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AuRico Metals Reports 2017 Second Quarter Results

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NYBob Member Level  Wednesday, 08/09/17 06:47:29 PM
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AuRico Metals Reports 2017 Second Quarter Results
August 09, 2017
Download this Press Release (PDF)
Reports Record Quarterly Royalty Revenues and Cash Balance
TORONTO, Aug. 9, 2017 /CNW/ -

AuRico Metals Inc. (TSX: AMI),("AuRico" or the "Company") today reported its financial results for the second quarter. For complete details of the Financial Statements and associated Management's Discussion and Analysis for the quarter ended June 30, 2017, please see the Company's filings on SEDAR (www.sedar.com) or the Company's website (www.auricometals.ca). All amounts are in US dollars unless otherwise indicated.


Recent Highlights include:

Record royalty revenue of $2.8 million, an increase of 39% compared to Q2 2016;
Revenue for the quarter was positively impacted by record second quarter gold production of 77,069 ounces from the Fosterville mine and 47,300 ounces from the Young-Davidson mine;
Annual royalty revenue guidance has been revised upwards for the second time in 2017, to a range of $10.5 to $11.0 million;
Future royalty revenue will be positively impacted by the significant 110% increase in gold ounces within Mineral Reserves at the Fosterville Mine;
The Company reported a record cash balance of $21.2 million at June 30, 2017;
Signed an Impact Benefits Agreement ("IBA") for the Kemess Underground Project with the Tse Key Nay First Nations;
Released a positive Preliminary Economic Assessment ("PEA") for the Kemess East project which displayed robust economics including a pre-tax NPV of C$670.0 million (22.1% IRR) and an after-tax NPV of C$375.0 million (16.7% IRR); and
Completed a $3.8 million (C$5.0 million) Canadian Exploration Expense ("CEE") flow-through financing to fund ongoing exploration at Kemess East.
Commenting on the results, Chris Richter, President and CEO of AuRico Metals stated; "Over the first half of 2017 we reached a number of key milestones at Kemess, including the receipt of our EA Certificate for Kemess Underground, the signing of an Impact Benefit Agreement with our First Nations Partners, and the release of a positive PEA on Kemess East. I am proud of the progress the team has made in achieving these milestones and increasingly highlighting Kemess as a stand out, advanced stage, development opportunity in a top jurisdiction. We look forward to pursuing further value creation through our ongoing efforts on detailed engineering, permitting, and Kemess East drilling which will feed into an integrated Feasibility Study on Kemess Underground and Kemess East. With regards to our royalty portfolio, we are very excited about the significant increase in its value over the first half of the year, not least as a result of the growing reserves and expanding production at Fosterville. The success at Fosterville underscores the high quality nature of our royalty portfolio."

Near-Term Corporate Objectives

The Company's key near-term objectives include:

Release results of 2017 Kemess East drill program (Q4 2017), and updated Kemess East resource estimate (Q1 2018);
Progress permitting and detailed engineering for the Kemess Underground project ahead of a potential decision to commence early construction activities (H1 2018);
Advance integrated Kemess Underground and Kemess East Feasibility Study (mid-2018);
Evaluation of funding alternatives for the potential development of the Kemess Underground project (ongoing).
2017 Outlook

AuRico Metals' goal is to deliver sustained value creation for the Company's many stakeholders. We will look to continue to create shareholder value by advancing the Kemess Underground project, by advancing the Kemess East project, by completing an integrated feasibility study, and by enhancing the value of our royalty portfolio.

The section below contains forward looking information; please refer to the Company's cautionary note regarding forward looking statements. The Company is providing the following revised guidance for 2017, assuming a 0.75 CAD to USD exchange rate and $1,250 per ounce gold price:

(in millions)
August 2017
May 2017

Royalty revenues (pre-tax)
$10.5 to $11.0
$9.5 to $10.4

General and administrative expense, excluding stock-based compensation

Care and maintenance expense

Powerline brushing campaign

Kemess Underground capital expenditures
$6.0 to $7.0
$5.5 to $6.0

Kemess East capital expenditures
Royalty revenue guidance has been increased for the second time in 2017, due to another increase in production guidance at Fosterville. The guidance range disclosed in the table above is based on the following guidance ranges provided by the operators:


Talk about bargain and undervalued -

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