LOUVEM MINES INC.
TSX VENTURE : LOV

LOUVEM MINES INC.

October 27, 2005 15:46 ET

Louvem Mines Reports its 2005 Third Quarterly Results

MONTREAL, QUEBEC--(CCNMatthews - Oct. 27, 2005) - In the third quarter, ended September 30, 2005, Louvem (TSX VENTURE:LOV) registered a net loss of $207,113, or $0.01 per share, compared with net earnings of $371,227, or $0.01 per share, in the third quarter of 2004. Cash flow from operations before net change in non-cash working capital items was ($27,672) for the third quarter of 2005, compared with $486,742 for the same period in the previous year.

For the nine-month period ended September 30, 2005, Louvem registered net earnings of $341,041, or $0.01 per share, compared with net earnings of $1,147,126, or $0.04 per share, for the corresponding period in 2004. Cash flow from operations before net change in non-cash working capital items was $906,097, compared with $1,386,312 for the same period in the previous year.

The differences for the three-month and nine-month periods ended September 30, 2005, are largely attributable to the decline in gold sales, which resulted from the production shut down at the Beaufor Mine during the months of July and August 2005.

Beaufor Mine

During the first two months of the third quarter of 2005, Richmont Mines and Louvem Mines, owners of the Beaufor Mine, carried out a planned halt in production in order to accelerate development and exploration activities aimed at maintaining the rate of production of the past few years. Production activities resumed as planned at the beginning of September.

In the third quarter of 2005, Louvem invested an amount of $659,133 for the driving of 367 metres of drifts, sublevels and crosscuts at levels 12, 15 and 17, and for increasing the ore inventory developed, whereas in 2004, the amount of $302,714 was devoted to development work. In addition, an amount of $47,985 went to the completion of 2,940 metres of exploration drilling in the corresponding zones at the developed levels, compared with $56,400 for 3,618 metres the same period in 2004.

The production and development activities completed during the third quarter of 2005 allowed for the milling of 14,973 tonnes of ore at an average recovered grade of 5.12 g/t, thus yielding 2,466 ounces of gold, whereas in the third quarter of 2004, 28,879 tonnes of ore at an average recovered grade of 6.19 g/t were milled, thus yielding 5,751 ounces of gold. For the third quarter 2005, ounces of gold were sold at an average price of US$435 per ounce, compared with an average price of US$408 per ounce for the third quarter 2004. The increase in the production cash cost, which rose from US$300 in 2004 to US$432 in 2005, is primarily attributable to the two-month production shut down.

For the nine-month period ended September 30, 2005, the amount of $1,117,485 was invested in the Beaufor Mine, compared with $519,087 in the same period in 2004. This investment allowed the development of 2,295 metres of drifts, sublevels and raises. In addition, the amount of $346,626 was allocated to exploration and contributed in particular to the completion of 9,233 metres of drilling, compared with $393,863 for 8,941 metres during the corresponding period in the previous year.

For the first nine months of 2005, Louvem's portion of tonnes of ore processed was 78,325 tonnes at an average recovered grade of 6.01 g/t, thus yielding 15,144 ounces of gold in 2005, compared with a portion of tonnes of ore processed of 97,004 at an average recovered grade of 6.04 g/t, thus yieldding 18,825 ounces of gold for the first nine months of 2004. For the same period of 2005, ounces of gold were sold at an average price of US$434 per ounce, compared with an average price of US$411 per ounce for the same period in 2004. The increase in the production cash cost, which rose from US$307 in 2004 to US$344 in 2005, is primarily attributable to the increase in the Canadian dollar and to the two-month production shut down at the Beaufor Mine.

Outlook 2005

The Beaufor Mine began the development of a ramp to a planned vertical depth of 30 metres starting at the lowest level of the mine located at 610 metres below the surface. This work will provide access for the extension of Zone C, where reserves of 50,000 tonnes at an average grade of 9.4 g/t have already been identified. The production from the ramp is expected in mid-year 2006. The potential of Zone B, located farther to the south, will also be verified by drilling, as will that of Zone C, which is open at depth.

As at September 30, 2005, Louvem had no long-term debt and had cash and cash equivalents totalling $2,682,982 and working capital of $2,953,149. The Company has no hedging contracts on gold or on currency.

Jean-Guy Rivard

President



FINANCIAL DATA
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Three-month period Nine-month period
ended September 30 ended September 30
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2005 2004 2005 2004
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Results ($)
Revenues 1,326,720 3,067,169 8,072,421 10,114,678
Net earnings (loss) (207,113) 371,227 341,041 1,147,126
Cash flow from
operations before
net change in
non-cash working
capital items (27,672) 486,742 906,097 1,386,312

Results per share ($)
Net earnings (loss)
basic and diluted (0.01) 0.01 0.01 0.04

Weighted average
number of common
shares outstanding 26,024,477 26,180,764 26,062,651 26,220,736
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September 30, 2005 December 31, 2004
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Financial position ($)
Total assets 6,630,024 6,783,305
Working capital 2,953,149 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 September 30
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2005 2004
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Production of gold (ounces) 2,151 5,673
Gold sales (ounces) 2,466 5,751
Cash cost (per ounce sold) US$432 US$300
Average selling price per ounce
of gold US$435 US$408
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Beaufor Mine - 50% Nine-month period ended September 30
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2005 2004
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Production of gold (ounces) 15,504 19,413
Gold sales (ounces) 15,144 18,825
Cash cost (per ounce sold) US$344 US$307
Average selling price per ounce
of gold US$434 US$411
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2004 average exchange rate: US$1 equals CAN$1.30
2005 estimated exchange rate: US$1 equals CAN$1.22


The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the information contained in this news release.

Contact Information

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