Aurizon Mines Ltd.: First Quarter Report March 31, 2005; Management's Discussion and Analysis.VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- Aurizon Mines Ltd. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :ARZ ARZ Allgemeines Rechenzentrum GmbH (Innsbruck, Austria) ARZ Auto-Restricted Zone ARZ Aquatic Ruin Zone (Sonic 2 level) )(AMEX AMEX See: American Stock Exchange :AZK AZK Artikel Zur Krankenpflege (German: articles on health care; Willich, Germany) ) - Aurizon reports financial results for the first quarter of 2005, which have been prepared on the basis of available information up to May 2, 2005. This Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial should be read in conjunction with the most recent annual financial statements of the Company. The first quarter was highlighted by the following activities: - Casa Berardi feasibility study completed. - Scoping study of West Mine mineral resources below 700 metres completed. - $25.3 million equity financing arranged. $19.5 million closed in the First Quarter. - Surface foundations for West Mine shaft infrastructure completed. On April 15, 2005, Aurizon reported the sale of its 50% interest in the Sleeping Giant Sleeping Giant may refer to: In geology:
Aurizon reported net earnings of $1.2 million in the first quarter of 2005 compared to a net loss of $0.3 million for the same period of 2004. Operating activities in the first quarter of 2005 resulted in a cash outflow of $1.3 million, compared to cash flow of $472,000 for the same period of 2004. Gold production for the quarter matched forecast at 7,140 ounces, although was 18% lower than the 8,715 ounces produced in the same period of 2004. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the accounting standard with respect to flow through shares, a future income tax liability must be recognized and the shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. reduced on the date the Company renounces the tax credits associated with the expenditures. Aurizon has future income tax assets that it has not recognized in previous years as a result of applying 'the more likely than not' test, thereby recording a valuation allowance. In this circumstance Circumstance or circumstances can refer to:
FINANCIAL RESULTS During the three months ended March 31, 2005, Aurizon earned $1.2 million, or one cent per share, compared to a net loss of $296,000, or nil cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , in the first quarter of 2004. Excluding the $2.06 million flow through tax benefits, the Company incurred a net loss of $0.9 million in the current quarter. Higher operating costs operating costs npl → gastos mpl operacionales at Sleeping Giant and higher corporate costs resulted in a cash outflow from operating activities of $1.3 million in the first quarter of 2005, compared to cash flow of $472,000 for the same period of 2004. Lower realized Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents gold prices together with lower gold sales, resulted in a 15% decrease in revenue compared to the same period of 2004. Revenue from mining operations totaled $2.9 million in the first quarter of 2005, compared to $3.5 million for the same period of 2004. The average gold price realized per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. during the first quarter was US$432 (C$531), compared to US$413 (C$558) for the same period of 2004. Mine operating costs in the first quarter of 2005 increased to $2.9 million, compared to $2.7 million in 2004. Higher mining costs associated with variable-dipping ore zones and a stronger Canadian dollar also contributed to higher total cash costs per ounce of US$422, compared to US$327 in 2004. Depreciation and depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able expense decreased in the first quarter of 2005 to $260,000, compared to $678,000 in the same period of 2004, due to a write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of Sleeping Giant in the fourth quarter of 2004. On a per ounce basis, depreciation and amortization decreased to US$42 in 2005 from US$85 for the same period of 2004. Investing activities totaled $6.7 million in the first quarter of 2005, compared to $5.3 million for the same period of 2004. Capital expenditures of $6.9 million were incurred during the first quarter of 2005, of which $6.3 million was invested at Casa Berardi and $0.6 million at Sleeping Giant. During the same period of 2004, $4.1 million was invested at Casa Berardi, and $1.2 million was invested at Sleeping Giant. Financing activities during the first quarter of 2005 totaled $19.1 million, of which, $18.5 million net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). was provided from the first closing of a $25.3 million gross proceeds equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. , and the balance from the exercise of incentive stock options. OPERATIONS The Sleeping Giant Mine produced 14,280 ounces of gold during the first quarter, matching forecast, although lower than the 17,480 ounces produced in the first quarter of 2004. Aurizon's share of 2005 production was 7,140 ounces. The average ore grade Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly of 10.7 grams per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. was 4% lower than plan, and 9% lower than the grade achieved in same period of 2004.
SLEEPING GIANT PRODUCTION
-----------------------------------------------------------
First Quarter
March 31
-----------------------------------------------------------
2005 2004
Tonnes milled 42,723 47,418
Ore grade (grams/tonne) 10.7 11.8
Gold production - ounces 14,280 17,430
Aurizon's 50% share 7,140 8,715
Gold sold 5,538 6,267
Total cash costs/ounce - US$ $422 $327
Depreciation and amortization/ounce - US$ $ 42 $ 85
-----------------------------------------------------------
Total production costs/ounce - US$ $464 $412
-----------------------------------------------------------
Difficult mining conditions resulting from variable-dipping ore zones, together with a strong Canadian dollar, have resulted in a corresponding increase in total cash costs to US$422 per ounce, compared to the US$327 per ounce achieved for the same period of 2003. The total cash costs in the first quarter were 12% higher than plan. Operating costs per tonne were $162, close to plan, and 2% higher than the comparable period in 2004. CASA BERARDI In January January: see month. 2005, Aurizon received an updated feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. from Met-Chem Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of Inc. for an initial start-up Start-up The earliest stage of a new business venture. mining situation for the 868,000 mineral reserve ounces of gold above the 700 metre metre In poetry, the rhythmic pattern of a poetic line. Various principles have been devised to organize poetic lines into rhythmic units. Quantitative verse, the metre of Classical Greek and Latin poetry, measures the length of time required to pronounce syllables, level in the West Mine area. The study outlines the first 5.5 years of production after a pre-production period of 18 months. Pre-production capital costs are estimated at $84 million, the majority of which will be for underground mine development. An internal scoping study has also been completed on the high grade resources below the 700 metre level, currently estimated at 368,000 ounces of gold. Work has been initiated to integrate these high grade resources into the mining plan. During the first quarter of 2005, the hoist hoist: see winch. installation work was initiated, as well as the steel fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. for the headframe. Underground development included completion of the ventilation ventilation, process of supplying fresh air to an enclosed space and removing from it air contaminated by odors, gases, or smoke. Proper ventilation requires also that there be a movement or circulation of the air within the space and that the temperature and raise and the extension of the exploration track drift drift, deposit of mixed clay, gravel, sand, and boulders transported and laid down by glaciers. Stratified, or glaciofluvial, drift is carried by waters flowing from the melting ice of a glacier. by approximately 348 metres at the 550 metre level to permit further exploration and infill in·fill n. 1. The use of vacant land and property within a built-up area for further construction or development, especially as part of a neighborhood preservation or limited growth program. 2. drilling of the lower portion of the 113 Zone and the 188-122 Zones. More than 8,300 metres of definition drilling was completed in 54 holes during the quarter to determine the continuity of mineralized min·er·al·ize v. min·er·al·ized, min·er·al·iz·ing, min·er·al·iz·es v.tr. 1. To convert to a mineral substance; petrify. 2. To transform a metal into a mineral by oxidation. 3. zones which were not incorporated into the recently completed feasibility study. The Company is currently on schedule for Casa Berardi to reach commercial production in the fourth quarter of 2006. OUTLOOK As at March 31, 2005, cash and working capital exceeded $23 million and the Company remains debt free. In order to provide additional cash and to focus activities on Casa Berardi, subsequent to the first quarter, Aurizon agreed to sell the Sleeping Giant Mine for $5 million, which exceeds its carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. . The sale is expected to close in May 2005 and Aurizon will receive its 50% share of production up to April 30, 2005. All environmental liabilities and reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. costs associated with the operation and ultimate closure of the mine will be assumed by the purchaser. "We are pleased to have strengthened our financial position in order to continue development activity at Casa Berardi" said David Hall David Hall may refer to:
Common Shares (Toronto Stock Exchange - ARZ)
-----------------------------------------------
March 31, Dec. 31,
2005 2004
Issued 115,427,965 103,421,522
Fully-diluted 122,705,835 111,306,392
Weighted average 107,457,003 100,577,055
-----------------------------------------------
As at May 2, 2005, the issued and fully diluted shares of the Company
were 118,791,298 and 126,039,168, respectively.
Summary of Quarterly Results
--------------------------------------------------------------------
2005 2004
--------------------------------------------------------------------
1st Quarter 4th Quarter 3rd Quarter 2nd Quarter
--------------------------------------------------------------------
Revenue $3,067,060 $4,924,366 $4,423,731 $5,325,478
--------------------------------------------------------------------
Net Earnings
(Loss) $1,153,359 ($4,898,825) ($ 272,679) ($ 228,190)
--------------------------------------------------------------------
Earnings (Loss)
per share
- Basic and
diluted $ 0.01 ($ 0.05) ($ 0.00) ($ 0.00)
--------------------------------------------------------------------
2004 2003
--------------------------------------------------------------------
1st Quarter 4th Quarter 3rd Quarter 2nd Quarter
--------------------------------------------------------------------
Revenue $3,681,446 $5,541,408 $4,787,672 $3,761,627
Net Earnings
(Loss) ($ 296,191) ($ 49,456) ($ 38,779) ($ 258,915)
--------------------------------------------------------------------
Earnings (Loss)
per share
- Basic and
diluted (0.00) $ 0.00 ($ 0.00) ($ 0.00)
--------------------------------------------------------------------
Aurizon is a Canadian-based gold exploration company, with activities in the Abitibi Abitibi may mean:
Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. , one of the world's most prolific gold and base metal regions. Aurizon has recently completed a positive Feasibility Study on its' one hundred percent (100%) owned Casa Berardi property. Pre-production construction is currently underway. Production at the Project is anticipated to commence in late 2006. Casa Berardi is accessible by road, has mining permits in place and is on the Hydro Quebec power grid. Aurizon shares trade on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol "ARZ" and on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. under the symbol "AZK". This report contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ", including, but not limited to, statements regarding the Company's expectations as to the market price of gold, strategic plans, future commercial production, production targets and timetables, mine operating costs, capital expenditures, work programs, exploration budgets and mineral reserve and resource estimates. 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. 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, factors associated with fluctuations in the market price of precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. , mining industry risks and hazards
Hazards is an independent, union-friendly magazine based in Sheffield, England, which has won major international awards. , environmental risks and hazards, uncertainty as to calculation of mineral reserves and resources, requirement of additional financing, risks of delays in construction and other risks more fully described in Aurizon's Annual Report on Form 20-F filed as an alternative form of AIF AIF Annual Information Form AIF Apoptosis-Inducing Factor AIF Agence Intergouvernementale de la Francophonie (French: Intergovernmental Agency for Francophony) AIF Australian Imperial Force with the Securities Commissions of the provinces of British Columbia, Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. and Quebec, with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission, and with the Toronto Stock Exchange. This 20-F document is available on Sedar at www.sedar.com. Cautionary Note to US Investors The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC to disclose only those mineral deposits that a company can economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: and legally extract or produce. We use certain terms in this news release such as "mineral resources Noun 1. mineral resources - natural resources in the form of minerals natural resource, natural resources - resources (actual and potential) supplied by nature " and "undiluted inferred resources" that the SEC guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. strictly prohibit pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. us from including in our Form 20-F, File No. 0-22672 available from us at Suite 900, 510 Burrard Street Burrard Street is a major thoroughfare in Vancouver, British Columbia, Canada. It is the central street of Downtown Vancouver and the Financial District. The street is named for Burrard Inlet, located at its northern terminus, which in turn is named for Sir Harry Burrard. , Vancouver, B.C. Canada V6C 3A8. You can also obtain this form from the SEC by calling in 1-800-SEC-0330 or visit Aurizon's page on SEDAR, where all of the Company's public documents are filed, including the Form 20-F (reference Annual Information Form). Cautionary Note to U.S. Investors concerning estimates of Measured and Indicated Resources - This news release uses the terms "measured" and "indicated" resources. We advise U.S. Investors that while those terms are recognized and required by Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. regulations, the U.S. Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. Cautionary Note to U.S. Investors concerning estimates of Inferred Resources - This news release uses the term "inferred" resources. We advise U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission 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 fea·si·ble adj. 1. Capable of being accomplished or brought about; possible: a feasible plan. See Synonyms at possible. 2. . 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 prefeasibility 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 minable.
Consolidated Balance Sheets (unaudited) - As at
(all figures in Canadian Dollars)
March 31, December 31,
2005 2004
--------------------------------------------------------------------
$ $
ASSETS
CURRENT
Cash and cash equivalents 23,033,161 11,938,154
Accounts receivable 2,757,400 3,127,555
Refundable tax credits 1,105,684 1,105,684
Prepaids 1,380,130 698,834
Inventories 1,925,167 1,268,665
--------------------------------------------------------------------
TOTAL CURRENT ASSETS 30,201,542 18,138,892
REFUNDABLE TAX CREDITS 263,000 -
RECLAMATION DEPOSITS 1,147,811 1,139,317
PROPERTY, PLANT AND EQUIPMENT 11,239,575 10,120,285
MINERAL PROPERTIES 61,831,225 56,752,747
--------------------------------------------------------------------
TOTAL ASSETS 104,683,153 86,151,241
--------------------------------------------------------------------
--------------------------------------------------------------------
LIABILITIES
CURRENT
Accounts payable and accrued
liabilities 6,225,319 5,896,290
--------------------------------------------------------------------
6,225,319 5,896,290
ASSET RETIREMENT OBLIGATIONS 2,970,252 2,917,725
FUTURE INCOME TAXES 2,680,862 2,680,862
LONG-TERM LIABILITIES 651,405 651,405
--------------------------------------------------------------------
TOTAL LIABILITIES 12,527,838 12,146,282
--------------------------------------------------------------------
SHAREHOLDERS' EQUITY
SHARE CAPITAL (Note 3)
Common shares issued - 115,427,965
(2004 - 103,421,522) 148,759,520 131,762,523
CONTRIBUTED SURPLUS 742,943 742,943
STOCK BASED COMPENSATION 450,757 450,757
DEFICIT (57,797,905) (58,951,264)
--------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 92,155,315 74,004,959
--------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 104,683,153 86,151,241
--------------------------------------------------------------------
--------------------------------------------------------------------
The attached notes form an integral part of these consolidated
financial statements.
Approved on behalf of the Board,
Brian Moorhouse, Robert Normand,
Director Director
Consolidated Statements of Operations and Deficit (unaudited) --
For the three months ended March 31,
2005 2004
--------------------------------------------------------------------
$ $
REVENUE
Mining operations 2,932,486 3,456,986
Royalty and other income 134,574 224,460
--------------------------------------------------------------------
3,067,060 3,681,446
--------------------------------------------------------------------
EXPENSES
Operating costs 2,866,970 2,699,311
Depreciation and depletion 260,000 678,334
Accretion 25,255 22,097
Administrative and general costs 801,440 552,460
Gain on sale of property, plant
and equipment (115,112) (37,500)
Foreign exchange loss (gain) 11,754 (42,529)
Capital taxes 97,343 79,141
--------------------------------------------------------------------
3,947,650 3,951,314
--------------------------------------------------------------------
EARNINGS (LOSS) FOR THE PERIOD
BEFORE THE FOLLOWING (880,590) (269,868)
INCOME TAX EXPENSE (21,051) (26,323)
TAX BENEFITS NOT PREVIOUSLY
RECOGNIZED (Note 2) 2,055,000 -
--------------------------------------------------------------------
NET EARNINGS (LOSS) FOR THE PERIOD 1,153,359 (296,191)
DEFICIT - BEGINNING OF PERIOD (58,951,264) (53,255,379)
--------------------------------------------------------------------
DEFICIT - END OF PERIOD (57,797,905) (53,551,570)
--------------------------------------------------------------------
--------------------------------------------------------------------
EARNINGS (LOSS) PER SHARE -
Basic and diluted 0.01 (0.00)
--------------------------------------------------------------------
--------------------------------------------------------------------
Weighted average number of common
shares outstanding 107,457,003 97,519,286
--------------------------------------------------------------------
--------------------------------------------------------------------
Consolidated Statements of Cash Flow (unaudited) -
For the three months ended March 31,
2005 2004
--------------------------------------------------------------------
$ $
OPERATING ACTIVITIES
Net earnings (loss) for the period 1,153,359 (296,191)
Add (deduct) items not requiring
an outlay of cash:
Depreciation and depletion 277,472 699,692
Accretion 25,255 22,097
Gain on sale of property, plant
and equipment (115,112) (37,500)
Unrealized foreign exchange
(gain) loss (51,000) (42,529)
Tax benefits not previously
recognized (2,055,000) -
--------------------------------------------------------------------
(765,026) 345,569
Decrease (increase) in non-cash
working capital items (490,272) 126,298
--------------------------------------------------------------------
(1,255,298) 471,867
--------------------------------------------------------------------
INVESTING ACTIVITIES
Property, plant and equipment (1,241,176) (266,058)
Reclamation deposits (8,494) (145,111)
Mineral properties (5,632,022) (4,946,959)
Proceeds on disposal of property,
plant and equipment 180,000 105,000
--------------------------------------------------------------------
(6,701,692) (5,253,128)
--------------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of shares 19,051,997 163,500
--------------------------------------------------------------------
19,051,997 163,500
--------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 11,095,007 (4,617,761)
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 11,938,154 27,080,839
--------------------------------------------------------------------
CASH AND CASH EQUIVALENTS - END
OF PERIOD 23,033,161 22,463,078
--------------------------------------------------------------------
--------------------------------------------------------------------
Notes to Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge (unaudited) (all figures in Canadian dollars) 1. Basis of Presentation The accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. unaudited interim financial statements have been prepared in accordance with Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting on a basis consistent with those outlined in the Company's audited financial statements for the year ended December December: see month. 31, 2004. These notes do not include all of the information and disclosures required by Canadian generally accepted accounting principles for annual financial statements. These interim financial statements should be read in conjunction with the most recent annual financial statements of the Company. The accompanying unaudited interim financial statements of the Company have been prepared by and are the responsibility of the Company's management. The Company's independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. have not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. . 2. Income Taxes Effective March 31, 2004, the Company has adopted a new CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) Accounting Standard, EIC EIC Editor-In-Chief EIC Euro Info Centre (DIN) EIC Earned Income Credit EIC Excellence in Cities (UK) EIC Enterprise Interaction Center (Interactive Intelligence) 146, in respect of flow through shares. Under this Standard, a future income tax liability must be recognized, and the shareholders' equity reduced, on the date that the Company renounces the tax credits associated with the flow through expenditures, provided that there is reasonable assurance that the expenditures will be made. A company with future income tax assets that it has not recognized in previous years as a result of applying the "more likely than not" test thereby recording a valuation allowance, must recognize the previously unrecorded future income tax assets as a reduction of income tax expense included in the determination of net income or loss in the period incurred. The net effect of the adoption of this Standard has resulted in the recognition of tax benefits not previously recognized in the statements of operations of $2,055,000 and a corresponding reduction in shareholders' equity. 3. Share Capital a) Private Placement On March 31, 2005, the Company completed a private placement of 7,805,555 flow through common shares at a price of $1.80 per share and 3,638,888 common shares at a price of $1.50 per share, resulting in gross proceeds of $19,508,331. At March 31, 2005 the Company has a commitment to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. $14,049,999 of eligible flow through expenditures at Casa Berardi prior to December 31, 2006. As at March 31, 2005, the Company has a commitment to issue a further 2,750,000 flow through common shares at a price of $1.80 per share and 583,333 common shares at a price of $1.50 per share for gross proceeds of $5,825,000. b) Warrants Warrants outstanding pursuant to private placements as at March 31, 2005 and the changes during the period ended are presented below. One warrant is exchangeable for one common share:
Three months ended March 31, 2005
--------------------------------------------------------------------
Weighted-average
Shares exercise price
--------------------------------------------------------------------
Outstanding at beginning of period 6,300,370 $2.43
Granted - -
Exercised - -
--------------------------------------------------------------------
Outstanding at end of period 6,300,370 $2.43
--------------------------------------------------------------------
--------------------------------------------------------------------
c) Incentive Stock Options The Company maintains an incentive stock option plan ("the plan") covering officers, directors and certain key employees. The exercise price of the options is equal to the fair value of the common shares at the date of grant and the options are fully vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) and exercisable in full at the date of grant. The maximum number of options available under the plan may not exceed 7,667,900 shares. The status of stock options granted to officers, directors and employees as at March 31, 2005 and the changes during the period ended is presented below:
Three months ended March 31, 2005
--------------------------------------------------------------------
Weighted-average
Shares exercise price
--------------------------------------------------------------------
Outstanding at beginning of period 1,584,500 $1.57
Granted - -
Exercised (562,000) $1.00
Expired (45,000) $1.00
--------------------------------------------------------------------
Outstanding at end of period 977,500 $1.93
--------------------------------------------------------------------
--------------------------------------------------------------------
4.Subsequent Events a) Effective April 30, 2005, the Company has agreed to sell its 50% interest in the Sleeping Giant Mine to its joint venture partner, Cambior Cambior Inc. was a Canadian based international gold producer with operations, development projects and exploration activities in the Americas. Cambior’s shares traded on the Toronto (TSX) and American (AMEX) stock exchanges under the symbol “CBJ”. Inc. for $5 million. All environmental liabilities and reclamation costs associated with the mine closure will be transferred to Cambior Inc. b) On April 21, 2005, the Company issued 2,750,000 flow through common shares at a price of $1.80 per share and 583,333 common shares at a price of $1.50 per share for gross proceeds of $5,825,000. 5. Commitments a) As at March 31, 2005, the Company has contractual obligations in respect of construction and development activities at Casa Berardi totaling $10.7 million. b) The Company has a commitment to purchase $1.2 million of mine equipment in the fourth quarter of 2005, of which $120,000 has been advanced as a deposit. U.S. Registration: Form 20-F (File #0-22672) Aurizon Mines Ltd. (TSX:ARZ) (AMEX:AZK) |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion