AuRico Gold cuts output forecast, sees higher costs

Sept 5 Wed Sep 5, 2012 9:02am EDT

Sept 5 (Reuters) - AuRico Gold Inc cut its full-year production forecast for the second time in as many months as the gold miner focuses on developing its Ocampo mine in Mexico.

AuRico now expects to produce 115,000 to 125,000 gold equivalent ounces at the mine in 2012, down from earlier estimates of 155,000 to 170,000 ounces.

The company raised its cash cost forecast as it steps up more expensive open-pit production during the development of its underground mine.

It now expects cash costs of $775 to $875 per gold equivalent ounce, up from $540 to $570 per gold equivalent ounce.

Development of the northeast underground mine at Ocampo was delayed by labor problems, reducing production in the second quarter.

AuRico cut its overall output forecast to 248,000 to 278,000 gold equivalent ounces from 298,000 to 333,000 gold equivalent ounces.

AuRico said production at its Young-Davidson project in Ontario was affected by a 10-day power outage due to forest fires in the Kirkland Lake area and said it now expects production of 55,000 to 65,000 ounces from the mine.

The Young-Davidson mine was earlier expected to produce 65,000 to 75,000 ounces.

The company's El Chanate mine in Mexico is on track to achieve its 2012 production targets.

Shares of AuRico closed at C$6.90 on Tuesday on the Toronto Stock Exchange.

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