Un coup d’oeil…a quick overview..Our research suggests that a bottoming in price is occurring on at New York Stock Exchange and Toronto Stock Exchange listed Richmont Mines, symbol “RIC” on both exchanges. A miner friend of ours from northern Quebec alerted us to the situation a month ago. Of course, we are constantly analyzing Canadian mining stocks such as Richmont trying to determine which ones are undervalued. Today, we find many that are very undervalued. Here are our key points in this overview:

1-The 2011 to 2014 price range is high of Richmont at $12.60 to a low of .94 cents. We are at $1.61 in Toronto and $1.60 on the NYSE.

2-The Richmont stock’s price had been hammered down by the price of gold as have been all of the gold mining stocks…..For example, if it costs gold mining companies on average $1200 to $1500 an ounce to move their gold production into the market with all the costs, i.e. insurance, transportation, administration, milling etc. (not just pull a “it out of the ground “ cost which can be about $850 for most) when the price of gold is at the $1240 level it is generally unprofitable for the mining companies and their share prices plunge……. $1240 is the price of gold bullion for now-but in our view, not for much longer! We see it moving higher.

3-In the latest annual report for 2012, Richmont produced 60,471 ounces of gold at their two mines…2013 results will be out shortly.

4-Richmont presently operates two mines, one in Quebec, another in Ontario with a third mine potentially to come on line when gold bullion prices are higher. Why is the company delaying the third mine? Because it would have a higher cost of production there due to the grade being lower, so it requires a higher price for gold bullion.

5-Richmont has 39.6 million shares outstanding…… That is small by most gauges of all mining companies. It has $5,000,000 in long term debt and $20,344,916 in cash. The balance sheet is fine.

6-AND! The new deeper zone at the operating Island mine has 771,000 ounces at a high grade already…. Usually such valuations run from a $30 low to $120 for “in ground” valuation. We will be doing an article on in ground valuations for mines later.

7-Richmont has mined 1,400,000 ounces of gold since 1991, a solid history of production.

8- Institutions own 31% of the Richmont shares, one of the largest public funds in Quebec owns 6.3% of Richmont as well as an investment fund in New York at 5.3% at last count. Insiders own 9% of the shares.

9-Things may change and Richmont could probably move to $5 to $6 a share if gold bullion can hit the $1450+ level….KEEP IN MIND THAT RICHMONT MINES IS NOT AN EXPLORATION COMPANY, IT HAS BEEN A PRODUCER FOR MANY YEARS.

10-No Guarantees but our low end target for the stock price is $3 by May-June. It sold at $6 in 2012. Again, to hit the $3 target, we feel that it may need a $1350 gold price. Higher gold prices and the whole situation changes for most miners.   KCG