Richmont Mines – Gold Production, Development and Exploration in Quebec and Ontario
Overview
Richmont Mines (TSX:RIC,NYSE Amex:RIC) is a Quebec, Canada based mining company with several small to mid-scale gold mines in operation, and a twenty-year track record of gold exploration, mine development and the operation of underground gold mines. The Company is focused on generating positive cash flow and profitable growth to provide a solid foundation on which to increase rates of production, grow gold reserve levels, and expand the Company’s roster of mineral properties.
Their portfolio of Canadian assets includes producing mineral properties, as well as early stage exploration and development projects and two 100% owned mills.
Investment highlights
- Twenty year track record of gold mine development and operation
- Over 1.3 million ounces of gold produced since 1991
- Strong financial position: low share count (39.6 million shares)
- Over $40 million cash (as of end of Q1 2013)
- Dual listed on TSX and NYSE Market, with a strong U.S. institutional following
- 60,741 ounces of gold sold in fiscal 2012
- Two producing gold mines in Canada
Key Properties
Island Gold Mine
The Island Gold Mine is located 50 km northeast of Wawa, Ontario, in the Sault Ste. Marie mining district. The closest community to the operation is the town of Dubreuilville, Ontario, which is located approximately 10 km to the northwest of the mine.
In the mid-80’s exploratory drilling two kilometers from the Kremzar Mine intersected a series of sub-parallel lenses containing gold mineralization within the highly altered rock unit. These gold bearing lenses are known as the Lochalsh, Island Gold, Shore, and Goudreau Lake Zones. Underground infrastructure was built into the Island deposit beneath Goudreau Lake from an adit on the north shore. Since beginning commercial production in October 2007, the Island Gold Mine has produced more than 225,000 ounces of gold.
The company completed a 35,000 metre exploration program over 2011-2012 below the existing infrastructure of the mine, which extends to approximately 400 metres below surface. Results include 26.09 g/t Au over 9.55 metres, 10.29 g/t Au over 5.19 metres, 10.40 g/t Au over 5.06 metres, 31.60 g/t Au over 6.59 metres, and 27.16 g/t Au over 10.62 metres.
The 43-101 technical report for the Island Gold Deep Mineral Resource estimate published February 25, 2013, has been filed on SEDAR.
Beaufor Property
The Beaufor Mine property, located approximately 25 kilometres from Val-d’Or, Quebec, has seen intermittent exploration work and gold production conducted on it since the early 1930’s.
Since 1996, the Beaufor Mine has produced over 500,000 ounces of gold. As of December 31, 2012 the Beaufor Mine had a proven and probable reserve estimate of 39,114 ounces of gold, an additional 160,263 ounces of measured and indicated resources, with a further 187,274 gold ounces in the inferred resource category.
Over 30,000 metres of diamond drilling was completed in 2011 to further increase the reserve estimate and extend the mine life, with an additional 35,000 metres completed in 2012 to aid this purpose.
The W Zone Gold Project
The Company continues to advance exploration work on the W Zone, a near-surface satellite deposit on the Beaufor Mine property, and as of the end of the first quarter of 2013 the ramp had been extended to the third sub-level, out of a total planned six sub-levels. Richmont plans to process an 8,000 tonne bulk sample from this zone during Q2 2013 at the company’s Camflo Mill, located approximately 50 km away. Providing positive results are obtained from this phase, a commercial production decision would be made on this project.
Monique Gold Project
The Company continues to advance the Monique Gold Project, a 100%-owned property located in Val-d’Or, Quebec.
In late December 2011, Richmont Mines announced indicated open pit estimated resources of 728,164 tonnes grading 2.35 g/t Au for 55,112 ounces of gold. Richmont submitted the required documentation for the permitting of an open pit operation in November 2011, and received its mining permits in January 2013. At the end of the first quarter of 2013, approximately 50%, or 560,000 tonnes, of the anticipated total overburden tonnage has been removed, and the first blasting of waste was carried out in mid-April. The Company plans to process a 5,000 tonne bulk sample at its Camflo Mill, located approximately 50 km away from the property, in Q2 2013.
If the results from the bulk sampling phase are favourable, open pit mining and milling would proceed over the following two year period, the approval for which is inclusive in the permit. The open pit phase could potentially be followed by an underground phase, for which a permit amendment would need to be obtained.
Summary
Richmont Mines is a Canadian exploration and mining company with two small to mid-scale producing gold mining operations, and two wholly-owned processing mills. Using the profits from the operating mines allows Richmont to develop additional exploration properties without the need to over dilute the stock: a self-financing junior mining company of this sort is a rarity.
Richmont is also in a strong financial position with a cash position of over 40 million dollars as of the end of Q1 2013, and a low share count at just 39.6 million. Its dual listing on the TSX and NYSE Market exchanges also provides a stable institutional investor base.
Management
Paul Carmel, Eng. – President and CEO
Mr. Carmel holds a Bachelor of Engineering, Mining degree from McGill University in Montreal, Canada. In addition to having a comprehensive background in mining engineering, Mr. Carmel has extensive experience in mergers and acquisitions, corporate finance and other aspects of the capital markets.
Mr. Carmel is a past Director of numerous mining companies, is a member of the Association of Professional Engineers of Quebec, and was a recipient of the Canadian Mineral Industry Education Foundation Scholarship. He was named Director, President and CEO of Richmont in May 2012.
Christian Pichette, Eng., M.Sc. – Executive Vice President and Chief Operating Officer
A mining engineer by training, Mr. Pichette holds a Master’s degree in Rock Mechanics. With over 30 years of experience in mining, Mr. Pichette has held managerial positions with many companies, including Placer Dome, TVX Gold, Barrick Gold and Cambior. His wide-ranging expertise in underground operations is a valuable asset for the Company.
Pierre Rougeau – Executive Vice President and Chief Financial Officer
Mr. Rougeau was Executive Vice-President, Operations and Sales for AbitibiBowater Inc. from 2009 through 2011, Chief Financial Officer for Abitibi Consolidated Inc. from 2001 to 2007, Head of Forest Products Investment Banking at UBS Warburg – Canada from 1998 to 2001, and worked at McLeod Young Weir/Scotia Capital from 1986 to 1998, where he held various positions in Investment Banking, including Managing Director.
Mr. Rougeau holds a Bachelor of Science, in Business Administration (Accounting) from St-Louis University in Missouri, and a Master’s of Science in Finance, from the University of Sherbrooke in Quebec. He was named Executive Vice-President and CFO of Richmont in November 2012.
Daniel Adam, Geo. PhD – Vice-President, Exploration
Mr. Adam obtained a Ph.D in Geology from the University of Nancy in France. He has more than 20 years of experience in production and geological exploration, which include numerous positions of varying responsibility at Selbaie Mines. Mr. Adam joined Richmont Mines in March 2008 as a Senior Exploration Geologist, and now holds the position of Exploration General Manager.
Rosaire Émond, Eng. – Project Manager (Island Gold Deep Project)
Mr. Émond holds a Mining Engineer degree from the University of Laval in Quebec, and has over 28 years of project management and mine-building experience with various companies including Placer Dome Canada and Agnico-Eagle Mines Limited.
Jennifer Aitken, MBA – Manager of Investor Relations
Ms. Aitken holds a Bachelor’s degree in Industrial Relations from McGill University, and an MBA from Concordia University’s John Molson School of Business. Ms. Aitken has more than five years of communication, sales and marketing experience in addition to six years as a sell-side associate research analyst with a leading Canadian Investment Bank.
