Net earnings for Richmont take dive

While 1995 earnings at Richmont Mines (TSE) kept pace with 1994, net earnings were down.

The company took in $20.19 million in 1995, compared with $20.64 million in 1994. Net earnings for the year were $2.87 milion (or 20 cents per share), compared with $4.4 million (32 cents per share) in 1994.

Richmont’s profitability was reduced as a result of an exploration program to increase reserves at the Francoeur mine in northwestern Quebec. New reserves outlined by the exploration program to date are already equal to the tonnage mined in 1995, and the program is not scheduled to end until August.

The program slowed production, resulting in the extraction of 170,000 tons of ore at a grade of 0.17 oz. gold per ton, compared with 193,000 tons grading 0.18 oz. in 1994. Gold production in 1995 was 29,471 oz., compared with 36,404 oz. in the previous year.

For the third quarter, revenue was $5 million, compared with $5.7 million for the same period in 1994. Net earnings were $876,013, compared with $1.71 million, while earnings per share dropped to 6 cents from 8 cents.

Custom milling at Richmont’s Camflo mill in Malarctic, Que., rose from 80,767 tons in 1994 to 162,447 tons in 1995.

In May 1995, the company purchased a 60% interest in the Nugget Pond gold project, near Baie Verte, Nfld.; the remaining 40% was obtained in January 1996. A positive feasibility study for the project was completed, and mill construction is scheduled to begin this year. Production would begin in 1997, at an annual rate of 46,000 oz. gold.

As a result of a $3.8-million investment in the Nugget Pond project and a $1-million investment in exploration and development at Francoeur, working capital in 1995 decreased to $13 million from $14.4 million in 1994.

Development work at the Beaufor mine was completed in 1995 and commercial gold production began on Jan. 3, 1996. Expected production from the mine is 30,000 oz. per year for the next five years. Richmont owns 36% of Louvem Mines (TSE), which has a 50% share in the Beaufor mine.