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:
http://www.newswire.ca/en/webcast/detail/1042473/1132593
Archive Call Access:
If you are unable to attend the conference call, a replay will
be available until midnight, November 20,
2012 by dialing the appropriate number below:
- Local Toronto Participants: 1-416-849-0833 Passcode:
#35680929
- North America Toll Free:
1-855-859-2056 Passcode: #35680929
Archive Webcast:
The webcast will be archived for 90 days by following the link
provided below:
http://www.newswire.ca/en/webcast/detail/1042473/1132593
About AuRico Gold
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.
SOURCE AuRico Gold Inc.