Aurizon reports 2007 financial results

    Shares Listed:
    Toronto Stock Exchange - Ticker Symbol - ARZ
    American Stock Exchange - Ticker Symbol - AZK
    U.S. Registration: (File No. 0-22672)

    VANCOUVER, March 19 /CNW/ - Aurizon Mines Ltd. (TSX: ARZ; AMEX:  AZK) is
pleased to announce its unaudited financial results for the year ended
December 31, 2007.


    Fourth Quarter highlights:

    -   Cash flow from operations of $12.0 million.

    -   Increase of $ 18.2 million in cash balances.

    -   Gold production of 37,007 ounces.

    -   Net loss of $5.9 million, or ($0.04) per share, which was net of a
        non-cash derivative loss of $10.3 million.

    -   Total cash costs of US$402 per ounce.

    2007 Full Year highlights:

    -   Achieved commercial production at Casa Berardi, producing 159,500
        ounces of gold in 2007.

    -   Discovered high grade zone (123-S) at Casa Berardi.

    -   Established mineral resources of 600,000 indicated ounces and
        1.4 million inferred ounces at Joanna.

    -   Cash flow from operations of $32 million.

    -   Total cash costs of US$327 per ounce.

    -   Net earnings of $5.5 million, or $0.04 per share, which was net of a
        non-cash derivative loss of $6.0 million.

    "2007 was another milestone year for Aurizon. Commercial production was
achieved at Casa Berardi and a significant mineral resource was outlined at
Joanna." said David Hall, Aurizon's President and Chief Executive Officer.
"Looking to the future, our growing operating cash flow will enable us to
enhance the value of our prospective land holdings. Aurizon is well positioned
to capitalize on rising gold prices."


    Financial Review

    In the fourth quarter of 2007, Aurizon incurred a net loss of 
$5.9 million, or ($0.04) per share, compared to a net loss of $2.2 million, or
($0.01) per share, in the fourth quarter of 2006. Fourth quarter results were
impacted by non-cash derivative losses of $10.3 million, stock based
compensation charges of $1.0 million, increased exploration activity of 
$1.7 million at Joanna, and higher depreciation and depletion charges of 
$9.2 million. In the fourth quarter of 2006, non-cash charges associated with
derivative instruments totaled $3.1 million, partially offset by a non-cash
future income tax recovery of $2.1 million. There were no revenues from
operations in 2006, as Casa Berardi was not in commercial production until
May 1, 2007.
    Cash flow from operating activities was $12.0 million in the fourth
quarter, compared to cash outflows of $10.0 million for the same period of
2006. Aurizon's aggregate operating, investing and financing activities during
the fourth quarter of 2007 resulted in a net $18.2 million increase in its
cash balances compared to a decrease of $0.6 million in the same period of
2006. On December 31, 2007, $19.2 million was released from restricted cash,
resulting in free cash of $24.8 million at year end. Restricted cash totaled
$31.8 million at December 31, 2007.
    Gold production for the fourth quarter of 2007 was 37,007 ounces from the
processing of 154,001 tonnes at an average grade of 8.1 grams of gold per
tonne. The anticipated lower ore grades in the fourth quarter, compared to the
average grade of 10.4 grams/tonne for the first nine months of 2007, together
with a strong Canadian dollar, resulted in cash operating costs per ounce of
US$402 in the quarter, compared to US$287 for the first nine months and US$327
for the year.
    Net earnings in 2007 totalled $5.5 million, or $0.04 per share, compared
to a net loss of $15.0 million, or ($0.10) per share in 2006. Earnings in 2007
include eight months of commercial operations at Casa Berardi from 
May 1, 2007. In 2006, Casa Berardi was in the pre-production construction
period, with initial start-up in the fourth quarter.
    Earnings in 2007 include non-cash charges associated with a $6.0 million
mark-to-market adjustment of non-hedge derivative instruments and a $3.5
million charge for stock based compensation, offset by a future income tax
recovery of $2.2 million.
    The net loss in 2006 included a number of non-cash items, including an
$8.7 million mark-to-market charge for non-hedge derivative instruments, a
$1.7 million charge for stock based compensation, and a $4.5 million future
income tax recovery. The 2006 loss also included non-recurring expenses
totalling $5.3 million related to an unsolicited takeover bid.
    In 2007, Casa Berardi gold production totalled 159,469 ounces and gold
sales during the year totalled 160,600 ounces. The average realized gold price
in 2007 was US$696 per ounce and, at an average Cdn/US exchange rate of 1.06,
sales proceeds totalled $118.8 million. As Casa Berardi was not in commercial
production until May 1, 2007, gold and silver sales, totalling $31.1 million,
and associated operating costs have been deferred and included in capitalized
mineral property costs.
    Eight months of commercial operations in 2007 resulted in cash flow of
$32.2 million, compared to cash outflows of $13.0 million in 2006. In 2006,
corporate and administrative cash costs, takeover bid costs, together with a
build-up of gold and supplies inventories resulted in the cash outflows.

    Balance Sheet

    As at December 31, 2007, cash and cash equivalents stood at 
$24.8 million, compared to $9.5 million in 2006. In addition, restricted cash
balances in respect of the Casa Berardi debt facility totalled $31.8 million
at December 31, 2007 compared to $19.4 million in 2006.
    At the end of 2007, Aurizon had working capital of $31.9 million,
compared to $29.4 million at the end of 2006. Included in current liabilities
are two principal debt payments due in March and September 2008, totalling
$25.7 million, together with a capital lease obligation of $0.1 million,
compared to one principal payment of $4.4 million included in current
liabilities at the end of 2006.
    In February 2008, an amendment to the project debt facility allowed the
modification of certain operating performance benchmarks that must be achieved
at Casa Berardi; extended the date of achieving these parameters from 
January 31, 2008 to September 30, 2008; and provided that an additional
principal payment totaling $15.0 million be made on March 31, 2008. All
principal repayments may be paid from the restricted cash accounts.
    Long term debt at December 31, 2007 totalled $44.9 million of which 
$43.1 million is project debt, $1.7 million is refundable government
assistance and $0.1 million are equipment capital leases.


    Summary of Key Operational Statistics

                             Q1       Q2       Q3       Q4     2007     2006
    Operating results
    Tonnes milled       104,663  134,569  152,025  154,001  545,258   68,481
    Grade - grams/tonne   10.14    10.38    10.65     8.14     9.78     8.58
    Mill recoveries - %   93.8%    93.8%    92.8%    91.8%    93.0%    93.9%
    Gold Production -
     ozs                 32,013   42,144   48,305   37,007  159,469   17,731
    Gold sold - ounces
     production          30,100   10,500        -        -   40,600    6,882
     production(l)            -   26,000   50,000   44,000  120,000        -
    Gold sold - total    30,100   36,500   50,000   44,000  160,600    6,882
    Per ounce data - US$
    Average realized
     gold price            $651     $666     $679     $770     $696     $625
    Total cash
     costs (2),(3)            -     $298     $282     $402     $327        -
    Amortization(4)           -     $152     $162     $214     $169        -
    Total production
     costs(5)                 -     $450     $444     $616     $496        -

    Table footnotes:

    (1) Commercial production achieved May 1, 2007.
    (2) Year to date data from date of commercial production on May 1, 2007.
    (3) Cost figures calculated in accordance with Gold Institute Standard
        from the date of achieving commercial production.
    (4) Depreciation, amortization and reclamation expenses.
    (5) Total cash costs plus depreciation, amortization and reclamation

    In 2007, gold production totalled 159,469 ounces from the processing of
545,258 tonnes at an average grade of 9.8 grams of gold per tonne. Mill
recoveries for the year averaged 93.0%, compared to 91% anticipated in the
feasibility study.
    Ore production scaled up during the first half of 2007 from 1,130 tonnes
per day to over 1,650 tonnes per day as additional stopes were developed.
Initial mining experience gained in early 2007, necessitated more elaborate
ground support systems, which have had a direct impact on the development and
production cycles. In addition to the ground support changes, modifications
were made to the mining sequence, which resulted in the mining of stopes in
the center of the orebody and working outwards to the abutments in a pyramidal
shape. Production rates stabilized in the second half of 2007 above 1,650
tonnes per day and are expected to increase to 1,800 tonnes per day in 2008.


    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
follows the recommendations of the Gold Institute standard. 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. The
following table provides a reconciliation of total cash costs per ounce to the
financial statements:

    Total Cash Costs per Ounce              Q2        Q3        Q4    2007(1)

    (in $ thousands)
    Operating costs                     $8,444   $14,859   $17,470   $40,773
    By-product silver sales               ($84)    ($121)     ($86)    ($291)
    Total cash costs - Cdn $            $8,360   $14,738   $17,384   $40,482
    Divided by average Bank of Canada
     Cdn$/US$ exchange rate               1.08     1.045      0.98     1.075
    Divided by ounces of gold sold      26,000    50,000    44,000   120,000
    Total cash costs per ounce
     of gold - US$                        $298      $282      $403      $327

    (1) Year to date data from date of commercial production on May 1, 2007.

    Higher than average mine reserve ore grades and a weaker Canadian dollar
in the second and third quarters of 2007 resulted in total cash costs of less
than US$300 per ounce. These two strong performing quarters, together with the
anticipated lower ore grades in the fourth quarter and a stronger Canadian
dollar, resulted in total cash costs of US$327 per ounce for 2007.


    Having achieved a successful commissioning and ramp-up of operations at
Casa Berardi in 2007, 2008 will mark the first full year of commercial
operations since Aurizon acquired the mine in 1998.
    The outlook for gold appears very positive. Investment demand for gold is
strong as a result of turmoil in the financial markets resulting from the U.S.
sub-prime mortgage meltdown, a weak U.S. dollar, expectations of lower
interest rates to avert a U.S. recession, and inflationary pressures in the
world economies. The rapid rise in the price of gold has recently resulted in
a dramatic decrease in jewellery demand and increase in scrap gold sales;
however, this may stabilize as consumers become accustomed to the higher
price. On the supply side, a lack of new gold discoveries to replace closures,
continued depletion of existing ore bodies, power shortages and work force
issues in South Africa, and significant capital cost escalations for new
projects are likely to dampen future global gold production.
    Based upon the 2008 mine plan, it is estimated that Casa Berardi will
produce approximately 160,000 - 170,000 ounces of gold at an estimated total
cash cost of US$394 per ounce, using a Cdn$/US$ exchange rate at parity. This
compares to gold production of 159,469 ounces and a total cash cost of US$327
in 2007 at an average Cdn$/US$ exchange rate of 1.07.
    The average daily mine production is estimated to increase to 1,800
tonnes per day in 2008, an increase of 20% over 2007. Ore grades are expected
to average 8.6 grams per tonne in 2008, compared to the 9.8 grams per tonne
achieved in 2007. Ore production in 2008 will be primarily from the 113 Zone
with some ore provided by the lower grade NW Zone and, later in 2008, with
development ore from the Lower Inter Zone.
    Based upon 165,000 ounces of gold production for 2008 and using the gold
price and exchange rates as at December 31st, 2007, the sensitivity of the
Company's cash flow to a 10% movement in either component is as follows:

                              Dec 31,2007                        Impact on
                          price & exchange         10%           Cash Flow
                               rates            Variance        ($ thousands)
    Gold price increases       US$834              $83             (1)$8,360
    Gold price declines        US$834             ($83)             ($13,790)
    Cdn/US dollar exchange
    -  Canadian dollar weakens  0.988           0.0988            (2)$11,755
    -  Canadian dollar
    strengthens                 0.988          (0.0988)          (2)($11,755)

    (1) Call options, related to the Company's project debt facility, were
        sold on 77,306 ounces of gold, exercisable at an average price of US
        $848 per ounce in 2008, representing approximately 47% of 2008
        planned gold production, thereby limiting full participation of gold
        prices above US$848 per ounce.
    (2) Excluding Cdn$21 million of foreign exchange contracts at 1.13.

    As of early March 2008, gold prices are above US$960 per ounce while the
Canadian dollar is very close to the level as at December 31, 2007.
    Containment of mine site operating costs will continue to be a challenge
in 2008 as significant cost pressures are affecting the mining industry. The
cost of labour and materials continue to rise at a rapid rate. Additional
ground support costs and lower productivities would negatively impact
operating costs.
    In accordance with the terms of the project debt facility, the Casa
Berardi mine is required to meet certain operating performance benchmarks by
September 30, 2008, as stipulated by the lenders.
    Sustaining capital costs at Casa Berardi in 2008 are estimated at $15.4
million, primarily for the development of the upper and lower portions of the
113 Zone and of the Lower Inter Zone. An additional $2.6 million is planned on
infrastructure and equipment improvements and $0.4 million for tailings pond
improvements. Underground development in 2008 will total 5,100 metres,
including 1,700 metres of ramping; 2,400 metres of drifting; and 1,000 metres
of raising.
    Aurizon intends to initially invest over $13 million, from working
capital, in exploration and development activities at its properties in 2008,
of which approximately $3 million will be expensed. In total, over 70,000
metres of drilling is planned.
    The Company's financial position at December 31, 2007, and the operating
cash flows that are expected from Casa Berardi over the next twelve months
should allow it to meet its financial obligations as they become due and also
fund its planned exploration and capital programs.

    Casa Berardi

    At Casa Berardi, surface drilling will focus on the extension of the
South fault, east of Zone 123-S, and in the area of the East Mine crown
    In addition, Lake Shore Gold has commenced surface drilling on the
adjacent Casa Berardi exploration property in order to fulfill its commitment
to incur expenditures of $600,000.
    A three year underground exploration program, initiated in 2007, will
continue as follows:

    a)  Drilling will occur, from the rehabilitated track drift on the 280
        metre level in the area of the Principal Zone and between the two
        mines where limited surface exploration has been performed to date.
        At the East Mine, rehabilitation of the underground workings and
        definition drilling is planned with the objective of transferring the
        inferred mineral resources to the indicated category and, ultimately,
        to mineral reserves.

    b)  An exploration drift will be developed at the 810 metre level, east
        of Zone 113 and south of the Casa Berardi fault, to provide drill
        access to test the depth extension of Zone 113 and to test the
        continuity and extension of Zones 118 to 122 and 123-South.

    A total of $10.2 million will be invested at Casa Berardi, including $6.1
million on underground development and infrastructure, and $4.1 million on
approximately 45,000 metres of surface and underground drilling.


    At Joanna, approximately $3 million will be initially invested to perform
approximately 26,000 metres of drilling focused on the following:

    a)  Surface drilling to a depth of 300 metres, outside of the area of the
        existing mineral resources.

    b)  Testing for potential of higher gold grade mineralization below 300

    c)  Exploration targets north of the existing mineral resources.

    In addition, Breton, Banville & Associates are currently working on a
preliminary assessment report to address the technical parameters of the
project, which should be completed early in the second quarter, 2008. Further
work programs will be budgeted following receipt of this report.
    At Joanna, mineral resources are currently estimated at 11.3 million
tonnes averaging 1.7 grams of gold per tonne, for 630,000 ounces in the
indicated mineral resource category and 28.6 million tonnes averaging 1.6
grams of gold per tonne, for 1.42 million ounces in the inferred mineral
resource category.


    At Kipawa, 2008 programs and budgets are being finalized in conjunction
with analysis and interpretation of the results from the extensive exploration
programs performed in 2007. It is anticipated that 2008 exploration activity
will include trenching and drilling to follow up on the discoveries of gold,
uranium and rare earth elements made in 2007. Work will commence upon receipt
of the necessary approval from the First Nations communities and government

    Mineral Reserves and Resources

    Aurizon's independent consultants are currently finalizing an updated
mineral reserve and resource estimate as at December 31, 2007, details of
which will be released shortly.

    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 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 American Stock Exchange under
the symbol "AZK". Additional information on Aurizon and its properties is
available on Aurizon's website at

    This report contains "forward-looking statements", including, but not
limited to, statements regarding the Company's expectations as to the market
price of gold, strategic plans, production targets and timetables, mine
operating costs, capital expenditures, work programs, and exploration budgets.
Forward-looking statements express, as at the date of this report, the
Company's plans, estimates, forecasts, projections, expectations, or beliefs
as to future events or results. Forward-looking statements involve a number of
risks and uncertainties, and there can be no assurance that such statements
will prove to be accurate. Therefore, actual results and future events could
differ materially from those anticipated in such statements. Factors that
could cause results or events to differ materially from current expectations
expressed or implied by the forward-looking statements, include, but are not
limited to, factors associated with fluctuations in the market price of
precious metals, mining industry risks and hazards, environmental risks and
hazards, uncertainty as to calculation of mineral reserves and resources,
requirement of additional financing, risks of delays in construction and other
risks more fully described in Aurizon's Annual Information Form filed with the
Securities Commission of the Provinces of British Columbia, Alberta, Manitoba,
Ontario and Quebec, and in Aurizon's Annual Report on Form 40-F filed with the
United States Securities and Exchange Commission. These documents are
available on Sedar at and on Edgar at

                         Consolidated Balance Sheets
                             As at December 31,

    (in Canadian Dollars - Unaudited)                 2007          2006
      Cash and cash equivalents                     24,836,323     9,465,215
      Restricted cash                               31,754,068    19,357,224
      Accounts receivable and prepaid expenses       3,100,475     3,027,999
      Refundable tax credits and mining duties       3,865,481     5,392,289
      Derivative instrument assets                   2,446,048             -
      Inventories                                    8,152,417     5,841,020
                                                    74,154,812    43,023,747
    Derivative instrument assets                     3,416,877             -
    Other assets                                     4,393,232     8,689,147
    Property, plant & equipment                     39,043,105    39,909,934
    Mineral Properties                             124,602,981   134,606,035
    TOTAL ASSETS                                   245,611,007   226,228,863

      Accounts payable and accrued liabilities      11,574,926     8,742,565
      Derivative instrument liabilities              4,851,528       531,135
      Current portion of long-term debt             25,795,846     4,435,524
                                                    42,222,300    13,709,224
    Derivative instrument liabilities               15,795,242     8,214,098
    Long-term debt                                  44,923,883    68,840,439
    Asset retirement obligations                     2,598,339     2,246,931
    Future income tax liabilities                   11,201,391     8,566,572
    TOTAL LIABILITIES                              116,741,155   101,577,264
    Share Capital
      Common shares issued -
       146,730,948 (2006 - 146,313,048)            190,975,945   193,330,698
    Contributed Surplus                                837,284       742,943
    Stock based compensation                         6,062,359     2,822,050
    Deficit                                        (69,005,736)  (72,244,092)
    TOTAL SHAREHOLDERS' EQUITY                     128,869,852   124,651,599
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     245,611,007   226,228,863

                 Consolidated Statements of Earnings (Loss)
                     For the periods ended December 31,

                           Three months ended              Year ended
    (in Canadian Dollars      December 31,                December 31,
     - Unaudited)          2007          2006          2007          2006
    Revenue                  $             $             $             $
       operations       33,333,433             -    87,998,729             -
      Operating costs   17,470,401             -    40,773,588             -
       depletion and
       accretion         9,177,158       101,384    22,032,648       101,384
       and general
       costs             2,176,159       975,130     8,487,181     5,178,190
      Exploration costs  1,685,160       160,214     5,242,346       623,656
       losses           10,312,418     3,058,604     6,038,612     8,745,233
      Interest on
       long-term debt    1,238,123             -     3,344,999             -
       takeover bid
       costs                     -             -             -     5,247,426
      Loss on sale of
       property, plant
       and equipment         5,431        52,200        40,704        49,887
      Foreign exchange
       loss                 20,505        (1,567)      122,730        44,559
      Capital taxes        212,359       305,167       849,432       796,725
      Other income        (702,970)     (318,777)   (2,252,909)   (1,238,849)
                        41,594,744     4,332,355    84,679,331    19,548,211
    Earnings (loss) for
     the period before
     income taxes       (8,261,311)   (4,332,355)    3,319,398   (19,548,211)
    Current income tax
     recovery                    -        24,629             -        24,629
    Future income tax
     recovery            2,359,775     2,137,632     2,209,947     4,487,226
    Net earnings (loss)
     for the period     (5,901,536)   (2,170,094)    5,529,345   (15,036,356)
    Earnings (loss) per
      Basic and diluted      (0.04)        (0.01)         0.04         (0.10)
    Weighted average
     number of common
     outstanding       146,501,956   144,399,006   146,501,956   144,399,006

                     Consolidated Statements of Cash Flow
                       For the years ended December 31,

                           Three months ended              Year ended
    (in Canadian Dollars      December 31,                December 31,
     - Unaudited)          2007          2006          2007          2006
                            $             $             $             $
      Net earnings
       (loss) for the
       year from
       operations       (5,901,536)   (2,170,094)    5,529,345   (15,036,356)
      Adjustment for
       non-cash items:
       depletion and
       accretion         9,177,158        29,832    22,032,648       101,384
      Refundable tax
       credits            (623,261)   (1,315,475)   (1,938,931)            -
      Loss (gain) on
       sale of
       property, plant
       & equipment           5,431        52,200        40,704        49,887
      Stock based
       compensation        995,953             -     3,529,074     1,725,920
       (gains) losses   10,312,418     3,058,604     6,038,612     8,745,233
      Future income
       tax recovery     (2,359,775)   (2,137,632)   (2,209,947)   (4,487,226)
                        11,606,388    (2,482,565)   33,021,505    (8,901,158)
       (increase) in
       non-cash working
       capital items       436,340    (7,514,202)     (784,005)   (4,120,919)
                        12,042,728    (9,996,767)   32,237,500   (13,022,077)
       deposits            (94,730)      (31,577)      (94,730)      (31,577)
      Property, plant
       & equipment      (2,093,249)   (6,740,099)   (6,960,279)  (18,555,496)
       properties       (1,223,269)   (8,198,784)  (27,461,735)  (55,912,287)
      Gold sales prior
       to commercial
       production                -     5,011,415    31,161,709     5,011,415
      Refundable tax
       credits           1,447,061     1,315,475     1,447,061     1,315,475
      Refundable mining
       duties                    -             -     2,462,930             -
      Deferred interest
       costs                     -    (1,087,276)   (1,613,319)   (2,399,553)
      Restricted cash
       funding           7,697,783    (5,894,083)  (12,396,844)  (19,357,224)
                         5,733,596   (15,624,929)  (13,455,207)  (89,929,247)
      Issuance of
       shares              379,142     1,958,110       814,357    16,502,486
      Long-term debt        11,874    23,030,086    (4,225,542)   73,275,963
      Deferred finance
       costs                     -             -             -    (2,372,123)
                           391,016    24,988,196    (3,411,185)   87,406,326
     EQUIVALENTS        18,167,340      (633,500)   15,371,108   (15,544,998)
     PERIOD              6,668,983    10,098,715     9,465,215    25,010,213
     OF YEAR            24,836,323     9,465,215    24,836,323     9,465,215

For further information:

For further information: AURIZON MINES LTD., David P. Hall, President
and C.E.O.; Ian S. Walton, Executive Vice President & C.F.O., Telephone: (604)
687-6600, Toll Free: 1-888-411-GOLD, Fax: (604) 687-3932, Web Site:, Email:; or Renmark Financial Communications
Inc., 2080 Rene-Levesque Blvd. West, Montreal, QC, H3H 1R6; Barry Mire:
bmire@renmarkfinancial .com, Jen Power:; Media:
Vanessa Napoli:, Tel: (514) 939-3989, Fax: (514)

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