TORONTO, Oct. 13, 2016 /CNW/ - Richmont Mines Inc. (TSX:
RIC) (NYSE MKT: RIC) ("Richmont" or the "Corporation"),
reports that the Island Gold Mine delivered another in-line quarter
of operational results and remains on track to meet, or exceed, its
positively revised annual guidance. During the quarter, a
successful mine and mill electrical upgrade was completed as
planned at the Island Gold Mine, which would support potential
future production growth opportunities that are currently under
review as part of the 2016 Preliminary Economic Assessment ("PEA")
update. Overall, the Corporation remains on target to achieve
company-wide revised guidance. (All amounts are in Canadian
dollars unless otherwise indicated).
HIGHLIGHTS FOR THE THIRD QUARTER
- The Island Gold Mine produced 14,031 ounces of gold (13,673
ounces sold), in-line with plan, as lower production was forecasted
for the quarter due to required downtime related to the scheduled
mine and mill electrical upgrade. The Island Gold Mine remains on
track to meet, or exceed, revised production guidance for the
year.
- Company-wide production was 18,856 ounces of gold (17,774
ounces sold) for the quarter, which positions the Corporation to
achieve revised company-wide production guidance for the year.
- Cash costs1 for the Island Gold Mine were
$958 per ounce (US$734 per ounce), in-line with plan, as lower
production was anticipated for the quarter due to the 25-day mill
shutdown to complete the electrical upgrade. Cash costs for the
Island Gold Mine remain on track to meet, or exceed, revised
guidance for the year.
- Company-wide cash costs for the quarter were $1,063 per ounce (US$815 per ounce), in-line with revised
guidance.
- Revenues for the quarter were $31.2
million (US$23.9 million), at
an average realized gold price of $1,754 per ounce (US$1,344 per ounce).
- Richmont ended the quarter with a reduced cash balance of
$78.9 million (US$60.1 million), in-line with plan due to lower
production and higher cash costs related to the 25-day mill
shutdown as well as higher capital investment requirements as
anticipated for the quarter.
- On September 12, 2016, the
Corporation announced positive revisions to its 2016 operational
guidance driven by significantly better than expected performance
from the Island Gold Mine in the first six months of the year.
"The third quarter was a pivotal quarter for the Island Gold
Mine as a strategic electrical upgrade was successfully completed,
which now positions this core asset for potential future production
growth and improved reliability. Following the upgrade, mill and
underground mine productivities have returned to target levels and
we expect to deliver improved performance and higher grades during
the fourth quarter as we begin to develop in ore in the
higher-grade third mining horizon." stated Renaud Adams, CEO. He continued, "At the Beaufor
Mine, after a difficult transition to the Q Zone, we expect to
deliver higher production and lower costs during the fourth quarter
as we increase the proportion of stope mining in the higher grade
Q Zone and process the 6,000 tonnes of broken ore that
remained in inventory at the end of the quarter."
___________________________
1 Refer to the Non-IFRS Performance Measures disclosure
presented at the end of this press release.
THIRD QUARTER OPERATIONAL HIGHLIGHTS
Third quarter operational highlights for the Island Gold and
Beaufor mines are provided in the tables below:
Production Highlights
|
|
|
|
|
|
|
|
|
|
Q2
15
|
Q3
15
|
Q4
15
|
Q1
16
|
Q2
16
|
Q3
2016
|
9-Months 2016
|
2016
Revised Guidance
|
Gold Produced
(oz)
|
|
|
|
|
|
|
|
|
|
Island Gold
Mine
|
14,997
|
15,076
|
14,203(1)
|
26,589
|
18,617
|
14,031(3)
|
59,237
|
75,000-80,000
|
|
Beaufor
Mine
|
7,082
|
5,714
|
5,652
|
4,615
|
4,703
|
4,825
|
14,143
|
23,000-26,000(4)
|
|
Monique
Mine
|
4,235
|
2,688
|
2,525
|
1,165(2)
|
-
|
-
|
1,165
|
Total Produced
(oz)
|
26,314
|
23,478
|
22,380
|
32,369
|
23,320
|
18,856
|
74,545
|
98,000-106,000
|
(1) Q4 2015 production
includes a 3 week underground mine shutdown.
(2) Processing of the
remaining stockpile pad at the depleted Monique Mine was completed
at the end of January 2016.
(3) Q3 2016 production
includes a 16-day underground mine shutdown and a 25-day mill
shutdown.
(4) Guidance includes
production from the Beaufor and Monique mines.
|
Cash Cost Highlights
|
|
|
|
|
|
|
|
|
|
Q2
15
|
Q3
15
|
Q4
15
|
Q1
16
|
Q2
16
|
Q3
16
|
9-Months 2016
|
2016 Revised
Guidance
|
Cash Costs
($)(1)
|
|
|
|
|
|
|
|
|
|
Island Gold
Mine
|
$954
|
$890
|
$1,026
|
$674
|
$766
|
$958
|
$770
|
$800-$840
|
|
Beaufor
Mine
|
$1,062
|
$974
|
$1,084
|
$1,398
|
$1,486
|
$1,411
|
$1,433
|
$1,150-$1,300(3)
|
|
Monique
Mine
|
$914
|
$1,005
|
$977
|
$1,185
|
-
|
-
|
$1,185
|
Total Cash Costs
($)(1)
|
$974
|
$926
|
$1,034
|
$806
|
$903
|
$1,063
|
$899
|
$885-$945
|
Cash Costs
(US$)(1)(2)
|
|
|
|
|
|
|
|
|
|
Island Gold
Mine
|
$776
|
$680
|
$768
|
$491
|
$595
|
$734
|
$583
|
$610-$640
|
|
Beaufor
Mine
|
$864
|
$744
|
$812
|
$1,018
|
$1,154
|
$1,082
|
$1,084
|
$875-$1,000
|
|
Monique
Mine
|
$743
|
$768
|
$731
|
$863
|
-
|
-
|
$897
|
Total Cash Costs
(US$)(1)
|
$792
|
$707
|
$774
|
$587
|
$701
|
$815
|
$680
|
$675-$720
|
(1) Refer to the Non-IFRS
Performance Measures disclosure presented at the end of this press
release.
(2) The revised guidance
assumes an exchange rate of 1.33 for January to June and 1.30 for
July to December.
(3) Guidance includes cash
costs from the Beaufor and Monique mines.
|
Operational Highlights
|
|
|
|
|
|
|
|
Q2
15
|
Q3
15
|
Q4
15
|
Q1
16
|
Q2
16
|
Q3
16
|
|
Island Gold
Mine
|
Underground
tpd
|
759
|
669
|
657(1)
|
853
|
911
|
735(2)
|
Mill tpd
|
787
|
722
|
656(1)
|
834
|
878
|
640(2)
|
Mill head grade
(g/t)
|
6.73
|
7.27
|
7.62
|
11.31
|
7.51
|
7.70
|
Recoveries
(%)
|
96.8
|
97.1
|
96.0
|
96.3
|
96.5
|
96.4
|
|
Beaufor
Mine
|
Underground
tpd
|
360
|
338
|
306
|
323
|
286
|
282
|
Mill head grade
(g/t)
|
6.05
|
5.93
|
6.30
|
4.96
|
5.27
|
5.62
|
Recoveries
(%)
|
98.6
|
98.6
|
98.4
|
98.7
|
98.1
|
97.3
|
(1) Q4 2015 underground
productivity includes a 3 week mine shutdown and a 2 week mill
shutdown.
(2) Q3 2016 productivity
includes a 16-day underground mine shutdown and a 25-day mill
shutdown.
|
Island Gold Third Quarter Highlights
- Production for the quarter was 14,031 ounces of gold (13,673
ounces sold), in-line with plan, which forecasted lower production
as part of the planned electrical upgrade. The operation remains on
track to meet, or exceed, revised production guidance.
- Cash costs for the quarter were $958 per ounce (US$734 per ounce), in-line with higher costs that
were anticipated for the quarter due to the lower production
estimated for the quarter. Cash costs remain on track to meet, or
exceed, revised guidance.
- A mine and mill electrical upgrade was successfully completed
as planned during the quarter. The upgrade included a 25-day mill
shutdown, which has been incorporated into the revised guidance.
The mine and mill upgrade would support the potential production
growth scenarios that are currently under review as part of the
2016 PEA update.
- During the quarter, the mine reported higher than the planned
mill head grade of 7.70 g/t gold, resulting from stope mining
activities in the first mining horizon and development in ore in
the lower grade extensions of the second mining horizon. During the
fourth quarter, it is expected that stope mining will begin in the
eastern and western extensions of the second mining horizon and
development in ore will begin in the 760 and 780 metre levels,
located in the third mining horizon.
- During the quarter, underground mine productivity averaged 735
tonnes per day, including 16 days of downtime related to the
electrical upgrade, or 890 tonnes per day excluding the
downtime.
- Mill productivity averaged 640 tonnes per day for the quarter,
including 25 days of downtime related to the electrical upgrade, or
878 tonnes per day excluding the downtime.
- The development of the main ramp continued and reached a
vertical depth of 810 metres at the end of the quarter. It is
expected that the ramp development will reach the bottom of the
higher grade third mining horizon at the 860 metre level in the
first quarter of 2017.
- Delineation drilling to date in the expanded 2016 PEA area
demonstrates the potential to grow our near-mine reserve inventory
and identify new resource blocks located within the 2016 PEA area.
These ounces could extend mine life above the 1,000 metre level and
be incorporated into the near-term mine plan utilizing current
infrastructure. Initial results from the recently launched 18 to 24
month Phase 2 exploration program continue to show the potential to
increase resources laterally along strike, primarily to the east,
and at depth below the 1,000 metre level.
Beaufor Third Quarter Highlights
- Production for the quarter increased slightly over the prior
quarter to 4,825 ounces of gold (4,101 ounces sold) at an average
grade of 5.62 g/t. Production in the quarter was impacted by low
availability of underground mobile equipment, which resulted in
approximately 6,000 tonnes of broken ore at 7.0 g/t gold remaining
in inventory and unavailable for processing. It is expected that
this broken ore will be processed in the fourth quarter.
- As a result of the low availability of mobile equipment during
the quarter, the operation prioritized its efforts on waste
development to better position stope mining operations in the
higher grade Q Zone in the fourth quarter.
- Cash costs for the quarter were $1,411 per ounce (US$1,082 per ounce), consistent with the prior
quarter.
- Grades and underground productivity are expected to increase in
the fourth quarter as a greater proportion of stope mining is
planned from the higher grade Q Zone, which should contribute to
higher production and lower costs.
Upcoming News
- 2016 Preliminary Economic Assessment Update (late October 2016)
- Q3 2016 Financial Results and Conference Call (November 10, 2016)
Non-International Financial Reporting Standards ("IFRS")
Performance Measures
In this press release, the term "cash costs per ounce" is used,
which is a non-IFRS performance measure, and may not be comparable
to similar measures presented by other companies. The Corporation
believes that, in addition to conventional measures prepared in
accordance with IFRS, the Corporation and certain investors use
this information to evaluate the Corporation's performance.
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 IFRS. "Cash
costs per ounce" is a common performance measure in the gold mining
industry, but does not have any standardized definition. The
Corporation reports cash cost per ounce based on ounces sold. Cash
costs include mine site operating costs, administration and
royalties but are exclusive of depreciation, accretion expense,
capital expenditures and exploration and project evaluation
costs.
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",
"objective" 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 or
regulation, 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,
without limitation, changes in the prevailing price of gold, the
Canadian-United States exchange rate, grade of ore mined and
unforeseen difficulties in mining operations and mine development
that could affect revenue and production costs and future
production. Other factors such as uncertainties regarding
government regulations could also affect the results. Other risks
are set out in Richmont's 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 requirements of
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects ("NI 43-101") adopted by the Canadian Securities
Administrators 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.
National Instrument 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 NI 43-101.
SOURCE Richmont Mines