Aurizon Mines Ltd. (TSX:ARZ)(NYSE Amex:AZK) reports unaudited
financial results for the first quarter of 2012, which have been
prepared on the basis of available information up to May 9, 2012.
Management's Discussion and Analysis should be read in conjunction
with the most recent annual financial statements of the Company.
All dollar amounts are in Canadian dollars unless otherwise
stated.
First quarter 2012 highlights and significant items
-- EBITDA(1) of $22.3 million, 74% higher than $12.8 million in same
quarter of 2011.
-- Net profit of $8.3 million, or $0.05 per share, 238% higher than $2.4
million, or $0.02 per share, for the same quarter in 2011.
-- Operating profit margin per ounce(1) increased 31% to US$1,011, due to
higher realized gold prices.
-- Gold production of 33,488 ounces.
-- Cash balances of $199 million and no debt.
From the President and Chief Executive Officer, George
Paspalas:
"Casa Berardi continues to deliver solid operating margins for
us and we are well advanced on the capital works programs scheduled
for this year at the mine to realize its future potential. The
modified mine plan in the first quarter will not adversely affect
2012 production. We are looking forward to the Joanna feasibility
study completion, updates on Heva and the Hosco West extension
drilling results, resource updates on the Marban and Fayolle
properties, and further exploration updates in-mine at Casa Berardi
in the second quarter."
FINANCIAL RESULTS
Financial review of the first quarter 2012
Net Profit of $8.3 million, or $0.05 per share, was achieved in
the first quarter of 2012, 238% higher than the net profit of $2.5
million, or $0.02 per share, in the same period of 2011. Results
were positively impacted by higher realized gold prices.
Revenue from Casa Berardi operations increased 20% to $56.8
million in the first quarter of 2012 from the sale of 33,364 ounces
of gold, compared to $47.2 million from the sale of 34,306 ounces
of gold in the same quarter of 2011. The average realized gold
price was US$1,692 per ounce and the average Cad/US exchange rate
was 1.0, compared to realized prices of US$1,392 per ounce at an
average exchange rate of 0.98 in the same quarter of 2011. The
average London afternoon gold fix for the first quarter of 2012 was
US$1,691 per ounce compared to US$1,384 per ounce for the same
period of 2011.
Cost of sales for the first quarter of 2012, comprising
operating costs and depreciation and amortization of $23 million
and $7.8 million respectively totalled $30.8 million. On a unit
cost basis(2), total cash costs per ounce of gold sold were US$681
and depreciation and amortization was US$234 per ounce, for a total
production cost of US$915 per ounce. A lack of available shotcrete
equipment and difficult ground conditions resulted in changes to
the mining sequence, which impacted ore throughput and ore grades.
As a result, unit operating costs(2) on a Canadian dollar per tonne
basis in the first quarter of 2012 were 7% higher than plan at $152
per tonne.
Gross profit of $25.9 million in the first quarter of 2012
increased significantly from $18.0 million for the same period of
2011. Rising gold prices allowed operating profit margins(2) to
increase to US$1,011 per ounce compared to US$771 per ounce in the
same quarter of 2011.
EBITDA(2) rose 74% to $22.3 million, compared to $12.8 million
in 2011, as a result of higher gold prices and lower general
administrative costs, partially reduced by higher total cash costs
per ounce.
Exploration expenditures in the first quarter of 2012 were $6.7
million compared to $7.1 million in the same period of 2011.
Exploration activities in 2012 were conducted primarily on the
Marban and Fayolle projects in addition to continued exploration
and feasibility work at Joanna.
General and administrative costs in the first quarter of 2012
totalled $4.9 million compared to $6.1 million for the same period
of 2011. Included in these costs are non-cash stock based
compensation charges totalling $1.3 million compared to $1.4
million in the same period of 2011. In the first quarter of 2012,
the establishment of a deferred share unit plan for non-executive
directors resulted in a charge of $0.5 million to general and
administrative costs. Included in the first quarter 2011 general
and administrative costs is a charge of $1.6 million representing
the fair value of estimated employee incentive payments.
Income and resource taxes totalled $6.6 million, or 45% of
pre-tax earnings, for the first quarter of 2012, up from $2.5
million, or 50% of pre-tax earnings, for the same period of 2011.
The Canadian statutory income and resource tax for the Company in
2012 is 38.4%. The difference in the statutory rates from the
effective rates is due to the non-deductibility of certain costs,
particularly for the determination of the Quebec resource tax.
Cash flows from operating activities in the first quarter of
2012 totalled $3.4 million, compared to $14.5 million in the same
period of 2011. The decrease in cash flow from a year ago is
principally due to income and resource tax payments totalling $24.5
million in the first quarter of 2012 in respect of 2011 taxes owing
and 2012 tax installments, and is also the primary factor resulting
in the $12.9 million increase in non-cash working capital.
Investing activities totalled $20.5 million in the first quarter
of 2012, compared to $11 million for the same period of 2011.
Capital expenditures at Casa Berardi totalled $15.4 million in the
first quarter of 2012, of which $12.6 million was on sustaining
capital and development, and $2.8 million was on exploration
activity.
Financing activities during the first quarter of 2012 resulted
in cash inflows totalling $2.3 million from incentive stock option
exercises.
FINANCIAL POSITION
Balance Sheet
As at March 31, 2012, cash and cash equivalents were $198.7
million, compared to $213.5 million as at December 31, 2011. Cash
balances were impacted by income and resource tax payments
totalling $24.5 million in the first quarter of 2012 in respect of
2011 taxes owing and 2012 tax installments. Working capital
increased to $200.2 million from $197.9 million as at December 31,
2011.
OPERATING RESULTS
Casa Berardi
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Summary of Key Operational Statistics
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2012 2011
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Q1 Q1 Q2 Q3 Q4
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Operating results
Tonnes milled 164,728 161,036 178,233 188,571 170,283
Grade - grams/tonne 6.99 6.85 8.00 7.95 9.13
Mill recoveries - % 90.5% 90.2% 90.4% 92.2% 92.0%
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Gold production - ozs 33,488 31,976 41,417 44,457 45,995
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Gold sold - ozs 33,364 34,306 39,900 40,257 50,787
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Per ounce data -
US$(3)
Average realized gold
price(i) $ 1,692 $ 1,392 $ 1,521 $ 1,695 $ 1,655
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Total cash costs(ii) $ 681 $ 621 $ 544 $ 497 $ 498
Amortization(iii) 234 238 225 250 238
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Total production
costs(iv) $ 915 $ 859 $ 769 $ 747 $ 736
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Table footnotes:
(i) Realized gold prices divided by ounces sold.
(ii) Operating costs net of by-product credits, divided by ounces sold, and
divided by the average Bank of Canada Cad$/US$rate.
(iii) Depreciation and amortization charges.
(iv) Total cash costs plus depreciation and amortization charges.
CASA BERARDI DISCUSSION
Operational results
Gold production from the Casa Berardi mine in the first quarter
of 2012 totalled 33,488 ounces, lower than plan, however, 5% higher
than the first quarter 2011 production of 31,976 ounces. A lack of
available shotcrete equipment and difficult ground conditions
resulted in changes to the mining sequence in the first quarter of
2012. This impacted both ore throughput and ore grades. Additional
shotcrete equipment will be operational in June 2012 which will
increase shotcreting and rehabilitation capacity.
Daily ore throughput of 1,810 tonnes per day at an average grade
of 6.99 grams per tonne was achieved in the first quarter 2012,
compared to 1,789 tonnes per day at an average grade of 6.85 grams
per tonne in the same quarter of 2011. Higher ore throughput and
higher ore grades were the principal factors for the higher gold
production in 2012, as metallurgical recoveries were similar in
both quarters. Unit operating costs(3) on a Canadian dollar per
tonne basis in the first quarter of 2012 were higher than plan, at
$152 per tonne, due to difficult ground conditions and a lack of
available shotcrete equipment impacting ore throughput. Unit
operating costs(4) in the same quarter of 2011 were $129 per
tonne.
The anticipated higher unit operating costs on a per tonne basis
in 2012, resulted in total cash costs(4) of US$681 per ounce in the
first quarter of 2012, compared to US$621 in the same quarter of
2011. A combination of an 18% increase in unit operating costs
partially offset by 2% higher ore grades resulted in the higher
total cash costs per ounce in the first quarter of 2012, compared
to the same quarter of 2011.
Rising gold prices have allowed operating profit margins(4) to
increase to US$1,011 per ounce compared to US$771 per ounce in the
same quarter of 2011.
Higher average ore throughput and grades are anticipated for the
balance of 2012, which is expected to result in higher gold
production and lower total cash costs per ounce than those realized
in the first quarter of 2012.
Casa Berardi Shaft Deepening
Shaft deepening of the West Mine production shaft, from the 760
metre level down to the 1,080 metre level continued, in addition to
the construction of a loading pocket at the 795 level and the
installation of a sinking hoist. Shaft deepening is expected to be
completed in early 2013 and operational by the second quarter of
2013. The shaft will provide access to the lower portion of Zones
113, 118, and 123 from a drift at the 1,010 metre level. As a
result of production priorities impacting the scheduling and
productivity of the shaft deepening, as well as general
inflationary cost pressures, the capital costs for the shaft
deepening and lateral drift development at the 1,010 metre level to
access Zones 113, 118 and 123 is now projected to be $40 million,
of which $13.3 million has been incurred to date. Approximately
$15.2 million of the remaining expenditures will be incurred in
2012 and the balance in 2013.
Casa Berardi Exploration
Three surface rigs and eight underground drill rigs were active
at Casa Berardi during the quarter. One surface drill rig was
active exploring Zone 160 near the East mine mill facilities where
there may be an opportunity to establish an open pit operation. A
second surface drill rig was actively exploring the Principal Zone
and another exploring the depth extensions of the West Mine area.
The underground drill rigs were primarily focused on infill and
step-out drilling of the upper extensions of Zones 118 and 123 from
the 550 level drift as well as depth extensions of Zones 118 and
123.
FEASIBILITY & EXPLORATION DISCUSSION
Joanna Gold Development Property
Feasibility study work on the Hosco deposit continues, with
completion of the study anticipated by midyear. Activities in the
first quarter included cost-optimization studies, a review of the
mining sequence and layout of the surface infrastructure and
further detailed environmental work, as well as studies on waste
and tailings characterization for potential metal leaching and acid
generation, optimization of civil works, and selection of the
optimal daily processing rate. The results of the various studies
will be incorporated into the feasibility study.
Two to three drill rigs were active in the first quarter of
2012, completing 16,675 metres of drilling as part of a $3.6
million exploration program targeting the Heva Zone area and
western extension of the Hosco deposit, between surface and a depth
of 200 metres, which corresponds to a 2.5 kilometre strike length
along the Cadillac Fault. The objective of the program is to test
the continuity of the near surface mineralized system westward from
the Hosco deposit at an initial 100 metre drill spacing.
Assays have been received from thirty six drill holes, of which
thirty three drill holes intersected one to six mineralized
intervals, calculated with a minimum cut off parameter of 0.5 grams
per tonne gold over 5 meters. Of these, eight holes returned at
least one drill interval with a grade of more than 3 grams per
tonne gold over a minimum thickness of 3 metres.
Initial metallurgical test work of the Heva mineralization
indicates that it is non-refractory, and could potentially deliver
high recoveries through direct cyanidation of the ore.
Marban Property
Four drill rigs were active in the first quarter of 2012,
completing 24,171 metres of drilling as part of a $4.9 million
exploration program that includes 34,000 metres of diamond
drilling, an updated mineral resource estimate and basic technical
studies, as well as metallurgical testwork. The focus of the
drilling is to outline the Marban deposit between surface and a
vertical depth of 250 metres in order to evaluate the economic
potential and to test the depth extensions of the Marban deposit;
to follow up on the drill fences completed during first phase
between the Norlartic and Marban deposits; and to investigate
select exploration targets previously outlined on the Marban
property. An updated resource estimate is expected to be completed
by the end of the second quarter of 2012.
Preliminary metallurgical testing of two composite samples from
the Marban property conducted by SGS Mineral Services indicates
favourable gold recoveries. Ore cyanidation testing produced
results ranging from 95.4% to 97.6% gold recoveries.
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.
Fayolle Property
One to two drill rigs were active in the first quarter of 2012,
completing 7,100 metres of drilling for continued exploration of
the Fayolle property, defining the size and geometry of the Fayolle
deposit, looking for extensions, and improving the quality of the
resources with 25 metre spaced drilling. An updated resource
estimate is expected to be completed by the end of the second
quarter of 2012.
Aurizon can earn up to a 65% interest in the Fayolle property,
subject to an underlying 2% net smelter royalty. The Fayolle
Property comprises 39 mining claims covering 1,373 hectares across
the Porcupine-Destor Break and is situated 10 kilometres north of
Aurizon's Joanna Project in north-western Quebec.
NON-GAAP MEASURES
Realized gold price per ounce
Realized gold price per ounce is a non-GAAP measure and is
calculated by adjusting revenue for silver by-product sales and
then dividing that by the gold ounces sold and the average Bank of
Canada Cad$/US$ exchange rate. For the first quarter of 2012, there
were silver sales adjustments totalling $0.3 million, compared to
silver sales adjustments totalling $0.2 million in the same period
of 2011. There were no gold derivative adjustments required for
either period.
Total cash costs per ounce of gold
Aurizon has included a non-GAAP performance measure, total cash
costs per ounce of gold, in this report. Aurizon reports total cash
costs on a sales basis. In the gold mining industry, this is a
common performance measure but does not have any standardized
meaning, and is a non-GAAP measure. The Company believes that, in
addition to conventional measures prepared in accordance with GAAP,
certain investors use this information to evaluate the Company's
performance and ability to generate cash flow. Accordingly, it is
intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. Total cash costs per
gold ounce are derived from amounts included in the statements of
earnings and include mine site operating costs such as mining,
processing and administration, but exclude amortization,
reclamation costs, financing costs and capital development costs.
The costs included in the calculation of total cash costs per ounce
of gold are reduced by silver by-product sales and then divided by
gold ounces sold and the average Bank of Canada Cad$/US$ exchange
rate.
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
are calculated by adjusting operating costs as shown in the
Statements of Earnings for inventory adjustments and then dividing
that by the tonnes processed through the mill. For the first
quarter of 2012, operating costs were decreased by inventory
adjustments of $2.0 million, compared to an inventory adjustment
increase of $0.6 million for the same period in 2011.
Operating profit margin per ounce
Operating profit margin per ounce is a non-GAAP measure, and is
calculated by subtracting the total cash costs per ounce from the
average realized gold price. For the first quarter of 2012, the
average realized gold price was US$1,692 less total cash costs of
US$681 for an operating profit margin of US$1,011, compared to an
average realized gold price of US$1,392 less total cash costs of
US$621 for an operating profit margin of US$771 in the same quarter
of 2011.
Earnings before interest, taxes, depreciation and amortization
("EBITDA")
EBITDA is a non-GAAP measure and is calculated by adjusting the
net profit or loss to exclude depreciation and amortization
charges, finance expense, finance income, and income tax expense.
The following table provides a reconciliation of net profit to
EBITDA for the first quarter ended March 31, 2012 and 2011:
First Quarter
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2012 2011
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Net profit for the period $ 8,263 $ 2,446
Depreciation and amortization 7,798 8,036
Finance income (572) (339)
Finance costs 222 200
Income tax expense 6,634 2,451
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EBITDA $ 22,345 $ 12,794
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OUTLOOK
Casa Berardi Operations
Gold production and operating cost guidance for 2012 remains
unchanged at 155,000 to 160,000 ounces at total cash costs of
US$600 per ounce, assuming a Canadian dollar exchange rate at
parity against the U.S. dollar for the balance of the year.
Onsite mining, milling and administration costs for 2012 are
expected to decrease from the $152 per tonne experienced in the
first quarter and average $134 per tonne for the year, unchanged
from previous guidance.
Capital expenditures at Casa Berardi, funded from operating cash
flow, are estimated to total $80 million in 2012 ($11.4 million
incurred in first quarter 2012), as a result of three major capital
projects: shaft sinking, construction of a paste backfill plant to
maximize the extraction of high grade ore from Zone 113 and to
allow greater mining flexibility, and continued replacement of
mobile equipment.
An additional $9.4 million will be invested on exploration at
Casa Berardi in 2012 ($2.8 million incurred in the first quarter
2012) which will include approximately 88,000 metres of surface and
underground diamond drilling. Up to 3 surface and 5 - 7 underground
drill rigs will be active during the course of 2012. 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 as identifying extensions of these
structures.
Manpower Transition from Contract miners to Aurizon
Employees
On April 2, 2012, Aurizon advised the contractors that conduct
the mining activities at Casa Berardi that the Company was going to
transition from the use of contract miners to employing its own
work force. The objective of the transition is to empower the work
force with a sense of belonging and pride of being Aurizon
employees, reducing turnover, and improve health and safety
performance without impacting operating costs. In addition, the
manpower transition plan will assist the Company in recruiting,
attracting, and retaining miners who would have otherwise preferred
to work directly for a mining company, rather than a contractor.
The response to date has been very encouraging and the transition
is expected to be completed in the third quarter, 2012.
Feasibility and Exploration properties
Feasibility study work on Joanna's Hosco deposit continues with
completion of the study anticipated by mid-year. Additional studies
and cost-optimization plans that were initiated in August 2011,
including a review of the mining sequence and layout of the surface
infrastructure and further detailed environmental work, as well as
studies on waste and tailings characterization for potential metal
leaching and acid generation, optimization of civil works, and
selection of the optimal daily processing rate, are in various
stages of progress. The results of the various studies will be
incorporated into the feasibility study.
In addition, the Company has initiated a $3.6 million
exploration program, comprising 24,500 metres of drilling in the
area of the Heva deposit which contains 270,000 ounces in measured
and indicated resources, (4.4 million tonnes at an average grade of
1.9 grams per tonne) and 421,000 ounces in inferred ounces (7.7
million tonnes with an average grade of 1.7 grams per tonne). The
program will evaluate the surface potential along a 2.5 kilometre
stretch of the Cadillac fault west of the Hosco deposit.
Corporate Development
Aurizon continues to focus on its organic growth within the
Abitibi area and evaluate accretive opportunities within the
Americas to enhance its reserve and production profile.
Conference call and webcast
Aurizon management will host a conference call and live webcast
for analysts and investors on Thursday, May 10, 2012 at 8:00 a.m.
Pacific Daylight Time (11:00 a.m. Eastern Daylight Time) to review
the results.
Conference Call Numbers:
Canada & USA Toll Free Dial In: 1-800-319-4610 or outside
Canada & USA Call: 1-604-638-5340.
The call is being webcast and can be accessed at Aurizon's
website at www.aurizon.com or enter the following URL into your web
browser:
http://services.choruscall.com/links/aurizon120510.html.
Those who wish to listen to a recording of the conference call
at a later time may do so by calling: Canada & USA Toll Free:
1-800-319-6413 or outside Canada & USA: 1-604-638-9010, (Code:
1001#). A replay of the call will be available until Thursday, May
17, 2012.
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
www.aurizon.com.
Forward-Looking Statements and Information
This report 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 report is made as of the date of this
report. 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 relating to the Company's Casa
Berardi project includes 2012 production estimates, anticipated
average daily ore throughput, total cash costs per ounce, and
milling and administration costs. This information is based on
assumptions that the Company believes are reasonable, including but
not limited to that that the Company's current mine plan can be
achieved, general business and economic conditions will not change
in a material adverse manner, material, equipment and labour costs
and currency exchange rates will remain stable, and that the
Company will not experience any material accident, labour dispute,
or failure of plant or equipment. Forward-looking information
relating to the Joanna project includes statements regarding the
Company's expectations as to timing of completion of the
feasibility study, the impact on previously estimated capital and
unit operating costs of changes in the scope of the project
including but not limited to the impact of the increased mineral
resource base and selection of an autoclave recovery process and
processing of ore on-site, the anticipated effect of the latter in
mitigating risks associated with the project, and plans and budgets
for exploration activities in the area of the Heva deposit.
Forward-looking information is by its nature uncertain and
involves foreseeable and unforeseeable risks and other factors
which may cause the actual outcomes, costs, timing, and performance
to be materially different from those anticipated by such
information. In relation to the Casa Berardi forward-looking
information, such factors include, among others, the risk that some
or all of the assumptions on which such information is based prove
to be invalid including that the cost of labour, equipment or
materials, including power, will increase more than expected, that
the price of gold will decline, that the Canadian dollar will
strengthen against the U.S. dollar, that mineral reserves or
mineral resources are not as estimated, unexpected occurrences that
affect rates of production, including failure or disruption to
plant, process or equipment, labour unrest, unexpected variations
in ore reserves, grade or recovery rates, or accidents, that actual
costs or actual results of reclamation activities are greater than
expected. In relation to the forward-looking information on the
Joanna project, factors and risks that could materially affect such
expectations and information include the possibility that changes
in project parameters as plans continue to be refined, including as
a result of third party review and the results of studies remaining
to be completed, could have a material negative or positive impact
on capital and operating costs, resource and reserves calculations,
and timing of completion of the feasibility study and the impact
could be material, that any of the information available to the
Company to date proves to be inaccurate, that mineral resource and
reserves are not as estimated, or that changes in laws relating to
permitting, construction, environmental and other matters occur
that affect timing, costs, and economics of the project as
presently conceived.
There are a number of other risks and uncertainties associated
with exploration, development and mining activities that may affect
the reliability of such forward-looking information including those
described in Aurizon's Annual Information Form ("AIF") 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 ("40-F"),
which are available on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.
There may be factors in addition to those described herein or on
the AIF and 40-F that cause actions, events or results to not be as
anticipated, estimated or intended. Readers are cautioned not to
place undue reliance on forward-looking information due to the
inherent uncertainty thereof.
CAUTIONARY NOTE TO US READERS AND INVESTORS
As a British Columbia corporation, the Company is subject to
certain rules and regulations issued by the British Columbia
Securities Commission ("BC Securities Commission"). The Company is
required to provide detailed information regarding its properties
including mineralization, drilling, sampling and analysis, security
of samples and mineral resource and mineral reserve estimates.
Further, the Company describes mineral resources associated with
its properties utilizing terminology such as "indicated" or
"inferred" which terms are recognized by Canadian regulations but
are not recognized by the United States Securities and Exchange
Commission ("SEC").
Cautionary Note to U.S. Readers and Investors Regarding Mineral
Resources
The SEC allows mining companies, in their filings with the SEC,
to disclose only those mineral deposits they can economically and
legally extract or produce. The Company may use certain terms in
this document, such as "mineral resources", "indicated mineral
resources" and "inferred mineral resources" that are recognized and
mandated by Canadian securities regulators but are not recognized
by the SEC.
This document may use the term "indicated" mineral resources.
U.S. readers are cautioned that while that term is recognized and
required by Canadian regulations, the SEC does not recognize it.
U.S. readers and investors are cautioned not to assume that any
part or all of mineral deposits in this category will ever be
converted into mineral reserves.
This document may also use the term "inferred" mineral
resources. U.S. readers are cautioned that while this term is
recognized and required by Canadian regulations, the SEC does not
recognize it. "Inferred resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or
pre-feasibility studies, except in rare cases. U.S. readers and
investors are cautioned not to assume that part or all of an
inferred resource exists, or is economically or legally
mineable.
Aurizon Mines Ltd.
Interim Balance Sheets (Unaudited)
(Expressed in thousands of Canadian dollars, unless otherwise stated)
March 31, December 31,
As at, 2012 2011
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ASSETS
Current assets
Cash and cash equivalents $ 198,702 $ 213,486
Marketable securities 681 864
Inventories 15,251 12,545
Accounts receivable and other 16,023 9,474
Derivative instrument assets - 357
Tax credits receivable 3,842 5,210
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Total current assets 234,499 241,936
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Non-current assets
Property, plant and equipment 170,017 164,783
Mineral properties 5,025 4,995
Deferred finance costs 302 343
Other assets 4,035 6,324
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Total non-current assets 179,379 176,445
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TOTAL ASSETS $ 413,878 $ 418,381
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LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 30,234 $ 25,788
Current income and resource tax liabilities 4,094 18,338
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Total current liabilities 34,328 44,126
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Non-current liabilities
Provisions 15,292 16,153
Deferred tax liabilities 31,422 36,918
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Total non-current liabilities 46,714 53,071
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Total liabilities 81,042 97,197
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EQUITY
Shareholders' equity
Issued capital 277,485 274,165
Contributed surplus 1,170 1,170
Stock based compensation 18,964 18,711
Accumulated other comprehensive gains
(losses) (570) (386)
Retained earnings 35,787 27,524
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Total shareholders' equity 332,836 321,184
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TOTAL LIABILITIES AND EQUITY $ 413,878 $ 418,381
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Aurizon Mines Ltd.
Interim Statements of Comprehensive Income (Unaudited)
(Expressed in thousands of Canadian dollars, except for per share data)
For the three months ended March 31, 2012 March 31, 2011
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Revenue $ 56,753 $ 47,212
Less cost of sales (30,822) (29,228)
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Gross profit 25,931 17,984
Other operating expenses
Exploration costs (6,686) (7,104)
General and administration costs (4,856) (6,086)
Other net gains (losses) 515 (36)
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Operating profit 14,904 4,758
Finance income 572 339
Finance costs (222) (200)
Other derivative losses (357) -
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Profit before income tax 14,897 4,897
Income tax expense (6,634) (2,451)
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NET PROFIT FOR THE PERIOD 8,263 2,446
Other comprehensive loss
Non-cash loss on marketable securities (184) (31)
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TOTAL COMPREHENSIVE INCOME FOR THE PERIOD $ 8,079 $ 2,415
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Weighted average number of common shares
outstanding - Basic 163,569,215 162,260,681
Earnings per share - Basic $ 0.05 0.02
Weighted average number of common shares
outstanding - Diluted 164,375,897 164,935,845
Earnings per share - Diluted $ 0.05 0.02
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Aurizon Mines Ltd.
Interim Statements of Cash Flows (Unaudited)
(Expressed in thousands of Canadian dollars, unless otherwise stated)
For the three months ended March 31, 2012 March 31, 2011
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Operating activities
Net profit for the period $ 8,263 $ 2,446
Adjustment for non-cash items:
Depreciation and amortization 7,841 8,036
Share-based compensation 1,274 1,398
Deferred income tax (recovery) expense (5,496) 271
Refundable and non-refundable taxes 3,315 -
Derivative losses 357 -
Other 799 2,071
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16,353 14,222
Decrease (increase) in non-cash working
capital items (12,929) 314
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Net cash provided by operating activities 3,424 14,536
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Investing activities
Property, plant and equipment (15,235) (10,546)
Mineral properties (30) (30)
Other investing activities (5,242) (418)
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Net cash used in investing activities (20,507) (10,994)
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Financing activities
Issuance of shares 2,299 393
Deferred finance costs - (477)
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Net cash provided (used) by financing
activities 2,299 (84)
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NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (14,784) 3,458
CASH AND CASH EQUIVALENTS - BEGINNING OF
PERIOD 213,486 139,341
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CASH AND CASH EQUIVALENTS - END OF PERIOD $ 198,702 $ 142,799
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(1) See "Non-GAAP" measures.
(2) See "Non-GAAP" measures.
(3) See "Non-GAAP" measures.
(4) See "Non-GAAP" measures.
Contacts: Aurizon Mines Ltd. George Paspalas President & CEO
604-687-6600 Aurizon Mines Ltd. Ian S. Walton Executive
Vice-President and Chief Financial Officer 604-687-6600 Aurizon
Mines Ltd. Investor Relationsjennifer.north@aurizon.com Aurizon
Mines Ltd. 604-687-6600 or Toll Free: 1-800-411-GOLD (4653)
604-687-3932 (FAX)info@aurizon.com www.aurizon.com
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