Aurizon Mines (ARZ-T) plans to sell around 5.2 million flow-through shares at $1.35 apiece to raise up to $7 million to fund a deepening of the ramp at the West mine area of its Casa Berardi project in northwestern Quebec.
The company plans to send the ramp down to the 500-metre level and cut a drift about 450 metres to the east to allow for access to the 113 zone on the 550-metre level. The access will allow drifting along the zone for definition drilling and the extraction of a bulk sample.
Zone 113 extends from 400 metres to 1,000 metres below surface, and contains previously reported probable mineral reserves of 984,000 oz. of gold averaging 7.4 grams per tonne. As a whole, the West mine area is home to proven and probable reserves of 1.5 million oz. at 6.7 grams per tonne. Current reserves, 6.9 million tonnes averaging 6.7 grams gold per tonne, are enough for a mine life of 7.5 years.
The work is part of a larger $17-million, 19-month plan, which will include drifting, definition drilling and bulk sampling on the West mine’s Lower Inter zone to the west.
A syndicate of agents, led by National Bank Financial, will place the shares on a best-efforts basis, and will receive a 6% cash commission on the gross proceeds. The syndicate will also be granted 2-year broker warrants for up to 6% of the number of shares sold under the offering. Those shares will also be priced at $1.35.
The offering is slated to close around Dec. 20, and is subject to regulatory approval.
Recently completed deep, follow-up drilling by Aurizon on the 118-120 zones confirm grade, thickness and continuity. Each of six holes cut gold values near the Casa Berardi fault; three also returned narrow quartz veins with high gold values south of the fault. Results run from 1.4 grams gold per tonne over 6 metres to 49.5 grams over 1.5 metres.
The 118-120 zones are situated about 300 to 500 metres east of the West mine’s known resources along the dip extension of the Principal zone, 500 to 1,000 metres below surface.
Aurizon plans to complete a resource estimate sometime in the first quarter of 2003.
Aurizon shares were trading 6 lower at $1.27 in late afternoon trade in Toronto on Dec. 13.
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