Interesting action RICHMONT MINES LTD. RIC:TSX RIC:AMEX CDN$ 2.89
ASSETS: CANADA
CASH: $20,000,000.00
LONG DEBT: Nil
HEDGE: NO
Q4-06/Q1-07 EXPLORATION: Quebec, Beaufor, E. Amphi (Fourax property), Francoeur (West zone), and Newfoundland Valentine Lake (17 zones of interest).
TOTAL GOLD RESOURCES (Excl. Inferred) 1,034,000 oz.
Rating: STRONG BUY
Risk: Moderate
O/S (MM): 24,500,000
F/D (MM): 26,500,000
Basic Market Capitalization ($MM): 70,805,000
% OPTIONS/WARRANTS ISSUED: 8%
NAV – Target: $5.12/share CDN.
P/CFPS – Target: $4.76/share CDN.
3 MONTH TARGET PRICE: $4.94/share CDN.
3-month return: 70.95%
US Market cap/reserve oz: $173
US Market cap/resource oz: $60
US Market cap/production oz: $880
EVALUATION DATA ($US)
Property Name 2007E Cash Flow CFPS
Beaufor: $645,000.00 $0.02
East Amphi: $3,000,000.00 $0.11
Island Gold: $5,375,000.00 $0.20
Administration: $3,948,300
Sub total: $5,071,700.00 $0.21
ASSUMPTIONS 2007E
Average Gold Price US$: 600/oz.
Exchange US/CDN $0.87
Beaufor Production: 15,000 oz/yr.
Beaufor Total Cash Cost: $557/oz.
E. Amphi Production: 30,000 oz/yr.
E. Amphi Total Cash Cost: $500/oz.
Island Gold Production: 25,000 oz/yr.
Island Gold Total Cash Cost: $385/oz.
In my opinion Richmont is undervalued and investors to buy before the end of Canadian tax loss selling at December 22, 2006. It will be interesting to observe the stock price ramp up between then and the end of March 07.
Note:
MONTREAL, November 1st, 2006 - Richmont Mines Inc. (the “Company”)
announces today that the TSX has accepted the Company’s notice of intention to
make a normal course issuer bid to purchase its outstanding common shares through
the facilities of the TSX, for a period of twelve months expiring on
November 2, 2007. Up to 1,200,000 common shares of Richmont Mines, representing
approximately 5% of the 24,237,853 common shares of the Company issued and
outstanding on October 31, 2006, may be purchased under the bid. The purchases
may commence on November 3, 2006 and will extend to November 2, 2007.
In the opinion of management of the Company, this normal course issuer bid is
justified by the fact that the common shares might be undervalued on the market from
time to time with regard to Richmont Mines’ financial position and future prospects
and that the purchase thereof by the Company is an appropriate use of its funds.
Cheers!