TORONTO, August 8, 2016 /PRNewswire/ --
Richmont Mines Inc. (TSX: RIC) (NYSE MKT: RIC) ("Richmont" or
the "Corporation") announces operating and financial results for
the three and six months ended June 30, 2016, driven by solid
results from the Island Gold Mine. The Corporation will host a
conference call and webcast on Monday,
August 8, 2016, beginning at 8:30
a.m. Eastern Time (details below). (All amounts are
in Canadian dollars, unless otherwise indicated.)
Second Quarter Highlights
- Company-wide production was 23,320 ounces for the quarter, an
11% decrease over Q2 2015, primarily due to the depletion of the
Monique stockpile earlier this year. The Island Gold Mine produced
18,617 ounces of gold in the second quarter, a 24% increase over Q2
2015, driven by record underground and mill productivity of 911
tonnes per day and 878 tonnes per day, respectively, as well as a
positive reconciliation (mined vs. reserves) of 19%.
- Gold sold during the quarter was 24,888 ounces, a decrease of
10% over Q2 2015, at an average realized price of $1,628 (US$1,263)
per ounce.
- Revenues for the quarter were $40.6
million (US$31.5 million),
consistent with Q2 2015.
- Company-wide cash
costs[1] for the quarter were
$903 per ounce (US$701 per ounce), a decrease of 7% over Q2 2015
and below current guidance estimates. Cash costs for the Island
Gold Mine were $766 per ounce
(US$595 per ounce), a 20% decrease
over Q2 2015 and significantly below current guidance
estimates.
- Company-wide All-in-Sustaining
Costs[1] ("AISC") for the
quarter were $1,330 per ounce
(US$1,032 per ounce), in-line with Q2
2015 and within current guidance estimates. AISC for the Island
Gold Mine were $1,038 per ounce
(US$806 per ounce), a 21% decrease
over Q2 2015 and significantly below current guidance
estimates.
- Earnings were $2.7 million, 8%
lower than Q2 2015, or $0.04 per
share (US$2.1 million, or
US$0.03 per share).
- Operating cash flow (after changes in non-cash working capital)
of $14.9 million (US$11.5 million), or $0.25 per share (US$0.19 per share), both in-line with Q2
2015.
- Richmont ended the quarter with an increased cash balance of
$95.5 million (US$73.4 million), which includes net proceeds of
$29.1 million (US$22.7 million) related to a bought-deal
prospectus financing completed on June 7,
2016 and $3.0 million of net
free cash flow[1].
- Based on the success of the Phase 1 exploration program at the
Island Gold Mine, the Corporation launched an aggressive 18 to 24
month Phase 2 drilling program of up to 142,000 metres, with an
estimated 39,000 metres to be completed in the second half of
2016.
- Based on the strong operational and cost performance in the
first six months of the year, Richmont expects to meet, or exceed,
the high end of production guidance and the low end of cash cost
and AISC guidance. The Corporation will determine whether a
revision to 2016 guidance estimates is warranted following the
completion of a scheduled 3-week electrical upgrade at the Island
Gold mill and the commencement of stope mining in the Q Zone of the
Beaufor Mine, both expected in August. It is anticipated that any
update to guidance estimates would be released by
mid-September.
[1] Non-IFRS performance measure. Refer to the Non-IFRS
Performance Measures section contained in the Second Quarter
Management's Discussion and Analysis.
"Positive grade and tonne reconciliations, as well as record
mining and milling productivities at the Island Gold Mine have
driven better than expected production and cost performance in the
first half of the year. For the remainder of the year, we expect
Island Gold to continue its strong performance as well as see
improved performance from the Beaufor Mine as stope mining from the
higher grade Q Zone commences." stated Renaud Adams, CEO. He continued, "Our solid cash
position and cash flow generation is expected to fully fund both
our accelerated development activities and the Phase 2 exploration
program that are currently underway at the Island Gold Mine, both
of which could position this core asset for significant production
growth and mine life extension."
Financial Highlights
Six months Six months
(in thousands of $, except per Quarter ended Quarter ended ended ended
share amounts) June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015
Revenue from mining operations 40,618 40,552 93,252 77,762
Net earnings per share, basic 0.04 0.05 0.19 0.14
Operating cash flow, per share 0.25 0.25 0.54 0.43
Adj. operating cash flow, per
share(1)(2) 0.19 0.18 0.55 0.36
Net free cash flow, per
share(2) 0.05 0.13 0.07 0.13
Revenue from mining operations
(US$) 31,521 32,977 70,104 62,945
Net earnings per share, basic
(US$) 0.03 0.04 0.14 0.11
Operating cash flow, per share
(US$) 0.19 0.21 0.41 0.35
Adj. operating cash flow, per
share(1)(2) (US$) 0.15 0.15 0.41 0.29
Net free cash flow, per
share(2) (US$) 0.04 0.10 0.05 0.11
(1) Before changes in non-cash working capital.
(2) Non-IFRS performance measure. Refer to the Non-IFRS
performance measures section contained in the Second Quarter
Management's Discussion & Analysis.
Operational Highlights
Six months Six months
Quarter ended Quarter ended ended ended
June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015
Gold produced (oz) 23,320 26,314 55,689 52,173
Gold sold (oz) 24,888 27,566 57,127 52,357
Average cash costs per ounce
($)(1) 903 974 848 976
Average AISC per ounce
($)(1) 1,330 1,304 1,200 1,281
Average realized gold price
per ounce ($) 1,628 1,468 1,629 1,482
Average cash costs per ounce
(US$)(1) 701 792 637 790
Average AISC per ounce
(US$)(1) 1,032 1,060 902 1,037
Average realized gold price
per ounce (US$) 1,263 1,194 1,225 1,200
(1) Non-IFRS performance measure. Refer to the Non-IFRS
performance measures section contained in the Second Quarter
Management's Discussion and Analysis.
Island Gold Mine Highlights
Six months Six months
Quarter ended Quarter ended ended ended
ISLAND GOLD MINE June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015
Gold produced (oz) 18,617 14,997 45,206 25,761
Gold sold (oz) 20,147 15,703 46,178 24,626
Cash costs per ounce ($)(1) 766 954 714 1,120
AISC per ounce ($)(1) 1,038 1,307 935 1,501
Realized gold price per ounce
($) 1,627 1,470 1,627 1,482
Cash costs per ounce
(US$)(1) 595 776 537 906
AISC per ounce (US$)(1) 806 1,063 703 1,214
Realized gold price per ounce
(US$) 1,263 1,195 1,223 1,200
Underground tpd 911 759 882 656
Mill tonnes 79,924 71,584 155,830 115,369
Mill tpd 878 787 856 637
Head grade (g/t gold) 7.51 6.73 9.36 7.16
Recoveries (%) 96.5 96.8 96.4 97.0
Sustaining costs ($000's) 5,480 5,555 10,193 9,383
Project costs ($000's) 7,946 4,546 14,933 8,853
Non-sustaining exploration
($000's) 3,624 605 7,394 1,040
Sustaining costs (US$000's) 4,253 4,517 7,663 7,595
Project costs (US$000's) 6,166 3,697 11,226 7,166
Non-sustaining exploration
(US$000's) 2,812 492 5,559 842
(1) Non-IFRS performance measure. Refer to the Non-IFRS
performance measures section contained in the second quarter
Management's Discussion and Analysis.
- At the end of the quarter, the Island Gold Mine reported more
than 5.5 years (over 2 million man hours) of operations without
lost-time injury.
- The Island Gold Mine produced 18,617 ounces of gold (20,147
ounces sold), an increase of 24% over the same period in 2015. As
previously disclosed, the mine plan for the quarter was focused in
lower-grade areas of the mine where ore development activities
primarily occurred in the lower grade extensions of the second
mining horizon. Overall, the operation reported a higher than
planned mined grade of 7.51 g/t. The forward looking 2016 mine plan
continues to forecast development and stope mining at grades of
between 7.0 and 7.5 g/t gold, using the December 2015 resource model capped at 95 g/t
gold.
- Underground productivity averaged a record 911 tonnes per day
and mill processing averaged record productivity of 878 tonnes per
day. The higher underground productivity and grade realized in the
quarter were primarily the result of a positive reconciliation
(mined vs. reserves) of 19%, comprised of 8% on tonnes and 10% on
grade. As compared to Q1 2016, there was a negative impact on mined
grades as a result of mining wider zones as compared to reserves.
It is expected that over the coming quarters drilling patterns will
continue to be evaluated to best optimize grade and tonnage
profiles.
- The percentage of higher cost development ore versus total ore
tonnes mined was 48% for the quarter, as compared to a planned 40%.
It is expected that during the second half of the year the
percentage of development ore mined will decrease to planned levels
of 40% as stope mining commences in the second mining horizon.
- Cash costs for the quarter were $766 per ounce (US$595 per ounce), significantly below guidance
estimates and a 20% decrease over the Q2 2015.
- AISC per ounce decreased to $1,038 (US$806), a
decrease of 21% over Q2 2015. AISC for the quarter included
$5.4 million of sustaining capital,
comprised of $2.0 million of
underground development costs, $0.8
million in electrical upgrades, $0.8
million of delineation drilling, $0.3
million for capital lease payments and $1.5 million on other assets.
- As previously disclosed, a 3-week mill electrical upgrade was
launched in late July and remains on track for completion in
mid-August.
- During the quarter, the Corporation spent $7.9 million in non-sustaining project costs
related to the accelerated development of the deeper resources,
which included advancing both the main access ramp ($2.6 million) and the east ramp ($2.0 million), fixed assets ($2.6 million), and exploration & delineation
development drift on level 740 ($0.7
million).
- The recent final update on the Phase 1 exploration drilling
program demonstrated the potential to grow production and increase
mine life both laterally above the 860 metre level, as well as in
the vertical extension below the 1,000 metre level. Exploration
drilling costs of $3.6 million
(approximately 16,800 metres) were incurred in the quarter,
completing the Phase 1 drilling program. The success of the Phase 1
program supported the launch of an aggressive 18 to 24 month Phase
2 exploration program of up to 142,000 metres of drilling.
Beaufor Mine Highlights
Six months Six months
Quarter ended Quarter ended ended ended
BEAUFOR MINE June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015
Gold produced (oz) 4,703 7,082 9,318 15,045
Gold sold (oz) 4,741 6,888 9,778 15,719
Cash costs per ounce ($)(1) 1,486 1,062 1,441 973
AISC per ounce ($)(1) 1,899 1,259 1,812 1,113
Realized gold price per ounce
($) 1,635 1,455 1,642 1,474
Cash costs per ounce
(US$)(1) 1,154 864 1,083 788
AISC per ounce (US$)(1) 1,475 1,024 1,362 901
Realized gold price per ounce
(US$) 1,269 1,183 1,234 1,193
Underground tpd 286 360 304 364
Mill tonnes 28,281 36,914 57,599 66,665
Head grade (g/t gold) 5.27 6.05 5.11 7.12
Recoveries (%) 98.1 98.6 98.4 98.6
Sustaining costs ($000's) 1,958 1,358 3,632 2,198
Sustaining costs (US$000's) 1,519 1,104 2,730 1,779
(1) Non-IFRS performance measure. Refer to the Non-IFRS
performance measures section contained in the second quarter
Management's Discussion and Analysis.
- At the end of the quarter, the Beaufor Mine reported 2.5 years
of operations without lost-time injury.
- Production for the quarter was 4,703 ounces (4,741 ounces
sold), a 34% decrease over Q2 2015, primarily as a result of lower
than expected tonnes and grades mined in secondary Zones M-MF and
12.
- Development of the higher-grade Q Zone advanced during the
quarter with stope mining planned for the third quarter, which
should contribute to increased grade and ounces produced in the
second half of the year.
- Cash costs for the quarter were $1,486 per ounce (US$1,154 per ounce), a 40% increase over Q2 2015.
Cash costs are expected to decrease as stope mining in the higher
grade Q Zone begins in the third quarter.
- AISC per ounce for the second quarter were $1,899 (US$1,475),
a 51% increase over Q2 2015. Sustaining costs for the quarter were
$2.0 million, which included
$1.0 million for capitalized
underground mine development, $0.4
million for expensed exploration costs and $0.6 million of other sustaining costs. AISC are
expected to decrease as higher grades stope mining in the new Q
Zone begins in the second half of the year.
- Underground productivity at the Beaufor Mine averaged 286
tonnes per day, modestly lower than planned levels.
Second Quarter and Recent Corporate Highlights
- On June 7, 2016, Richmont
announced the completion of a bought-deal prospectus offering (the
"Offering"). Pursuant to the Offering, the Corporation issued
2,990,000 common shares at a price of $10.40 per common share for gross proceeds of
approximately $31 million that
included 390,000 common shares issued pursuant to the exercise in
full of the underwriter's over-allotment option.
- Effective Friday, June 17, 2016
Richmont was added to the S&P/TSX Global Mining Index and the
S&P/TSX Global Gold Index.
Upcoming News & Events
- Phase 2 exploration update (September
2016)
- Potential guidance update (mid-September)
- Updated Preliminary Economic Assessment and Technical Session
(Q4 2016)
Financial Statements and Management's Discussion and
Analysis
The financial statements and related Management's Discussion and
Analysis can be found on the Corporation's website
at http://www.richmont-mines.com or under the Company's
profile on http://www.sedar.com and with the Securities
and Exchange Commission at http://www.sec.gov/edgar.shtml.
Webcast and Conference Call
A webcast and conference call will be held
on Monday, August 8,
2016 starting at 8:30 a.m. Eastern Time. Senior management
will be on the call to discuss the results.
Conference Call Access
- International & Toronto:
1-416-764-8688
- Canada & U.S. Toll Free:
1-888-390-0546
Please ask to be placed into the Richmont Mines 2016 Second
Quarter Results Conference Call.
Conference Call Live Webcast
The conference call will be broadcast live on the Internet via
webcast. To access the webcast, please follow this
link: http://event.on24.com/r.htm?e=1221836&s=1&k=4BF022AEDB00EC80C28A6E55008FCE7C
Archive Call Access
If you are unable to attend the conference call, a replay will
be available until 08:00 a.m. Eastern
Time, Monday, August 15, 2016
by dialing the appropriate number below:
- International & Toronto:
1-416-764-8677 Passcode: 882550#
- Canada & U.S. Toll Free:
1-888-390-0541 Passcode: 882550#
Archive Webcast
The webcast will be archived for 90 days. To access the archived
webcast, visit the Corporation's website
at http://www.richmont-mines.com or follow this
link: http://event.on24.com/r.htm?e=1221836&s=1&k=4BF022AEDB00EC80C28A6E55008FCE7C
About Richmont Mines Inc.
Richmont Mines has produced over 1.6 million ounces of gold from
its operations in Quebec,
Ontario and Newfoundland since beginning production. The
Corporation currently produces gold from the Island Gold Mine in
Ontario, and the Beaufor Mine in
Quebec. The Corporation is also
advancing development of the significant high-grade resource
extension at depth of the Island Gold Mine in Ontario. With 35 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.
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. Except as may be required by law,
the Corporation undertakes no obligation and disclaims any
responsibility to publicly update or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise.
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. The forward-looking information contained herein
is made as of the date of this news release.
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 Regulation 43-101.
Renaud Adams, President and CEO,
Phone: +1-416-368-0291 ext. 101; Anne
Day, Vice-President, Investor Relations, Phone:
+1-416-368-0291 ext. 105