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Richmont Mines Inc.

TICKER: RIC:TSX; RIC:NYSE.MKT

Richmont Mines Inc. is a Quebec-based gold company that has produced over 1.4 Moz gold in Canada since 1991 and has 30 years of experience in gold exploration and mine development. The company has a solid financial position, limited long-term debt and only 39.6M shares outstanding. Richmont is focused on generating positive cash flow, establishing a low-cost, long-life production profile through organic growth, and on advancing Island Gold Deep, a high-grade cornerstone asset below the company's producing Island Gold mine in Ontario.


The information provided below is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.

Expert Comments:

Michael Gray, Macquarie Capital Markets (9/15/14) "Today, before market open, Richmont Mines Inc. announced a 4,800m exploration drill program (four holes, $0.5M) to test the Deep C deposit down-plunge between 800m to 1,000m vertical depth. This program is in addition to the 3,000m drill program planned from underground that tests the immediate area to the east of the known deposit below a 800m vertical depth. . .we reiterate our Outperform recommendation and target of $5/share; Richmont is one of our top buys amongst the junior gold producers we cover."

Vivien Diniz, Gold Investing News (8/6/14) "It was good news all around for Richmont Mines Inc. this week. The company not only released positive Q2/14 but also completed the acquisition of the Island gold mine property. . .the company achieved record operating cash flow in Q2/14 of $13.4M on record revenue of $39M."

Kevin Chiew, CIBC World Markets (7/15/14) "Richmont Mines Inc. reported Q2/14 production of 29,091 oz, significantly higher than our estimate of 20,000 oz, with the main source of the beat generated by better production coming from Beaufor. . .higher production from Beaufor of 8,168 oz (up from 4,401 oz in Q1/14) was driven by improved grade, benefiting from development completed the prior year."

Jeff Wright, H.C. Wainwright & Co. (5/14/14) "We are initiating coverage of Richmont Mines Inc. with a Buy rating and 12-month price target of $2.75. We believe the progression into much higher grade at the Island Gold mine will lead to an increase in production in 2015 and a rerating of the company."

Adam Melnyk, Desjardins Securities (4/28/14) "We see the Deep zone of Richmont Mines Inc.'s Island gold project as the future of the company's production base. In our view, production at Island is tracking in line with expectations and initial sampling results from the Deep zone confirm the higher grades present at depth. We are upgrading our rating to Speculative Buy."

more comments

Adam Melnyk, Desjardins Securities (3/20/14) "Given that Richmont Mines Inc. is a producer with operations (and cost structure) entirely domiciled in Canada, we note that it is positively leveraged to the current environment of a weakening Canadian dollar versus the U.S. dollar. . .we see the deep zones of Island Gold (911 Koz Au attributable at 9.57g/t Au) as the future of the company's production base. We see mining from Island Gold Deep commencing in 2016, with a 13‐year mine life to 2028 and average annual production of 67 Koz Au at total cash costs of US$727/oz."

The Gold Report Interview with Michael Gray (3/19/14) "Richmont Mines Inc. found a new deposit of just above 1 Moz of approximately 10 g/t gold immediately below its Island Gold mine near Wawa, Ontario. This deeper zone (Deep C) at Island Gold transforms the company from one that was living on a small reserve base to one with the potential for a 10-year mine life with higher margins. Despite the issues on grade it encountered in the upper portions of the Island Gold mine last year, the company has ramped down to the top of its Deep C zone with nearly 1 Moz of high-grade ore. It is drilling that off to 20m centers right now. This is a perfect scenario: the development is getting put in place; Richmont just has to extend the ramp infrastructure, develop stopes and feed the mill with higher grades. The true thickness of the Deep C zone average 4.5m versus 2.7m in the upper portion of the mine. That will mitigate dilution, bring higher grades to the mill and increase production, based on our analysis." More >

The Gold Report Interview with Ron Struthers (3/5/14) "Richmont Mines Inc. produces good grades but has seen a temporary rise in production costs because its grade declined from about 5.5 g/t to 4.5 g/t. That had quite an effect on its earnings. But I think these numbers will soon reverse, which should make for a good turnaround there. The company is driving down a ramp to produce from its Island Gold Deep deposit in Canada. In late January, it updated that resource to 169 Koz Indicated at 11.5 g/t, with almost 1 Moz in the Inferred at 9.29 g/t. Again, very good grades." More >

Adam Melnyk, Desjardins Securities (2/21/14) "Richmont Mines Inc. produced 64.6 Koz Au in 2013, above guidance of 63 Koz Au and our forecast of 61 Koz Au. . .the beat on production versus our estimate was mainly driven by stronger-than-expected production in Q4/13 from the flagship Island Gold mine."

Michael Gray, Macquarie Capital Markets (2/20/14) "In 2014, Richmont Mines Inc. plans to perform 32,500m of exploration drilling and 35,000m of definition drilling. . .we reiterate our Outperform recommendation and $3.50 target as Island Gold is a Canadian asset with great exploration upside."

Michael Gray, Macquarie Equity Research (2/11/14) "Richmont Mines Inc. reported its corporate mineral reserve and resource estimates as of Dec. 31, 2013, with total 2P + Measured, Indicated and Inferred (MI&I) of 42 Mt at 3.68g/t Au for 5 Moz Au. . .the reserve and resource estimate for year-end 2013 are based on $1,225/oz gold, versus year-end 2012 at $1,450/oz gold. Total 2P + MI&I ounces were 13% higher, while grade was 8% higher. . .we reiterate our Outperform recommendation. . .we would be buying Richmont shares for exposure to the growing high-grade Island Deep Zone and leverage on the rebound potential of higher gold prices."

Ron Struthers, Struthers Resource Stock Report (2/10/14) "I like Richmont Mines Inc. as it has been able to become a small growing producer with just 39M shares out. . .the Island gold mine deep zone adds a lot of blue sky potential, and what will also give a big boost to future growth is its Wasmac gold property."

Michael Gray, Macquarie Capital Markets (1/29/14) "Over the past 12 months, the total resources at the Island Gold Deep zones at Richmont Mines Inc.'s Island gold mine more than doubled from 508 Koz gold to 1.12 Moz gold. . .we reiterate our Outperform rating and recommend accumulating the company's shares for exposure to the growing high-grade Deep zones and leverage on the rebound potential of higher gold prices."

Adam Melnyk, Desjardins Securities (1/29/14) "We are encouraged by the increase in Island Gold Deep's resources. . .and remain positive on the development potential of the project, which we expect to serve as Richmont Mines Inc.'s future production base. . .six new subparallel gold zones are now included in the resource estimate for Island Gold Deep, which remains open laterally and at depth. . .we have added four years of mine life to our model for Island Gold Deep, which now extends to 2028. . .a portion of the updated resource (at 100%) is now classified in the indicated category, totaling 169 Koz Au with an average grade of 11.52 g/t Au."

Adam Melnyk, Desjardins Securities (1/28/14) "Before market open today, Richmont Mines Inc. released an updated resource estimate for its Island Gold Deep project. . .global resources have increased by ~46%. . .a portion of the updated resource (at 100%) is now classified in the Indicated category, totaling 169 Koz Au with an average grade of 11.52 g/t Au. . .we are encouraged by the increase in Island Gold Deep's resources and remain positive on the development potential of the project."

Adam Melnyk, Desjardins Securities (12/20/13) "Before market open today, Richmont Mines Inc. announced that it has terminated the CA$50M senior secured credit facility with Macquarie Bank. Management cited the decline in the price of gold as the primary reason for the termination and has indicated it will not incur any cancellation costs as a consequence."

Kevin Chiew, CIBC World Markets (11/25/13) "As of Sep. 30, Richmont Mines Ltd. had cash and equivalents of $21.2M and total debt of $6.2M; Richmont continues to have access to credit through a senior credit facility for up to $50M. The drawdown deadline for the first $12.5M tranche has been extended until Dec. 31 (previously Sep. 30). . .we expect Q4/13 production to benefit from commercial production from the W Zone and Monique (both declared commercial production Oct. 1)."

Chris Cann, Edison Investment Research (11/18/13) "Richmont Mines Inc. updated the resource at its Island Gold Deep deposit in October to 2.3 Mt grading 10.53 g/t gold for 771 Koz. . .we believe Island Gold Deep's proximity to the Island Gold workings, its mineralized widths and high grade should facilitate development of a low capital-intensity, low operating-cost expansion. . .we expect Richmont to produce 80 Koz plus in 2014."

Ron Struthers, Struthers Resource Stock Report (10/21/13) "Richmont Mines Inc. has had three very positive news releases in the last couple weeks. . .the company started commercial production at Monique. . .it started commercial production at the W Zone. . .Richmont announced an updated Inferred mineral resource estimate of 2.3 Mt grading 10.53 g/t for 771 Koz gold for the Island Gold Deep project."

Adam Melnyk, Desjardins Securities (10/17/13) "Before market open today, Richmont Mines Inc. announced that its 100%-owned W Zone mine (a satellite deposit of Beaufor) in Québec achieved commercial production effective October 1, 2013, which is in line with management's guidance and our forecast. . .we are pleased to see the W Zone reach this milestone. We expect ore feed from Beaufor, the W Zone and Monique to have a positive impact on unit costs and efficiency levels at the Camflo mill. The company indicates that the mill is currently operating at full capacity (~1,200 tpd) with ore feed from these three operations."

Kevin Chiew, CIBC World Markets (10/8/13) "Richmont Mines Inc. provided an updated Inferred resource for the Island Gold Deep C zone of 771 Koz (2.3 Mt at 10.53 g/t), up from the previous Inferred resource of 508 Koz (1.5 Mt at 10.73 g/t). Overall, the increase in ounces supports our view of continuing exploration upside for this asset. . .capital spending at Island Gold Deep continues to focus on extending the ramp at depth down to the C zone. Beyond its balance sheet, the company continues to have the option to access up to US$50M from a senior secured credit facility with Macquarie Bank."

Adam Melnyk, Desjardins Securities (10/7/13) "Richmont Mines Inc. released an updated resource estimate for its Island Gold Deep project in Ontario. . .Inferred resources have increased by 52% to 771 Koz gold at an overall unchanged grade of 10.53 g/t. . .we remain positive on the development potential of Island Gold Deep and are encouraged by the increase in the project's resource base."

Adam Melnyk, Desjardins Securities (10/4/13) "Richmont Mines Inc. announced its 100%-owned Monique open-pit mine in Québec achieved commercial production effective October 1, 2013, which is in line with management's guidance and our forecast. . .we are pleased to see Monique reach this milestone. With the W zone expected to achieve commercial production later this month, ore feed from Beaufor, Monique and the W zone should have a positive impact on unit costs and efficiency levels at the Camflo mill."

Hebba Investments, Seeking Alpha (8/20/13) "We believe that Richmont Mines Inc. offers investors a terrific opportunity for outsized returns. . .based on a comparison with its peers, the company is trading at a significant discount. . .the company will give investors a tremendous leverage on the gold price as it rises. . .these valuations are based on management simply meeting previous quarter production and cost totals of 14 Koz gold. . .the Monique Deposit offers additional upside for investors. . .investors should scramble at the opportunity to diversify into a company flying below the radar."

Kevin Chiew, CIBC World Markets (8/6/13) "Richmont Mines Inc. reported gold production for the quarter totaled 14,081 oz at cash costs of US$999/oz., compared with our estimate of 15,000 oz at cash costs of US$1,138/oz. The cash balance at end of Q2/13 was $26.5M. . .Beaufor benefited from a head grade of 7.15 g/t (versus 4.90 g/t in Q1/13), targeting higher-grade areas while reducing processing of lower-grade development ore. . .after the successful completion of the bulk sampling phase for the W zone and Monique, both projects are expected to achieve commercial production in early October, with each respective mine contributing 3 Koz and 4.5 Koz of gold production in Q4/13."

Adam Melnyk, Desjardins Securities (8/2/13) "Grades at Richmont Mines Inc.'s Beaufor trumped expectations. . .the strong beat was driven by a higher-than-expected head grade for the quarter of 7.15 g/t Au versus our expectation of 4.5 g/t Au. . .we continue to see Island Gold Deep as the future of the company's production base and are encouraged by the continuing development of the project."

Adam Melnyk, Desjardins Securities (7/31/13) "The decision to advance Monique to commercial production is a positive development for Richmont Mines Inc.; with both Monique and the W zone expected to come online in October 2013, the ore feed from these two mines to the Camflo mill (which currently processes only ore from Beaufor) should have a positive impact on unit costs and efficiency levels at the mill, given that Camflo would potentially operate at near capacity (~1,200 tpd)."

The Gold Report Interview with Ron Struthers (7/29/13) "Richmont Mines Inc. has 2 Moz in reserves and resources and is producing about 65 Koz a year. It is also putting a new W Zone at the mine into production. It did a successful bulk sample test, at grades of 5.3 g/t with 97.4% recovery. The company has always been managed very prudently. It only has 40M shares out, a strong cash position of $43M and less than $1M in debt. It has a $50M loan facility available as well, so it is in a strong position. The market is valuing its mines and ounces at just $20M right now. If you look at 2 Moz reserves and resources, they're valued at $10/oz—and that's at a producing mine. I just find that ridiculously cheap. . .the high costs are a short-term issue. It will get by this as the year progresses and fall more in line with normal grades that are a bit higher. This additional zone is a higher grade zone that will help with that. It's also paring costs wherever it can, cutting corners here and there like all the gold miners now." More >

Adam Melnyk, Desjardins Securities (6/19/13) "Richmont Mines Inc. announced that following the successful completion of a bulk sample for its 100%-owned W zone project located near Val-d'Or, the company has decided to advance it to commercial production. . .Richmont is now guiding for 6,000 oz of production from the W zone in H2/13, which consists of 3,000 oz gold of precommercial production in Q3/13, followed by 3,000 oz gold of commercial production in Q4/13. This compares with our production estimate of 3,000 oz gold in H2/13. . .the decision to advance the W zone to commercial production ahead of our expectations for H2/13 is clearly an encouraging development for Richmont."

Kevin Chiew, CIBC World Markets (6/18/13) "Richmont Mines Inc. has secured a letter of offer for a senior secured credit facility for up to US$50M to fund the long-term development of its Island Gold Deep project. . .the company has cash and cash equivalents of $43.8M, which we believe is sufficient to meet capital requirements for 2013, including $17M allocated toward the development of the Island Gold Deep project."

Adam Melnyk, Desjardins Securities (6/17/13) "Richmont Mines Inc. announced that it had obtained a letter of offer for a senior secured credit facility with Macquarie Bank of up to $50M. . .we are reiterating our Speculative Buy rating and CA$3.50 target price on the company. Given the difficult financing environment for resource companies, we view positively the fact that Richmont was able to arrange financing for the development of the Island Gold Deep zone which, in our view, forms the future of its production base."

Kevin Chiew, CIBC World Markets (5/10/13) "Richmont Mines Inc.'s gold sales totaled 14,261 oz in Q1/13. . .with an initial Inferred resource established of 508 Koz (average grade of 10.73 g/t), we continue to believe in the strong economic potential of the Island Gold Deep project."

Adam Melnyk, Desjardins Securities (5/10/13) "We remain focused on Richmont Mines Inc.'s development of the deep zones at Island Gold, which, in our view, form the future of the company's production base. We are therefore maintaining our Speculative Buy rating. . .we anticipate initial production from the deep zone at Island in 2016."

Adam Melnyk, Desjardins Securities (4/12/13) "Richmont Mines Inc. announced deep drilling results before market open today from presently undefined zones at its 100%‐owned flagship Island Gold mine in Ontario. . .highlights of the X Zone include 20.64 g/t Au over 3.4m, 17.48 g/t Au over 3.3m, 17.53 g/t Au over 3.1m and 13.64 g/t Au over 9.6m. . .the company also announced that work to extend the ramp to the C Zone at Island Gold has commenced. . .we are encouraged by the high‐grade intercepts encountered at parallel zones."

The Gold Report Interview with Jocelyn August (2/27/13) "Richmont Mines Inc. is an interesting one also. We're interested in seeing what it does with the Island Gold Mine project, which is currently producing, and it is also looking at the deep drilling potential it has there. We're looking for a preliminary resource estimate at Island in Q1/13, but it will be for the deep drilling. Richmont is currently trading at only about $2.80/share, and it's down from a high of $12.50/share in the past year. In November, the company announced the closure of its Francoeur mine not too long after the start of production there because of high operating costs and it not being financially feasible to keep running the project. Because of the size of the Island project, it will be interesting to see what it is able to do." More >

Adam Melnyk, Desjardins Securities (2/26/13) "Richmont Mines Inc. has released an initial resource estimate for the C zone at its 100%-owned flagship Island Gold mine near Wawa; the resource is estimated at 1.5 Mt at 10.73 g/t for 508 Koz in the Inferred category. The C zone is located at depth at Island Gold and remains open in all directions. . .we are maintaining our Speculative Buy rating."

Kevin Chiew, CIBC (2/25/13) "Richmont Mines Inc. released its initial resource estimate for the C zone of the Island Gold Deep project with an inferred resource of 508 Koz (1.5 Mmt at 10.73 g/t), better than our CIBC estimate of ~400 Koz at ~10 g/t and supportive of the company's development strategy. Overall, we are encouraged by the outcome of the initial resource: The C zone exhibits better continuity than currently mined areas at Island Gold, has a fairly uniform grade distribution and has generated recovery rates of >96% (based on preliminary metallurgical testing)."

Adam Melnyk, Desjardins Securities (1/9/13) "Richmont Mines Inc. announced before market open today that it has received the required mining permits for its 100%-owned Monique gold project. . .we view this announcement as positive, as it advances Monique down the development track."

Eric Allison, Casimir Capital (12/4/12) "Richmont Mines Inc. has been experiencing substantial success, especially in terms of deep drilling at Island Gold. . .and it has revamped its management team. The fact that Franceour was closed with employees let go where necessary only several months after the mine commenced production indicates management's strong focus on reducing costs. Our revised price target still yields ~75% upside return potential, and we therefore reiterate our Overweight recommendation on the shares."

Ron Stewart, Dundee Capital Markets (11/30/12) "Richmont Mines Inc. announced that it is closing the Francoeur mine. . .the company still has two producing mines and both host significant growth opportunities. We expect Island to produce 41 Koz gold this year, and with promising exploration potential at depth that we confirmed on a site visit last week, we see the opportunity for the operation to grow to ~60 Koz/year. . .management is acting prudently and in the best interests of its shareholders by letting Francoeur close. . .and we are reiterating our Buy recommendation."

Cosmos Chiu, CIBC World Markets (11/30/12) "Richmont Mines Inc. announced the immediate closure of Francoeur due to unfavorable mine economics. . .the closure comes unexpectedly but, in our view, was the right decision. . .to provide some perspective, Francoeur represented less than 1% of our operating NAV for the company. . .the main focus of the company now rests squarely on Island Gold where we believe Richmont can generate the most value."

Cosmos Chiu, CIBC World Markets (11/25/12) "We had the opportunity to visit Richmont Mines Inc.'s Island Gold mine. . .from our conversations with management and onsite staff, and from the extent of preliminary planning, we believe the development of deeper resources at Island Gold could be a game changer. The company released a number of new drill results from its deep drilling program. . .collectively, the drill results had an average cut grade of 8.92 g/t over 4m, and continued to demonstrate a robust vein system at depth with good continuity and solid grades."

Ron Stewart, Dundee Capital Markets (11/9/12) "Richmont Mines Inc. announced Q3/12 operating and financial results on November 8. Net income of CA$0.3M, or +CA$0.01/share, was above our -CA$0.04/share expectation. . .we are maintaining our Buy recommendation. . .and we note that the all-in margin, thought slim at 4%, has been consistently positive over the last two years."

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