Vancouver — Richmont Mines (RIC-T), yet another junior producer feeling the pinch of historically low gold prices, posted a loss of $4.35 million, or 29 per share, in the quarter ended June 30.
The company, which operates gold mines in Quebec and Newfoundland, saw revenues plunge to $6.1 million from $10.2 million in the corresponding period last year.
Richmont decided to take a $4.2-million writedown on its Nugget Pond mine, as well as a $1-million provision for site restoration costs. Lower grades and higher cost from the Newfoundland mine prompted the company to take action. Located near La Scie, the operation produced 1,600 oz. gold during the quarter at an average cash cost of US$366 per oz.
At the Hammerdown project, northwest of Springdale, Nfld., the company continued its development work. So far this year, Richmont has put $3.5 million into the property. Since early July, the ore has been transported to the Nugget Pond mill, which treats 375 tons per day at an average grade of 0.6 oz. per ton.
The Francoeur mine hoisted about 60,000 tons of ore in the quarter, producing 12,200 oz. gold at a cash cost of US$319 per oz. Due to depletion of reserves, the operation is slated to close in October.
At the Beaufor mine in northwestern Quebec, Richmont hopes to resume operations before the end of the year. Mining was suspended last year while geotechnical studies evaluated the safety of the operation. Richmont recently acquired Aurizon Mines’ (ARZ-T) half-interest in the mine. The company already had a stake in it through its 69.3% ownership of Louvem Mines (LOV-M), which owns the remaining half of Beaufor.
Acting as operator, Aurizon suspended mining at Beaufor in August 2000, due to concerns over pillar stability. The partners commissioned an independent firm to assess the pillars.
They now say the report concludes that mining can safely resume once hydrostatic barricades are installed and certain near-surface stopes are backfilled. The cost of this is estimated at $4.5 million.
Beaufor’s proven and probable reserves stand at 1.1 million tons grading 0.22 oz. gold per ton, or 237,000 contained ounces.
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