VANCOUVER, BRITISH COLUMBIA (AMEX: AZK) is pleased to announce
highlights of its financial results for the period ended September
30, 2007 (To review the complete interim unaudited financial
statements or Management's Discussion and Analysis please see the
Company's SEDAR filings at www.sedar.com or on the Company's
website at www.aurizon.com).
The third quarter was highlighted by the following
activities:
- Record cash flow from operations of $17.9 million.
- Net earnings of $3.8 million, or $0.03 per share, which was
net of a non-cash derivative instrument loss of $3.8 million.
- Adjusted net earnings of $6.7 million, or $0.05 per share.
- Gold production for the third quarter totalled 48,305 ounces,
a 15% increase from the second quarter, 2007.
- Total cash costs of US$282 per ounce in the third quarter, a
decrease of 5% from the second quarter, 2007.
- At Joanna, an updated mineral resources estimate of 630,000
ounces of gold in the indicated mineral resource category and 1.42
million ounces in the inferred mineral category. This represents a
gain of 53% and 12% respectively.
- At Kipawa, uranium, rare earth element oxides and gold
clustered anomalies associated with airborne radiometric anomalies
were discovered.
- Agreement signed with Lake Shore Gold Corp. to accelerate
exploration outside the mining lease at Casa Berardi.
- Letter of intent signed with Vantex Resources Ltd. to acquire
a 75% interest in two claims located along strike of the gold
bearing horizons at Joanna.
"Casa Berardi delivered a strong operating performance,
resulting in record cash flow for the Company," said David P. Hall,
President and Chief Executive Officer. "In addition, exploration
success at Joanna and Kipawa continues to create value for our
shareholders."
CASH RESOURCES AND LIQUIDITY
At September 30, 2007, Aurizon had cash balances of $46.1
million, of which $39.5 million is in restricted accounts that may
be used to fund the Casa Berardi project and service the project
debt, compared to cash balances of $28.8 million ($19.3 million
restricted) at the beginning of the year. The restricted cash
balances will be released upon achievement of certain operating
benchmarks anticipated in 2008.
Working capital totaled $24.2 million at September 30, 2007,
compared to working capital of $29.8 million at the beginning of
the year. Long term debt at September 30, 2007 totaled $45.2
million, compared to $68.8 million at the beginning of the year.
Two principal payments of $12.9 million due in March and September
2008, for a total of $25.8 million, has resulted in a reduction of
long term debt and an increase in current liabilities.
CASA BERARDI
Casa Berardi produced 48,305 ounces of gold in the third quarter
of 2007, compared to 42,143 ounces and 32,284 ounces in the second
and first quarters of 2007, respectively, for total gold production
of 122,462 ounces in the first nine months of 2007. The 15%
increase in gold production is primarily related to higher volumes
of ore throughput.
Ore throughput in the mill during the third quarter increased to
152,025 tonnes from 134,569 tonnes in the second quarter of 2007.
The average ore grade increased to 10.6 grams/tonne from 10.3
grams/tonne achieved in the first half of 2007. Mill recoveries of
92.8% were achieved in the quarter, slightly lower than the 93.8%
achieved in the first half of 2007.
The average daily mine production increased to 1,652 tonnes per
day from 1,604 tonnes per day in the second quarter.
On a unit cost basis, total cash costs per ounce of gold sold
were US$282, down from US$298 in the second quarter.
The average processed grades in 2007 are about 35% higher than
the average grade of the West Mine reserves. The production grades
are expected to trend back to the reserve grade in 2008, resulting
in higher cash costs per ounce.
Unit mining costs in the third quarter of 2007, were $94/tonne,
11% lower than the second quarter costs of $106/tonne, due
primarily to higher ore throughput.
Since commissioning the mill in November 2006, Casa Berardi has
produced 140,193 ounces of gold.
OUTLOOK
Casa Berardi Mine
Labour force issues that are currently facing the mining
industry in general, will continue to impact the scaling up of mine
production. Daily production is expected to be maintained at 1,650
tonnes per day for the balance of 2007 and increase to 1,800 tonnes
per day in 2008, supported by the flexibility provided from having
access to the Northwest and Lower Inter Zones. In the fourth
quarter, ore grades are expected to be lower than the high grades
achieved to date in 2007. As a result the Company expects Casa
Berardi to produce approximately 165,000 ounces of gold for the
year, compared to the previously announced forecast of 170,000 -
180,000 ounces.
The recent significant strengthening of the Canadian dollar
relative to the U.S. dollar will have a negative impact on
Aurizon's future earnings as the U.S. dollar gold sales are
converted into Canadian dollars. To date, rising gold prices have
mitigated the impact of the strong Canadian dollar. Using a CDN/US
dollar exchange rate of 0.95 for the fourth quarter, total cash
costs of US$330 per ounce are forecast for the second half of 2007
compared to the previous guidance of US$300-US$320 per ounce.
Capital and exploration expenditures in the fourth quarter of
2007 are expected to be approximately $6.1 million, of which $3.6
million will be spent at Casa Berardi on sustaining capital and
$0.9 million on exploration, with the $1.6 million balance to be
incurred on further exploration at the Joanna and Kipawa
properties.
It is anticipated that development costs will increase in 2008
in order to support the increased mine production. The current
production grades experienced in 2007 are expected to gradually
trend back to the current ore reserve grades, which will result in
higher cash costs per ounce in 2008.
Joanna Gold Property
Three rigs are currently active on the property with the
following objectives:
- Drilling targets situated to the west of the western resource
block and between the western and eastern resource blocks to extend
the mineralization and increase resources.
- Infill drilling in the area of the existing resource blocks to
upgrade the quality of the resources.
- Deep drilling to depths of 700 metres below the eastern
resource block to test the depth potential.
Environmental studies, geotechnical and metallurgical testwork
are in progress. A contract has been awarded to Breton, Banville
& Associates "BBA" to complete a preliminary economic
assessment study early in the first quarter of 2008.
Kipawa Property
In addition to the gold potential at Kipawa, the recent
discovery of rare earth elements and uranium has opened additional
value creation opportunities for Aurizon, as these elements
potentially provide solutions to future global energy and
environmental challenges.
Surface drilling and trenching should be initiated upon receipt
of final approvals by government agencies and First Nations.
Conference Call
Aurizon Mines will host a conference call to discuss the third
quarter results on Monday, November 12th , 2007 at 8:30 a.m.
Pacific Standard Time (11:30 a.m. Eastern Standard Time).
You may access the call by calling the operator at 416-641-6124
or toll free access at 1-866-300-7687 ten (10) minutes prior to the
scheduled start time. The call is also being webcast and can be
accessed at Aurizon's website at www.aurizon.com, or through
www.InvestorCalendar.com. A playback version of the call will be
available until Monday, November 19, 2007 at 416-695-5800 or
1-800-408-3053 (Passcode 3241521#).
Aurizon is a gold producer with a growth strategy focused on
developing its existing projects in the Abitibi region of
north-western Quebec, one of the world's most prolific gold and
base metal regions, and by increasing its asset base through
accretive transactions. Aurizon shares trade on the Toronto Stock
Exchange under the symbol "ARZ" and on the American Stock Exchange
under the symbol "AZK". Additional information on Aurizon and its
properties is available on Aurizon's website at
http://www.aurizon.com.
Forward Looking Statements
This Report contains "forward-looking statements". These
forward-looking statements include, but are not limited to,
statements regarding the Company's strategic plans, future
commercial production, and work programs. Forward-looking
statements express, as at the date of this Report, the Company's
plans, estimates, forecasts, projections, expectations, or beliefs
as to future events or results and the Company does not intend, and
does not assume any obligation to update these forward-looking
statements. We caution that forward-looking statements involve a
number of risks and uncertainties, and there can be no assurance
that such statements will prove to be accurate. Therefore, actual
results and future events could differ materially from those
anticipated in such statements. Factors that could cause results or
events to differ materially from current expectations expressed or
implied by the forward-looking statements, include, but are not
limited to, mining industry risks and hazards, environmental risks
and hazards, risks of delays in construction and other risks more
fully described in Aurizon's Annual Information Form filed with the
Securities Commission of the provinces of British Columbia,
Alberta, Manitoba, Ontario and Quebec, and in Aurizon's Annual
Report on Form 40-F filed with the United States Securities and
Exchange Commission. These documents are available on Sedar at
www.sedar.com and on Edgar at www.sec.gov/.
CAUTIONARY NOTE TO US READERS
As a British Columbia corporation, the Company is subject to
certain rules and regulations issued by the British Columbia
Securities Commission ("BC Securities Commission"). The Company is
required to provide detailed information regarding its properties
including mineralization, drilling, sampling and analysis, security
of samples and mineral resource and mineral reserve estimates.
Further, the Company describes mineral resources associated with
its properties utilizing terminology such as "indicated" or
"inferred" which terms are recognized by Canadian regulations but
are not recognized by the United States Securities and Exchange
Commission ("SEC").
Cautionary Note to U.S. Investors Regarding Mineral
Resources
The SEC allows mining companies, in their filings with the SEC,
to disclose only those mineral deposits they can economically and
legally extract or produce. The Company may use certain terms in
this document, such as "mineral resources", "indicated mineral
resources" and "inferred resources" that are recognized and
mandated by Canadian securities regulators but are not recognized
by the SEC.
This Report may use the term "indicated" resources. U.S. readers
are cautioned that while that term is recognized and required by
Canadian regulations, the SEC does not recognize it. U.S. investors
are cautioned not to assume that any part or all of mineral
deposits in this category will ever be converted into mineral
reserves.
This Report may also use the term "inferred" resources. U.S.
readers are cautioned that while this term is recognized and
required by Canadian regulations, the SEC does not recognize it.
"Inferred resources" have a great amount of uncertainty as to their
existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. U.S. investors are cautioned not to
assume that part or all of an inferred resource exists, or is
economically or legally mineable.
Contacts: Aurizon Mines Ltd. David P. Hall President (604)
687-6600 or Toll Free: 1-888-411-GOLD Aurizon Mines Ltd. Ian S.
Walton Chief Financial Officer (604) 687-6600 or Toll Free:
1-888-411-GOLD (604) 687-3932 (FAX) Email: info@aurizon.com
Website: www.aurizon.com