Richmont buys stake in Louvem

Richmont Mines (ME) is expanding its presence in la belle province by acquiring an interest in Louvem Mines’ (TSE) properties near Val d’Or.

The company bought 8 million common shares in Louvem from St. Genevieve Resources (TSE). The shares, representing 31% of those issued and outstanding, were sold for $2 million.

Of particular interest to Richmont is Louvem’s stake in two gold projects: Monique (41%) and Beaufor (50%). The former has possible reserves of 1 million tons averaging 0.16 oz. gold per ton; the latter, 600,000 tons grading 0.25 oz. gold (including 175,000 tons at 0.257 oz. gold). Richmont President Jean-Guy Rivard said his company has a good relationship with Louvem and hopes some of its ore can be used as feed for the Camflo mill. The mill, near Malartic, was recently reactivated by Richmont which is looking for new sources of ore to bring it up to capacity.

Rivard added that the good relationship with Louvem carries other benefits. “Their understanding of the geology around (Richmont’s) Francouer mine has led to discussions and a better understanding of the shape of our ore zone.” Richmont bought the shares shortly after releasing its 1993 year-end results, according to which revenues jumped 55% and net profits 58%. The company generated $13.9 million, compared with $9 million in 1992, while net profits escalated to $3.2 million (or 27 cents per share) from $2 million (17 cents per share).

The figures are a reflection of higher gold production. Richmont cranked out 28,384 oz. of the yellow metal in 1993, compared with 21,016 oz. in 1992. A total of 157,355 tons were put through the mill, at an average grade of 0.18 oz. gold per ton. Reserves at Francouer are estimated at 2.5 million tons grading 0.199 oz. gold per ton.

This year, the company expects to produce 40,000 oz. gold from 200,000 tons of ore.