TORONTO, November 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 (http://www.sedar.com) or the
Company's website (http://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 http://www.sedar.com, and on Newmarket's website
athttp://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 http://www.sedar.com and on the Company's
website athttp://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.
Chris Richter, President and
Chief Executive Officer, AuRico Metals Inc., +1-416-216-2780,
chris.richter@auricometals.ca; Robert
Chausse, Chief Financial Officer, AuRico Metals Inc.,
+1-416-216-2780, robert.chausse@auricometals.ca