TORONTO, November 11, 2015 /PRNewswire/ --
AuRico Metals Inc. (TSX: AMI), ("AuRico" or the "Company") today reported its financial results for the quarter ended September 30, 2015. For complete details of the unaudited Condensed Interim Consolidated Financial Statements and associated Management's Discussion and Analysis for the period ended September 30, 2015, please see the Company's filings on SEDAR (https://www.sedar.com) or the Company's website (https://www.auricometals.ca). All amounts are in US dollars unless otherwise indicated.
Third Quarter Highlights
- Earned royalty revenues of $1.5 million;
- Completed the acquisition of Mineral Streams, which is anticipated to add approximately CAD $1.0 million per year in royalty income;
- Completed a private placement with Alamos for total proceeds of CAD $5.6 million ($4.2M USD);
- Completed its 2015 exploration program at Kemess, with 27,719 metres drilled; Highlights included the intersection of 772 metres of 0.465 grams per tonne (g/t) gold and 0.365% copper (further results below);
- Continued permitting efforts at Kemess Underground with Environmental Application submission expected in early 2016;
- Continued to advance the updated Kemess Underground Feasibility Study; and
- Reported $14.7 million in cash and $10.4 million in working capital, excluding inventories, as at September 30, 2015.
Commenting on the results, Chris Richter, President and CEO stated, "The third quarter was AuRico Metals' first quarter as a standalone company and I'm pleased with the progress the team has made in advancing both our royalty strategy and our Kemess Project. With the acquisition of Mineral Streams in September, AuRico has added to our portfolio of high quality cash flowing royalties located in top tier jurisdictions. We've also benefited from the exploration success the operators of the assets underlying a number of our royalties have had. At Kemess we announced the results of our successful 2015 drill campaign focused on Kemess East just last week and we continue to make good progress in advancing the Kemess Underground development project through, among other things, a feasibility study update and Environmental Application submission - both targeted for early 2016."
Operations Update
Royalties
The Company recognized revenue of $0.7 million from the Young-Davidson royalty in Q3 2015. Alamos has guided to gold production at Young-Davidson of 160,000 to 180,000 ounces of gold in 2015 and the mine is expected to ramp-up production further in 2016.
The Company recognized revenue of $0.7 million from the Fosterville royalty in Q3 2015. In Q3 2015 Fosterville sold 32,770 ounces, a record quarter of production driven by increased mill grades, which were reported at 6.42 grams per tonne. In addition, Newmarket has recently released promising drill results at Fosterville including the discovery of a new zone called the Eagle Fault (please refer to press releases dated September 14, 2015 and October 14, 2015 available at https://www.sedar.com, and on Newmarket's website athttps://www.newmarketgoldinc.com).
On September 18, 2015, the Company closed the acquisition of Mineral Streams, a private company owning a 0.25% NSR on the Williams Mine at Barrick Gold Corporation's Hemlo complex, a 0.5% NSR on Wesdome Gold Mine Ltd's Eagle River Mine, and a 1.5% NSR on Barrick's David Bell property, which also forms part of the Hemlo complex. The transaction closed on September 18, 2015 and the Company acquired all of the outstanding common shares of Mineral Streams by issuing 4,753,951 common shares and making a cash payment of CAD $3.4 million (USD$2.6 million). These royalties contributed $0.1 million in revenue for the short period owned during Q3 2015.
Kemess Underground
The Company continues to advance the preparation of the Kemess Underground Environmental Application ("EA"). Based on the current timeline it is expected that the EA will be submitted in Q1 2016. Once submitted the EA undergoes a 30 day screening (in order to ascertain that the EA complies with certain information requirements) and if the EA is compliant there is a 180 day review period during which time comments are received, addressed and incorporated into the Final Assessment Report. This is then delivered to both the provincial and federal ministers for their respective decisions. These decisions must be announced within 45 days.
The updated Feasibility Study continues to move forward, with its release anticipated in the first quarter of 2016.
Kemess East
The Company recently completed its 2015 exploration program at the Kemess East project, which included 27,719 metres of diamond drilling. The program included drilling 12 drill holes within the Kemess East deposit, 3 drill holes in the Kemess Offset target and 9 drill holes on other targets. The Kemess East results further expanded the higher grade core mineralized zone so that it is approximately 300 metres east-to-west and north-to-south at a similar elevation to the previously reported mineral resource. The deposit remains open to the east towards the Kemess East Offset fault, to the south towards the post mineral sovereign intrusion and to the north.
Highlights from these results include:
- Hole KH-15-01, which intersected 305 metres of 0.625 g/t gold and 0.433% copper;
- Including 166 metres of 0.831 g/t gold and 0.492% copper;
- Hole KH-15-02, which intersected 301 metres of 0.466 g/t gold and 0.394% copper;
- Including 184 metres of 0.619 g/t gold and 0.463% copper;
- Hole KH-15-23, which intersected 458 metres of 0.640 g/t gold and 0.437% copper;
- Including 361 metres of 0.749 g/t gold and 0.478% copper;
- Including 167 metres of 1.022 g/t gold and 0.574% copper;
- Hole KH-15-27, which intersected 590 metres of 0.516 g/t gold and 0.366% copper;
- Including 476 metres of 0.615 g/t gold and 0.431% copper;
- Including 325 metres of 0.743 g/t gold and 0.492% copper;
- Hole KH-15-30, which intersected 772 metres of 0.465 g/t gold and 0.365% copper;
- Including 615 metres of 0.569 g/t gold and 0.429% copper; and
- Including 224 metres if 0.773 g/t gold and 0.508% copper.
The drill results have both increased the confidence in the inaugural Kemess East resource and raised expectations for a potential increase in resources.
The Kemess Offset target is directly east of the Kemess Underground deposit and shows similar geological characteristics as Kemess Underground.
Further information about the 2015 exploration program, including drill results, are included in the Company's press releases dated November 3, 2015 and August 18, 2015, which are available on SEDAR at https://www.sedar.com and on the Company's website athttps://www.auricometals.ca.
The technical information about the Company's exploration activities referenced in this press release has been reviewed and verified by Mr. Chris Rockingham, an officer of the Company, who is a qualified person within the meaning of National Instrument 43-101.
Corporate Objectives
The Company's objectives over the next six months include:
- Submit the Kemess Underground EA (Q1 2016);
- Release an updated Kemess Underground Feasibility Study (Q1 2016);
- Complete an updated Kemess East resource (Q1 2016); and
- Evaluate potential royalty acquisition opportunities that are accretive to the Company's cash flow profile.