Q3 Webcast Presentation

18
TSX – NYSE MKT: RIC Third Quarter 2015 Financial Results November 5, 2015

Transcript of Q3 Webcast Presentation

Page 1: Q3 Webcast Presentation

TSX – NYSE MKT: RIC

Third Quarter 2015 Financial ResultsNovember 5, 2015

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FORWARD LOOKING STATEMENTS

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 couldcause actual results to differ materially from those indicated in such forward-looking statements include changes in theprevailing price of gold, the Canadian-U.S. exchange rate, grade of ore mined and unforeseen difficulties in miningoperations that could affect revenue and production costs. Other factors such as uncertainties regarding governmentregulations could also affect the results. Other risks may be detailed from time to time in Richmont Mines Inc.’speriodic reports and annual notice.

The resource estimates in this presentation were prepared in accordance with NI 43-101 adopted by the CanadianSecurities Administrators. The requirements of NI 43-101 differ significantly from the requirements of the United StatesSecurities and Exchange Commission (the “SEC”). In this presentation, we use the terms “Measured”, “Indicated” and“Inferred” Resources. Although these terms are recognized and required to be used in Canada, the SEC does notrecognize them. The SEC permits U.S. mining corporations, in their filings with the SEC, to disclose only those mineraldeposits that constitute “Reserves”. Under United States standards, mineralization may not be classified as a Reserveunless the determination has been made that the mineralization could be economically and legally extracted at the timethe determination is made. United States investors should not assume that all or any portion of a Measured orIndicated Resource will ever be converted into “Reserves”. Furthermore, “Inferred Resources” have a great amount ofuncertainty as to their existence and whether they can be mined economically or legally, and United States investorsshould not assume that “Inferred Resources” exist or can be legally or economically mined, or that they will ever beupgraded to a more certain category.

U.S. Investors are urged to consider the disclosure in our annual report on Form 20-F, File No. 001-14598, which maybe obtained from us or from the SEC’s web site: http://sec.gov/edgar.shtml.

(All amounts are in Canadian dollars, unless otherwise indicated.)

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ANOTHER SOLID PERFORMANCE FOR Q3

• Richmont delivers another solid quarter

• Production on track for high end of guidance; AISC mid-range of guidance

• Strong cash balance of $76.5M

• Released PEA on Island Gold• Potential to accelerate production and

lower AISC

• Expansion opportunity to 1,150tpd

• Announced 23,000m deep directional drilling program at Island Gold

• Update on 17,000m surface drilling program at Island Gold

• Mine life extension at Beaufor Q Zone

Q3 2015

9-months2015

2015 Guidance

Gold produced (oz) 23,478 75,651 87,000-95,000

Gold sold (oz) 22,962 75,319

Cash cost per ounce (CAN$)(1) $926 $961 $935-$1,035

AISC (CAN$)(1) $1,311 $1,290 $1,335-$1,490

Cash cost per ounce (US$)(1) $707 $763 $750-$825

AISC (US$)(1) 1,001 1,024 $1,075-$1,190

(1) Refer to the Non-GAAP performance measures contained in the Q3 MD&A.

Q3 Highlights

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Production (oz) Cash Costs (CAD$/oz)

Growing Production and Decreasing Cash Costs

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FINANCIAL HIGHLIGHTS

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FINANCIAL RESULTS HIGHLIGHTS

Solid Financial Results

Strong cash position of $76.5M as of Sept. 30, 2015 supports fully funded strategic growth plan

(in thousands, except per share amounts)Quarter EndedSept. 30, 2015

Quarter EndedSept. 30, 2014

Nine Months EndedSept. 30, 2015

Nine Months EndedSept. 30, 2014

Revenue from mining operations 34,107 34,215 111,869 102,634

Net earnings per share, basic 0.06 0.09 0.19 0.16

Operating cash flow, per share 0.20 0.18 0.63 0.54

Adj. Operating cash flow, per share(1) 0.20 0.23 0.56 0.67

Free cash flow, per share(2) (0.02) 0.05 0.11 0.17

(1) Before changes in non-cash working capital (2) Refer to the Non-GAAP performance measures contained in the Q3 MD&A.

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CONSOLIDATED OPERATIONAL RESULTS HIGHLIGHTS

Production Growth and Declining CostsQuarter EndedSept. 30, 2015

Quarter EndedSept. 30, 2014

Nine Months EndedSept. 30, 2015

Nine Months EndedSept. 30, 2014

Gold produced (oz) 23,478 24,300 75,651 72,808

Gold sold (oz) 22,962 24,635 75,319 72,837

Cash cost per ounce (CAN$)(1) 926 876 961 948

AISC (CAN$)(1) 1,311 1,074 1,290 1,157

Realized gold price (CAN$) 1,482 1,386 1,482 1,406

Cash cost per ounce (US$)(1) 707 804 763 866

AISC (US$)(1) 1,001 986 1,024 1,057

Realized gold price (US$) 1,132 1,273 1,176 1,285

(1) Refer to the Non-GAAP performance measures contained in the Q3 MD&A.

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OPERATIONS OVERVIEW

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Growing Production andDecreasing Costs

Mining and Milling Ramp-up

ISLAND GOLD: ON TRACK FOR RECORD 2015

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Guidance

Gold produced (oz) 15,076 40,837 45,000-50,000

Gold sold (oz) 14,233 38,859

Cash cost per ounce (CAN$)(1) $890 $1,036 $935-$1,035

AISC (CAN$)(1) $1,267 $1,416 $1,350-$1,495

Cash cost per ounce (US$)(1) $680 $823 $748-$828

AISC (US$)(1) $968 $1,125 $1,080-$1,196

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Underground Mine Productivity Mill Productivity

ISLAND GOLD: POSITIONING FOR GROWTH

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Underground tpd 669 660

Mill tonnes 66,416 181,785

Mill tpd 722 666

Head grade (g/t) 7.27 7.20

Recoveries (%) 97.12 97.01

Sustaining Costs ($000’S) 5,371 14,754

Project and non-sustaining exploration costs ($000’s) 8,234 18,124

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Development Ore vs. Unit Costs

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ISLAND GOLD: OPTIMIZING UNIT COSTS

$44SG&A (20%)

2015 YTD Unit Cost Allocation

$139MINING (62%)

$32MILLING

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$8ROYALTIES (4%)

Strong Leverage to Canadian Dollar95% of Cash Outflows in CAD$

70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5%

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Q4 2014 (50%)

Q3 2015 $114/tonne

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Q2 2015(39%)

PEA (2017-2022)$74/tonne

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ISLAND GOLD: PEA OVERVIEW• Potential for increased production and lower AISC

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Permitted Capacity 900tpdBase Case 800tpd

• Phased approach with Phase 1 (800 tpd)

• Mining from a depth of 450 to 860 metres over three long-hole mining horizons

• Excludes resources above the 450 metre level, isolated resource blocks and parallel zones

• Avg. production of approx. 78,000 gold ounces per year from 2017 to 2022 at $552/oz cash costs

• Potential Expansion case to 1,150 tpd in H1 2017

PEA Summary 2017-2022

Tonnes Milled (Mt) 1.7Head Grade (g/t) 8.67Mine life excl. transition period (years) 6Daily mine production (tpd) 801Gold recovery (%) 96.5Production (Koz) 464.6Average annual gold production (Koz) 78Total operating cost ($M) 256Average cash operating cost ($/t) 148Average cash operating cost ($/oz) 552Transition Period Project Capital 2015-16 ($M) 62Sustaining Capital ($M) 40.5

Mill Expansion OpportunityExpanded Case: 1,150tpd

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ISLAND GOLD MINE: PEA BASE CASE (800TPD)

Developing deeper resource to create substantial long-term growth.

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ISLAND GOLD MINE: PEA BASE CASE (800TPD)

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ISLAND GOLD MINE: PLANNED NEAR-MINE EXPLORATION DRILLING

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ISLAND GOLD MINE: 2015 PLANNED REGIONAL EXPLORATION DRILLING

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BEAUFOR MINE: OPERATIONAL HIGHLIGHTS

Beaufor MineQuarter ended

Sept. 30/15Quarter ended

Sept. 30/14Nine-months ended

Sept. 30/15Nine-months ended

Sept. 30/14

Gold produced (oz) 5,714 5,757 20,759 18,325

Gold sold (oz) 5,919 6,323 21,638 18,166

Cash cost per ounce (CAN$)(1) 974 974 974 949

AISC (CAN$)(1) 1,225 987 1,144 1,035

Realized gold price (CAN$) 1,481 1,384 1,476 1,409

Cash cost per ounce (US$)(1) 744 895 773 868

AISC (US$)(1) 936 907 908 947

Realized gold price (US$) 1,131 1,271 1,171 1,288

Underground tpd 338 359 355 321

Mill tonnes 30,437 30,859 97,102 85,326

Head grade (g/t) 5.93 5.98 6.74 6.83

Recoveries (%) 98.55 96.97 98.60 97.86

Sustaining Capital ($000’S) 1,485 84 3,683 1,567

Project and non-sustaining capital ($000’s) 208 558 208 1,126

(1) Refer to the Non-GAAP performance measures contained in the Q3 MD&A.

• Development of the Q Zone extends mine life

• Target of reaching the mineralized structure by early 2016

• 28,000m of exploration drilling and 8,000m of definition drilling completed to date

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MONIQUE MINE: OPERATIONAL HIGHLIGHTS

Monique MineQuarter ended

Sept. 30/15Quarter ended

Sept. 30/14Nine-months ended

Sept. 30/15Nine-months ended

Sept. 30/14

Gold produced (oz) 2,688 7,131 14,055 16,351

Gold sold (oz) 2,810 6,843 14,822 16,716

Cash cost per ounce (CAN$)(1) 1,005 753 745 1,042

AISC (CAN$)(1) 1,020 790 762 1,085

Realized gold price (CAN$) 1,471 1,383 1,487 1,396

Cash cost per ounce (US$)(1) 768 692 592 953

AISC (US$)(1) 779 726 605 992

Realized gold price (US$) 1,124 1,270 1,180 1,276

Mill tonnes 52,987 82,775 178,751 197,562

Head grade (g/t) 1.64 2.77 2.53 2.67

Recoveries (%) 96.16 96.66 96.71 96.28(1) Refer to the Non-GAAP performance measures contained in the Q3 MD&A.

• Milling of the lower-grade cash-flow accretive stockpiled ore during Q3

• Processing of the lower grade stockpile will be completed by the end of 2015

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Q & A