Richmont Mines Inc. said Feb. 2 that it expects consolidated gold production to increase by up to 15% year over year in 2017, to between 110,000 ounces and 120,000 ounces, driven by a strong performance from its Island gold mine in Ontario.

The mine is expected to produce 87,000 ounces to 93,000 ounces of gold this year, helped by improved underground mine and mill productivity of about 900 tonnes per day at an average mill head grade of 8.9 g/t of gold.

The increase in output will see an up to an 8% reduction in cash costs, both company wide and at the Island gold mine. For the year, cash costs are expected to range from US$640 per ounce to US$680 per ounce.

Meanwhile, all-in sustaining costs will range between C$1,180 per ounce to US$1,235 per ounce.

In 2017, the company will spend between C$20 million to C$21 million on accelerated underground mine development at Island, while another C$11 million to C$12 million will be earmarked for infrastructure and equipment.

Leveraging the lower Canadian dollar against the U.S. dollar, the company is currently working on a preliminary economic assessment to confirm the economics of an 1,100 tonne-per-day expansion case scenario.

However, should the PEA not confirm the economics of the expansion case or should the gold price breach a minimum sustaining threshold of C$1,550 per ounce, Richmont would consider deferring all ongoing expansion capital to future periods and return the operation to sustaining capital requirements under a 900-tonne-per-day scenario.

In addition, the company is considering strategic alternatives for its Quebec-based Beaufor and Camflo mill, as well as the Wasamac project.