Richmont Posts Impressive Growth and Consolidates Island Gold

August 11, 2014

Richmont Mines (RIC) recently reported a remarkable surge in gold output and sales, largely due to record production at its flagship Island Gold Mine in Ontario. Second quarter production was up 107% yoy, not only because of a 58% increase at Island Gold, but a 35% increase from the Beaufor Mine and recommenced open-pit operations at the Monique Mine in Quebec.

As a result of the improved production rates, cash holdings have more than doubled to $32M, which will undoutedly help continue the expansion of the high-grade Island Gold project. The company also revised its annual production guidance to 75,000 to 85,000 oz Au.

Although such growth is likely to slow, the company's stockpiles, now standing at 47,000 tonnes at 1.2g/t, will provide a future source of cheap ore. Moreover, the company announced it closed its transaction to acquire the remaining 31% stake in Island Gold, which will help accelerate the development and extend the life of the mine.

In light of RIC's tremendous growth, mine consolidation and development plans, shares have surged more than 60% since we first alerted our clients and followers. Despite the runup, RIC still remains undervalued compared to most gold mining stocks--especially those with operations in stable countries such as Canada. We think the company's next two quarterly reports will continue to show yoy improvements in both revenue and earnings, which should continue to attract a lot of attention since low gold prices and rising cash costs have rendered many mining companies unprofitable.



This article was originally published by Investinations on www.argmaur.com.