The Agreement will enable Richmont to extend the western boundary of its Island Gold Deep Project by a distance of 585 metres thus increasing the project’s exploration potential towards the west. Mining rights below a depth of 400 meters were also secured on several claims to the south of the Island Gold Deep project, thus adding to the project’s exploration potential at depth. As part of the Agreement, Richmont will acquire Claim SSM 722481 in its entirety, which immediately abuts Island Gold’s Localsh Zone, where reserves and resources currently exist and where mining is currently taking place. In exchange, Argonaut will receive exploration and mining rights from surface to a maximum depth of 400 metres on certain Richmont claims that border the Magino Gold Project, providing it with greater flexibility in its project development. The rights that Richmont will be transferring to Argonaut in no way affect the current operation at the Island Gold Mine or the Island Gold Deep Project. Under the terms of the Agreement, Richmont will receive a net payment of CAN$2.0 million in cash from Argonaut upon completion of the land transactions.

Chart 1: Longitudinal Section – Island Gold Mine: Deep C Zone

Paul Carmel, President and CEO of Richmont commented: "We are very pleased to have reached this agreement with Argonaut. With our Island Gold Deep Project focused at depth and Argonaut’s Magino Gold Project being evaluated for its open-pit mining potential, on two separate and distinct geological structures, there was a mutually beneficial opportunity for both companies to optimize their respective assets. In Richmont’s case, these newly added mining rights are located immediately adjacent to our Island Gold Mine operations as well as the Island Gold Deep Project, which currently has an estimated Inferred resource base of 771,000 ounces at a grade of 10.53 g/t. By gaining access to these areas, we have not only expanded our exploration horizon laterally, but have also secured the down-dip potential of the Island Gold Deep Project."

Additional details about the Island Gold Deep Project

The Island Gold Deep C Zone project contains an estimated Inferred mineral resource of 2,278,000 tonnes grading 10.53 g/t Au for 771,000 ounces as at October 1, 2013. Island Gold Deep is sub-vertical, and is located at a depth of between 450 metres and 1,000 metres, is open in all directions, and appears to be an extension of the areas currently being mined above in the Island Gold Mine, but at higher grades (10.53 g/t undiluted vs 5.60 g/t diluted) and greater widths (4.5 metres versus 2.7 metres).

Additional details about the Island Gold Mine Property

The 59.0 km2 (5,900 hectares) Island Gold property is located 83 km northeast of Wawa, Ontario. Ore from the Island Gold Mine is processed at Richmont’s on-site mill, an 850 tonne per day rated CIP facility. Since Island Gold began commercial production in October 2007, Richmont has produced more than 225,000 ounces of gold. Underground operations are accessed via a ramp, and mining activities currently reach a vertical depth of approximately 400 metres.