TORONTO, Jan. 31, 2012 /CNW/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or "AuRico Gold" or
the "Company") provides operating and capital expenditure guidance for 2012. All
amounts are in U.S. dollars unless otherwise indicated.
2012 Production Guidance ____________________________________________________________________________________________________________________________________________
For 2012 the Company is providing guidance on production, cash costs and
capital expenditures as summarized in the table below.
Gold eq. Production
65,000 - 75,000
$450 - $550
$173 - $187
180,000 - 200,000
$465 - $495
$36 - $50
78,000 - 88,000
$450 - $480
$45 - $49
47,000 - 57,000
$750 - $780
$17 - $21
AuRico North America1
370,000 - 420,000
$500 - $525
$271 - $307
75,000 - 85,000
$870 - $900
$22 - $33
85,000 - 95,000
$965 - $995
$25 - $31
160,000 - 180,000
$920 - $950
$47 - $64
540,000 - 600,000
$625 - $655
$318 - $371
Production and cash costs for the Ocampo mine, El Cubo mine, and on a
consolidated basis are calculated on a per gold equivalent ounce basis.
Gold equivalent production and cash costs are based on a gold
equivalency ratio of 55:1 unless otherwise indicated.
Cash costs for the Young-Davidson, Fosterville, Stawell and El Chanate
mines are calculated on a per gold ounce basis, using by-product
revenues as a cost credit. Production includes gold ounces only.
Includes pre-production, sustaining and accelerated underground capital
Includes $29.2 million of accelerated pre-stripping of the South East
Layback associated with the expansion of the crushing and stacking
productivity from 14,000 tpd to 21,000 tpd.
The following currency assumptions were used to forecast 2012 estimates:
• 12:1 Mexican pesos to the US dollar
• 1:1 Canadian dollars to the US dollar
• 1:1 Australian dollars to the US dollar
"2012 will be another transformational year for AuRico as we begin to
realize the potential of our expanded asset base in North America.
Supported by inaugural production from the Young-Davidson mine and
three full quarters of production from the El Chanate mine at the
higher processing rate of 21,000 tonnes per day, we expect to deliver
strong production growth from our core North American assets at cash
costs considerably lower than the industry average, despite common
inflationary pressures being experienced throughout the mining
industry," stated René Marion, President and CEO. He continued, "The
depth and experience of the management team combined with our quality
assets positions the Company to achieve significant growth not only in
2012 but well beyond. We look forward to providing our updated reserve
and resource estimates during the second half of the first quarter,
followed by an overview of our 2012 strategic exploration program."
In 2012, the key milestones for the Young-Davidson mine will be
targeting the first gold pour by the end of March and achieving
commercial production by the third quarter. Capital expenditures will
be focused on the completion of surface construction requirements, in
particular the processing plant, administration building, warehouse,
truck shop and other associated infrastructure. In 2012, the Company is
targeting the following:
Completion of the surface construction and mill commissioning phases of
the project, which were 79% completed as of December 31, 2011.
Open pit mine pre-production development began on November 17, 2011 with
mill processing scheduled to begin by mid-March. A stockpile of open
pit ore has been established for processing at the mill facility. The
open pit is expected to average approximately 35,000 tonnes of ore and
waste per day in 2012.
During 2012 all production will be from the open pit while accelerating
underground production in 2013, earlier than the original target of
2014. To support this timeline, underground capital development will be
accelerated in order to support the advancement of underground
The mill processing facility is expected to ramp-up to the nameplate
capacity of 6,000 tonnes per day during the second quarter of 2012.
Completion of shaft, headframe and hoist construction, as well as
construction of the mid-shaft loading facility. Total lateral and
vertical development is expected to be 6.6 kilometres and 1.2
Completion of both a stoping method study and an expansion study. The
stoping study will identify alternate mining and backfill methods that
could ultimately increase mining recovery, lower dilution and maximize
the economics of mining the deposit, potentially resulting in increases
to the present in-situ reserve inventory. The expansion study will
evaluate opportunities to increase underground mining rates beyond the
current design of 6,000 tonnes per day to up to 10,000 tonnes per day.
Since 2008, the Company's objective has been to optimize and expand
operations at Ocampo. In 2012, capital expenditures are estimated to
decrease significantly as the expansion and accelerated pre-stripping
programs were largely completed by the end of 2011. In 2012 the Company
is targeting the following:
Continued development of the Northeast and Santa Eduviges underground
mines and further optimization of underground productivities. At the
end of 2011 the underground mines were averaging approximately 2,400
tonnes per day.
Engineering studies regarding the development and commissioning of Level
2, a potential third underground mine, are well advanced with a
production decision expected by the end of Q1 2012 and production
contribution anticipated in late 2012 to early 2013.
Open pit capital pre-stripping on the Conico open pit. With the capital
stripping program at the Picacho open pit completed at the end of 2011,
the planned pre-stripping activities have reduced by more than 65% over
Late in 2012, construction of an extension to the heap leach facility
will begin, which is expected to provide an additional 18.5 million
tonnes of stacking capacity. The expansion program is targeted for
completion in 2013.
Capital expenditures in 2012 include $5.0 million for the heap leach pad
expansion, $1.7 million for expansion of the underground ventilation
network, $3.2 million for underground equipment replacement, $0.8
million for underground infrastructure upgrades, as well as $7.3
million for major component replacement and capital spares, which is
consistent with the normal equipment life cycle.
Engineering studies evaluating the economics associated with the
underground and mill expansion as well as the commissioning of the
existing shaft system will continue to be reviewed in 2012. It is
estimated that these programs will be launched in 2013.
El Chanate ____________________________________________________________________________________________________________________________________________
Since acquiring the El Chanate mine in April 2011, the Company has
launched an expansion program designed to increase crushing and
stacking productivity to up to 26,000 tonnes per day. The second phase
of this expansion program targets a crushing and stacking rate of + 50%
or 21,000 tonnes per day and is expected to be achieved by the end of
the first quarter. In 2012, the Company will remain focused on
continuing to optimize open pit and heap leach productivities,
including the following:
Since acquiring the operation in early April 2011, the Company has
increased the truck haulage fleet by 69%.
In 2012, there will be an accelerated pre-stripping program to secure
long term access to ore in order to support the 21,000 tonnes per day
stacking rate. The pre-stripping program is focused on the south east
layback extension of the open pit and is expected to increase the
stripping ratio in 2012 to 3.9:1 as compared to the life of mine strip
ratio of 2.4:1. With the existing reserve base at currently planned
stacking rates, 2012 is expected to be the peak year for waste
stripping. The expansion stripping program adds $29.2 million to
capital requirements in 2012.
In addition to the increase in the mining fleet in late 2011,
approximately $1.0 million will be spent on upgrading and adding mobile
equipment (dozers, etc.) to support the increased stacking capacity,
and $0.5 million will be directed to further enhancing health and
Completion of the Phase 2, 21,000 tonnes per day expansion program
launched in 2011, which will include upgrades to the crusher feeders
and screens, installation of a reclaim tunnel for the fine ore
stockpile, an additional overland conveyor, and installation of
automated controls in the ADR (Adsorption-Desorption-Recovery) for
approximately $2.0 million.
The decision to proceed with the final 3 phases of the expansion
program, which have an ultimate target of 26,000 tonnes per day, will
be made after the release of the Company's reserve and resource update
that is targeted for the first quarter of 2012.
Phase 6 of the heap leach expansion will provide 18.9 million tonnes of
additional capacity to the leach pad facility, at an estimated capital
cost of $6.7 million. This expansion is expected to be completed in the
El Cubo ____________________________________________________________________________________________________________________________________________
In 2012, the Company will continue to target improved productivities
through the conversion to long-hole mining including the following:
Ongoing underground development as the mine continues to ramp-up to
targeted levels of 1,800 tonnes per day of in-situ ore. By the end of
2012, the Company expects that approximately 95% of production will be
from long-hole mining stopes.
Accessing, developing and mining the newly discovered high-grade deposit
Dolores/Capulin. As of December 31, 2011, the mine was just over 80
metres from intersecting the deposit. The Company is targeting the
development of the deposit to take place during the first two quarters
of the year with production commencing during the third quarter.
Approximately $6.0 million of the capital budget will target an increase
in the mining fleet that will include the delivery of four long-hole
drills, six haulage trucks, six LHDs and one jumbo, all related to the
conversion of the remainder of mining stopes to long-hole mining.
Approximately $1.7 million will be directed to the completion of
underground infrastructure upgrades (ventilation, pumping and
reticulation) and $1.5 million for the mid-life overhaul of underground
The mill facility processing rates are expected to increase to an
ultimate target of 1,800 tonnes per day of direct underground ore feed.
A significant portion of the Company's focus in 2012 will be on the
Capital development and mine infrastructure programs will be focused on
down dip G6L and D2 mineralized zones.
Replacement of mining equipment including two underground trucks, one
underground loader and one surface loader.
A rebuild and replacement program for a portion of the mining fleet.
A significant portion of the Company's focus in 2012 will be on the
Much of the capital spend will be devoted towards continued
infrastructure development in the Phoenix and Harrier ore zones.
The key focus for plant and equipment is the replacement of some older
units including two underground trucks, one underground loader and one
From an infrastructure perspective, the significant project is the
establishment of another in-pit tailings facility for flotation
About AuRico Gold
AuRico Gold is a leading intermediate Canadian gold and silver producer
with a diversified portfolio of quality mines and projects in Canada,
Mexico and Australia. The Company currently has five operating
properties including the Ocampo mine in Chihuahua State, the El Chanate
mine in Sonora State, the El Cubo mine in Guanajuato State, as well as
the Fosterville and Stawell gold mines in Victoria, Australia. The
first production from the exciting Young-Davidson gold mine in northern
Ontario is targeted by the end of Q1 2012 as the mine ramps up to over
200,000 ounces of annual production by 2015. AuRico's strong pipeline
of development and exploration stage projects includes advanced
development properties in Mexico and British Columbia and several
highly prospective exploration properties in Mexico. AuRico's head
office is located in Toronto, Ontario, Canada.
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 ability to continue to fund expansion and
exploration operations through cash flows, the ability of the Company
to optimize and expand its operations and development projects through
capital expenditure, the ability of the Company to complete its
expansion studies in a timely manner and to achieve positive results
therefrom, the ability to realize the perceived benefits of the
acquisition of Northgate, the ability of Young-Davidson to commence
production by the end of Q1 2012 and to achieve over 200,000 ounces of
annual production by 2015 and to meet the timelines for the
commencement of mill processing, the ability to accelerate underground
production at Young-Davidson, the ability to increase mining rates at
Young-Davidson, the ability of the Company to achieve its targets for
the continued expansion and development of Ocampo and El Chanate, the
ability to improve infrastructure and productivity at El Cubo, Stawell
and Fosterville, the future price of gold and silver and the ratio of
their prices, the de-risking of operations, future exploration results
of the Company's 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 the Company's 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 and 2012 results, operating performance projections
for 2011 and 2012, the Company's ability to fully fund its business
model internally, 2011 and 2012 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 and 2012.
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.
SOURCE AuRico Gold Inc.
For further information:
For further information please visit the AuRico Gold website at http://www.auricogold.com or contact:
| René Marion |
President & Chief Executive Officer
AuRico Gold Inc.
| || || || || || || || Anne Day |
Director of Investor Relations
AuRico Gold Inc.