AuRico adds third mine to its portfolio

AuRico Gold (AUQ-T) has added another mine to Kirkland Lake’s heritage.

The company announced the first gold pour at the Young-Davidson mine, and it expects that the mine will reach commercial production by the third quarter.

Early results from the mill were stellar: the facility averaged 5,000 tonnes per day from April 19–29. This beats the budgeted throughput rate for the month, and the mill reached the design capacity of 6,000 tonnes per day for some of those days.

For the mine to reach commercial production, the processing plant will have to average at least 5,100 tonnes per day over 30 days, and the open pit will have to average 29,750 tonnes per day over 30 days.

AuRico says it has stockpiled 963,000 tonnes, or six months of ore supply, ahead of the mill for processing.

The company only broke ground at the site 20 months ago, but construction didn’t divert the company from better defining what is in the ground.

During the commissioning process it increased reserves by 36% and announced a 33% expansion program that will take annual production up to 250,000 oz. by 2016.

Young-Davidson now has 46.6 million tonnes grading 2.56 grams gold per tonne for 3.8 million oz. proven and probable reserves.

The mine is expected to produce between 65,000 and 75,000 oz. gold this year, at a cash cost between US$450 and US$550 per oz.

Commissioning Young-Davidson is part of AuRico’s shift into becoming a North American-focused gold producer. The company sold off its Australian assets and its El Cubo project in Mexico earlier this year.

With Young-Davidson added to the fold, AuRico will have three operating mines. The other two are Ocampo and El Chanate, both  in Mexico.

It expects the three mines will produce 450,000 to 530,000 oz. gold production by 2014, at average cash costs between US$480 and US$530 per oz.