Financial Highlights
For the fourth quarter, the Company reported the following results:
- Revenues of $50.8 million
- Operating cash flow before changes in working capital(1) of $17.5 million, or $0.07 per share
- Adjusted net loss(1) of $5.5 million, or $0.02 per share
- Net loss of $106.4 million, or $0.43 per share, including non-cash impairment charges and net realizable value adjustments of $71.7 million, or ($0.29) per share, net of taxes
- Production of 49,526 gold ounces(2)
- Cash costs of $771 per gold ounce(3)
- All-in sustaining costs of $1,232 per gold ounce(3)
For the full year, the Company reported the following results:
- Revenues of $227.6 million
- Operating cash flow before changes in working capital(1) of $78.1 million, or $0.31 per share
- Adjusted net earnings(1) of $13.1 million, or $0.05 per share
- Net loss of $176.8 million, or $0.71 per share, including non-cash impairment charges and net realizable value adjustments of $171.4 million, or ($0.68) per share, net of taxes
- Production of 192,602 gold ounces(2)
- Cash costs of $676 per gold ounce(3)
- All-in sustaining costs of $1,181 per gold ounce(3)
AuRico Gold Company-Wide Production Growth
| (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 3,509 pre-production gold ounces produced at Young-Davidson during the three months ended December 31, 2013. |
| (3) | Total cash costs per gold ounce and all-in sustaining costs per gold ounce have been presented prior to inventory net realizable value adjustments. See the discussion of Non-GAAP measures provided below. |
| 2013 Operational Results | |||||||||||||||
| First Quarter March 31/13 | Second Quarter June 30/13 | Third Quarter Sept. 30/13 | Fourth Quarter Dec. 31/13 | Year-End Dec. 31/13 | |||||||||||
| Gold Ounces Produced3 | 46,170 | 48,003 | 48,903 | 49,526 | 192,602 | ||||||||||
| Total Cash Costs per oz.1,2 | $635 | $655 | $628 | $771 | $676 | ||||||||||
| All-in Sustaining Costs per oz.2 | $1,090 | $1,189 | $1,210 | $1,232 | $1,181 | ||||||||||
| 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, prior to inventory net realizable value adjustments. See the Non-GAAP Measures section on page 23 of the Management’s Discussion and Analysis for the year ended December 31, 2013. | |
| 3. | Includes pre-production gold ounces from the Young-Davidson underground mine prior to the declaration of commercial production on October 31, 2013. |
Recent Highlights
- 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 fourth quarter, the Company averaged 2,590 tpd from the
Young –Davidson underground mine (approx. 3,000 tpd in November and December), exceeding the year-end targeted level of 2,000 tpd. 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. - During the first two months of commercial production, underground unit mining costs were approximately $39per tonne and are expected to average approximately $45 per tonne in Q1 2014, which reflects the inclusion of paste fill operations following the recent commissioning of paste backfill plant. Unit costs are expected to decrease steadily throughout the year, corresponding with planned quarter-over-quarter increases in underground productivity.
- The Company recently received the necessary permits to increase the daily processing limit of the
Young –Davidson mill facility to 10,000 tonnes per day from the previous 8,000 tonnes per day. While the mill facility is expected to average between 7,000 and 7,500 tonnes per day in 2014, this future increase in throughput capacity will provide considerable flexibility as the mine continues ramping up to its target of 8,000 tonnes per day at the end of 2016. This productivity upgrade provides organic growth optionality that could permit early treatment of the longer term stockpile inventory, which could potentially enhance our future cash flow profile.
“The Company has reported solid results for 2013 that are in-line with market expectations and with the fourth quarter representing the sixth consecutive quarter of company-wide production growth. As we start 2014, both assets are performing at, or above, expected levels and this gives us confidence that the first quarter will represent the seventh consecutive quarter of company-wide production growth, a trend that we expect to continue throughout the year,” stated Scott Perry, President and Chief Executive Officer. He continued, “At our cornerstone
Managing Long-Term Liquidity
The Company is fortunate to be well positioned with a quality asset base, a growing production profile and a strong liquidity position that provides the Company with access to a number of shareholder friendly, non-dilutive debt financing options. The Company intends to issue longer dated term debt to enhance our balance sheet, repay existing debt, bolster our already strong liquidity position, and to secure additional flexibility to pursue future organic growth opportunities at our cornerstone
Operational Highlights – Continuing Operations
| Young-Davidson | El Chanate | Total | ||||||||||
| (in thousands, except ounces, average realized prices and total cash costs) | Quarter Ended December 31, 2013 | Quarter Ended December 31, 2012 | Quarter Ended December 31, 2013 | Quarter Ended December 31, 2012 | Quarter Ended December 31, 2013 | Quarter Ended December 31, 2012 | ||||||
| Gold ounces produced | 29,597 | 19,236 | 16,420 | 14,782 | 46,017 | 34,018 | ||||||
| Pre-production gold ounces produced(3) | 3,509 | 7,127 | – | – | 3,509 | 7,127 | ||||||
| Total gold ounces produced | 33,106 | 26,363 | 16,420 | 14,782 | 49,526 | 41,145 | ||||||
| Total cash costs per gold ounce(1)(2)(3) | $850 | $744 | $615 | $520 | $771 | $650 | ||||||
| Revenue from mining operations | $31,420 | $38,425 | $19,362 | $24,694 | $50,782 | $63,119 | ||||||
| Average realized gold price per ounce | $1,261 | $1,722 | $1,251 | $1,717 | $1,257 | $1,720 | ||||||
| Young-Davidson | El Chanate | Total | ||||||||||
| (in thousands, except ounces, average realized prices and total cash costs) | Year Ended December 31, 2013 | Year Ended December 31, 2012 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | ||||||
| Gold ounces produced | 89,236 | 29,139 | 71,864 | 71,145 | 161,100 | 100,284 | ||||||
| Pre-production gold ounces produced(3) | 31,502 | 26,999 | – | – | 31,502 | 26,999 | ||||||
| Total gold ounces produced | 120,738 | 56,138 | 71,864 | 71,145 | 192,602 | 127,283 | ||||||
| Total cash costs per gold ounce(1)(2)(3) | $744 | $708 | $592 | $462 | $676 | $536 | ||||||
| Revenue from mining operations | $124,439 | $45,492 | $103,192 | $118,130 | $227,631 | $163,622 | ||||||
| Average realized gold price per ounce | $1,395 | $1,728 | $1,395 | $1,676 | $1,395 | $1,690 | ||||||
Financial Highlights – Continuing Operations
| (in thousands, except per share amounts) | Quarter Ended December 31, 2013 | Quarter Ended December 31, 2012(2) | |||||||
| Adjusted net (loss) / earnings(1) | ($5,484) | $13,505 | |||||||
| Adjusted net (loss) / earnings per share, basic(1) | ($0.02) | $0.05 | |||||||
| Net loss | ($106,412) | ($135,142) | |||||||
| Net loss per share, basic | ($0.43) | ($0.48) | |||||||
| Adjusted operating cash flow(1) | $17,508 | $30,426 | |||||||
| (in thousands, except per share amounts) | Year Ended December 31, 2013 | Year Ended December 31, 2012(2) | |||||||
| Adjusted net earnings(1) | $13,052 | $16,903 | |||||||
| Adjusted net earnings per share, basic(1) | $0.05 | $0.06 | |||||||
| Net loss | ($176,770) | ($99,779) | |||||||
| Net loss per share, basic | ($0.71) | ($0.35) | |||||||
| Adjusted operating cash flow(1) | $78,079 | $37,142 |
| (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. Total cash costs per gold ounce have been presented prior to inventory net realizable value adjustments. The Company has restated adjusted net earnings for 2012. |
| (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 30 in the Company’s Management’s Discussion & Analysis or note 3(a) to the Company’s consolidated financial statements for the year ended December 31, 2013. |
| (3) | The Young-Davidson open pit mine declared commercial production on September 1, 2012, and is therefore excluded from cash costs prior to this date. The Young-Davidson underground mine declared commercial production on October 31, 2013, and is therefore excluded from 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) | Quarter Ended | Quarter Ended | ||||||
| December 31, 2013 | December 31, 2012 | |||||||
| Net loss from continuing operations | ($106,412) | ($135,142) | ||||||
| Adjustments: | ||||||||
| Deferred income tax expense related to foreign exchange | $19,781 | $629 | ||||||
| Foreign exchange gain | (3,732) | (2,298) | ||||||
| Net realizable value adjustments on inventory | 37,196 | – | ||||||
| Impairment charges | 59,886 | 127,000 | ||||||
| (Gain) / loss on option component of convertible notes | (772) | 6,186 | ||||||
| Unrealized loss on investments | – | 17,778 | ||||||
| Unrealized loss on derivatives | – | 210 | ||||||
| Unrealized loss on contingent consideration | 483 | 3,569 | ||||||
| Equity in loss / (earnings) of jointly-controlled entity | 2,533 | (83) | ||||||
| Gain on disposition of 50% interest in Orion | – | (6,620) | ||||||
| Impact of new Mexican mining tax | 4,917 | – | ||||||
| Other (including tax effect of adjustments) | (19,364) | 2,276 | ||||||
| Adjusted net (loss) / earnings from continuing operations | ($5,484) | $13,505 | ||||||
| Adjusted net (loss) / earnings from continuing operations, per share | ($0.02) | $0.05 | ||||||
| Net earnings from discontinued operations | $- | $108,977 | ||||||
| Adjustments: | ||||||||
| Unrealized foreign exchange gain | $- | ($391) | ||||||
| Net realizable value adjustments on inventory | – | 7,778 | ||||||
| Disposition-related costs | – | 6,796 | ||||||
| Loss on disposition of El Cubo and Guadalupe y Calvo | – | 2,277 | ||||||
| Gain on disposition of Ocampo | – | (150,793) | ||||||
| Ocampo outside tax basis adjustment | – | (39,168) | ||||||
| Tax impact | – | 80,101 | ||||||
| Adjusted net earnings from discontinued operations | $- | $15,577 | ||||||
| Adjusted net earnings from discontinued operations, per share | $- | $0.06 | ||||||
| Adjusted net (loss) / earnings | ($5,484) | $29,082 | ||||||
| Adjusted net (loss) / earnings, per share | ($0.02) | $0.10 | ||||||
| (in thousands, except per share metrics) | Year Ended | Year Ended | ||||||
| December 31, 2013 | December 31, 2012 | |||||||
| Net loss from continuing operations | ($176,770) | ($99,779) | ||||||
| Adjustments: | ||||||||
| Deferred income tax expense / (recovery) related to foreign exchange | $24,999 | ($15,785) | ||||||
| Foreign exchange (gain) / loss | (10,927) | 10,663 | ||||||
| Net realizable value adjustments on inventory | 42,069 | – | ||||||
| Impairment charges | 158,574 | 127,000 | ||||||
| Gain on option component of convertible notes | (15,622) | (4,046) | ||||||
| Unrealized loss on investments | – | 146 | ||||||
| Unrealized gain on derivatives | (2,183) | (1,713) | ||||||
| Unrealized loss / (gain) on contingent consideration | 7,395 | (1,568) | ||||||
| Equity in loss / (earnings) of jointly-controlled entity | 2,533 | (83) | ||||||
| Gain on disposition of 50% interest in Orion | – | (6,620) | ||||||
| Impact of new Mexican mining tax | 4,917 | – | ||||||
| Other (including tax effect of adjustments) | (21,933) | 8,688 | ||||||
| Adjusted net earnings from continuing operations | $13,052 | $16,903 | ||||||
| Adjusted net earnings from continuing operations, per share | $0.05 | $0.06 | ||||||
| Net earnings from discontinued operations | $- | $131,052 | ||||||
| Adjustments: | ||||||||
| Unrealized foreign exchange loss | $- | $9,080 | ||||||
| Loss on disposition of Australian operations | – | 1,736 | ||||||
| Net realizable value adjustments on inventory | – | 16,070 | ||||||
| Impairment of Australian Operations | – | 22,857 | ||||||
| Disposition-related costs | – | 12,123 | ||||||
| Gain on disposition of El Cubo and Guadalupe y Calvo | – | (21,785) | ||||||
| Gain on disposition of Ocampo | (150,793) | |||||||
| Tax impact | – | 83,005 | ||||||
| Adjusted net earnings from discontinued operations | $- | $103,345 | ||||||
| Adjusted net earnings from discontinued operations, per share | $- | $0.37 | ||||||
| Adjusted net earnings | $13,052 | $120,248 | ||||||
| Adjusted net earnings, per share | $0.05 | $0.43 | ||||||
Adjusted Operating Cash Flow Reconciliation
| (in thousands, except per share metrics) | Quarter Ended | Quarter Ended | |||||
| December 31, 2013 | December 31, 2012 | ||||||
| Operating cash flow from continuing operations | $11,954 | ($7,813) | |||||
| Add back: Non-cash change in operating working capital | 5,554 | 38,239 | |||||
| Adjusted operating cash flow from continuing operations | $17,508 | $30,426 | |||||
| Adjusted operating cash flow from continuing operations, per share | $0.07 | $0.11 | |||||
| (in thousands, except per share metrics) | Year Ended | Year Ended | |||||
| December 31, 2013 | December 31, 2012 | ||||||
| Operating cash flow from continuing operations | $63,266 | ($7,231) | |||||
| Add back: Non-cash change in operating working capital | 14,813 | $44,373 | |||||
| Adjusted operating cash flow from continuing operations | $78,079 | $37,142 | |||||
| Adjusted operating cash flow from continuing operations, per share | $0.31 | $0.13 |
Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”)
| (in thousands) | Year Ended | Year Ended | ||||||||
| December 31, 2013 | December 31, 2012 | |||||||||
| Net loss from continuing operations | ($176,770) | ($99,779) | ||||||||
| Add back: | ||||||||||
| Finance costs | 2,928 | 2,237 | ||||||||
| Amortization and depletion | 65,529 | 18,723 | ||||||||
| Deferred income tax expense / (recovery) | 14,456 | (7,849) | ||||||||
| Current income tax (recovery) / expense | (140) | 6,625 | ||||||||
| EBITDA | ($93,997) | ($80,043) | ||||||||
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)
| (in thousands) | Year Ended | Year Ended | ||||||
| December 31, 2013 | December 31, 2012 | |||||||
| EBITDA | ($93,997) | ($80,043) | ||||||
| Add back: | ||||||||
| Exploration | 41 | 1,307 | ||||||
| Non-cash items identified in supplemental cash flow note, excluding amortization and depletion, and deferred income tax expense / recovery | 181,770 | 143,967 | ||||||
| Adjusted EBITDA | $87,814 | $65,231 | ||||||
Non-GAAP Measures
The Company uses the measures adjusted net earnings, cash costs per ounce, all-in sustaining costs per ounce, adjusted operating cash flow, EBITDA and Adjusted EBITDA 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 and all-in sustaining costs per ounce are reconciled to the Company’s financial statements beginning on page 23 of the Company’s Management’s Discussion and Analysis for the year ended December 31, 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. Management uses adjusted operating cash flow as a measure internally to evaluate the underlying operating cash flow performance of the Company as a whole for the reporting periods presented, and to assist with the planning and forecasting of future operating cash flow.
EBITDA represents net loss from continuing operations before interest, taxes, amortization, and depreciation. Adjusted EBITDA represents EBITDA, adjusted for exploration expense and other non-cash items included in earnings. While the adjustments to net earnings in these measures include items that are recurring, EBITDA and adjusted EBITDA a valuable indicator of the Company’s ability to generate liquidity by producing operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.
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 www.auricogold.com or under the Company’s profile on www.sedar.com and with the Securities and Exchange Commission at www.sec.gov/edgar.shtml (“Edgar”).
2014 Dividend Schedule
In 2014, the quarterly dividend will be linked to operating cash flow (“OCF”), whereby the Company intends to pay out 20% of the OCF generated in the preceding quarter, divided by the Company’s outstanding common shares at the time the dividend is approved. Dividend payments corresponding to the 2014 quarterly financial results are expected to be paid, subject to the approval of the Board of Directors, within three to four weeks following the release of the Company’s financial statements. The first quarter 2014 dividend is therefore expected to be paid in late May 2014. Information on the Company’s dividend reinvestment plan (DRIP) is available through the following link: www.auricogold.com/DRIP.
Upcoming News Flow
The Company expects to issue the following updates during the first half of 2014:
- Q1 2014 Production Preview (April 21)
- Q1 2014 Financial Results (May 8)
- Annual General Meeting (May 9)
- Company-Wide Exploration Update (late-May)
Fourth Quarter Conference Call and Webcast
A webcast and conference call will be held on Tuesday, March 4, 2014 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
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/1301913/1436577
Archive Call Access
If you are unable to attend the conference call, a replay will be available until midnight, March 11, 2014 by dialing the appropriate number below:
- International & Toronto: 1-416-849-0833 Passcode: #90211565
Canada & U.S. Toll Free: 1-855-859-2056 Passcode: #90211565
Archive Webcast
The webcast will be archived for 90 days. To access the archived webcast, visit the Company’s website atwww.auricogold.com or follow this link: http://www.newswire.ca/en/webcast/detail/1301913/1436577
About
Cautionary Statement
Certain information included in this presentation 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”, “schedule” 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 and competitive 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 labor; development delays at the
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 presentation 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.
SOURCE
PDF available at: http://stream1.newswire.ca/media/2014/03/03/20140303_C8868_DOC_EN_37454.pdf
please visit the AuRico Gold website at 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
