VANCOUVER (miningweekly.com) – The TSX- and NYSE MKT-listed stock of gold producer Richmont Mines rallied on Tuesday after the company announced a positive reserve and resource update for the flagship Island Gold mine, in Ontario, lifting reserve tonnes by 21% to 2.6-million tonnes and contained ounces by 34% to 752 000 oz.
The Toronto-headquartered company also said the reserve grade increased by 11% to 9.17 g/t.
Based on a mining and milling rate of 900 t/d, this boosts the mine life by about 2.5 years from the previous 5.4 years after depletion in 2016, to nearly eight years as of December 31, 2016.
The Island Gold mine also showed an increase of 28% and 30% in measured and indicated, and inferred ounces, respectively, owing to both higher tonnes and grade on a year-on-year basis.
Richmont is demonstrating the significant exploration upside at the mine at depth and it could announce similar results next year as a large-scale exploration programme that is regularly returning positive drill results both at depth and laterally continues.
The company is working on completing an updated preliminary economic assessment on the Island Gold asset, which is expected to be complete in the second quarter. The study will assess the potential to expand the mine from about 900 t/d currently to 1 100 t/d over the next two years.
Meanwhile, at the company’s smaller Beaufor mine, in Quebec, Richmont reported fewer ounces in the reserves and resources, in line with a previous statement that the potential to extend the mine life at Beaufor is limited owing to the mine being in a diminishing phase of its life. Beaufor’s reserve tonnes stand at 200 000 t, grading 6.86 g/t for 45 000 oz of contained gold.