TORONTO, November 8, 2017 /PRNewswire/ --
Richmont Mines Inc. (TSX: RIC) (NYSE:
RIC) ("Richmont" or the "Corporation") announces operating and
financial results for the three and nine months ended September 30, 2017. (All amounts are in
Canadian dollars, unless otherwise indicated.)
THIRD QUARTER AND NINE-MONTH HIGHLIGHTS - CONTINUING
OPERATIONS[(1)]
- Revenues of $36.5 (US$29.2) million for the quarter and
$123.4 (US$94.3) million for the nine-month period.
- Net earnings of $4.8 (US$3.8) million, or $0.08 (US$0.06) per
share for the quarter and $21.7
(US$16.6) million, or $0.34 (US$0.26) per
share for the nine-month period.
- Record production of 26,659 ounces of gold (22,666 ounces sold)
for the quarter and 76,541 ounces of gold (74,849 ounces sold) for
the nine-month period, positioning the Island Gold Mine to exceed
the high end of annual production guidance of between 87,000 and
93,000 ounces.
- Cash costs[(2)] of $666 (US$532) per
ounce for the quarter and $637
(US$487) per ounce for the nine-month
period. The Island Gold Mine remains on track to beat the lower end
of annual cash cost guidance of between $715
and $765 (US$550 to US$590)
per ounce.
- All-In-Sustaining
Costs[(2)] ("AISC") for the Island Gold
Mine were $886 (US$708) per ounce for the quarter and
$796 (US$609) per ounce for the nine-month period. The
Island Gold Mine remains on track to beat the lower end of annual
AISC guidance of between $945 and
$995 (US$725 and US$765) per
ounce.
- AISC for continuing operations, including all corporate
overhead, was $1,038 (US$829) per ounce for the quarter and
$921 (US$704) per ounce for the nine-month
period.
- Operating cash flow from the Island Gold Mine was $14.5 (US$11.6)
million for the quarter and $62.2 (US$47.5)
million for the nine-mine period. Operating cash
flow[(2)] (before changes in non-cash
working capital), including all corporate overhead, was
$11.5 (US$9.2)
million for the quarter, or $0.18 (US$0.14) per
share, and $50.6 (US$38.7) million for the nine-month period, or
$0.80 (US$0.61) per share.
- The Island Gold Mine generated strong free cash flow of
$4.4 (US$3.5)
million for the quarter and $31.8 (US$24.3)
million for the nine-month period. Net free cash
flow[(2)], including all corporate overhead,
was $1.8 (US$1.4) million for the quarter, or $0.03 (US$0.02) per
share, and $21.0 (US$16.0) million for the nine-month period, or
$0.33 (US$0.25) per share.
- Cash balance at the end of the quarter was approximately
$90.0 (US$72.1) million. As a result of timing, the
finished goods inventory at the end of the quarter consisted of
approximately 2,000 gold ounces. These ounces were sold in the
fourth quarter.
- Year to date, Island Gold has continued to outperform the 2017
Expansion Case Preliminary Economic Assessment ("PEA") on all key
metrics, which demonstrates the significant upside potential of
this asset.
- The mill expansion to 1,100 tonnes per day advanced during the
quarter and the operation is anticipated to achieve the target run
rate in the latter part of 2018.
- On September 11, 2017, Richmont
announced that it had entered into a definitive agreement with
Alamos Gold ("Alamos") whereby Alamos will acquire all of the
issued and outstanding shares of Richmont pursuant to a plan of
arrangement. The transaction is expected to close on, or about,
November 23, 2017.
"The positive results we have reported were supported by another
consecutive quarter of solid performance from the Island Gold Mine.
This high-quality operation delivered record production at peer
leading cash costs, which positions Island Gold to beat annual
guidance for the third consecutive year. Year to date, the Island
Gold Mine has generated a strong free cash flow stream of
$31.8 million, which will increase
significantly once the level of capital investment decreases to
sustaining levels post 2018," commented Renaud Adams, President and CEO. He continued,
"During the quarter, we announced a transaction with Alamos that is
consistent with our commitment to create significant shareholder
value. As part of this strategic transaction, our shareholders will
maintain exposure to the ongoing potential of the Island Gold Mine
and benefit from having meaningful ownership in a diversified
intermediate producer with a proven and experienced management
team."
_______________________
[1] Continuing operations includes the Island Gold Mine and corporate overhead. The
Beaufor Mine, the Camflo Mill, the Monique Mine, the Wasamac development project
and all other mineral claims, mining leases and mining concessions located in the
province of Quebec are reported as discontinued operations. Refer to the Q3
Management's Discussion and Analysis for further details.
[2] Refer to the Non-IFRS Performance Measures disclosure presented at the end of this
press release.
Financial and Operating Highlights - Continuing Operations[(1)]
Quarter Quarter Nine-Months Nine-Months
ended ended ended ended
Sept.30, Sept.30, Sept.30, Sept.30,
2017 2016 2017 2016
(in thousands of $, except
per share and per oz amounts)
Gold produced (oz) 26,659 14,031 76,541 59,237
Gold sold (oz) 22,666 13,673 74,849 59,851
Cash costs per ounce ($)[(2)] 666 947 637 761
AISC per ounce ($)[(2)] 1,038 1,463 921 1,134
Realized gold price per ounce ($) 1,608 1,756 1,644 1,657
Revenue from mining operations 36,549 24,053 123,363 99,378
Net earnings (per share) 0.08 0.01 0.34 0.18
Operating cash flow, per share[(2)] 0.19 0.05 0.81 0.53
Operating cash flow (before non-cash
changes in working capital), per
share[(2)] 0.18 0.08 0.80 0.59
Sustaining Capital ($) 4,984 5,090 11,933 15,283
Project Capital ($) 10,042 13,457 21,941 28,390
Net free cash flow, per share[(2)] 0.03 (0.24) 0.33 (0.18)
Revenue from mining operations (US$) 29,174 18,431 94,336 75,184
Net earnings (per share) (US$) 0.06 - 0.26 0.13
Operating cash flow, per share[(2)] (US$) 0.15 0.04 0.62 0.40
Operating cash flow (before non-cash
changes in working capital), per
share[(2) ](US$) 0.14 0.06 0.61 0.45
Sustaining Capital (US$) 3,978 3,900 9,125 11,562
Project Capital (US$) 8,016 10,312 16,778 21,478
Net free cash flow, per share[(2) ](US$) 0.02 (0.18) 0.25 (0.14)
[(1)] Continuing operations includes the Island Gold Mine and corporate overhead.
[(2)] Non-IFRS performance measure. Refer to the Non-IFRS performance measures section
contained in the Q3 2017 Management's Discussion and Analysis.
Island Gold Mine: Operational Highlights
Year to date, the Island Gold Mine has outperformed the PEA on
all key operating and financial metrics including tonnes mined and
milled, grades and unit operating costs, all of which has supported
a significant free cash flow stream of $31.8 (US$24.3)
million.
- Underground mine and mill productivities of 1,028 and 931
tonnes per day year to date (1,055 and 946 tonnes per operating
day), respectively, as compared to the 1,000 tonnes per day and 900
tonnes per day considered in the PEA. Following underground mine
infrastructure improvements completed during the quarter, the mill
is now operating at an average of nearly 1,000 tonnes per day.
- Unit operating costs of $182
(US$139) per tonne, below the
$204 (US$151)/tonne considered in the PEA.
- The mill upgrade to 1,100 tonnes per day mill is currently
underway and advancing well on schedule. A ball mill has been
sourced and is currently being refurbished, detailed engineering
has been completed and earthworks started in the third quarter. The
mill target run rate is anticipated to be achieved in the latter
part of 2018.
- Upgrade of the mining infrastructure to support the expanded
capacity has advanced in the third quarter. Surface fans have been
upgraded to increase mine ventilation and new underground pumping
stations have been commissioned. Additional mining equipment, such
as trucks and scoops, have been ordered with deliveries estimated
for the first half of 2018.
Consolidated Highlights - Continuing and Discontinued Operations[(1)]
Quarter Quarter Nine-Months Nine-Months
ended ended ended ended
Sept.30, Sept.30, Sept.30, Sept.30,
(in thousands of $, except 2017 2016 2017 2016
per share and per oz amounts)
Gold produced (oz) 30,039 18,856 90,689 74,545
Gold sold (oz) 26,287 17,774 89,855 74,901
Cash costs per ounce ($)[(2)] 840 1,054 783 892
AISC per ounce ($)[(2)] 1,259 1,595 1,101 1,289
Realized gold price per ounce ($) 1,608 1,754 1,644 1,659
Revenue from mining operations 42,378 31,244 148,118 124,496
Net earnings (per share), basic 0.03 - 0.28 0.19
Operating cash flow, per share[(2)] 0.13 0.05 0.81 0.59
Operating cash flow (before non-cash
changes in working capital), per
share[(2)] 0.15 0.09 0.80 0.64
Net free cash flow, per share[(2)] (0.05) (0.26) 0.26 (0.20)
Revenue from mining operations (US$) 33,827 23,942 113,266 94,187
Net earnings (per share) (US$) 0.02 - 0.21 0.14
Operating cash flow, per share[(2)] (US$) 0.10 0.04 0.62 0.44
Operating cash flow (before non-cash
changes in working capital), per
share[(2) ](US$) 0.12 0.07 0.61 0.48
Net free cash flow, per share[(2) ](US$) (0.04) (0.20) 0.20 (0.15)
[(1)] Continuing operations includes the Island Gold Mine and corporate overhead. The
Beaufor Mine, the Camflo Mill, the Monique Mine, the Wasamac development project
and all other mineral claims, mining leases and mining concessions located in
the province of Quebec are reported as discontinued operations. Refer to the Q3
Management's Discussion and Analysis for further details.
[(2)] Non-IFRS performance measure. Refer to the Non-IFRS performance measures section
contained in the Q3 2017 Management's Discussion and Analysis.
Upcoming News and Events
- Special Meetings of Richmont and Alamos Shareholders
(Nov. 16)
- Closing of the Richmont / Alamos Transaction (on, or about,
Nov. 23)
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 http://www.richmont-mines.com or under the
Corporation's profile on http://www.sedar.com and with
the Securities and Exchange Commission
at http://www.sec.gov/edgar.shtml.
Non-International Financial Reporting Standards ("IFRS")
Performance Measures
In this press release, the terms "cash costs per ounce", "all-in
sustaining costs", "net free cash flow" and "operating cash flow"
are used, which 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 non-IFRS 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 Q3 2017 Management's Discussion and Analysis.
About Richmont Mines Inc.
Richmont Mines currently produces gold from the Island Gold Mine in
Ontario and is also advancing
development of the significant high-grade resource extension to the
east and at depth. With more than 35 years of experience in gold
production, exploration and development, and prudent financial
management, the Corporation has successfully positioned the Island
Gold Mine to cost-effectively build its Canadian reserve base and
to 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's 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.
Contacts:
Renaud Adams,
President and CEO,
Phone: +1-416-368-0291 ext. 101
Anne Day
Senior Vice-President,
Investor Relations
Phone: +1-416-368-0291 ext. 105