RICHMONT MINES INC. Investor Presentation October TSX - NYSE MKT: RIC. Copyright 2012 by Richmont Mines

Transcription

1 RICHMONT MINES INC. Investor Presentation October 2012 w w w. r i c h m o n t - m i n e s. c o m 1 T S X N Y S E M K T : R I C

2 SAFE HARBOR STATEMENT & CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING RESOURCE ESTIMATES This presentation contains forward-looking statements that include risks and uncertainties. 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-U.S. 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 detailed from time to time in Richmont Mines Inc. s periodic reports and annual notice. The resource estimates in this presentation were prepared in accordance with Regulation adopted by the Canadian Securities Administrators. The requirements of Regulation differ significantly from the requirements of the United States Securities and Exchange Commission (the SEC ). In this presentation, we use the terms Measured, Indicated and Inferred Resources. Although these terms are recognized and required in Canada, the SEC does not recognize them. The SEC permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that constitute Reserves. Under United States standards, mineralization may not be classified as a Reserve unless the determination has been made that the mineralization could be economically and legally extracted at the time the determination is made. United States investors should not assume that all or any portion of a Measured or Indicated Resource will ever be converted into Reserves. Further, Inferred Resources have a great amount of uncertainty as to their existence and whether they can be mined economically or legally, and United States investors should not assume that Inferred Resources exist or can be legally or economically mined, or that they will ever be upgraded to a higher category. U.S. Investors are urged to consider the disclosure in our annual report on Form 20-F, File No , which may be obtained from us or from the SEC s web site: 2

3 RICHMONT MINES INVESTMENT HIGHLIGHTS Investment Highlights Strong balance sheet, tight capital structure and experienced management team anchor the company for future growth; Potentially very significant deep drilling exploration results currently being experienced at Island Gold Mine; Growth goals achievable without overly compromising the balance sheet or undue share dilution. 3

4 RICHMONT MINES OVERVIEW RIC has produced over 1.2 million ounces of gold from its operations in Quebec, Ontario and Newfoundland since RIC: TSX (CAN$) Shares Outstanding * Cash & equivalents * Long-term debt * Mgmt. & Director Ownership Employees 39.6 million ~ $60 million ~ $0.3 million ~ 12% ~ week price range Average 3 month volume (in CAN$M, except closing price) Working capital: Cash & equivalents: Long-term debt Operating cash flow: Closing price TSX: Market capitalization: $3.30 $ ,030 6/30/2012 $56.5 $55.5 $10.2 ($4.5) $4.73 $158 3/31/ 2012 $72.2 $69.3 $9.5 $6.8 $7.77 $260 NYSE Amex (US$) $3.23 $ ,700 12/31/2011 $68.7 $63.5 $38.8 $10.94 $362 12/31/2010 $43.9 $40.0 $18.3 $5.11 $160 * As of September 26,

5 RICHMONT MINES OPERATIONAL STRUCTURE Two Production Hubs Ontario Island Gold Mine & Mill Quebec (Camflo Mill) Beaufor Mine Francoeur Mine Monique Project Production forecasts: 2012: 40,000 45,000 Au ozs 2013: 45,000 50,000 Au ozs Combined production forecasts (excl. Monique in 2012) : 2012: 25,000 30,000 Au ozs 2013: 45,000 50,000 Au ozs P R O D U C T I O N F O R E C A S T S 2012: ~ 65,000 Au ounces 2013: ~ 100,000 Au ounces 5

6 RICHMONT MINES OPERATIONAL STRUCTURE Our Goal Ontario Quebec (Camflo Mill) Island Gold Mine & Mill Beaufor Mine Francoeur Mine Monique Project Other Projects OBJECTIVE: 10 Year Mine Life Annual production of 50,000 + Au ozs OBJECTIVE: 10 Years of Mill Feed Annual production of 50,000 + Au ozs O B J E C T I V E Establish 10 years of annual production of 100,000 ozs and to set the stage for future growth 6

7 ONTARIO PRODUCTION HUB ISLAND GOLD MINE Island Gold Mine OVERVIEW: Located in NE Ontario Production: 225,000+ Au ozs since 10/2007 Underground mechanized mine, ramp access 850 tpd CIP mill on-site Reserves + Resources (as of Dec. 31, 2011): P+P reserves 171,814 Au ozs M+I resources 153,920 Au ozs Inferred resources 67,238 Au ozs No R & R below 400 m: open laterally and at depth Promising deep drill results in 2012 (-500 to -900 m) 1+ year no lost time accident O B J E C T I V E S Establish resources at depth (in Q1 2013) Build reserves of 500,000 + Au ozs and resources of 1,000,000 Au ozs 7

8 (Ounces) ISLAND GOLD MINE PRODUCTION Annual Gold Sales 60,000 1,275 1,549 1,500 40,000 1,104 1,000 20, ,879 oz ,865 oz ,196 oz Target: 40,000 to 45,000 oz Target: 45,000 to 50,000 oz 500 (US$) F 2013F Ounces gold sold Cash cost per ounce Selling price 0 Note: Cash cost includes royalties. 8

9 ISLAND GOLD MINE DEEP DRILLING SHOWS POTENTIAL Deep Drilling Yields Potential at Depth Drill results suggest that the C Zone is currently the most continuous of the four zones (G, C, D and E1E) previously identified through drilling, and that it appears to be a continuation at depth of the zone currently being mined. Notable intercepts (all true widths and cut-grades) include: g/t Au over 6.59 metres (C Zone) g/t Au over metres (C Zone) g/t Au over 8.02 metres (C Zone) g/t Au over 5.88 metres (C Zone) g/t Au over 4.84 metres (Zone E1E) g/t Au over 4.08 metres (Zone E1E) g/t Au over 6.58 metres (G Zone) g/t Au over 2.18 metres (D Zone) g/t Au over 2.05 metres (D Zone) 35,000 metres of deep drilling planned at Island Gold in 2012, with the goal of establishing resources below the current infrastructure in Q

10 Diabase dyke Diabase dyke ISLAND GOLD MINE LONGITUDINAL SECTION C ZONE SEPTEMBER 2012 W Crown Pillar Lochalsh Island Main Portal Island Ext1 Island Ext2 Goudreau E Level m Level m Ddh Bay 1.78/2 1.78/2.0 Ddh Bay Ddh Bay 4.54/ / m -900m 4.01/ / / / / / / / / / / / / / / / / / / / / / / / / / New Intersection Intersection Assay Pending Previous Intersection Previous Intersection Below 3g/t Au Proven Reserves Probable Reserves Indicated Resources Inferred Resources Planned Drifts 3.62/ / / / / / /2.2 Actual Ramp and Drifts Mined Out Au g/t, Cut 75g / True thickness metres 10

11 2013 Est. Production ~ 50,000 Au ozs QUEBEC PRODUCTION HUB CAMFLO MILL CAMFLO MILL ~ 25,000 Au ozs Beaufor Mine = + ~ 20,000 Au ozs Francoeur Mine + ~ 5,000 Au ozs (1) Monique Project (1) Non commercial pre-production bulk sample ounces 11

12 QUEBEC PRODUCTION HUB CAMFLO MILL OUR VISION: PORTFOLIO APPROACH Beaufor Mine Our vision: Establish 10 years of recurring production of ~ 50,000 ozs annually = Francoeur Mine Monique Project Future Projects CAMFLO MILL OWNED (in Quebec) - Chimo - Courval - Arncoeur - Louvem Norex - Lac Fortune - Camflo NW + ASSET PURCHASES? 12

13 QUEBEC PRODUCTION HUB CAMFLO MILL Camflo Mill OVERVIEW: Located in Malartic, Quebec 100% owned Replacement value >CAN$35 M 2+ years no lost-time accident Excess capacity = ability to capitalize on regional discoveries & opportunities O B J E C T I V E S Establish 10 years of feed: 500,000 + Au ozs of reserves through a portfolio approach Develop pipeline of assets for future Maximize utilization rate 13

14 QUEBEC PRODUCTION HUB BEAUFOR MINE Beaufor Mine OVERVIEW: Located near Val-d Or, Quebec Production: 500,000+ Au ounces since 1996 Underground, shaft access 5 years no lost-time accident Ore processed 50 km away at Camflo Mill Reserves + Resources (as of Dec. 31, 2011): P + P reserves 69,121 Au ozs M + I resources 182,334 Au ozs Inferred resources 182,185 Au ozs O B J E C T I V E S Extend reserve base: focus on definition, exploration and development Advance development of W Zone Re-evaluate economics of existing resource base at depth 14

15 BEAUFOR MINE MINE LAYOUT 15

16 BEAUFOR MINE LONGITUDINAL SECTION / ZONES 350, W AND 367 RESERVES - RESOURCES (DECEMBER 31, 2011) W Reserves Resources Zone W Perron Shaft 5 Beaufor Shaft 4 Zone 367 Ramp Portal E Crown pillar Zone 350 ZONE m ZONE m Probable Reserves: 13,868 T at 7.53 g/t Au; 3,357 oz Au Indicated Resources: 5,422 T at 7.02 g/t Au; 1,224 oz Au Probable Reserves: 23,177 T at 7.98 g/t Au; 5,946 oz Au Indicated Resources: 24,943 T at 7.48 g/t Au; 5,998 oz Au ZONE W, WF and WH S N Probable Reserves: 90,165 T at 6.92 g/t Au; 20,060 oz Au Indicated Resources: 12,412 T at 5.63 g/t Au; 2,247 oz Au Inferred Resources: 4,510 T at 7.49 g/t Au; 1,086 oz Au -400 m 16

17 (Ounces) BEAUFOR MINE OVERVIEW Annual Gold Sales 30,000 2,000 20,000 1,113 1,290 1,559 1,500 1,000 (US$) 10, ,854 oz 22,258 oz 26,947 oz Target: 20,000 to 25,000 oz Target: 20,000 to 25,000 oz F 2013F Ounces gold sold Cash cost per ounce Selling price 0 Note: Cash cost includes royalties. 17

18 QUEBEC PRODUCTION HUB FRANCOEUR MINE Francoeur Mine OVERVIEW: Located in Rouyn-Noranda, Quebec Commercial production begun Aug. 1, 2012 (expect ~5,000 Au ozs in 12 and ~20,000 Au ounces in 13) Underground, shaft access, 150 employees Ore processed at Camflo Mill, ~100 km away Past production ( ): 345,000 Au oz at 6.3 g/t Reserves + Resources (as of June 15, 2012) (1) : P + P reserves 77,580 Au ozs M + I resources 4,499 Au ozs Inferred resources 5,771 Au ozs O B J E C T I V E S Extend reserve base via exploration Maximize productivity and efficiency Focus on health & safety 1)Calculated based on a gold price of US$1,400 (CAN$1,400) per ounce, and a cut-off grade of 3.75 g/t Au. 18

19 FRANCOEUR MINE DEVELOPMENT FOCUS / LONGITUDINAL W Surface E Zone 2 Zone m Zone 3 Level 4 Level 6 South Zone Zone 7 East Zone Legend 2009 Resources Zone 1 Mined out - 500m Level 12 Level 13 Level 14 North Zone Existing development Development since dewatering Level 15 Level 16 Planned development Level m -1000m Open at depth 4.08 km 2 (408.3 hectares), 25 km SW of Rouyn-Noranda, QC Q2/12 Non-cash write down: CAN$33.2 M (CAN$27.9 M after-tax) related to lower anticipated production 2012 drilling plan: 9,100 metres exploration, 25,000 metres definition 19

20 (Ounces) FRANCOEUR MINE OVERVIEW Forecasted Annual Commercial Gold Sales 30,000 20,000 10,000 Target: 20,000 Au ozs 0 Target: 5,000 oz (1) 2012F 2013F (1) Based on commercial production from August 1 December 31,

21 QUEBEC PRODUCTION HUB MONIQUE GOLD PROPERTY Monique OVERVIEW: Located 25 km east of Val-d Or, Quebec 5.39 km 2 (539 hectares); 100%-owned 50 km away from Camflo Mill Open-Pit Resources (as of Dec. 31, 2011): Indicated resources 55,112 Au ozs (728, g/t Au) Permit application for small open-pit submitted in November 2011 O B J E C T I V E S Process 5,000 tonne bulk sample in 2013 Establish project economics 21

22 1200m E MONIQUE GOLD PROPERTY LONGITUDINAL SECTION: G ZONE W Overburden E 4.54/ /8 3.07/ / / / / / / / / / / / / / / / / / / / / / / / /9 1.68/ / / / / / / / / /0.85 Resources DDH intersection Au g/t / True thickness (m) (cut at 26g) Whittle pit shell m 1.92/ / / / / / / / / / / / / /6.5 Au g/t (cut at 26g) >5 7.8/ / / / / / / / m 1.61/ / / / / / / / /3 2.04/ / / / / m Copyright 2011 Richmont 2012 by Richmont Mines Inc. Mines 22

23 WASAMAC GOLD PROPERTY OVERVIEW Wasamac Dramatic Gold Price Leverage OVERVIEW: Located 15 km from Rouyn-Noranda, QC 5.91 km 2 (591 hectares); 100%-owned No royalties or back-in rights Past production ( ): 1,892,448 tonnes at 4.16 g/t Au ; 252,923 onces Au Exploration drilling: ~ 125,000 metres over the 2010 to 2012 period Reserves + Resources (as of Dec 31, 2011): M + I Resources: Inferred Resources: 556,385 Au ozs 2,130,532 Au ozs O B J E C T I V E S Optimize project economics & advance technical studies Focus on most promising Main Zone 23

24 3500E 4000E WASAMAC GOLD PROPERTY RESOURCES (DECEMBER 2011), CUT-OFF: 1.5 G/T AU W Wasamac Mine / Main Zone ( ) Production: 1,892,448 T at 4.16 g/t Au Looking ,923 onces Au Zone 1 Crown Pillar Measured & Indicated Resources : 1,773,529T at 2.58 g/t Au; 147,115 oz Au E Inferred Resources: 1,432,404T at 2.45 g/t Au; 112,650 oz Au Main Zone (Old Mine) Inferred Resources : 3,932,289T at 2.89 g/tau; Zone 2 Zone ,749 oz Au m Main Zone Measured & Indicated Resources : 3,182,577T at 2.79 g/t Au; 285,262 oz Au Inferred Resources: 3,624,125T at 2.84 g/t Au; 331,006 oz Au m Zone 1 Measured & Indicated Resources : 1,526,991T at 2.08 g/t Au; 102,351 oz Au Inferred Resources: 4,704,746T at 2.15 g/t Au; 324,892 oz Au Zone 3 Indicated Resources : 40,299T at 1.87 g/t Au; 2,419 oz Au Inferred Resources: 3,170,004T at 2.49 g/t Au; 253,988 oz Au WASAMAC TOTAL RESOURCES Measured & Indicated Resources : 6,762,455T at 2.56 g/t Au; 556,385 oz Au Inferred Resources: 25,686,159T at 2.58 g/t Au; 2,130,532 oz Au Zone 2 Measured & Indicated Resources : 239,059T at 2.50 g/t Au; 19,238 oz Au Inferred Resources: 8,822,590T at 2.62 g/t Au; 743,246 oz Au 250 metres Drillhole Intersections Mined out / Opening 24

25 WASAMAC GOLD PROPERTY FOCUS Focus on Main Zone 2012 drill program: ~ 55,000 metres; 3 drills currently active Primary focus: Main Zone - M & I Resources (1) : 285,262 Au ounces - Inferred Resources (1) : 695,755 Au ounces Advance technical studies on the property including metallurgical, geotechnical, and hydro-geological Project design optimization: Focus on Main Zone where geometry, grade, widths and metallurgy appear most promising Assess economic impact of smaller scale operation, which would be scalable over time to respond to market conditions (1) Resources as of December 31, 2011, and do not include 2012 drill results. 25

26 WASAMAC GOLD PROPERTY 2012 DRILL PROGRAM Significant Drill Results & Zone 4 Discovered 2012 drilling program at Wasamac has yielded additional significant results (1) : Main Zone Zone 2 Zone g/t Au over metres 2.83 g/t Au over metres 3.70 g/t Au over metres 4.61 g/t Au over metres 3.80 g/t Au over 7.01 metres 3.37 g/t Au over 9.45 metres 5.16 g/t Au over metres 5.19 g/t Au over 7.81 metres Note: all drill results are true widths and cut-grades (35 g/t Au). Zone 4: a newly discovered zone which is located on the boundary of the Wasamac property and the optioned Globex claims: 7.09 g/t Au over 4.80 metres (1) Are not included in December 31, 2011 estimated resources. 26

27 RICHMONT MINES FOCUS ON SHARE PRICE APPRECIATION Establish both production hubs with 10 year mine lives, capable of each producing a minimum of 50,000 ozs annually (100,000 ozs company-wide). HOW? Per-Share Appreciation Strategy Ontario (Island Gold): grow resources at depth and optimize project Quebec: adopt a portfolio approach to reserve maximization Achieve the above by maintaining a strong balance sheet and limiting the issuance of equity. Upon optimization of the two main production hubs, evaluate the potential implementation of the Wasamac project and/or complete strategic acquisitions that will enable the Corporation to become an intermediate gold producer. 27