Ashanti

Decreased gold production, lower prices and a $7.8-million writedown of mining assets combined to produce more red ink for Richmont Mines (RIC-T) during 1999.

The Montreal-based gold miner churned out 84,000 oz. last year from its mines in Quebec and Newfoundland, down from 97,000 oz. a year earlier. Cash costs rose last year to US$191 per oz. from US$185 per oz. a year earlier, while gold prices were US$50 per oz. lower than 1998.

Richmont posted a net loss of $8.2 million (or 53 per share) on revenue of $35.1 million for the year, compared with net earnings of $4 million on revenue of $47.8 million in 1998. If the writedown is excluded, last year’s loss was $396,596, or 0.03 per share.

The writedown was also reflected in the 1999 third-quarter results, which show a loss of $7.3 million, compared with earnings of $144,200 a year earlier. A total of 16,000 oz. gold was produced at a cash cost of US$183 per oz. in the quarter, compared with 23,100 oz. at US$202 in the last three months of 1998.

Richmont notes that last year’s results reflect a suspension (since September) of production at the Francouer mine, near Rouyn-Noranda, Que. The company has since carried out and completed a development program. Production is expected to resume shortly.

The Nugget Pond mine in Newfoundland was the star performer last year, turning out 43,500 oz. at a cash cost of US$138 per oz., compared with 44,000 oz. at US$144 per oz. in 1998.

Francouer produced 18,100 oz. at US$262 per oz. for its partial operating run last year, down significantly from the 32,500 oz. produced at a cash cost of US$219 in 1998.

The 50%-owned Beaufor mine near Val d’Or, Que., produced a total of 22,400 oz. at a cash cost of US$191 per oz. in 1999, compared with 20,600 oz. at US$185 a year earlier.

Richmont expects to produce 92,000 oz. gold this year at an average cash cost of US$192 per oz. from its existing mines.

The company has working capital of $12.5 million, as well as an unused credit facility valued at $7 million.

Richmont owns about 70% of Louvem Mines (LOV-M), which owns 50% of the Beaufor underground mine. The other half of the narrow-vein operation is owned by Aurizon Mines (ARZ-T).

Louvem Mines reported a net loss of $28,812 on revenue of $9.3 million for 1999, compared with net earnings of $592,630 on revenue of $9 million in 1998. The loss in the fourth quarter of 1999 was $94,294, down from a loss of $198,265 in the last three months of 1998.

A total of 194,400 tons grading 0.23 oz. gold per ton was mined last year at Beaufor, compared with 166,700 tons of 0.25 oz. a year earlier. Recoveries held firm at about 98.9%

Last year’s exploration program replaced the mined ore and identified new reserves. Louvem expects the Beaufor mine to produce 48,000 oz. gold this year, which should result in a return to profitability.