TORONTO, April 13, 2017 /PRNewswire/ --
Richmont Mines Inc. (TSX: RIC) (NYSE: RIC) ("Richmont" or
the "Corporation"), reports first quarter company-wide production
of 29,401 ounces of gold, at cash costs1 of
$791 (US$598) per ounce. The strong operational
performance was supported by another consecutive quarter of solid
production from the Island Gold Mine of 23,772 ounces of gold, at
cash costs of $668 (US$504) per ounce, a 19% decrease over the prior
quarter. Overall, Richmont is well positioned to achieve annual
production and cash cost guidance for the year. (All
amounts are in Canadian dollars unless otherwise
indicated.)
FIRST QUARTER ANNUAL HIGHLIGHTS:
- Company-wide production was 29,401 ounces of gold (28,528
ounces sold) for the quarter, driven by production from the
cornerstone Island Gold Mine of 23,772 ounces of gold (22,649
ounces sold).
- Company-wide cash costs for the quarter were $791 (US$598) per
ounce. Cash costs from the Island Gold Mine are below current
guidance levels at $668 (US$504) per ounce, a 19% reduction over the
prior quarter.
- The Island Gold Mine reported record underground mine and mill
productivities for the quarter, averaging 1,019 and 926 tonnes per
day, respectively.
- Revenues for the quarter were $46.5 (US$35.1)
million.
- As of December 31, 2016, Mineral
Reserves at the cornerstone Island Gold Mine increased by 34% (net
of depletion) to 752,200 ounces of gold, at an increased grade of
9.17 g/t gold. Inferred Resources increased by 30% to 995,700
ounces of gold at an increased grade of 10.18 g/t, at an average
discovery cost of less than $35
(US$26) per ounce.
- Recent exploration drilling results identified new high-grade
mineralization located approximately 800 metres east of the main
Island Gold deposit. Hole GD-640-05 intersected 20.6 g/t gold over
11.3 metres (core length), demonstrating the significant potential
for near-term and continued resource growth. Additionally, early
results from delineation drilling completed within the Expansion
Case Preliminary Economic Assessment (Expansion Case PEA) area,
demonstrate the significant potential to further expand reserves at
higher than current average grades.
- Effective, March 15, 2017,
Richmont appointed Mr. Robert J.
Chausse as Chief Financial Officer, strengthening the senior
management team.
"The Island Gold Mine has delivered another quarter of solid
production as well as lower cash costs, confirming the potential of
this operation as we continue to transform the mine into one of the
lowest cost underground gold producers in the Americas. The
Expansion Case PEA is nearing completion and we remain confident
that we will issue a positive report that will support the 1,100
tonnes per day expansion scenario while achieving our overall low
cost objective," commented Renaud
Adams, President and CEO. "Along with the strong operational
performance achieved during the quarter, we continue to unlock the
potential of the Island Gold Mine through our strategic drilling
program. Initial delineation drilling results demonstrate the
potential for short-term reserve growth at higher grades within the
main deposit. Recent exploration drilling has also shown the
potential of the deposit to the east of the main deposit area where
new high-grade mineralization was identified close to existing
infrastructure that could also provide additional expansion
opportunities."
____________________________
1 Refer to the Non-IFRS Performance
Measures disclosure presented at the end of this press release.
First 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 Q1 17 2017 Guidance
Gold Produced
(oz)
Island
Gold
Mine 15,076 14,203(1) 26,589 18,617 14,031(3) 24,086 23,772 87,000-93,000
Beaufor
Mine 5,714 5,652 4,615 4,703 4,825 5,419 5,629 23,000-27,000
Monique 1,165(2
Mine 2,688 2,525 ) - - - - -
Total
Produced (oz) 23,478 22,380 32,369 23,320 18,856 29,505 29,401 110,000-120,000
(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.
Cash Cost Highlights
Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 2017 Guidance
Cash Costs
($)(1)
Island
Gold
Mine $883 $1,019 $667 $757 $947 $826 $668 $715-$765
Beaufor
Mine $972 $1,081 $1,396 $1,484 $1,408 $1,480 $1,265 $1,265-$1,320
Monique
Mine $1,002 $974 $1,182 - - - - -
Total Cash
Costs ($)(1) $921 $1,028 $800 $895 $1,054 $952 $791 $835-$885
Cash Costs
(US$)(1)
Island
Gold
Mine $675 $763 $486 $588 $726 $619 $504 $550-$590(2)
Beaufor
Mine $742 $810 $1,017 $1,152 $1,080 $1,110 $956 $975-$1,015(2)
Monique
Mine $766 $729 $861 - - - - -
Total Cash
Costs (US$)(1) $703 $770 $583 $695 $808 $714 $598 $640-$680(2)
(1) Refer to the Non-IFRS Performance Measures disclosure presented at the
end of this press release.
(2) Assuming an exchange rate of 1.30 Canadian dollars to 1.0 US dollar.
Operational Highlights
Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17
Island Gold Mine
Underground tpd 669 657(1) 853 911 735(2) 977 1,019
Mill tpd 722 656(1) 834 878 640(2) 903 926
Mill head grade
(g/t) 7.27 7.62 11.31 7.51 7.70 9.31 9.18
Beaufor Mine
Underground tpd 338 306 323 286 282 302 354
Mill head grade
(g/t) 5.93 6.30 4.96 5.27 5.62 6.16 6.0
(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 23,772 ounces of gold (22,649
ounces sold). The mine is now well positioned to achieve the
high-end of production guidance for the year of 87,000-93,000
ounces.
- Cash costs for the quarter were $668 (US$504) per
ounce, below guidance for the year and a 19% reduction over prior
quarter. The operating unit costs for the quarter were $181 (US$137) per
tonne milled, in-line with the 2017 mine plan.
- Mill head grade for the quarter was 9.18 g/t gold, representing
an inline grade reconciliation (mined vs. December 31, 2016 Mineral Reserves) for the
quarter. The forward-looking 2017 mine plan continues to forecast a
mill head grade of approximately 8.90 g/t gold.
- Record underground mine and mill productivities for the
quarter, averaging 1,019 and 926 tonnes per day, respectively, with
lower-grade underground ore stockpiled for future processing,
resulting in an improved overall mill head grade for the
quarter.
- During the quarter, long-hole stope mining continued in the
first and second mining horizons and development in ore was
advanced as planned in the higher-grade third mining horizon.
Stoping in the third mining horizon is expected to begin in the
fourth quarter.
- The development of the main ramp continued and reached a
vertical depth of 860 metres at the end of the quarter, which is
in-line with the 2017 development plan and as contemplated in the
upcoming Expansion Case PEA.
- As of December 31, 2016, Mineral
Reserves at the cornerstone Island Gold Mine increased by 34% (net
of depletion) to 752,200 ounces of gold, at an increased grade of
9.17 g/t gold. Inferred Resources increased by 30% to 995,700
ounces of gold at an increased grade of 10.18 g/t, and at an
average discovery cost of less than $35 (US$26) per
ounce. (see press release dated January
31, 2017 and the technical report titled "Technical Report
on the Mineral Reserve and Resource Estimate as of December 31, 2016 for the Island Gold Mine" dated
March 17, 2017).
- Recent exploration drilling results identified new high-grade
mineralization located approximately 800 metres east of the main
Island Gold deposit. Hole GD-640-05 intersected 20.6 g/t gold over
11.3 metres (core length), demonstrating significant potential for
near-term and continued resource growth. Additionally, early
results from delineation drilling completed within the Expansion
Case PEA area, indicates the significant potential to further
expand our reserves at higher than current average grades. (see
press release dated March 30,
2017).
- Expansion Case PEA: The Corporation is well
advanced to release the results of the Expansion Case PEA during
the second quarter, as previously disclosed. The study considers
the most cost and capital effective plan to mine the portion of the
mineral resources that is located within the main area of interest
over four mining horizons, to a maximum depth of 1,000 metres below
surface, using current mine infrastructure. The Corporation remains
focused on transforming the high-grade Island Gold Mine into one of
the lowest cost underground gold producers in the Americas. Recent
achievements include:
- The integration of the December 31,
2016 Mineral Reserves and Resources into the 1,100 tonnes
per day mine plan has been completed.
- The required permit amendments that allow for an ore mining and
processing increase to 1,100 tonnes per day were received in
December.
- The accelerated development of the underground ramp system has
advanced as planned.
- Engineering and identification of the main equipment required
for the mill expansion is well underway and expected capital
requirements for the expanded milling capacity remains below the
$15.0 million, as previously
disclosed.
- The 2017 mine plan and the Expansion Case PEA are focused on
optimizing cash flow generation that is capable to fully fund
current and future production as well as all strategic exploration
programs.
Beaufor Mine Highlights
- Production for the quarter was 5,629 ounces of gold (5,879
ounces sold), in-line with previously disclosed plans to ramp-up
production and achieve increased production in the second half of
the year.
- Cash costs of $1,265 (US$956) per ounce achieved during the quarter, a
significant reduction of 15% over the prior quarter and in-line
with 2017 plans to return the mine to free cash flow generation
status in the first half of the year.
- Underground productivity increased to 354 tonnes per day (403
tonnes per day in March). During the quarter the majority of the
mining activities were transitioned into the new Q Zone and
additional haulage and mucking mobile equipment were commissioned.
Underground productivity and operating costs are expected to
continue to improve over the balance of the year.
- The Corporation is also considering other strategic
alternatives regarding the Beaufor Mine and Camflo Mill.
Upcoming News
- Q1 Financial Results (May 4)
- Annual and Special Meeting of Shareholders (May 4)
- Expansion Case 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. Refer to the
Corporation's 2016 MD&A for a reconciliation of cash costs to
cost of sales.
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 40-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 scientific or technical information 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.
Contact:
Renaud Adams
President and CEO
Phone: 416-368-0291 ext. 101
Anne Day
Senior Vice-President
Investor Relations
Phone: 416-368-0291 ext. 105