Q3 2013 Financial Results

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Information about Q3 2013 Financial Results

Published on November 8, 2013

Author: AuricoGold

Source: slideshare.net

Description

Q3 2013 Financial Results

Q3 2013 Financial Results Conference Call and Webcast November 8, 2013 TSX: AUQ / NYSE: AUQ www.auricogold.com

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

Scott Perry President & CEO

Corporate Update Total Gold Ounces Produced ► ► Reliable, consistent, stable production Delivered fifth quarter of company-wide production growth ► Young-Davidson commercial underground production declared October 31st 26,363 28,281 29,252 30,099 2013 Q1 2013 Q2 2013 Q3 Solid Q3 results in-line with targeted levels ► Young-Davidson Mine(1) 2012 Q4 El Chanate Mine ► 1MM hours lost time incident free at both operations 17,889 18,751 18,804 2013 Q2 2013 Q3 14,782 ► Mid-shaft hoisting infrastructure commissioned ► Third quarter dividend paid (Oct. 29) 2012 Q4 1. 2013 Q1 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

Disciplined Growth Drives Shareholder Value 60,000 Gold Ounces Produced Young-Davidson El Chanate 50,000 40,000 30,000 20,000 10,000 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13E First Quarter March 31/13 Second Quarter June 30/13 Third Quarter Sept. 30/13 YTD as of Sept. 30/13 2013 Guidance 46,170 48,003 48,903 143,076 190,000-220,000 $635 $655 $628 $640 $565-$645 $1,090 $1,189 $1,210 $1,164 $1,100-$1,200 Consolidated Results Gold Ounces Produced3 Total Cash Costs per oz.1,2 All-in Sustaining Cash Costs per oz. 1. 2. 3. Prior to commissioning the underground mine at Young-Davidson, 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. Cash costs, prior to long-term, low-grade stockpile and heap leach inventory net realizable value adjustments & reversals. See the Non-GAAP Measures section on page 20 of the Management’s Discussion and Analysis for the three and nine months ended Sept. 30, 2013. Includes pre-production gold ounces from the Young-Davidson underground mine. 5

Young-Davidson Underground • Mid-shaft loading project commissioned • Lost time incident free during 3-year construction phase • Commercial production declared Oct 31st • Q4 underground ore productivity of 2ktpd • Significant productivity & cost efficiency benefits • Paste Backfill Plant • First paste pour anticipated in December • Lost time incident free • Ahead of schedule & under budget • Underground Mine Development • Significant development advance achieved • 2/3 of 2014 mine plan is currently accessed • Underground Production Contribution Growth • Underground operations have now surpassed the open pit operations in terms of metal contribution 6

Positioned For Value Creation ► Politically-friendly jurisdiction  ► Organic year over year production growth  ► Lower end of industry cost curve  ► Long mine life  ► Strong balance sheet  ► Pure gold leverage  ► Strong FCF generation (limited CAPEX)  ► Capital return to shareholders (regular dividends)  7

Rob Chausse Chief Financial Officer Conference Call and Webcast November 8, 2013

Continuing Operations Highlights(1) Quarter Ended (in thousands, except ounces and per share amounts) Revenue from mining operations Quarter Ended Sept. 30, 2013 Sept. 30, 2012 $54,304 $39,772 Total gold ounces sold (excluding pre-production ounces) 40,185 23,120 Total gold ounces produced (excluding pre-production ounces) 38,456 29,291 $21,758 $(149) $0.09 $0.00 $14,859 $42,321 Net earnings per share, basic $0.06 $0.15 Adjusted net earnings / (loss)(3) $816 $(1,180) Adjusted net earnings per share, basic(3) $0.00 $0.00 Adjusted operating cash flow(2) Adjusted operating cash flow per share, basic(2) Net earnings 1. 2. 3. Continuing operations include the Young-Davidson and El Chanate mine operations. See the table on slide 19 for a reconciliation of adjusted operating cash flow and refer to the discussion of Non-GAAP measures in the Company’s Q3 2013 Financial Results Press Release. See the table on slide 13 for a reconciliation of adjusted net earnings and refer to the discussion of Non-GAAP measures in the Company’s Q3 2013 Financial Results Press Release. 9

Continuing Operations Highlights(1) Nine-months Ended (in thousands, except ounces and per share amounts) Revenue from mining operations Nine-months Ended Sept. 30, 2013 Sept. 30, 2012 $176,849 $100,503 Total gold ounces sold (excluding pre-production ounces) 121,058 58,285 Total gold ounces produced (excluding pre-production ounces) 115,083 66,266 Adjusted operating cash flow(2) $60,571 $6,716 $0.24 $0.02 $(70,358) $35,363 $(0.28) $0.12 $18,536 $3,398 $0.07 $0.01 Adjusted operating cash flow per share, basic(2) Net (loss) / earnings Net (loss) / earnings per share, basic Adjusted net earnings(3) Adjusted net earnings per share, basic(3) 1. 2. 3. Continuing operations include the Young-Davidson and El Chanate mine operations. See the table on slide 19 for a reconciliation of adjusted operating cash flow and refer to the discussion of Non-GAAP measures in the Company’s Q3 2013 Financial Results Press Release. See the table on slide 18 for a reconciliation of adjusted net earnings and refer to the discussion of Non-GAAP measures in the Company’s Q3 2013 Financial Results Press Release. 10

Continuing Operations Highlights(1) YoungDavidson El Chanate Q3 2013 Q3 2012(2) Gold ounces produced 19,652 18,804 38,456 29,291 Pre-production gold ounces produced 10,447 - 10,447 7,922 Total gold ounces produced 30,099 18,804 48,903 37,213 Gold ounces sold 22,127 18,058 40,185 23,120 Pre-production gold ounces sold 10,355 - 10,355 8,701 Total gold ounces sold 32,482 18,058 50,540 31,821 $666 $588 $628 $528 Revenue from mining operations $29,584 $24,720 $54,304 $39,772 Average realized price per ounce $1,333 $1,330 $1,332 $1,672 (in thousands, except ounces, average realized prices and total cash costs) Cash costs per ounce, before NRV(3),(4),(5) 1. 2. 3. 4. 5. Continuing operations include the Young-Davidson and El Chanate mine operations. Certain comparative information has been restated as a result of the adoption of IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine, which was applied prospectively to production stripping costs incurred on or after January 1, 2012. For further details, refer to the Critical Accounting Estimates, Policies and Changes section on page 24 in the Company’s Management’s Discussion & Analysis or note 3(a) to the Company's condensed consolidated financial statements for the three and nine months ended Sept. 30, 2013. Cash costs for the El Chanate mine and Young-Davidson mine are calculated on a per gold ounce basis, using by-product revenues as a cost credit. Gold ounces used to calculate cash costs include ounces sold at the El Chanate mine and ounces produced at the Young-Davidson mine. The Young-Davidson mine declared commercial production on September 1, 2012 however the Young-Davidson underground mine remains in the pre-production period. Preproduction ounces produced and sold are excluded from the calculation of cash costs as they are credited against capitalized project costs. 11

Continuing Operations Highlights(1) YoungDavidson El Chanate Gold ounces produced 59,639 55,444 115,083 66,266 Pre-production gold ounces produced 27,993 - 27,993 19,872 Total gold ounces produced 87,632 55,444 143,076 86,138 Gold ounces sold 64,047 57,011 121,058 58,285 Pre-production gold ounces sold 28,423 - 28,423 13,910 Total gold ounces sold 92,471 57,011 149,482 72,195 $692 $586 $640 $477 Revenue from mining operations $93,019 $83,830 $176,849 $100,503 Average realized price per ounce $1,447 $1,433 $1,440 $1,671 (in thousands, except ounces, average realized prices and total cash costs) Cash costs per ounce, before NRV(3),(4),(5) 1. 2. 3. 4. 5. Nine-months ended Nine-months ended Sept. 30/13 Sept. 30/12(2) Continuing operations include the Young-Davidson and El Chanate mine operations. Certain comparative information has been restated as a result of the adoption of IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine, which was applied prospectively to production stripping costs incurred on or after January 1, 2012. For further details, refer to the Critical Accounting Estimates, Policies and Changes section on page 24 in the Company’s Management’s Discussion & Analysis or note 3(a) to the Company's condensed consolidated financial statements for the three and nine months ended Sept. 30, 2013. Cash costs for the El Chanate mine and Young-Davidson mine are calculated on a per gold ounce basis, using by-product revenues as a cost credit. Gold ounces used to calculate cash costs include ounces sold at the El Chanate mine and ounces produced at the Young-Davidson mine. The Young-Davidson mine declared commercial production on September 1, 2012 however the Young-Davidson underground mine remains in the pre-production period. Pre-production ounces produced and sold are excluded from the calculation of cash costs as they are credited against capitalized project costs. 12

Adjusted Net Earnings Reconciliation  (in thousands, except per share metrics) Quarter Ended September 30, 2013 $ 14,859 Net earnings from continuing operations Adjustments: Deferred income tax recovery related to foreign exchange Unrealized foreign exchange loss Net realizable value adjustments on inventory Impairment charges Gain on option component of convertible notes Unrealized gains on investments Unrealized gain on derivatives Unrealized loss / (gain) on contingent consideration Other (including tax effect of adjustments) Adjusted net earnings / (loss) from continuing operations $ Adjusted net earnings / (loss) from continuing operations, per share $ Net loss from discontinued operations Adjustments: Unrealized foreign exchange loss Loss on disposition of Australian operations Net realizable value adjustment on Ocampo HL inventory Impairment of Australian Operations Disposition-related costs Gain on disposition of El Cubo and GyC Ocampo outside tax basis adjustment Tax impact Adjusted net earnings from discontinued operations Adjusted net earnings from discontinued operations, per share Adjusted net earnings Adjusted net earnings, per share Quarter Ended September 30, 2012 $ 42,321 (7,335) 2,482 (7,372) (3,875) 63 1,994 816 $ 0.00 $ (17,511) 7,952 (14,416) (20,251) (730) (5,137) 6,592 (1,180) (0.00) $ $ ($7,781) $ $ 2,190 (6,074) 5,327 (24,062) 39,168 3,695 12,463 0.04 $ $ 11,283 0.04 816 0.00 13

Scott Perry President & CEO

Disciplined Growth Drives Shareholder Value 60,000 Gold Ounces Produced Young-Davidson El Chanate 50,000 40,000 30,000 20,000 10,000 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13E First Quarter March 31/13 Second Quarter June 30/13 Third Quarter Sept. 30/13 YTD as of Sept. 30/13 2013 Guidance 46,170 48,003 48,903 143,076 190,000-220,000 $635 $655 $628 $640 $565-$645 $1,090 $1,189 $1,210 $1,164 $1,100-$1,200 Consolidated Results Gold Ounces Produced3 Total Cash Costs per oz.1,2 All-in Sustaining Cash Costs per oz. 1. 2. 3. Prior to commissioning the underground mine at Young-Davidson, 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. Cash costs, prior to long-term, low-grade stockpile and heap leach inventory net realizable value adjustments & reversals. See the Non-GAAP Measures section on page 20 of the Management’s Discussion and Analysis for the three and nine months ended Sept. 30, 2013. Includes pre-production gold ounces from the Young-Davidson underground mine. 15

Q&A

Appendix

Adjusted Net Earnings Reconciliation  (in thousands, except per share metrics) Net (loss) / earnings from continuing operations Adjustments: Deferred income tax expense / (recovery) related to foreign exchange Unrealized foreign exchange (gain) / loss Net realizable value adjustments on inventory Impairment charges Gain on option component of convertible notes Unrealized gains on investments Unrealized gain on derivatives Unrealized loss / (gain) on contingent consideration Other (including tax effect of adjustments) Adjusted net earnings from continuing operations Adjusted net earnings from continuing operations, per share Nine Months Ended Nine Months Ended September 30, 2013 September 30, 2012 $ (70,358) $ 35,363 $ $ Net earnings from discontinued operations Adjustments: Unrealized foreign exchange loss Loss on disposition of Australian operations Net realizable value adjustment on Ocampo HL inventory Impairment of Australian Operations Disposition-related costs Gain on disposition of El Cubo and GyC Ocampo outside tax basis adjustment Tax impact Adjusted net earnings from discontinued operations Adjusted net earnings from discontinued operations, per share Adjusted net earnings Adjusted net earnings, per share 5,218 (7,195) 4,873 98,688 (14,850) (2,071) 6,912 (2,681) 18,536 $ 0.07 $ (16,414) 12,961 (10,232) (17,632) (1,923) (5,137) 6,412 3,398 0.01 $ $ $22,075 9,471 1,736 8,292 22,857 5,327 (24,062) 39,168 2,904 87,768 0.31 $ $ 18,536 $ 0.07 $ 91,166 0.32 18

Adj. Operating Cash Flow Reconciliation Quarter Ended  (in thousands, except per share metrics) Operating cash flow from continuing operations Add back: Non-cash change in operating working capital Operating cash flow (before changes in working capital) from continuing operations Operating cash flow (before changes in working capital) from continuing operations, per share Quarter Ended Septem ber 30, 2013 Septem ber 30, 2012 $24,338 (2,580) ($5,653) 5,504 $21,758 $ 0.09 ($149) $ (0.00) Nine Months Ended  (in thousands, except per share metrics) Operating cash flow from continuing operations Add back: Non-cash change in operating working capital Operating cash flow (before changes in working capital) from continuing operations Operating cash flow (before changes in working capital) from continuing operations, per share Nine Months Ended Septem ber 30, 2013 Septem ber 30, 2012 $51,312 $9,259 $60,571 $ 0.24 $ $582 $6,134 $6,716 0.02 19

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