Aurizon drills deep into Casa Berardi

Narrow-vein miner Aurizon Mines (ARZ-T) has begun a deep drilling program in hopes of outlining more mineralized material at the past-producing Casa Berardi gold mine in northwestern Quebec.

After purchasing the project in 1998, Aurizon went on to outline 6.9 million tonnes of reserves grading 6.7 grams per tonne. It also defined a resource of 4.5 million tonnes running 7.7 grams.

In 2000, a feasibility study concluded that the reserve could support annual production of 200,000 oz. over 7.5 years. Total cash costs were projected at US$145 per oz., and capital costs at $121 million.

Drilling will focus on Zones 113 and 118, both of which Aurizon discovered. Each lies about 1,000 metres below surface and remains open latterally and at depth.

Zone 113, which returned the deepest interval — 14.8 metres averaging 19.3 grams uncut — will be tested downdip from earlier intersections. Eastern extensions are the target at Zone 118, which returned up to 26.4 uncut grams over 10.9 metres. About 11,000 metres are planned in all.

Aurizon is funding the program with proceeds from an equity offering. Nearly 8.4 million units were issued at 60 apiece, for gross proceeds in excess of $5 million. Each unit consists of a share and half a warrant. A whole warrant can be exercised at 65 until mid-2003.

A bought deal for 7.1 million shares at $1.15 each will allow Aurizon to buy out residual interests in the project held by Casa Berardi vendor TVX Gold (TVX-T). Aurizon, which still owes TVX $3.9 million of the purchase price, is entitled to match any offer made for TVX’s net smelter royalty on Casa Berardi and is offering $5 million for the NSR and to retire the debt.