Richmont’s Wasamac shows potential

Shares of Richmont Mines (RIC-T, RIC-X) jumped $1.42, or 15.1%, to $10.69 on drill results from its Wasamac gold property in Quebec’s Abitibi region.

The company plans to expand its exploration program there by another 10,000 metres to 45,000 metres this year, as part of an effort to evaluate the potential for an underground bulk-mining operation.

Drill hole 11-72 returned 31 metres of 7.28 grams gold per tonne and hole 11-74A cut 33 metres of 2.17 grams gold. Other notable intercepts include: 11-73, which cut 7 metres of 1.62 grams gold; 11-77, which returned 10 metres of 1.82 grams gold; and 10 metres of 2.03 grams gold in hole 11-81. 

Richmont is working on an updated resource calculation that should be released before the end of the year.

A preliminary economic assessment is targeted to be ready in the first quarter of 2012. 

As of Dec. 31, 2010, Wasamac had measured and indicated resources of 5.1 million tonnes grading 2.51 grams gold per tonne for 411,073 oz. contained gold. Inferred resources add 11.5 million tonnes grading 2.72 grams gold for just over 1 million contained oz. gold.

The 7.6-sq.-km Wasamac property is 15 km west of Richmont’s headquarters in Rouyn-Noranda, Que., in the heart of the Abitibi gold mining district and less than 10 km east of its Francoeur mine, which it is advancing to commercial production. 

Richmont acquired 100% ownership of the Wasamac property in 1992 and began dewatering the pre-existing underground operations, as well as some surface drilling. The project was shelved in 1994 during an industry-wide downturn. 

Gold at Wasamac was discovered in 1936 through trenching work. Intermittent production between 1965 and 1971 totalled 1.9 million tonnes grading 4.16 grams gold per tonne for 252,923 oz. gold. 

At presstime Richmont traded at $10.94 per share. The company has 31.7 million shares outstanding.