LOUVEM MINES INC.
TSX VENTURE : LOV

LOUVEM MINES INC.

October 26, 2006 15:12 ET

Louvem Mines Announces its Third Quarter Results for 2006

MONTREAL, QUEBEC--(CCNMatthews - Oct. 26, 2006) - For the three-month period ended September 30, 2006, Louvem Mines Inc. (TSX VENTURE:LOV) reported total revenues of $1,729,565 and a net loss of $515,305, or $0.02 per share, compared with total revenues of $1,326,720 and a net loss of $207,113, or $0.01 per share, in 2005. Cash flow used in operations was $647,933 during the third quarter of 2006, compared with $281,865 in 2005. For the three-month period ended September 30, 2006, 2,500 ounces of gold were sold at an average price of US$609 per ounce, compared with 2,466 ounces of gold sold at an average price of US$438 for the same period in 2005.

For the nine-month period ended September 30, 2006, Louvem Mines Inc. reported total revenues of $6,890,732 and a net loss of $1,274,528, or $0.05 per share, compared with total revenues of $8,072,421 and net earnings of $341,041, or $0.01 per share in 2005. Cash flow used in operations was $713,815 compared with $5,892 in 2005. For the nine-month period ended September 30, 2006, 10,132 ounces of gold were sold at an average price of US$598 per ounce, compared with 15,144 ounces of gold sold at an average price of US$437 per ounce for the same period in 2005.

BEAUFOR MINE

Three-month period ended September 30, 2006

For the three-month period ended September 30, 2006, 36,942 tonnes of ore were transported to the mill. In all, 27,052 tonnes of ore at an average recovered grade of 5.75 g/t were milled, thus yielding 5,000 ounces of gold, 2,500 ounces for Louvem, which were sold at an average price of US$609 per ounce. During the corresponding period in 2005, 29,945 tonnes of ore at an average recovered grade of 5.12 g/t were milled, thus yielding 4,931 ounces of gold, 2,466 ounces for Louvem, which were sold at an average price of US$438 per ounce, at that time a two-month production shut down was required to advance underground development.

For the third quarter of 2006, the rate of production was affected mainly by the lower availability of long-hole stopes. This situation can be explained by the absence of continuity in mineralized zones located east of the Beaufor property. Combined with higher prices for consumables and energy, higher wage expenses and the appreciation of the Canadian dollar relative to the US dollar, this situation is mainly responsible for the increase in cash production costs, which rose from US$435 per ounce in the third quarter of 2005 to US$552 per ounce during the same quarter in 2006.

Nine-month period ended September 30, 2006

For the nine-month period ended September 30, 2006, 112,492 tonnes of ore at an average recovered grade of 5.60 g/t were milled, thus yielding 20,265 ounces of gold, 10,132 ounces for Louvem, which were sold at an average price of US$598 per ounce. For the corresponding period in 2005, 156,649 tonnes of ore at an average recovered grade of 6.01 g/t were milled, thus yielding 30,287 ounces of gold, 15,144 ounces for Louvem, which were sold at an average price of US$437 per ounce. The decrease in production is mainly due to the lower availability of ore and to lower grades, to higher prices for consumables and energy, higher wage expenses and the appreciation of the Canadian dollar, which are all factors that have contributed to the increase in cash production costs, which went from US$347 for the first nine months of 2005 to US$583 for the same period in 2006.

Outlook for Beaufor Mine

Since the first quarter of 2005, the results for Beaufor Mine have been below expectations. The problem identified can be summarized to stopes located in narrow mineralized zones in which development cannot confirm definition drilling despite sustained underground development in the east sector. Following the evaluation of different options considered for the Beaufor Mine, exploration work will be increased and a 20,000-metre drilling program will be carried out to identify significant mineral zones on the Beaufor property. Many exploration targets of interest have been identified and will be evaluated throughout the upcoming months. In order to do so, underground definition drilling has been suspended to prioritize the development of this exploration program, and production will be reduced.

During the fourth quarter of 2006, Richmont Mines expects a production of 35,000 tonnes of ore at an average recovered grade of 5.00 g/t, thus yielding 5,500 ounces of gold, 2,750 ounces for Louvem.

For 2007, production of approximately 100,000 tonnes of ore at an average grade of 6.5 g/t, thus yielding 20,000 ounces of gold, 10,000 ounces for Louvem, is expected. Approximately 35,000 tonnes of ore will come from the mineralized zone located near the Beaufor fault, accessible through the ramp located below level 20. This production decrease causes a workforce reduction of approximately 26 employees. Golder Associates has recently been mandated to prepare a reserve report, which should be available by the end of the year. The value of the assets of this property will be reassessed when this information will be available.

OUTLOOK

The Beaufor Mine continues to be operated and many exploration targets will be examined over the upcoming months. As of September 30, 2006, Louvem had no long-term debt, had cash and cash equivalents of $308,706 and could count on working capital of $938,491. The Company has no hedging contract on gold and currency.

Jean-Guy Rivard

President



FINANCIAL DATA
---------------------------------------------------------------------
Three-month periods Nine-month periods
ended September 30, ended September 30,
2006 2005 2006 2005
---------------------------------------------------------------------
Results ($)
Revenues 1,729,565 1,326,720 6,890,732 8,072,421
Net earnings (loss) (515,305) (207,113) (1,274,528) 341,041
Cash flow
used in operations (647,933) (281,865) (713,815) (5,892)

Results per share ($)
Net earnings (loss),
basic and diluted (0.02) (0.01) (0.05) 0.01
Weighted average
number of common
shares outstanding 25,929,689 26,024,477 25,941,099 26,062,651
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September 30, 2006 December 31, 2005
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Financial position ($)
Total assets 5,190,683 6,481,525
Working capital 938,491 2,375,603
Long-term debt - -
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PRODUCTION AND SALES DATA
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Beaufor Mine - 50% Three-month periods ended September 30,
2006 2005
---------------------------------------------------------------------

Gold production (ounces) 2,487 2,151
Gold sales (ounces) 2,500 2,466
Cash cost (per ounce sold) US$552 US$435
Average selling
price per ounce of gold US$609 US$438
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Beaufor Mine - 50% Nine-month periods ended September 30,
2006 2005
---------------------------------------------------------------------

Gold production (ounces) 10,095 15,504
Gold sales (ounces) 10,132 15,144
Cash cost (per ounce sold) US$583 US$347
Average selling
price per ounce of gold US$598 US$437
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Average exchange rate used for the third quarter of 2005:
US$1 equals CAN$1.21
2006 estimated exchange rate: US$1 equals CAN$1.13


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Contact Information

  • Louvem Mines Inc.
    Julie Normandeau
    Investor Relations
    514-397-1448
    514-397-8620 (FAX)
    www.louvem.com