LOUVEM MINES INC.
TSX VENTURE : LOV

LOUVEM MINES INC.

July 28, 2005 15:33 ET

Louvem Mines Reports its 2005 Quarterly Results

MONTREAL, QUEBEC--(CCNMatthews - July 28, 2005) - For the second quarter ended June 30, 2005, Louvem Mines (TSX VENTURE:LOV) posted net earnings of $347,378, or $0.01 per share, compared with net earnings of $698,980, or $0.03 per share, for the second quarter of 2004. Cash flow from operations before net change in non-cash working capital was $520,988 for the second quarter of 2005, compared with $789,497 for the same period last year.

For the six month period ended June 30, 2005, Louvem posted net earnings of $548,154, or $0.02 per share, compared with net earnings of $775,899, or $0.03 per share, for the same period in 2004. Cash flow from operations before net change in non-cash working capital was $933,769 for the first six months of 2005, compared with $899,570 for the same period last year.

Beaufor Mine

For the three-month period ended June 30, 2005, 68,632 tonnes of ore from the Beaufor Mine at an average recovered grade of 5.94 g/t were processed, yielding 13,117 ounces of gold, or 6,559 ounces for Louvem. For the second quarter of 2004, 88,744 tonnes of ore at an average recovered grade of 6.19 g/t were processed, yielding 17,663 ounces of gold, or 8,831 ounces for Louvem. For the second quarter of 2005, total gold sales reached 6,612 ounces, compared with 9,592 ounces for the corresponding quarter in 2004. The rise in production cash cost, which went from US$303 per ounce for the second quarter of 2004 to US$322 per ounce for the same quarter in 2005, was a result of the rise in the Canadian dollar, which moved from $0.77 to $0.81 in the corresponding periods.

During the second quarter of 2005, Louvem invested $166,050 in fixed assets for the Beaufor Mine, compared with $139,987 in the second quarter of 2004. In all, 410 metres of development for drifts, sublevels and raises were excavated. Moreover, Louvem devoted $118,756 for exploration, including 3,250 metres of drilling, compared with $180,235 for the corresponding period last year.

For the six-month period ended June 30, 2005, 134,548 tonnes of ore at an average recovered grade of 6.17 g/t were processed, yielding 26,706 ounces of gold, or 13,353 ounces for Louvem. For the corresponding period in 2004, 141,984 tonnes of ore at an average recovered grade of 6.02 g/t were processed, yielding 27,480 ounces of gold, or 13,740 ounces for Louvem. For this period of 2005, sales were 12,678 ounces, compared with 13,073 ounces for the corresponding period in 2004. The Canadian dollar, which moved from a six-month period average of $0.77 in 2004 to $0.81 in the corresponding period in 2005, caused the cash cost of production to go from US$310 per ounce for the six-month period ended June 30, 2004, to US$322 for that of 2005.

In the first six months of 2005, Louvem invested $447,954 in the Beaufor Mine, compared with $216,373 in the same period of 2004. Of this amount, $382,918 went to the developement of 937 metres of drifts, sublevels and raises. Louvem also bought equipment for $65,036. Moreover, an amount of $233,894 was invested for exploration, including 6,293 metres of drilling, compared with $373,160 for the corresponding period last year.

Outlook 2005

During the third quarter, as announced in may, production at the Beaufor Mine will be suspended for development and exploration works to be carried out. Production is scheduled to start back up on September 1, 2005. The works to be completed will increase the developed ore inventory to 50,000 tonnes by the end of the year, compared with 15,000 tonnes at the end of June 2005, and will maintain an appropriate level of production. Louvem maintains the objective of production of 24,000 ounces of gold for the year 2005.

As at June 30, 2005, Louvem had no long-term debt, but had cash and cash-equivalents of $3,653,438, and working capital of $3,669,412. The Company has no hedging contracts on gold or on currency.

Jean-Guy Rivard

President



FINANCIAL DATA
--------------------------------------------------------------------
Three-month period Six-month period
ended June 30 ended June 30
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2005 2004 2005 2004
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Results ($)
Revenues 3,537,762 5,142,834 6,745,701 7,047,509
Net earnings 347,378 698,980 548,154 775,899
Cash flow from
operations before
net change in
non-cash working
capital items 520,988 789,497 933,769 899,570

Results per share ($)
Net earnings basic and
diluted 0.01 0.03 0.02 0.03

Weighted average number
of common shares
outstanding 26,065,452 26,215,843 26,082,053 26,240,941
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June 30, 2005 December 31, 2004
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Financial position ($)
Total assets 7,108,492 6,783,305
Working capital 3,669,412 3,212,903
Long-term debt - -
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PRODUCTION AND SALES DATA
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Beaufor Mine - 50% Three-month period ended June 30
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2005 2004
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Production of gold (ounces) 6,559 8,831
Gold sales (ounces) 6,612 9,592
Cash cost (per ounce sold) US$322 US$303
Average selling price per ounce
of gold US$428 US$411
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Beaufor Mine - 50% Six-month period ended June 30
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2005 2004
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Production of gold (ounces) 13,353 13,740
Gold sales (ounces) 12,678 13,073
Cash cost (per ounce sold) US$322 US$310
Average selling price per ounce
of gold US$427 US$413
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2004 average exchange rate: US$1 = CAN$1.30
2005 estimated exchange rate: US$1 = CAN$1.24



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Contact Information

  • Louvem Mines Inc.
    Julie Normandeau
    Investor Relations
    (514) 397-1410
    (514) 397-8620 (FAX)