QUOTE AND NEWS
SeekingAlpha  Aug 8  Comment 
AuRico Gold Inc. (NYSE:AUQ) Q2 2014 Earnings Conference Call August 8, 2014 8:30 AM ET Executives Anne Day – VP, IR Scott Perry – President and CEO Rob Chausse – CFO Peter MacPhail – COO Analysts Mike Parkin...
SeekingAlpha  Aug 8  Comment 
ByBen Kramer-Miller: AuRico Gold (NYSE:AUQ) just reported its second quarter earnings. Despite the headline, which boasted that production hit a new record, I think it gives investors reason to be concerned. The company lost $17 million on $76...
SeekingAlpha  Jul 18  Comment 
ByBen Kramer-Miller: AuRico Gold (NYSE:AUQ) recently announced its second quarter production data. While the company reported a 17% year over year increase in quarterly production (56,200 oz. vs. 48,000 oz.) it also reported a 22% increase in...
Motley Fool  Jul 17  Comment 
The stock market plunged after news of a Malaysian airliner crashing in Ukraine, but these stocks still managed to post solid gains on the day. Find out more about what made them soar.
StreetInsider.com  Jul 16  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/AuRico+Gold+%28AUQ%29+Provides+Q2+Production+Data/9666391.html for the full story.
SeekingAlpha  May 9  Comment 
Start Time: 08:37 End Time: 09:09 AuRico Gold Inc. (AUQ) Q1 2014 Earnings Conference Call May 9, 2014 08:30 AM ET Executives Scott Perry - President & CEO Robert Chausse - CFO Peter MacPhail - EVP & COO Anne Day - VP, IR ...
StreetInsider.com  Apr 17  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/AuRico+Gold+%28AUQ%29+Board+Adopts+Advance+Notice+By-Law+Connected+to+Director+Nominations/9389264.html for the full story.
Benzinga  Mar 6  Comment 
In a report published Thursday, Credit Suisse analyst Anita Soni reiterated an Outperform rating on AuRico Gold (NYSE: AUQ), and raised the price target from $5.00 to $6.00. In the report, Credit Suisse noted, “Our TP is raised on a higher...
SeekingAlpha  Mar 4  Comment 
AuRico Gold Inc(AUQ) Q4 2013 Results Earnings Conference Call March 04, 2014 / 8:30 A.M. E.T Executives Anne Day – VP, IR Scott Perry – President & CEO Robert Chausse – CFO Peter MacPhail – EVP & COO Analysts ...
TheStreet.com  Mar 4  Comment 
NEW YORK (TheStreet) -- AuRico Gold was falling 4.9% to $4.74 Tuesday after missing analysts' estimates for earnings and revenue in the fourth quarter. The gold producer posted a loss of 2 cents a share for the fourth quarter, while analysts...




 

Formerly Gammon Gold, AuRico is a Halifax based gold and silver mining & exploration company with an executive office in Toronto. On August 29, 2011 it purchased Northgate Minerals for US$1.49 billion, raising reserves of gold by 3.528 million ounces up to 7.899 million ounces (resources by 8.541M oz to 18.884M oz) and giving it the potential to reach intermediate producer status by 2013 when annual gold equivalent production is estimated to reach 733,000 ounces (about 18% of that silver). By 2012 there will be six operating mines in Mexico (El-Chanate, Ocampo, El Cubo), Canada (one of Kemess or Young-Davidson) and Australia (Stawell, Fosterville).[1]

The takeover of Northgate came amidst company reports of widening losses, US$29.4M in the the second quarter of 2011.

In the first 9 months of 2011 AuRico gained significant size; In April it doubled reserves by added Capital Gold's El Chanate mine and Orior gold project. Following that, the Northgate takeover in August increased 2013 estimated gold production by 87% (reserves and resources boosted by more than 80%). At 14.7 times EBITDA, the acquisition of Northgate might be considered a bargain (that's the lowest for a billion dollar North American deal since 2004); that compares to 40.4 times EBITDA paid by Kinross Gold for Redback Mining.[2] The deal values Northgate 46% higher than its average stock price in the previous 20 days. Total production (combined) will increase by about 54% in the next 2 years (2013 will reach about 733,000 ounces of gold equivalent which takes into account silver).

Northgate Minerals

Previously traded on the TSX (NGX) and AMEX(NXG). Was a Vancouver based gold, copper and silver producer. Its operating mines are both in Australia (Fosterville, Australia, & Stawell, Australia) while its two projects are in Canada (Matachewan, Ontario (in the vicinity of the Abitibi Gold Belt). Its main operating mines also included Kemess South in Northern British Columbia however that mine has been winding down operations. Kemess South produced 2.7 million ounces of gold and 700 million pounds of copper since opening in 2000 (consequently net cash costs have skyrocketed due to falling reserves, $(56) in 2006 when output was over 310,000 ounces compared to $370 in 2010 when output was 100,789 gold ounces). After merging Primero Mining into the company it will have over 13 million ounces of gold reserves/resources. Market value is $1.2 billion (summer 2011). Its largest property, Young-Davidson is being developed with the support of the Matachewan First Nation which is supplying most of the workers for construction and development.[3]

Northgate Minerals greatly enlarged itself following the acquisition of Australian miner Perseverance Corp. on February 18 2008 (initiated November 2007); The acquisition of Perseverance gave it the status of operator for three mines which had an annual output of 480,000 ounces of gold equivalent & 71 million pounds of copper, at the time. After acquiring Perseverance Corp., Northgate's resources amounted to 7 million ounces of gold and 260 million pounds of copper.[4]

Northgate company overview

In late 2010/early 2011 Northgate produced at an annual rate of about 320,000 gold equivalent ounces (considering both Northgate and Primero) which is comparable to New Gold and Eldorado Gold both of which have a market value many times greater than Northgate (though production will decline sharply in the second half when Kemess South shuts down). With production expected to increase by 72% or 230,000 by 2013, boosting total production up to 550,000 as new projects come on tap (seven million ounces of gold between San Dimas and Young-Davidson), Northgate could soon become a major player in the industry.[5] Because the Kemess South mine is coming to a close, 2011 gold production is expected to be in the area of 195-205 thousand ounces (44% lower than in 2010) at a cash cost of $805-$845/oz.[6]

Main Operations, Production

Northgate assets

Production estimated to be 195,000 oz gold gold in 2011 rising to 274,000 oz in 2012 then 341,000 oz in 2013.

Kemess South - Dwindling reserves have forced production down to 12,000 gold ounces in 2011 compared to 100,789 gold ounces in 2010. Also produces copper (40.7 million pounds in 2010 expected to decrease to 5.3 million pounds in 2011). Kemess South was the company's first operation.

Young - Davidson - $1.5 billion open pit mine that was purchased in November of 2005 for $18 million.[3][7] It is located 60 km west of Kirkland Lake (where Kinross Gold and Kirkland Lake Gold operate/operated/Kirkland Lake Gold is another $1 billion market cap gold developer). Young-Davidson broke ground in September 2010 (permit obtained two months early in July 2010) and is scheduled to begin producing in 2013 when it begin its 15 year mine life.[3] Over 3 million ounces of gold reserves; 2.8 million ounces of gold were added to resources July 2009.[8] Located within the Abitibi Gold Belt, nearby Timmins was one of Canada's largest gold mines in terms of historic production having produced more than 64 million ounces. Gold production centered on Young-Davidson dates back to the 1930's.

Young - Davidson is on traditional first nation reserve land but it has already received permission from the Matachewan First Nation as well as a key permit. The initial capital cost of the mine is $340 million. Young - Davidson will produce 180,000 ounces of gold per year beginning in 2013 (total reserves 2.5 to 3.0 million ounces) at a cost of $350 an ounce. Long term employment : 275 jobs.[3]

AuRico

Total production (not including Northgate's assets) estimated to be 280,000 gold equivalent ounces in 2011 rising to 361,000 oz in 2012 and 392,000 oz in 2013. All operations and projects are located throughout Mexico. 2011's production guidance includes about 95,000 ounces of gold equivalent

El Chanate (near border with USA), Ocampo and El Cubo (South Central).

Ocampo - leads all operations in both gold and silver production (54,725 ounces/2.2 million oz respectively in first half of 2011) and total cash cost (low of $413/oz in the first six months of 2011).[9] Gold production was 78.6% of the company total in the January to June 2011 period (66% in the quarter ended June 2011: 28,843 ounces) but that was with El Cubo closed from June 2010 to February 2011 (though commencement wasn't accounted until June 2011).

El Chanate - Part of the company only since April 2011 when Capital Gold was taken over.

Projects

Northgate Minerals

San Dimas and Young-Davidson which are both of similar size (15 year mine life/3+ million ounces of gold equivalent each). San Dimas consists of three underground gold-silver mines.

24 mining leases to land in Powell and Cairo townships, Larder Lake Mining Division, Ontario which contain at least 600,000 tonnes in reserves.[6] Royalty rate for mines in the region will be 5% when the price of gold goes above US$270/oz in addition to $1/tonne of ore mined.

Stawell Corridor, Victoria, Australia

Venture conducted by three exploration companies; Kiska Metals (in charge of advancing the project), Brixton Metals Corporation and Northgate Minerals. Northgate's operates its potential 50% share through subsidiary Leviathan Resources Pty Ltd (Northgate must spend $1.5 million in three separate exploration licenses (the licenses cover 120 km of new land) by March 31, 2012 to retain its 50% interest). The mine has already been producing albeit at less than 100% potential (presents additional opportunities through exploration). The 240 km long gold belt is anchored by Stawell Gold Mines (SGM). Victoria Goldfields (collective name of the properties) accounts for 3/4 of all gold production in Victoria, Australia. Total land area being considered is 870 squared km.[10]

Stawell is home to over 5 million ounces of gold reserves and is producing at a rate of 100,000 gold equivalent ounces per year (graded 8 g/t). The gold is found within quartz vein systems within volcanogenic sediments located on the western portion of a Magdala basalt antiform. The basaltic rock is in fluid drenched, iron-rich volganogenic sediments (this condition is thought to have contributed to gold formation).[10] Production is up from the 90,800 ounces of gold produced by Fosterville in 2006.

Other opportunities have been discovered near Stawell Gold Mines including Murtoa, Westmere Dome Target and Dundonnell.

Northgate and Kiska Metals have, prior to this, engaged in joint exploration ventures in British Columbia (RDN) and the Yukon Territories (both gold).

AuRico

Both are in Mexico. Guadalupe y Calvo (owned since takeover of Mexgold Resources in August 2006) and Orion (part of the Capital Gold deal).

Business and Financials

AuRico's 2011 second quarter revenue showed a 98% increase over the same period in 2010 ($112.9M) attributable to a 53% rise in gold equivalent production (up to 75,000 ounces) and a 26% improvement in quarterly cash costs (down to $384/oz using a gold silver ratio of 39).[11] Those numbers should rise even higher in the near future given that El Cubo is back online and newly acquired Northgate assets will immediately increase AuRico production by more than 56%, with that number rising to over 80% by 2013.

Northgate Minerals

Northgate's revenue from 2008 to 2010 was flat (ranged from $461 to $485 million each year) while operating income and net earnings were even less appealing (operating income was in the red for both 2009 and 2010 with 2010 being twice as bad (-$92 million). Investors in it for the long term should not be concerned since much of that is due to unusual expense ($92 million which was only $28 million that last time the company reported positive operating income) and other expenses used in prepping projects like Young-Davidson (3 million ounces of gold/15 year mine life/commercial production by 2013). Average net gold cash cost was US$184 million in 2008 following the acquisition of Perseverance Corp.

Primero Mining

2010 was the first year that Primero reported revenue; revenue was $60.28 million. Gross profit was just over $14 million but because of $22.79 million expenses directly related to financing projects operating income was $20.38 million in the red, taxes totalled $11.04 million (no taxes paid in years prior to 2010) bringing net income down to -$34.49 million (down from -$0.91 million in 2009 and -$.78 million in 2008). 2010 diluted basic earnings per share was -93 cents (down from -43 cents in 2009, -1.10 in 2008).

Acquisitions

Northgate Minerals

In the summer of 2010 it initiated a $370.4 million takeover of Primero Mining, 35.5% of Primero was purchased from Goldcorp which will receive 11% of the new company's shares in return (amounts to 46.7 million shares). The deal gives Northgate the San Dimas gold mine in Durango, Mexico. Update: Subsequent to AuRico's takeover offer, Northgate Minerals terminated its takeover of Primero Mining.

May 12, 2011 purchased another property near Young - Davidson, 50 miles southeast of Timmins, Ontario from Matachewan Consolidated Mines, Limited. It includes 24 mining leases to land in Powell and Cairo townships, Larder Lake Mining Division, Ontario which contain at least 600,000 tonnes in reserves.[6] Royalty rate for mines in the region will be 5% when the price of gold goes above US$270/oz in addition to $1/tonne of ore mined regardless of price.

In November of 2007 it conducted a friendly takeover of Perseverance Mining of Australia which, at the time produced about 200,000 ounces of gold per year (takeover completed in early 2008). The combined company initially produced more than 275,000 oz of gold per year. With high prices for copper and rising prices for gold, this company should be able to show a large increase in profits for the next few years. The takeover gave it the lucrative Victoria Goldfields properties in the Stawell corridor of Victoria, Australia.

Aurico Gold

April 2011 - Purchased Capital Gold Corp. for $420 million.

References

  1. Where the mines are (August 29, 2011).
  2. Northgate Takeover Proving Cheapest With Record Gold: Real M&A (August 30, 2011).
  3. 3.0 3.1 3.2 3.3 Ground broken on $1.5B Young Davidson Mine (2010-09-16).
  4. Northgate offers cash for Australian company (2007-11-05).
  5. Miners tie golden knot (2011-07-14).
  6. 6.0 6.1 6.2 Northgate Minerals Key Developments : Reuters. Retrieved on 2011-07-14.
  7. Matachewan gears up for gold mine construction (August 2010).
  8. Northgate Minerals Corporation - Operations & Projects. Retrieved on 2011-07-14.
  9. Aurico Gold Reports (August 11, 2011).
  10. 10.0 10.1 Kiska Metals Corporation Stawell Gold Mine Victoria, Australia. Retrieved on 2011-07-14.
  11. AuRico 2011 Second Quarter Results (August 11, 2011).
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