AuRico dives 12% over Mexico production problems, announces new CEO
AuRico Gold Inc. (NYSE:AUQ) shed 12% on Tuesday on massive trading volumes, after its preliminary operational results for the second quarter provided a few nasty output surprises.
Production of 51,101 gold ounces and 894,414 million silver ounces, or 67,411 gold equivalent ounces, were far below earlier guidance by the company.
While the company poured the first gold at its Young-Davidson mine in Northern Ontario during the quarter, the Toronto-based firm Ocampo mine in Mexico fell short of its target and produced only 37,579 gold equivalent ounces. The company explained that "unusually high turnover of skilled labour" significantly reduced underground development and reduced tonnage by 30%.
The company reduced its full-year production guidance and raised its cost guidance to 155,000-170,000 gold equivalent ounces at cash costs of $540-570 per gold equivalent ounce.
By the close the Aurico had given up 12.2% at $6.62 on the NYSE, recovering from a 52-week low of $6.23 hit in morning trade. More than 13 million shares in the $1.9 billion company changed hands compared to the daily average of 2.4 million.
The Financial Post commented that "the production numbers were a fresh disappointment from a company that has a history of underperformance, dating back to when it was called Gammon Gold Inc."
The company also announced that René Marion, CEO since 2007 has tendered his resignation for health reasons effective September 3 and that industry veteran Scott Perry, Aurico's CFO since 2008, would take over.