Louvem Mines Inc. (TSX VENTURE:LOV), announces today its financial results for
the second quarter, which ended June 30, 2008. Financial results are based on
Canadian GAAP and dollars are reported in Canadian currency, unless otherwise
noted.
Revenues were $4,001,274 for the second quarter of 2008 compared with $4,595,913
during the same period in 2007. In all 4,351 ounces of gold were sold at an
average price of US$910 (CAN$917) in the second quarter of 2008, compared with
6,298 ounces of gold sold at an average price of US$675 (CAN$725) for the same
period in 2007. The decrease in revenues is mainly attributable to the reduction
in quantity of ounces sold but was offset by the increase in the average price
of the ounces of gold sold.
The Company posted a net profit of $975,227, or $0.04 per share for the second
quarter of 2008, compared with a net profit of $990,872, or $0.04 per share for
the same period in the previous year. Cash flow from operations was $1,344,728
for the second quarter of 2008, compared with $2,716,950 for the same period in
the prior year.
Total expenses for the second quarter of 2008 were $3,007,731 compared with
$3,588,246 incurred in the same period in 2007. Operating costs for the second
quarter of 2008 were $2,022,665, a 19% decrease compared with $2,496,643 in the
same period in 2007. Administrative expenses increased to $217,678 in this
year's second quarter compared with $177,943 due to higher costs related to
professional services. Second quarter 2008 expenses for exploration were
$586,457 compared with $157,920 in the same period the prior year. This
difference is mainly due to the reclassification, for fiscal planning purposes,
of exploration tax credits from previous years for an amount of $214,565. In
2007, an exploration tax credit of $88,056 was booked against exploration
expense. The increase of $186,296 in exploration expenses at the Beaufor Mine
for the second quarter of 2008 compared with exploration expenses of $244,140
for the same period in 2007, reflects the Company's efforts to grow its
reserves. Depreciation and depletion decreased from $749,503 in 2007 to $178,400
in 2008, reflecting a lower depreciation and depletion rate 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 with December 31, 2006.
Beaufor Mine
During the second quarter of 2008, 29,062 tonnes of ore from the Beaufor Mine
were processed at an average recovered grade of 9.31 g/t, and 8,702 ounces of
gold were sold at an average price of US$910 (CAN$917) per ounce, Louvem's share
was 4,351 ounces. In the same quarter the prior year, 39,874 tonnes of ore were
processed at an average recovered grade of 9.83 g/t, and 12,597 ounces of gold
were sold at an average price of US$675 (CAN$725) per ounce, Louvem's share was
6,298 ounces.
Cash costs at the Beaufor Mine decreased from US$524 (CAN$528) in the trailing
first quarter to US$462 (CAN$465) per ounce of gold sold for the second quarter
of 2008. This reduction in cost of US$62 (CAN$63) is mainly due to the 15%
increase in grade. However the cash cost for the second quarter of 2008 was
US$462 (CAN$465) which is higher by US$94 (CAN$69) when compared to the cash
cost of US$368 (CAN$396) for the same quarter in 2007. This increase was due to
a 6% higher Canadian dollar, the increase in mining and milling cost of 11% due
to a reduction in production and a reduction of grade by 5%.
Exploration Efforts: The Company is approximately half-way through its planned
drilling program for 2008 at Beaufor and expects to report an exploration update
in the next four to six weeks. Its objective is to identify sufficient reserves
to continually replace production at this mine and to evaluate the potential of
the zones discovered last year below the current mining infrastructures.
Six-Month Review
For the six-month period ended June 30, 2008, revenue was $7,841,588, or 12%
above revenue of $7,026,219 during the same period of 2007, reflecting increased
gold sale prices per ounce. In the 2008 six-month period, 8,352 ounces of gold
were sold at an average price of US$928 (CAN$935) per ounce, compared with 9,404
ounces of gold sold in the first half of 2007 at an average price of US$691
(CAN$743) per ounce.
Operating costs, for the six-month period ended June 30, 2008 were $4,136,891,
down $307,003 over operating costs of $4,443,894 during the same period last
year primarily due to the decrease in ounces sold.
Exploration and project evaluation costs were $747,228 during the first half of
2008, compared with $302,798 during the same period in 2007. The increase is
mainly due to the reclassification, for fiscal planning purposes of exploration
tax credits of $214,565 pertaining to prior years when in the first six months
of 2007 exploration credits of $123,539 were recorded against the exploration
expense.
Net earnings for the first half of 2008 were $1,881,653, or $0.07 per share,
compared with net earnings of $756,952, or $0.03 per share, during the six-month
period ended June 30, 2007.
Beaufor Mine
During the first half of 2008, 59,759 tonnes of ore were processed at an average
recovered grade of 8.69 g/t, and 16,705 ounces of gold were sold at an average
price of US$928 (CAN$935) per ounce, Louvem's share was 8,352 ounces. For the
six-month period ended June 30, 2007, 69,574 tonnes of ore were processed at an
average recovered grade of 8.41 g/t, and 18,808 ounces of gold were sold at an
average price of US$691 (CAN$743) per ounce, Louvem's share was 9,404 ounces.
For the first half of 2007, the average cash cost per ounce of gold was US$440
(CAN$473). For the first half of 2008, due to a lower production rate, an
increase of 6% in the Canadian dollar and an increase in mining and milling
costs of 8%, the average cash cost per ounce of gold was US$491 (CAN$495).
Outlook
In spite of the challenges touching the mining industry which concerning mainly
the increase in cost of manpower and raw material, Louvem is pleased with the
operating improvements at the Beaufor Mine and remains enthusiastic with the
exploration potential on this property. The Company has no hedging contract on
gold and currency.
Jean-Guy Rivard
President and Chief Executive Officer
About Louvem Mine Inc.
The Company has a 50% interest in the Beaufor Mine and owns other exploration
properties located near Val-d'Or, in North-western Quebec, Canada.
More information on Louvem Mines can be found on its website at: www.louvem.com.
KEY FINANCIAL DATA
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Three-month period Six-month period
ended June 30 ended June 30
2008 2007 2008 2007
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Results ($)
Revenues 4,001,274 4,595,913 7,841,588 7,026,219
Net earnings 975,227 990,872 1,881,653 756,952
Cash flow from
operations 1,344,728 2,716,950 2,739,013 2,857,714
Results per
share ($)
Net earnings basic 0.04 0.04 0.07 0.03
Weighted average
number of common
shares
outstanding 25,929,689 25,929,689 25,929,689 25,929,689
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June 30, December 31,
2008 2007
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Financial position ($)
Total assets 7,184,680 4,777,562
Working capital 3,970,605 1,817,690
Long term debt - -
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SALES AND PRODUCTION DATA
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Beaufor Mine - 50 % Three-month period ended June 30,
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2008 2007
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Gold sales (ounces) 4,351 6,298
Production of gold (ounces) 5,007 4,944
Cash cost (per ounce sold) (US$) 462 368
Cash cost (per ounce sold) (CAN$) 465 396
Average selling price (per ounce of gold) (US$) 910 675
Average selling price (per ounce of gold) (CAN$) 917 725
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Beaufor Mine - 50 % Six-month period ended June 30,
-------------------------------------------------------------------------
2008 2007
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Gold sales (ounces) 8,352 9,404
Production of gold (ounces) 10,199 9,265
Cash cost (per ounce sold) (US$) 491 440
Cash cost (per ounce sold) (CAN$) 495 473
Average selling price (per ounce of gold) (US$) 928 691
Average selling price (per ounce of gold) (CAN$) 935 743
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Average exchange rate used for 2007: US$1 equals CAN$1.0748
2008 estimated exchange rate: US$1 equals CAN$1.0072
Louvem Mines Inc. (TSXV:LOV)
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