Aurizon reports record earnings, revenues, and cash flow in 2009

    
    Shares Listed: Toronto Stock Exchange - Ticker Symbol - ARZ
    NYSE Amex:   - Ticker Symbol - AZK
    U.S. Registration: (File 001-31893)
    News Release Issue No. 7-2010
    

VANCOUVER, March 19 /CNW/ - Aurizon Mines Ltd. (TSX - ARZ; NYSE Amex - AZK) is pleased to announce its financial results for the year ended December 31, 2009. All dollar amounts are in Canadian dollars unless otherwise stated.

    
    HIGHLIGHTS

    Fourth Quarter highlights:

    -   Cash flow from operations of $12.0 million.

    -   Gold production of 36,459 ounces.

    -   Net earnings of $9.9 million, or $0.06 per share, including non-cash
        gains from the recognition of $4.5 million of non-refundable tax
        credits and derivatives of $0.5 million.

    -   Total cash costs of US$459 per ounce(1).

    2009 Highlights:

    -   Record revenues of $175.6 million, 22% higher than 2008.

    -   Record net earnings of $36.7 million, or $0.23 per share, and record
        adjusted net earnings of $32.9 million(1), or $0.21 per share.

    -   Record cash flow from operating activities of $71.8 million, 19%
        higher than 2008.

    -   Operating profit margin per ounce increased 15% to US$514(1).

    -   Total cash costs of US$401 per ounce.

    -   Project debt of $29.2 million repaid and $21.2 million released from
        restricted cash accounts.

    -   $47.3 million equity financing completed.

    -   $113 million in cash and working capital of $101.7 million.
    

"Aurizon had an extremely successful year" said David Hall, President and Chief Executive Officer. "We exceeded our production targets, generated record revenues, cash flow and earnings, and increased our financial strength by building our cash balances and repaying our project debt. In addition we increased mineral reserves, completed a positive pre-feasibility study for Joanna and had success with our exploration programs. We are well positioned to implement our internal and external growth plans."

FINANCIAL RESULTS

Financial review of the fourth quarter 2009

Net earnings of $9.9 million, or $0.06 per share, were achieved in the fourth quarter of 2009, compared to a net loss of $4.1 million, or ($0.03) per share in the same period of 2008. Fourth quarter results in 2009 were positively impacted by the recognition of $4.5 million of non-refundable tax credits. After removing the negative impact of non-cash derivative losses of $3.9 million on an after tax basis, adjusted net earnings were $13.8 million, or $0.09 per share compared to adjusted net earnings of $0.6 million, or nil cents per share, for the same quarter of 2008. In the fourth quarter of 2008, earnings were negatively impacted by non-cash derivative losses of $4.7 million on an after tax basis.

In the fourth quarter of 2009, the average realized gold price was US$946(1) per ounce and the average Cad/US exchange rate was 1.06. Included in the average realized gold price is the impact of 26,183 ounces sold at an average price of US$895 per ounce from the exercise of call options. In the same period of 2008, the average realized gold price was US$793 per ounce and the average Cad/US exchange rate was 1.23.

Cash flow from operating activities in the fourth quarter of 2009 was $12.0 million, compared to $11.6 million in 2008. The Company's aggregate operating, investing and financing activities during the fourth quarter of 2009 resulted in net cash inflows of $5.1 million.

Financial review of the year ended December 31, 2009

Net earnings in 2009 totalled $36.7 million, or $0.23 per share, compared to net earnings of $4.9 million, or $0.03 per share in 2008. Results were positively impacted by higher realized gold prices and the recognition of $4.5 million of non-refundable tax credits. After removing the positive impact of non-cash derivative gains of $3.8 million on an after tax basis, adjusted earnings were $32.9 million, or $0.21 per share in 2009, compared to adjusted earnings of $10.2 million, or $0.07 per share in 2008. Earnings in 2008 were negatively impacted by non-cash derivative losses of $8.5 million, partially offset by a $3.2 million recovery of corporate takeover costs, on an after tax basis.

Cash flow from operating activities in 2009 rose 19% to $71.8 million from $60.3 million in 2008 as higher realized gold prices resulted in a 15% increase in operating profit margins. The operating profit margin in 2009 was US$514 per ounce compared to US$448 per ounce in 2008. Gold production in 2009 totalled 159,261 ounces, in line with than prior year's production of 158,830 ounces.

In 2009, Casa Berardi gold production totalled 159,261 ounces and gold sales during the year totalled 159,275 ounces, similar to both 2008 and 2007. The average realized gold price in 2009 was US$915 per ounce at an average Cad/US exchange rate of 1.14. During 2009, nearly 52% of the gold sales were delivered against gold call options at an average price of US$882 per ounce, 9% lower than the average London fixing of US$973 per ounce. The Canadian dollar fluctuated considerably against the US dollar during 2009, ranging from an average Cad/US dollar exchange rate of 1.25 in the first quarter to 1.06 in the fourth quarter, and averaging 1.14 for the year.

In 2008, Casa Berardi gold production totalled 158,830 ounces and gold sales during the year totalled 159,404 ounces. The average realized gold price in 2008 was US$847 per ounce and at an average Cad/US exchange rate of 1.07, gold sales totalled $144 million, 21% higher than 2007. During 2008, 53,217 ounces were delivered against gold call options at an average price of US$835 per ounce, 5% lower than the average London fixing of US$876 per ounce. Whilst the Canadian dollar fluctuated considerably during 2008 against the US dollar, the average Cad/US dollar exchange rate for the year of 1.07 was similar to the 1.06 rate in 2007. Silver sales in 2008 totalled $0.5 million.

Balance Sheet

As at December 31, 2009, cash and cash equivalents increased to $113.1 million, compared to $55.6 million in 2008. Included in the 2008 cash balances are restricted cash amounts in respect of the Casa Berardi debt facility totalling $21.2 million.

At the end of 2009, Aurizon had working capital of $101.7 million compared to $24.1 million at the end of 2008. Reflected in working capital are net derivative liabilities totaling $8.6 million compared to $13.3 million at the end of 2008. In 2008, working capital also included debt obligations totaling $21.7 million.

Long term obligations related to refundable government assistance and capital leases totalled $0.7 million at December 31, 2009, compared to $9.4 million at the end of 2008, which included project debt of $8.2 million.

As at the date of this report, Aurizon had 159,099,107 common shares issued and outstanding. In addition, 9.9 million incentive stock options are outstanding that are exercisable into common shares at an average price of $3.98 per share.

Operating review of the year

    
    -------------------------------------------------------------------------
    Summary of Key Operational Statistics
    -------------------------------------------------------------------------
                                   Q1          Q2          Q3          Q4
    -------------------------------------------------------------------------
    Operating results
    Tonnes milled                167,484     170,429     178,420     172,343
    Grade - grams/tonne             7.93        7.84        8.14        7.16
    Mill recoveries - %            91.3%       92.8%       94.2%       91.9%
    -------------------------------------------------------------------------
    Gold production - ozs         38,966      39,874      43,962      36,459
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gold sold - ozs               37,400      42,042      43,650      36,183
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per ounce data - US$
    Average realized gold
     price(1)                       $888        $897        $929        $946
                                ---------------------------------------------
    Total cash costs(2)             $379        $386        $392        $459
    Amortization(3)                 $183        $189        $212        $224
                                ---------------------------------------------
    Total production costs(4)       $562        $575        $604        $683
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------
    Summary of Key Operational Statistics
    -------------------------------------------------------------
                                  2009        2008        2007
    -------------------------------------------------------------
    Operating results
    Tonnes milled                688,676     654,397     545,258
    Grade - grams/tonne             7.77        8.16        9.78
    Mill recoveries - %            92.6%       92.5%       93.0%
    -------------------------------------------------------------
    Gold production - ozs        159,261     158,830     159,469
    -------------------------------------------------------------
    -------------------------------------------------------------
    Gold sold - ozs              159,275     159,404     160,600
    -------------------------------------------------------------
    -------------------------------------------------------------
    Per ounce data - US$
    Average realized gold
     price(1)                       $915        $847        $696
                                ---------------------------------
    Total cash costs(2)             $401        $399        $331
    Amortization(3)                 $201        $209        $172
                                ---------------------------------
    Total production costs(4)       $602        $608        $503
    -------------------------------------------------------------
    -------------------------------------------------------------

    Table footnotes:

    (1) Realized gold prices net of realized derivative gains or losses
        divided by ounces sold.
    (2) Operating costs net of by-product credits, divided by ounces sold,
        and divided by the average Bank of Canada Cad$/US$ rate.
    (3) Depreciation, amortization and accretion expenses.
    (4) Total cash costs plus depreciation, amortization and accretion
        expenses.
    

In 2009, gold production totalled 159,261 ounces from the processing of 688,676 tonnes at an average grade of 7.8 grams of gold per tonne. Mill recoveries for the year averaged 92.6%. Increased daily ore throughput of 1,887 tonnes per day in 2009 compared to 1,788 tonnes per day in 2008 was partially offset by lower ore grades, resulting in a slight increase in gold production in 2009.

Total cash costs in 2009 were US$401 per ounce, in line with the US$399 per ounce costs in 2008, as a weaker Canadian dollar offset the impact on costs of mining lower ore grades. Unit operating costs(1) in 2009 were stable at $108 per tonne compared to the unit costs of $105 per tonne in 2008. The operating profit margin in 2009 increased 15% to US$514 per ounce compared to US$448 per ounce in 2008, due primarily to higher realized gold prices.

(1) See non-GAAP measures on pages 4 and 5

In 2008, gold production totalled 158,830 ounces from the processing of 654,397 tonnes at an average grade of 8.2 grams of gold per tonne. Mill recoveries for the year averaged 92.5%. A 20% increase in ore throughput combined with 17% lower ore grades resulted in a slight decrease in gold production in 2008.

Total cash costs in 2008 were US$399 per ounce, higher than the US$331 per ounce costs in 2007, as a result of mining lower ore grades. Higher ore throughput in 2008 allowed unit operating costs to drop from $107 per tonne in 2007 to $105 per tonne in 2008, partially mitigating the higher unit costs on a per ounce basis.

The operating profit margin in 2008 increased 23% to US$448 per ounce compared to US$365 per ounce in 2007, due primarily to higher realized gold prices.

NON-GAAP MEASURES

Calculation of Adjusted Net Earnings

Adjusted net earnings are calculated by removing the gains and losses, net of income tax, resulting from the mark-to-market revaluation of the Company's gold and foreign currency price protection contracts, and the recovery of corporate takeover costs, as detailed in the table below. Adjusted net earnings do not constitute a measure recognized by generally accepted accounting principles (GAAP) in Canada or the United States, and do not have a standardized meaning defined by GAAP. The Company discloses this measure, which is based on its financial statements, to assist in the understanding of the Company's operating results and financial position.

    
    -------------------------------------------------------------------------
                                 Q4 2009     Q4 2008      2009        2008
    -------------------------------------------------------------------------
    (in thousands of Canadian
     dollars, except per share
     amounts)

    Net earnings as reported      $9,862     ($4,054)    $36,706      $4,921
    Add (deduct) the after-tax
     effect of:
    Derivative (gain) loss         3,937       4,664      (3,830)      8,522
    Recovery of defense costs          -           -           -      (3,220)
    -------------------------------------------------------------------------
    Adjusted net earnings        $13,799        $610     $32,876     $10,223
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjusted net earnings per
     share                         $0.09       $0.00       $0.21       $0.07
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Realized gold price per ounce of gold

Realized gold price per ounce of gold is a non-GAAP measure and is calculated by adjusting revenue for all realized gains and losses on gold derivative instruments and then dividing by the gold ounces sold.

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 is calculated by adjusting operating costs as shown in the Statement of Earnings and Comprehensive Income for inventory adjustments and then dividing by the tonnes processed through the mill.

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 2009, the average realized gold price was US$915 less total cash costs of US$401 for an operating profit margin of US$514, compared to an average realized gold price of US$847 less total cash costs of US$399 for an operating profit margin of US$448 in 2008.

For the fourth quarter ended December 31, 2009, the average realized gold price was US$946 less total cash costs of US$459 for an operating profit margin of US$487, compared to an average realized gold price of US$793 less total cash costs of US$356 for an operating profit margin of US$437 in 2008.

Outlook

Casa Berardi enters its fourth year of commercial operations in 2010, following the re-commencement of operations in November 2006.

Aurizon intends to utilize its strong cash flow to upgrade mineral resources to mineral reserves in order to extend and optimize the current mine plan.

Aurizon also intends to complete a prefeasibility study to assess the relative risks and opportunities of mining the Principal Zone crown pillar by open pit.

Drills are active on the 810 metre level exploration drift delineating the 113(deep), 113(S4), 118 and 123 Zones. The 550 metre level exploration track drift is being extended by 600 metres to provide a drilling platform to verify the continuity between the Principal zones, and the 118, 120 and 123 Zones.

A surface exploration drilling program at both the East and West Mine is evaluating the extension of existing zones and testing new interpolated targets.

Based upon the 2010 mine plan, it is estimated that Casa Berardi will produce approximately 145,000 - 155,000 ounces of gold at an estimated total cash cost of US$490 per ounce, using a Cad$/US$ exchange rate of 1.05. This compares to gold production of 159,261 ounces and a total cash cost of US$401 per ounce in 2009 at an average Cad$/US$ exchange rate of 1.14. The slight decrease in gold production for 2010 is attributable to lower average gold grades being included in the 2010 mine plan, particularly in the first part of the year.

On-site mining, milling and administrative costs are expected to average $104 per tonne in 2010.

The average daily mine production is estimated at 2,000 tonnes per day in 2010, up from 1,887 tonnes per day in 2009. Ore grades are expected to average 6.7 grams per tonne compared to the 7.8 grams per tonne achieved in 2009.

Beginning in 2011 and through subsequent years of operations, annual gold production of 160,000 to 170,000 ounces is anticipated at total cash costs approximating US$425 per ounce, as higher grade areas are included in the mine plan. It is anticipated that the mine plan will be revised to incorporate the final results of the extensive drill programs currently in progress.

Sustaining capital expenditures at Casa Berardi are estimated to be $20.7 million in 2010, and will include development of the upper and lower portions of Zone 113, underground infrastructure and equipment replacements. A further $7.2 million will be invested in the first half of 2010 on exploration. Additional exploration programs and budgets for the balance of the year will be developed to reflect results achieved in the first half of 2010.

At Joanna, a $3.4 million surface exploration program, comprising 28,000 metres of drilling, is testing targets to the north and south of the Hosco deposit; performing infill drilling on the Heva deposit; testing a potential satellite pit, approximately 700 metres west of the proposed Hosco pit; and testing potential extensions of the Hosco pit. Five (5) drill rigs are currently active on the Project.

In addition, work has commenced under the direction of BBA Inc., Montreal, Quebec, on a final feasibility study, which is anticipated to be completed in the fourth quarter, 2010.

At Kipawa, a $1.3 million exploration drilling program to test gold targets will commence in the second quarter as follow up on the work performed in 2009.

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 includes, but is not limited to, statements with respect to anticipated rates of recovery, timing and amount of future production, anticipated total cash cost per ounce of gold to be produced at the Casa Berardi Mine, currency exchange rates, the future price of gold and the effects thereof, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates and the economic viability thereof, the timing and amount of estimated capital expenditures, costs and timing of the development of new deposits, plans and budgets for and expected timing and results of exploration activities, permitting time-lines, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation obligations and expenses, title disputes or claims, adequacy of insurance coverage, the availability of qualified labour, acquisition plans and strategies, and the payment of dividends in the future. 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 contained in this report is based on certain assumptions that the Company believes are reasonable, including the exchange rates of the U.S. and Canadian currency in 2010, that the current price of and demand for gold will be sustained or will improve, the supply of gold will remain stable, that the current mill recovery rates at the Company's Casa Berardi Mine will continue, that the Company's current mine plan can be achieved, that the general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed on reasonable terms and that the Company will not experience any material accident, labor dispute, or failure of plant or 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, the risk that actual results of 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 or mineral 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 lower rates of production than expected, of unexpected variations in ore reserves, 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 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.

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 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.

    
                             Aurizon Mines Ltd.
                               Balance Sheets
                             As at December 31,

    (expressed in thousands of Canadian Dollars)          2009        2008
    -------------------------------------------------------------------------
    ASSETS                                                  $           $

    Current assets
      Cash and cash equivalents                          113,098      34,337
      Restricted cash                                          -      21,225
      Accounts receivable and prepaid expenses             4,825       4,419
      Tax credits receivable                               2,587       5,301
      Derivative instrument assets                         5,274         412
      Inventories                                         11,897      10,145
    -------------------------------------------------------------------------
                                                         137,681      75,839
    Non-current assets
      Derivative instrument assets                             -       1,420
      Other assets                                        14,551       1,553
      Property, plant and equipment                       53,691      54,761
      Mineral properties                                 117,370     124,378
    -------------------------------------------------------------------------
    TOTAL ASSETS                                         323,293     257,951
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES

    Current liabilities
      Accounts payable and accrued liabilities            16,451      15,067
      Derivative instrument liabilities                   13,885      13,727
      Current portion of long-term obligations               652      21,663
      Current provincial resource taxes payable            3,752       1,302
      Current portion of future income and resource
       tax liabilities                                     1,275           -
    -------------------------------------------------------------------------
                                                          36,015      51,759
    Non-current liabilities
      Derivative instrument liabilities                        -      13,474
      Long-term obligations                                  705       9,430
      Asset retirement obligations                        21,816      20,905
      Future income and resource tax liabilities          29,120      17,442
    -------------------------------------------------------------------------
    TOTAL LIABILITIES                                     87,656     113,010
    -------------------------------------------------------------------------
    SHAREHOLDERS' EQUITY
      Share Capital
        Common shares issued - 159,008,607 (2008 -
         148,068,248)                                    247,365     194,647
      Contributed Surplus                                    979         872
      Stock based compensation                            10,178       9,013
      Deficit                                            (22,885)    (59,591)
    -------------------------------------------------------------------------
    TOTAL SHAREHOLDERS' EQUITY                           235,637     144,941
    -------------------------------------------------------------------------
    TOTAL EQUITY & LIABILITIES                           323,293     257,951
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                             Aurizon Mines Ltd.
        Statements of Earnings (Loss) and Comprehensive Income (Loss)
                              For the periods,

    (expressed in thousands of
     Canadian Dollars, except    Three months ended          Year ended
     for share and per share        December 31,            December 31,
     amounts)                     2009        2008        2009        2008
    -------------------------------------------------------------------------
    Revenue                         $           $           $           $
      Mining operations           41,975      37,517     175,560     144,452
    -------------------------------------------------------------------------
    Expenses
      Operating                   17,740      16,590      73,479      68,605
      Depreciation, depletion
       and accretion               8,574      10,535      36,514      35,582
      Administrative and general   3,186       3,182      10,851      10,929
      Exploration                  1,070       3,116       3,769      11,426
      Derivative (gains) losses    5,084       5,794      (4,946)     10,586
      Interest on long-term debt     (57)        360         485       2,692
      Foreign exchange (gain) loss    25         828       2,413      (1,059)
      Capital taxes                  169         136         837         397
      Non refundable tax credits  (4,468)          -      (4,468)          -
      Other income                  (181)       (426)       (786)     (6,229)
    -------------------------------------------------------------------------
                                  31,142      40,115     118,148     132,929
    -------------------------------------------------------------------------
    Earnings (loss) for the
     period before income taxes   10,833      (2,598)     57,412      11,523
    Current provincial mining
     taxes                        (1,235)       (465)     (7,753)     (1,302)
    Future income tax recovery
     (expense)                       264        (991)    (12,953)     (5,300)
    -------------------------------------------------------------------------
    Net earnings (loss) and
     comprehensive income (loss)
     for the period                9,862      (4,054)     36,706       4,921
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings (loss) per share
      Basic and diluted             0.06       (0.03)       0.23        0.03
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of
     common shares outstanding   158,990     147,708     156,266     147,708
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                             Aurizon Mines Ltd.
                           Statements of Cash Flow
                              For the periods,

                                 Three months ended          Year ended
    (expressed in thousands         December 31,            December 31,
     of Canadian Dollars)         2009        2008        2009       2008
    -------------------------------------------------------------------------
                                    $           $           $           $
    OPERATING ACTIVITIES
      Net earnings (loss) for
       the period                  9,862      (4,054)     36,706       4,921
      Adjustment for non-cash
       items:
        Depreciation, depletion
         and accretion             8,575      10,535      36,514      35,582
        Refundable tax credits      (237)       (534)       (709)     (2,003)
        Non refundable tax
         credits                  (4,793)          -      (4,793)          -
        Stock based compensation     784       1,708       2,865       4,003
        Unrealized derivative
         (gains) losses             (481)      5,794     (14,139)     10,586
        Future income tax
         expense (recovery)         (264)        991      12,953       5,301
        Other                        (60)         96         (25)         85
    -------------------------------------------------------------------------
                                  13,386      14,536      69,372      58,475
        Decrease (increase) in
         non-cash working capital
         items                    (1,404)     (2,977)      2,450       1,790
    -------------------------------------------------------------------------
      Net cash provided by
       operating activities       11,982      11,559      71,822      60,265
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
        Reclamation deposits        (221)       (158)       (221)       (158)
        Property, plant and
         equipment                (1,949)     (2,363)    (11,422)     (7,500)
        Mineral properties        (7,322)     (6,546)    (26,811)    (20,498)
        Refundable tax credits     2,492       1,783       5,790       3,957
        Derivative instruments         -           -      (2,620)          -
        Restricted cash proceeds       -      14,220      21,225      10,528
    -------------------------------------------------------------------------
      Net cash provided by (used
       in) investing activities   (7,000)      6,936     (14,059)    (13,671)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Issuance of shares, net        220         173      50,925       2,653
      Long-term debt                (109)        119     (29,927)    (39,747)
    -------------------------------------------------------------------------
    Net cash provided by (used
     in) financing activities        111         292      20,998     (37,094)
    -------------------------------------------------------------------------
    INCREASE IN CASH AND CASH
     EQUIVALENTS                   5,093      18,787      78,761       9,500
    CASH AND CASH EQUIVALENTS -
     BEGINNING OF PERIOD         108,005      15,550      34,337      24,837
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS -
     END OF PERIOD               113,098      34,337     113,098      34,337
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

SOURCE AURIZON MINES LTD.

For further information: For further information: AURIZON MINES LTD., Suite 3120, 666 Burrard Street, Park Place, Vancouver, British Columbia, V6C 2X8; For further information, contact David P. Hall, President or Ian S. Walton, Chief Financial Officer, at Telephone: (604) 687-6600, Toll Free: 1-888-411-GOLD, Fax: (604) 687-3932, Web Site: www.aurizon.com, Email: info@aurizon.com; Or Renmark Financial Communications Inc., 2080 Rene-Levesque Blvd. West, Montreal, QC, H3H 1R6; Barry Mire: bmire@renmarkfinancial.com, Maurice Dagenais: mdagenais@renmarkfinancial.com, Media: Lynn Butler: lbutler@renmarkfinancial.com, Tel: (514) 939-3989, Fax: (514) 939-3717

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AURIZON MINES LTD.

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