young-davidson mine update

19
Young-Davidson Mine Update Luc Guimond, General Manager December 5, 2013 www.auricogold.com

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Page 1: Young-Davidson Mine Update

Young-Davidson Mine Update Luc Guimond, General Manager

December 5, 2013

www.auricogold.com

Page 2: Young-Davidson Mine Update

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

Page 3: Young-Davidson Mine Update

Overview

• Historic production from underground gold mines in

Timmins and Kirkland Lake (~108 M Oz.)

• Five mines with greater than 5 million ounces

production, Young-Davidson is likely to be the sixth

• 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

• First gold pour on April 30th, 2012

• Commercial production declared

September 1st, 2012

• Underground production

commenced Oct/12;Declared

commercial production Oct. 31/13

• Solid safety record

(1) Refer to endnote #1. 3

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Historic Production from U/G Mines of Timmins & Kirkland Lake(1)

Historical Production YD P&P YD M&I YD Inferred

Active

Page 4: Young-Davidson Mine Update

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

• 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

Period Mine Tonnes Grade (g/t) Produced (Oz)

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

Total 8,954,400 3.37 970,300

Young-Davidson Mine (YD)

Matachewan Consolidated Mine (MCM)

4

Page 5: Young-Davidson Mine Update

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

Page 6: Young-Davidson Mine Update

Underground Mine Plan

Transverse long hole stoping

• For wider zones (12-40m)

• 30m sub levels

• Longitudinal retreat

• For areas < 12m widths

• Pastefill

• Mining recovery ~ 92%

• Dilution ~10%

• Underground reserve grade

2.82 g/t

YD West

Zone

Highly Productive Mining Methods

6 3.8M reserve ounces with exploration upside

YD Historic

Mine Workings

Open Pit

Ramp Portal

10350L

MCM Shaft

9890L

9590L

9400L

9200L

8900L

MCM Historic

Mine Workings

NG Shaft

Page 7: Young-Davidson Mine Update

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

Page 8: Young-Davidson Mine Update

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Target Actual

Underground Mine Productivity (tpd)

Underground Mining Rates

• Commercial underground production declared October 31, 2013

• Target of 2,000tpd by end of 2013

• 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

• Consistently exceeding 1,000 tpd

• Four stopes mined to date

• Ramp up progressing well

8

Commercial

Production

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2012A 2013E 2014E 2015E 2016E 2017E

Underground Mine Ramp-up (tpd) (Year-End Productivity)

Page 9: Young-Davidson Mine Update

Process Plant Performance YTD

Crusher

9

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Mill Tonnes Processed (tonnes per day) Target Actual

Page 10: Young-Davidson Mine Update

Shaft System Productivities

10

• 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

Upper mine represents 8 years of production

Page 11: Young-Davidson Mine Update

Northgate Production Shaft Work

• 3rd leg (610m)

• Planned end of 2016

• 1st leg reaming completed (440m)

• Ground support completed

• 2nd leg reaming completed (890m)

LEGEND

Raise Bore Leg #1

Raise Bore Leg #2

Raise Bore Leg #3

11

• Current location of shaft

bottom 9533 L

• Shaft sinking activities will

resume in September

• Continue hoisting waste

through MCM shaft

Accessing mine via shaft system

Reaming of NG shaft

Page 12: Young-Davidson Mine Update

Solid Production Growth

Stable and Growing Production Profile(3)

• Solid production growth quarter over quarter

• Cash costs in-line with target levels

(3) Refer to endnote #3.

12

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13E

Go

ld O

un

ces P

rod

uced

Page 13: Young-Davidson Mine Update

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.

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Page 14: Young-Davidson Mine Update

Appendix

Page 15: Young-Davidson Mine Update

Crusher Station 9530 L

Soledad Property – Kern County, California

15

Page 16: Young-Davidson Mine Update

Conveyor Level 9500 L

Soledad Property – Kern County, California

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Page 17: Young-Davidson Mine Update

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 31 0.99 1

Young-Davidson - Underground 13,983 2.80 1,259

Total Young-Davidson 14,014 2.80 1,260

(2) Refer to endnote 2. 17

Page 18: Young-Davidson Mine Update

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 $13.00 NSR

Orion - - - $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.

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Page 19: Young-Davidson Mine Update

All-in Sustaining Cash Cost Allocation

Cash Costs

Sustaining

Exploration

Corporate G&A

2013 All-in Sustaining Cash Costs $1,100-$1,200 per ounce(4)

Labour 57%

Power 6%

Diesel 9%

Consumables 19%

Materials/Mtc 9%

Cost Allocation

(Includes contract

labour)

All-in Sustaining Cash Costs

• Provides increased transparency

• More representative of actual cost of production

• Removes influence of accounting treatments

• Can be reconciled to FCF

19 (4) Refer to endnote #4.