Richmont Mines (TSX: RIC, Stock Forum) had reason to celebrate when the company announced that its 2014 gold production total of 95,208 ounces beat out its 2013 gold production figure by 45%.
According to the news release, year-end 2014 gold production levels also beat the company's guidance by 5% and are the second highest in corporate history leaving the company with cash and cash equivalents, at the end of December, of approximately $35.0 million.
The company also announced transformative development plans in 2015 for its 1.1 million gold ounce global higher-grade resource at the Island Gold Mine located in Ontario, Canada, which included extending the main access ramp to a minimum depth of 750 metres and the secondary eastern ramp to a minimum of 570 metres.
The Island Gold Mine would also see completing of 41,000 metres of exploration drilling for possible eastward extension of exising resource and 59,000 metres of definition and delineation drilling to upgrade the inferred resources between 500 and 1000 metres in preparation for mining in 2016.
Guidance for 2015 is expected to be 78,000 to 80,000 ounces at a cash cost of CAN$935 to CAN$1,035. Total planned capital expenditures anticipated to hit $56.3 million with $48.3 million being directed to the operation and development of the Island Gold Mine.
Company President and CEO, Renaud Adams, commented, “2015 will be a transformational year for Richmont. Our 2015 budget represents a significant step towards positioning Island Gold with the view of creating a longer-life multi-million gold ounce, higher production and superior free cash flow operation.This will provide a solid foundation for Richmont to deliver potentially industry-leading high-quality growth from a mining-friendly and safe jurisdiction for many years to come.”
He went on, “We are very proud of the production results that our operations team delivered in 2014. We generated the second highest level of gold sales in the Corporation's 20+ year history as well as strong operating cash flow in spite of a more challenging gold price environment.”
Then explained, “These achievements speak to the dedication and experience of our management team and employees. Looking ahead to 2015, Richmont will embark on important, game-changing development milestones that will enable us to unlock significant value at our cornerstone Island Gold Mine.”
And illustrated, “Two priorities are driving our Island Gold accelerated 2015 plans, namely to expedite access to the deeper high quality resource base, and to increase our reserve and resource base. These two priorities will extend the mine life, accelerate potential production expansion and increased free cash flow visibility, while providing the strongest organic growth profile in the Corporation's history.”
Then he finally concluded, “It is important to note that we will be laying the groundwork for Island Gold's future in 2015, and this will involve extensive development and drilling and therefore a sizeable investment this year. Once completed, however, we expect to have numerous years of established mine life at lower costs ahead of us, and we will be very well-positioned for growth”
Richmont Mines was in the news recently when the Montreal, Quebec-based company announced a week ago that deep exploration drilling had extended mineralization at the Island Gold Mine.
Shares gained 9.83% on the news to $3.91 per share.
Currently there are 48.3m outstanding shares with a market cap of $188.8 million.