AZK Aurizon Mines, Ltd. Ordinary Shares (Canada)

Shares Listed: Toronto Stock Exchange - Ticker Symbol - ARZ NYSE Amex: - Ticker Symbol - AZK U.S. Registration: (File 001-31893) VANCOUVER, Nov. 5 /PRNewswire-FirstCall/ -- Aurizon reports financial results for the third quarter of 2009, which have been prepared on the basis of available information up to November 2, 2009. (To review the complete interim unaudited financial statements and associated Management Discussion and Analysis, which should be read in conjunction with the Company's most recent audited annual financial statements, please visit the Company's website at http://www.aurizon.ocm/ or view the Company's SEDAR filings at http://www.sedar.com/). The third quarter was highlighted by the following activities: - Project debt of $21 million repaid in full and $28 million released from restricted accounts. - Revenues of $44.2 million, matching second quarter's record revenues. - Cash flow from operating activities of $17.6 million, up 24% compared to same quarter of 2008. - Earnings of $8.2 million, or $0.05 per share, and adjusted earnings of $7.7 million, or $0.05 per share. - Gold production of 43,962 ounces, 10% higher than plan and 6% higher than the same quarter of 2008. - Total cash costs of US$392 per ounce, 3% lower than same quarter of 2008. At September 30, 2009, Aurizon had cash balances of $108 million, working capital of $95.4 million, and no bank debt. "Aurizon produced another strong quarter of excellent operational performance and significant cash flow. This is due to the commitment of our strong Quebec team, which has experienced minimal turnover during the past year." said David P. Hall, President and Chief Executive Officer. "As a result we are now debt free and are in a strong financial position to pursue internal and external growth initiatives." FINANCIAL RESULTS Third Quarter 2009 Earnings of $8.2 million, or $0.05 per share, were achieved in the third quarter of 2009, compared to earnings of $7.1 million, or $0.05 per share, in the same period of 2008. Results were positively impacted by non-cash derivative gains of $0.6 million on an after tax basis. After adjusting for this item, earnings for the quarter were $7.7 million, or $0.05 per share, compared to adjusted earnings in the third quarter of 2008 of $4.3 million or $0.03 per share. In 2008, operating results were positively impacted by non-cash derivative gains of $2.8 million, on an after tax basis. Revenue from Casa Berardi operations increased to $44.2 million in the third quarter of 2009 from the sale of 43,650 ounces of gold, compared to $35.5 million from the sale of 40,228 ounces of gold in the same quarter of 2008, as a result of more gold ounces sold, a weaker Canadian dollar and higher realized gold prices. The average realized gold price was US$929 per ounce and the average Cad/US exchange rate was 1.084, compared to realized prices of US$845 per ounce at an average exchange rate of 1.04 in the same quarter of 2008. The 2009 average realized gold price includes the sale of 20,026 ounces of gold at an average price of US$886 per ounce from the exercise of call options, compared to 11,525 ounces of gold sold at an average price of US$832 per ounce from the exercise of call options in the third quarter of 2008. Actual gold production in the quarter was 43,962 ounces, compared to 41,522 ounces in the same quarter of 2008. Operating costs in the third quarter of 2009 totalled $19.0 million, while depletion, depreciation and accretion ("DD&A") totalled $10.1 million. On a unit cost basis, total cash costs per ounce of gold sold were US$392(1) and DD&A was US$212 per ounce, for a total production cost of US$604 per ounce. In the third quarter of 2009, the Company effectively reduced its exposure to the gold call options sold by purchasing 16,614 ounces of call options expiring in 2010 with an exercise price of US$863 per ounce. This purchase effectively reduces by 25% the Company's ounces that are subject to call options in 2010 and raises the average call price in 2010 from US$908 per ounce to US$923 per ounce. The cost of the purchase, totalling $2.6 million, has been reflected on the balance sheet as a derivative instrument asset and changes in the fair value of the call options are reflected in earnings. In the third quarter of 2009, a stronger Canadian dollar; the expiry of gold call options and foreign exchange contracts; and the purchase of call options to allow the participation in higher gold prices, partially mitigated by rising gold prices; resulted in a non-cash derivative gain of $0.7 million. Including the fair value of the gold call options purchased, the net unrealized derivative liabilities at September 30, 2009, totalled $9.1 million compared to net unrealized derivative liabilities of $25.4 million at December 31, 2008. In the same quarter of 2008, the non-cash gain was $3.5 million. There are no margin requirements with respect to these derivative positions. Administrative and general costs in the third quarter of 2009 were higher than the same period of 2008 at $2.3 million, compared to $1.9 million. Excluding non-cash stock based compensation charges, general and administrative costs were $1.7 million in 2009 compared to $1.5 million in the same quarter of 2008. Exploration and pre-feasibility expenditures of $0.7 million incurred in respect of Joanna and Kipawa were charged to operations during the third quarter of 2009, compared to $3.1 million in the same period of 2008. Income and resource taxes totalled $4.7 million, of which $2.1 million are current Quebec mining taxes and $2.6 million are future income taxes. The future income taxes are a result of temporary differences between the tax and accounting bases of the Company's assets and liabilities. Foreign exchange gains totalling $0.4 million were realized in the third quarter of 2009, compared to a gain of $0.8 million in the same quarter of 2008. The primary cause for the exchange gains in the third quarter of 2009 was the delivery of US$15.0 million dollars into foreign exchange contracts at rates more favourable than the prevailing market rates. Cash flow from operating activities increased 24% to $17.6 million in the third quarter of 2009, compared to cash flow of $14.2 million in the same period of 2008. A weaker Canadian dollar and higher realized US dollar gold prices resulted in a 14% increase in realized Canadian dollar gold prices and a wider operating profit margin in the third quarter of 2009, compared to the same period last year. Capital expenditures totalled $8.3 million in the third quarter, of which $4.0 million was on sustaining capital and $4.3 million was on exploration activity at Casa Berardi. A decision to repay the project debt in full in the third quarter resulted in the release of restricted cash of $30.2 million which had been maintained in accordance with the terms of the debt facility. The Company received $3.3 million of Quebec refundable mining credits during the third quarter of 2009. Aggregate investing activities resulted in cash inflows of $22.6 million during the third quarter of 2009, compared to outflows of $6.1 million in the same period of 2008. The project debt totalling $21.0 million was repaid in full on September 30, 2009. The exercise of incentive stock options provided $0.4 million, resulting in a net cash outflow of $20.6 million from financing activities during the third quarter of 2009. In the same period of 2008, financing activities resulted in net cash outflows of $12.8 million. --------------------------------------- (1) See "Non-GAAP measures" on page 6. Nine Months 2009 Earnings for the nine months ended September 30, 2009, were $26.8 million or $0.17 per share, compared to earnings of $9.0 million or $0.06 per share in the same period of 2008. Results were impacted by non-cash derivative gains of $10.1 million on an after tax basis. After adjusting for this item, earnings for the first nine months were $16.8 million, or $0.11 per share, compared to adjusted earnings in the same period of 2008 of $9.6 million or $0.07 per share, which included the impact of the recovery of defense costs of $3.2 million, on an after tax basis. Cash flow from operating activities in the first nine months of 2009 totalled $59.8 million, compared to cash flow of $48.7 million for the same period of 2008. Operating profit margin per ounce increased 13% to US$521(2) per ounce for the nine months ended September 30, 2009, compared to US$462 per ounce in the same period of 2008. Investing activities in the first nine months of 2009 resulted in a net cash outflow of $7.1 million, of which $29.0 million was incurred on capital and exploration expenditures, $2.6 million spent purchasing gold call options, whilst cash inflows were generated from the release of the restricted cash balances totalling $21.2 million and $3.3 million from refundable mining credits. In the same period of 2008, investing activities resulted in a net cash outflow of $21.1 million of which $19.1 million was incurred on capital expenditures, $3.7 million was transferred to restricted cash accounts, and $1.6 million was received from refundable mining credits. Financing activities during the first nine months of 2009 resulted in a net cash inflow of $20.9 million due to the $47.3 million public equity financing and $3.4 million from the exercise of incentive stock options, reduced by principal debt repayments of $29.2 million and repayment of a $0.6 million government assistance obligation. In the same period of 2008, financing activities resulted in a net cash outflow of $37.4 million due to principal debt repayments of $39.9 million, reduced by the exercise of incentive stock options totalling $2.5 million. CASH RESOURCES AND LIQUIDITY As at September 30, 2009, cash balances increased to $108 million, compared to $55.6 million at the beginning of the year. Included in the December 31, 2008 cash balances are restricted cash amounts in respect of the Casa Berardi debt facility totalling $21.2 million. In order to release the restricted cash balances and eliminate further annual administrative fees associated with the project debt, the Company decided to repay the project debt in full in September 2009 in advance of the final scheduled payment in March 2010. The final principal payment of $21 million was made in September thereby allowing the release of $28 million to the Company's general account in the third quarter. Aurizon had working capital of $95.4 million as at September 30, 2009, compared to $24.1 million at the end of 2008. Reflected in working capital are net derivative liabilities totalling $9.1 million compared to $13.3 million at the end of 2008. Long-term debt related to refundable government assistance and capital leases totalled $0.7 million at September 30, 2009, compared to long-term debt of $9.4 million at the beginning of the year, which included project debt of $8.25 million. --------------------------------------- (2) See "Non-GAAP measures" on page 6. 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$929 per ounce. Since commissioning the mill in November 2006, Casa Berardi has produced 458,832 ounces of gold. ------------------------------------------------------------------------- Operations 2009 ------------------------------------------------------------------------- YTD Q3 Q2 Q1 ------------------------------------------------------------------------- Operating results Tonnes milled 516,333 178,420 170,429 167,484 Grade - grams/tonne 7.97 8.14 7.84 7.93 Mill recoveries - % 92.8% 94.2% 92.8% 91.3% ------------------------------------------------------------------------- Gold Production - ounces 122,802 43,962 39,874 38,966 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gold sold - ounces 123,092 43,650 42,042 37,400 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Per ounce data - US$ Average realized gold price $906 $929 $897 $888 --------------------------------------- Total cash costs(1) $385 $392 $386 $379 Amortization(2) 194 212 189 183 --------------------------------------- Total production costs(3) $579 $604 $575 $562 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Operations 2008 ------------------------------------------------------------------------- Q4 Q3 Q2 Q1 ------------------------------------------------------------------------- Operating results Tonnes milled 169,291 161,358 160,054 163,694 Grade - grams/tonne 7.70 8.58 7.73 8.63 Mill recoveries - % 91.5% 93.3% 92.7% 92.6% ------------------------------------------------------------------------- Gold Production - ounces 38,363 41,522 36,871 42,074 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gold sold - ounces 38,348 40,228 41,217 39,611 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Per ounce data - US$ Average realized gold price $793 $845 $869 $877 --------------------------------------- Total cash costs(1) $356 $405 $436 $422 Amortization(2) 226 211 210 191 --------------------------------------- Total production costs(3) $582 $616 $646 $613 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Table footnotes: (1) Operating costs net of by-product silver credits, divided by ounces sold, and divided by the average Bank of Canada Cad$/US$ rate. (2) Depreciation, depletion and accretion expenses divided by ounces sold, and divided by the average Bank of Canada Cad$/US$ rate. (3) Total cash costs plus depreciation, depletion and accretion expenses per ounce of gold sold. 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. OTHER PROPERTIES Joanna Gold Property Exploration activities in the first half of 2009 resulted in the discovery of two new mineralized trends which were identified north and south of the main Heva-Hosco gold bearing trend at Joanna. Both discoveries remain open on strike and down dip. A winter program comprising 17,000 metres of drilling to test the aforementioned targets and to optimise the mineral resources in the Hosco block has been initiated. Two drill rigs are currently active and a third rig is expected to be added before year end. The pre-feasibility study on the Hosco block is nearing completion and is subject to review by management. The study will incorporate the measured and indicated resources of approximately 1.27 million ounces of gold, together with the results of recently completed metallurgical tests. The study will also be completed in accordance with the Company's global development principles supporting technical, economic, environmental and social considerations. During the quarter, various informational meetings were held with all stakeholder groups in order to listen and understand their views. The feedback was positive and recommendations have been incorporated into the pre-feasibility study, results of which will be released shortly. Kipawa Gold Property A program of soil sampling in areas of interest contiguous to gold showings identified in 2008 was completed in order to extend the known gold structures, and better define gold targets. Upon analysis and evaluation of the results of this program, a winter drill program may be initiated. 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. NON-GAAP MEASURES a) Calculation of Adjusted Earnings Adjusted earnings are calculated by removing the gains and losses, net of income tax, resulting from the mark-to-market revaluation of the Company's gold and foreign currency price protection contracts, and defense recovery costs, as detailed on the table below. Adjusted earnings do not constitute a measure recognized by generally accepted accounting principles (GAAP) in Canada or the United States, and do not have a standardized meaning defined by GAAP. The Company discloses this measure, which is based on its financial statements, to assist in the understanding of the Company's operating results and financial position. ------------------------------------------------------------------------- 3rd 3rd Nine Nine Quarter Quarter Months Months 2009 2008 2009 2008 ------------------------------------------------------------------------- (in thousands of Canadian dollars, except per share amounts) Earnings as reported $8,211 $7,108 $26,844 $8,975 Add (deduct) the after-tax effect of: Unrealized (gain) loss on derivative instruments (560) (2,778) (10,065) 3,858 Recovery of defense costs - - - (3,220) ------------------------------------------------------------------------- Adjusted earnings $7,651 $4,330 $16,779 $9,613 ------------------------------------------------------------------------- Adjusted earnings per share $0.05 $0.03 $0.11 $0.07 ------------------------------------------------------------------------- ------------------------------------------------------------------------- b) Total Cash Costs per Gold Ounce Aurizon has included a non-GAAP performance measure of total cash costs per ounce of gold in this report. Aurizon reports total cash costs on a sales basis. In the gold mining industry, this is a common performance measure, but does not have any standardized meaning, and is a non-GAAP measure. The Company believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Total cash costs per gold ounce are derived from amounts included in the statements of earnings and include mine site operating costs such as mining, processing and administration, but exclude amortization, reclamation costs, financing costs and capital development costs. These costs are reduced by silver by-product sales and then divided by gold ounces sold and the average Bank of Canada Cad$/US$ exchange rate to arrive at the total cash operating costs per ounce. c) Unit Mining Costs per Tonne Unit mining costs per tonne is a non-GAAP measure and may not be comparable to data prepared by other gold producers. The Company believes that this generally accepted industry measure is a realistic indication of operating performance and is useful in allowing year over year comparisons. Unit mining costs per tonne is calculated by adjusting operating costs as shown in the Statements of Earnings and Comprehensive Income for inventory adjustments and then dividing by the tonnes of ore processed through the mill. d) Operating Profit Margins per Ounce Operating profit margins per ounce are a non-GAAP measure, and are calculated by subtracting the total cash costs per ounce from the average realized gold price. For the quarter ended September 30, 2009, the average realized gold price was US$929 less total cash costs of US$392 for a operating profit margin of US$537 per ounce, compared to an average realized gold price of US$845 less total cash costs of US$405 for a operating profit margin of US$440 per ounce for the third quarter of 2008. For the nine months ended September 30, 2009, the average realized gold price was US$906 less total cash costs of US$385 for a operating profit margin of US$521 per ounce, compared to an average realized gold price of US$880 less total cash costs of US$418 for a operating profit margin of US$462 per ounce for the same period of 2008. Outstanding Share Data As of November 2, 2009, Aurizon had 158,978,482 common shares issued and outstanding. In addition, 7,979,225 incentive stock options, representing 5% of outstanding share capital, are outstanding and exercisable into common shares at an average price of $3.75 per share. Common Shares (TSX - ARZ & NYSE Amex - AZK) ------------------------------------------------------------------------- September 30, December 31, 2009 2008 ------------------------------------------------------------------------- Issued 158,937,732 148,068,298 Fully-diluted 166,757,707 156,586,548 Weighted average 158,862,732 147,707,642 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Qualified Person and Quality control Information of a scientific or technical nature was prepared under the supervision of Michel Gilbert, P. Eng., Executive Vice-President, Operations of Aurizon and a qualified person under National Instrument 43-101. Conference Call Aurizon Management will host a conference call and live webcast for analysts and investors on Thursday, November 5, 2009 at 11:00 a.m. Pacific Standard Time (2:00 p.m. Eastern Standard Time) to review the results. You may access the call by calling the operator at 416-644-3418 or toll free access at 1-800-587-1893 ten (10) minutes prior to the scheduled start time. The call is being webcast and can be accessed at Aurizon's website at http://www.aurizon.com/ or enter the following URL into your web browser: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2847020. Those who wish to listen to a recording of the conference call at a later time may do so by calling 416-640-1917 or 1-877-289-8525 (Passcode 4173202 followed by the number sign). This playback version of the call will be available until Thursday, November 12, 2009. Forward Looking Statements and Information This report 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 report is made as of the date of this report. 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 with respect to anticipated rates of recovery, timing and amount of future production, anticipated total cash cost per ounce of gold to be produced at the Casa Berardi Mine, 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 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, permitting time-lines, 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, and the payment of dividends in the future. 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. The forward-looking information contained in this report is based on certain assumptions that the Company believes are reasonable, including the exchange rates of the U.S. and Canadian currency in 2009, that the current price of and demand for gold will be sustained or will improve, the supply of gold will remain stable, that the current mill recovery rates at the Company's Casa Berardi Mine will continue, that the Company's current mine plan can be achieved, that the general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed on reasonable terms and that the Company will not experience any material accident, labor dispute, or failure of plant or equipment. However, forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include, among others, the risk that actual results of exploration activities will be different than anticipated, that cost of labour, equipment or materials will increase more than expected, that the future price of gold will decline, that the Canadian dollar will strengthen against the U.S. dollar, that mineral reserves or mineral resources are not as estimated, that actual costs or actual results of reclamation activities are greater than expected; that changes in project parameters as plans continue to be refined may result in increased costs, of lower rates of production than expected, of unexpected variations in ore reserves, grade or recover rates, of failure of plant, equipment or processes to operate as anticipated, of accidents, labour disputes and other risks generally associated with mining, unanticipated delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors and other risks more fully described in Aurizon's Annual Information Form filed with the securities commission of all of the provinces and territories of Canada and in Aurizon's Annual Report on Form 40-F filed with the United States Securities and Exchange Commission, which are available on Sedar at http://www.sedar.com/ and on Edgar at http://www.sec.gov/. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on forward-looking information due to the inherent uncertainty thereof. 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 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 Amex under the symbol "AZK". Additional information on Aurizon and its properties is available on Aurizon's website at http://www.aurizon.com/. Aurizon Mines Ltd. Balance Sheets (unaudited) - as at September December (in thousands of Canadian dollars) 30 2009 31 2008 ------------------------------------------------------------------------- $ $ ASSETS CURRENT Cash and cash equivalents 108,005 34,337 Restricted cash - 21,225 Accounts receivable and prepaid expenses 4,755 4,419 Refundable tax credits and mining duties 2,003 5,301 Derivative instrument assets 3,666 412 Inventories 10,130 10,145 ------------------------------------------------------------------------- 128,559 75,839 Derivative instrument assets - 1,420 Other assets 2,025 1,553 Property, plant & equipment 54,940 54,761 Mineral properties 125,545 124,378 ------------------------------------------------------------------------- TOTAL ASSETS 311,069 257,951 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES CURRENT Accounts payable and accrued liabilities 16,743 15,067 Derivative instrument liabilities 12,757 13,727 Current portion of long-term debt 658 21,663 Current provincial mining taxes payable 3,048 1,302 ------------------------------------------------------------------------- 33,206 51,759 Derivative instrument liabilities - 13,474 Long-term debt 700 9,430 Asset retirement obligations 21,733 20,905 Future income tax liabilities 30,659 17,442 ------------------------------------------------------------------------- TOTAL LIABILITIES 86,298 113,010 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Share capital 247,048 194,647 Contributed surplus 979 872 Stock based compensation 9,491 9,013 Deficit (32,747) (59,591) ------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 224,771 144,941 ------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 311,069 257,951 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Aurizon Mines Ltd. Statements of Earnings and Comprehensive Income (unaudited) Three months ended Nine months ended September 30 September 30 (in thousands, except per share amounts, of Canadian dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- $ $ $ $ REVENUE Mining operations 44,167 35,502 129,957 106,935 ------------------------------------------------------------------------- EXPENSES Operating 18,989 17,025 55,739 52,015 Depreciation, depletion and accretion 10,147 8,835 27,940 25,045 Administrative and general 2,250 1,866 7,665 7,656 Exploration costs 729 3,133 2,699 8,401 Unrealized derivative (gains) losses (715) (3,451) (13,658) 4,792 Interest on long-term debt 159 568 542 2,333 Foreign exchange (gain) loss (427) (789) 2,388 (1,887) Capital taxes 270 136 668 262 Other income (151) (501) (605) (5,803) ------------------------------------------------------------------------- 31,251 26,822 83,378 92,814 ------------------------------------------------------------------------- Earnings for the period before income taxes 12,916 8,680 46,579 14,121 Current provincial mining taxes (2,101) (339) (6,518) (836) Future income tax recovery (expense) relating to provincial mining taxes 189 175 (963) (1,767) Future income tax expense (2,793) (1,408) (12,254) (2,543) ------------------------------------------------------------------------- Earnings and comprehensive income for the period 8,211 7,108 26,844 8,975 ------------------------------------------------------------------------- Earnings per share - basic and diluted 0.05 0.05 0.17 0.06 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares outstanding (thousands) 158,863 147,986 155,358 147,604 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Aurizon Mines Ltd. Statements of Deficit (unaudited) Three months ended Nine months ended September 30 September 30 (in thousands of Canadian dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- $ $ $ $ Deficit - Beginning of period as previously reported (40,958) (62,645) (59,591) (69,006) Retrospective adoption of new accounting standard - - - 4,494 ------------------------------------------------------------------------- Deficit - as adjusted (40,958) (62,645) (59,591) (64,512) Earnings for the period 8,211 7,108 26,844 8,975 ------------------------------------------------------------------------- Deficit - end of period (32,747) (55,537) (32,747) (55,537) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Aurizon Mines Ltd. Statements of Cash Flow (unaudited) Three months ended Nine months ended September 30 September 30 (in thousands of Canadian dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- $ $ $ $ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Earnings for the period 8,211 7,108 26,844 8,975 Adjustments for non-cash items: Depreciation, depletion, and accretion 10,147 8,835 27,940 25,045 Refundable tax credits (127) (554) (472) (1,469) Loss (gain) on sale of property, plant and equipment - - 34 (11) Stock based compensation 516 401 2,081 2,295 Unrealized non-hedge derivative (gains) losses (715) (3,451) (13,658) 4,792 Future income tax expense (recovery) relating to mining duties (189) (175) 963 1,767 Future income tax expense 2,793 1,408 12,254 2,543 ------------------------------------------------------------------------- 20,636 13,572 55,986 43,937 Decrease (increase) in non-cash working capital items (3,069) 605 3,854 4,767 ------------------------------------------------------------------------- 17,567 14,177 59,840 48,704 ------------------------------------------------------------------------- CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES Property, plant and equipment (1,751) (1,849) (9,473) (5,137) Mineral properties (6,571) (6,842) (19,489) (13,952) Restricted cash proceeds (funding) 30,208 450 21,225 (3,692) Refundable tax credits 3,298 2,175 3,298 1,640 Derivative instruments (2,620) - (2,620) - ------------------------------------------------------------------------- 22,564 (6,066) (7,059) (21,141) ------------------------------------------------------------------------- CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES Issuance of shares, net of costs 358 149 50,705 2,481 Long-term debt (20,951) (12,985) (29,818) (39,866) ------------------------------------------------------------------------- (20,593) (12,836) 20,887 (37,385) ------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 19,538 (4,725) 73,668 (9,822) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 88,467 19,739 34,337 24,836 ------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS - END OF PERIOD 108,005 15,014 108,005 15,014 ------------------------------------------------------------------------- ------------------------------------------------------------------------- DATASOURCE: Aurizon Mines Ltd. CONTACT: AURIZON MINES LTD., Suite 3120, 666 Burrard Street, Park Place, Vancouver, British Columbia, V6C 2X8, David P. Hall, President, or Ian S. Walton, Chief Financial Officer, at Telephone: (604) 687-6600, Toll Free: 1-888-411-GOLD, Fax: (604) 687-3932, Web Site: http://www.aurizon.com/, Email: ; or Renmark Financial Communications Inc., 2080 Rene-Levesque Blvd., West Montreal, QC, H3H 1R6, Barry Mire: ; Maurice Dagenais: ; Media: Valerie Lacasse: , Tel: (514) 939-3989, Fax: (514) 939-3717

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