TORONTO, Aug. 3, 2017 /CNW Telbec/ - Richmont Mines Inc.
(TSX: RIC) (NYSE: RIC) ("Richmont" or the "Corporation") announces
operating and financial results for the three and six months ended
June 30, 2017, driven by solid
results from the Island Gold Mine. The Corporation will host a
conference call and webcast on Thursday,
August 3, 2017, 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 31,249 ounces of gold
(35,040 ounces sold) for the quarter, primarily driven by
solid production from the Island Gold Mine of 26,110 ounces of
gold (29,534 ounces sold).
- Company-wide cash costs1 for the quarter were
$725 (US$539) per ounce, positively impacted by record
low cash costs from the Island Gold Mine of $580 (US$431) per
ounce.
- Company-wide All-In-Sustaining Costs1 ("AISC") of
$957 (US$711) per ounce, positively impacted by record
low AISC of $677 (US$503) per ounce from the Island Gold
Mine.
- The Island Gold Mine remains on-track to meet, or beat, annual
production and cost guidance.
- Second quarter revenues of $59.3
(US$44.1) million.
- Earnings of $10.5 (US$7.8) million, or $0.17 (US$0.12) per
share.
- Operating cash flow1 (before changes in non-cash
working capital) was $24.9
(US$18.5) million, or $0.39 (US$0.29) per
share.
- Net free cash flow1 was $19.2 (US$14.3)
million, or $0.30 (US$0.22) per share.
- Cash balance at the end of the quarter increased to
$95.9 (US$73.9) million, an increase of $20.7 (US$15.4)
million over the first quarter; working capital increased to
$81.4 (US$62.7) million.
- The results of the Expansion Case Preliminary Economic
Assessment ("PEA") were released during the second quarter,
supporting strong production growth of 22% at low industry cash
costs and a robust cash flow stream over an initial eight-year
Phase 1 period. The ramp-up is currently advancing and the mill is
anticipated to achieve the target run rate of 1,100 tonnes per day
in the latter part of 2018 once the expansion is completed.
- On July 27, 2017 the Corporation
provided an update from its strategic exploration drilling program
currently underway at the Island Gold Mine. Recent exploration
drilling has intersected high-grade, wide mineralization in the
down plunge extension of the main Island Gold deposit with Hole
MH8-4 intersecting 19.85 g/t gold over 8.4 metres (true width and
assays capped at 70 g/t gold).
"The positive results for the quarter were supported by another
consecutive quarter of solid production and record low cash costs
reported from our cornerstone Island Gold Mine. This strong
operational and cost performance drove robust cash flow streams
even during a period of accelerated investment in our strategic
expansion and exploration programs at Island Gold," stated
Renaud Adams, CEO. He continued,
"Company-wide, our focus remains on creating sustainable
shareholder value by driving ongoing operational and cost
efficiencies throughout the organization and maintaining our
disciplined approach to capital allocation. Over the balance of the
year, we will continue to focus on further unlocking the potential
of the Island Gold Mine as we position the operation to be one of
the lowest cost producers in the Americas."
__________________________________
1 Non-IFRS performance measure. Refer to the Non-IFRS
Performance Measures contained in the Q2 2017 Management's
Discussion and Analysis.
Financial
Highlights
|
|
|
|
|
|
(in thousands of
$, except per share amounts)
|
Quarter
ended
June 30,
2017
|
Quarter
ended
June 30,
2016
|
Six-Months
ended
June 30,
2017
|
Six-Months
ended
June 30,
2016
|
Revenue from mining
operations
|
59,278
|
40,618
|
105,740
|
93,252
|
Net earnings per
share, basic
|
0.17
|
0.04
|
0.25
|
0.19
|
Operating cash flow,
per share(1)
|
0.48
|
0.25
|
0.68
|
0.54
|
Operating cash flow (before non-cash changes
in working capital), per share(1)
|
0.39
|
0.19
|
0.65
|
0.55
|
Net free cash flow,
per share(1)
|
0.30
|
0.05
|
0.31
|
0.07
|
Revenue from mining
operations (US$)
|
44,073
|
31,521
|
79,236
|
70,104
|
Net earnings per
share, basic (US$)
|
0.12
|
0.03
|
0.19
|
0.14
|
Operating cash flow,
per share(1) (US$)
|
0.36
|
0.19
|
0.51
|
0.41
|
Operating cash flow (before non-cash changes
in working capital), per share(1) (US$)
|
0.29
|
0.15
|
0.49
|
0.41
|
Net free cash flow,
per share(1) (US$)
|
0.22
|
0.04
|
0.23
|
0.05
|
|
(1) Non-IFRS performance measure.
Refer to the Non-IFRS performance measures section contained in the
Q2 2017 Management's Discussion and Analysis.
|
Operational
Highlights
|
|
|
|
|
|
|
Quarter
ended
June 30,
2017
|
Quarter
ended
June 30,
2016
|
Six-Months
ended
June 30,
2017
|
Six-Months
ended
June 30,
2016
|
Gold produced
(oz)
|
31,249
|
23,320
|
60,650
|
55,689
|
Gold sold
(oz)
|
35,040
|
24,888
|
63,568
|
57,127
|
Average cash costs
per ounce ($)(1)
|
725
|
895
|
754
|
841
|
Average AISC per
ounce ($)(1)
|
957
|
1,322
|
1,031
|
1,193
|
Average realized gold
price per ounce ($)
|
1,688
|
1,628
|
1,659
|
1,629
|
Average cash costs
per ounce (US$)(1)
|
539
|
695
|
565
|
632
|
Average AISC per
ounce (US$)(1)
|
711
|
1,026
|
773
|
897
|
Average realized gold
price per ounce (US$)
|
1,255
|
1,263
|
1,243
|
1,225
|
|
(1) Non-IFRS performance measure.
Refer to the Non-IFRS performance measures section contained in the
Q2 2017 Management's Discussion and Analysis.
|
Island Gold Mine
Highlights
|
|
|
|
|
|
ISLAND GOLD
MINE
|
Quarter
ended
June 30,
2017
|
Quarter
ended
June 30,
2016
|
Six-Months
ended
June 30,
2017
|
Six-Months
ended
June 30,
2016
|
Gold produced
(oz)
|
26,110
|
18,617
|
49,882
|
45,206
|
Gold sold
(oz)
|
29,534
|
20,147
|
52,183
|
46,178
|
Cash costs per ounce
($)(1)
|
580
|
757
|
618
|
706
|
AISC per ounce
($)(1)
|
677
|
1,029
|
751
|
927
|
Realized gold price
per ounce ($)
|
1,686
|
1,627
|
1,659
|
1,627
|
Cash costs per ounce
(US$)(1)
|
431
|
588
|
463
|
531
|
AISC per ounce
(US$)(1)
|
503
|
799
|
563
|
697
|
Realized gold price
per ounce (US$)
|
1,254
|
1,263
|
1,243
|
1,223
|
Underground
tpd
|
1,148
|
911
|
1,084
|
882
|
Mill
tonnes
|
85,578
|
79,924
|
168,943
|
155,830
|
Mill tpd
|
940
|
878
|
933
|
856
|
Head grade (g/t
gold)
|
9.73
|
7.51
|
9.46
|
9.36
|
Recoveries
(%)
|
97.6
|
96.5
|
97.1
|
96.4
|
Sustaining costs
($000's)
|
2,877
|
5,480
|
6,949
|
10,193
|
Project costs
($000's)
|
5,970
|
7,946
|
11,899
|
14,933
|
Non-sustaining
exploration ($000's)
|
4,889
|
3,624
|
8,651
|
7,394
|
Sustaining costs
(US$000's)
|
2,139
|
4,253
|
5,207
|
7,663
|
Project costs
(US$000's)
|
4,439
|
6,166
|
8,916
|
11,226
|
Non-sustaining
exploration (US$000's)
|
3,635
|
2,812
|
6,483
|
5,559
|
|
(1)
Non-IFRS performance measure. Refer to the Non-IFRS performance
measures section contained in the Q2 2017 Management's
Discussion and Analysis.
|
Island Gold Mine Highlights
- Production for the quarter was 26,110 ounces of gold
(29,534 ounces sold). The mine is now well positioned to
achieve, or exceed, the high-end of annual production guidance for
the year.
- Record low cash costs for the quarter of $580 (US$431) per
ounce, significantly below annual cash cost guidance. The mine is
now well positioned to achieve, or beat, the low-end of annual cash
costs guidance for the year.
- AISC for the quarter were $677
(US$503) per ounce, significantly
below annual AISC guidance for the year.
- For the quarter, project capital, primarily related to the
expansion, was $6.0 (US$4.4) million and exploration expense was
$4.9 (US$3.6)
million.
- Mill head grade for the quarter was 9.73 g/t gold, partially
resulting from lower than planned dilution in development ore and
the impact of development in the high grade portions of the wider
sections of veins located on the 800 and 820 metre levels.
- Record underground mine and mill productivities for the
quarter, averaging 1,148 and 940 tonnes per day, respectively, with
lower-grade underground ore stockpiled for future processing, also
contributing to the 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 lower grade extensions of the third mining horizon
is expected to begin in the fourth quarter.
- The eastern portion of the main ramp system has achieved a
vertical depth of 860 metres as planned, allowing the
development of the western portion of the main ramp system to begin
during the second quarter.
- For the first six months, development of the 620 metre and 840
metre level exploration drifts advanced 250 metres and 80 metres,
respectively, supporting ongoing exploration and delineation
drilling both laterally to the east and at depth.
- During the quarter the transition from underground development
contractors to the internal workforce was initiated as planned,
this is expected to further reduce development costs over the
balance of the year.
- The results of the Expansion Case PEA were released during the
second quarter (see May 29, 2017
press release). The study represents another step in a multi-phased
approach to unlock the potential of the Island Gold Mine. The PEA
confirms the increase in underground mine and mill productivity to
1,100 tonnes per day supporting strong production growth of 22% at
low industry cash costs and a robust cash flow stream over an
eight-year Phase 1 period, for a low incremental capital cost of
$28.2 (US$20.9) million. The ramp-up to 1,100 tonnes
per day is currently advancing and the operation is anticipated to
achieve the target run rate in the latter part of 2018.
- On July 27, 2017 the Corporation
provided an update Island Gold Mine exploration drilling program
where recent exploration drilling intersected high-grade, wide
mineralization in the down plunge extension of the main Island Gold
deposit with Hole MH8-4 intersecting 19.85 g/t gold over 8.4 metres
(true width and assays capped at 70 g/t gold). Please refer to the
Corporation's July 27, 2017 press
release for additional information about the results from the
drilling program.
Beaufor Mine
Highlights
|
|
|
|
|
|
BEAUFOR
MINE
|
Quarter
ended
June 30,
2017
|
Quarter
ended
June 30,
2016
|
Six-Months
ended
June 30,
2017
|
Six-Months
ended
June 30,
2016
|
Gold produced
(oz)
|
5,139
|
4,703
|
10,768
|
9,318
|
Gold sold
(oz)
|
5,506
|
4,741
|
11,385
|
9,778
|
Cash costs per ounce
($)(1)
|
1,502
|
1,484
|
1,380
|
1,439
|
AISC per ounce
($)(1)
|
1,791
|
1,897
|
1,682
|
1,810
|
Realized gold price
per ounce ($)
|
1,697
|
1,635
|
1,660
|
1,642
|
Cash costs per ounce
(US$)(1)
|
1,117
|
1,152
|
1,034
|
1,082
|
AISC per ounce
(US$)(1)
|
1,332
|
1,473
|
1,260
|
1,361
|
Realized gold price
per ounce (US$)
|
1,262
|
1,269
|
1,244
|
1,234
|
Underground
tpd
|
339
|
286
|
346
|
304
|
Mill
tonnes
|
31,414
|
28,281
|
61,423
|
57,599
|
Head grade (g/t
gold)
|
5.21
|
5.27
|
5.60
|
5.11
|
Recoveries
(%)
|
97.7
|
98.1
|
97.4
|
98.4
|
Sustaining costs
($000's)
|
1,596
|
1,958
|
3,450
|
3,632
|
Non-sustaining
exploration costs ($000's)
|
214
|
-
|
354
|
-
|
Sustaining costs
(US$000's)
|
1,187
|
1,519
|
2,585
|
2,730
|
Non-sustaining
exploration costs (US$000's)
|
158
|
-
|
265
|
-
|
|
(1)
Non-IFRS performance measure. Refer to the Non-IFRS performance
measures section contained in the Q2 2017 Management's
Discussion and Analysis.
|
Beaufor Mine Highlights
- Production for the quarter was 5,139 ounces of gold
(5,506 ounces sold). Production in the quarter was lower than
anticipated, primarily due to lower grades mined as higher than
expected dilution was reported from one stope located in the Q
Zone.
- Cash costs of $1,502 (US$1,117) per ounce, higher than annual
guidance, are primarily related to lower production achieved for
the quarter.
- AISC for the quarter were $1,791
(US$1,332) per ounce.
- Exploration expense was $0.3
(US$0.2) million for the
quarter.
- Underground productivity was 339 tonnes per day. During the
quarter, the majority of mining activities were within the main Q
Zone, however beginning in Q3 mining flexibility is expected to
improve as additional ore will be sourced from new parallel
structures.
- During the quarter, the Corporation advanced the review of
strategic alternatives regarding the Beaufor Mine and Camflo
Mill.
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
www.richmont-mines.com or under the Corporation's profile on
www.sedar.com and with the Securities and Exchange Commission at
www.sec.gov/edgar.shtml.
2017 Second Quarter Results Webcast and Conference
Call
Senior management will discuss second quarter financial results
during a conference call and webcast scheduled on Thursday, August 3, 2017 at 8:30 a.m. E.T.
Webcast access
http://event.on24.com/r.htm?e=1464043&s=1&k=2332374CD8C93FEF484C8DE7AA03A11F
Telephone access
- Toll free (Canada &
U.S.): 1 888 390-0546
- Toronto local &
International: 1 416 764-8688
A replay will be available until August
17, 2017 by dialing 1 416 764-8677 (Toronto local and international) or
1 888 390-0541 (toll free in Canada and U.S.), using pass code 269710#. The
webcast and presentation slides will be archived on the
Corporation's website at www.richmont-mines.com.
Non-International Financial Reporting Standards ("IFRS")
Performance Measures
"Cash cost per ounce", "All-in
Sustaining Costs", "net free cash flow" and "operating cash flow"
are non-IFRS performance measures, 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, these measures are 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. For full disclosure and reconciliation of these measures,
refer to the Non-IFRS Performance Measures section contained in the
Q2 2017 Management's Discussion and Analysis.
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 more than 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 United States Securities
and Exchange Commission (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
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.
SOURCE Richmont Mines