A pair of private placements will provide
The placements are for 4.2 million shares priced at $1.50 apiece, for gross proceeds of $6.3 million, and for 10.6 million shares at $1.80 for $19 million. The larger placement consists of flow-through shares, and neither has warrants attached.
Aurizon has a 66,000-metre drilling program scheduled for Casa Berardi in 2005, where it is blocking out new mineralization with the intention of resuming production at the mine in 18 months. A feasibility study released in January put the probable resource at Casa Berardi’s West mine at 4.4 million tonnes grading 6.2 grams gold per tonne, and concluded that a 150,000-oz.-per-year operation would be economic.
Aurizon recently let out a contract to widen a raise to surface in the volcanic rocks north of the Casa Berardi fault, to avoid ground problems that had plagued the operation when it was in production in the 1990s. The raise, which extends to a depth of 550 metres, will be used as the principal production shaft. The contract provides shaft-sinking to 810 metres.
The existing raise has a collar, and its hoist is now being installed.
Aurizon posted a $5.7-million loss in 2004, the principal item in the loss being a writedown of the value of the Sleeping Giant gold mine in northwestern Quebec. Sleeping Giant is a 50-50 joint venture with
The $4.7-million writedown accounted for an expected increase in capital costs at Sleeping Giant, which would provide for investment in drifting and crosscutting at the lower level of the mine. Aurizon also expects operating costs to increase because the mine is exploiting variably dipping structures, which are slower to mine.
The carrying value of the mine was reduced to the estimated present value of future net cash flows.
Aurizon took in $18.4 million in revenue in 2004, up from $18.3 million in the previous year, and the $5.7-million loss works out to 6 per share. In 2003 Aurizon posted a loss of $301,154.
Sleeping Giant produced 67,000 oz. gold last year, up 1,000 oz. from 2003. Lower grades and a higher Canadian dollar combined to increase cash production costs to US$314 per oz., from US$266 in 2003.
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