Casa Berardi produced 136,848 ounces of gold at total cash costs of US$696 per ounce, in-line with previous guidance of 137,000 ounces and US$695 per ounce
693,859 tonnes of ore milled at an average grade of 6.8 grams of gold per tonne at unit mining costs of $140 per tonne
Replenishment of Casa Berardi mineral reserves to 1,461,000 ounces of gold (net of mining depletion) at December 31, 2012. A successful drilling program resulted in a 6% increase in the average undergruond mineral reserve grade to 7.1 grams/tonne and an 11% increase in mineral reserves, before mining depletion, compared to 2011
Successful transtion from contractor to owner-operated mining at Casa Berardi
Self-funded capital investments at Casa Berardi of $75 million are facilitating transition into Zone 118 and 123 and increased opertional flexibiility
Completed the 2012 drill program at Heva, with an in-pit and underground mineral resource estimate to be completed within the first half of 2013
Positive feasibility study received on the Joanna-Hosco deposit of the advanced stage Heva-hosco property

CASA BERARDI STRATEGY FOR 2013

OPERATIONS

Operational flexibility will be constrained in 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 the year.

Major shutdowns are planned for 2013, particularly in the first quarter, in order to switch over to the deepened shaft and incorporate new infrastructure into the mining schedule.

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 average US$810 per ounce in 2013 for the year gradually decreasing to US$700 per ounce in the second half. Onsite mining, milling and administration costs are expected to average $170 per tonne in 2013, up approximately 21% from 2012 projected 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:

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 920 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 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 to Golder Associates. 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.

OUTLOOK FOR 2013

With a year-end cash and cash equivalents balance of $204.2 million together with strong operating cash flows, management of Aurizon expects that Aurizon will be able to fund the capital and exploration projects planned for 2013. Production performance at Casa Berardi was consistent with Aurizon’s revised expectations for 2012 at 136,848 ounces. 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 18 months. Management of Aurizon currently expects that Aurizon will be making a significant investment 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 future. Following the transition period, Aurizon expects that Casa Berardi will return to historical production levels.

Casa Berardi Mineral Reserve Estimate as of December 31, 2012

Notes:

    1.        Open pit mineral reserves were estimated by BBA and underground mineral reserves were estimated by Aurizon personnel.
    2.        Mineral reserves and resources estimates have been completed in accordance with the CIM Standards with regards to mineral reserves and mineral resources estimates.
               Mineral resources are exclusive of mineral reserves. Mining depletion for 2012 is included in 2012 Mineral reserves.
    3.        Mineral Reserves are estimated at a cut-off grade of 4.12 g/t Au for underground, and 1.2 g/t Au for East Mine open pit and 0.5g/t Au for Principal open pit.
    4.        Mineral Reserves are estimated using an average long-term gold price of US$1,350 per ounce and a US$/C$ exchange rate of 1:1.
    5.        A minimum mining width of three metres was used.
    6.        Totals may not represent the sum of the parts due to rounding.
    7.        See Appendix A for additional technical parameters.

This page was last updated: April 16, 2013