2. FORWARD LOOKING STATEMENTS
This presentation contains forward-looking statements and forward-looking information as defined under Canadian and U.S. securities laws. All statements,
other than statements of historical fact, are forward-looking statements. The words "expect", "believe", "anticipate", "will", "intend", "estimate", "forecast",
"budget" and similar expressions identify forward-looking statements. Forward-looking statements include information as to strategy, plans or future financial or
operating performance, such as the Company’s expansion plans, project timelines, production plans, projected cash flows or capital expenditures, cost
estimates, projected exploration results, reserve and resource estimates and other statements that express management’s expectations or estimates of future
performance.
Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management, are
inherently subject to significant uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those
projected in the forward-looking statements, including: uncertainty of production and cost estimates; fluctuations in the price of gold and foreign exchange
rates; the uncertainty of replacing depleted reserves; the risk that the Young-Davidson shaft will not perform as planned; the risk that mining operations do not
meet expectations; the risk that projects will not be developed accordingly to budgets or timelines, changes in laws in Canada, Mexico and other jurisdictions
in which the Company may carry on business; risks of obtaining necessary licenses, permits or approvals for operations or projects such as Kemess; disputes
over title to properties; the speculative nature of mineral exploration and development; risks related to aboriginal title claims; compliance risks with respect to
current and future environmental regulations; disruptions affecting operations; opportunities that may be pursued by the Company; employee relations;
availability and costs of mining inputs and labor; the ability to secure capital to execute business plans; volatility of the Company’s share price; continuation of
the dividend and dividend reinvestment plan; the effect of future financings; litigation; risk of loss due to sabotage and civil disturbances; the values of assets
and liabilities based on projected future cash flows; risks arising from derivative instruments or the absence of hedging; adequacy of internal control over
financial reporting; changes in credit rating; and the impact of inflation.
Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained
herein. Such statements are based on a number of assumptions which may prove to be incorrect, including assumptions about: business and economic
conditions; commodity prices and the price of key inputs such as labour, fuel and electricity; credit market conditions and conditions in financial markets
generally; revenue and cash flow estimates, production levels, development schedules and the associated costs; ability to procure equipment and supplies
and on a timely basis; the timing of the receipt of permits and other approvals for projects and operations; the ability to attract and retain skilled employees and
contractors for the operations; the accuracy of reserve and resource estimates; the impact of changes in currency exchange rates on costs and results;
interest rates; taxation; and ongoing relations with employees and business partners. 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. “Inferred” resources” have a great amount of
uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies.
United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral
reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally
mineable.
2
3. Overview
•
•
Low cost producer and strong
production growth profile
Long mine life: Opportunity to
expand as reserves increase
Located in a stable jurisdiction,
close to major centres
Historic Production from U/G Mines of Timmins
& Kirkland Lake(1)
20
15
Ounces (Millions)
•
Active
10
5
Historical Production
•
•
YD P&P
YD M&I
Hoyle Pond
Macassa 1933-99 + 2002-13
Pamour
Young-Davidson
Coniarium
Paymaster
Upper Canada 1938-71
Preston
Sylvanite 1927-61
Hallnor
Aunor
Teck Hughes 1917-68
Wright Hargreaves 1921-65
Lakeshore Mine K.L. 1918-65
Commercial production declared
September 1st, 2012
Kerr Addison 1938-96
•
McIntyre 1912-88
First gold pour on April 30th, 2012
Dome 1910-2013
•
Hollinger 1910-68
0
YD Inferred
Underground production
commenced Oct/12;Declared
commercial production Oct. 31/13
• Historic production from underground gold mines in
Timmins and Kirkland Lake (~108 M Oz.)
Solid safety record
• Five mines with greater than 5 million ounces
production, Young-Davidson is likely to be the sixth
(1) Refer to endnote #1.
3
4. Rich Tradition – Mine History
•
Site of two former producers
•
20+ years in operation
•
•
+1,200 tpd average production rate
Early pioneers of bulk mining
•
+1 million tonne stopes underground
Young-Davidson Mine (YD)
•
Mined ~9 million tonnes and produced 970,000
ounces
•
Average realized grade of 3.37 g/tonne
•
Profitable operations at realized grades
•
Supported dividend payments
Matachewan Consolidated Mine (MCM)
Period
Mine
Tonnes
1934 to 1957
YD
5,653,000
3.21
585,000
1934 to 1954
MCM
3,205,000
3.66
378,000
1981 to 1982
MCM
96,400
2.36
7,300
8,954,400
3.37
970,300
Total
Grade (g/t)
Produced (Oz)
4
5. Responsible Mining
Fostering positive relationships with all stakeholders
•
Strong First Nations support
•
Partnerships with local communities
•
Hiring and training locally
•
•
96% of mine workforce from local regions
Supporting local suppliers
•
47% of mine spending on local suppliers
5
6. Underground Mine Plan
Ramp Portal
10350L
MCM Historic
Mine Workings
Open Pit
Highly Productive Mining Methods
YD Historic
Mine Workings
Transverse long hole stoping
NG Shaft
MCM Shaft
•
•
9890L
•
YD West
Zone
9590L
For wider zones (12-40m)
30m sub levels
Longitudinal retreat
•
For areas < 12m widths
9400L
•
8900L
3.8M reserve ounces with exploration upside
•
Mining recovery ~ 92%
•
9200L
Pastefill
Dilution ~10%
•
Underground reserve grade
2.82 g/t
6
7. Open Pit Overview
•
315m wide x 800m long and 140m deep
•
Life of Mine production: 2.25 years
•
7.5Mt of ore @ 1.36 g/t Au
•
Mill Feed 4.2Mt @ 1.78 g/t
•
Low grade stockpile 3.3Mt @ 0.82 g/t
•
Strip Ratio 2.5:1
•
8m benches
•
Cat 777 Trucks
•
992 Loaders
7
8. Underground Mining Rates
Underground Mine Ramp-up (tpd)
Underground Mine Productivity (tpd)
(Year-End Productivity)
2,600
8,000
Target
2,400
Commercial
Production
Actual
2,200
2,000
7,000
6,000
1,800
5,000
1,600
1,400
4,000
1,200
1,000
3,000
800
2,000
600
400
1,000
200
0
0
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
2012A
2013E
2014E
•
2017E
Target of 2,000tpd by end of 2013
•
2016E
Commercial underground production declared October 31, 2013
•
2015E
Currently mining in the Upper Boundary Zone (“UBZ”)
•
•
•
60,000 to 80,000 tonne stopes
Mining 30,000 to 40,000 tonne panels
Overall average ore thickness (current reserves) is 20 metres
•
Highly productive bulk mining methodologies
•
Highly mechanized with low manning requirements
8
9. Process Plant Performance YTD
Crusher
9,000
Mill Tonnes Processed (tonnes per day)
Target
8,000
Actual
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
9
10. Shaft System Productivities
Upper mine represents 8 years of production
• Supports increased
underground mining rates
• Improved productivity vs.
ramp haulage
• Optimizes cycle time
• Enhanced cost efficiencies
• Reduces mobile equipment
requirements
• Improves ventilation
• ⅔ of 2014 mine plan is
currently accessed
• Capacity of 8,000tpd
10
11. Northgate Production Shaft Work
Accessing mine via shaft system
Reaming of NG shaft
• 1st leg reaming completed (440m)
• Ground support completed
• 2nd leg reaming completed (890m)
• 3rd leg (610m)
• Planned end of 2016
LEGEND
Raise Bore Leg #1
Raise Bore Leg #2
Raise Bore Leg #3
11
12. Solid Production Growth
Stable and Growing Production Profile(3)
Gold Ounces Produced
35,000
30,000
25,000
20,000
15,000
10,000
5,000
Q3 12
Q4 12
Q1 13
•
Q3 13
Q4 13E
Solid production growth quarter over quarter
•
Q2 13
Cash costs in-line with target levels
(3) Refer to endnote #3.
12
13. Endnotes
1.
Data provided by the Timmins Resident Geologist Program Ontario Geological Survey for the Ministry of Northern Development & Mines (2006).
2.
Reserves and resources for Young-Davidson and El Chanate mines, Kemess Underground Project, and Orion represent gold grade as per technical reports and
Company disclosure. For more information regarding AuRico Gold’s Mineral Reserves and Resources as at December 31, 2012 and the Kemess Feasibility
Study, please refer to the press release dated March 25, 2013 titled AuRico Reports 2012 Reserve & Resource Update and Kemess Feasibility Study Results,
available on the Company website at www.auricogold.com. Measured and indicated resources excludes inferred resources.
3.
Production figures include gold ounces only. Production at the Young-Davidson mine includes pre-production ounces, which include ounces produced prior to the
declaration of commercial production on September 1, 2012, as well as all ounces produced from the underground mine.
4.
All-in sustaining costs are defined as cash costs, sustaining capital, corporate general and administrative expense, reclamation, care and maintenance expense,
and exploration expenditures. Prior to commissioning the underground mine at Young-Davidson, all-in 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 expenditures.
13
17. Reserves and Resources(2)
Total Proven and Probable Reserves
Tonnes
(000's)
Gold
(g/t)
Gold Oz.
(000's)
Young-Davidson - Surface
6,425
1.31
271
Young-Davidson - Underground
39,037
2.82
3,534
Total Young-Davidson
45,462
2.60
3,804
Total Measured and Indicated Resources
Tonnes
(000's)
Gold
(g/t)
Gold Oz.
(000's)
Young-Davidson - Surface
291
1.70
16
Young-Davidson - Underground
9,531
2.74
839
Total Young-Davidson
9,821
2.71
855
Inferred Resources
Tonnes
(000's)
Gold
(g/t)
Gold Oz.
(000's)
Young-Davidson - Surface
0.99
1
Young-Davidson - Underground
13,983
2.80
1,259
Total Young-Davidson
(2) Refer to endnote 2.
31
14,014
2.80
1,260
17
18. Notes to Reserves and Resources
Notes:
•
Mineral Reserves and Resources have been stated as at December 31, 2012.
•
Mineral Resources are in addition to Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability when calculated using Mineral
Reserve assumptions. Reserves have been reported in accordance with NI 43-101, as required by Canadian securities regulatory authorities. In addition, while the terms “Measured”,
“Indicated and “Inferred” Mineral Resources are required pursuant to NI 43-101, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of
the SEC, and mineral resource information contained herein is not comparable to similar information regarding mineral reserves disclosed in accordance with the requirements of the SEC.
Investors should understand that “Inferred” Mineral Resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. In
addition, investors are cautioned not to assume that any part or all of AuRico’s Mineral Resources constitute or will be converted into Reserves.
•
Following the completion of a joint venture agreement, Minera Frisco has a 50% interest in the Orion Project.
•
Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.
The following metal prices were used for the calculation of Reserves and Resources:
Reserves
Resources
USD
Au $/oz
Ag $/oz
Cu $/lb
Au $/oz
Ag $/oz
Cu $/lb
El Chanate
$1,400
-
-
$1,600
-
-
Young-Davidson
$1,400
-
-
$1,600
-
-
Kemess Underground
$1,300
$23.00
$3.00
-
-
-
Orion
$13.00 NSR
$850
$13.00
-
Reserves and Resources were prepared under the supervision of the following Qualified Persons:
Resources
Reserves
El Chanate
Jeffrey Volk, CPG, FAusIMM, Director Reserves
and Resources, AuRico Gold Inc.
Chris Sharpe, P.Eng, Manager Mining, AuRico Gold Inc.
Young-Davidson - Open Pit
Jeffrey Volk, CPG, FAusIMM, Director Reserves
and Resources, AuRico Gold Inc.
Chris Sharpe, P.Eng, Manager Mining, AuRico Gold Inc.
Young-Davidson - Underground
Jeffrey Volk, CPG, FAusIMM, Director Reserves
and Resources, AuRico Gold Inc.
Chris Bostwick, FAusIMM, SVP Technical Services,
AuRico Gold Inc.
Kemess Underground
Jeffrey Volk, CPG, FAusIMM, Director Reserves
and Resources, AuRico Gold Inc.
Chris Bostwick, FAusIMM, SVP Technical Services,
AuRico Gold Inc.
Orion
Jeffrey Volk, CPG, FAusIMM, Director Reserves
and Resources, AuRico Gold Inc.
18
19. All-in Sustaining Cash Cost Allocation
All-in Sustaining Cash Costs
2013 All-in Sustaining Cash Costs
$1,100-$1,200 per ounce(4)
Corporate
G&A
Exploration
• Provides increased transparency
• More representative of actual cost of production
• Removes influence of accounting treatments
• Can be reconciled to FCF
Sustaining
Cost Allocation
Materials/Mtc
9%
Consumables
19%
Cash Costs
Diesel
9%
Labour
57%
(Includes contract
labour)
Power
6%
(4) Refer to endnote #4.
19
