Casa Berardi Exploration

CASA BERARDI EXPLORATION

Casa Berardi Mine

In 2012, $9.4 million will be invested on exploration at Casa Berardi which will include approximately 88,000 metes of surface and underground diamond drilling.  Up to 3 surface and 5 - 7 underground drill rigs will be active during the course of 2012.  The Company expects to capitalize these costs as the primary objective of the drilling will be to improve the quality of the known reserves and resources as well as exploring for extensions of these structures.

Surface exploration will include testing of the following:

• Eastern extension of the Prnicipal zone
• Northwest extension of the Lower Inter Zone in the West mine
• Extension of Zone 123 at depth
• Southern area of Zone 123 at depth
• Potential of the southern area between the Principal and the East mine
• Extension of Zone 160

Underground rigs will primarily focus on definition drilling of the Lower Inter, and Zones 109, 113, 118, and 123.  In addition, exploration drilling will be performed on the Principal, 118 and 140 Zones.

Casa Berardi Shaft Deepening

In the first quarter of 2011, a contract was awarded for the deepening of the West Mine production shaft from the 760 metre level down to the 1,080 metre level.  Deepening the shaft is a component of the overall strategy to have greater mining flexibility in the West Mine.

Shaft deepening commenced in the second quarter and to the end of the third quarter, ramp access from the 880 metre level has resulted in 104 metres of excavation by means of an Alimak raise up to the current shaft bottom, which will allow for accelerated shaft deepening.  In addition, 477 metres of horizontal development has been completed.  The shaft is expected to be completed towards the end of 2012 and will provide access to the lower portion of Zones 113, 118, and 123 once a drift at the 1,010 metre level is completed in 2013.  The estimated cost of the shaft deepening, drift access to Zones 118 and 123, and related infrastructure is approximately $33.5 million.  Expenditures during the third quarter totalled $2.8 million and year to date total $6.6 million.

Casa Berardi Exploration

Three surface rigs and seven underground drill rigs were active at Casa Berardi during the third quarter of 2011. A shortage of drill crews forced the suspension of two underground rigs.  The surface drill rigs were primarily active exploring the extensions of the 123 and 148 Zones at depth and the open pit resource potential of Zone 160 near the East mine mill facilities.  The underground drill rigs were primarily focused on infill and step out drilling of the upper extensions of Zones 118 and 123 from the 550 level drift as well as depth extensions of Zones 118 and 120 from the 810 level drift.

In the first quarter, Aurizon reported a 44% increase in mineral reserves and an updated mineral resource estimate for its Casa Berardi mine, located in north western Quebec, Canada. 

Highlights include the following:

• Mine life extended from six years to ten years.
• An increase of 44% in mineral reserves to 1,457,000 ounces of gold
• A significant open pit mineral reserve of 370,000 ounces established in the area of the Principal zones, which are still open laterally.
• An increase of 10% in West Mine underground mineral reserves.
• An increase of 74% and an upgrade of the ounces contained in Zone 123 between the 800 metre and 1,000 metre levels. This zone remains open both up dip and down dip.
• An increase of 40% in the ounces contained in the Principal Zones, accessible from underground.

Casa Berardi - Lake Shore option

Lake Shore Gold Corp. ("Lake Shore") Lake Shore has announced that it will conduct an approximate 10,700 metre diamond drill program in 2010 on both East and West blocks of the optioned property. The program will include approximately 6,000 metres in 23 holes designed to confirm the continuity and expand the mineralization of the G zone in the East Block area. Drill results from the G zone include 8.58 grams per tonne gold over 10.4 metres and 6.84 grams per tonne gold over 3.10 metres. Drilling of the G zone has identified mineralization to a vertical depth of 280 metres within a strike length of 500 metres. The G zone is located approximately 7.5 kilometres to the east of the Casa Berardi processing facility.

Future Exploration and Development

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The Casa Berardi gold deposits are located along a five kilometre east-west mineralized corridor.  They include the East and West mines, and the Principal Zones.  The Casa Berardi gold deposits can be classified as an Archean sedimentary-hosted lode gold deposit.  The gold mineralization is superimposed on a continuous graphitic mudrock unit corresponding to the Casa Berardi Fault plane.  Gold occurs mainly south of the Casa Berardi Fault, and occasionally on both sides of the fault.

The mine has produced over 1.3 million recovered gold ounces since commencing production in 1986, including 636,400 recovered ounces since Aurizon recommenced production in November 2006.

BBA Inc. (BBA) was commissioned by Aurizon to undertake a prefeasibility study on the Principal Mine open pit.  Roscoe Postle Associates Inc. (“RPA”) was commissioned by Aurizon to prepare updated mineral reserve and mineral resource estimates on the rest of the property.  

Proven and Probable Mineral Reserves have increased as a result of:

• At the West Mine, the 2010 mine production in Zones 113, Lower Inter, North West and 115 have been more than replaced by gains in mineral reserves primarily from the Principal Zone open pit and  Zone 123S.  Additional reserve increases were provided from Zones 118 and 109.
• As a result of the addition of the lower grade ore from the Principal Zone open pit, tonnage has increased by 77%, grade has decreased by 19% and ounces of gold have been increased by 44% compared to 2009. 
• Mineral reserves are estimated using an average long-term gold price of US$950 per ounce and a US$/C$ exchange rate of 1:1, compared to US$825 per ounce in 2009 and a US$/C$ exchange of 1:1.09.  A minimum cut off grade of 4.1 grams of gold per tonne was used for the underground zones, based on long term operating costs and gold prices.  A minimum cut off grade of 1.2 grams and 0.5 grams of gold per tonne was used respectively for the East Mine and Principal Zone open pits.  In 2009, the minimum cut off grade was 3.9 grams of gold per tonne for the underground zones.
• As the mining industry is currently experiencing gold prices that are higher than US$950 per ounce, the operations periodically mine ore that is not included in mineral reserves as the grades are lower than the long term minimum cut-off grades.

Additional Information

Please browse to our news releases pages for additional information on exploration results at Casa Berardi.