Page 52 By Gregory Reynolds A change to selective mining at its Beaufor Mine in Quebec has resulted in a dramatic reduction in the mine s cost per ounce of gold produced re ports Richmont Mines Inc Commenting on Richmont s second quarter operational performance company president and CEO Paul Carmel noted W e are very pleased with the notable improvemen ts at our Beaufor Mine this quarter The 53 year over year decrease in cash cost per ounce at the mine to 777 US765 is testament to the se lective mining approach that we have implemented over the past quarter and to the work ethic of our employ ees who have embraced and adopted our newlyimplemented measures Also of note in the second quarter were the successful bulk samples taken from our W Zone and Monique projects which are now proceeding to commercial production W ith the additional material from these opera tions our Camfo Mill is now operat ing at full capacity and we expect it to deliver lower unit costs At our Island Gold Mine in Ontario our Island Gold Deep project continues to progress on schedule but our operational per formance at the mine was below expectations for the quarter Reasons include me chanical issues at the mill which have since been resolved and haul age equipment shortages that we have addressed by acquiring four new 30 tonne capa city Cat erpillar trucks under capital lease programs While the new equip ment will translate into improvements in the lat ter half of this year and thereafter our year to date production levels at Island Gold are below budgeted levels That being said we expect the improved performance at Beaufor to lar gely mitigate lower production from Island Gold Island Gold is near Dubreuilville 83 km northeast of W awa Richmont Mines was founded in 1981 by JeanGuy Rivard During the subsequent decade the company at tracted a range of public and private fnancing which was used to acquire properties and carry out exploration programs Since beginnin g commercial produc tion in 1991 Richmont Mines has become an established gold producer specializing in the exploration and development of under ground gold de posits Over the years it has operated six mines the Francoeur Beaufor and East Amphi mines located in Quebec the Nugget Pond and Hammerdown mines in Newfoundland and the Is land Gold Mine in Ontario In total these operations have yielded over 1000000 ounces of gold Revenues for the second quarter of 2013 were 178 million down 25 from revenues of 237 millio n in the second quarter of 2012 refecting a 12 decrease in the number of gold ounces sold and a 14 decrease in the average gold price obtained in Canadian dolla rs A total of 12826 ounces of gold were sold at an aver age price of 1389 US1367 per ounce in the current quarter versus gold sales of 1461 1 ounces and an average realized sales price of 1617 US1618 per ounce in the compa rable period last year The lower number of ounces sold dur ing the quarter was driven by lower production at the Island Gold Mine which saw decreases of 26 in ton nage and 18 in head grade year over year These ef fects were partially of fset by the notable 60 head grade increase and corresponding improved production at the Beaufor Mine Cost of sales which includes operat ing costs royalties and certain related depreciation and depletion expenses totaled 152 million in the second quarter of 2013 down 18 from 185 million in the compar able pe riod last year refecting lower ton nage at Island Gold and lower costs per tonne at Beaufor that were mainly attributable to lower levels of devel opment and defnition drilling Exploration and project evaluation costs totaled 23 million in the cur rent quarter versus 53 milli on in the comparable period of 2012 The year over year decrease stems from the corporation s decision to discontinue exploration drilling at the W asamac Gold Property and the capitalization of exploration drilling costs at Island Gold Deep in line with the corpora tion s accounting policies On a segmented basis exploration expenses excluding depreciation and exploration tax credits of 02 mil lion were approximately 12 million at the Island Gold Mine and 06 mil lion at the Beaufor Mine while ex ploration and project evaluation costs at other properties amounted to 07 million during the current quarter The corporation incurred a net loss of Contd on pg 53 Selective mining achieves big dr op in cash per ounce costs