Aurizon (TSX:ARZ)(NYSE MKT:AZK) reports unaudited financial results
for the first quarter of 2013 ("Q1'13"), which have been prepared
on the basis of available information up to May 14, 2013.
Management's Discussion and Analysis should be read in conjunction
with the most recent annual financial statements of the Company.
All dollar amounts are expressed in Canadian dollars unless
otherwise stated.
Q1'13 Financial and Operating Highlights
-- Revenue of $43.2 million from 26,200 ounces of gold sold at an average
realized price of US$1,621 per ounce
-- Net loss of $2.9 million, or $0.02 per basic share, and Adjusted EBITDA
of $15.8 million
-- Cash and cash equivalents balance of $188.8 million and debt-free at the
period-end
-- Positive cash flow from operations of $5.8 million and self-funded
capital expenditures of $19.6 million
-- Casa Berardi produced 24,444 ounces of gold, in-line with the Q1'13
budget, at total cash costs of US$812 per ounce
-- As planned, Q1'13 production was limited by major shutdowns to interface
the deepened shaft with the existing and future underground operations.
Thus, Q1'13 operating results are not necessarily reflective of
quarterly averages expected for the full year of 2013
-- Previous guidance for 2013 production of 125,000-130,000 gold ounces and
total cash costs of US$810 per ounce remains unchanged
-- The transition phase at Casa Berardi and lateral development out to
Zones 118 and 123 is on schedule:
-- Shaft deepening project is well advanced, with excavation down to
the 965 metre level at the end of Q1'13;
-- Construction of the paste backfill plant is progressing as planned
with key structural work completed and mechanical equipment now
installed; and
-- The wet shotcrete plant was completed and commissioned in April 2013
Arrangement Agreement with Hecla Mining Company
On March 3, 2013, Aurizon entered into an Arrangement Agreement
(the "Arrangement") with Hecla Mining Company and 0963708 B.C. Ltd.
(collectively "Hecla") whereby Hecla agreed to acquire all of the
issued and outstanding common shares of Aurizon in exchange for
0.9953 common shares of Hecla Mining Company, or in exchange for
$4.75 in cash, or any combination thereof per share, all subject to
proration. The maximum aggregate amount of cash consideration to be
paid is $513,631,193 and the maximum aggregate number of Hecla
Mining Company shares that may be elected is 57,000,000. Upon
completion of the Arrangement, Aurizon would become a wholly-owned
subsidiary of Hecla.
All unexercised and in-the-money Aurizon incentive stock options
will be deemed to be fully vested and transferred and disposed by
the holder thereof to Aurizon and cancelled in exchange for
consideration in accordance with the Arrangement. Additionally,
each DSU and RSU outstanding at the time of completion shall be
cancelled in exchange for a cash payment by Aurizon equal to $4.75
per unit.
The anticipated transaction is to be effected by way of a
statutory plan of arrangement pursuant to the Business Corporations
Act (British Columbia). The Arrangement requires the approval of 66
2/3% of the votes cast by the affected securityholders of Aurizon
voting as a single class and the approval of 66 2/3% of the votes
cast by the Aurizon shareholders; this approval was obtained at a
special meeting on May 9, 2013. Assuming required regulatory
approvals are obtained, completion of the transaction is expected
in the second quarter of 2013.
Alamos Offer
On January 14, 2013, Alamos Gold Inc. ("Alamos") commenced an
unsolicited offer (the "Offer") to acquire all of the issued and
outstanding common shares of Aurizon, other than any common shares
held directly or indirectly by Alamos and its affiliates, in
exchange for consideration of cash or Alamos shares, or a
combination thereof, all subject to proration. On January 23, 2013,
Aurizon's Board of Directors issued a Director's Circular with a
recommendation that shareholders reject the Offer and not tender
their common shares to the offer for reasons set out therein. On
March 5, 2013, Alamos announced the waiver of the minimum tender
condition and extended the Offer until March 19, 2013. On March 19,
2013, Alamos announced that it would not extend the Offer and would
not take up any shares tendered to the Offer.
FINANCIAL AND OPERATING HIGHLIGHTS
For the 3 months ended
March 31,
-------------------------
Units 2013 2012
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Operating Highlights (Casa Berardi
Mine)
Ore milled Tonnes 132,318 164,728
Average ore grade Grams/tonne 6.3 7.0
Mill recovery rate % 91.7 90.5
Gold produced Ounces 24,444 33,488
Gold sold Ounces 26,200 33,364
Realized gold price(1) US$/ounce 1,621 1,692
London P.M. Fix gold price US$/ounce 1,630 1,691
Total cash costs(1) US$/ounce 812 681
Depreciation and amortization(1) US$/ounce 337 234
Total production costs(1) US$/ounce 1,149 915
Operating profit margin(1) US$/ounce 809 1,011
Unit mining costs(1) $/tonne 179 152
Financial Highlights (Unaudited)
Revenue $'000 43,245 56,753
Gross profit $'000 12,706 25,931
Net profit (loss) $'000 (2,936) 8,263
Net profit (loss) per share (basic & $/share
diluted) (0.02) 0.05
EBITDA(1) $'000 7,411 22,388
Adjusted EBITDA(1) $'000 15,771 22,388
Net cash provided by operating $'000
activities 5,770 3,424
Capital expenditures $'000 19,597 15,235
Cash and cash equivalents $'000 188,847 198,702
Total assets $'000 451,116 413,878
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Note: (1) This News Release contains non-GAAP performance measures
throughout, as follows: realized gold price; total cash costs; depreciation
and amortization; total production costs; unit mining costs; EBITDA; and
Adjusted EBITDA. Refer to the Non-GAAP Measures section of this News Release
for definitions and a reconciliation of these measures to revenue, cost of
sales and net profit as reported in the unaudited statements of
comprehensive income.
SUMMARY OF Q1'13 FINANCIAL PERFORMANCE
REVENUE
In both Q1'12 and Q1'13, Aurizon derived greater than 99.5% of
its total revenue from the sale of gold, with the remainder earned
from the sale of silver, all produced from the Casa Berardi gold
mine.
Revenue in Q1'13 totalled $43.2 million, primarily from the sale
of 26,200 gold ounces at a realized gold price of US$1,621 per
ounce. This compares to revenue in Q1'12 of $56.8 million, from the
sale of 33,364 gold ounces at a realized gold price of US$1,692 per
ounce. The $13.5 million decrease in revenue from Q1'12 to Q1'13 is
comprised of the following components:
-- $12.1 million decrease from 21.5% fewer gold ounces sold, mainly as a
result of fewer tonnes of ore milled at a lower average grade; and
-- $1.9 million decrease from a 4.2% reduction in the realized gold price
per ounce; partially offset by
-- $0.5 million increase from a strengthening of the USD/CAD exchange rate
realized on gold sales.
COST OF SALES
Cost of sales in Q1'13 totalled $30.5 million, comprised of
operating costs of $21.6 million and depreciation and amortization
of $8.9 million. Cost of sales in Q1'12 totalled $30.8 million,
comprised of operating costs of $23.0 million and depreciation and
amortization of $7.8 million. The $0.3 million, or 1.0%, decrease
in Q1'13 is due to lower sales volume offset by higher unit
production costs.
Operating costs, comprised of mining, milling and refining
costs, decreased by $1.4 million, or 6.1%, from Q1'12 to Q1'13.
Total cash costs were US$812 per gold ounce in Q1'13, compared to
US$681 in Q1'12, while gold ounces sold decreased to 26,200 ounces
in Q1'13 from 33,364 ounces in Q1'12. The increase in total cash
costs per ounce is attributable mainly to the combination of a
lower average ore grade, general inflationary pressures, reduced
efficiency from mining smaller-sized stopes and temporary
constraints resulting from the shaft-deepening project.
Depreciation and amortization expense increased by $1.1 million,
or 14.2%, from Q1'12 to Q1'13. On a per-ounce sold basis, this
expense increased to US$337 in Q1'13 from US$234 in Q1'12. This
increase reflects the amortization of higher-than-historical levels
of capital investment at Casa Berardi from 2011 through Q1'13 and
the decrease in sales volume from Q1'12 to Q1'13 which resulted in
certain fixed depreciation charges being allocated to fewer
ounces.
GROSS PROFIT
Gross profit was $12.7 million in Q1'13, compared to $25.9
million in Q1'12. The reduction primarily reflects revenue which
was lower by $13.5 million as described above. Lower realized gold
prices and higher total cash costs contributed to a lower operating
profit margin of US$809 per ounce in Q1'13, as compared to US$1,011
per ounce in Q1'12.
EXPLORATION COSTS
Exploration costs totalled $1.9 million in Q1'13 compared to
$6.7 million in Q1'12. Exploration activities in Q1'13 were focused
mainly on the Heva-Hosco property and the Duvay-Fontana project,
while in Q1'12 the focus was primarily on the Marban and Fayolle
projects and continued exploration and feasibility work on the
Hosco deposit.
GENERAL AND ADMINISTRATION COSTS
General and administrative costs reflect the head office costs
in Vancouver, B.C. as well as the administrative and technical
group in Val d'Or, Quebec. These costs increased to $11.4 million
in Q1'13, from $4.9 million in Q1'12. The increase is largely
explained by $5.4 million of non-recurring corporate transaction
costs in Q1'13 related to the unsolicited Alamos Offer and the
Arrangement Agreement with Hecla Mining Company, as well as $2.0
million of incremental share-based compensation expense resulting
from accelerating the estimated vesting period of options
outstanding.
INCOME AND RESOURCE TAX EXPENSE
The income and resource tax expense in Q1'13 was $1.7 million,
compared to $6.6 million in Q1'12. A higher effective tax rate in
Q1'13 was the result of corporate transaction costs being
non-deductible for Quebec resource tax purposes and a higher
provincial allocation of income taxes to Quebec.
NET PROFIT (LOSS)
The net loss in Q1'13 totalled $2.9 million, or $0.02 per basic
share, compared to net profit in Q1'12 of $8.3 million, or $0.05
per basic share. The decrease to a net loss is mostly explained by
the combination of lower gold production at higher production
costs, non-recurring corporation transaction costs of $5.4 million,
$2.0 million of incremental share-based compensation from an
accelerated vesting period and a one-time mineral property
impairment charge of $1.0 million, partially offset by lower
exploration costs.
OPERATIONS OUTLOOK FOR 2013
Aurizon is currently in a transition phase at Casa Berardi while
it installs the required infrastructure to commence mining new
areas east of the production shaft. These new mining areas will be
the foundation of future underground production at Casa Berardi.
The shaft sinking and lateral development out to the 118 and 123
Zones are in progress and the operation is expected to transition
from the existing mining areas over the next 15 months. Aurizon is
investing significantly in Casa Berardi in 2013 in order to
continue the development of the lower levels of the West Mine and
secure a strong production profile into the future. Following the
transition phase, Aurizon expects that Casa Berardi will return to
historical production levels.
CASA BERARDI STRATEGY FOR 2013
OPERATIONS
Operational flexibility will be constrained through the first
half of 2013 during the continued shaft sinking and development to
commission the 118 and 123 Zones. As a result, it is estimated that
Casa Berardi will produce approximately 125,000 - 130,000 ounces of
gold in 2013 at an average grade of 7.2 grams of gold per tonne.
Gold production should gradually increase through the year as more
stopes become available and should reach historic levels in the
second half of 2013.
As quarterly operating results are expected to fluctuate
throughout the year, they will not necessarily be reflective of
these full year averages. Lower throughput at lower than average
ore grades is expected in the first half of 2013 which is expected
to result in approximately 33% fewer ounces of gold produced in the
first half of 2013 compared to the second half of the year.
Average daily ore throughput is estimated at 1,760 tonnes per
day, which would be lower than the 1,896 tonnes per day achieved in
2012. Mine sequencing in 2013 will result in ore grades that are
expected to be 6% higher than 2012 at approximately 7.2 grams per
tonne. Zone 118 is expected to provide ore for the first time in
the third quarter with an anticipated average grade in 2013 of
approximately 7.9 grams per tonne. Approximately 46% of production
is expected to come from Zone 113; 22% from Zone 118; 13% from the
Lower Inter Zone; and the residual 19% coming from the smaller
zones and development material. Assuming a Canadian/U.S. dollar
exchange rate at parity, total cash costs are anticipated to
gradually decrease to US$700 per ounce in the second half of 2013
and average US$810 per ounce for the full year. Onsite mining,
milling and administration costs are expected to average $170 per
tonne in 2013, up by approximately 21% from 2012 costs as a result
of the impact of fixed operating costs on lower ore throughput,
higher stope preparation costs, and industry wide inflationary cost
pressures, gradually trending down to $155 per tonne in the second
part of the year.
CAPITAL EXPENDITURES
Capital expenditures at Casa Berardi are estimated to total
$102.3 million in 2013, comprised of the following:
(in millions of Canadian dollars) 2013 Budget
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Sustaining Capital Expenditures
Mining development $ 24.4
Shaft deepening 19.3
Paste backfill plant 7.8
Property, plant and equipment 11.1
Infill and exploration drilling 4.1
Drill extensions of the East Mine open pit 1.2
Wet shotcrete plant 0.6
Miscellaneous projects 0.8
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New Capital Projects
Development of East Mine open pit(1) 26.0
Principal Zone development 7.0
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33.0
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Total $ 102.3
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Note: (1) Subject to further studies and permitting
Deepening of the West Mine production shaft continues at a
budgeted cost of $19.3 million in order to provide access to the
lower portions of the 113, 118 and 123 Zones. The shaft, currently
at a depth of 965 metres, will be extended to approximately 1,080
metres below surface, which will provide access at the 1,010 metre
level to develop a drift from the shaft to Zones 118 and 123. The
shaft deepening is expected to be completed near the end of 2013
and commissioned by the first quarter of 2014.
Mining equipment replacement and fleet expansion to support the
expanded development activities is budgeted at $11.1 million. A
further $7.8 million will be invested to complete the construction
of a paste backfill plant and $7.0 million for the development of
the Principal Zone from the 280 metre level.
Subject to further studies and permitting, $26 million is
budgeted in 2013 to begin the excavation of the East Mine open pit
with the objective of commencing production from the pit by early
2014. A review and update of the prefeasibility study done by BBA
on the East Mine Open Pit is underway. The block model is being
revised and the mandate to commence additional geotechnical studies
has been awarded. The implication of the presence of underground
openings of the East Mine will also be subject to further studies.
Permitting for the operation of a rock quarry, road construction
and relocation, wood clearing and excavation of the open pit has
been initiated with excavation of the surface overburden planned to
start during the third quarter of 2013. The mining approach
including mining rate and unit costs is also under review.
EXPLORATION
In 2013, it is expected that $5.2 million will be invested on
exploration at Casa Berardi which will include approximately 58,000
metres of surface and underground diamond drilling. Up to three
surface and five to seven underground drill rigs will be active
during the course of 2013. Aurizon 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 the South domain of
Zone 123 to investigate extensions of known mineralization.
Underground rigs will primarily focus on definition drilling of
Zones 113, 118, 123, and the Principal Zone. In addition,
exploration drilling from underground will be performed on the
Cherty Zone 159.
EXPLORATION FOCUS FOR 2013
ADVANCED STAGE GOLD DEVELOPMENT PROPERTY - HEVA AND HOSCO WEST
EXTENSION AREAS
An initial $1.5 million exploration program, consisting of
10,000 metres of surface drilling was initiated during Q1'13 with
an objective to fill the gap on sections outside of the core of
Heva. Additional drilling of the down-dip extensions on Heva and
Hosco West will permit the evaluation of conceptual mining and
economic studies; metallurgical test-work is planned for later in
2013. With the 2012 drill program at Heva now completed, it is
intended that an in-pit and underground mineral resource estimate
will be completed by the end of Q2'13.
DUVAY PROPERTY
A total of 5,721 metres of drilling was completed at the Duvay
property during Q1'13. In March 2013, the Company terminated its
related option agreement with Tres-Or Resources Ltd.
MARBAN PROPERTY
An updated mineral resource estimate on the Phase II drilling
completed in August 2012 is in progress and is expected to be
completed by the end of Q2'13. Following the updated mineral
resource estimate the Company will review and evaluate a Phase III
drill program.
Pursuant to an option agreement, Aurizon may earn up to a 65%
interest in the Marban property, which comprises 42 mining claims
and 3 mining concessions covering 976 hectares in the center of the
Malartic gold mining camp in the Abitibi region of Quebec, subject
to underlying royalties.
LIQUIDITY
BALANCE SHEET
The Company held $188.8 million of cash and cash equivalents as
at March 31, 2013, a $15.4 million decrease from the $204.2 million
balance as at December 31, 2012. In Q1'13, positive cash flows from
operating activities of $5.8 million and financing activities of
$0.3 million were more than offset by $21.7 million of investing
activities, as described below.
Net working capital, calculated as total current assets less
total current liabilities, was $197.3 million as at March 31, 2013
compared to $204.6 million as at December 31, 2012.
The Company held no financial debt as at March 31, 2013.
CASH FLOW FROM OPERATING ACTIVITIES
The Company generated $5.8 million of cash flow from operating
activities in Q1'13, $2.1 million higher compared to Q1'12. The
increase is due to a $7.4 million difference in the non-cash
working capital change, partially offset by a $5.3 million
reduction in net profit after adjustments for non-cash items.
The $7.4 million difference in the non-cash working capital
change is primarily due to the $12.9 million increase in non-cash
working capital during Q1'12 being influenced by a significant
payment of taxes owed in respect of 2011.
The $5.3 million reduction in net profit after adjustments for
non-cash items is mostly due to fewer gold ounces sold at higher
total cash costs per ounce and $5.4 million of corporation
transaction costs in Q1'13, partially offset by a $4.8 million
decrease in total exploration costs, as compared to Q1'12.
CASH FLOW FROM INVESTING ACTIVITIES
Investing activities, primarily related to capital expenditures
at the Casa Berardi mine, totalled $21.7 million in Q1'13 compared
to $20.5 million in Q1'12.
Capital expenditures at the Casa Berardi Mine totalled $19.6
million in Q1'13, and were comprised mainly of $7.8 million on
mining development and exploration activities, $3.0 million on the
shaft deepening, $3.1 million on the paste backfill plant, $1.6
million on the East Mine open pit and $1.7 million on machinery and
equipment. In Q1'12 the comparable total was $15.2 million, of
which $12.4 million was on sustaining capital and development and
$2.8 million was on exploration activity.
In addition to capital expenditures, the Company's investing
activities for Q1'13 also included $2.1 million for reclamation
deposits. In Q1'12, the Company's investing activities also
included $1.2 million for reclamation deposits, $30 thousand for
mineral property option payments and $4.0 million held in
escrow.
CASH FLOW FROM FINANCING ACTIVITIES
Financing activities, related to the issuance of shares upon the
exercise of stock options, resulted in cash inflows of $0.3 million
in Q1'13, compared to $2.3 million in Q1'12.
NON-GAAP MEASURES
In addition to GAAP measures presented in the Company's
unaudited interim financial statements prepared under IFRS, the
Company and certain investors utilize non-GAAP financial measures
in evaluating operating performance. These non-GAAP financial
measures do not have any standardized meaning prescribed by IFRS
and are therefore unlikely to be comparable to similar measures
presented by other issuers. The following table provides a
reconciliation of non-GAAP financial measures to revenue, cost of
sales and net profit as reported in the unaudited interim
statements of comprehensive income.
RECONCILIATION OF NON-GAAP MEASURES
Three months ended
March 31,
--------------------
Unit of
Measure Reference 2013 2012
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Revenue C$'000 43,245 56,753
Less: Silver by-product credits (181) (293)
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Gold sales revenue C$'000 43,064 56,460
Realized US$/C$ exchange rate 1.014 1.000
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Gold sales revenue US$'000 A 42,481 56,438
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Cost of sales C$'000 B 30,539 30,822
Less: Depreciation and amortization C (8,905) (7,798)
Less: Silver by-product credits (181) (293)
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Cash operating costs C$'000 D 21,453 22,731
Average US$/C$ exchange rate E 1.008 1.001
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Cash operating costs US$'000 F 21,276 22,703
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Gold ounces sold Ounces G 26,200 33,364
Tonnes milled Tonnes H 132,318 164,728
Inventory adjustment to Cost of C$'000 I
sales (1) 2,105 2,031
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Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")
Net profit (loss) for the period C$'000 (2,936) 8,263
Depreciation and amortization 8,947 7,841
Finance income (514) (572)
Finance costs 203 222
Income and resource tax expense 1,711 6,634
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EBITDA C$'000 7,411 22,388
Corporate transaction costs 5,371 -
Share-based compensation from
accelerated vesting 1,989 -
Mineral property impairment 1,000 -
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Adjusted EBITDA C$'000 15,771 22,388
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Unit Non-GAAP Measures:
Realized gold price US$/ounce A/G 1,621 1,692
Total cash costs US$/ounce F/G 812 681
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Operating profit margin US$/ounce 809 1,011
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Total cash costs US$/ounce F/G 812 681
Depreciation and amortization US$/ounce (C/G)/E 337 234
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Total production costs US$/ounce 1,149 915
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Unit mining costs C$/tonne (B+C+I)/H 179 152
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Note: (1) This inventory adjustment in the calculation of unit mining costs
reflects production costs associated with unsold gold bullion and ore
inventory.
OUTSTANDING SHARE DATA
As of May 14, 2013, Aurizon had 164,838,377 common shares issued
and outstanding and 10,167,500 incentive stock options outstanding
and exercisable into common shares at an average price of $5.37 per
option.
COMMON SHARES
March 31, 2013 December 31, 2012
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Issued, period end 164,665,627 164,562,827
Fully-diluted, period end 175,023,502 175,063,502
Issued, period weighted average 164,597,094 164,168,819
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QUALIFIED PERSON AND QUALITY CONTROL
Information of a scientific or technical nature in this document
was prepared under the supervision of Martin Bergeron, P. Eng.,
Vice-President of Operations of Aurizon and a qualified person
under National Instrument 43-101.
CAUTIONARY NOTES
FORWARD-LOOKING STATEMENTS AND INFORMATION
This News Release contains "forward-looking statements" and
"forward-looking information" within the meaning of applicable
securities regulations in Canada and the United States
(collectively, "forward-looking information"). The forward-looking
information contained in this News Release is based on information
available to the Company as of the date of this News Release.
Except as required under applicable securities legislation, the
Company does not intend, and does not assume any obligation, to
update this forward-looking information. Forward-looking
information includes, but is not limited to, statements regarding
the Company's expectations and estimates as to future gold
production, anticipated rates of recovery, anticipated total cash
cost per ounce of gold to be produced at the Casa Berardi Mine,
onsite mining, milling and administration costs, anticipated ore
throughput and grades, timing and estimated costs for the
completion of the shaft deepening project at Casa Berardi,
estimated timing for the development and mining of the East Mine
open pit and Principal areas at Casa Berardi, timing of updated
resource estimates for the Marban project, Arrangement Agreement
with Hecla Mining Company, currency exchange rates, the future
price of gold and the effects thereof, the estimation of mineral
reserves and mineral resources, the realization of mineral reserve
and mineral resource estimates and the economic viability thereof,
the anticipated conversion of mineral resources to mineral reserves
and the timing thereof, the timing and amount of estimated capital
expenditures, costs and timing of the development of new deposits,
plans and budgets for and expected timing and results of
exploration activities and feasibility and pre-feasibility studies,
permitting time-lines, evaluation of opportunities, requirements
for additional capital, government regulation of mining operations,
environmental risks, reclamation obligations and expenses, title
disputes or claims, adequacy of insurance coverage, the
availability of qualified labour, acquisition plans and strategies.
Often, but not always, forward-looking information can be
identified by the use of words such as "plans", "expects, "is
expected", "budget", "scheduled", "estimates", forecasts",
"intends", "anticipates", or "believes", or the negatives thereof
or variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might", or
"will" be taken, occur or be achieved.
Such forward-looking information is based on a number of
assumptions, including but not limited to those set out in this
News Release, the most recent technical reports for the Company's
properties and the Company's annual information form ("AIF") for
its most recent year end filed on SEDAR. Such assumptions include
those relating to the U.S./Canadian dollar exchange rate, gold
price per ounce, anticipated fuel prices, anticipated prices and
availability of hydro-electric power, that the mine plan and gold
recoveries will be achieved, that pre-production capital costs,
operating costs and sustaining and restoration costs will be as
estimated, that the Arrangement Agreement with Hecla Mining Company
will be completed, the availability of an experienced workforce and
suppliers for projects, that equipment will be available when
required and at estimated costs, that the assumptions underlying
mineral resource estimates are valid and that no unforeseen
accident, fire, ground instability, flooding, labour disruption,
equipment failure, metallurgical, environmental or other events
that could delay or increase the cost of development or production
will occur, that the results of exploration activities will be
consistent with the Company's expectations, that the current price
of and demand for gold will be sustained or will improve, the
supply of gold will remain stable, that the general business,
political and economic conditions as well as those specific to the
Company's operations will not change in a material adverse manner,
and that financing will be available if and when needed on
reasonable terms.
Forward-looking information is by its nature uncertain and
involves foreseeable and unforeseeable risks and other factors
which may cause the actual outcomes, costs, timing and performance
to be materially different from those anticipated by such
information. Such risks and factors include, among others, the risk
that any of the assumptions on which the forward looking
information is based prove to be incorrect or invalid, the risk of
unexpected variations in mineral resources and reserves, grade or
recovery rates, of failure of plant, equipment or processes to
operate as anticipated, of accidents, labour disputes, of
unanticipated delays in obtaining governmental approvals or
financing or in the completion of development or construction
activities, risk that estimated costs, including costs of labour,
equipment and materials, including power, are not as anticipated,
of an undiscovered defect in title or other adverse claim, that
results of exploration activities will be different than
anticipated, that the future price of gold will decline, that the
Canadian dollar will strengthen against the U.S. dollar, that
mineral resources and reserves are not as estimated, that actual
costs of restoration activities are greater than expected and that
changes in project parameters as plans continue to be refined
result in increased costs There are a number of other risks and
uncertainties associated with exploration, development and mining
activities that may affect the reliability of the forward looking
information herein, including those described in Aurizon's AIF and
in Aurizon's Annual Report on Form 40-F ("40-F") filed with the
United States Securities and Exchange Commission. The AIF and 40-F
are available respectively on SEDAR at www.sedar.com and on EDGAR
at www.sec.gov/. There may be factors in addition to those
described herein or in the AIF or 40F that cause actions, events or
results not to be as anticipated, estimated or intended. Readers
are cautioned not to place undue reliance on forward-looking
information due to the inherent uncertainty thereof.
Aurizon Mines Ltd.
Balance sheets (Unaudited)
(expressed in thousands of Canadian dollars, unless otherwise stated)
March 31, December 31,
As at, 2013 2012
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ASSETS
Current assets
Cash and cash equivalents $188,847 $204,232
Marketable securities 504 477
Inventories 20,197 16,433
Accounts receivable and other 6,220 5,885
Tax credits and other taxes receivable 13,232 10,061
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Total current assets 229,000 237,088
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Non-current assets
Property, plant and equipment 212,662 204,451
Mineral properties 4,285 5,285
Deferred finance costs 137 178
Other assets 5,032 2,649
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TOTAL ASSETS $451,116 $449,651
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LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 31,194 $ 29,342
Current income and resource tax liabilities 528 3,121
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Total current liabilities 31,722 32,463
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Non-current liabilities
Provisions 16,200 16,706
Deferred tax liabilities 38,494 35,955
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Total liabilities 86,416 85,124
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EQUITY
Shareholders' equity
Issued share capital 283,060 282,600
Contributed surplus 3,028 2,921
Stock based compensation 22,189 19,675
Accumulated other comprehensive income 28 -
Retained earnings 56,395 59,331
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Total shareholders' equity 364,700 364,527
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TOTAL LIABILITIES AND EQUITY $451,116 $449,651
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Aurizon Mines Ltd.
Statements of Comprehensive Income (Unaudited)
(expressed in thousands of Canadian dollars, unless otherwise stated)
March 31, March 31,
For the three months ended, 2013 2012
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Revenue $ 43,245 $ 56,753
Less: Cost of sales (30,539) (30,822)
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Gross profit 12,706 25,931
Other operating expenses
General and administrative costs (11,402) (4,856)
Exploration costs (1,851) (6,686)
Other net (losses) gains (989) 515
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Operating (loss) profit (1,536) 14,904
Finance income 514 572
Finance costs (203) (222)
Other derivative losses - (357)
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(Loss) Profit before income and resource taxes (1,225) 14,897
Income and resource tax expense (1,711) (6,634)
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NET (LOSS) PROFIT (2,936) 8,263
Other comprehensive income (loss)
Items that may be reclassified to profit
Unrealized gain (loss) on marketable
securities 28 (184)
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TOTAL COMPREHENSIVE (LOSS) INCOME $ (2,908) $ 8,079
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Weighted average number of common shares
outstanding - Basic 164,597 163,569
Earnings (loss) per share - Basic $ (0.02) $ 0.05
Weighted average number of common shares
outstanding - Diluted 164,597 164,376
Earnings (loss) per share - Diluted $ (0.02) $ 0.05
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Aurizon Mines Ltd.
Statements of Cash Flows (Unaudited)
(expressed in thousands of Canadian dollars, unless otherwise stated)
March 31, March 31,
For the three months ended, 2013 2012
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Operating activities
Net (loss) profit $ (2,936) $ 8,263
Adjustments for non-cash items:
Depreciation and amortization 8,947 7,841
Share-based compensation 2,759 1,274
Deferred income tax expense (recovery) 2,539 (5,496)
Refundable and non-refundable taxes (398) 3,315
Derivative losses - 357
Other 374 996
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11,285 16,550
Increase in non-cash working capital items (5,515) (12,929)
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Net cash provided by operating activities 5,770 3,621
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Investing activities
Property, plant and equipment (19,597) (15,235)
Mineral properties - (30)
Other investing activities (2,079) (5,242)
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Net cash used in investing activities (21,676) (20,507)
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Financing activities
Issuance of shares 323 2,299
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Net cash provided by financing activities 323 2,299
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Net decrease in cash and cash equivalents (15,583) (14,587)
Effect of foreign currency exchange rate changes
on cash 198 (197)
Cash and cash equivalents - beginning of period 204,232 213,486
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Cash and cash equivalents - end of period $188,847 $198,702
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ABOUT AURIZON
Aurizon is a gold producer with a growth strategy focused on
developing its existing projects in the Abitibi region of
north-western Quebec, one of the world's most favourable mining
jurisdictions and prolific gold and base metal regions, and by
increasing its asset base through accretive transactions. Aurizon
shares trade on the Toronto Stock Exchange under the symbol "ARZ"
and on the NYSE MKT under the symbol "AZK". Additional information
on Aurizon and its properties is available on Aurizon's website at
www.aurizon.com.
U.S. Registration (File 001-31893)
Contacts: Aurizon Mines Ltd. George Paspalas President & CEO
604-687-6600 or Toll Free: 1-888-411-GOLD (4653) 604-687-3932 (FAX)
Aurizon Mines Ltd. Ian S. Walton Executive Vice President & CFO
604-687-6600 or Toll Free: 1-888-411-GOLD (4653) 604-687-3932 (FAX)
Aurizon Mines Ltd. Investor Relations 604-687-6600 or Toll Free:
1-888-411-GOLD (4653) 604-687-3932 (FAX)jennifer.north@aurizon.com
/ info@aurizon.com www.aurizon.com
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