AUR RESOURCES INC.
TSX : AUR

AUR RESOURCES INC.

October 27, 2006 06:00 ET

Aur Resources Inc. Reports Net Earnings of US$84.6 Million and Cash Flow from Operating Activities of US$142.9 Million in the Third Quarter of 2006

All dollar amounts are expressed in United States currency unless otherwise stated.

TORONTO, ONTARIO--(CCNMatthews - Oct. 27, 2006) - Aur Resources Inc. (TSX:AUR)(SSE:AUR) today announced net earnings for the third quarter of US$84.6 million.

"The strong financial performance experienced by Aur over the last two years is expected to continue for the foreseeable future as high metal prices will benefit our existing operations as well as the Duck Pond Mine which will begin production before year end and the Andacollo Hypogene Copper-Gold Deposit which is now under development", said Jim Gill, Aur's President and CEO. "We expect Aur's financial strength and operating expertise to result in continued profitable growth in the years ahead."

Third Quarter Highlights - 2006

- Net Earnings of $84.6 million, $0.87 (CDN$0.98) per share, in the third quarter, an increase of 173% compared to 2005.

- Cash Flow from Operating Activities of $142.9 million in the third quarter, an increase of 122% compared to 2005.

- Cash and Working Capital increased to $592.5 million and $487.4 million, respectively, as at September 30, 2006.

- Cash per Share of $6.07 (CDN$6.79) at September 30, 2006.

- Dividends of $13.1 million paid to Aur shareholders on July 1, 2006.

- Production Decision made for the Andacollo Hypogene Copper-Gold Deposit

Financial Results

Third Quarter

Mining revenues were $202.3 million in the third quarter of 2006, compared to $108.1 million for the same period in 2005. Net earnings were $84.6 million, equal to $0.87 per share for the quarter, a 173% increase over net earnings of $31.0 million or $0.33 per share for the same quarter last year. Cash flow from operating activities was $142.9 million, equal to $1.48 (CDN$1.65) per share, compared to $64.3 million or $0.68 per share in the third quarter of 2005. Aur's consolidated cash position at September 30, 2006 increased by $93.9 million to $592.5 million from June 30, 2006, and working capital increased by $62.8 million to $487.4 million.

Aur's realized copper price, including $0.06 per pound of cathode sales premiums and $0.11 per pound of quotational period pricing adjustments, averaged $3.65 per pound in the third quarter of 2006, compared to the LME average price for the quarter of $3.48 per pound.

Nine Months

Mining revenues were $556.9 million for the nine months ended September 30, 2006, approximately 77% higher than the $314.2 million for the same period in 2005. Net earnings were $225.3 million, equal to $2.33 per share for the nine months ended September 30, 2006, a 124% increase over net earnings of $100.8 million or $1.06 per share for the same period last year. Cash flow from operating activities was $370.6 million, equal to $3.83 (CDN$4.29) per share for the year to date, compared to $160.5 million or $1.69 per share in 2005. Aur's consolidated cash position at September 30, 2006 increased by $231.2 million to $592.5 million from December 31, 2005, and working capital increased by $145.6 million to $487.4 million.

Aur's realized copper price, including $0.06 per pound of cathode sales premiums and $0.35 per pound of quotational period pricing adjustments, averaged $3.41 per pound during the nine months ended September 30, 2006, compared to the LME average price of $3.00 per pound for the year to date.

The following table presents a summary of Aur's Consolidated Statements of Operations for the periods ended September 30, 2006 and 2005:



Three months ended September 30 Nine months ended September 30
($000's) ($000's)
----------------------------- ------------------------------
2006 2005 Change 2006 2005 Change
--------- --------- --------- --------- --------- ---------
Mining
revenues 202,346 108,097 94,249 556,892 314,246 242,646
Mining
expenses (44,740) (41,025) (3,715) (123,960) (124,380) 420
Depreciation
&
amortization (7,537) (8,172) 635 (22,378) (24,846) 2,468
Mine closure
& site
restoration (1,008) (1,588) 580 (1,707) (3,089) 1,382
ENAMI copper
price
participation (9,496) (2,074) (7,422) (25,229) (3,062) (22,167)
Non-
controlling
interests (30,146) (12,153) (17,993) (83,098) (23,485) (59,613)
--------- --------- --------- --------- --------- ---------
Operating
earnings 109,419 43,085 66,334 300,520 135,384 165,136
Business
development (1,443) (1,713) 270 (5,329) (4,354) (975)
Administration (1,832) (1,050) (782) (6,791) (4,833) (1,958)
Interest on
long-term
debt (2,109) (2,109) - (6,328) (6,328) -
Stock-based
compensation (681) (277) (404) (1,612) (1,141) (471)
Taxes (27,386) (9,110) (18,276) (73,984) (25,070) (48,914)
Interest
and other 8,604 2,192 6,412 18,755 7,106 11,649
--------- --------- --------- --------- --------- ---------

Net earnings 84,572 31,018 53,554 225,231 100,764 124,467
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------

Basic
earnings
per share 0.87 0.33 0.54 2.33 1.06 1.27
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------


Metal Production and Sales

Third Quarter
Copper production from the Andacollo and Quebrada Blanca Mines in the third quarter of 2006 was 55.6 million pounds of copper, compared to 57.6 million pounds of copper, in the third quarter of 2005, plus0.3 million pounds of copper, 0.8 million pounds of zinc, 11,000 ounces of silver and 300 ounces of gold representing Aur's share of production from the Louvicourt Mine which closed on July 12, 2005. Mining revenues were $202.3 million in the third quarter of 2006, a $94.2 million increase over the same period in 2005. The increase was primarily due to higher realized copper prices, which were $1.77 per pound higher.

Minesite cash operating costs were $44.7 million in the third quarter of 2006, compared to $41.0 million in 2005. Aur's cash operating cost per pound of copper sold was $0.81 for the quarter, $0.10 per pound higher than in the third quarter of 2005. The higher unit operating costs resulted primarily from increased energy, labour and acid costs and lower copper production.

Nine Months

Copper production from the Andacollo and Quebrada Blanca Mines for the nine months ended September 30, 2006 was 164.7 million pounds of copper, compared to 168.3 million pounds of copper, plus 11.4 million pounds of copper, 8.8 million pounds of zinc, 138,000 ounces of silver and 4,500 ounces of gold representing Aur's share of production from Louvicourt for the same period in 2005. There were 15.0 million fewer pounds of copper produced for the year to date, compared to 2005, of which 11.4 million pounds represented Aur's share of production from the Louvicourt Mine. Mining revenues were $556.9 million for the nine months ended September 30, 2006, a $242.6 million increase over the same period in 2005. The increase was primarily due to higher realized copper prices, which were $1.70 per pound higher.

Minesite cash operating costs were $124.0 million for the nine months ended September 30, 2006, compared to $124.4 million in 2005. Aur's cash operating cost per pound of copper sold was $0.76 for the nine months ended September 30, 2006, $0.11 per pound higher than in the same period of 2005. The higher unit operating costs resulted primarily from 15.6 million fewer pounds sold for the year to date together with higher energy, reagent and labour costs, compared to 2005.

Mine Operating Earnings (1)

The following table presents a summary of mine operating earnings for the periods ended September 30, 2006 and 2005.



Three months ended September 30 Nine months ended September 30
($000's) ($000's)
----------------------------- ------------------------------
2006 2005 Change 2006 2005 Change
--------- --------- --------- --------- --------- ---------
Louvicourt - 944 (944) - 14,236 (14,236)
Andacollo 23,666 16,708 6,958 74,517 41,578 32,939
Quebrada
Blanca 133,940 49,420 84,520 358,415 134,052 224,363
--------- --------- --------- --------- --------- ---------

157,606 67,072 90,534 432,932 189,866 243,066
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------

(1) Mine operating earnings equals mining revenues less mining expenses.


Mine Operating Cash Flow

Cash flow from mine operating activities was $147.2 million in the third quarter of 2006, compared to $69.0 million for the same period last year. Mine operating cash flow increased approximately 113.3% in the third quarter of 2006 by comparison to 2005.

Andacollo Mine

Third Quarter

The Andacollo Mine produced 9.2 million pounds of LME registered cathode copper during the third quarter of 2006, compared to 13.2 million pounds in the third quarter of 2005 as slow leaching kinetics continued to negatively impact production. A total of 5.2 million tonnes of rock, of which 1.0 million tonnes was heap leach ore and 1.5 million tonnes was dump leach ore, was mined at a strip ratio of 1.3:1. A total of 4.6 million tonnes of rock, of which 1.0 million tonnes was heap leach ore, was mined at a strip ratio of 3.7:1 in the third quarter of 2005. Highly altered ore, initially encountered in the first half of the year, continued to negatively impact leaching rates in the third quarter and resulted in lower production than forecast. In-process copper inventories, however, rose by approximately 3,000 tonnes to 13,000 tonnes in the quarter as a consequence of the longer leach cycle times.

Andacollo's revenues of $30.3 million, generated from the sale of 8.2 million pounds of copper in the third quarter of 2006, were $5.5 million higher than the revenues of $24.8 million in the third quarter of 2005 as a result of higher copper prices. Cash operating costs were $6.6 million; $1.5 million lower than for the same period in 2005 principally due to the lower copper production. The cash operating costs in the third quarter of 2006 were $0.81 per pound of copper sold, $0.20 per pound higher than in 2005, principally due to the 5.0 million fewer pounds of copper sold and higher energy, reagent and labour costs in the third quarter of 2006, compared to the same period in 2005. Cash flow from operating activities was $23.5 million in the third quarter of 2006, compared to $17.2 million in 2005. Expenditures on property, plant and equipment were $6.3 million in the third quarter, of which $0.8 million was sustaining capital and $5.5 million was for special projects, including $0.7 million on the dump leach facility, $0.1 million on the heap leach pad expansion and $4.7 million on the Hypogene Deposit development, compared to $2.7 million in 2005.

Nine Months

Andacollo produced 29.6 million pounds of LME registered cathode copper during the nine months ended September 30, 2006, compared to 38.4 million pounds in 2005. A total of 13.5 million tonnes of rock, of which 2.8 million tonnes was heap leach ore and 2.5 million tonnes was dump leach ore, was mined at a strip ratio of 1.6:1. A total of 14.1 million tonnes of rock, of which 3.1 million tonnes was heap leach ore, was mined at a strip ratio of 3.5:1 in 2005.

Andacollo's revenues of $96.3 million, generated from the sale of 28.5 million pounds of copper for the nine months ended September 30, 2006, were $30.6 million higher than the revenues of $65.7 million in 2005 as a result of higher copper prices. Cash operating costs were $21.7 million, $2.4 million lower than for the same period in 2005. The cash operating costs in 2006 were $0.76 per pound of copper sold, $0.13 per pound higher than in 2005, for the same reasons as in the third quarter, compared to the same period in 2005. Cash flow from operating activities was $72.6 million for the nine months ended September 30, 2006, compared to $43.0 million in 2005. Expenditures on property, plant and equipment were $11.7 million, of which $1.5 million was sustaining capital and $10.2 million was for special projects, including $3.3 million on the dump leach facility, $0.9 million on the heap leach pad expansion and $5.9 million on the Hypogene Deposit feasibility study, compared to $3.7 million in 2005.

Quebrada Blanca Mine

Third Quarter

The Quebrada Blanca Mine had an excellent third quarter in which it produced 46.4 million pounds of LME registered cathode copper, compared to 44.4 million pounds in the third quarter of 2005. A total of 8.9 million tonnes of rock, of which 1.8 million tonnes was heap leach ore and 1.5 million tonnes was dump leach ore, was mined at a strip ratio of 1.7:1 in the third quarter of 2006, compared to 9.1 million tonnes of rock, of which 1.9 million tonnes was heap leach ore and 3.0 million tonnes was dump leach ore, at a strip ratio of 0.9:1 for the third quarter 2005.

Quebrada Blanca's revenues, generated from the sale of 47.2 million pounds of copper, were $172.0 million in the third quarter of 2006, compared to $81.5 million generated from the sale of 43.5 million pounds of copper in 2005. The $90.5 million increase in revenues was primarily due to a higher realized copper price. Cash operating costs of $38.1 million were $6.0 million higher than in the same period in 2005. Cash operating costs were $0.81 per pound of copper sold, $0.07 per pound higher than in the third quarter of 2005 due to higher energy, acid, labour and transportation costs. Cash flow from operating activities was $123.7 million in the third quarter of 2006 compared to $45.0 million in 2005. Expenditures on property, plant and equipment were $2.4 million in the third quarter, of which $1.9 million was sustaining capital, compared to $0.2 million in 2005.

Nine Months

The Quebrada Blanca Mine produced 135.1 million pounds of LME registered cathode copper for the nine months ended September 30, 2006, compared to 129.8 million pounds in 2005. A total of 26.2 million tonnes of rock, of which 5.6 million tonnes was heap leach ore and 6.1 million tonnes was dump leach ore, was mined at a strip ratio of 1.2:1 compared to 27.6 million tonnes of rock, of which 5.6 million tonnes was heap leach ore and 9.4 million tonnes was dump leach ore, at a strip ratio of 0.8:1 in 2005.

Quebrada Blanca's revenues, generated from the sale of 134.7 million pounds of copper, were $460.6 million for the nine months ended September 30, 2006, compared to $221.3 million generated from the sale of 129.1 million pounds of copper in 2005. The $239.3 million increase in revenues was due to a higher realized copper price and the higher sales volumes. Cash operating costs of $102.2 million were $15.0 million higher than in the same period in 2005. Cash operating costs were $0.76 per pound of copper sold, $0.08 per pound higher than in 2005 for the same reasons as in the third quarter. Cash flow from operating activities was $313.8 million in 2006 compared to $118.0 million in 2005. Expenditures on property, plant and equipment were $4.0 million, compared to $0.5 million in 2005.

Development Projects

Duck Pond - Newfoundland

The Duck Pond copper-zinc mine remains on schedule to achieve commercial production in early 2007. Underground development, including stope preparation, is in progress on three levels and to date approximately 10,000 tonnes of ore has been mined and stockpiled on surface for processing in the concentrator. Definition drilling continues to define the deposit for stope planning purposes and has totaled 20,000 metres to date. Construction of the tailings facility and other key site infrastructure is now complete with the concentrate storage building at the Turf Point ship loading facility expected to be completed in November. The concentrator construction is progressing well, however, completion of this work and commissioning is behind schedule and the processing of ore is now expected to begin in mid-November. This will result in production for 2006 being reduced to 5,500 tonnes and 4,100 tonnes of copper and zinc concentrates containing 2.7 million pounds of copper and 4.9 million pounds of zinc in 2006 compared to the original forecast of 5.2 million pounds of copper and 10.6 million pounds of zinc. Capital development expenditures were $28.4 million in the third quarter and $53.6 million, to date.

Andacollo Hypogene Copper-Gold Deposit - Chile

Development of the Andacollo Hypogene Copper-Gold Deposit for production by late 2009 commenced in the third quarter following the formal production decision being announced on August 3, 2006. During the third quarter, basic engineering and design work, geotechnical studies related to the tailings pond and mine design, and environmental permitting progressed as planned. Additional water rights to ensure availability for the mining operation were secured, purchase orders for major equipment with long lead delivery time such as the primary crusher, SAG and ball mills were made and tenders for leasing for the mobile mining fleet were initiated. Organization of the project management team required to ensure the on-time budget development of the mine also continued during the third quarter. A total of $4.7 million was spent on the development of this project in the third quarter of 2006, with $5.9 million having been spent to date in 2006. Capital expenditures are expected to total $19.8 million in 2006 on development of the Hypogene Deposit.

Other Financial Information

Business Development

Aur's expenditures on its exploration projects and the identification and evaluation of potential acquisitions were $1.4 million and $5.3 million in the third quarter and for the year to date, respectively, compared to $1.7 million and $4.4 million, respectively, in 2005. Drilling resumed in the third quarter on the El Dorado gold-silver property in southern Argentina where quartz veins and hydrothermal breccias carrying isolated occurrences of gold-silver mineralization were encountered. Drilling will continue into the fourth quarter. Results from drilling on the Camacho base metal property in the State of Zacatecas, Mexico are expected before the end of 2006. Early in the fourth quarter, the Macuchi VMS property in Ecuador was optioned from Largo Resources Limited. Geological and related work will start immediately on this property from which 435,000 tonnes of ore grading 11.5 grams of gold per tonne and 4.7% copper was mined during the 1940's. The search for development stage deposits and/or producing mines which meet Aur's investment criteria continues in Africa, Eastern Europe and CIS countries, as well as in the Americas. A number of exploration and acquisition opportunities have also been identified and are under evaluation.

Administration

Administration expenses were, as expected $1.8 million and $6.8 million in the third quarter and for the year to date, respectively, compared to $1.1 million and $4.8 million in 2005.

Depreciation and amortization

Depreciation and amortization expenses were, as expected, $7.5 million and $22.4 million in the third quarter and for the year to date, respectively, compared to $8.2 million and $24.8 million in 2005, the reduction being primarily due to the increased supergene reserves at the Andacollo Mine and fewer pounds of cathode copper produced in 2006, compared to 2005.

Mine closure and site restoration

Non-cash mine closure and site restoration expenses for the Andacollo and Quebrada Blanca Mines were $1.0 million and $1.7 million in the third quarter and for the year to date, respectively, compared to $1.6 million and $3.1 million in 2005. These expenses were lower in 2006, primarily as a result of no further costs being accrued for Louvicourt.

Interest on long-term debt

Interest expense on Aur's $125 million senior notes debt were $2.1 million and $6.3 million in the third quarter and for the year to date, respectively, for both 2006 and 2005 and will be $8.4 million for the year.

Stock-based compensation

Stock-based compensation expense was $0.7 million and $1.6 million in the third quarter and for the year to date, respectively, compared to $0.3 million and $1.1 million in 2005.

ENAMI copper price participation

A copper price participation expense related to the Quebrada Blanca Mine, payable to ENAMI, of $9.5 million and $25.2 million was accrued in the third quarter and for the year to date, respectively, compared to $2.1 million and $3.1 million in 2005.

Interest and other

The net amount of interest and other expenses and revenues was positive $8.6 million and $18.8 million in the third quarter and for the year to date, respectively, compared to a positive $2.2 million and $7.1 million, respectively, in 2005. Net revenues in the third quarter were primarily due to interest and other income of $8.9 million.

Provision for income and resource taxes

Provision for taxes was $27.4 million in the third quarter and $74.0 million for the year to date, respectively, compared to $9.1 million and $25.1 million in 2005. Current income taxes for the nine months ended September 30, 2006 totaled $67.5 million, of which $55.4 million related to Quebrada Blanca and $12.1 million related to Andacollo. Chilean specific mining taxes totaled $6.8 million, of which $6.5 million related to Quebrada Blanca and $0.3 million related to Andacollo. The higher tax expense in 2006 is a result of higher earnings.

Non-controlling interests

Non-controlling interests expense, related to the interests of Aur's partners in the Andacollo and Quebrada Blanca Mines, was $30.1 million and $83.1 million in the third quarter and in the year to date, respectively, of 2006, compared to $12.2 million and $23.5 million for the same periods in 2005.

Aur is entitled to receive 76.5% and 63% of Quebrada Blanca's and Andacollo's future cash distributions, respectively. As at September 30, 2006, the entitlement of the non-controlling interests to cash distributions was $42.0 million.

Working capital

Working capital increased $62.8 million during the third quarter to $487.4 million at September 30, 2006, primarily due to increased cash balances resulting from operating activities.

Property, plant and equipment

Investments in property, plant and equipment totaled $36.8 million during the third quarter of 2006, compared to $11.8 million for the same period in 2005. These investments included $28.4 million invested at Duck Pond, $6.3 million invested at Andacollo and $2.4 million invested at Quebrada Blanca. Investments in property, plant and equipment totaled $79.0 million for the nine months ended September 30, 2006, of which $10.0 million was for the 2005 copper price participation paid to Teck Cominco, $53.9 million was invested at Duck Pond, $11.7 million at Andacollo and $4.0 million at Quebrada Blanca.

2006 Outlook

Aur has used an LME copper price of $3.46 per pound for the remaining three months in developing this 2006 outlook.

In 2006, Aur expects its share of the 217 million pounds of copper production from the Andacollo and Quebrada Blanca Mines to total approximately 160 million pounds. Cash operating costs per pound of copper sold, are forecast to average $0.76 per pound in 2006. In addition, 2.7 million pounds of copper and 4.9 million pounds of zinc are expected to be produced by the Duck Pond Mine in 2006, the revenue from which will be credited to the capital development costs.

Revenue is forecast to be approximately $763 million. Mine operating costs are expected to be $169 million. Operating profit, after business development, administration and senior notes interest costs, is expected to be approximately $569 million. Net earnings, after all other expenses including depreciation and amortization, non-cash mine closure expenses, income tax provision and non-controlling interests totaling $261 million, are forecast at approximately $308 million, equal to $3.15 or CDN$3.58 per share.

Cash flow from operating activities is forecast to be approximately $512 million. Cash expenditures associated with financing activities are expected to total $120 million and are comprised of $25 million for dividends to Aur shareholders, $6 million copper price participation to ENAMI, $3 million for capital leases and $93 million for dividend payments to non-controlling interests of Quebrada Blanca, offset by proceeds of $7 million, from common share issuances related to the exercise of employee stock options. Cash expenditures on investing activities are expected to total $131 million in 2006, comprised primarily of $81 million at Duck Pond, $28 million at Andacollo of which $20 million is for the Hypogene Project, $12 million at the Quebrada Blanca Mine and $10 million to Teck Cominco for the 2005 copper price participation. Aur's consolidated cash balance at December 31, 2006 is, therefore, forecast to be $622 million, after the payment of $60.6 million of dividends to Quebrada Blanca non-controlling interests in December.

Aur's sensitivity to copper price is such that a $0.50 per pound increase or decrease in the price of copper from $3.46 per pound, in the remaining three months of 2006, would change the 2006 net earnings by $17 million and cash flow from operating activities by $29 million.

This news release contains forward-looking statements that are based on current expectations and which involve risks and uncertainties, including those referred to in Aur's 2005 Annual Report and/or in Aur's Annual Information Form dated March 24, 2006 ("AIF") and filed with Canadian securities regulatory authorities, that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in the forward-looking statements. Such forward-looking statements include statements regarding financial results and expectations for 2006 and include, among other things, statements regarding targets, estimates and/or assumptions in respect of copper production and/or copper prices, timing and costs of the development of new deposits, operating costs, ongoing expenditures on property, plant and equipment, levels of and increases and decreases in production, reserves and/or resources and anticipated grades and recovery rates and are or may be based on assumptions and/or estimates related to future economic, market and other conditions and include parameters, assumptions and conclusions in any feasibility studies. Factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, the factors described or referred to elsewhere herein and/or in the AIF and include unanticipated and/or unusual events. Many of such factors are beyond Aur's ability to control or predict. Actual results may differ materially from those anticipated. Readers are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Aur disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise.
Additional information, including the quarterly and annual consolidated financial statements, Annual Information Form ("AIF"), Management Information Circular and other disclosure documents, may also be examined and/or obtained through the Internet by accessing Aur's website at www.aurresources.com or by accessing the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.

Aur's third quarter analyst conference call will be held at 10:00 a.m., ET, on October 27, 2006. This listen-only webcast can be accessed by going directly to CCNMatthews web site at www.ccnmatthews.com or by going to the home page of Aur's web site.



PRODUCTION STATISTICS
Three months ended September 30

---------------------------------------------------------------------------
2006 Andacollo Quebrada Blanca Total
---------------------------------------------------------------------------
Ore (tonnes)
Heap leach 966,168 1,797,616 n/a
Dump leach 1,456,211 1,538,700 n/a

Copper Grade (%TCu)
Heap leach 0.71 1.27 n/a
Dump leach 0.38 0.57 n/a

Copper (000 pounds)
Produced 9,215 46,421 55,636
Sold 8,223 47,197 55,420
Less: non-controlling
interests (3,043) (11,090) (14,133)
--------- --------- --------
Net to Aur 5,180 36,107 41,287
Inventory 1,658 3,532 5,190

Cost per pound of
copper sold 0.81 0.81 0.81
---------------------------------------------------------------------------
2005 Louvicourt Andacollo Quebrada Blanca Total
---------------------------------------------------------------------------
Ore (tonnes) 51,066 1,017,220 1,856,358 n/a

Grade
Copper (%) 1.03 0.86 1.21 n/a
Soluble copper (%) n/a 0.74 1.08 n/a
Zinc (%) 2.79 - - n/a
Gold (oz/t) 0.02 - - n/a
Silver (oz/t) 1.41 - - n/a

Copper (000 pounds)
Produced 321 13,211 44,372 57,904
Sold 321 13,222 43,532 57,075
Less: non-controlling
interests - (4,893) (10,231) (15,124)
-------- --------- --------- --------
Net to Aur 321 8,329 33,301 41,951
Inventory - 739 3,232 3,971

Other metals produced
and sold
Zinc (pounds) 825,000 - - 825,000
Gold (ounces) 300 - - 300
Silver (ounces) 11,000 - - 11,000

Cost per pound of
copper sold 0.91 0.61 0.74 0.71
---------------------------------------------------------------------------
Notes: 1. Tonnes of ore milled at Louvicourt and stacked at Andacollo and
Quebrada Blanca and all metal production figures are shown on a
100% basis with the exception of metal production figures for
Louvicourt, which represent Aur's 30% joint venture interest. Net
copper to Aur represents Aur's 30%, 70% and 90% beneficial
interests in Louvicourt, Andacollo and Quebrada Blanca,
respectively, in 2005 and Aur's 63% and 76.5% beneficial
interests in Andacollo and Quebrada Blanca in 2006.
2. Cash operating cost per pound of copper sold includes smelting,
refining, transportation and marketing costs, settlement
adjustments, provisional pricing, and is net of by-product
credits where applicable.



PRODUCTION STATISTICS
Nine months ended September 30
---------------------------------------------------------------------------
2006 Andacollo Quebrada Blanca Total
---------------------------------------------------------------------------
Ore (tonnes)
Heap leach 2,774,616 5,589,935 n/a
Dump leach 2,523,742 6,135,596 n/a

Copper Grade (%TCu)
Heap leach 0.72 1.30 n/a
Dump leach 0.39 0.56 n/a

Copper (000 pounds)
Produced 29,568 135,135 164,703
Sold 28,538 134,662 163,200
Less: non-controlling
interests (10,559) (31,643) (42,202)
--------- --------- --------
Net to Aur 17,979 103,019 120,998
Inventory 1,658 3,532 5,190

Cost per pound of
copper sold 0.76 0.76 0.76
---------------------------------------------------------------------------
2005 Louvicourt Andacollo Quebrada Blanca Total
---------------------------------------------------------------------------
Ore (tonnes) 819,920 3,100,000 5,524,067 n/a

Grade
Copper (%) 2.20 0.84 1.31 n/a
Soluble copper (%) n/a 0.72 1.10 n/a
Zinc (%) 1.85 - - n/a
Gold (oz/t) 0.03 - - n/a
Silver (oz/t) 0.95 - - n/a

Copper (000 pounds)
Produced 11,403 38,440 129,827 179,670
Sold 11,403 38,257 129,147 178,807
Less: non-controlling
interests - (12,403) (18,792) (31,195)
-------- --------- --------- --------
Net to Aur 11,403 25,854 110,355 147,612
Inventory - 739 3,232 3,971

Other metals produced
and sold
Zinc (pounds) 8,842,000 - - 8,842,000
Gold (ounces) 4,500 - - 4,500
Silver (ounces) 138,000 - - 138,000

Cost per pound of
copper sold 0.43 0.63 0.68 0.65
---------------------------------------------------------------------------
Notes: 1. Tonnes of ore milled at Louvicourt and stacked at Andacollo and
Quebrada Blanca and all metal production figures are shown on a
100% basis with the exception of metal production figures for
Louvicourt, which represent Aur's 30% joint venture interest. Net
copper to Aur represents Aur's 30%, 70% and 90% beneficial
interests in Louvicourt, Andacollo and Quebrada Blanca,
respectively, in 2005 and Aur's 63% and 76.5% beneficial
interests in Andacollo and Quebrada Blanca in 2006.
2. Cash operating cost per pound of copper sold includes smelting,
refining, transportation and marketing costs, settlement
adjustments, provisional pricing, and is net of by-product
credits where applicable.





AUR RESOURCES INC.
UNAUDITED INTERIM CONSOLIDATED STATEMENTS

September 30, 2006
(Expressed in thousands of United States dollars)

These interim financial statements have not been audited or reviewed
by the Corporation's external auditors



Consolidated Statements of Operations Three months Nine months
(in thousands of United States ended ended
dollars except earnings per share) September 30 September 30
-------------------------------------
(Unaudited) 2006 2005 2006 2005
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $

Mining revenues 202,346 108,097 556,892 314,246
---------------------------------------------------------------------------

Expenses
Mining 44,740 41,025 123,960 124,380
Business development 1,443 1,713 5,329 4,354
Administration 1,832 1,050 6,791 4,833
Depreciation and amortization 7,537 8,172 22,378 24,846
Mine closure and site restoration 1,008 1,588 1,707 3,089
Interest on long-term debt 2,109 2,109 6,328 6,328
Stock-based compensation 681 277 1,612 1,141
ENAMI copper price participation 9,496 2,074 25,229 3,062
Interest and other (note 7) (8,604) (2,192) (18,755) (7,106)
---------------------------------------------------------------------------

60,242 55,816 174,579 164,927
---------------------------------------------------------------------------

Earnings before taxes and
non-controlling interests 142,104 52,281 382,313 149,319

Income and resource taxes (27,386) (9,110) (73,984) (25,070)
---------------------------------------------------------------------------

Earnings before non-controlling
interests 114,718 43,171 308,329 124,249

Non-controlling interests (30,146)(12,153) (83,098) (23,485)
---------------------------------------------------------------------------

Net earnings for the period 84,572 31,018 225,231 100,764
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Basic earnings per share (note 6(b)) 0.87 0.33 2.33 1.06
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Diluted earnings per share (note
6(b)) 0.86 0.32 2.30 1.05
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Consolidated Statements of Retained
Earnings Three months Nine months
(in thousands of United States ended ended
dollars) September 30 September 30
-------------------------------------
(Unaudited) 2006 2005 2006 2005
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $
Retained earnings - beginning of
period 382,296 194,575 254,782 128,646

Net earnings for the period 84,572 31,018 225,231 100,764

Dividends on common shares - - (13,145) (3,817)
---------------------------------------------------------------------------

Retained earnings - end of period 466,868 225,593 466,868 225,593
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.



Consolidated Segmented Information on Operations for the three months ended
September 30
(in thousands of United States dollars)
(Unaudited)

Quebrada
2006 Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $

Mining revenues 30,299 172,047 - 202,346
---------------------------------------------------------------------------

Expenses
Mining 6,633 38,107 - 44,740
Business Development - - 1,443 1,443
Administration - - 1,832 1,832
Depreciation and amortization 639 6,794 104 7,537
Mine closure and site restoration 203 805 - 1,008
Interest on long-term debt - - 2,109 2,109
Stock-based compensation - - 681 681
ENAMI copper price participation - 9,496 - 9,496
Interest and other (967) (1,479) (6,158) (8,604)
---------------------------------------------------------------------------
6,508 53,723 11 60,242
---------------------------------------------------------------------------
Earnings (loss) before taxes 23,791 118,324 (11)142,104
Income and resource taxes (3,910) (21,780) (1,696)(27,386)
---------------------------------------------------------------------------
Earnings (loss) before non-controlling
interests 19,881 96,544 (1,707)114,718
Non-controlling interests (7,460) (22,686) - (30,146)
---------------------------------------------------------------------------

Net earnings (loss) 12,421 73,858 (1,707) 84,572
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Quebrada
2005 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $ $
Mining revenues 1,807 24,800 81,490 - 108,097
---------------------------------------------------------------------------

Expenses
Mining 863 8,092 32,070 - 41,025
Business Development - - - 1,713 1,713
Administration - - - 1,050 1,050
Depreciation and
amortization - 2,245 5,838 89 8,172
Mine closure and site
restoration 249 179 1,160 - 1,588
Interest on long-term debt - - - 2,109 2,109
Stock-based compensation - - - 277 277
ENAMI copper price
participation - - 2,074 - 2,074
Interest and other (613) 93 317 (1,989) (2,192)
---------------------------------------------------------------------------
499 10,609 41,459 3,249 55,816
---------------------------------------------------------------------------
Earnings (loss) before
taxes 1,308 14,191 40,031 (3,249) 52,281
Income and resource taxes 3,092 (2,133) (6,731) (3,338) (9,110)
---------------------------------------------------------------------------
Earnings (loss) before
non-controlling interests 4,400 12,058 33,300 (6,587) 43,171
Non-controlling interests - (4,461) (7,692) - (12,153)
---------------------------------------------------------------------------
Net earnings (loss) 4,400 7,597 25,608 (6,587) 31,018
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.



Consolidated Segmented Information on Operations for the nine months ended
September 30
(in thousands of United States dollars)
(Unaudited)

Quebrada
2006 Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $
Mining revenues 96,264 460,628 - 556,892
---------------------------------------------------------------------------

Expenses
Mining 21,747 102,213 - 123,960
Business Development - - 5,329 5,329
Administration - - 6,791 6,791
Depreciation and amortization 3,099 18,980 299 22,378
Mine closure and site restoration 614 1,093 - 1,707
Interest on long-term debt - - 6,328 6,328
Stock-based compensation - - 1,612 1,612
ENAMI copper price participation - 25,229 - 25,229
Interest and other (2,550) (4,056) (12,149)(18,755)
---------------------------------------------------------------------------
22,910 143,459 8,210 174,579
---------------------------------------------------------------------------
Earnings (loss) before taxes 73,354 317,169 (8,210)382,313
Income and resource taxes (12,516) (59,769) (1,699)(73,984)
---------------------------------------------------------------------------
Earnings (loss) before
non-controlling interests 60,838 257,400 (9,909)308,329
Non-controlling interests (22,614) (60,484) - (83,098)
---------------------------------------------------------------------------
Net earnings (loss) 38,224 196,916 (9,909)225,231
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Quebrada
2005 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $ $
Mining revenues 27,263 65,687 221,296 - 314,246
---------------------------------------------------------------------------

Expenses
Mining 13,027 24,109 87,244 - 124,380
Business Development - - - 4,354 4,354
Administration - - - 4,833 4,833
Depreciation and
amortization 766 6,791 17,127 162 24,846
Mine closure and site
restoration 497 430 2,162 - 3,089
Interest on long-term debt - - - 6,328 6,328
Stock-based compensation - - - 1,141 1,141
ENAMI copper price
participation - - 3,062 - 3,062
Interest and other (790) 441 (244) (6,513) (7,106)
---------------------------------------------------------------------------
13,500 31,771 109,351 10,305 164,927
---------------------------------------------------------------------------
Earnings (loss) before
taxes 13,763 33,916 111,945 (10,305)149,319
Income and resource taxes (1,918) (3,873) (19,286) 7 (25,070)
---------------------------------------------------------------------------
Earnings (loss) before
non-controlling interests 11,845 30,043 92,659 (10,298)124,249
Non-controlling interests - (9,857) (13,628) - (23,485)
---------------------------------------------------------------------------
Net earnings (loss) 11,845 20,186 79,031 (10,298)100,764
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.



As at
---------------------------
Consolidated Balance Sheets September 30 December 31
(in thousands of United States dollars) 2006 2005
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(Unaudited)
$ $

Assets

Current
Cash 592,510 361,263
Receivables 9,193 11,751
Inventories and prepaid expenses (note 2) 74,247 62,934
---------------------------------------------------------------------------
675,950 435,948
Property, plant and equipment 349,865 290,919
Future income and resource taxes 1,693 3,387
Long-term copper inventory and other (note 3) 21,753 23,127
---------------------------------------------------------------------------

1,049,261 753,381
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current
Accounts payable and accrued liabilities 76,677 55,224
Dividends payable - 12,384
Copper price participations (note 4) 35,229 15,959
Payable to non-controlling interests 41,985 6,534
Current portion of obligation under capital lease 2,654 3,387
Current portion of mine closure and site restoration 764 718
Current portion of senior notes 31,250 -
---------------------------------------------------------------------------

188,559 94,206
---------------------------------------------------------------------------

Senior notes (note 5) 93,750 125,000

Obligation under capital leases 4,562 6,060

Future income and resource taxes 22,909 24,897

Mine closure and site restoration 27,746 26,831

Non-controlling interests 48,067 33,108
---------------------------------------------------------------------------

197,034 215,896
---------------------------------------------------------------------------

385,593 310,102
---------------------------------------------------------------------------

Contingency (note 10)

Shareholders' equity
Share capital (note 6) 190,663 183,654
Contributed surplus -- stock-based compensation 4,008 2,396
Cumulative translation adjustment 2,129 2,447
Retained earnings 466,868 254,782
---------------------------------------------------------------------------

663,668 443,279
---------------------------------------------------------------------------

1,049,261 753,381
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.



Consolidated Segmented Balance Sheet Information as at
(in thousands of United States dollars)

September 30, 2006 Quebrada
(Unaudited) Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $
Assets
Current
Cash 105,669 198,775 288,066 592,510
Receivables 1,312 2,227 5,654 9,193
Inventories and prepaid expenses 13,606 56,236 4,405 74,247
---------------------------------------------------------------------------
120,587 257,238 298,125 675,950
Property, plant and equipment 40,461 214,826 94,578 349,865
Futture income and resource taxes - - 1,693 1,693
Long-term copper inventory and other - 20,872 881 21,753
---------------------------------------------------------------------------

161,048 492,936 395,277 1,049,261
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Liabilities
Current
Accounts payable and accrued
liabilities 18,252 53,231 5,194 76,677
Copper price participations - 25,229 10,000 35,229
Payable to non-controlling interests - 41,985 - 41,985
Current portion of obligation under
capital leases - 2,555 99 2,654
Current portion of mine closure and
site restoration - - 764 764
Current portion of senior notes - - 31,250 31,250
---------------------------------------------------------------------------
18,252 123,000 47,307 188,559
Senior notes - - 93,750 93,750
Obligation under capital leases - 4,368 194 4,562
Future income and resource taxes 3,753 19,156 - 22,909
Mine closure and site restoration 5,408 19,204 3,134 27,746
Non-controlling interests 48,067 - - 48,067
---------------------------------------------------------------------------
75,480 165,728 144,385 385,593
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Quebrada
December 31, 2005 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $ $
Assets
Current
Cash 1,489 45,224 37,805 276,745 361,263
Receivables 233 2,410 6,442 2,666 11,751
Inventories and prepaid
expenses 70 9,798 50,630 2,436 62,934
---------------------------------------------------------------------------
1,792 57,432 94,877 281,847 435,948
Property, plant and
equipment - 32,392 219,577 38,950 290,919
Future income and
resource taxes - - - 3,387 3,387
Long-term copper
inventory and other - - 22,057 1,070 23,127
---------------------------------------------------------------------------

1,792 89,824 336,511 325,254 753,381
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Liabilities
Current
Accounts payable and
accrued liabilities 566 7,579 38,740 8,339 55,224
Dividends payable - - - 12,384 12,384
Copper price
participations - - 5,959 10,000 15,959
Payable to
non-controlling interests - - 6,534 - 6,534
Current portion of
obligation under capital
leases - - 3,387 - 3,387
Current portion of mine
closure and site
restoration 718 - - - 718
---------------------------------------------------------------------------
1,284 7,579 54,620 30,723 94,206
Senior notes - - - 125,000 125,000
Obligation under capital
leases - - 6,060 - 6,060
Future income and
resource taxes - 3,670 21,227 - 24,897
Mine closure and site
restoration 1,364 5,037 19,689 741 26,831
Non-controlling interests - 25,453 7,655 - 33,108
---------------------------------------------------------------------------

2,648 41,739 109,251 156,464 310,102
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.



Three months Nine months
Consolidated Statements of Cash Flow ended ended
(in thousands of United States September 30 September 30
dollars) -------------------------------------
(Unaudited) 2006 2005 2006 2005
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $
Operating activities
Net earnings for the period 84,572 31,018 225,231 100,764
Non-cash items -
Depreciation and amortization 7,537 8,172 22,378 24,846
Future income and resource taxes 396 1,546 (294) 5,071
Mine closure and site restoration 751 815 795 2,154
Gain on sale of marketable securities - - - (1,804)
Gain on disposal of property, plant
and equipment (10) (377) (150) (522)
Interest on obligation on properties
purchased 4 8 13 26
Stock-based compensation 681 277 1,612 1,141
Copper price participation 9,496 2,074 25,229 3,062
Non-controlling interests 30,146 12,153 83,098 23,485
---------------------------------------------------------------------------

133,573 55,686 357,912 158,223
Net change in non-cash working
capital items (note 8) 9,346 8,647 12,699 2,256
---------------------------------------------------------------------------

142,919 64,333 370,611 160,479
---------------------------------------------------------------------------

Financing activities
Dividends on common shares (13,073) (3,817) (25,457) (11,773)
Repayments of capital leases (1,766) (865) (3,392) (2,841)
Payments of non-controlling interests - - (32,687) (3,589)
Payment of copper price participation
to ENAMI - - (5,916) -
Common shares issued 1,209 881 7,009 2,574
Foreign exchange and other 1,373 584 90 (171)
---------------------------------------------------------------------------
(12,257) (3,217) (60,353) (15,800)
---------------------------------------------------------------------------

Investing activities
Payment of copper price participation - - (10,000) (10,000)
Property, plant and equipment (28,404) (8,421) (44,787) (9,868)
Mineral property development (8,685) (4,410) (24,766) (8,568)
Proceeds on sale of marketable
securities - - - 2,213
Proceeds on disposal of property,
plant and equipment 316 1,062 542 1,225
---------------------------------------------------------------------------

(36,773)(11,769) (79,011) (24,998)
---------------------------------------------------------------------------

Increase in cash for the period 93,889 49,347 231,247 119,681

Cash -- beginning of period 498,621 276,854 361,263 206,520
---------------------------------------------------------------------------

Cash -- end of period 592,510 326,201 592,510 326,201
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.



Consolidated Segmented Information on Cash Flow for the three months ended
September 30
(in thousands of United States dollars)
(Unaudited)



Quebrada
2006 Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $
Operating activities
Net earnings (loss) 12,421 73,858 (1,707) 84,572
Non-cash items 8,306 38,478 2,217 49,001
---------------------------------------------------------------------------
20,727 112,336 510 133,573
Net change in non-cash working
capital items 2,773 11,321 (4,748) 9,346
---------------------------------------------------------------------------

23,500 123,657 (4,238)142,919
---------------------------------------------------------------------------

Financing activities
Dividends on common shares - - (13,073)(13,073)
Repayments of capital leases - (1,766) - (1,766)
Common shares issued - - 1,209 1,209
Foreign exchange and other 14 523 836 1,373
---------------------------------------------------------------------------
14 (1,243) (11,028)(12,257)
---------------------------------------------------------------------------
Investing activities
Property, plant and equipment (6,291) (2,391) (19,722)(28,404)
Mineral property development - - (8,685) (8,685)
Proceeds on disposal of property,
plant and equipment - - 316 316
---------------------------------------------------------------------------

(6,291) (2,391) (28,091)(36,773)
---------------------------------------------------------------------------

Intersegment distributions to
corporate 52 227 (279) -
---------------------------------------------------------------------------
Increase (decrease) in cash for
the period 17,275 120,250 (43,636) 93,889
Cash - beginning of period 88,394 78,525 331,702 498,621
---------------------------------------------------------------------------

Cash - end of period 105,669 198,775 288,066 529,510
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Quebrada
2005 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $ $

Operating activities
Net earnings (loss) 4,400 7,597 25,608 (6,587) 31,018
Non-cash items (4,267) 9,019 16,177 3,739 24,668
---------------------------------------------------------------------------
133 16,616 41,785 (2,848) 55,686
Net change in non-cash
working capital items 6,667 549 3,264 (1,833) 8,647
---------------------------------------------------------------------------

6,800 17,165 45,049 (4,681) 64,333
---------------------------------------------------------------------------

Financing activities
Repayments of capital
leases - - - (3,817) (3,817)
Payments of
non-controlling interests - - (865) - (865)
Common shares issued - - - 881 881
Foreign exchange and other 297 (54) (216) 557 584
---------------------------------------------------------------------------

297 (54) (1,081) (2,379) (3,217)
---------------------------------------------------------------------------

Investing activities
Property, plant and
equipment - (2,680) (178) (5,563) (8,421)
Mineral property
development - - - (4,410) (4,410)
Proceeds on disposal of
property, plant and
equipment 1,062 - - - 1,062
---------------------------------------------------------------------------

1,062 (2,680) (178) (9,973)(11,769)
---------------------------------------------------------------------------

Intersegment distributions
to corporate (8,144) (90) 934 7,300 -
---------------------------------------------------------------------------
Increase (decrease) in
cash for the period 15 14,341 44,724 (9,733) 49,347
Cash - beginning of
period 1,004 12,920 70,155 192,775 276,854
---------------------------------------------------------------------------

Cash - end of period 1,019 27,261 114,879 183,042 326,201
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.



Consolidated Segmented Information on Cash Flow for the nine months ended
September 30
(in thousands of United States dollars)
(Unaudited)

Quebrada
2006 Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $
Operating activities
Net earnings (loss) 38,224 196,916 (9,909)225,231
Non-cash items 26,407 103,781 2,493 132,681
---------------------------------------------------------------------------
64,631 300,697 (7,416)357,912
Net change in non-cash working
capital items 7,964 13,101 (8,366) 12,699
---------------------------------------------------------------------------
72,595 313,798 (15,782)370,611
---------------------------------------------------------------------------

Financing activities
Dividends on common shares - - (25,457)(25,457)
Repayments of capital leases - (3,392) - (3,392)
Payments of non-controlling interests - (32,687) - (32,687)
Payment of copper price participation
to ENAMI - (5,916) - (5,916)
Common shares issued - - 7,009 7,009
Foreign exchange and other (141) 80 151 90
---------------------------------------------------------------------------

(141) (41,915) (18,297)(60,353)
---------------------------------------------------------------------------

Investing activities
Payment of copper price participation - - (10,000)(10,000)
Property, plant and equipment (11,694) (3,994) (29,099)(44,787)
Mineral property development - - (24,766)(24,766)
Proceeds on disposal of property,
plant and equipment 3 - 539 542
---------------------------------------------------------------------------

(11,691) (3,994) (63,326)(79,011)
---------------------------------------------------------------------------
Intersegment distributions to
corporate (318)(106,919) 107,237 -
---------------------------------------------------------------------------
Increase in cash for the period 60,445 160,970 9,832 231,247
Cash - beginning of period 45,224 37,805 278,234 361,263
---------------------------------------------------------------------------

Cash - end of period 105,669 198,775 288,066 592,510
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Quebrada
2005 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ $ $ $ $
Operating activities
Net earnings (loss) 11,845 20,186 79,031 (10,298)100,764
Non-cash items (195) 20,951 37,179 (476) 57,459
---------------------------------------------------------------------------
11,650 41,137 116,210 (10,774)158,223
Net change in non-cash
working capital items 4,768 1,865 1,747 (6,124) 2,256
---------------------------------------------------------------------------

16,418 43,002 117,957 (16,898)160,479
---------------------------------------------------------------------------

Financing activities
Dividends on common shares - - - (11,773)(11,773)
Repayments of capital
leases - (180) (2,661) - (2,841)
Payments of
non-controlling interests - (3,589) - - (3,589)
Common shares issued - - - 2,574 2,574
Foreign exchange and other 266 (140) (558) 261 (171)
---------------------------------------------------------------------------
266 (3,909) (3,219) (8,938)(15,800)
---------------------------------------------------------------------------

Investing activities
Payment of copper price
participation - - - (10,000)(10,000)
Property, plant and
equipment - (3,743) (455) (5,670) (9,868)
Mineral property
development - - - (8,568) (8,568)
Proceeds on sale of
marketable securities - - - 2,213 2,213
Proceeds on disposal of
property, plant and
equipment 1,225 - - - 1,225
---------------------------------------------------------------------------

1,225 (3,743) (455) (22,025)(24,998)
---------------------------------------------------------------------------

Intersegment distributions
to corporate (17,351) (9,070) (10,392) 36,813 -
---------------------------------------------------------------------------
Increase (decrease) in
cash for the period 558 26,280 103,891 (11,048)119,681
Cash - beginning of
period 461 981 10,988 194,090 206,520
---------------------------------------------------------------------------

Cash - end of period 1,019 27,261 114,879 183,042 326,201
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.


AUR RESOURCES INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine month periods ended September 30, 2006 and 2005
(Tabular information in thousands of United States dollars except where otherwise noted)
(Unaudited)

1. Accounting policies

The interim unaudited consolidated financial statements of Aur Resources Inc. ("Aur") have been prepared in accordance with accounting principles generally accepted in Canada using the same accounting policies as those disclosed in note 1 to Aur's audited consolidated financial statements for the year ended December 31, 2005. These interim unaudited consolidated financial statements should be read in conjunction with Aur's audited annual consolidated financial statements included in Aur's Annual Report for the year 2005.



2. Inventories and prepaid expenses

September 30 December 31
2006 2005
---------------------------
$ $
Cathode copper 4,456 2,867
In-process inventories 51,016 43,808
Mine supplies 12,518 12,172
Prepaid expenses 6,257 4,087
---------------------------

74,247 62,934
---------------------------
---------------------------


3. Long-term copper inventory and other

September 30 December 31
2006 2005
---------------------------
$ $
Long-term in-process copper inventory 18,747 18,747
Deferred financing cost 881 1,070
Advances to Quebrada Blanca minesite employees 2,125 3,310
---------------------------

21,753 23,127
---------------------------
---------------------------


4. Copper price participations

Teck Cominco Limited ("Teck Cominco") is entitled to a copper price participation of $10 million for 2006 and $2.5 million quarterly beginning in 2007 to a maximum of $40 million on or before December 31, 2012 if the United States inflation adjusted copper prices exceeds a threshold amount, which was $1.26 per pound at December 31, 2005. Aur paid Teck Cominco $10 million on January 7, 2005 for 2004 and a further $10 million on January 6. 2006 for 2005 and has accrued $10 million for 2006 with a corresponding increase in property plant equipment assets at Quebrada Blanca as the copper price exceeded the threshold amount in 2004 and 2005 and is expected to do so in 2006. Aur's property, plant and equipment assets at Quebrada Blanca are increased by these accruals with amortization commencing once payment to Teck Cominco is made. A maximum of $20 million of future payments for 2006-2012 which depends upon future copper prices remains to be paid to Teck Cominco.

ENAMI is entitled to receive a per pound price participation in copper sales from the Quebrada Blanca Mine equal to 10% of the amount by which the average realized sales price per pound of copper, less transportation and certain related costs, sold by the Mine in any calendar year exceeds a specified inflation adjusted indexed price for such year. The inflation adjusted maximum entitlement to ENAMI for this price participation was estimated at $48.2 million at December 31, 2005, of which $5.9 million was paid on May 8, 2006 as the average realized copper price for 2005 exceeded the inflation adjusted copper price for the year. An additional $25.2 million liability to ENAMI has been accrued at September 30, 2006 as the average realized copper price for 2006 is expected to exceed the inflation adjusted copper price for the year.

5. Senior notes

On March 10, 2003, Aur issued US$125 million of senior unsecured notes (the "Notes") to a number of U.S. insurance companies. The Notes bear interest at 6.75% per annum, require semi-annual interest payments and are repayable at any time in whole or in part, subject to certain specified prepayment premiums based on prevailing interest rates at the time of prepayment.



The scheduled principal repayments are as follows:

September 30 December 31
2006 2005
------------ -----------
$ $
Current portion
March 2007 31,250 -
------------ -----------
Long term portion
March 2007 - 31,250
March 2008 31,250 31,250
March 2009 31,250 31,250
March 2010 31,250 31,250
------------ -----------
93,750 125,000
------------ -----------
125,000 125,000
------------ -----------
------------ -----------


6. Share capital, earnings per share and stock-based compensation

(a) Issued and outstanding

Three months ended Three months ended
September 30, 2006 September 30, 2005
---------------------------------------
Shares Amount Shares Amount
---------------------------------------
# 000's $ # 000's $
Common shares
Balance - beginning of period 97,362 189,455 95,251 179,962
Share purchase options exercised 215 1,208 280 881
---------------------------------------
Balance - end of period 97,577 190,663 95,531 180,843
---------------------------------------
---------------------------------------


(b) Earnings per common share

Three months ended Nine months ended
September 30 September 30
--------------------------------------
2006 2005 2006 2005
--------------------------------------
$ $ $ $
(i) Basic
Numerator
Net earnings available to
shareholders 84,572 31,018 225,231 100,764
--------------------------------------
Denominator (# 000's)
Weighted average number of shares 96,845 95,136 96,845 95,136
--------------------------------------
Basic earnings per share 0.87 0.33 2.33 1.06
--------------------------------------
--------------------------------------

(ii) Diluted
Numerator
Income available to shareholders 84,572 31,018 225,231 100,764
--------------------------------------
Denominator (# 000's)
Weighted average number of shares 96,845 95,136 96,845 95,136
Potential incremental issuance from
stock- based compensation 83 249 83 249
Potential issuance of shares from
purchase options 902 705 902 705
--------------------------------------
97,830 96,090 97,830 96,090
--------------------------------------
Diluted earnings per share 0.86 0.32 2.30 1.05
--------------------------------------
--------------------------------------


(c) Stock-based compensation plans

At September 30, 2006, Aur had one stock-based compensation plan, a common share purchase option plan (the "Plan"), which is described below.

The Plan is for directors, officers and senior management personnel of Aur. Options under the Plan are typically granted in such numbers as reflect the level of responsibility of the particular optionee and his or her contribution to the business and activities of Aur. Options granted under the Plan typically have a five year term and are typically made cumulatively exercisable by the holders thereof as to a proportionate part of the aggregate number of shares subject to the option over a specified term. Except in specified circumstances, options are not assignable and terminate upon the optionee ceasing to be employed by or associated with Aur. The terms of the Plan further provide that the price at which shares may be issued under the Plan cannot be less than the market price of the shares when the relevant options are granted.

Aur's common shares are listed on the Toronto Stock Exchange, trading in Canadian dollars, and the Santiago Stock Exchange, trading in United States dollars. The following table summarizes information regarding Aur's outstanding and exercisable common share purchase options as at September 30, 2006:



Outstanding Exercisable
--------------------------------------------------------------------
Weighted Weighted
average average
Range of Weighted exercise exercise
exercise average price price
prices months per per
per share Shares remaining share Shares share
--------------------------------------------------------------------
CDN$ # 000's # CDN$ # 000's CDN$
3.30 to 5.90 184 23 4.11 102 4.46
6.11 to 8.05 961 41 6.77 481 6.56
10.40 to 11.21 461 50 11.17 168 11.19
12.63 to 18.41 445 53 15.67 172 16.03
----- -----
2,051 923
----- -----
----- -----


The number of stock options outstanding at September 30, 2006 represents 2.1% of Aur's issued and outstanding common shares.

The following table summarizes information regarding Aur's common share purchase options for the periods ended September 30, 2006:



Three months ended Nine months ended
------------------------------------------
Weighted Weighted
average average
exercise exercise
price price
Shares per share Shares per share
------------------------------------------
# 000's CDN$ # 000's CDN$

Balance - beginning of period 2,091 8.38 2,876 6.94
Granted 175 18.38 445 15.67
Exercised (215) 6.28 (1,270) 5.95
------ -------

Balance - end of period 2,051 9.45 2,051 9.45
------ -------
------ -------


For purposes of stock-based compensation, the fair value of each option was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants as follows: dividend yield of 0.6% (2005 - 0.9%), expected volatility of 42% (2005 - 42%), risk-free interest rate of 4.7% (2005 - 3.6%) and expected life of 24 months (2005 - 24 months).



7. Interest and other

Three months Nine months
ended September 30 ended September 30
----------------------------------------
2006 2005 2006 2005
----------------------------------------
$ $ $ $
Interest on obligation under
capital leases 89 125 300 410
Interest and other income (8,901) (2,552) (18,372) (6,108)
Interest and financing costs 4 16 13 549
Foreign exchange (77) 564 (979) 134
Gain on sale of marketable
securities - - - (1,804)
Gain on disposal of property,
plant and equipment (10) (377) (150) (522)
Miscellaneous 291 30 433 235
----------------------------------------

(8,604) (2,192) (18,755) (7,106)
----------------------------------------
----------------------------------------


8. Supplementary cash flow information

Three months Nine months
ended September 30 ended September 30
----------------------------------------
2006 2005 2006 2005
----------------------------------------
$ $ $ $
Net change in non-cash working
capital:
Receivables (2,443) 4,639 2,558 577
Inventories (5,158) (3,880) (11,312) (7,206)
Accounts payable and accrued
liabilities 16,947 7,888 21,453 8,885
----------------------------------------
9,346 8,647 12,699 2,256
----------------------------------------
----------------------------------------
Other information:
Interest paid 4,219 4,219 8,438 8,438
Income, resource and capital
taxes paid 16,071 362 53,774 11,487


9. Financial instruments

Fair value of financial instruments

The carrying amount of cash, accounts receivable and current liabilities approximate their fair value due to the short term maturities of these instruments.

Derivatives

In January 2006, Aur entered into monthly forward sales contracts to hedge a portion of the scheduled zinc production from its wholly owned Duck Pond copper-zinc-silver-gold deposit currently under development and thereby protected itself from the risk that falling zinc prices would reduce revenue from zinc sales from its Duck Pond Mine.

Effective January 1, 2006, Aur adopted the Canadian Institute of Chartered Accountants Accounting Guideline 13, "Hedging Relationships", relating to the circumstances in which hedge accounting is appropriate, including the identification, documentation, designation and effectiveness of hedges and the discontinuance of hedge accounting.

Aur formally documents the relationship between the derivative and hedged item. Aur also notes the risk management objective and strategy for using the derivative. This process includes linking all derivatives to specific commitments for forecasted transactions.

Aur will recognize revenue on zinc forward sales contracts when the designated production is delivered to meet the contracted commitment. The average zinc price over the term of each monthly forward contract is used to calculate the revenue from the sale.

Aur's hedging commitments arising from this transaction, which are spread evenly, on a monthly basis, over the period July 2007 through December 2011 and cover approximately 75% of scheduled zinc production during the period, are:



Zinc Forward Sales
------------------------------------------------
Year Hedge Tonnage Average Price Average Price
------------------------------------------------
$/tonne $/lb

2007 (July-December) 12,700 1,857 0.84
2008 25,900 1,723 0.78
2009 25,900 1,584 0.72
2010 25,900 1,479 0.67
2011 25,900 1,393 0.63
------------------------------------------------

116,300 1,579 0.72
------------------------------------------------
------------------------------------------------


At September 30, 2006, the estimated fair value of Aur's zinc forward sales, based on a forward spot price of $1.02 per pound, was a loss of $77.7 million.

10. Contingency

In 2003, the Chilean Internal Revenue Service (the "IRS") issued to CMQB a notice of reassessment in respect of the deduction of certain components of guarantee fees owed to Aur and claimed as expenses by CMQB. CMQB contested such reassessment and, in August 2005, the Iquique Tax Court rendered a judgement confirming certain elements of the IRS reassessment. As a consequence of the foregoing, the IRS assessed CMQB with taxes of $1.9 million, including interest, penalties and inflation adjustment to such date. CMQB appealed such judgement to the Court of Appeals of Iquique and, in October, 2006, the Court of Appeals annulled such judgement. As a result, CMQB's contestation of the original IRS reassessment will be turned to the Iquique Tax Court for rehearing. It is the opinion of management and CMQB's legal counsel that CMQB's income tax filings with respect to the guarantee fees are correct and that the payment of the guarantee fees should not attract withholding taxes. Should the IRS ultimately be successful in its reassessment, Aur would record a pre-tax charge to earnings equal to its proportionate share of the amount of the reassessment, plus interest, penalties and inflation adjustment to the date of final judgement. At this time, the outcome of the appeal and ultimate resolution of this reassessment cannot be determined and, accordingly, the loss, if any, has not been recorded in the consolidated financial statements.

Contact Information

  • Aur Resources Inc.
    Dr. James W. Gill
    President and Chief Executive Officer
    (416) 362-2614
    or
    Aur Resources Inc.
    Mr. Ed Guimaraes
    Vice-President and Controller
    (416) 362-2614
    (416) 367-0427 (FAX)
    Website: www.aurresources.com