Shares Listed: Toronto Stock Exchange - Ticker Symbol - ARZ
NYSE Amex - Ticker Symbol - AZK
U.S. Registration: (File 001-31893)
News Release Issue # 1 - 2011
VANCOUVER,
Jan. 11 /PRNewswire/ - Aurizon Mines
Ltd. (TSX:ARZ; NYSE Amex:AZK) announces its 2010 gold production
results and 2011 production guidance, as well as capital and
exploration budgets.
Highlights:
- Gold production in 2010 of 141,000 ounces.
- An increase in 2011 gold production to 165,000 - 170,000
ounces.
- Expenditures of $51.1 million at Casa Berardi for shaft
deepening, equipment, infrastructure and sustaining capital.
- Exploration expenditures at Casa Berardi of $13.4 million
including 115,000 metres of drilling.
- Expenditures of $5.4 million at Joanna for metallurgical
testwork and completion of the final feasibility and related
studies.
- Exploration drilling program of 26,000 metres on Joanna's Heva
deposit at a cost of $3.7 million.
- Exploration expenditures of $21.2 million on Aurizon's other
properties including 92,000 meters of drilling.
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"Following a transitional year at Casa Berardi,
we are looking forward to increased gold production in 2011."
said David Hall, President and Chief
Executive Officer. "We are making a significant investment in
infrastructure at Casa Berardi to develop the lower levels of the
West Mine and secure a strong production profile into the future.
In addition, we are also investing approximately $39 million to actively explore eight properties
and create further value for our shareholders."
2010 Gold Production
Gold production from Aurizon's 100% owned Casa
Berardi mine for the year ended December 31,
2010, totalled 141,116 ounces from the processing of 722,745
tonnes at an average grade of 6.8 grams of gold per tonne.
Recoveries for the year averaged 89.8%. Gold production was
within the Company's 2010 guidance of 140,000 to 145,000 ounces and
it is anticipated that total cash costs per ounce will be in line
with the Company's guidance of US$535
per ounce for 2010.
Fourth Quarter 2010 Gold Production
Ore processed in the fourth quarter 2010
amounted to 191,697 tonnes at an average grade of 6.9 grams of gold
per tonne. Metallurgical recoveries of 88.6% resulted in gold
production of 37,496 ounces in the quarter.
Forecast Gold Production for 2011
It is estimated that Casa Berardi will produce
between 165,000 to 170,000 ounces of gold in 2011 at an average
grade of 8.0 grams of gold per tonne. Average daily ore
throughput is estimated at 1,965 tonnes per day, similar to
2010. The increase in gold production for 2011 is
attributable to the average gold grades returning to the average
underground reserve grade of the mine following a year of mine
sequencing lower grade ore. Approximately 44% of production
will come from Zone 113, 39% from the Lower Inter Zone, and the
residual 17% from smaller zones and development material.
Assuming a Canadian/U.S. dollar exchange rate at
parity, total cash costs per ounce for the year are anticipated to
approximate US$495 per ounce in
2011. Onsite mining, milling and administration costs are
expected to average $117 per tonne,
up approximately 7% from 2010 projected costs as a result of
reduced development ore, smaller stopes, and longer haulage
distances.
The following key parameters form the basis of
the 2011 production guidance and operating cost estimate:
- Ore grade of 8.0 grams per tonne
- Ore throughput of 1,965 tonnes per day
- Mill recoveries of 92%
- Canadian dollar at par against the U.S. dollar
- Operating costs of $117 per
tonne
As quarterly operating results are expected to
fluctuate throughout the year, they will not necessarily be
reflective of these full year averages.
Casa Berardi Gold Mine, Quebec
Capital expenditures at Casa Berardi are
estimated to total $51.1 million in
2011, of which approximately 50% comprises expenditures that will
allow access to the lower portion of Zone 113 as well as the
recently discovered gold mineralization at depth in Zones 118 and
123, east of the West mine production shaft. These expenditures are
comprised of the following:
|
|
Capital expenditures |
2011 Budget |
Sustaining capital |
$21.8 million |
Shaft deepening |
$13.6 million |
Mining equipment |
$8.3 million |
Mining infrastructure and tailings pond |
$7.4 million |
Total |
$51.1 million |
Sustaining capital expenditures at Casa Berardi
are budgeted to be $21.8 million and
will include development of the upper and lower portions of Zone
113, as well as development to access Zones 118 and 123 from the
810 metre level down to approximately the 1,000 metre level.
As previously reported, this development will provide drill bases
to test the depth extensions of both the 123 and 118 Zones as well
as commence mine development of these zones.
In 2011, $13.6
million is budgeted to commence the deepening of the West
Mine production shaft a further 320 metres to provide access to the
lower portion of the 113, 118 and 123 Zones. The shaft,
currently at a depth of 760 metres, will be extended to
approximately 1,080 metres below surface. This will provide a
drift access at the 1,010 metre level from these zones to the
shaft. The estimated cost of the shaft deepening, drift
access to 118 and 123 zones, and related infrastructure is
approximately $32 million and is
expected to start in early 2011 and be completed at the end of the
third quarter of 2012.
Mining equipment replacements and fleet
expansion to support the expanded development activities is
budgeted at $8.3 million. A
further $7.4 million will be invested
in underground infrastructure additions and tailings pond
construction.
Casa Berardi Exploration
An additional $13.4
million will be invested on exploration at Casa Berardi in
2011 which will include approximately 115,000 metres of surface and
underground diamond drilling. Up to 4 surface and 8
underground drill rigs will be active during the course of
2011. The Company expects to capitalize these costs as the
primary objective of the drilling will be to improve the quality of
the known reserves and resources as well exploring for extensions
of these structures.
Surface exploration will focus on the extension
of the Principal zone, where a prefeasibility study of an open pit
mining operation is nearing completion. In addition, the
surface exploration program will test the depth extension of the
Lower Inter zone, and the depth and lateral extensions of the East
mine area as well as the potential for open pit operations.
Underground rigs will primarily focus on infill
and step out drilling the upper extensions of Zones 118 and 123
from the recently completed 550 level drift. Drilling of the
depth extensions of these zones will resume in 2012 following
development of the required access from the 810 level drift.
Other underground rigs will perform infill and step out drilling on
existing zones in the West mine area, and explore Zones 146 and 157
in the East mine area.
Joanna Gold Development Property,
Quebec
Feasibility study work on the Hosco open pit
deposit will continue in 2011 with completion of the study
anticipated by mid-year. Results from the step out drill
program, performed in 2010, in the area of the Hosco pit will be
incorporated into an updated mineral resource estimate and block
model for inclusion in the study. The evaluation and
optimization of alternate metallurgical processes to treat the
Hosco ore will continue through the first quarter of 2011. A
detailed evaluation of the use of an autoclave is being conducted
while continuing to optimize the Albion technology to improve
recoveries and reduce reagents consumption. Concurrently,
detailed engineering, pit optimization, and environmental impact
studies are underway. Following completion of the feasibility
study, permitting, site preparation, and procurement of major
long-lead items will be initiated. The Company has budgeted
$5.4 million for these activities in
2011 and expects the majority of these costs to be expensed.
In addition, an initial $3.7 million exploration program, comprising
26,000 metres of surface drilling, will concentrate on the Heva
deposit, approximately 3 kilometres west of the proposed Hosco
pit. The objective of the 2011 drill campaign is to perform
step-out drilling on 50 metre spacing along the 2.5 kilometre
strike length of the Heva deposit and potential satellite zones,
down to 150 metres, in order to extend the mineral resources
contour and to increase the quality of the existing indicated and
inferred mineral resources. Two to three drill rigs will be
active during the first five months of 2011.
Other Properties
Aggressive exploration programs are also planned
at the Company's other Quebec
properties. A total $21.2
million will be invested in the following properties during
2011:
|
|
Exploration expenditures |
2011 Budget |
Fayolle Property |
$6.5 million |
Marban Property |
$4.0 million |
Rex South Property |
$4.1 million |
Opinaca-Wildcat Properties |
$3.6 million |
Duverny Property |
$1.0 million |
Patris Property |
$0.6 million |
General exploration |
$1.4 million |
Total |
$21.2 million |
Fayolle Property
Following encouraging exploration results in
2010, at least 45,000 metres of drilling is planned in 2011,
divided between the following two objectives: a) continue to work
on the Fayolle deposit by defining the size and geometry of the
deposit on a 25 - 50 metre drill spacing; and b): initiating an
exploration program to test similar geological controls to the
Fayolle deposit inside the 2 kilometre long gold bearing structure
that crosses the property. The Company expects to generate a
mineral resource estimate from the 2011 drill activity. The
2011 budget for this program is $6.5
million.
Aurizon may earn up to a 65% interest in the
Fayolle Property, comprising 39 mining claims covering 1,373
hectares across the Porcupine-Destor Break, one of the most
productive gold bearing structures of the Abitibi Belt. The
Fayolle Property is situated 10 kilometres north of Aurizon's
Joanna Project in north-western Quebec.
Marban Property
Initial results from drilling the Marban
property in 2010 confirm the possibility of defining a large volume
medium grade deposit above 200 metres. In 2011, Aurizon has
planned an initial $4.0 million
exploration program comprising 32,000 metres of drilling to
continue testing the lateral and depth extensions of the existing
mineral resources. Two to three drill rigs are expected to be
active on the property.
Aurizon may earn up to a 65% interest in the
Marban property, which comprises forty-two mining claims and three
mining concessions covering 976 hectares in the heart of the
Malartic gold mining camp in the
Abitibi region of Quebec, subject
to underlying royalties. The Marban block covers 3 kilometres
of a 1 kilometre wide favourable gold bearing deformation zone
punctuated by historic production, current mineral resources and
exploration potential. Underground potential can be projected
by following down dip extensions, similar to other deposits in the
Abitibi area.
Rex South
Property
Following the discovery of a major
gold-silver-copper-tungsten mineralized zone on the Rex South
property in 2010, the Company has planned a 2011 exploration budget
totalling $4.1 million. The
discovered zone occurs in an area of significant outcrop exposure
and has been recognized over a strike length of 3.3 kilometres and
a width of 50 to 200 metres, and is open in all directions.
In 2011, a 4,000 metre drill program is planned to test the
discovery zone as well as surface sampling other copper-gold
anomalies indentified through geophysical and geochemical
surveys.
Aurizon may earn up to a 65% interest in the Rex
South Property comprising 1,822 claims covering a surface area of
794 square kilometres, about 145 kilometres southeast of the
community of Puvirnituq in
northern Quebec. The Rex South property hosts strong
exploration potential based on extensive geochemical anomalies,
geophysical signatures, and the presence of several mineralized
prospects including high-grade gold and copper values obtained by
grab samples.
Opinaca-Wildcat Properties
Following the signing of letters of intent in
the third quarter 2010, the Company plans to initiate an
exploration program of surface sampling, geophysical surveys and
drilling at the Opinaca-Wildcat properties in 2011 at a budgeted
cost of $3.6 million.
Approximately $1.0 million of
expenditures, including 2,000 metres of drilling, is planned for
the Opinaca property, and approximately $2.6
million of expenditures, including 5,000 metres of drilling,
is planned for the Wildcat property.
Aurizon can earn up to a 60% interest in the
Opinaca Property (Opinaca A and B), comprising 649 mineral claims
covering 338 square kilometres, and up to a 65% interest in the
Wildcat Property, comprising 432 mineral claims covering 225 square
kilometres. Both properties are situated in the James Bay area, 350 kilometres north of
Matagami, Quebec and in close
proximity to Goldcorp's Eleonore project.
Duverny Property
At Duverny, a $1.0
million exploration program is planned for 2011 comprising
soil and rock sampling, geophysical surveys, followed by 5,000
metres of drilling.
Aurizon may earn a 100% interest in 44 mineral
claims covering 2,100 hectares, 25 kilometres northeast of
Amos, Quebec, subject to
underlying royalties. The Duverny Property covers part of a
mafic volcanic belt associated with the Chicobi fault
corridor. Gold mineralization indicators in this area have
similarities to the Timmins
context, such as carbonate saturation and the presence of extensive
quartz vein systems associated with folded structures.
Patris Property
A $0.6 million
exploration program, comprising drilling a minimum of 4,000 metres,
is planned in 2011 for the Company's recently optioned Patris
property.
Aurizon may earn up to a 60% interest in the
Patris property comprising 50 mineral claims covering a surface
area of 22 square kilometres, 30 kilometres northeast of
Rouyn-Noranda, and 7 kilometres
from the Company's Joanna property. The Patris property has a
very strong potential for gold discoveries similar to deposits
known at other major mining camps in the Abitibi belt, as it covers
the LaPause Fault over 4 kilometres. This regional structure
limits the northern edge of the Cadillac Tectonic Zone, connecting
the area to the Malartic
camp. Historical gold showings are already known within the
property area.
Kipawa Gold - Rare Earth Elements Property, Quebec
At Kipawa, the
2010 exploration drill program on the gold targets did not provide
sufficient encouraging results to warrant further work at this time
in view of Aurizon's other exploration priorities. However,
rare earth elements prospecting produced encouraging results.
Due to the increasing interest in rare earth elements, the Company
is reviewing alternatives for the future exploration of
Kipawa.
Corporate Development
Aurizon continues to focus on its organic growth
within the Abitibi area, whilst evaluating accretive opportunities
within North America to enhance
its reserve and production profile.
2010 Year End Financial Results
Aurizon expects to release fourth quarter and
2010 year-end financial results on or about March 17, 2011, and will hold a conference call
to discuss the results. Details of the call, including times
and contact numbers, will be announced closer to the date.
Aurizon also expects to release an updated
mineral reserves and resources estimate for the Casa Berardi mine
in early March 2011.
Quality Control
Information of a scientific or technical nature in this news
release was prepared under the supervision of Martin Bergeron, P.Eng., Vice President,
Operations and Martin Demers, P.
Geo., Exploration Manager, both qualified persons under National
Instrument 43-101.
About Aurizon
Aurizon is a gold producer with a growth
strategy focused on developing its existing projects in the Abitibi
region of north-western Quebec,
one of the world's most favourable mining jurisdictions and
prolific gold and base metal regions, and by increasing its asset
base through accretive transactions. Aurizon shares trade on
the Toronto Stock Exchange under the symbol "ARZ" and on the NYSE
Amex under the symbol "AZK". Additional information on
Aurizon and its properties is available on Aurizon's website at
http://www.aurizon.com.
Non GAAP Information
Unit mining costs per tonne
Unit mining costs per tonne is a non-GAAP
measure and may not be comparable to data prepared by other gold
producers. The Company believes that this generally accepted
industry measure is a realistic indication of operating performance
and is useful in allowing year over year comparisons. Unit
mining costs per tonne is calculated by adjusting operating costs
as shown in the Statement of Earnings for inventory adjustments and
then dividing that by the tonnes processed through the mill.
Total cash costs per ounce of gold
Aurizon has included a non-GAAP performance
measure of total cash costs per ounce of gold in this
release. Aurizon reports total cash costs on a sales
basis. In the gold mining industry, this is a common
performance measure but does not have any standardized meaning, and
is a non-GAAP measure. The Company believes that, in addition
to conventional measures prepared in accordance with GAAP, certain
investors use this information to evaluate the Company's
performance and ability to generate cash flow. Accordingly,
it is intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. Total cash
costs per gold ounce are derived from amounts included in the
statements of earnings and include mine site operating costs such
as mining, processing and administration, but exclude amortization,
reclamation costs, financing costs and capital development
costs. The costs included in the calculation of total cash
costs per ounce of gold are reduced by silver by-product sales and
then divided by gold ounces sold and the average Bank of Canada
Cad$/US$ exchange rate.
Forward-looking Information
Estimates regarding production, costs and
expected recoveries at Casa Berardi in 2011 and the Company's
budgets and planned exploration and development programs on its
various properties for 2011 constitutes 'forward-looking
information' within the meaning of applicable Canadian securities
legislation and will be updated if required under applicable
Canadian securities laws. This information is provided as
general guidance only and is based on assumptions and subject to
risks as described below. Readers are cautioned that actual
results may vary from the forward-looking information
disclosed.
FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking
statements" and "forward-looking information" within the meaning of
applicable securities regulations in Canada and the
United States (collectively, "forward-looking
information"). The forward-looking information contained in
this news release is made as of the date of this news
release. Except as required under applicable securities
legislation, the Company does not intend, and does not assume any
obligation to update this forward-looking information.
Forward-looking information includes, but is not limited to,
statements regarding the Company's expectations and estimates as to
future gold production, total cash costs per ounce, onsite mining,
milling and administration costs and sustaining capital
expenditures at Casa Berardi, the Company's expected expenditures
and planned programs on its properties for 2011. In addition,
forward-looking information includes statements with respect to
estimated mineral reserves and resources, anticipated effects of
drill results on the Company's projects, timing and expectations of
future development, exploration, and work programs. Often,
but not always, forward-looking information can be identified by
the use of words such as "plans", "expects", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "believes", or the negatives thereof or variations
of such words and phrases or statements that certain actions,
events, or results "may", "could", "would", "might", or "will", be
taken, occur or be achieved. The forward-looking information
expresses, as at the date of this news release, the Company's
plans, estimates, forecasts, and expectations, as to future events
or results and are based on certain assumptions that the Company
believes are reasonable, and the further assumptions that past
operational performance will continue, there will be no material
disruption in operations, demand for and the price of gold will be
sustained or will improve, the supply of gold will remain stable,
that the general business and economic conditions will not change
in a material adverse manner, that financing will be available if
an when needed on reasonable terms and that the Company will not
experience any material accident, labour dispute, or failure of
plant and equipment.
However, forward-looking information involves
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the
Company to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking information. Such factors include, among
others, conclusions of economic evaluations, the risk that actual
results of development and exploration activities will be different
than anticipated, that cost of labour, equipment or materials will
increase more than expected, that the future price of gold will
decline, that the Canadian dollar will strengthen against the U.S.
dollar, that mineral reserves and resources are not as estimated,
that actual costs or actual results of reclamation activities are
greater than expected; that changes in project parameters as plans
continue to be refined may result in increased costs, of unexpected
variations in mineral reserves and resources, grade or recover
rates, of failure of plant, equipment or processes to operate as
anticipated, of accidents, labour disputes and other risks
generally associated with mining, unanticipated delays in obtaining
governmental approvals or financing or in the completion of
development or construction activities, as well as those factors
and other risks more fully described in Aurizon's Annual
Information Form filed with the securities commission of all
of the provinces and territories of Canada and in Aurizon's
Annual Report on Form 40-F filed with the United States Securities
and Exchange Commission, which are available on Sedar at
www.sedar.com and on Edgar at www.sec.gov/. Although the
Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking information, there may be other
factors that cause actions, events or results to not be as
anticipated, estimated or intended. There can be no assurance
that forward-looking information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Readers are cautioned not to
place undue reliance on forward-looking information due to the
inherent uncertainty thereof.
SOURCE Aurizon Mines Ltd.
Copyright . 11 PR Newswire