Aurizon sees strong gains in August (September 20, 2010)

VANCOUVER — The latest drill results from the Casa Berardi gold mine in northwestern Quebec have capped off a month of sharp stock price gains for Aurizon Mines (ARZ-T, AZK-N).

In Toronto, the company’s shares jumped 54¢ or 8.3% to $7.04 on Aug. 30, the day the latest drill results were released. The following day its shares hit a high of $7.42 before closing at $7.09.

Meanwhile, Aurizon started August hovering around $5, and was trading as low as $3.81 in February.

The latest drill results came from the 810-metre level of the mine. Hole 160 was particularly good, intercepting a true width of 21.5 metres grading 42.1 grams gold per tonne from 267 metres.

Other results included hole 153 that hit a true width of 3.9 metres of 15.2 grams gold, hole 191 that cut a true width of 4.3 metres averaging 13 grams gold and hole 196 that returned a true width of 7.8 metres of 6 grams gold.

The latest drill results came from the 123 zone, located roughly 1 km east of the West mine shaft at Casa Berardi. The company has outlined a series of stacked mineralized lenses with a south-east dipping host corridor 200 metres thick by 1 km along strike.

It has also been drilling on surface near the West and East mine shafts and at other levels below ground. Aurizon plans to incorporate the results of the current drill program at Casa Berardi into a new resource estimate sometime later this year.

The last estimate was released in March and contained measured and indicated resources of 5.1 million tonnes grading 5.6 grams gold and 4.5 million inferred tonnes of 6.6 grams gold. Also in March, the company updated its reserve estimate to 4.43 million tonnes of 7.1 grams gold for more than one million contained ounces gold.

Earlier in August, the company released quarterly results that gave its shares a boost. During the second quarter, Aurizon increased measured and indicated resources at its Joanna project by 35%, optioned three new properties and gave a positive update on production at Casa Berardi.

In 2010, the company has been mining through a lower-grade section of Casa Berardi. For next year, however, Aurizon expects to return to higher-grade material, which will both increase production and lower costs. For 2011, the company is projecting gold production of around 167,000 oz. at US$425 per oz., compared to the estimated 150,000 oz. at US$500 per oz. this year.

By the fourth quarter of 2010, the company will be free of call options that had it selling 60% of its gold at about US$907 per oz. in the second quarter.

With $124 million in cash on hand, Aurizon is working on several significant exploration programs in Quebec.

At Joanna, it launched a $5.1-million exploration program in July, for both infill and exploration drilling. A full feasibility study on the project is expected out by the end of the year while drilling will continue into 2011.

The company also plans to do exploration programs on several optioned properties where it can earn up to a 65% stake. At Marban, a 9.7-sq.-km claim block in the Malartic gold camp, it is spending $5 million on exploration. At Fayolle, a 13.7-sq.-km claim block in the Abitibi belt, the company plans to spend $3.5 million. At Rex South, a 555-sq.-km block in northern Quebec, it is spending $1.5 million on exploration.