GOLD STUDY: Hosco deposit hosts 1.66M oz at Joanna project

QUEBEC – Aurizon Mines of Vancouver has received a positive feasibility study confirming the Hosco deposit at the Joanna project 20 km east of Rouyn-Noranda hosts 1.66 million oz of gold. The study was prepare by BBA Inc. with...

QUEBEC – Aurizon Mines of Vancouver has received a positive feasibility study confirming the Hosco deposit at the Joanna project 20 km east of Rouyn-Noranda hosts 1.66 million oz of gold. The study was prepare by BBA Inc. with contributions from other engineering firms.

The feasibility study examined an 8,500-t/d open pit mine at the Hosco deposit. Using a cut-off grade of 0.5 g/t  the total diluted proven and probable reserves are 41.1 million tonnes at 1.26 g/t Au. The pre-production capital costs and sustaining costs are estimated, respectively, at $422 million and $97 million. The average operating cash cost is estimated at US$716/oz and $25.32/tonne milled. The financial analysis, using a price of gold of US$1,350/oz, indicates a pre-tax net present value (5% discount rate) of $112 million with a pre-tax internal rate of return of 8.7% and a payback period of 8.2 years. On an after tax basis, Aurizon estimates that the IRR is 6.5%.

“The results of the feasibility study has realized a 67% increase in proven and probable in-pit mineral reserves at the Hosco deposit compared to the 2009 pre-feasibility study," said Aurizon president and CEO George Paspalas. "Whilst the feasibility study on the Hosco deposit generates a positive return at three-year trailing average gold prices, we believe that it is prudent, in terms of capital allocation, to defer development and permitting of the Hosco deposit and continue to pursue exploration of these areas, which if successful, could lead to a staged and perhaps more financially beneficial development strategy at Joanna."

The company will continue exploration at the Heva deposit and Hosco West Extension, both of which have returned higher grades than the Hosco deposit.

Additional details are available at Aurizon.com.

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