Reports Eighth Consecutive Quarter of Record
Production
Young-Davidson Delivers a 14% Increase in Quarterly
Production
TORONTO, July 16, 2014 /PRNewswire/ - AuRico Gold Inc.
(TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") today
announces preliminary second quarter production results. All
amounts are in U.S. dollars unless otherwise indicated. (Results
for the second quarter 2014 are estimates only and are subject to
change.)
AuRico is reporting its eighth consecutive
quarter of record company-wide gold production driven by record
production from the cornerstone Young-Davidson mine. Period-over-period production
growth is expected to continue going forward, underpinned by the
ongoing ramp-up in production at the Young-Davidson mine located in northern Ontario.
Company Wide Quarterly Production
Growth
Preliminary 2014 Second Quarter Operational
Results
|
|
|
|
|
|
|
|
Q1/13 |
Q2/13 |
Q3/13 |
Q4/13 |
Q1/14 |
Q2/141 |
Young-Davidson |
|
|
|
|
|
|
Gold ounces produced2 |
28,281 |
29,252 |
30,099 |
33,106 |
35,104 |
40,166 |
|
Underground cash costs per gold
ounce |
- |
- |
- |
$663 |
$808 |
$803 |
|
Open pit cash costs per gold
ounce |
$694 |
$716 |
$666 |
$983 |
$1,350 |
$974 |
Total cash costs per gold
ounce3 |
$694 |
$716 |
$666 |
$850 |
$1,009 |
$871 |
Underground mine |
|
|
|
|
|
|
|
Tonnes mined per day |
1,130 |
1,611 |
1,417 |
2,590 |
2,611 |
3,595 |
|
Grades (g/t) |
2.7 |
2.5 |
2.8 |
3.1 |
2.8 |
3.3 |
|
Development metres |
1,941 |
2,445 |
2,620 |
2,986 |
3,772 |
3,545 |
Mill processing facility |
|
|
|
|
|
|
|
|
Tonnes processed per day |
6,466 |
7,017 |
6,747 |
6,969 |
7,163 |
8,230 |
|
|
Grades (incl. open pit stockpile) |
1.8 |
1.7 |
1.7 |
2.0 |
1.8 |
2.2 |
El Chanate |
|
|
|
|
|
|
Gold ounces produced |
17,889 |
18,751 |
18,804 |
16,420 |
19,110 |
16,032 |
Total cash costs per gold
ounce3 |
$563 |
$602 |
$588 |
$615 |
$586 |
$618 |
Open pit tonnes mined per day |
106,319 |
98,928 |
87,336 |
98,487 |
95,402 |
93,808 |
Consolidated Results |
|
|
|
|
|
|
Gold ounces produced2 |
46,170 |
48,003 |
48,903 |
49,526 |
54,214 |
56,198 |
Total cash costs per gold ounce 3 |
$635 |
$655 |
$628 |
$771 |
$870 |
$801 |
1. Data provided for the
second quarter 2014 are estimates only and subject to change.
2. 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.
3. Cash costs are prior to
inventory net realizable value adjustments & reversals.
For Young-Davidson, gold ounces for cash costs purposes include
ounces produced for 2013, and ounces sold for 2014. For El
Chanate and on a consolidated basis, gold ounces for cash cost
purposes include ounces sold. Pre-production ounces produced at
Young-Davidson are excluded from ounces produced as these ounces
are credited against capitalized project costs when sold. |
"We are pleased to report the Company's eighth
consecutive quarter of record gold production and another record
performance at the Young-Davidson mine where the operation continues to
exceed expectations. With production levels ahead of plan and the
related cost efficiencies being realized, we are increasingly
confident that Young-Davidson will be generating positive free cash
flow by the end of this year", stated Scott
Perry, President and Chief Executive Officer. He continued,
"Company-wide, we remain firmly on track to meet our annual 2014
production guidance and the Company remains well positioned with a
solid balance sheet, a quality asset base, and a team that is
committed to long-term shareholder value creation."
Young-Davidson Update
During the second quarter the Young-Davidson mine continued to deliver
productivity improvements throughout the operation and reported its
eighth consecutive quarter of record gold production.
- The Young-Davidson mine recently established a new
safety record by achieving 465 days of lost time incident free
operations.
- Record production of 40,166 gold ounces was reported in the
quarter, representing an increase of 5,062 ounces, or 14%, over the
prior quarter. The operation is expected to deliver additional
period-over-period production increases going forward as the
underground mine ramps-up to targeted levels.
- Underground cash costs for the quarter were $803 per gold ounce and are expected to decline
throughout the year, corresponding with planned
quarter-over-quarter increases in underground productivity. Total
cash costs for the quarter, which includes the open pit mine and
open pit stockpile, were $871 per
gold ounce.
- During the quarter, underground mine productivity exceeded
planned levels and averaged approximately 3,595 tonnes per day at
grades in-line with reserve grade estimates. With underground
productivity currently at more than 90% of the year-end target, the
operation is firmly 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.
- For the second full quarter of underground commercial
production, unit mining costs were in-line with expectations at
approximately $45 per tonne.
Corresponding with the planned quarter-over-quarter increases in
underground productivity, unit costs are expected to decrease
steadily throughout the year to a year-end underground unit mining
cost of approximately $40 per
tonne.
- During the quarter, the operation was able to fully utilize
excess paste-fill capacity to accelerate the filling of additional
mined out stopes to potentially accelerate the planned underground
ramp-up schedule through earlier access to secondary stopes. The
capacity of the paste-fill plant will fully support the underground
ramp-up to 8,000 tonnes per day at the end of 2016.
- During the quarter underground development advance continued to
exceed planned levels with approximately 3,545 metres completed, an
average of 39 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
2014 and beyond.
- During the quarter, the mill facility significantly exceeded
targeted levels and averaged of 8,230 tonnes per day, at planned
recoveries of 88%.The higher throughput level during the quarter
has firmly established a sustainable mill processing run rate of
8,000 tonnes per day going forward that will provide considerable
flexibility as the underground mine continues to ramp up to its
target of 8,000 tonnes per day at the end of 2016.
- As planned, the short life open pit mine was fully depleted in
early June. As a result, open pit mining activities have ceased and
mining costs of approximately $3
million per month have been eliminated. Currently,
approximately 3.2 million tonnes of open pit ore, at an average
grade of approximately 0.80 grams per tonne, is stockpiled ahead of
the mill facility for future processing. The open pit stockpile
will supplement underground ore feed to the mill processing
facility as the underground mine ramps up to targeted levels. As
the related mining costs associated with the stockpile were
expended in prior periods, processing of these ore tonnes will
favourably augment the mine's free cash flow profile going
forward.
El Chanate Update
- At the end of the quarter, the El Chanate mine achieved 479
days of lost time incident free operations.
- During the quarter the open pit mined an average of 93,808
tonnes per day.
- Production in the quarter reflected higher than planned
sequencing of lower grade benches primarily attributable to lower
than planned mine contractor productivity. Operations are expected
to increasingly shift to higher grade benches during the second
half of the year.
- Cash costs for the quarter were $618 per ounce, in-line with guidance
levels.
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 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
Mexico and Canada. 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 and the
possible recalculation or reduction of reserves and resources; 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 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 such as
Kemess; 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;
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 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. 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/2014/07/16/20140716_C7903_DOC_EN_42141.pdf