Aurizon Mines has received positive feasibility study results, which have established in-pit mineral reserves of 1.66 million ounces of gold in the Hosco deposit that forms part of its 100%-owned Joanna project in north-western Quebec, Canada.

The feasibility study has indicated probable gold reserve of 41.1Mt at 1.26g/t with a cut-off of 0.5 g/t.

According to the study, the mine life is expected to be 13.4 years based on reserves.

Aurizon Mines president and chief executive officer George Paspalas said the Joanna property has provided significant exploration success for Aurizon and the results of the feasibility study has realised a 67% increase in proven and probable in-pit mineral reserves at the Hosco deposit compared to the 2009 pre-feasibility study.

"The company has also encountered follow-up exploration success at the Heva deposit and the Hosco West Extension areas, also on the Joanna property," Paspalas added.

"The company intends to spend an additional $4.2 million to continue the drilling in these areas."

The feasibility study was conducted by engineering firm BBA, which estimated initial capital costs to be $422.2m to develop the mine, a pre-development cost to be $97.3m and $7m for contingency.

It also indicated the net present value of the mine at 5% to $112m, pre-tax; internal rate of return is 8.7% and payback period is 8.2 years.

Construction of the mine is expected to take nearly three years, according to the company, which plans to process 1.45 million ounces and average 110,000 ounces in the first 12 months.