Richmont Mines Terminates Senior Credit Facility with Macquarie
Bank Limited
MONTREAL, QUEBEC--(Marketwired - Dec 20, 2013) - Richmont Mines
Inc. (TSX:RIC)(NYSEMKT:RIC), ("Richmont" or the "Corporation"),
announces that it has decided to terminate the Senior Secured
Credit Facility (the "Facility") for up to CAN$50 million secured
with Macquarie Bank Limited ("MBL" or "Macquarie") in August 2013.
No amounts have been drawn on the Facility, and no gold hedging
contracts have been put in place. The Corporation, in conjunction
with MBL, has begun the process to release the securities that had
been put in place as part of the Facility. As per the terms of the
Facility, the Corporation will not incur any cancellation
costs.
Paul Carmel, President and CEO of Richmont commented: "When we
began discussions with Macquarie in March 2013, the gold
environment was quite different than it is now, with the gold price
trading in the US$1,600-US$1,650/ounce range. At the high gold
prices at the time, financing Island Gold Deep partly through debt
was deemed a good business decision whilst the hedging of a minimal
amount of production ounces to lock in attractive margins was
deemed to be a prudent approach. With today's gold price
approximately $400/ounce lower, however, those assumption no longer
hold true. To this end, we believe that it is in the best interest
of Richmont and its shareholders to terminate the Facility, and to
continue to develop Island Gold Deep through internally-generated
cash flow from our four producing mines."
According to the terms of the Facility, the Corporation issued
warrants for the purchase of 1,250,000 Richmont shares to MBL on
the closing date of the Facility Agreement. A total of 812,500
warrants vested immediately upon closing of the Facility Agreement,
with a strike price of CAN$2.45 per share, and will expire 3 years
from the original date of their issue to MBL. Following the
termination of the Facility, the remaining 437,500 warrants will be
cancelled.
Mr. Carmel continued, "Macquarie has been outstanding to deal
with and they fully understand our decision. We look forward to
maintaining our relationship and revisiting possible financing
alternatives in the future."
Additional details about the Island Gold Deep Project
The Island Gold Deep C Zone project contains an estimated
Inferred mineral resource of 2,278,000 tonnes grading 10.53 g/t Au
for 771,000 ounces as at October 1, 2013. Island Gold Deep is
sub-vertical, and is located at a depth of between 450 metres and
1,000 metres, is open in all directions, and appears to be an
extension of the areas currently being mined above in the Island
Gold Mine, but at higher grades (10.53 g/t undiluted versus 5.60
g/t diluted) and greater widths (4.5 metres versus 2.7 metres).
Additional details about the Island Gold Mine Property
The 59.0 km2 (5,900 hectares) Island Gold property is located 83
km northeast of Wawa, Ontario. Ore from the Island Gold Mine is
processed at Richmont's on-site mill, an 850 tonne per day rated
CIP facility. Since Island Gold began commercial production in
October 2007, Richmont has produced more than 225,000 ounces of
gold. Underground operations are accessed via a ramp, and mining
activities currently reach a vertical depth of approximately 400
metres.
About Richmont Mines Inc.
Richmont Mines has produced over 1,400,000 ounces of gold from
its operations in Quebec, Ontario and Newfoundland since beginning
production in 1991. The Corporation currently produces gold from
the Island Gold Mine in Ontario, and the Beaufor Mine, Monique Mine
and the W Zone Mine in Quebec. The Corporation is also advancing
the Island Gold Deep project beneath the Island Gold Mine in
Ontario. With over 20 years of experience in gold production,
exploration and development, and prudent financial management, the
Corporation is well-positioned to cost-effectively build its
Canadian reserve base and to successfully enter its next phase of
growth. Richmont routinely posts news and other important
information on its website (www.richmont-mines.com).
About Macquarie Bank Limited
MBL is a subsidiary of Macquarie Group, a global financial
services firm headquartered in Sydney, Australia. With offices
around the world, including Vancouver and Toronto, the Metals and
Energy Capital Division of MBL is a leading provider of debt,
equity and other forms of financing to the global resources
industry.
Forward-Looking Statements
This news release contains forward-looking statements that
include risks and uncertainties. When used in this news release,
the words "estimate", "project", "anticipate", "expect", "intend",
"believe", "hope", "may" and similar expressions, as well as
"will", "shall" and other indications of future tense, are intended
to identify forward-looking statements. The forward-looking
statements are based on current expectations and apply only as of
the date on which they were made.
The factors that could cause actual results to differ materially
from those indicated in such forward-looking statements include
changes in the prevailing price of gold, the Canadian-United States
exchange rate, grade of ore mined and unforeseen difficulties in
mining operations that could affect revenue and production costs.
Other factors such as uncertainties regarding government
regulations could also affect the results. Other risks may be set
out in Richmont Mines' Annual Information Form, Annual Reports and
periodic reports.
Cautionary note to US investors concerning resource
estimates
Information in this press release is intended to comply with the
requirements of the Toronto Stock Exchange and applicable Canadian
securities legislation, which differ in certain respects with the
rules and regulations promulgated under the United States
Securities Exchange Act of 1934, as amended ("Exchange Act"), as
promulgated by the SEC. The reserve and resource estimates in this
press release were prepared in accordance with Regulation 43-101
adopted by the Canadian Securities Administrators. The requirements
of Regulation 43-101 differ significantly from the requirements of
the United States Securities and Exchange Commission (the
"SEC").
U.S. Investors are urged to consider the disclosure in our
annual report on Form 20-F, File No. 001-14598, as filed with the
SEC under the Exchange Act, which may be obtained from us (without
cost) or from the SEC's web site: http://sec.gov/edgar.shtml.
Regulation 43-101
The geological data in this news release has been reviewed by
Mr. Daniel Adam, Geo., Ph.D., Vice-President, Exploration, an
employee of Richmont Mines Inc., and a qualified person as defined
by R 43-101.
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Investor Relations:Jennifer AitkenRICHMONT MINES INC.514
397-1410 ext.
101jaitken@richmont-mines.comwww.richmont-mines.com
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