Since its start in 1981 Richmont Mines (RIC-T, RIC-N, RIC-X) has developed six underground gold mines in central and eastern Canada that together have produced more than one million ounces of gold.
Now Richmont is turning its attention back to its past-producing Francoeur mine in Quebec, about 25 km west of Rouyn-Noranda, which had produced more than 345,000 oz. gold for the company between 1991 and 2001.
The mine was closed when the prevailing gold price fell below US$300 per oz. But now with spot prices for the precious metal hovering at about US$900 per oz., the project looks far more attractive.
“At these gold prices this project makes a lot of sense,” says Martin Rivard, Richmont’s president and chief executive. “It’s 100% owned by us and there are no royalties.”
Richmont won’t need to build a mill, either, as ore from the mine was previously processed at the company’s Camflo mill and should the mine go back into production that arrangement will carry on.
The mill currently processes ore from Richmont’s Beaufort mine and does custom milling for third parties.
Rivard notes that there is a lot of potential for exploration. “There are several zones that are sub-parallel to the existing zone so this is a good exploration target,” he says.
“This is a typical underground deposit where more drilling can confirm more resources. The study we’re currently doing is focused on the West Zone…The gold that was mined previously was in the same system, but we were mining the eastern portion.”
Francoeur’s historical indicated resources, which are not compliant with National Instrument 43-101 requirements, have been estimated at 885,000 tonnes at a grade of 7.99 grams gold per tonne for contained gold of 227,500 ounces.
Dewatering of the 820-metre deep mine, and other work will include the commissioning of the existing hoist and upgrading related infrastructure.
Richmont estimates the program will take about eight months.
The company is also planning a surface drilling program of about 8,000 metres this summer to increase known resources. The budget this year for dewatering and drilling is about C$4.5 million.
Underground development is planned in the first quarter of 2010 and definition drilling will take place later in the year. A technical report will be released in the third quarter of this year.
At press-time in Toronto, Richmont was trading at $4.38 per share.
It has a 52-week trading range of $1.21-$4.93 per share and has 26.1 million shares outstanding.
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