Island Gold Mine Exceeds Revised Annual
Operational Guidance
TORONTO, Jan. 17, 2017 /CNW Telbec/ - Richmont Mines Inc.
(TSX: RIC) (NYSE MKT: RIC) ("Richmont" or the "Corporation"),
reports record company-wide production of 104,050 ounces of gold,
at cash costs of $908 per ounce
(US$685 per ounce), within the
positively revised operational guidance announced on September 12, 2016. The strong operational
performance was supported by record annual production of 83,323
ounces of gold from the Island Gold Mine, a 51% increase over 2015,
at cash costs of $779 per ounce
(US$587 per ounce), exceeding the
revised production and cash cost guidance for the year. (All
amounts are in Canadian dollars unless otherwise
indicated.)
FOURTH QUARTER AND ANNUAL HIGHLIGHTS:
- Company-wide production was 29,505 ounces of gold (27,759
ounces sold) for the quarter, which contributed to record annual
production of 104,050 ounces of gold (102,660 ounces sold),
achieving the high end of revised production guidance for the year.
The solid quarterly and annual performance was driven by production
from the cornerstone Island Gold Mine of 24,086 ounces of gold
(22,422 ounces sold) for the quarter and 83,323 ounces of gold
(82,273 ounces sold) for the year, a 51% increase over 2015,
exceeding revised production guidance for the year.
- Company-wide cash costs1 for the quarter were
$952 per ounce (US$714 per ounce) and $908 per ounce (US$685 per ounce) for 2016, in-line with revised
cash cost guidance for the year.
- Cash costs for the Island Gold Mine were $826 per ounce (US$619 per ounce) for the quarter and
$779 per ounce (US$587 per ounce) for 2016, below revised
guidance for the year and a 24% reduction over 2015.
- Richmont reported fourth quarter revenues of $44.2 million ($US33.1
million) and record annual revenues of $168.7 million (US$127.3
million).
- Richmont ended the quarter with a strong cash balance of
approximately $75.1 million
(US$55.9 million) that is expected to
fully support the Corporation's organic growth strategy.
- During the quarter, Richmont received the required permit
amendments that allow for ore mining and processing rate increases
to an average of 1,100 tonnes per day as contemplated in the
Preliminary Economic Assessment ("PEA") that is currently under
review.
"The Island Gold Mine has once again delivered another
consecutive year of production growth and improved productivity
that has exceeded expectations. This solid performance from Island
Gold has contributed to the best ever production results in
Richmont's history," commented Renaud
Adams, President and CEO. "We begin 2017 with the Island
Gold mine and mill operating at, or above, the increased base case
productivity level of 900 tonnes per day, positioning the operation
for another year of strong operational performance. We will also
continue to evaluate a potential, fully permitted expansion to
1,100 tonnes per day that requires minimal capital investment. We
are looking forward to another year of creating value for our
shareholders by continuing our disciplined focus on quality
production that drives positive cash flow streams."
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_______________________________
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|
1 Refer to
the Non-IFRS Performance Measures disclosure presented at the end
of this press release.
|
Fourth quarter operational highlights for the Island Gold and
Beaufor Mines are provided in the tables below:
|
Production
Highlights
|
|
|
|
|
|
|
|
|
|
|
Q3
15
|
Q4
15
|
Q1
16
|
Q2
16
|
Q3
16
|
Q4
16
|
2016
|
2016 Revised
Guidance
|
|
Gold Produced
(oz)
|
|
|
|
|
|
|
|
|
|
Island Gold
Mine
|
15,076
|
14,203(1)
|
26,589
|
18,617
|
14,031(3)
|
24,086
|
83,323
|
75,000-80,000
|
|
Beaufor
Mine
|
5,714
|
5,652
|
4,615
|
4,703
|
4,825
|
5,419
|
20,727(4)
|
23,000-26,000(4)
|
|
Monique
Mine
|
2,688
|
2,525
|
1,165(2)
|
-
|
-
|
-
|
|
Total Produced
(oz)
|
23,478
|
22,380
|
32,369
|
23,320
|
18,856
|
29,505
|
104,050
|
98,000-106,000
|
|
(1)
|
Q4 2015 production
includes a 3 week underground mine shutdown.
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|
(2)
|
Processing of the
remaining stockpile pad at the depleted Monique Mine was completed
at the end of January 2016.
|
|
(3)
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Q3 2016 production
includes a 16-day underground mine shutdown and a 25-day mill
shutdown.
|
|
(4)
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Includes production
from the Beaufor and Monique mines.
|
|
Cash Cost
Highlights
|
|
|
|
|
|
|
|
|
|
|
Q3
15
|
Q4
15
|
Q1
16
|
Q2
16
|
Q3
16
|
Q4
16
|
2016
|
2016 Revised
Guidance
|
|
Cash Costs
($)(1)
|
|
|
|
|
|
|
|
|
|
Island Gold
Mine
|
$883
|
$1,019
|
$667
|
$757
|
$947
|
$826
|
$779
|
$800-$840
|
|
Beaufor
Mine
|
$972
|
$1,081
|
$1,396
|
$1,484
|
$1,408
|
$1,480
|
$1,429(3)
|
$1,150-$1,300(3)
|
|
Monique
Mine
|
$1,002
|
$974
|
$1,182
|
-
|
-
|
-
|
|
Total Cash Costs
($)(1)
|
$921
|
$1,028
|
$800
|
$895
|
$1,054
|
$952
|
$908
|
$885-$945
|
|
Cash Costs
(US$)(1)(2)
|
|
|
|
|
|
|
|
|
|
Island Gold
Mine
|
$675
|
$763
|
$486
|
$588
|
$726
|
$619
|
$587
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$610-$640
|
|
Beaufor
Mine
|
$742
|
$810
|
$1,017
|
$1,152
|
$1,080
|
$1,110
|
$1,079(3)
|
$875-$1,000
|
|
Monique
Mine
|
$766
|
$729
|
$861
|
-
|
-
|
-
|
|
Total Cash Costs
(US$)(1)(2)
|
$703
|
$770
|
$583
|
$695
|
$808
|
$714
|
$685
|
$675-$720
|
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(1)
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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)
|
Includes cash costs
from the Beaufor and Monique mines.
|
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Operational
Highlights
|
|
|
|
|
|
|
|
|
Q3
15
|
Q4
15
|
Q1
16
|
Q2
16
|
Q3
16
|
Q4
16
|
|
Island Gold
Mine
|
|
Underground
tpd
|
669
|
657(1)
|
853
|
911
|
735(2)
|
977
|
|
Mill tpd
|
722
|
656(1)
|
834
|
878
|
640(2)
|
903
|
|
Mill head grade
(g/t)
|
7.27
|
7.62
|
11.31
|
7.51
|
7.70
|
9.31
|
|
Beaufor
Mine
|
|
Underground
tpd
|
338
|
306
|
323
|
286
|
282
|
302
|
|
Mill head grade
(g/t)
|
5.93
|
6.30
|
4.96
|
5.27
|
5.62
|
6.16
|
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(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 Mine Highlights
- Production for the quarter was 24,086 ounces of gold (22,422
ounces sold) and 83,323 ounces of gold (82,273 ounces sold) for the
year, a 51% increase over 2015, exceeding revised production
guidance for the year.
- Cash costs for the quarter were $826 per ounce (US$619 per ounce). Cash costs for 2016 were
$779 per ounce (US$587 per ounce), below revised guidance for the
year and a reduction of 24% over 2015.
- Underground mine and mill productivities for the quarter
averaged 977 and 903 tonnes per day, respectively, in-line with the
2017 production scenario considered in the PEA that is currently
under review.
- During the quarter, long-hole stope mining began in the eastern
and western extensions of the second mining horizon and development
in ore began in the higher-grade third mining horizon.
- The development of the main ramp continued and reached a
vertical depth of 846 metres at the end of the quarter. It is
expected that the ramp will reach the bottom of the higher-grade
third mining horizon at the 860 metre level in the first quarter of
2017.
- Mill head grade for the quarter was 9.31 g/t, an increase over
the prior two quarters, primarily due to the increased contribution
of higher-grade ore from the third mining horizon and a positive
grade reconciliation of 10% (mined vs. December 31, 2015 Mineral Reserves).
- During the quarter, Richmont received the required permit
amendments that allow for ore mining and processing rate increase
to an average of 1,100 tonnes per day as contemplated in the PEA
that is currently under review.
Beaufor Mine Highlights
- Production for the quarter increased over prior quarters to
5,419 ounces of gold (5,337 ounces sold) at cash costs of
$1,480 per ounce (US$1,110 per ounce). Underground productivity
increased over the prior two quarters to an average of 302 tonnes
per day at a higher mill head grade of 6.16 g/t (8.78 g/t in
December) as a result of improved mobile equipment availability and
increased stope mining activities in the higher-grade Q Zone. For
2016, the mine produced 19,562 ounces of gold (19,216 ounces sold)
at cash costs of $1,444 per ounce
(US$1,090 per ounce).
- Grades and underground productivity are expected to continue to
increase in future quarters as a greater proportion of stope mining
is planned from the higher grade Q Zone and mobile equipment
capacity continues to be improved.
- Annual production for the Quebec Division, which includes the
Beaufor and Monique Mines, was
20,727 ounces of gold at cash costs of $1,429 per ounce (US$1,079 per ounce), underperforming revised
guidance for the year.
Upcoming News
- 2016 Reserve and Resource Update (early February)
- 2017 Operational Outlook (early February)
- Q4 and Annual Financial Results (February 21)
- Exploration Update (Q1 2017)
- PEA Results (Q2 2017)
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, royalties
and by-product credits but are exclusive of depreciation, accretion
expense, interests on capital leases, capital expenditures and
exploration and project evaluation costs.
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.
SOURCE Richmont Mines