TORONTO (miningweekly.com) – Dual-listed AuRico Gold this week reported a net loss of $103.49-million, or $0.42 a share, for the three months ended June 30, impacted by $104.9-million in after-tax noncash impairments and revaluations.
AuRico, which operates the Young-Davidson mine, in Northern Ontario, and the El Chanate mine, in Mexico, on Thursday said that, of that amount, $80-million was related to a goodwill impairment charge on the El Chanate mine, owing to a reduction in the estimated short- and long-term metal prices used in life-of-mine plans.
The company had also determined that an impairment charge of $16.5-million was required for the retained interest royalty in the future life-of-mine free cash flows of the Fosterville and Stawell mines, in Australia, which were sold to TSX-listed Crocodile Gold Corp in 2012.
The remaining $8.4-million was related to net realisable value adjustments for heap leach and long-term, low-grade stockpile inventories.
The Young-Davidson mine produced 29 252 oz of gold at a cost of $716/oz in the period, bringing total half-year output for the mine to 57 533 oz. The El Chanate mine produced 18 751 oz of gold at a cost of $655/oz in the quarter, bringing half-year output for the mine to 36 640 oz.
Total gold output for the quarter increased 61% year-on-year.
Revenue more than doubled to $57.66-million, up from $27.45-million a year earlier. The company’s average realised gold price in the quarter dropped 15% to $1 369/oz.
Spot gold prices on Friday traded at $1 314/oz, having fallen sharply from the start of the year, hitting a near three-year low at about $1 180/oz in late June. This was prompting miners across the globe to cut spending, adjust plans and defer or divest projects as they struggle to adapt to a low-price environment.
CEO Scott Perry said the midshaft crushing and hoisting system at the Young-Davidson mine was progressing on schedule and remained on target to be commissioned during September.
“The shaft and hoisting system is the key catalyst that will drive significant improvements in underground productivities and further cost efficiencies.
“With quality operations, a strong cash position and a fully funded growth profile, the company is well positioned for success, even in this challenging market environment," he said.