Louvem Mines Inc. (TSX VENTURE: LOV)
-- Net earnings of $75,430, or nil per share, for the first quarter of
2010, compared with net earnings of $336,844, or $0.01 per share, for
the comparable period of 2009;
-- $5,227,634 in cash and cash equivalents and no long term debt at March
31, 2010;
-- Parent Company Richmont Mines Inc. (TSX: RIC)(NYSE Amex: RIC) announces
intention to acquire outstanding 30% of Louvem that it does not
currently own.
Louvem Mines Inc. (TSX VENTURE: LOV), ("Louvem" or the
"Company"), announces its financial results for the first quarter
of 2010, ended March 31, 2010. Financial results are based on
Canadian GAAP and dollars are reported in Canadian currency, unless
otherwise noted.
Revenues were $2,801,882 in the first quarter of 2010, compared
with revenues of $3,393,656 for the comparable period in 2009. A
total of 2,452 ounces of gold were sold at an average price of
US$1,096 (CAN$1,140) in the first three months of 2010, versus gold
sales of 3,000 ounces at an average price of US$984 (CAN$1,124) in
the first quarter of 2009. The year-over-year decrease in revenues
was mainly attributable to a lower number of gold ounces being
sold, the effects of which were partially offset by an increase in
the average price per ounce of gold sold.
The Company posted net earnings of $75,430, or nil per share, in
the first quarter of 2010, down from earnings of $336,844, or $0.01
per share, for the first quarter of 2009. Operating cash flow was
$81,473 in the quarter, versus $322,958 in the comparable period of
2009, with the year-over-year difference due to a lower revenue
base that stemmed from fewer gold ounces being sold.
Total expenses for the first quarter of 2010 were $2,706,020,
compared with $2,869,725 in the same period of 2009. Operating
costs for the first three months of 2010 totalled $2,256,547,
compared with $2,290,095 in the first quarter of 2009. Exploration
expenses fell by $143,867 year-over-year to $134,983 in the first
quarter of 2010, a reflection of the extensive exploration program
in 2009. Depreciation and depletion expense increased from $75,013
in 2009 to $112,782 in 2010. This was driven by a higher
depreciation and depletion rate per ounce of gold sold, calculated
based on proven and probable reserves, which declined
year-over-year at the Beaufor Mine.
First Quarter News
On March 31, 2010, Louvem's parent company, Richmont Mines Inc.
(TSX - NYSE Amex: RIC), ("Richmont"), announced that it intended to
acquire the 30% of the issued and outstanding shares of Louvem that
it currently did not own. Under terms of the transaction proposed
by Richmont, Louvem shareholders would receive one Richmont share
for each 5.4 shares of Louvem held. This represents a value of
$0.76 per Louvem share, and is a premium of approximately 48% to
Louvem shareholders, based on the March 30, 2010 closing prices on
the TSX Venture Exchange and the TSX of Louvem shares and Richmont
shares, respectively.
Subsequent to this announcement, Louvem's Board of Directors
established an independent committee comprised of Mr. Gaston Gagnon
and Mr. Pierre Barbeau, both independent directors of Louvem, to
review and assess the terms of the proposal made by Richmont. The
independent committee retained the services of Colby, Monet,
Demers, Delage & Crevier LLP to act as legal advisor, and KPMG
LLP to act as financial advisor to the independent committee in
connection with the transaction. KPMG LLP was also given the
mandate to provide the independent committee with an opinion as to
the fairness of the proposed transaction for minority Louvem
shareholders, from a financial point of view. The transaction
remains subject to the approval of the Board of Directors of
Louvem, regulatory approvals, the execution of definitive
documentation and the approval of Louvem shareholders.
A surface exploration program on the Beaufor Mine property was
completed in the first quarter of 2010. This program identified one
promising zone - Zone 350 - located approximately 800 metres to the
southwest of the mine infrastructure. This zone is composed of a
quartz vein that contains pyrite, tourmaline and visible gold, and
varies in thickness from 0.35 metres to 2.8 metres. A total of
2,904 metres over 8 holes were drilled on this zone. Several
interesting intercepts were documented, notably 100.00 g/t over a
true width of 0.91 metres in hole 50-01, and 23.57 g/t over a true
width of 0.90 metres in hole 35-01. The results suggest that Zone
350 covers a minimum lateral distance of 350 metres, and is open at
depth and laterally. More exploration drilling is planned in the
near future on this area of the property, to further investigate
the potential of this zone.
Also during the first quarter of 2010, the Beaufor Mine reached
a production level of 1,000,000 gold ounces over its mine life. The
mine produced a total of 517,129 gold ounces over the 27 years that
it was in operation during the period 1933 until 1995. Since
commercial production resumed in 1996, the mine produced an
additional 482,871 gold ounces, reaching the lifetime production
milestone of 1,000,000 gold ounces in March 2010.
Beaufor Mine (100%)
------------------------------------------------------------------------
Three months ended
March 31, March 31,
2010 2009
------------------------------------------------------------------------
Tonnes(1) 25,262 29,463
Head grade (g/t) 6.15 6.47
Gold recovery (%) 98.16 97.86
Recovered grade (g/t) 6.04 6.34
Ounces sold(1) 4,903 6,001
Cash cost per ounce (US$) 885 668
Louvem's share of investment in property,
plant and equipment (CAN$) 348,927 143,530
Louvem's share in exploration expenses
(CAN$) 134,983 278,850
Deferred development (metres) 600 91
Diamond drilling (metres)
Definition 10,808 4,119
Exploration 1,832 5,976
------------------------------------------------------------------------
(1) Louvem's share is 50%.
A total of 25,262 tonnes from the Beaufor Mine were processed in
the first quarter of 2010 at an average recovered grade of 6.04
g/t, versus 29,463 tonnes at an average recovered grade of 6.34 g/t
in the comparable period of 2009. Total cash cost per ounce
produced rose to US$885 (CAN$920) in the current quarter, from
US$668 (CAN$763) in the prior year, a reflection of lower tonnage,
a lower average recovered grade, and higher mining costs associated
with increased development needed to access the mining areas. A
total of 4,903 ounces of gold were sold from this mine in the first
quarter of 2010 at an average price of US$1,096 (CAN$1,140), in
line with the mine's annual sales target of 20,000 ounces of gold.
This was compared to 6,001 ounces of gold sold at an average price
of US$984 (CAN$1,124) in the comparable period of 2009. Louvem's
share of the gold ounces sold was 2,452 ounces in the first quarter
of 2010, versus 3,000 ounces in the comparable period of 2009. In
addition to exploration and definition drilling, the main priority
at the Beaufor Mine is to assess different mining methods in order
to reach ore zones more efficiently, with the intended result of
reducing operating costs and increasing recovered grades.
Annual and Special General Meeting of Shareholders
Louvem will hold its Annual and Special General Meeting of
shareholders at 10:00 am on Friday, June 18, 2010, at 1155
Rene-Levesque Boulevard West, 40th floor, in Montreal. The notice
of the Annual and Special General Meeting of shareholders and
Management Information Circular will be sent to shareholders within
the coming days.
Martin Rivard
President and Chief Executive Officer
About Louvem Mines Inc.
The Company has a 50% interest in the Beaufor Mine and owns
other exploration properties located near Val-d'Or, in northwestern
Quebec, Canada. More information on Louvem Mines can be found on
its website at: www.louvem.com.
Forward-Looking Statements
This news release contains forward-looking statements that
include risks and uncertainties. When used in this news release,
the words "project", "expect", "may" and similar expressions, as
well as "will" 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 revenues and production costs. Other factors such as
uncertainties regarding government regulations could also affect
the results. Other risks may be set out in Louvem's Annual
Information Form, Annual Reports and periodic reports.
Regulation 43-101
The geological data in this news release has been reviewed by
Mr. Daniel Adam, Geo., Ph.D, Exploration Manager, an employee of
Richmont Mines Inc., the operator of the Beaufor Mine, and a
qualified person as defined by regulation 43-101.
KEY FINANCIAL DATA
Three-month period
ended March 31,
2010 2009
--------------------------------------------------------------------------
Results ($)
Revenues 2,801,882 3,393,656
Net earnings 75,430 336,844
Cash flow from operations 81,473 322,958
Results per share ($)
Net earnings basic - 0.01
Weighted average number of common shares
outstanding 25,929,689 25,929,689
--------------------------------------------------------------------------
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March December
31, 2010 31, 2009
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Financial position ($)
Total assets 8,781,958 8,330,756
Working capital 4,997,635 5,193,254
Long term debt - -
--------------------------------------------------------------------------
SALES AND PRODUCTION DATA
--------------------------------------------------------------------------
Three-month period
Beaufor Mine - 50 % ended March 31,
2010 2009
--------------------------------------------------------------------------
Gold sales (ounces) 2,452 3,000
Production of gold (ounces) 2,817 2,425
Cash cost (per ounce sold) (US$) 885 668
Cash cost (per ounce sold) (CAN$) 920 763
Average selling price (per ounce of gold)
(US$) 1,096 984
Average selling price (per ounce of gold)
(CAN$) 1,140 1,124
--------------------------------------------------------------------------
Average exchange rate used for 2009: US$1 = CAN$1.1420
2010 ESTIMATED EXCHANGE RATE: US$1 = CAN$1.0401
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Louvem Mines Inc. Jennifer Aitken Investor Relations
514-397-1448 514-397-8620 (FAX) jaitken@richmont-mines.com
Louvem Mines Inc. (TSXV:LOV)
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