Aurizon raises $5 million for Casa Berardi work

Aurizon Mines (ARZ-T) has arranged an offering that will raise $5 million for exploration work at the Casa Berardi gold deposit, 95 km north of La Sarre in northwestern Quebec.

The offering, being made through National Bank Financial, consists of 8.3 million units priced at 60 apiece. Each unit is a common share of Aurizon with half a purchase warrant attached.

The warrants can be exercised until the end of June, 2003, at 65 per warrant.

National Bank Financial gets a 6% cash commission for the offering, plus 501,000 warrants to purchase units at 62 apiece.

Casa Berardi, which Aurizon bought from TVX Gold (tvx-t) in 1998, has a minable reserve of 6.9 million tonnes grading an average 6.7 grams gold per tonne in its West Zone. A feasibility study two years ago indicated that production of 200,000 oz. gold annually from the West Zone would have a cash cost around US$145 per oz. Preproduction capital costs were estimated at $121 million.

Casa Berardi’s East and West mines were in production from 1988 and 1990, respectively. They were shut down in 1997 with their reserves depleted, but Aurizon’s subsequent drilling outlined more reserves in the West zone. Current reserves are believed to be enough for a seven-and-a-half-year mine life.

The company, which will also be using some of the proceeds of the offering for general working capital, expects the offering to close in mid-April. The approval of the Toronto Stock Exchange is necessary for the share issue.