Aurizon gives thumbs-up to Casa Berardi — Exploration aimed at restarting past producer in Quebec

After completing a due diligence review of the Casa Berardi mine, management of Aurizon Mines (ARZ-T) has approved plans to acquire 100% of the mine complex, situated in the Abitibi region of northwestern Quebec.

The existing infrastructure includes extensive underground workings, a 2,200-tonne-per-day mill, hoist, headframe and underground mining equipment.

Aurizon believes the project has the potential to increase its reserves and gold production. Currently, the company has 50% interests in two mines in northwestern Quebec: Sleeping Giant and Beaufor.

Casa Berardi turned out more than 650,000 oz. gold between 1989 and 1996.

Aurizon estimates the project still contains a resource of about 3 million tonnes grading 5.9 grams gold per tonne, or 570,000 oz. Of this total, about 350,000 oz. are in the West mine area.

The acquisition is still subject to a definitive purchase agreement and to financing for the initial payment and a first-phase exploration program.

Aurizon is discussing financing alternatives, with a view to closing the acquisition by the end of March.

The general terms call for Aurizon to pay $3 million in cash or shares, plus an additional $5 million within three years, or at the start of commercial production. It also must pay a net smelter return royalty of 2% to 4%, depending on the gold price, to a maximum of $10 million.

Once the acquisition is completed, Aurizon intends to launch a major exploration effort aimed at defining enough reserves to resume commercial production at historic annual levels of 80,000 to 100,000 oz. gold.

The initial $7-million program will test an area within a 1-km radius of known deposits. Particular attention will be paid to the West Mine area, which hosts most of the existing resource and is believed to have the best exploration potential.