Close

AuRico Gold (AUQ) Provides Q2 Production Data

July 16, 2014 4:31 PM EDT
Get Alerts AUQ Hot Sheet
Price: $2.86 --0%

Today's EPS Names:
FSI, RELV, NEOM, More
Join SI Premium – FREE

AuRico Gold Inc. (NYSE: AUQ) 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

Company Wide Quarterly Production Growth

Preliminary 2014 Second Quarter Operational Results

Q1/13Q2/13Q3/13Q4/13Q1/14Q2/141
Young-Davidson
Gold ounces produced228,28129,25230,09933,10635,10440,166
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 day1,1301,6111,4172,5902,6113,595
Grades (g/t)2.72.52.83.12.83.3
Development metres1,9412,4452,6202,9863,7723,545
Mill processing facility�
Tonnes processed per day6,4667,0176,7476,9697,1638,230
Grades (incl. open pit stockpile)1.81.71.72.01.82.2
El Chanate
Gold ounces produced17,88918,75118,80416,42019,11016,032
Total cash costs per gold ounce3$563$602$588$615$586$618
Open pit tonnes mined per day106,31998,92887,33698,48795,40293,808
Consolidated Results
Gold ounces produced246,17048,00348,90349,52654,21456,198
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.

Preliminary 2014 Second Quarter Operational Results

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%, 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.

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.

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 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.
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.
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

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



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Corporate News, Guidance, Management Comments