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 more than 39,870 oz., up from 36,870 oz. in the same quarter of 2008.
Total cash costs came in at US$386 per oz., 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 with adjusted earnings in last year’s second quarter 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 compared with $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.
Total cash costs, on the basis of gold sold, were US$386 per oz. in the second quarter compared to US$436 per oz. in the same period 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 prefeasibility study is in progress on the Hosco block, incorporating the new measured and indicated resource estimate of about 1.27 million oz., 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 150,000 to 155,000 oz. 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 traded at $4.68 per share. The Vancouverbased junior has a 52-week trading range of $1.21-6.24 per share and 158.83 million shares outstanding.
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