AURICO GOLD $4.36 - Toronto symbol AUQ

AURICO GOLD $4.36 (Toronto symbol AUQ; TSINetwork Rating: Speculative) (604-681-2802; www.auricogold.com; Shares outstanding: 248.5 million; Market cap: $1.0 billion; Dividend yield: 0.4%) operates the El Chanate gold mine in Mexico. The company also started up its Young-Davidson gold project in northern Ontario last year. It’s now at full production.

In the three months ended June 30, 2014, AuRico’s production jumped 47.2%, to 56,198 ounces from 38,186 ounces a year earlier. That increased its revenue by 31.0%, to $75.5 million from $57.7 million.

Cash flow per share declined to $0.05 from $0.08. The company’s costs rose as it moved from open pit to underground mining at Young-Davidson, but they should fall as AuRico completes the mine’s new infrastructure.

AuRico’s balance sheet is strong, with cash of $140.6 million, or $0.57 a share. The stock yields 0.4%.

The company’s rising output from its two mines, plus its high cash balance, give it appeal. However, like most gold firms, AuRico’s shares will need a recovery in gold prices to move higher.

AuRico is a hold.

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