LOUVEM MINES INC.
TSX VENTURE : LOV

LOUVEM MINES INC.

October 29, 2009 08:30 ET

Louvem Mines Reports Its 2009 Third Quarter Results

MONTREAL, QUEBEC--(Marketwire - Oct. 29, 2009) - Louvem Mines Inc. (TSX VENTURE: LOV) is pleased to announce its financial results for the third quarter ended September 30, 2009. Financial results are based on Canadian GAAP and dollar amounts are reported in Canadian currency, unless otherwise noted.

Revenues were $3,092,866 for the third quarter of 2009, compared with $3,791,438 during the same period in 2008. In all, 2,926 ounces of gold were sold at an average price of US$901 (CAN$1,054) per ounce in the third quarter of 2009, compared with 4,001 ounces of gold sold at an average price of US$881 (CAN$939) per ounce for the same period in 2008. While the number of ounces of gold sold fell 27% year-over-year in the third quarter of 2009, this level represented a 24% increase over Q2 2009 levels.

Total expenses for the third quarter of 2009 were $2,873,128, compared with $2,463,743 incurred in the same period in 2008. Total operating costs for the third quarter of 2009 were $2,281,957, compared with $1,838,833 for the same period in 2008. The cash cost per ounce of gold sold increased year-over-year, from US$432 (CAN$460) in the third quarter of 2008 to US$667 (CAN$780) for this quarter, mainly due to an important drop in the recovered grade at the Beaufor Mine.

Exploration spending in the third quarter of 2009 was $225,225, compared with $284,543 in the same period in 2008, reflecting sustained efforts in exploration. Depreciation and depletion increased from $164,032 in 2008 to $166,766 in 2009, reflecting lower gold sales, offset by a higher depreciation and depletion rate per ounce of gold sold, which is calculated based on the proven and probable reserves at the Beaufor Mine.

The Company posted net earnings of $63,061, or nil per share, for the third quarter of 2009, compared with net earnings of $878,640, or $0.03 per share, for the same period in 2008. Cash flow from operations was $519,470 for Q3 2009, compared with $1,529,203 in Q3 2008.

Beaufor Mine

During the quarter ended September 30, 2009, a total of 26,912 tonnes of ore were processed, up 5% over 2008 levels. However, cash cost per ounce sold increased a substantial 54% year-over-year to US$667 (CAN$780), from US$432 (CAN$460) in 2008, driven by 31% drop in the recovered grade to 6.76 g/t (from 9.73 g/t in 2008), which was primarily attributable to lower than expected results from room-and-pillar stopes. Higher production costs were partly offset by the higher average selling price, as the quarterly average price for ounces sold increased 12% over Q3 2008 levels to CAN$1,054 (US$901).

Nine-Month Review

For the nine-month period ended September 30, 2009, revenues stood at $9,044,279, down 22% relative to revenues of $11,633,026 for the same period in 2008, reflecting the lower number of gold ounces sold. During the first nine months of 2009, 8,277 ounces of gold were sold at an average price of US$930 (CAN$1,088) per ounce, compared with 12,353 ounces of gold sold at an average price of US$878 (CAN$936) per ounce for the same period in 2008.

Operating costs for the first nine months of 2009 were $6,655,281, up 11% year-over-year, primarily due to higher mining costs and increased definition drilling at the Beaufor Mine, which increased from 6,740 metres in 2008 to 18,955 metres in 2009. Exploration costs for the first nine months of 2009 were $1,015,570, compared with $1,031,771 for the same period last year.

For the nine-month period ended September 30, 2009, the Company posted net earnings of $31,143, or nil per share, compared with net earnings of $2,760,293, or $0.11 per share, for the nine-month period ended September 30, 2008. Lower net earnings in 2009 are due to lower gold sales and higher production costs relative to 2008.

Beaufor Mine

Year-to-date, Beaufor Mine has processed a total of 79,181 tonnes of ore, 7% below 2008 levels. Cash cost per ounce of gold produced rose 51% to US$687 (CAN$804), again reflecting a substantially lower recovered grade of 6.50 g/t (versus 9.01 g/t in 2008), driven by less favourable results from room-and-pillar stopes, most notably in the second and third quarters of 2009. A total of 16,554 ounces of gold, with Louvem's share of 8,277 ounces, were sold in the first nine months of 2009, down 33% from 2008 levels, however this was partially offset by a 16% year-over-year increase in the average selling price to CAN$1,088 (US$930) per ounce.

Exploration at the Beaufor Mine

The 7,100 metres of exploration drill testing completed in the third quarter of 2009 mainly focused on the east and west extensions of the Q Zone, the depth extension of the C Zone, and the area proximal to the Perron Fault. While results have not led to any significant increase in inferred resources in the zones at depth from year-end 2008, Louvem expects to complete the detailed analysis of these drilling results by the end of this year, at which point management will evaluate all possible alternatives for the mine. Definition drilling in the zones accessible from the current infrastructure increased substantially in 2009 to 10,174 metres in the quarter versus 2,190 metres in Q3 of last year. Results from this drilling will be compiled for the Company's year-end reserve calculations.

Outlook

Louvem Mines is maintaining its exploration efforts at the Beaufor Mine and is working to lower its production costs. The Company has no long-term debt and has $5.5 million in working capital as at September 30, 2009.

Martin Rivard

President and Chief Executive Officer

About Louvem Mines Inc.

The Company has a 50% interest in the Beaufor Mine and owns other exploration properties located near Val-d'Or, in northwestern Quebec, Canada.

More information on Louvem Mines can be found on its website at: www.louvem.com.

KEY FINANCIAL DATA

 Three-month periodNine-month period
 ended September 30,ended September 30,
 2009 2008 2009 2008 
Results ($)    
Revenues3,092,866 3,791,438 9,044,279 11,633,026 
Net earnings63,061 878,640 31,143 2,760,293 
Cash flow from (used in) operations519,470 1,529,203 (256,760)4,275,202 
     
Results per share ($)    
Net earnings basic0.03 0.11 
     
Weighted average number of common shares25,929,689 25,929,689 25,959,689 25,929,689 
 September 30, 2009 December 31, 2008 
Financial position ($)  
Total assets8,249,887 9,281,325 
Working capital5,465,557 5,468,777 
Long term debt

SALES AND PRODUCTION DATA

Beaufor Mine – 50%Three-month period ended September 30,
2009 2008 
Gold sales (ounces)2,926 4,001 
Production of gold (ounces)2,842 3,163 
   
 US$ CAN$ US$ CAN$ 
Cash cost (per ounce sold)667 780 432 460 
Average selling price (per ounce of gold)901 1,054 881 939 
Beaufor Mine – 50%Nine-month period ended September 30,
2009 2008 
Gold sales (ounces)8,277 12,353 
Production of gold (ounces)7,467 13,362 
   
 US$ CAN$ US$ CAN$ 
Cash cost (per ounce sold)687 804 454 484 
Average selling price (per ounce of gold)930 1,088 878 936 

Average exchange rated used for 2008: US$1 equals CAN$1.0660
2009 ESTIMATED EXCHANGE RATE: US$1 EQUALS CAN$1.1701

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Louvem Mines Inc.
    Martin Rivard
    President and Chief Executive Officer
    514-397-1448
    514-397-8620 (FAX)
    www.louvem.com