10:53:30 EDT Thu 28 Mar 2024
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AuRico Gold Inc
Symbol AUQ
Shares Issued 248,118,521
Close 2014-07-15 C$ 4.20
Market Cap C$ 1,042,097,788
Recent Sedar Documents

AuRico estimates 56,198 oz of Au production for Q2

2014-07-16 16:24 ET - News Release

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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