 |
| | 
Outlook
Based upon the first nine month results and the mine plan for the fourth quarter, Casa Berardi remains on target to produce at the upper range of the 150,000 to 155,000 ounces of gold forecast at the beginning of the year. The continued strength of the Canadian dollar and expected sequencing of lower ore grades in the fourth quarter has resulted in a revision to the forecast total cash costs of US$414 per ounce for the full year, assuming a Cad$/US$ exchange rate of 1.05 in the fourth quarter 2009. Previous guidance for 2009 was US$405 per ounce assuming a Cad$/US$ exchange rate of 1.10 for the second half of 2009.
Sustaining capital costs at Casa Berardi for the remainder of 2009 are estimated to total $4.1 million, including $3.6 million for the development of the upper and lower portions of the 113 Zone and of the Lower Inter Zone and $0.5 million on property, plant and mine equipment improvements. In addition, a further $5.0 million will be spent on exploration.
The Company is in a strong financial position at September 30, 2009, with cash balances of $108 million, working capital of $95.4 million, and no bank debt. The outlook for gold remains positive which should provide strong profit margins and operating cash flows from Casa Berardi and further strengthen Aurizon's balance sheet while continuing to fund its planned exploration and capital programs.
With the stability of operations at Casa Berardi providing significant cash flow and a strong balance sheet, the Company continues to actively pursue opportunities to enhance its growth profile.
| |
|
2009 |
2008 |
| |
YTD |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
| Operating results |
|
|
|
|
|
|
|
|
| Tonnes milled |
516,333 |
178,420 |
170,429 |
167,484 |
169,291 |
161,358 |
160,054 |
163,694 |
| Grade - grams/tonne |
7.97 |
8.14 |
7.84 |
7.93 |
7.70 |
8.58 |
7.73 |
8.63 |
| Mill recoveries - % |
92.8% |
94.2% |
92.8% |
91.3% |
91.5% |
93.3% |
92.7% |
92.6% |
| Gold Production - ounces |
122,802 |
43,962 |
39,874 |
38,966 |
38,363 |
41,522 |
36,871 |
42,074 |
| Gold sold - ounces |
123,092 |
43,650 |
42,042 |
37,400 |
38,348 |
40,228 |
41,217 |
39,611 |
| Per ounce data - US$ |
|
|
|
|
|
|
|
| Average realized gold price |
$906 |
$929 |
$897 |
$888 |
$793 |
$845 |
$869 |
$877 |
| Total cash costs 1 |
$385 |
$392 |
$386 |
$379 |
$356 |
$405 |
$436 |
$422 |
| Amortization 2 |
194 |
212 |
189 |
183 |
226 |
211 |
210 |
191 |
| Total production costs 3 |
$579 |
$604 |
$575 |
$562 |
$582 |
$616 |
$646 |
$613 |
Table footnotes:- Operating costs net of by-product silver credits, divided by ounces sold, and divided by the average Bank of Canada Cad$/US$ rate.
- Depreciation, depletion and accretion expenses divided by ounces sold, and divided by the average Bank of Canada Cad$/US$ rate.
- Total cash costs plus depreciation, depletion and accretion expenses per ounce of gold sold.
Third Quarter 2009
Casa Berardi
Casa Berardi produced 43,962 ounces of gold in the third quarter of 2009, and 43,650 ounces were sold at an average price US$929 per ounce. Since commissioning the mill in November 2006, Casa Berardi has produced 458,832 ounces of gold.
Ore throughput in the mill during the third quarter of 2009 increased to 178,420 tonnes from 161,358 tonnes in the same period of 2008 as a stable daily production rate of 1,939 tonnes per day was achieved. An average ore grade of 8.1 grams/tonne was achieved in the third quarter of 2009, in line with plan. Mill recoveries averaged 94.2% in the third quarter of 2009. This compares to ore grades of 8.6 grams/tonne and mill recoveries of 93.3% in the third quarter of 2008.
Since March 2009, ore feed has been provided by three different zones including the 113 Zone, the NW Zone, and the newly developed Lower Inter Zone, thereby improving flexibility in the mining operations.
Total cash costs, on the basis of gold sold, were US$392 per ounce in the third quarter of 2009, in line with plan, compared to US$405 per ounce in the third quarter of 2008. A slightly weaker Canadian dollar in the third quarter of 2009 was the primary factor for the lower unit costs compared to those achieved in the same period of 2008. Unit mining costs in the third quarter of 2009 were $103 per tonne, similar to the same quarter of 2008 costs of $101 per tonne. Operating profit margin per ounce increased 22% to US$537 per ounce from US$440 per ounce in the same quarter of 2008.
Casa Berardi Exploration
An aggressive exploration program is in progress at Casa Berardi, following completion of the exploration drift at the 810 metre level, east of Zone 113 and south of the Casa Berardi fault. Drilling is in progress to test the depth extension of Zone 113, the continuity and extension of zones previously discovered by surface drilling in the Principal Zone area, the west extension of the Lower Inter Zone, and along the dip extension of the East Mine with the objective of delineating mineral resources. Ten surface and underground drill rigs are currently active on site.
Recent drilling from the 280 metre level drift has targeted two parallel zones, 124-1 and 124-2, approximately 20 to 30 metres apart, that have over 100 metres of strike length between a depth of 100 metres and 350 metres. The drill results indicate high grade trends within the zones, with intersections such as 59.4 grams of gold per tonne over 7.0 metres in Zone 124-1, and 16.2 grams of gold per tonne over 4.2 metres in Zone 124-2.
In addition, recent drilling from the new 810 metre level drift has returned high grade intersections such as 16.8 grams of gold per tonne over 5.3 metres and 18.9 grams of gold per tonne over 4.0 metres in Zone 120, located 650 metres east of the current production shaft.
For the remainder of 2009, $5.0 million will be invested at Casa Berardi for exploration activities, including $ 2.2 million on underground development and infrastructure.
Casa Berardi Reserves and Resources - December 31, 2008
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 Zone. 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 sometimes on both sides of the fault.
The mine has produced over 1.0 million recovered gold ounces since commencing production in 1986, including 375,000 recovered ounces since Aurizon re-commissioned production in December 2006.
Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA) were commissioned by Aurizon to prepare mineral reserve and mineral resource estimates on the different zones of the property, in accordance with the Standards of Disclosure for Mineral Projects as defined by N1 43-101.
CASA BERARDI MINE
MINERAL RESERVE ESTIMATE
As at December 31, |
| |
2008 |
2007 |
| |
Tonnes |
Grade
Grams/tonne |
Gold Ounces |
Tonnes |
Grade
Grams/tonne |
Ounces
of gold |
| Northwest (NW) |
83,000 |
5.4 |
14,400 |
116,000 |
6.1 |
23,000 |
| 113 |
709,000 |
8.7 |
199,200 |
780,000 |
8.7 |
218,000 |
| East mine - Crown Pillar |
407,000 |
4.2 |
54,400 |
84,000 |
3.9 |
11,000 |
| East mine - Underground |
88,000 |
6.3 |
17,800 |
- |
- |
- |
| Total Proven Reserves |
1,287,000 |
6.9 |
285,900 |
981,000 |
8.0 |
252,000 |
| |
|
|
|
|
|
|
| Lower Inter (LI) |
953,000 |
8.9 |
273,000 |
857,000 |
9.5 |
262,000 |
| North West (NW) |
- |
- |
- |
- |
- |
- |
| South West (SW) |
72,000 |
4.6 |
10,700 |
5,000 |
5.8 |
1,000 |
| 109 |
68,000 |
5.4 |
11,700 |
43,000 |
6.8 |
10,000 |
| 111 |
37,000 |
5.4 |
6,400 |
28,000 |
5.6 |
5,000 |
| 113 |
993,000 |
9.4 |
298,400 |
843,000 |
12.1 |
329,000 |
| 115 |
30,000 |
11.8 |
11,400 |
37,000 |
12.0 |
14,000 |
| 117S |
19,000 |
7.0 |
4,300 |
- |
- |
- |
| East Mine - Crown Pillar |
228,000 |
3.7 |
26,800 |
206,000 |
5.2 |
34,000 |
| East Mine - Underground |
63,000 |
8.2 |
16,500 |
- |
- |
- |
| Low-Grade Development |
87,000 |
3.9 |
10,900 |
89,000 |
3.9 |
11,000 |
| Total Probable Reserves |
2,550,000 |
8.2 |
670,100 |
2,106,000 |
9.8 |
666,000 |
| Total Proven and Probable Reserves |
3,836,000 |
7.8 |
956,000 |
3,087,000 |
9.3 |
918,000 |
Notes:
- CIM definitions were followed for Mineral Reserves.
- Mineral Reserves are estimated at a cut-off grade of 4.4 g/t Au for underground, and 1.2 g/t Au for open pit.
- Mineral Reserves are estimated using an average long-term gold price of US$750 per ounce and a US$/C$ exchange rate of 1:1.10.
- A minimum mining width of three metres was used.
- Totals may not represent the sum of the parts due to rounding.
Proven and Probable Mineral Reserves have been renewed as a result of:
Additional drilling at the East Mine crown pillar and re-assessment of the block model in the underground section above the 300 metre level have resulted in a gain of mineral reserves at the East Mine. The East Mine crown pillar represents 17% of the total reserves at Casa Berardi.
At the West Mine, the gain in mineral reserves from Zones 109, 117S, Lower Inter and South West, have been compensated by 2008 mine production in Zones 113 and North West, and a re-assessment of the block model in Zone 115, resulting in an overall underground reserve renewal in 2008.
A 16% decrease in grade is a result of the addition of low grade ore from the East Mine crown pillar and the re-assessment of the cut-off grade, due to higher gold prices.
Mineral reserves are estimated using an average long-term gold price of US$750 per ounce, compared to US$581 per ounce in 2007, and a US$/C$ exchange of 1:1.0. A minimum cut off grade of 4.4 grams of gold per tonne was used, based on long term operating costs and gold prices, for the underground zones; and 1.2 grams of gold per tonne for the open pit. In 2007, the minimum cut off grade was 5.1 grams of gold per tonne.
As the mining industry is currently experiencing gold prices that are higher than US$750 per ounce, the operations periodically mine ore that is not included in mineral reserves as the grades are lower than the minimum cut-off grades.
Reconciliation of Casa Berardi Mineral Reserves
Reconciliations between the mineral reserve estimates and the mill production averaged 99.5% for the tonnage and 105% for the grade.
| |
Tonnes |
Gold ounces |
| Mineral Reserves - December 31, 2007 |
3,087,000 |
918,000 |
| Resources conversion (1) |
754,000 |
114,000 |
| Mining depletion (2) |
(655,000) |
(171,000) |
| Mining Cost (3) |
650,000 |
95,000 |
| Mineral Reserves - December 31, 2008 |
3,836,000 |
956,000 |
Notes to the reconciliation of mineral reserves:
- Resource conversion resulted in the addition of 114,000 ounces to mineral reserves.
- Mining depletion represents mineral reserves mined and processed in 2008 before milling recoveries and, therefore, does not correspond to the actual 2008 gold production of 158,800 ounces.
- Mining costs represent an adjustment to the cut off grade as a result of changes in the three year moving average gold price and forecast operating costs.
Mine Plan for Mineral Reserves
- The mine plan for the current mineral reserves totals 3.8 million tonnes of ore, grading 7.8 grams of gold per tonne, to be mined over five years (2009 to 2013) from 113 Zone, Lower Inter Zone, and six smaller West Mine zones.
- Development was compiled by zone, measured from mine plans, and scheduled monthly for 2009, and quarterly thereafter. Development requirements average 20 metres per day for the next three years, and then decline rapidly, as most accesses and infrastructure will be completed.
- Production was compiled by stope, and scheduled quarterly by zone. The majority of the production tonnage will come from the 113 and the Lower Inter zones, together making up 85% of underground reserves.
CASA BERARDI MINE
MINERAL RESOURCE ESTIMATES
As at December 31, |
| |
2008 |
2007 |
| |
Tonnes |
Grade
Grams/tonne |
Gold
Ounces |
Tonnes |
Grade
Grams/tonne |
Gold
Ounces |
| Measured Mineral Resources |
|
|
|
|
|
|
| Zone 113 |
160,000 |
7.93 |
41,000 |
- |
- |
- |
| North West |
42,000 |
6.48 |
9,000 |
- |
- |
- |
| East Mine Crown Pillar |
310,000 |
3.11 |
31,000 |
- |
- |
- |
| East Mine Underground |
216,000 |
6.55 |
46,000 |
299,000 |
6.84 |
66,000 |
| Total Measured Resources |
728,000 |
5.39 |
126,000 |
299,000 |
6.84 |
66,000 |
| Indicated Mineral Resources |
|
|
|
|
|
|
| Zone Lower Inter |
122,000 |
6.04 |
24,000 |
103,000 |
19.86 |
66,000 |
| Zone North West |
- |
- |
- |
24,000 |
4.19 |
3,000 |
| Zone South West |
300,000 |
4.66 |
45,000 |
579,000 |
4.59 |
85,000 |
| Zone Inter |
124,000 |
4.43 |
18,000 |
124,000 |
4.43 |
18,000 |
| Zone 109 |
- |
- |
- |
19,000 |
11.19 |
7,000 |
| Zone 111 |
52,000 |
5.24 |
9,000 |
52,000 |
5.24 |
9,000 |
| Zone 113 |
182,000 |
5.24 |
31,000 |
681,000 |
3.89 |
85,000 |
| Zone 115 |
112,000 |
14.68 |
53,000 |
24,000 |
15.28 |
12,000 |
| Zone 117S |
- |
- |
- |
18,000 |
8.99 |
5,000 |
| Zone 118 |
230,000 |
7.04 |
52,000 |
230,000 |
7.04 |
52,000 |
| Principal Crown Pillar |
1,785,000 |
6.19 |
355,000 |
339,000 |
5.51 |
60,000 |
| Principal Underground |
837,000 |
6.38 |
172,000 |
316,000 |
7.01 |
71,000 |
| East Mine Crown Pillar |
399,000 |
2.63 |
34,000 |
667,000 |
4.03 |
86,000 |
| East Mine Underground |
90,000 |
6.27 |
18,000 |
138,000 |
8.20 |
36,000 |
| Total Indicated Resources |
4,234,000 |
5.95 |
810,000 |
3,314,000 |
5.60 |
596,000 |
| Total Measured & Indicated Resources |
4,962,000 |
5.87 |
936,000 |
3,613,000 |
5.70 |
662,000 |
| Inferred Mineral Resources |
|
|
|
|
|
|
| Zone Lower Inter |
43,000 |
5.62 |
8,000 |
43,000 |
5.62 |
8,000 |
| Zone 104 |
115,000 |
6.62 |
25,000 |
115,000 |
6.62 |
25,000 |
| Zone 118 |
854,000 |
6.64 |
183,000 |
854,000 |
6.64 |
183,000 |
| Zone 123 - S |
714,000 |
9.42 |
216,000 |
714,000 |
9.42 |
216,000 |
| Principal crown pillar |
841,000 |
5.97 |
162,000 |
1,647,000 |
6.43 |
340,000 |
| Principal underground |
836,000 |
5.97 |
161,000 |
1,316,000 |
6.50 |
275,000 |
| East Mine Crown Pillar |
310,000 |
3.02 |
30,000 |
170,000 |
5.74 |
31,000 |
| East Mine Underground |
156,000 |
9.10 |
46,000 |
156,000 |
9.10 |
46,000 |
| East Mine Cherty |
225,000 |
6.80 |
49,000 |
225,000 |
6.80 |
49,000 |
| East Mine Zone 160 |
243,000 |
5.40 |
42,000 |
243,000 |
5.40 |
42,000 |
| Total Inferred Resources |
4,339,000 |
6.60 |
920,000 |
5,484,000 |
6.89 |
1,215,000 |
Notes:
- CIM definitions were followed for Mineral Resources.
- Mineral Resources are estimated at cut-off grades of:
- 4 g/t Au for West Mine, Principal Mine and East Mine.
- 3 g/t Au for South West, Inter and 104 zones in the West Mine. Those zones were estimated by Aurizon in 2000 using 2D polygons on longitudinal sections and reviewed by RPA in 2005.
- 1.30 g/t Au for the East Mine - Open Pit (Geostat, 2008).
- Mineral Resources are estimated using an average long-term gold price of US$750 per ounce, and a US$/C$ exchange rate of 1:1.10.
- Minimum mining widths of two to three metres were used.
- Mineral Resources are exclusive of Mineral Reserves.
- Totals may not represent the sum of the parts due to rounding.
- Mineral resources which are not mineral reserves do not have demonstrated economic viability
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