Quebec - Fayolle

Aurizon has entered an exploration joint venture with Typhoon Exploration Inc., ("Typhoon") on the Fayolle Project located 35 kilometres north-east of Rouyn Noranda and close to Aurizon's Joanna Project in Quebec. The property comprises 39 mining claims 100% owned by Typhoon covering 1,373 hectares across the Porcupine-Destor Break, one of the most productive gold bearing structures of the Abitibi Belt.

The key terms of the joint venture option agreement include:

• Aurizon can earn a 50% interest in the project, subject to an underlying 2% net smelter royalty, by incurring expenditures of $10 million over four years, of which $3.5 million is a firm commitment to be spent within two years.
• Aurizon may earn an additional interest of 15%, for a total interest of 65%, by either delivering a feasibility study, or spending an additional $15 million on the project.
• ARZ will provide input on exploration programs and will become operator after the initial 50% interest has been earned.
• During the course of the initial four year term, Aurizon will have the right to subscribe for common shares of Typhoon of up to $500,000 on each anniversary of the option agreement, for a total investment of up to $2 million. The first subscription will consist of 609,756 units (the "Units") at a price of $0.82 per Unit with each Unit being comprised of one common share in the capital of the Company (and one share purchase warrant a "Warrant"). Each Warrant will entitle Aurizon to purchase one additional common share of Typhoon at the price of $ 1.25 per share for a period of 18 months following the closing. The securities issued under the offering will be subject to a four month hold period. The remaining subscriptions will be based on a 15 day weighted average share price. The first two subscriptions totalling $1 million are firm commitments and are required in order for Aurizon to earn the initial 50% interest in the Fayolle project.

Typhoon has explored the Fayolle project since 2003 and incurred approximately $10 million advancing the project. The mineralized zones on the Fayolle deposit are distributed along a major shear corridor of approximately 2.5 kilometres long by 1 kilometre wide, marked by intensive carbonate alteration and local gold enrichment associated with finely disseminated pyrite. The grade is highly variable inside the favourable corridor, from 0.1 grams per tonne anomalies to concentrations of up to 100 grams per tonne in individual drilling samples. Down dip, the mineralization remains open at depth.

Inferred mineral resources totalling 113,000 ounces of gold have been delineated to date down to 100 metres at Fayolle by Typhoon at a grade of 1.6 grams of gold per tonne using a cut off grade of 0.5 grams per tonne (Reference: "Mineral Resources Evaluation of the Fayolle Gold Deposit 43-101 Technical Report" prepared for Typhoon Exploration Inc., dated February 21, 2007 available on SEDAR). Higher grade intervals in the range of 10 to 40 grams per tonne over 3 to 30 metres have been encountered during previous drilling.

Year End 2012 Update

During the year, the Company incurred $1.8 million of exploration expenditures on the project which were charged to earnings (2011: $5.7 million).

Updated Mineral Resource Estimate - August 3, 2012

The updated mineral resource estimate was prepared by InnovExplo of Val-d’Or, Quebec, in collaboration with Aurizon’s personnel.  The Independent and Qualified Persons for the updated mineral resource estimate, as defined by National Instrument 43-101, are Pierre-Luc Richard, M.Sc., P.Geo. and Alain Carrier, M.Sc., P.Geo. (InnovExplo Inc.), and the effective date of the estimate is August 3, 2012.  Metallurgical testwork was conducted by SGS Mineral Services of Lakefield, Ontario.

The updated mineral resource estimate integrates the results of all the drill programs on the Fayolle deposit since the mineral resource estimate prepared by InnovExplo Inc. on February 21, 2007.  A total of 253 surface holes and 68,826 metres are included in the updated mineral resource estimate, of which 92 holes and 30,927 metres have been drilled since May 2010, when Aurizon and Typhoon Exploration Inc. (“Typhoon”) first entered into an exploration joint venture on the Fayolle Project.

The updated mineral resources are estimated at 1,814,800 tonnes at 2.7 grams of gold per tonne, or 156,000 ounces of gold at a minimum cut-off grade of 0.8 grams of gold per tonne.  All of the updated mineral resources are in the Indicated mineral resource category.  Different capping grades have been applied, and are referenced on the resource table on the following page.

For comparison, the previous resource estimation prepared for Typhoon Exploration Inc., by InnovExplo Inc. dated as of February 21, 2007, included a resource sensitivity table using different cut off grades. At a cut off grade of 0.5 grams of gold per tonne, indicated mineral resources totalled 464,700 tonnes at 2.4 grams of gold per tonne for 36,081 ounces of gold, and inferred mineral resources totalled 2,191,100 tonnes at 1.6 grams of gold per tonne for 113,021 ounces of gold.   (Reference: "Mineral Resources Evaluation of the Fayolle Gold Deposit 43-101 Technical Report" prepared for Typhoon Exploration Inc., dated February 21, 2007 available on SEDAR).

The following table represents results at additional cut-off grades for comparison purposes (cut-off grades are a function of the market conditions: gold price, exchange rates and mining costs).

Table 1: Fayolle Deposit 2012 Mineral Resource Estimate

⁽¹⁾ All of the mineral resources are in the Indicated mineral resource category. 

Notes:

• The Independent and Qualified Persons for the Mineral Resource Estimate, as defined by National Instrument 43-101, are Pierre-Luc Richard, M.Sc., P.Geo. and Alain Carrier, M.Sc., P.Geo. (InnovExplo Inc), and the effective date of the estimate is August 3rd, 2012.
• Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability
• Results are presented undiluted and in situ. The estimate includes four (4) gold-bearing zones
• Resources were compiled at a range from 0.40g/t Au to 5.00 g/t Au cut-off grades. Cut-off grades must be re-evaluated in light of prevailing market conditions (gold price, exchange rate and mining cost). Note that no pitshell was used.
• A fixed density of 2.82 g/cm3 was used in ore zones.
• A minimum true thickness of 2.0 m was applied, using the grade of the adjacent material when assayed, or a value of zero when not assayed.
• High grade capping was done on the raw data and established at 40g/t Au for Zone 1, Zone 2 and the Envelope, and at 90g/t Au for Zone 3.
• Compositing was done on drill hole sections falling within the mineralized zone envelopes (composite = 1 metres).
• Resources were evaluated from drill hole using an ID2 interpolation method in a multi folders percent block model.
• The indicated category is defined by the drillholes spacing and established geological continuity.
• Ounce (troy) = Metric Tons x Grade / 31.10348. Calculations used metric units (metres, tonnes and g/t).
• The number of metric tons was rounded to the nearest hundred; grades are expressed at 1 decimal; ounces were rounded to the nearest 1 thousand. Any discrepancies in the totals are due to rounding effects; rounding followed the recommendations in National Instrument 43-101. InnovExplo is not aware of any known environmental, permitting, legal, title-related, taxation, soci-politcal, marketing or other relevant issue that could materially affect the Mineral Resource Estimate.

Geology

Gold mineralization of the Fayolle Zone is mainly contained in deformed ultramafic volcanic slivers of altered intermediate intrusions near the contact with massive basalt and silicified sediments.  Shear zones and fault patterns observed are generally oriented west to north-west, corresponding to a major inflexion of the La Pause Fault.

The dense and complex dykes swarm is characterized by changing orientation and perceived as a strong favourability indicator for gold mineralization.

Mineralization is part of a stacking of pluri-metric zones located inside a 50 to 100 metre wide favourable structure, plunging moderately towards the east.  Visually, this mineralized structure corresponds to tectonic breccias mixed with deformed intrusive material of intermediate composition.  The grades can generally be correlated with the intensity and complexity of brecciation.  Alteration is characterized by carbonates, chlorite and fuchsite in ultramafic rocks and by albite-hematite in dykes.  Gold is mostly observed as free grains up to a millimetre in size, as fracture-filling, and veinlets in both host rocks.

Metallurgical Testwork

As the gold can be found in two different types of rock, two gold-bearing composite samples were examined by SGS Mineral Services: a Komatiite composite, containing an assay grade of 7.78 grams of gold per tonne and an intrusive composite, containing an assay grade of 4.59 grams of gold per tonne.  After 48 hours, gold recoveries ranged from 94% to 97% for both composites.  Finer grinding typically increased the gold recovery at the cost of higher cyanide consumption.  

Gravity separation testing on the Komatiite composite showed a 27.3% Gravity Recoverable Gold (“GRG”). Gravity separation testing on the Intrusive composite showed a 41.4% GRG.  The combination of gravity recovery and cyanidation of the gravity tail did increase the overall gold recovery by 1-3%. This demonstrates that this concept would be beneficial from a plant design and financial perspective.

Bond ball mill testing indicated that the two composites fell in the medium range of hardness compared to the SGS database (12.0-14.1 kWh/t).

Outlook

The drill program completed to date has focused on obtaining information inside the Fayolle Zone down to a depth of about 250 metres, and laterally along 200 metres.  The new updated mineral resource estimate indicates the potential to delineate mineralization at a grade above 5 grams of gold per tonne using a tight drilling pattern, using two different orientations.

Efforts have been made during the last two years to test the mineralized system influence outside the Fayolle Zone with 41 holes drilled at a 100 to 150 metre-wide spacing along a 2 kilometre long trend. Mineralized intersections, in the range of 1 to 8 grams per tonne over thickness between 3 to 10 metres, have identified different parallel gold bearing structures located a few hundred metres south of the Fayolle Zone (See Aurizon’s August 9, 2011 press release).  

Prior to continuing further exploration activity, the exploration potential at the Fayolle property will be re-evaluated within the context of the new mineral resource estimate.

For further information on the resource update, please view the news release dated September 6, 2012 on our website at http://www.aurizon.com/English/News/News-Releases/default.aspx.

 
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This page last updated: April 3, 2013