Aurizon tallies $31-million loss

Following a major writedown of its mining properties in Quebec last year, Aurizon Mines (TSE) is gearing up to explore a low-cost copper-gold property in Mexico. For the year ended Dec. 31, the company reported a loss of $31.1 million ($1.37 per share) on revenue of $15.5 million, compared with a loss of $6.5 million (29 cents per share) on revenue of $14.8 million in 1989.

The loss was due mainly to a $26.6-million writedown on the value of Aurizon’s mineral properties, including the Sleeping Giant mine in Quebec where operations were suspended last year in the wake of falling gold prices. The mine, which entered production just three years ago, was supposed to have a 12-year lifespan.

Meanwhile, Aurizon said it has now acquired 100% control of the La Reyna copper-gold property near Mazatlan in northern Mexico. Previous drilling at La Reyna has outlined preliminary reserves of 12 million tons grading 0.71% copper and 0.03 oz. gold per ton, including high-grade sections with values up to 0.38 oz. gold. The copper-oxide portion of the deposit is amenable to open pit mining methods and low-cost, heap leach (SX-EW) recovery.

Last year’s gold production at the Sleeping Giant mine rose to 33,341 oz., up from 29,489 oz. in 1989. The mine generated cash flow of $3.3 million, compared with $617,804 in 1989. Cambior is currently earning a 50% interest in the mine and related mill facilities by investing $12 million over three years.

Aurizon’s asset writedown placed the company in breach of a minimum net worth requirement with its Swiss bondholders, and this year $24.8 million worth of the bonds were redeemed for $3.7 million cash and 6.3 million series A convertible preferred shares. The remaining bonds, totalling $4.6 million, mature on Nov. 16, 1995.

Aurizon said a recently completed private placement will enable the company to conduct preliminary exploration at its Bruneau, Benoit and Senneville properties in Quebec.