Exploration expenditures on mineral properties in Quebec, exclusive of Casa Berardi, decreased to $2.0 million in Q4'12 from $6.2 million in Q4'11. This decrease is largely due to minimal expenditures related to the Hosco deposit in Q4'12, whereas exploration and feasibility work were ongoing in Q4'11.
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 $4.6 million in Q4'12, from $4.1 million in Q4'11.
INCOME AND RESOURCE TAX EXPENSE
Income and resource taxes in Q4'12 totalled $6.9 million, or 42.3% of profit before taxes, compared to $17.0 million, or 43.8% of profit before taxes in Q4'11. Current income and resource tax expense totalled $4.2 million in Q4'12 compared to $19.2 million in Q4'11.
Net profit of $9.5 million, or $0.06 per basic share, was achieved in Q4'12, compared to net profit of $21.8 million, or $0.13 per share, in Q4'11. The reduction of 56.4% is mostly explained by the combination of lower gold production at higher production costs and a non-recurring $1.3 million impairment loss on marketable securities, partially offset by the combination of a higher realized gold price per ounce, lower exploration costs and a lower effective tax rate.
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 the future. Following the transition period, Aurizon expects that Casa Berardi will return to historical production levels.
CASA BERARDI STRATEGY FOR 2013
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.
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