RICHMONT MINES INC.
TSX : RIC
NYSE Amex : RIC

RICHMONT MINES INC.

February 22, 2011 08:15 ET

Richmont Mines Reports Strong Fourth Quarter and Full Year 2010 Results

MONTREAL, QUEBEC, CANADA--(Marketwire - Feb. 22, 2011) - Richmont Mines Inc. (TSX:RIC)(NYSE Amex:RIC),("Richmont" or "the Company"), is pleased to announce its fourth quarter and 2010 fiscal year results for the period ended December 31, 2010. Financial results are based on Canadian GAAP and dollars are reported in Canadian currency, unless otherwise noted.

Highlights:

  • Full year 2010 revenue increased 26% to $90.8 million; Net earnings of $0.31 per share versus $0.01 per share in 2009;

  • Q4 2010 revenue growth of 53% to $26.2 million; Net earnings of $0.15 per share versus $0.00 per share in comparable period of 2009;

  • 2010 gold sales of 68,123 ounces, 14% above the 59,733 ounces of gold sold in 2009;

  • $43.9 million in working capital at December 31, 2010, no hedging contracts and no long-term debt;

  • 2011 production forecasted to be 80,000 – 85,000 ounces;

  • Wasamac property resource base expanded significantly to 411,073 Au ounces of Measured and Indicated Resources and 1,007,875 Au ounces of Inferred Resources.

Martin Rivard, President and CEO of Richmont Mines commented: "We were very pleased with the operational performances that were realized this year at Richmont. Our two active mines generated consolidated gold sales of 68,123 ounces, ahead of our forecasted gold production of 65,000 ounces for the year, and a notable 14% improvement over 2009 levels. Fourth quarter results showed a similar year-over-year improvement, with tonnage, recovered grades and gold sales up notably at both of our operating mines over the comparable period of 2009. In terms of our ongoing efforts to grow our production pipeline, work at the Francoeur Mine progressed well in 2010, and we look forward to beginning commercial production at this mine in mid-2011. On the exploration front, favourable results obtained on our Wasamac property in 2010 further cemented our commitment to this asset, and reinforced our view that Wasamac has the potential to become a driving factor behind our corporate objective to become an intermediate gold producer. We are planning an additional 35,000 metres of drilling on this property in 2011, and we are optimistic about the long-term value and untapped possibilities of this asset."

Q4 2010 Results

Revenue for the fourth quarter of 2010 was $26.2 million, a 53% improvement over last year's $17.1 million. Net income for the fourth quarter of 2010 was $4.6 million, or $0.15 per share, compared with the $0.1 million, or $0.00 per share earned in the fourth quarter of 2009. Total precious metals revenue increased $10.6 million, or 69%, to $26.0 million in the fourth quarter of 2010 compared with $15.4 million in the fourth quarter of 2009. This was driven by a 43% increase in ounces of gold sold, and an 18% increase in the average sales price per ounce of gold in Canadian dollars. In the fourth quarter of 2010, 18,591 ounces of gold were sold at an average price of US$1,359 (CAN$1,400), versus gold sales of 13,029 ounces at an average price of US$1,035 (CAN$1,182). Other revenue decreased to $0.2 million in the fourth quarter of 2010 from $1.7 million in the year-ago period, reflecting lower custom-milling revenues.

Operating costs, including royalties, increased 19% year-over-year in the fourth quarter of 2010 to $13.9 million, reflecting the greater level of tonnes processed from the Beaufor and Island Gold mines. Similarly, the average cash cost of production decreased to US$727 (CAN$749) in the fourth quarter of 2010, from US$790 (CAN$902) in the comparable period in 2009, with the notable improvement reflecting higher tonnage level, improved grades and enhanced gold recovery rates from both operating mines.

Exploration and project evaluation costs, net of exploration credits, totalled $2.0 million in the fourth quarter of 2010, well above the $0.3 million in the comparable period in 2009, reflecting expenses associated with the Company's expanded exploration programs at the Wasamac and Monique properties, as well as higher exploration related expenses at both the Island Gold and Beaufor mines.

Full Year 2010 Results

Revenue for the 12 months ended December 31, 2010 totalled $90.8 million, a notable improvement from last year's $71.9 million. Net earnings for the year were $9.0 million, or $0.31 per share, a significant improvement over last year's $0.3 million, or $0.01 per share. Total annual precious metal revenue increased 32% to $87.2 million in 2010 from $66.2 million in 2009, driven by higher gold sales and a higher average gold sales price. For the full year, 68,123 ounces of gold were sold at an average price of US$1,243 (CAN$1,280), versus gold sales of 59,733 ounces in 2009 at an average price of US$969 (CAN$1,107). Other revenue declined to $3.6 million in 2010 from $5.7 million in 2009, reflecting lower custom milling revenue.

Operating costs, including royalties, increased 13% year-over-year in 2010 to $56.6 million, driven by higher level of tonnes processed from both the Island Gold and Beaufor mines. The average cash cost of production decreased in the Company's operating currency, the Canadian dollar, to CAN$832 (US$808) from CAN$842 (US$737) in 2009, reflecting improved recovered grades at Beaufor and improved gold recovery rates from both operating mines.

Strong Cash Position and No Long-Term Debt

At December 31, 2010, cash and cash equivalents were $40.0 million, compared with $21.1 million at December 31, 2009. Richmont Mines had no long-term debt obligations, no hedging, and had working capital of $43.9 million. The cash equivalents included $11.6 million of term deposits with high level credit ratings and $28.4 million in cash deposited in two Canadian chartered banks.

Operational Highlights
Island Gold Mine
     
  Three months ended Fiscal year ended
  December 31, December 31, December 31, December 31,
  2010 2009 2010 2009
         
Tonnes 55,553 51,784 251,237 211,773
Head grade (g/t) 6.72 5.61 5.95 6.04
Gold recovery (%) 96.51 93.44 95.49 94.52
Recovered grade (g/t) 6.49 5.24 5.68 5.71
Ounces sold 11,589 8,729 45,865 38,879
Cash cost per ounce (US$) 676 738 780 736

The Island Gold Mine processed 55,553 tonnes of ore in the fourth quarter of 2010 at an average recovered grade of 6.49 g/t, a notable improvement over the fourth quarter of 2009, during which 51,784 tonnes of ore were processed at an average recovered grade of 5.24 g/t. Higher tonnage and improvement in the gold recovery rate, which was 96.51% in the fourth quarter of 2010 versus 93.44% in the comparable period of 2009, both were driven by the mill expansion completed at the end of the third quarter, during which a 6 foot by 8 foot ball mill was replaced with a larger 9 foot by 11 foot ball mill. Fourth quarter gold sales from this mine increased to 11,589 ounces at an average price of US$1,356 (CAN$1,397) per ounce in 2010, versus gold sales of 8,729 ounces at an average price of US$1,023 (CAN$1,168) per ounce in the comparable period of 2009. Cash costs at Island Gold decreased to US$676 (CAN$696) from US$738 (CAN$842) in the fourth quarter of 2009, reflecting improvements in tonnage, gold recovery rate and recovered grade.

For the 12 months ended December 31, 2010, 251,237 tonnes of ore were processed at an average recovered grade of 5.68 g/t, and 45,865 ounces of gold were sold at an average price of US$1,238 (CAN$1,275) per ounce. This compared to 211,773 tonnes of ore processed, an average recovered grade of 5.71 g/t, and gold sales of 38,879 ounces at an average price of US$967 (CAN$1,104) per ounce in 2009. While the recovered grade was essentially flat year-over-year in 2010, due primarily to lower than expected grades in long-hole stopes in the first half of the year, tonnage rose 19% as a result of improved productivity at the mine and the expanded mill capacity. In the Company's operating currency, Canadian dollars, full year cash costs at Island Gold decreased CAN$38 to CAN$803 (US$780) in 2010 from CAN$841 (US$736) in 2009, reflecting improvements in tonnage and gold recovery rate, and essentially flat recovered grades of 5.68 g/t in the current period versus 5.71 g/t in 2009.

As of December 31, 2010, total Proven and Probable Reserves at the Island Gold Mine were 161,197 gold ounces, this compared to Proven and Probable Reserves of 264,085 gold ounces at the end of December 2009. The annual decline was attributable to 12 months of production at the mine, results from definition drilling in 2010 that lowered Probable reserve estimates in the Lochalsh Zone, and to reconciliation calculations between actual production and reserve estimates, due to lower than anticipated amounts of gold being recovered from several blocks as a result of more variable gold distribution in the alteration zone. While exploration efforts in 2010 did not increase this mine's reserve base, drilling in 2010 did garner favourable results at depth, between -400 and -900 metres of elevation, which confirmed the extension of the Island Gold mineralized zones at depth over a lateral distance of more than 1 km. Estimated Measured and Indicated Resources at the Island Gold Mine increased to 188,511 gold ounces at December 31, 2010, versus 154,813 gold ounces at December 31, 2009, as drilling efforts throughout the year enabled the Company to successfully convert Inferred Resources to Measured and Indicated Resources. This fact is reflected in the decline in estimated Inferred Resources to 138,732 gold ounces at December 31, 2010 versus 199,569 gold ounces at the end of December 2009. The Company is intently focused on expanding the reserve and resource base of this asset, and is optimistic about the long-term possibilities at Island Gold. To this end, a total of 38,000 metres of drilling are planned in 2011, of which 30,000 metres will be underground exploration and definition drilling, up from the 27,000 metres drilled in 2009, and 8,000 metres will be surface exploration drilling, up slightly from the 5,600 metres completed in 2009.

Going forward, the Company expects to achieve higher average mill throughput at Island Gold which, when combined with a stabilization in recovered grades, should enable this mine to achieve its targeted production rate of 45,000 to 50,000 ounces of gold in 2011.

Beaufor Mine    
  Three months ended Fiscal year ended
  December 31, December 31, December 31, December 31,
  2010 2009 2010 2009
         
Tonnes 30,486 22,412 104,945 101,593
Head grade (g/t) 7.26 6.09 6.72 6.52
Gold recovery (%) 98.39 97.95 98.19 97.90
Recovered grade (g/t) 7.14 5.97 6.60 6.38
Ounces sold 7,002 4,300 22,258 20,854
Cash cost of production per ounce (US$) 814 897 866 740

In the fourth quarter of 2010, a total of 30,486 tonnes of ore were processed from the Beaufor Mine at an average recovered grade of 7.14 g/t. This represented notable improvements of 36% in tonnage and 20% in recovered grade, over the 22,412 tonnes of ore that were processed at an average recovered grade of 5.97 g/t in the comparable period of 2009. Gold sales from this mine increased 63% year-over-year to 7,002 ounces in the fourth quarter of 2010 at an average realized price of US$1,365 (CAN$1,406) per ounce, from gold sales of 4,300 ounces an average price of US$1,060 (CAN$1,211) in the year-ago period. Cash costs at this mine declined notably to US$814 (CAN$838) in the fourth quarter of 2010, versus US$897 (CAN$1,025) in the comparable period last year, reflecting improved tonnage levels, gold recovery rates and recovered grades.

For the full year 2010, a total of 104,945 tonnes of ore were processed from the Beaufor Mine at an average recovered grade of 6.60 g/t, and 22,258 ounces of gold were sold at an average price of US$1,253 (CAN$1,290). This compared to tonnage of 101,593, an average recovered grade of 6.38 g/t, and realized gold sales of 20,854 ounces at an average sales price of US$975 (CAN$1,113) in 2009. Cash costs at the Beaufor Mine for the 12 months of 2010, however, increased to US$866 (CAN$891) from US$740 (CAN$845) last year, reflecting higher milling costs for the year, and lower recovered grades and tonnage levels in the first nine months of the year, primarily as a result of the greater amount of development necessary to access the ore zones in this timeframe.

Proven and Probable Reserves at the Beaufor Mine increased to 68,998 gold ounces at December 31, 2010, from 44,637 gold ounces at December 31, 2009. This reflects the addition of 24,798 ounces of reserves identified through the drilling program on the near-surface W and 367 zones, in conjunction with reserves established within the mine's existing underground infrastructure as a result of definition drilling in 2010, offset by 22,258 ounces of gold sales from the mine in 2010. The Company is planning 11,000 metres of definition drilling and 19,000 metres of exploration drilling at the Beaufor Mine in 2011. The primary focus will be to expand and advance the potential of the near-surface W and 367 zones, located to the west of the mine's existing infrastructure, and other previously identified areas. The Company remains committed to Beaufor, and is optimistic about the future potential of this asset.

Drilling efforts in 2010 similarly resulted in a minor increase in Measured and Indicated Resources to 173,453 ounces of gold at the end of 2010 versus 171,372 ounces at the end of 2009. Inferred Resources declined slightly to 182,185 ounces of gold as of December 31, 2010 from 199,256 ounces at the end of the prior year. Existing resources are mostly below the existing infrastructure of the mine, and currently do not economically justify an extension of the infrastructure at this time.

2010 News, Development and Exploration Progress

Francoeur Mine

The Company made good progress at the Francoeur Mine in 2010. Dewatering of the mine was completed at the end of June, and underground development work to reach the targeted West Zone began shortly thereafter. As of December 31, 2010, a total of 1,239 metres of underground development had been completed, the mine's surface infrastructure rehabilitated, and the preparation of underground installations required for commercial production is being completed as development work progresses. Definition drilling began in November 2010, and as of year-end 2010, a total of 1,663 metres had been completed. Commercial production at this mine is planned for mid-2011, with anticipated annual production of 35,000 ounces of gold over an initial mine life of 4 years.

Wasamac Exploration Program and Revised Resource Estimate

The Company began a 10,000 metre drilling campaign on the Wasamac property in May and, after obtaining favourable results, extended the program and completed approximately 20,000 metres of drilling during the year. The ultimate objective of the campaign was to evaluate the feasibility for an underground bulk-mining operation. This property's updated resource estimate of 411,073 Au ounces of Measured and Indicated Resources and 1,007,875 Au ounces of Inferred Resources, detailed in our February 17, 2011 press release, highlights the future long-term potential of this asset. Richmont management is very optimistic about possibilities at Wasamac, and plans to fully investigate the role it may play in the Company's goal to become an intermediate gold producer. Consequently, the Company is planning an additional 35,000 metres of drilling on the property in 2011.

Monique and Cripple Creek Exploration Programs

The Company announced plans for a 5,500 metre drilling campaign on the Monique property in 2010, with the goal of evaluating the potential for a small open-pit operation. Exploration drilling began in February 2011, and preliminary results are anticipated during the second quarter of 2011.

In February 2010, the Company began an exploration drilling campaign on the Cripple Creek property, located west of the Timmins Gold Camp in Ontario. Drilling over approximately 7,500 metres yielded several interesting intercepts, including the notable 73.54 g/t Au over 7 metres. In view of intensive winter drilling programs on the Monique and Wasamac properties and due to limited availability of drills and geological staff, Richmont management has decided to defer the planned 3,500 metre winter 2011 exploration drilling campaign on its Cripple Creek property. The timing of the next drilling program will be evaluated during the course of 2011. The goal of the program will be to confirm the new interpretation of Zone 16 provided by results obtained to date, to better target mineralized zones, and to test the extension of the Mahoney Zone at depth.

2011 Corporate Exploration and Definition Drilling Plan and Budget

The Company plans to complete a total of 90,500 metres of exploration drilling during 2011 with a total approximate budget of $12 million. On a property-by-property basis, the breakdown is as follows: 23,000 metres at Island Gold, 19,000 metres at Beaufor, 8,000 metres at Francoeur, 35,000 metres at Wasamac, and 5,500 metres at Monique. An additional 44,400 metres of definition drilling are planned during 2011, with an estimated total cost of $3.2 million. The breakdown of this drilling is as follows: 15,000 metres at Island Gold, 11,000 metres at Beaufor, and 18,400 metres at Francoeur.

2010 Corporate News

Several notable corporate developments occurred in 2010. The Company completed an equity financing in mid-June through which 3.3 million Richmont common shares were issued for gross proceeds of $16.5 million. The funds raised in this transaction were earmarked for development work at the Francoeur Mine and for general corporate purposes. Also in June, the Company consolidated its ownership of Louvem Mines Inc. ("Louvem") via the acquisition of the outstanding 30% of Louvem shares not previously owned by Richmont. The successful completion of this acquisition expanded Richmont's exploration property portfolio, increased the Company's interest in the Beaufor Mine to 100%, and also streamlined Richmont's internal operations. Also on the acquisition front, the Company signed an option agreement with SOQUEM Inc. in December 2010 to acquire SOQUEM'S 19% interest in the Monique property. Under terms of the agreement, detailed in our December 22, 2010 press release, the transaction should be completed at the end of February 2011. Upon successful transfer of this 19% residual interest, Richmont will own 100% of the Monique property, giving the Company greater flexibility and control over the future development of this promising asset.

Outlook

"We will continue to be very active in 2011", stated Martin Rivard. "Operationally our focus will be on reducing our cash costs at our two operating mines, ensuring that the Francoeur Mine transitions smoothly into commercial production and on meeting our production forecast for the year of between 80,000 and 85,000 gold ounces. We are similarly planning over 60,000 metres of drilling at the Island Gold and Beaufor mines as part of our ongoing efforts to expand the reserve bases at both of these operations. We will also continue to be very proactive on the exploration front. Growing our production profile and realizing our objective of producing more than 200,000 ounces of gold per year are top priorities for Richmont's management team. And while Richmont's large property portfolio has great potential, we must also seek external sources of growth through acquisitions and strategic partnerships. To this end, management is committed to ensuring that external opportunities are actively sought out, evaluated and acted upon when a strategic benefit exists. We continue to have a solid financial position with no long-term debt, no gold or currency hedging and $40 million of cash, which puts us in a strong position going into 2011".

Martin Rivard

President and Chief Executive Officer

About Richmont Mines Inc.

The Company has produced over 1,200,000 ounces of gold from its operations in Quebec, Ontario and Newfoundland since beginning production in 1991. The Company currently produces gold from its Island Gold and Beaufor mines, and expects to begin production from its Francoeur Mine in mid-2011, which will increase Richmont's production to 100,000 ounces of gold on an annual basis. With extensive experience in gold exploration, development and mining, the Company is well positioned to cost-effectively build its North American reserve base through a combination of organic growth, strategic acquisitions and partnerships. Richmont routinely posts news and other important information on its website (www.richmont-mines.com).

Forward-Looking Statements

This news release contains forward-looking statements that include risks and uncertainties. When used in this news release, the words "estimate", "project", "anticipate", "expect", "intend", "believe", "hope", "may" and similar expressions, as well as "will", "shall" 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 revenue and production costs. Other factors such as uncertainties regarding government regulations could also affect the results. Other risks may be set out in Richmont Mines' Annual Information Form, Annual Reports and periodic reports.

Regulation 43-101

The reserve and resource estimates as of December 31, 2010 and December 31, 2009 were performed by qualified persons as defined by Regulation 43-101. Please refer to the SEDAR website (www.sedar.co) for full reports and additional corporate documentation.

This press release was reviewed by Mr. Daniel Adam, Geo., Ph.D., Exploration Manager, a qualified person as defined by Regulation 43-101, and an employee of Richmont Mines Inc.

Cautionary note to US investors concerning resource estimates

Information in this press release is intended to comply with the requirements of the Toronto Stock Exchange and applicable Canadian securities legislation, which differ in certain respects with the rules and regulations promulgated under the United States Securities Exchange Act of 1934, as amended ("Exchange Act"), as promulgated by the SEC. The reserve and resource estimates in this press release were prepared in accordance with Regulation 43-101 adopted by the Canadian Securities Administrators. The requirements of Regulation 43-101 differ significantly from the requirements of the United States Securities and Exchange Commission (the "SEC").

U.S. Investors are urged to consider the disclosure in our annual report on Form 20-F, File No. 001-14598, as filed with the SEC under the Exchange Act, which may be obtained from us (without cost) or from the SEC's web site: http://sec.gov/edgar.shtml.

FINANCIAL DATA    
  Three months ended Fiscal year ended
  December 31, December 31, December 31, December 31,
CAN$ 2010 2009 2010 2009
Results (in thousands of $)        
Revenue 26,213 17,100 90,781 71,884
Net earnings 4,555 110 9,011 336
Cash flow from operations 5,416 749 18,499 2,967
         
Results per share ($)        
Net earnings basic and diluted 0.15 - 0.31 0.01
         
Basic weighted average number of common shares        
  outstanding (thousands) 31,040 26,104 28,687 26,108
         
         
Average selling price of gold per ounce 1,400 1,182 1,280 1,107
Average selling price of gold per ounce (US$) 1,359 1,035 1,243 969
           
  December 31, 2010   December 31, 2009
Financial position (in thousands of $)      
Total assets 117,646   85,230
Working capital 43,880   24,936
Long-term debt -   -

 

SALES AND PRODUCTION DATA  
  Three-month period ended December 31
    Ounces of gold Cash cost
  Year Sales Production (per ounce sold)
  US$ CAN$
Island Gold Mine 2010 11,589 11,237 676 696
  2009 8,729 10,871 738 842
Beaufor Mine 2010 7,002 7,398 814 838
  2009 4,300 4,293 897 1,025
Total 2010 18,591 18,635 727 749
  2009 13,029 15,164 790 902
  Fiscal year ended December 31
    Ounces of gold Cash cost
  Year Sales Production (per ounce sold)
  US$ CAN$
Island Gold Mine 2010 45,865 43,762 780 803
  2009 38,879 39,794 736 841
Beaufor Mine 2010 22,258 23,087 866 891
  2009 20,854 19,227 740 845
Total 2010 68,123 66,849 808 832
  2009 59,733 59,021 737 842

Note: Average exchange rate used for 2010: US$1 = CAN$1.0299.

Average exchange rate used for 2009: US$1 = CAN$1.1420.

CONSOLIDATED STATEMENTS OF EARNINGS  
  (in thousands of Canadian dollars)  
(Unaudited) Three months ended   Fiscal year ended  
  December 31, December 31,   December 31,   December 31,  
  2010 2009   2010   2009  
  $ $   $   $  
               
REVENUE              
  Precious metals 26,031 15,403   87,182   66,151  
  Other 182 1,697   3,599   5,733  
               
  26,213 17,100   90,781   71,884  
               
EXPENSES              
  Operating costs 13,343 11,384   54,565   48,751  
  Royalties 588 370   2,075   1,563  
  Custom milling - 1,121   1,863   3,708  
  Administration 1,322 1,111   4,571   3,681  
  Exploration and project evaluation 1,997 325   7,217   7,066  
  Accretion expense - asset retirement obligations 74 69   287   240  
  Depreciation, depletion and writeoffs 2,489 1,298   8,118   5,696  
  Gain on disposal of long term assets - (14 ) (489 ) (594 )
               
  19,813 15,664   78,207   70,111  
               
EARNINGS BEFORE OTHER ITEMS 6,400 1,436   12,574   1,773  
               
MINING AND INCOME TAXES 1,845 1,373   3,691   1,475  
               
NET EARNINGS 4,555 63   8,883   298  
               
LOSS ATTRIBUTABLE TO              
  NON-CONTROLLING INTERESTS - (47 ) (128 ) (38 )
               
NET EARNINGS ATTRIBUTABLE TO              
  RICHMONT MINES SHAREHOLDERS 4,555 110   9,011   336  
               
NET EARNINGS PER SHARE              
  basic and diluted 0.15 -   0.31   0.01  
               
WEIGHTED AVERAGE NUMBER OF              
  COMMON SHARES OUTSTANDING (thousands) 31,040 26,104   28,687   26,108  
               
DILUTED WEIGHTED AVERAGE NUMBER OF              
  COMMON SHARES OUTSTANDING (thousands) 31,385 26,159   29,016   26,215  

 

CONSOLIDATED BALANCE SHEETS  
  (in thousands of Canadian dollars)
  December 31, December 31,
  2010 2009
  $ $
     
     
ASSETS    
     
CURRENT ASSETS    
  Cash and cash equivalents 40,030 21,139
  Shares of publicly-traded companies 1,311 741
  Accounts receivable 1,892 1,213
  Mining and income taxes receivable 1,745 1,500
  Exploration tax credits receivable 3,474 1,348
  Inventories 7,364 7,360
     
  55,816 33,301
     
DEPOSITS RESTRICTED 290 106
     
PROPERTY, PLANT AND EQUIPMENT 61,540 51,823
     
  117,646 85,230
LIABILITIES      
       
CURRENT LIABILITIES      
  Accounts payable and accrued charges 9,262 7,130  
  Mining and income taxes payable 2,674 1,235  
       
  11,936 8,365  
       
ASSET RETIREMENT OBLIGATIONS 6,366 5,928  
       
FUTURE MINING AND INCOME TAXES 2,493 976  
       
  20,795 15,269  
       
SHAREHOLDERS' EQUITY      
       
  Capital stock 88,598 64,675  
  Contributed surplus 6,339 6,133  
  Retained earnings (deficit) 1,097 (2,789 )
  Accumulated other comprehensive income 817 (44 )
  Non-controlling interests - 1,986  
       
  96,851 69,961  
       
  117,646 85,230  
CONSOLIDATED STATEMENTS OF CASH FLOW    
  (in thousands of Canadian dollars)  
(Unaudited) Three months ended   Fiscal year ended  
  December 31,   December 31,   December 31,   December 31,  
  2010   2009   2010   2009  
  $   $   $   $  
                 
CASH FLOW FROM OPERATING                
ACTIVITIES                
  Net earnings 4,555   63   8,883   298  
  Adjustments for:                
    Depreciation, depletion and writeoffs 2,489   1,298   8,118   5,696  
    Stock-based compensation 240   189   803   484  
    Accretion expense - asset retirement obligations 74   69   287   240  
    Gain on disposal of long term assets -   (14 ) (489 ) (594 )
    Loss (gain) on disposal of shares of                
      publicly-traded companies (130 ) 13   (210 ) 23  
    Future mining and income taxes 812   315   1,517   (110 )
                 
  8,040   1,933   18,909   6,037  
                 
  Net change in non-cash working capital items (2,624 ) (1,184 ) (410 ) (3,070 )
                 
  5,416   749   18,499   2,967  
                 
CASH FLOW USED IN INVESTING                
ACTIVITIES                
  Restricted cash and deposits -   -   (184 ) 10  
  Disposal of shares of publicly-traded companies 182   185   501   199  
  Property, plant and equipment - Francoeur Mine (2,876 ) (1,188 ) (9,144 ) (1,976 )
  Property, plant and equipment - Island Gold Mine (987 ) (815 ) (4,650 ) (4,318 )
  Property, plant and equipment - Beaufor Mine (359 ) (438 ) (2,462 ) (1,092 )
  Other property, plant and equipment (350 ) (228 ) (518 ) (626 )
  Disposal of long term assets -   -   533   9  
  Redemption of non-controlling interests -   -   (325 ) -  
                 
  (4,390 ) (2,484 ) (16,249 ) (7,794 )
                 
CASH FLOW FROM (USED) IN FINANCING                
ACTIVITIES                
  Issue of common shares 980   -   17,981   82  
  Common share issue costs -   -   (1,340 ) -  
  Redemption of common shares -   (5 ) -   (137 )
                 
  980   (5 ) 16,641   (55 )
                 
Net increase (decrease) in cash and cash equivalents 2,006   (1,740 ) 18,891   (4,882 )
                 
Cash and cash equivalents, beginning of period 38,024   22,879   21,139   26,021  
                 
Cash and cash equivalents, end of period 40,030   21,139   40,030   21,139  
                       
   
EXPLORATION AND PROJECT EVALUATION  
  (in thousands of Canadian dollars)  
(Unaudited) Three months ended   Fiscal year ended  
  December 31,   December 31,   December 31,   December 31,  
  2010   2009   2010   2009  
  $   $   $   $  
                 
Exploration costs – Mines                
  Island Gold Mine 1,124   412   4,561   3,136  
  Beaufor Mine 841   636   2,584   3,006  
  Francoeur Mine 33   -   151   1,812  
                 
  1,998   1,048   7,296   7,954  
                 
Exploration costs – Other properties                
  Wasamac property 1,011   19   1,712   82  
  Cripple Creek property 10   6   838   23  
  Monique property 242   -   289   2  
  Other properties 65   -   104   47  
  Project evaluation 119   117   443   305  
                   
    3,445   1,190   10,682   8,413  
                   
Exploration tax credits (1,448 ) (865 ) (3,465 ) (1,347 )
                   
    1,997   325   7,217   7,066  

Contact Information