Richmont Mines Inc. (TSX: RIC) reported strong second-quarter operational results last week, said it was on track to meet or exceed annual guidance
SmallCapPower | July 17, 2017: Richmont Mines Inc. (TSX: RIC) last Thursday reported strong second-quarter operational results, with revenues up 27.6% to $59.3 million as compared with $46.5 million in the prior year quarter. The strong growth in revenues was driven primarily by higher than expected production of gold and cost reduction initiatives. Richmont Mines shares moved up by 8.1% following the update.
Company-wide production was 31,249 ounces of gold (up 6.3% QoQ) for the quarter, primarily driven by another quarter of solid production from the Island Gold Mine of 26,110 ounces of gold (up 9.8% QoQ). The mine is now well positioned to achieve, or exceed, the high-end of production guidance for the year of 87,000-93,000 ounces. Company-wide cash costs for the quarter were $725 (US$539) per ounce, positively impacted by record low cash costs from the Island Gold Mine of $580 (US$431) per ounce. The Island Gold Mine remains on-track to meet, or beat, the low end of annual cash cost guidance. During the quarter, Richmont announced results from the Expansion Case Preliminary Economic Assessment (“PEA”) completed on the Island Gold Mine. The PEA confirmed the positive economics of a low cost 1,100 tonne per day underground mine and mill expansion and represents another positive step forward in unlocking the potential of the Island Gold Mine.
Richmont Mines CEO Renaud Adams said, “During the balance of the year our focus at the Island Gold Mine will remain on enhancing operational and cost efficiencies, executing on our expansion plan and advancing our strategic delineation and exploration drilling programs. All of these initiatives are supported by our strong balance sheet and our disciplined approach to capital allocation.”
In terms of valuation, Richmont Mines currently trades at a Price to TTM Sales of 3.66x, Price to Book of 3.03x, and forward PE of 12.03x.
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