Aurizon posts loss on improved production

Despite higher gold production and realized prices for the yellow metal, Aurizon Mines (ARZ-T) posted a net loss of $1 million for the three months ended June 30.

The loss translates into 2 per share, and compares with a year-ago net loss of $1.4 million, or 4 per share. Revenue between the two periods grew to $4.2 million from $3.4 million. Operating cash flow was negative to the tune of $190,000, an improvement on the year-ago outflow of $874,000.

The recent quarter’s results include a non-recurring interest and finance costs of $546,000 and the expensing of care and maintenance costs at Casa Berardi totalling $608,000.

For the first half of the year, the net loss piled up to of $1.3 million (3 per share) on revenue of $8.7 million, compared with a year-ago loss of $2.7 million (7 per share) on $6.8 million. Cash flow was $200,000 to the good, a turnaround from the $1.1 million bled the previous year.

On the production front, the Sleeping Giant mine in Quebec, co-owned with Cambior (CBJ-T) produced 16,854 oz. of gold (8,427 oz. for Aurizon’s account), just below expectations. Total cash costs came in at US$238 per oz., up US$12 per oz. from a year earlier.

During the six-month period, Aurizon’s half-share of the mine’s production climbed slightly to 17,423 oz. Cash costs climbed US$4 per oz. to US$227 per oz.

The company realized an average of US$302 per oz. for its quarterly production, and US$297 per oz. for the half-year, both better than a year ago.

A feasibility study looking at deepening the mine’s main shaft is due in the fourth quarter. Aurizon’s share of capital expenditures could reach $3 million.

During the recent quarter, Aurizon wrapped up two private placements for net proceeds of $12.4 million. The company then acquired TVX Gold‘s (TVX-T) residual interest in Casa Berardi property in northwestern Quebec, where a $2 million exploration drill program is underway.

Looking ahead, Aurizon has lowered Sleeping Giant’s project full-year production estimate to 32,000 oz. at US$245 apiece, as throughput is expected to decline.

At the end of June, Aurizon was debt-free and had working capital of more than $7 million.