TORONTO, September 11, 2017 /PRNewswire/ --
Richmont Mines Inc. (TSX - NYSE: RIC)
("Richmont" or the "Corporation") announces that it has entered
into a definitive agreement with Monarques Gold Corporation (TSXV:
MQR) ("Monarques"), pursuant to which Monarques will acquire
Richmont's Quebec based assets
(the "Quebec Assets") including the Beaufor Mine, the Camflo Mill
and the Wasamac development project as well as all other mineral
claims, mining leases and mining concessions located in the
province of Quebec (the
"Transaction").
"We are very pleased to announce this transaction with Monarques
as it provides our Beaufor and Camflo teams with the optimal
outcome. These assets will form an integral part of a Quebec-based company that is dedicated to
maintaining ongoing operations and unlocking their longer-term
potential. We would like to thank our team for their dedicated
efforts over the past number of years and we wish them all the best
and we look forward to sharing in their future successes," stated
Renaud Adams, President and CEO. He
continued, "Richmont shareholders will also benefit from this
transaction as our equity position and retained royalties provide
exposure to the potential upside from a portfolio of assets located
in the highly prospective Abitibi region."
Transaction Highlights
Concurrently with signing the definitive agreement for the
Transaction, Richmont subscribed for approximately C$2 million of subscription receipts from
Monarques at a price of $0.35 per
subscription receipt. Each subscription receipt will be
automatically exchanged for one common share (each, a "Subscription
Share") of Monarques upon the closing of the Transaction.
In addition, upon closing of the Transaction, Monarques will
issue additional common shares to Richmont such that Richmont will
hold approximately 19.9% of the undiluted issued and outstanding
common shares of Monarques, inclusive of the Subscription
Shares.
Monarques will grant Richmont the following Net Smelter Return
("NSR") royalties:
- 1.0% NSR on the Beaufor Mine (once post-closing production
reaches an aggregate of 100,000 ounces of gold)
- 1.0% NSR on Richmont's interest in the Camflo mineral
claims
- 1.5% NSR on the Wasamac property (buyback provision of
C$7.5 million for 0.5%)
Subject to regulatory approval, Monarques will assume
responsibility for all environmental and other liabilities related
to the Quebec Assets.
Richmont will enter into a lock-up agreement pursuant to which,
subject to certain exceptions, it will not sell, assign, encumber
or otherwise dispose of the Subscription Shares for a period of one
year from the closing of the Transaction.
The Transaction is expected to close on or about September 30, 2017, and is subject to customary
closing conditions.
Red Cloud Klondike Strike Inc. is acting as financial advisor
and Fasken Martineau is acting as legal counsel to Richmont.
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, receipt of regulatory approvals and risks related to
the conditions precedent of the Transaction 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.
Renaud Adams, President and CEO,
Phone: 416-368-0291 ext. 101; Anne
Day, Senior Vice-President, Investor Relations, Phone:
416-368-0291 ext. 105