LOUVEM MINES INC.
TSX VENTURE : LOV

LOUVEM MINES INC.

February 25, 2010 08:00 ET

Louvem Mines Reports Its Fourth Quarter and Year End Results for 2009

- Gold sales of 10,427 in 2009 versus 16,454 ounces in 2008

- Net loss of $125,530 in 2009 versus earnings of $3,182,904 in 2008, primarily reflecting lower gold sales, tonnage and recovered grades at the Beaufor Mine

MONTREAL, QUEBEC--(Marketwire - Feb. 25, 2010) - Louvem Mines Inc. (TSX VENTURE:LOV), ("Louvem" or "the Company"), announces its financial results for the fourth quarter and year ended December 31, 2009, as well as updated Reserve and Resource estimates. Financial results are based on Canadian GAAP and dollar amounts are reported in Canadian currency, unless otherwise noted.

"While our full year gold sales from the Beaufor Mine of 20,854 ounces, which translated into 10,427 ounces at Louvem, were in line with management's revised target of 20,000 ounces, as a Company we are disappointed with this year's results. Grades in the room and pillar stopes at the mine were significantly lower than expected in 2009, resulting in lower production and higher operating costs, a fact that emphasizes the need for continued exploration efforts on this property" commented Mr. Martin Rivard, President and CEO of Louvem Mines. "In Q4 2009, the Company initiated a 6,600 metre surface drilling program that identified one promising zone called Zone 350. More drilling is planned in 2010 to further evaluate the potential of this zone and other targeted areas at Beaufor. The Company remains committed to Beaufor, and expects these efforts to translate into improved results at this mine going forward."

2009 Fourth Quarter Results
Revenues for the fourth quarter of 2009 were $2,608,501 compared with $4,004,653 for the same period in 2008, reflecting a decline in the number of ounces of gold sold, partially offset by a 25% increase in the average selling price per ounce, in Canadian dollars. A total of 2,150 ounces of gold were sold at an average price of US$1,060 (CAN$1,211) in the fourth quarter of 2009, versus gold sales of 4,101 ounces at an average price of US$908 (CAN$968) in the comparable period in 2008.

Operating costs for the fourth quarter of 2009 were $2,234,563 compared with $2,462,086 in the same period in 2008. The cash cost per ounce of gold sold rose significantly to US$910 in the fourth quarter compared with US$563 for the corresponding period last year. The increase is mainly attributable to lower tonnage levels and a lower recovered grade of 5.97 g/t in the fourth quarter of 2009 versus 8.41 g/t in the prior year, which reflected disappointing results from room and pillar stopes during the quarter.

The Company posted a net loss of ($156,673), or ($0.01) per share in the fourth quarter of 2009, compared with a profit of $422,611, or $0.02 per share for the same period in 2008. The difference is primarily attributable to a lower profit margin from the Company's mining operations, which totalled $368,304 during the fourth quarter of 2009 compared with $1,506,656 during the same period in 2008. This reflected a decline in the number of ounces of gold sold, partially offset by an increase in the average sales price per ounce of gold achieved in the quarter.

During the fourth quarter of 2009, 22,412 tonnes of ore from the Beaufor Mine were processed at an average recovered grade of 5.97 g/t, and 4,300 ounces of gold were sold at an average price of US$1,060 (CAN$1,211) per ounce, Louvem's share was 2,150 ounces. In the same quarter the prior year, 30,343 tonnes of ore were processed at an average recovered grade of 8.41 g/t, and 8,201 ounces of gold were sold at an average price of US$908 (CAN$968) per ounce, Louvem's share was 4,101 ounces.

Reserves and Resources Calculation
At the end of 2009, Proven and Probable Reserves at the Beaufor Mine were estimated at 165,761 tonnes at a grade of 8.38 g/t for 44,637 ounces of gold, compared with 69,792 ounces at the end of 2008. Measured and Indicated Resources were estimated at 171,372 ounces at the end of 2009 compared with 148,000 ounces at the end of 2008. Significant exploration below the current mining infrastructure resulted in a major increase in Inferred Resources which went from 154,927 ounces at the end of 2008 to 199,256 ounces at the end of 2009. However, increases in both Measured and Indicated Resources and Inferred Resources are all below the existing infrastructure of the mine, and currently do not economically justify an extension of current operations. Approximately 25,000 to 30,000 metres of drilling is planned on this property in 2010, reflecting the Company's continued commitment to expanding its reserve and resource base.

Beaufor Mine (100%)

  December 31, 2009 December 31, 2008
  Reserves Tonnes   Grade   Ounces1 Tonnes   Grade   Ounces1
  (metric (g/t Au )   (metric (g/t Au )  
  Proven 47,033   6.63   10,021 96,678   7.17   22,287
  Probable 118,728   9.07   34,616 147,385   10.03   47,505
  Total Proven and Probable 165,761   8.38   44,637 244,063   8.89   69,792
 
  December 31, 2009 December 31, 2008
  Resources2 Tonnes  (metric Grade  (g/t Au ) Ounces1 Tonnes  (metric Grade  (g/t Au ) Ounces1
  Measured 96,396   5.78   17,903 101,767   5.46   17,861
  Indicated 725,732   6.58   153,469 635,839   6.37   130,139
  Total Measured and Indicated 822,128   6.48   171,372 737,606   6.24   148,000
                     
  Inferred 919,214   6.74   199,256 655,804   7.35   154,927
(1) Louvem's share is 50%.
(2) Resources presented in the above table are exclusive of reserves and do not have demonstrated economic viability at this time.

Full Year 2009 Review
Precious metals revenues totalled $11,605,604 in 2009 versus $15,537,392 in 2008, reflecting lower gold sales partially offset by a higher average selling price per ounce. Specifically, 10,427 ounces of gold were sold at an average price of US$975 (CAN$1,113), compared with 16,454 ounces of gold sold at an average price of US$886 (CAN$944) in 2008.

Operating costs during 2009 totalled $8,889,844, up 5% over the 2008 level of $8,437,809, and the cash cost per ounce of gold sold increased to US$747 in 2009 compared with US$481 in 2008. This was mainly attributable to lower tonnage and a decline in the recovered grade, detailed below. The Company posted a net loss of $125,530, or nil per share for the year ended December 31, 2009, versus a profit of $3,182,904, or $0.12 per share for the comparable period in 2008.

In 2009, 101,593 tonnes of ore were processed from the Beaufor Mine at an average recovered grade of 6.38 g/t, and 20,854 ounces of gold were sold at an average price of US$975 (CAN$1,113) per ounce, Louvem's share was 10,427. In the same period the prior year, total ore tonnage from the Beaufor Mine was 115,674, the average recovered grade was 8.85 g/t, and 32,908 ounces of gold were sold at an average price of US$886 (CAN$944) per ounce, of which Louvem's share was 16,454 ounces.

Outlook
Production at the Beaufor Mine in 2010 is expected to be approximately 20,000 ounces of gold (Louvem's share 10,000 ounces). The Company is planning 25,000 – 30,000 metres of drilling in 2010 to evaluate the potential of several previously identified zones. The Company has no hedging contracts on gold and currency. Louvem currently has cash and cash equivalents of $5,495,088 and no long term debt.

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 north-western Quebec, Canada. More information on Louvem Mines can be found on its website at: www.louvem.com.

Forward-Looking Statements
This news release contains forward-looking statements that include risks and uncertainties. When used in this news release, the words "project", "expect", "may" and similar expressions, as well as "will" and other indications of future tense, are intended to identify forward-looking statements. The forward-looking statements are based on current expectations and apply only as of the date on which they were made. The factors that could cause actual results to differ materially from those indicated in such forward-looking statements include changes in the prevailing price of gold, the Canadian-United States exchange rate, grade of ore mined and unforeseen difficulties in mining operations that could affect revenues and production costs. Other factors such as uncertainties regarding government regulations could also affect the results. Other risks may be set out in Louvem's Annual Information Form, Annual Reports and periodic reports.

National Instrument 43-101 (NI 43-101)
The reserve and resource calculation of the Beaufor Mine property as of December 31, 2009 and December 31, 2008 was prepared by Mr. Richard Dubuc, P.Geo., and Mr. Jessy Thelland, B.Sc., Geo., employees of Richmont Mines Inc. (the operator of the Beaufor Mine), and qualified persons under the terms of this instrument, and was supervised by Mr. Daniel Adam, Geo., Ph.D., Exploration Director, an employee of Richmont Mines Inc. The reserve calculations were prepared using a gold price of US$785 (CAN$785) for 2008 and US$850 (CAN$850) for 2009.

KEY FINANCIAL DATA

  Three-month period Fiscal year
  ended December 31 ended December 31
CAN$ 2009   2008 2009   2008
             
Results ($)            
Revenues 2,608,501   4,004,653 11,652,780   15,637,679
Net earnings (loss) (156,673 ) 422,611 (125,530 ) 3,182,904
Cash flow from (used in) operations 4,550   1,256,863 (252,210 ) 5,532,065
             
Results per share ($)            
Net earnings (loss) basic (0.01 ) 0.02 -   0.12
             
Weighted average number of common            
  shares outstanding 25,929,689   25,929,689 25,929,689   25,929,689
               
  December 31, 2009 December 31, 2008
     
Financial position ($)    
Total assets 8,330,756 9,281,325
Working capital 5,193,254 5,468,777
Long term debt - -

SALES AND PRODUCTION DATA

Beaufor Mine – 50% Three-month period ended December 31 Fiscal Year ended December 31
2009 2008 2009 2008
Gold sales (ounces) 2,150 4,101 10,427 16,454
Production of gold (ounces) 2,146 3,814 9,613 17,177
Cash cost (per ounce sold) (US$) 910 563 747 481
Cash cost (per ounce sold) (CAN$) 1,039 600 853 513
Average selling price (per ounce of gold) (US$) 1,060 908 975 886
Average selling price (per ounce of gold) (CAN$) 1,211 968 1,113 944
Average exchange rate used for 2009: US$1 = CAN$1.1420
Average exchange rate used for 2008: US$1 = CAN$1.0660

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.
    Jennifer Aitken
    Investor Relations
    514-397-1448
    514-397-8620 (FAX)
    www.louvem.com