RICHMONT
MINES REPORTS STRONG REVENUE AND NET INCOME
IN
THE FIRST QUARTER OF 2009
� Precious metals revenue up 32% and ounces sold
increase 11%
� First quarter earnings of $1.4 million, or $0.05 per
share, $1 million above prior year
�
Exploration expenses of $1.2
million
�
$27.4 million in cash and cash
equivalents at March 31, 2009
MONTREAL,
Quebec, Canada, May 7, 2009 - Richmont Mines Inc.
(TSX/NYSE Amex: RIC), a gold exploration, development and production company
with operations in Canada, today announced financial and operational results
for its first quarter ended March 31, 2009. Financial results are based on
Canadian GAAP and dollars are reported in Canadian currency, unless otherwise
noted.
Revenue for the first quarter
of 2009 was $19.9 million, a 33% increase compared with $15.0 million in
the first quarter of 2008. In
the 2009 quarter, 16,614 ounces
of gold were sold at an average price of US$908 (CAN$1,131) per ounce, compared
with 14,995 ounces
of gold sold in the same period the prior year at an average price of US$888
(CAN$947) per ounce. Total precious metals revenue was up $4.6 million, or
32%, to $18.8 million in the first quarter of 2009 compared with
$14.2 million in the first quarter of 2008, driven by the increase in
ounces sold at a 19% higher average selling price per ounce in Canadian dollars.
Operating costs, including
royalties, for the first quarter of 2009 were $13.5 million compared with
$10.4 million in the same period the prior year reflecting increased
production. The average cash cost per ounce of gold sold was relatively flat at
US$653 (CAN$813) in the first quarter compared with US$654 (CAN$697) in the
first quarter of 2008 reflecting the impact of a stronger US dollar.
Exploration and project
evaluation costs increased $0.1 million to $1.2 million in the first
quarter of 2009, as the Company continued its efforts to grow its reserves.
Exploration costs were approximately $0.8 million at the Beaufor Mine, $0.4 million at the Island Gold Mine,
$0.2 million at the Francoeur property and about
$0.1 million on other properties during the current quarter. The Company
recorded exploration tax credits of $0.3 million during the quarter.
Net earnings for the first
quarter of 2009 were $1.4 million, or $0.05 per share, compared with net
earnings of $0.4 million, or $0.02 per share, in the first quarter of 2008.
Strong
Cash Position and Solid Capital Structure
At March
31, 2009, cash and cash equivalents were $27.4 million, a
$1.4 million increase from $26.0 million at December
31, 2008. The cash
equivalents included $12.4 million of Canadian bankers
acceptance and bank discount notes with high level credit ratings and
$15.0 million in cash deposited in a major Canadian chartered bank. During
the quarter, $1.6 million was invested in property, plant and equipment,
the majority of which was at the Island Gold Mine. Richmont
Mines has no long-term debt obligations, working capital of $28.3 million
and only 26.1 million shares outstanding.
Island Gold Mine
|
Three months ended
|
|
March 31,
|
March 31,
|
|
2009
|
2008
|
|
|
|
Tonnes
|
51,028
|
31,688
|
Head grade (g/t)
|
6.85
|
7.23
|
Gold recovery (%)
|
94.39
|
94.95
|
Recovered grade (g/t)
|
6.47
|
6.86
|
Ounces sold
|
10,613
|
6,992
|
Cash cost per
ounce (US$)
|
671
|
759
|
|
|
|
Investment in
property, plant and equipment (thousands
of CAN$)
|
1,291
|
475
|
Exploration
expenses (thousands of CAN$)
|
368
|
312
|
|
|
|
Differed
development metres
|
437
|
118
|
|
|
|
Diamond drilling (metres)
|
|
|
|
Definition
|
3,566
|
1,088
|
|
Exploration
|
-
|
3,393
|
During the first quarter of
2009, 51,028 tonnes of ore from the Island Gold Mine were processed at an
average recovered grade of 6.47 g/t, and 10,613
ounces of gold were sold at an average price of US$911
(CAN$1,135) per ounce. For the same period last year, 31,688 tonnes of ore were processed at an average recovered grade of
6.86 g/t, and 6,992 ounces
of gold were sold at an average price of US$879 (CAN$937) per ounce. Although the
increase in tonnes processed, the mining costs were higher because of major
repairs at the mill that resulted in several loss days of operations. The mill
upgrade is advancing well as daily output reached peaks in excess of 700 tonnes
per day. The cash cost was US$671 (CAN$836) during the quarter as compared with
a cash cost of US$759 (CAN$809) for the same quarter the prior year. The higher
cash cost in Canadian dollars is mainly due to a lower recovered grade of 6%,
which is mainly attributable to lower grades in the development ore, and to
increased definition drilling of 3,566
metres in 2009 compared with 1,088
metres in 2008.
Mr. Martin
Rivard, President and CEO of Richmont Mines, commented, �During the first quarter we accelerated
our development activities at Island Gold and the ore from the development zone
was of a lower grade than we had previously experienced, resulting in an
increase in cash cost per ounce in CAN$. We are confident that the grade levels
will improve as the development activities progress. The mine is now producing
near our projected level of around 600 tonnes per day and we anticipate strong
production from this mine in 2009 and beyond and our focus is to significantly
reduce operating costs.�
Beaufor Mine
|
Three months ended
|
|
March 31,
|
March 31,
|
|
2009
|
2008
|
|
|
|
Tonnes
|
29,463
|
30,697
|
Head grade (g/t)
|
6.47
|
8.28
|
Gold recovery (%)
|
97.86
|
97.98
|
Recovered grade (g/t)
|
6.34
|
8.11
|
Ounces sold
|
6,001
|
8,003
|
Cash cost per
ounce (US$)
|
621
|
562
|
|
|
|
Investment in property, plant and equipment (thousands of CAN$)
|
209
|
80
|
Exploration
expenses (thousands of CAN$)
|
806
|
550
|
|
|
|
Differed
development metres
|
91
|
-
|
|
|
|
Diamond drilling (metres)
|
|
|
|
Definition
|
4,119
|
1,749
|
|
Exploration
|
5,976
|
5,857
|
During the first quarter of
2009, 29,463 tonnes of ore from the Beaufor Mine were
processed at an average recovered grade of 6.34 g/t, and 6,001
ounces of gold were sold at an average price of US$902
(CAN$1,124) per ounce. In the same quarter the prior year, 30,697 tonnes of ore
were processed at an average recovered grade of 8.11 g/t, and 8,003
ounces of gold were sold at an average price of US$896
(CAN$955) per ounce. The cash cost of production in the first quarter of 2009
was US$621 (CAN$773) per ounce sold, up from US$562 (CAN$599) in the first
quarter of 2008, due to increased definition drilling, higher mining costs and
a lower grade level of ore recovered during the current period. During the current quarter, Richmont processed 27,869 tonnes of custom milling ore at
the Camflo Mill while there was no custom milling at Camflo Mill in the 2008 first quarter.
Mr. Rivard
continued, �We are increasing our efforts to reduce our operating costs at Beaufor Mine while maintaining a significant exploration
program of approximately 45,000
metres of drilling for 2009.�
Francoeur
Richmont has decided to
move forward with exploration activities at the Francoeur
Project in Quebec, where it
previously mined 345,000 ounces
of gold, which were mainly processed at the Camflo
Mill, prior to ceasing operations in 2001 when the relatively low price of gold
at the time could not justify additional capital expenditures. The mine was
subsequently flooded in 2003. The Company began preparation work to start
dewatering activities of the underground openings and will upgrade the existing
hoist and related infrastructure. This work is expected to be completed over an
eight month period. A surface drilling program consisting of approximately 8,000
metres is planned for this summer with the objective of
increasing known resources. Richmont�s 2009 budget
for dewatering and drilling program is approximately CAN$4.5 million. The
Company also plans to file a technical report (NI 43-101) during the third
quarter of 2009.
Appointment
After the passing of Mr. Jean-Guy
Rivard, founder and Chairman of Richmont Mines, on March
28, 2009, the Company appointed Mr. Denis Arcand
as Interim Chairman of the Board of Directors until the next Annual and Special
General Meeting of the Company. Mr. Arcand was Vice
President of the Board of Directors and has been a Director of Richmont Mines since September 1995.
Furthermore, Ms. Sandra
Cauchon, lawyer of Richmont Mines, has been appointed as secretary of the
Company on February 24, 2009,
in replacement of Ms. Stephanie Lee.
Outlook
Mr. Rivard
concluded, �We will increase our efforts on production cost reductions at both
operating mines while maximising our exploration efforts. We are pleased to
initiate exploration and development work at our past producing Francoeur Mine, which fits well into our growth plan. We
will also continue to evaluate potential acquisition and partnership
opportunities to fill our pipeline with additional reserves and resources.�
Annual and Special General
Meeting
Richmont Mines�Annual and Special General Meeting will be held on Thursday,
May 14, 2009, at Suite 2500,
Salle Lafleur A, 1000 De la
Gaucheti�re West Street,
Montreal, Quebec, at 9:00 a.m.
The annual meeting presentation will also be available on Richmont
Mines� Web site.
Other Upcoming Events
Mr. Martin
Rivard, President and CEO,
will present at the New York Society of
Security Analysts� 2009 Metals & Mining conference at
the NYSSA New York City offices, 1177 Avenue of the Americas,
beginning at 3:40 p.m. on Wednesday,
June 3, 2009. A copy of Mr. Rivard�s
presentation will be available on Richmont Mines� Web
site, in the Investor Relations section, on the day of the presentation.
Martin Rivard
President and Chief Executive Officer
About Richmont Mines Inc.
Richmont produces gold from
its operations in Canada
and is focused on building its reserves in North America,
and has extensive experience in gold exploration, development and mining. Since
it began production in 1991, Richmont has produced
more than one million ounces of gold from its holdings in Quebec,
Ontario and Newfoundland.
Richmont�s strategy is to cost-effectively develop
and exploit its gold mining assets, acquire properties, or develop partnerships
to expand its reserve base. Richmont routinely posts
news and other important information on its Web site at: www.richmont-mines.com.
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� 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.
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.
Cautionary Note to U.S.
Investors Concerning Resource Estimates
The resource estimate in this news release is prepared in accordance
with Regulation 43-101 adopted by the Canadian Securities Administrators. The
requirements of R 43-101 differ significantly from the requirements of the
United States Securities and Exchange Commission (the �SEC�).� In this news release, we use the terms
�measured�, �indicated� and �inferred� resources. Although these terms are
recognized and required in Canada,
the SEC does not recognize them. The SEC permits U.S.
mining companies, in their filings with the SEC, to disclose only those mineral
deposits that constitute �reserves�. Under United
States standards, mineralization may not be
classified as a reserve unless the determination has been made that the
mineralization could be economically and legally extracted at the time the
determination is made. United States
investors should not assume that all or any portion of a measured or indicated
resource will ever be converted into �reserves�. Further, �inferred resources�
have a great amount of uncertainty as to their existence and whether they can
be mined economically or legally, and United
States investors should not assume that
�inferred resources� exist or can be legally or economically mined, or that
they will ever be upgraded to a higher category.
For more information, please contact Investor
Relations:
Investor Relations,
Kei
Advisors LLC���������������������������������� Ticker symbol: RIC
FINANCIAL STATEMENTS FOLLOW.
EXPLORATION PROPERTIES
|
Three months ended
|
|
March 31,
|
March 31,
|
|
2009
|
2008
|
|
$
|
$
|
|
|
|
Exploration costs
� Mines
|
|
|
|
Beaufor Mine
|
806
|
550
|
|
Island Gold Mine
|
368
|
312
|
|
|
|
|
1,174
|
862
|
|
|
|
Exploration costs
� Other properties
|
|
|
|
Francoeur / Wasamac properties
|
192
|
40
|
|
Golden Wonder
property
|
-
|
474
|
|
Other properties
|
18
|
8
|
|
Project evaluation
|
101
|
50
|
|
|
|
|
|
|
1,485
|
1,434
|
|
|
|
|
Exploration tax
credits
|
(267)
|
(353)
|
|
|
|
|
|
|
1,218
|
1,081
|
FINANCIAL DATA
|
Three-month period
|
|
ended March 31,
|
CAN$
|
2009
|
2008
|
|
|
|
Results
(in thousands of $)
|
|
|
Revenue
|
19,873
|
14,961
|
Net earnings
|
1,433
|
406
|
Cash flow from
operations
|
3,063
|
2,542
|
|
|
|
Results
per share ($)
|
|
|
Net earnings basic
and diluted
|
0.05
|
0.02
|
|
|
|
Basic weighted
average number of common
|
|
|
|
shares outstanding
(thousands)
|
26,105
|
24,053
|
|
|
|
Average selling
price of gold per ounce
|
1,131
|
947
|
Average selling
price of gold per ounce (US$)
|
908
|
888
|
|
|
|
|
|
March 31,
|
December
31,
|
|
2009
|
2008
|
|
|
|
Financial
position (in thousands of $)
|
|
|
Total assets
|
84,467
|
82,881
|
Working capital
|
28,317
|
26,753
|
Long-term debt
|
-
|
-
|
sales and production data
|
Three-month period ended March 31,
|
|
|
Ounces of gold
|
Cash cost
|
|
Year
|
Sales
|
Production
|
(per ounce sold)
|
|
US$
|
CAN$
|
Island
Gold Mine
|
2009
|
10,613
|
9,506
|
671
|
836
|
|
2008
|
6,992
|
8,008
|
759
|
809
|
Beaufor
Mine
|
2009
|
6,001
|
4,851
|
621
|
773
|
|
2008
|
8,003
|
10,385
|
562
|
599
|
Total
|
2009
|
16,614
|
14,357
|
653
|
813
|
|
2008
|
14,995
|
18,393
|
654
|
697
|
Average
exchange rate used for 2008: US$1 = CAN$1.0660
2009 estimated exchange rate:
US$1 = CAN$1.2456
consolidated
statements of EARNINGS
|
(in thousands of Canadian dollars)
|
(Unaudited)
|
Three months ended
|
|
March 31,
|
March 31,
|
|
2009
|
2008
|
|
$
|
$
|
|
|
|
REVENUE
|
|
|
|
Precious metals
|
18,790
|
14,194
|
|
Other
|
1,083
|
767
|
|
|
|
|
19,873
|
14,961
|
|
|
|
EXPENSES
|
|
|
|
Operating costs
|
13,086
|
10,097
|
|
Royalties
|
418
|
347
|
|
Custom milling
|
717
|
-
|
|
Administration
|
889
|
827
|
|
Exploration and
project evaluation
|
1,218
|
1,081
|
|
Accretion expense - asset retirement
obligations
|
69
|
43
|
|
Depreciation and
depletion
|
1,355
|
1,205
|
|
Loss (gain) on
disposal of mining assets
|
(2)
|
20
|
|
|
|
|
17,750
|
13,620
|
|
|
|
EARNINGS BEFORE
OTHER ITEMS
|
2,123
|
1,341
|
|
|
|
MINING AND INCOME
TAXES
|
589
|
723
|
|
|
|
|
1,534
|
618
|
|
|
|
MINORITY INTEREST
|
101
|
212
|
|
|
|
NET EARNINGS
|
1,433
|
406
|
|
|
|
NET EARNINGS PER SHARE
|
|
|
|
basic and diluted
|
0.05
|
0.02
|
|
|
|
BASIC AND DILUTED WEIGHTED
AVERAGE NUMBER OF
|
|
|
|
COMMON SHARES
OUTSTANDING (thousands)
|
26,105
|
24,053
|
See accompanying notes to consolidated financial statements available on
SEDAR (www.sedar.com).
CONSOLIDATED BALANCE SHEETS
|
(in thousands of Canadian dollars)
|
|
March 31,
|
December
31,
|
|
2009
|
2008
|
|
$
|
$
|
|
(Unaudited)
|
(Audited)
|
|
|
|
ASSETS
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
Cash and cash
equivalents
|
27,443
|
26,021
|
|
Restricted
cash
|
104
|
116
|
|
Short-term
investments
|
152
|
121
|
|
Accounts
receivable
|
876
|
986
|
|
Mining and income
taxes receivable
|
1,669
|
1,586
|
|
Inventories
|
5,648
|
6,012
|
|
|
|
|
35,892
|
34,842
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT
|
48,575
|
48,039
|
|
|
|
|
84,467
|
82,881
|
LIABILITIES
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts payable and accrued
charges
|
6,851
|
6,912
|
|
Mining and income taxes
payable
|
724
|
1,177
|
|
|
|
|
7,575
|
8,089
|
|
|
|
ASSET
RETIREMENT OBLIGATIONS
|
4,821
|
4,664
|
|
|
|
MINORITY
INTEREST
|
2,125
|
2,024
|
|
|
|
FUTURE
MINING AND INCOME TAXES
|
1,409
|
1,086
|
|
|
|
|
15,930
|
15,863
|
|
|
|
SHAREHOLDERS�
EQUITY
|
|
|
|
|
|
|
Capital stock
|
64,639
|
64,672
|
|
Contributed surplus
|
5,774
|
5,678
|
|
Deficit
|
(1,671)
|
(3,096)
|
|
Accumulated other
comprehensive income
|
(205)
|
(236)
|
|
|
|
|
68,537
|
67,018
|
|
|
|
|
84,467
|
82,881
|
See accompanying
notes to consolidated financial statements available on SEDAR (www.sedar.com).
CONSOLIDATED
STATEMENTS OF CASH FLOW
|
(in thousands of Canadian dollars)
|
(Unaudited)
|
Three months ended
|
|
March 31,
|
March 31,
|
|
2009
|
2008
|
|
$
|
$
|
|
|
|
CASH FLOW FROM OPERATING ACTIVITIES
|
|
|
|
Net earnings
|
1,433
|
406
|
|
Adjustments for:
|
|
|
|
|
Depreciation and
depletion
|
1,355
|
1,205
|
|
|
Stock-based
compensation
|
101
|
141
|
|
|
Accretion expense - asset retirement
obligations
|
69
|
43
|
|
|
Loss (gain) on
disposal of mining assets
|
(2)
|
20
|
|
|
Gain on disposal
of short-term investments
|
-
|
(35)
|
|
|
Minority interests
|
101
|
212
|
|
|
Future mining and
income taxes
|
323
|
(174)
|
|
|
|
|
3,380
|
1,818
|
|
|
|
|
Net change in
non-cash working capital items
|
(317)
|
724
|
|
|
|
|
3,063
|
2,542
|
|
|
|
CASH
FLOW FROM (USED IN) INVESTING ACTIVITIES
|
|
|
|
Property, plant
and equipment - Island Gold Mine
|
(1,291)
|
(475)
|
|
Property, plant
and equipment - Beaufor Mine
|
(209)
|
(80)
|
|
Other property,
plant and equipment
|
(103)
|
(270)
|
|
Disposal of
mining assets
|
8
|
14
|
|
Cash received
from an advance to a minority partner
|
-
|
375
|
|
Acquisition of
short-term investments
|
-
|
(12)
|
|
Disposal of
short-term investments
|
-
|
651
|
|
|
|
|
(1,595)
|
203
|
|
|
|
CASH
FLOW USED IN FINANCING ACTIVITIES
|
|
|
|
Issue of common
shares
|
14
|
19
|
|
Redemption of
common shares
|
(60)
|
(40)
|
|
|
|
|
(46)
|
(21)
|
|
|
|
|
|
|
Net increase in
cash and cash equivalents
|
1,422
|
2,724
|
|
|
|
Cash and cash
equivalents, beginning of period
|
26,021
|
27,291
|
|
|
|
Cash and cash
equivalents, end of period
|
27,443
|
30,015
|
See accompanying
notes to consolidated financial statements available on SEDAR (www.sedar.com).