletion, and deferred income tax expense / recovery
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(6,193)
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(3,885)
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Adjusted EBITDA
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$28,618
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$20,837
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Nine Months Ended
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Nine Months Ended
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(in thousands)
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Sept. 30, 2014
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Sept. 30, 2013
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EBITDA
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$56,165
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($20,883)
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Add back:
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Exploration
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60
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22
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Non-cash items identified in supplemental cash flow note, excluding
amortization
and depletion, and deferred income tax expense / recovery
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8,553
|
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93,497
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Adjusted EBITDA
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$64,778
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$72,636
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Non-GAAP Measures
The Company uses the measures adjusted net earnings, cash costs per
ounce, adjusted operating cash flow, EBITDA and Adjusted EBITDA in this
press release, which 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. The
non-GAAP measures cash costs per ounce and EBITDA are reconciled to the
Company's financial statements beginning on page 18 of the Company's
Management's Discussion and Analysis for the three and nine months
ended September 30, 2014.
Adjusted net earnings is comprised of net earnings, adjusted for
specific items. While the adjustments to net earnings in this measure
include items that are recurring, adjusted net earnings is a useful
measure as the unrealized gains / losses on foreign exchange, fair
value adjustments on contingent consideration and derivatives,
unrealized and realized gains and loss on investments, corporate
restructuring costs, losses on the retained interest royalty,
impairment charges, net realizable value adjustments on inventory, and
other non-recurring items do not reflect the underlying operating
performance of the Company's core mining business in the periods
presented and are not necessarily indicative of future operating
results.
Adjusted operating cash flow excludes the change in non-cash operating
working capital, which includes changes in receivables, inventories,
prepaid assets, and payables. Management uses adjusted operating cash
flow as a measure internally to evaluate the underlying operating cash
flow performance of the Company as a whole for the reporting periods
presented, and to assist with the planning and forecasting of future
operating cash flow.
Adjusted EBITDA represents EBITDA, adjusted for exploration expense and
other non-cash items included in earnings. While the adjustments to net
earnings in this measure includes items that are recurring, adjusted
EBITDA is a valuable indicator of the Company's ability to generate
liquidity by producing operating cash flow to fund working capital
needs, service debt obligations, and fund capital expenditures.
Financial Statements and Management's Discussion and Analysis
The financial statements and related Management's Discussion and
Analysis can be found on the Company's website at www.auricogold.com or under the Company's profile on www.sedar.com and with the Securities and Exchange Commission at www.sec.gov/edgar.shtml ("Edgar").
Q3 2014 Dividend Declared
Commencing in 2014, the quarterly dividend is linked to operating cash
flow ("OCF"), whereby the Company pays out 20% of the OCF generated in
the preceding quarter, divided by the Company's outstanding common
shares at the time the dividend is approved. On November 6, 2014, the
Board of Directors declared the Company's quarterly dividend payment of
$0.00225 per share for the third quarter ended September 30, 2014,
payable on December 1, 2014 to shareholders of record at the close of
business on November 17, 2014. Further information on the Company's
dividend reinvestment plan (DRIP) is available through the following
link: www.auricogold.com/DRIP.
Third Quarter Webcast and Conference Call
A webcast and conference call will be held on Friday, November 7, 2014 starting at 8:30 a.m. Eastern Time. Senior Management will be on the call to discuss the results.
Conference Call Access:
-
International & Toronto: 1-647-427-7450
-
Canada & U.S. Toll Free: 1-888-231-8191
Please ask to be placed into the AuRico Gold 2014 Third Quarter Results
Conference Call.
Conference Call Live Webcast
The conference call will be broadcast live on the internet via webcast.
To access the webcast, please follow this link: http://www.newswire.ca/en/webcast/detail/1421804/1579264.
Archive Call Access
If you are unable to attend the conference call, a replay will be
available until midnight, November 14, 2014 by dialing the appropriate number below:
-
International & Toronto: 1-416-849-0833 Passcode: #15205991
-
Canada & U.S. Toll Free: 1-855-859-2056 Passcode: #15205991
Archive Webcast
The webcast will be archived for 90 days. To access the archived
webcast, visit the Company's website at
www.auricogold.com or follow this link: http://www.newswire.ca/en/webcast/detail/1421804/1579264.
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
development opportunities in Canada and Mexico. AuRico's head office is
located in Toronto, Ontario, Canada.
Cautionary Statement
This press release contains certain information that constitutes
"forward-looking information" and "forward-looking statements" as
defined under Canadian and U.S. securities laws. All statements in this
press release, other than statements of historical fact, are
forward-looking statements. The words "expect", "believe",
"anticipate", "contemplate", "may", "could", "will", "intend",
"estimate", "forecast", "target", "budget", "schedule" and similar
expressions identify forward-looking statements. Forward-looking
statements in this press release include, without limitation, those
under the headings , "Young-Davidson Highlights" and "El Chanate Highlights" which include, without limitation, statements with respect to our
expectations on underground productivity levels, underground unit
mining cost, underground development, mill facility processing rate,
cash flow, free cash flow, cash costs, capital investment and timing to
completion on the final leg of the Northgate production shaft,
information as to our strategy, plans and future financial and
operating performance, such as our expansion plans, project timelines,
production plans, projected cash flows or capital expenditure levels,
cost estimates, mining or milling methods, projected exploration
results, resource and reserve estimates and other statements that
express our 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
at the time of making such statements, 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 and assumptions underlying the forward-looking
statements in this press release 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 mines 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, including the
necessary licenses, permits, authorizations and/or approvals from the
appropriate regulatory authorities for the Kemess Underground project;
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, as well as those factors discussed under "Risk
Factors" in the Company's most recent Annual Information Form.
Actual results and developments are likely to differ, and may differ
materially, from those expressed or implied by the forward-looking
statements contained in this press release. Such statements are based
on a number of assumptions which may prove to be incorrect, including,
but not limited to, the assumptions set forth in our most recent Form
40-F/Annual Information Form. 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.
There can be no assurance that forward-looking statements or information
will prove to be accurate, accordingly, investors should not place
undue reliance on the forward-looking statements or information
contained herein. 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 investors that while those terms are recognized
and required by Canadian regulations, the United States Securities and
Exchange Commission does not recognize them. "Inferred resources" have
a great amount of uncertainty as to their existence and as to their
economic and legal feasibility. It cannot be assumed that all or any
part of an inferred resource will ever be upgraded to a higher
category. 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.
SOURCE AuRico Gold Inc.
PDF available at: http://stream1.newswire.ca/media/2014/11/06/20141106_C9475_DOC_EN_43191.pdf