Richmont Mines Reports Strong Results from the Island Gold Mine Expansion Case Preliminary Economic Assessment

TORONTO, May 29, 2017

Positive First Step in a Multi-Phased Transformation of the Island Gold Mine;
Low Industry Cash Costs and Robust Cash Flow Stream

TORONTO, May 29, 2017 /PRNewswire/ - Richmont Mines Inc. (TSX: RIC) (NYSE: RIC) ("Richmont" or the "Corporation"), is pleased to announce positive results from an Expansion Case Preliminary Economic Assessment ("PEA") completed on the Island Gold Mine, located in northern Ontario, Canada. The study confirms the increase in underground mine and mill productivity to 1,100 tonnes per day will support strong production growth of 22% at low industry cash costs and a robust cash flow stream over the eight-year Phase 1 period, with low incremental capital of $28.2 (US$20.9) million required. The ramp-up to 1,100 tonnes per day is currently underway and the operation is anticipated to achieve the target run rate in the latter part of 2018. (All amounts are in Canadian dollars unless otherwise indicated).

"The strong outcome of the Expansion Case PEA represents a key milestone and the next step in our phased approach to unlock the full potential of the Island Gold Mine. With minimal capital we are positioning the mine as a low cost operation that is anticipated to generate strong cash flow streams after funding all project and sustaining capital." stated Renaud Adams, CEO. He continued, "It is important to consider that the PEA incorporates only 24% of the current inferred resources as of December 2016. All resources outside the main area of interest, below the 1,000 metre level and east of the PEA area, were excluded but will eventually be considered in a potential Phase 2 expansion as we continue to grow the resource inventory through our strategic drilling programs."

Island Gold Mine Expansion Case PEA Highlights

• The operation is expected to produce an average of 125,000 gold ounces per year, excluding the 2017 and 2018 ramp-up period, or 115,000 ounces over the 8-year period considered in the PEA.
• Low industry cost profile over the PEA period, including cash costs of approximately $650 (US$480) per ounce, All-in Sustaining Costs ("AISC") of approximately $835 (US$620) per ounce and All-in Costs ("AIC"), which includes all project and sustaining capital, of approximately $910 (US$675) per ounce.
• Minimal incremental capital investment of $28.2 (US$20.9) million is estimated to support a productivity increase from 900 to 1,100 tonnes per day, which would contribute to a strong pre-tax cumulative net cash flow stream after all capital expenditures of $749 (US$555) million at a spot gold price of $1,700 (US$1,260) per ounce, or $615 (US$456) million at a downside case gold price of $1,550 (US$1,150) per ounce over the eight years considered by the PEA.
• Additional opportunities remain for further expansion scenarios and mine life extension as the PEA only incorporates approximately 24% of the current total inferred resources (as at Dec. 31, 2016), which excludes more than 750,000 inferred resource ounces and does not take into consideration the most recent drilling success laterally to the east and at depth below the 1,000 metre level.

Expansion Case PEA Summary (1,100 tpd) ARIVA.DE Börsen-Geflüster Kurse Richmont Mines -   0,00%
Tonnes Milled (Mt)	3.1
Head Grade (g/t)	9.68
Mine plan (years)	8
Daily mine and mill production (tpd) (excl. 2017-2018 ramp-up)	1,100
Gold recovery (%)	96.5
Total Production (Koz)	926
Avg. annual gold production (Koz)	115
Avg. annual gold production (excl. 2017-2018 ramp-up) (Koz)	125

Pre-Tax Net Cash Flow Sensitivity Table

The table below provides the estimated impact on pre-tax net cash flow at various gold prices and currency exchange rates, which demonstrate that the PEA mine plan generates positive pre-tax net cash flow even at a gold price of US$1,000 per ounce and a Canadian to U.S. currency exchange rate at parity.

Pre-tax Net Cash Flow(1)(2) (CAD$M) Sensitivity
US$ Gold Price
CAD:US		1,000	1,100	1,200	1,300	1,400
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