Strong profit margins and operating cash flow from the Casa Berardi underground gold mine in Quebec sent Aurizon Mines‘ (ARZ-T, AZK-X) second-quarter results into record territory.
The junior gold producer posted revenues of $44.2 million in the second quarter, up from $36.3 million a year-earlier, with cash flow from operating activities of $22.5 million, a 19% gain over the same quarter in 2008.
Earnings reached $13.6 million or 8¢ per share, compared with earnings of $5.6 million or 4¢ per share in the year-earlier quarter.
Second-quarter gold production met expectations, reaching 39,874 ounces, up from 36,871 ounces in the same quarter of 2008.
Total cash costs came in at US$386 per ounce, 11% lower than the same quarter of 2008.
After adjusting for non-cash derivative gains of $9.7 million on an after-tax basis, adjusted earnings for the quarter were $3.9 million, or 2¢ per share, compared to adjusted earnings in the second quarter of 2008 of $1.1 million or 1¢ per share.
Aurizon’s cash balances at the end of the quarter tallied $118.7 million (up from $55.6 million at the beginning of the year) and working capital of $84.1 million exceeded the $24.1 million at the end of 2008.
Included in the cash balance was $30.2 million held in restricted accounts in respect of the Casa Berardi project debt facility. An equity financing at $5.15 per share in April contributed net proceeds of $47.3 million.
Casa Berardi produced 39,874 ounces of gold in the second quarter of
2009, and 42,042 ounces were sold at an average price US$897 per ounce. Since commissioning the mill in November 2006, Casa Berardi has produced 414,870 ounces of gold.
Total cash costs, on the basis of gold sold, were US$386 per ounce in the second quarter of 2009, in line with plan, and compared to US$436 per ounce in the second quarter of 2008.
Aurizon has decided to defer mining by open pit the crown pillar at the Casa Berardi East mine. A technical assessment study on mining the upper portion of the Principal Zones by open pit is in progress and is expected to be completed in the fourth quarter.
At Joanna, a pre-feasibility study is in progress on the Hosco
block, incorporating the new measured and indicated resource estimate of about 1.27 million ounces, together with the results of the ongoing metallurgical tests. It is anticipated that the study will be completed in the fourth quarter.
Exploration activity at Kipawa in the second quarter was focused
primarily on the initiation of soil sampling in areas of interest contiguous to gold showings identified in 2008.
Casa Berardi remains on target to produce between 150,000 to 155,000 ounces of gold this year.
The remaining project debt of $21 million, which is repayable in the next nine months, is reflected in working capital.
At presstime Aurizon was trading at $4.68 per share. The Vancouver-based junior has a 52-week trading range of $1.21-$6.24 per share.
As of Aug. 10, Aurizon had 158.83 million shares outstanding.
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