Aurizon Mines

احدث اجدد واروع واجمل واشيك Aurizon Mines

Aurizon is a gold producer with a growth strategy focused on developing its existing projects in the Abitibi region of north-western Quebec, Canada, one of the world's most favourable mining jurisdictions and prolific gold and base metal regions, and by increasing production through accretive transactions.

Exploration is currently being conducted at Casa Berardi, as well as at Aurizon's other gold project, Joanna, and its' gold/rare-earth's project, Kipawa. The company has one mine in production right now(Casa Berardi), with plans for a second mine to be put into production in a few years(Joanna).
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Joanna - Canada

Joanna is a mine that Aurizon currently has in development. According the the prefeasibility study:

Has 1 million oz of gold reserves, 2 million resource.
Production of 110,000 oz per year for 8.5 years
Cash cost of $434
Cap ex is $192 million.

The proposed open pit operation has the potential in itself to increase Aurizon's gold production by 60% to approximately 260,000 ounces per year. The final feasibility study has been commissioned and is expected to be completed in mid 2011.

Aurizon also intends to complete a prefeasibility study to assess the relative risks and opportunities of mining the Principal Zone crown pillar by open pit. You can see the Principal Zone in the graph below. It lies in between the East and West mine, and is a shallow deposit.

Financials And Production

The second quarter of 2010 was highlighted by the following activities:

    * Cash flow from operations of $16.5 million, up 80% from first quarter 2010.
    * Gold production of 38,527 ounces.
    * Net earnings of $5.3 million, or $0.03 per share.
    * Total cash costs of US$504 per ounce and operating margins of US$578 per ounce.
    * A 35% increase in measured and indicated mineral resources at Joanna.
    * Encouraging results from drilling in the Principal area at Casa Berardi.
    * Optioning three attractive exploration properties in Quebec.
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Aurizon currently has $124 million in cash and no debt. They expect to generate $60-$70 million in cash flow for 2010.

When Casa Beradi was constructed back in 2006, one of the terms of the loan facility was that Aurizon was required to hedge future production. This has hurt them as gold has risen but the good news is the last of the hedges will finally be unwound in Q3.

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Conclusion

Aurizon currently has one solid mine in production(Casa Berardi). They are currently in a low grade ore section which is hurting their production and cash cost. They will be through the low grade ore section by the end of this year, leading the way for increased production and lower cash cost for 2011 and beyond. Once Joanna is constructed, production will increase by over 100,000 oz per year at low cash cost.

The company is going to finally for the first time be able to sell all gold production at spot prices once the last of the gold hedges is removed in Q3 2010. In other words as long as gold remains at these levels, Aurizon's net income is going to get a lot better.

With 159 shares outstanding, Aurizon currently has a market cap of $1.1 billion. Considering the cash flow they will now be generating, and the fact that production will be at 170,000 oz per year and $425 cash cost in 2011, this is a ridiculously low valuation. But it's not out of the norm. If you have read any of the other reviews here on Goldstocksdaily.com, it seems that just about every solid mining company out there is undervalued.

Casa Berardi – Canada

Casa Berardi started production in 2006, and for the past 3 years has been producing 160,000 oz of gold per year. The mine has produced over 1.2 million recovered gold ounces since commencing production in 1986, including 500,000 recovered ounces since Aurizon re-commissioned production in December 2006. The Casa Berardi gold deposits are located along a five kilometre east-west mineralized corridor. They include the East and West mines, and the Principal Zone.

Based upon the 2010 mine plan, it is estimated that Casa Berardi will produce approximately 145,000 — 155,000 ounces of gold at an estimated total cash cost of US$490 per ounce. This compares to gold production of 159,261 ounces and a total cash cost of US$401per ounce in 2009. The slight decrease in gold production for 2010 is attributable to lower average gold grades being included in the 2010 mine plan, particularly in the first part of the year.

The average daily mine production is estimated at 2,000 tonnes per day in 2010, up from 1,887 tonnes per day in 2009. Ore grades are expected to average 6.7 grams per tonne compared to the 7.8 grams per tonne achieved in 2009. Beginning in 2011 and through subsequent years of operations, annual gold production of 160,000 to 170,000 ounces is anticipated at total cash costs approximating US$425 per ounce, as higher grade areas are included in the mine plan. It is anticipated that the mine plan will be revised to incorporate the final results of the extensive drill programs currently in progress.

Casa Berardi currently has 1 million oz of gold in reserves.