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Richmont Mines Inc. (RIC) Readies Additional Canadian Projects, Sets 500,000 oz. Gold Production Goal

Once a company has a base formed it is in a solid position to set a course of its choosing. This is especially true when a company is operating in a product/commodity area that is currently at higher price levels. One must keep an eye on these types of investments.

Richmont Mines Inc., an exploration and development company, focuses on the discovery, development and marketing of gold deposits primarily in Canada. The company currently operates at locations within Ontario, Quebec, Newfoundland and Labrador, Canada. The company is currently debt free and expects to remain in this position.

The company controls between 55 and 100% of its various projects. Overall, inferred oz. production is well over 900,000 for all projects combined while proven gold production is approximately 350,000 oz. In these estimates one must understand that Canadian estimates vary somewhat from how US estimates are made. In most respects, however, Canadian standards are generally considered a world standard and are more strict in interpretation than US standards. From this perspective, the inferred production works with the fact that Richmont Mines operates underground and not in a strip mine orientation. Generally, this would mean that, since it works narrow veins that tend to run fairly deep, it may have access to additional production capacity.

At present the company has over 270,000 oz. of indicated gold resources at two operational sites. It also indicates that potential indicated and inferred gold resources are well in excess of 500,000 oz. at three continuing projects. To date, the company has realized over 1 million oz. of gold with expectation of annual production reaching 250,000 oz. in 2010 and 500,000 oz. annually by 2015. Given Richmont Mining’s respectable extraction cost, which run in the middle US$500 per oz. range, it would appear that the company in a solid position to move its 5 year plan forward with only a small effort. Gold pricing has a funny way of changing quickly, as it is a major component within the global economic picture, but Richmont does appear to be on a profitable track and may be worth investigating.

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