Richmont in black again

A second good quarter is the reward for the bookkeeping adjustments made in 1999 by small gold producer Richmont Mines (RIC-T).

Richmont, which operates gold mines in Quebec and Newfoundland, earned $1.4 million (or 9 a share) on revenue of $10.2 million in the three months ended June 30. For the first half of the year, the company was ahead by $2.3 million (15 per share), with revenue of $21.2 million.

The results compare favourably with those of the corresponding periods in 1999. That year saw a second-quarter loss of $142,893 made on revenue of $9.2 million, and a loss of $514,006 on revenue of $18.6 million in the first half. Richmont also took a $7.8-million writedown in the final quarter of 1999, leaving it with an $8.2-million loss on the year. The writedown included the entire carrying value of its Francoeur mine, west of Rouyn-Noranda, Que.

The Nugget Pond mine, near La Scie, Nfld., continued to be Richmont’s best-performing asset, producing 11,300 oz. gold at an average cash cost of US$135 per oz. during the quarter. Nugget Pond’s costs were higher than in the second quarter of 1999, when the mine produced 12,400 oz. at US$119 per oz., but lower than in the first quarter of the year. For the first six months of 2000, Nugget Pond produced 23,000 oz. at an average of US$142 per oz.

At the Hammerdown project, northwest of Springdale, Nfld., site preparation started in early May and test-mining of a proposed 20,000-tonne bulk sample began several weeks later. About 7,700 tonnes of test material had been stockpiled by the end of July, and the sample will be trucked to the Nugget Pond mill for processing in October.

Hammerdown has metallurgically simple mineralization, and Richmont does not expect to have to make significant modifications at Nugget Pond to get good recoveries.

Hammerdown’s proven and probable reserves stand at 270,000 tonnes grading 20.9 grams gold per tonne. As long as mining and milling prove feasible, the deposit is expected to provide about seven years of feed for the Nugget Pond mill.

The Francoeur mine hoisted about 27,000 tonnes of ore in the quarter, but the company’s Camflo mill site, which converted to custom milling in June, processed only 15,600 tonnes. The result was that Francoeur produced only 3,100 oz. gold in the period, at a cash cost of US$327 per oz. The mill will be treating the remaining ore in the third quarter.

Louvem Mines (lov-m), in which Richmont owns a 69% interest, incurred a small loss during the quarter — $32,026, on revenue of $2.6 million. Louvem’s producing asset, the Beaufor mine, northeast of Val d’Or, Que., produced 12,100 oz. gold in the quarter, up from 9,400 oz. in the second quarter of 1999. The company has produced 25,000 oz. so far in 2000. Aurizon Mines (arz-t) is the operator.

Mining was recently suspended at Beaufor while geotechnical studies evaluate the safety of the operation.