AuRico Gold Reports Increased Production Profile, Record Operating Cash Flow and Record Net Free Cash Flow for the Second Quarter

By Aurico Gold Inc., PRNE
Monday, July 11, 2011

TORONTO, July 12, 2011 -


- Ocampo Realized
Production up 44%, Cash Costs Down by 26% vs. Q2 2010; Reducing
Ocampo Cash Cost Guidance for 2011

AuRico Gold Inc. (TSX:AUQ) (NYSE: AUQ), (”AuRico” or “the
Company”) is pleased to announce preliminary results that include a
significant increase in production as well as record operating cash
flow and net free cash flow for the second quarter. During the
quarter, the Ocampo mine produced 19% more gold equivalent ounces
(realized) as compared to Q1 2011 at cash costs of USD$340 per
realized gold equivalent ounce, resulting in a record margin of 77%
or $1,171 per gold equivalent ounce. The Company’s consolidated
production for the quarter was augmented by solid production from
the El Chanate mine that was acquired effective April 8, 2011.

The Company also announces that based on the continued success
in reducing costs at Ocampo during the first six months of the
year, the 2011 cash cost outlook previously reported for Ocampo has
been decreased to $400-$430 per gold equivalent ounce from
$425-$455 at a gold to silver ratio of 55:1.

Second Quarter Highlights

On a consolidated basis, the Company reported:

  • Increased quarter-end cash balance by 54% to $102
    as compared to a cash balance of $66 million immediately
    following the completion of the Capital Gold acquisition, effective
    April 8, 2011.
  • Record revenues of $113 million, a 98% increase over
  • Record operating cash flow of $55 million, a 251%
    increase over 2010.
  • Record net free cash flow of $21 million, a 263%
    increase over 2010.
  • Strong production of 43,652 gold ounces and 1.2 million
    silver ounces, or 66,120 gold equivalent ounces using the Company’s
    long-term gold equivalency ratio of 55:1 and 75,022 using the
    actual gold equivalency ratio of 39:1 realized during the quarter,
    representing an increase of 53% over the same period in 2010.
  • Strong consolidated cash cost performance of $433 per
    gold equivalent ounce using the Company’s long-term gold
    equivalency ratio of 55:1. Using the actual gold equivalency ratio
    of 39:1 realized in the quarter, cash costs were $381, with margins
    of $1,128 per gold equivalent ounce (75%), representing a decrease
    of 26% over the same period in 2010.

On an asset basis, the Company reported:

  • Effective cost containment initiatives: Cash costs at
    Ocampo of $399 per gold equivalent ounce using the Company’s
    long-term gold equivalency ratio of 55:1. Using the actual gold
    equivalency ratio of 39:1 realized in the quarter, cash costs were
    $340, with margins of $1,171 per gold equivalent ounce (77%), the
    highest ever in the history of Ocampo.
  • Reduced cash cost guidance at Ocampo: Continued
    productivity improvements and effective cost containment
    initiatives at Ocampo have resulted in a $25 per ounce (6%)
    decrease in the Company’s 2011 cash cost outlook for Ocampo to
    $400-430 per gold equivalent ounce using the Company’s long-term
    gold equivalency ratio of 55:1.
  • Increased productivity at El Chanate: Upon completing
    the acquisition of Capital Gold, the Company immediately deployed
    additional mining equipment to increase material movement rates at
    El Chanate, which in June was 79% more than the 2010 average.
    Optimization of the crushing and stacking operation has allowed the
    facility to recently increase placement rates by almost 30% from
    14,000 to approximately 18,000 tonnes per day. The higher stacking
    rate is expected to positively impact production and cash costs in
    the latter part of Q3.
  • Production resumes at El Cubo: On July 11 processing at
    the Los Torres mill resumed. In June, mining rates averaged 1,108
    tonnes per day, significantly ahead of planned rates. As of July
    , the ore stockpiled ahead of the mill for processing exceeded
    75,000 tonnes.
  • Success from the 2011 exploration program: Positive
    resultswere reported during the quarter from the Ocampo district
    and the El Chanate mine exploration programs.

“We are very encouraged that second quarter results have
continued to build on the positive results reported over the past
five quarters. During the quarter, the Company benefited from the
higher productivity at Ocampo and a reduction in cash costs, as
well as from the initial production contribution from the recently
acquired El Chanate mine. As a result, we have delivered one of our
strongest production quarters at cash costs well below industry
average, and reported record operating and net free cash flows,”
stated René Marion, President and Chief Executive Officer. “We
begin the second half of the year with over $102 million in cash
on-hand and three wholly-owned Mexican mines in production that
will contribute to a growing and diversified production profile
going forward. AuRico is one of the fastest growing mid-tier
precious metal producers in the industry with a solid track record
of not only containing operating costs, but reducing them during a
period of high inflationary pressures and providing investors with
exceptional leverage to strong gold and silver prices.”

Ocampo Key Highlights

  • Best ever net free cash flow performance at $28 million
  • Lowest ever realized cash costs at $340 per gold equivalent
  • Best ever margins at 77% or $1,171 per gold equivalent
  • Underground productivity of 1,893 tonnes per day
  • Record underground development of 7,520 metres
  • Open pit mining rate of 110,532 tonnes per day
  • Picacho push-back near completion, currently mining mill-grade
  • Estrella and Conico push-backs to commence in Q3
  • Mill productivity of 3,183 tonnes per day at the Ocampo mill
    processing facility
  • Mill optimization initiatives have increased recoveries to 97%
    for gold and 88% for silver
  • Heap leach tonnes increasing to target levels 10,000 tonnes per
    day by the end of Q3
  • Successful exploration program continues to discover new high
    grade ores in this prospective mining district

El Chanate Key Highlights

  • Material moved from the open pit and stockpiles increased to
    67,320 tonnes per day in June, a 79% increase over 2010 average of
    37,625 tonnes per day
  • Optimization of the crushing and stacking operation has allowed
    the facility to recently increase placement rates from a nominal
    14,000 to approximately 18,000 tonnes per day for an increase
    approaching 30%. The enhanced stacking rate is expected to impact
    production and costs in the latter part of Q3
  • 681,744 tonnes of Run of Mine (ROM) ore moved to the heap leach
    pad and placed under irrigation in Q2
  • 6.2 million tonnes of stacked heap leach ore are now under full
  • All crushed and stacked ore is now agglomerated
  • 12 pieces of new contractor and owner equipment deployed during
    the quarter
  • Exploration program launched with significant results returning
    composite grades substantially higher than reserve grades

El Cubo Highlights

  • Processing resumed at Las Torres Mill on July 11
  • Mining rate averaged 1,108 tonnes per day in June,
    significantly ahead of planned rates
  • Over 75,000 tonnes of ore stockpiled ahead of the mill for
    processing as of July 10
  • Development toward the Dolores - Capulin discovery commenced
    May 1
  • Longhole stope drilling commenced in June and capacity will be
    further increased with the mid July delivery of the first of two
    new drill rigs purchased. Longhole stoping conversion is expected
    to lead to greater productivity, lower dilution and decreased costs
    as demonstrated Ocampo.
  • Exploration program to resume in Q3, with immediate follow-up
    drilling on the Dolores - Capulin discovery

Operational Results

    Ended June
    ounces and
    total cash
    costs)           Ocampo        El Chanate    El Cubo       Consolidated
                   2011   2010    2011(1) 2010 2011  2010     2011      2010
    Production    28,781    24,963  14,871  -   -   4,268    43,652    29,231
    Production 1,210,798 1,066,998  24,912  -   - 213,203 1,235,710 1,280,201
    Gold eq.
    (realized)    59,517    41,362  15,505  -   -   7,593    75,022    48,955
    Gold eq.
    (55:1)(3)     50,796    44,363  15,324  -   -   8,143    66,120    52,506
    (realized)      $340      $458    $484  -   -    $840      $381      $520
    (55:1)(3)       $399      $426    $484  -   -    $781      $433      $484

(1) Represents results subsequent to the acquisition of the
El Chanate mine on April 8, 2011.

(2) Cash costs for the Ocampo mine and on a consolidated basis
are calculated on a per gold equivalent ounce basis.  Cash
costs for the El Chanate mine are calculated on a per gold ounce
basis, using silver revenues as a by-product cost credit.

(3) Using the Company’s long-term gold equivalency

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. Its 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 Note to US Investors - The United
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

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 results, operating
performance projections for 2011, our ability to fully fund our
business model internally, 2011 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. The operating and financial performance of the
Company will  be affected by changes in the actual gold
equivalency ratio realized in 2011. 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


Image with caption: “El Chanate Mine (CNW Group/AuRico Gold
Inc.)”. Image available at: href="">

For further information:

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

    René Marion                         Anne Day
    President & Chief Executive Officer Director of Investor Relations
    AuRico Gold Inc.                    AuRico Gold Inc.
    +1-647-260-8880                     +1-647-260-8880



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