VANCOUVER, Jan. 11 /CNW/ -- Shares Listed: Toronto Stock Exchange -
Ticker Symbol - ARZ NYSE Amex - Ticker Symbol - AZK U.S.
Registration: (File 001-31893) News Release Issue No. 1
- 2011 VANCOUVER, Jan. 11 /CNW/ - 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._____________|
"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. To view this news release in HTML
formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/January2011/11/c9833.html
table border="0" cellspacing="0"tr valign="top"td valign="top"
align="center" colspan="2"bAURIZON MINES LTD./b/td/tr tr
valign="top"td valign="top" align="center"David Hall, President and
C.E.O.br/ Telephone: (604) 687-6600br/ Toll Free: 1-888-411-GOLDbr/
Fax: (604) 687-3932/td td align="center"Martin Bergeron, Vice
President, Operationsbr/ Telephone: (819) 874-4511br/ Fax: (819)
874-3391/td/tr tr valign="top"td align="center" colspan="2"Web
Site: a href="http://www.aurizon.com"www.aurizon.com/a Email: a
href="mailto:info@aurizon.com"info@aurizon.com/a/td/tr tr
valign="top"td align="center" colspan="2"or/td/tr tr valign="top"td
align="center" colspan="2"bRenmark Financial Communications
Inc./bbr/ 1050 - 3400 De Maisonneuve Blvd Westbr/ Montreal,
QC H3Z 3B8br/ Barry Mire: a
href="mailto:bmire@renmarkfinancial.com"bmire@renmarkfinancial.com/abr/
Maurice Dagenais: a
href="mailto:mdagenais@renmarkfinancial.com"mdagenais@renmarkfinancial.com/abr/
Media: Veronica Ortiz Rodriguez: a
href="mailto:vortizrodriguez@renmarkfinancial.com"vortizrodriguez@renmarkfinancial.com/abr/
Tel: (514) 939-3989 Fax: (514) 939-3717/td/tr/table
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