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TORONTO, Nov. 12, 2012 /PRNewswire/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or "the Company") reports financial results for the three and
nine months ended September 30, 2012 and provides an update on the
Young-Davidson mine. All amounts are in U.S. dollars. The Company will
host a conference call on Tuesday, November 13, 2012 beginning at 10:00
a.m. Eastern Time.
Third Quarter Financial Highlights
For the third quarter, the Company reported the following results,
inclusive of discontinued operations unless otherwise noted:
Revenues of $77.1 million.
Adjusted net earnings(1) of $29.5 million, or $0.10 per share.
Consolidated production of 51,103 gold ounces(2) and 478,497 silver ounces, or 59,727 gold equivalent ounces(2) using the actual gold equivalency ratio of 56:1 realized in the
quarter.
Consolidated cash costs of $625 per gold equivalent ounce (realized)(1), prior to the reversal of a net realizable value adjustment on the
Ocampo ore-in-process heap leach inventory. Inclusive of the reversal,
cash costs were $553 per gold equivalent ounce (realized)(1).
Operating cash flow (before changes in working capital) of $40.6
million, or $0.14 per share.
Cash costs from continuing operations of $504 per gold ounce(3).
Average realized margin from continuing operations of $1,169 per ounce,
or 70%.
(1)
See the table at the end of this press release for a reconciliation of
adjusted net earnings and refer to the discussion of Non-GAAP measures
below.
(2)
Includes 7,922 pre-commercial production gold ounces produced at
Young-Davidson.
(3)
Continuing operations include the Young-Davidson and El Chanate mine
operations.
"During the quarter we announced the sale of the Ocampo mine, which is
expected to close in mid-December. Following the completion of the
transaction, the Company will focus on delivering reliable, stable and
consistent performance from our two remaining low-cost, long-life, core
assets located in Canada and Mexico, which will underpin our commitment
to shareholder friendly initiatives. Our expanding production base,
strong cash position and growing free cash flow profile should provide
a platform for shareholder value creation," said Scott Perry, Chief
Executive Officer. He continued, "Our production growth profile is
primarily driven by the recently commissioned Young-Davidson mine,
which reported solid production and cash cost results in its first
month of commercial production. In the latter part of October, the
first two underground stopes in the Upper Boundary Zone came into
production and as a result, we expect strong production performance at
the Young-Davidson mine due to the contribution of this higher grade
underground ore during the fourth quarter."
Third Quarter Highlights
Quarter Ended Sept. 30, 2012(1)
Quarter Ended Sept. 30, 2011(1)
Nine Months Ended Sept. 30, 2012(1)
Nine Months Ended Sept. 30, 2011(1)
Revenue from mining operations
$77,063
$112,087
$368,051
$295,304
Average realized gold price per ounce
$1,664
$1,704
$1,666
$1,552
Average realized silver price per ounce
$29.87
$38.15
$30.95
$36.37
Earnings from operations
$16,967
$52,793
$80,113
$120,154
Net earnings from continuing operations
$43,018
$20,626
$36,199
$6,268
Net (loss) / earnings from discontinued operations
($7,781)
$41,988
$22,475
$92,655
Total net earnings
$35,237
$62,614
$58,674
$98,923
Net earnings per share from continuing operations, basic
$0.15
$0.12
$0.13
$0.04
Net (loss) / earnings per share from discontinued operations, basic
($0.03)
$0.24
$0.08
$0.58
Total net earnings per share, basic
$0.12
$0.36
$0.21
$0.62
Adjusted net earnings(2)
$29,491
$34,767
$111,152
$91,416
Adjusted net earnings per share(2)
$0.10
$0.20
$0.39
$0.57
Total operating cash flow
$6,170
$51,713
$85,531
$139,747
Total net free cash flow
($103,433)
$12,251
($343,056)
$38,280
(1) The information in this table includes the results of both continuing
and discontinued operations, except where indicated. (2) See the table at the end of this press release for a reconciliation of
adjusted net earnings and refer to the discussion of Non-GAAP measures
below.
Operational Results - Continuing Operations
Quarter ended Sept 30/12
Nine months ended Sept. 30/12
El Chanate
Young-Davidson
Total
El Chanate
Young-Davidson
Total
Gold oz. produced
19,388
9,903
29,291
56,363
9,903
66,266
Gold oz. sold
19,121
3,999
23,120
54,286
3,999
58,285
Pre-commercial production
gold oz. produced(1)
-
7,922
7,922
-
19,872
19,872
Pre-commercial production
gold oz. sold(1)
-
8,701
8,701
-
13,910
13,910
Total cash costs per gold
oz.(2)(3)(4)
$434
$639
$504
$425
$639
$458
Margins per gold oz.
$1,221
$1,117
$1,169
$1,240
$1,117
$1,213
(1) Pre-commercial production ounces produced and sold at Young-Davidson
are excluded from consolidated ounces produced and sold, as these
ounces are credited against capitalized
project costs. (2) Cash costs for the El Chanate mine and Young-Davidson mine are
calculated on a per gold ounce basis, using by-product revenues as a
cost credit. Refer to the discussion of Non-GAAP
measures below. (3) Gold ounces used to calculate cash costs include ounces sold at the El
Chanate mine and ounces produced at the Young-Davidson mine for the
three and nine months ended
September 30, 2012. (4) The Young-Davidson mine declared commercial production on September 1,
2012 and therefore, cash costs are calculated on post-commercial
production ounces only (9,903 ounces).
Pre-commercial production ounces produced are excluded from the
calculation of cash costs as they are credited against capitalized
project costs.
Young-Davidson Update (October)
On September 1, 2012, the Young-Davidson mine achieved commercial
production.
During October, the Young-Davidson mine produced 9,177 gold ounces.
Production from the initial two stopes in the Upper Boundary Zone began
in the latter part of October. During the fourth quarter the Company
has targeted mining 90,000 tonnes at grades in excess of 3.0 grams per
tonne gold, including the 12,000 tonnes mined in October at grades
averaging 4.0 grams per tonne gold.
Mill feed grades are continuing to increase, through a combination of
higher grade open pit ore and the initial production contribution from
the underground.
The mill facility continued to operate at target levels during October.
Raise boring of the second leg (450 metres) of the Northgate shaft is
progressing well and is expected to be completed in early 2013.
Structural work for the new headframe will be completed before year
end, with mechanical installations completed in Q1 2013. Construction
of the mid-shaft crushing and loading infrastructure is on schedule for
commissioning by mid-year 2013.
Corporate Highlights
On October 9, 2012, the Company entered into a definitive agreement with
Minera Frisco, S.A.B. de C.V. ("Minera Frisco"), pursuant to which
Minera Frisco will acquire the Company's Ocampo mine and the Venus and
Los Jarros exploration properties located in Chihuahua, Mexico, as well
as a 50% interest in the Orion advanced development project located in
Nayarit, Mexico, for total consideration of $750 million in cash. The
transaction is expected to close in December 2012.
On October 5, 2012, the Company reached an agreement to settle the class
action claim filed by Ed J. McKenna, subject to approval of the court
and the right of the Company to terminate the agreement under certain
circumstances.
During October 2012, the Company sold its entire equity interest in
Endeavour Silver Corp. and Crocodile Gold Corporation on a block trade
basis for gross proceeds of $104.6 million.
Adjusted Net Earnings
Young- Davidson
El Chanate
Corporate & Other
Continuing Operations
Ocampo
El Cubo
Discontinued Operations
Consolidated
Net earnings / (loss)
2,740
16,590
23,688
43,018
(27,282)
19,501
(7,781)
35,237
Adjustments:
Unrealized foreign
exchange loss
-
-
7,952
7,952
1,948
242
2,190
10,142
Fair value adjustment on
option component of
convertible senior notes
-
-
(14,416)
(14,416)
-
-
-
(14,416)
Unrealized gain on
investments
-
-
(20,251)
(20,251)
-
-
-
(20,251)
Other unrealized gains
and non-recurring
expenses
-
-
(1,598)
(1,598)
-
-
-
(1,598)
Disposition-related costs
-
-
-
-
3,507
1,820
5,327
5,327
Reversal of NRV
adjustment on Ocampo
heap leach
-
-
-
-
(6,074)
-
(6,074)
(6,074)
Ocampo outside tax
basis adjustment
-
-
-
-
39,168
-
39,168
39,168
Gain on disposition of El
Cubo and GyC
-
-
-
-
-
(24,062)
(24,062)
(24,062)
Tax impact of
adjustments
-
-
2,323
2,323
333
3,362
3,695
6,018
Adjusted net earnings
2,740
16,590
(2,302)
17,028
11,600
863
12,463
29,491
Earnings per share
$ 0.06
$ 0.04
$ 0.10
Non-GAAP Measures
The Company uses the measures adjusted net earnings, cash costs per
ounce, and net free cash flow in this press release, which do not have
a standardized meaning prescribed by International Financial Reporting
Standards ("IFRS" or "GAAP"). They are, therefore, considered to be
non-GAAP measures and may not be comparable to similar measures
presented by other companies. The non-GAAP measures cash costs per
ounce and net free cash flow are reconciled to the Company's financial
statements on page 27 of the Company's Management's Discussion and
Analysis.
Adjusted net earnings is comprised of net earnings from both continuing
and discontinued operations, adjusted for specific items. While the
adjustments to net earnings in this measure include items that are
recurring, adjusted net earnings is a useful measure as the unrealized
gains / losses on foreign exchange, fair value adjustments on
investments and derivative liabilities, and other non-recurring items
do not reflect the underlying operating performance of the Company's
core mining business in the periods presented and are not necessarily
indicative of future operating results.
Financial Statements and Management's Discussion and Analysis
The interim financial statements and related Management's Discussion and
Analysis can be found on the Company's website at www.auricogold.com or under the Company's profile on www.sedar.com and with the Securities and Exchange Commission at www.sec.gov/edgar.shtml ("Edgar").
Conference Call Details
A webcast and conference call will be held on Tuesday, November 13, 2012
starting at 10:00 a.m. Eastern Time. Senior management will be on the
call to discuss the results.
Conference Call Access:
Canada & U.S. Toll Free: 1-888-231-8191
International & Toronto: 1-647-427-7450
Conference Call Live Webcast:
The conference call will be broadcast live on the internet via webcast.
To access the webcast, please follow the link below:
AuRico Gold is a leading Canadian gold producer with a diversified
portfolio of high quality mines and projects in North America that have
significant production growth and exploration potential. Following the
divestiture of Ocampo, the Company will be focused on its core
operations including the Young-Davidson gold mine in northern Ontario
which declared commercial production on September 1st, 2012 and the El
Chanate mine in Sonora State. AuRico's strong project pipeline also
includes advanced development opportunities in Mexico and British
Columbia. AuRico's head office is located in Toronto, Ontario, Canada
Cautionary Statement
Certain information included in this news release constitutes
forward-looking statements, including any information as to our
projects, plans and future financial and operating performance. All
statements, other than statements of historical fact, are
forward-looking statements. The words "expect", "believe",
"anticipate", "will", "intend", "estimate", "forecast", "budget",
"schedule" and similar expressions identify forward-looking statements.
Forward-looking statements are necessarily based upon a number of
factors and assumptions that, while considered reasonable by
management, 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 include, but
are not limited to: changes to current estimates of mineral reserves
and resources; fluctuations in the price of gold and silver; changes in
foreign exchange rates (particularly the Canadian dollar, Mexican peso
and U.S. dollar); the impact of inflation; changes in our credit
rating; employee relations; litigation; disruptions affecting
operations; availability of and increased costs associated with mining
inputs and labor; development delays at the Young-Davidson mine;
technical challenges associated with the construction of capital
projects; operating or technical difficulties in connection with mining
or development activities; inherent risks associated with mining and
mineral processing; the risk that the Young-Davidson, El Chanate and
Ocampo mines and may not perform as planned; the ability to realize the
perceived benefits from the acquisition of Capital Gold and Northgate;
the ability to complete the sale of the Ocampo mine; 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;
contests over title to properties; changes in national and local
government legislation in Canada, Mexico 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; risks arising from holding
derivative instruments; business opportunities that may be pursued by,
the company; and the ability of the company to successfully integrate
acquisitions. Many of these uncertainties and contingencies can affect
our actual results and could cause actual results to differ materially
from those expressed or implied in any forward-looking statements made
by, or on behalf of, us. Readers are cautioned that forward-looking
statements are not guarantees of future performance. All of the
forward-looking statements made in this third quarter report are
qualified by these cautionary statements. Specific reference is made to
the most recent Form 40-F/Annual Information Form on file with the SEC
and Canadian provincial securities regulatory authorities for a
discussion of some of the factors underlying forward-looking
statements. 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.
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