Young-Davidson Analyst Tour

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Information about Young-Davidson Analyst Tour

Published on June 25, 2013

Author: AuricoGold



Young-Davidson Analyst Tour

Young-Davidson Mine UpdateLuc Guimond, General ManagerJune 25,

FORWARD LOOKING STATEMENTSThis 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 oroperating performance, such as the Company’s expansion plans, project timelines, production plans, projected cash flows or capital expenditures, costestimates, projected exploration results, reserve and resource estimates and other statements that express management’s expectations or estimates of futureperformance.Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management, areinherently subject to significant uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from thoseprojected in the forward-looking statements. Such factors include: uncertainty of production and cost estimates; fluctuations in the price of gold and foreignexchange rates; the uncertainty of replacing depleted reserves; the risk that the Young-Davidson and El Chanate mine may not perform as planned; changesin laws or regulations in Canada, Mexico and other jurisdictions in which the Company may carry on business; risks of obtaining necessary licenses, permits,authorizations or approvals for operations or projects such as Kemess; contests over title to properties; the speculative nature of mineral exploration anddevelopment; risks related to aboriginal title claims; compliance risks with respect to current and future environmental regulations; disruptions affectingoperations; opportunities that may be pursued by the Company; employee relations; availability and costs of mining inputs and labor; the ability to securecapital to execute business plans; volatility of the Company’s share price; any decision to declare dividends; the implementation and continued availability ofthe dividend reinvestment plan; the effect of future financings; litigation; risk of loss due to sabotage and civil disturbances; the values of assets and liabilitiesbased on projected future cash flows; risks arising from holding derivative instruments; risks arising from the absence of hedging; adequacy of internal controlover financial reporting; changes in our 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 containedherein. Such statements are based on a number of assumptions which may prove to be incorrect, including assumptions about: business and economicconditions; commodity prices and the price of key inputs such as labour, fuel and electricity; credit market conditions and conditions in financial marketsgenerally; revenue and cash flow estimates, production levels, development rates and the costs for each; our ability to procure equipment and supplies insufficient quantities and on a timely basis; the timing of the receipt of permits and other approvals for our projects and operations; our ability to attract andretain skilled employees and contractors for our operations; the accuracy of our reserve and resource estimates; the impact of changes in currency exchangerates on our costs and results; interest rates; taxation; and our ongoing relations with our 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 orotherwise, except as required by applicable law.Cautionary Note to U.S. Investors Concerning Measured, Indicated and Inferred ResourcesThis presentation uses the terms "measured," "indicated" and "inferred” resources. We advise investors that while those terms are recognized and required byCanadian regulations, the United States Securities and Exchange Commission does not recognize them. Under Canadian rules, estimates of inferred mineralresources 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 measuredor 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 aninferred mineral resource exists, or is economically or legally mineable.2

Overview• Historic production from underground gold mines inTimmins and Kirkland Lake (~108 M Oz.)• Five mines with greater than 5 million ouncesproduction, Young-Davidson is likely to be the sixth• Cornerstone asset• Low cost producer and strongproduction growth profile• Long mine life: Opportunity to expandas reserves increase• Located in a stable jurisdiction, closeto major centres• First gold pour on April 30th, 2012• Commercial production declaredSeptember 1st, 2012• Underground production commencedOctober 2012(1) Refer to endnote #1. 305101520Hollinger1910-68Dome1910-2013McIntyre1912-88KerrAddison1938-96LakeshoreMineK.L.1918-65WrightHargreaves1921-65TeckHughes1917-68AunorHallnorSylvanite1927-61PrestonUpperCanada1938-71PaymasterConiariumYoung-DavidsonPamourMacassa1933-99+2002-13HoylePondOunces(Millions)Historic Production from U/G Mines of Timmins& Kirkland Lake(1)Historical Production YD P&P YD M&I YD InferredActive

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 970,000ounces• Average realized grade of 3.37 g/tonne• Profitable operations at realized grades• Supported dividend paymentsPeriod Mine Tonnes Grade (g/t) Produced (Oz)1934 to 1957 YD 5,653,000 3.21 585,0001934 to 1954 MCM 3,205,000 3.66 378,0001981 to 1982 MCM 96,400 2.36 7,300Total 8,954,400 3.37 970,300Young-Davidson Mine (YD)Matachewan Consolidated Mine (MCM)4

Home Safe Every Day• Reduced Lost Time Injury (LTI)• 2012 LTI frequency rate: 0.12• Achieved key milestone in LTI• 2 million man hours with no LTI• Ongoing safety education programs• 1,500 hours of safety and emergencyresponse training completed in 2012Fostering a safety culture where zero injuries are possible5

Responsible MiningFostering 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 suppliers6

YD HistoricMine WorkingsOpen PitRamp Portal10350LNG Shaft MCM Shaft9890L9590L9400L9200L8900LMCM HistoricMine WorkingsUnderground 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%YD WestZoneHighly Productive Mining Methods73.8M reserve ounces with exploration upside

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• Low grade stockpile as of May 31, 2013• 2Mt of ore @ 0.81 g/t010,00020,00030,00040,00050,000January February March April MayOpen Pit Productivity (tonnes per day)Target Actual8

Underground Mining Rates02004006008001,0001,2001,4001,6001,8002,000January February March April MayTarget ActualUnderground Mine Productivity (tonnes per day)• Underground production commenced in October 2012• Tonnes per day averaged 1,800tpd in May (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 requirements9

Process Plant Performance YTDCrusher01,0002,0003,0004,0005,0006,0007,0008,000January February March April MayMill Tonnes Processed (tonnes per day)Target Actual10

2013 Upper Mine Production & DevelopmentQ2 StopesQ2 StopesQ3 StopesQ4 Stopes11Upper mine represents 8 years of production

Northgate Production Shaft Work• 3rd leg (610m)• Planned end of 2016• 1st leg reaming completed (440m)• Ground support completed• 2nd leg reaming completed (890m)LEGENDRaise Bore Leg #1Raise Bore Leg #2Raise Bore Leg #312Accessing mine via shaft systemReaming of NG shaft

Shaft System Productivities13• Supports increasedunderground mining rates• Improved productivity vs.ramp haulage• Optimizes cycle time• Enhanced cost efficiencies• Reduces mobile equipmentrequirements• Improves ventilation• Continual operations• Capacity of 8,000tpdShaft system catalyst for underground production growth

9590 Level Ore Rockbreaker  Completed9590 Level Waste Rockbreaker  Completed2nd Leg of Shaft Reaming  Completed9500 Level Conveyor9530 Level Crusher RoomMid-shaft Loading Pocket CommissioningNorthgate Production ShaftNorthgate Mid-shaft Loading Pocket Milestones:• Commissioning the mid-shaft crushing and hoistingsystem during Q3• Key catalyst for further increases in U/G production• Completed raise boring of the second leg of productionshaft mid-April• Vertical access to 1.8M ounces, or 8 years ofproduction• Vertical depth of ~900m• Loading pocket and crusher installation ongoing Crusher room constructionore pass throat 14

MCM Shaft WorkSoledad Property – Kern County, CaliforniaLegend• Current location of shaftbottom 9533 L• Shaft sinking activities willresume in September• Sinking complete mid-2015• Continue hoisting wastethrough MCM shaft• Men and materials• Ventilation15MCM shaft sinkingAccessing mine via shaft system

Solid Production GrowthSecond consecutive quarter of solid results in line with guidance levels• Solid production growth quarter over quarter• Cash costs in-line with target levels• Mill and underground operations exceeding targeted levels05,00010,00015,00020,00025,00030,0002012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2FYoung-Davidson Total Gold Ounces Produced(6)(6) Refer to endnote #6.16

Young-Davidson Milestone Dates2nd leg of shaft reaming completed Q2 - 2013Shaft Waste handling / rock breaker / loading pocketcommissionedQ3 - 2013Shaft Ore handling system / crusher commissioned Q3 - 2013Paste fill plant operation Q4 - 2013Paste Fill Plant• $45M - $50M capex in 2013• Offsets requirement for additionaltailings capacity• Commissioning anticipated for Q4 201317

2013 Operational Estimates(4)(2) Refer to endnote #2. (4) Refer to endnote #4. (7) Refer to endnote #7.(3) Refer to endnote #3. (6) Refer to endnote #6.Young-Davidson 2013 Operational Estimates (March 25, 2013)Gold Production (ounces)(6) 120,000-140,000Cash Costs per Ounce(2)(3) $575-$675Total All-in Sustaining Costs per Ounce(2)(7) $1,250-$1,350Capital Investment Program (US$000’s)Non-recurring Growth CapitalPaste Backfill Plant $45,000-$50,000Shaft and Mid-Shaft Loading and Crushing Facility $25,000-$30,000Open Pit Mine Development $6,000-$8,000Sustaining Capital $59,000-$62,000Total Capital Investment $135,000-$150,000Depletion and Amortization (US$ per ounce) $300-$310Exploration (US$000’s) Up to $3,50018

Endnotes1. Data provided by the Timmins Resident Geologist Program Ontario Geological Survey for the Ministry of Northern Development & Mines (2006).2. Cash Costs per Gold Ounce, All-In Cash Costs Per Gold Ounce, and Adjusted Net Earnings are Non-GAAP measures that do not have any standardizedmeaning prescribed by International Financial Reporting Standards (“IFRS” or “GAAP”), and that should not be considered in isolation from or as a substitute forperformance measures prepared in accordance with GAAP. See the Non-GAAP Measures section on page 30 of the Managements Discussion and Analysis forthe year ended December 31, 2012 available on the Company website at Cash costs for the Young-Davidson and El Chanate mines are calculated on a per gold ounce basis, using by-product revenues as a cost credit. Gold ouncesinclude ounces sold at the El Chanate mine and ounces produced at the Young-Davidson mine. 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 undergroundounces sold is credited against capital expenditures.4. For more information regarding AuRico Gold’s 2013 operational estimates, including production, costs, and capital investments, please refer to the press releasedated March 25, 2013 titled AuRico Reports Fourth Quarter and Annual Financial Results available on the Company website at Reserves and resources for Young-Davidson and El Chanate mines, Kemess Underground Project, and Orion represent gold grade as per technical reports andCompany disclosure. For more information regarding AuRico Gold’s Mineral Reserves and Resources as at December 31, 2012 and the Kemess FeasibilityStudy, 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 Measured and indicated resources excludes inferred resources.6. Production figures include gold ounces only. Production at the Young-Davidson mine includes pre-production ounces, which include ounces produced prior to thedeclaration of commercial production on September 1, 2012, as well as all ounces produced from the underground mine.7. All-in costs are defined as cash costs, sustaining capital, corporate general and administrative expense, reclamation, care and maintenance expense, andexploration expenditures. Prior to commissioning the underground mine at Young-Davidson, all-in cash costs are calculated on ounces produced from the openpit only. All underground costs are capitalized, and any revenue related to underground ounces sold is credited against capital expenditures.19

Young-Davidson Mine UpdateLuc Guimond, General ManagerJune 25,


Northgate Shaft Reaming 2nd LegSoledad Property – Kern County, California• 4m thick rock pillar in place• Pillar will be blasted by shaft crew during bolting cycle• Raise boring of 2nd leg completed• Shaft crews currently in bolting phase of 2nd leg• 5m thick concrete plug in place just above 9500 L9590 L9500 L9440 L11 LevelShaft Collar• 1st Leg ground support completed22

Crusher Station 9530 LSoledad Property – Kern County, CaliforniaCrusher room excavationcompletedPit trench excavation completed23

Conveyor Level 9500 LSoledad Property – Kern County, CaliforniaConveyor drift excavation completedOre pass raise to crusher excavatedLoading pocket excavation completedShaft fullof muckConcrete plug inplace24

Reserves and Resources(5)Total Proven and Probable ReservesTonnes(000s)Gold(g/t)Gold Oz.(000s)Young-Davidson - Surface 6,425 1.31 271Young-Davidson - Underground 39,037 2.82 3,534Total Young-Davidson 45,462 2.60 3,804Total Measured and Indicated ResourcesTonnes(000s)Gold(g/t)Gold Oz.(000s)Young-Davidson - Surface 291 1.70 16Young-Davidson - Underground 9,531 2.74 839Total Young-Davidson 9,821 2.71 855Inferred ResourcesTonnes(000s)Gold(g/t)Gold Oz.(000s)Young-Davidson - Surface 31 0.99 1Young-Davidson - Underground 13,983 2.80 1,259Total Young-Davidson 14,014 2.80 1,260(5) Refer to endnote 5. 25

Notes to Reserves and ResourcesNotes:• 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 MineralReserve 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 ofthe 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. Inaddition, 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 ResourcesUSD Au $/oz Ag $/oz Cu $/lb Au $/oz Ag $/oz Cu $/lbEl Chanate $1,400 - - $1,600 - -Young-Davidson $1,400 - - $1,600 - -Kemess Underground $1,300 $23.00 $3.00 $13.00 NSROrion - - - $850 $13.00 -Reserves and Resources were prepared under the supervision of the following Qualified Persons:Resources ReservesEl ChanateJeffrey Volk, CPG, FAusIMM, Director Reservesand Resources, AuRico Gold Inc.Chris Sharpe, P.Eng, Manager Mining, AuRico Gold Inc.Young-Davidson - Open PitJeffrey Volk, CPG, FAusIMM, Director Reservesand Resources, AuRico Gold Inc.Chris Sharpe, P.Eng, Manager Mining, AuRico Gold Inc.Young-Davidson - UndergroundJeffrey Volk, CPG, FAusIMM, Director Reservesand Resources, AuRico Gold Inc.Chris Bostwick, FAusIMM, SVP Technical Services,AuRico Gold Inc.Kemess UndergroundJeffrey Volk, CPG, FAusIMM, Director Reservesand Resources, AuRico Gold Inc.Chris Bostwick, FAusIMM, SVP Technical Services,AuRico Gold Inc.OrionJeffrey Volk, CPG, FAusIMM, Director Reservesand Resources, AuRico Gold Inc.26

All-in Sustaining Cash Cost AllocationCash CostsSustainingExplorationCorporateG&A2013 All-in Sustaining Cash Costs$1,100-$1,200 per ounceLabour57%Power6%Diesel9%Consumables19%Materials/Mtc9%Cost Allocation(Includes contractlabour)All-in Sustaining Cash Costs• Provides increased transparency• More representative of actual cost of production• Removes influence of accounting treatments• Can be reconciled to OCF27

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