Richmont, Louvem finish 1998 profitably

Richmont Mines (RIC-T) is writing its year-end story in black ink for the seventh time in a row.

The Montreal-based gold producer earned a profit of $3.9 million (or 25 cents a share) on revenue of $47.8 million in 1998. Revenue was 23% higher than the $38.7 million Richmont took in the previous year, and profits rose 63%.

Richmont’s operating cash flow, buoyed by a significant increase in production and a decrease in operating costs, rose 65% to $16.9 million in 1998. Richmont used a substantial part of this year’s operating cash flow to wipe out its long-term debt (T.N.M., Jan. 25/99) and now has $13 million in cash and short-term securities.

Meanwhile, Richmont subsidiary Louvem Mines (LOV-M) also announced a profit for the year, having earned $937,063 (4 cents per share) on revenue of $9.1 million. The company booked a loss of $1 million in 1997, which came on revenue of $6.7 million.

With operating cash flow rising to $1.6 million from last year’s outflow of $387,731, Louvem also had an opportunity to retire half of its debt. The company was left with a debt of $1.2 million at year-end.

Through Louvem, Richmont holds a half-interest in the Beaufor mine near Val d’Or, Que., and the former can credit its improved earnings to higher production and lower operating costs at the mine. Louvem’s share of production rose to 41,200 oz. from 29,800 oz. the year before, and cash costs fell to US$223 per oz., against US$307 in 1997.