May 19 2010
Aurizon is pleased to announce an exploration joint venture with Typhoon Exploration Inc., ("Typhoon") on the Fayolle Project located 10 kilometres north of Aurizon's Joanna Project in Quebec.
The property comprises 39 mining claims 100% owned by Typhoon covering 1,373 hectares across the Porcupine-Destor Break, one of the most productive gold bearing structures of the Abitibi Belt.
The key terms of the joint venture option agreement include:
- Aurizon can earn a 50% interest in the project, subject to an underlying 2% net smelter royalty, by incurring expenditures of $10 million over four years, of which $3.5 million is a firm commitment to be spent within two years.
- Aurizon may earn an additional interest of 15%, for a total interest of 65%, by either delivering a feasibility study, or spending an additional $15 million on the project.
- ARZ will provide input on exploration programs and will become operator after the initial 50% interest has been earned.
- During the course of the initial four year term, Aurizon will have the right to subscribe for common shares of Typhoon of up to $500,000 on each anniversary of the option agreement, for a total investment of up to $2 million. The first subscription will consist of 609,756 units (the "Units") at a price of $0.82 per Unit with each Unit being comprised of one common share in the capital of the Company and one share purchase warrant (a "Warrant"). Each warrant will entitle Aurizon to purchase one additional common share of Typhoon at the price of $1.25 per share for a period of 18 months following the closing. The securities issued under the offering will be subject to a four month hold period. The remaining subscriptions will be based on a 15 day weighted average share price. The first two subscriptions totalling $1 million are firm commitments and are required in order for Aurizon to earn the initial 50% interest in the Fayolle project.
Typhoon has explored the Fayolle project since 2003 and incurred approximately $10 million advancing the project. The mineralized zones on the Fayolle deposit are distributed along a major shear corridor of approximately 2.5 kilometres long by 1 kilometre wide, marked by intensive carbonate alteration and local gold enrichment associated with finely disseminated pyrite. The grade is highly variable inside the favourable corridor, from 0.1 grams per tonne anomalies to concentrations of up to 100 grams per tonne in individual drilling samples. Down dip, the mineralization remains open at depth.
"Acquiring a resource on a major gold bearing structure that shows strong indicators for gold mineralization represents an excellent opportunity for additional discoveries. Drilling efforts will be concentrated on two targets: extend the known Fayolle deposit resource outline down dip; and generate and test other targets using already defined geological controls. The exploration group is mobilized and ready to commence activities once all regulatory approvals are received." said Mr. Martin Demers, Exploration Manager, Aurizon Mines Ltd.
Inferred mineral resources totalling 113,000 ounces of gold have been delineated to date down to 100 metres at Fayolle by Typhoon at a grade of 1.6 grams of gold per tonne using a cut off grade of 0.5 grams per tonne (Reference: "Mineral Resources Evaluation of the Fayolle Gold Deposit 43-101 Technical Report" prepared for Typhoon Exploration Inc., dated February 21, 2007 available on SEDAR). Higher grade intervals in the range of 10 to 40 grams per tonne over 3 to 30 metres have been encountered during previous drilling.
"We are pleased to enter into this agreement with Typhoon", said David Hall, Aurizon's C.E.O. "This is consistent with our strategy of exploring established geological trends, close to good infrastructure, and we look forward to the start of an extensive exploration program at Fayolle."
Information of a scientific or technical nature was prepared under the supervision of Martin Demers, P. Geo., Exploration Manager of Aurizon and a Qualified Person under National Instrument 43-101.