According to the terms of the Facility, the Corporation will issue call warrants ("warrants") for the purchase of 1,250,000 Richmont shares to MBL at closing of the Facility Agreement. The warrants have an exercise price of CAN$2.45 per share, and will expire 3 years from the original date of their issue to MBL. A total of 812,500 warrants will vest immediately upon closing of the Facility Agreement. The remaining 437,500 warrants will vest when the conditions to drawdown Tranche B are fully met by the Corporation.
Mr. Carmel continued: "Regarding the hedging component of the financing, the number of ounces that we will be obliged to commit in the near term represents less than 25% of the initial estimated 508,000 Au ounce inferred resource at Island Gold Deep, without factoring in possible future expansion. When adding the Corporation's existing reserve and resource base at its other operations, the percentage of ounces hedged becomes smaller still. With the completion of this facility, Richmont's leverage to the gold price actually increases, in our view, because it will allow us to access and potentially develop what we believe is a larger and higher grade zone of mineralization than what we are currently mining at Island Gold."
Additional details about the Island Gold Deep Project
The Island Gold Deep C Zone project contains an estimated Inferred mineral resource of 1.5 million tonnes grading 10.73 g/t Au for 508,000 ounces as at January 25, 2013. Island Gold Deep is sub-vertical, and is located at a depth of between 450 metres and 1,000 metres and is open in all directions. Island Gold Deep appears to be an extension of the areas currently being mined above in the Island Gold Mine, but at higher grades (10.73 g/t undiluted vs 5.60 g/t diluted) and greater widths (4.5 metres versus 2.7 metres). The Corporation has a capital budget for the project of $17 million in 2013, with work focused on extending the ramp at depth to establish a more optimal horizon for definition drilling and to access the deposit in order to begin mining operations. At the time of this release, the ramp had been extended to a depth of 500 vertical meters and is expected to reach an approximate depth of 570 metres by year-end 2013, and 750 metres by year-end 2014. As the ramp progresses, an exploration drift and an initial development level will be established at depths deemed optimal for the Island Gold Deep zone.
Additional details about the Island Gold Mine Property
The 59.12 km2 (5,912 hectares) Island Gold property is located 83 km northeast of Wawa, Ontario. Ore from the Island Gold Mine is processed at Richmont's on-site mill, an 850 tonne per day rated CIP facility. Since Island Gold began commercial production in October 2007, Richmont has produced more than 225,000 ounces of gold. Underground operations are accessed via a ramp, and mining activities currently reach a vertical depth of approximately 400 metres. As of December 31, 2012, the Island Gold Mine had a total of 191 employees, estimated Proven & Probable reserves of 141,456 Au ounces, estimated Measured & Indicated Resources of 110,958 Au ounces, and additional estimated Inferred Resources of 55,744 Au ounces.
About Richmont Mines Inc.
Richmont Mines has produced over 1,300,000 ounces of gold from its operations in Quebec, Ontario and Newfoundland since beginning production in 1991. The Corporation currently produces gold from the Island Gold Mine in Ontario and the Beaufor Mine in Quebec and is advancing two gold projects, the W Zone project and the Monique Gold project. With extensive experience in gold exploration, development and mining, the Corporation is well positioned to cost-effectively build its Canadian 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).
About Macquarie Bank Limited
MBL is a subsidiary of Macquarie Group, a global financial services firm headquartered in Sydney, Australia. With offices around the world, including Vancouver and Toronto, the Metals and Energy Capital Division of MBL is a leading provider of debt, equity and other forms of financing to the global resources industry.
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.
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.
The geological data in this news release has been reviewed by Mr. Daniel Adam, Geo., Ph.D., Vice-President, Exploration, an employee of Richmont Mines Inc., and a qualified person as defined by R 43-101.
Visit our Facebook page
RICHMONT MINES INC.
514 397-1410 ext. 101
Most Popular Stories
- 2014 Will Be 'Breakthrough Year' for U.S., Obama Says
- Target Overwhelmed by Worried Customers
- Congress Ends Turbulent Year with Approving IRS Chief
- First Family Arrives for Hawaiian Island Holiday
- Renewable Energy Group to Acquire Syntroleum
- Covered California Lags on Hispanic Enrollment
- Ally Financial Settles Auto Loan Suit
- Climate Change Isn't an Equal Opportunity Destroyer
- Kanye, Kardashians and Other Kooks: A Wacky, Tacky, Entertaining Year
- Luis Suarez Re-ups With Liverpool F.C.