In return, Aurizon will issue 1 million shares to TVX, plus additional shares on a quarterly basis to cover interest on the outstanding payment at 10% per year. The interest payments will be secured by a lien on the buildings, machinery and equipment at Casa Berardi.
The property, a former producer, is in the Abitibi region and covers about 140 sq. km along a 43-km stretch of the Casa Berardi fault. It includes a 2,200-tonne-per-day mill, hoist, headframe and underground equipment. Previous operations were performed from ramps that provide access to the upper part of the deposits, at the East Mine and West Mine areas. About 3.7 million tonnes, at an average gold grade of 6.7 grams per tonne, were extracted between 1988 and 1997 to produce 688,000 oz. gold.
The West Mine area hosts minable gold reserves of 1.5 million oz. contained in 6.9 million tonnes grading 6.7 grams per tonne. This is equivalent to the average grade of the 650,000 oz. previously produced.
The property also contains undiluted mineral resources totalling 4.5 million tonnes grading 7.7 grams gold.
A feasibility study of the West Mine area envisages annual production of more than 200,000 oz. gold at an average cash cost of US$145 per oz. The mine life is pegged at 7.5 years, and capital costs are estimated at $121 million. In the West Mine area, zones 113 and 118, which were discovered during a 76,500-metre drill program by Aurizon, are still open to depth. The deepest holes returned 26.2 grams gold per tonne over 4.2 metres at zone 113, and 26.4 grams over 10.9 metres at zone 118.
The company is seeking funds for follow-up drilling to test extensions of these zones and other targets.
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