Guiding for Another Record Year with Gold Production Growth of up to
14%;
Cash Costs per Ounce Reduction of up to 13%; Capital Investment
Reduction of up to 36%
TORONTO, Feb. 19, 2015 /CNW/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") announces operational and capital investment
estimates for 2015 that includes significant production growth from the
cornerstone Young-Davidson mine. The Young-Davidson operation begins
the year at the mid-point of its planned ramp-up, increasingly
positioning the operation for growing profitability and a growing net
free cash flow stream going forward.
All amounts are in U.S. dollars unless otherwise indicated. This release contains forward looking information and reference is made
to the cautionary statement below.
2015 Operational Estimates
In 2015, company-wide production is expected to be in the range of
225,000 to 255,000 gold ounces, an increase of up to 14% over the prior
year. Production growth is primarily driven by quarter over quarter
production increases from the cornerstone Young-Davidson mine.
Company-wide cash costs are expected to decrease by up to 13% to
between $675 and $775 per ounce while all-in sustaining costs are
expected to decrease by up to 17% to between $1,000 and $1,100 per
ounce. Capital investment requirements at our operations are expected
to decline by up to 36% over the previous year and are estimated to be
between $102.5 and $115 million. It is anticipated that annual
production will continue to grow year over year as annual capital
investment requirements and all-in sustaining costs per ounce
correspondingly decline.
To view "Growing Production With a Corresponding Decrease in Costs and Capital
Investment", please click: http://files.newswire.ca/975/2015_Guidance_Charts.pdf
"In 2015 we will continue to build on the successes that we have
achieved over the past two years. The disciplined ramp-up of the
underground mine at Young-Davidson is expected to continue and drive
production growth of up to 15% at this cornerstone asset along with a
corresponding decrease in underground cash costs of up to 17%. These
operational improvements, combined with a significant decrease of up to
37% in capital investment requirements at Young-Davidson are expected
to position Young-Davidson for growing net free cash flow streams."
stated
Scott Perry
, President and Chief Executive Officer. He
continued, "Company-wide, AuRico begins 2015 uniquely positioned among
our peer group with an organic production growth profile, declining
costs and lower capital investment requirements. During the year, the
Company will also continue to focus on surfacing additional value at
our Canadian development projects in British Columbia and Manitoba."
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2015 Operational Estimates1
|
|
|
|
|
|
|
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Gold Production (ounces)
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Low
|
High
|
|
Young-Davidson
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160,000
|
180,000
|
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El Chanate
|
65,000
|
75,000
|
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Total Production
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225,000
|
255,000
|
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Cash Costs per Ounce
|
|
|
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Young-Davidson
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|
|
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Underground Mine
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$600
|
$700
|
|
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Historical Open Pit Stockpile Inventory (see note below)
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$1,100
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$1,200
|
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Young-Davidson Total
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$675
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$775
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El Chanate
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$675
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$775
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Total Cash Costs per Ounce
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$675
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$775
|
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Note: For cash flow purposes, cost to process historical open pit stockpile
inventory is approx. $800 per ounce
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All-in Sustaining Costs per Ounce
|
|
|
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Young-Davidson
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$950
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$1,050
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El Chanate
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$950
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$1,050
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Total All-in Sustaining Costs per Ounce2,3
|
$1,000
|
$1,100
|
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Capital Investment Program ($000s)
|
|
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Young-Davidson
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|
|
|
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Growth Capital
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$40,000
|
$45,000
|
|
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Sustaining Capital
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$45,000
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$50,000
|
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Total Capital Investment - Young-Davidson
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$85,000
|
$95,000
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El Chanate
|
|
|
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Sustaining Capital
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$17,500
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$20,000
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Total Capital Investment - El Chanate
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$17,500
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$20,000
|
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Total Capital Investment
|
$102,500
|
$115,000
|
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Exploration Drilling Programs ($000s)
|
|
|
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Kemess Development Project
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$5,000
|
$10,000
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Lynn Lake Development Project
|
$5,000
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$10,000
|
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Mexico Properties
|
$2,000
|
$3,000
|
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General and Administrative ($000s)4
|
|
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Corporate G&A
|
$15,000
|
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Crocodile Gold Royalty Asset
|
|
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Upfront Cash Receipt (January 2015)
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$17,000
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Annual NSR Revenue Estimates (Payable in Quarterly Instalments)
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$2,500
|
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1.
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The following currency assumptions were used to forecast 2015 estimates:
0.85:1 US dollar to the Canadian dollar and 14.0:1 Mexican pesos to the
US dollar.
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2.
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Company-wide all-in sustaining costs are defined as cash costs,
sustaining capital, corporate general and administrative expense,
excluding stock-based compensation and other non-cash items, and
sustaining exploration.
|
|
3.
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Sustaining capital is defined as capital expenditures required to
maintain current levels of production.
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4.
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Does not include share-based compensation and other non-cash expenses.
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Young-Davidson
The Young-Davidson mine is expected to deliver another year of
production growth along with declining costs as the underground mine
continues to ramp-up to planned levels. The declining capital
investment requirements and growing production will underpin the
operation's net free cash flow stream going forward.
-
Production at Young-Davidson is expected to increase by approximately
15% to between 160,000 and 180,000 gold ounces, which is underpinned by
increasing underground productivity throughout the year as the mine
ramps-up from 4,000 tonnes per day to the year-end exit rate of 6,000
tonnes per day.
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During January, the mill facility was offline for a 5-day period for a
budgeted mill reline, and consequently the Company expects production
to be approximately 40,000 ounces in the first quarter and then
increase gradually over the balance of the year.
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Underground unit mining costs are expected to decline by 10-20% over the
prior year average, underpinned by increasing underground productivity
throughout the year.
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Underground cash costs are expected to decline by up to 17% to between
$600 and $700 per gold ounce as underground productivity continues to
ramp-up throughout the year.
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All-in sustaining costs are expected to decline to between $950 and
$1,050 per gold ounce as production increases and costs continue to
decline.
-
Capital investment requirements are expected to decrease by
approximately 37% to between $85 and $95 million as growth capital
requirements continue to decline.
El Chanate
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Production is expected to be between 65,000 and 75,000 ounces, in-line
with prior year production levels.
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Cash costs are expected to be between $675 and $775 per ounce.
-
All-in sustaining costs are expected to be between $950 and $1,050 per
ounce.
-
Capital investment requirements are expected to decrease by up to 33%
over the prior year, primarily as a result of reduced stripping
requirements.
-
In 2015, the Company will focus drilling on the Company's expanded land
package located along the prospective El Chanate Trend.
About AuRico Gold
AuRico Gold is a leading Canadian gold producer with mines and projects
in North America that have significant production growth and
exploration potential. The Company is focused on its core operations
including the cornerstone Young-Davidson gold mine in northern Ontario,
and the El Chanate mine in Sonora State, Mexico. AuRico's project
pipeline also includes the advanced development Kemess Property in
northern British Columbia and the Lynn Lake Gold Camp in northern
Manitoba. The Company also has other exploration 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 risk
that mining operations do not meet expectations; the risk that projects
will not be developed according 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; disputes over title to
properties; the speculative nature of mineral exploration and
development; risks related to aboriginal or Ejido 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; 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 ability
to do so 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.
In particular, forward-looking information included in this document
includes, but is not limited to: (1) production estimates and
production growth rates, which assume accuracy of projected ore grade,
mining rates, recovery timing and recovery rate estimates and may be
impacted by unscheduled maintenance, labour and contractor
availability; (2) capital expenditures and other cash costs, which
assume foreign exchange rates and accuracy of production estimates, and
may be impacted by unexpected maintenance, the need to hire external
resources and accelerated capital plans; (3) profits and free cash
flow, which assume production and expenditure estimates and may be
impacted by gold prices, production estimates, and the timing of
payments, and (4) reserves and resources which are forward looking
statements by their nature involving implied assessment, and may be
impacted by metal prices, future drilling results, operating costs,
mining recoveries and dilution rates.
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.
PDF available at: http://stream1.newswire.ca/media/2015/02/19/20150219_C9746_DOC_EN_43381.pdf