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AuRico Reports First Quarter Financial Results

Stocks in this article: AUQ

TORONTO, May 9, 2013 /PRNewswire/ --

AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") reports financial results for the three months ended March 31, 2013. All amounts are in U.S. dollars. The Company will host a conference call on Friday, May 10, 2013 beginning at 8:30 a.m. Eastern Time (details below).

Financial Highlights

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

  • Revenues of $64.9 million
  • Net earnings of $18.3 million, or $0.07 per share
  • Adjusted net earnings (1) of $10.9 million, or $0.04 per share
  • Production of 46,170 gold ounces (2)
  • Cash costs of $635 per gold ounce (1)
  • All-in cash costs of $985 per gold ounce (3)
  • Operating cash flow before changes in working capital (1) of $20.1 million, or $0.08 per share

Recent Highlights

  • Reaming of the second leg of the Young- Davidson shaft was completed in mid-April. The shaft now extends 900m from surface, providing vertical access to approximately 1.8 million ounces, or 50% of reserve ounces, the focus of the next 8 years of production. Construction activities continue to focus on the crushing and mid-shaft loading pocket infrastructure in preparation for commissioning during the third quarter.
  • Commissioning of the MCM shaft at the Young- Davidson mine was completed in mid-February. The MCM shaft is currently being used to hoist waste to surface, which reduces congestion in the ramp system and improves overall productivities in the underground mine.
  • Follow-up drilling on the three new areas of mineralization identified at El Chanate as part of the 2012 program has begun with one drill currently on site. These areas are all located along trend of the open pit and could increase resources and mine life.
  • The Company's inaugural quarterly dividend of $0.04 per share was paid on April 18, 2013. In 2013, the Company will pay a dividend of $0.16 per share (payable quarterly) and subsequent to 2013, the Company's dividend will be linked to operating cash flow, whereby the Company intends to pay out 20% of the operating cash flow generated in the preceding quarter.

"We delivered another quarter of solid results, paid our first quarterly dividend and reported continued progress at the Young- Davidson mine. With the reaming of the second leg of the shaft completed in mid-April, we are well positioned for the targeted commissioning of the mid-shaft hoisting facility during the third quarter," stated Scott Perry, President and Chief Executive Officer. He continued, "The Company's strategy of divesting non-core, high cost assets in 2012 has established a peer leading balance sheet and a fully funded growth profile. In addition, the divestments have resulted in a significant reduction in G&A as well as the elimination of significant capital investment obligations associated with the divested assets. Going forward, we will continue to focus on delivering quality organic production growth that drives margins and free cash flow generation."

(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 7,729 pre-production gold ounces produced at Young- Davidson during the three months ended March 31, 2013 (3)     The final definition of all-in costs is expected to be finalized by the World Gold Council later this year, which will provide additional clarity on the treatment of certain costs. At that time, if required, AuRico will amend its current reporting and will provide quarterly and year-to-date all-in costs that conform to the official standard. See the discussion of All-in Cash Costs below.

Operational Highlights - Continuing Operations

                            Young-Davidson       El Chanate         Total
      (in thousands,                   Quarter Quarter Quarter Quarter Quarter
      except ounces,                    Ended   Ended   Ended   Ended   Ended
     average realized                   March   March   March   March   March
     prices and total   Quarter Ended    31,     31,     31,     31,     31,
        cash costs)     March 31, 2013  2012    2013    2012    2013    2012
    Gold ounces
    produced                    20,552       -  17,889  19,093  38,441  19,093
    Pre-production gold
    ounces produced(3)           7,729       -       -       -   7,729       -
    Total gold ounces
    produced                    28,281       -  17,889  19,093  46,170  19,093
    Total cash costs
    per gold
    ounce(1)(2)(3)                $694       -    $563    $416    $635    $416
    Revenue from mining
    operations                 $36,765       - $28,120 $33,273 $64,885 $33,273
    Average realized
    gold price per
    ounce                       $1,630       -  $1,622  $1,723  $1,627  $1,723

Financial Highlights - Continuing Operations

                                              Quarter Ended    Quarter Ended
    (in thousands, except per share amounts)  March 31, 2013 March 31, 2012(2)

    Adjusted net earnings(1)                         $10,897           $10,090
    Adjusted net earnings per share, basic(1)          $0.04             $0.04
    Net earnings / (loss)                            $18,274          ($13,598)
    Net earnings / (loss) per share, basic             $0.07            ($0.05)
    Adjusted operating cash flow(1)                  $20,122            $5,878

(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. (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 16 in the Company's Management's Discussion & Analysis or note 3(a) to the Company's condensed consolidated financial statements for the three months ended March 31, 2013. (3)     The Young-Davidson 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

    (in thousands, except per share metrics)             Ended     Quarter Ended
                                                       March 31,     March 31,
                                                          2013         2012
    Net earnings / (loss) from continuing
    operations                                           $18,274      ($13,598)
    Unrealized foreign exchange (gain)/loss                 (936)        9,822
    (Gain) / loss on option component of
    convertible notes                                     (6,869)       13,802
    Unrealized gain on derivatives                        (2,194)         (297)
    Unrealized loss on contingent consideration            2,789             -
    Other                                                   (167)           361
    Adjusted net earnings from continuing
    operations                                           $10,897        $10,090
    Adjusted net earnings from continuing
    operations, per share                                  $0.04          $0.04

    Net earnings from discontinued operations                  -        $14,813
    Unrealized foreign exchange loss                           -          9,917
    Impairment of Australian Operations                        -         22,857
    Adjusted net earnings from discontinued
    operations                                                 -        $47,587
    Adjusted net earnings from discontinued
    operations, per share                                      -          $0.17

    Adjusted net earnings                                $10,897        $57,677
    Adjusted net earnings, per share                       $0.04          $0.20

Adjusted Operating Cash Flow Reconciliation

                                                         Quarter      Quarter
    (in thousands, except per share metrics)              Ended        Ended
                                                        March 31,    March 31,
                                                           2013         2012

    Operating cash flow from continuing operations        $13,099      $10,470
    Add back: Non-cash change in operating working
    capital                                                 7,023       (4,592)
    Adjusted operating cash flow from continuing
    operations                                            $20,122       $5,878
    Adjusted operating cash flow from continuing
    operations, per share                                   $0.08        $0.02

All-in Cash Costs

All-in cash costs of $985 per ounce reported for the quarter are currently below full year guidance levels due to the timing of certain exploration and capital expenditures. The Company expects annual all-in cash costs to be within the previously disclosed full year guidance range of $1,100 to $1,200 per ounce.

Non-GAAP Measures

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