Shares Listed: Toronto Stock Exchange - Ticker Symbol - ARZ NYSE Amex - Ticker Symbol - AZK U.S. Registration: (File 001-31893) News Release Issue # 1 - 2011
-- 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
2010 Gold Production
Gold production from Aurizon's 100% owned Casa Berardi mine for the year
ended
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
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,
Capital expenditures at Casa Berardi are estimated to total
Sustaining capital expenditures at Casa Berardi are budgeted to be
In 2011,
Mining equipment replacements and fleet expansion to support the
expanded development activities is budgeted at
Casa Berardi Exploration
An additional
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,
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
In addition, an initial
Other Properties
Aggressive exploration programs are also planned at the Company's other
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
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
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
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
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
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
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
Duverny Property
At Duverny, a
Aurizon may earn a 100% interest in 44 mineral claims covering 2,100
hectares, 25 kilometres northeast of
Patris Property
A
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
Kipawa Gold - Rare Earth Elements Property,
At
Corporate Development
Aurizon continues to focus on its organic growth within the Abitibi
area, whilst evaluating accretive opportunities within
2010 Year End Financial Results
Aurizon expects to release fourth quarter and 2010 year-end financial
results on or about
Aurizon also expects to release an updated mineral reserves and
resources estimate for the Casa Berardi mine in early
Quality Control
Information of a scientific or technical nature in this news release was
prepared under the supervision of
About Aurizon
Aurizon is a gold producer with a growth strategy focused on developing
its existing projects in the Abitibi region of north-western
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
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.