The start of production at the Nugget Pond mine, near Baie Verte, Nfld., enabled Richmont Mines (ric-t) to boost its operating cash flow tenfold in the second quarter, compared with 1996 levels. Also, the company saw its cash costs drop by nearly one-third.
During its first three months of commercial production, Nugget Pond yielded 11,962 oz. gold from 30,819 tons at an average grade of 0.4 oz. gold per ton.
Recovery was 96.6%, while the cash cost of producing each ounce was US$151 per oz. — two dollars below Richmont’s projection.
For the quarter, Richmont produced 21,531 oz. gold from its two wholly owned gold mines, Francouer in Quebec and Nugget Pond, and its 18% share of production at the Beaufor mine in Quebec. Production in the same quarter of 1996 was 6,690 oz. Each of the 1997 ounces cost Richmont an average of US$210, while the 1996 ounces cost the company US$310 each.
Richmont’s net earnings for the second quarter were $1 million (or 7 cents per share) on revenue of $11.5 million, compared with $686,000 (5 cents per share) and $4.7 million, respectively, in 1996.
The quarter also saw Richmont offer to purchase all outstanding shares of the company that operates the Beaufor mine, Louvem Mines (lov-t). But by the closing date of the offer, Richmont had only increased its 36% share to 69.3%.
For the last half of the year, Richmont expects to produce 45,000 oz. gold at a cash cost of US$215 per oz. The company’s hedging program will enable it to sell 27,000 oz. gold at a minimum of US$391 per oz. over the remainder of this year, and 45,000 oz. at US$380 per oz. in 1998.
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