AuRico Gold expects a 25% increase in 2014 production

9 February 2014 (Last Updated February 9th, 2014 18:30)

Canadian exploration firm AuRico Gold expects to report a 25% increase in company-wide production this year. Production is anticipated to be in the range of 210,000oz to 240,000oz of gold.

Canadian exploration firm AuRico Gold expects to report a 25% increase in company-wide production this year. Production is anticipated to be in the range of 210,000oz to 240,000oz of gold.

Young-Davidson mine's production is estimated to increase by about 32% to between 140,000oz and 160,000oz.

Productivity from the underground mine for Q1 2014 is anticipated to average about 2,500t per day and is likely to increase steadily throughout the year, as the underground mine ramps-up to a targeted year-end exit rate of 4,000t per day.

"Gold production from both assets is expected to increase over the prior quarter, which will represent the seventh consecutive quarter of company-wide gold production growth." 

AuRico Gold expects to achieve a sustainable production rate of 8,000t per day by the end of 2016.

Production from El Chanate is expected to be between 70,000oz and 80,000oz, consistent with the previous year's production levels, as the mine continues to operate at targeted levels.

The company said it will now focus on follow-up drilling in the three key areas of mineralisation that were identified in the 2013 drilling programme outside the open pit, as well as the El Chanate Deeps area located under the current open pit floor.

AuRico Gold will also start fieldwork to identify new potential targets on its expanded land package located north-west and south-east of the mine site, which provides access to an additional 20km along the prospective El Chanate Trend.

Company-wide cash costs are expected to be between $675 per ounce and $775 per ounce, and all-inclusive sustaining costs are estimated to be in the range of $1,100 per ounce to $1,200 per ounce.

The capital investment requirements of $125m to $135m were up to 40% lower than last year's, as construction activities at the Young-Davidson mine were completed.

The company said it expects yearly capital investment requirements and all-in sustaining costs per ounce to further decline in the coming years.

AuRico Gold CEO Scott Perry said that company-wide gold production is anticipated to significantly increase due to the steady increase in the production profile of its Young-Davidson mine.

"In the first quarter, gold production from both assets is expected to increase over the prior quarter, which will represent the seventh consecutive quarter of company-wide gold production growth," Perry said.