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AuRico Reports Fourth Quarter And Annual Financial Results

Stocks in this article: AUQ

The Company is required to adopt the accounting standard IFRIC 20 "Stripping Costs in the Production Phase of a Surface Mine" effective January 1, 2013, as discussed in detail under "Recent Accounting Pronouncements" on page 34 of the MD&A. The adoption of IFRIC 20 will result in the capitalization of fewer stripping costs at the El Chanate mine retroactively to 2012. The estimated impact of this accounting standard will increase total cash costs reported in 2013, with a corresponding decrease in sustaining capital. The Company has therefore increased 2013 cash costs estimates to $550 to $600 per gold ounce, which includes amounts from prior periods, and decreased sustaining capital estimates to $8 to $12 million as provided in the table below. As this change relates solely to cost allocation, all-in cash cost estimates and budgeted cash flow streams have not been impacted by this new accounting standard.

2013 Operational Estimates (Revised)

    2013 Operational Estimates(2) (March 25, 2013)
    Gold Production (ounces)
          Young-Davidson                            120,000-140,000
          El Chanate                                 70,000-80,000
    Total Production                                190,000-220,000
    Cash Costs per Ounce
          Young-Davidson(3)                            $575-$675
          El Chanate (revised)                         $550-$600
    Total Cash Costs per Ounce (revised)               $565-$645
    All-in Cash Costs(1)
          Young-Davidson(3)                          $1,250-$1,350
          El Chanate                                  $900-$1,000
    Total All-in Cash Costs per Ounce                $1,100-$1,200
    Capital Investment Program (US$000's)
                     Non-recurring Growth Capital
                                 Paste Backfill
                                 Plant              $45,000-$50,000
                                 Shaft and
                                 Mid-Shaft Loading
                                 and Crushing
                                 Facility           $25,000-$30,000
                                 Open Pit Mine
                                 Development         $6,000-$8,000
                     Sustaining Capital(4)          $59,000-$62,000
          Total Capital Investment - Young
          Davidson                                 $135,000-$150,000
          El Chanate
                     Non-recurring Growth Capital
                                 Southeast Open
                                 Pit Expansion      $20,000-$25,000
                                 Heap Leach
                                 Expansion           $2,000-$3,000
                     Sustaining Capital(4)
                     (revised)                      $8,000-$12,000
    Total Capital Investment - El Chanate
    (revised)                                       $30,000-$40,000
    Total Capital Investment (revised)             $165,000-$190,000
    Depletion and Amortization (US$ per ounce)
          Young-Davidson                               $300-$310
          El Chanate                                   $245-$255
    Total Depletion and Amortization                   $280-$290
    Exploration (US$000's)
          Young-Davidson                             Up to $3,500
          El Chanate                                 Up to $3,500
          Other Properties                           Up to $8,000
    Total Exploration                                Up to $15,000
    General and Administrative (US$000's)(5)
          Corporate G&A                                 $25,000


    1.  All-in costs are defined as cash costs, sustaining capital, corporate
             general and administrative expense and exploration expense.
    2.      The following currency assumptions were used to forecast 2013
                     — 12.5:1 Mexican pesos to the US dollar
                     — 1:1 Canadian dollars to the US dollar
    3. Prior to commissioning the underground mine, 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.
    4.    Sustaining capital is defined as capital expenditures required to
                       maintain current levels of production.
    5.               Does not include share-based compensation.


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