Higher earnings for Richmont

Buoyed by higher gold prices, Richmont Mines (RIC-T) wrapped up its second straight profitable quarter at the end of September.

Earnings approached $4.3 million (or 28 per share) on revenue of $17.3 million, compared with $3.3 million (22 a share) on revenue of $11.6 million in the corresponding period of 2001. Between the two periods, cash flow from operations climbed $1.5 million, to more than $6.5 million.

For the first nine months of the year, Richmont earned $7.7 million (50 per share) — a significant improvement over the $2.4-million loss (16 per share) of a year earlier. Revenue between the two periods nearly doubled to $38.2 million.

During the quarter, the Beaufor mine in Quebec produced 21,126 oz. gold. Quarterly gold sales totalled 21,406 oz. produced at a cash cost of US$140 per oz. Mining at Beaufor resumed in January following a temporary closure to allow for geotechnical studies. Since January, the mine has poured 40,271 oz. at US$154 per oz.

Richmont acquired Aurizon Mines‘ (ARZ-T) half-interest in Beaufor last summer. The rest of the mine is owned by Richmont’s 63%-owned subsidiary, Louvem Mines (LOV-V).

Meanwhile, the Hammerdown mine in Newfoundland chipped in 13,477 oz. Sales totalled 13,003 oz. produced at US$145 apiece.

Richmont is on-track to producing a record 100,000 oz. in all of 2002. During the first three quarters of the year, the company’s gold sales amounted to 76,533 oz. produced at US$154 per oz., up from 50,232 oz. at US$180 per oz. a year earlier.

At the end of September, Richmont had $26.9 million in working capital and an unused line of credit totalling $5 million.

For its part, Louvem rang up a quarterly profit of $2.6 million (10 per share) on revenue of $5.4 million, compared with a year-earlier loss of $293,839, (a penny per share) on revenue of $337. Cash flow from operations was just less than $2.8 million, better than the $440,379 consumed a year earlier.

Nine-month earnings were $3.7 million (14 per share) on $10.2 million, up from a $1.3-million loss (5 a share) on $30,785 in the first nine months of 2001. Cash flow between the two periods soared to $4.4 million from minus $1.5 million. Again, the turnaround reflects the resumption of operations at Beaufor.

Richmont shares were a quarter higher at $4.90 in afternoon trading in Toronto on Oct. 25, whereas Louvem shares were fetching 50, up a dime, in Vancouver.