Richmont not disuaded by loss

The loss of more than half a million dollars in the first quarter has not dampened the optimism of Rouyn-Noranda, Que.-based Richmont Mines (RIC-T).

The combination of a lower average gold price and a drop in tonnage and grade from the Francoeur gold mine in northwestern Quebec (34,801 tons grading 0.15 oz. gold per ton, compared with last year’s 38,725 tons grading 0.20 oz. gold) was chiefly responsible for the loss of $539,172 (or 4 cents a share). In the first quarter of 1996, net earnings were $550,660 (also 4 cents a share). Revenue dropped to $3.3 million from $4.8 million.

According to Richmont, the drop in grade and tonnage mined at Francoeur was an expected consequence of the mine operating plan. Production took place in lower-grade areas so as to allow access to higher-grade zones for the balance of 1997. Production and grades had already returned to “normal” values by the end of the quarter, the company reports.

Richmont’s Nugget Pond mine in Newfoundland entered production in April 1996 amd yielded 32,000 oz. gold that year. It is on track to produce 46,000 oz.

annually at a cash cost of US$153 per oz.

Louvem Mines (LOV-T), 36% owned by Richmont, recorded a loss of $234,644 for the first quarter, compared with earnings of $16,008 in the first three months of 1996.

With a full year of commercial production at Nugget Pond and a return to historical production levels at the company’s other operations, Richmont expects earnings of 40 cents per share in 1997.