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AuRico Declines After Impairment on Mine: Toronto Mover

AuRico Gold Inc. (AUQ), which operates mines in Mexico and Canada, fell the most in six months after the company took a writedown on its El Chanate operation and fourth-quarter revenue missed analysts’ estimates.

AuRico declined 5.3 percent to C$6.40 at 10:46 a.m. in Toronto, where the company is based. The shares earlier fell 6.4 percent, the most intraday since Sept. 5.

The company had a net loss of $25.4 million, or 9 cents a share, compared with profit of $77.9 million, or 31 cents, a year earlier, it said in a statement yesterday. Earnings included a $127 million goodwill charge related to the El Chanate mine in Mexico. Fourth-quarter revenue of $63.1 million was lower than the $71.3 million average of three analysts’ estimates compiled by Bloomberg.

The impairment on El Chanate “had not been previously communicated,” Steven Green, a Toronto-based analyst at TD Securities Inc, said in a note today. “The writedown is consistent with our view however that El Chanate generates very little free cash flow at these gold prices given the very high sustaining capital.”

AuRico will pay its first quarterly dividend of 4 cents a share on April 18, the company said yesterday. It completed a $300 million share buyback in January after selling Mexican assets to billionaire Carlos Slim’s Minera Frisco SAB in December.

To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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