Reports Eighth Consecutive Quarter of Record Production
Young-Davidson Delivers a 14% Increase in Quarterly Production
TORONTO, July 16, 2014 /PRNewswire/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ),("AuRico" or the "Company") today announces preliminary second quarter
production results. All amounts are in U.S. dollars unless otherwise
indicated. (Results for the second quarter 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 ongoing
ramp-up in production at the Young-Davidson mine located in northern
Ontario.
Company Wide Quarterly Production Growth
Preliminary 2014 Second Quarter Operational Results
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|
|
|
|
|
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| Q1/13 | Q2/13 | Q3/13 | Q4/13 | Q1/14 | Q2/141 |
Young-Davidson |
|
|
|
|
|
|
Gold ounces produced2 |
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 ounce3 |
$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
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Mill processing facility
|
|
|
|
|
|
|
|
|
Tonnes processed per day
|
6,466
|
7,017
|
6,747
|
6,969
|
7,163
|
8,230
|
|
|
Grades (incl. open pit stockpile)
|
1.8
|
1.7
|
1.7
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2.0
|
1.8
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2.2
|
El Chanate |
|
|
|
|
|
|
Gold ounces produced
|
17,889
|
18,751
|
18,804
|
16,420
|
19,110
|
16,032
|
Total cash costs per gold ounce3 |
$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 produced2 |
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
|
1. Data provided for the second quarter 2014 are estimates only and
subject to change. 2. Includes pre-production gold ounces from the Young-Davidson
underground mine prior to the declaration of commercial production in
the underground mine on October 31, 2013. 3. Cash costs are prior to inventory net realizable value adjustments
& 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. Pre-production ounces produced at Young-Davidson
are excluded from ounces produced as these ounces are credited against
capitalized project costs when sold.
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"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.
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The Young-Davidson mine recently established a new safety record by
achieving 465 days of lost time incident free operations.
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Record production of 40,166 gold ounces was reported in the quarter,
representing an increase of 5,062 ounces, or 14%, 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 includes the open pit mine and open pit
stockpile, were $871 per gold ounce.
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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% 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.
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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.
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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.
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During the quarter underground development advance 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.
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During the quarter, the mill facility significantly exceeded targeted
levels and averaged of 8,230 tonnes per day, at planned recoveries of
88%.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.
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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 0.80 grams per tonne, is 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
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At the end of the quarter, the El Chanate mine achieved 479 days of lost
time incident free operations.
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During the quarter the open pit mined an average of 93,808 tonnes per
day.
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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.
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Cash costs for the quarter were $618 per ounce, in-line with guidance
levels.
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 Young-Davidson gold mine in northern Ontario, and the El
Chanate mine in Sonora State, Mexico. AuRico's project pipeline also
includes advanced development opportunities in Mexico and Canada.
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
uncertainty of replacing depleted reserves and the possible
recalculation or reduction of reserves and resources; the risk that the
Young-Davidson shaft will not perform as planned; 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 such as Kemess; 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; continuation
of the dividend and dividend reinvestment plan; 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. 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/2014/07/16/20140716_C7903_DOC_EN_42141.pdf