Richmont Mines Closes Francoeur Mine, Suspends Activity at Wasamac

Richmont Mines Inc. (TSX:RIC, AMEX:RIC, NYSE:RIC), announced the of the Francoeur Mine and the suspension of exploration activities on the Wasamac gold property, both in Quebec.

As quoted in the press release:

• Richmont will take a pre-tax write-off of approximately CAN$11 – CAN$13 million related to the closure of the Francoeur Mine, the majority of which will be accounted for in Q4 2012. The write-off will consist of $4 – $5 million in cash (related to employee severance) with the remaining amount being non-cash;
• Commercial gold production at Francoeur will cease on November 30, 2012, after which the Corporation will complete a closure process of approximately 4 months. It is estimated that 115 employees will be laid off immediately and 35 employees will be retained temporarily for this 4 month de-commissioning period.

Richmont’s President and CEO, Mr. Paul Carmel said:

Given the ongoing high operating costs at Francoeur, and management’s inability to foresee marked improvements in the future, we are obliged to make the difficult but responsible decision to close the mine. Low realized grades, difficult mining conditions and a tight labour pool for the experienced miners required for the challenging mining conditions at Francoeur were the main factors that contributed to the higher costs that led to the decision.

To view the whole press release, click here.