TORONTO,
Nov. 11, 2015 /PRNewswire/
- AuRico Metals Inc. (TSX: AMI), ("AuRico" or the "Company")
today reported its financial results for the quarter ended
September 30, 2015. For
complete details of the unaudited Condensed Interim Consolidated
Financial Statements and associated Management's Discussion and
Analysis for the period ended September 30,
2015, please see the Company's filings on SEDAR
(www.sedar.com) or the Company's website (www.auricometals.ca). All
amounts are in US dollars unless otherwise indicated.
Third Quarter Highlights
- Earned royalty revenues of $1.5
million;
- Completed the acquisition of Mineral Streams, which is
anticipated to add approximately CAD $1.0
million per year in royalty income;
- Completed a private placement with Alamos for total proceeds of
CAD $5.6 million ($4.2M USD);
- Completed its 2015 exploration program at Kemess, with 27,719
metres drilled; Highlights included the intersection of 772 metres
of 0.465 grams per tonne (g/t) gold and 0.365% copper (further
results below);
- Continued permitting efforts at Kemess Underground with
Environmental Application submission expected in early 2016;
- Continued to advance the updated Kemess Underground Feasibility
Study; and
- Reported $14.7 million in cash
and $10.4 million in working capital,
excluding inventories, as at September 30,
2015.
Commenting on the results, Chris Richter, President and CEO stated, "The
third quarter was AuRico Metals' first quarter as a standalone
company and I'm pleased with the progress the team has made in
advancing both our royalty strategy and our Kemess Project. With
the acquisition of Mineral Streams in September, AuRico has added
to our portfolio of high quality cash flowing royalties located in
top tier jurisdictions. We've also benefited from the exploration
success the operators of the assets underlying a number of our
royalties have had. At Kemess we announced the results of our
successful 2015 drill campaign focused on Kemess East just last
week and we continue to make good progress in advancing the Kemess
Underground development project through, among other things, a
feasibility study update and Environmental Application submission –
both targeted for early 2016."
Operations Update
Royalties
The Company recognized revenue of $0.7 million from the Young-Davidson royalty in Q3 2015. Alamos has
guided to gold production at Young-Davidson of 160,000 to 180,000 ounces of gold
in 2015 and the mine is expected to ramp-up production further in
2016.
The Company recognized revenue of $0.7 million from the Fosterville royalty in Q3 2015. In Q3
2015 Fosterville sold 32,770 ounces, a record quarter of production
driven by increased mill grades, which were reported at 6.42 grams
per tonne. In addition, Newmarket has recently released promising
drill results at Fosterville
including the discovery of a new zone called the Eagle Fault
(please refer to press releases dated September 14, 2015 and October 14, 2015 available at www.sedar.com, and
on Newmarket's website at
www.newmarketgoldinc.com).
On September 18,
2015, the Company closed the acquisition of Mineral Streams,
a private company owning a 0.25% NSR on the Williams Mine at
Barrick Gold Corporation's Hemlo
complex, a 0.5% NSR on Wesdome Gold Mine Ltd's Eagle River Mine,
and a 1.5% NSR on Barrick's David
Bell property, which also forms part of the Hemlo complex. The transaction closed on
September 18, 2015 and the Company
acquired all of the outstanding common shares of Mineral Streams by
issuing 4,753,951 common shares and making a cash payment of CAD
$3.4 million (USD $2.6 million). These royalties contributed
$0.1 million in revenue for the short
period owned during Q3 2015.
Kemess Underground
The Company continues to advance the preparation
of the Kemess Underground Environmental Application ("EA"). Based
on the current timeline it is expected that the EA will be
submitted in Q1 2016. Once submitted the EA undergoes a 30 day
screening (in order to ascertain that the EA complies with certain
information requirements) and if the EA is compliant there is a 180
day review period during which time comments are received,
addressed and incorporated into the Final Assessment Report. This
is then delivered to both the provincial and federal ministers for
their respective decisions. These decisions must be announced
within 45 days.
The updated Feasibility Study continues to move
forward, with its release anticipated in the first quarter of
2016.
Kemess East
The Company recently completed its 2015
exploration program at the Kemess East project, which included
27,719 metres of diamond drilling. The program included
drilling 12 drill holes within the Kemess East deposit, 3 drill
holes in the Kemess Offset target and 9 drill holes on other
targets. The Kemess East results further expanded the higher
grade core mineralized zone so that it is approximately 300 metres
east-to-west and north-to-south at a similar elevation to the
previously reported mineral resource. The deposit remains
open to the east towards the Kemess East Offset fault, to the south
towards the post mineral sovereign intrusion and to the north.
Highlights from these results include:
- Hole KH-15-01, which intersected 305 metres of 0.625 g/t gold
and 0.433% copper;
- Including 166 metres of 0.831 g/t gold and 0.492% copper;
- Hole KH-15-02, which intersected 301 metres of 0.466 g/t gold
and 0.394% copper;
- Including 184 metres of 0.619 g/t gold and 0.463% copper;
- Hole KH-15-23, which intersected 458 metres of 0.640 g/t gold
and 0.437% copper;
- Including 361 metres of 0.749 g/t gold and 0.478% copper;
- Including 167 metres of 1.022 g/t gold and 0.574% copper;
- Hole KH-15-27, which intersected 590 metres of 0.516 g/t gold
and 0.366% copper;
- Including 476 metres of 0.615 g/t gold and 0.431% copper;
- Including 325 metres of 0.743 g/t gold and 0.492% copper;
- Hole KH-15-30, which intersected 772 metres of 0.465 g/t gold
and 0.365% copper;
- Including 615 metres of 0.569 g/t gold and 0.429% copper;
and
- Including 224 metres if 0.773 g/t gold and 0.508% copper.
The drill results have both increased the
confidence in the inaugural Kemess East resource and raised
expectations for a potential increase in resources.
The Kemess Offset target is directly east of the
Kemess Underground deposit and shows similar geological
characteristics as Kemess Underground.
Further information about the 2015 exploration
program, including drill results, are included in the Company's
press releases dated November 3, 2015
and August 18, 2015, which are
available on SEDAR at www.sedar.com and on the Company's website at
www.auricometals.ca.
The technical information about the Company's
exploration activities referenced in this press release has been
reviewed and verified by Mr. Chris
Rockingham, an officer of the Company, who is a qualified
person within the meaning of National Instrument 43-101.
Corporate Objectives
The Company's objectives over the next six months
include:
- Submit the Kemess Underground EA (Q1 2016);
- Release an updated Kemess Underground Feasibility Study (Q1
2016);
- Complete an updated Kemess East resource (Q1 2016); and
- Evaluate potential royalty acquisition opportunities that are
accretive to the Company's cash flow profile.
About AuRico Metals
AuRico Metals is a mining royalty and development
company whose royalty assets include a 1.5% NSR on the
Young-Davidson Gold Mine, a 0.25% NSR on the Williams mine at
Hemlo, and a 0.5% NSR on the Eagle
River mine – all located in Ontario,
Canada. AuRico Metals also has a 2% NSR on the Fosterville
Mine, located in Victoria,
Australia, and 100% ownership of the advanced Kemess Project
in British Columbia,
Canada. AuRico Metals' head office is located in Toronto, Ontario, Canada.
Cautionary Statement
This MD&A 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, or may be deemed to be, 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, projected gold production from
the Young-Davidson, Fosterville, Stawell, Hemlo and Eagle
River mines, which are not owned by the Company, plans or
future financial or operating performance, such as the Company's
expansion plans, project timelines including permitting and the
environmental application, production plans, expected drilling
targets, expected level of capital expenditures, forecasted cash
shortfalls and the Company's ability to fund them, cost estimates,
projected exploration results, reserve and resource estimates, the
Company's ability to create value for shareholders, sufficiency of
working capital for future commitments 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 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
document include, but are not limited to: changes to current
estimates of mineral reserves and resources; fluctuations in the
price of gold and copper; changes in foreign exchange rates
(particularly the Canadian dollar and U.S. dollar); the performance
of the Young-Davidson, Fosterville, Stawell, Hemlo and Eagle
River mines, which may impact the future cash flows
associated with the Company's royalty holdings, the impact of
inflation; employee relations; litigation; disruptions affecting
operations; availability of and increased costs associated with
mining inputs and labor; operating or technical difficulties in
connection with mining or development activities; inherent risks
associated with mining and mineral processing; 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 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.
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; development schedules
and the associated costs; ability to procure equipment and supplies
and on a timely basis; the timing and ability to obtain permits and
other approvals for projects and operations including provincial
and federal approval of the environmental application; 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 Metals