Aurizon Mines Ltd.: Updated Feasibility Study Improves Casa Berardi Reserves and Economics.VANCOUVER, 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) ) has received a positive 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. prepared by Roscoe Postle Associates Inc. ("RPA RPA Remote Patron Authentication RPA Rural Payments Agency (UK Department of Environment, Food and Rural Affairs) RPA Replication Protein A RPA RNAse Protection Assay RPA Regional Plan Association RPA Random-Phase Approximation ") for its Casa Berardi Project located in northwestern Quebec, Canada, integrating the results from the January 2005 Feasibility Study, based on reserves above 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, and the January 2005 resources estimate, based on resources below 700 metre level. The Updated Feasibility Study has incorporated into the updated mine plan, the higher grade gold below 700 metres in Zone 113. "We are pleased with the results of the Updated Feasibility Study, which reflect a substantial increase in reserves, and a 6% reduction in total cash costs. It should be noted that at the prevailing gold price and exchange rate, the Project's internal rate of return increases to 33% and that the total Project cash flow would increase by approximately $50 million," said David Hall David Hall may refer to:
The new mineral reserve estimate, has been prepared by RPA as part of the Updated Feasibility Study, which has been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the Standards of Disclosure for Mineral Projects as defined by National Instrument 43-101. ("NI 43-101")
HIGHLIGHTS
(All dollar figures expressed in Canadian dollars, except where
indicated)
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Updated
Feasibility Study Feasibility Study
January 2005 September 2005
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Assumptions: US$ gold price of US$400/oz and an exchange rate of 1.25
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West Mine Mineral Reserves
(gold ounces) 867,900 1,212,800
Pre-production Capital Cost
(in millions) (1) $ 84.1 $ 102.6
Sustaining Capital Cost
(in millions) $ 34.0 $ 36.9
Pre-production period (2) 18 months 19 months
Total Operating Cost per tonne $ 54 $ 62
Total Cash Cost per ounce (US$) US$233/oz US$219/oz
Payback period 3.5 years 2.75 years
Internal rate of return
(before tax(3)) 17% 23%
Average annual production rate
(life of mine) 150,000 oz 175,000 oz
Average gold grade
(life of mine) 6.2 grams/tonne 7.8 grams/tonne
Mine Life 5.5 years 6.2 years
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Notes:
(1) Since April 1, 2005, approximately $23 million of the capital
cost has been incurred on the project.
(2) As at April 1, 2005.
(3) Aurizon will have approximately $150 million of accumulated
exploration, development and capital costs, together with loss
carry-forwards, available for deduction against taxable income,
at commencement of commercial production.
In addition to Mineral Reserves noted above, the Project contains the
following Mineral Resources:
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Mineral Resources
(Updated Feasibility Study Grade Gold
September, 2005) Tonnes Grams/tonne Ounces
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Total Indicated Mineral Resources 2,721,000 5.11 446,800
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Total Inferred Mineral Resources 5,649,000 6.50 1,184,000
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Aurizon has implemented a continuous development program at Casa Berardi. The goal of this program is to advance the Casa Berardi Project to commercial production, in as short a period as possible, while reducing the pre-production capital costs and lowering the technical and financial risk of the Project. Development work at Casa Berardi has been undertaken concurrent with the feasibility work program. The remaining pre-production time required to bring the Project to commercial production is anticipated to be 13 months. It is RPA's opinion that the capital cost estimates included in the Updated Feasibility Study are of a higher confidence level than is normal for a feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. , due to the fact that contracts for 70 percent of the development work, including shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. , steel and cement cement, binding material used in construction and engineering, often called hydraulic cement, typically made by heating a mixture of limestone and clay until it almost fuses and then grinding it to a fine powder. , have been signed. Pre-production capital costs are estimated at C$102.6 million (US$82 million), of which approximately $23 million has already been incurred. - On surface, 80% of site construction is complete. A new head frame has been erected along with a hoist hoist: see winch. room and surface ore and waste bins. Mechanical and electrical hoist installation is complete. - Underground, the shaft has been raised up from the 550 metre level to the collar bottom. The 42 metre deep collar construction is completed. Installation of services required for shaft sinking shaft sinking, excavation from the surface of an opening in the earth. Shafts, which are generally vertical, are usually distinguished from tunnels, which are horizontal. are complete. Shaft sinking has recently commenced. Underground development is ongoing, achieving budgeted productivity. The ramp has been extended to 630 metres below the surface, representing 45% of the required ramp development. Five working headings have been accessed. - Work on the refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur and modification of the Casa Berardi mill is underway. - The majority of remaining pre-production activity will be for the mill and underground mine development. The Updated Feasibility Study has been built around a mineral reserve based on drilling of Zone 113 and the West Mine. Technical problems encountered prior to the mine's closure in 1997 have been addressed in the Updated Feasibility Study. The start up plan anticipates that Casa Berardi production to will be scaled up to reach an average of 175,000 ounces of gold per annum Per annum Yearly. for 6 years, for total production of 1,092,000 ounces. Aurizon has already retained the required key technical staff to develop and operate the mine, and has undertaken development and exploration drill programs in order to increase the Project's mine life. History The Casa Berardi project is located 95 kilometres north of La Sarre, northwestern Quebec. Previous mining operations were performed from a ramp accessing the upper part of the deposits at the East and West mine sites, from which 3.74 million tonnes, at an average grade of 6.7 grams of gold per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. were extracted between 1988 and 1997 to produce 688,000 recovered ounces. Following acquisition of the Project in 1998, Aurizon carried out a surface exploration diamond drill program with the objective of increasing the gold resources. This program was followed by underground drilling to increase the confidence level of known resources. Surface and underground infrastructure Existing facilities on site include a 2,200 tonnes per day processing plant, a building complex including warehouse, maintenance, mine dry, a 120KV electrical power line, and ramp access. Mobile equipment remaining from the previous operation is available for the proposed mining operation. Aurizon has already completed construction of the following surface and underground infrastructures: - The headframe, hoist buildings and silos - Hoist mechanical and electrical installation - 42 metre concrete shaft collar The shaft collar is a simple, yet important, machine component found in many power transmission applications - most notably motors and gearboxes. They are used as mechanical stops, locating components, and bearing faces. The simple design lends itself to easy installation. and related shaft sinking services - Ramp development in Zone 113 to the 630 metre level and to the Lower Inter to the 445 metre level - Access drift to the shaft and stations on the 280 metre and 550 metre levels - Access to 550, 570, 590, 610 and 630 metre sub levels - Shaft pilot raise from the 550 metre level to shaft collar - 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 from the 550 metre to the 280 metre level - Fill raise/auxiliary ventilation raise from the 550 metre to the 610 metre level Mineral reserves and resources The Casa Berardi deposit is a vein type deposit located close to the contact between sedimentary basin The term sedimentary basin is used to refer to any geographical feature exhibiting subsidence and consequent infilling by sedimentation. As the sediments are buried, they are subjected to increasing pressure and begin the process of lithification. sequence and the volcanic basement This article is about the section of a building. For the foundation, see Basement rock. A basement is one or more floors of a building that are either completely or partially below the ground floor. Slab-on-grade buildings do not have basements. . The deposit extends for a 5 kilometre strike along the Casa Berardi Fault system. Mineral reserves and resource estimations have been classified in accordance with NI-43-101. - Block models have been revised for Zone 113 in order to integrate the portions above and below the 700 metre level. Capping of 155 grams/tonne gold has been used for high grade core and 55 grams/tonne gold has been used for lower grade material - Polygonal pol·y·gon n. A closed plane figure bounded by three or more line segments. po·lyg  o·nal adj. estimates were completed for Zone SW, NW and 111 in
accordance with a 4.0 grams/tonnes gold cut-off cut-off Anesthesiology The point at which elongation of the carbon chain of the 1-alkanol family of anesthetics results in a precipitous drop in the anesthetic potential of these agents–eg, at > 12 carbons in length, there is little anesthetic activity, grade. Previous
resource estimates used a 3.0 grams/tonne gold cut-off.- RPA has reviewed reports by Aurizon, Met-Chem, SRK SRK Shah Rukh Khan (Indian actor) SRK Shoryuken (fighting games) SRK Soave-Redlich-Kwong (thermodynamic model) SRK Syk-Related Tyrosine Kinase and Geostat relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc resource estimates. In addition RPA constructed a block model for the Lower Inter Zone. The selected mining method is Sequential Transversal and Longitudinal lon·gi·tu·di·nal adj. Running in the direction of the long axis of the body or any of its parts. Long Hole when the vein is larger than 10 metres and Longitudinal Long Hole Retreat when the vein is less than 10 metres. The stoping sequence includes cemented rockfill of the primary stoping sequence, cemented and unconsolidated rockfill for the longitudinal retreat and unconsolidated rockfill for secondary stoping sequence. Stope stope n. An excavation in the form of steps made by the mining of ore from steeply inclined or vertical veins. tr.v. stoped, stop·ing, stopes To remove (ore) from or mine by means of a stope. dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. has been calculated from numerical numerical expressed in numbers, i.e. Arabic numerals of 0 to 9 inclusive. numerical nomenclature a numerical code is used to indicate the words, or other alphabetical signals, intended. modeling on the basis of the stability of the stope openings, ore deposit geometry geometry [Gr.,=earth measuring], branch of mathematics concerned with the properties of and relationships between points, lines, planes, and figures and with generalizations of these concepts. and mining method. The amount of dilution was reduced for stopes Stopes , Marie Carmichael 1880-1958. British social reformer who opened England's first birth control clinic (1924) in London and later promoted family planning in east Asia. of smaller dimensions on the fringes On The Fringe is a popular Pakistani television show on Indus Music. It is hosted and scripted by the eccentric television host and music critic, Fasi Zaka and directed by Zeeshan Pervez. of the zone, and increased for stopes with unfavourable geometry.
CASA BERARDI UPDATED MINERAL RESERVE AND RESOURCE ESTIMATE
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High
Cut- Assay
off Capp-
Grade Grade ing Specific Dilut-
grams/ Gold grams/ grams/ Gravity ion
Tonnes tonne Ounces tonne tonne T/m3 Factor
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PROBABLE
MINERAL
RESERVES
Zone 113 2,935,000 9.11 859,900 4.0 55 - 155 2.70 14%
Lower
Inter
Zone 1,190,000 6.08 232,600 4.0 40.0 2.77 10%
Northwest
Zone 162,000 5.99 31,200 4.0 23.0 2.77 24%
Southwest
Zone 420,000 4.12 55,600 4.0 18.5 2.77 19%
Zone 111 112,000 6.19 22,400 4.0 27.1 2.77 27%
Development
ore 89,000 3.88 11,100 - - - -
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Total
Probable
Mineral
Reserves 4,908,000 7.69 1,212,800
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INDICATED
MINERAL
RESOURCES
Zone 113 231,000 5.04 37,400 4.0 55 - 155
Lower Inter 298,000 5.45 52,200 40.0
Zone 111 219,000 4.75 33,400 27.1
Northwest 44,000 6.17 8,700 23.0
Southwest 323,000 4.58 47,500 18.5
Inter Zone 124,000 4.43 17,600 3.0 18.7
Principal
Zones
below
crown
pillar 316,000 7.01 71,200 3.0 12.6 to
56.1
Principal
Zones
in crown
pillar 339,000 5.51 60,000 3.0 12.6 to
56.1
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West Mine
Indicated
Mineral
Resources 1,894,000 5.39 328,000
East Mine
crown
pillar 827,000 4.47 118,800 1.3
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Total
Indicated
Mineral
Resources 2,721,000 5.11 446,800
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INFERRED
MINERAL
RESOURCES
Zone 104 115,000 6.62 24,500 3.0 31.0
Zone 109 125,000 9.11 36,600 3.0 44.4
Zones
117-123 1,704,000 6.10 334,000 3.0 No
capping
Principal
Zones
below
crown
pillar 1,316,000 6.50 275,000 3.0 12.6 to
56.1
Principal
Zones
in crown
pillar 1,647,000 6.43 340,500 3.0 12.6 to
56.1
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West Mine
Total 4,907,000 6.41 1,010,600
East Mine
Total 742,000 7.27 173,400 4.3 31.0
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Total
Inferred
Mineral
Resources 5,649,000 6.50 1,184,000
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Notes: All of the above mineral reserve and resource estimates have been audited and/or prepared by RPA. Indicated Mineral Resources Noun 1. mineral resources - natural resources in the form of minerals natural resource, natural resources - resources (actual and potential) supplied by nature are exclusive of Mineral Reserves. Mineral resources which are not mineral reserves do not have demonstrated economic viability. Proposed surface and underground infrastructure The proposed mine infrastructure incorporates a 5.5 metre diameter concrete vertical circular shaft down to 790 metres. Related surface and underground infrastructure including a headframe (mainly completed), hoist room (completed), and revised electrical distribution (underway). Ore and waste passes, ventilation raises, ramps and lateral lateral /lat·er·al/ (-il) 1. denoting a position farther from the median plane or midline of the body or a structure. 2. pertaining to a side. lat·er·al adj. 1. development work and associated underground infrastructure is underway. All infrastructure has been designed to ensure a long mine life beyond that established in the Updated Feasibility Study.
Underground Mine Operation
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Permanent Infrastructure North of the Casa Berardi fault
(massive volcanics)
Mining operation South of the Casa Berardi fault (sediments)
Mining method Stopes greater than 10 metres wide
- Sequential Transversal and Longitudinal
long hole
Stopes less than 10 metres wide
- Transversal long hole retreat
Back fill Primary stoping sequence
- cemented rockfill
Secondary stoping sequence
- unconsolidated rockfill
Longitudinal retreat
- 50% unconsolidated/50% consolidated rockfill
Production rate Scale from 1,600 tonnes/day (start up)
2,200 tonnes/day (life of mine)
Standard stope dimension 20 metres high x 15 metres wide
x zone thickness (average 11 metres)
Active stopes required 8 active stopes of 9,000 tonnes per month
Hoisting 5.5 metres circular concrete shaft (790 metres)
Hoisting capacity of 300 tonnes per hour
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The underground operation is designed to sustain a daily production rate of 2,200 tonnes, 7 days a week, 365 days a year. Initial production is expected to be established from higher grade portions of Zone 113, Zone NW, development in low grade material, and a development stock pile. Mining and development sequence flexibility will be achieved by using both longitudinal and transversal mining methods, multiple ore zones, shaft and ramp access. To mitigate mit·i·gate v. To moderate in force or intensity. mit  i·gation n. previous operational ground problems related to drifts
and infrastructure, permanent openings, such as the shaft, ramp,
ore/waste pass systems and ventilation raises will be located north of
the Casa Berardi fault within the massive volcanic rocks rocks which have been produced from the discharges of volcanic matter, as the various kinds of basalt, trachyte, scoria, obsidian, etc., whether compact, scoriaceous, or vitreous.See also: Volcanic . The mining operation will be located on the south side of the fault and will not interfere with permanent infrastructure. To ensure long term ground stability, drift and stopes located within 10 metres of major faults will be cable bolted and shotcreted. The previous operation experienced several serious stope failures. This has been addressed in the Updated Feasibility Study by limiting stope size, using cemented rock fill, improving backfill back·fill n. Material used to refill an excavated area. tr.v. back·filled, back·fill·ing, back·fills To refill (an excavated area) with such material. placement capacity and quality control, and proper stope sequencing to allow backfill curing time In the annealing procedure could be divided into 3 stages:heating to a particular temperature, keeping for a period of time and cooling to room temperature. The curing time is the hold time of the 2nd stage. . In RPA's opinion, the proposed measures to maintain development and stope stability are in accordance with commonly accepted practice, and appropriate for the anticipated conditions. Production rate problems experienced by the previous ramp-only operation will be addressed by hoisting ore up the new shaft and maintaining a sufficient stope inventory. Eight active stopes per month, each averaging 9,000 tonnes, will be required to sustain a planned production rate of 2,200 tonnes per day. Ventilation requirements will be achieved by downcasting fresh air from the existing ventilation raise and the main ramp access. Exhaust Exhaust may refer to: In mathematics:
The ore will be hoisted to surface through the new shaft, loaded into trucks from a storage bin and transported 5 kilometres to the processing plant. Ore from the lower portion of the orebody and from the former West mine area will be trucked to the orepass system or to the surface.
Ore processing
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Milling: Intensive cyanidation leaching, gravity circuit
followed by conventional Carbon-in-leach circuit
Average recovery
(life of mine): 91.2%
Tailings: 1.4 million tonnes (residual capacity),
additional cell required in year 2
Mill Operating days: 345 days (94.5% mill availability)
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Processing of the ore will be performed at the existing facilities, which contain a standard cyanidation carbon-in-leach circuit. Metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. testwork, performed by SGS SGS Société Générale de Surveillance SGS Symantec Gateway Security (appliance) SGS School of Graduate Studies SGS Subgrid Scale SGS Singapore Government Securities SGS Shell Global Solutions Lakefield Research, indicates that the addition of an intensive cyanide cyanide (sī`ənīd'), chemical compound containing the cyano group, -CN. Cyanides are salts or esters of hydrogen cyanide (hydrocyanic acid, HCN) formed by replacing the hydrogen with a metal (e.g., sodium or potassium) or a radical (e.g. gravity circuit is expected to improve overall gold recovery. In accordance with the proportion of quartz quartz, one of the commonest of all rock-forming minerals and one of the most important constituents of the earth's crust. Chemically, it is silicon dioxide, SiO2. and or sedimented hosted ratio, which impact the gold recovery, overall gold recovery is expected to be 91.2%. With minor modifications, the existing mill is expected to operate at 2,200 tonnes per day, for an annual production of 803,000 tonnes over 365 operating days. Mill production rate will be scaled up from 1,600 tpd to 2,200 tpd over a 15 month period. Existing tailings Tailings (also known as tailings pile, tails, leach residue, or slickens[1]) are the materials left over[2] after the process of separating the valuable fraction from the worthless fraction of an ore. pond capacity is estimated at 1.45 million cubic metres Noun 1. cubic metre - a metric unit of volume or capacity equal to 1000 liters cubic meter, kiloliter, kilolitre metric capacity unit - a capacity unit defined in metric terms . Incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. storage capacity will be provided by the construction of a new cell. Environmental compliance In addition to the environmental permits transferred from the previous owners, a series of operating permits were obtained by Aurizon. The Project is being developed in compliance with 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. , Quebec and World Bank Equator Principles The Equator Principles is a set of environmental and social benchmarks for managing environmental and social issues in development project finance in the emerging markets. Once adopted by banks and other financial institutions, the Equator Principles commit the adoptees not to . Modifications to the permits will be obtained to reflect the proposed mining plan, milling rate and tailings management. The Project is being developed in compliance with federal and provincial regulations and World Bank Equator Principles. Project master schedule The Project master schedule estimates that the shaft, surface and underground facilities, required underground development, underground infrastructure, mill improvements and rehabilitation rehabilitation: see physical therapy. , and mine site infrastructure should be completed by November 1, 2006, within a 19 month period, from April 1, 2005. Aurizon is already six months into the construction period. The remaining Project master schedule includes permitting, remaining detailed engineering, current productivity rates, labour force availability, lead time for purchasing consumables and project commissioning.
Capital costs
CAPITAL COSTS
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Total
$
(000's)
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Mine Development
Shaft 16,067
Underground development 23,693
Stope preparation, definition drilling, etc. 4,491
Plant & Infrastructure
Surface facilities 9,993
Underground infrastructure 11,186
Cement plant 2,666
Electrical distribution 4,180
Water management 1,286
Mill refurbishment and modification 4,775
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Total Direct Costs 78,337
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Contingency 6,343
Indirect
Engineering, procurement and construction management 743
Power/Fuel 2,441
Aurizon Labour 8,547
Owner's Costs 6,209
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Total 102,621
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The scope of the project has been expanded since the January 2005 Feasibility Study, in order to access higher grade reserves (below 700 metres) early in the production cycle. Consequently additional underground development and stope preparation expenditures are included in the capital cost estimates. The increase in costs have been more than offset by the economic benefit of accessing the higher grades at depth. Direct cost estimates for the shaft development, related surface infrastructure and steel are derived from recent tenders based on detailed engineering studies and/or contracts which have been awarded. Some of the work has already been completed. Quotes have been received for the necessary major mine and process equipment. Unit costs for the underground development are based on the contracts in force and supported by the actual productivity achieved on site. Given this degree of certainty, a contingency contingency n. an event that might not occur. margin on direct costs of 8% is considered adequate. It is anticipated that all underground pre-production development will be performed by mining contractors utilizing their own mobile equipment. After the pre-production stage, mining operations will be performed by Aurizon using a combination of existing and leased equipment and, therefore, no capital investment has been planned for major mining equipment. Operating costs operating costs npl → gastos mpl operacionales Operating costs per tonne have increased from the January 2005 estimate due to higher cement and reagent reagent /re·a·gent/ (re-a´jent) a substance used to produce a chemical reaction so as to detect, measure, produce, etc., other substances. re·a·gent n. costs, a reduction in the throughput rate Throughput rate is an obsolete term[1] in the terminology of automated chemical analysis. It may mean either:
1. ^ International Union of Pure and Applied Chemistry. "throughput rate". , and the impact of mining at levels below the proposed shaft bottom which will require transport costs up to the shaft's lowest ore-handling system. The impact of the increases has been more than offset, on a cost per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. basis, by the higher grades experienced at depth. The average total cash cost is estimated at US$219 per ounce, using an exchange rate of 1.25, for the 6 year period covered.
UNIT OPERATING COSTS
------------------------------------------
($/Tonne)
Mining $40
Milling 14
Administration 8
Total Unit Operating Costs $62
-----------------------------------------
Economic model The economic model for the Updated Feasibility Study is based on mineral reserves for the West Mine area and includes a start-up Start-up The earliest stage of a new business venture. base case scenario to quickly advance the project to the production stage. Results of infill in·fill n. 1. The use of vacant land and property within a built-up area for further construction or development, especially as part of a neighborhood preservation or limited growth program. 2. drilling on Zone 109, Zone 113 updip extension and Zone 115 will be incorporated into a year end resource estimate.
FEASIBILITY STUDY SUMMARY
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Assumptions: US$ gold price of US$400/oz and an exchange rate of 1.25
Tonnes milled 4,804,000 Initial capital $103M
Average gold grade (g/t) 7.8 Sustaining capital $ 37M
Average mill recovery 91.2% NPV (before taxes) @ 0% $107M
Total Gold Produced (ozs.) 1,092,000 NPV (before taxes) @ 5% $ 68M
Average annual ozs. 175,000 IRR (Note 1) 23%
Average total cash cost/oz US$219
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Note:
(1) At the prevailing gold prices and exchange rate, the internal
rate of return is 33%.
(2) Aurizon will have approximately $150 million of accumulated
exploration, development and capital costs, together with loss
carry-forwards available, for deduction against taxable income,
at commencement of commercial production.
The economics of the project are mainly sensitive to fluctuations in
the price of gold and exchange rate.
SENSITIVITY ANALYSIS
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Internal Rate
Change Variation of Return
--------------------------------------------------------------------
+ 10% US$ 440 33%
Gold price - base case - US$ 400 23%
- 10% US$ 360 12%
--------------------------------------------------------------------
+ 10% 1.38 33%
Exchange rate - base case - 1.25 23%
- 10% 1.13 12%
--------------------------------------------------------------------
+ 10% US$ 241 18%
Cash operating costs/ounce
- base case - US$ 219 23%
- 10% US$ 197 28%
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+ 10% C$112.9 m 19%
Pre-production capital costs
- base case - C$102.6 m 23%
- 10% C$ 92.4 m 27%
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Outlook Aurizon intends to advance the development of the Casa Berardi West Mine as quickly as possible and expand the known resources and reserves. The salient initiatives include: - BNP Paribas BNP Paribas (Euronext: BNP, TYO: 8665 ) is one of the main banks in Europe and France. It was created on 23 May 2000 through the merger of Banque Nationale de Paris (BNP) and Paribas. has been awarded an exclusive mandate An exclusive mandate is a government's assertion of its legitimate authority over a certain territory, part of which another government controls with stable, de facto sovereignty. It is also known as a claim to sole representation or an exclusive authority claim. to arrange and underwrite To insure; to sell an issue of stocks and bonds or to guarantee the purchase of unsold stocks and bonds after a public issue. The word underwrite has two meanings. a debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay facility of up to Cdn$75 million to complete the construction and start-up of Casa Berardi. At the end of the second quarter 2005, Aurizon had $25 million in cash and working capital. - Construction at Casa Berardi is already underway. Contracts have been awarded for 70% of the development work including shaft, steel and cement. Headframe and shafthouse construction is more than 80% complete. Shaft sinking has recently commenced. - Aurizon has already spent $5.5 million in exploration and definition drilling activities in 2005 in order to increase and upgrade the quality of the indicated (466,000 ounces) and inferred (1,184,000 ounces) mineral resources identified on the Project. Three underground rigs are currently active in the West Mine area. Underground definition drilling is testing Zones 118 to 120 which are 500 to 700 metres east of Zone 113, with the intent of increasing resources and extending the mine life in this area. Underground exploration is also testing the dip extensions of Zone 113 to a depth of 1,100 metres. - The surface exploration program is in the first year of an initial three year plan. Drilling west of the West Mine has been completed for 2005. Drilling is expected to continue on other targets outside of the mining lease late this year and in 2006. Additional Information Two sketches are attached showing the existing and planned underground development and exploration activities. A Technical Report based on the Updated Feasibility Study will be posted on the Company web site and on SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review within a 30 day period following this news release. All other information previously released on the Casa Berardi project is also available on the Aurizon website. A conference call will be held at 10:30 a.m. Eastern Standard Time on Monday, October 3, 2005, to discuss the results of the Updated Feasibility Study. Aurizon is a Canadian-based gold development company, with activities in the Abitibi region of northwestern Quebec, one of the world's most prolific gold and base metal regions. 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 News Release 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. 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, 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, 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 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. 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 and legally extract or produce. We use certain terms in this news release such as "mineral resources" "indicated mineral resources" and "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 Indicated Resources - This news release uses the term "indicated" resources. We advise U.S. Investors that while that term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission 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. 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. 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 minable. U.S. Registration: (File #0-22672) Form 20-F Aurizon Mines Ltd. (TSX:ARZ) (AMEX:AZK) |
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