Richmont changes plans at Beaufor (May 16, 2005)

Just a week after reporting on its first quarter, Richmont Mines (RIC-T) announced it would close the Beaufor mine in northwestern Quebec for eight weeks in the third quarter. The mine is equally owned by Louvem Mines (LOV-V), in which Richmont has a 70% stake.

The closure will enable Richmont to develop more production areas. In the first quarter, 515 metres of drifts, sublevels and raises were developed at a total cost of $441,970.

By the end of the year, three levels should be available for production and the developed ore inventory should be double the current 25,000 tonnes. Currently, most of the ore is being produced from one level.

At the end of 2003, Beaufor had a proven and probable reserve of 232,000 oz. gold contained in 924,000 tonnes grading 7.8 grams gold per tonne. Last year, 53,240 tonnes of ore were processed, the average grade being 5.74 grams gold per tonne. Indicated and measured resources stood at 173,400 oz. gold.

Gold at Beaufor exists in quartz-tourmaline veins in shear zones in the Bourlamaque granodiorite. Ore is processed at Richmont’s Camflo mill, which will continue to operate during the shutdown, processing a bulk sample from the company’s East Amphi gold property.

Beaufor’s forecast production for this year has been reduced by 11% to 48,000 oz. gold. In the first quarter, the mine cranked out 13,589 oz. gold. The mill processed 65,916 tonnes grading 6.4 grams gold per tonne.

Richmont earned $100,547 in the first quarter, compared with a loss of $1 million a year earlier. The company sold its production for an average of US$428 per oz., US$12 higher than a year earlier. This gain was offset in part by the higher Canadian dollar, which averaged US4 higher during this year’s quarter, at US81.

Exploration costs at East Amphi exceeded $3 million during the three months. The main ramp was extended 183 metres to a vertical depth of 200 metres.

In addition, 730 metres of drifting and crosscuts have been completed. Exploration drilling is under way, and reserves and resources will be re-calculated.

The company spent $1.8 million underground at the Island Gold project, 15 km from Dubreuilville, Ont. Richmont is earning a 55% interest in the property from Patricia Mining (PAT-V).

At the end of March, Richmont had $20.2 million in cash and equivalents. The company has 16.17 million shares outstanding and shares recently traded at $4.50.

Richmont is also earning a 70% interest in the Valentine Lake gold property in Newfoundland from Mountain Lake Resources (MOA-V).