AuRico Gold Reports Third Quarter Financial Results and Confirms Declaration of Commercial Production at Young-Davidson
TORONTO, November 7, 2013 /PRNewswire/ --
(All amounts are in U.S. dollars, unless otherwise indicated)
AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") reports financial results for the three and nine months ended September 30, 2013. The Company will host a conference call on Friday, November 8, 2013 beginning at 8:30 a.m. Eastern Time (details below).
Financial Highlights
For the third quarter, the Company reported the following results:
- Revenues of $54.3 million
- Operating cash flow before changes in working capital(1) of $21.8 million, or $0.09 per share
- Adjusted net earnings(1) of $0.8 million, or $0.00 per share
- Net earnings of $14.9 million, or $0.06 per share, including reversals of net realizable value adjustments previously recognized of $7.4 million, or $0.03 per share
- Production of 48,903 gold ounces(2)
- Cash costs of $628 per gold ounce(1)
Third
Quarter
First Quarter Second Quarter Sept. YTD as of
March 31/13 June 30/13 30/13 Sept. 30/13
Gold Ounces
Produced3 46,170 48,003 48,903 143,076
Total Cash
Costs per
oz.1,2 $635 $655 $628 $640
All-in
Sustaining
Costs per
oz2. $1,090 $1,189 $1,210 $1,164
- All-in sustaining costs of $1,210 per gold ounce(3)
1. Prior to commissioning the underground mine at Young-Davidson, cash costs are
calculated on ounces
produced from the open pit only. All underground costs are capitalized, and
any revenue related to underground ounces sold is credited against capital.
2. Cash costs, prior to long-term, low-grade stockpile and heap leach inventory
net realizable value
adjustments & reversals. See the Non-GAAP Measures section on page 20 of the
Management's Discussion and Analysis for the three months ended Sept. 30, 2013.
3. Includes pre-production gold ounces from the Young-Davidson underground mine.
Recent Highlights
- Effective October 31, 2013 the Company declared commercial production of the Young-Davidson underground mine following the successful commissioning of the shaft and hoisting infrastructure. This key milestone will support increased underground productivities and favourable unit cost efficiencies over the life of the mine and will be pivotal in unlocking the potential of the Young-Davidson mine and positioning the Company for the future.
- The Company's quarterly dividend payment of $0.04 per share for the third quarter was paid on October 29, 2013. The Company has introduced an optional dividend reinvestment plan to acquire additional common shares by reinvesting cash dividends. Further information on the Company's dividend reinvestment plan is available through the following link: http://www.auricogold.com/DRIP. The next dividend payment is scheduled to be paid on January 29, 2014 to shareholders of record on January 14, 2014.
"With the declaration of commercial production at the Young-Davidson underground mine the Company will begin to deliver steadily increasing annual production growth as the shaft and hoisting system supports increased underground productivities over the coming years," stated Scott Perry, President and Chief Executive Officer. He continued, "With five consecutive quarters of solid, company-wide results being reported, we continue to demonstrate the potential of our high quality asset base and the depth of our operations team. With two quality operations, a strong cash position and a fully-funded growth profile that is underpinned by the potential of the Young-Davidson mine, the Company is well positioned for significant, sustainable and profitable growth going forward."
(1) See the table at the end of this press release for a reconciliation
of adjusted net earnings and adjusted operating cash flow and refer
to the discussion of Non-GAAP measures below.
(2) Includes 10,447 pre-production gold ounces produced at Young-Davidson
during the three months ended September 30, 2013.
(3) See the discussion of All-in Sustaining Costs and Non-GAAP measures
provided below.
Operational Highlights - Continuing Operations
Young-Davidson
Quarter Quarter
Ended Ended
(in thousands, except ounces, average September 30, September 30,
realized prices and total cash costs) 2013 2012
Gold ounces produced 19,652 9,903
Pre-production gold ounces produced(3) 10,447 7,922
Total gold ounces produced 30,099 17,825
Total cash costs per gold ounce(1)(2)(3) $666 $639
Revenue from mining operations $29,584 $7,067
Average realized gold price per ounce $1,333 $1,756
Young-Davidson
Nine Months Nine Months
Ended Ended
(in thousands, except ounces, average September 30, September 30,
realized prices and total cash costs) 2013 2012
Gold ounces produced 59,639 9,903
Pre-production gold ounces produced(3) 27,993 19,872
Total gold ounces produced 87,632 29,775
Total cash costs per gold ounce(1)(2)(3) $692 $639
Revenue from mining operations $93,019 $7,067
Average realized gold price per ounce $1,447 $1,756
Continued, part two:
Operational Highlights - Continuing Operations
El Chanate
Quarter Quarter
Ended Ended
(in thousands, except ounces, average September 30, September 30,
realized prices and total cash costs) 2013 2012
Gold ounces produced 18,804 19,388
Pre-production gold ounces produced(3) - -
Total gold ounces produced 18,804 19,388
Total cash costs per gold ounce(1)(2)(3) $588 $470
Revenue from mining operations $24,720 $32,705
Average realized gold price per ounce $1,330 $1,655
El Chanate
Nine Months Nine Months
Ended Ended
(in thousands, except ounces, average September 30, September 30,
realized prices and total cash costs) 2013 2012
Gold ounces produced 55,444 56,363
Pre-production gold ounces produced(3) - -
Total gold ounces produced 55,444 56,363
Total cash costs per gold ounce(1)(2)(3) $586 $448
Revenue from mining operations $83,830 $93,436
Average realized gold price per ounce $1,433 $1,665
Continued, part three:
Operational Highlights - Continuing Operations
Total
Quarter Quarter
Ended Ended
(in thousands, except ounces, average September 30, September 30,
realized prices and total cash costs) 2013 2012
Gold ounces produced 38,456 29,291
Pre-production gold ounces produced(3) 10,447 7,922
Total gold ounces produced 48,903 37,213
Total cash costs per gold ounce(1)(2)(3) $628 $528
Revenue from mining operations $54,304 $39,772
Average realized gold price per ounce $1,332 $1,672
Total
Nine Months Nine Months
Ended Ended
(in thousands, except ounces, average September 30, September 30,
realized prices and total cash costs) 2013 2012
Gold ounces produced 115,083 66,266
Pre-production gold ounces produced(3) 27,993 19,872
Total gold ounces produced 143,076 86,138
Total cash costs per gold ounce(1)(2)(3) $640 $477
Revenue from mining operations $176,849 $100,503
Average realized gold price per ounce $1,440 $1,671
Financial Highlights - Continuing Operations
Quarter
Ended
September
Quarter Ended
(in thousands, except per share amounts) September 30, 2013 30, 2012(2)
Adjusted net earnings / (loss)(1) $816 ($1,180)
Adjusted net earnings / (loss) per share, basic(1) $0.00 ($0.00)
Net earnings $14,859 $42,321
Net earnings per share, basic $0.06 $0.15
Adjusted operating cash flow(1) $21,758 ($149)
Nine Months
Ended
September
Nine Months Ended
(in thousands, except per share amounts) September 30, 2013 30, 2012(2)
Adjusted net earnings(1) $18,536 $3,398
Adjusted net earnings per share, basic(1) $0.07 $0.01
Net (loss) / earnings ($70,358) $35,363
Net (loss) / earnings per share, basic ($0.28) $0.12
Adjusted operating cash flow(1) $60,571 $6,716
(1) See the tables at the end of this press release for a reconciliation
of adjusted net earnings and adjusted operating cash flow and refer
to the discussion of Non-GAAP measures below. Total cash costs per
gold ounce have been presented prior to net realizable value
adjustments and reversals on the Young-Davidson low-grade long-term
stockpile inventory and the El Chanate heap leach ore in process
inventory. The Company has restated adjusted net earnings for 2012.
(2) Certain comparative information has been restated as a result of the
adoption of IFRIC 20, Stripping Costs in the Production Phase of a
Surface Mine, which was applied prospectively to production stripping
costs incurred on or after January 1, 2012. For further details,
refer to the Critical Accounting Estimates, Policies and Changes
section on page 24 in the Company's Management's Discussion &
Analysis or note 3(a) to the Company's condensed consolidated
financial statements for the three and nine months ended September
30, 2013.
(3) The Young-Davidson open pit mine declared commercial production on
September 1, 2012, and is therefore excluded from consolidated cash
costs prior to this date. Pre-production ounces produced are excluded
from consolidated ounces produced as these ounces are credited
against capitalized project costs when sold.
Adjusted Net Earnings Reconciliation
Quarter Quarter
Ended Ended
September September
(in thousands, except per share metrics) 30, 2013 30, 2012
Net earnings from continuing operations $14,859 $42,321
Adjustments:
Deferred income tax recovery related to foreign exchange (7,335) (17,511)
Unrealized foreign exchange loss 2,482 7,952
Net realizable value adjustments on inventory (7,372) -
Gain on option component of convertible notes (3,875) (14,416)
Unrealized gains on investments - (20,251)
Unrealized gain on derivatives - (730)
Unrealized loss / (gain) on contingent consideration 63 (5,137)
Other (including tax effect of adjustments) 1,994 6,592
Adjusted net earnings / (loss) from continuing operations $816 ($1,180)
Adjusted net earnings / (loss) from continuing operations,
per share $0.00 ($0.00)
Net loss from discontinued operations - ($7,781)
Adjustments:
Unrealized foreign exchange loss - 2,190
Net realizable value adjustments on inventory - (6,074)
Disposition-related costs - 5,327
Gain on disposition of El Cubo and Guadalupe y Calvo - (24,062)
Ocampo outside tax basis adjustment - 39,168
Tax impact - 3,695
Adjusted net earnings from discontinued operations - $12,463
Adjusted net earnings from discontinued operations, per share - $0.04
Adjusted net earnings $816 $11,283
Adjusted net earnings, per share $0.00 $0.04
Nine Nine
Months Months
Ended Ended
September September
(in thousands, except per share metrics) 30, 2013 30, 2012
Net (loss) / earnings from continuing operations ($70,358) $35,363
Adjustments:
Deferred income tax expense / (recovery) related to
foreign exchange 5,218 (16,414)
Unrealized foreign exchange (gain) / loss (7,195) 12,961
Net realizable value adjustments on inventory 4,873 -
Impairment charges 98,688 -
Gain on option component of convertible notes (14,850) (10,232)
Unrealized gains on investments - (17,632)
Unrealized gain on derivatives (2,071) (1,923)
Unrealized loss / (gain) on contingent consideration 6,912 (5,137)
Other (including tax effect of adjustments) (2,681) 6,412
Adjusted net earnings from continuing operations $18,536 $3,398
Adjusted net earnings from continuing operations, per share $0.07 $0.01
Net earnings from discontinued operations - $22,075
Adjustments:
Unrealized foreign exchange loss - 9,471
Loss on disposition of Australian operations - 1,736
Net realizable value adjustments on inventory - 8,292
Impairment of Australian Operations - 22,857
Disposition-related costs - 5,327
Gain on disposition of El Cubo and Guadalupe y Calvo - (24,062)
Ocampo outside tax basis adjustment - 39,168
Tax impact - 2,904
Adjusted net earnings from discontinued operations - $87,768
Adjusted net earnings from discontinued operations, per share - $0.31
Adjusted net earnings $18,536 $91,166
Adjusted net earnings, per share $0.07 $0.32
Adjusted Operating Cash Flow Reconciliation
Quarter Quarter
Ended Ended
(in thousands, September September
except per share
metrics) 30, 2013 30, 2012
Operating cash
flow from
continuing
operations $24,338 ($5,653)
Add back: Non-cash
change in
operating working
capital (2,580) 5,504
Adjusted operating
cash flow from
continuing
operations $21,758 ($149)
Adjusted operating
cash flow from
continuing
operations, per
share $0.09 ($0.00)
(in thousands,
except per share Nine Months Ended Nine Months Ended
metrics) September 30, 2013 September 30, 2012
Operating cash
flow from
continuing
operations $51,312 $582
Add back: Non-cash
change in
operating working
capital 9,259 6,134
Adjusted operating
cash flow from
continuing
operations $60,571 $6,716
Adjusted operating
cash flow from
continuing
operations, per
share $0.24 $0.02
Non-GAAP Measures
The Company uses the measures adjusted net earnings, cash costs per ounce, all-in sustaining costs per ounce, adjusted operating cash flow 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, all-in sustaining costs per ounce and net free cash flow are reconciled to the Company's financial statements beginning on page 20 of the Company's Management's Discussion and Analysis for the three and nine months ended September 30, 2013.
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 contingent consideration and derivatives, impairment charges, net realizable value adjustments, 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.
Adjusted operating cash flow excludes the change in non-cash operating working capital, which includes changes in receivables, inventories, prepaid assets, and payables.
Financial Statements and Management's Discussion and Analysis
The financial statements and related Management's Discussion and Analysis can be found on the Company's website at http://www.auricogold.com or under the Company's profile on http://www.sedar.com and with the Securities and Exchange Commission at http://www.sec.gov/edgar.shtml ("Edgar").
Third Quarter Conference Call and Webcast
A webcast and conference call will be held on Friday, November 8, 2013 starting at 8:30 a.m. Eastern Time. Senior management will be on the call to discuss the results.
Conference Call Access
- International & Toronto: 1-647-427-7450
- Canada & U.S. Toll Free: 1-888-231-8191
When the operator answers, please ask to be placed into the AuRico Gold Third Quarter Results Conference Call.
Conference Call Live Webcast
The conference call will be broadcast live on the internet via webcast. To access the webcast, please follow this link: http://www.newswire.ca/en/webcast/detail/1236207/1361801
Archive Call Access
If you are unable to attend the conference call, a replay will be available until midnight, November 15, 2013 by dialing the appropriate number below:
- International & Toronto: 1-416-849-0833 Passcode: #76263849
- Canada & U.S. Toll Free: 1-855-859-2056 Passcode: #76263849
Archive Webcast
The webcast will be archived for 90 days. To access the archived webcast, visit the Company's website at http://www.auricogold.com or follow this link: http://www.newswire.ca/en/webcast/detail/1236207/1361801
About AuRico Gold
AuRico Gold is a leading Canadian gold producer with mines and projects in North America that have solid production growth and exploration potential. The Company is focused on its core operations including the Young-Davidson gold mine in northern Ontario and the El Chanate mine in Sonora State, Mexico. AuRico's project pipeline also includes development opportunities in Canada and Mexico. AuRico's head office is located in Toronto, Ontario, Canada.
Cautionary Statement
Certain information included in this presentation 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; changes in foreign exchange rates (particularly the Canadian dollar, Mexican peso and U.S. dollar); the impact of inflation; changes in our credit rating; any decision to declare a quarterly dividend; employee relations; litigation; disruptions affecting operations; availability of and increased costs associated with mining inputs and labor; development delays at the Young-Davidson mine; 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 and El Chanate mines may not perform as planned; 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; the impact of global liquidity and credit availability and the values of assets and liabilities based on projected future cash flows; risks arising from holding derivative instruments; business opportunities that may be pursued by the Company. 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 presentation 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.
Cautionary Note to U.S. Investors Concerning Measured, Indicated and Inferred Resources
This presentation uses the terms "measured," "indicated" and "inferred" resources. We advise investors that while those terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.
For further information please visit the AuRico Gold website at http://www.auricogold.com or contact:
Rob Chausse
Chief Financial Officer
AuRico Gold Inc.
+1-647-260-8880
Anne Day
Vice President, Investor Relations and Communications
AuRico Gold Inc.
+1-647-260-8880
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