Young-Davidson Reports Underground Cash Costs of $656 per Ounce and Underground Unit Costs of
$41 per Tonne
TORONTO, Oct. 14, 2014 /CNW/ - AuRico Gold Inc. (TSX:
AUQ) (NYSE: AUQ), ("AuRico" or the "Company") today announces
preliminary third quarter production results. All amounts are
in U.S. dollars unless otherwise indicated. (Results for the
third quarter 2014 are estimates only and are subject to
change.)
AuRico is reporting its ninth 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.
To view "Company Wide Quarterly
Production Growth", please click:
http://files.newswire.ca/975/aurico_1014.pdf
Preliminary 2014 Third Quarter Operational
Results
|
Q1/13 |
Q2/13 |
Q3/13 |
Q4/13 |
Q1/14 |
Q2/14 |
Q3/141 |
Young-Davidson |
|
|
|
|
|
|
|
Gold ounces
produced2 |
28,281 |
29,252 |
30,099 |
33,106 |
35,104 |
40,166 |
40,538 |
|
Underground cash costs per gold
ounce |
- |
- |
- |
$663 |
$808 |
$803 |
$656 |
|
Open pit cash costs per gold
ounce |
$694 |
$716 |
$666 |
$983 |
$1,350 |
$974 |
$923 |
Total cash costs per gold
ounce3 |
$694 |
$716 |
$666 |
$850 |
$1,009 |
$871 |
$723 |
Underground mine |
|
|
|
|
|
|
|
|
Tonnes mined per day |
1,130 |
1,611 |
1,417 |
2,590 |
2,611 |
3,595 |
3,752 |
|
Grades (g/t) |
2.7 |
2.5 |
2.8 |
3.1 |
2.8 |
3.3 |
3.1 |
|
Development metres |
1,941 |
2,445 |
2,620 |
2,986 |
3,772 |
3,545 |
3,269 |
Mill processing
facility |
|
|
|
|
|
|
|
|
Tonnes processed per day |
6,466 |
7,017 |
6,747 |
6,969 |
7,163 |
8,230 |
7,670 |
|
Grades (incl. open pit stockpile) |
1.8 |
1.7 |
1.7 |
2.0 |
1.8 |
2.2 |
1.9 |
|
Recoveries (%) |
86% |
85% |
89% |
88% |
87% |
88% |
90% |
El Chanate |
|
|
|
|
|
|
|
Gold ounces
produced |
17,889 |
18,751 |
18,804 |
16,420 |
19,110 |
16,032 |
16,499 |
Total cash costs per
gold ounce3 |
$563 |
$602 |
$588 |
$615 |
$586 |
$618 |
$663 |
Open pit tonnes mined
per day |
106,319 |
98,928 |
87,336 |
98,487 |
95,402 |
93,808 |
94,643 |
Consolidated Results |
|
|
|
|
|
|
|
Gold ounces
produced2 |
46,170 |
48,003 |
48,903 |
49,526 |
54,214 |
56,198 |
57,037 |
Total cash costs per gold
ounce3 |
$635 |
$655 |
$628 |
$771 |
$870 |
$801 |
$706 |
1. Data provided for the
third 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. Represents a non-GAAP measure. See page 18 of the
Company's Q2 2014 Management's Discussion & Analysis for
further information. 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
were credited against capitalized project costs when sold. |
"The Company is pleased to report its ninth
consecutive quarter of record company-wide gold production, which
builds on the successes achieved in prior quarters. We are
particularly encouraged that our operation teams have delivered
another strong quarter of production and demonstrated that their
focus remains on quality production that drives margins, with
Young-Davidson reporting a significant 17% decrease
in cash costs", stated Scott Perry,
President and Chief Executive Officer. He continued, "The
disciplined approach to our business underpins our growing
production profile, which combined with our decreasing cost
profile, positions the Company for long-term, sustainable
performance. We remain optimistic that in the current gold price
environment, the Young-Davidson
mine will be generating positive free cash flow by the end of this
year."
Young-Davidson Update
- At the end of the quarter, the Young-Davidson mine achieved 557 days of lost time
incident free operations.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Currently, approximately 2.6 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. 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.
El Chanate Update
- During the quarter, the open pit mining rate averaged 94,643
tonnes per day with mined grades being in-line with plan.
- 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.
- Production increased over the prior quarter while cash costs
for the quarter were $663 per ounce,
which is 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/2014/10/14/20141014_C7501_DOC_EN_43002.pdf