AuRico Gold Announces Increased Consolidated Production and Reduced Cash Cost Guidance

By Aurico Gold Inc., PRNE
Wednesday, July 20, 2011

TORONTO, July 21, 2011 -

- Expansion
Programs Underway at the El Chanate and El Cubo Mines

AuRico Gold Inc. (TSX:AUQ) (NYSE:AUQ), (”AuRico” or “the
Company”) is pleased to announce a positive revision to its
consolidated operational outlook for 2011 that includes an increase
in production and a reduction in cash cost estimates for 2011. The
Company is also providing a status update on progress at the El
Chanate and El Cubo mines.

Our improved operational outlook is supported by the robust
performance continuing to be reported from the flagship Ocampo
mine, the expansion program that has been implemented at the El
Chanate mine and the resumption of commercial production at the El
mine on July 11th. AuRico has revised its
consolidated operational outlook for 2011, including the reduction
in cash cost estimates for Ocampo as announced on July 12th, as

                   2011 Consolidated Operational Outlook Update
                       (Ocampo, El Cubo and El Chanate[3])
                                          Previous Outlook     Revised Outlook
    Gold Production (ounces)            167,000 to 189,000  175,000 to 195,000
                                              4,840,000 to        4,950,000 to
    Silver Production (ounces)                   5,555,000           5,500,000
    Gold Eq. Production (ounces)[1]     255,000 to 290,000  265,000 to 295,000
    Total Cash Costs per Gold Eq.
    Ounce[1,2]                                   $455-$485           $445-$475

1.     Assumes a gold equivalency ratio
of 55:1
2.     Assumes a foreign exchange rate of
12.0 Mexican pesos to 1 U.S. dollar
3.     Attributable production

The Company anticipates that a further update may be provided in
September when the preliminary impact of the expansion programs
launched at El Chanate and El Cubo begin to be realized.

“Throughout the first half of the year Ocampo continued to
deliver strong production results at cash costs below the industry
average and this robust performance has been further augmented by
our growing and diversified production profile. Production from the
El Chanate mine contributed to our operating results for the first
time in Q2 and with the commencement of commercial production at El
in mid-July, we look forward to record results in the coming
quarters,” stated Rene Marion, President and Chief Executive
Officer. “Ongoing productivity initiatives will be further enhanced
in the coming quarters as we gain traction from our multi-phased
expansion program at El Chanate, the introduction of long-hole
mining methods at El Cubo and further productivity improvements at
Ocampo. Over the past eighteen months, the Company has undergone a
considerable transformation and is now one of the fastest growing
mid-tier precious metal producers, with a solid track record of
delivering results.”

El Chanate Expansion Program

The Company has already made significant progress through
implementing the first phase of a potential 5-phase strategic
expansion program that was launched immediately upon acquiring the
El Chanate operation on April 8th. The 5-phase program
targets up to an 86% increase in the crushing and stacking rate
from the 2010 average of 14,000 tonnes per day to 26,000 tonnes per
day. Initially, the Company will implement Phases 1 and 2 that
target a cumulative 50% increase in the crushing and stacking rates
to 21,000 tonnes per day by mid-2012. At current spot metal prices
the Phase 1 and 2 expansions are anticipated to yield an internal
rate of return of over 1,300%. The decision to proceed with any, or
all, of the remaining phases will be made following the completion
of the 2011 year-end El Chanate reserve update that will
incorporate the 213 holes drilled to June 30th that are not
included in the previous reserve and the planned 20,000 metres
expected to be drilled in the second half of 2011. With a new
reserve anticipated to be issued in late Q1 2012, together with an
updated mine design, a decision will be made on how many of the
remaining Phases will be completed to reach optimal capacity.

Phase 1 (Target: 18,000 tonnes per day)
As of the end of Q2, Phase 1 of the expansion program had already
delivered a 79% increase (116% month to date in July) in material
moved and a 30% increase in the crushing and stacking rate to
approximately 18,000 tonnes per day. This improvement in tonnage
was attained through an increase in the crush size to 0.38 inches,
from 0.16 inches, as internal reviews indicate that leach recovery
is not sensitive to crush size in that range, but rather to
solution levels. Other initiatives include an initial upgrade to
the conveyor and stacking systems, an additional stacker, an
additional track dozer and the conversion to a cascaded leach
operation. Phase 1 is expected to be completed by the end of the
third quarter.

  • Capital estimate: $1.8-2.3 million
  • Payback: 3 months

Phase 2 (Target: 21,000 tonnes per day)
Phase 2 targets a cumulative 50% increase in the crushing and
stacking rate to 21,000 tonnes per day  that will be achieved
through a further expansion of the conveyor system, the deployment
of additional mobile equipment, two new grasshoppers, upgrades to
the carbon recovery plant and a further optimization of the
agglomeration system. The eight month program is anticipated to be
launched in early Q4 and completed in mid-2012.

  • Capital estimate: $1.6-2.1 million
  • Payback: 2 months

Phase 3 (Target: 23,000 tonnes per day)
The third phase of the expansion program would include further
operational enhancements including an upgrade to the primary
crushing system, installation of a dust collection system and
further expansion of the conveyor and stacking systems. If
implemented, the anticipated completion date of the third phase
would be in the second half of 2012.

  • Capital estimate: $1.8-2.3 million
  • Payback: 4 months

Phase 4 (Target: 26,000 tonnes per day)
The fourth phase of the expansion program would include
construction of a second stacker line, installation of a new
stacker and new grasshoppers to realize further enhancements to the
conveyor and stacking systems. If implemented, the anticipated
completion date of the fourth phase would be Q3 2012.

  • Capital estimate: $2.0-2.5 million
  • Payback: 3 months

Phase 5 (Process Optimization)
The final phase of the expansion program would focus on process
optimization and improving agglomeration including the installation
of a third agglomeration drum and a new foundry induction furnace.
If implemented, the anticipated completion date of the fifth phase
would be Q3 2012.

  • Capital estimate: $1.4-1.9 million

Exploration Update
The 2011 exploration program launched in April at the El Chanate
mine continues to deliver encouraging results. A second exploration
drill is expected to be mobilized on site by the end of July with
20,000 metres of drilling in 90 holes planned during the second
half of the year with one reverse circulation (”RC”) and one
diamond drill, at a projected cost of $2.4 million. The objective
of the program is to increase in-pit reserves, add new reserves
outside of the existing ultimate pit limit and identify new targets
for follow-on drilling.

El Cubo Operational Ramp-up

Commercial production resumed at the El Cubo mine on July
th led by a new mine management team under a new
modern collective agreement. The new team has launched a strategic
operational enhancement program and we expect to realize ongoing
productivity enhancements to be reported from El Cubo going

When commercial production resumed at the Los Torres mill there
were more than 75,000 tonnes stockpiled ahead of the mill for
processing. Since restarting, the mill has been processing at a
rate in excess of 1,650 tonnes per day. Mining rates have increased
to average 1,100 tonnes per day and continue to ramp up to the
targeted rate of 1,800 tonnes per day more quickly than the planned
timeline of mid-2012.

Underground Operations and Conversion to Long-hole

With the goal of replicating the success of the conversion to
long-hole mining achieved at the Ocampo underground, long-hole
stope drilling commenced in June and drilling rates will be further
increased in late-July with the delivery of the first of two new
production drill rigs. Long-hole stoping conversion is expected to
lead to greater productivity, lower dilution and decreased unit
costs. During the period Q4 2008 to Q4 2010, underground tonnes per
day at Ocampo increased by over 125%, with a corresponding 25%
decrease in unit mining costs while mining dilution decreased
significantly. These improvements are primarily due to the
changeover to long-hole stoping. It is anticipated that with the
introduction of long-hole stoping at El Cubo, manpower productivity
should increase to a level such that cut-and-fill crews could be
redeployed towards exploration drifting on targets identified from
surface drilling. A planned capital investment of $1.5 million has
been allocated to purchase two Stopemate long hole drills, three
scoop trams and the conversion of an additional three scoop trams
to remote mucking. It is anticipated that 30% of ore mining will be
long-hole by the end of year and that productivity in the initial
areas selected for long-hole mining will be higher than if they
were to be mined using the cut-and-fill method.

Dolores - Capulin Target
Dedicated jumbo development toward the Dolores-Capulin resource
discovery commenced May 1st and has advanced 110 metres
to date. It is expected that development will have advanced
sufficiently by Q2 2012 to allow stoping activities to begin.
Concurrently, additional surface drilling is planned to further
delineate the extent of the ore zone. The current resource at
Dolores-Capulin stands at 47,755 Measured and Indicated gold
equivalent ounces, using a gold equivalency rate of 55:1.

Exploration Update
The surface exploration program at El Cubo is being re-started with
one diamond drill rig being mobilized by the end of July. The
planned 12,000 metre, 36 hole, $1.8 million program will initially
focus on the Dolores-Capulin and Puertecito discoveries made in
early 2010.

The contents of this press release have been reviewed and
approved by Chris Bostwick, Senior Vice President - Technical
Services, who is a “Qualified Person” for the purposes of NI

About AuRico Gold
AuRico Gold is a leading intermediate Canadian gold and silver
producer with a diversified portfolio of high quality mines and
projects in Mexico. The Company’s three wholly-owned operating
properties include the Ocampo mine in Chihuahua State, the El
Chanate mine in Sonora State and the El Cubo mine in Guanajuato
State. AuRico’s strong pipeline of development and exploration
stage projects include the Guadalupe y Calvo advanced development
property in Chihuahua State and the Orion advanced development
property in Nayarit State, along with six exploration properties
throughout Mexico. AuRico’s head office is located in Toronto,
Ontario, Canada

Cautionary Statement

Cautionary Note to US Investors - The United States
Securities and Exchange Commission permits US mining companies, in
their filings with the SEC, to disclose only those mineral deposits
that a company can economically and legally extract or produce.
This press release uses certain terms, such as “measured”,
“indicated” and “inferred” “resources,? that the SEC guidelines
strictly prohibit US registered companies from including in their
filings with the SEC. US Investors are urged to consider closely
the disclosure in AuRico Gold’s Annual Report on Form 40-F, which
may be secured from AuRico Gold, or from the SEC’s website at


No stock exchange, securities
commission or other regulatory authority has approved or
disapproved the information contained herein.

Certain statements included herein,
including information as to the future financial or operating
performance of the Company, its subsidiaries and its projects,
constitute forward-looking statements. The words ”believe”,
”expect”, ”anticipate”, ”target”, ”continue”, ”estimate”,
”may”, and similar expressions identify forward-looking
statements. Forward-looking statements include, among other things,
statements regarding the grades of additional underground and
surface drilling programs at El Chanate, the ability to delineate
additional measured and indicated resources or reserves as a
result, the suitability of targets for future open pit mining at El
Chanate, anticipated future financial and operational performance,
the future price of gold and silver, the timing of re-commissioning
and re-commencement of production at El Cubo, the de-risking of
operations, future exploration results of its exploration and
development program at El Chanate and the success of the Company’s
exploration approach, the Company’s ability to delineate additional
resources and reserves as a result of such program, and the
company’s ability to mine such targets by mid-2011, statements
regarding its financial exposure to litigation, targets, estimates
and assumptions in respect of gold and silver production and
prices, operating costs, results and capital expenditures, mineral
reserves and mineral resources and anticipated grades, recovery
rates, future financial or operating performance, margins,
operating and exploration expenditures, costs and timing of
completion of the Ocampo expansion program and improvements to the
heap leach pad, costs and timing of the development and
commencement of production of new deposits, costs and timing of
construction, costs and timing of future exploration and
reclamation expenses including, anticipated 2011 and 2012 results,
operating performance projections for 2011 and 2012, our ability to
fully fund our business model internally, 2011 and 2012 gold and
silver production and the cash and operating costs associated
therewith, the ability to achieve productivity and operational
efficiencies, and the timing of each thereof. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the Company, are
inherently subject to significant business, economic, competitive,
political and social uncertainties and contingencies. Many factors
could cause the Company’s actual results to differ materially from
those expressed or implied in any forward-looking statements made
by, or on behalf of, the Company. Such factors include, among
others, known and unknown uncertainties and risks relating to
additional funding requirements, reserve and resource estimates,
commodity prices, hedging activities, exploration, development and
operating risks, illegal miners, political and foreign risk,
uninsurable risks, competition, limited mining operations,
production risks, environmental regulation and liability,
government regulation, currency fluctuations, recent losses and
write-downs, restrictions in the Company’s loan facility,
dependence on key employees, possible variations of ore grade or
recovery rates, failure of plant, equipment or process to operate
as anticipated, accidents and labour disputes. Investors are
cautioned that forward-looking statements are not guarantees of
future performance and, accordingly, investors are cautioned not to
put undue reliance on forward-looking statements due to the
inherent uncertainty therein.

For further information:

please visit the AuRico Gold  website at  href=""> or

René Marion
President & Chief Executive Officer
AuRico Gold Inc.

Anne Day
Director of Investor Relations
AuRico Gold Inc.


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