Hibernation sends Richmont’s sales south

With revenue grinding down to a mere $863,306 during the first three months of 2001, junior Richmont Mines (RIC-T) posted a loss of $348,427, or 2 per share.

That’s nonetheless an improvement over the $1.2-million (8-per-share) loss it recorded in the year-earlier period, when revenue was $5.3 million.

The drop in revenue is attributed to a slide in first-quarter gold sales, which fell to 1,750 oz. gold from 13,007 oz. The company notes that it no longer processes ore during winter at its Nugget Pond mill on the Baie Verte Peninsula or its Camflo mill in northwestern Quebec, as operating costs are too high.

During the recent quarter, operations ate up $7.4 million dollars, compared with $38,331 generated a year earlier.

The resumption of activities at the Nugget Pond and Camflo are expected to improve significantly during the second quarter, and the company’s 2002 production target remains 100,000 oz. Processing resumed at the Nugget Pond mill in March.

About 23,400 tons of ore were mined at the Hammerdown gold mine in Newfoundland, resulting in 1,977 oz. gold. The average selling price of gold was US$295 per oz., up from US$263 in the first quarter of 2001.

Richmont has a 69.3% stake in Louvem Mines (LOV-M), which reported no precious metals sales during the recent quarter. Revenue was $1,128, compared with $3,133 a year earlier. The company suffered a net loss of $287,571 (or a penny per share). Cash flow consumed by operations amounted to $1.4 million.

Louvem has a half-interest in the Beaufor mine in northwestern Quebec. The mine resumed operations in January, and by the end of March, 42,000 tons of ore had been excavated. The material was transported to the Camflo Mill, where it will be processed along with second-quarter production. Ore processing resumed at the Camflo in mid-April. Richmont acquired Aurizon Mines‘ (ARZ-T) half-interest in the mine last summer.