2014

AuRico Reports Second Quarter Financial Results

TORONTO, August 8, 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 six months ended June 30, 2013. The Company will host a conference call on Friday, August 9, 2013 beginning at 8:30 a.m. Eastern Time (details below).

Financial Highlights

For the second quarter, the Company reported the following results:

  • Revenues of $57.7 million
  • Adjusted net earnings[(1)] of $6.1 million, or $0.02 per share
  • Net loss of $103.5 million, or ($0.42) per share, including non-cash impairment charges and net realizable value adjustments of $104.9 million, or ($0.42) per share, net of taxes
  • Production of 48,003 gold ounces[(2)]
  • Cash costs of $655 per gold ounce[(1)]
  • All-in sustaining costs of $1,189 per gold ounce[(3)]
  • Operating cash flow before changes in working capital[(1)] of $18.7 million, or $0.08 per share
          See the table at the end of this press release for a reconciliation
          of adjusted net earnings and adjusted operating cash flow and refer
    [(1)]            to the discussion of Non-GAAP measures below.
          Includes 9,817 pre-production gold ounces produced at Young-Davidson
    [(2)]             during the three months ended June 30, 2013
          See the discussion of All-in Sustaining Costs and Non-GAAP measures
    [(3)]                           provided below.



Recent Highlights

  • Mr. Alan Edwards was appointed non-executive Chairman of the Board effective July 1, 2013. Mr. Edwards was appointed as an independent director on May 13, 2010.
  • The Company's quarterly dividend payment of $0.04 per share for the second quarter was paid on July 29, 2013. The Company also 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 October 29, 2013 to shareholders of record on October 11, 2013.

"With another quarter of solid results reported from both operations we continue to demonstrate the potential of our high quality asset base. The mid-shaft crushing and hoisting system is progressing on schedule and remains on target to commission during September. The shaft and hoisting system is the key catalyst that will drive significant improvements in underground productivities and further cost efficiencies," stated Scott Perry, President and Chief Executive Officer. He continued, "With quality operations, a strong cash position and a fully-funded growth profile, the Company is well positioned for success even in this challenging market environment."

Impairment Charges and Net Realizable Value Adjustment

Due to the lower metal price environment currently being experienced, the Company's second quarter net earnings were adjusted by $104.9 million, net of taxes, for non-cash impairments and revaluations.  Of that amount, $80 million, net of tax, is related to an impairment charge associated with the El Chanate mine. This impairment charge was related to a reduction in the estimated short and long-term metal prices used in life-of-mine plans, and was charged entirely against goodwill.  The Company also determined that an impairment charge of $16.5 million, net of tax, was required for the retained interest royalty in the future life-of-mine free cash flows of the Fosterville and Stawell mines, which were disposed of in 2012.  The remaining $8.4 million, net of tax, is related to net realizable value adjustments for heap leach and long-term, low-grade stockpile inventories.

Operational Highlights - Continuing Operations


                              Young-Davidson      El Chanate           Total
    (in thousands,            Quarter Quarter  Quarter  Quarter   Quarter  Quarter
    except ounces,              Ended   Ended    Ended    Ended     Ended    Ended
    average realized             June    June     June     June      June     June
    prices and total              30,     30,      30,      30,       30,      30,
    cash costs)                  2013    2012     2013     2012      2013     2012
    Gold ounces
    produced                   19,435       -   18,751   17,882    38,186   17,882
    Pre-production
    gold ounces
    produced[(3)]               9,817  11,950        -        -     9,817   11,950
    Total gold
    ounces produced            29,252  11,950   18,751   17,882    48,003   29,832
    Total cash costs
    per gold
    ounce[(1)(2)(3)]             $716       -     $602     $457      $655     $457
    Revenue from
    mining
    operations                $26,670       -  $30,990  $27,458   $57,660  $27,458
    Average realized
    gold price per
    ounce                      $1,366       -   $1,373   $1,610    $1,369   $1,610

                              Young-Davidson       El Chanate           Total
                                  Six     Six      Six      Six       Six      Six
    (in thousands,             Months  Months   Months   Months    Months   Months
    except ounces,              Ended   Ended    Ended    Ended     Ended    Ended
    average realized             June    June     June     June      June     June
    prices and total              30,     30,      30,      30,       30,      30,
    cash costs)                  2013    2012     2013     2012      2013     2012
    Gold ounces
    produced                   39,987       -   36,640   36,975    76,627   36,975
    Pre-production
    gold ounces
    produced[(3)]              17,546  11,950        -        -    17,546   11,950
    Total gold
    ounces produced            57,533  11,950   36,640   36,975    94,173   48,925
    Total cash costs
    per gold
    ounce[(1)(2)(3)]             $705       -     $585     $435      $645     $435
    Revenue from
    mining
    operations                $63,435       -  $59,110  $60,731  $122,545  $60,731
    Average realized
    gold price per
    ounce                      $1,507       -   $1,481   $1,670    $1,494   $1,670



 

Financial Highlights - Continuing Operations


                                               Quarter Ended     Quarter Ended
                                                    June 30,          June 30,
    (in thousands, except per share amounts)            2013         2012[(2)]
    Adjusted net earnings[(1)]                        $6,122            ($921)
    Adjusted net earnings per share,
    basic[(1)]                                         $0.02           ($0.00)
    Net (loss) / earnings                         ($103,491)            $6,640
    Net (loss) / earnings per share, basic           ($0.42)             $0.03
    Adjusted operating cash flow[(1)]                $18,691              $987

                                                  Six Months  Six Months Ended
                                                       Ended          June 30,
    (in thousands, except per share amounts)   June 30, 2013         2012[(2)]
    Adjusted net earnings[(1)]                       $17,719            $4,578
    Adjusted net earnings per share,
    basic[(1)]                                         $0.07             $0.02
    Net (loss) / earnings                          ($85,217)          ($6,958)
    Net (loss) / earnings per share, basic           ($0.34)           ($0.02)
    Adjusted operating cash flow[(1)]                $38,813            $6,865


          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 on the Young-Davidson low-grade long-term stockpile
           inventory and the El Chanate heap leach ore in process inventory.
    [(1)]       The Company has restated adjusted net earnings for 2012.
          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 21 in the Company's Management's Discussion
            & Analysis or note 3(a) to the Company's condensed consolidated
            financial statements for the three and six months ended June 30,
    [(2)]                                2013.
           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
    [(3)]        credited against capitalized project costs when sold.


Adjusted Net Earnings Reconciliation


    (in thousands, except per share metrics)       Quarter Ended  Quarter Ended
                                                   June 30, 2013  June 30, 2012
    Net (loss) / earnings from continuing
    operations                                        ($103,491)         $6,640
    Adjustments:
    Impairment charges                                    98,688              -
    Net realizable value adjustments on inventory         12,245              -
    Foreign exchange loss on translation of tax
    basis recorded in deferred income tax expense         11,852          5,688
    Unrealized foreign exchange gain                     (8,741)        (4,813)
    Gain on option component of convertible notes        (4,106)        (9,618)
    Unrealized gain on derivatives                           123          (896)
    Unrealized loss on contingent consideration            4,060              -
    Other                                                (4,508)          2,078
    Adjusted net earnings from continuing
    operations                                            $6,122         ($921)
    Adjusted net earnings from continuing
    operations, per share                                  $0.02        ($0.00)

    Net earnings from discontinued operations                  -        $15,043
    Adjustments:
    Unrealized foreign exchange gain                           -        (2,636)
    Net realizable value adjustments on inventory              -         14,366
    Loss on disposition of Australian Operations               -          1,736
    Other                                                      -          (791)
    Adjusted net earnings from discontinued
    operations                                                 -        $27,718
    Adjusted net earnings from discontinued
    operations, per share                                      -          $0.10

    Adjusted net earnings                                 $6,122        $26,797
    Adjusted net earnings, per share                       $0.02          $0.09



    (in thousands, except per share metrics) Six Months Ended  Six Months Ended
                                                June 30, 2013     June 30, 2012
    Net loss from continuing operations             ($85,217)          ($6,958)
    Adjustments:
    Impairment charges                                 98,688                 -
    Net realizable value adjustments on
    inventory                                          12,245                 -
    Foreign exchange loss / (gain) on
    translation of tax basis recorded in
    deferred income tax expense                        12,553             1,097
    Unrealized foreign exchange (gain) /
    loss                                              (9,677)             5,009
    (Gain) / loss on option component of
    convertible notes                                (10,975)             4,184
    Unrealized gain on derivatives                    (2,071)           (1,193)
    Unrealized loss on contingent
    consideration                                       6,849                 -
    Other                                             (4,675)             2,439
    Adjusted net earnings from continuing
    operations                                        $17,719            $4,578
    Adjusted net earnings from continuing
    operations, per share                               $0.07             $0.02

    Net earnings from discontinued
    operations                                              -           $29,856
    Adjustments:
    Unrealized foreign exchange loss                        -             7,281
    Net realizable value adjustments on
    inventory                                               -            14,366
    Loss on disposition of Australian
    Operations                                              -             1,736
    Impairment of Australian Operations                     -            22,857
    Other                                                   -             (791)
    Adjusted net earnings from discontinued
    operations                                              -           $75,305
    Adjusted net earnings from discontinued
    operations, per share                                   -             $0.27

    Adjusted net earnings                             $17,719           $79,883
    Adjusted net earnings, per share                    $0.07             $0.28



Adjusted Operating Cash Flow Reconciliation


                                                          Quarter       Quarter
    (in thousands, except per share metrics)                Ended         Ended
                                                          June 30,     June 30,
                                                             2013          2012
    Operating cash flow from continuing operations        $13,875      ($4,235)
    Add back: Non-cash change in operating working
    capital                                                 4,816         5,222
    Adjusted operating cash flow from continuing
    operations                                            $18,691          $987
    Adjusted operating cash flow from continuing
    operations, per share                                   $0.08         $0.00



                                                       Six Months     Six Months
    (in thousands, except per share metrics)                Ended          Ended
                                                    June 30, 2013  June 30, 2012
    Operating cash flow from continuing operations        $26,974         $6,235
    Add back: Non-cash change in operating working
    capital                                                11,839            630
    Adjusted operating cash flow from continuing
    operations                                            $38,813         $6,865
    Adjusted operating cash flow from continuing
    operations, per share                                   $0.15          $0.02



Non-GAAP Measures

The Company uses the measures adjusted net earnings, cash costs per ounce, all-in sustaining costs, 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 18 of the Company's Management's Discussion and Analysis for the three and six months ended June 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").

Second Quarter Conference Call and Webcast

A webcast and conference call will be held on Friday, August 9, 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 Second 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/1192183/1307011

Archive Call Access

If you are unable to attend the conference call, a replay will be available until midnight, August 16, 2013 by dialing the appropriate number below:

  • International & Toronto: 1-416-849-0833  Passcode:  #13657313
  • Canada & U.S. Toll Free: 1-855-859-2056  Passcode: #13657313

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/1192183/1307011

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 press 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" 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, competitive and other 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 labour; 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 respect to the future potential of the Kemess project, 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; and business opportunities that may be pursued by the Company.  Many of these uncertainties and contingencies can affect our actual results, dividend policy, development and operating plans and other elements of our business 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 press release 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 press release 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

(AUQ. AUQ)

SOURCE AuRico Gold Inc.



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