Richmont Mines Sinks 14% on Revised Reserve Estimates
Shares of Richmont Mines (NYSE: RIC) are seeing increased weaknes during Tuesday's trading session after the company changed its reserve estimates for the Francoeur Mine.
The company revised Reserve and Resource estimates for the Francoeur Mine, located near Rouyn-Noranda, Quebec using a $1,400 gold price and a 3.75 g/t Au cut-off grade, versus $800 and 5.15 g/t Au cut-off grade previously.
Paul Carmel, Richmont Mines' President and CEO commented: "As we have previously announced, information obtained from definition drilling completed over 2011 and early 2012 indicated that the mineralized zones were more discontinuous in the upper portion of Francoeur's West Zone than in the initial geological model."
This, coupled with average realized grades that were below the 2009 reserve levels, have led to the downward revision of reserves and production and, hence, to the write-down on assets. While we are undeniably disappointed with the lower life-of-mine production estimate, the West Zone remains open at depth and we remain optimistic about our planned exploration drilling at Francoeur," Carmel stated.
Currently, shares of Richmont Mines are trading down about 14 percent at $4.10 per share.
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