Richmont Mines, Inc. (RIC) Reports Q1 Gold Production of 29,401 Ounces

Richmont Mines Inc. (NYSE: RIC) reports first quarter company-wide production of 29,401 ounces of gold, at cash costs1 of $791 (US$598) per ounce. The strong operational performance was supported by another consecutive quarter of solid production from the Island Gold Mine of 23,772 ounces of gold, at cash costs of $668 (US$504) per ounce, a 19% decrease over the prior quarter. Overall, Richmont is well positioned to achieve annual production and cash cost guidance for the year. (All amounts are in Canadian dollars unless otherwise indicated.)

FIRST QUARTER ANNUAL HIGHLIGHTS:

• Company-wide production was 29,401 ounces of gold (28,528 ounces sold) for the quarter, driven by production from the cornerstone Island Gold Mine of 23,772 ounces of gold (22,649 ounces sold).
• Company-wide cash costs for the quarter were $791 (US$598) per ounce. Cash costs from the Island Gold Mine are below current guidance levels at $668 (US$504) per ounce, a 19% reduction over the prior quarter.
• The Island Gold Mine reported record underground mine and mill productivities for the quarter, averaging 1,019 and 926 tonnes per day, respectively.
• Revenues for the quarter were $46.5 (US$35.1) million.
• As of December 31, 2016, Mineral Reserves at the cornerstone Island Gold Mine increased by 34% (net of depletion) to 752,200 ounces of gold, at an increased grade of 9.17 g/t gold. Inferred Resources increased by 30% to 995,700 ounces of gold at an increased grade of 10.18 g/t, at an average discovery cost of less than $35 (US$26) per ounce.
• Recent exploration drilling results identified new high-grade mineralization located approximately 800 metres east of the main Island Gold deposit. Hole GD-640-05 intersected 20.6 g/t gold over 11.3 metres (core length), demonstrating the significant potential for near-term and continued resource growth. Additionally, early results from delineation drilling completed within the Expansion Case Preliminary Economic Assessment (Expansion Case PEA) area, demonstrate the significant potential to further expand reserves at higher than current average grades.
• Effective, March 15, 2017, Richmont appointed Mr. Robert J. Chausse as Chief Financial Officer, strengthening the senior management team.

"The Island Gold Mine has delivered another quarter of solid production as well as lower cash costs, confirming the potential of this operation as we continue to transform the mine into one of the lowest cost underground gold producers in the Americas. The Expansion Case PEA is nearing completion and we remain confident that we will issue a positive report that will support the 1,100 tonnes per day expansion scenario while achieving our overall low cost objective," commented Renaud Adams, President and CEO. "Along with the strong operational performance achieved during the quarter, we continue to unlock the potential of the Island Gold Mine through our strategic drilling program. Initial delineation drilling results demonstrate the potential for short-term reserve growth at higher grades within the main deposit. Recent exploration drilling has also shown the potential of the deposit to the east of the main deposit area where new high-grade mineralization was identified close to existing infrastructure that could also provide additional expansion opportunities."

____________________________1 Refer to the Non-IFRS Performance Measures disclosure presented at the end of this press release.

First quarter operational highlights for the Island Gold and Beaufor Mines are provided in the tables below:

Island Gold Mine Highlights

• Production for the quarter was 23,772 ounces of gold (22,649 ounces sold). The mine is now well positioned to achieve the high-end of production guidance for the year of 87,000-93,000 ounces.
• Cash costs for the quarter were $668 (US$504) per ounce, below guidance for the year and a 19% reduction over prior quarter. The operating unit costs for the quarter were $181 (US$137) per tonne milled, in-line with the 2017 mine plan.
• Mill head grade for the quarter was 9.18 g/t gold, representing an inline grade reconciliation (mined vs. December 31, 2016 Mineral Reserves) for the quarter. The forward-looking 2017 mine plan continues to forecast a mill head grade of approximately 8.90 g/t gold.
• Record underground mine and mill productivities for the quarter, averaging 1,019 and 926 tonnes per day, respectively, with lower-grade underground ore stockpiled for future processing, resulting in an improved overall mill head grade for the quarter.
• During the quarter, long-hole stope mining continued in the first and second mining horizons and development in ore was advanced as planned in the higher-grade third mining horizon. Stoping in the third mining horizon is expected to begin in the fourth quarter.
• The development of the main ramp continued and reached a vertical depth of 860 metres at the end of the quarter, which is in-line with the 2017 development plan and as contemplated in the upcoming Expansion Case PEA.
• As of December 31, 2016, Mineral Reserves at the cornerstone Island Gold Mine increased by 34% (net of depletion) to 752,200 ounces of gold, at an increased grade of 9.17 g/t gold. Inferred Resources increased by 30% to 995,700 ounces of gold at an increased grade of 10.18 g/t, and at an average discovery cost of less than $35 (US$26) per ounce. (see press release dated January 31, 2017 and the technical report titled "Technical Report on the Mineral Reserve and Resource Estimate as of December 31, 2016 for the Island Gold Mine" dated March 17, 2017).
• Recent exploration drilling results identified new high-grade mineralization located approximately 800 metres east of the main Island Gold deposit. Hole GD-640-05 intersected 20.6 g/t gold over 11.3 metres (core length), demonstrating significant potential for near-term and continued resource growth. Additionally, early results from delineation drilling completed within the Expansion Case PEA area, indicates the significant potential to further expand our reserves at higher than current average grades. (see press release dated March 30, 2017).
• Expansion Case PEA: The Corporation is well advanced to release the results of the Expansion Case PEA during the second quarter, as previously disclosed. The study considers the most cost and capital effective plan to mine the portion of the mineral resources that is located within the main area of interest over four mining horizons, to a maximum depth of 1,000 metres below surface, using current mine infrastructure. The Corporation remains focused on transforming the high-grade Island Gold Mine into one of the lowest cost underground gold producers in the Americas. Recent achievements include:
  • The integration of the December 31, 2016 Mineral Reserves and Resources into the 1,100 tonnes per day mine plan has been completed.
  • The required permit amendments that allow for an ore mining and processing increase to 1,100 tonnes per day were received in December.
  • The accelerated development of the underground ramp system has advanced as planned.
  • Engineering and identification of the main equipment required for the mill expansion is well underway and expected capital requirements for the expanded milling capacity remains below the $15.0 million, as previously disclosed.
  • The 2017 mine plan and the Expansion Case PEA are focused on optimizing cash flow generation that is capable to fully fund current and future production as well as all strategic exploration programs.

Beaufor Mine Highlights

• Production for the quarter was 5,629 ounces of gold (5,879 ounces sold), in-line with previously disclosed plans to ramp-up production and achieve increased production in the second half of the year.
• Cash costs of $1,265 (US$956) per ounce achieved during the quarter, a significant reduction of 15% over the prior quarter and in-line with 2017 plans to return the mine to free cash flow generation status in the first half of the year.
• Underground productivity increased to 354 tonnes per day (403 tonnes per day in March). During the quarter the majority of the mining activities were transitioned into the new Q Zone and additional haulage and mucking mobile equipment were commissioned. Underground productivity and operating costs are expected to continue to improve over the balance of the year.
• The Corporation is also considering other strategic alternatives regarding the Beaufor Mine and Camflo Mill.

Upcoming News

• Q1 Financial Results (May 4)
• Annual and Special Meeting of Shareholders (May 4)
• Expansion Case PEA Results (Q2 2017)

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