TORONTO, Sept. 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.
SOURCE Richmont Mines