July 21, 2011 / 12:28 PM / 7 years ago

UPDATE 2-AuRico raises 2011 production forecast, cuts cost estimate

* Expects 2011 gold output of 175,000-195,000 ounces vs prior 167,000-189,000 ounces

* Sees 2011 silver production of 4.95-5.5 mln ounces

* Expects total cash cost of $445-$475/gold equivalent ounce (Adds silver production outlook, details, share movement)

July 21 (Reuters) - AuRico Gold raised its 2011 production forecast and lowered its cash cost outlook range, driven mainly by growth at its flagship Ocampo mine in northern Mexico.

The miner now expects 2011 gold production of 175,000-195,000 ounces, up from its prior forecast of 167,000-189,000 ounces.

AuRico expects total cash cost per gold equivalent ounce of $445-$475 for the year, down from its earlier view of $455-$485.

The company changed its name to AuRico from Gammon Gold in May after completing its takeover of Capital Gold.

It now sees 2011 silver production of 4.95-5.5 million ounces. That compares with the company’s previous forecast of 4.8-5.6 million ounces.

“Throughout the first half of the year Ocampo continued to deliver strong production results at cash costs below the industry average,” said the company, which began commercial production at its El Cubo mine in mid-July.

Earlier this month, AuRico reported a jump in second-quarter gold production and lower costs, that were driven by cost containment initiatives and recent acquisitions.

Production from the El Chanate mine contributed to its operating results for the first time in the second quarter.

AuRico had clinched the $408 million deal to acquire Capital and its El Chanate asset in Mexico after an extended takeover battle with rival Timmins Gold .

Shares of Toronto, Ontario-based AuRico, which is expanding operations at its El Chanate and El Cubo mines, closed at C$12.16 on Wednesday on the Toronto Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Gopakumar Warrier)

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