Mr. Scott Perry reports
AURICO GOLD ANNOUNCES PRELIMINARY SECOND QUARTER PRODUCTION RESULTS
AuRico Gold Inc. has released preliminary second quarter
production results. All dollar amounts are in U.S. dollars unless otherwise
indicated. (Results for the second quarter of 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 continuing 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 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 (1)
Young-Davidson
Gold ounces produced (2) 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 ounce (3) $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 (including
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 ounce (3) $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 produced (2) 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
Notes:
(1) Data provided for the second quarter of 2014 are estimates only
and subject to change.
(2) Includes preproduction gold ounces from the Young-Davidson underground mine
prior to the declaration of commercial production in the underground mine
on Oct. 31, 2013.
(3) Cash costs are prior to inventory net realizable value adjustments and
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.
Preproduction 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 per cent, 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 include 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 per cent 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 advances 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 8,230 tonnes per day, at planned recoveries of
88 per cent. 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 0.8 gram per tonne, are 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.
We seek Safe Harbor.
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