Lower gold grades and a stronger Canadian dollar caused
The loss is equivalent to 7 per share — a far cry from the tidy profit of $197,760 (or 1 per share) reported for the corresponding period of 2003. Likewise, revenue between the two periods slipped by about 30% to just shy of $6.9 million. Cash flow from operations (before net change in non-cash working capital) fell 71% to $397,713.
Production at the Beaufor mine, near Val d’Or, Que., fell 18% to 9,817 oz. as grades slipped to 5.8 from 7.5 grams gold per tonne. The lower production also reflects 20,000 tonnes of extracted ore that were not processed before the end of the quarter. The leftover ore will be processed in the second quarter. Cash costs at the mine increased to US$334 from US$244 per oz.
At the end of 2003, Beaufor had proven and probable reserves of 907,000 tonnes grading 7.9 grams gold, or 232,000 oz. Richmont owns half of the mine; the remainder is held by 69.3%-owned subsidiary
Gold sales from the Hammerdown mine, near King’s Point, Nfld., totalled 5,221 oz. produced at a cash cost of US$323 per oz., compared with year-earlier sales of 6,076 oz. produced at US$233 apiece. The increased costs are attributed to a 23% drop in grades. Richmont expects the mine’s reserves to be depleted by the end of the second quarter.
Richmont realized an average of US$417 for each ounce of gold sold during the first quarter, up from US$371 per oz. a year earlier.
On the exploration front, surface installations and the underground ramp portal have been completed at the East Amphi property. The ramp is headed to a depth of 200 metres to allow for drilling in the main zone; surface drilling continues. The company plans to spend $7 million in order to define a major portion of the 250,000 oz. of gold resources.
Richmont picked up East Amphi and the nearby Fourax property late last year by paying
In central Newfoundland, the company will begin a second round (3,000 metres) of exploration drilling on the Valentine Lake gold project in June. Six recently completed due diligence holes returned 3.4-17 grams gold per tonne over widths of 2-50 metres from the property’s main zone. Previous drilling by BP Minerals returned up to 9.1 grams gold per tonne over 9.6 metres, 6.3 grams gold over 4.6 metres, 7.4 grams over 4 metres, and 9.12 grams over 3 metres. The zone remains open laterally and at depth.
Based on the latest results, Richmont has staked an additional 323 claims, thereby expanding the size of the property to 173 sq. km.
Richmont can earn a 70% stake in the property by paying
At the end of March, Richmont had no long-term debt plus working capital of $30 million.
For its part, Richmont’s subsidiary, Louvem Mines, saw its first-quarter earnings fall to $76,919 (or nil per share). Revenue slipped 38% to $1.9 million, and cash flow from operations dropped 86% to $110,073. At quarter’s end, Louvem had no long-term debt and $2.1 million in working capital.
Louvem is awaiting the results of a $250,000 exploration program on its 81%-owned Monique property, 16 km east of the Beaufor mine.
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