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Louvem Mines Reports its Fourth Quarter and Year End Results for 2007
- Net earnings of $555,879 for 2007, compared with a net loss of $2,065,321 for 2006;
MONTREAL, QUEBEC, Feb 21, 2008 (MARKET WIRE via COMTEX) -- Louvem Mines Inc. (CA:LOV: news, chart, profile) , announces today its financial results for the fourth quarter and year ended December 31, 2007.
2007 Fourth Quarter Results
Total revenues fell by $177,268 to reach $1,407,996 during the fourth quarter of 2007 compared to the same quarter in 2006. In the fourth quarter of 2007, 1,807 ounces of gold were sold at an average price of US$717 (CAD$771), compared with 2,301 ounces of gold sold at an average price of US$605 (CAD$686) for the same period in 2006. The decrease in revenues is mainly attributable to lower gold sales.
Operating costs for the fourth quarter of 2007 were $740,056, a 53% decrease compared with $1,571,147 in the same period in 2006. The cash cost per ounce of gold sold was down significantly to US$381 in the fourth quarter compared with US$602 for the corresponding period last year. This is mainly associated with higher gold grades at the Beaufor Mine.
The Company posted a net profit of $26,656 for the fourth quarter of 2007, compared with a loss of $790,793 for the same period in 2006. The difference of $817,449 is due primarily to:
- the change in the profit margin from mining operations, which totalled $653,015 during the fourth quarter of 2007, compared with $8,036 during the same period in 2006, owing to a substantial rise in the ore grade (which rose from 5.30 g/t in the fourth quarter of 2006 to 8.07 g/t for the same period in 2007) and the higher selling price per ounce of gold that was achieved;
- the decrease in depreciation and depletion expenses, which fell from $123,692 for the fourth quarter of 2006 to $72,734 for the same quarter in 2007, due to a lower rate of depreciation and depletion per ounce, which is calculated based on the proven and probable reserves which were higher at the Beaufor Mine as at December 31, 2007 when compared to December 31, 2006;
- and a lower charge for mining and income taxes.
During the fourth quarter of 2007, 13,921 tonnes of ore from the Beaufor Mine were processed at an average recovered grade of 8.07 g/t, and 3,613 ounces of gold were sold at an average price of US$717 per ounce, Louvem's share was 1,807 ounces. In the same quarter the prior year, 27,021 tonnes of ore were processed at an average recovered grade of 5.30 g/t, and 4,601 ounces of gold were sold at an average price of US$605 per ounce, Louvem's share was 2,301 ounces. The Camflo mill was unavailable to mill all of the ore produced by the Beaufor Mine during the last quarter which resulted in Beaufor's ore inventory reaching more than 17,200 tonnes of ore at the end of the year. This ore is being processed in the first quarter of 2008 along with normal production from the mine and grades of approximately 8.0 g/t are anticipated.
The cash cost of production in the fourth quarter of 2007 was US$381 per ounce sold compared with US$602 in the fourth quarter of 2006 as production grades were back to the average reserve grade in 2007.
The exploration program currently underway at the Beaufor Mine to uncover potential new zones is bearing positive results. Slightly over $1.8 million was invested in exploration at the Beaufor Mine in 2007 and more than $3 million is planned for 2008, Louvem's share is 50% of these amounts.
Proven and Probable Reserves at the Beaufor Mine increased more than 50% in 2007 to reach 75,632 ounces compared with the 49,490 ounces of reserves at the end of 2006. Increases in reserves were related to exploration and development activities at the mine. Measured and Indicated Resources were estimated at 141,267 ounces compared with 148,394 ounces at the end of 2006. Beaufor has had promising results as exploration activities in 2007 discovered several mineralized zones which translated into an increase of 30,278 ounces of Inferred Resources, Louvem's share is 50% of these amounts. In 2008, the Company plans to complete more than 42,000 meters of drilling, of which 19,500 meters are dedicated to further test the newly discovered Q Zone.
Reserve and Resources Calculation Beaufor Mine (100%) ------------------------------------------------------------------------ ------------------------------------------------------------------------ December 31, 2007 December 31, 2006 Reserves Tonnes Grade Ounces(1) Tonnes Grade Ounces(1) (metric) (g/t Au) (metric) (g/t Au) ------------------------------------------------------------------------ Proven 90,822 7.56 22,085 66,167 6.90 14,676 Probable 164,879 10.10 53,547 118,703 9.12 34,814 Total Proven and Probable 255,701 9.20 75,632 184,870 8.33 49,490 ------------------------------------------------------------------------ ------------------------------------------------------------------------ December 31, 2007 December 31, 2006 Resources(2) Tonnes Grade Ounces(1) Tonnes Grade Ounces(1) (metric) (g/t Au) (metric) (g/t Au) ------------------------------------------------------------------------ Measured 101,160 5.73 18,639 78,642 5.94 15,029 Indicated 591,534 6.45 122,628 532,823 7.79 133,365 Total Measured and Indicated 692,694 6.34 141,267 611,465 7.55 148,394 Inferred 133,962 7.03 30,278 - - - ------------------------------------------------------------------------ ------------------------------------------------------------------------ (1) Louvem's share is 50% (2) Resources presented in the above table are exclusive of reserves and do not have demonstrated economic viability at this time.
Mr. Jean-Guy Rivard, President and CEO of Louvem Mines, commented, "Beaufor continues to be a strong performing operation for us, and it exceeded its initial 2007 production goal of 20,000 ounces by achieving 26,204 ounces of gold production, Louvem's share was 13,102 ounces. Identifying and developing the current zones in which we are now operating have greatly improved grade, and logically, reduced costs per ounce. Importantly, our exploration activity continues to encourage us as we expand the exploration program at this site."
2007 Review
Precious metals revenues rose by $1,318,805 in 2007 to reach $9,751,884 compared with $8,433,079 in 2006. The difference is attributable to the increase in gold sales and to the higher average selling price per ounce that was achieved. Specifically, 13,091 ounces of gold were sold at an average price of US$693 (CAD$745) in 2007, compared with 12,433 ounces of gold sold at an average price of US$598 (CAD$678) in 2006.
Operating costs for the year 2007 were $6,261,129, a 24% decrease compared with $8,244,921 in the same period in 2006. The cash cost per ounce of gold sold was down significantly to US$445 in 2007 compared with US$585 in 2006.
The Company posted a net profit of $555,879 for the year ending December 31, 2007, compared with a loss of $2,065,321 in 2006.
During the year ended December 31, 2007, 97,429 tonnes of ore, at an average recovered grade of 8.36 g/t, were processed, and 26,182 ounces of gold were sold at an average price of US$693 per ounce, Louvem's share was 13,091 ounces. In the same period the prior year, 139,513 tonnes of ore, at an average recovered grade of 5.54 g/t, were processed, and 24,866 ounces of gold were sold at an average price of US$598 per ounce, Louvem's share was 12,433 ounces. The cash cost of production per ounce declined 24% to US$445 per ounce for 2007 compared with US$585 per ounce in 2006 as a result of higher grades, improvements in productivity, refocused operations and improved mining plans put into place in the first half of 2007.
Outlook
Louvem is pleased with the recent operating improvements at the Beaufor Mine and remains enthusiastic with the exploration potential on this property. The Company has no hedging contract on gold and currency. Exploration continues at Beaufor with 42,000 additional meters of drilling planned for 2008.
Jean-Guy Rivard
President and Chief Executive Officer
About Louvem Mine Inc.
The Company has a 50% interest in the Beaufor Mine and owns other exploration properties located near Val-d'Or, in North-western Quebec, Canada.
More information on Louvem Mines can be found on its website at: www.louvem.com.
KEY FINANCIAL DATA -------------------------------------------------------------------------- Three-month period Year ended December 31 ended December 31 2007 2006 2007 2006 -------------------------------------------------------------------------- Results ($) Revenues 1,407,996 1,585,264 9,841,438 8,475,996 Net earnings (loss) 26,656 (790,793) 555,879 (2,065,321) Cash flow from (used in) operations (728,578) (720,744) 1,881,910 (1,434,559) Results per share ($) Net earnings (loss) basic - (0.03) 0.02 (0.08) Weighted average number of common Shares outstanding 25,929,689 25,929,689 25,929 689 25,938,223 -------------------------------------------------------------------------- -------------------------------------------------------------------------- December 31, 2007 December 31, 2006 -------------------------------------------------------------------------- Financial position ($) Total assets 4,777,562 4,997,514 Working capital 1,817,690 532,072 Due to parent company - 700,000 Long term debt - - -------------------------------------------------------------------------- Sales and production data -------------------------------------------------------------------------- Beaufor Mine - 50 % Three-month period ended December 31 -------------------------------------------------------------------------- 2007 2006 -------------------------------------------------------------------------- Gold sales (ounces) 1,807 2,301 Production of gold (ounces) 1,902 2,460 Cash cost (per ounce sold) US$381 US$602 Average selling price (per ounce of gold) US$717 US$605 -------------------------------------------------------------------------- -------------------------------------------------------------------------- Beaufor Mine - 50 % Year ended December 31 -------------------------------------------------------------------------- 2007 2006 -------------------------------------------------------------------------- Gold sales (ounces) 13,091 12,433 Production of gold (ounces) 13,102 12,555 Cash cost (per ounce sold) US$445 US$585 Average selling price (per ounce of gold) US$693 US$598 -------------------------------------------------------------------------- 2006 exchange rate: US$1 equals 1.13 $ CAN 2007 exchange rate: US$1 equals 1.07 $ CAN
The TSX Venture Exchange accepts no responsibility for the veracity or accuracy of this news release.
Contacts: Louvem Mine Inc. Jean-Guy Rivard President and Chief Executive Officer 514-397-1448 514-397-8620 (FAX) www.louvem.com
SOURCE: LOUVEM MINES INC.
http://www.louvem.comCopyright 2008 Market Wire, All rights reserved.
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