AURICO GOLD $3.67 - Toronto symbol AUQ

AURICO GOLD $3.67 (Toronto symbol AUQ; TSINetwork Rating: Speculative)(604-681-2802; www.auricogold.com; Shares outstanding: 249.6 million; Market cap: $917.4 million; Dividend yield: 2.5%) operates the El Chanate gold mine in Mexico and the Young- Davidson gold project in northern Ontario. Young- Davidson started up in 2013, and will reach full production in 2016.

In the three months ended December 31, 2014, AuRico’s production jumped 23.0%, to 56,583 ounces from 46,017 ounces a year earlier. That increased its revenue by 40.2%, to $71.2 million from $50.8 million.

Cash flow per share was unchanged at $0.07 (all figures except share price and market cap in U.S. dollars). The company’s costs rose as it moved from open pit to underground mining at Young-Davidson. However, those costs should fall as it completes the mine’s new infrastructure.

AuRico’s balance sheet is strong, with cash of $89.0 million, or $0.36 a share. The stock yields 2.5%.

The stock trades at 7.1 times this year’s forecast cash flow of $0.41 U.S. a share. However, like most gold firms, AuRico’s shares will need a gold-price recovery to move significantly higher.

AuRico is a hold.

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