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AuRico Gold Reports Strong Operational Results with a 42% Increase in Cash Position to $145 Million

October 13, 2011

Gold equivalent production of 76,630(1) ounces, a 68% increase over the same period in 2010

TORONTO, Oct. 13, 2011 /PRNewswire/ – AuRico Gold Inc. (TSX:AUQ) (NYSE:AUQ), (“AuRico”, “AuRico Gold” or “the Company”) is pleased to announce
preliminary results for the third quarter that includes increased
production and operating cash flows resulting in a significantly
enhanced quarter-end cash position.

During the third quarter the Company continued to deliver strong
performance across the key operational and financial metrics including
production, cash costs and operating cash flow, and reported a
significantly increased quarter-end cash position of $145 million. The
Company is well positioned for continued production growth from its
three wholly-owned mines in Mexico and is scheduled this month to
complete the strategic acquisition of Northgate Minerals Corporation
(“Northgate”). This transaction has the potential to create a new
leading intermediate gold producer.

AuRico remains on track to meet its 2011 operational guidance: 265,000
to 295,000 gold equivalent ounces, at cash costs of $445 to $475 per
gold equivalent ounce (using the Company’s long-term gold equivalent
ratio of 55:1).

Third Quarter Highlights

——————————

        --  Increased quarter-end cash balance by 42% to $145 million as
            compared to a cash balance of $102 million at the end of Q2
            2011.
        --  Revenues of $112 million, representing a 102% increase over Q3
            2010.
        --  Strong cash flow from operations of $51 million, a 63% increase
            over Q3 2010.
        --  Strong productionof 45,686 gold ounces and 1.4 million silver
            ounces, or 76,630 gold equivalent ounces using the actual gold
            equivalency ratio of 44:1 realized during the quarter,
            representing an increase of 68% over the same period in 2010,
            or 70,658 gold equivalent ounces using the Company's long-term
            gold equivalency ratio of 55:1, a 45% increase, or one of the
            best quarterly production results reported by the Company.
        --  Sales of 40,779 gold ounces and 1.1 million silver ounces, or
            65,429 gold equivalent ounces using the actual gold equivalency
            ratio of 44:1 realized during the quarter, or 60,650 gold
            equivalent ounces using the Company's long-term gold
            equivalency ratio of 55:1. At the end of the quarter,
            approximately 11,000 gold equivalent ounces produced remained
            in inventory in order to realize a more advantageous metal
            price in the current volatile metal price environment.
        --  Strong cash cost performance.Using the gold equivalency ratio
            of 44:1 realized in the quarter, consolidated cash costs were
            $488 per gold equivalent ounce ($526 per gold equivalent ounce
            at the Company's long-term gold equivalency ratio of 55:1),
            which includes non-recurring commissioning costs related to the
            resumption of production at the El Cubo mine.
        --  Announced the proposed acquisition of Northgateon August 29th.
            Upon completion of the transaction, which is scheduled to occur
            this month, the Company will be a new leading intermediate gold
            producer with significant growth potential. The key Northgate
            asset, the prospective Young-Davidson mine, is targeting
            production in Q1 2012 and is expected to be a cornerstone
            operation in AuRico's expanded asset base.

(1. Using the gold equivalency ratio of 44:1 realized in the quarter)

“Our production base expanded this quarter to include three operating
mines contributing to our growing production profile with all three
operations expected to deliver increased production in the fourth
quarter and beyond. Ocampo has delivered another strong quarter, the
expansion program at the El Chanate mine is well advanced and the El
Cubo mine reported positive operating cash flow in its first quarter of
production following resumption of operations. Our robust cash flow
continued to fully fund our expansion and exploration programs and
contributed to the increased quarter-end cash position of $145
million,” stated Ren© Marion, President and Chief Executive Officer.
“During the quarter the Company also announced the proposed acquisition
of Northgate. This transformational acquisition will expand our
resource inventory to over 19 million gold equivalent ounces and our
asset base will be underpinned by two cornerstone operations, Ocampo
and Young-Davidson, which alone have the potential to produce over
500,000 gold equivalent ounces at lowest quartile cash costs. We are
particularly excited by the exploration potential at Young-Davidson,
which is located in the Abitibi gold belt in Northern Ontario, the
second largest gold belt in the world.”

Ocampo Highlights

——————————

        --  Consistent performance at the Northeast and Santa Eduviges
            underground mines averaged 1,939 tonnes per day in the quarter
            (2,011 tonnes per day in September).
        --  At the Santa Eduviges underground mine, development continues
            vertically into the main deposit and in addition, development
            was initiated on the new Yatana and Veta Libre veins within the
            complex.
        --  Mining from the Picacho open pit continues to ramp up and is
            expected to reach full production in the fourth quarter.
        --  The Ocampo mill facility continued its strong performance and
            averaged 3,137 tonnes per day with gold and silver recoveries
            of 97% and 90%, respectively.
        --  Engineering studies are underway to evaluate the economics
            associated with the commissioning of the existing shaft system
            immediately adjacent to the mill facility. The study will
            incorporate the favourable cost efficiencies and productivity
            enhancements attributable to hoisting ore from the Northeast
            underground mine, which would significantly reduce truck
            haulage to the processing facilities.
        --  The Company continues to evaluate the development and
            commissioning of Level 2, a potential third underground mine
            exploiting recently delineated orebody extensions. A
            commissioning decision is expected by the end of Q1 2012.
        --  Additional underground capacity would necessitate the potential
            evaluation of increasing the mill capacity beyond the current
            3,200 tonnes per day.

El Chanate Highlights

——————————

        --  At the end of the quarter, the initial phase of a 5-phase
            expansion program was near completion. Phase 1 of the program
            targets an average crushing and stacking rate of 18,000 tonnes
            per day with stacking rates in September averaging 17,314
            tonnes per day (23% increase over Q1 2011 average of
            approximately 14,125 tonnes per day).
        --  Phase 2 of the expansion program is well advanced with a target
            stacking and crushing rate of 21,000 tonnes per day. Crushing
            and stacking rates are expected to reach 21,000 tonnes per day
            by the end of Q1 2012.
        --  Upgrades to the conveyor system are underway and expected to be
            completed in November.
        --  A new stacker is now fully operational at the heap leach
            facility that will support the increased stacking rates.
        --  At the end of the quarter the main water distribution pipeline
            to the heap leach pad was increased from an 8" to an 18" line
            to allow for adequate irrigation of additional stacked tonnage.
            Concurrently, two additional pumps were installed at the heap
            leach facility and a third is scheduled to be operational by
            the end of October. With the increase in solution capacity, it
            will be possible to place more surface area under leach,
            including an estimated 1.33 million tonnes of ROM (Run of Mine)
            material placed in the past two quarters that in combination,
            is expected to result in increased metal production in the
            fourth quarter.
        --  An additional ADR (Adsorption-Desorption-Recovery) plant is
            under construction and is expected to be completed in early
            January.
        --  The decision to proceed with the final 3 phases of the
            expansion program, which have an ultimate target of 26,000
            tonnes per day, will be made at the end of Q1 2012 upon the
            release of the Company's reserve and resource update.
        --  The 2011 exploration program launched in April continues to
            deliver encouraging results. With two drills currently on-site,
            the objective of the 20,000 metre program is to increase in-pit
            reserves, add new reserves outside of the existing ultimate pit
            limit and identify new targets for follow-on drilling.

El Cubo Highlights

——————————

        --  Processing El Cubo ores at the Las Torres mill resumed on July
            23rd and production continues to ramp up to ultimate target
            levels of 1,800 tonnes per day of in-situ ore. During the
            quarter, the mill processing rate was ahead of schedule and
            averaged 1,752 tonnes per day at near historic metallurgical
            recoveries utilizing a smaller and more efficient work force
            than in previous years.
        --  The ramp-up in production underground is progressing well,
            averaging 1,113 tonnes per day of in-situ ore, with September
            averaging 1,338 tonnes per day.
        --  The conversion to long-hole mining continues to advance with
            four long-hole mining stopes currently in various stages of
            mining and development. Engineering studies indicate that up to
            95% of production will come from long-hole mining (original
            target of 40%) by year end 2012. It is anticipated that the
            conversion to long-hole mining will result in improvements in
            productivity, dilution and costs, similar to those achieved at
            the Ocampo mine.
        --  Of the 122,637 tonnes milled during the quarter, 51,563 tonnes
            were sourced from high cost stockpiles (established by early
            July) with the remainder from direct underground ore feed.
            Operating costs of $1,083 per gold equivalent ounce1 are
            estimated to be comprised of $872 per gold equivalent ounce1
            direct mined and $1,385 per gold equivalent ounce1 from
            previously stockpiled material. It is anticipated that costs
            will continue to decrease over the coming quarters as the
            underground operations ramp up to full production and the
            contribution from longhole mining increases.
        --  In mid-September, ramp development to the new Dolores-Capulin
            discovery and other key areas of the mine was accelerated.

(1. Using the Company’s long-term gold equivalency ratio of 55:1)

Operational Results

     _____________________________________________________________________________
    |  Three   |         Ocampo    |El Chanate |     El Cubo  |     Consolidated  |
    |  Months  |                   |           |              |                   |
    |EndedSept.|                   |           |              |                   |
    |    30    |                   |           |              |                   |
    |__________|___________________|___________|______________|___________________|
    |          |     2011|     2010|  2011|2010|   2011|  2010|     2011|     2010|
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Gold      |   24,844|   27,018|16,444|   -|  4,398|     -|   45,686|   27,018|
    |Ounces    |         |         |      |    |       |      |         |         |
    |Produced  |         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Silver    |1,064,906|1,189,769|     -|   -|308,528|     -|1,373,434|1,189,769|
    |Ounces    |         |         |      |    |       |      |         |         |
    |Produced  |         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Gold eq.  |   48,826|   45,520|16,444|   -| 11,360|     -|   76,630|   45,520|
    |Oz.       |         |         |      |    |       |      |         |         |
    |Produced  |         |         |      |    |       |      |         |         |
    |(realized)|         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Gold eq.  |   44,206|   48,650|16,444|   -| 10,008|     -|   70,658|   48,650|
    |Oz.       |         |         |      |    |       |      |         |         |
    |Produced  |         |         |      |    |       |      |         |         |
    |(55:1)(2) |         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Cash Costs|     $436|     $436|  $466|   -|   $963|$1,386|     $488|     $445|
    |(2)       |         |         |      |    |       |      |         |         |
    |(realized)|         |         |      |    |       |      |         |         |
    |(1)       |         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Cash Costs|     $482|     $408|  $466|   -| $1,083|$1,290|     $526|     $416|
    |(2) (55:1)|         |         |      |    |       |      |         |         |
    |(1)(2)    |         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Gold      |   22,153|   26,167|16,426|   -|  2,200|   194|   40,779|   26,361|
    |Ounces    |         |         |      |    |       |      |         |         |
    |Sold      |         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Silver    |  945,704|1,188,135|     -|   -|147,155|14,578|1,092,859|1,202,713|
    |Ounces    |         |         |      |    |       |      |         |         |
    |Sold      |         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Gold eq.  |   43,520|   44,672|16,426|   -|  5,483|   427|   65,429|   45,099|
    |Ounces    |         |         |      |    |       |      |         |         |
    |Sold      |         |         |      |    |       |      |         |         |
    |(realized)|         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|
    |Gold eq.  |   39,348|   47,769|16,426|   -|  4,876|   459|   60,650|   48,228|
    |Ounces    |         |         |      |    |       |      |         |         |
    |Sold      |         |         |      |    |       |      |         |         |
    |(55:1)(2) |         |         |      |    |       |      |         |         |
    |__________|_________|_________|______|____|_______|______|_________|_________|

    (1)      Cash costs for the Ocampo mine, El Cubo mine, and on a
             consolidated basis are calculated on a per gold equivalent
             ounce basis.  Cash costs for the El Chanate mine are
             calculated on a per gold ounce basis, using silver revenues as
             a by-product cost credit.

    (2)      Using the Company's long-term gold equivalency ratio.
     ______________________________________________________________________________
    |   Nine   |         Ocampo    |El Chanate |      El Cubo  |     Consolidated  |
    |  Months  |                   |           |               |                   |
    |  Ended   |                   |           |               |                   |
    | Sept. 30 |                   |           |               |                   |
    |__________|___________________|___________|_______________|___________________|
    |          |         |         |  2011|    |       |       |         |         |
    |          |     2011|     2010|   (1)|2010|   2011|   2010|     2011|     2010|
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Gold      |   79,569|   73,836|31,315|   -|  4,398| 10,844|  115,282|   84,680|
    |Ounces    |         |         |      |    |       |       |         |         |
    |Produced  |         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Silver    |3,310,509|3,217,584|     -|   -|308,528|536,457|3,619,037|3,754,041|
    |Ounces    |         |         |      |    |       |       |         |         |
    |Produced  |         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Gold eq.  |  158,248|  123,428|31,315|   -| 11,360| 19,108|  200,923|  142,536|
    |Oz.       |         |         |      |    |       |       |         |         |
    |Produced  |         |         |      |    |       |       |         |         |
    |(realized)|         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Gold eq.  |  139,760|  132,338|31,315|   -| 10,008| 20,596|  181,083|  152,934|
    |Oz.       |         |         |      |    |       |       |         |         |
    |Produced  |         |         |      |    |       |       |         |         |
    |(55:1)(2) |         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Cash Costs|     $381|     $449|  $476|   -|   $963|   $807|     $414|     $499|
    |(2)       |         |         |      |    |       |       |         |         |
    |(realized)|         |         |      |    |       |       |         |         |
    |(2)       |         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Cash Costs|     $433|     $418|  $476|   -| $1,083|   $748|     $459|     $464|
    |(2) (55:1)|         |         |      |    |       |       |         |         |
    |(2)(3)    |         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Gold      |         |   72,408|32,304|   -|       | 11,160|  110,608|   83,568|
    |Ounces    |   76,104|         |      |    |  2,200|       |         |         |
    |Sold      |         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Silver    |3,195,176|3,244,585|     -|   -|147,155|555,469|3,342,331|3,800,054|
    |Ounces    |         |         |      |    |       |       |         |         |
    |Sold      |         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Gold eq.  |  152,321|  122,277|32,304|   -|  5,483| 19,713|  190,108|  141,990|
    |Ounces    |         |         |      |    |       |       |         |         |
    |Sold      |         |         |      |    |       |       |         |         |
    |(realized)|         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|
    |Gold eq.  |  134,198|  131,400|32,304|   -|       | 21,259|  171,378|  152,659|
    |Ounces    |         |         |      |    |  4,876|       |         |         |
    |Sold      |         |         |      |    |       |       |         |         |
    |(55:1)(2) |         |         |      |    |       |       |         |         |
    |__________|_________|_________|______|____|_______|_______|_________|_________|

    (1)      Represents results subsequent to the acquisition of the El
             Chanate mine on April 8, 2011.

    (2)      Cash costs for theOcampo mine, El Cubo mine, and on a
             consolidated basis are calculated on a per gold equivalent
             ounce basis.  Cash costs for the El Chanate mine are
             calculated on a per gold ounce basis, using silver revenues as
             a by-product cost credit.

    (3)      Using the Company's long-term gold equivalency ratio.

About AuRico Gold

AuRico Gold is a leading intermediate Canadian gold and silver producer
with a diversified portfolio of high quality mines and projects in
Mexico. The Company’s three wholly-owned operating properties include
the Ocampo mine in Chihuahua State, the El Chanate mine in Sonora State
and the El Cubo mine in Guanajuato State. AuRico’s strong pipeline of
development and exploration stage projects include the Guadalupe y
Calvo advanced development property in Chihuahua State and the Orion
advanced development property in Nayarit State, along with several
exploration properties throughout Mexico. The Company’s proposed
acquisition of Northgate Minerals Corporation is scheduled to occur in
late October 2011. AuRico’s head office is located in Toronto, Ontario,
Canada.

For further information please visit the AuRico Gold website at http://www.auricogold.com.

Cautionary Statement

Cautionary Note to US Investors – The United States Securities and
Exchange Commission permits US mining companies, in their filings with
the SEC, to disclose only those mineral deposits that a company can
economically and legally extract or produce. This press release uses
certain terms, such as “measured”, “indicated” and “inferred”
“resources”, that the SEC guidelines strictly prohibit US registered
companies from including in their filings with the SEC. US Investors
are urged to consider closely the disclosure in AuRico Gold’s Annual
Report on Form 40-F, which may be secured from AuRico Gold, or from the
SEC’s website at
http://www.sec.gov/edgar.shtml.

No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.

Certain statements included herein, including information as to the
future financial or operating performance of the Company, its
subsidiaries and its projects, constitute forward-looking statements.
The words ”believe”, ”expect”, ”anticipate”, ”target”,
”continue”, ”estimate”, ”may”, and similar expressions identify
forward-looking statements. Forward-looking statements include, among
other things, statements regarding the likelihood of meeting updated
2011 operational guidance, the likelihood of completing the acquisition
of Northgate Minerals Corporation in October, if the acquisition is
completed, the likelihood of Young-Davidson commencing production in
2012, Picacho open pit reaching full production in the fourth quarter,
crushing and stacking rates reaching 21,000 tonnes per day during the
end of 2011, the El Chanate conveyor system upgrades being completed in
November, the completion of the ADR by early January 2012, the benefits
of additional long-hole mining at El Cubo, the decrease of operating
costs at El Cubo in the fourth quarter of 2011, the ability to
delineate additional measured and indicated resources or reserves as a
result, the suitability of targets for future open pit mining at El
Chanate, anticipated future financial and operational performance, the
future price of gold and silver,  the de-risking of operations, future
exploration results of its exploration and development program at El
Chanate and the success of the Company’s exploration approach, the
Company’s ability to delineate additional resources and reserves as a
result of such program, and, statements regarding its financial
exposure to litigation, targets, estimates and assumptions in respect
of gold and silver production and prices, operating costs, results and
capital expenditures, mineral reserves and mineral resources and
anticipated grades, recovery rates, future financial or operating
performance, margins, operating and exploration expenditures, costs and
timing of completion of the Ocampo expansion program and improvements
to the heap leach pad, costs and timing of the development and
commencement of production of new deposits, costs and timing of
construction, costs and timing of future exploration and reclamation
expenses including, anticipated 2011 results, operating performance
projections for 2011, the Company’s ability to fully fund its business
model internally, 2011 gold and silver production and the cash and
operating costs associated therewith, the ability to achieve
productivity and operational efficiencies, and the timing of each
thereof. Forward-looking statements are necessarily based upon a number
of estimates and assumptions that, while considered reasonable by the
Company, are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies. The
operating and financial performance of the Company will be affected by
changes in the actual gold equivalency ratio realized in 2011. Many
factors could cause the Company’s actual results to differ materially
from those expressed or implied in any forward-looking statements made
by, or on behalf of, the Company. Such factors include, among others,
known and unknown uncertainties and risks relating to additional
funding requirements, reserve and resource estimates, commodity prices,
hedging activities, exploration, development and operating risks,
illegal miners, political and foreign risk, uninsurable risks,
competition, limited mining operations, production risks, environmental
regulation and liability, government regulation, currency fluctuations,
recent losses and write-downs, restrictions in the Company’s loan
facility, dependence on key employees, possible variations of ore grade
or recovery rates, failure of plant, equipment or process to operate as
anticipated, accidents and labour disputes. Investors are cautioned
that forward-looking statements are not guarantees of future
performance and, accordingly, investors are cautioned not to put undue
reliance on forward-looking statements due to the inherent uncertainty
therein.

 

 

 

SOURCE AuRico Gold Inc.


Source: PR Newswire