TORONTO (miningweekly.com) – Canadian gold miner AuRico Gold on Thursday said it expected to lift 2014 output by up to 25%, boosted by significant growth from the Young-Davidson mine, in Ontario, as the operation entered its first full year of a three-year underground ramp-up to targeted output levels.

In 2014, company-wide output was expected to be in the range of between 210 000 oz and 240 000 oz gold.

The production growth would be driven mainly by sequential quarterly increases in output from the Young-Davidson mine. The mine’s output was expected to increase by up to 32% to between 140 000 oz and 160 000 oz.

Company-wide cash costs were expected to be between $675/oz and $775/oz, and all-inclusive sustaining costs were expected to be between $1 100/oz and $1 200/oz.

The capital investment requirements of $125-million to $135-million were up to 40% lower than last year, reflecting construction activities winding down at the Young-Davidson mine. AuRico expected yearly capital investment requirements and all-in sustaining costs per ounce to continue to decline over the coming years.

"Company-wide gold production is expected to significantly increase due to the steadily increasing production profile from our cornerstone Young-Davidson mine. In the first quarter, gold production from both assets [including El Chanate mine, in Sonora state, Mexico] is expected to increase over the prior quarter, which will represent the seventh consecutive quarter of company-wide gold production growth,” president and CEO Scott Perry said.

AuRico said that owing to the current gold price environment, management had reviewed the company's cost structure, resulting in the company renegotiating several contracts on more favourable terms and the elimination of than 50 positions at the El Chanate mine site.

During the first quarter, the company had also cut its corporate head office personnel by 30%. The size of the board was also reduced from nine to eight, rather than to fill an existing vacancy.

MINE PERSPECTIVE

The Young-Davidson property is situated on the site of two old mines, both with records of successful mining and simple metallurgy.

The mining operations comprise an openpit and underground mine.

Surface facilities consist of a modern 6 000 t/d process plant using conventional gold-processing technology.

Additional surface facilities supporting the mine include an administration/engineering building, a warehouse and a maintenance shop. The tailings impoundment facility location has been selected to incorporate and remediate a historic tailings site.

The project has a 15-year mine life.

Commercial production from the openpit mine was declared on September 1, 2012, and from the underground operation on October 31, 2013.

AuRico has achieved commercial production at its Young-Davidson underground mine, following the successful commissioning of the shaft and hoisting of infrastructure. The shaft-hoisting infrastructure was a critical project milestone that would unlock the potential of the underground mine and support increased underground productivity and favourable unit cost efficiencies over the life of the mine.