Young-Davidson

We are currently building the Young-Davidson gold mine located near the town of Matachewan, approximately 60 km west of Kirkland Lake in northern Ontario. The property consists of contiguous mineral leases and claims totalling 11,000 acres and is situated on the site of two past producing mines that produced one million ounces in the 1930s – 1950s.

Currently on schedule, Young-Davidson is expected to commence commissioning activities in Q4 2011 and is targeting its first gold pour in late Q1 2012. Once in production, Young-Davidson will represent one of two cornerstone assets of AuRico.

Initial production will come from an open pit forecast to produce approximately 85,000 ounces in 2012 and 135,000 ounces in 2013. Over a 15-year mine-life, the mine is expected to generate average annual production of 180,000 ounces of gold.

Geology

Young-Davidson is situated within the southwestern part of the Abitibi Greenstone Belt, one of the largest greenstone belts in the world with historic production of 160 million ounces of gold. The Abitibi consists of a complex and diverse array of volcanic, sedimentary, and plutonic rocks typically metamorphosed to greenschist facies grade, but locally attaining amphibolite facies grade. Within the Abitibi lies the Kirkland-Larder Lake trend, home to several gold camps including Young-Davidson, with combined historic production of 34 million ounces of gold.

Mineralization

Gold mineralization at Young-Davidson is associated with a syenite intrusive rock (a quartz granite). Within this syenite, the gold mineralization is associated with a stockwork of quartz veinlets and narrow quartz veins, rarely greater than a few centimetres thick that are within a broader halo of disseminated pyrite and potassic alteration. Historic mining demonstrated the continuity of mineralization from surface to a depth of approximately 500 metres. Mineralization is known to extend beyond 1,500 metres below surface (orebody open at depth); however, current drilling below this level will not be initiated until suitable underground drill platforms become available. Other mines along the Kirkland-Larder Lake trend were mined to depths of over 2,000 metres.

Exploration

In 2011, we have budgeted $3.6 million focusing on expanding reserves / resources outside of the currently known YD resource area:

• Diamond drilling to explore the size and extent of the YD West Zone, a new zone discovered in 2010 that returned one of the best holes ever drilled on the property (3.46 g/t over 79.5m).
• Exploration to the east and down dip of currently known reserves.

The 2011 drill campaign has been highly successful:

• In September, we announced a new resource estimate for the YD West zone: an Indicated and Inferred Resource of 536,000 and 53,000 ounces of gold, respectively.  The zone is now the thickest on the property (average 30 m), with the potential to be one of the lowest cost per ounce mining zones at Young-Davidson. YD West remains open at depth and to the west, underscoring the exploration upside on the property.
• Exploration to the east of currently known reserves has returned 5.44 g/t over 54.0 m and highlights the potential of a new footwall zone, the YMX Footwall, which may provide another underground mining front on the property.