Richmont Mines Updates Corporate Mineral Reserve and Resource Estimates, W Zone Mine Non-Cash Write-Down
Richmont Mines Inc. (TSX:RIC,NYSEMKT:RIC) announced updated corporate mineral reserve and resource estimates as of December 31, 2013, together with forecasted 2014 production, capital expenditures and exploration budget. As a result of a downward adjustment to the W Zone Mine reserve base, it will incur a $13.5 million non-cash write-down on the W Zone Mine in the fourth quarter of 2013.
As quoted in the press release:
- Total Proven & Probable Reserve ounces increased 3% year-over-year using US$1,225/oz gold price, versus gold price of US$1,450/oz last year;
- Total Measured & Indicated Resource ounces increased 5% year-over-year, including Indicated Resources of 168,897 gold ounces, grading 11.52 g/t, established at Island Gold Deep;
- Total Inferred Resource ounces increased 20% year-over-year, including an expanded Inferred Resource of 954,583 gold ounces, grading 9.29 g/t, at Island Gold Deep;
- W Zone Mine reserve base reduced following 2013 production and a re-interpretation of the geology following exposure from mining; Richmond will incur a $13.5 million, or $0.34 per share, non-cash write-down on the asset base in the fourth quarter of 2013;
- 2014 capital expenditures budget of $18.1 million, of which $16.3 million will be earmarked for the continued development of the Island Gold Mine and Island Gold Deep;
- 2014 exploration budget of $3.8 million, primarily at the Beaufor and Island Gold mines;
- 2014 production forecast of 70,000 to 80,000 ounces of gold.
Richmont Mines President and CEO Paul Carmel, said:
We are very pleased that our recent efforts have resulted in overall increases in both our mineral reserves and resources year-over-year, and are particularly pleased with the 168,897 ounces of indicated resources that were defined at Island Gold Deep as well as exceeding our one million ounce resource target for the Island Gold property. Our diamond drilling focus in 2014 will largely be on infill drilling at our operations and at Island Gold Deep, while the majority of our capital expenditures will be focused on development at our Island Gold Mine including Island Gold Deep. On the production front, we are expecting 2014 to be a better year than 2013, as we will have four producing operations that, combined, will generate approximately 70,000 to 80,000 ounces of gold. The production loss from the W Zone Mine will be replaced in 2014 with a higher mill throughput from our Monique Mine, thus lowering the impact on our production profile.