Richmont Mines Closes Island Gold Acquisition, Reports Strong Q2 Results

Richmont Mines Closes Island Gold Acquisition, Reports Strong Q2 ResultsIt was good news all around for Richmont Mines (TSX:RIC,NYSEMKT:RIC) this week. The company not only released positive second-quarter results, but also completed the acquisition of the Island Gold Mine property.

Q2 2014 was a strong quarter for Richmont Mines, which achieved record operating cashflow of $13.4 million on record revenue of $39 million. As the company noted in a conference call, those figures are a significant improvement over the same period last year.

Meanwhile, the company also saw strength in terms of gold sales, selling 27,790 ounces for an average price of $1,399; that's a whopping 117-percent increase over the 2013 figure. Richmont also noted that it decreased its cash cost per ounce by 16 percent — it came in at C$849 compared to 2013′s $1,015. The lower cash cost was made possible due to improvements at its mines, as well as scheduling and sequencing. The improvements, as interim CEO Elaine Ellingham noted, "paid off with milling higher grades and higher tonnages."

Furthermore, the company's gold sales for the first half of the year came in at 48,202 ounces averaging $1,417, which is 78 percent higher than in the same period last year.

Richmont also increased its gold production guidance to 75,00 to 85,000 ounces due to strong quarterly and six-month operational performance. The previous range was 70,000 to 80,000 ounces. Meanwhile, the company recorded net earnings of $5.7 million, or $0.12 per, share for Q2; that's more encouraging than the net loss of $1.1 million sustained in the same period in 2013.

Beyond the strong performance from the company's producing mines, Beaufor, Monique and Island, Ellingham also noted that the company achieved a significant milestone in completing the acquisition of the Island Gold Mine in Ontario, which consists of four patented claims.