Toronto Stock Exchange - Ticker Symbol - ARZ
American Stock Exchange - Ticker Symbol - AZK
U.S. Registration: (File No. 0-22672)
VANCOUVER, Nov. 12 /CNW/ - Aurizon is pleased to announce highlights of
its financial results for the period ended September 30, 2007. (To review the
complete interim unaudited financial statements or Management's Discussion and
Analysis please see the Company's SEDAR filings at www.sedar.com or on the
Company's website at www.aurizon.com.)
The third quarter was highlighted by the following activities:
- Record cash flow from operations of $17.9 million.
- Net earnings of $3.8 million, or $0.03 per share, which was net of a
non-cash derivative instrument loss of $3.8 million.
- Adjusted net earnings of $6.7 million, or $0.05 per share
- Gold production for the third quarter totalled 48,305 ounces, a 15%
increase from the second quarter, 2007.
- Total cash costs of US$282 per ounce in the third quarter, a
decrease of 5% from the second quarter, 2007.
- At Joanna, an updated mineral resources estimate of 630,000 ounces of
gold in the indicated mineral resource category and 1.42 million
ounces in the inferred mineral category. This represents a gain of
53% and 12% respectively.
- At Kipawa, uranium, rare earth element oxides and gold clustered
anomalies associated with airborne radiometric anomalies were
- Agreement signed with Lake Shore Gold Corp. to accelerate exploration
outside the mining lease at Casa Berardi.
- Letter of intent signed with Vantex Resources Ltd. to acquire a 75%
interest in two claims located along strike of the gold bearing
horizons at Joanna.
"Casa Berardi delivered a strong operating performance, resulting in
record cash flow for the Company." said David P. Hall, President and Chief
Executive Officer. "In addition, exploration success at Joanna and Kipawa
continues to create value for our shareholders."
SOURCES AND LIQUIDITY
At September 30, 2007, Aurizon had cash balances of $46.1 million, of
which $39.5 million is in restricted accounts that may be used to fund the
Casa Berardi project and service the project debt, compared to cash balances
of $28.8 million ($19.3 million restricted) at the beginning of the year. The
restricted cash balances will be released upon achievement of certain
operating benchmarks anticipated in 2008.
Working capital totaled $24.2 million at September 30, 2007, compared to
working capital of $29.8 million at the beginning of the year. Long term debt
at September 30, 2007 totaled $45.2 million, compared to $68.8 million at the
beginning of the year. Two principal payments of $12.9 million due in March
and September 2008, for a total of $25.8 million, has resulted in a reduction
of long term debt and an increase in current liabilities.
Casa Berardi produced 48,305 ounces of gold in the third quarter of 2007,
compared to 42,143 ounces and 32,284 ounces in the second and first quarters
of 2007, respectively, for total gold production of 122,462 ounces in the
first nine months of 2007. The 15% increase in gold production is primarily
related to higher volumes of ore throughput.
Ore throughput in the mill during the third quarter increased to 152,025
tonnes from 134,569 tonnes in the second quarter of 2007. The average ore
grade increased to 10.6 grams/tonne from 10.3 grams/tonne achieved in the
first half of 2007. Mill recoveries of 92.8% were achieved in the quarter,
slightly lower than the 93.8% achieved in the first half of 2007.
The average daily mine production increased to 1,652 tonnes per day from
1,604 tonnes per day in the second quarter.
On a unit cost basis, total cash costs per ounce of gold sold were
US $282, down from US$298 in the second quarter.
The average processed grades in 2007 are about 35% higher than the
average grade of the West Mine reserves. The production grades are expected to
trend back to the reserve grade in 2008, resulting in higher cash costs per
Unit mining costs in the third quarter of 2007, were $94/tonne, 11% lower
than the second quarter costs of $106/tonne, due primarily to higher ore
Since commissioning the mill in November 2006, Casa Berardi has produced
140,193 ounces of gold.
Casa Berardi Mine
Labour force issues that are currently facing the mining industry in
general, will continue to impact the scaling up of mine production. Daily
production is expected to be maintained at 1,650 tonnes per day for the
balance of 2007 and increase to 1,800 tonnes per day in 2008, supported by the
flexibility provided from having access to the Northwest and Lower Inter
Zones. In the fourth quarter, ore grades are expected to be lower than the
high grades achieved to date in 2007. As a result the Company expects Casa
Berardi to produce approximately 165,000 ounces of gold for the year, compared
to the previously announced forecast of 170,000 - 180,000 ounces.
The recent significant strengthening of the Canadian dollar relative to
the U.S. dollar will have a negative impact on Aurizon's future earnings as
the U.S. dollar gold sales are converted into Canadian dollars. To date,
rising gold prices have mitigated the impact of the strong Canadian dollar.
Using a CDN/US dollar exchange rate of 0.95 for the fourth quarter, total cash
costs of US$330 per ounce are forecast for the second half of 2007 compared to
the previous guidance of US$300-US$320 per ounce.
Capital and exploration expenditures in the fourth quarter of 2007 are
expected to be approximately $6.1 million, of which $3.6 million will be spent
at Casa Berardi on sustaining capital and $0.9 million on exploration, with
the $1.6 million balance to be incurred on further exploration at the Joanna
and Kipawa properties.
It is anticipated that development costs will increase in 2008 in order
to support the increased mine production. The current production grades
experienced in 2007 are expected to gradually trend back to the current ore
reserve grades, which will result in higher cash costs per ounce in 2008.
Joanna Gold Property
Three rigs are currently active on the property with the following
- Drilling targets situated to the west of the western resource block
and between the western and eastern resource blocks to extend the
mineralization and increase resources.
- Infill drilling in the area of the existing resource blocks to
upgrade the quality of the resources.
- Deep drilling to depths of 700 metres below the eastern resource
block to test the depth potential.
Environmental studies, geotechnical and metallurgical testwork are in
progress. A contract has been awarded to Breton, Banville & Associates "BBA"
to complete a preliminary economic assessment study early in the first quarter
In addition to the gold potential at Kipawa, the recent discovery of rare
earth elements and uranium has opened additional value creation opportunities
for Aurizon, as these elements potentially provide solutions to future global
energy and environmental challenges.
Surface drilling and trenching should be initiated upon receipt of final
approvals by government agencies and First Nations.
Aurizon Mines will host a conference call to discuss the third quarter
results on Monday, November 12th , 2007 at 8:30 a.m. Pacific Standard Time
(11:30 a.m. Eastern Standard Time).
You may access the call by calling the operator at 416-641-6124 or toll
free access at 1-866-300-7687 ten (10) minutes prior to the scheduled start
time. The call is also being webcast and can be accessed at Aurizon's website
at www.aurizon.com, or through www.InvestorCalendar.com. A playback version of
the call will be available until, Monday, November 19, 2007 at 416-695-5800 or
1-800-408-3053 (Passcode 3241521 followed by the number sign).
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 http://www.aurizon.com.
Forward Looking Statements
This Report contains "forward-looking statements". These forward-looking
statements include, but are not limited to, statements regarding the Company's
strategic plans, future commercial production, and work programs.
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 and the Company does not intend, and does not
assume any obligation to update these forward-looking statements. We caution
that 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, mining industry
risks and hazards, environmental risks and hazards, 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 www.sedar.com
and on Edgar at www.sec.gov/.
CAUTIONARY NOTE TO US READERS
As a British Columbia corporation, the Company is subject to certain
rules and regulations issued by the British Columbia Securities Commission
("BC Securities Commission"). The Company is required to provide detailed
information regarding its properties including mineralization, drilling,
sampling and analysis, security of samples and mineral resource and mineral
reserve estimates. Further, the Company describes mineral resources associated
with its properties utilizing terminology such as "indicated" or "inferred"
which terms are recognized by Canadian regulations but are not recognized by
the United States Securities and Exchange Commission ("SEC").
Cautionary Note to U.S. Investors Regarding Mineral Resources
The SEC allows mining companies, in their filings with the SEC, to
disclose only those mineral deposits they can economically and legally extract
or produce. The Company may use certain terms in this document, such as
"mineral resources", "indicated mineral resources" and "inferred resources"
that are recognized and mandated by Canadian securities regulators but are not
recognized by the SEC.
This Report may use the term "indicated" resources. U.S. readers are
cautioned that while that term is recognized and required by Canadian
regulations, the SEC does not recognize it. U.S. investors are cautioned not
to assume that any part or all of mineral deposits in this category will ever
be converted into mineral reserves.
This Report may also use the term "inferred" resources. U.S. readers are
cautioned that while this term is recognized and required by Canadian
regulations, the SEC does not recognize it. "Inferred resources" have a great
amount of uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of
an Inferred Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form the basis
of feasibility or pre-feasibility studies, except in rare cases. U.S.
investors are cautioned not to assume that part or all of an inferred resource
exists, or is economically or legally mineable.
For further information:
For further information: 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:
email@example.com; Or Renmark Financial Communications Inc., 2080 Rene-Levesque
Blvd. West, Montreal, QC, H3H 1R6; Barry Mire: firstname.lastname@example.org; Jen
Power: email@example.com, Tel.: (514) 939-3989, Fax : (514)