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."
2015 Operational Estimates1 |
|
|
|
|
|
Gold Production (ounces) |
Low |
High |
Young-Davidson |
160,000 |
180,000 |
El Chanate |
65,000 |
75,000 |
Total Production |
225,000 |
255,000 |
Cash Costs per Ounce |
|
|
Young-Davidson |
|
|
|
Underground Mine |
$600 |
$700 |
|
Historical Open Pit Stockpile
Inventory (see note below) |
$1,100 |
$1,200 |
Young-Davidson Total |
$675 |
$775 |
El Chanate |
$675 |
$775 |
Total Cash Costs per Ounce |
$675 |
$775 |
Note: For cash flow purposes, cost to process
historical open pit stockpile inventory is approx. $800 per
ounce |
All-in Sustaining Costs per
Ounce |
|
|
Young-Davidson |
$950 |
$1,050 |
El Chanate |
$950 |
$1,050 |
Total All-in Sustaining Costs per
Ounce2,3 |
$1,000 |
$1,100 |
Capital Investment Program
($000s) |
|
Young-Davidson |
|
|
|
Growth Capital |
$40,000 |
$45,000 |
|
Sustaining Capital |
$45,000 |
$50,000 |
Total Capital Investment -
Young-Davidson |
$85,000 |
$95,000 |
El Chanate |
|
|
|
Sustaining Capital |
$17,500 |
$20,000 |
Total Capital Investment - El
Chanate |
$17,500 |
$20,000 |
Total Capital Investment |
$102,500 |
$115,000 |
Exploration Drilling Programs
($000s) |
|
|
Kemess Development Project |
$5,000 |
$10,000 |
Lynn Lake Development
Project |
$5,000 |
$10,000 |
Mexico Properties |
$2,000 |
$3,000 |
General and Administrative
($000s)4 |
|
Corporate G&A |
$15,000 |
Crocodile Gold Royalty
Asset |
|
|
Upfront Cash Receipt (January
2015) |
$17,000 |
Annual NSR Revenue
Estimates (Payable in Quarterly Instalments) |
$2,500 |
1. |
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. |
2. |
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. |
Sustaining capital is defined as capital expenditures required
to maintain current levels of production. |
4. |
Does not include share-based compensation and other non-cash
expenses. |
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.
- 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.
- Underground unit mining costs are expected to decline by 10-20%
over the prior year average, underpinned by increasing underground
productivity throughout the year.
- 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.
- 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
- Production is expected to be between 65,000 and 75,000 ounces,
in-line with prior year production levels.
- Cash costs are expected to be between $675 and $775 per ounce.
- All-in sustaining costs are expected to be between $1,000 and $1,100 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