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AuRico Gold Announces Preliminary Fourth Quarter Operational Results

TORONTO, January 14, 2014 /PRNewswire/ --

- Reports Sixth Consecutive Quarter of Production Growth

- $ are US

AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") today announces preliminary fourth quarter and annual operational results. All amounts are in U.S. dollars unless otherwise indicated.

AuRico reported its sixth consecutive quarter of production growth, with the Young-Davidson and El Chanate operations continuing to report solid production results that are in-line with expectations.

AuRico Gold Company-wide Production Growth

The shaft hoisting infrastructure at the Young-Davidson underground mine was commissioned in October, which facilitated the declaration of commercial production on October 31. The shaft hoisting system has, and will continue to, facilitate significant increases in underground productivities and corresponding cost efficiency improvements. During the first two months of commercial production, underground unit mining costs were approximately $39 per tonne resulting in underground production cash costs of $663 per ounce.

Preliminary 2013 Fourth Quarter Operational Results

                                                      Year-end
                                                        Dec.
                            Q1     Q2     Q3     Q4    31/13    2013 Guidance
    Young-Davidson
    Gold Ounces
    Produced[3]           28,281 29,252 30,099 33,106 120,738  120,000-140,000
            Underground
            Cash Costs
            per oz.            -      -      -   $663    $663                -
            Open Pit Cash
            Costs per oz.   $694   $716   $666   $983    $757                -
    Total Cash Costs per
    oz.[1],[2]              $694   $716   $666   $850    $744        $575-$675
    El Chanate
    Gold Ounces Produced  17,889 18,751 18,804 16,420  71,864    70,000-80,000
    Total Cash Costs per
    oz.[2]                  $563   $602   $588   $615    $592        $550-$600
    Consolidated Results
    Gold Ounces
    Produced[3]           46,170 48,003 48,903 49,526 192,601  190,000-220,000
    Total Cash Costs per
    oz.[1],[2]              $635   $655   $628   $766    $676        $565-$645
    [1]  Prior to commissioning the underground mine at Young-Davidson, cash
         costs were calculated on ounces produced from the open pit only. All
         underground costs were capitalized, and any revenue related to
         underground ounces sold was credited against capital. Subsequent to
         the declaration of commercial production in the underground mine,
         cash costs are calculated on ounces produced from both the open pit
         and underground mines, and revenue related to the sale of underground
         ounces is recognized in the Company's Statement of Operations as
         revenue.
    [2]  Cash costs are prior to inventory net realizable value adjustments &
         reversals, and are estimates only and subject to change. See the
         Non-GAAP Measures section on page 20 of the Management's Discussion
         and Analysis for the nine months ended September 30, 2013.
         Underground cash costs per ounce and open pit cash costs per ounce 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. Underground cash costs per ounce and
         open pit cash costs per ounce are determined by allocating production
         and refining costs to the underground and open pit tonnes mined and
         processed, and then dividing by the relevant ounces produced.
    [3]  Includes pre-production gold ounces from the Young-Davidson
         underground mine prior to the declaration of commercial production in
         the underground mine on October 31, 2013.

"We are pleased to report our sixth consecutive quarter of company-wide production growth and annual production results that are in-line with guidance estimates. Young Davidson is well positioned to drive continued growth in company-wide gold production as the underground operations continue to ramp-up productivity levels over the coming years," stated Scott Perry, President and CEO of AuRico. He continued, "Underpinning our asset base is a strong balance sheet and a management team that is focused on creating shareholder value."

Young-Davidson Update

  • Commercial production of the underground mine was declared on October 31, 2013, following the commissioning of the shaft hoisting system, which will facilitate significant increases in underground productivities and ongoing unit operating cost improvements.
  • During the quarter, the Company averaged 2,590 tpd from the underground mine (approx. 3,000 tpd in November and December), exceeding the year-end targeted level of 2,000 tpd with mine grades being in-line with reserve grade estimates. Underground productivity for the first quarter of 2014 is expected to remain in-line with overall fourth quarter levels (approx. 2,500 tpd) and increase steadily throughout the remainder of the year to reach a productivity target of 4,000 tpd by the end of the year. 
  • The paste backfill plant has been commissioned and the first pour was completed in early January. In 2011, the mine plan was re-engineered to utilize paste backfill to allow for significantly improved mining recovery and reduced dilution.
  • During the first two months of commercial production, underground unit mining costs were approximately $39 per tonne resulting in underground production cash costs of $663 per ounce. In the first quarter of 2014, unit mining costs are expected to average approximately $45 per tonne, reflecting the inclusion of paste fill operations following the commissioning of the paste backfill plant in early January. The unit mining costs are then expected to decrease steadily throughout the year, corresponding with planned quarter-over-quarter increases in underground productivity.
  • As at year end, development advance exceeded expectations with 75% of the 2014 mine plan already laterally accessed and 100% vertically accessed. In 2014, the Company will continue to advance underground development to optimize available ore inventory and thereby position the mine for sustainable, period-over-period, productivity increases in 2014 and beyond.
  • Open pit cash costs were $983 per ounce due to the higher operating strip ratio that resulted from waste movement in the quarter being ineligible for capitalization given the open pit mine life of less than one year. The stripping ratio during the quarter was 3.44:1 versus a year-to-date strip ratio 1.49:1 and is scheduled to average 2:1 for the remaining four to six months of open pit operations.
  • Open pit mine productivities remained at targeted levels and averaged 35,299 tpd during the quarter. As anticipated in the mine plan, the open pit will be fully depleted in coming months at which time approximately 3.0 million tonnes of open pit ore will be stockpiled ahead of the mill facility for future processing.
  • The mill facility continued to operate above nameplate capacity and averaged approximately 6,969 tpd during the fourth quarter.

El Chanate Update

  • The El Chanate open pit mine returned to targeted material movement levels, mining an average of 98,487 tpd during the quarter as compared to 87,366 tpd in the prior quarter as contractor equipment availability returned to normal levels.
  • Crushing and stacking rates remained in-line with targeted levels and averaged 17,462 tpd.

Fourth Quarter Dividend Declared

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