Richmont’s Island Gold drives strong quarterly gold production, performance

JOHANNESBURG (miningweekly.com) –  Small-scale gold producer Richmont Mines has reported a strong operating and financial performance for the second quarter ending June 30, driven by solid results from its flagship Island Gold mine, in Ontario.

The company produced 31 249 oz of gold and sold 35 040 oz in the quarter, with 26 110 oz of gold (29 534 oz sold) produced by Island Gold mine.

Richmont’s cash costs for the quarter were $539/oz, positively impacted by Island Gold’s record low cash costs of $431/oz.

Companywide all-in-sustaining costs (AISC) were $711/oz, positively impacted by a record low AISC of $503/oz from the Island Gold mine.

Island Gold mine remains on track to meet, or exceed, yearly production and cost guidance.

The company reported second-quarter revenues of $44.1-million and earnings of $7.8- million, or $0.12 a share.

Operating cash flow was $18.5-million, or $0.29 a share, while net free cash flow was $14.3-million, or $0.22 a share.

Richmont ended the period with a cash balance that increased at the end of the quarter to $73.9-million, an increase of $15.4-million from the first quarter. Working capital increased to $62.7-million.

Richmont CEO Renaud Adams noted in a statement released on Thursday that the positive results for the quarter were supported by another consecutive quarter of solid production and record-low cash costs reported from Island Gold mine.

“This strong operational and cost performance drove robust cash flow streams, even during a period of accelerated investment in our strategic expansion and exploration programmes at Island Gold," he stated.

Meanwhile, Richmont’s Beaufor mine, in Quebec, produced 5 139 oz of gold for the quarter. Production was lower than expected, primarily as a result of lower grades mined, as higher-than-expected dilution was reported from one stope located in the Q Zone.

Cash costs were higher than the yearly guidance at $1 117/oz. This was primarily related to lower production achieved for the quarter, while AISC for the quarter was $1 332/oz.

Meanwhile, Richmont’s strategic exploration drilling programme, currently under way at Island Gold mine, has intersected high-grade, wide mineralisation in the down plunge extension of the main Island Gold deposit. Hole MH8-4 intersects 19.85 g/t gold over 8.4 m.

Adams added that Richmont’s focus remains on creating sustainable shareholder value by driving ongoing operational and cost efficiencies throughout the organisation and maintaining the company’s disciplined approach to capital allocation.

“Over the balance of the year, we will continue to focus on further unlocking the potential of the Island Gold mine as we position the operation to be one of the lowest cost producers in the Americas,” he stated.