Aurizon reports record revenues and cash flow in second quarter 2009



    
    Shares Listed:
    Toronto Stock Exchange - Ticker Symbol - ARZ
    NYSE Amex:   - Ticker Symbol - AZK
    U.S. Registration: (File 001-31893)
    

    VANCOUVER, Aug. 14 /CNW/ - Aurizon is pleased to announce record revenues
and cash flow and other highlights of its financial and operating results for
the second quarter ended June 30, 2009, which have been prepared on the basis
of available information up to August 10, 2009. (To review the complete
interim unaudited financial statements and associated Management Discussion
and Analysis, which should be read in conjunction with the Company's most
recent audited annual financial statements, please visit the Company's website
at www.aurizon.com or view the Company's SEDAR filings at www.sedar.com).
    The second quarter was highlighted by the following activities:

    
    -   Record revenues of $44.2 million.

    -   Record cash flow from operating activities of $22.5 million, up 19%
        compared to same quarter of 2008.

    -   Earnings of $13.6 million, or $0.08 per share, and adjusted earnings
        of $3.9 million, or $0.02 per share.

    -   Gold production of 39,874 ounces, in line with plan.

    -   Total cash costs of US$386 per ounce, 11% lower than same quarter of
        2008.

    -   Equity financing in April 2009 realized net proceeds of
        $47.3 million.
    

    At June 30, 2009, Aurizon had cash balances of $118.7 million, and
working capital of $84.1 million. Included in the cash balances is $30.2
million which is held in restricted accounts in respect of the Casa Berardi
project debt facility.
    "With cash balances of $118.7 million and working capital of $84.1
million, the Company is in a strong financial position to pursue its growth
strategy to increase its reserve base and production profile" said David P.
Hall, President and Chief Executive Officer. "Strong profit margins and
operating cash flows from Casa Berardi should further strengthen Aurizon's
balance sheet, enabling the Company to fund its planned exploration and
development programs and pursue opportunities that are attractive and
accretive to Aurizon's stakeholders."

    FINANCIAL RESULTS

    Second Quarter 2009

    Earnings of $13.6 million, or $0.08 per share, were achieved in the
second quarter of 2009, compared to earnings of $5.6 million, or $0.04 per
share, in the same period of 2008. Results were positively impacted by
non-cash derivative gains of $9.7 million on an after tax basis. After
adjusting for this item, earnings for the quarter were $3.9 million, or $0.02
per share, compared to adjusted earnings in the second quarter of 2008 of $1.1
million or $0.01 per share. In 2008, operating results were positively
impacted by a $3.2 million recovery of corporate takeover defense costs and
non-cash derivative gains of $1.4 million, on an after tax basis.
    Revenue from Casa Berardi operations increased to $44.2 million in the
second quarter of 2009 from the sale of 42,042 ounces of gold, compared to
$36.3 million from the sale of 41,217 ounces of gold in the same quarter of
2008, primarily as a result of a weaker Canadian dollar and higher realized
gold prices. The average realized gold price was US$897 per ounce and the
average Cad/US exchange rate was 1.17, compared to realized prices of US$869
per ounce at an average exchange rate of 1.01 in the same quarter of 2008. The
2009 average realized gold price includes the sale of 16,042 ounces of gold at
an average price of US$874 per ounce from the exercise of call options,
compared to 18,717 ounces of gold sold at an average price of US$839 per ounce
from the exercise of call options in the second quarter of 2008. Actual gold
production in the quarter was 39,874 ounces, compared to 36,871 ounces in the
same quarter of 2008.
    Subsequent to June 30, 2009, the Company effectively reduced its exposure
to the gold call options sold by purchasing 16,614 ounces of call options
expiring in 2010 with an exercise price of US$863 per ounce. This purchase
effectively reduces the ounces that are subject to call options in 2010 by 25%
and raises the average call price in 2010 from US$908 per ounce to US$923 per
ounce. The cost of the purchase, totalling US$2.4 million, will be reflected
on the balance sheet as a derivative instrument asset and changes in the fair
value of the call options reflected in earnings.
    Operating costs in the second quarter of 2009 totalled $19.1 million,
while depletion, depreciation and accretion ("DD&A") totalled $9.3 million. On
a unit cost basis, total cash costs per ounce of gold sold were US$386(1) and
DD&A was US$189 per ounce, for a total production cost of US$575 per ounce.
    In the second quarter of 2009, lower gold option volatilities, a stronger
Canadian dollar, the expiry of gold call options and foreign exchange
contracts, partially mitigated by rising gold prices, resulted in a non-cash
gain of $13.9 million and a decrease in the net unrealized derivative
liabilities to $12.4 million at June 30, 2009. In the same quarter of 2008,
the non-cash gain was $1.7 million. There are no margin requirements with
respect to these derivative positions.
    Administrative and general costs in the second quarter of 2009 were lower
than the same period of 2008 at $2.6 million compared to $3.3 million
resulting from lower stock based compensation charges in 2009. Excluding these
non-cash stock based compensation charges, general and administrative costs
were $2.0 million in 2009 compared to $1.8 million in the same quarter of
2008.
    Exploration and pre-feasibility expenditures of $0.7 million incurred in
respect of Joanna and Kipawa were charged to operations during the second
quarter of 2009, compared to $2.9 million in the same period of 2008.
    Interest costs associated with the project debt facility dropped to $0.1
million from $0.6 million in the second quarter of 2008 as a result of lower
debt and declining interest rates.
    Income and resource taxes totalled $11.5 million, of which $3.3 million
are current Quebec mining taxes and $8.2 million are future income taxes. The
future income taxes are a result of temporary differences between the tax and
accounting bases of the Company's assets and liabilities.
    Foreign exchange losses totalling $1.1 million were realized in the
second quarter of 2009, compared to a loss of $0.1 million in the same quarter
of 2008. The primary cause for the higher loss in the second quarter of 2009
is the delivery of US$9.0 million dollars into foreign exchange contracts at
rates less favourable than the prevailing market rates.
    Cash flow from operating activities increased 19% to $22.5 million in the
second quarter of 2009, compared to cash flow of $19.0 million in the same
period of 2008. A weaker Canadian dollar and higher realized US dollar gold
prices resulted in a 19% increase in realized Canadian dollar gold prices and
a wider operating profit margin in the second quarter of 2009 compared to the
same period last year. In the second quarter of 2008 there was also a $4.0
million recovery of takeover defense costs included in other income.
    Capital expenditures totalled $10.1 million in the second quarter, of
which $7.4 million was on sustaining capital and $2.7 million was on
exploration activity at Casa Berardi.
    In accordance with the terms of the project debt facility, restricted
cash accounts are maintained for Casa Berardi's operations. These restricted
cash balances increased by $4.0 million in the second quarter of 2009 as a
result of positive cash flow from Casa Berardi operations, net of sustaining
capital and the release of $13.0 million to the Company's general account.
    Aggregate investing activities resulted in cash outflows of $14.1 million
during the second quarter of 2009, compared to outflows of $21.6 million in
the same period of 2008.
    A bought deal equity financing in April 2009, at $5.15 per share,
resulted in net proceeds of $47.3 million. In addition, the exercise of
incentive stock options provided a further $0.8 million. These equity
issuances, reduced by a repayment of government assistance totalling $0.6
million, resulted in net cash inflows of $47.5 million from financing
activities during the second quarter of 2009. In the same period of 2008,
financing activities resulted in a net cash inflow of $1.1 million.

    First Half 2009

    Earnings for the six months ended June 30, 2009, were $18.6 million or
$0.12 per share, compared to earnings of $1.9 million or $0.01 per share in
the same period of 2008. Operating results were impacted by non-cash
derivative gains of $9.3 million on an after tax basis. After adjusting for
this item, earnings for the first half were $9.3 million, or $0.06 per share,
compared to adjusted earnings in the same period of 2008 of $5.3 million or
$0.04 per share, which included the impact of the recovery of defense costs of
$3.2 million, on an after tax basis.
    Cash flow from operating activities in the first half of 2009 totalled
$42.3 million, compared to cash flow of $34.5 million for the same period of
2008. Operating profit margin per ounce increased 15% to US$511(2) per ounce
for the six months ended June 30, 2009, compared to US$444 per ounce in the
same period of 2008.
    Investing activities in the first half of 2009 totalled $29.6 million, of
which $20.6 million was incurred on capital and exploration expenditures and
$9.0 million was transferred to restricted cash accounts. In the same period
of 2008, investing activities totalled $15.1 million of which $10.4 million
was incurred on capital expenditures, $4.1 million was transferred to
restricted cash accounts, and $0.5 million was paid as a reassessment of
refundable tax credits.
    Financing activities during the first half of 2009 resulted in a net cash
inflow of $41.5 million due to the $47.3 million public equity financing and
$3.0 million from the exercise of incentive stock options, reduced by a
principal debt repayment of $8.2 million on March 31, 2009 and repayment of a
$0.6 million government assistance obligation. In the same period of 2008,
financing activities resulted in a net cash outflow of $24.5 million due to a
principal debt repayment of $26.7 million, reduced by the exercise of
incentive stock options totalling $2.3 million.

    CASH RE

SOURCES AND LIQUIDITY As at June 30, 2009, cash balances increased to $118.7 million, compared to $55.6 million at the beginning of the year. Included in these cash balances are restricted cash amounts in respect of the Casa Berardi debt facility totalling $30.2 million, compared to $21.2 million as at December 31, 2008. Aurizon had working capital of $84.1 million as at June 30, 2009, compared to $24.1 million at the end of 2008. Reflected in working capital are the two final project debt repayments due in September 2009 and March 2010 totalling $21.0 million and net derivative liabilities totalling $10.0 million compared to $13.3 million at the end of 2008. Long-term debt related to refundable government assistance totalled $0.7 million at June 30, 2009, compared to long-term debt of $9.4 million at the beginning of the year, which included project debt of $8.25 million. CASA BERARDI Casa Berardi produced 39,874 ounces of gold in the second quarter of 2009, and 42,042 ounces were sold at an average price US$897 per ounce. Since commissioning the mill in November 2006, Casa Berardi has produced 414,870 ounces of gold. Operations ------------------------------------------------------------------------- 2009 2008 ------------------------------------------------------------------------- H1 Q2 Q1 Q4 Q3 Q2 Q1 ------------------------------------------------------------------------- Operating results Tonnes milled 337,913 170,429 167,484 169,291 161,358 160,054 163,694 Grade - grams/ tonne 7.88 7.84 7.93 7.70 8.58 7.73 8.63 Mill recoveries - % 92.0% 92.8% 91.3% 91.5% 93.3% 92.7% 92.6% ------------------------------------------------------------------------- Gold Production - ounces 78,840 39,874 38,966 38,363 41,522 36,871 42,074 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gold sold - ounces 79,442 42,042 37,400 38,348 40,228 41,217 39,611 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Per ounce data - US$ Average realized gold price $893 $897 $888 $793 $845 $869 $877 ------------------------------------------------------------- Total cash costs(1) $382 $386 $379 $356 $405 $436 $422 Amortiza- tion(2) 186 189 183 226 211 210 191 ------------------------------------------------------------- Total production costs(3) $568 $575 $562 $582 $616 $646 $613 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Table footnotes: (1) Operating costs net of by-product silver credits, divided by ounces sold, and divided by the average Bank of Canada Cad$/US$ rate. (2) Depreciation, depletion and accretion expenses divided by ounces sold, and divided by the average Bank of Canada Cad$/US$ rate. (3) Total cash costs plus depreciation, depletion and accretion expenses per ounce of gold sold. Ore throughput in the mill during the second quarter of 2009 increased to 170,429 tonnes from 160,054 tonnes in the same period of 2008 as a stable daily production rate of 1,870 tonnes per day was achieved. An average ore grade of 7.8 grams/tonne was achieved in the second quarter of 2009, in line with plan. Mill recoveries averaged 92.8% in the second quarter of 2009. This compares to ore grades of 7.7 grams/tonne and mill recoveries of 92.7% in the second quarter of 2008. Since March 2009, ore feed has been provided by three different zones including the 113 Zone, the NW Zone, and the newly developed Lower Inter Zone, thereby improving flexibility in the mining operations. Total cash costs, on the basis of gold sold, were US$386 per ounce in the second quarter of 2009, in line with plan, and compared to US$436 per ounce in the second quarter of 2008. The weakness of the Canadian dollar in the second quarter of 2009 was the primary factor for the lower unit costs compared to those achieved in the same period of 2008. Unit mining costs in the second quarter of 2009 were $112 per tonne, 7% higher than the same quarter of 2008 costs of $105 per tonne, due to increased stope preparation associated with the start-up of mining the Lower Inter Zone in the quarter. Operating profit margin per ounce increased 18% to US$511 per ounce from US$433 per ounce in the same quarter of 2008. Casa Berardi Exploration Exploration activities at Casa Berardi during the first half of 2009 have focused on the completion of an exploration drift at the 810 metre level, east of Zone 113 and south of the Casa Berardi fault. The drift provides drill access to test the depth extension of Zone 113 and to test the continuity and extension of Zones 118 to 122 and the 123-South Zone. Drilling in the vicinity of Zone 113 has confirmed the previous geological interpretation of the Zone and has extended the favourable gold trend 100 metres deeper to the 950 metre level. For the remainder of 2009, $10.5 million will be invested at Casa Berardi for exploration activities, including $4.2 million on underground development and infrastructure. Underground exploration will continue from the exploration drift at the 810 metre level of the West mine, to test the depth extension of Zone 113 and the continuity and extension of Zones 118 and 123-South. In addition, an underground and surface drill program has recently commenced to explore along the west extension of the Lower Inter Zone, along the Principal Zone and along the dip extension of the East Mine with the objective of delineating mineral resources. Nine drill rigs are currently active at Casa Berardi. At the Casa Berardi East Mine, the Company has decided to defer mining by open pit, the crown pillar until closer to the end of the mine life and focus on the opportunity to re-commence underground operations. The technical assessment study on mining the upper portion of the Principal Zones by open pit is in progress and is expected to be completed in the fourth quarter of 2009. The study will be completed in accordance with the Company's global development principles supporting technical, economic, environmental and social considerations. OTHER PROPERTIES Joanna Gold Property Exploration activities in the first half of 2009 resulted in the discovery of two new mineralized trends which were identified north and south of the main Heva-Hosco gold bearing trend at Joanna. Both discoveries remain open on strike and down dip. Work also included the testing of a deep exploration target 400 to 700 metres down-plunge from the Hosco mineral resource contour. Results obtained from the program indicate the grade and thickness of the Hosco mineralization continue. No gold enrichment was encountered. At Joanna, a pre-feasibility study is currently in progress on the Hosco block, incorporating the new measured and indicated resource estimate of approximately 1.27 million ounces, together with the results of the ongoing metallurgical tests. The pre-feasibility study will be completed in accordance with the Company's global development principles supporting technical, economic, environmental and social considerations. It is anticipated that the study will be completed in the fourth quarter, 2009. Kipawa Gold/Uranium Property Exploration activity at Kipawa in the second quarter was focussed primarily on the initiation of soil sampling in areas of interest contiguous to gold showings identified in 2008, with the objective of extending the known gold structures. This work follows the analysis and interpretation of results from the surface programs performed in 2008. OUTLOOK Based upon the first half results and the 2009 mine plan, Casa Berardi remains on target to produce between 150,000 to 155,000 ounces of gold. The recent strength of the Canadian dollar has resulted in revised total cash costs of US$433 per ounce for the second half of the year and US$405 per ounce for the full year, assuming a Cad$/US$ exchange rate of 1.10 for the second half of 2009. Previous guidance for 2009 was US$390 per ounce, assuming a Cad$/US$ exchange rate of 1.20. Sustaining capital costs at Casa Berardi for the remainder of 2009 are estimated to total $9.7 million, including $5.0 million for the development of the upper and lower portions of the 113 Zone and of the Lower Inter Zone and $4.6 million on property, plant and mine equipment improvements. In addition, a further $10.5 million will be spent on exploration. The Company is in a strong financial position at June 30, 2009, with cash balances of $118.7 million and working capital of $84.1 million. The remaining project debt of $21 million, which is repayable in the next nine months, is reflected in working capital. The outlook for gold remains positive which should provide strong profit margins and operating cash flows from Casa Berardi, which should further strengthen Aurizon's balance sheet while continuing to fund its planned exploration and capital programs. With the stability of operations at Casa Berardi providing significant cash flow and a strong balance sheet, the Company continues to actively pursue opportunities to enhance its growth profile. NON-GAAP MEASURES a) Calculation of Adjusted Earnings Adjusted 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 defense recovery costs, as detailed on the table below. Adjusted 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. --------------------------------------------------------------------- 2nd 2nd 1st 1st Quarter Quarter Half Half 2009 2008 2009 2008 --------------------------------------------------------------------- (in thousands of Canadian dollars, except per share amounts) Earnings as reported $13,585 $5,643 $18,633 $1,867 Add (deduct) the after-tax effect of: Unrealized (gain) loss on derivative instruments (9,723) (1,352) (9,305) 6,635 Recovery of defense costs - (3,220) - (3,220) --------------------------------------------------------------------- Adjusted earnings $3,862 $1,071 $9,328 $5,282 --------------------------------------------------------------------- Adjusted earnings per share $0.02 $0.01 $0.06 $0.04 --------------------------------------------------------------------- --------------------------------------------------------------------- b) Total Cash Costs per Gold Ounce Aurizon has included a non-GAAP performance measure of total cash costs per ounce of gold in this report. Aurizon reports total cash costs on a sales basis. In the gold mining industry, this is a common performance measure, but does not have any standardized meaning, and is a non-GAAP measure. The Company believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Total cash costs per gold ounce are derived from amounts included in the statements of earnings and include mine site operating costs such as mining, processing and administration, but exclude amortization, reclamation costs, financing costs and capital development costs. These costs are reduced by silver by-product sales and then divided by gold ounces sold and the average Bank of Canada Cad$/US$ exchange rate to arrive at the total cash operating costs per ounce. c) 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 Statements of Earnings and Comprehensive Income for inventory adjustments and then dividing by the tonnes of ore processed through the mill. d) Operating Profit Margins per Ounce Operating profit margins per ounce are a non-GAAP measure, and are calculated by subtracting the total cash costs per ounce from the average realized gold price. For the quarter ended June 30, 2009, the average realized gold price was US$897 less total cash costs of US $386 for a operating profit margin of US$511 per ounce, compared to an average realized gold price of US$869 less total cash costs of US$436 for a operating profit margin of US$433 per ounce for the second quarter of 2008. Outstanding Share Data As of August 10, 2009, Aurizon had 158,825,232 common shares issued and outstanding. In addition, 7,652,475 incentive stock options, representing 4.8% of outstanding share capital, are outstanding and exercisable into common shares at an average price of $3.63 per share. Common Shares (TSX - ARZ & NYSE Amex - AZK) -------------------------------------------- June 30, December 31, 2009 2008 -------------------------------------------- Issued 158,787,732 148,068,298 Fully-diluted 166,477,707 156,586,548 Weighted average 153,605,599 147,707,642 -------------------------------------------- -------------------------------------------- Qualified Person and Quality Control Information of a scientific or technical nature was prepared under the supervision of Michel Gilbert, P. Eng., Executive Vice-President, Operations of Aurizon and a qualified person under National Instrument 43-101. Conference Call Aurizon management will host a conference call and live webcast for analysts and investors on Friday, August 14, 2009 at 8:00 a.m. Pacific Standard Time (11:00 a.m. Eastern Standard Time) to review the results. You may access the call by calling the operator at 416-644-3417 or toll free access at 1-800-732-9307 ten (10) minutes prior to the scheduled start time. 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://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2732180. Those who wish to listen to a recording of the conference call at a later time may do so by calling 416-640-1917 or 1-877-289-8525 (Passcode 21310490 followed by number sign). This playback version of the call will be available until Friday, August 14, 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 2009, 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 (unaudited) - as at June 30 December 31 (in thousands of Canadian Dollars) 2009 2008 ------------------------------------------------------------------------- $ $ ASSETS CURRENT Cash and cash equivalents 88,467 34,337 Restricted cash 30,207 21,225 Accounts receivable and prepaid expenses 3,943 4,419 Refundable tax credits and mining duties 5,301 5,301 Derivative instrument assets 7 412 Inventories 10,505 10,145 ------------------------------------------------------------------------- 138,430 75,839 Derivative instrument assets 12 1,420 Other assets 1,896 1,553 Property, plant & equipment 56,509 54,761 Mineral properties 125,701 124,378 ------------------------------------------------------------------------- TOTAL ASSETS 322,548 257,951 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES CURRENT Accounts payable and accrued liabilities 19,689 15,067 Derivative instrument liabilities 10,014 13,727 Current portion of long-term debt 21,577 21,663 Current provincial mining taxes payable 3,067 1,302 ------------------------------------------------------------------------- 54,347 51,759 Derivative instrument liabilities 2,431 13,474 Long-term debt 708 9,430 Asset retirement obligations 21,322 20,905 Future income tax liabilities 28,054 17,442 ------------------------------------------------------------------------- TOTAL LIABILITIES 106,862 113,010 ------------------------------------------------------------------------- ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Share Capital 246,530 194,647 Contributed Surplus 872 872 Stock based compensation 9,242 9,013 Deficit (40,958) (59,591) ------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 215,686 144,941 ------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 322,548 257,951 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Aurizon Mines Ltd. Statements of Earnings and Comprehensive Income (unaudited) Three months ended Six months ended (in thousands, except per share June 30 June 30 amounts, of Canadian Dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- $ $ $ $ REVENUE Mining operations 44,224 36,299 85,790 71,433 ------------------------------------------------------------------------- EXPENSES Operating 19,085 18,120 36,752 34,989 Depreciation, depletion and accretion 9,281 8,661 17,793 16,211 Administrative and general 2,622 3,313 5,415 5,828 Exploration costs 738 2,906 1,970 5,231 Unrealized derivative (gains) losses (13,876) (1,680) (12,943) 8,242 Interest on long-term debt 131 618 383 1,765 Foreign exchange loss (gain) 1,118 62 2,814 (1,098) Capital taxes 195 (99) 398 126 Other income (137) (4,552) (454) (5,302) ------------------------------------------------------------------------- 19,157 27,349 52,128 65,992 ------------------------------------------------------------------------- Earnings for the period before income taxes 25,067 8,950 33,662 5,441 Current provincial mining taxes (3,250) (497) (4,417) (497) Future income tax expense relating to provincial mining taxes (729) (1,181) (1,151) (1,942) Future income tax expense (7,503) (1,629) (9,461) (1,135) ------------------------------------------------------------------------- Earnings and comprehensive income for the period 13,585 5,643 18,633 1,867 ------------------------------------------------------------------------- Earnings per share - basic and diluted 0.08 0.04 0.12 0.01 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares outstanding (thousands) 158,716 147,712 153,606 147,412 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Aurizon Mines Ltd. Statements of Deficit (unaudited) Three months ended Six months ended (in thousands of June 30 June 30 Canadian Dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- $ $ $ $ Deficit - Beginning of period as previously reported (54,543) (68,288) (59,591) (69,006) Retrospective adoption of new accounting standard - - - 4,494 ------------------------------------------------------------------------- Deficit - as adjusted (54,543) (68,288) (59,591) (64,512) Earnings for the period 13,585 5,643 18,633 1,867 ------------------------------------------------------------------------- Deficit - end of period (40,958) (62,645) (40,958) (62,645) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Aurizon Mines Ltd. Statements of Cash Flow (unaudited) Three months ended Six months ended (in thousands of June 30 June 30 Canadian Dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- $ $ $ $ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Earnings for the period 13,585 5,643 18,633 1,867 Adjustments for non-cash items: Depreciation, depletion, and accretion 9,281 8,661 17,793 16,211 Refundable tax credits (129) (533) (343) (915) Loss (gain) on sale of property, plant and equipment - - 34 (11) Stock based compensation 641 1,532 1,565 1,893 Unrealized non-hedge derivative (gains) losses (13,876) (1,680) (12,943) 8,242 Future income tax expense relating to mining duties 729 1,181 1,151 1,942 Future income tax expense 7,503 1,629 9,461 1,135 ------------------------------------------------------------------------- 17,734 16,433 35,351 30,364 Decrease in non-cash working capital items 4,803 2,526 6,922 4,161 ------------------------------------------------------------------------- 22,537 18,959 42,273 34,525 ------------------------------------------------------------------------- CASH USED IN INVESTING ACTIVITIES Property, plant and equipment (4,198) (1,740) (7,723) (3,287) Mineral properties (5,937) (4,718) (12,919) (7,110) Restricted cash funding (3,969) (15,169) (8,982) (4,142) Refundable tax credits - - - (534) ------------------------------------------------------------------------- (14,104) (21,627) (29,624) (15,073) ------------------------------------------------------------------------- CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES Issuance of shares, net of costs 48,086 1,406 50,348 2,332 Long-term debt (639) (349) (8,867) (26,881) ------------------------------------------------------------------------- 47,447 1,057 41,481 (24,549) ------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 55,880 (1,611) 54,130 (5,097) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 32,587 21,350 34,337 24,836 ------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS - END OF PERIOD 88,467 19,739 88,467 19,739 ------------------------------------------------------------------------- -------------------------------------------------------------------------

For further information:

For further information: AURIZON MINES LTD., David P. Hall, President
and C.E.O., Ian S. Walton, Executive Vice President and C.F.O., 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; Henri Perron: hperron@renmarkfinancial.com; Media
- Vanessa Napoli: vnapoli@renmarkfinancial.com, Tel: (514) 939-3989, Fax:
(514) 939-3717

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AURIZON MINES LTD.

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