AuRico Gold Reports Continued Strong Performance in the Second Quarter
TORONTO, Aug. 11, 2011 /CNW/ --
Operating Cash flow Increases 247%, Net Free Cash Flow Increases 261%
and Record Margins of 75%
TORONTO, Aug. 11, 2011 /CNW/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ('AuRico') is pleased to report financial results for the second quarter ended
June 30, 2011. All amounts are in U.S. dollars unless otherwise
indicated.
During the second quarter the Company delivered record performance in
most key operational and financial metrics, including record revenues,
earnings from operations, operating cash flow and net free cash flow.
The Company is well positioned for quarter over quarter production
growth from its three wholly-owned mines in Mexico.
AuRico's robust performance to date has supported the positive update of
the Company's 2011 operational guidance. Production guidance has been
increased to 175,000 to 195,000 gold ounces, 4.95 to 5.50 million
silver ounces, or 265,000 to 295,000 gold equivalent ounces, at reduced
cash costs of $445 to $475 per gold equivalent ounce (using the
Company's long-term gold equivalent ratio of 55:1).
Second Quarter Financial Highlights
-- Record revenue of $112.9 million, a 98% increase over 2010
-- Record Earnings from Operations(1) of $56.1 million or $0.33
per share, a 246% increase over 2010
-- Net earnings of $35.8 million, (or $0.21 per share), prior to
non-recurring charges of $8.7 million, (or $0.05 per share),
related to the acquisition of Capital Gold, and $2.6 million,
net of tax, (or $0.02 per share), in stand-by costs related to
the recommencement of operations at El Cubo, a 49% increase
over 2010, after adjusting for the Q2 2010 El Cubo impairment
charge of $194.6 million, net of tax and $3.7 million, net of
tax, in stand-by costs at El Cubo.
-- Record operating cash flow of $54.4 million or $0.32 per share,
a 247% increase over 2010
-- Record net free cash flow of $20.7 million, a 261% increase
over 2010
-- Increased the quarter-end cash balance by 54% to $102.1 million
as compared to a cash balance of $66.3 million immediately
following the completion of the Capital Gold acquisition, an
increase of $35.8 million since the April 8, 2011 transaction.
Second Quarter Operational Highlights
-- Strong and growing production of 43,714 gold ounces and 1.2
million silver ounces, or 75,073 gold equivalent ounces using
the actual gold equivalency ratio of 39:1 realized during the
quarter, representing a 53% increase over 2010
-- Lowest quartile cash costs of $384 per gold equivalent ounce,
using the actual gold equivalency ratio of 39:1 realized during
the quarter, a 26% improvement ($136 per gold equivalent ounce)
over 2010
-- Record margins of $1,125 per ounce (75%) company-wide, a 65%
improvement over 2010
-- Increased consolidated production guidance and reduced cash
cost guidance for 2011, contrary to the current industry
environment.
Asset Highlights
-- Effective cost containment initiatives at Ocampo delivered
industry leading cash costs of $340 per gold equivalent ounce
using the actual gold equivalency ratio of 39:1 realized during
the quarter, with margins of $1,171 per gold equivalent ounce
(77%), the highest ever in the history of Ocampo and in the
lowest cash cost quartile among peers
-- Reduced cash costs guidance at Ocampo based on the continued
productivity improvements and effective cost containment
initiatives have resulted in a $25 per ounce (6%) decrease in
the Company's 2011 cash cost outlook for Ocampo to $400 to $430
per gold equivalent ounce using the Company's long-term gold
equivalency ratio of 55:1.
-- Increased productivity at El Chanate achieved through the
immediate deployment of additional mining equipment upon the
completion of the acquisition of El Chanate effective April 8.
Material movement rates at El Chanate increased in June by 79%
more than the 2010 average. The initial phase of a multi-phase,
18-month expansion program was launched early in the quarter
targeting the optimization of the crushing and stacking
operation to a potential 26,000 tonnes per day. The immediate
impact of the program has allowed the facility to increase
current placement rates by almost 30% from 14,000 to
approximately 18,000 tonnes per day. These optimization
initiatives are expected to have a favourable impact on
production in the third quarter and cash costs towards the end
of the year.
-- Production resumed at El Cubo on July 11 when operations at the
Las Torres mill processing facility resumed. During the month
of July, mining rates continued to be ahead of planned rates,
averaging 1,011 tonnes per day. As of August 7, the ore
stockpiled ahead of the mill for processing exceeded 55,000
tonnes.
-- Success from the 2011 exploration program: Positive results
were reported during the quarter from the Ocampo district and
the El Chanate mine exploration programs.
'The past eighteen months have been transformational for the Company as
demonstrated in the record results reported in the second quarter
including, record operating cash flow, net free cash flow, margins and
cash costs. The success of our cost containment and productivity
performance programs has positioned the Company as an industry leader
with Ocampo reporting cash costs in the lowest quartile among our
peers. This is particularly significant as this has been achieved in a
period of increasing industry cost pressures where average cash costs
have increased by more than 17% in 2010,' stated René Marion, President
and Chief Executive Officer. 'The solid results reported in the second
quarter support our updated guidance, with increased production and
reduced cash cost forecasts for 2011. In the third quarter our growth
profile is expected to be further enhanced through the continued strong
performance at Ocampo, the initial impact of the productivity
enhancements implemented at El Chanate and the recommencement of
production at El Cubo in mid-July. We begin the second half of the year
well positioned for accelerated growth.'
Operational and Financial Results
____________________________________________________________________________________
|Three | Ocampo | El Chanate | El Cubo | Consolidated |
|Months |___________________|____________|___________________|____________________|
|Ended June| | | | | | | | |
|30 | | | | | | | | |
|(in | | | | | | | | |
|thousands,| | | | | | | | |
|except | | | | | | | | |
|ounces and| | | | | | | | |
|total cash| | | 2011( | | | | | |
|costs) | 2011 | 2010 | (5)) |2010| 2011 | 2010 | 2011 | 2010 |
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Gold | | | | | | | | |
|ounces | | | | | | | | |
|sold | 27,920| 23,835| 15,878| -| -| 4,316| 43,798| 28,151|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Silver | | | | | | | | |
|ounces | | | | | | | | |
|sold |1,189,166|1,036,246| 29,892| -| -| 221,437|1,219,058| 1,257,683|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounces | | | | | | | | |
|sold | | | | | | | | |
|(realized)| | | | | | | | |
|((1)) | 58,120| 39,744| 16,647| -| -| 7,755| 74,767| 47,499|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Gold | | | | | | | | |
|ounces | | | | | | | | |
|produced | 28,843| 24,963| 14,871| -| -| 4,268| 43,714| 29,231|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Silver | | | | | | | | |
|ounces | | | | | | | | |
|produced |1,210,429|1,066,998| 24,912| -| -| 213,203|1,235,341| 1,280,201|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounces | | | | | | | | |
|produced | | | | | | | | |
|(realized)| | | | | | | | |
|((1)) | 59,568| 41,362| 15,505| -| -| 7,593| 75,073| 48,955|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Revenue | | | | | | | | |
|from | | | | | | | | |
|mining | | | | | | | | |
|operations| $87,795| $47,811|$25,109| -| -| $9,233| $112,904| $57,044|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Mine | | | | | | | | |
|standby | | | | | | | | |
|costs | -| -| -| -| $3,591| $4,315| $3,591| $4,315|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Net | | | | | | | | |
|earnings /| | | | | | | | |
|(loss) | | | | | | | | |
|before | | | | | | | | |
|other | | | | | | | | |
|items | $53,385| $19,853| $9,806| -|($4,473)|($227,288)| $43,809|($211,480)|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Cash flow | | | | | | | | |
|from | | | | | | | | |
|operations| $55,213| $20,416|$14,283| -|($6,354)| ($1,162)| $54,413| $15,694|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Total cash| | | | | | | | |
|costs per | | | | | | | | |
|gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounce | | | | | | | | |
|(realized)| | | | | | | | |
|((2)(4)) | $340| $458| $486| -| -| $840| $384| $520|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Total cash| | | | | | | | |
|costs per | | | | | | | | |
|gold ounce| | | | | | | | |
|((2)) | ($925)| ($40)| $486| -| -| $562| ($414)| $52|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounces | | | | | | | | |
|sold | | | | | | | | |
|(55:1)( | | | | | | | | |
|(3)) | 49,541| 42,676| 16,421| -| -| 8,342| 65,962| 51,018|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounces | | | | | | | | |
|produced | | | | | | | | |
|(55:1)( | | | | | | | | |
|(3)) | 50,851| 44,363| 15,324| -| -| 8,143| 66,175| 52,506|
|__________|_________|_________|_______|____|________|__________|_________|__________|
|Total cash| | | | | | | | |
|costs per | | | | | | | | |
|gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounce | | | | | | | | |
|(55:1)((2)| | | | | | | | |
|(3)(4)) | $399| $426| $486| -| -| $781| $435| $484|
|__________|_________|_________|_______|____|________|__________|_________|__________|
((1)) Gold equivalent ounces include silver ounces
produced and sold converted to a gold equivalent
based on the ratio of the
actual realized sales prices of the commodities.
((2)) See the Non-GAAP Measures section of the
Management's Discussion and Analysis contained on
page 28.
((3)) Gold equivalent ounces include silver ounces
produced and sold converted to a gold equivalent,
based on the Company's
long-term gold equivalency ratio of 55:1.
((4)) Cash costs for the Ocampo mine, the El Cubo mine
and on a consolidated basis are calculated on a per
gold equivalent
ounce basis. Cash costs for the El Chanate mine are
calculated on a per gold ounce basis, using silver
revenues as a
by-product cost credit.
((5)) Represents results subsequent to the acquisition of
the El Chanate mine on April 8, 2011.
_____________________________________________________________________________________
|Six Months| Ocampo | El Chanate | El Cubo | Consolidated |
|Ended June|___________________|____________|____________________|____________________|
|30 | | | | | | | | |
|(in | | | | | | | | |
|thousands,| | | | | | | | |
|except | | | | | | | | |
|ounces and| | | | | | | | |
|total cash| | | 2011( | | | | | |
|costs) | 2011 | 2010 | (5)) |2010| 2011 | 2010 | 2011 | 2010 |
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Gold | | | | | | | | |
|ounces | | | | | | | | |
|sold | 53,951| 46,241| 15,878| -| -| 10,966| 69,829| 57,207|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Silver | | | | | | | | |
|ounces | | | | | | | | |
|sold |2,249,472|2,056,450| 29,892| -| -| 540,891|2,279,364| 2,597,341|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounces | | | | | | | | |
|sold | | | | | | | | |
|(realized)| | | | | | | | |
|((1)) | 108,801| 77,605| 16,647| -| -| 19,286| 125,448| 96,891|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Gold | | | | | | | | |
|ounces | | | | | | | | |
|produced | 54,725| 46,818| 14,871| -| -| 10,844| 69,596| 57,662|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Silver | | | | | | | | |
|ounces | | | | | | | | |
|produced |2,245,603|2,027,815| 24,912| -| -| 536,457|2,270,515| 2,564,272|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounces | | | | | | | | |
|produced | | | | | | | | |
|(realized)| | | | | | | | |
|((1)) | 109,422| 77,908| 15,505| -| -| 19,108| 124,927| 97,016|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Revenue | | | | | | | | |
|from | | | | | | | | |
|mining | | | | | | | | |
|operations| $158,108| $89,713|$25,109| -| -| $22,018| $183,217| $111,731|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Mine | | | | | | | | |
|standby | | | | | | | | |
|costs | -| -| -| -| $11,146| $4,315| $11,146| $4,315|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Net | | | | | | | | |
|earnings /| | | | | | | | |
|(loss) | | | | | | | | |
|before | | | | | | | | |
|other | | | | | | | | |
|items | $90,964| $35,014| $9,806| -|($12,399)|($226,225)| $67,361|($199,254)|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Cash flow | | | | | | | | |
|from | | | | | | | | |
|operations| $106,777| $37,353|$14,283| -|($17,924)| $2,003| $88,034| $30,706|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Total cash| | | | | | | | |
|costs per | | | | | | | | |
|gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounce | | | | | | | | |
|(realized)| | | | | | | | |
|((2)(4)) | $360| $456| $486| -| -| $794| $383| $523|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Total cash| | | | | | | | |
|costs per | | | | | | | | |
|gold ounce| | | | | | | | |
|((2)) | ($755)| ($19)| $486| -| -| $533| ($473)| $86|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounces | | | | | | | | |
|sold | | | | | | | | |
|(55:1)( | | | | | | | | |
|(3)) | 94,850| 83,631| 16,421| -| -| 20,800| 111,271| 104,431|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounces | | | | | | | | |
|produced | | | | | | | | |
|(55:1)( | | | | | | | | |
|(3)) | 95,554| 83,688| 15,324| -| -| 20,596| 110,878| 104,284|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
|Total cash| | | | | | | | |
|costs per | | | | | | | | |
|gold | | | | | | | | |
|equivalent| | | | | | | | |
|ounce | | | | | | | | |
|(55:1)((2)| | | | | | | | |
|(3)(4)) | $413| $423| $486| -| -| $736| $432| $486|
|__________|_________|_________|_______|____|_________|__________|_________|__________|
((1)) Gold equivalent ounces include silver ounces produced and sold
converted to a gold equivalent based on the ratio of the actual
realized sales prices of the commodities.
((2)) See the Non-GAAP Measures section of the Management's Discussion
and Analysis contained on page 28.
((3)) Gold equivalent ounces include silver ounces produced and sold
converted to a gold equivalent, based on the Company's
long-term gold equivalency ratio of 55:1.
((4)) Cash costs for the Ocampo mine, the El Cubo mine and on a
consolidated basis are calculated on a per gold equivalent ounce
basis. Cash costs for the El Chanate mine are calculated on a per
gold ounce basis, using silver revenues as a by-product cost
credit.
((5)) Represents results subsequent to the acquisition of the El
Chanate mine on April 8, 2011
The financial statements are available on the Company's website at www.auricogold.com or www.sedar.com.
Q2 Conference Call and Webcast
A webcast and conference call will be held on Thursday, August 11, 2011
starting at 10:00 a.m. Eastern Time. Senior management will be on hand
to discuss the results.
Conference Call Access:
-- Canada & US Toll Free: 1-888-231-8191
-- International & Toronto: 1-647-427-7450
When the Operator answers please ask to be placed into the AuRico Gold
Second Quarter 2011 Results Conference Call.
Conference Call Webcast:
The conference call event will be broadcast live on the internet via
webcast. To access the webcast please follow the link provided below:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3580940
Archive Call Access:
If you are unable to attend the conference call, a replay will be
available until midnight, August 18, 2011 by dialing the appropriate
number below:
-- Local Toronto Participants: 1-416-849-0833 Passcode:
#77592060
-- North America Toll Free: 1-800-642-1687 Passcode: #77592060
Archive Webcast:
The webcast will be archived for 90 days by following the link provided
below:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3580940 or via the Company's website at www.auricogold.com.
About AuRico Gold
AuRico Gold is a leading intermediate Canadian gold and silver producer
with a diversified portfolio of high quality mines and projects in
Mexico. The Company's three wholly-owned operating properties include
the Ocampo mine in Chihuahua State, the El Chanate mine in Sonora State
and the El Cubo mine in Guanajuato State. AuRico's strong pipeline of
development and exploration stage projects includes the Guadalupe y
Calvo advanced development property in Chihuahua State and the Orion
advanced development property in Nayarit State, along with six
exploration properties throughout Mexico. AuRico's head office is
located in Toronto, Ontario, Canada.
Cautionary Statement
Cautionary Note to US Investors - The United States Securities and
Exchange Commission permits US mining companies, in their filings with
the SEC, to disclose only those mineral deposits that a company can
economically and legally extract or produce. This press release uses
certain terms, such as 'measured', 'indicated' and 'inferred'
'resources', that the SEC guidelines strictly prohibit US registered
companies from including in their filings with the SEC. US Investors
are urged to consider closely the disclosure in AuRico Gold's Annual
Report on Form 40-F, which may be secured from AuRico Gold, or from the
SEC's website at http://www.sec.gov/edgar.shtml.
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
Certain statements included herein, including information as to the
future financial or operating performance of the Company, its
subsidiaries and its projects, constitute forward-looking statements.
The words ''believe'', ''expect'', ''anticipate'', ''target'',
''continue'', ''estimate'', ''may'', and similar expressions identify
forward-looking statements. Forward-looking statements include, among
other things, statements regarding anticipated future financial and
operational performance, the future price of gold and silver and the
ratio of their prices, the de-risking of operations, future exploration
results of its exploration and development programs and the success of
the Company's exploration approaches, the Company's ability to
delineate additional resources and reserves as a result of such
programs, statements regarding its financial exposure to litigation,
targets, estimates and assumptions in respect of gold and silver
production and prices, operating costs, results and capital
expenditures, mineral reserves and mineral resources and anticipated
grades, recovery rates, future financial or operating performance,
margins, operating and exploration expenditures, costs and timing of
completion of the Ocampo expansion program and improvements to the heap
leach pad, costs and timing of the development and commencement of
production of new deposits, costs and timing of construction, costs and
timing of future exploration and reclamation expenses including,
anticipated 2011 results, operating performance projections for 2011,
our ability to fully fund our business model internally, 2011 gold and
silver production and the cash and operating costs associated
therewith, the ability to achieve productivity and operational
efficiencies, and the timing of each thereof. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the Company, are
inherently subject to significant business, economic, competitive,
political and social uncertainties and contingencies. The operating and
financial performance of the Company will be affected by changes in the
actual gold equivalency ratio realized in 2011. Many factors could
cause the Company's actual results to differ materially from those
expressed or implied in any forward-looking statements made by, or on
behalf of, the Company. Such factors include, among others, known and
unknown uncertainties and risks relating to additional funding
requirements, reserve and resource estimates, commodity prices, hedging
activities, exploration, development and operating risks, illegal
miners, political and foreign risk, uninsurable risks, competition,
limited mining operations, production risks, environmental regulation
and liability, government regulation, currency fluctuations, recent
losses and write-downs, restrictions in the Company's loan facility,
dependence on key employees, possible variations of ore grade or
recovery rates, failure of plant, equipment or process to operate as
anticipated, accidents and labour disputes. Investors are cautioned
that forward-looking statements are not guarantees of future
performance and, accordingly, investors are cautioned not to put undue
reliance on forward-looking statements due to the inherent uncertainty
therein.
###
(____________________________________ )
(1) Represents earnings before other items prior to non-recurring charges
of $8.7 million in costs related to the acquisition of Capital Gold
Corporation effective April 8, 2011 and $3.6 million in stand-by costs
related to the recommencement of operations at El Cubo. In 2010,
represents earnings before other items prior to $223.4 million in
impairment charges related to the El Cubo mine and $4.3 million in
stand-by costs at El Cubo.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/August2011/11/c3047.html
please visit the AuRico Gold website at http://www.auricogold.com or contact:
| René Marion President & Chief Executive Officer AuRico Gold Inc. 1-647-260-8880 | Anne Day Director of Investor Relations AuRico Gold Inc. 1-647-260-8880 |