TORONTO, November 10, 2016 /PRNewswire/ --
Richmont Mines Inc. (TSX: RIC) (NYSE
MKT: RIC) ("Richmont" or the "Corporation") announces operating and
financial results for the three and nine months ended September 30, 2016, driven by solid results from
the Island Gold Mine. The Corporation will host a conference call
and webcast on Thursday, November 10,
2016, beginning at 8:30 a.m. Eastern
Time (details below). (All amounts are in Canadian
dollars, unless otherwise indicated.)
Third Quarter and Recent Highlights
- Company-wide production was 18,856 ounces of gold for the
quarter, a 20% decrease over the same quarter of 2015, primarily as
the result of the depletion of the Monique stockpile earlier this
year and the required downtime related to the scheduled 25-day mill
electrical upgrade at the Island Gold Mine. The Island Gold Mine
produced 14,031 ounces of gold in the third quarter, a 7% decrease
over Q3 2015, in-line with expectations as lower production was
anticipated due to the electrical upgrade.
- Revenues for the quarter were $31.2
million (US$23.9 million), an
8% decrease over Q3 2015.
- Company-wide cash costs[1] for
the quarter were $1,063 per ounce
(US$815 per ounce), a 15% increase
over Q3 2015. Cash costs for the Island Gold Mine were $958 per ounce (US$734 per ounce), an 8% increase over Q3 2015,
in-line with expectations, as lower production was anticipated, as
discussed above.
- Company-wide All-in-Sustaining
Costs[1] ("AISC") for the quarter
were $1,604 per ounce (US$1,230 per ounce), a 22% increase over Q3 2015.
AISC for the Island Gold Mine were $1,330 per ounce (US$1,019 per ounce), a 5% increase over Q3 2015,
in-line with expectations, as lower production was anticipated, as
described above.
- Earnings for the quarter were $0.2
million (US$0.2 million), a
$3.1 million (US$2.4 million) decrease over Q3 2015, primarily
due to increased exploration expense. On a per share basis,
earnings for the quarter were nil per share (nil in US$ per
share).
- Operating cash flow (before changes in non-cash working
capital[1]) for the quarter was
$5.8 million (US$4.5 million), or $0.09 per share (US$0.07 per share), a decrease of $5.8 million (US$4.5
million) over Q3 2015 due to lower production and higher
costs, as described above.
- 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 a positive revision to its 2016 operational
guidance estimates driven by significantly better than expected
performance from the Island Gold Mine in the first six months of
the year.
- On October 12, 2016, the
Corporation reported continued positive results from delineation
drilling at the Island Gold Mine located within the expanded
Expansion Case Preliminary Economic Assessment (the "Expansion Case
PEA") area as well as initial results from the strategic Phase 2
exploration drilling program.
- On November 1, 2016, the
Corporation provided a status update on the Expansion Case PEA
currently underway at the Island Gold Mine that will consider a
potential ore mining and productivity increase to 1,100 tonnes per
day beginning in 2018, with minimal capital investment
required.
__________________________
[1] Non-IFRS performance measure. Refer to the Non-IFRS Performance Measures section
contained in the Third Quarter Management's Discussion and Analysis.
"The third quarter was a pivotal quarter for Island Gold that
positions this cornerstone asset for the next stage of its growth
strategy. Following the successful completion of the electrical
upgrade, the mine and mill have consistently averaged base case
productivity of 900 tonnes per day and are well positioned to
support the 1,100 tonnes per day scenario that was outlined in the
recent Expansion Case PEA update. Results from our near-mine
drilling programs have been very encouraging, which could support
the evaluation of a further expansion scenario to 1,200 tonnes per
day as we grow our resource inventory and extend mine life," stated
Renaud Adams, CEO. He continued, "As
we move into the final quarter of the year, we remain on track to
achieve our company-wide revised guidance and the Island Gold Mine
is well positioned to meet, or exceed, revised guidance as
production in the fourth quarter is expected to increase. With a
strong cash position and operating cash flow profile that is
supported by a disciplined management team, Richmont is well
positioned for continued shareholder value creation."
Financial Highlights
Quarter ended Quarter ended
(in thousands of $, except per share amounts) Sept. 30, 2016 Sept. 30, 2015
Revenue from mining operations 31,244 34,107
Net earnings per share, basic - 0.06
Operating cash flow, per share 0.05 0.20
Adj. operating cash flow, per share[1][2] 0.09 0.20
Net free cash flow, per share[2] (0.26) (0.02)
Revenue from mining operations (US$) 23,942 26,058
Net earnings per share, basic (US$) - 0.04
Operating cash flow, per share (US$) 0.04 0.15
Adj. operating cash flow, per share[1][2] (US$) 0.07 0.15
Net free cash flow, per share[2] (US$) (0.20) (0.01)
Nine months Nine months
ended ended
(in thousands of $, except per share amounts) Sept. 30, 2016 Sept. 30, 2015
Revenue from mining operations 124,496 111,869
Net earnings per share, basic 0.19 0.19
Operating cash flow, per share 0.59 0.63
Adj. operating cash flow, per share[1][2] 0.64 0.56
Net free cash flow, per share[2] (0.20) 0.11
Revenue from mining operations (US$) 94,187 88,785
Net earnings per share, basic (US$) 0.14 0.15
Operating cash flow, per share (US$) 0.44 0.50
Adj. operating cash flow, per share[1][2] (US$) 0.48 0.45
Net free cash flow, per share[2] (US$) (0.15) 0.09
[1] Before changes in non-cash working capital.
[2] Non-IFRS performance measure. Refer to the Non-IFRS
performance measures section contained in the Third
Quarter Management's Discussion & Analysis.
Operational Highlights
Quarter
ended
Sept.
30, Quarter ended
2016 Sept. 30, 2015
Gold produced (oz) 18,856 23,478
Gold sold (oz) 17,774 22,962
Average cash costs per ounce ($)[1] 1,063 926
Average AISC per ounce ($)[1] 1,604 1,311
Average realized gold price per ounce ($) 1,754 1,482
Average cash costs per ounce (US$)[1] 815 707
Average AISC per ounce (US$)[1] 1,230 1,001
Average realized gold price per ounce (US$) 1,344 1,132
Nine months Nine months
ended ended
Sept. 30, 2016 Sept. 30, 2015
Gold produced (oz) 74,545 75,651
Gold sold (oz) 74,901 75,319
Average cash costs per ounce ($)[1] 899 961
Average AISC per ounce ($)[1] 1,296 1,290
Average realized gold price per ounce ($) 1,659 1,482
Average cash costs per ounce (US$)[1] 680 763
Average AISC per ounce (US$)[1] 980 1,024
Average realized gold price per ounce (US$) 1,255 1,176
[1] Non-IFRS performance measure. Refer to the
Non-IFRS performance measures section contained
in the Third Quarter Management's Discussion and
Analysis.
Island Gold Mine Highlights
Nine months Nine months
Quarter ended Quarter ended ended ended
ISLAND GOLD MINE Sept. 30, 2016 Sept. 30, 2015 Sept. 30, 2016 Sept. 30, 2015
Gold produced (oz) 14,031 15,076 59,237 40,837
Gold sold (oz) 13,673 14,233 59,851 38,859
Cash costs per ounce
($)[1] 958 890 770 1,036
AISC per ounce ($)[1] 1,330 1,267 1,025 1,416
Realized gold price per
ounce ($) 1,756 1,485 1,657 1,483
Cash costs per ounce
(US$)[1] 734 680 583 823
AISC per ounce (US$)[1] 1,019 968 776 1,125
Realized gold price per
ounce (US$) 1,346 1,135 1,254 1,177
Underground tpd 735[2] 669 833[2] 660
Mill tonnes 58,836 66,416 214,666 181,785
Mill tpd 640[2] 722 783[2] 666
Head grade (g/t gold) 7.70 7.27 8.91 7.20
Recoveries (%) 96.3 97.1 96.4 97.0
Sustaining costs ($000's) 5,090 5,371 15,283 14,754
Project costs ($000's) 13,457 7,539 28,390 16,389
Non-sustaining exploration
($000's) 3,509 695 10,903 1,735
Sustaining costs
(US$000's) 3,900 4,103 11,562 11,710
Project costs (US$000's) 10,312 5,760 21,478 13,007
Non-sustaining exploration
(US$000's) 2,689 531 8,249 1,377
[1] Non-IFRS performance measure. Refer to the Non-IFRS
performance measures section contained in the Third
[2] Quarter Management's Discussion and Analysis.
Quarter and Nine months ended Sept. 30, 2016
productivity includes a 16-day underground mine shutdown
and a 25-day mill shutdown.
- At the end of the quarter, the Island Gold Mine reported more
than 5.8 years (over 2 million man hours) of operations without
lost-time injury.
- Production for the quarter was 14,031 ounces of gold (13,673
ounces sold), a 7% decrease over Q3 2015. Production achieved in
the quarter was in-line with expectations, 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), an 8% increase over Q3 2015.
Cash costs were in-line with expectations due to the lower
production estimated for the quarter. Cash costs remain on track to
meet, or exceed, revised guidance.
- AISC for the quarter were $1,330
per ounce (US$1,019 per ounce), a 5%
increase over Q3 2015. AISC were in-line with expectations due to
the lower production estimated for the quarter. AISC 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 and a 16-day mine shutdown, which have been incorporated
into the revised annual guidance. The mine and mill upgrade could
support the potential production growth scenario that is being
considered as part of the Expanded Case PEA.
- During the quarter, the mine reported a mill head grade of 7.70
g/t gold, higher than anticipated, 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, stope mining will begin in the eastern and western
extensions of the second mining horizon and development in ore will
begin in the third mining horizon.
- During the quarter, underground mine productivity averaged 890
tonnes per day, excluding the 16 days of downtime related to the
electrical upgrade.
- During the quarter, the underground mine achieved a positive
reconciliation (mined vs. reserves) of 19% and 15% on grades and
tonnes, respectively, or 37% on ounces, as compared with the
December 31, 2015 Mineral
Reserves.
- The percentage of higher cost development ore versus total ore
mined was 44% for the quarter (49% YTD), as compared to a planned
40%.
- Mill productivity averaged 878 tonnes per day, excluding the 25
days of downtime related to the electrical upgrade.
- 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.
- A status update was recently released on the Expansion Case
PEA, which is currently underway that will consider a potential
productivity increase to 1,100 tonnes per day beginning in 2018,
with minimal capital investment required. A further upside scenario
of up to 1,200 tonnes per day will also be considered as additional
resources are included in the mine plan.
- Drilling to date in the Expansion Case PEA area demonstrates
the potential to grow the near-mine reserve inventory and identify
potential new resource blocks located within the Expansion Case 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 Mine Highlights
Nine months Nine months
Quarter ended Quarter ended ended ended
BEAUFOR MINE Sept. 30, 2016 Sept. 30, 2015 Sept. 30, 2016 Sept. 30, 2015
Gold produced (oz) 4,825 5,714 14,143 20,759
Gold sold (oz) 4,101 5,919 13,879 21,638
Cash costs per ounce
($)[1] 1,411 974 1,433 974
AISC per ounce ($)[1] 1,893 1,225 1,837 1,144
Realized gold price per
ounce ($) 1,751 1,481 1,674 1,476
Cash costs per ounce
(US$)[1] 1,082 744 1,084 773
AISC per ounce (US$)[1] 1,451 936 1,390 908
Realized gold price per
ounce (US$) 1,342 1,131 1,266 1,171
Underground tpd 282 338 297 355
Mill tonnes 27,426 30,437 85,025 97,102
Head grade (g/t gold) 5.62 5.93 5.28 6.74
Recoveries (%) 97.3 98.6 98.0 98.6
Sustaining costs ($000's) 1,979 1,484 5,611 3,683
Sustaining costs
(US$000's) 1,516 1,134 4,245 2,923
[1] Non-IFRS performance measure. Refer to the Non-IFRS
performance measures section contained in the Third
Quarter Management's Discussion and Analysis.
- Production for the quarter was 4,825 ounces of gold (4,101
ounces sold), a 16% decrease over Q3 2015. 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), a 45% increase over Q3 2015,
mainly as a result of lower production in the quarter.
- AISC for the quarter were $1,893
per ounce (US$1,451 per ounce), a 55%
increase over Q3 2015, mainly as a result of lower production and
higher sustaining costs in the 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 & Events
- Phase 2 exploration update (Q1 2017)
- December 31, 2016 Mineral Reserve
and Resource estimates (mid-February
2017)
- 2017 Operational Outlook and Guidance (February 2017)
- Expansion Case PEA (H1 2017)
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 Corporation'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 Thursday, November 10, 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 Third
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=1282095&s=1&k=F4C4E0F118C1317E32F3869F267FBFF0
Archive Call Access
If you are unable to attend the conference call, a replay will
be available until 08:30 a.m. Eastern
Time, Thursday, November 24,
2016 by dialing the appropriate number below:
- International & Toronto: 1-416-764-8677 Passcode: 435976#
- Canada & U.S. Toll Free: 1-888-390-0541 Passcode: 435976#
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=1282095&s=1&k=F4C4E0F118C1317E32F3869F267FBFF0
About Richmont Mines Inc.
Richmont Mines 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
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 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.
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