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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 20-F [   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012 OR [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ OR [   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report ________ Commission file number 001-14598 RICHMONT MINES INC.(Exact name of Registrant as specified in its charter) Quebec, Canada(Jurisdiction of incorporation or organization) 161, Avenue Principale, Rouyn-Noranda, Quebec, Canada J9X 4P6(Address of principal executive offices) Paul Carmel Telephone: 819 797-2465 Facsimile: 819 797-0166161, Avenue Principale, Rouyn-Noranda, Quebec, Canada J9X 4P6(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered pursuant to Section 12(b) of the Act: Title of each Class

   Name of each Exchange on which RegisteredCommon Stock, no par value

   The Toronto Stock Exchange and the NYSE MKT
  Securities registered or to be registered pursuant to Section 12(g) of the Act: None


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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: As of December 31, 2012: 39,566,103. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes [   ] No [ X ] If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.Yes [   ] No [ X ] Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [   ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes [   ] No [ X ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated Filer [   ]

   Accelerated Filer [ X ]

   Non-Accelerated Filer [   ]
 Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing. US GAAP [   ]

   International Financial Reporting Standards as issued by   [ X ]

   Other [   ]the International Accounting Standards Board
 If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 [   ]   Item 18 [   ] If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes [   ] No [ X ]


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TABLE OF CONTENTS PAGEITEM 1.

   IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

   7ITEM 2.

   OFFER STATISTICS AND EXPECTED TIMETABLE

   7ITEM 3.

   KEY INFORMATION

   7ITEM 4.

   INFORMATION ON THE CORPORATION

   20ITEM 4A.

   UNRESOLVED STAFF COMMENTS

   71ITEM 5.

   OPERATING AND FINANCIAL REVIEW AND PROSPECTS

   71ITEM 6.

   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

   89ITEM 7.

   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

   105ITEM 8.

   FINANCIAL INFORMATION

   108ITEM 9.

   THE OFFER AND LISTING

   108ITEM 10.

   ADDITIONAL INFORMATION

   111ITEM 11.

   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   127ITEM 12.

   DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

   127ITEM 13.

   DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

   128ITEM 14.

   MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

   128ITEM 15.

   CONTROLS AND PROCEDURES

   128ITEM 16.A.

   AUDIT COMMITTEE FINANCIAL EXPERT

   129ITEM 16.B.

   CODE OF ETHICS

   129ITEM 16.C.

   PRINCIPAL ACCOUNTANT FEES AND SERVICES

   129ITEM 16.D.

   EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

   130ITEM 16.E.

   PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

   130ITEM 16.F.

   CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

   130ITEM 16.G.

   CORPORATE GOVERNANCE

   131ITEM 16.H.

   MINE SAFETY DISCLOSURE

   132ITEM 17.

   CONSOLIDATED FINANCIAL STATEMENTS

   132ITEM 18.

   CONSOLIDATED FINANCIAL STATEMENTS

   132ITEM 19.

   EXHIBITS

   133


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Forward-Looking Statements This Annual Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts included in this Annual Report, including, without limitation, those regarding the Corporation’s financial position, business strategy, budgets, reserve estimates, development and exploitation opportunities and projects, classification of reserves, and plans and objectives of management for future operations, are forward-looking statements. Although the Corporation believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such forward-looking statements reflect the Corporation’s views as at the date of this Form 20-F and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the Risk Factors set forth in “ITEM 3. KEY INFORMATION – D. Risk Factors”. Given these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as otherwise required by law, the Corporation expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Corporation’s expectations or any change in events, conditions or circumstances on which any such statement is based. Note to Investors Concerning Certain Measures of Performance Throughout this document, the Corporation uses performance indicators that are not defined according to International Financial Reporting Standards (“IFRS”), such as the total cash cost of production per ounce sold for each of the Corporation’s properties, excluding the rates of depreciation per ounce. These performance indicators are widely used in the mining industry. Nonetheless, they are in no way a standard prescribed by IFRS. The Corporation believes that some investors use these indicators, in addition to the financial information prepared in accordance with IFRS, to evaluate the Corporation’s performance and its ability to generate cash. Consequently, this information must be considered supplementary and should not under any circumstances be regarded as a substitute for the performance indicators prepared in accordance with IFRS. Adoption of International Financial Reporting Standards On January 1st2011, the Corporation has adopted International Financial Reporting Standards (“IFRS”) as adopted by the International Accounting Standards Board. The impacts of this transition are presented in the Corporation’s December 31, 2011 consolidated financial statements. Unless otherwise indicated, all amounts presented herein are based on IFRS. Previously, the Corporation’s consolidated financial statements were prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). At that time, reference was made to notes to the consolidated financial statements included in the Annual Report for a discussion of the material differences between Canadian GAAP and U.S. generally accepted accounting principles (“U.S. GAAP”), and their effect on the Corporation’s consolidated financial statements. Statements prepared in accordance with IFRS are not comparable in all respects with financial statements that are prepared in accordance with either Canadian GAAP or with US GAAP. 4


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Terminology Unless otherwise specified, all units of measurement used in this report are expressed according to the metric system. The most commonly used conversion factors and their respective abbreviations are shown below: 1 troy ounce (oz) = 31.1035 grams (g) 1 metric tonne (t) = 1.1023 short ton (st) 1 metre (m) = 3.28 feet Au: gold g/t: gram per metric tonne ha: hectare NSR: Net Smelter Return t/d: metric tonnes per day cm: centimetre mm: millimetre kg: kilogram g: gram t/m3: metric tonnes per cubic metre km: kilometre NPI: Net Profit Interest ppb: part per billion TSX: Toronto Stock Exchange Currency In this Annual Report, all dollar amounts are in Canadian dollars unless otherwise stated. Definitions **Mineral Reserve** Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve provides a lower level of confidence than a Proven Mineral Reserve. A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a preliminary feasibility study. Such study must include adequate information on mining, processing, metallurgical, economic parameters and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined. **Proven Mineral Reserves** A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic parameters and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. 5


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**Probable Mineral Reserves** A Probable Mineral Reserve is the economically mineable part of an Indicated Mineral Resource and, in some cases, a Measured Mineral Resource, demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic parameters, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. **Mineral Resources** Mineral Resources are sub-divided in order of increasing geological confidence into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource. A Mineral Resource is a concentration or occurrence of natural solid inorganic or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. **Measured Mineral Resources** A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, density, shape, and physical characteristics are so well established that they can be estimated with sufficient confidence to allow the appropriate application of technical and economic parameters to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, underground workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. **Indicated Mineral Resources** An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, density, shape, and physical characteristics can be estimated with a level of sufficient confidence to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, underground workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. **Inferred Mineral Resources** An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, underground workings and drill holes. **Cash cost per ounce** Cash cost per ounce is comprised of minesite costs incurred during the period and applicable royalty payments. Cash cost per ounce is affected by various factors such as the quantity of gold produced, operating costs and Canadian dollar/US dollar exchange rates and is intended to provide investors with information about the cash generating capabilities of mining operations. Management uses this measure to monitor the performance of mining operations. 6


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**Net Profit Interest (NPI)** A percentage interest in the net profit as defined in the following manner: gross revenues realized from the sale or deemed sale as herein provided, of ores produced from the property or concentrates derived therefrom less costs (all costs and expenses attributable to exploration, development, mining, milling, concentrating, production, handling, delivery and/or sale of ores or concentrates). **Net Smelter Return (NSR)** A royalty payment made by a producer of metals based on gross metal production from the property, less deduction of certain limited costs including refining, transportation and insurance costs. **Regulation 43-101** Standards of disclosure for mineral projects adopted by the Canadian Securities Administrators. This Regulation applies to all oral statements and written disclosure of scientific or technical information, including disclosure of a mineral resource or mineral reserve, made by or on behalf of an issuer in respect of a mineral project of the issuer. **ITEM 1.**

   **IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**
 Not applicable. **ITEM 2.**

   **OFFER STATISTICS AND EXPECTED TIMETABLE**
 Not applicable. **ITEM 3.**

   **KEY INFORMATION**
  **A.**

   **Selected Financial Data**
  The selected financial data of Richmont Mines Inc. (consolidated with its wholly-owned subsidiaries, Camflo Mill Inc., Patricia Mining Corporation (“Patricia Mining”) and Louvem Mines Inc. (“Louvem”); herein referred to collectively as “Richmont Mines,” “Richmont” or the “Corporation”) set forth below has been derived from the consolidated financial statements of the Corporation which have been audited by Raymond Chabot Grant Thornton LLP, Chartered Accountants, as indicated in their Independent Registered Public Accounting Firm’s report as at December 31, 2012 and 2011 and which are included elsewhere in this Annual Report. The selected financial data were extracted from the more detailed consolidated financial statements of the Corporation and related notes included in this Annual Report and should be read in conjunction with such consolidated financial statements and related notes and with the information appearing under the heading “ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS.” On January 1st2011, the Corporation has adopted International Financial Reporting Standards (“IFRS”) as adopted by the International Accounting Standards Board. The impacts of this transition are presented in the Corporation’s December 31, 2011 consolidated financial statements. Unless otherwise indicated, all amounts presented herein are based on IFRS. Previously, the Corporation’s consolidated financial statements were prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). At that time, reference was made to notes of the consolidated financial statements of the Corporation included in the Annual Report for a discussion of the material differences between Canadian GAAP and U.S. generally accepted accounting principles (“U.S. GAAP”), and their effect on the Corporation’s consolidated financial statements. Statements prepared in accordance with IFRS are not comparable in all respects with financial statements that are prepared in accordance with either Canadian GAAP or with US GAAP. 7


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Herein, all references to “$” and “CAN$” refer to Canadian dollars and all references to “US$” refer to United States dollars. The information contained in this Annual Report on Form 20-F is current as at December 31, 2012, except where a different date is specified. The Corporation has not declared or paid any dividends on its capital stock during the past five years and currently has no intention of paying dividends subject to a periodic review of this policy by the Board of Directors. Selected Financial Data(IFRS)1,2(in thousands of Canadian dollars except per share and share data)2012

   2011

   2010Revenues from precious metals

   101,148

   118,239

   87,182Net earnings (loss) from continuing operations

   (2,977)

   26,043

   9,304Net loss from discontinued operation

   (42,038)

   (125)

   (98)Net earnings (loss) attributable to Richmont Mines Shareholders

   (45,015)

   25,918

   9,334Earnings (loss) per shareBasic earnings (loss) per shareEarnings (loss) from continuing operations

   ($0.08)

   $0.81

   $0.33Loss from discontinued operation

   ($1.20)

   -

   -($1.28)

   $0.81

   $0.33Diluted earnings (loss) per shareEarnings (loss) from continuing operations

   ($0.08)

   $0.80

   $0.32Loss from discontinued operation

   ($1.20)

   -

   -($1.28)

   $0.80

   $0.32Total assets

   148,244

   167,990

   115,305Long-term debt

   702

   -

   -Working capital

   54,296

   68,711

   43,880EquityTotal

   118,363

   134,134

   94,791Share capital

   132,113

   104,872

   91,010Number of outstanding common shares at year end (000’s)

   39,566

   33,110

   31,230
  1

   These selected financial data have been prepared using accounting policies specified by IFRS that are in effect at December 31, 2012.2

   Statements prepared in accordance with IFRS are not comparable in all respects with financial statements that are prepared in accordance with either Canadian GAAP or US GAAP. 8


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Selected Financial Data(Canadian GAAP)1(in thousands of Canadian dollars except per share and share data)2009

   2008Total revenues

   71,884

   70,591Net earnings

   336

   1,635Net earnings per shareBasic

   $0.01

   $0.07Diluted

   $0.01

   $0.07Total assets

   85,230

   82,881Long-term debt

   -

   -Working capital

   24,936

   26,753Shareholders’ equityTotal

   69,961

   69,042Capital stock

   64,675

   64,672Number of outstanding common shares at year end (000’s)

   26,104

   26,113
 1

   These selected financial data have been prepared using accounting policies specified by Canadian GAAP. Selected Financial Data(U.S. GAAP Reconciliation)1(in thousands of Canadian dollars except per share and share data)2009

   2008Net earnings

   1,579

   3,576Net earnings per shareBasic

   $0.06

   $0.15Diluted

   $0.06

   $0.15Weighted average number of common shares outstanding (000’s)

   26,108

   24,047Shareholders’ equity

   51,313

   49,192
 1

   Statements prepared in accordance with IFRS are not comparable in all respects with financial statements prepared in accordance with either Canadian GAAP or US GAAP. 9


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Exchange Rates The Government of Canada permits a floating exchange rate to determine the value of the Canadian dollar against the U.S. dollar. Set forth below are the average rates of exchange for the Canadian dollar and the U.S. dollar for each of the past five fiscal years, and the range of high and low rates for each of the past six calendar months. For purposes of these tables, the rate of exchange is presented as published by the Bank of Canada. The tables set forth the number of Canadian dollars required under that formula to buy one U.S. dollar. The average rate means the average of the exchange rates of each day during the period. U.S. Dollar/Canadian Dollar Exchange Rates Year endedDecember 31

   Average2008

   1.072009

   1.142010

   1.032011

   0.992012

   1.00
 The following table sets forth the high and low exchange rate for the past six months. As of April 19, 2013, the exchange rate was 1.03. U.S. Dollar/Canadian Dollar Exchange RatesMonth

   High

   LowNovember 2012

   0.9906

   1.0057December 2012

   0.9825

   0.9972January 2013

   0.9815

   1.0101February 2013

   1.0031

   1.0314March 2013

   1.0145

   1.0343April 1stto April 19th, 2013

   1.0086

   1.0295
 **B.**

   **Capitalization and Indebtedness**
 Not applicable. **C.**

   **Reasons for the Offer and Use of Proceeds**
 Not applicable. **D.**

   **Risk Factors**
 See the discussion regarding forward-looking statements on Page 1. In addition to the other information contained herein, the following risk factors should be carefully considered when evaluating an investment in the Corporation’s common shares: 10


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Risks Associated with the Mining Industry **The exploration of mineral properties is highly speculative, involves substantial expenditures and is frequently unsuccessful.** The Corporation’s profitability is significantly affected by the costs and results of its exploration and development programs. As mines have limited lives based on proven and probable mineral reserves, the Corporation actively seeks to replace and expand its mineral reserves, primarily through exploration and development as well as through strategic acquisitions. Exploration for minerals is highly speculative in nature, involves many risks and is frequently unsuccessful. Among the many uncertainties inherent in any gold exploration and development program are the location of economic ore bodies, the development of appropriate metallurgical processes, the receipt of necessary governmental permits and the construction of mining and processing facilities. Substantial expenditures are required to pursue such exploration and development activities. Assuming discovery of an economic ore body, depending on the type of mining operation involved, several years may elapse from the initial phases of drilling until commercial operations are commenced and during such time the economic feasibility of production may change. Accordingly, the Corporation's current or future exploration and development programs may not result in any new economically viable mining operations or yield new mineral reserves to replace and expand current mineral reserves. **The Corporation’s financial performance and results may fluctuate widely due to volatile and unpredictable commodity prices and changes in the exchange rate between the U.S. and Canadian dollars.** The Corporation’s earnings are directly related to commodity prices as revenues are derived principally from the sale of gold. Gold prices fluctuate widely and are affected by numerous factors beyond the Corporation's control, including central bank purchases and sales, producer hedging and de-hedging activities, expectations of inflation, the relative exchange rate of the U.S. dollar with other major currencies, global and regional demand, political and economic conditions, production costs in major gold-producing regions and worldwide production levels. The aggregate effect of these factors is impossible to predict with accuracy. In addition, the price of gold has on occasion been subject to very rapid short-term changes because of speculative activities. Fluctuations in gold prices may materially adversely affect the Corporation’s financial performance or results of operations. If the market price of gold falls below the Corporation's total cash costs per ounce of production at one or more of its projects at that time and remains so for any sustained period, the Corporation may experience losses and/or may curtail or suspend some or all of its exploration, development and mining activities at such projects or at other projects. Also, the Corporation’s evaluation of proven and probable reserves at its current mines was based on a market price of gold between CAN$1,200 and CAN$1,450 per ounce. If the market price of gold falls below this level, the mines may be rendered uneconomic and production may be suspended. The Corporation’s policy and practice is not to sell forward its future gold production; however, under the Corporation's price risk management policy, approved by the Corporation’s board of directors (the “Board”), the Corporation may review this practice on a project by project basis. The Corporation may occasionally use derivative instruments to mitigate the effects of fluctuating by precious metal prices; however, these measures may not be successful. The volatility of gold prices is illustrated in the following table which sets out, for the periods indicated, the high, low and average afternoon fixing prices for gold on the London Bullion Market (the “London P.M. Fix”). (US$ per ounce)

   2012

   2011

   2010

   2009

   2008

   2007High price

   1,792

   1,895

   1,421

   1,212

   1,011

   841Low price

   1,540

   1,319

   1,058

   810

   712

   608Average price

   1,669

   1,572

   1,225

   972

   872

   695
 On April 19, 2013, the London P.M. Fix was US$1,406 per ounce of gold. 11


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The Corporation’s operating results and cash flows are significantly affected by changes in the U.S. dollar/Canadian dollar exchange rate. All of the Corporation's precious metals revenues are earned in U.S. dollars but the majority of its operating costs at its mines, are in Canadian dollars. The U.S. dollar/Canadian dollar exchange rate has fluctuated significantly over the last several years. From January 1, 2007 to January 1, 2013, the Noon Buying Rate fluctuated from a high of CAN$1.3000 per US$1.00 to a low of CAN$0.9170 per US$1.00. Historical fluctuations in the U.S. dollar/Canadian dollar exchange rate are not necessarily indicative of future exchange rate fluctuations. The Corporation has no gold hedging contracts and no U.S. dollar exchange contracts. However, the Corporation may engage in hedging activities in the future. Hedging activities are intended to protect a corporation from the fluctuations of the price of gold and to minimize the effect of declines in gold prices on results of operations for a period of time. Hedging activities may protect a corporation against low gold prices, however, they may also limit the price that can be realized on gold that is subject to forward sales and call options where the market price of gold exceeds the gold price in a forward sale or call option contract. The Corporation continually evaluates the potential short- and long-term benefits of engaging in such derivative strategies based upon current market conditions. However, the use of byproduct metal derivative strategies may not benefit the Corporation in the future. There is a possibility that the Corporation could lock in forward deliveries at prices lower than the market price at the time of delivery. In addition, the Corporation could fail to produce enough precious metals to offset its forward delivery obligations, causing the Corporation to purchase the metal in the spot market at higher prices to fulfill its delivery obligations or, for cash settled contracts, make cash payments to counterparties in excess of precious metals revenue. If the Corporation is locked into a lower than market price forward contract or has to buy additional quantities at higher prices, its net income could be adversely affected. Also, the Corporation may in the future, if it considers it advisable, enter into hedging arrangements with a view to reducing some risks associated with foreign exchange exposure. However, such hedging strategies may not prove to be successful and foreign exchange fluctuations may materially adversely affect the Corporation’s financial performance and results of operations. **If the Corporation experiences mining accidents or other adverse conditions, the Corporation’s mining operations may yield less gold than indicated by its estimated gold production and to the extent not adequately covered by insurance may result in possible adverse financial consequences to the Corporation.** The Corporation’s gold production may fall below estimated levels as a result of mining accidents such as cave-ins, rock falls, rock bursts, slope and pit wall failures, dams, fires or flooding or as a result of other operational problems such as a failure of mining, production and milling equipment. In addition, production may be reduced or curtailed if, during the course of mining, unfavourable, unusual or unexpected geological or geotechnical formations or seismic activity are encountered, ore grades are lower than expected, the physical or metallurgical characteristics of the ore are less amenable than expected to mining or treatment, data on which engineering assumptions are made prove faulty or dilution increases. The Corporation may also encounter shortages or interruptions of economical electricity and adequate water supplies at its mines and production facilities which may adversely affect operations. Finally, inclement weather conditions, floods and the occurrence of other adverse natural phenomena at its mine and production sites may curtail, interrupt or delay mining and production operations and the ability of the Corporation to transport and market its production. Occurrences of this nature and other accidents, adverse conditions or operational problems in future years may result in the Corporation's failure to achieve current or future production estimates and may make profitable mineral deposits unprofitable for continued production. In addition, the occurrence of industrial accidents may result in personal injury or death and damage to property which may result in possible legal liability to the Corporation and if not adequately covered by insurance possible adverse financial consequences to the Corporation. The occurrence of any of these factors could materially and adversely affect a project and as a result materially and adversely affect the Corporation’s business, financial condition, results of operations and cash flows. 12


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**The exploration and development of new mineral deposits is subject to numerous risks and uncertainties which may adversely affect the Corporation’s ability to expand or replace its existing production.** The exploration process generally begins with the identification and appraisal of mineral prospects. Exploration and development projects have no operating history upon which to base estimates of future operating costs and capital requirements. Mining projects frequently require a number of years and significant expenditures during the mine development phase before production is possible. Development projects are subject to the completion of successful feasibility studies and environmental assessments, issuance of necessary governmental permits, acquiring title to prospects and the receipt of adequate financing. The economic feasibility of development projects is based on many factors such as: estimation of reserves;anticipated metallurgical recoveries;environmental considerations and permitting;estimates of future gold prices; andanticipated capital and operating costs of such projects. Exploration and development of mineral deposits thus involve significant financial risks which a combination of careful evaluation, experience and knowledge may not eliminate. The discovery of an ore body may result in substantial rewards, however, few properties which are explored are ultimately developed into producing mines. A mine must generate sufficient revenues to offset operating and development costs such as the costs required to establish reserves by drilling, to develop metallurgical processes, to construct facilities and to extract and process metals from the ore. Once in production, it is impossible to determine whether current exploration and development programs at any given mine will result in the establishment of new reserves. **Newly opened mines, mine construction projects and expansion projects are subject to risks associated with new mine development, which may result in delays in the start-up of mining operations, delays in existing operations and unanticipated costs.** The Corporation’s ability to replace its existing mineral reserves as they are produced and depleted will be dependent upon locating new or expanding production from existing economic mineral reserves and developing new mines or extending and expanding existing mining operations. The Corporation’s ability to achieve full production rates at its new and expanded mines on schedule is subject to a number of risks and uncertainties. New mines may require the construction of significant new underground mining operations and may present problems in acquiring and achieving access to mine locations. The construction of underground mining facilities is subject to a number of risks, including unforeseen geological formations, implementation of new mining processes, delays in obtaining required title to mining deposits and access to locations and utilities, delays in obtaining construction, environmental or operating permits and engineering and mine design adjustments, construction delays and delays resulting from inclement weather. These occurrences may result in delays in the planned start up dates and in additional costs being incurred by the Corporation beyond those budgeted. Moreover, the construction activities at possible mine extensions may take place concurrently with normal mining operations, which may result in conflicts with, or possible delays to, existing mining operations. **Due to the nature of the Corporation’s mining operations, the Corporation may face liability, delays and increased production costs from environmental and industrial accidents and pollution, and the Corporation’s insurance coverage may prove inadequate to satisfy future claims against the Corporation.** The business of gold mining is generally subject to risks and hazards, including environmental hazards, industrial accidents, unusual or unexpected rock formations, changes in the regulatory environment, cave-ins, rock bursts, rock falls, slope and pit wall failures and flooding and gold bullion losses. Such occurrences could result in damage to, or destruction of, mineral properties or production facilities, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. The Corporation carries 13


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insurance to protect itself against certain risks of mining and processing which may not provide adequate coverage in certain unforeseen circumstances. The Corporation may also become subject to liability for pollution, cave-ins or other hazards against which it cannot insure or against which it has elected not to insure because of high premium costs or other reasons, or the Corporation may become subject to liabilities which exceed policy limits. In these circumstances, the Corporation may be required to incur significant costs that could have a material adverse effect on its financial performance and results of operations. **The Corporation’s operations are subject to numerous laws and extensive government regulations which may cause a reduction in levels of production, delay or the prevention of the development of new mining properties or otherwise cause the Corporation to incur costs that adversely affect the Corporation’s results of operations.** The Corporation’s mining and mineral processing operations and exploration activities are subject to the laws and regulations of federal, provincial, and local governments in the jurisdictions in which the Corporation operates. These laws and regulations are extensive and govern prospecting, exploration, development, production, exports, taxes, labour standards, occupational health and safety, waste disposal, toxic substances, environmental protection, mine safety and other matters. Compliance with such laws and regulations increases the costs of planning, designing, drilling, developing, constructing, operating, closing, reclaiming and rehabilitating mines and other facilities. New laws, regulations or taxes, amendments to current laws, regulations or taxes governing operations and activities of mining corporations or more stringent implementation or interpretation thereof could have a material adverse impact on the Corporation, cause a reduction in levels of production and delay or prevent the development of new mining properties. The Canadian mining industry is subject to federal and provincial environmental protection legislation. This legislation sets high standards on the mining industry in order to reduce or eliminate the effects of waste generated by extraction and processing operations and subsequently emitted into the air or water. Consequently, drilling, refining, extracting and milling are all subject to the restrictions imposed by such legislation. In addition, the construction and commercial operation of a mine typically entail compliance with applicable environmental legislation and review processes, as well as the obtaining of permits, particularly for the use of the land, permits for the use of water, and similar authorizations from various governmental bodies. Compliance with such laws and regulations increases the costs of planning, designing, drilling, developing, constructing, operating and closing mines and other facilities. All of the Corporation’s operations are subject to reclamation, site restoration and closure requirements. Costs related to ongoing site restoration programs are expensed when incurred. The Corporation calculates its estimates of the ultimate reclamation liability based on current laws and regulations and the expected future costs to be incurred in reclaiming, restoring and closing its mining operations. It is possible that the Corporation’s estimates of its ultimate reclamation liability could change as a result of possible changes in laws and regulations and changes in cost estimates. Failure to comply with applicable laws and regulations may result in enforcement actions thereunder, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may become subject to civil or criminal fines or penalties for violations of applicable laws or regulations. New or expanded environmental regulations, if adopted, or more stringent enforcement of existing laws and regulations, could affect the Corporation’s projects or otherwise have a material adverse effect on its operations. As a result, expenditures on any and all projects, actual production quantities and rates and cash operating costs, among other things, may be materially and adversely affected and may differ materially from anticipated expenditures, production quantities and rates, and costs, and estimated production dates may be delayed materially, in each case. Any such event would materially and adversely affect the Corporation’s business, financial condition, results of operations and cash flows. 14


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**The conduct of mining operations is dependent upon obtaining and renewing applicable governmental permits the issuance of which may be subject to meeting certain conditions which may prove difficult and costly.** Mineral exploration and mining activities may only be conducted by entities that have obtained or renewed exploration or mining permits and licenses in accordance with the relevant mining laws and regulations. No guarantee can be given that the necessary exploration and mining permits and licenses will be issued to the Corporation in a timely manner, or at all, or, if they are issued, that they will be renewed, or that the Corporation will be in a position to comply with or can afford to comply with all conditions that may be imposed. **Increased regulation of greenhouse gas emissions and climate change issues may adversely affect the Corporation’s operations.** The Corporation operates in a number of jurisdictions in which regulatory requirements have been introduced or are being contemplated to monitor, report and/or reduce greenhouse gas emissions. Under the Copenhagen Accord, Canada has committed to reducing greenhouse gas emissions by 17%, relative to 2005 levels, by 2020, but this commitment is subject to future alignment with reduction targets in the United States. Canada is currently developing new regulatory requirements to address greenhouse gas emissions. Similarly, the Province of Quebec has passed legislation enabling the establishment of a greenhouse gas emissions registry, greenhouse gas reduction targets and a cap-and-trade system to achieve Quebec's commitment to reduce greenhouse gas emissions by 20%, relative to 1990 levels, by 2020. The Corporation's operations in Quebec use primarily hydroelectric power and as a consequence, Management believes they are not large producers of greenhouse gases. **Title to the Corporation’s properties may be uncertain and subject to risks** The acquisition of title to mineral properties is a very detailed and time-consuming process. Title to, and the area of, mineral deposits may be disputed. Although the Corporation believes it has taken reasonable measures to ensure proper title to its properties, there is no guarantee that title to any of its properties will not be challenged or impaired. Third parties may have valid claims on underlying portions of the Corporation's interests, including prior unregistered liens, agreements, transfers or claims, including native land claims, and title may be affected by, among other things, undetected defects. In addition, the Corporation may be unable to operate its properties as permitted or to enforce its rights in respect of its properties. Moreover, where the Corporation’s interest in a property is less than 100% or a third party holds a form of profit sharing interest, the Corporation’s entitlement to, and obligations in respect of, the property are subject to the terms of the agreement relating to that property, which in certain circumstances may be the subject of differing interpretations between the parties to that agreement. **The success of the Corporation is dependent on good relations with its employees and on its ability to attract and retain key personnel.** Production at the Corporation’s mines and mine projects is dependent on the efforts of the Corporation’s employees and contractors. Relationships between the Corporation and its employees may be affected by changes in the scheme of labour relations that may be introduced by relevant government authorities in the jurisdictions that the Corporation operates. Changes in applicable legislation or in the relationship between the Corporation and its employees or contractors may have a material adverse effect on the Corporation’s business, results of operations and financial condition. A first collective agreement for a three-year period ending December 31, 2006 was entered into with the employees of the Camflo Mill in May 2004. At the beginning of 2007, this agreement was renewed for another three-year period ending December 31, 2009, and was again renewed at the beginning of 2010 for another three-year period ending December 31, 2012. The Corporation is presently negotiating the renewal of the collective agreement that expired on December 31, 2012. 15


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The Corporation is also dependent upon a number of key management personnel. The loss of the services of one or more of such key management personnel could have a material adverse effect on the Corporation. The Corporation's ability to manage its operating, development, exploration and financing activities will depend in large part on the efforts of these individuals. The Corporation faces significant competition for qualified personnel and the Corporation may not be able to attract and retain such personnel. **The estimates of mineral reserves and forecasts of the production are subject to numerous uncertainties, and the production and recovery of the reserve estimates appearing in the Annual Report may not be realized.** The ore reserves presented in the Annual Report are in large part estimates, and production of the anticipated tonnages and grades may not be achieved or the indicated level of recovery may not be realized. There are numerous uncertainties inherent in estimating proven and probable reserves including many factors beyond the Corporation’s control. The estimation of reserves is a complex and subjective process and the accuracy of any such estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. Reserve estimates may require revision based on various factors such as actual production experience, exploration results, market price fluctuations of gold, results of drilling, metallurgical testing, production costs or recovery rates. These factors may render the proven and probable reserves unprofitable to develop at a particular property or for a specific mine. Any material reduction in estimates of the Corporation’s reserves or its ability to extract these reserves could have a material adverse effect on its future cash flows, results of operations and financial condition. Also, the grade of ore mined may differ from that indicated by drilling results, and this variation may have an adverse impact on production results. In addition, the reliability of estimates of future production might also be affected by factors such as weather, strikes and environmental occurrences. The Corporation’s annual production estimates are developed based on, among other things, mining experience, reserve estimates, assumptions regarding ground conditions and physical characteristics of ores (such as hardness and presence or absence of certain metallurgical characteristics) and estimated rates and costs of production. Actual production may vary from estimates for a variety of reasons, including risks and hazards of the types discussed above. **The mining industry is highly competitive, and the Corporation may not be successful in competing for new mining properties.** The mining industry is intensely competitive and the Corporation is in competition with other mining corporations for the acquisition of interests in precious and other metal or mineral mining properties which are in limited supply. In the pursuit of such acquisition opportunities, the Corporation competes with other Canadian and foreign companies that may have substantially greater financial and other resources. As a result of this competition, the Corporation may be unable to maintain or acquire attractive mining properties on acceptable terms, or at all. **The Corporation may not have insurance or its insurance coverage may prove inadequate to reimburse the Corporation for liabilities encountered from operations.** The Corporation carries insurance against property damage and comprehensive general liability insurance for all operations. It is also insured against gold and silver bullion thefts and losses of goods in transit. Such insurance, however, contains exclusions and limitations on coverage. The Corporation believes that its insurance coverage is adequate and appropriate for the perceived risks of its current operations, however, such insurance may not continue to be available, or if available may not continue to be available at economically acceptably premiums or may not continue to be adequate to cover the Corporation’s anticipated liabilities. In some cases, however, risk coverage is not available or is considered too expensive relative to the perceived risk. 16


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Risks not insured against include mine cave-ins, mine flooding or other comparable hazards. Furthermore, there are risks attributable to most types of environmental pollution against which the Corporation cannot insure or against which it has elected not to insure. **The Corporation may have difficulty financing its additional capital requirements for its planned mine construction, exploration and development.** The construction of mining facilities and commencement of mining operations, the expansion of existing capacity and the exploration and development of the Corporation’s properties, including continuing exploration and development projects, will require substantial capital expenditures. Based on current funding available to the Corporation and expected cash from operations, the Corporation believes it has sufficient funds available to fund its projected capital expenditures for all of its current mining operations. However, if cash from operations is lower than expected or capital costs at these current mining operations or future projects exceed current estimates, or if the Corporation incurs major unanticipated expenses related to exploration, development or maintenance of its properties, the Corporation may be required to seek additional financing to maintain its capital expenditures at planned levels. In addition, the Corporation will have additional capital requirements to the extent that it decides to expand its present operations and exploration activities; construct additional new mining and processing operations, such as its Island Gold Deep Project, at any of its properties; or take advantage of opportunities for acquisitions, joint ventures or other business opportunities that may arise. Additional financing may not be available when needed or, if available, the terms of such financing may not be favorable to the Corporation and, if raised by offering equity securities, or securities convertible into equity securities, any additional financing may involve substantial dilution to existing shareholders. Failure to obtain any financing necessary for the Corporation's capital expenditure plans may result in a delay or indefinite postponement of exploration, development or production on any or all of the Corporation's properties, which may have a material adverse effect on the Corporation’s business, financial condition and results of operations. **Weakness in the global credit and capital markets could have a material adverse impact on the Corporation's liquidity and capital resources.** The credit and capital markets experienced significant deterioration in 2008, including the failure of significant and established financial institutions in the United States and abroad, and continued to show weakness and uncertainty in recent years. These unprecedented disruptions in the credit and capital markets have negatively impacted the availability and terms of credit and capital. If uncertainties in these markets continue, or these markets deteriorate further, it could have a material adverse effect on the Corporation's liquidity, ability to raise capital and costs of capital. Failure to raise capital when needed or on reasonable terms may have a material adverse effect on the Corporation’s business, financial condition and results of operations. **The Corporation may be party to certain mining joint ventures in the future, under which the Corporation’s joint venture partners may be in a position to prevent the Corporation from meeting its objectives.** Mining projects are often conducted through an unincorporated joint venture or an incorporated joint venture corporation. Joint ventures can often require unanimous approval of the parties to the joint venture or their representatives for certain fundamental decisions, such as an increase or reduction of registered capital, merger, division, dissolution, including indebtedness and the pledge of the joint venture assets, which means that each joint venture party has a veto right with respect to such decisions, which could in turn lead to a deadlock. The Corporation’s existing or future joint venture partners may veto the Corporation’s business plans, with regard to a specific joint venture, and prevent the Corporation from achieving its objectives. 17


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**On a regular basis, the Corporation evaluates potential acquisitions of mining properties and/or interests in other mining corporations which may entail certain risks.** Consistent with its acquisition and growth strategy the Corporation is actively pursuing the acquisition of advanced exploration, development and production assets. From time to time, the Corporation may also acquire securities of or other interests in corporations with respect to which the Corporation may enter into acquisition or other transactions. Acquisition transactions involve inherent risks, including, without limitation: accurately assessing the value, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition candidates;ability to achieve identified and anticipated operating and financial synergies;unanticipated costs;diversion of management attention from existing business;potential loss of key employees or the key employees of any business the Corporation acquires;unanticipated changes in business, industry or general economic conditions that affect the assumptions underlying the acquisition; anddecline in the value of acquired properties, corporations or securities. Any one or more of these factors or other risks could cause the Corporation not to realize the benefits anticipated to result from the acquisition of properties or corporations, and could have a material adverse effect on the Corporation’s ability to grow and, consequently, on the Corporation’s financial condition and results of operations. The Corporation continues to seek acquisition opportunities consistent with its acquisition and growth strategy, however, it may not be able to identify additional suitable acquisition candidates available for sale at reasonable prices, to consummate any acquisition, or to integrate any acquired business into its operations successfully. Acquisitions may involve a number of special risks, circumstances or legal liabilities, some or all of which could have a material adverse effect on the Corporation’s business, results of operations and financial condition. In addition, to acquire properties and corporations, the Corporation could use available cash, incur debt, issue common shares or other securities, or a combination of any one or more of these. This could limit the Corporation’s flexibility to raise additional capital, to operate, explore and develop its properties and to make additional acquisitions, and could further dilute and decrease the trading price of the common shares. When evaluating an acquisition opportunity, the Corporation cannot be certain that it will have correctly identified and managed the risks and costs inherent in the business that it is acquiring. From time to time, the Corporation engages in discussions and activities with respect to possible acquisitions. At any given time, discussions and activities can be in process on a number of initiatives, each at different stages of development. Potential transactions may not be successfully completed, and, if completed, the business acquired may not be successfully integrated into the Corporation’s operations. If the Corporation fails to manage its acquisition and growth strategy successfully it could have a material adverse effect on its business, results of operations and financial condition. 18


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Risks related to owning the Corporation’s common shares **The Corporation’s shares fluctuate in price.** The market price of the Corporation’s common shares may fluctuate due to a variety of factors relating to the Corporation’s business, including the announcement of expanded exploration, development and production activities by the Corporation and its competitors, gold price volatility, exchange rate fluctuations, consolidations, dispositions, acquisitions and financings, changes or restatements in the amount of the Corporation’s mineral reserves, fluctuations in the Corporation’s operating results, sales of the Corporation’s common shares in the marketplace, failure to meet analysts’ expectations, changes in quarterly revenue or earnings estimates made by the investment community, speculation in the press or investment community about the Corporation’s strategic position, results of operations, business or significant transactions and general conditions in the mining industry or the worldwide economy. In addition, wide price swings are currently common in the markets on which the Corporation's securities trade. This volatility may adversely affect the prices of the Corporation's common shares regardless of the Corporation's operating performance. The market price of the Corporation’s common shares may experience significant fluctuations in the future, including fluctuations that are unrelated to the Corporation’s performance. **Issuance by the Corporation of additional common shares could affect the market price of the shares and dilute existing shareholders.** Issuance of a substantial number of the Corporation’s common shares by the Corporation, for example, in connection with a potential acquisition or to raise additional capital for operations, or to reduce indebtedness, or pursuant to existing agreements, or the availability of a large number of Corporation common shares that may be available for sale, could adversely affect the prevailing market prices for the Corporation’s outstanding common shares. A decline in the market price of the Corporation’s outstanding common shares could impair the Corporation’s ability to raise additional capital through the issuance of securities should the Corporation desire to do so. **The Corporation does not currently anticipate declaring any dividends on its common shares.** The Corporation has not declared or paid any dividends on its common shares since its incorporation and it has no current plans to pay dividends on its common shares. Its present policy is to retain earnings to finance its capital expenditures program. The Board of Directors assesses its dividend policy on a yearly basis. In the future, the Board of Directors may declare dividends according to its assessment of the financial position of the Corporation, taking into account its financing requirements for future growth and other factors that the Board of Directors may deem relevant in the circumstances. **The Corporation has adopted International Financial Reporting Standards** On January 1st2011, the Corporation has adopted International Financial Reporting Standards (“IFRS”) as adopted by the International Accounting Standards Board. The impacts of this transition are presented in the Corporation’s December 31, 2011 consolidated financial statements. Several important differences exist between the new accounting methods applied under IFRS, the accounting methods previously applied under Canadian GAAP, and the accounting methods under U.S. GAAP. Accordingly, the financial information presented under IFRS is not comparable in all respects with financial information that is prepared in accordance with either Canadian GAAP or US GAAP. 19


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**Potential unenforceability of civil liabilities and judgments.** The Corporation is incorporated under the laws of the Province of Quebec, Canada. All of the Corporation’s directors and officers as well as the experts named in the Form 20-F are residents of Canada. Also, all of the Corporation’s assets and substantially all of the assets of these persons are located outside of the United States. As a result, it may be difficult for shareholders to initiate a lawsuit within the United States against these non-U.S. residents, or to enforce U.S. judgments against the Corporation or these persons. The Corporation’s Canadian counsel has advised the Corporation that a monetary judgment of a U.S. court predicated solely upon the civil liability provisions of U.S. federal securities laws would likely be enforceable in Canada if the U.S. court in which the judgment was obtained had a basis for jurisdiction in the matter that was recognized by a Canadian court for such purposes. This result may not always be the case. It is less certain that an action could be brought in Canada in the first instance on the basis of liability predicated solely upon such laws. **ITEM 4.**

   **INFORMATION ON THE CORPORATION**
  **A.**

   **History and Development of the Corporation**
 General The legal and commercial name of the Corporation is Richmont Mines Inc. The Corporation is a corporation domiciled in Quebec, Canada. The Corporation was incorporated pursuant to Part 1A of the Companies Act(Quebec) on February 12, 1981 (File number 1843-2286) under the corporate name of Ressources Minières Rouyn Inc. by Article of Amendment filed February 10, 1987 the Corporation added the English version Rouyn Mining Resources Inc. and by another amendment filed with the Government of Quebec on June 20, 1991, the Corporation changed its name to Richmont Mines Inc., now governed by the Business Corporations Act(Quebec). The Articles of the Corporation are registered by the Government of Quebec in register S02473, folio 10. Richmont Mines holds all of the shares of Camflo Mill Inc., a corporation incorporated under the Canada Business Corporations Act, all of the shares of Patricia Mining Corporation (“Patricia Mining”), a corporation continued under the Ontario Business Corporation Actand all of the shares of Louvem Mines Inc. (“Louvem”), a corporation incorporated under the Companies Act(Quebec) now governed by the Business Corporations Act(Quebec). The head office and principal place of business of the Corporation are located at offices of approximately 8,391 square feet at 161 avenue Principale, Rouyn-Noranda, Quebec, J9X 4P6, telephone number: 819 797-2465. The Corporation also utilizes an office of approximately 2,709 square feet in rented premises at 1501 McGill College, Suite 2920, Montreal, Quebec H3A 3M8. The common shares of Richmont Mines are listed and posted for trading on the Toronto Stock Exchange (TSX: RIC) and the New York Stock Exchange Market (NYSE MKT: RIC). The co-transfer agent for the Corporation in the United States is Computershare Trust Company, N.A., 350 Indiana Street, Suite 800, Golden, Colorado 80401. Richmont Mines is principally engaged in activities related to the acquisition, exploration, development and operation of mineral properties. The Corporation began its exploration activities in northwestern Quebec in the spring of 1984. During the following years, it acquired a portfolio of properties with gold-bearing potential with a view to development and commercial operation. Three-year History Richmont currently operates two gold mines, two of its three material properties, (the Beaufor Mine in Quebec and the Island Gold Mine in Ontario). On April 27, 2009, the Corporation announced it began dewatering the past-producing underground mine at its Francoeur property, located 25 km west of Rouyn-Noranda, Quebec. In addition to dewatering the mine, which 20


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reaches a depth of approximately 820 metres, the Corporation also re-commissioned the existing hoist and upgraded the related infrastructure. This work was completed during the second quarter of 2010. On May 19, 2010, the Corporation filed an amended Technical Report for the Francoeur Gold Project on SEDAR (www.sedar.com), with estimated Probable Reserves of 615,664 tonnes grading 6.91 g/t Au which could support production of approximately 136,000 ounces of gold (before recovery) over an initial 4-year period. Underground development and definition drilling were completed during 2010 and 2011, and 13,077 tonnes of low-grade development ore were processed during the last two quarters of 2011. On July 3, 2012, the Corporation announced revised Reserve estimates for Proven and Probable reserves of 504,687 tonnes grading 4.78 g/t Au for 77,580 ounces of gold compared to the previous estimated 615,664 tonnes grading 6.91 g/t Au, for 136,000 ounces of gold. Commercial production at the Francoeur Mine started on August 1st, 2012. On November 29, 2012, the Corporation announced the immediate closure of the Francoeur Mine due to high operating costs, management’s inability to foresee marked improvements in the future, low grades, difficult mining conditions and a tight labour pool for experienced miners. The closing process was estimated to take approximately 4 months. Commercial production ceased on November 30, 2012. On June 17, 2010, Richmont Mines completed an overnight marketed public offering of 3,300,000 common shares (the “Common Shares”) at a price of $5.00 per Common Share for aggregate gross proceeds of $16.5 million. The 3,300,000 Common Shares issued by Richmont Mines included 300,000 Common Shares issued upon the exercise in part by the underwriters of an over-allotment option. The net proceeds of the offering was used for development work at Richmont Mines’ projects, primarily the Francoeur Mine and for general corporate purposes. The Common Shares offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. On June 30, 2010, Richmont Mines acquired all of the issued and outstanding shares of Louvem Mines Inc. (“Louvem”) not already owned by Richmont Mines. Louvem and 9222-0383 Quebec Inc., a wholly-owned amalgamated subsidiary, and the shareholders of Louvem received one share of Richmont Mines for each 5.4 shares of Louvem held by them. The Amalgamation constituted a “business combination” within the meaning of Multilateral Instrument 61-101. On December 21, 2010, the Corporation signed an option agreement with SOQUEM Inc. (“SOQUEM”) to acquire the remaining 19% interest of the Monique property. Under the terms of the option agreement, Richmont Mines paid an amount of $350 thousand upon signing the Agreement, and undertook to complete exploration work in the amount of $400 thousand on or before February 28, 2011, in order to acquire the residual 19% interest of the Monique property. With all conditions met, Richmont Mines now owns a 100% interest in the Monique property. During 2011, Richmont completed over 8,100 metres of exploration drilling on the G and J zones of the Monique project, with the objective of evaluating the potential for a small open pit operation on the property. Richmont Mines submitted the required documentation for the permitting of an open pit operation in November 2011, and also began a 1,700 metre surface drilling program in early December 2011. On January 9, 2013, the Corporation announced that it had received the required mining permits for its 100%-owned Monique Gold Project. The Corporation has begun overburden removal with a view to extracting a 5,000 tonnes bulk sample in 2013. A 20,000 metre drilling program was completed on the Wasamac property in 2010. In May 2011, Richmont entered into an option agreement with Globex Mining Enterprises Inc. (Globex) to acquire a 100% interest in 5 claims adjacent to the Corporation’s Wasamac property. The option agreement gave Richmont the ability to explore the eastern extension of its Wasamac property. Complete details can be found in the May 9, 2011 press release entitled “Richmont Mines signs option agreement with Globex; Expands Wasamac exploration package.”Following the completion of the 2011 extensive drilling program of over 50,000 metres on Wasamac, a Regulation 43-101 report was filed on SEDAR on January 27, 2012. In March 2012, Richmont announced the 21


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results from a Preliminary Economic Assessment for Wasamac and the Corporation’s Board of Directors approved a $15 million advanced exploration budget for 2012. Richmont spent $9.5 million on the Wasamac gold property and the adjacent Globex optioned land package in 2012, compared to $6.6 million in 2011 and $1.7 million in 2010. The increase reflects that a 50,000 metre drilling program was completed on the Wasamac gold property. The higher exploration expenses similarly reflect that advanced technical work and economic optimization analyses were being completed on the property. In November 2012, Richmont announced that scheduled technical work and permitting efforts would continue as planned in 2013 at Wasamac, however, no additional exploration and development activities would be undertaken on the asset. This decision was made following several months of project optimization studies, from which Richmont concluded that alternative scenarios did not currently offer a meaningful economic improvement in the current gold price environment, over the initial Preliminary Economic Assessment outlined in the Corporation’s March 28, 2012 press release. The project remains an important asset for the Corporation given its location, size and potential leverage to the gold price, and it will be re-evaluated in the event economic parameters change in the project’s favour or in the event further geological information on the project comes to light. As a result of this decision and following no significant exploration drilling results, the Corporation terminated its option agreement with Globex. In October 2011, Richmont completed a private placement of 980,500 common shares at $10.50 per share with the Fonds de solidarité FTQ and the Fonds régional de solidarité Abitibi-Témiscamingue, s.e.c. (collectively, the “Subscribers”), for a total cash consideration of $10.3 million. In addition, the private placement entitled the Subscribers to 245,125 warrants to purchase additional Richmont common shares at an exercise price of $13.00 per common share until December 31, 2012. Net proceeds were used to fund advance exploration work at the Wasamac gold property. Please see the October 31, 2011 press release entitled “Richmont Mines Inc. completes CAN$10.3 million private placement”for full details. On February 27, 2012, the Corporation announced the resignation of Mr. Martin Rivard, its President and Chief Executive Officer. Mr. Martin Rivard officially left Richmont Mines on May 31, 2012. On May 10, 2012, the Corporation subsequently announced the appointment of Mr. Paul Carmel as its new President and Chief Executive Officer, effective May 22, 2012. It was also announced at this time, that Mr. Christian Pichette was appointed to the position of Executive Vice-President and Chief Operating Officer. Mr. Pichette has worked for Richmont since September 12, 2005, and previously held the position of Vice-President, Operations. On April 12, 2012, the Corporation announced the appointment of Mr. Ebe Scherkus as a member of the Board of Directors. Please see the April 12, 2012 press release entitled “Gold industry veteran Ebe Scherkus to join the Richmont Mines Board of Directors”for full details. On November 26, 2012, the Corporation announced the appointment of Mr. Pierre Rougeau to the position of Executive Vice-President and Chief Financial Officer, effective December 3, 2012. Please see the November 26, 2012 press release entitled “Richmont Mines announces the appointment of Mr. Pierre Rougeau as Chief Financial Officer”for full details. On February 1st, 2012, Richmont Mines completed a $10 million private placement with Mr. Bob Buchan and two members of his immediate family in the form of convertible debentures. The debentures had a 5 year maturity, a 7.6% annual interest rate, and were convertible into Richmont common shares at a conversion price of $12.17 per share at the option of the holders at any time following the date of issuance. Mr. Buchan was appointed as Vice-Chairman of Richmont’s Board of Directors on January 11, 2012. On September 24, 2012, Richmont Mines announced the immediate retirement of the $10 million debentures held by Mr. Bob Buchan and two members of his immediate family. Mr. Buchan subsequently left Richmont’s Board of Directors. 22


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On September 26, 2012, the Corporation announced the completion of a $26 million private placement with four institutional funds. The Corporation issued 5.97 million shares at $4.35 per share. Please see the September 26, 2012 press release entitled “Richmont Mines Inc. closes CAN$26 million private placement”for full details. On February 25, 2013, Richmont announced that it would invest $35 million on the deep C Zone, located below the existing infrastructure and reserve base of its Island Gold Mine. Believed to be an extension of the existing mine at depth, the C Zone is sub-vertical and occurs at approximately 450 metres to 1,000 metres below surface.The Corporation announced that it would invest on the Island Gold Deep project in 2013 to extend the existing ramp from its current depth of 450 metres below surface, and to commence work on the first segment of a vertical shaft which will be raise-bored from a depth of 450 metres to surface. An additional $10 million will be invested in the existing upper operations of the mine during the year. On February 25, 2013, the Corporation announced the appointment of Mr. Daniel Adam as Vice-President, Exploration. Mr. Adam has worked for Richmont Mines since March 10, 2008 and has held various positions over the past 5 years. Capital Expenditures The following table sets forth the Corporation’s capital expenditures on its properties for the past three fiscal years. Years Ended(in thousands of $)

   

   December 312012

   2011

   2010$

   $

   $Island Gold Mine

   8,364

   4,959

   4,650W Zone – Beaufor Property

   9,911

   3,480

   -Beaufor Mine

   1,192

   3,090

   2,462Discontinued operation – Francoeur Mine

   15,458

   19,237

   9,144Other

   2,929

   904

   51837,854

   31,670

   16,774
  Richmont invested $37.9 million in the ongoing development of its assets in 2012, up from $31.7 million in 2011. The notable year-over-year increase reflects the advancement of the underground exploration drift at the Island Gold Mine to improve access for deep exploration drilling below the mine’s current infrastructure. The level of increased investment similarly reflects the development of the ramp to access the W Zone, a near-surface zone located on the Beaufor Mine property. An additional $2.9 million was invested at the Camflo Mill and other corporate installations in 2012, up from $0.9 million in 2011. Richmont spent $19.2 million on the ongoing development of the Francoeur Mine during 2011, as the Corporation prepares to advance this asset into the commercial production stage in mid-2012. The annual increase over 2010 investment levels primarily reflects that a total of 4,999 metres of development and 13,911 metres of definition drilling were completed during 2011, versus 1,239 metres and 1,663 metres, respectively, during 2010. The annual increase similarly highlights the expanded workforce at Francoeur, which totaled 119 employees at the end of 2011 versus 74 at the end of 2010. Richmont invested $5.0 million in capital expenditures at the Island Gold Mine in 2011, a reflection of ongoing development costs, refurbishing and acquisition of equipment. The Corporation spent an additional $3.1 million in capital expenditures at the Beaufor Mine in 2011 with the year-over-year increase primarily reflecting the construction of a new emergency escape exit from the 12th level of the mine to surface, and $3.5 million in the expenditures in the W Zone, a near-surface zone located on the Beaufor property that is currently in development. 23


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An additional $0.9 million was invested at the Camflo Mill and other corporate installations in 2011, bringing the Corporation’s total investment in property, plant and equipment to $31.7 million for the year, up from the $16.8 million invested in capital expenditures during 2010. Richmont invested $4.7 million in capital expenditures at the Island Gold Mine in 2010, a reflection of ongoing development costs, refurbishing and acquisition of equipment. The Corporation spent an additional $2.5 million in capital expenditures at the Beaufor Mine in 2010, largely attributable to the cost associated with the excavation of a new safety exit from the mine’s underground operations. Capital expenditures at the Francoeur Mine totaled $9.1 million in 2010, reflecting higher development costs associated with transitioning this mine into commercial production. Dewatering of the mine’s 17 levels was completed at the end of June 2010, and underground development work to reach the targeted West Zone began shortly thereafter. Property Interests The following table outlines Richmont Mines’ interest in its exploration properties as at December 31, 2012. Property

   Year of acquisition

   Number of Mining titles

   Participation1QuebecMonique

   1994

   18

   100%Wasamac

   1988

   4

   100%Camflo Northwest

   2005

   13

   80%OntarioSewell

   2002

   6

   100%Cripple Creek

   2002

   27

   100%
 1

   The Corporation will be required to pay royalties if some of these properties are brought into commercial production. 24


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Exploration and Project Evaluation Expenditures The following table presents Richmont Mines’ exploration and project evaluation expenses in 2010, 2011 and 2012 and the budgeted estimated amounts for 2013 (in thousands of CAN$). 2013

   

   2012

   

   2011

   

   2010(in thousands of $)

   $

   

   $

   

   $

   

   $EstimatedMinesIsland Gold

   6,311

   

   10,969

   

   5,549

   

   4,561Beaufor

   2,793

   

   1,432

   

   803

   

   2,2509,104

   

   12,401

   

   6,352

   

   6,811Other propertiesWasamac

   1,133

   

   9,477

   

   6,647

   

   1,712Monique

   352

   

   744

   

   2,284

   

   289W Zone

   -

   

   -

   

   188

   

   334Other

   1,855

   

   459

   

   184

   

   997Project evaluation

   40

   

   511

   

   470

   

   443Exploration and project evaluation before depreciation and exploration tax credits

   12,484

   

   23,592

   

   16,125

   

   10,586Depreciation

   365

   

   200

   

   155

   

   139Exploration tax credits

   (880

   )

   (3,527

   )

   (5,354

   )

   (3,465

   )11,969

   

   20,265

   

   10,926

   

   7,260
 2013 Trends The cost-effective development of its mining assets, both current and future, has always been at the heart of Richmont Mines’ success over the years, and remains a top priority for the Corporation. Richmont is committed to generating positive cash flows and delivering organic growth, all the while continuing to identify and evaluate potential strategic partnership and acquisition possibilities to expand its pipeline of projects, grow its reserve base and increase its future production profile. Richmont Mines plans to complete more than 88,000 metres of exploration drilling and 26,500 metres of definition drilling during 2013. In addition, the Corporation plans to complete bulk sample programs at the Monique and W Zone projects and, in the event these programs are successful, to bring these projects into commercial production. At the Island Gold Mine, exploration drilling will be completed. 37,400 metres of exploration drilling is especially planned for the Island Gold Deep project. Plans for Island Gold Deep include extending the ramp from its current depth of 450 metres in order to accelerate and extend the knowledge about what have been found at depth and, upon permitting approval, beginning to raise bore the first 450 metre section of a vertical shaft. 25


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**B.**

   **Business Overview**
  **1.**

   **Beaufor Mine, Val-d’Or, Quebec, Canada**
 Location and Property Description The Beaufor Mine property, along with other adjacent properties such as Pascalis, Perron, Colombière, Courvan and Perron Blocks 2, 3 and 4, are located approximately 20 kilometres to the northeast of the town of Val-d’Or, in the Abitibi-East county, in the Province of Quebec. Description of Mining Rights The property, which includes the Mineral Reserves of the Beaufor Mine, consists of a series of adjacent mining rights subdivided into four projects: Perron, Beaufor, Pascalis and Colombière. The projects are composed of two mining leases, one mining concession and 23 claims over a total area of 591 ha. The Courvan project and Perron blocks 2, 3 and 4 form another group of mining titles with high economic potential but currently have no mining activities. This group consists of two mining concessions and 66 claims, over a total area of 1,298 ha. Property

   Number of mining

   Area

   Expiration datetitles

   (ha)Beaufor

   1

   106.03

   Mining concession 280PTA: 01/31/2014Colombière

   13

   226.00

   Claims expire between 09/21/2013 and 10/15/2013Courvan

   61

   1,099.12

   Mining concession 295 and 280PTB: 01/31/2014 and59 claims expire between 08/09/2013 and 04/30/2015Pascalis

   1

   37.50

   Mining Lease BM 750: 06/02/2016Perron

   11

   221.58

   Mining Lease BM 858: 03/11/2023 and10 claims expire between 07/11/2013 and 07/12/2014Perron Blocks 2, 3 and 4

   7

   199.08

   Claims expire between 09/06/2014 and 12/15/2014Total

   94

   1,889.31
  All of these claims will be renewed before the anniversary date by applying excess credits available or by the execution of the required works. For the mining leases, taxes are paid to the government every year to keep them in good standing. For a mining concession, geological work is performed to keep it in good standing or taxes are paid every year. Richmont Mines has an internal procedure and an external control to insure appropriate follow up regarding claims expiry dates. All the mining claims, mining concessions and mining leases were in good standing in 2012 and are expected to be for 2013. A detailed list and map of locations can be found in the Technical Report for the Beaufor Mine as of December 31, 2006 filed on March 29, 2007 under the Corporation’s profile on the SEDAR web site at www.sedar.com. A mining lease application is underway for the western area of the property called the W Zone. This new zone is accessible by a ramp and is currently in development. Ownership of Mining Rights All the mining titles of the Beaufor property are held by Richmont Mines. Mining Royalties All the Beaufor division’s properties are subject to the payment of royalties and financial contractual obligations. Details can be found in the Technical Report for the Beaufor Mine as of December 31, 2006, filed on March 29, 2007 under the Corporation’s profile on the SEDAR web site at www.sedar.com. 26


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**Beaufor Property (Royalty payable on 50% of the production)** The Beaufor Mine’s production is subject to a quarterly royalty payment to Aurizon Mines Ltd.: Gold Price (US$/oz)

   Royalties per ounce produced<300

   CAN$0.00300 – 325

   CAN$17.00325 – 350

   CAN$18.50350 – 375

   CAN$20.00375 – 400

   CAN$22.50400 – 500

   CAN$24.00>500

   CAN$30.00
 **Perron Property (payable on 100% of the production)** The Perron Property is subject to a quarterly royalty payment to Aurizon Mines Ltd.: Gold Price (US$/oz)

   Royalties per ounce produced<300

   CAN$0.00300 – 325

   CAN$17.00325 – 350

   CAN$18.50350 – 375

   CAN$20.00375 – 400

   CAN$22.50400 – 500

   CAN$24.00>500

   CAN$30.00
 Despite the fact that claims 5102441, 5098056 and 5098055 are part of the Perron Block 2 property, they are subject to the same royalty as the claims included in the Perron property. **Perron Block 2 (payable on 100% of the production on claims 3493171, 3493172 and 3493173)** The Perron Block 2 Property is subject to a 2% NSR payable to Northwest Gold Corporation (“Northwest”). The Northwest NSR is payable when the gold price is higher than US$300 per ounce. **Pascalis (payable on 100% of the production)** The Pascalis Property is subject to a 25% NPI royalty payable to New Pascalis Mines Limited. **Colombière (payable on 100% of the production)** The Colombière Property is subject to a 2% NSR payable to IAMGOLD Corporation (formerly Cambior Inc.). Environmental Obligations and Permits Over 75% of the development waste material is hoisted from the underground mine to the surface and placed in a waste dump. The waste rock is not acid generating and does not require any particular environmental measures. The rehabilitation plan for the Beaufor Mine was approved in April 2008 by the Ministère des Ressources naturelles du Québec(the “MRN”). A partial revision of the rehabilitation plan was submitted to MRN in November 2010, following the expansion of the tailings storage area and drilling programs on the old tailings restored. The rehabilitation plan was accepted by the MRN on December 7, 2011. The rehabilitation plan must be renewed by December 2013. It will include the W Zone. 27


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According to the Corporation’s knowledge, all necessary permits and authorizations have been requested and obtained. Infrastructure Two mine shafts are located on the Beaufor property: the old Perron shaft No. 5 is currently used for hoisting and the Pascalis shaft is used as the ventilation air intake shaft. A raise between the 1,250 level and surface is used as an escape way. The ramp collar that provides access to the W Zone project is located 350 metres South-East of the Perron shaft. As of December 31st, 2012, the ramp was 632 metres in length, and reached a vertical depth of 83 metres below surface. There are also a series of buildings including warehouses, workshops and offices. There were 163 employees and 32 independent contractors as of December 31, 2012. Location of Mineralized Zones The mineralized zones, including the Mineral Reserves, underground infrastructure and the waste pad are located on mining concession 280 PTA of the Beaufor property, mining lease 750 of the Pascalis property and mining lease 858 of the Perron property. Only the reserves of the 350 Zone, which are west of the W Zone, are subject to a mining lease application (November 2011). Accessibility The mine can be accessed from Highway 117 by going east from Val-d’Or to the Perron Road, and then north towards the village of Perron. The mine can also be accessed using the secondary road 397 from Val-d’Or to Val-Senneville, and then going south on Paré Road to the village of Perron. Climate The average annual precipitation is approximately 914 mm, with most falling in September (approximately 102 mm). Snowfalls occur between October and May, with the most snowfall occurring between November and March. The monthly average for that period is about 50 mm (expressed in mm of water). The average daily temperature in Val-d’Or is 1.2° C, slightly above freezing. The average temperature for July reaches 17.2° C, while in January the temperature falls to –17.2°C. The lowest temperature measured was -43.9° C and the highest temperature measured was 36.1° C. Although the temperature of the area is below the freezing point an average of 209 days per year, mining operations aren’t affected by the climate. Local Resources and Infrastructure The area is well served by existing infrastructure and human resources. The population of the town of Val-d’Or is approximately 32,000 people. The town is accessible from the national road network and commercial flights are available daily at the local airport. The town also hosts an appropriate base of suppliers and manufacturers for the mining industry. A railroad is located a few km to the south of the property and power is supplied by Hydro-Québec. The ore from the Beaufor Mine is hauled by truck to the Camflo Mill located at an approximate distance of 49 km from the mine site. Waste rock is stored on site. Skilled administrative personnel, technicians, geologists, mining engineers and experienced miners are available in the area. However, as several advanced staged projects are currently active in the vicinity, it is now more difficult to find, recruit and retain manpower. 28


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Physiography The regional landscape is typical of the Abitibi lowlands, with its small rolling hills and widespread swamps, and its mixed forests of broadleafs and conifers. The forest cover is relatively young, as a forest fire devastated the area in 1942. The elevation is approximately 300 metres above sea-level. Exploration History Intermittent exploration fieldwork has been conducted on the Beaufor property since the 1930s. Following a development period, Aurizon Mines (50%) and Louvem (50%) started commercial production at the Beaufor Mine in January 1996. In August 2000, Aurizon Mines stopped mining operations at the Beaufor Mine for reasons of risk of instability of the crown pillar. In spring 2001, Aurizon Mines transferred the mining rights of the Perron, Beaufor, Pascalis, Colombière and Courvan properties to Richmont Mines for an amount of $1.8 million. In September 2001, Richmont Mines undertook construction work to secure the crown pillar and commercial production resumed at the Beaufor Mine jointly with Louvem in January 2002. In March 2010, the Beaufor Mine attained the notable production level of 1,000,000 gold ounces over its mine life. In June 2010, Richmont Mines acquired all of the issued and outstanding shares of Louvem not owned by Richmont Mines. As a result of this transaction, Richmont Mines owns a 100% interest in the Beaufor Mine and 100% of Louvem’s properties. Geological Setting **Regional Geology** The mining town of Val-d’Or is located in the southeastern part of the Abitibi greenstone belt formed of Archean volcanic and sedimentary rocks of the Superior Province. The mining camp of Val-d’Or is located in the Malartic area, which is comprised of a volcanic pile including ultramafic, basaltic and rhyolitic flows. The Bourlamaque granodiorite intrusion hosts significant gold concentrations, namely at the Beaufor Mine. **Beaufor Mine Geology** The Beaufor, Perron, Pascalis, Colombière and Courvan properties belong to the same gold-bearing hydrothermal system with a similar geometry. The Beaufor deposit is included in the Bourlamaque granodiorite. Gold mineralization occurs in veins associated with shear zones moderately dipping south. The mineralization is associated with quartz-tourmaline veins resulting from the filling of shear and extension fractures. The gold-bearing veins show a close association with mafic dykes intrusive and undercutting the granodiorite. The dykes seem to have influenced the structural control of the gold-bearing veins. **Mineralization** Gold-bearing veins at the Beaufor Mine consist of quartz-tourmaline-pyrite veins, typical of Archean epigenetic lode gold deposits, that cross-cut the Bourlamaque Batholith. Mafic dykes that predate the mineralization are associated with shear-hosted gold-bearing veins. Shallowly dipping extensional gold-bearing veins are commonly observed at the Beaufor Mine. Shear zones striking N070oand dipping steeply to the southwest control the opening and gold enrichment of veins. All the gold-bearing veins are contained in a strongly-altered granodiorite in the form of chlorite-silica forming anastomosing corridors of 5 to 30 m in thickness. The veins at the Beaufor Mine form panels of more than 300 m in length by 350 m in height. The thickness of the veins varies from 5 cm to 5 m. The zones are limited by the Beaufor fault (N115o/65o-75o) at 380 metres from the surface and a parallel system of shears (N70o/sub vertical). 29


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2012 Results **Production** During the year ended December 31, 2012, a total of 116,675 tonnes of ore were processed from the Beaufor Mine at an average recovered grade of 5.08 g/t, and 19,055 ounces of gold were sold at an average price of US$1,666 (CAN$1,665) per ounce. This compared to tonnage of 100,888, at an average recovered grade of 8.45 g/t, and gold sales of 26,947 ounces at an average selling price of US$1,576 (CAN$1,559) in 2011, and tonnage of 104,945 tonnes at an average recovered grade of 6,72 g/t and gold sales of 22,258 ounces of gold at an average selling price of US$1,253 (CAN$1,290) in 2010. Cash costs at the Beaufor Mine in 2012 increased to US$1,394 (CAN$1,393) from US$921 (CAN$911) in the prior year, as the benefits of lower cost per tonne were offset by the notably lower grade. 2011 cash costs at the Beaufor Mine increased from US$867 (CAN$892) in 2010. Beaufor Mine 2012

   2011

   2010Tonnes

   116,675

   100,888

   104,945Head grade (g/t)

   5.19

   8.45

   6.72Gold recovery (%)

   97.80

   98.36

   98.19Recovered grade (g/t)

   5.08

   8.31

   6.60Ounces sold

   19,055

   26,947

   22,258Cash cost per ounce (US$)

   1,394

   921

   867Investment in property, plant and equipment (thousands of CAN$)

   1,192

   3,090

   2,462Exploration expenses (thousands of CAN$)

   1,432

   803

   2,250Deferred development (metres)

   238

   685

   1,350Diamond drilling (metres)Definition

   9,725

   13,101

   21,928Exploration

   14,730

   18,176

   33,449
 **Exploration** Proven and Probable reserves at the Beaufor Mine increased slightly to 39,114 gold ounces at December 31, 2012, from 38,331 gold ounces at December 31, 2011. This reflects the addition of reserves established within the mine’s existing underground infrastructure as a result of definition drilling in 2012, offset by gold production from the mine during the year. In addition, the near-surface W Zone, located to the west of the mine’s existing infrastructure, had Probable reserves of 30,680 ounces of gold at December 31, 2012, unchanged from the prior year. Year-end 2011 Proven and Probable reserves (including W Zone) were similar to those at December 31, 2010, as results from definition drilling were successful in replacing the mine’s 2011 gold production. As of December 31, 2012, the main access ramp to the W Zone was 630 metres in length, and reached a vertical depth of 83 metres. Development work mainly done in the 367 Zone and another W Zone satellite sector resulted in 4,422 tonnes of development ore being brought to surface with a sampled gold grade of 3.61 g/t. The 367 Zone does not currently demonstrate a mining potential. The first sub-level providing access to the main W Zone reserves was reached in February 2013. 30


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**Drilling** Most of the drill holes are planned on vertical cross-sections in order to undercut the shear veins at right angles. Drilling programs are sub-divided into two main categories: Exploration drilling using a 40 to 80 metre by 40 to 80 metre grid;Definition drilling based on a 10 to 20 metre by 10 to 20 metre grid. Drilling operations are performed by a drilling contractor, under the supervision of the geological staff at the Beaufor Mine. Underground drill holes are LTK48 (35.6 mm) and BQTK (40.7 mm) calibre. The core recovery is better than 90%, including the fault zones where the RQD (“rock quality designation”) is more than 75%. Detailed description of the drill core is prepared by experienced and highly qualified personnel, in accordance with established Beaufor Mine guidelines. In 2013, Richmont plans to do 11,500 metres of definition drilling and 17,500 metres of exploration drilling at the Beaufor Mine in an effort to increase available reserves. The Corporation is also planning 500 metres of definition drilling and 1,000 metres of exploration drilling on the W Zone. Furthermore, 5,000 metres of surface drilling are planned on distant showings on the Beaufor, Colombière and Courvan properties. **Sampling** Sampling of the rock mass is performed using drill cores and blasted rock. Results of the drill cores analyses as well as the grades of ore samples taken in the car wagon are taken into account for Mineral Reserve calculation. The weight of each sample is around 0.5 kg per 3.5 to 5 tonne wagon. For development purposes, the weight of each sample is around 0.5 kg per 12 tonnes of blasted rock. There are currently no face-sampling “chips” taken at the Beaufor Mine. In definition drill holes, samples are collected between 0.5 m and 1 metre intervals, and frequently include both vein material and wall rocks, since veins are often less than 1 metre thick. Core recovery is over 90%. The entire core is then analyzed at the chemical assay laboratory. For exploration holes, the length of the sample varies from 0.5 to 1 metre. The core is sawed in two using a core saw. Recuperation of core is over 90%. **Assays** ALS Chemex Laboratories in Val-d’Or was selected to analyze samples from the Beaufor Mine. This laboratory is certified ISO 9001-2000 for the Supply of assays and geochemical analysis servicesby QMI, an ISO certification firm. The step-by-step procedure for sample analysis is briefly described as follows: Upon receipt of sample bags, all sample numbers are verified and entered into the Laboratory Information Management System (LIMS), a sample tracking system used by the laboratory;Samples are dried and crushed to 70% passing 2 mm using a jaw crusher. A representative sub-sample weighing 250 to 300 g of the –2 mm fraction is prepared using a “Riffle Jones” splitter. The sub-sample is then pulverized to 85% passing –200 mesh using a ring pulveriser;Samples are then analyzed by fire assay with gravimetric finish using 30 g per sample. 31


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**Quality Control** The laboratory’s quality control program, at different steps of the process, includes: Crushing, pulverizing, weighing: daily monitoring;Fire assay: 1 blank, 2 standards and 3 duplicates are inserted in each batch of 84 samples. A second quality control program established at the Beaufor Mine involves the insertion of blanks and standards. Furthermore, rejects for all samples exceeding 10 g/t Au and less than 100 g/t Au are systematically re-assayed. **Security of Samples** Samples are gathered in plastic boxes by the Beaufor Mine geological personnel and stored in a core shack. The samples are collected by the laboratory staff and brought to the laboratory directly. Historical production and milling data indicate reliability of the laboratory results. When there is doubt as to the location of a sample, the sampling number or any other anomaly, the data is not used for calculation. Mineral Reserve Estimates In 2012, the Mineral Reserve estimates were performed by Jessy Thelland, P.Geo., and François Chabot, Eng., employees of Richmont Mines and qualified persons pursuant to Regulation 43-101. The methodology and procedures for Mineral Reserve estimates have been adopted from a study completed in 2006 by Golder Associates, an independent firm. The database, factors and parameters used in the determination of the Mineral Reserves are based on the available information at the Beaufor Mine as of December 31, 2012. However, these parameters are revised on an annual basis in order to take into consideration the experience gathered from the current mining operation. The Mineral Reserve estimates are carried out in accordance with Regulation 43-101. Mineral Reserves are classified according to the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) classification adopted by the CIM Council on August 20, 2000. All standards generally accepted in the mineral industry as well as Regulation 43-101 requirements and CIM regulations for Mineral Reserve estimates have been fully complied with in this study. All the geo-scientific data collected at the Beaufor Mine is grouped into two main databases. Internal procedures have been prepared in order to validate the information in the databases. All the work performed by the Beaufor Mine geology department, from data entry to layout drawings follows strict and established procedures, including crosschecks to ensure full validity. Access to all databases is restricted to selected personnel in order to ensure complete integrity. **Mineral Reserve Estimates** The database and the parameters used to estimate the Mineral Reserves are based on past mining experience and the information available as at December 31, 2012. The parameters were reviewed and modified by Golder Associates in 2006. Thus, both the dilution and the ore recovery factors by mining methods used in the reserve estimate are based on actual results obtained in 2012. All these factors and parameters are updated on an annual basis in order to account for changes in the mining operations. The conversion of Mineral Resources to Reserves is based on economic feasibility. As per Regulation 43-101, only Mineral Resources in the Measured and Indicated categories can be used to establish the estimate of Mineral Reserves. The budgeted costs used are based on actual and historic data of the mining operation and are updated based on experience and to reflect the changes in the prevailing economic situation. 32


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See “ITEM 3. KEY INFORMATION - D. Risk Factors – Risks Associated with the Mining Industry– The estimates of mineral reserves and forecasts of the production are subject to numerous uncertainties, and the production and recovery of reserve estimates appearing in the Annual Report may not be realized” for a discussion of the risks inherent in estimating reserves and production. Technical Parameters The basis and the parameters used for reserve estimation are given in the following sections. Mining Methods The two major underground extraction methods currently used at the Beaufor Mine are room and pillar and long hole methods: Rooms and Pillars Geometry: stope width of 6 metres in the plane of the vein with in-stope pillars of 2.5 metres X 2.5 metres;Maximum dip of vein: 40°;Ore mining recovery: 80% used in the economic evaluation;Internal dilution: the ore block is designed with a true thickness of 2.4 metres. The drilling intercepts are projected to the same lengths. The minimum mining width is 2.4 metres. The dilution grade is assumed to be 0 g/t Au;External dilution: a dilution of 5% at a grade of 0 g/t Au is added in the determination of the economic Mineral Reserves.Long HoleGeometry: maximum panel length of 25 metres;Minimum dip of vein: 45°;Ore mining recovery: 100% for designed stopes with all pillars between stopes clearly identified during the process of Mineral Reserve estimation;Internal dilution: minimum mining width is 2.4 metres. The drilling intersections are projected to a minimum width of 2.4 metres;External dilution: a dilution rate of 10% for waste at a grade of 0 g/t Au is assumed for primary stopes. **Cut-off Grades** Cut-off grades have been calculated based on both developed and un-developed workings for the two major mining methods used at the Beaufor Mine, which are room and pillar and long hole. The main criteria are as follows: No profit margin is built into the estimate;Deferred development costs or capital expenditures are not used;Only the price of gold is taken into account in the economic calculation;The price of gold used was CAN$1,450 per ounce applying an exchange rate of CAN$1.00:US$1.00;Operating costs include fixed costs budgeted for 2013 and variable costs (production and development) based on the results from January to July 2012 for each method. 33


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The results of the cut-off grade study by mining method for both developed and un-developed underground workings are listed in the following table: Mining Method   Workings   Cut-off Grade(g/t)Room and pillar   Developed   5.09Room and pillar   Undeveloped   5.86Long hole   Developed   4.32Long hole   Undeveloped   5.09
  Reserve Classification Descriptions with more details about classification of reserves at the Beaufor Mine are set out below. **Proven Mineral Reserves** At the Beaufor Mine, Proven Reserves are based on ore blocks developed from drifts or raises up to a maximum of 8 metres from these openings. The level of accuracy of the economic evaluation in the calculation of reserve is that of a feasibility study. **Probable Mineral Reserves** The Mineral Reserve estimate in the Probable category is based on an economic study in order to determine the economically mineable part of an Indicated Mineral Resource. At the Beaufor Mine, Probable Reserves extend to a maximum of 10 metres from drilling data. Dilution and mining recovery rates are included in the reserve calculation. **Reserve Table** In accordance with the Mineral Reserve calculation, as at December 31, 2012, the Mineral Reserves of the Beaufor Mine are estimated as follows: Category of reserves   Tonnes   Grade   Au(metric)   (g/t Au)   (oz)Proven   73,725   5.87   13,906Probable   122,420   6.40   25,208Total (proven + probable)   196,145   6.20   39,114Before mill recovery of 98.36%
  In accordance with the Mineral Reserve calculation, as at December 31, 2012, the Mineral Reserves at the W Zone project are estimated as follows: Category of reserves   Tonnes   Grade   Au(metric)   (g/t Au)   (oz)Proven   -   -   -Probable   132,251   7.21   30,680Total (proven + probable)   132,251   7.21   30,680Before mill recovery of 98.36%
  34


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As of December 31, 2012, the Mineral Reserves at the Beaufor Mine and the W Zone were estimated at 69,794 ounces of gold, calculated using a long-term gold price of CAN$1,450 per ounce, for an expected mine life of approximately three years. Mining Operations and Metallurgy The two major underground extraction methods currently used at the Beaufor Mine are room and pillar and long hole methods. The Beaufor Mine ore is trucked to the Camflo Mill located approximately 49 kilometres from the mine site. Camflo Mill Inc., is 100% owned by Richmont Mines. The Camflo Mill, with a rated capacity of 1,200 tonnes per day, is a Merrill-Crow conventional type mill with circuits for crushing, grinding, gold cyanidation and precipitation using zinc powder. The historic average rate of recovery of the mill is 98.5% when ore extracted from the Beaufor Mine is milled. No major operating problems have been experienced at this mill nor are any anticipated in the near future. Usual maintenance and repairs are carried out when deemed appropriate. Production Summary During the year ended December 31, 2012, 19,055 ounces of gold were sold at an average price of US$1,666 (CAN$1,665). This compared to gold sales of 26,947 ounces of gold at an average price of US$1,576 (CAN$1,559) in 2011 and 22,258 ounces at an average sale price of US$1,253 (CAN$1,290) in 2010. Cash costs per ounce at the Beaufor Mine in 2012 increased to US$1,394 (CAN$1,393) from US$921 (CAN$911) in the prior year, as the benefits of lower cost per tonne were offset by the notably lower grade. 2011 cash costs at the Beaufor Mine increased from US$867 (CAN$892) in 2010 as a result of a higher cost per tonne that reflected a greater amount of development completed to access the ore zones, the effects of which were partially offset by an improved recovered grade. 2012      2011      2010Precious metals revenues (thousands of CAN$)      31,727      42,016      28,714Ounces sold      19,055      26,947      22,258Data per ounce of gold sold   US$   CAN$   US$   CAN$   US$   CAN$Cash cost   1,394   1,393   921   911   867   892Depreciation and depletion   110   110   72   71   62   64Total   1,504   1,503   993   982   929   956Average price obtained per ounce   1,666   1,665   1,576   1,559   1,253   1,290
   **2.**   **Francoeur Mine, Rouyn-Noranda, Quebec, Canada** Location and Property Description The Francoeur property is located 25 km west of Rouyn-Noranda, Abitibi, Beauchastel Township, ranges IV and V, lots 1 to 9. 35


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Description of Mining Rights The Francoeur property consists of 12 mining claims, 3 mining concessions and 5 mining leases totalling approximately 408 ha. Number of mining titles   Area      Expiration date(ha)12 mining claims   118.76   Claims expire between 03/25/2013 and 12/28/20143 mining concessions   230.21   Mining concessions 194, 322 and 326: 01/31/20145 mining leases   103.95   Mining leases 776, 825, 826, 849 and 1006 expire between 09/07/2015 and 06/26/203220   452.92
  All of these claims will be renewed before the anniversary date by applying excess credits available or by the execution of the required works. For the mining leases, taxes are paid to the government every year to keep them in good standing. For mining concessions, geological work is performed to keep it in good standing or taxes are paid every year. Richmont Mines has an internal procedure and an external control to insure appropriate follow up regarding claim expiry dates. All the mining claims, mining concessions and mining leases were in good standing in 2012 and are expected to be for 2013. A mining lease was obtained for the West Zone area in 2012. Two claims were suspended following the reception of the mining lease, as a result of their area having been modified. A detailed list and map of locations can be found in the amended technical report for the Francoeur Mine as of August 17, 2012 filed under the Corporation’s profile on the SEDAR website at www.sedar.com. Ownership of Mining Rights All mining titles on the Francoeur property are held by Richmont Mines. Mining Royalties There are no royalties or back-in-rights related to any of the mining claims, mining leases and mining concessions. Environmental Obligations and Permits A closure plan was submitted in 2012 to the Ministère des Ressources naturelles(the “MRN”), pursuant to which financial guarantees have already been submitted. Also, following the announcement of the end of mining activities, Richmont began a gradual closure process. The Corporation will provide the authorities with the required information and plans. Infrastructure The Francoeur property includes two vertical shafts with their headframes. The 477-metre shaft No.6 provided access to levels 4 to 11, and it now serves for the ventilation purposes. A machine shop, a core shack and a warehouse are regrouped in this same area. The 818-metre Jean-Guy Rivard shaft (No.7) is located 650 metres northeast of the No.6 shaft. The Jean-Guy Rivard shaft was sunk by Richmont Mines, giving access to six (6) additional levels (12 to 17). The headframe also included a service building containing a covered ore bin, the main office and a dry room. A hoist room, an air compressors room, an electric room are grouped in this same area. There are no mill facilities at the mine site, and accordingly, no mine tailings were left in place, except in the area of the old tailings between shaft No.1 and No.2 in the eastern part of the property. 36


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From 1993 to the end of mining activities in 2001, the ore was sent to Richmont Mines’ Camflo Mill in Malartic. This waste contains 0.4% sulphur, this material has a positive neutralizing potential and is not generating acidic drainage (H2SO4). Richmont Mines also used the Camflo Mill to treat the ore from the West Zone in 2012. Consequently, no mine tailings have been stored on the site. Only a non-acid generating waste stock pile is on the mining site. Location of Mineralized Zones The Francoeur No.3 deposit constitutes the main ore zone of the Francoeur Mine which was mined until 2001 down to the 17thlevel by Richmont Mines. The No.3 deposit is hosted in the metavolcanic rocks of the Blake River Group. Gold mineralization mainly developed in the ductile Francoeur-Wasa shear zone. The mineralized zone extends for at least 1,200 metres down dip from surface to beyond the 17thlevel. It is a composite orebody consisting of four distinct ore zones, three of which occur within the Francoeur-Wasa shear zone. The “West Zone” is located to the west of the No.3 deposit. It is composed of two zones, the Main Zone (West) and the Footwall Zone (FW), both located in the Francoeur-Wasa shear zone and dipping northward at about 30 to 40°. Gold-bearing mineralization is closely associated with albite-pyrite alteration. This zone apparently differs from the No.3 orebody by its apparent NW plunge instead of the NE plunge generally observed elsewhere. Accessibility The property is easily accessible by Provincial road 117 that joins Rouyn-Noranda and the little community of Arntfield. From there, a secondary road (Provencher Avenue North) leads northwest for 3.2 km to the Francoeur No.6 and Jean-Guy Rivard shafts. A number of gravel and bush roads crosscut the property over a few hundred metres in all directions. Climate The average temperatures are -17.2° C in January and +17.2° C in July based on measurements taken over 30 years in this area. There is an average maximum of 61 cm of snow in December and 101.9 mm of rain in September. Local Resources Rouyn-Noranda (pop. 41,475) is a well established mining community offering a vast amount of services. The Horne copper smelter is the most important employer with a workforce of more than 500. Physiography The area straddles in the coniferous and boreal zone. The forest cover is composed of 50% leafy and 50% resinous trees with moderate commercial value. The topography is relatively flat (285 m to 300 m) with the exception of the northeast corner of the property where outcrops are no more than 30 metres higher than the average level. Exploration History The Francoeur property was staked for the first time in 1923 following a gold discovery which later became Zone 1. In 1932, Francoeur Gold Mines Ltd. sunk a 45° incline shaft (No.1) of approximately 226 metres with four levels (95, 191, 290 and 488 foot levels) in the footwall of Zone 1. In 1936, zones 2 and 3, located at more than 549 metres west of Zone 1, were discovered through drilling along the Francoeur-Wasa shear. Additionally, a 45° incline shaft (No.2) was sunk to a depth of 183 metres with four development levels (132, 221, 311 and 399 foot levels) in the lower footwall of Zone 2. In 1938, a 150 short tons 37


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per day concentrator was built on the property, and mining of both No.1 and No.2 deposits began immediately thereafter. In 1939, Zone 8 was discovered approximately 244 metres north of the Francoeur-Wasa shear. This zone was opened as early as 1940 through a cross-cut driven from the second level of Zone 2. On the third level, the drift was extended approximately 914 metres to the west to reach and mine the ore of Zone 3. Between August 1938 and March 1947, Francoeur Gold Mines Ltd. produced 94,303 ounces of gold from 520,363 tonnes of ore with a recovered grade of 5.6 g/t of gold (Brown, 1962). In July 1964, Francoeur Gold Mines Ltd. was acquired by Wright-Hargreaves Mines Ltd. (Wasamac Division). In 1965, after further drilling, the Wasamac No.2 vertical shaft (now called shaft No.6) was sunk by Wright-Hargreaves Mines Ltd. to a depth of 477 metres to mine the Zone 3 from the 4thto the 11thlevel. Mining operations started in May 1968 and ended in March 1971 for a total gold production of 69,227 ounces from 385,292 tonnes grading 5.6 g/t of gold (Karpoff, 1986). The ore was milled at the Wasamac No.1 mine concentrator located 6 km to the east. During 1973 and 1974, the property was optioned to Kerr Addison Mines Ltd. and Noranda Exploration Corporation Ltd. They drilled five (5) holes along the Francoeur-Wasa shear zone with little success (GM 29431, GM 30512). Finally, exploration work, including three deep holes (FR-82-1, 2 and 17), was carried out from 1980 to 1984 by Long Lac Exploration Ltd. (GM 40041, GM 41362). In October 1985, Ressources Minières Rouyn (“RMR”, now Richmont Mines) signed an option agreement with Lac Minerals for the acquisition of a 50% interest on the Francoeur property. An assessment of the property was commissioned in order to evaluate the remaining resources left in place by Wright-Hargreaves. Karpoff (1986) evaluated that approximately 416,402 tonnes grading 7.54 g/t Au were still accessible by the Wasamac shaft No.2 (now shaft No.6). In the spring of 1986, RMR started the dewatering and the rehabilitation of the underground infrastructures. In 1986 and 1987, a total of 27,799 m of surface diamond drilling in 75 holes was carried out on zones 1, 2, 8, and below the 11thlevel of Zone 3. At the same time, surface facilities were installed and underground diamond drilling confirmed the previously reported in situ reserves. The surface diamond drilling program delineated more than 1 million tonnes of possible reserves under the 11thlevel of Zone 3. During the spring of 1988, RMR extracted a 23,111 tonne bulk sample grading 6.8 g/t Au from the No.3 deposit. The ore was successfully processed at Lac Minerals Ltd.’s mill located in Malartic, Québec and mining operations from the No.6 shaft started the same year. Considering the shallow dip of the Zone 3 (42°N), it was then evaluated that it would be more profitable to sink a new shaft 650 m north of the No.6 shaft thereby giving access to the resources found under the lowest level (11th). This is why the Jean-Guy Rivard (No.7) shaft was sunk in May 1989 to a final depth of 818 metres. In June 1991, RMR’s name was changed to Richmont Mines Inc. On October 1st, 1991, development work was completed and commercial production began at a rate of 400 tonnes per day. From 1992 to 1994, production was increased from 500 tons to 800 tonnes per day.
  In June 1992, Richmont Mines acquired Lac Minerals’ 50% share of the Francoeur and Wasamac properties. In 1993, Richmont Mines bought the Camflo Mill and began processing Francoeur’s ore. The ore was previously processed at East Malartic Mill (Québec) and Deak Resources in Virginiatown, Ontario. The exploration program conducted at the Francoeur property in 1997 was successful in discovering Zone 7, which is different, in terms of dipping, from the No.3 deposit. This zone was dipping south (70-75°) while the main gold-bearing structure was dipping north (40-45°). Following the discovery of Zone 7, a major development program was undertaken in 1998. Rehabilitation work was done in shaft No.6 and access drifting 38


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and infill drilling commenced on levels 4, 6 and 7. In 1999, development work on levels 4, 6 and 7 and related sublevels were completed. Commercial production of Zone 7 resumed at the beginning of February 2000. From 1991 to 2001, the Francoeur Mine produced 1,701,892 tonnes of ore at a grade of 6.31 g/t (345,436 ounces of gold). In 2001, 2002 and 2003, Richmont conducted exploration work in the west part of the mine. Given the low gold price, the mine was closed and site restoration began. Richmont acquired the adjacent Norex property in February 2002. Following the closure of the mine, minimal exploration work was conducted to keep the mining concessions and leases in good standing and only 4 exploration holes were drilled from surface between 2005 and 2007. The target was an auriferous shear subsidiary to the Francoeur-Wasa shear zone. As a result of the higher gold price over the last few years, Richmont decided to proceed with an exploration program. An exploration drilling program was completed in 2009 with approximately 7,500 m of drilling.
  A technical 43-101 report was produced in 2009 and the dewatering of the mine was undertaken. At the end of 2009, 8 out of the mine’s 17 levels had been dewatered, and the surface infrastructure had been fully re-commissioned. The Corporation began drift excavation and underground mine preparation work on this property when dewatering of the mine was completed at the end of the second quarter of 2010. As of December 31, 2010, 1,239 metres of underground development had been completed. From 2010 to November 2012, 639 diamond drill holes were done over a total of 46,489 metres to define the West Zone. A new reserve estimate was completed in June 2012 and a 43-101 Technical Report was filed on SEDAR on August 17, 2012. Furthermore, an exploration drift and rehabilitation work were done on levels 12 to 17 as was the access ramp between levels 16 and 17. The Francoeur Mine began commercial production on August 1st, 2012. The ramp was being advanced below level 17 until the announcement of the mine closure on November 29th, 2012. Geological Setting **Regional Geology** The property is located in the Rouyn-Noranda area, a typical sector of the Archean aged Abitibi greenstone belt located in the eastern part of the Superior Province. The Superior Province is the largest exposed Archean craton in the world that hosts several world class gold deposits. It has yielded nearly 300 million ounces of gold from hundreds of deposits since the beginning of the twentieth century. **Project Geology** The Francoeur Mine includes the Francoeur No.1, No.2 and No.3 deposits. They occur along the Francoeur-Wasa shear zone and, from east to west, together with the Arntfield No.1, No.2, and No.3 deposits, the Wasamac Mine and the Wingate deposit. Despite the showing of local differences, all of these deposits are very similar to one another in both geological aspects and types of mineralization. The Francoeur No.3 deposit was the largest one of them all. **Mineralization** The ore zones of the Francoeur deposits are generally made up of distinct lenticular and tabular bodies up to one metre in thickness, and form buff or beige coloured bands, called BB bands. All the BB bands are mainly composed of carbonate, albite, pyrite and minor amounts of quartz and rutile, with trace amounts of sericite and gold. There is no evidence of stratigraphic control on the gold deposition in the Francoeur Mine. 39


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Instead, the gold emplacement apparently developed in the shear zone and is partially related to albitite dikes. A similar lack of stratigraphic control was noted for deposits adjacent to the Cadillac Break in the Noranda district of Quebec. The nature of the contacts of gold ore bodies with enclosing mylonitic schist is quite variable. There are two types of basic contacts, one of which is faulted, while the other may be sharp or gradational. The BB bands display a wide variety of textures ranging from a foliated micro-breccia, to more common fine grained and very well laminated rock. They contain on average 20 to 40 g/t Au and the grade can reach 50 g/t Au locally. The gold is commonly in its native form and is very fine-grained. Gold grains are usually associated with small pyrite crystals, but a proportion is also disseminated in the finely recrystallized carbonate-albite matrix. **2012 Development** In 2012, necessary developments were completed permitting the Francoeur Mine to begin commercial production on August 1st, 2012. At the end of November, the mine had 153 employees, an increase from the 119 employees at the end of 2011. Development rhythm to access reserves below the 17thlevel was as planned for the year. At the announcement of the mine closure on November 29, 2012, mechanized sub-level 18-3 had been reached and ore development had been completed over several metres. A total of 4,107 metres of underground development and 23,567 metres of definition drilling were completed during the year at Francoeur. On November 29th, 2012, the Corporation announced the immediate closure of the Francoeur Mine. Constant high production costs due to low gold grade, difficult mining conditions and the lack of experienced miners required to run the mine in those particular conditions, within a context in which Management was not able to see significant improvements in the future, were the main factors which led to the decision to close the mine. Gold commercial production at the mine ceased on November 30th, 2012 and the Corporation subsequently began the estimated 4 months closing process. **Exploration** A considerable amount of exploration and development work has been carried out on the Francoeur property since the discovery of the first gold-bearing veins in the 1920’s. Richmont Mines has carried out major underground exploration programs along extensions of known mining blocks. **Methodology** Generally, most of the boreholes at the Francoeur deposit were set-up on transversal sections allowing them to intersect mineralized zones at a right angle. Off-section holes were drilled when underground openings were not available. Exploration programs were generally split into two categories: 20 m x 30 m spaced exploration holes;10 m x 15 m spaced definition holes. For the West Zone, because exploration boreholes were set-up in the footwall of the mineralized zones, they crosscut them at a very acute angle. For example, borehole R-882B started at a dip of -46° and finished 697.08 m deeper at a dip of 0°. The West Zone, which dips 42° north, was intersected over 9.90 m along the core (from 547.80 to 557.70 m and represents, in fact, a horizontal width of 2.64 m or a true thickness of 1.70 m). Definition drilling done in the West Zone was planned to intersect as perpendicularly as possible the mineralized zone. The drilling spacing can go down to 10 m x 15 m in certain areas. 40


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**Sampling** The rock sampling methods used underground were core drilling, wall sampling and rock blasting. Borehole and wall sampling assay results were used to determine the grade of mining blocks. Muck samples were taken from blasted ore in wagons transporting gold-bearing mineralization to the ore pass. These samples were used in the grade reconciliations and in calculations of reserves. Grades from development work and active stopes were compiled on a monthly basis and transferred to sections and plan views. Grade values were assigned to that part of development work carried out during the current month. Specific procedures had to be followed during the sampling process as each sample for every 12 tons of ore has to be representative of the broken rock. Two sampling methods were applied at the Francoeur Mine: (1)   Core sampling: sample lengths of exploration holes with varying geological parameters such as, for example, the amount of sulphides on both walls of a vein. The core of exploration holes was split in half with a diamond saw blade leaving a remaining sample as a reference for any subsequent detailed studies. Rejects were stored three months at the assay lab and, after that period of time, they could be shipped to the client if requested. When mineral resources were found by any exploration programs, a definition drilling program was initiated to verify the repeatability of the grades and better define the geometry of the orebody. Core from definition holes were analyzed entirely.(2)   Muck sampling: several sampling procedures were applied in the past at the Francoeur mine. The most widely used method was the sampling of trams, comprised of the following procedures: Collect two handfuls of muck of every size per 4-ton tram (4 tons) or three handfuls per 5-ton tram, avoiding grabbing fine material;The collected material should be randomly taken and be representative of the whole tram;Samples should be collected at the ore pass;One sample bag should weigh a minimum of 6 pounds and represent the muck from 4 wagons or 16 to 20 tonnes; andThere is a tag number for each bag and the sampling book should contain the following information: date of sampling, level, stope identification, number of sampled wagons and sampler initials. **Assays** Expert Laboratory of Rouyn-Noranda was the laboratory used for sample assaying in 2012. The sampling and assaying procedures of Expert Laboratory are: Sample Preparation 1.   Receiving SamplesUpon receipt, samples are placed in numerical order and compared with the client packing list to verify receipt of all samples. If the client does not provide a packing list with the shipment, one will be prepared by the person unpacking the samples. If the samples received do not correspond to the client list, the client will be notified. 41


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2.   Sample PreparationSamples are dried if necessary and then reduced to -1/4 inch with a jaw crusher. The jaw crusher is cleaned with compressed air and barren material between sample batches. The sample is then reduced to 90% -10 mesh with a roll crusher. The roll crusher is cleaned between samples with a wire brush and compressed air and barren material between sample batches. The first sample of each sample batch is screened at 10 mesh to determine that 90% passes 10 mesh. Should 90% not pass, the roll crusher is adjusted and another test is done. Screen test results are recorded in the log book provided for this purpose. The sample is then riffled using a Jones type riffle to approximately 300 g. Excess material is stored for the client as a crusher reject. The 300 g portion is pulverized to 90% -200 mesh in a ring and puck type pulverizer, the pulverizer is cleaned between samples with compressed air and silica sand between batches. The first sample of each batch is screened at 200 mesh to determine that 90% passes 200 mesh. Should 90% not pass, the pulverizing time is increased and another test is done. Screen test results are recorded in the log book provided for this purpose. Gold fire assay geochem A 29.166 g sample is weighed in a crucible that has been previously charged with approximately 130 g of flux. The sample is then mixed and 1 mg of silver nitrate is added. The sample is then fused at 1,800o F for approximately 45 minutes. The sample is then poured into a conical mold and allowed to cool. After cooling, the slag is broken off and the lead button weighing 25 – 30 g is recovered. This lead button is then cupelled at 1,600o F until all the lead is oxidized. After cooling, the dore bead is placed in a 12 X 75 mm test tube. 0.2 ml of 1:1 nitric acid is added and allowed to react in a water bath for 30 minutes. 0.3 ml of concentrated hydrochloric acid is then added and allowed to react in the water bath for 30 minutes. The sample is then removed from the water bath and 4.5 ml of distilled water is added. The sample is thoroughly mixed, allowed to settle and the gold is determined by atomic absorption. Each furnace batch is comprised of 28 samples that include a reagent blank and gold standard. Crucibles are not reused until the result of the sample that was previously in each crucible has been obtained. Crucibles that have had gold values of 200 ppb are discarded. The lower detection limit is 5 ppb and samples assaying over 1,000 ppb are checked gravimetrically. Gold fire assay gravimetric A 29.166 g sample is weighed in a crucible that has been previously charged with approximately 130 g of flux. The sample is then mixed and 2 g of silver nitrate is added. The sample is then fused at 1,800o F for approximately 45 minutes. The sample is then poured in a conical mold and allowed to cool. After cooling, the slag is broken off and the lead button weighing 25 – 30 g is recovered. This lead button is then cupelled at 1,600o F until all the lead is oxidized. After cooling, the dore bead is flattened with a hammer and placed in a porcelain parting cup. The cup is filled with 1:7 nitric acid and heated to dissolve the silver. When the reaction appears to be finished, a drop of concentrated nitric acid is added and the sample is observed to ensure there is no further action. The gold bead is then washed several times with hot distilled water, then is dried, annealed, cooled and weighed. Each furnace batch is comprised of 28 samples that include a reagent blank and gold standard. Crucibles are not reused until the result of the sample that was previously in each crucible has been obtained. Crucibles that have gold values of 3.00 g/t are discarded. The lower detection limit is 0.03 g/t and there is no upper limit. All values over 3.00 g/t are verified before reporting. **Quality control** A “Quality Assurance/Quality Control” (“QA/QC”) program was followed in 2012. One Rocklabs official standard and one blank sample were added to every 100 sample lot sent to Expert Laboratory. 42


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**Security of Samples** In 2012, Francoeur’ samples were brought to the laboratory by laboratory people. Mineral Reserve Estimates All the results of the definition drilling done in 2011 and in the beginning of 2012 were used to do the re-estimation of the Francoeur Mineral reserve in June 2012. Mining costs, gold price and cut-off grade were also updated. As of June 15th, 2012, proven and probable reserves of the Francoeur Mine were re-estimated to be 504,687 tonnes at a grade of 4.78 g/t Au for a total of 77,580 ounces of gold. Technical parameters used for this reserve estimation are described in the technical report filed on SEDAR on August 17th, 2012. See “ITEM 3. KEY INFORMATION - D. Risk Factors – Risks Associated with the Mining Industry– The estimates of mineral reserves and forecasts of the production are subject to numerous uncertainties, and the production and recovery of reserve estimates appearing in the Annual Report may not be realized” for a discussion of the risks inherent in estimating reserves and production. When the mine was closed on November 30th, 2012, the Corporation decided to retain a crew of miners to muck out all the blasted material that remained in the stopes. A new reserve estimation as of December 31th, 2012, was completed for the Francoeur Mine. Only the blasted material remaining in the stopes and the material in surface ore stockpiles was accounted for as reserves. All the mineralisation that was defined by underground development and by all the definition drilling assay results received as of November 29, 2012 was reclassified as resources. Mining methods Generally speaking, the room-and-pillar method is considered when the rock quality determination (“RQD”) is lower than 25% and for gold-bearing structures with a maximum dip of 40°. Long-hole or shrinkage-stoping methods can be envisioned when the RQD is higher than 25% and when gold-bearing structures have a minimum dip of 45°. Historically, the rate of recovery of the room-and-pillar method was 85% with an external dilution of 15% at a grade of 0.68 g/t (0.02 oz/st). These parameters were used to establish the probable reserves of the West Zone. The long-hole method was used when the orebody was dipping at more than 45°. At this critical dip, the scraping of the blasted ore was required before doing any progression in the stope. As soon as the dip of the orebody is 50° and higher, the blasted ore falls downward due to gravity to the lower level without any scraping manoeuvres. The historical rate of recovery of the long-hole method at the Francoeur Mine is 95%. Pillars of various dimensions have been left in the stopes allowing a better stability of the hanging-wall and a minimum dilution (±15%). **Cut-off Grade** A cut-off grade of 4.30 g/t was used for the December 31, 2012 final reserves calculation. **Mineral Reserve Estimation** Following the closure of the Francoeur Mine on November 30, 2012, only broken tonnes in the stopes and broken tonnage in stockpiles have been considered as reserves. 43


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As at December 31, 2012, the Mineral Reserves of the Francoeur Mine are estimated at: Reserve Category   Tonnes   Grade   Au(metric)   (g/t Au)   (oz)Proven (broken underground)   5,826   4.48   839Proven (broken in stockpile)   2,613   4.61   387Total proven   8,439   4.52   1,226
  Mining Operations and Metallurgy Francoeur commercial production began on August 1st, 2012 and ceased on November 30, 2012. The Francoeur Mine was in commercial production for 4 months. In 2012, 62,204 tonnes of ore from the Francoeur Mine were treated at the Camflo Mill at a grade of 4.05 g/t, producing 8,089 ounces of gold. The mucking of the underground blasted ore and the treatment at the Camflo Mill will continue during the first quarter of 2013. 44


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3.   Island Gold Mine, Dubreuilville, Ontario, Canada Location and Property Description The Island Gold Mine is located approximately 50 km northeast of Wawa, Ontario, in the Sault Ste. Marie Mining Division. Dubreuilville, Ontario, is approximately 10 km northwest of the Island Gold Mine. Description of Mining Rights The Island Gold property is divided in seven parts and consists of 189 patented, leased and staked claims totalling 5,912 ha. Property   Number of   Area (ha)   Expiration date   Richmont Minesclaims         Ownership (%)Kremzar   20   398   Patented Claims:taxes are paid every year,2 Mining Leases: 02/28/2022 to 06/30/2030   100Lochalsh   31   370   Patented Claims:taxes are paid every yearMining Leases: 06/30/2030 to 03/31/2032Claims: 03/26/2013 to 04/25/2014   100Goudreau   64   1,007   Patented Claims:taxes are paid every year1 Claim: 08/20/2013   100Island Gold   25   3,326   Claims: 03/05/2013 to 10/25/2014   100Edwards   43   707   Patented Claims:taxes are paid every yearClaim: 04/05/2013 to 07/24/2014   100Ego   3   64   Patented Claims:taxes are paid every yearClaims: 06/03/2014   100Salo   3   40   Patented Claims:taxes are paid every yearClaims: 06/08/2013 to12/28/2013   100
  The claims will be renewed by applying excess credits available before the anniversary date. Taxes are paid annually to the government to keep Patented Claims and Mining Leases in good standing. Richmont Mines has an internal procedure to ensure monitoring of the claims expiry dates. All of these mining claims, mining leases and patented leases were in good standing in 2012 and are expected to be for 2013. A mining lease has been renewed in 2012. A detailed list and map of locations can be found in the Island Gold 43-101 Technical Report dated May 15, 2007, and filed on May 25, 2007 under the Corporation’s profile on the SEDAR web site at www.sedar.com. 45


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**Summary of Agreements** Richmont Mines entered into an agreement with Patricia Mining on August 28, 2003. Under the agreement, Richmont Mines completed a private placement investment of $1.0 million in common shares of Patricia Mining at $0.50 per share and obtained an option to acquire a 55% interest in the Island Gold property by investing up to $10 million or by bringing the project into commercial production. This initial investment was used to partly finance a $3 million exploration program on the Island Gold project. On December 3, 2004, Richmont Mines decided to invest up to $10 million in order to acquire a 55% interest in this project. Richmont Mines became the project operator as of January 1, 2005. During the course of the fourth quarter 2005, after having fulfilled its obligation to invest $10 million for the project development, the Corporation acquired its 55% interest. In January 2006, Richmont Mines and Patricia Mining announced the purchase of the remaining joint venture interest of Algoma Steel Inc. (“Algoma”) in the Goudreau property near Dubreuilville, Ontario, for $100 thousand. The property remains subject to the 15% net profits interest royalty as per the original joint venture agreement between Algoma and Patricia Mining. On December 16, 2008, Richmont Mines acquired all of the common shares of Patricia Mining that it did not already own pursuant to a plan of arrangement under the Business Corporations Act(Ontario). As a result of this transaction, Richmont Mines owns a 100% interest in the Island Gold Mine. On May 9, 2012, Richmont Mines acquired Red Pine Exploration’s remaining 25% interest in the Edwards property, bringing the Corporation’s ownership to 100%, and on June 13, 2012, the Corporation acquired the Salo property, which includes 3 claims located to the East of the Island Gold Mine. Ownership of Mining Rights All mining titles on the Island Gold project were jointly held by Richmont Mines (55%), and Patricia Mining (45%). Since the acquisition of Patricia Mining on December 16, 2008, Richmont Mines holds 100% of all mining titles relating to the Island Gold property. Following the acquisition, the mining rights owned by Patricia (45%) were transferred to Richmont Mines in February and March 2009. Mining Royalties All the Island Gold properties held by Richmont Mines are subject to the payment of royalties and financial contractual obligations. Details can be found in the Island Gold 43-101 Technical Report dated May 15, 2007 and filed on May 25, 2007 under the Corporation’s profile on the SEDAR website at www.sedar.com. The Kremzar Property is subject to a 4% NSR payable to Algoma. The Algoma NSR will become payable at such time as the aggregate amount of NSR received by the Corporation and Teck Resources Ltd. (“Teck”) (formerly Aur Resources Inc.) equals the aggregate preproduction costs. The Kremzar Property is also subject to a 3% NSR payable to Teck, which is payable until such time as the Algoma NSR becomes payable. In the event that the Algoma NSR becomes payable and is reduced below 4%, Teck will be entitled to receive a net smelter return equal to 50% of the amount by which the Algoma royalty is reduced, payable on the same terms as the Algoma NSR. The Lochalsh Property is subject to a 3% NSR payable to Teck. The Goudreau Property is subject to a 2% NSR payable to Teck and a 15% NPI royalty payable to Algoma. Red Pine Exploration owns a 2% NSR on the Edwards property. 46


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Environmental Obligations and Permits The permit to operate the Kremzar Mill, located on the Island Gold Mine property, was amended in September 2008 to include water treatment to clarify the effluent of the primary pond. The treatment is done by adding a coagulant and a flocculant. The new permit number is 0734-7HYHVH.The Lochalsh closure plan was approved on April 30, 2007. As of December 31, 2010, an amount of $183.5 thousand is in place to cover the closure costs.The Ontario Ministry of Northern Development and Mines ("MNDM") has a financial guarantee of $979.1 thousand for Kremzar which is distributed as follows: $572.6 thousand for demolition costs of the mill (costs discounted at the end of May 2010 by an outside firm), $11.0 thousand for others costs and $395.6 thousand for the Kremzar Mine (costs discounted at December 31, 2009 and accepted by the MNDM in January 2010). These costs were also reconfirmed by the amendment of September 2010 for the enhancement of existing dikes. Infrastructure The Island Gold Mine infrastructure includes the primary tailings pond, the secondary settling pond, the Kremzar Mill (a carbon-in-pulp mill with a capacity of 850 tonnes per day), the Lochalsh ramp and portal, the mine access road, and the hydro lines. An office, a core logging and storage facility, and a locker-room are also located on the Kremzar Mine site. Location of Mineralized Zones The mineralized zones, including the reserves of the Island Zone and underground infrastructure, are located on mining leases 991853, 991854 and 991852 and patented claim 2075 of the Lochalsh property, and the ramp and waste pad are on patented claims 1776 and 1710 of the Goudreau property. The reserves of Lochalsh are located on mining leases 825288 and 825287 of the Lochalsh property. Accessibility Access to the Island Gold Mine is via an all-weather road from Highway 519, just west of Dubreuilville, Ontario. This village is located approximately 35 km east of the junction between Highways 17 and 519. It takes approximately one hour to drive from Wawa, Ontario, to the mine site. Climate The mine is located within the Lake Superior Regional climatic zone, moderated by the influence of Lake Superior. The average day time temperature is 2°C, ranging from -41°C to 31°C throughout the year. Annual precipitation is normally 669 mm of rain and 278 cm of snow. Winter winds are from the northwest and north, and during the summer south westerly to westerly winds prevail. The climate does not affect the mining operation, which extends all year long. Local Resources and Infrastructure Wawa has a population of approximately 3,500. Dubreuilville was a forestry community with a lumber mill which is now closed and a population of approximately 900. The Island Gold Mine is also within a few kilometres of railway lines operated by Canadian National Railways and Algoma Railways. Sidings for each of these railway lines are located at the villages of Goudreau and Lochalsh. A power substation connected to the provincial power grid, water supply, gravel roads, offices, maintenance buildings and living accommodation are all available within the Mine area. Power is supplied by Algoma Power Inc. (formerly Great Lakes Power Corporation). 47


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Richmont Mines also offers living accommodations and flexible schedules to its employees. Training is offered in order to maintain a local qualified workforce. Physiography The property area is within the Precambrian Shield adjacent to Lake Superior, in an area of low rolling hills that trend in an east-west direction with widespread swamps, and mixed forests of broadleafs and conifers. Property relief is low, from a high point of 488 metres above sea level near Miller and Maskinonge Lakes, to a topographic low point of 381 metres above sea level near Goudreau Creek. The Mine area has been partially logged. Exploration History In 1983, Canamax Resources Inc. (“Canamax”) and Algoma formed a joint venture to evaluate the mineral potential of Algoma's 117 patented claims covering the Goudreau iron range. In 1985, drilling by Canamax about two kilometres south of the Kremzar mine intersected a series of sub-parallel lenses containing gold mineralization within deformed rocks of the Goudreau Lake Deformation Zone (“GLDZ”). These lenses are known as the Lochalsh, Island Gold, Shore and Goudreau Lake zones. During 1989 and 1990, a 1,280 metre long ramp was driven into the Island deposit beneath Goudreau Lake from an adit on the north shore. Drifts and raises totalling 382 metres were developed on two levels at depths of 125 metres and 140 metres below the Goudreau Lake elevation. A bulk sample weighing 4,167 tonnes was extracted and processed at the Kremzar Mill. Patricia Mining acquired the project in 1996 and completed 16,862 metres of diamond drilling in 49 holes on the Island deposit and Lochalsh Zone between 1996 and 2002. In 2004, Patricia Mining started an underground exploration program at a cost of $3.0 million. A total of 125 metres of exploration drifts, 53 metres of ore sill and 8,137 metres of drilling have been completed. In 2005, Richmont Mines completed 2,111 metres of underground development and 7,903 metres of delimitation drilling. A total of 7,259 tonnes with a content of 6.23 g/t Au from ore development were stockpiled on the surface. In 2006, Richmont Mines continued the exploration program. A total of 3,469 metres of development were completed including 506.5 metres of ramps and 1,700.5 metres of ore silling. A total of 56,861 tonnes of development ore with a content of 6.96 g/t Au were stockpiled on the surface. At the end of December, a total of 41,531 tonnes of mineralized material grading 4.80 g/t Au were processed at the mill. A total of 28,149 metres of underground diamond drilling were performed on the Island Zone, and 10,602 metres of drilling were completed from the surface on the Lochalsh and Goudreau zones. Reserve estimates were performed by Genivar in 2007 based on this work. On October 1, 2007, Island Gold began commercial production. On December 16, 2008, Richmont Mines acquired all of the outstanding shares of Patricia Mining and now owns a 100% interest in the property. During 2009, underground drilling at the Island Gold Mine represented 212 drill holes totalling 26,914 metres. Approximately half of these metres were exploration holes in the Lochalsh, Goudreau and Extension-2 zones. The drilling confirmed the presence and continuity of the targeted zones. A surface diamond drilling program was implemented in conjunction with the underground drilling. The goal of this program was to primarily test the near surface eastern and western extensions of the known zones in the vicinity of Island Gold Mine. In 2010, Richmont Mines continued its underground exploration program via drilling and drifting. The excavations were done in waste rock to continue the exploration access drifts towards the Extension-2 sector of the E1E Zone, the Goudreau and the Lochalsh zones. This development also permitted exploration diamond drilling in the Extension-2 sector of the E1E Zone, the Lochalsh and the Goudreau zones. During 2010, underground drilling at the Island Gold Mine included 12,110 metres of definition drilling and 24,423 metres of 48


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exploration drilling. These metres were exploration holes in the Lochalsh, Extension-1, Goudreau and Extension-2 zones. Drilling confirmed the presence and continuity of the targeted zones. The delineation drilling into the Extension-1 sector of the E1E and the Lochalsh sector permitted the conversion of Probable Reserves into Proven Reserves. The exploration drilling in the Extension-2 sector of the E1E resulted in the addition of Probable Reserves. A surface diamond drilling program was implemented in conjunction with the underground drilling during 2010. The goal of this program was to primarily test the eastern, western and depth extensions of the known zones in the vicinity of Island Gold Mine. The 2010 surface exploration drill program was completed in December 2010. The program consisted of 30,015 metres. The drilling on the projected eastern, western and depth extensions of the mine structure horizon was successful in identifying the continuance of similar alteration, mineralization and shearing over one kilometre east of the Island Gold Deposit under Goudreau Lake. A total of 58,958 metres of drilling were completed in 2011. Nearly 26,000 metres of underground definition drilling were completed in the areas of Lochalsh, Goudreau and Extensions 2 and 3. These holes have allowed, along with others, for the conversion of a portion of the resources into reserves. Drilling below the 400 level was mainly done from the surface and once again demonstrated the depth potential of this mine. More specifically, drilling has identified four main areas (G, C, D and E1E) between the -500 and -900 m levels over a 150 metre corridor extending between the Main Island and Lochalsh areas. A total of 85,509 metres of drilling was done in 2012 at Island Gold, nearly 60,534 metres of which were done underground. Definition drilling in Lochalsh, Goudreau and Extensions 2 and 3 permitted, along with other drill holes, to convert a part of resources into reserves. Drilling below the 400 level was done from surface and from underground, and demonstrated the potential at depth of this mine (Island Gold Deep program). Geological Setting **Regional Geology** The Island Gold property is part of the Michipicoten greenstone belt which is part of the Wawa sub-province and Superior Province of Archean age. The property is stratigraphically positioned in the upper portion of the Wawa Assemblage, composed by intermediate to felsic volcanic rocks capped by pyrite-bearing iron formations. **Project Geology** The Island Gold property covers part of the interface between the Catfish assemblage, composed of mafic rocks, and the Wawa assemblage, which consists of felsic rocks. The pyrite-rich Goudreau iron formation lies at the contact between the Wawa and Catfish assemblages. A unit of pyroclastic rocks marks the transition between the two assemblages and hosts the gold occurrences encountered on the property. This gold mineralization is controlled by the Goudreau Lake Deformation zone (the “GLDZ”). The GLDZ hosts the Island, Lochalsh, Goudreau, Shore, and north shear gold zones, all located within the Island Gold property. **Mineralization** Within the GLDZ are a series of parallel shear zones, up to 25 metre wide by several hundred metres long, with dips ranging from -70° to -90°, that host the gold mineralization. Moderate to high strain intensity is present within the shear zones containing pervasive alterations occurring in the form of iron carbonate, silica and calcite. Within areas of intense sericitization and silicification with 2% to 5% pyrite are narrow, subparallel quartz veins carrying gold mineralization. Gold is found primarily in quartz stringers and in veins 1 centimetre to 1.5 metres wide. Finely disseminated gold occurs in clusters up to 3 mm in diameter. At the Island Gold deposit, 5 zones referred to as E1, E, D1, D, and C, are defined and characterized by the presence of alteration halos ranging from 0.5 metres to over 8 metres in thickness, and are comprised of intense silica alteration, albite alteration and quartz-carbonate veins. Two dominant envelopes are defined, namely the C/D envelope and the E/E1 envelope, which includes the D1 Zone. An anastamosing pattern defines the relationship between the zones. 49


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The mineralized C Zone, which is being defined, corresponds to the continuation at depth of the mineralized zones which are mined at present above the -400 m level. The mineralization undergoes an inflection southward between the -400 m and -500 m levels, before returning with a high dip southward at depth. The average width of the mineralized C Zone is approximately 4.5 metres, wich is above the average of 2.7 metres in mineralized zones above the level 400 m. Also, it seems that the number of gold-bearing quartz veins inside the alteration zone of the C Zone is slightly greater, with also numerous drill holes containing some visible gold, which translates into a higher average grade. 2012 Results **Production** For the 12 months ended December 31, 2012, 246,743 tonnes of ore were processed at the Island Gold Mine at an average recovered grade of 5.45 g/t, and 41,686 ounces of gold were sold at an average price of US$1,666 (CAN$1,665) per ounce. This compared to 261,731 tonnes of ore processed at an average recovered grade of 6.10 g/t, and gold sales of 49,196 ounces at an average price of US$1,566 (CAN$1,549) per ounce for 2011. The year-over-year variation reflected a 6% decrease in tonnage and a 10% decrease in recovered grades slightly offset by a small increase in the recovery rate. Cash costs at Island Gold increased in Canadian dollars during the last 12 months, from US$766 (CAN$758) in 2011 to US$884 (CAN$884) in 2012, primarily a reflection of the decrease in recovered grade and higher mining costs as fewer tonnes were processed. **Island Gold Mine** 2012   2011   2010Tonnes   246,743   261,731   251,237Head grade (g/t)   5.45   6.10   5.95Gold recovery (%)   96.45   95.91   95.49Recovered grade (g/t)   5.25   5.85   5.68Ounces sold   41,686   49,196   45,865Cash cost per ounce (US$)   884   766   783Investment in property, plant and equipment (thousands of CAN$)   8,364   4,959   4,650Exploration expenses (thousands of CAN$)   10,969   5,549   4,561Deferred development (metres)   1,135   1,821   2,478Diamond drilling (metres)Definition   16,425   13,080   12,110Exploration   69,084   45,878   54,438
  **Exploration** Richmont’s objective is to increase the reserves of this property and the Corporation remains confident regarding the long-term possibilities of Island Gold. To this end, an exploration drilling program totalling 69,084 metres was completed in 2012 from the new underground exploration drift being extended towards the -470 m level. Emphasis was placed on underground and surface exploration, and was specifically focused on the program at depth (Island Gold Deep). Less definition and delineation drilling was completed during 2012 near the mine infrastructures, which resulted in a decrease in the reserves of the mine. The Corporation plans to complete 79,700 metres of drilling at Island Gold in 2013 with a dual purpose of defining new reserves near current infrastructures of the Island Gold Deep (C Zone and other previously identified zones). 50


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In 2013, the Corporation plans to extend the existing ramp from its current depth of 450 metres below surface, and to commence work on the first segment of a vertical shaft which will be raise-bored from a depth of 450 metres to surface. **Drilling** Most of the drill holes are planned on vertical cross-sections, in order to intercept mineralized zones at right angles along a grid spacing of 20 metres by 15 metres, targeting alteration assemblages in the E1E Zone. Drilling operations are performed by a drilling contractor, under the supervision of the geological staff at the Island Gold Mine. Underground drill holes are BQ or NQ calibre. Core recovery is 100%. The drill core is logged in detail by experienced and highly skilled staff, following established guidelines for the Island Gold Mine. A rock quality designation (“RQD”) analysis was completed for most of the drill holes drilled in the 2011 program and the RQD for the zones is excellent (› 90%). The interpretation and development of each section was completed after receipt of the drill holes assays and section plots. This interpretation served to complete the reserve estimates. **Sampling** The drill hole sampling approach is defined to coincide with lithological contacts, and samples have a minimum width of 0.3 metres and a maximum length of one metre. The core recovery is very good and can be considered to be representative. The panel (or chip) sampling method consisted of taking horizontal representative samples of the geology (units or alteration) that was exposed either in the face or in the adjacent walls. The samples weighed an average of 1.5 kg to 2 kg for a zone of 1.5 vertical metres by 0.3 to 1.0 horizontal metres. Each face was sampled and the number of assays varied based on the geology and the opening. The drill cores and chip samples are representative and the mineralization style, with the presence of quartz veins and free gold, shows a nugget effect. **Assays** Swastika Laboratories (2008) Ltd. of Swastika, Ontario, was used to perform fire assay, gravimetric and specific gravity analyses for the underground drilling and development program in most part of 2011. During 2012, core samples were sent to Expert Laboratory in Rouyn-Noranda, QC, and also at Actlabs Laboratory located in Geraldton, Ontario. Many underground muck and chip samples were sent to the Wesdome assay lab in Wawa. Swastika laboratories are accredited ISO 9001-2000, and hold a Certificate of Laboratory Proficiency (PTP-MAL). Gold assays are completed by fire assay with 30 g of material with either a gravimetric or AA finish. The cut-off for gravimetric versus AA finish, has been established at 3 g/t Au. When the grade exceeds 30 g/t Au, a Metallic Sieve assay is performed. Detection limit for gold safely is at 3 ppb. Rejects and pulps are kept by the laboratory or stored at the Island Gold site. These methods and the routine sample preparation are described in the following section. A detailed procedure can be found in the Technical Report for the Island Gold as of May 15, 2007, filed on May 25, 2007 under the Corporation’s profile on the SEDAR web site at www.sedar.com. The step-by-step procedure for sample analyses is briefly described as follows: 1)   Dry samples, if required;2)   Crush total sample to 1⁄2 inch (Jaw Crusher);3)   Split approximately 350 g using a Riffle Jones;4)   Remaining rejects are placed in a plastic bag and packed in cartons with sample numbers listed on the outside; 51


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5)   Pulverize the 350 g sample;6)   Homogenize the pulp: it is then ready for assay;7)   Samples are then analyzed by fire assay with an absorption atomic or gravimetric finish. A total of 30 g of representative material are subjected to the fire assay and to gravimetric finish. The Pulp and Metallic Method was used to overcome sampling difficulties caused by coarse particles of gold, native silver or other similar metals that do not pulverize very well. Swastika’s adaptation of this method for Gold Assay is as follows: pulverize the entire sample if possible, screen through a 100 Mesh sieve (other Mesh sizes can be used depending on sample size and allowable deviation). The -100 Mesh fraction is weighed, homogenized and assayed in duplicate using one assay tonne (30 g) portions. The +100 Mesh fraction (approximately 20 g) is weighed and entirely fused. The correction resulting from gold found in the metallic portion is incorporated into the final calculated result. The weight and grade of both fractions are also reported. Following a study showing that there was a good correlation between fire assay with gravimetric finish and metallic results, it was decided in 2011 to stop using the metallic method. **Quality Control** In 2007, during the course of the geological confirmation program, an evaluation of “Quality Assurance/Quality Control” (“QA/QC”) data was done to address the three main concerns of analytical determination protocols, namely: (i) contamination, (ii) accuracy, and (iii) precision, as measured by the results obtained from field and analytical blank standards, certified reference standards and an assortment of specific duplicate samples collected and/or prepared, in addition to the regular samples submitted to the laboratory. A certified standard and blank assay was run with each sample batch. In addition, a replicate assay was run on every 10thsample to be used for checking the reproducibility of the assays. The results of the field and analytical blanks used to monitor for potential contamination during sample processing and assaying indicate that no significant contamination is likely to have occurred during the sampling/assaying programs completed for 2007. In 2011 and 2012, the QA/QC program was still in place with the addition of certified standards applied to samples submitted to the laboratory (Swastika, Expert Laboratory of Rouyn-Noranda and Actlabs of Geraldton). Each laboratory has its own QA/QC program with the addition of analytical blank standards and certified reference standards to each batch of assays. **Security of Samples** In 2005, the core logging facility and core storage area were established on the Kremzar Mine and milling site. A trailer was installed on site and is used as a core logging facility. A separate room was installed for core sawing and sample packing. The cores are stored outdoors in covered racks or as separate cross-piles. There is a gate on the mine access road and there are personnel working on site at all times. Individual sample bags are sealed. The samples are placed in large rice fiber bags and placed on pallets. Shipping of samples is done by a transportation company. Once in Swastika, the samples are collected by Swastika Laboratories staff and brought to the laboratory. The underground channel samples are shipped to the River Gold laboratory in Wawa by Island Gold staff. In 2012, a new and more functional coreshack was built near the old one on the Island Gold Mine site. 52


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Mineral Reserve Estimates Proven and Probable reserves at the Island Gold Mine were estimated at 785,221 tonnes of ore at a grade of 5.60 g/t, for 141,456 ounces of gold at December 31, 2012. This compared with Proven and Probable reserves of 959,523 tonnes of ore at a grade of 5.57 g/t, for 171,814 ounces of gold at December 31, 2011. The decrease reflects gold sales of 41,686 ounces from this mine during 2012, partially offset by additional reserves obtained from 16,425 metres of definition drilling completed during the year. Proven and Probable reserves at December 31, 2010 were 818,066 tonnes of ore at a grade of 6.13 g/t for 161,197 gold ounces. The increase from 2010 to 2011 was attributable to definition drilling during 2011, the results of which allowed Island Gold to replace its 2011 annual gold production. At December 31, 2012, Mineral Reserve estimates were supervised by Daniel Adam, P.Geo., Ph.D., Vice-President, Exploration, an employee of the Corporation, who is a qualified person under Regulation 43-101. Factors and parameters used in the determination of the Mineral Reserve estimates are based on the knowledge of the Island Gold Mine as of December 31, 2012. The Mineral Reserve estimates were carried out in accordance with Regulation 43-101 recommendations and regulations. Mineral Reserves were classified according to the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) classification and adopted by the CIM Council on December 11, 2005. All standards generally accepted in the mineral industry as well as Regulation 43-101 recommendations and CIM regulations for Mineral Reserve estimates have been fully complied with. See “ITEM 3. KEY INFORMATION - D. Risk Factors – Risks Associated with the Mining Industry– The estimates of mineral reserves and forecasts of the production are subject to numerous uncertainties, and the production and recovery of reserve estimates appearing in the Annual Report may not be realized” for a discussion of the risks inherent in estimating reserves and production. **Mineral Reserve Estimates** General The database and the parameters used to estimate the Mineral Reserves are based on the results from 2012, the forecast for 2013 and information available as at December 31, 2012 (January 25, 2013 for the C Zone at depth). The technical parameters were reviewed by Daniel Adam, P.Geo., Ph.D., Vice-President, Exploration, an employee of the Corporation. Thus, both the dilution and the ore-recovery factors by mining methods used in the reserve estimate are based on mining methods. All these factors and parameters will be updated on an annual basis in order to account for changes in mining operations. Technical Parameters The main parameters used to estimate Mineral Reserves are as follows: A cut-off grade of 3.0 g/t Au fixed with a gold price at CAN$1,450 per ounce with an exchange rate of CAN$1.00/US$1.00;Grade capping at 75 g/t Au for all zones;A minimum true thickness of 2.0 metres based on the mining method (longitudinal long holes);An average rock density of 2.82 t/m3is defined;Ore mining recovery: 95% for designed stopes - pillars between stopes have been excluded;External dilution: a dilution rate of 10% to 25% for waste at a grade of 0.5 g/t Au is assumed for stopes (% varies in function of the stope width). A dilution rate of 30% is assumed for development;Excluded mill recovery of approximately 95%. 53


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Estimation Method At the Island Gold Mine, the Gemcom GEMS 6.3.1 software was used to prepare the calculation. The reserve estimates were calculated following two distinct methods. Reserve estimation was done with block model using an inverse distance to the power 2 calculation for Island Main, Lochalsh and Goudreau sectors and using Ordinary Kriging for Extension 1 and 2. Regardless of the methods used, composites were established by the geological department for each drill hole and underground development face. The diamond drill hole composites were determined following an interpretation on vertical cross-sections and horizontal plans while the development composites were interpreted using the face mapping and assay results of each development face. Once individual composites were determined, each one was tagged in the database according to their individual zone name. Individual pierce points were generated on longitudinal sections for each zone. These longitudinal sections are a representation of an average plane through each mineralized zone. For the polygonal method, construction of the polygons is completed on longitudinal sections. An area of influence of 20 metres was determined for the development composite and the diamond drill holes. A 10 metre influence was used on the lateral extremities of the development composite to limit their influence. When all polygons are generated, a combination of the development and drill hole pierce points is created. After the ore block limits are determined and the grade and tonnes of each reserve block are calculated, specific dilution and ore recovery are factored into the final reserve estimate. All the geo-scientific data collected at the Island Gold Mine are entered into a Gemcom database. Internal procedures have been prepared in order to validate the information in the database. All this work is performed by the Island Gold Mine geology department and all steps, from data entry to layout drawings, follow strict and established procedures, including crosschecks to ensure full validity. Access to all databases is restricted to selected personnel in order to ensure complete integrity. **Cut-off Grade** The cut-off for the stope was established at 3.0 g/t Au. This cut-off was calculated using among other things 2012 production costs and anticipated 2013 production costs. Reserve Classification More detailed descriptions regarding classification of Mineral Reserves at the Island Gold Mine are set out below. **Proven Mineral Reserves** Ore development was completed above, below or on both levels of the ore block. If only one level was developed, a minimum drill spacing of 20 metres was necessary to confirm the vein continuity. An economic feasibility was estimated by the engineering department of the Island Gold Mine to validate the block as reserves. **Probable Mineral Reserves** No development was done above or below. Since the information from the ore development was lacking, a maximum drill hole spacing of 20 metres center to center was necessary to validate the vein continuity inside the ore block. Economic feasibility was estimated by the engineering department of the Island Gold Mine to validate the block as reserves. Dilution and mining recovery rates are included in the reserve calculation. 54


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**Reserve Table** As of December 31, 2012, the Mineral Reserves of the Island Gold Mine are estimated at: Reserve Categories   Tonnes   Grade   Au1(metric)   (g/t Au)   (oz)Proven   428,958   5.42   74,807Probable   356,263   5.82   66,649Total (Proven + Probable)   785,221   5.60   141,4561   Before mill recovery of 95%
  As of December 31, 2012, the Mineral Reserves at Island Gold were 141,456 ounces of gold, calculated using a long-term gold price of CAN$1,450 per ounce and an expected mine life of approximately three years. Mining Operations and Metallurgy The extraction method is by longitudinal long holes with a maximum panel length fixed by a hydraulic radius factor of 4.5. The Island Gold ore is hauled by truck to the Kremzar mill located at an approximate distance of 0.8 km from the portal of the ramp. The Kremzar mill is a traditional gold recovery mill using a conventional Carbon in Pulp (“CIP”) process, with circuits for crushing, grinding, gold cyanidation and carbon-in-pulp and two electrowinning (“EW”) cells. Gold recovery of the CIP circuit at the Kremzar mill is 95%. For the 12 months ended December 31, 2012, 41,686 ounces of gold were sold from the Island Gold Mine at an average price of US$1,666 (CAN$1,665) per ounce. This compared to gold sales of 49,196 ounces at an average price of US$1,566 (CAN$1,549) per ounce in 2011. Cash costs at Island Gold increased in Canadian dollars during the last 12 months, from US$766 (CAN$758) in 2011 to US$884 (CAN$884) in 2012, primarily as a reflection of the decrease in recovered grade and higher mining costs as fewer tonnes were processed. 2012      2011      2010Precious metals revenues (thousands of CAN$)      69,421      76,223      58,468Ounces sold      41,686      49,196      45,865Data per ounce of gold sold   US$   CAN$   US$   CAN$   US$   CAN$Cash cost   884   884   766   758   783   806Depreciation and depletion   181   181   161   159   115   118Total   1,065   1,065   927   917   898   924Average price obtained per ounce   1,666   1,665   1,566   1,549   1,238   1,275
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4.   Exploration Projects and Other Properties General Richmont Mines owns or holds interests in many mining properties at different stages of exploration. The following table outlines Richmont Mines’ interest in its exploration properties as at December 31, 2012. Property   Year of acquisition   Number of Mining titles   Participation1QuebecMonique   1994   18   100%Wasamac   1988   4   100%Camflo Northwest   2005   13   80%OntarioSewell   2002   6   100%Cripple Creek   2002   27   100%1   The Corporation will be required to pay royalties if some of these properties are brought into commercial production.
   4.1   Wasamac, Quebec, Canada Location and Property Description The Wasamac property is located approximately 15 km west of Rouyn-Noranda, Quebec, within the heart of the Abitibi gold mining district. Description of Mining Rights The Wasamac property consists of 3 mining concessions (CM 349, CM 364, and CM 370 for 757.65 ha) and a mining claim (CDC20098 for 1.71 ha) which cover a total area of 759.36 hectares in the Beauchastel township. Ownership of Mining Rights The Corporation owns 100% of the Wasamac property. Mining Royalties There are no royalties or back-in-rights related to any of the mining concessions. Environmental Obligations and Permits Restoration work of drilling sites was done in 2012 and is expected to be completed in 2013. To the knowledge of the Corporation, all necessary permits and approvals were sought and obtained for the work completed to date. Infrastructure In the past, the Wasamac Mine had an inclined shaft dipping to the North in the footwall of the Main Zone that was approximately 420 m deep. Drifting was done on 7 main levels (every 200 feet) until approximately -400 m below surface. Two lateral drifts accessed zones 1 and 2 towards the east (at the 400 foot and 800 foot levels). The mine was closed in 1971 and is now entirely flooded. All infrastructure was dismantled and equipment removed. The surface rights covering the area of the old infrastructure and of the tailings pond are still owned by Richmont. 56


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Hydro-Québec electric power is available from a provincial hydro line which runs along Provincial Highway 117. The Ontario Northland Railway runs north of the property, parallel to Provincial Highway 117. Location of Mineralized Zones The main mineralized zones currently known on the Wasamac property are located within the Wasa shear zone. This shear zone runs through the center of the property, and has an East-West orientation and a dip of about 50° to the North. Accessibility The property is located 15 km west of Rouyn-Noranda, province of Quebec in Canada. It is easily accessible from the Provincial Highway 117 that joins Rouyn-Noranda and the little community of Arntfield. The Wasamac property is directly accessible from Provincial Highway 117 and from a secondary road (Rang des Cavaliers) which leads directly to it. Climate The average temperatures are -17.2° C in January and +17.2° C in July based on measurements taken over 30 years in the area. There is an average of 61 cm of snow in December and 101.9 mm of rain in September. Local Resources and Infrastructure Rouyn-Noranda (pop. 41,475) is a well established mining community offering a vast amount of services. The Horne copper smelter is the most important employer with a workforce of more than 500 employees. Skilled administrative personnel, technicians, geologists, mining engineers and experienced miners are available in the area. However, as several advanced staged projects are currently active in the vicinity, it is now more difficult to find, recruit and retain manpower. Physiography The area straddles the coniferous and boreal zones. The forest cover is composed of 50% leafy and 50% resinous trees with a moderate commercial value. The Abitibian forest is a living habitat able to support a wide diversity of mammals and birds. Amongst these, beavers and moose are the most common species. Meanwhile, the moose habitat is somewhat restricted by the absence of large coniferous covers, human activities and the close proximity of the town of Rouyn-Noranda. Beaver dams hinder the water flow in several areas (including the Wasamac property) and aquatic fur animals like muskrats, minks and otters can cohabit in such an environment. Exploration History The Wasamac property has been the object of extensive past exploration work. The following section provides a brief exploration history. Gold mineralization was originally discovered in 1936 by Mine d’Or Champlain through surface trenching work. Subsequent surface diamond drilling intersected encouraging gold values but geological continuity seemed erratic. A 60 metre shaft (Wildcat Shaft) was sunk and one underground level was developed. In 1944, Mine d’Or Champlain changed its name to Wasa Lake Gold Mines and initiated a new exploration program. This led to the discovery of a new gold bearing zone, the Main Zone, located some 300 metres north of the Wildcat Zone. 57


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During the period from 1945 to 1948, an inclined shaft was sunk at a 55° angle down to the 1,000 foot level which was followed by significant development work on five underground levels. Ore reserves established at the time stood at just over 2 million tonnes at an average grade of 5.28 g/t Au (Regulation 43-101 non-compliant). In 1960, Barnat Mines Ltd., in association with Little Long Lac Gold Mines, gained control of Wasa Lake Gold Mines and changed its name to Wasamac Mines Ltd. A production decision was reached in 1964, and the underground workings were dewatered and rehabilitated and commercial production officially commenced on April 1st, 1965. Between 1965 and 1971, nearly 1.9 M tonnes of ore from the Wasamac deposit were treated by Wasamac Mines Ltd. and after by Wrigth-Hargreaves Mines Ltd. In May 1971, the mine ceased its operations due to low gold prices (approximately US$35/oz), increasing production costs and the abolishment of federal aid to the mining sector. Consequently, very little exploration was conducted until 1974, when Lac Minerals carried out limited diamond drilling on the MacWin Zone and deep diamond drilling work on the Main Zone. During the early 1980’s, Lac Minerals reactivated exploration work on the property; in 1980 they completed 80 km of maxmin, magnetometer and VLF ground geophysical surveys. This work was followed up with surface geological mapping, and in 1981 the Corporation drilled 64 surface holes totaling 7,375 metres in an attempt to: Verify the down dip extension of the Main Zone;Evaluate the surface pillar zone through definition drilling at 30 metre spacing; andEvaluate the down plunge extensions of the Mac Win, Wildcat and 2 zones. In 1983, following pre feasibility work on the surface pillar recovery, Lac Minerals drilled an additional 1,880 metres from 33 surface holes at a 15 metre spacing in order to upgrade the level of confidence of this surface zone. Many open pit studies were subsequently prepared for the surface pillar but low gold prices at the time prevented the Corporation from undertaking a production decision. Following the option agreement with Lac Minerals in 1986, the exploration work conducted by Ressources Minières Rouyn (“RMR”, which later changed its name to Richmont Mines Inc. in 1991), which consisted of 11 surface holes totalling 3,710 metres, was aimed at further evaluating the surface pillar zone along with Zone 1 and Main Zone down dip extensions. From November 1987 to June 1988, RMR dewatered the mine to a depth of 975 feet and rehabilitated the 400 and 800 foot levels in an attempt to explore the Zone 1 down dip extension through underground drilling. Once again, however, weak gold prices drove the Corporation to bring the project to a halt. In 1994, Richmont restored the Wasamac Mine site. All surface installations were dismantled, the shaft was capped and the tailings re-vegetated. From 1989 to 2002, exploration work on the property consisted of limited surface diamond drilling to keep the mining lease in good standing. A total of 8 surface holes were drilled during this period, totalling just over 4,500 metres. The main geological target was the Wasa shear zone at depth. In 2002, Richmont re-activated exploration work on the Wasamac property in an attempt to evaluate the down plunge extension of the zones 1 and 2 at depth. In 2011, a total of approximately 52,000 metres of drilling was completed on the Wasamac property. 58


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In March 2012, the Corporation announced the results of an independent Regulation 43-101 compliant Preliminary Economic Assessment (“PEA”) for the Wasamac gold project. According to the PEA which assumed a gold price of CAN$1,350 per ounce, the estimated total potential mine life would be 14 years with production of 6,000 tonnes per day, and an annual production of 140,000 ounces of gold. The PEA similarly estimated that the total life of mine recovered production would be 1.75 million ounces of gold at an average cash cost of US$688 per ounce, or CAN$46.15 per tonne. The undiscounted cash flows of this project was estimated to be CAN$405 million with an internal rate of return of 7% and a payback of 8 years. See “ITEM 3. KEY INFORMATION - D. Risk Factors – Risks Associated with the Mining Industry– The estimates of mineral reserves and forecasts of the production are subject to numerous uncertainties, and the production and recovery of reserve estimates appearing in the Annual Report may not be realized” for a discussion of the risks inherent in estimating reserves and production. Following 2012 drilling results, Richmont announced that scheduled technical work and permitting efforts would continue as planned in 2013 at Wasamac, however, no additional exploration and development activities would be undertaken on the asset. This decision was made following several months of project optimization studies, from which Richmont concluded that alternative scenarios did not currently offer a meaningful economic improvement in the current gold price environment, over the initial Preliminary Economic Assessment outlined in the Corporation’s March 28, 2012 press release. Geological Setting **Regional Geology** The Wasamac property is located within the Rouyn-Noranda mining district, in the Abitibi greenstone belt of the Superior Province of the Canadian Shield. The area consists mostly of felsic to mafic volcanic rocks of Archean age along with related dioritic sills which are concordant to the regional rock formations. These volcanic and intrusive rocks have generally been metamorphosed to the green schist facies. The Superior Province is the largest exposed Archean craton in the world that hosts several world class gold deposits. It has yielded nearly 300 million ounces of gold from hundreds of deposits since the beginning of the twentieth century. One prominent characteristic of all significant gold deposits in the Superior Province is their occurrence within or immediately adjacent to greenstone belts. Another characteristic is their occurrence within major tectonic zones which comprise a series of shear zones. The Superior Province is divided into four major subprovince types: volcano-plutonic, plutonic, metasedimentary and high grade gneiss. The boundaries of these subprovinces are either major dextral, transcurrent, east-striking faults or zones of structural and metamorphic transition. The greenstone belts which host the gold deposits occur as east-northeasterly trending ribbon domains in the volcano-plutonic terrains. They typically consist of mafic to ultramafic and felsic metavolcanics, interlayered with metasediments. The supracrustal rocks have been intruded by syn-volcanic plutons. Saturated and undersaturated felsic to mafic igneous rocks intruded into the greenstone belts in late Archean. The metamorphic grade of most of the present greenstone terrains ranges from sub-greenschist to greenschist facies in the center, to lower amphibolite facies at the margin. Amphibolite facies contact metamorphic aureoles occur around intrusions into the greenstones. **Project Geology** Volcanic rocks of the Blake River Group which host the gold deposits are the principal Archean rock-types exposed in the study area. Rocks of the Blake River Group are bounded to the north by the Porcupine-Destor-Parfouru fault system and to the south by the Cadillac Fault. The Blake River Group is the youngest volcanic sequence in the Superior Province and forms a central volcanic complex which is characterized by cyclic bimodal andesite-rhyolite units of calc-alkaline and tholeiitic affinity. These units are underlain by the sedimentary rocks of the Timiskaming Group, which are themselves overlain by little deformed Proterozoic 59


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sedimentary rocks of the Cobalt Group along the south boundary. The volcanic rocks are intruded by two major intrusive rocks, mafic gabbro-diorite sills and stocks that are either synvolcanic or clearly post-tectonic. All lithologies, except for the syenites, are folded and metamorphosed. Two large granitic bodies are located just north of the Wasamac property: the Flavrian and the Powell batholiths. These two bodies cross-cut the volcanic rocks and are located within the general axis of the Blake River Group syncline. Elsewhere on the property, diabase dykes of Proterozoic age and lamprophyre dykes are also found. The property can be subdivided into two distinct volcanic sequences; the southeastern portion is characterized by massive mafic to intermediate flows, while the northern portion is underlain by an intercalation of mafic volcanic flows, felsic tuffs and brecciated rhyolite. These two volcanic sequences are separated by a subsidiary fault of the Larder Lake-Cadillac tectonic zone, called the Wasa shear zone, which crosses the entire length of the property from east to west. Elsewhere on the property, several small mafic intrusive bodies composed of gabbro and diorite can be found. These intrusive bodies vary in size and seem to be generally concordant with the regional stratigraphy which runs east-west. Below the Proterozoic Cobalt sediments, just south of the Wasamac property, the Larder Lake-Cadillac Fault cuts the Archean rocks and separates the rocks of the Blake River Group to the north with the sedimentary rocks of the Timiskaming Group to the south. Beside this major structure, the Archean rocks are also affected by two families of very different faults, one of which is related to the Wasa shear zone, and the other to the Horne fault. Like the regional structures, these faults and shear zones are nearly striking east-west. The Wasa shear zone is a reverse fault with a north dipping trend and is strongly hydrothermally altered on the Wasamac property. Most of the gold mineralization found on the property to date is related to the Wasa shear zone. Only minor folding has been observed on the property. Schistosity varies between south-east to north-east with a northern dip of about 55 degrees and corresponds to regional schistosity. The stratigraphic high, from pillows observation, is towards the north. **Mineralization** The Wasa shear zone runs through the centre of the property in an east-west fashion. This shear zone, which trends at an azimuth of 265°, has a 50-60° dip to the north and a maximum thickness of 80 metres. To the west, the shear zone splits into two separate branches and becomes thinner, while to the east, the shear zone weakens as well and displays an average thickness of 25 metres. This shear zone is characterized by the development of a strong mylonitic fabric and an intense hydrothermal alteration which totally destroyed the primary structures and textures of the protolith. Mineral assemblages of rocks within the shear zone consist of chlorite, carbonate, hematite, albite and sericite in the middle of the zone. Gold is associated with a dissemination of fine pyrite in the altered portions of the shear zone. The Wasa shear zone, which has been well drilled over its entire length, does not outcrop anywhere on surface. During the production era, two gold bearing zones were mined, namely the Main Zone and the East N°1 Zone (now Zone 1), while two other less significant zones, the East N°2 (now Zone 2) and the MacWin zones, have only been delimited by diamond drilling. Main Zone:Originally discovered in 1944 through surface drilling, the Main Zone can be described as a well laminated mineralized zone. It is located near the centre of the property, within the Wasa Shear and high grade parts displays true widths of 10-15 metres (up to 25 metres locally) over a strike length of 400 metres. Gold mineralization is associated with quartz, carbonate, sericite, albite, pyrite and chlorite inside the shear zone. Visible gold is rare and strong gold assays are generally associated with high silica content and a lot of fine grained pyrite. If the entire mineralized zone is considered, i.e. including lower grade parts, the width of the mineralized zone can reach over 50 metres. 60


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Zone 1:Located some 400 metres east of the Main Zone, this zone has a similar mineralogical assemblage with the Main Zone. The high grade part displays true widths of 4.5 to 7.5 metres over a strike length of 150 metres. During the last phase of production work, underground development work was undertaken in an effort to mine this gold bearing lens but only limited tonnage was finally extracted. The thickness of the whole mineralized envelop is larger, up to 20 metres. Zone 2:In September of 1944, surface drilling work intersected another gold bearing structure some 800 metres east of the Main Zone. The higher grade part of this zone has an average thickness of 3 to 6 metres over a strike length of 225 metres. The zone was partially developed from underground but no production was recorded. This mineralized zone is located in the upper part of the shear zone, near the hanging wall. Zone 3:This mineralization was intersected with the 2002-2004 drilling. It is located in the lower part of the shear zone, near the footwall, below the MacWin Zone. Zone 4:This new mineralized zone was discovered with the exploration drilling conducted in 2012. This small mineralized zone was intersected at the eastern edge of the property, it extends onto the neighboring Globex Mining Enterprises claim. MacWin Zone:Formerly known as the Wingate Zone, this zone was found in 1945 near the eastern property boundary and is also located within the Wasa shear zone. Wildcat Zone:Located approximately 300 metres south of the Main Zone, the Wildcat Zone was the first gold showing to be discovered on the property (1936). This gold bearing zone consists of a carbonate altered zone at the margins of a gabbroic unit. Gold mineralization is associated with quartz carbonate veinlets containing fine grained pyrite. The pyrite mineralization is also present throughout the altered halo as disseminations. This zone, which has been interpreted as being erratic, was investigated through underground development work in 1937, but operations ceased a year later due to lower than expected gold grades. Further surface drilling was subsequently completed in 1944, but efforts failed to improve the grade. The Wildcat shaft was later used as a ventilation raise. In 1981, Exploration Long Lac completed 18 holes over 1,562 m. These vertical holes showed a possible extension of the mineralization to the south-east. Also, RMR and Richmont previous drilling realized in this area showed a possible extension of the mineralized structure to the south-west. Drilling Previous Exploration Work A considerable amount of exploration and development work was carried out on the Wasamac property since the discovery of the first gold-bearing veins. Successive underground developments have allowed for the discovery of additional mineralization along the Wasa Shear during the years the Main Zone was exploited. The most recent exploration programs conducted on the Wasamac property were completed between 2002 and 2012 by the Corporation. In 2002, in order to keep the property in good standing, the Corporation drilled a 420 metre surface hole on the property which targeted the down plunge extension of Zone 2. Drill hole WS-02-01 successfully intersected mineralization which yielded 4.15 g/t Au over a true width of 6.8 m. In light of this positive result, the Corporation made the decision to follow up with a substantial surface drilling program in 2003, during which a total of 9,475 metres of surface diamond drilling was completed in 15 drill holes. 61


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All of the drilling successfully intersected the Wasa shear zone at depth which demonstrates excellent continuity. Nine (9) drill holes from this program returned assay values above 4 g/t Au from the Wasa Shear intersections. 
    This surface drilling program was continued in 2004, during which 3,859 m of drilling were completed. One hole began in 2005 and was only completed in 2006. Hole WS-05-21, over 745 m, cut the Wasa shear zone but returned only low gold values (0.91 g/t over 4.1 m). In 2007, 2 holes over a total of 435 m were done on the west extension of the Wildcat Zone. Hole WS-07-22 cut the Wildcat structure with a gold intercept of 1.39 g/t over 6.6 m. In 2008-2009, 3 exploration holes were done to test geophysical anomalies that could indicate parallel structure to the Wasa shear zone. Alteration zones were cut but returned no significant gold value. In 2010, as a result of the favourable gold price, Richmont decided to restart work on the Wasamac property. Richmont began a 10,000 m drilling program on this property in May 2010, with the goal to evaluate the potential for an underground bulk mining operation. Subsequent to favorable results being obtained, the 2010 drilling program was extended to 20,000 m. Drilling was planned using a hole spacing of about 75 metres on a vertical longitudinal section. Drilling was concentrated mainly on Zone 2 with some holes drilled into Zone 1. Three diamond drill rigs were used on the property for the 2010 program. Every hole was done on NQ core diameter from section 50W to 600E. Of the 33 holes completed, 31 reached their target. Holes WS-10-35 and WS-10-54 were stopped before completion, the first one due to drilling material stuck in the hole, and the second due to a too large deviation. Three to four diamond drill rigs were used on the property for the 2011 program. Every hole was done NQ core diameter. A total of 78 holes were completed (11 were stopped and redone due to bad deviations) and 4 were not finished by the end of 2011. A total of approximately 52,000 metres were drilled on the Wasamac property in 2011. Main results of the 2011 drilling program were: Confirmed the mineralization at the bottom of the Main Zone with a large thickness in the western portion, where gold mineralization is also found in the footwall of the shear zone;Widened Zone 2 at depth to the west and demonstrated its junction with Zone 1. Indicated also that Zone 2 remains open at depth;Better defined Zone 3, which has now been cut by more than 20 holes; Indicated that Zone 3 remains open at depth. 2012 Drilling Several diamond drill rigs were also used on the property during the 2012 drilling program. Always with a diameter NQ, 87 exploration wells were drilled for a total of 42,809 metres. Most of these holes were drilled on private land, and agreements were reached with the respective owners. Also, to minimize disturbance to area residents, anti-noise walls were used and drilling schedules were adapted. Main results of the 2012 drilling program were: Main Zone resources at depth now account for almost all of the indicated category. Main Zone remains open at the east and at depth. Zone 3 mineralization is now better defined, and it is still partly open at depth. 62


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A fourth mineralized zone was intersected at the eastern edge of the property. This area continues into part on the neighboring property. Silver grades were systematically assayed with gold. Also, samples of all the available mineralized intersections were also re-assayed for silver. The silver has now been included in the new resource estimate. Nearly 45% of the Wasamac resources are now in the measured and indicated resource categories. More extensive metallurgical tests were initiated on composite samples of drill core for the 4 main mineralized zones of the property. Results will be available in 2013. Over twenty geotechnical drill holes were also carried out to verify the quality of the rock in the crown pillar and the hanging wall of the Main Zone and Zone 1. A large diameter drilling was also carried out to intersect existing developments of the former Wasamac mine and serve as dewatering well. All applications for permits and certificates of authorization have been completed to begin the excavation of an exploration ramp and dewatering of the old mine. On November 29, 2012, Richmont Mines announced that, given the current market conditions and gold price and as alternative mining scenarios considered showed no improvement over the results of the PEA, that exploration work was being suspended. In 2012, 13 holes totaling 10,136 metres were completed on 5 claims of the adjoining property that had been optioned from Globex Mining Enterprises. Only the small mineralized zone 4, at the edge of the two properties, was intersected. With these poor results and the decision to suspend exploration on the Wasamac property, Richmont Mines decided to terminate the option agreement with Globex, with whom it had the right to acquire 100% of these 5 claims. Under the terms of the agreement, Richmont Mines could abandon its right to exercise the option on these 5 claims at any time by giving a written notice to Globex to this purpose, 30 days before the date of withdrawal. After fulfilling of this obligation, the Corporation had no additional obligation to Globex. Sampling There is not a lot of information available about the rock sampling methods used underground, either for core drilling or wall sampling, from when the Wasamac Mine was in operation. Since 2002, core description has been performed by the Corporation’s geological staff according to the Corporation’s standards. The Corporation’s geologists are members in good standing of the OGQ (Ordre des Géologues du Québec) or the OIQ (Ordre des Ingénieurs du Québec). Since 2010, logging has been done on the Francoeur minesite. The data introduced in the logging software was: Log header, hole location and parameters, surveys;Descriptions of the main and sub geological units with their location;Mineralized zones with their mineralogy, attitude, thickness; andStructures, alterations and RQD (Rock Quality Designation). Selected mineralized intervals were cut in half with a saw blade, one half being kept as a reference in core boxes, the other half being sent to Expert Laboratory in Rouyn-Noranda for gold grade determination. Transportation of samples to the laboratory was done by Richmont Mines’ personnel. The assay results and core descriptions were collected and put into sets of interpreted sections helping the geological staff to interpret and to plan the drilling. 63


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The core boxes were marked with aluminium tags and moved to permanent storage in steel core-racks on the Francoeur minesite. Since 2003, most of the split cores left in core-boxes have been stored at the Francoeur Mine and remain available if other tests (gravimetric, metallogenic or petrographic studies) are needed. Similarly, since 2009, rejects and pulps from the laboratory have been sent back to the Francoeur minesite. Assays We do not have any details about the analytical procedure used by laboratories before 2002. During the 2002-04 surface drilling programs, diamond drill cores were logged and split at the Corporation’s core logging facility. Samples from one half of the cores were tagged and bagged and delivered directly to the Techni-Lab S.G.B. Abitibi Inc. assay office in Ste-Germaine-Boulé, QC (Techni-Lab). The other half remained in the appropriate core boxes for future verification. Techni-Lab follows several procedures when batches of samples are received: Sample Preparation The samples are counted and classified. A project list is created and the sample identification numbers are compared with the order form provided by the client. Moreover, each sample is allocated two identification tags, one for the pulp and the other for the reject. 1.
      Samples are classified by order of priority and placed in cake tins (4 rows of 12 tins);2.
      Wet samples are dried in an oven at 60° C for one hour;3.
      Bags to be used in the sampling process are allocated the project number and the sample ID;4.
      Each sample is crushed at -2 mm. The sample is then homogenized and "reduced" after several cycles in a "Riffle Jones" splitter to retain a 250 g portion; and5.
      This portion is then pulverized at 80% passing -200 meshes during 3 minutes in a ring pulveriser. A form is filled and bags of pulp are numbered accordingly. A set of 24 crucibles, including a blank, a duplicate and a standard, is prepared. The crucibles are filled with 115 g of flux and a teaspoon of flour. A portion of the pulp is weighed (30 g) and added to the flux in the crucible. The content of each crucible is then homogenised. 1.
      A 30 gram pulp sample is taken for analysis;2.
      Lead collection of the sample with a flux to obtain a lead button;3.
      Cupellation of the lead button to free the precious metal bead;4.
      Dissolution of the bead in "Aqua Regia";5.
      Measurement of the gold content by Atomic Absorption Spectrometry (AAS); and6.
      If the gold content is higher than 10,000 ppb, a second 30 gram pulp sample is taken following lead collection and cupellation but the measurement of the gold content is performed using gravimetry instead of AAS. In 2011 and 2012, all the samples were sent to Expert Laboratory in Rouyn-Noranda. Nearly 20% of pulps and rejects from the mineralized zone were re-assayed by the laboratory Techni-Lab in Ste-Germaine-Boulé. The sampling and assaying procedures of Expert Laboratory are: 64


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Sample Preparation 1.
      Receiving SamplesUpon receipt, samples are placed in numerical order and compared with the client packing list to verify receipt of all samples. If the client does not provide a packing list with the shipment, one will be prepared by the person unpacking the samples. If the samples received do not correspond to the client list, the client will be notified.2.
      Sample PreparationSamples are dried if necessary and then reduced to -1/4 inch with a jaw crusher. The jaw crusher is cleaned with compressed air between samples and barren material between sample batches. The sample is then reduced to 90% -10 mesh with a rolls crusher. The rolls crusher is cleaned between samples with a wire brush and compressed air and barren material between sample batches. The first sample of each sample batch is screened at 10 mesh to determine that 90% passes 10 mesh. Should 90% not pass, the roll crusher is adjusted and another test is done. Screen test results are recorded in the log book provided for this purpose. The sample is then riffled using a Jones type riffle to approximately 300 g. Excess material is stored for the client as a crusher reject. The 300 g portion is pulverized to 90% -200 mesh in a ring and puck type pulverizer, the pulverizer is cleaned between samples with compressed air and silica sand between batches. The first sample of each batch is screened at 200 mesh to determine that 90% passes 200 mesh. Should 90% not pass, the pulverizing time is increased and another test is done. Screen test results are recorded in the log book provided for this purpose. Gold Fire Assay Geochem A 29.166 g sample is weighed in a crucible that has been previously charged with approximately 130 g of flux. The sample is then mixed and 1mg of silver nitrate is added. The sample is then fused at 1,800 F for approximately 45 minutes. The sample is then poured into a conical mold and allowed to cool; after cooling, the slag is broken off and the lead button weighing 25-30 g is recovered. This lead button is then cupelled at 1,600 F until all the lead is oxidized. After cooling, the dore bead is placed in a 12 X 75 mm test tube. 0.2 ml of 1:1 nitric acid is added and allowed to react in a water bath for 30 minutes; 0.3 ml of concentrated hydrochloric acid is then added and allowed to react in the water bath for 30 minutes. The sample is then removed from the water bath and 4.5 ml of distilled water is added. The sample is thoroughly mixed, allowed to settle and the gold is determined by atomic absorption. Each furnace batch comprises 28 samples that include a reagent blank and gold standard. Crucibles are not reused until the result of the sample that was previously in each crucible has been obtained. Crucibles that have had gold values of 200 PPB are discarded. The lower detection limit is 5 PPB and samples assaying over 1,000 PPB are checked gravimetrically. Gold Fire Assay Gravimetric A 29.166 g sample is weighed into a crucible that has been previously charged with approximately 130 g of flux. The sample is then mixed and 2mg of silver nitrate is added. The sample is then fused at 1,800 F for approximately 45 minutes. The sample is then poured in a conical mold and allowed to cool, after cooling, the slag is broken off and the lead button weighing 25-30 g is recovered. This lead button is then cupelled at 1,600 F until all the lead is oxidized. After cooling, the dore bead is flattened with a hammer and placed in a porcelain parting cup. The cup is filled with 1:7 nitric acid and heated to dissolve the silver. When the reaction appears to be finished, a drop of concentrated nitric acid is added and the sample is observed to ensure there is no further action. The gold bead is then washed several times with hot distilled water, dried, annealed, cooled and weighed. 65


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Each furnace batch comprises 28 samples that include a reagent blank and gold standard. Crucibles are not reused until we have obtained the result of the sample that was previously in each crucible. Crucibles that have had gold values of 3.00 g/t are discarded. The lower detection limit is 0.03 g/t and there is no upper limit. All values over 3.00 g/t are verified before reporting. Quality Control For the 2011 and 2012 drilling program, a QA/QC procedure was followed. A certified standard from Rocklabs and a blank was inserted in every batch of 20 samples sent to Expert Laboratory. Security of Samples The samples are prepared in the exploration core shack located on the Francoeur Mine site where access is limited to the exploration staff. The samples are transported to the laboratory by the staff of Richmont. Mineralization Identified by Zone Crown Pillar: Mineralization which is located in the first 100 metres below surface. Most of this material is above the old mine in the Main Zone and in the top of zones 1 and 2. Main Zone: Located at the bottom of the old mine, this area was only partly developed and almost not mined. The mineralized zone has a dimension of about 300 metres x 300 metres and an average horizontal thickness of 30 metres. Zone 1:This zone extends from surface to –700 metres with a lateral extension of about 200 metres and an average horizontal thickness of 16 metres. It was partly developed and mined in the upper part. It joins the west part of Zone 2 at depth. Zone 2:This mineralized zone extends from surface to –1,000 metres and spans up to 400 metres laterally with an average horizontal thickness of 13 metres. It remains partly open at depth. Zone 3:This zone has now been tested with more than 25 drill holes. It extends from an elevation of –200 metres to –600 metres, continues laterally over 350 metres, and has an average horizontal thickness of 11 metres. This zone remains partly open at depth. 4.2
      Monique, Quebec, Canada Location and Property Description The Monique property is located 25 km east of Val-d’Or, in the province of Quebec. The property is located approximately 10 km east of the Beaufor Mine and 50 km from the Corporation’s Camflo Mill. The property can be reached from Rouyn-Noranda via Highway 117 to the town of Val-d’Or, and then by a secondary road that leads directly to the property. The Monique property consists of 18 mining claims which represent a total area of 538.7 hectares. On December 21, 2010, the Corporation signed an option agreement with SOQUEM Inc. (“SOQUEM”) to acquire the remaining 19% interest of the Monique property. Under terms of the option agreement with SOQUEM, Richmont Mines paid an amount of $350 thousand upon signing the Agreement, and completed exploration work in the amount of more than $400 thousand before February 28, 2011, and acquired the residual 19% interest of the Monique property. Richmont Mines will grant a 0.38% NSR (Net Smelter Return) royalty to SOQUEM in the event that the property reaches commercial production. Similarly, Richmont Mines will assume the royalty obligations that exist on 8 out of the property’s 18 claims, payable to Exploration Concorde Ltd., equal to 5% net profit interest. 66


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Gold mineralization on the Monique property is mainly associated with three deformation zones that cross the Property with an orientation of 280° and a 75° - 80° dip to the north. Gold mineralization is defined by a network of quartz/tourmaline/carbonate veins and veinlets, measuring 1 cm - 10 cm, with disseminated sulphides in the altered wall rocks. Free gold is observed frequently in the veins. A total of 12 gold zones have been observed on the Property over the years, the most promising being the A, B, G and J zones. In 2011, Richmont completed an 8,117 metre exploration drill program on the G and J zones of the Monique project. Results obtained from the G Zone include 2.18 g/t Au over 6.69 metres and 2.47 g/t Au over 6.21 metres (true width), and results obtained from the J Zone include 6.92 g/t Au over 3.30 metres, 3.24 g/t Au over 6.21 metres, and 2.88 g/t Au over 9.16 metres (true width). Environmental Obligations and Permits A closure plan was developed in conjunction with Roche Ltd, Consulting Group, that was submitted to the Ministère des Ressources naturelleson March 18, 2013. Financial guarantees will be submitted following the approval of the plan. Work Completed in 2012 The Corporation obtained the required approval to complete a bulk sample during 2013. If the bulk sampling phase is successful, a reserve calculation will be completed and open pit mining of the G and J zones would begin. The material will be treated at Richmont’s Camflo Mill. TABLE OF RESERVESDecember 31, 2012
        
        
        
        
        
        December 31, 2011Tonnes
        
        
        Grade
        
        
        Ounces
        
        
        Tonnes
        
        
        Grade
        
        
        Ounces(metric)
        
        
        (g/t Au)
        
        
        contrained
        
        
        (metric)
        
        
        (g/t Au)
        
        
        containedIsland Gold MineProven Reserves1
        
        428,958
        
        
        5.42
        
        
        74,807
        
        
        498,727
        
        
        5.66
        
        
        90,776Probable Reserves1
        
        356,263
        
        
        5.82
        
        
        66,649
        
        
        460,796
        
        
        5.47
        
        
        81,038Beaufor MineProven Reserves1
        
        73,725
        
        
        5.87
        
        
        13,906
        
        
        81,822
        
        
        6.56
        
        
        17,251Probable Reserves1
        
        122,420
        
        
        6.40
        
        
        25,208
        
        
        94,106
        
        
        6.97
        
        
        21,080W ZoneProbable Reserves1
        
        132,251
        
        
        7.21
        
        
        30,680
        
        
        132,342
        
        
        7.25
        
        
        30,860GOLD PROJECTSFrancoeur MineProven Reserves2
        
        8,439
        
        
        4.52
        
        
        1,226
        
        
        52,626
        
        
        5.14
        
        
        8,700Probable Reserves2
        
        -
        
        
        -
        
        
        -
        
        
        452,061
        
        
        4.74
        
        
        68,880TOTAL GOLDProven and Probable Reserves
        
        1,122,056
        
        
        5.89
        
        
        212,476
        
        
        1,772,480
        
        
        5.59
        
        
        318,585
 1In 2012, based on a price of US$1,450/oz and an exchange rate of 1.00 (in 2011, a price of US$1,200/oz and an exchange rate of 1.00 and in 2010, a price of US$1,000/oz and an exchange rate of 1.00 was used). 2Francoeur Mine closed in November 2012. Broken, recoverable, stockpiled ore. Reserves as at December 31, 2011 were adjusted to reflect the re-evaluation completed in June 2012. 67


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Regulation 43-101 – Standards of Disclosure of Mineral Projects Mineral Reserve calculations for the Corporation’s material properties were established by “qualified persons” as defined under Regulation 43-101, and their names are set out in the table below. These reserve estimations were reviewed by Mr. Daniel Adam, P.Geo., Ph.D., Vice President, Exploration, an employee of Richmont Mines. Mines
        Qualified Persons
        TitlesBeaufor Mine and W Zone project
        Jessy Thelland, P. Geo.
        Senior Geologist, Beaufor MineFrançois Chabot, Eng.
        Manager, Beaufor Mine and Monique ProjectIsland Gold Mine
        Daniel Adam, P.Geo., Ph.D.
        Vice-President, Exploration, Corporate division(supervision)Daniel Vachon, Eng.
        Chief EngineerIsland Gold Deep
        Daniel Adam, P.Geo., Ph.D.
        Vice-President, Exploration, Corporate divisionFrancoeur Mine
        Marc-André Lavergne, Eng.
        Francoeur Mine ManagerDaniel Adam, P.Geo., Ph.D.
        Vice-President, Exploration Corporate divisionPierre Rivard, P.Geo.
        Production GeologistWasamac Project
        Daniel Adam, P.Geo., Ph.D.
        Vice-President, Exploration, Corporate divisionMonique Project
        Raynald Vincent, Eng., M.G.P.
        Chief Exploration Projects, Corporate division
 On the next page you will find a map of the Corporation’s properties. 68


---




---

Gold Marketing and Sales The profitability of gold mining is directly related to the market price of gold as compared to the cost of production. Gold prices fluctuate widely and are affected by numerous factors, including expectations with respect to the rate of inflation, exchange rates (specifically the U.S. dollar relative to other currencies), interest rates, global and regional political and economic crises and governmental policies with respect to gold holdings by a nation’s central bank. The demand and supply of gold usually affect gold prices but not necessarily in the same manner as supply and demand affect the prices of other commodities. The whole of gold available for sale includes a combination of mine production, stock and gold bullion held by governments, public and private financial institutions, industrial organizations and private individuals. As the amounts produced in any single year account for a small portion of the total available supply of gold, normal variations in current production do not have a significant impact on the supply of gold or on its price. The following table sets out the annual average gold price (London PM fix) in U.S. over the past five years: Exchange(US$)
        
        
        rate1
        
        
        (CAN$)2008
        
        872
        
        
        1.07
        
        
        9332009
        
        972
        
        
        1.14
        
        
        1,1082010
        
        1,225
        
        
        1.03
        
        
        1,2622011
        
        1,572
        
        
        0.99
        
        
        1,5562012
        
        1,669
        
        
        1.00
        
        
        1,669As at April 19, 2013
        
        1,406
        
        
        1.03
        
        
        1,4481Source: Bank of Canada
 Gold can be easily sold on numerous markets throughout the world and it is not difficult to ascertain its market price at any particular time. Richmont Mines is not dependent upon the sale of its gold to any one customer because of the large number of available gold purchasers. Richmont Mines may occasionally use put and call options on gold, and forward sales contracts on gold and U.S. dollars. All such contracts are previously approved by the Corporation’s Board of Directors. Gold bars are carried between the mills and the refinery by commercial armoured truck. These bars are refined at the Royal Canadian Mint of Ottawa refinery under a service contract at competitive rates. Refined metal is sold on the spot market to commercial bullion dealers (or under forward sales contracts if previously approved by the Corporation’s Board of Directors). As at December 31, 2012, Richmont Mines had not entered into any gold derivatives contracts. Governmental Regulation (Environment) Richmont Mines’ principal operations are the production of gold from mining development, extraction and processing of minerals, and mining exploration to maintain and increase its ore reserves. These operations are subject to various levels of control and strict government regulations, such as laws and regulations with respect to activities related to natural resources and the protection of the environment. Environmental protection legislation applicable to the Canadian mining industry mandates high standards for the reduction or elimination of emissions, deposits, and issuance or release into the environment of contaminants caused by the extraction or processing of ore. In addition, certificates of authorization must be obtained in advance for the construction and commercial operation of a mine, plant, concentrator or refinery, since such types of operations that are specific to the mining industry may result in emissions, deposits, issuance or release of contaminants into the environment or may affect the quality of the environment. 70


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Quebec & Ontario Provincial legislation in Quebec and Ontario in mining matters contemplates the acquisition and ownership of mining titles, safety standards, royalties and mining taxes. The Mining Actprovides for the rehabilitation and restoration of lands affected by mining activities. In Ontario, approval for any plan for the rehabilitation and restoration of land affected by a Corporation’s operations is given by the Ministry of Northern Development and Mines (“MNDM”), while in Quebec it is given by the MRN. Corporations must comply with the plan and provide a financial guarantee to that effect. In Quebec, when a corporation commences mining operations, it must submit its rehabilitation and closure plan before the beginning of its activities. In Ontario, the plan must be approved before the beginning of commercial production; moreover, a local public consultation must also be held. The Ministries may enjoin a corporation who has already ceased its mining operations on a particular site to perform the rehabilitation and restoration work required by the presence of tailings. If the Corporation does not comply with such requirements, the MRN and the MNDM may have the rehabilitation and restoration work executed by a third party, at the Corporation’s cost. Richmont Mines does not foresee any specific difficulty in meeting the requirements under the Mining Act(Quebec) and the Mining Act(Ontario). Richmont Mines holds certificates of authorization issued by the Ministère du Développement durable, de l’Environnement, de la Faune et des Parcs(the Ministry of Sustainable Development, Environment, Wildlife and Parks, the “MDDEFP”) with respect to its mining operations in Quebec (Beaufor Mine, Francoeur Mine, Monique project and Camflo Mill) and by the Ontario’s Ministry of the Environmentfor its Island Gold Mine, located in Ontario. C.
        Organization StructureSee Exhibit 8.1 to this Annual Report.D.
        Property, Plants and EquipmentSee Section B. “Business Overview” above.
  ITEM 4A.
        
        UNRESOLVED STAFF COMMENTSNone.ITEM 5.
        
        OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 The discussion and analysis of the operating results and financial position of the Corporation for the three years ended December 31, 2010, 2011 and 2012 should be read in conjunction with the Corporation’s consolidated financial statements and the accompanying notes included in this Annual Report. Notice should also be taken of the cautionary statement regarding forward-looking statements on page 1 of this Annual Report, in particular with respect to trend and other forward looking information and disclosure regarding the Corporation’s contractual obligations. The preparation of financial statements involves making estimates and assumptions that have a significant impact on the reported amounts of revenues, expenses, assets and liabilities. The items most dependent on the use of estimates include the useful life of assets, amortization and depletion calculations based on proven and probable reserves, and the calculation of asset retirement obligations as well as future income and mining taxes. Consequently, future results may differ from these estimates. 71


On January 1st2011, the Corporation has adopted International Financial Reporting Standards (“IFRS”) as adopted by the International Accounting Standards Board. The impacts of this transition are presented in the Corporation’s December 31, 2011 consolidated financial statements. Unless otherwise indicated, all amounts presented herein are based on IFRS. Previously, the Corporation’s consolidated financial statements were prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). At that time, reference was made to notes to the consolidated financial statements of the Corporation included in the Annual Report for a discussion of the material differences between Canadian GAAP and U.S. generally accepted accounting principles (“U.S. GAAP”), and their effect on the Corporation’s consolidated financial statements. Statements prepared in accordance with IFRS are not comparable in all respects with financial statements that are prepared in accordance with either Canadian GAAP or with US GAAP. A.
      Operating Results Year ended December 31, 2012 compared to year ended December 31, 2011 and year ended December 31, 2010 (all dollar amounts are in thousands of Canadian dollars unless otherwise stated except for share and per ounce data). Overview Gold Prices The gold market remained strong in 2012 as the average price rose to approximately US$1,669 per ounce from an average price of US$1,572 in 2011, and US$1,225 in 2010. Gold began 2012 with an average of US$1,656 for January, a level that was 5% above the 2011 average price per ounce of US$1,572. The monthly average gold price declined to a low of US$1,586 in May then increased progressively throughout the year, reaching an average monthly high of US$1,747 for October 2012, before declining slightly to end the year at an average monthly price of US$1,689 for December. The main factors that are expected to continue to have a positive influence on the future price of gold include: Continued demand for gold ETF;Non-hedging and less aggressive hedging policies of producers;Demand levels that exceed the industry’s annual production;Uncertainty around governmental fiscal issues in North America and Europe;Ongoing geopolitical instability. Production Richmont currently produces gold at the Island Gold Mine in Ontario and at the Beaufor Mine in Quebec. Gold sales from these two operations totalled 60,741 ounces in 2012, compared to 76,143 ounces sold in 2011, with the shortfall primarily attributable to lower head grades and compared to 68,123 ounces in 2010. Including 5,202 ounces of gold sold from the Francoeur Mine that was closed on November 30, 2012, the Corporation’s gold sales were 65,943 ounces in 2012, in line with Richmont’s revised production guidance of approximately 65,000 ounces of gold. The Island Gold Mine generated gold sales of 41,686 ounces in 2012, in line with its production objective of 40,000 to 45,000 ounces, but below the 49,196 ounces of gold sold in 2011, which was a record for this operation. As of December 31, 2012, the Island Gold Mine had Proven and Probable reserves of 141,456 ounces 72
      of gold, which translates into a replacement of 27% of its 2012 annual production. In 2011, gold sales from this mine increased 7% over 2010 levels, were at the high end of its 2011 production objective of 45,000 to 50,000 ounces of gold, and were a record for this mine. The Beaufor Mine, which has been in commercial production since 1996, generated gold sales of 19,055 ounces in 2012, below its targeted production range of 20,000 to 25,000 ounces in 2012. This production level was also below this mine’s 2011 gold sales of 26,947 ounces, a shortfall that is attributable to the year-over-year decline in average head grade to 5.19 g/t Au in 2012 from 8.45 g/t Au in 2011. While annual production decreased, definition drilling completed at the Beaufor Mine during 2012 successfully enabled this operation to replace its annual production. Proven and Probable reserves as of December 31, 2012 at the Beaufor Mine were 39,114 ounces of gold versus 38,331 ounces of gold at the end of 2011. Sales of gold ounces from Beaufor increased 21% year-over-year in 2011, primarily as a result of a notable improvement in recovered grade to 8.31 g/t Au from 6.60 g/t Au in the prior year. Investments Richmont invested $37.9 million in the ongoing development of its assets in 2012, up from $31.7 million in 2011. The notable year-over-year increase reflects the advancement of the underground exploration drift at the Island Gold Mine to improve access for deep exploration drilling below the mine’s current infrastructure. The level of increased investment similarly reflects the development of the ramp to access the W Zone, a near-surface zone located on the Beaufor Mine property. An additional $2.9 million was invested at the Camflo Mill and other corporate installations in 2012, up from $0.9 million in 2011. The 2011 investment level of $31.7 million represented a notable increase over the $16.8 million investment level of 2010. This variance primarily reflects that a total of 18,910 metres of development and definition drilling were completed during 2011 at the Francoeur Mine, versus a total of 2,902 metres during 2010. Capital expenditures at the Island Gold Mine in 2011 included ongoing development costs, and the refurbishment and acquisition of equipment. Capital expenditures at the Beaufor Mine in 2011 included the construction of a new emergency escape exit from level 12 of the mine to surface, while expenditures of $3.5 million at the W Zone reflected advanced exploration activities and the start of work on the ramp portal. An additional $0.9 million was invested at the Camflo Mill and other corporate installations in 2011, versus $0.5 million in 2010. Summary of Operational and Financial Results Net loss in 2012 was ($45.0 million) or ($1.28) per share, compared to net earnings in 2011 of $25.9 million, or $0.81 per share and net earnings of $9.3 million, or $0.33 per share in 2010. The cash and cash equivalent balance was $59.8 million at December 31, 2012, a decrease of $3.7 million over the $63.5 million at December 31, 2011. The cash and cash equivalent balance was $40.0 million at December 31, 2010. At December 31, 2012, Richmont had working capital of $54.3 million compared with $68.7 million at December 31, 2011 and $43.9 million at December 31, 2010. 73
      Change to accounting policies 
    New Accounting Pronouncement During the year, the Corporation early adopted the amendments to IAS 1 Presentation of financial statements from the Annual Improvements 2009-2011. These amendments to IAS 1 are effective for annual period beginning on or after January 1st, 2013 and clarify that the requirements for comparative information provided beyond minimum requirements should be presented in accordance with IFRS. Future Accounting Pronouncements At the date of authorization of these consolidated financial statements, new standards, amendments and interpretations to existing standards have been published by the International Accounting Standards Board (“IASB”) but are not yet effective, and have not been adopted early by the Corporation. Management anticipates that all of the pronouncements not yet effective will be adopted in the Corporation’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Corporation’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Corporation’s consolidated financial statements. Amendments to IAS 1 Presentation of Financial Statements The Amendments to IAS 1 are effective for annual periods beginning on or after July 1, 2012 and require entities to group items presented in other comprehensive income (OCI) into those that, in accordance with other IFRSs, will not be reclassified subsequently to profit or loss and those that will be reclassified subsequently to profit or loss when specific conditions are met. The existing option to present items of OCI either before tax or net of tax remains unchanged; however, if the items are presented before tax, then the amendments to IAS 1 require the tax related to each of the two groups of OCI to be shown separately. Management does not anticipate a material impact on the Corporation’s consolidated financial statements from these Amendments. IFRS 9 Financial Instruments (IFRS 9) The IASB aims to replace IAS 39 Financial Instruments: Recognition and Measurement (IAS 39) in its entirety with IFRS 9. To date, the chapters dealing with recognition, classification, measurement and derecognition of financial assets and liabilities have been issued. These chapters are effective for annual periods beginning on or after January 1, 2015. Chapters dealing with impairment methodology and hedge accounting are still being developed. Further, in November 2012, the IASB published an exposure draft in order to made limited modifications to IFRS 9’s financial asset classification model to address application issues. Management has not yet assess the impact of this new standard on the consolidated financial statements. However, Management does not expect to implement IFRS 9 until all of its chapters have been published and the impact of all resulting changes can be comprehensively assessed. Consolidation Standards A package of new consolidation standards is effective for annual periods beginning or after January 1, 2013. Information on these new standards is presented below. Management has not yet completed its assessment of the impact of these new and revised standards on the Corporation’s consolidated financial statements. IFRS 10 Consolidated Financial Statements (IFRS 10) IFRS 10 supersedes IAS 27 Consolidated and Separate Financial Statements (IAS 27) and SIC 12 Consolidation - Special Purpose Entities. IFRS 10 revises the definition of control and provides extensive new guidance on its application. These new requirements have the potential to affect which of the Corporation’s investees are considered to be subsidiaries and therefore change the scope of consolidation. However, the requirements on 74
      consolidation procedures, accounting for changes in non-controlling interests and accounting for loss of control of a subsidiary remain the same. Management’s provisional analysis is that IFRS 10 will not change the classification (as subsidiaries or otherwise) of any of the existing investees at December 31, 2012. IFRS 11 Joint Arrangements (IFRS 11) IFRS 11 supersedes IAS 31 Interests in Joint Ventures (IAS 31). It aligns more closely the accounting by the investors with their rights and obligations relating to the joint arrangement. In addition, IAS 31's option of using proportionate consolidation for joint ventures has been eliminated. IFRS 11 now requires the use of the equity accounting method, which is currently used for investments in associates. Management does not anticipate a material impact on the consolidated financial statements from these Amendments. IFRS 12 Disclosure of Interests in Other Entities (IFRS 12) IFRS 12 integrates and makes consistent the disclosure requirements for various types of investments, including unconsolidated structured entities. It introduces new disclosure requirements about the risks to which an entity is exposed from its involvement with structured entities. Transition Guidance for IFRS 10, 11 and 12 Subsequent to issuing the new standards the IASB made some changes to the transitional provisions in IFRS 10, 11 and 12. The guidance confirms that the entity is not required to apply IFRS 10 retrospectively in certain circumstances and clarifies the requirements to present adjusted comparatives. The guidance also makes changes to IFRS 11 and 12 which provide similar relief from the presentation or adjustment of comparative information for periods prior to the immediately preceding period. Further, it provides additional relief by removing the requirement to present comparatives for the disclosures relating to unconsolidated structured entities for any period before the first annual period for which IFRS 12 is applied. The new guidance is also effective for annual periods on or after January 1, 2013. Consequential amendments to IAS 27 Separate Financial Statements (IAS 27) and IAS 28 Investments in Associates and Joint Ventures (IAS 28) IAS 27 now only addresses separate financial statements. IAS 28 brings investments in joint ventures into its scope. However, IAS 28's equity accounting methodology remains unchanged. IFRS 13 Fair Value Measurement (IFRS 13) IFRS 13 clarifies the definition of fair value and provides related guidance and enhanced disclosures about fair value measurements. It does not affect which items are required to be fair-valued. IFRS 13 applies prospectively for annual periods beginning on or after January 1, 2013. Management is in the process of reviewing its valuation methodologies for conformity with the new requirements and has not yet completed its assessment of their impact on the Corporation’s consolidated financial statements. Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) The Amendments to IAS 32 add application guidance to address inconsistencies in applying IAS 32’s criteria for offsetting financial assets and financial liabilities in the following two areas: the meaning of “currently has a legally enforceable right of set-off”that some gross settlement systems may be considered equivalent to net settlement. 75
      The Amendments are effective for annual periods beginning on or after January 1, 2014 and are required to be applied retrospectively. Management does not anticipate a material impact on the Corporation's consolidated financial statements from these Amendments. Disclosures – Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) Qualitative and quantitative disclosures have been added to IFRS 7 Financial Instruments: Disclosures (IFRS 7) relating to gross and net amounts of recognised financial instruments that are (a) set off in the statement of financial position and (b) subject to enforceable master netting arrangements and similar agreements, even if not set off in the statement of financial position. The Amendments are effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. The required disclosures should be provided retrospectively. Management does not anticipate a material impact on the consolidated financial statements from these Amendments. IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine This new interpretation addresses accounting issues regarding waste removal costs incurred in surface mining activities during the production phase of a mine, referred to as production stripping costs. The new interpretation addresses the classification and measurement of production stripping costs as either inventory or as a tangible or intangible non-current asset. This interpretation also provides guidance for the initial measurement, depreciation or amortization and impairment of such assets. It is applicable for annual periods beginning on or after January 1, 2013. Management has not yet assessed the impact of the adoption of this new interpretation on its consolidated financial statements. Annual Improvements 2009-2011 The Annual Improvements 2009-2011 made several minor amendments to a number of IFRSs. The amendments relevant to the Corporation are summarised below: Clarification of the requirements for opening statement of financial position clarifies that the appropriate date for the opening statement of financial position is the beginning of the period 2010 (related notes are no longer required to be presented);addresses comparative requirements for the opening statement of financial position when an entity changes accounting policies or makes retrospective restatements or reclassifications, in accordance with IAS 8. Tax effect of distribution to holders of equity instruments addresses a perceived inconsistency between IAS 12 Income Taxes (IAS 12) and IAS 32 Financial Instruments: Presentation (IAS 32) with regards to recognizing the consequences of income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction;clarifies that the intention of IAS 32 is to follow the requirements in IAS 12 for accounting for income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction. Segment information for total assets and liabilities clarifies that the total assets and liabilities for a particular reportable segment are required to be disclosed if, and only if: (i) a measure of total assets or of total liabilities (or both) is regularly provided to the chief operating decision maker; (ii) there has been a material change from those measures disclosed in the last annual financial statements for that reportable segment. 76
      The Annual Improvements noted above are effective for annual periods beginning on or after January 1, 2013. Management does not anticipate a material impact on the Corporation's consolidated financial statements from these Amendments. Revenue Total annual precious metal revenues decreased 14% in 2012 to $101.1 million from $118.2 million in 2011, reflecting a 20% decrease in the number of gold ounces sold from the Island Gold and Beaufor Mines, the effects of which were partially mitigated by a 7% increase in the average gold sales price realized in Canadian dollars. For the year, 60,741 ounces of gold were sold at an average price of US$1,666 (CAN$1,665) per ounce, versus gold sales of 76,143 ounces of gold in 2011 at an average price of US$1,570 (CAN$1,553) per ounce. The Island Gold Mine sold 41,686 ounces of gold in 2012 at an average price of US$1,666 (CAN$1,665), compared with 49,196 ounces of gold sold at an average price of US$1,566 (CAN$1,549) in 2011 and 45,865 ounces of gold sold at an average price of US$1,238 (CAN$1,275) in 2010. The Beaufor Mine sold 19,055 ounces of gold at an average price of US$1,666 (CAN$1,665) per ounce in 2012, compared to 26,947 ounces of gold at an average price of US$1,576 (CAN$1,559) in 2011, and 22,258 ounces at an average price of US$1,253 (CAN$1,290) per ounce in 2010. Total annual precious metal revenues of $118.2 million in 2011 was 36% above the $87.2 million generated in 2010, driven by a 21% increase in the average gold sales price realized in Canadian dollars and a 12% increase in the number of ounces of gold sold. In 2012, the Corporation had other revenues of $0.6 million from silver sales and the custom milling of 7,314 tonnes of ore at the Camflo Mill in January. Other revenues of $0.3 million in 2011 was derived entirely from silver sales, while other revenues of $3.3 million in 2010 reflected that 82,939 tonnes of custom milling ore were processed at the Camflo Mill during the year. Expenses Cost of sales, including operating costs, royalties and depreciation and depletion expenses, totalled $73.8 million in 2012, up 3% from $71.7 million in 2011, with the increase primarily driven by a 16% rise in the level of tonnage processed from the Beaufor Mine during the year. On a segmented basis, 2012 cost of sales decreased 2% year-over-year at the Island Gold Mine to $44.4 million, reflecting lower tonnage, and lower royalties and depreciation and depletion expense as a result of the 15% decrease in gold ounces sold. Operating costs at the Beaufor Mine increased 8% in 2012 to $28.7 million from $26.5 million in 2011, primarily a reflection of higher tonnage, while other operating costs rose to $0.8 million from $0.1 million in 2011 due to the higher tonnage processed at the Camflo Mill throughout the year. The average cash cost of production increased 29% in Canadian dollars in 2012 to US$1,044 (CAN$1,044) from US$821 (CAN$812) in 2011. The increase reflects higher costs at both the Island Gold Mine and Beaufor Mine operations, which were driven by slightly lower recovered grades and tonnage at Island Gold, and a significant reduction of grades at Beaufor. Cost of sales in 2011 increased 8% over the 2010 levels of $66.1 million, reflecting a slightly higher level of tonnage processed from the Island Gold Mine, higher mining costs at the Beaufor Mine due to the greater amount of development necessary to access the ore zones, as well as higher milling costs associated with operating the Camflo Mill at less than 30% capacity during the year. On a segmented basis, 2011 cost of sales rose 6% year-over-year at the Island Gold Mine to $45.1 million, reflecting higher royalties and a higher depreciation and depletion expense as a result of a higher rate and a 7% annual increase in gold ounces sold, while operating costs at the Beaufor Mine increased 24% in 2011 to $26.5 million from $21.4 million in 2010, primarily a reflection of a higher cost per tonne as well as higher depreciation and depletion expense that stemmed from a higher rate and an increase in the number of gold ounces sold. In 2011, the average cash cost of production decreased 3% or $22 in Canadian dollars to US$821 (CAN$812) from US$810 (CAN$834) in 2010. This decrease was driven by lower cash costs at Island Gold, the effect of which more than mitigated the increase in cash costs at Beaufor during the year. 77
      The amount of royalties paid out in 2012 decreased to $2.3 million from $2.6 million in 2011, with the decrease reflecting lower consolidated production levels, partially offset by the higher average gold price. The Corporation pays a 3% net smelter return (NSR) royalty on the greater part of the gold production at the Island Gold Mine, and royalties of $30 per ounce on 50% of the ounces produced from the Beaufor Mine. 2011 royalty payments of $2.6 million were above the $2.1 million paid in 2010, with the increase primarily attributable to higher consolidated production levels and the higher average gold price. Custom milling- Richmont processed 7,314 tonnes of custom milling ore in 2012. Richmont did not process any custom milling ore at the Camflo Mill in 2011, versus 82,939 tonnes of custom milling ore being processed in 2010. Administration- Administration expenses totaled $10.3 million in 2012 versus $5.5 million in 2011. The higher overall cost was related to higher non-cash expenses for share-based compensation as 1,736,575 options were granted to directors, employees and officers, the payment of a $2.0 million severance compensation to the Corporation’s ex-President and CEO in the first half of 2012, to higher Board compensation, and higher salary costs stemming from the greater number of administrative employees. Administrative expenses in 2011 were 11% higher than in 2010, primarily reflecting additional staff, higher compensation and increased benefits related to exercised stock options. Exploration and project evaluation– As in previous years, Richmont Mines continued its investments related to exploration and project evaluation. Exploration Costs (in thousands of $)
        2012
        
        2011
        
        2010$
        
        $
        
        $Exploration costs - MinesIsland Gold
        10,969
        
        5,549
        
        4,561Beaufor
        1,432
        
        803
        
        2,25012,401
        
        6,352
        
        6,811Exploration costs - Other propertiesWasamac
        9,477
        
        6,647
        
        1,712Monique
        744
        
        2,284
        
        289W Zone
        -
        
        188
        
        334Other
        459
        
        184
        
        997Project evaluation
        511
        
        470
        
        443Exploration and project evaluation before depreciation and exploration tax credits
        23,592
        
        16,125
        
        10,586Depreciation
        200
        
        155
        
        139Exploration tax credits
        (3,527
        )
        (5,354
        )
        (3,465
        )20,265
        
        10,926
        
        7,260
 Accretion expense of asset retirement obligations– The Corporation’s production and exploration activities are subject to various federal and provincial laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Corporation conducts its operations so as to protect public health and the environment. The Corporation has 78
      recorded the asset retirement obligations of its mining sites on the basis of management’s best estimates of future costs, based on information available on the reporting date. Best estimates of future costs are the amount the Corporation would reasonably pay to settle its obligation on the closing date. Future costs are discounted using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the liability. Such estimates are subject to change based on modifications to laws and regulations or as new information becomes available. This charge was $66 thousand in 2012, compared with $127 thousand in 2011 and $117 thousand in 2010. Loss (Gain) on disposal of long term assets– The loss (gain) on disposal of long term assets includes the following items: 2012
        
        2011
        
        2010(in thousands of $)
        
        $
        
        $
        
        $Valentine Lake property a)
        
        -
        
        (3,000
        )
        -Corporate building b)
        
        -
        
        -
        
        (496
        )Mining equipment
        
        198
        
        (10
        )
        7198
        
        (3,010
        )
        (489
        )
  a)
      On January 24, 2011, the Corporation received $3 million from Mountain Lake Resources Inc. for the sale of its 70% interest in the Valentine Lake property located in Central Newfoundland. A gain on the disposal of long-term assets was recognized for the same amount.b)
      On January 4, 2010, the Corporation sold a corporate building with a net book value of $34 thousand for a cash consideration of $530 thousand. Mining and Income Taxes2012
        
        
        2011
        
        
        2010(in thousands of $)
        
        $
        
        
        $
        
        
        $Current taxes
        
        4,610
        
        
        5,020
        
        
        2,175Future taxes
        
        (4,237
        )
        
        3,523
        
        
        1,568373
        
        
        8,543
        
        
        3,743
 The 2012 current tax expense totalled $4.6 million and includes Ontario mining taxes of $1.5 million, an adjustment to previous year taxes of $1.4 million and a recorded tax charge of $1.8 million, the latter of which enabled the Corporation to benefit from an exploration credit of the same amount. The recovery of future taxes is due to a $2.3 million reduction in liabilities for future mining taxes and a reduction of $1.9 million for income taxes. For the fiscal year 2011, mining and income taxes totalled $8.5 million or 25% of pre-tax earnings of $34.5 million. During the year, the Corporation recognized future income tax assets of $1.1 million, which reduced the income tax expense by the same amount. Excluding this income tax asset of $1.1 million, the tax rate would be 28%, the effective tax rate for the Corporation. 2010 mining and income tax expense totalled $3.7 million or 29% of pre-tax income of $12.9 million, and reflected federal and provincial taxes and future mining and income taxes applicable for the year. A $0.5 million 79
      credit on mining duties from the previous year and a charge of $0.2 million relating to part XII.6 of the tax return of a subsidiary are included in this expense. Net loss from discontinued operation At the end of November 2012, management made the decision to cease commercial gold production at the Francoeur Mine. This Mine is included in the Quebec segment. As a result, revenues, expenses and losses relating to the discontinuation of this operation have been segregated from the Corporation’s results from continuing operations, and are shown as a single line item in the consolidated income statement. The Francoeur Mine remaining property, plant and equipment have been valued at their recoverable amount, and management expects that the majority of these assets will be redeployed to the Corporation’s other mines. The recoverable value of assets was established by three internal experts with the necessary expertise to determine the value of mining assets. They evaluated the fair value for each asset considering the general condition of the asset as well as the actual conditions of the market.Total charges related to the mine closure including asset write-down, closure costs and operational losses, totaled $13.9 million in the fourth quarter and $42.0 million for the full year of 2012, after mining and income taxes. Net Earnings 2011 net earnings of $25.9 million, or $0.81 per share, were well above net earnings of $9.3 million, or $0.33 per share, in 2010. The year-over-year change was primarily driven by a 21% increase in the selling price per ounce in Canadian dollars and a 12% increase in ounces of gold sold in 2011. The effect of these improvements were partially offset by higher exploration and project evaluation costs stemming from the Corporation’s extensive exploration drilling program in 2011, and higher cost of sales due to higher tonnage at the Island Gold Mine, higher operating costs at the Beaufor Mine and higher milling costs associated with operating the Camflo Mill at less than 30% capacity. Balance Sheet Assets The total assets of Richmont Mines increased from $115.3 million as at December 31, 2010 to $168.0 million at the end of 2011 and decreased to 148.2 million at the end of 2012. At December 31, 2012, Richmont had working capital of $54.3 million compared with $68.7 million at December 31, 2011. The $14.4 million decrease reflects a $3.7 million decrease in cash and cash equivalents, a $9.7 million decrease in exploration tax credits receivable, a portion of which were applied against income and mining tax liabilities, and a $5.4 million increase in account payables and accrued charges that stemmed from the discontinuation of operations at the Francoeur Mine. At December 31, 2011, Richmont had working capital of $68.7 million compared with $43.9 million at December 31, 2010. The $24.8 million increase reflected a $23.5 million increase in cash and cash equivalents, an $8.9 million increase in credit and taxes receivable, offset by a $2.7 million increase in account payables and accrued charges and an increase of $5.8 million in mining and income taxes payable. Liabilities The amount of liabilities of Richmont was $29.9 million as at December 31, 2012 and is composed of current liabilities, asset retirement obligations, finance leases obligations, long-term share based compensation and deferred income and mining tax liabilities.The amount of liabilities of the Corporation was $33.9 million as at December 31, 2011, compared with $20.5 million at December 31, 2010. 80
      Asset retirement obligations The rate used to determine the future value of the obligations is 3.5% (4% in 2011) while the rate reflecting the current market assessments (adjusted for the risks specific to this liability) used to determine the actual value of the obligations is 1.3% (1% in 2011). The payments schedule was determined by taking into account the proven and probable reserves and the estimated annual production level. The following table sets forth the estimated cash flows of future retirement costs used in the calculation of the asset retirement obligations for the year ended December 31, 2012: 2012
        
        Total amount
        
        
        Anticipatedof the estimated
        
        
        cash flowcash flow
        
        
        payment schedule(in thousands of $)
        
        $Beaufor Mine
        
        785
        
        
        2016Island Gold Mine
        
        1,467
        
        
        2016Camflo Mill
        
        3,958
        
        
        2017Francoeur Mine
        
        820
        
        
        2013 and after7,030
 Long-Term Debt During the year, the Corporation acquired rolling stock at a cost of $1.6 million via two finance leases. The Corporation benefits from an option of a lower purchase price at the end of these two contracts. The first finance lease obligation is for an underground loader and has a carrying value of $456 thousand. The second finance lease obligation is for a boomer and has a carrying value of $539 thousand. Future minimum finance lease payments at December 31, 2012 are as follows: Minimum lease payments due(in thousands of $)
        
        2013
        
        2014
        
        TotalDecember 31, 2012:Lease payments
        
        965
        
        64
        
        1,029Finance charges
        
        (33
        )
        (1
        )
        (34
        )Net present values
        
        932
        
        63
        
        995
 In March and in August 2012, the Corporation signed agreements with thirteen employees considered as key personnel. These agreements incorporate a retention payment (“Retention Awards”) provided certain conditions are met by the employee, most notably that the employee continues his or her employment with the Corporation until March and August 2017. These retention payments would be payable in 2017 in either of the Corporation’s common shares or cash, at the discretion of the employee, with the number of common shares to be determined by the current value of the common shares at the time of payment. The total amount that could be paid as Retention Awards under these agreements is $6 million. The cost and liability recorded in 2012 to this effect are $639 thousand, which correspond to the best estimate of the expense and liability accrued in 2012 relating to the Retention Awards, based on estimated forfeitures and a 1.3% discount rate. 81
      Long-term debt includes the following financial liabilities:December 31,
        
        
        December 31,2012
        
        
        2011(in thousands of $)
        
        $
        
        
        $Finance leases obligations
        
        995
        
        
        -Long-term share-based compensation
        
        639
        
        
        -1,634
        
        
        -Current portion
        
        932
        
        
        -702
        
        
        -
 Deferred income and mining tax assets and liabilities Note 11 of the Corporation’s consolidated financial statements included in this Annual Report provides detailed information about tax reconciliation as well as deferred income and mining tax assets and liabilities. Shareholders’ equity Shareholders’ equity totaled $118.4 million as at December 31, 2012 compared with $134.1 million as at December 31, 2011 and with $94.8 million in 2010. At December 31, 2012, Richmont Mines had 39,566,103 shares outstanding and 2,277,450 options granted under its stock option plans and 324,675 options outside of the Corporation’s plans. At December 31, 2011, Richmont Mines had 33,109,963 shares outstanding and 1,636,600 options granted under its stock option plan compared with 31,230,063 shares outstanding and 2,311,000 options at December 31, 2010. Commitments and contingencies The Corporation is subject to royalty payments on 50% of the production of the Beaufor Mine at a rate of $30 per ounce produced, a 3% Net Smelter Return royalty per ounce produced at the Island Gold Mine. Royalty payments could be payable on other properties if such other properties are brought into commercial production. The Corporation is committed, under an operating lease expiring in December 2017, to pay a total sum of $0.7 million for office space. Minimum rental payments for the next five years amount to $0.1 million annually. The Corporation is committed, under two finance lease obligations related to rolling stock, that expire in December 2013 and in January 2014, to pay a sum totalling $1.0 million in 2013. The carrying value of rolling stock under finance leases totals $1.7 million. In March and in August 2012, the Corporation signed agreements with thirteen employees considered as key personnel. These agreements incorporate a retention payment (“Retention Awards”) provided certain conditions are met by the employee, most notably that the employee continues his or her employment with the Corporation until March and August 2017. These retention payments would be payable in 2017 in either of the Corporation’s common shares or cash, at the discretion of the employee, with the number of common shares to be determined by the current value of the common shares at the time of payment. The total amount that could be paid as Retention Awards under these agreements is $6.0 million. 82
      Critical Accounting Estimates The preparation of financial statements requires the use of estimates and the formulation of assumptions that have a significant impact on revenue and expenses as well as on the amounts of assets and liabilities. The following factors represent the estimates that management considers the most significant, and for which the actual amounts may differ considerably thereby affecting operating results. Mineral reserves The main parameters used to determine the mineral reserves of Beaufor Mine, W Zone Project and Island Gold Mine are the following: 2012
        
        
        2011
        
        
        2010Gold (US$/ounce)
        
        1,450
        
        
        1,200
        
        
        1,000Exchange rate (US$/CAN$)
        
        1.00
        
        
        1.00
        
        
        1.00Gold (CAN$/ounce)
        
        1,450
        
        
        1,200
        
        
        1,000
 Period of depletion of mining sites in production Property, plant and equipment of mining sites in production are depleted according to the units-of-production method to write down the cost to residual value. Management estimates the residual value of property, plant and equipment based on the estimated fair value as of the financial position date. For these assets, the depletion rate is calculated based on the number of ounces of gold sold in proportion to the number of ounces in proven and probable reserves. Proven and probable reserves are estimates of the quantity of ore that could be economically and legally extracted from a mine. The Corporation estimates its reserves using information compiled by qualified persons who work for the Corporation. This information relates to geological data on the size, depth and shape of the deposit and requires geological assessments to interpret the data. The assessment of proven and probable reserves is based on factors such as the estimated exchange rate, price of metals, capital investments required and production costs stemming from geological assumptions based on the size and grade of the deposit. Changes in proven and probable reserves could have an impact on the net carrying amount of property, plant and equipment, asset retirement obligations, recognition of deferred tax assets and amortization, depreciation and depletion expenses. Asset retirement obligations The Corporation assesses its asset retirement obligations annually. Determining these obligations requires significant estimates and assumptions due to the numerous factors that affect the amount ultimately payable. Such factors include estimates of the scope and cost of restoration activities, legislative amendments, known environmental impacts, the effectiveness of reparation and restoration measures and changes in the discount rate. This uncertainty may lead to differences between the actual expense and the allowance. At the date of the statement of financial situation, asset retirement obligations represent management’s best estimate of the charge that will result when the actual obligation is terminated. Impairment test of property, plant and equipment Determining if there are any facts and circumstances indicating impairment loss or reversal of impairment losses is a subjective process involving judgment and a number of estimates and interpretations in many cases. When an indication of impairment loss or a reversal of an impairment loss exists, the recoverable amount of the individual asset must be estimated. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs must be determined. 83
      The assumption used in the asset valuation process was a price of CAN$1,550 per ounce of gold in 2013, CAN$1,500 in 2014, and CAN$1,450 in 2015. These prices are used in order to estimate future revenues and are based on an average price obtained from mining industry analysts. In the process of measuring expected future cash flows, management makes assumptions about future operating results, such as future metal production (Proven and Probable reserves), estimated future metal prices, operating costs, capital and site restoration expenses and estimated future foreign exchange rates. These assumptions relate to future events and circumstances. Actual results may differ from estimated results. Income taxes and deferred mining taxes The Corporation is subject to taxes from different tax jurisdictions. Management continually evaluates the likelihood that its deferred tax assets could be realized. This requires management to assess whether it is probable that sufficient taxable income will exist in the future to utilize these losses within the carry-forward period. The Corporation also maintains allowances for uncertain tax positions that, in Management’s opinion, appropriately reflect the risks related to the tax positions subject to discussions, audits, differences of opinion and appeals with the tax authorities or that are otherwise uncertain. These allowances are determined using best estimates of the amount payable based on a qualitative assessment of all relevant information. These allowances are reassessed at the end of each financial reporting period to determine if the amount is sufficient. However, audits by the tax authorities could subsequently result in an additional liability. Upon the definite resolution of a tax issue resulting in a tax amount that differs from the initially recognized tax expense, the difference is recognized in the tax expense of the period of definitive settlement. Share-based remuneration expense The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Corporation has made estimates as to the volatility of its own shares, the probable life of options and the time of exercise of those options. The model used by the Corporation is the Black-Scholes model. The Corporation similarly evaluated the expected extinguishments for each remuneration program within the parameters of each individual program. Provisions and contingent liabilities Judgments are made as to whether a past event has led to a liability that should be recognized in the consolidated financial statements or disclosed as a contingent liability. Quantifying any such liability often involves judgments and estimations. These judgments are based on a number of factors including the nature of the claims or dispute, the legal process and potential amount payable, legal advice received, past experience and the probability of a loss being realized. Several of these factors are sources of estimation uncertainty. Start of advanced exploration phase The Corporation evaluates the potential of each project to determine when the project should progress from the exploration phase to the advanced exploration phase. Once Management has determined that a project has demonstrated a potential for development, and a feasibility study supports its commercial viability and its economic benefit, the project moves into the advanced exploration phase once approval has been given by the Board of Directors. Expenditures related to the project are capitalized as of this time. Start of commercial production Management assesses the stage of completion of each advanced exploration project to determine when it begins commercial production. The Corporation considers a number of criteria to determine when a mine enters into commercial production, thereby resulting in reclassification from “Advanced exploration project” to “Mining site in production”. The following criteria are used: 84
      Production capacity achieved;Recovered grade;Stage of completion of development work. When a mine under advanced exploration project becomes a mining site under production, previously capitalized costs are allocated among the various assets, such as inventory, development expenses, buildings and equipment. Additionally, from that time, some previously capitalized costs are then recognized as expenses and the related income is recognized as precious metals revenue. Depreciation/depletion begins at that time as well. Reconciliation of total cash cost per ounce to production costs:(in thousands of $ other than exchange rate data)
        
        2012
        
        
        2011
        
        
        2010Operating costs as per note 3 of the consolidated financial statements (CAN$)
        
        61,102
        
        
        59,202
        
        
        54,733Royalties as per note 3 of the consolidated financial statements (CAN$)
        
        2,294
        
        
        2,614
        
        
        2,075Total cash costs (CAN$)
        
        63,396
        
        
        61,816
        
        
        56,808Ounces of gold sold
        
        60,741
        
        
        76,143
        
        
        68,123Total cash cost in CAN$/per ounce
        
        1,044
        
        
        812
        
        
        834Average exchange rate (US$/CAN$)
        
        0.9996
        
        
        0.9891
        
        
        1.0299Total cash cost in US$/per ounce
        
        1,044
        
        
        821
        
        
        810
  B.
      Liquidity and Capital Resources (all dollar amounts are in thousands of Canadian dollars, unless otherwise stated) At December 31, 2012, Richmont had a working capital of $54.3 million compared with $68.7 million at December 31, 2011 and $43.9 million at December 31, 2010. The $14.4 million decrease reflects a $3.7 million decrease in cash and cash equivalents, a $9.7 million decrease in exploration tax credits receivable, a portion of which were applied against income and mining tax liabilities, and a $5.4 million increase in account payables and accrued charges that stemmed from the discontinuation of operations at the Francoeur Mine. The $24.8 million increase from 2010 to 2011 reflected a $23.5 million increase in cash and cash equivalents, an $8.9 million increase in credit and taxes receivable, offset by a $2.7 million increase in account payables and accrued charges and an increase of $5.8 million in mining and income taxes payable. Certain of the restricted deposits relate specifically to site restoration. As at December 31, 2012, the Corporation had $161 thousand in deposits restricted with the Quebec government, $184 thousand in deposits restricted with the Ontario government and a credit facility is available to the Corporation in the amount of $3.0 million for the issuance of letters of credit as guarantees for the settlement of asset retirement obligations. The credit facility has a fixed annual fee of 0.85% (0.85% in 2011). The following table provides the allocation of deposits restricted and letters of credit issued as at December 31, 2012: 85
      2012
        
        
        Date of(in thousands of $)
        
        $
        
        
        renewalDeposits restrictedIsland Gold Mine (Lochalsh property)
        
        184Beaufor Mine
        
        107Francoeur Mine
        
        54345Others
        
        339684Letters of creditCamflo Mill
        
        1,332
        
        
        January 20, 2013Island Gold Mine (Kremzar property)
        
        979
        
        
        January 26, 20132,311
 Cash flow from operating activities Cash flow from operations decreased from $38.8 million in 2011 to $7.7 million in 2012. This decrease reflects that net earnings in 2011 were $25.9 million, or $0.81 per share, compared with net loss of $45.0 million or ($1.28) per share in 2012 reflecting a 20% decrease in ounces of gold sales mitigated by a 7% increase in the selling price in Canadian dollars. Futhermore Richmont spent $20.3 million in exploration costs in 2012 compared to $10.9 million in 2011. Cash flow from operations increased from $18.3 million in 2010 to an amount of $38.8 million in 2011 as mentioned above. This increase reflects a 21% increase in the selling price per ounce in Canadian dollars, and a 12% increase in ounces of gold sold. Somewhat mitigating the effect of the improvements were higher exploration and project evaluation costs and higher cost of sales. Cash flow used in investing activities Richmont invested $37.9 million in the ongoing development of its assets in 2012, up from $31.7 million in 2011. The notable year-over-year increase reflects the advancement of the underground exploration drift at the Island Gold Mine to improve access for deep exploration drilling below the mine’s current infrastructure. The level of increased investment similarly reflects the development of the ramp to access the W Zone, a near-surface zone located on the Beaufor Mine property. An additional $2.9 million was invested at the Camflo Mill and other corporate installations in 2012, up from $0.9 million in 2011. The 2011 investment level of $31.7 million represented a notable increase over the $16.8 million investment level of 2010. This variance primarily reflects that a total of 18,910 metres of development and definition drilling were completed during 2011 at the Francoeur Mine, versus a total of 2,902 metres during 2010. Capital expenditures at the Island Gold Mine in 2011 included ongoing development costs, and the refurbishment and acquisition of equipment. Capital expenditures at the Beaufor Mine in 2011 included the construction of a new emergency escape exit from level 12 of the mine to surface, while expenditures of $3.5 million at the W Zone reflected advanced exploration activities and the start of work on the ramp portal. An additional $0.9 million was invested at the Camflo Mill and other corporate installations in 2011, versus $0.5 million in 2010. 86
      (in thousands of $)
        2012$
        
        2011
          $
        
        2010
          $Island Gold Mine
        8,364
        
        4,959
        
        4,650W Zone - Beaufor Property
        9,911
        
        3,480
        
        -Beaufor Mine
        1,192
        
        3,090
        
        2,462Discontinued operation - Francoeur Mine
        15,458
        
        19,237
        
        9,144Other
        2,929
        
        904
        
        51837,854
        
        31,670
        
        16,774
 Cash flow from financing activities The Corporation issued 483,600 common shares during 2012 and 899,400 in 2011 following the exercise of stock options, for a total cash consideration of $1.5 million and $2.8 million, respectively. In 2010, the Corporation issued 401,000 common shares following the exercise of stock options, for a total cash consideration of $1.5 million. In September 2012, the Corporation issued, as part of a private placement, 5,972,540 common shares at $4.35 each for a total consideration of $26.0 million. An expense of $1.0 million has been incurred relating to the issuance of common shares, creating a non recorded future tax asset of $0.2 million. On October 2011, the Corporation issued, as part of a private placement, 980,500 common shares at $10.50 each, for a total cash consideration of $10.3 million and 245,125 stock warrants. An amount of $0.5 million was incurred in relation to the issuance of common shares, creating a future tax asset of $0.1 million. In May 2010, the Corporation filed a $25 million short form base shelf prospectus that covers a 25-month period. Consequently, Richmont Mines may elect to offer and issue common shares of the Corporation, warrants, subscription receipts, or any combination of such securities up to an aggregate initial offering price of $25 million over this timeframe. On June 2010, the Corporation completed an equity financing of 3,300,000 common shares at a price of $5.00 per common share, for gross proceeds of $16.5 million. The net proceeds of the offering has been used for development work at Richmont’s projects, primarily the Francoeur Mine in Quebec, for potential acquisitions and for general corporate purposes. Also, on June 2010, the Corporation issued 1,425,407 common shares at a price of $4.69 each, following Richmont’s successful acquisition of the outstanding 30% of the issued and outstanding shares of Louvem Mines Inc. that it did not previously own. Capital disclosures Richmont’s cash and cash equivalents balance was $59.8 million at December 31, 2012, $63.5 million at December 31, 2011 and $40.0 million at December 31, 2010. The Corporation invests its cash and cash equivalents in high-quality securities issued by government agencies, financial institutions and major corporations, and limits its amount of credit exposure by diversifying its holdings. The Corporation’s objectives when managing its capital are to safeguard the Corporation’s ability to continue as a going concern in order to support ongoing exploration programs and the development of its mining assets, to provide sufficient working capital to meet its ongoing obligations and to pursue potential investments. The Corporation’s working capital is sufficient for its present requirements. The Corporation’s profitability may vary significantly as a result of many factors, including, the price of gold, Canadian dollar/United States dollar 87
      exchange rate, fluctuations in commodity prices and unforeseen variations from expected grade, tonnage levels and production costs at its operating mines. The Corporation has no material commitments for either capital expenditures or its exploration program. The Corporation’s budget can be modified and its investments adjusted depending on available funds and operating and exploration results. The exploration and development of new mineral deposits is subject to numerous risks, discussed in greater detail on page 8. As at December 31, 2012, Richmont Mines had no hedging contracts. In order to finance additional exploration activities or to maintain or increase its liquidity and capital resources, the Corporation may decide to issue new shares or to issue new debt. **C.**
        **Research and Development, Patents and Licenses, etc.**None.D.
        Trend InformationSee discussions in Parts A and B of “ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS”.E.
        Off-Balance Sheet ArrangementsThe Corporation does not have any off-balance-sheet arrangements.F.
        Tabular Disclosure of Contractual Obligations
 As of December 31, 2012, the Corporation had the following long-term liabilities required to be reflected on the Corporation’s balance sheet under International financial reporting standard. Payments due by period(in thousands of $)Less than
        
        
        
        
        
        
        
        
        More thanContractual obligations
        
        Total
        
        
        1 year
        
        
        1-2 years
        
        
        3-4 years
        
        
        4 yearsAsset retirement obligations
        
        6,745
        
        
        370
        
        
        -
        
        
        6,375
        
        
        -Finance leases obligations
        
        995
        
        
        932
        
        
        63
        
        
        -
        
        
        -Long-term share-based compensation
        
        639
        
        
        -
        
        
        -
        
        
        -
        
        
        639Total
        
        8,379
        
        
        1,302
        
        
        63
        
        
        6,375
        
        
        639
 88
      **ITEM 6.**

   **DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**
  **A.**

   **Directors and Senior Management**
 The names, offices, principal occupations, length of service and share ownership of the directors and senior management of the Corporation are as follows: Number of

   Number ofOffice held

   

   

   shares owned

   options heldName and Municipality of

   with the

   Principal

   Director or

   on March 26,

   **on March 26,**Residence

   Corporation

   Occupation

   Officer since

   20131

   2013H. Greg Chamandy7

   Executive

   Businessman

   May 14, 2009

   5,016,3632

   457,000Westmount, QC, Canada

   Chairman ofthe BoardPaul Carmel

   President and

   President and CEO of

   May 22, 2012

   63,000

   324,675Westmount, QC, Canada

   CEO

   Richmont Mines Inc.Réjean Houle4,5

   Director

   Ambassador,

   Jan. 27, 1989

   76,500

   65,000Lasalle, QC, Canada

   

   Canadien HockeyClub Inc.6Eberhard Scherkus3,4

   Director

   Mining Consultant

   April 12, 2012

   60,000

   170,700Oakville, ON, CanadaElaine Ellingham, P. Geo.4,7

   Director

   Geologist, President

   Feb. 4, 2010

   -

   130,000Toronto, ON, Canada

   

   of EllinghamConsulting Ltd.Sam Minzberg3,5

   Director

   Attorney Partner,

   Feb. 4, 2010

   -

   130,000Westmount, QC, Canada

   

   Davies Ward Phillips& Vineberg LLPMichael Pesner, CPA,

   Director

   President, Hermitage

   Nov. 1, 2010

   -

   126,000CA3,5,7

   

   Canada Finance Inc.Montreal, QC, CanadaPierre Rougeau

   Executive

   Executive Vice

   December 3, 2012

   -

   100,000Beaconsfield, QC, Canada

   Vice-

   President and CFO ofPresident and

   Richmont Mines Inc.CFODaniel Adam

   Vice-

   Vice-President,

   March 10, 2008

   35,200

   35,000Rouyn-Noranda, QC,

   President,

   Exploration ofCanada

   Exploration9

   Richmont Mines Inc.Christian Pichette, Eng.,

   Executive

   Executive Vice–

   Oct. 6, 2005

   50,100

   100,200M.Sc.

   Vice-

   President and ChiefBrossard, QC, Canada

   President and

   Operating Officer ofChief

   Richmont Mines Inc.OperatingOfficer8Nicole Veilleux, CPA, CA

   Financial

   Financial Director of

   March 1, 2006

   35,000

   105,300Rouyn-Noranda, QC,

   Director

   Richmont Mines Inc.Canada
 89
      Number of

   Number ofOffice held

   

   

   shares owned

   options heldName and Municipality of

   with the

   Principal

   Director or

   on March 26,

   **on March 26,**Residence

   Corporation

   Occupation

   Officer since

   20131

   2013Sidney Horn

   Corporate

   Attorney, Stikeman

   Dec. 15, 2009

   -

   130,000Outremont, QC, Canada

   Secretary

   Elliott LLPMélissa Tardif

   Assistant

   Legal Advisor of

   August 8,

   -

   20,000Ste-Gertrude-Manneville,

   Corporate

   Richmont Mines Inc.

   2011QC, Canada

   Secretary
 1)

   As the Corporation has no direct knowledge of the number of shares controlled by the above-mentioned directors and officers, the information was provided by each of them.2)

   Of this number, 4,020,854 and 33,704 common shares are held respectively by Oxbridge Bank & Trust SCC, an entity ultimately controlled by Mr. Chamandy and Ms. Chantal Condoroussis, Mr. Chamandy’s spouse.3)

   Member of the Audit Committee.4)

   Member of the Environmental, Health and Safety Committee.5)

   Member of the Human Resources and Compensation Committee.6)

   National Hockey League Team.7)

   Member of the Governance and Ethics Committee.8)

   Mr. Christian Pichette was nominated Executive Vice-President and Chief Operating Officer on May 10, 2012.9)

   Mr. Daniel Adam was nominated Vice-President, Exploration on February 25, 2013. The Corporation does not have any other committee other than those mentioned above. The above-mentioned individuals have held their principal occupation as indicated beside their respective names during the last five years, with the exception of: Mr. Christian Pichette who, prior to May 10, 2012, was Vice-President, Operations of Richmont Mines; Daniel Adam, who, prior to February 25, 2013 was General Manager, Exploration of Richmont Mines; Ms. Mélissa Tardif who, prior August 2011, was a lawyer in a property management company; Mr. Paul Carmel, who, prior to May 22, 2012 was the Managing Director and Head of Mining – Investment Banking for Desjardins Capital Markets; Mr. Pierre Rougeau, who, prior to January 2011 was a Vice-President, Operations and Sales for Abitibi Bowater Inc., and Mr. Ebe Scherkus, who, prior to April 12, 2012, was working as President and Chief Operating Officer at Agnico-Eagle Mines Ltd. 90
      Certain directors also serve on the Boards of Directors of other reporting issuers. The following table presents, for each director, the other reporting issuers for which they serve as directors. Director

   Other Reporting IssuersH. Greg Chamandy

   Chelsea Acquisition Corp. and Liquid Nutrition Group Inc.Sam Minzberg

   HSBC Bank Canada(1), Reitmans (Canada) Limited and Quebecor Media Inc(2).Elaine Ellingham

   Aurania Resources Ltd.Michael Pesner

   Quest Rare Minerals Ltd.(3), Mint Technology Corp., Bitumen Capital Inc., Unite Capital Corp. and Le Château Inc(4).Ebe Scherkus

   Premier Gold Mines Ltd. and Stornoway Diamand Corporation.
 Notes: 1)

   HSBC Bank Canada is a public company in Canada with only preferred shares listed. The bank does not do SEDI filings for their Directors since they don’t hold preferred shares.2)

   Mr. Minzberg is not a Director of Quebecor Inc., he is an insider of Quebecor Inc. by virtue of his directorship of Quebecor Media Inc.3)

   Quest Rare Minerals Ltd. is the new name of Corporation Uranium Quest.4)

   Mr. Pesner is a Director of Le Château Inc. but does not possess any shares or options from the company so there are no SEDI filings for him related to that company. Each director shall, unless he resigns or his office becomes vacant for any reason, hold office until the close of the next annual meeting of shareholders or until his successor is elected or appointed. The directors and officers mentioned above own a total of 5,336,163 common shares of Richmont Mines, which represents 13.48% of the 39,596,103 common shares issued and outstanding of Richmont Mines as at April 19, 2013. **B.**

   **Compensation (all the amounts are in Canadian dollars)**
 Compensation of Senior Officers During the financial year ended December 31, 2012, the five Named Executive Officers of the Corporation (as hereinafter defined) were paid an aggregate remuneration of $4,519,457. The following information sets forth the remuneration paid for the financial year ended December 31, 2012 by the Corporation and its subsidiaries to the Corporation’s President and Chief Executive Officer, Executive Vice-President and Chief Operating Officer and Executive Vice-President and Chief Financial Officer and other executive officers (collectively, the “Named Executive Officers”) who have received in return for services rendered to the Corporation or its subsidiaries in any capacity, an aggregate compensation exceeding $150,000 during the latest fiscal year. In March 2012, the Corporation offered employment agreements to Mr. Pichette, the Executive Vice-President and Chief Operating Officer and Mrs. Nicole Veilleux, the Financial Director both considered to be key personnel. These agreements incorporate a retention payment provided certain conditions are met by the employee, most notably that the employee continues his or her employment with the Corporation until March 2017. These retention payments would be payable in 2017 either through the issuance of the Corporation’s common shares or cash, at the discretion of the employee, with the number of common shares to be determined by the market value of the common shares at the time of payment. 91
      Summary Compensation Table of the Named Executive Officers Share-

   Option-Name and

   Fiscal

   

   based

   based

   Non-equity incentive plan

   All other

   Totalprincipal position

   **year**

   Salary

   **awards**

   awards

   compensation

   compensation

   **compensation**($)

   ($)

   ($)(1)

   ($)

   ($)(2)

   ($)Annual

   Long termincentive

   incentiveplans

   plans(Bonus)Paul Carmel(3)

   2012

   182,000

   

   1,000,000

   184,000

   

   18,250

   1,384,250President and

   2011

   -

   n/a

   -

   -

   n/a

   -

   -Chief Executive

   2010

   -

   

   -

   -

   

   -

   -OfficerPierre Rougeau(4)

   2012

   20,000

   

   183,490

   -

   

   460

   203,950Executive Vice-

   2011

   -

   n/a

   -

   -

   n/a

   -

   -President and

   2010

   -

   

   -

   -

   

   -

   -Chief FinancialOfficerChristian

   2012

   280,000

   

   53,000

   120,000

   

   25,500

   478,500Pichette(5)

   2011

   265,000

   n/a

   70,000

   100,000

   n/a

   20,185

   455,185Executive Vice-

   2010

   255,000

   

   80,000

   55,000

   

   18,960

   408,960President andChief OperatingOfficerNicole Veilleux

   2012

   165,000

   

   25,000

   36,000

   

   16,840

   242,840Financial Director

   2011

   160,000

   n/a

   20,500

   50,450

   n/a

   14,790

   245,7402010

   135,000

   

   38,600

   30,000

   

   13,430

   217,030Martin Rivard(6)

   2012

   208,300

   

   -

   -

   

   2,001,617

   2,209,917President and

   2011

   310,000

   n/a

   150,000

   115,170

   n/a

   25,142

   600,312Chief Executive

   2010

   300,000

   

   118,000

   120,000

   

   14,365

   552,365Officer
 Notes: 1)

   The Corporation granted 15,800 options to Nicole Veilleux and 33,400 options to Christian Pichette on December 12, 2012, 100,000 options to Pierre Rougeau on November 23, 2012 and 324,675 options to Paul Carmel on May, 22, 2012.The fair value of the options granted annually is determined by multiplying the number of options granted by their value under the Black & Scholes model or is based on the value of the services rendered, in accordance with International Financial Reporting Standards. The value determined under Black & Scholes corresponds to the fair accounting value established according to the following assumptions: 2012

   2011

   2010Risk-free rate:

   1.6%

   1.6%

   1.8%Expected option life:

   3.8 years

   4.6 years

   4.6 yearsVolatility:

   62%

   61%

   61%Expected dividends yield:

   0%

   0%

   0%
 2)

   The heading “All Other Compensation” includes:a)

   the amount that was paid to each of the senior management designed to be equivalent to the amount that would normally be paid in the form of a retirement savings plan. Please see the section entitled “Other Compensation” below.b)

   the amount that was paid to each of the senior management for health and life insurance fees, car allowance, parking allowance and professional fees.c)

   any amount that was paid as termination benefits for Martin Rivard.d)

   Please note that the amount of taxable benefit, associated with the exercising of options, is now presented in the section Options Exercised by Named Executive Officers during the Most Recently Completed Financial Year Ended December 31, 2012.3)

   On May 22, 2012, Mr. Paul Carmel was appointed President and Chief Executive Officer.4)

   On December 3, 2012, Mr. Pierre Rougeau was appointed Executive Vice-President and Chief Financial Officer.5)

   On May 10, 2012, Mr. Christian Pichette, Executive Vice-President was appointed Executive Vice-President and Chief Operating Officer.6)

   On February 27, 2012, Mr. Martin Rivard resigned from the position of President and Chief Executive Officer of the Corporation effective May 31, 2012. 92
      Directors compensation (other than the Executive Chairman of the Board) During a meeting held in December 2011, the members of the Board of Directors determined the annual compensation granted to the members of the Board for the fiscal year ended December 31, 2012. During this meeting, it was decided that the members of the Board (with the exception of the Executive Chairman of the Board) would be paid a sum of $20,000 in annual compensation for the 2012 year, that an additional sum of $12,000 would be paid to each Chair of a sub-committee of the Board of Directors, and that meeting attendance fees would no longer be given to Board members. The level of the annual compensation of the members of the Board of Directors (with the exception of the Executive Chairman of the Board) is based on the Human Resources and Compensation Committee’s analysis regarding compensation levels of directors of mining companies that are similar to Richmont. Executive Chairman of the Board compensation On May 12, 2012, the Board of Directors authorized an annual compensation of $270,000 for 2012. The Executive Chairman was not eligible to receive an annual bonus. On an aggregate basis, the Corporation’s Board members therefore received total compensation of $3,429,574 during the 2012 fiscal year, as detailed in the table below. Please note that this table does not include the compensation granted to the Chief Executive Officer, who is also a director of the Board. For more details about the Chief Executive Officer’s compensation, please consult the section “Compensation of the Named Executive Officers for the Financial Year Ended December 31, 2012. Director Compensation Table for the financial year ended on December 31, 2012 Non-EquityShare-

   Option-

   Incentive Plan

   

   All otherFiscal

   Fees

   based

   based

   Compensation

   Pension

   CompensationName

   Year

   **Earned**

   **Awards**

   **Awards(1)**

   (bonus)

   Value

   (2)

   Total($)

   ($)

   ($)

   ($)

   

   ($)

   ($)H. Greg Chamandy

   2012

   270,000

   

   1,211,056

   -

   

   

   1,481,056Executive Chairman

   2011

   235,000

   n/a

   -

   78,333

   n/a

   n/a

   313,333of the Board

   2010

   235,000

   

   56,250

   94,000

   

   

   385,250Robert Buchan(3)

   2012

   180,000

   

   -

   

   

   

   180,000Vice-Chairman of

   2011

   -

   n/a

   -

   n/a

   n/a

   n/a

   -the Board

   2010

   -

   

   -

   

   

   

   -Réjean Houle

   2012

   20,000

   

   144,000

   

   

   

   164,000Director

   2011

   20,000

   n/a

   -

   n/a

   n/a

   n/a

   20,0002010

   20,000

   

   56,250

   

   

   

   76,250Sam Minzberg

   2012

   32,000

   

   144,000

   

   

   

   176,000Director

   2011

   32,000

   n/a

   -

   n/a

   n/a

   n/a

   32,0002010

   32,000

   

   156,900

   

   

   

   188,900Elaine Ellingham

   2012

   38,550

   

   144,000

   

   

   

   182,550Director

   2011

   32,000

   n/a

   -

   n/a

   n/a

   n/a

   32,0002010

   20,000

   

   156,900

   

   

   

   176,900Michael Pesner(4)

   2012

   32,000

   

   144,000

   

   

   

   176,000Director

   2011

   32,000

   n/a

   -

   n/a

   n/a

   n/a

   32,0002010

   5,333

   

   181,298

   

   

   

  186,631
 93
      Non-EquityShare-

   Option-

   Incentive Plan

   

   All otherFiscal

   Fees

   based

   based

   Compensation

   Pension

   **Compensation**Name

   Year

   **Earned**

   **Awards**

   **Awards(1)**

   (bonus)

   Value

   (2)

   Total($)

   ($)

   ($)

   ($)

   

   ($)

   ($)Eberhard Scherkus(5)

   2012

   21,000

   

   568,968

   

   

   

   589,968Director

   2011

   -

   n/a

   -

   n/a

   n/a

   n/a

   -2010

   -

   

   -

   

   

   

   -Denis Arcand(6)

   2012

   10,000

   

   144,000

   

   

   

   154,000Vice-Chairman of

   2011

   20,000

   n/a

   -

   n/a

   n/a

   n/a

   20,000the Board

   2010

   20,000

   

   56,250

   

   

   

   76,250Raynald Vézina(7)

   2012

   10,000

   

   144,000

   

   

   

   154,000Director

   2011

   20,000

   n/a

   -

   n/a

   n/a

   n/a

   20,0002010

   20,000

   

   56,250

   

   

   

   76,250Jean-Pierre Ouellet(8)

   2012

   8,000

   

   144,000

   

   

   

   152,000Director

   2011

   32,000

   n/a

   -

   n/a

   n/a

   n/a

   32,0002010

   32,000

   

   156,900

   

   

   

   188,900A. Michel Lavigne(9)

   2012

   -

   

   -

   

   

   

   -Director

   2011

   -

   n/a

   -

   n/a

   n/a

   n/a

   -2010

   25,202

   

   156,900

   

   

   

   182,102Sidney Horn(10)

   2012

   20,000

   

   -

   

   

   

   20,000Director

   2011

   -

   n/a

   -

   n/a

   n/a

   n/a

   -2010

   -

   

   -

   

   

   

  -
 Notes: 1)

   The Corporation granted 50,000 options to each of the Directors in place on January 10, 2012, 170,700 on April 11, 2012 to a new Director and 352,000 options to the Executive Chairman of the Board on May 10, 2012.The fair value of the options granted annually is determined by multiplying the number of options granted by their value under the Black & Scholes model, in accordance with International Financial Reporting Standards. The value determined under Black & Scholes corresponds to the fair accounting value established according to the following assumptions: 2012

   2011

   2010Risk-free rate:

   1.6%

   1.6%

   1.8%Expected option life:

   3.8 years

   4.6 years

   4.6 yearsVolatility:

   62%

   61%

   61%Expected dividends yield:

   0%

   0%

   0%
 2)

   Please note that the amount of taxable benefit, associated with the exercising of options are now presented in the section Options Exercised by Named Executive Directors during the Most Recently Completed Financial Year Ended December 31, 2012.3)

   Mr. Buchan commenced his position on January 11, 2012 and resigned on September 24, 2012.4)

   Mr. Pesner commenced his position on November 1, 2010. The amount presented for 2010 represents the amounts earned between November 1, 2010 and December 31, 2010.5)

   Mr. Scherkus commenced his position on April 10, 2012. The amount presented for 2012 represents the amounts earned between April 10, 2012 and December 31, 2012.6)

   Mr. Arcand resigned from his position as Director of the Corporation on May 9, 2012.7)

   Mr. Vézina resigned from his position as Director of the Corporation on May 9, 2012.8)

   Mr. Ouellet resigned from his position as Director of the Corporation on February 28, 2012.9)

   Please note that Mr. Lavigne resigned from his position as director and Chairman of the Audit Committee on October 4, 2010, and that the amount presented represents the amount earned between February 4, 2010 and October 4, 2010.10)

   Mr. Horn commenced his position as director on April 5, 2012 and resigned on September 24, 2012. The Corporation has not set aside or accrued any amounts to provide pension, retirement or similar benefits to the directors or executive officers. 94
      **C.**

   **Board Practices**
 The directors serve as directors of the Corporation from their election until the next Annual and Special General Meeting that will be held on May 9, 2013 or until a successor is duly elected. Directors Name

   Elected or AppointedDirectorRéjean Houle

   January 1989H. Greg Chamandy

   May 2009Elaine Ellingham

   February 2010Samuel Minzberg

   February 2010Michael Pesner

   November 2010Eberhard Scherkus

   April 2012Paul Carmel

   May 2012
 Employment Contracts The Corporation has entered into employment contracts with the Named Executive Officers: Paul Carmel, as President and Chief Executive Officer; Pierre Rougeau, as Executive Vice-President and Chief Financial Officer; Christian Pichette, as Executive Vice-President and Chief Operating Officer, and Nicole Veilleux, as Financial Director. The contracts of Christian Pichette and Nicole Veilleux provide that, in the event of termination initiated by the Corporation without cause or initiated by a Named Executive Officer for good reason, or if the contract is not renewed, the Executive Vice-President and Chief Operating Officer, Mr. Pichette, will be entitled to receive an amount equal to one year of total compensation (total compensation is defined as all the components which have monetary value and, without limiting the scope of the foregoing, any salary, bonuses, RRSP contributions and automobile allowances, if any) and the continuation of other benefits over this same period, while the Financial Director, Mrs. Veilleux, for her part will be entitled to one month of total compensation by year of service, notwithstanding such year of service is completed or not. For the purposes of calculating the severance payment, the Named Executive Officer’s total compensation will be based on the annual average of the two (2) complete fiscal years immediately preceding the date of termination. Moreover, and notwithstanding the provisions contained in the Omnibus Long-Term Incentive Plan and the conditions of the options held by the Named Executive Officers, all the options held by each of the Named Executive Officers will become vested on the termination date. Also, the options thus vested on the termination date will be exercisable on the earliest of the following two dates: (i) on the dates initially stipulated; or (ii) two years after the termination date. The estimated amount that could be paid by the Corporation in these given circumstances, assuming that the termination occurred on the last working day of the most recent financial year of the Corporation and that this date falls during the renewal term of the contract of employment of the Named Executive Officer is $475,790 for the Executive Vice-President and Chief Operating Officer and $305,441 for the Financial Director. These amounts include the options annual average value attributed during the last two years. The contracts of Paul Carmel and Pierre Rougeau provide that, if the termination occurs at any time, by the Corporation, without cause, Mr. Carmel and Mr. Rougeau will be entitled to the basic payments (accrued base salary, accrued expenses and vacation), to an indemnity in lieu of notice representing two (2) times the base salary at the time of the termination of the agreement (one (1) time in the case of Mr. Rougeau), the entitlement under the annual bonus plan, the whole minus applicable deductions and the same level of group insurance benefits he was receiving or entitled to receive for two (2) years (one (1) year in the case of Mr. Rougeau) 95
      following the date of termination. All un-vested options held by the executive on the date of termination will automatically vest on this day. The estimated amount that could be paid by the Corporation in these given circumstances, assuming that the termination occurred on the last working day of the most recent financial year of the Corporation is $904,488 for the President and CEO and $363,432 for the Executive Vice-President and Chief Financial Officer. Change of Control Agreements The Corporation has also entered into an agreement with the Executive Chairman of the Board and with each of the Named Executive Officers in case of a change of control. For the Named Executive Officers: In the event that, during a three-year period after the date of a “change of control”, the employment contract of Nicole Veilleux or Christian Pichette were to be terminated by his or her resignation for valid cause or by the severing by the Corporation of the employment relationship binding him or her to the Corporation for cause other than serious cause or his permanent incapacity, then the Corporation shall pay him or her, in addition to the payment of any amount owed to him or her as unpaid salary and vacation accumulated but not yet taken on the termination date, within 30 days of the termination date, a lump sum equivalent to twice his or her total average annual compensation (total compensation is defined as all the components which have monetary value and, without limiting the scope of the foregoing, any salary, bonuses (applicable for the period, regardless of whether they are calculated at that time), benefits, automobile allowances if any and insurance), based on the average annual amount of total compensation for the two full calendar years preceding the termination date, minus applicable deductions. Also, all the options held by the Named Executive Officer will become vested on the termination date and thereupon may be exercised. Moreover, and notwithstanding the provisions contained in the Omnibus Long-Term Incentive Plan and the conditions of the options held by the Named Executive Officers, the maturity dates of the options thus exercisable will be those initially stipulated, but without exceeding three years after the termination date. The change of control agreements will end upon the termination of the Named Executive Officer within the Corporation if it occurs before the occurrence of a change of control. The estimated amount that could be paid by the Corporation in these given circumstances, assuming that a change of control occurred on the last business day of the most recent financial year of the Corporation, is $951,579 for the Executive Vice-President and Chief Operating Officer and $488,706 for the Financial Director. These amounts include the options annual average value attributed during the last two years. In the event that following termination of employment, amounts are payable to a Named Executive Officer pursuant to an employment contract and a change of control agreement, the Corporation would only have to pay the greater of the two amounts for the Executive Vice–President and Chief Financial Officer and for the Financial Director. The contracts of Paul Carmel and Pierre Rougeau provide that, after a change of control, if the contract is terminated within six (6) months following the change in control, Mr. Carmel and Mr. Rougeau will be entitled to the basic payments (accrued base salary, accrued expenses and vacation), to an indemnity in lieu of notice representing three (3) times the base salary at the time of the termination of the agreement (two (2) times in the case of Mr. Rougeau), the entitlement under the annual bonus plan, the whole minus applicable deductions and the same level of group insurance benefits he was receiving or entitled to receive for three (3) years (one (1) year in Mr. Rougeau’s case) following the date of termination. All un-vested options held by the executive on the date of termination will automatically vest on this day. The estimated amount that could be paid by the Corporation in these given circumstances, assuming that a change of control occurred on the last business day of the most recent financial year of the Corporation, is $1,206,732 for the President and Chief Executive Officer and $603,432 for the Executive Vice-President and Chief Financial Officer. 96
      For the Executive Chairman of the Board (the “Executive”): (a) In case of a change of control: In the event that the Executive’s appointment as Chairman of the Board is terminated by the Corporation (including, without limitation, if the Executive does not stand for election or is not elected a director of the Corporation) or the Executive resigns from his position as Executive Chairman of the Board, either (1) at the time of, or within 12 months following, the occurrence of a transaction or event constituting a Change of Control, or (2) within 6 months prior to the occurrence of a transaction or event constituting a Change of Control, in each case (if applicable) whether or not the Executive remains non-executive Chairman of the Board or a director of the Corporation, the Executive will be entitled to the payments and benefits set out hereafter: (a) his annual base salary accrued and unpaid up to and including the date of termination; (b) any annual bonus plan payment to which the Executive may be entitled as of the date of termination; (c) a severance payment equal to one (1) time the Executive’s annual base salary; (d) his accrued expenses up to and including the date of termination. The estimated amount that could be paid by the Corporation in these given circumstances, assuming that a change of control occurred on the last business day of the most recent financial year of the Corporation, is $270,000 for the Executive Chairman of the Board. (b) In case of a termination other than under a change of control: In the event of the termination of the Executive’s appointment as Executive Chairman other than under a change of control, either by the Corporation or by the Executive’s resignation from his position as the Executive Chairman of the Board, (in each case, if applicable, whether or not the Executive remains non-executive Chairman of the Board or a director of the Corporation), the Executive will be entitled to receive the following compensation: (a) his annual base salary accrued and unpaid up to and including the date of termination; (b) any annual bonus plan payment to which the Executive may be entitled as of the date of termination; (c) his accrued expenses up to and including the date of termination. There would not be any amounts owed to the Executive Chairman of the Board following a termination on the last business day of the most recent financial year of the Corporation. In all of the cases noted above, a change of control occurs when: (i) another party acquires, directly or indirectly, alone or with any person acting in concert with him, more than 33 1/3% of the outstanding voting securities of the Corporation, (ii) after a takeover bid, a public offer of exchange, a merger, an arrangement, another form of business combination, a sale of assets of the Corporation or a contested election, or any combination of these transactions, the persons who are directors of the Corporation immediately prior to these transactions cease, after these transactions, to represent the majority of the directors on the Board, or on the Board of Directors of any parent Corporation or successor of the Corporation, or (iii) the shareholders of another entity hold more than 33 1/3% of the outstanding voting securities of the entity resulting from a merger, arrangement or other form of business combination with the other entity. 97
      Human Resources and Compensation Committee The Board has a Human Resources and Compensation Committee composed entirely of independent directors. The Human Resources and Compensation Committee meets at least once a year to make recommendations to the Board on the remuneration of Corporation’s employees, executive officers and directors. The Human Resources and Compensation Committee takes into consideration the responsibilities and workload of executive officers in formulating its recommendations and favors giving key personnel competitive compensation in order to keep them with the Corporation. Each member of the Human Resources and Compensation Committee has been in a senior leadership position in various organizations, and in those capacities obtained direct experience relevant to executive compensation, and has the skills and experience that enable the Human Resources and Compensation Committee to make decisions on the suitability of the Corporation’s compensation policies and practices. In fiscal year 2012, the Human Resources and Compensation Committee of the Corporation was composed of Mr. Sam Minzberg, Mr. Michael Pesner and Mr. Réjean Houle. The compensation of the Executive Chairman of the Board, the President and Chief Executive Officer and the other executive officers is determined by the Board of Directors following recommendations by the Human Resources and Compensation Committee. As the Board of Directors establishes the salaries of executive officers, it should be noted that the Executive Chairman of the Board and the President and Chief Executive Officer abstain from the discussion and the ensuing decision concerning their total compensation arrangements. Governance and Ethics Committee The Board has a Corporate Governance and Ethics Committee, which meets at least once a year and is composed of a majority of independent directors. In fiscal year 2012, the Corporate Governance and Ethics Committee was composed of Elaine Ellingham, Michael Pesner and Greg Chamandy. The Corporate Governance and Ethics Committee’s mandate is to evaluate every aspect of the Corporation’s governance practices. In particular, the Corporate Governance and Ethics Committee examines the effectiveness of the Corporation’s governance practices at regular intervals, and reviews the role and the mandate of the Board and its committees. The Board does not have a nominating committee to identify new candidates for Board nomination, however the Corporate Governance and Ethics Committee exercises all of the functions of a nominating committee. Comprised of a majority of independent directors, the Corporate Governance and Ethics Committee makes recommendations to the Board regarding selection criteria for directors, and periodically reviews the criteria the Board has adopted, as the case may be. When necessary, the Board looks for candidates with varied backgrounds, who can contribute to the overall performance of the Board, and who have demonstrated integrity, independence, experience and leadership in the past. Directors and members of senior management may recommend a candidate to the Corporate Governance and Ethics Committee if he or she believes that the individual possesses the required abilities to successfully perform the duties of a director. The Corporate Governance and Ethics Committee is responsible for conducting an interview with the candidate, from which it will form recommendations that will then be given to the Board of Directors. Audit Committee The Audit Committee is a standing committee of the Board of Directors whose primary function is to carry out a detailed and thorough review of audit matters, to be responsible for the oversight of the work of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit or review services for the Corporation (including resolution of disagreements between management and the auditor regarding financial reporting), to consider and approve related party transactions and to offer the Corporation’s auditors, shareholders and employees a direct link to the non-executive directors. This Committee will assist the Board in fulfilling its oversight responsibilities by reviewing the financial information which will be provided to the 98
      shareholders and others, the internal auditing and disclosure controls and procedures, the audit process, and adherence to applicable laws and regulations. In carrying out its duties, the Committee will apply reasonable materiality standards to all matters under review. The Audit Committee is composed of Messrs Michael Pesner, Ebe Scherkus and Sam Minzberg. All members of the audit committee are independent and financially literate as defined in National Instrument 52-110 Audit Committees(“NI 52-110”). Mr. Pesner is a CPA, CA and is President of Hermitage Canada Finance Inc., a Corporation that specializes in financial advisory services. Previously, Mr. Pesner was a Senior Partner in Financial Advisory Services at the Montreal offices of KMPG, prior to which he was National Executive, Corporate Recovery Partner at KMPG predecessor firm Thorne Ernst & Whinney. Mr. Pesner also serves on the Board of Directors of the following public companies: Quest Rare Minerals Ltd., Mint Technology Corp., Bitumen Capital Inc., Le Château Inc. and Unite Capital Corp. Mr. Scherkus recently retired as President and Chief Operating Officer of Agnico-Eagle Mines Ltd. after a 27 year career. Mr. Scherkus is a graduate of McGill University (B.Sc.), a member of the Association of Professional Engineers of Ontario and past president of the Quebec Mining Association. He also serves as Chairman of the Board of Premier Gold Mines ltd. and Stornaway Diamond Corporation. Mr. Minzberg is a senior partner with the law firm Davies Ward Phillips & Vineberg, LLP in Montreal, and is a member of the firm’s Management Committee. Mr. Minzberg specializes in corporate, commercial and tax law. He was previously President and CEO of Claridge Inc., a management and holding company on behalf of the Charles R. Bronfman Family. Mr. Minzberg also serves on the Board of Directors of Quebecor Média Inc., HSBC Bank Canada and Reitmans (Canada) Ltd. Environmental, Health and Safety Committee On December 8, 2010, the Board of Directors created the Environmental, Health and Safety Committee, composed of a majority of independent directors. In fiscal year 2012, the Environmental, Health and Safety Committee was composed of Réjean Houle, Ebe Scherkus and Elaine Ellingham. The Environmental, Health and Safety Committee is responsible for evaluating whether the Corporation’s current environmental, health and safety practices are appropriate, for ensuring that these practices are standardized across all of the Corporation’s divisions, and for making recommendations when appropriate. The Chairman of the Environmental, Health and Safety Committee is responsible for providing the Board of Directors with an account of the Environmental, Health and Safety Committee. **D.**

   **Employees**
 The number of employees of the Corporation as of December 31, 2012, 2011 and 2010, was 471, 489 and 407 respectively. The distribution of the employees was the following: Category of Activity orGeographical Location

   December 31,2012

   2011

   2010Head Office

   32

   18

   15Beaufor

   163

   141

   102Island Gold

   191

   177

   185Exploration

   20

   14

   11Camflo

   21

   20

   20Francoeur

   44

   119

   74Total

   471

   489

   407
 99
     **E.**

   **Share Ownership**
 See “ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES - A. Directors and Senior Management” above for the number of shares of the Corporation’s common shares held by directors and executive officers of the Corporation. Information regarding the outstanding stock options held by directors and senior management of the Corporation as of December 31, 2012, is set forth below. Stock Options Outstanding to Named Executive Officers and Directors as at December 31, 2012 UnexercisedOptions at Year-Unexercised

   Endunderlying

   (#)

   Exercise price ofsecurities

   Exercisable/

   share options

   Share optionsName

   (unit)

   Unexercisable

   ($)

   expiry datePaul Carmel(3)President and Chief Executive

   324,675

   Nil/ 324,675

   6.61

   June 1, 2019OfficerTOTAL

   324,675Pierre Rougeau(4)Executive Vice-President and

   100,000

   20,000 / 80,000

   3.61

   Nov. 22, 2017Chief Financial OfficerTOTAL

   100,000Christian Pichette(5)

   5,000

   

   2.83

   July 10, 2013Executive Vice-President and

   10,000

   

   1.80

   Dec. 11, 2013Chief Operating Officer

   20,000

   43,080 / 57,120

   3.55

   Dec. 10, 201419,800

   

   5.09

   Dec. 8, 201512,000

   

   12.03

   Dec. 8, 201633,400

   

   3.05

   Dec 11, 2017TOTAL

   100,200Nicole Veilleux

   20,000

   

   2.83

   July 10, 2013Financial Director

   25,000

   

   1.80

   Dec. 11, 201325,000

   79,160 / 26,140

   3.55

   Dec. 10, 201416,000

   

   5.09

   Dec. 8, 20153,500

   

   12.03

   Dec. 8, 201615,800

   

   3.05

   Dec. 11, 2017TOTAL

   105,300H. Greg Chamandy

   75,000

   

   4.12

   May 13, 2014Director and Executive

   30,000

   80,000 / 377,000

   4.19

   Feb. 3, 2015Chairman of the Board

   352,000

   

   6.57

   May 9, 2018TOTAL

   457,000Réjean Houle

   5,000

   

   1.80

   Dec. 11, 2013Director

   10,000

   5,000 / 60,000

   4.19

   Feb. 3, 201550,000

   

   11.51

   Jan. 9, 2015TOTAL

   65,000Sam Minzberg

   50,000

   

   4.19

   Feb. 3, 2015Director

   30,000

   50,000 / 80,000

   4.19

  Feb. 3, 2015
 100
      UnexercisedOptions at Year-Unexercised

   Endunderlying

   (#)

   Exercise price ofsecurities

   Exercisable/

   share options

   Share optionsName

   (unit)

   Unexercisable

   ($)

   expiry date50,000

   

   11.51

   Jan. 9, 2015TOTAL

   130,000Elaine Ellingham

   50,000

   

   4.19

   Feb. 3, 2015Director

   30,000

   50,000 / 80,000

   4.19

   Feb. 3, 201550,000

   

   11.51

   Jan. 9, 2015TOTAL

   130,000Michael Pesner

   50,000

   

   5.31

   Nov. 8, 2015Director

   26,000

   47,334 / 78,666

   5.31

   Nov. 8, 201550,000

   

   11.51

   Jan. 9, 2015TOTAL

   126,000Eberhard Scherkus

   50,000

   

   6.98

   Jan. 9, 2015Director

   20,700

   20,000 / 150,700

   6.98

   April 10, 2017100,000

   

   6.98

   April 10, 2017TOTAL

   170,700
 Description of the Share Option Plans Other than the Omnibus Long-Term Incentive Plan, the Corporation had only one equity-based compensation plan previously in existence, a share option plan, for the benefit of the Corporation’s and its affiliate’s officers, directors, employees and service providers (the “Share Option Plan”). Following the approval and adoption of the Omnibus Long-Term Incentive Plan in May 2012, options are no longer granted under the Share Option Plan and all grants of awards are now made under the Omnibus Long-Term Incentive Plan (the “Omnibus Plan”). As of December 31, 2012, options for the acquisition of a total of 1,377,550 common shares under the Share Option Plan were outstanding and with exercise prices ranging from $1.80 to $12.03 per share, representing approximately 3.5% of the common shares issued and outstanding on such date. As at December 31, 2012, options to acquire a total of 899,900 common shares had been granted under the Omnibus Plan and 324,675 options had been granted outside of the Corporation’s Omnibus Plan, representing approximately 3.1% of the common shares issued and outstanding on such date, leaving a balance of 1,079,006 available options to be issued by the Board of Directors pursuant to the Omnibus Plan, as indicated in the table below. 101
      Information regarding Omnibus and Share Option plans as at December 31, 2012 Number of shares to be

   Weighted-average

   Number of sharesissued upon exercise of

   exercise price of

   available for future grantsoutstanding options

   outstanding options

   under the Omnibus PlanOmnibus and ShareOption plans

   2,277,450

   $5.89

   1,079,006(approved by the holders)
 During the year 2012, 18 option holders exercised a total of 483,600 options. The total number of common shares reserved and available for grant and issuance pursuant to Awards (as defined in the Omnibus Plan) (including the common shares issuable upon exercise of the options granted under the Share Option Plan of the Corporation) shall not exceed a number of common shares equal to ten percent (10%) of the total issued and outstanding common shares of the Corporation at the time of granting of Awards (on a non-diluted basis) or such other number as may be approved by the TSX and the shareholders of the Corporation from time to time. Options are no longer granted under the Share Option Plan and all grants of Awards are now made under the Omnibus Plan. Any increase in the issued and outstanding common shares (whether as a result of exercise of Awards or otherwise) will result in an increase in the number of common shares that may be issued on Awards outstanding at any time and any increase in the number of Awards granted will, upon exercise, make new grants available under the Omnibus Plan. The Omnibus Plan provides that the aggregate number of common shares of the Corporation (a) issued to “Insiders” and “Associates” (as each such term is defined in the Omnibus Plan) of such Insiders under the Omnibus Plan or any other proposed or established share compensation arrangement within any one-year period and (b) issuable to Insiders and Associates of such Insider at any time under the Omnibus Plan or any other proposed or established share compensation arrangement, shall not in each case exceed ten percent (10%) of the issued and outstanding common shares of the Corporation. Awards granted or awarded under the Omnibus Plan may not be assigned or transferred with the exception of an assignment made to a personal representative of a deceased “Participant” (as defined in the Omnibus Plan). The Board of Directors may in its sole discretion, appoint from time to time one or more entities to act as administrative agent to administer the Awards under the Omnibus Plan. The Board of Directors will not provide financial assistance to Participants to assist them in exercising their Awards, provided, however, that the Board of Directors may, in its discretion, amend the Omnibus Plan to authorize the administrator under the Omnibus Plan to make arrangements to provide a form of financial assistance to the Participants. The Omnibus Plan is managed by the Board of Directors which establishes the terms of the option grants, including the exercise price, provided however, that the exercise price is not lower than the market price, as determined by the closing asked price of the common shares on the TSX on the trading day immediately preceding the date of grant. The options granted under the Omnibus Plan are vested or become subject to exercise according to the terms established by the Board of Directors at the time of grant. If the expiry date falls during a blackout period (during any period when the Corporation’s policies do not permit an option holder to exercise an option) or within ten business days following the last day of the blackout period, then the expiry date will be the last day of this ten business day period. Following the termination without cause of an option holder, the options that remain unexercised must be exercised within 60 days in the case of the termination without cause or resignation, 1 year in the case of death, 3 years in the case of disability or injury and 3 years in the case of early retirement. The Board of Directors has the discretionary power to modify these terms and periods, provided that options cannot expire later than 10 years from the date on which they were granted. 102
      If at any time after the grant of an Award to any Participant and prior to the expiration of the term of such Award, the Common Shares shall be reclassified, reorganised or otherwise changed, the Corporation shall consolidate, merge or amalgamate with or into another corporation (the corporation resulting or continuing from such consolidation, merger or amalgamation being herein called the “Successor Corporation”), the Participant shall be entitled to receive upon the subsequent exercise or vesting of such Award, in accordance with the terms thereof and shall accept in lieu of the number of Shares then subscribed for but for the same aggregate consideration payable therefore, the aggregate number of shares of the appropriate class or other securities of the Corporation or the Successor Corporation (as the case may be) or other consideration from the Corporation or the Successor Corporation (as the case may be) that such Participant would have been entitled to receive as a result of such reclassification, reorganization or other change of shares or, as a result of such consolidation, merger or amalgamation, if on the record date of such reclassification, reorganization or other change of shares or the effective date of such consolidation, merger or amalgamation, as the case may be, such Participant had been the registered holder of the number of Shares to which such Participant was immediately theretofore entitled upon such exercise or vesting of such Award. If, at any time after the grant of an Award to any Participant and prior to the expiration of the term of such Award, the Corporation shall make a distribution to all holders of Shares or other securities in the capital of the Corporation, or cash, evidences of indebtedness or other assets of the Corporation (excluding an ordinary course dividend in cash or shares, but including for greater certainty shares or equity interests in a subsidiary or business unit of the Corporation or one of its subsidiaries or cash proceeds of the disposition of such a subsidiary or business unit), or should the Corporation effect any transaction or change having a similar effect, then the price or the number of Shares to which the Participant is entitled upon exercise or vesting of Award shall be adjusted to take into account such distribution, transaction or change. The Board shall determine the appropriate adjustments to be made in such circumstances in order to maintain the Participants' economic rights in respect of their Awards in connection with such distribution, transaction or change. The Board may amend the Omnibus Plan or any Award at any time without the consent of the Participants provided that such amendment shall: not adversely alter or impair any Award previously granted;be subject to any regulatory approvals including, where required, the approval of the TSX; andbe subject to shareholder approval, where required, by law or the requirements of the TSX, provided that shareholder approval shall not be required for the following amendments and the Board may make any changes which may include but are not limited to:amendments of a "housekeeping" nature;a change to the vesting provisions of any Award;the introduction or amendment of a cashless exercise feature payable in securities, whether or not such feature provides for a full deduction of the number of underlying securities from the Omnibus Plan reserve (as defined in the Omnibus Plan);the addition of a form of financial assistance and any amendment to a financial assistance provision which is adopted;a change to the “Eligible Participants” of the Omnibus Plan (as defined in the Omnibus Plan), including a change which would have the potential of broadening or increasing participation by Insiders; andthe addition of a deferred or restricted share unit or any other provision which results in Participants receiving securities while no cash consideration is received by the issuer. The Board shall be required to obtain shareholder approval to make the following amendments: any change to the maximum number of Shares issuable from treasury under the Omnibus Plan; 103
      any amendment which reduces the exercise price of any Award, as applicable, after such an Award has been granted or any cancellation of an Award and the substitution of that Award by a new Award with a reduced price;any amendment which extends the expiry date of any Award, or the Restriction Period (as defined in the Omnibus Plan) of any Restricted Share Units (RSU) beyond the original expiry date, except in case of an extension due to a Black-Out Period (as defined in the Omnibus Plan);any amendment which would permit a change to the Eligible Participants, including a change which would have the potential of broadening or increasing participation by Insiders;any amendment which would permit any Award granted under the Omnibus Plan to be transferable or assignable by any Participant;any amendment which increases the maximum number of Shares that may be issued to (i) Insiders and Associates of such Insiders; or (ii) any one Insider and Associates of such Insider under the Omnibus Plan and any other proposed or established “Share Compensation Arrangement” (as defined in the Omnibus Plan) in a one-year period;any amendment to the amendment provisions of the Omnibus Plan, provided that Shares held directly or indirectly by Insiders benefiting from the amendments shall be excluded when obtaining such shareholder approval. Notwithstanding anything contained to the contrary in the Omnibus Plan, in a “Grant Agreement” (as defined in the Omnibus Plan) contemplated herein, but subject to any specific provisions contained in any “Employment Agreements” (as defined in the Omnibus Plan), in the event of a Change in Control under the Omnibus Plan, a reorganization of the Corporation, an amalgamation of the Corporation, an arrangement involving the Corporation, a take-over bid (as that term is defined in the Securities Act(Québec)) for all of the Shares or the sale or disposition of all or substantially all of the properties and assets of the Corporation, the Board may make such provision for the protection of the rights of the Participants as the Board in its discretion considers appropriate in the circumstances, including, without limitation, changing the “Performance Criteria” (as defined in the Omnibus Plan) and/or other vesting conditions for the Awards and/or the date on which any Award expires or the “Restriction Period” (as defined in the Omnibus Plan), the “Performance Period” (as defined in the Omnibus Plan), the Performance Criteria and/or other vesting conditions for the Awards. The Board may, by resolution, advance the date on which any Award may be exercised or payable or, subject to applicable regulatory provisions and shareholder approval, extend the expiration date of any Award, in the manner to be set forth in such resolution provided that the period during which an “Option” (as defined in the Omnibus Plan) or a Share Appreciation Rights (“SAR”) is exercisable or RSU is outstanding does not exceed ten (10) years from the date such Option or SAR is granted in the case of Options and SARs and three (3) years after the calendar year in which the award is granted in the case of RSUs. The Board shall not, in the event of any such advancement or extension, be under any obligation to advance or extend the date on or by which any Option or SAR may be exercised or RSU may be outstanding by any other Participant. The Committee may, by resolution, but subject to applicable regulatory approvals, decide that any of the provisions hereof concerning the effect of termination of the Participant's employment shall not apply for any reason acceptable to the Human Resources and Compensation Committee. The Board may, subject to regulatory approval, discontinue the Omnibus Plan at any time without the consent of the Participants provided that such discontinuance shall not materially and adversely affect any Awards previously granted to a Participant under the Omnibus Plan. See the additional descriptive information regarding the Omnibus Plan appearing the section entitled “ITEM 10. ADDITIONAL INFORMATION – Omnibus Long-Term Incentive Plan” below. 104
      The table below describes the share options exercised during the financial year ended December 31, 2012 by Named Executive Officers and the aggregate value realized on unexercised options at Year-End. Options Exercised by Named Executive Officers during the Most Recently Completed Financial Year Ended December 31, 2012 Market Valueof SecuritiesSecurities

   UnderlyingName and Principal

   

   Under Options

   Options on the

   

   TaxablePosition

   Exercise Date

   Exercised

   Date of Exercise

   **Exercise Price**

   Benefit(#)

   ($/Security)

   ($/Security)

   ($)Nicole Veilleux,

   March 1, 2012

   5,000

   9.84

   2.83

   35,050Financial DirectorMartin Rivard(1)

   January 5,President and Chief

   2012

   25,000

   10.99

   2.88

   202,750Executive Officer

   March 1, 2012

   50,000

   9.84

   3.15

   334,500April 2, 2012

   40,000

   7.66

   1.80

   234,400April 2, 2012

   45,000

   7.66

   3.55

   184,950April 2, 2012

   19,000

   7.66

   5.09

  48,830
 Note: 1)

   On February 27, 2012, Mr. Martin Rivard resigned from the position of President and Chief Executive Officer of the Corporation effective May 31, 2012. **ITEM 7.**

   **MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**
  **A.**

   **Major Shareholders**
 As of April 19, 2013, to the knowledge of the directors and executive officers of the Corporation, Oxbridge Bank & Trust SCC (“Oxbridge”), an entity ultimately controlled by H. Greg Chamandy, a member of the Board of the Corporation and Chairman of the Board, is the only shareholder, directly or indirectly, beneficially owning or controlling over more than 5% of the outstanding common shares of the Corporation. Oxbridge, with its affiliates, beneficially owns or controls directly or indirectly 5,016,363 common shares and 457,000 common share options, representing approximately 12.67% of the outstanding common shares of the Corporation (excluding common shares underlying outstanding options). See “ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES – E. Share Ownership” above. Mr. Chamandy and Oxbridge became a shareholder of the Corporation in 2009. Mr. Chamandy or Oxbridge does not have any different voting rights compared with the Corporation’s other shareholders. As of April 19, 2013, a total of 7,413,354 shares of the Corporation’s common shares, representing 18.72% of the issued and outstanding shares of the Corporation’s common shares, were held by a total of 124 U.S. record holders. The Corporation is not directly or indirectly owned or controlled by another corporation or by any foreign government or by any other natural or legal person, severally or jointly. The Corporation has no knowledge of any arrangement that may, at a subsequent date, result in a change of control of the Corporation. 105
      **B.**

   **Related Party Transactions**
 A Related Party Transaction is any transaction between the Corporation and (a) enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, the Corporation; (b) associates; (c) individuals owning, directly or indirectly, an interest in the voting power of the Corporation that gives them significant influence over the Corporation, and close members of any such individual’s family; (d) key management personnel, that is, those persons having authority and responsibility for planning, directing and controlling the activities of the Corporation, including directors and senior management and close members of such individuals’ families; and (e) enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence. Throughout the year 2012, and until the date of this Annual Report, certain Related Party Transactions occurred with the Corporation, as described below: Oxbridge Bank & Trust SCC On May 12, 2009, Oxbridge announced that it had acquired common shares of the Corporation and that, together with its joint actors, it owned and controlled an aggregate of approximately 10% of the issued and outstanding common shares of the Corporation. On November 24, 2009, Oxbridge amended its public disclosure related to the Corporation, and announced that it had acquired common shares from a private investor and that, subject to the completion of such acquisition, Oxbridge, together with its joint actors, would own and control common shares and options to purchase common shares representing an aggregate amount of approximately 19.49% of the issued and outstanding common shares (excluding common shares underlying outstanding options). Oxbridge also indicated that it intended to engage in discussions with the Board and management of the Corporation, as well as other shareholders, regarding the Corporation, its prospects and potential means for enhancing shareholder value, including potential changes in the business, strategy or Board composition of the Corporation. On November 25, 2009, in a letter duly authorized by the Board of Directors of Oxbridge and delivered to Denis Arcand, Chairman of the Board, and to the other members of the Board, Mr. Chamandy outlined certain proposals from Oxbridge (the “Oxbridge Proposals”) including the addition of Elaine Ellingham, A. Michel Lavigne, Samuel Minzberg and Jean-Pierre Ouellet (the “Proposed Directors”) to the Board, all with a view to maximizing the Corporation’s potential value for all of its shareholders. On November 30, 2009, Oxbridge announced the completion of the acquisition of common shares announced on November 24, 2009. Based on the Oxbridge Proposals and the Board’s own independent review of the Proposed Director’s qualifications, credentials, expertise, and experience, the directors determined that there existed no impediment, legally or from a corporate governance perspective, to the Proposed Directors acting as directors of the Corporation or holding their proposed positions on the Board committees, for reasons of conflict of interests or otherwise, and that the Proposed Directors, together with the current directors, have the qualifications, credentials, expertise and experience to implement the execution of the contemplated strategic plan for the Corporation’s future growth. Accordingly, on December 15, 2009, the Board unanimously determined that it is in the best interests of the Corporation and all its stakeholders to call a meeting of the shareholders of the Corporation for the purposes of electing the Proposed Directors. In addition, Mr. Chamandy was appointed Chairman of the Board and Mr. Arcand was appointed Vice-Chairman of the Board. Finally, the Board approved and the Corporation executed a mutual undertaking whereby (A) Mr. Chamandy and Oxbridge, in their capacity as shareholders of the Corporation, have undertaken to vote, and to cause to be 106
      voted, all shares of the Corporation that they, or any person with whom they are acting jointly or in connection with the Corporation, control directly or indirectly, in favour of the election of the current directors of the Corporation, as directors of the Corporation at all meetings of the shareholders of the Corporation to be held prior to December 31, 2012, at which directors are to be elected; and (B) the Corporation has undertaken (i) to cause the Proposed Directors (or any replacement) to be included as nominees proposed by the Corporation to its shareholders for election at the meeting; (ii) to ensure that the Proposed Directors and one additional individual (the “Additional Director”) to be identified by Mr. Chamandy, duly authorized by Oxbridge, before the next annual meeting of the shareholders of the Corporation (or any replacement), be included as nominees proposed by the Corporation to its shareholders for election to the Board of Directors at all meetings of the shareholders of the Corporation at which directors are to be elected prior to December 31, 2011; and (iii) to use its commercially reasonable efforts to cause the election of such Proposed Directors at such meetings in each case, provided that (x) there exists no impediment, legal or from a corporate governance perspective, to such replacement person or Additional Director, as the case may be, acting as a director of the Corporation, for reasons of conflict of interest or otherwise, and (y) such replacement person or Additional Director, as the case may be, has the qualifications, credentials, expertise and experience to oversee the execution of the Corporation’s strategic plan for future growth together with the current directors, in each case as determined by the Board of Directors of the Corporation. Davies, Ward, Phillips & Vineberg On February 4, 2010, Director Samuel Minzberg, was elected a Director of the corporation by a majority of shareholders during a special meeting held for that purpose. Mr. Minzberg is a senior partner at the law firm Davies Ward Phillips & Vineberg LLP (“Davies”) and is a member of the firm’s management committee. In 2011, the Corporation paid fees to Davies in the amount of approximately $27 thousand (including taxes) for professional services rendered mainly in legal tax advices ($14 thousand, in 2010, mainly in connection with legal tax advice). Stikeman, Elliott On December 15, 2009, Sidney Horn was named as Corporate Secretary of the Corporation. Mr. Horn is a senior partner at the law firm Stikeman, Elliott LLP (“Stikeman”). In 2012, the Corporation paid fees to Stikeman in the amount of approximately $333 thousand (including taxes) for professional services rendered mainly in connection with general matters and financings. In 2011, the Corporation paid fees to Stikeman in the amount of approximately $225 thousand (including taxes) for professional services rendered mainly in connection with general corporate matters, financings and the option agreement with Globex Mining Enterprises Inc. In 2010, the Corporation paid fees to Stikeman in the amount of approximately $626 thousand (including taxes) for professional services rendered, mainly in connection with the acquisition of Louvem Mines, the completion of an overnight marketed public offering of 3,300,000 common shares of Richmont and for general corporate purposes. Oxbridge Aviation On May 14, 2009, Mr. H. Greg Chamandy was appointed as Director of the Corporation and subsequently Executive Chairman of the Board. Oxbridge Aviation is owned by Mr. H. Greg Chamandy. In 2011, the Corporation paid fees to Oxbridge Aviation in the amount of approximately $4 thousand for a meeting of the Board of Directors in Rouyn-Noranda (Quebec), ($3 thousand, in 2010). 107
      Subsequent Transaction See “ITEM 8. FINANCIAL INFORMATION - B. Significant Change” for a discussion of a February 1, 2012 transaction with the Vice Chairman of the Board and two members of his immediate family. **C.**

   **Interests of Experts and Counsel**
 Not applicable. **ITEM 8.**

   **FINANCIAL INFORMATION**
  **A.**

   **Consolidated Statements and Other Financial Information**
 The following consolidated financial statements of the Corporation are attached to this Annual Report: Independent Auditor’s report of registered public accounting firm dated February 20, 2013 on Internal Control over financial reporting and on the Consolidated Statements of Financial Position as at December 31, 2012, 2011 and 2010, Consolidated Income Statements, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, and Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010. Notes to Consolidated Financial Statements. The Corporation has adopted International Financial Reporting Standards (“IFRS”) for its 2011 fiscal year, as required by the Accounting Standards Board of the Canadian Institute of Chartered Accountants. IFRS requires that all effective standards be retrospectively applied as of the reporting date, which for the Corporation is December 31, 2011. Several important differences exist between the new accounting methods applied under IFRS, the accounting methods previously applied under Canadian GAAP, and the accounting methods under U.S. GAAP. Accordingly, the financial information presented under IFRS is not comparable in all respects with financial information that is prepared in accordance with either Canadian GAAP or US GAAP. The Corporation has not declared or paid any dividends on its common shares since its incorporation. Richmont Mines has no current plans to pay dividends on its common shares. Its present policy is to retain earnings to finance its capital expenditures program. In the future, the Board of Directors may declare dividends according to its assessment of the financial position of the Corporation, taking into account its financing requirements for future growth and other factors that the Board of Directors may deem relevant in the circumstances. The Corporation had no export sales during 2012. Except for the two litigation matters discussed above in the section entitled “Commitments and contingencies,” the Corporation knows of no active, pending or overtly threatened legal or arbitration proceeding to which the Corporation is a party or to which any of its properties is subject which may have, or has had in the recent past, a significant effect on the Corporation’s financial position or profitability. **B.**

   **Significant Change**
 The Corporation has no significant change since the date of the annual financial statements included. **ITEM 9.**

   **THE OFFER AND LISTING**
 The Corporation’s common shares are traded on the TSX under the symbol “RIC” and on the NYSE MKT also under the symbol “RIC”. 108
      Toronto Stock Exchange Set forth below are the high and low sell prices on the TSX for actual trades of shares of the Corporation’s common shares for the periods indicated. Last Five Full YearsToronto Stock ExchangeCommon Shares Trading Activity
  - Price -Canadian DollarsYear Ended

   High

   LowDecember 31, 2008

   $4.20

   $1.21December 31, 2009

   $4.93

   $2.04December 31, 2010

   $5.71

   $3.78December 31, 2011

   $13.39

   $4.28December 31, 2012

   $12.98

   $2.69
   Last Two Full YearsToronto Stock ExchangeCommon Shares Trading Activity
  - Price -Canadian DollarsQuarter Ended

   High

   LowMarch 31, 2011

   $6.54

   $4.28June 30, 2011

   $9.75

   $6.27September 30, 2011

   $13.39

   $6.77December 31, 2011

   $13.35

   $8.30March 31, 2012

   $12.98

   $7.53June 30, 2012

   $7.94

   $4.48September 30, 2012

   $5.37

   $3.30December 31, 2012

   $4.75

   $2.69
   Last Six MonthsToronto Stock ExchangeCommon Shares Trading Activity
  - Price -Canadian DollarsMonth Ended

   High

   LowOctober 31, 2012

   $4.75

   $3.80November 30, 2012

   $4.08

   $2.77December 31, 2012

   $3.15

   $2.69January 31, 2013

   $3.44

   $2.83February 29, 2013

   $3.23

   $2.63March 31, 2013

   $2.83

   $2.30
 * The closing price of the Corporation’s common shares on the TSX on April 19, 2013 was CAN$2.01. 109
      American Stock Exchange and NYSE Amex, NYSE MKT The Corporation’s common shares were listed for trading on the American Stock Exchange effective on March 6, 1997. In 2008, the American Stock exchange was bought by NYSE Alternext and became NYSE Amex in the beginning of 2009.On May 2012, NYSE Amex become NYSE MKT. Set forth below are the high and low sell prices on and NYSE Amex until May 2012, and NYSE MKT thereafter for actual trades of shares of the Corporation’s Common shares for the periods indicated. Last Five Full YearsAmerican Stock Exchange /NYSE Amex, NYSE MKTCommon Shares Trading Activity
  - Price -US DollarsYear Ended

   High

   LowDecember 31, 2008

   $4.18

   $0.95December 31, 2009

   $4.36

   $1.60December 31, 2010

   $5.72

   $3.50December 31, 2011

   $13.40

   $4.28December 31, 2012

   $12.91

   $2.71
   Last Two Full YearsNYSE Amex, NYSE MKTCommon Shares Trading Activity
  - Price -US DollarsQuarter Ended

   High

   LowMarch 31, 2011

   $6.72

   $4.28June 30, 2011

   $10.16

   $6.40September 30, 2011

   $13.40

   $6.86December 31, 2011

   $13.19

   $7.79March 31, 2012

   $12.91

   $7.53June 30, 2012

   $7.93

   $4.32September 30, 2012

   $5.40

   $3.23December 31, 2012

   $4.86

   $2.71
 110
      Last Six MonthsNYSE MKTCommon Shares Trading Activity
  - Price -US DollarsMonth Ended

   High

   LowOctober 31, 2012

   $4.86

   $3.88November 30, 2012

   $4.10

   $2.78December 31, 2012

   $3.19

   $2.71January 31, 2013

   $3.40

   $2.83February 29, 2013

   $3.24

   $2.56March 31, 2013

   $2.76

   $2.23
 * The closing price of the Corporation’s common shares on the NYSE MKT on April 19, 2013 was US$1.97.  **ITEM 10.**

   **ADDITIONAL INFORMATION**
  **A.**

   **Share Capital**
 Not applicable. **B.**

   **Memorandum and Articles of Association**
 The Corporation was incorporated pursuant to Part 1A of the Companies Act(Quebec) on February 12, 1981 (File number 1843-2286) under the name Ressources Minières Rouyn inc. by Article of Amendment filed February 10, 1987 the Corporation added the English version Rouyn Mining Resources Inc. and by another amendment filed with the Government of Quebec on June 20, 1991, the Corporation changed its name to Richmont Mines Inc., now governed by the Business Corporations Act(Quebec) (the “Business Corporations Act”) which replaced the Companies Act(Quebec) on February 14, 2011. The Articles of the Corporation are registered by the Government of Quebec in register S02473, folio 10. The Corporation has perpetual duration and no specific objects or purposes are set forth in its Articles or ByLaws. Amendments to Articles On February 14, 2011, the Companies Act(Quebec) was replaced by the new Business Corporations Act(Quebec) (the “Business Corporations Act”). The new Business Corporations Act provides that a corporation may hold shareholder meetings at a place outside of the Province of Quebec if the Articles so allow. The Board of Directors believes that it would be beneficial both to the Corporation and its shareholders to give the Board flexibility to permit shareholder meetings to be held outside of the Province of Quebec. The new Business Corporations Act further provides that if the Articles so allow, the directors of a corporation that is a reporting issuer may appoint one or more additional directors to hold office for a term expiring not later than the close of the annual shareholders meeting following their appointment, provided that the total number of directors so appointed may not exceed one third of the number of directors elected at the annual shareholders meeting preceding their appointment. The Board believes that it would be beneficial to the Corporation and its shareholders to give the Board flexibility to add directors who possess expertise and knowledge relevant to the 111
      Corporation’s operations from time to time between two annual shareholder meetings. Pursuant to its Articles, the business of the Corporation is managed by a Board of Directors composed of a maximum of eleven directors. Accordingly, the Board of Directors, at its meeting held on March 28, 2011, adopted a resolution to amend the Articles approving the foregoing proposed amendments subject to the receipt of the approval of shareholders. In accordance with the Business Corporations Act, the proposed amendments to the Articles were approved by the shareholders at the Annual and Special General Meeting of shareholders held on May 13, 2011 (the “Meeting”). By-Laws The Corporation updated its General By-laws enacted by the Board of Directors on February 25, 1981, which have been amended since and are now known as the “By-laws”. To align the By-laws with the terminology and principles set out in the new Business Corporations Act as well as governance best practices, the Board of Directors elected to adopt the By-laws on April 5, 2012. (For more information, see exhibit 1.3 of 2011 Annual Report). **Matters affecting shareholders and the calling and holding of their meetings** An annual meeting of shareholders must be held not later than 15 months after the last preceding annual meeting;An annual or special shareholders meeting may be held at the Corporation head office or at any other location that the Directors may determine from time to time;In accordance with the Business Corporations Act, a notice of any special shareholders meeting indicates the date, time and place of the meeting and the business to be transacted and contains the text of any special resolution to be submitted to the meeting;In accordance with the Business Corporations Act, a notice of any annual or special shareholders meeting must be given to shareholders entitled to vote at the meeting and to each director not less than 21 days and not more than 60 days before the date of the meeting;The required quorum to hold a shareholders meeting has been increased to 25% of the issued and outstanding shares carrying the right to vote at the meeting and held by at least two shareholders present in person or represented by proxyholders at the beginning of the meeting;In accordance with the Business Corporations Act, if a shareholders meeting is adjourned for an aggregate of 30 days or more, notice must be given as for an original meeting; **The business of the Board of Directors and the powers of directors** The minimum and maximum number of directors are those indicated in the articles of the Corporation as amended from time to time;The By-laws allow the directors to appoint one or more additional directors to hold office for a term expiring not later than the close of the next annual shareholders meeting following their appointment;In accordance with the Business Corporations Act, the powers of the Board of Directors have been restated to provide for the exercise by the Board of Directors of all the powers necessary to manage, or supervise the management of, the business and affairs of the Corporation. Except to the extent provided by the Business Corporations Act, such powers may be exercised without shareholder approval and may be delegated to a director, an officer or one or more committees of the Board of Directors;Without limiting the foregoing, the By-laws confirm that the Board of Directors may, among other things, borrow money, issue, reissue, sell or hypothecate the Corporation’s debt obligations, have the Corporation enter into a suretyship to secure performance of an obligation of any person and hypothecate all or any of its property, owned or subsequently acquired, to secure any obligation; 112
      A director who is not present at a meeting at which a resolution is adopted is deemed to have consented to the resolution unless the director records his or her dissent in accordance with the Business Corporations Act within 7 days after becoming aware of the resolution; andThe By-laws confirm that a majority of the directors in office constitutes a quorum at any meeting of the Board of Directors. **Provisions regarding conflicts of interest** The By-laws are now consistent with the Business Corporations Act in that they state the general principle contained in the legislative provisions dealing with conflicts of interest of directors and referring to the Business Corporations Act for their implementation, including the manner in which a director must disclose his interest in a contract or a transaction to which the Corporation is party. **Harmonization of provisions regarding the indemnification of directors and officers:** Provisions allowing the Corporation to indemnify directors and officers of the Corporation (or a group in which the Corporation was a shareholder or creditor) have also been amended to be in line with the criteria set out in the Business Corporations Act. **Other amendments** The Corporation keeps the records required by the Business Corporations Act and the Board of Directors may appoint or remove transfer agents or other agents responsible for keeping such records;Shares are certificated unless the Board of Directors, by resolution, determines that shares of any class or series or certain shares of a given class or series will be uncertificated. The Board of Directors may also, by resolution, determine that a certificated share will become an uncertificated share as soon as the paper certificate is surrendered to the Corporation, directly or by the intermediary of a transfer agent; andThe Board of Directors may, from time to time, subject to the laws governing the Corporation, including the Act respecting the transfer of securities and the establishment of security entitlements (R.S.Q. c. T- 11.002), regulate, from time to time or generally, the transfer of the securities of the Corporation; the transfer of uncertificated shares, if any, is subject to the conditions prescribed by law. In accordance with the Business Corporations Act, the By-Laws have been approved and ratified by the shareholders. Omnibus Long-Term Incentive Plan **Introduction** The Board of Directors has approved the Omnibus Long-Term Incentive Plan (the "Omnibus Plan") of the Corporation, (a copy of which has been disclosed in Exhibit "4.2" of 2011 Annual Report), and approved by the shareholders of the Corporation. The Omnibus Plan was drafted to comply with the policies of the TSX and remains subject to any requirements the NYSE MKT may have for the Omnibus Plan to be in compliance with the NYSE standards. The following information is intended as a summary of the Omnibus Plan, and is qualified in its entirety by the more detailed provisions of the Omnibus Plan in the form disclosed as Exhibit "4.2" in 2011 Annual Report. The Omnibus Plan is intended to furnish an incentive to directors, officers, senior executives and other employees of the Corporation, consultants and service providers providing ongoing services to the Corporation ("Eligible Participants", and when such Eligible Participants are granted Awards (as defined below), the "Participants") to continue their services for the Corporation and to encourage such Eligible Participants whose skills, performance and loyalty to the objectives and interests of the Corporation are necessary to its success. 113
      The Omnibus Plan will permit the granting of options ("Options"), restricted share units ("RSUs"), share appreciation rights ("SARs") and retention awards ("Retention Awards" and together with the Options, the RSUs and the SARs, the "Awards") to Eligible Participants of the Corporation. The Omnibus Plan will be administered by the Board of Directors. **General Terms Applicable to Awards** See "ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES - E. Share Ownership". **Specific Terms Related to the Options** The Board of Directors will (i) set the term of the Options granted under the Omnibus Plan which term cannot exceed ten (10) years and (ii) fix the vesting terms of Options as it deems appropriate at the time of the grant of such Options. Should the expiration date for an Option fall within a period during which designated persons cannot trade in any securities of the Corporation pursuant to the Corporation's policy respecting restrictions on insider trading which is in effect at that time (a "Black-Out Period") or within nine (9) business days following the expiration of a Black-Out Period, the expiry date of the Option shall be extended until that date which is the tenth business day following the end of the Black-Out Period. The exercise price of any Options granted pursuant to the Omnibus Plan will be determined by the Board of Directors at the time of the grant, provided that the exercise price shall not be less than the market value of the common shares at the time of the grant which shall be, if the grant is made during a Black-Out Period, the weighted average trading volume price of the common shares on the TSX for the five (5) trading day period following the last day of such Black-Out Period. If the grant is made outside a Black-Out Period, the market value of the common shares shall be the weighted average trading volume price of the common shares on the TSX for the five (5) trading day period ending on the last trading day before the day on which the Option is granted. Pursuant to the Omnibus Plan, the exercise price may also be such other price as is permitted under the rules of the TSX. With the consent of the Board, a Participant may, rather than exercise the Option which the Participant is entitled to exercise under the Omnibus Plan, elect to exercise such Option, in whole or in part and, in lieu of receiving the common shares to which the exercised Option relate, receive the number of common shares, disregarding fractions, which, when multiplied by the market value of the common shares to which the exercised Option relate, have a value equal to the product of the number of common shares to which the exercised Option relate multiplied by the difference between the market value of such common shares and the price of such Option, less any amount withheld on account of income taxes, which withheld income taxes will be remitted by the Corporation. **Specific Terms Related to the RSUs** The Board of Directors, will fix the period during which RSUs may vest, a period which period shall not exceed three (3) years after the calendar year in which the RSU is granted (the "Restriction Period"). Each RSU grant will be subject to certain vesting conditions (including performance criteria, if any) such conditions to be determined by the Board of Directors, as the case may be, and to be provided to the Participant under a separate agreement. The vesting of the RSUs may be subject to the expiration of a performance period which corresponds to the period over which the performance criteria, if any, and other vesting conditions will be measured and which shall not end after the Restriction Period (the "Performance Period"). The Participant will be entitled to receive, after the vesting determination date, which is the date on which, after the end of the Performance Period, if any, the Board of Directors, determines that the vesting conditions (including the performance criteria, if any) are met, but no later than the last day of the Restriction Period (the "RSU Vesting Determination Date"), payment for each awarded RSU in the form of the common shares of the Corporation, cash, or a combination of the common shares and cash, at the discretion of the Board of Directors. For the purposes of such payment, the market value of the common shares of the Corporation shall be the 114
      weighted average trading volume price of the common shares on the TSX for the five trading day period ending on the last trading day before the day on which the payment is made. **Specific Terms Related to the SARs** The Board of Directors will (i) set the term of the SARs granted under the Omnibus Plan which term cannot exceed ten (10) years and (ii) fix the vesting terms of SARs, (including performance criteria, if any) as it deems appropriate at the time of the grant of such SARs. Should the expiration date for a SAR fall within a Black-Out Period or within nine (9) business days following the expiration of a Black-Out Period, the expiry date of the SAR shall be extended until that date which is the tenth business day following the end of the Black-Out Period. The exercise price of any SAR granted pursuant to the Omnibus Plan will be determined by the Board of Directors at the time of the grant, provided that the exercise price shall not be less than the market value of the common shares at the time of the grant which shall be, if the grant is made during a Black-Out Period, the weighted average trading volume price of the common shares on the TSX for the five (5) trading day period following the last day of such Black-Out Period. If the grant is made outside a Black-Out Period, the market value of the common shares shall be the weighted average trading volume price of the common shares on the TSX for the five (5) trading day period ending on the last trading day before the day on which the SAR is granted. The exercise of a SAR with respect to any number of common shares of the Corporation shall entitle the Participant to a payment, in cash or common shares, or a combination of cash and common shares, for each SAR, equal to the excess of the market value of the common shares on the effective date of such exercise over the exercise price per SAR. **Specific Terms Related to the Retention Awards** The Board of Directors will (i) set the term of the Retention Awards granted under the Omnibus Plan and (ii) fix the vesting terms of Retention Awards (including performance criteria, if any) as it deems appropriate at the time of the grant of such Retention Awards. Each Retention Award awarded to a Participant shall entitle the Participant to receive, on the vesting date of the Retention Award, such number of common shares of the Corporation which, when multiplied by the market value of the common shares on the vesting date of the Retention Award, to which the Retention Awards relate, have a value equal to the amount determined by the Board of Directors at the time of the grant (the "Retention Payment"), less any amount withheld on account of income taxes, which withheld income taxes will be remitted by the Corporation. A Participant may, in lieu of receiving the common shares to which the Retention Awards relate, elect to receive, in cash, the Retention Payment, less any amount withheld on account of income taxes, which withheld income taxes will be remitted by the Corporation. **Cessation in Case of Grant of Options, SARs and Retention Awards** Unless the Board of Directors decides otherwise, Options, SARs or Retention Awards granted under the Omnibus Plan will expire at the earlier of the expiration of the original term of the Options, SARs or Retention Awards, and (i) the effective date of the termination as specified in the notice of termination provided by the Corporation to the Participant that its employment has been terminated for cause; (ii) twelve (12) months after the Participant's death; (iii) three (3) years after the Participant's employment has been terminated for reasons other than for "cause" or by reason of injury or disability, after retirement of a Participant (provided that the Participant does not carry on any activities or business in the mining services business prior to the end of the term of his/her Options, SARs or Retention Awards) or after a Participant becoming eligible to receive long-term disability benefits; or (iv) sixty (60) days following the Participant's termination of employment for any other reason. 115
      **Cessation in Case of RSU Grant** Unless the Board of Directors decides otherwise, upon a Participant's (i) death; (ii) termination of employment for reason of injury or disability; (iii) eligibility to receive long-term disability benefits; (iv) retirement (provided that the Participant does not carry on any activities or business in the mining services business prior to the RSU Vesting Determination Date); (v) leave of absence for a period of more than six (6) months authorized by the Corporation; (vi) termination of employment for reasons other than for "cause" (excluding resignation); the Participant's participation in Omnibus Plan in respect of RSUs shall be immediately terminated, provided however, that all unvested RSUs shall remain in effect until the applicable RSU Vesting Determination Date. On the RSU Vesting Determination Date or any earlier date as may be determined by the Board of Directors, the Board of Directors will evaluate whether the vesting conditions and performance criteria, if any, were met in order to determine the amount of the payment to which the Participant is entitled, if any, in accordance with the following formula: D multiplied by

   EF
 where: (i)

   D is equal to the number of RSUs outstanding in the Participant's account,(ii)

   E is equal to the number of completed months during the applicable Performance Period, as of the date of the Participant's death, termination, eligibility date to receive long-term disability benefits, election for a leave of absence or retirement (subject to the condition mentioned above), and(iii)

   F is equal to the total number of months included in the applicable Performance Period. Upon a Participant's employment being terminated for cause or the Participant's resignation, the Participant's participation in the Omnibus Plan shall be immediately terminated and all RSUs credited to such Participant's account that have not vested shall be forfeited and cancelled. **Amendment** The Board of Directors has the discretion to make amendments to the Omnibus Plan which it may deem necessary, without the consent of the Participants, provided that such amendment shall: (a)

   not adversely alter or impair any Award previously granted except as permitted by the provisions of Omnibus Plan;(b)

   be subject to any regulatory approvals including, where required, the approval of the TSX; and(c)

   be subject to the shareholders' approval, where required, by law or the requirements of the TSX, provided that shareholder approval shall not be required for the following amendments and the Board of Directors may make any changes which may include but are not limited to: (i)

   amendments of a "housekeeping" nature;(ii)

   a change to the vesting provisions of any Award;(iii)

   the introduction or amendment of a cashless exercise feature payable in securities, whether or not such feature provides for a full deduction of the number of underlying securities from the Omnibus Plan reserve; 116
      (iv)

   the addition of a form of financial assistance and any amendment to a financial assistance provision which is adopted;(v)

   a change to the Eligible Participants under the Omnibus Plan, including a change which would have the potential of broadening or increasing participation by insiders; and(vi)

   the addition of a deferred or restricted share unit or any other provision which results in Participants receiving securities while no cash consideration is received by the issuer. The Board of Directors shall be required to obtain shareholder approval to make the following amendments: (a)

   any change to the maximum number of common shares of the Corporation issuable from treasury under the Omnibus Plan, except such increase resulting from any increase in the issued and outstanding common shares of the Corporation (whether as a result of exercise of Awards or otherwise) and in the event of an adjustment pursuant to the Omnibus Plan;(b)

   any amendment which reduces the exercise price of any Award after such Awards have been granted or any cancellation of an Award and the substitution of that Award by a new Award with a reduced price, except in the case of an adjustment pursuant to a change in capitalization;(c)

   any amendment which extends the expiry date of any Award or the Restriction Period of any RSU beyond the original expiry date, except in case of an extension due to a Black-Out Period;(d)

   any amendment which would permit a change to the Eligible Participants, including a change which would have the potential of broadening or increasing participation by Insiders;(e)

   any amendment which would permit any Award granted under the Omnibus Plan to be transferable or assignable by any Participant other than by will or by the laws of succession of the domicile of a deceased Participant;(f)

   any amendment which increases the maximum number of common shares of the Corporation (i) issued to Insiders and Associates of such Insiders under the Omnibus Plan or any other proposed or established share compensation arrangement within one-year period; or (ii) issuable to Insiders and Associates of such Insiders at any time under the Omnibus Plan or any other proposed or established share compensation arrangement;(g)

   any amendment to the amendment provisions of the Omnibus Plan; and(h)

   provided that common share of the Corporation held directly or indirectly by Insiders benefiting from such amendments shall be excluded when obtaining such shareholder approval. **Impact of a Change of Control** Subject to the provisions contained in any employment agreement between a holder of Awards and the Corporation, if (i) any person becomes the beneficial owner, directly or indirectly, of 50% or more of either the issued and outstanding common shares of the Corporation or the combined voting power of the Corporation's then outstanding voting securities entitled to vote generally; (ii) any person acquires, directly or indirectly, securities to which is attached the right to elect the majority of the directors of the Corporation; (iii) the Corporation undergoes a liquidation or dissolution or sells all or substantially all of its assets; or (iv) the Corporation is involved in, or becomes subject to, a reorganization, an amalgamation, an arrangement, a take-over bid (as that term is defined in the Securities Act(Québec)) for all of the common shares of the Corporation or the sale or disposition of all or substantially all of the property and assets of the Corporation, the Board of Directors may make such provision for the protection of the rights of the Participants as the Board of Directors, in its discretion, considers appropriate in the circumstances, including, without limitation, changing the performance criteria and/or the vesting conditions for the Awards and/or the date on which any Award expires or 117
      the Restricted Period, the Performance Period, the Performance Criteria and/or the vesting conditions for the Awards. **Shareholder Approval** Shareholders approved the adoption by the Corporation of the Omnibus Plan. The Options granted to Mr. Eberhard Scherkus on April 10, 2012 under the Omnibus Plan, as described in 2011 Annual Report has been ratified and approved. **C.**

   **Material Contracts**
 Private Placements In October 2011, Richmont completed a private placement of 980,500 common shares at CAN$10.50 per share with the Fonds de solidarité FTQ and the Fonds régional de solidarité Abitibi-Témiscamingue, s.e.c. (collectively, the “Subscribers”), for a total cash consideration of CAN$10.3 million. In addition, the private placement entitled the Subscribers to 245,125 warrants to purchase additional Richmont common shares at an exercise price of CAN$13.00 per common share before December 31, 2012. On February 1st, 2012, Richmont Mines completed a CAN$10 million private placement with Mr. Bob Buchan and two members of his immediate family in the form of convertible debentures. The debentures which had a 5 year maturity with a 7.6% annual interest rate were convertible into Richmont common shares at a conversion price of CAN$12.17 per share at the option of the holders at any time following the date of issuance. On September 24, 2012, Richmont Mines announced the immediate retirement of these debentures held by Mr. Bob Buchan and two members of his immediate family. On September 26, 2012, Richmont Mines Inc. completed a non-brokered private placement with four institutional funds, through which the Corporation issued 5.97 million common shares at CAN$4.35 per share for, a total cash consideration of CAN$26 million. Some Directors and officers subscribed to the private placement for an amount representing less than 2% of the private placement. Acquisition of Louvem Mines Inc. On May 18, 2010, Richmont reached an agreement with Louvem Mines Inc.’s (“Louvem”) shareholders regarding the Corporation’s proposed acquisition of the 30% of the issued and outstanding shares of Louvem that it did not previously own. Under terms of the transaction, 9222-0383 Quebec Inc., a wholly-owned subsidiary of Richmont, and Louvem merged on June 30, 2010, and formed a new corporation of the same name, namely Louvem Mines Inc. (“New Louvem”). On the date of the merger, New Louvem shareholders, other than Richmont, received one Richmont common share for each 5.4 New Louvem shares held. As a result, Richmont issued a total of 1,425,407 common shares at a price of $4.69, which was the closing price on the date of issue. Amended and Restated Shareholders Rights Plan **Introduction** On March 28, 2011, the Corporation amended and restated the existing shareholder rights plan which was set to terminate in accordance with its terms in 2012 (the “Amended and Restated Rights Plan”). The Amended and Restated Rights Plan was approved by the shareholders of the Corporation at the Meeting (Reference is made at Item 19. in Exhibit 2.2 of 2011 Annual Report). 118
      **Background** A shareholder rights plan was adopted by the Corporation’s shareholders in 2002 and, in accordance with the terms set out at that time, the Omnibus Plan required ratification at the Corporation’s annual meetings in 2005, 2008 and 2011, and would expire in April 2012. In lieu of shareholders ratifying the Omnibus Plan in 2011 for one year only (the Omnibus Plan expires in 2012), the Board of Directors thought it appropriate to bring the shareholder rights plan up to date. Consequently, a new shareholder rights plan, which will expire in 2021 (10 years following the effective date). This plan needs to be reconfirmed at every third annual meeting of the Corporation. The primary objective of a rights plan is (a) to prevent creeping acquisition of control or an acquisition of control through a partial bid; (b) to provide adequate time to the Board of Directors and shareholders to properly consider and evaluate any unsolicited takeover bid without undue pressure; (c) to provide the Board of Directors and shareholders adequate time to value of all of the assets of the Corporation and for the Corporation to undertake a value recognition program if necessary to demonstrate the value of one or more assets; (d) to provide the Board of Directors of the Corporation adequate time to explore and develop alternatives for maximizing shareholder value if an unsolicited takeover bid is made for the Corporation and to possibly allow competing bids to emerge; and (e) to provide every shareholder of the Corporation an equal opportunity to participate in such a bid and to ensure the equal treatment of all shareholders of the Corporation under such bid. The Amended and Restated Rights Plan encourages a potential acquiror to proceed either by way of a “Permitted Bid” (as defined in the Amended and Restated Rights Plan), which requires the takeover bid to satisfy certain minimum standards designed to promote fairness, or with the concurrence of the Board of Directors. The Amended and Restated Rights Plan is not intended to prevent takeover bids that treat shareholders of the Corporation fairly and has not been adopted in response to any proposal to acquire control of the Corporation. On the effective Date, one Right (as defined in the Amended and Restated Rights Plan) was issued and attached to each common share of the Corporation then outstanding, and one Right will be issued and attached to each common share of the Corporation subsequently issued. In choosing to implement a rights plan, the Board of Directors considered the legislative framework in Canada governing takeover bids. Under provincial securities legislation, a takeover bid means an offer to acquire voting or equity shares of a corporation, where the shares subject to the offer to acquire, together with shares already owned by the bidder and any person or corporation acting jointly or in concert with the bidder, aggregate 20% or more of the outstanding shares of a corporation, but does not include an offer to acquire if the offer to acquire is a step in an amalgamation, merger, reorganization or arrangement that requires approval in a vote of security holders. The Board of Directors has reviewed the Amended and Restated Rights Plan for conformity with current practices of Canadian companies with respect to shareholder protection rights plan. The Corporation believes that the Amended and Restated Rights Plan preserves the fair treatment of shareholders, is consistent with current best Canadian corporate practice and addresses institutional investor guidelines. The Amended and Restated Rights Plan contains substantially the same terms and conditions as the 2008 Rights Plan and has been updated to meet current best Canadian corporate practices. The existing legislative framework for takeover bids in Canada continues to raise the following concerns for shareholders of the Corporation: Time– Canadian securities laws permit a takeover bid to expire 35 days (21 days in the Province of Quebec) after it is initiated. The Board of Directors of the Corporation is of the view that this is not sufficient time to permit shareholders to consider a takeover bid and make a reasoned and unhurried decision as well as permit directors to evaluate a takeover bid, explore, develop and pursue alternatives which it believes are preferable to the takeover bid or which could maximize shareholder value, and make reasoned recommendations to the shareholders. 119
      Pressure to Tender- A shareholder may feel compelled to tender to a takeover bid which the shareholder considers to be inadequate out of concern that in failing to do so, the shareholder may be left with illiquid or minority discounted common shares. This is particularly so in the case of a partial takeover bid for less than all of the common shares, where the bidder wishes to obtain a control position but does not wish to acquire all of the common shares. The Amended and Restated Rights Plan provides the shareholder with a tender approval mechanism which is intended to ensure that the shareholder can separate the decision to tender from the approval or disapproval of a particular takeover bid.Unequal Treatment: Full Value- While existing Canadian securities legislation has substantially addressed many concerns in this regard, there remains the possibility that control of the Corporation may be acquired pursuant to a private agreement in which one or a small group of shareholders dispose of common shares at a premium to market price which premium is not shared with the other shareholders or through a partial bid that may be oppressive to the shareholders of the Corporation.In addition, a person may slowly accumulate common shares through stock exchange acquisitions which may result, over time, in an acquisition of control without payment of fair value for control or a fair sharing of a control premium among all shareholders. **Summary** The following is a summary of the principal terms of the Amended and Restated Rights Plan for the Corporation which is qualified in its entirety by reference to the text of the Amended and Restated Rights Plan and reference is made at Item 19. in Exhibit 2.2 of 2011 Annual Plan. A shareholder or any other interested party may also obtain a copy of the Amended and Restated Rights Plan by contacting the Assistant Corporate Secretary, 161 Avenue Principale, Rouyn-Noranda, Quebec, J9X 4P6; telephone (819) 797-2465; fax (819) 797-0166, by consulting the Web site EDGAR at www.sec.gov/edgar or by consulting the Corporation’s Web Site at www.richmont-mines.com. In the opinion of the Board of Directors, the terms of the Amended and Restated Rights Plan conform to the terms of plans now in place in many other Canadian public companies. **Effective Date** The effective date of the Amended and Restated Rights Plan is March 28, 2011 (the “Effective Date”). **Term** The Amended and Restated Rights Plan will be in effect until the end of the 2014 annual meeting of shareholders of the Corporation unless the Amended and Restated Rights Plan is reconfirmed at that meeting by the shareholders. If the Amended and Restated Rights Plan is so reconfirmed, it will then need to be reconfirmed at every third annual meeting. If it is not reconfirmed it will terminate. Even if reconfirmed by the shareholders, it expires ten years after the Effective Date, at which time a new plan can be adopted. **Issue of Rights** On the Effective Date, one Right was issued and attached to each common share outstanding of the Corporation and will be issued and attached to each common share of the Corporation subsequently issued. **Rights Exercise Privilege** The Rights will separate from the common shares and will be exercisable 10 trading days (the “Separation Time”) after a person has acquired, or commenced a takeover bid to acquire, 20% or more of the common shares, other than by an acquisition pursuant to a takeover bid permitted by the Amended and Restated Rights Plan (a “Permitted Bid”). The acquisition by any person (an “Acquiring Person”) of 20% of the common shares, other than by way of a Permitted Bid, is referred to as a “Flip-in Event”. Any Rights held by an Acquiring 120
      Person will become void upon the occurrence of a Flip-in Event. Ten trading days after the occurrence of the Flip-in Event, each Right (other than those held by an Acquiring Person) will permit the purchase by holders of Rights, other than an Acquiring Person, of common shares at a 50% discount to their market price. The issue of the Rights is not initially dilutive. Upon a Flip-in Event occurring and the Rights separating from the common shares, reported earnings per share of the Corporation on a fully diluted or non-diluted basis may be affected. Holders of Rights not exercising their Rights upon the occurrence of a Flip-in Event may suffer substantial dilution. **Certificates and Transferability** Prior to the Separation Time, the Rights are evidenced by a legend imprinted on certificates for the common shares and are not transferable separately from the common shares. From and after the Separation Time, the Rights will be evidenced by Rights certificates which will be transferable and traded separately from the common shares. **Permitted Bid Requirements** The requirements for a Permitted Bid include the following: the takeover bid must be made by way of a takeover bid circular;the takeover bid must be made to all shareholders of the Corporation as registered on the books of the Corporation, other than the offeror;the takeover bid must be outstanding for a minimum period of 60 days and common shares tendered pursuant to the takeover bid may not be taken up prior to the expiry of the 60 day period and only if at such time more than 50% of the common shares of the Corporation held by shareholders, other than the bidder, its affiliates and persons acting jointly or in concert and certain other persons (the “Independent Shareholders”), have been tendered to the takeover bid and not withdrawn; andif more than 50% of the common shares held by Independent Shareholders are tendered to the takeover bid within the 60 day period, the bidder must make a public announcement of that fact and the takeover bid must remain open for deposits of common shares for not less than ten (10) business days from the date of such public announcement. The Amended and Restated Rights Plan allows for a competing Permitted Bid (a “Competing Permitted Bid”) to be made while a Permitted Bid is in existence. A Competing Permitted Bid must satisfy all the requirements of a Permitted Bid except that it may expire on the same date as the Permitted Bid, subject to the requirement that it be outstanding for a minimum period of thirty-five (35) days. **Waiver** The Board of Directors, acting in good faith, may, prior to the occurrence of a Flip-in Event, waive the application of the Amended and Restated Rights Plan to a particular Flip-in Event (an “Exempt Acquisition”) where the takeover bid is made by a takeover bid circular to all holders of common shares of the Corporation. When the Board of Directors exercises the waiver power for one takeover bid, the waiver will also apply to any other takeover bid for the Corporation made by a takeover bid circular to all holders of common shares prior to the expiry of any other bid for which the Amended and Restated Rights Plan has been waived. Additionally, the Board of Directors, acting in good faith, may waive the application of the Amended and Restated Rights Plan for any Flip-in Event by written notice delivered to the Rights Agent (as such term is defined in the Amended and Restated Rights Plan). 121
      **Redemption** The Board of Directors with the approval of a majority of the votes cast by shareholders (or holders of Rights if the Separation Time has occurred) voting in person or by proxy at a meeting duly called for that purpose may redeem the Rights at $0.000001 per share. Rights will be deemed to have been redeemed by the Board of Directors following completion of a Permitted Bid, Competing Permitted Bid or Exempt Acquisition. **Amendment** After the Meeting, the Board of Directors may amend the Amended and Restated Rights Plan with the approval of a majority vote of the votes cast by shareholders (or the holders of Rights if the Separation time has occurred) voting in person and by proxy at a meeting duly called for that purpose. The Board of Directors without such approval may correct clerical or typographical errors and, subject to approval at the next meeting of the shareholders (or holders of Rights, as the case may be) may make amendments to the Amended and Restated Rights Plan to maintain its validity due to changes in applicable legislation. **Board of Directors** The Amended and Restated Rights Plan will not detract from or lessen the duty of the Board of Directors to act honestly and in good faith with a view to the best interests of the Corporation. The Board of Directors, when a Permitted Bid is made, will continue to have the duty and power to take such actions and make such recommendations to shareholders as are considered appropriate. **Exemptions for Investment Advisors** Investment advisors (for fully managed accounts), trust companies (acting in their capacities as trustees and administrators), statutory bodies whose business includes the management of funds and administrators of registered pension plans acquiring 20% or more of the common shares of the Corporation are exempted from triggering a Flip-in Event, provided that they are not making, or are not part of a group making, a takeover bid. **Approval of the Directors** The directors of the Corporation have unanimously approved and adopted the Amended and Restated Rights Plan. In adopting the Amended and Restated Rights Plan, the directors concluded, for the reasons discussed above, that it was in the best interests of the Corporation and the shareholders to do so. The directors believe that the Amended and Restated Rights Plan preserves the fair treatment of shareholders of the Corporation, is consistent with Canadian’s corporate practice and addresses institutional investor guidelines. **Shareholder Approval** The Amended and Restated Rights Plan was confirmed and approved by the affirmative vote of a majority of the votes cast by shareholders of the Corporation at the Meeting. **D.**

   **Exchange Controls**
 There are no governmental laws, decrees, regulations or other legislation in Canada that may affect the export or import of capital, or the remittance of interest, dividends or other payments to non-residents holders of the Corporation’s common shares, except that any remittance of dividends to United States residents is subject to a 15% withholding tax (5% if the shareholder is a corporation owning at least 10% of the common shares of the Corporation) pursuant to Article X of the reciprocal income tax treaty between Canada and the United States. 122
      **E.**

   **Taxation**
 The following summary of the material Canadian federal income tax considerations generally applicable in respect of the common shares reflect the Corporation’s opinion. The tax consequences to any particular holder of common shares will vary according to the status of that holder as an individual, trust, corporation or member of a partnership, the jurisdiction in which that holder is subject to taxation, the place where that holder is resident and, generally, according to that holder’s particular circumstances. This summary is applicable only to holders who are resident in the United States, have never been resident in Canada, deal at arm’s length with the Corporation, hold their common shares as capital property and who will not use or hold the common shares in carrying on business in Canada. Special rules, which are not discussed in this summary, may apply to a United States holder that is an issuer that carries on business in Canada and elsewhere. This summary is not exhaustive of all possible income tax consequences. It is not intended as legal or tax advice to any particular holder of common shares and should not be so construed. Each holder should consult his own tax advisor with respect to the income tax consequences applicable to him in his own particular circumstances. Disposition of common shares If a non-resident were to dispose of common shares of the Corporation to another Canadian corporation which deals or is deemed to deal on a non-arm’s length basis with the non-resident and which, immediately after the disposition, is connected with the Corporation (i.e., the non-resident and any person with whom the non-resident does not deal at arm’s length holds directly or indirectly shares representing more than 10% of the voting power and more than 10% of the market value of all issued and outstanding shares of the Corporation), the amount by which the fair market value of any consideration (other than any shares of the purchaser corporation) exceeds the paid-up capital of the common shares sold will be deemed to be taxable as a dividend paid by the purchasing corporation, either immediately or eventually by means of a deduction in computing the paid-up capital of the purchasing corporation, and subject to withholding taxes as described below. Under the Income Tax Act(Canada), a gain from the sale of common shares of the Corporation by a non-resident will not be subject to Canadian tax since the common shares of the Corporation are listed on a prescribed stock exchange, provided the shareholder (and persons who do not deal at arm’s length with the shareholder) have not held a “substantial interest” in the Corporation (25% or more of the shares of any class of the Corporation’s stock) at any time in the five years preceding the disposition. Generally, the Canada-United States Income Tax Convention (1980) (the “Treaty”) will exempt from Canadian taxation any capital gain realized by a resident of the United States, provided that the value of the common shares is not derived principally from real property situated in Canada. Dividends In the case of any dividends paid to non-residents, the Canadian tax is withheld by the Corporation, which remits only the net amount to the shareholder. By virtue of Article X of the Treaty, the rate of tax on dividends paid to residents of the United States is generally limited to 15% of the gross dividend (or 5%, in the case of certain corporate shareholders owning at least 10% of the Corporation’s voting shares). In the absence of treaty provisions, the rate of Canadian withholding tax imposed on non-residents is 25% of the gross dividend. Stock dividends received by non-residents from the Corporation are taxable by Canada as ordinary dividends. If a non-resident holder disposes of common shares to the Corporation (unless the Corporation acquired the common shares in the open market in the manner in which shares would normally be purchased by any member of the public), this will result in a deemed dividend to the non-resident holder equal to the amount by which the consideration paid by the Corporation exceeds the paid-up capital of such stock. The amount of such dividend will be subject to withholding tax as described above. 123
      Capital Gains A non-resident of Canada is not subject to tax under the Income Tax Act(Canada) in respect of a capital gain realized upon the disposition of a share of a class that is listed on a prescribed stock exchange unless the share represents “taxable Canadian property” to another holder thereof. A common share of the Corporation will be taxable Canadian property to a non-resident holder if, at any time during the period of five years immediately preceding the disposition, the non-resident holder, persons with whom the non-resident holder did not deal at arm’s length, or the non-resident holder and persons with he/she did not deal at arm’s length owned 25% or more of the issued shares of any class or series of the Corporation. In the case of a non-resident holder to whom shares of the Corporation represent taxable Canadian property and who is resident in the United States, American tax will be payable on a capital gain realized on such shares by reason of the Treaty unless the value of such shares is derived principally from real property situated in Canada or the non-resident holder previously held the shares while resident in Canada. However, in such a case, certain transitional relief under the Treaty may be available. Certain United States Federal Income Tax Consequences The following is a summary of the material United States federal income tax consequences of the acquisition, ownership and disposition of common shares of the Corporation by a United States Holder (as defined below) that holds the common shares as a capital asset. The discussion does not cover all aspects of United States federal income taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have on, the acquisition, ownership or disposition of common shares of the Corporation by particular shareholders, and does not address state, local, foreign or other tax laws. In particular, this summary does not address tax considerations applicable to persons that own (directly or indirectly) 10 percent or more of the Corporation’s voting shares, nor does this summary discuss all of the tax considerations that may be relevant to certain types of persons subject to special treatment under the United States federal income tax laws (such as financial institutions, insurance companies, persons liable for the alternative minimum tax, individual retirement accounts and other tax-deferred accounts, tax-exempt organizations, dealers in securities or currencies, persons that hold the common shares as part of straddles, hedging transactions or conversion transactions for United States federal income tax purposes or persons whose functional currency is not the United States dollar). As used herein, the term “United States Holder” means a beneficial owner of the Corporation’s common shares that is (i) a citizen or resident of the United States for United States federal income tax purposes, (ii) a corporation, or other entity treated as a corporation, created or organised under the laws of the United States or any State thereof, (iii) an estate the income of which is subject to United States federal income tax without regard to its source or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust. The summary is based on the tax laws of the United States, including the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, existing and proposed regulations thereunder, published rulings and court decisions, as well as on the income tax treaty between the United States and Canada (the “Treaty”), all as currently in effect and all subject to change at any time, possibly with retroactive effect. Distributions on common shares of the Corporation General. United States Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Corporation are required to include in gross income for United States federal income tax purposes the gross amount of such distributions to the extent that the Corporation has current or accumulated earnings and profits (as determined for United States federal income tax purposes), without reduction for any Canadian income tax withheld from such distributions. Such income will be foreign source dividend income and generally will not be eligible for the dividends received deduction allowed to corporations. Canadian tax withheld from such distributions may be credited, subject to certain limitations, against the United States Holder’s United States federal income tax liability or, alternatively, may be deducted in computing the United States Holder’s United States federal taxable income by those who itemize deductions. (See more detailed 124
      discussion in the section captioned “Foreign Tax Credit” below). To the extent that distributions exceed current or accumulated earnings and profits of the Corporation, they will be treated first as a return of capital up to the United States Holder’s adjusted basis in the common shares, and then as capital gain. Preferential tax rates for long-term capital gains are applicable to a United States Holder that is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a United States Holder that is a corporation. The Corporation does not maintain calculations of its earnings and profits in accordance with United States Federal income tax accounting principles. For taxable years beginning on or after January 1, 2013, dividends paid by foreign qualified corporations to non-corporate taxpayers will be taxed at the same rate as long-term capital gains, rather than at the higher ordinary income tax rate. A foreign corporation such as the Corporation is a qualified corporation (i) if the corporation is eligible for the benefits of a comprehensive income tax treaty with the United States which the United States Internal Revenue Service (“IRS”) determines is satisfactory and which contains an exchange of information provision, or (ii) to the extent that the dividends are paid with respect to stock that is readily tradable on an established securities market in the United States. The IRS has ruled that the Treaty is a satisfactory treaty for this purpose. Accordingly, dividends paid with respect to shares of the Corporation should be eligible for the reduced tax rate. Eligibility for the reduced tax rate is dependent on satisfying a holding period and certain other limitations. The reduced tax rate also cannot be claimed with respect to dividends that are included as investment income for purposes of the limitation on the deduction of investment interest. For tax years beginning after 2012, dividends paid to U.S. citizens and residents with modified adjusted gross income above $200,000 ($250,000 for joint returns) also will be subject to a 3.8% Medicare contribution tax. The 3.8% tax is imposed on the lesser of net investment income or the excess of modified adjusted gross income above $200,000 ($250,000 for joint returns). For trusts the threshold applies at the top marginal bracket, which for 2013 starts at $11,950. There is an exemption for foreign trusts except to the extent the foreign trust has United States beneficiaries. Foreign Currency Dividends. Dividends paid in Canadian dollars will be included in income in a US dollar amount calculated by reference to the exchange rate in effect on the day the dividends are received by the United States Holder, regardless of whether the Canadian dollars are converted into US dollars at that time. If dividends received in Canadian dollars are converted into US dollars on the day they are received, the United States Holder generally will not be required to recognize foreign currency gain or loss with respect to the dividend income. A United States Holder may have foreign currency gain or loss if it does not convert the amount of such dividend into U.S. dollars on the date of its receipt. Effect of Canadian Withholding Taxes. As discussed above in Taxation, Dividend, under current law payments by the Corporation to foreign investors are subject to a 25% Canadian withholding tax. The rate of withholding applicable to United States Holders that are eligible for benefits under the Treaty generally is reduced to a maximum rate of 15% (except for certain corporate holders). For United States federal income tax purposes, United States Holders will be treated as having received the amount of Canadian taxes withheld by the Corporation, and as then having paid over the withheld taxes to the Canadian taxing authorities. As a result of this rule, the amount of dividend income included in gross income for United States federal income tax purposes by a United States Holder with respect to the payment of dividends may be greater than the amount of cash actually received (or receivable) by the United States Holder from the Corporation with respect to the payment. Foreign Tax Credit Subject to certain limitations, a United States Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Corporation may be entitled, at the option of the United States Holder, to either a deduction or a tax credit for such foreign tax paid or withheld. United States Holders that are eligible for benefits under the Treaty will not be entitled to a foreign tax credit for the amount of Canadian taxes withheld in excess of the 15% maximum rate available under the Treaty, and with respect to which the United States Holder can obtain a refund from the Canadian taxing authorities. The limitation in foreign taxes eligible for credit is calculated separately with respect to specific classes of income. The rules 125
      governing foreign tax credits are complex and, therefore, United States Holders should consult their tax advisor regarding the availability of foreign tax credits in their particular circumstances. United States Holders that are accrual basis taxpayers must translate Canadian taxes into United States dollars at a rate equal to the average exchange rate for the taxable year in which the taxes accrue, while all United States Holders must translate taxable dividend income into U.S. dollars at the spot rate on the date received. This difference in exchange rates may reduce the U.S. dollar value of the credits for Canadian taxes relative to the United States Holder’s United States federal income tax liability attributable to a dividend. Disposition of common shares of the Corporation A United States Holder will recognize gain or loss from the sale of common shares of the Corporation equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholder’s tax basis in the common shares of the Corporation. This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the United States Holder, which will be a short-term or long-term capital gain or loss depending upon the holding period of the United States Holder. Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year. Deductions for net capital losses are subject to significant limitations. For United States Holders that are not corporations, net capital loss may be offset against up to $3,000 of ordinary income each tax year, and any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For United States Holders that are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward from the loss year to be offset against capital gains until the earlier of five years or the exhaustion of the net capital loss. As with dividends, for tax years beginning after 2012, capital gains of U.S. citizens and residents with modified adjusted gross income above $200,000 ($250,000 for joint returns) will be subject to a 3.8% Medicare contribution tax. Backup Withholding and Information Reporting Payments of dividends or other proceeds with respect to common shares of the Corporation by a United States paying agent or other United States intermediary will be reported to the IRS and to the United States Holder as may be required under applicable regulations. Backup withholding at a rate of 28 per cent may apply to these payments if the United States Holder fails to provide an accurate taxpayer identification number or certification of foreign or other exempt status or fails to report all interest and dividends required to be shown on its United States federal income tax returns. Certain United States Holders (including, among others, corporations) are not subject to backup withholding. United States Holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining exemption. **F .**

   **Dividends and Paying Agents**
 Not applicable. **G.**

   **Statement by Experts**
 Not applicable. **H .**

   **Documents on Display**
 Subject to confidentiality concerns, all documents concerning the Corporation that are referred to in this Report may be inspected by shareholders upon reasonable advance notice, at the Corporation’s headquarters at 161, avenue Principale, Rouyn-Noranda, Quebec, J9X 4P6. A summary in English of any such document not in English will be provided. 126
      **I.**

   **Subsidiary Information**
 Not applicable. **ITEM 11.**

   **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
 Commodity Price and Foreign Currency Risk Disclosure See “ITEM 4. INFORMATION ON THE CORPORATION – B. Business Overview - Gold Marketing and Sales” above. The Corporation’s revenues are mainly denominated in US dollars, while investments and operating costs, primarily accrue in Canadian dollars. The Corporation’s cash flows and results of operations will therefore be affected by fluctuations in the US/CAN dollar exchange rate. The Corporation’s financial results are sensitive to movements in the price of gold, and the US$/CAN$ exchange rate, as the Corporation mostly generates revenue in US dollars and generally incurs expenses in Canadian dollars. The following table describes, for demonstration purposes only, the financial impact that changes in certain variables would generally have had on the Corporation’s 2012 net earnings, all other variables bring constant. SENSITIVITY ANALYSISVariable

   Change

   Impact on net earnings(in thousands of CAN$)Price of gold (US$)

   +/-10% per ounce

   +/- 7,903Exchange rate (US$/CAN$)

   +/- 7% (US$/CAN$)

   +/- 5,572
  To reduce the effects of fluctuations in US/CAN dollar exchange rates, the Corporation may use financial instruments to hedge currency exposures in the ordinary course of business. The Corporation has not entered into such agreements over the last three (3) years. The Corporation does not require or place collateral for its foreign currency and gold hedging derivatives. However, the Corporation seeks to minimize its credit risk by dealing with only major international banks and financial institutions. Interest Rate Risk Disclosure At December 31, 2012, the Corporation had long-term finance lease obligations. See “ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS - A. Operating Results – Long-Term Debt” above. The Corporation does not believe it is exposed to significant interest rate risk. **ITEM 12.**

  **DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**
 Not applicable. 127
      PART II **ITEM 13.**

   **DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**
 There have been no defaults, dividend arrearages or delinquencies. **ITEM 14.**

   **MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**
 There have been no material modifications to the rights of security holders. See “ITEM 10. ADDITIONAL INFORMATION – C. Material Contracts” for a description of the Corporation’s Amended and Restated Shareholders’ Rights Plan. **ITEM 15.**

   **CONTROLS AND PROCEDURES**
  a)

   Disclosure Controls and Procedures. Based on their evaluation of the Corporation’s disclosure controls and procedures as of the end of the period covered by this Annual Report, and pursuant to Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, Paul Carmel, President and Chief Executive Officer and Pierre Rougeau, Executive Vice-President and Chief Financial Officer, have concluded that the Corporation’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e)) are designed to ensure that information required to be disclosed by the Corporation in the reports that it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and are operating in an effective manner.
  b)

   Management’s Annual Report on Internal Control Over Financial Reporting. Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act. The Corporation’s internal control system was designed to provide reasonable assurance to the Corporation’s management and Board of Directors regarding the reliability of financial reporting and the preparation of published financial statements in accordance with IFRS. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation.
 Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2012. In making this assessment, management used the criteria for effective internal control over financial reporting set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Based on this assessment, management has concluded that, as of December 31, 2012, the Corporation’s internal control over financial reporting was effective based on those criteria. The effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2012 has been audited by Raymond Chabot Grant Thornton LLP, an independent registered public accounting firm, as stated in their report which appears herein. The Corporation will continue to periodically review its disclosure controls and procedures and internal controls over financial reporting and may make modifications from time to time as considered necessary or desirable. c)

   Attestation Report of the Registered Public Accounting Firm. The attestation report of Raymond Chabot Grant Thornton LLP, an independent registered public accounting firm, regarding the Corporation’s internal control over financial reporting is included under Item 18.
 128
      d)

   Changes in Internal Control Over Financial Reporting. Management regularly reviews its system of internal control over financial reporting and makes changes to the Corporation’s processes and systems to improve controls and increase efficiency, while ensuring that the Corporation maintains an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.
 There were no changes in the Corporation’s internal control over financial reporting that occurred during the period covered by this Annual Report on Form 20-F that have materially affected, or are reasonable likely to materially affect, the Corporation’s internal control over financial reporting. ITEM 16.A.

   AUDIT COMMITTEE FINANCIAL EXPERT
 The Corporation’s Board of Directors has determined that Michael Pesner, chairman of the Audit Committee, serves as “audit committee financial expert” on its audit committee and that he is also an “independent” director as defined under the listing standards of the NYSE MKT. ITEM 16.B.

   CODE OF ETHICS
 The Board has a Code of Ethics for individuals responsible for financial information, including the President and Chief Executive Officer, the Executive Vice-President and Chief Financial Officer, the Financial Director, the Executive Vice-President and Chief Operating Officer and any other person performing functions that are connected to the objective of the Code of Ethics for Financial Reporting Individuals. The Code of Ethics for Financial Reporting Individuals, which is under the responsibility of the Audit Committee, is reviewed and reassessed annually and must be signed by all associated employees every year. A copy of such code may be obtained by making a request to the Assistant Corporate Secretary of the Corporation. The Board also has a Code of Business Conduct and Ethics for its directors, officers and employees. The Corporation similarly has a whistle blower policy under the terms of which employees can report an offence to the Code of Business Conduct and Ethics, or voice a concern relating to possible irregularities with regards to internal accounting, auditing or internal controls, by communicating confidentially with a Director appointed by email, mail or telephone. A memo was sent to all employees of the Corporation explaining this procedure. Furthermore, no director may participate in any Board discussion regarding a matter in which he has a conflict of interest, and may not vote on any such matter. Copies of the Business Conduct and Ethics Code and the Code of Ethics for Financial Reporting Individuals are available on EDGAR at www.sec.gov/edgar.shtml. ITEM 16.C.

   PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Audit Committee’s Pre-Approval Policies and Procedures Beginning in 2004, the Corporation’s Audit Committee provided to the Corporation’s principal independent accounting firm a list of preapproved services. If officers of Richmont Mines request such firm to perform other services on behalf of the Corporation, the independent accounting firm must have the approval of the Audit Committee chairman before accepting the mandate, which request must also be formally approved by the Audit Committee at the next Audit Committee meeting. The list of services provided to the Corporation’s principal independent accounting firm is subject to revision every year by the Audit Committee and can be modified by the Audit Committee at any time by sending written notice to the Corporation’s principal independent accounting firm. The following tables show the total fees billed for each of the two past financial years by the Corporation’s principal independent accounting firm. Audit Fees The aggregate fees billed by the external auditors for audit services for each of the last three financial years are the following: 129
      Nature of services

   2012

   2011

   2010Audit services*

   $133,000

   $175,500

   $187,000
 * Includes the audit of the internal controls and financial reporting as required by the Sarbanes-Oxley legislation.  Audit-Related Fees The aggregate fees billed for each of the last three financial years for certification services and related services provided by the external auditors which are reasonably related with the performance of the audit or review of the Corporation’s financial statements are described in the following table: Nature of services

   2012

   2011

   2010Special work

   $25,050

   $69,800

   $82,800
  Taxation Fees The aggregate fees billed for each of the last three financial years for the professional services provided by the external auditors with regards to tax compliance, tax advice and tax planning are described in the following table: Nature of services

   2012

   2011

   2010Review quarterly estimate

   $10,125

   $10,125

   $10,000Planning and tax advice

   $7,925

   $16,250

   $7,950
  All Other Fees The aggregate fees billed for each of the last three financial years for the products and services provided by the external auditors, other than the services previously stated, are described in the following table: Nature of services

   2012

   2011

   2010Other consultations

   $8,185

   $3,293

   $1,650Other expenses

   $8,960

   $9,265

   $9,916
  100% of all Audit Related Fees, Tax Fees and All Other Fees reported above were approved by the Corporation’s Audit Committee. ITEM 16.D.

   EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
 The Corporation did not rely on any exemption from the listing standards for audit committees. ITEM 16.E.

   PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
 The Corporation had no share repurchase program in effect in 2012. ITEM 16.F.

   CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
 Not applicable. 130
      ITEM 16.G.

   CORPORATE GOVERNANCE
 NYSE MKT Corporate Governance Matters The Corporation’s common shares are listed on NYSE MKT. Section 110 of the NYSE MKT Corporation Guide permits the NYSE MKT to consider the laws, customs and practices of the foreign issuer’s country of domicile in relaxing certain NYSE MKT listing criteria, and to grant exemptions from NYSE MKT listing criteria based on these considerations. A corporation seeking relief under these provisions is required to provide written certification from independent local counsel that the non-complying practice is not prohibited by home country law. A description of the significant ways in which the Corporation’s governance practices differ from those followed by domestic companies pursuant to NYSE MKT standards is as follows: 
  Shareholder Meeting Quorum Requirement: The NYSE MKT recommended minimum quorum requirement for a shareholder meeting is one-third of the outstanding common shares. In addition, a corporation listed on NYSE MKT is required to state its quorum requirement in its By-Laws. The Corporation’s quorum requirement as set forth in its By-Laws is two shareholders with at least 10% of the issued and outstanding common shares entitled to vote at a meeting of shareholders whether present in person or represented by proxy.
  Proxy Delivery Requirement: NYSE MKT requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings, and requires that these proxies shall be solicited pursuant to a proxy statement that conforms to SEC proxy rules. The Corporation is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act and Rule 405 under the Securities Act and the equity securities of the Corporation are accordingly exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Corporation solicits proxies in accordance with applicable rules and regulations in Canada.
  Shareholder Approval Requirement:The Corporation will follow the Canadian securities regulatory authorities and Toronto Stock Exchange rules for shareholder approval of new issuances of its common shares. Following such securities and exchange rules, shareholder approval is required for certain issuances of shares that: (i) materially affect control of the Corporation; or (ii) provide consideration to insiders in aggregate of 10% or greater of the market capitalization of the listed issuer and have not been negotiated at arm’s length. Shareholder approval is also required, pursuant to Toronto Stock Exchange rules, in the case of most private placements: (x) for an aggregate number of listed securities issuable greater than 25% of the number of securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the date of closing of the transaction if the price per security is less than the market price; or (y) that during any six month period are to insiders for listed securities or options, rights or other entitlements to listed securities greater than 10% of the number of securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the date of the closing of the first private placement to an insider during the six month period. The Corporation believes that foregoing are consistent with the laws, customs and practices in Canada. In addition, the Corporation may from time-to-time seek relief from NYSE MKT corporate governance requirements on specific transactions under Section 110 of the NYSE MKT Corporation Guide by providing written certification from independent local counsel that the non-complying practice is not prohibited by the Corporation’s home country law. 131
      ITEM 16.H.

   MINE SAFETY DISCLOSURE
 Neither Richmont Mines nor any subsidiary has received any notice of any violations concerning mine safety or other regulatory matters under the Federal Mine Safety and Health Act of 1977. There were no mining related fatalities at any mines operated by Richmont Mines or its subsidiaries and there is no pending legal action before the Federal Mine Safety and Health Review Commission. PART III **ITEM 17.**

   **CONSOLIDATED FINANCIAL STATEMENTS**
 The Corporation has elected to provide consolidated financial statements pursuant to Item 18 of Form 20-F. **ITEM 18.**

   **CONSOLIDATED FINANCIAL STATEMENTS**
 The audited consolidated financial statements referred to below are included herein and found immediately following the text of this Annual Report. The report of the Independent Auditor on such consolidated financial statements is included herein immediately preceding such audited consolidated financial statements. Audited Consolidated Financial Statements Independent Auditor’s report of registered public accounting firm dated February 20, 2013 on Internal Control over financial reporting and on the Consolidated Statements of Financial Position as at December 31, 2012, 2011 and, 2010, Consolidated Income Statements, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, and Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010, and a summary of significant accounting policies, and other explanatory information. 132
      ITEM 19.

   EXHIBITS
 Exhibit No.

   Exhibit1.1

   Articles of the Corporation, including all amendments thereto(1)1.2

   By-Laws of the Corporation, including all amendments thereto(2)1.3

   New By-Laws No. 2012-1 adopted by the shareholders at the Annual Meeting on May 10, 2012(3)2.1

   Shareholder Rights Plan(4)2.2

   Amended and Restated Shareholders’ Rights Plan(5)4.1

   Acquisition Agreement and Amalgamation Agreement (Acquisition of Louvem Mines Inc.)(5)4.2

   Omnibus Long-Term Incentive Plan adopted by the shareholders at the Annual Meeting on May 10, 2012(6)4.3

   Private Financing: Fonds de solidarité des travailleurs du Québec (F.T.Q.); Fonds régional de solidarité Abitibi-Témiscamingue, société en commandite(7)4.4

   Private Financing: Robert Buchan; Fraser Buchan; Jennifer Buchan(7)4.5

   Private Financing: Non-brokered private placement with four institutional funds †8.1

   List of Subsidiaries †12.1

   Rule 13a-14(a)/15d-14(a) Certifications †13.1

   Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Actof 2002, 18 U.S.C. Section 1350 †
  † Filed herewith.
  (1)

   Incorporated by reference to Exhibit No. 1 to the Company’s Registration Statement on Form 20-F dated September 25, 1996 filed with the Securities and Exchange Commission and Amendments to Articles mentioned under “Item 10 Additional Information” into the Corporation’s Annual Report on Form 20-F for the fiscal year ended December 31, 2010 filed with the Securities and Exchange Commission on May 5, 2011.(2)

   Incorporated by reference to Exhibit No. 1 to the Company’s Registration Statement on Form 20-F dated September 25, 1996 filed with the Securities and Exchange Commission and Amendment to By-Laws mentioned under “Item 10 Additional Information” into the Corporation’s Annual Report on Form 20-F for the fiscal year ended December 31, 2010 filed with the Securities and Exchange Commission on May 5, 2011.(3)

   Incorporated by reference to Exhibit No. 1 to the Corporation’s Annual Report under “Item 10 Additional Information” on Form 20- F for the fiscal year ended December 31, 2011 filed with the Securtities and Exchange Commission on April 27, 2012.(4)

   Incorporated by reference to the identically numbered exhibit to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2006 filed with the Securities and Exchange Commission on May 10, 2007.(5)

   The Acquisition and Amalgamation Agreements were filed on EDGAR on May 28, 2010 and the Amended and Restated Shareholders Rights Plan was filed on EDGAR on April 14, 2011. These documents are incorporated by reference in this Annual Report.(6)

   The Omnibus Long-Term Incentive Plan incorporated in the 2011 Management Information Circular and in the 2011 Annual Report on Form 20-F was filed on EDGAR on April 27, 2012. That document is incorporated by reference in this Annual Report.(7)

   The two Private Financing (the first one with Fonds de solidarité des travailleurs du Québec (F.T.Q.) and Fonds régional de solidarité Abitibi-Témiscamingue, société en commandite), (the second one with Robert Buchan; Fraser Buchan; Jennifer Buchan) were filed on Form 20-F on EDGAR on April 27, 2012. Those documents are incorporated by reference in this Annual Report. 133
      SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf. RICHMONT MINES INC.RegistrantDated: April 19, 2013

   By:

   (/s/) Pierre RougeauPierre RougeauExecutive Vice-President and Chief Financial Officer
      Consolidated Financial Statements of RICHMONT MINES INC. Years ended December 31, 2012 and 2011
      INDEPENDENT AUDITOR’S REPORT OF REGISTERED PUBLICACCOUNTING FIRM To the shareholders of Richmont Mines Inc. We have completed integrated audits of Richmont Mines Inc.’s 2012, 2011 and 2010 consolidated financial statements and of its internal control over financial reporting as at December 31, 2012. Our opinions, based on our audits, are presented below. Report on the consolidated financial statements We have audited the accompanying consolidated financial statements of Richmont Mines Inc., which comprise the consolidated statements of financial position as at December 31, 2012 and 2011 and the consolidated income statements, the consolidated statements of comprehensive income, the consolidated statements of changes in equity and the consolidated statements of cash flows for each of the years in the three-year period ended December 31, 2012, and a summary of significant accounting policies and other explanatory information. Management’s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and for such internal control as management determines necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform an audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence, on a test basis, about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting principles and policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Richmont Mines Inc. as at December 31, 2012 and 2011 and its financial performance and its cash flows for each of the years in the three-year period ended December 31, 2012 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Report on internal control over financial reporting We have also audited Richmont Mines Inc. internal control over financial reporting as at December 31, 2012, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
      INDEPENDENT AUDITOR’S REPORT OF REGISTERED PUBLICACCOUNTING FIRM Management’s responsibility Management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s report on Internal Control over Financial Reporting. Auditor’s responsibility Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on assessed risk and performing such other procedures as we considered necessary in the circumstances. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal control over financial reporting. Definition of internal control over financial reporting A Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with International Financial Reporting Standards. A Company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with International Financial Reporting Standards, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the consolidated financial statements. Inherent limitations Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, Richmont Mines Inc. maintained, in all material respects, effective internal control over financial reporting as at December 31, 2012, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).   Montreal (Canada) February 20, 2013 1 CPA auditor, CA public accountancy permit no. A105359
      RICHMONT MINES INC.Consolidated Financial StatementsYears ended December 31, 2012 and 2011
 Consolidated Financial Statements Consolidated Income Statements

   1Consolidated Statements of Comprehensive Income

   2Consolidated Statement of Changes in Equity

   3Consolidated Statements of Financial Position

   6Consolidated Statements of Cash Flows

   7Notes to Consolidated Financial Statements

   8
      CONSOLIDATED INCOME STATEMENTS Years ended December 31 (in thousands of Canadian dollars) 2012

   

   2011

   

   2010$

   

   $

   

   $CONTINUING OPERATIONSRevenues from precious metals

   101,148

   

   118,239

   

   87,182Cost of sales (note 3)

   73,798

   

   71,696

   

   66,103GROSS PROFIT

   27,350

   

   46,543

   

   21,079OTHER EXPENSES (REVENUES)Exploration and project evaluation (note 4)

   20,265

   

   10,926

   

   7,260Administration (note 5)

   10,270

   

   5,456

   

   4,913Loss (gain) on disposal of long-term assets (note 7)

   198

   

   (3,010

   )

   (489

   )Other revenues (note 8)

   (598

   )

   (343

   )

   (3,287

   )30,135

   

   13,029

   

   8,397OPERATING EARNINGS (LOSS)

   (2,785

   )

   33,514

   

   12,682Financial expenses (note 9)

   656

   

   115

   

   103Financial revenues (note 10)

   (837

   )

   (1,187

   )

   (468

   )EARNINGS (LOSS) BEFORE MINING AND INCOME TAXES

   (2,604

   )

   34,586

   

   13,047MINING AND INCOME TAXES (note 11)

   373

   

   8,543

   

   3,743NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS

   (2,977

   )

   26,043

   

   9,304NET LOSS FROM DISCONTINUED OPERATION (note 12)

   (42,038

   )

   (125

   )

   (98

   )NET EARNINGS (LOSS)

   (45,015

   )

   25,918

   

   9,206NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS

   -

   

   -

   

   (128

   )NET EARNINGS (LOSS) ATTRIBUABLE TO RICHMONT MINES SHAREHOLDERS

   (45,015

   )

   25,918

   

   9,334EARNINGS (LOSS) PER SHARE(note 13)Basic earnings (loss) per shareEarnings (loss) from continuing operations

   (0.08

   )

   0.81

   

   0.33Loss from discontinued operation

   (1.20

   )

   -

   

   -Basic net earnings (loss)

   (1.28

   )

   0.81

   

   0.33Diluted earnings (loss) per shareEarnings (loss) from continuing operations

   (0.08

   )

   0.80

   

   0.32Loss from discontinued operation

   (1.20

   )

   -

   

   -Diluted net earnings (loss)

   (1.28

   )

   0.80

   

   0.32BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (in thousands)

   35,055

   

   31,813

   

   28,687DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (in thousands)

   35,207

   

   32,434

   

   29,016
 The accompanying notes are an integral part of the consolidated financial statements. 1
      CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year ended December 31 (in thousands of Canadian dollars) 2012

   

   2011

   

   2010$

   

   $

   

   $NET EARNINGS (LOSS)

   (45,015

   )

   25,918

   

   9,206OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXESFair value variation on available-for-sale financial assets

   (281

   )

   (274

   )

   1,071Realized gains on sale of available-for-sale financial assets transferred to net earnings

   (90

   )

   (142

   )

   (210

   )OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES

   (371

   )

   (416

   )

   861TOTAL COMPREHENSIVE INCOME (LOSS)

   (45,386

   )

   25,502

   

   10,067COMPREHENSIVE LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS

   -

   

   -

   

   (128

   )COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO RICHMONT MINES SHAREHOLDERS

   (45,386

   )

   25,502

   

   10,195(45,386

   )

   25,502

   

   10,067
 The accompanying notes are an integral part of the consolidated financial statements. 2
      CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended December 31, 2012 (in thousands of Canadian dollars) Available-for-Retained

   

   saleContributed

   

   earnings

   

   financialShare capital

   

   surplus

   

   (deficit)

   

   assets

   

   Total equity$

   

   $

   

   $

   

   $

   

   $BALANCE AT DECEMBER 31, 2011

   104,872

   

   6,688

   

   22,173

   

   401

   

   134,134Issue of sharesCommon

   25,981

   

   -

   

   -

   

   -

   

   25,981Exercise of share options

   2,174

   

   (653

   )

   -

   

   -

   

   1,521Common shares issue costs

   (914

   )

   -

   

   -

   

   -

   

   (914

   )Convertible debentures -Equity component, net impact

   -

   

   88

   

   -

   

   -

   

   88Deferred income and mining tax liabilities

   -

   

   (23

   )

   -

   

   -

   

   (23

   )Share-based compensation

   -

   

   2,962

   

   -

   

   -

   

   2,962Transactions with Richmont Mines shareholders

   27,241

   

   2,374

   

   -

   

   -

   

   29,615Net loss

   -

   

   -

   

   (45,015

   )

   -

   

   (45,015

   )Other comprehensive lossAvailable-for-sale financial assets:Fair value variation, net of taxes

   -

   

   -

   

   -

   

   (281

   )

   (281

   )Reclassification to net earnings, net of taxes

   -

   

   -

   

   -

   

   (90

   )

   (90

   )Total comprehensive loss

   -

   

   -

   

   (45,015

   )

   (371

   )

   (45,386

   )BALANCE AT DECEMBER 31, 2012

   132,113

   

   9,062

   

   (22,842

   )

   30

   

   118,363
 The accompanying notes are an integral part of the consolidated financial statements. 3
      CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended December 31, 2011 (in thousands of Canadian dollars) Available-for-Retained

   

   saleContributed

   

   earnings

   

   financialShare capital

   

   surplus

   

   (deficit)

   

   assets

   

   Total equity$

   

   $

   

   $

   

   $

   

   $BALANCE AT DECEMBER 31, 2010

   91,010

   

   6,709

   

   (3,745

   )

   817

   

   94,791Issue of sharesCommon

   10,295

   

   -

   

   -

   

   -

   

   10,295Exercise of share options

   3,904

   

   (1,100

   )

   -

   

   -

   

   2,804Common shares issue costs

   (337

   )

   -

   

   -

   

   -

   

   (337

   )Share-based compensation

   -

   

   1,079

   

   -

   

   -

   

   1,079Transactions with Richmont Mines shareholders

   13,862

   

   (21

   )

   -

   

   -

   

   13,841Net earnings

   -

   

   -

   

   25,918

   

   -

   

   25,918Other comprehensive income (loss)Available-for-sale financial assets:Fair value variation, net of taxes

   -

   

   -

   

   -

   

   (274

   )

   (274

   )Reclassification to net earnings, net of taxes

   -

   

   -

   

   -

   

   (142

   )

   (142

   )Total comprehensive income (loss)

   -

   

   -

   

   25,918

   

   (416

   )

   25,502BALANCE AT DECEMBER 31, 2011

   104,872

   

   6,688

   

   22,173

   

   401

   

   134,134
 The accompanying notes are an integral part of the consolidated financial statements. 4
      CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended December 31, 2010 (in thousands of Canadian dollars) Total equityAvailable-

   

   attributableRetained

   

   for-sale

   

   to Richmont

   

   

   Non-Share

   

   Contributed

   

   earnings

   

   financial

   

   Mines

   

   

   controlling

   

   Totalcapital

   

   surplus

   

   (deficit)

   

   assets

   

   shareholders

   

   

   interests

   

   equity$

   

   $

   

   $

   

   $

   

   $

   

   

   $

   

   $BALANCE ATJANUARY 1, 2010

   67,087

   

   6,226

   

   (7,954

   )

   (44

   )

   65,315

   

   

   1,986

   

   67,301Issue of shares for cashCommon

   16,500

   

   -

   

   -

   

   -

   

   16,500

   

   

   -

   

   16,500Exercise of share options

   2,078

   

   (597

   )

   -

   

   -

   

   1,481

   

   

   -

   

   1,481Issue of shares in exchange for non-controlling interests

   6,685

   

   -

   

   (5,125

   )

   -

   

   1,560

   

   

   (1,858

   )

   (298

   )Common shares issue costs

   (1,340

   )

   -

   

   -

   

   -

   

   (1,340

   )

   

   -

   

   (1,340

   )Share-based compensation

   -

   

   1,080

   

   -

   

   -

   

   1,080

   

   

   -

   

   1,080Transactions with Richmont Mines shareholders

   23,923

   

   483

   

   (5,125

   )

   -

   

   19,281

   

   

   (1,858

   )

   17,423Net earnings (loss)

   -

   

   -

   

   9,334

   

   -

   

   9,334

   

   

   (128

   )

   9,206Other comprehensive income (loss)Available-for-sale financial assetsFair value variation, net of taxes

   -

   

   -

   

   -

   

   1,071

   

   1,071

   

   

   -

   

   1,071Reclassification to net earnings, net of taxes

   -

   

   -

   

   -

   

   (210

   )

   (210

   )

   

   -

   

   (210

   )Total comprehensive income (loss)

   -

   

   -

   

   9,334

   

   861

   

   10,195

   

   

   (128

   )

   10,067BALANCE ATDECEMBER 31, 2010

   91,010

   

   6,709

   

   (3,745

   )

   817

   

   94,791

   

   

   -

   

   94,791
 The accompanying notes are an integral part of the consolidated financial statements. 5
      CONSOLIDATED STATEMENTS OF FINANCIAL POSITION December 31 (in thousands of Canadian dollars) December 31,

   

   December 31,2012

   

   2011$

   

   $ASSETSCURRENT ASSETSCash and cash equivalents

   59,810

   

   63,532Shares of publicly-traded companies

   30

   

   893Receivables (note 14)

   2,921

   

   3,063Income and mining tax assets

   916

   

   916Exploration tax credits receivable

   3,485

   

   13,176Inventories (note 15)

   7,764

   

   7,59774,926

   

   89,177RESTRICTED DEPOSITS (note 18 c)

   684

   

   290PROPERTY, PLANT AND EQUIPMENT (note 16)

   65,150

   

   77,456DEFERRED INCOME AND MINING TAX ASSETS (note 11)

   7,484

   

   1,067TOTAL ASSETS

   148,244

   

   167,990LIABILITIESCURRENT LIABILITIESPayables, accruals and provisions

   17,356

   

   12,005Income and mining taxes payable

   1,972

   

   8,461Current portion of long-term debt

   932

   

   -Current portion of asset retirement obligations

   370

   

   -20,630

   

   20,466LONG-TERM DEBT (note 17)

   702

   

   -ASSET RETIREMENT OBLIGATIONS (note 18 d)

   6,375

   

   6,685DEFERRED INCOME AND MINING TAX LIABILITIES (note 11)

   2,174

   

   6,705TOTAL LIABILITIES

   29,881

   

   33,856EQUITYShare capital (note 19)

   132,113

   

   104,872Contributed surplus

   9,062

   

   6,688Retained earnings (deficit)

   (22,842

   )

   22,173Accumulated other comprehensive income

   30

   

   401TOTAL EQUITY

   118,363

   

   134,134TOTAL LIABILITIES AND EQUITY

   148,244

   

   167,990Commitments (note 22)
 The accompanying notes are an integral part of the consolidated financial statements. On behalf of the Board: /s/ Paul Carmel

   /s/ Michael PesnerPaul Carmel

   Michael PesnerDIRECTOR

   DIRECTOR
 6
      CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31 (in thousands of Canadian dollars) 2012

   

   2011

   

   2010$

   

   $

   

   $OPERATING ACTIVITIESNet earnings (loss)

   (45,015

   )

   25,918

   

   9,206Adjustments for:Depreciation and depletion

   10,771

   

   10,097

   

   7,637Impairment loss on Francoeur Mine’s assets

   41,161

   

   -

   

   -Non-cash expenses related to discontinued operation

   4,571

   

   -

   

   -Taxes received (paid)

   (3,626

   )

   1,597

   

   (981

   )Interest revenues

   (718

   )

   (570

   )

   (259

   )Interest and accretion expenses on long-term debt

   596

   

   -

   

   -Share-based compensation

   3,601

   

   1,079

   

   1,080Accretion expense – asset retirement obligations

   66

   

   127

   

   117Loss (gain) on disposal of long-term assets

   205

   

   (3,010

   )

   (489

   )Gain on disposal of shares of publicly-traded companies

   (90

   )

   (142

   )

   (210

   )Mining and income taxes

   (6,655

   )

   8,543

   

   3,7434,867

   

   43,639

   

   19,844Net change in non-cash working capital items (note 20)

   2,789

   

   (4,801

   )

   (1,565

   )Cash flows from operating activities

   7,656

   

   38,838

   

   18,279INVESTING ACTIVITIESAcquisition of shares of publicly-traded companies

   -

   

   (102

   )

   -Disposition of shares of publicly-traded companies

   582

   

   246

   

   501Restricted deposits

   (394

   )

   -

   

   (184

   )Interest received

   736

   

   517

   

   220Property, plant and equipment – Francoeur Mine

   (15,458

   )

   (19,237

   )

   (9,144

   )Property, plant and equipment – Island Gold Mine

   (8,364

   )

   (4,959

   )

   (4,650

   )Property, plant and equipment – Beaufor Mine

   (1,192

   )

   (3,090

   )

   (2,462

   )Property, plant and equipment – W Zone

   (9,911

   )

   (3,480

   )

   -Property, plant and equipment – Other

   (2,929

   )

   (904

   )

   (518

   )Disposition of property, plant and equipment

   105

   

   3,032

   

   533Redemption of non-controlling interests

   -

   

   -

   

   (325

   )Cash flows used in investing activities

   (36,825

   )

   (27,977

   )

   (16,029

   )FINANCING ACTIVITIESIssue of convertible debentures

   10,000

   

   -

   

   -Retirement of convertible debentures

   (10,000

   )

   -

   

   -Issue of common shares

   27,502

   

   13,099

   

   17,981Common shares issue costs

   (914

   )

   (458

   )

   (1,340

   )Interest paid

   (508

   )

   -

   

   -Payment of finance leases obligations

   (633

   )

   -

   

   -Cash flows from financing activities

   25,447

   

   12,641

   

   16,641Net change in cash and cash equivalents

   (3,722

   )

   23,502

   

   18,891Cash and cash equivalents, beginning of period

   63,532

   

   40,030

   

   21,139Cash and cash equivalents, end of period (note 25 d)

   59,810

   

   63,532

   

   40,030
 The accompanying notes are an integral part of the consolidated financial statements. 7
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars) 1.

   General information and compliance with IFRS
 Richmont Mines Inc. (the “Corporation“), initially incorporated under Part 1A of the Quebec Companies Act, has been governed by the Business Corporations Act (Quebec) since February 14, 2011 and is engaged in mining, exploration and development of mining properties, principally gold. The consolidated financial statements have been prepared by the Corporation’s management in accordance with International Financial Reporting Standards (“IFRS”) that are in effect at December 31, 2012, as established by the International Accounting Standards Board. Richmont Mines inc. is the parent company. The address of the head office is 161 Avenue Principale, Rouyn-Noranda, Quebec, Canada. The Corporation’s shares are listed on the Toronto Stock Exchange (TSX) and on the New York Stock Exchange Market (NYSE MKT), under the symbol “RIC”. 2.

   Summary of accounting policies
  2.1.

   Overall considerations
 The significant accounting policies that have been applied in the preparation of these consolidated financial statements are summarized below. 2.2.

   Basis of evaluation
 These consolidated financial statements have been prepared on a going concern basis, under the historical cost method, except for available-for-sale financial assets which are measured at fair value. 2.3.

   Standards, amendments and interpretations to existing standards
  2.3.1

   Early adopted by the Corporation
 During the year, the Corporation early adopted the amendments to IAS 1 Presentation of financial statements from the Annual Improvements 2009-2011. These amendments to IAS 1 are effective for annual period beginning on or after January 1st, 2013 and clarify that the requirements for comparative information provided beyond minimum requirements should be presented in accordance with IFRS. 2.3.2

   Not early adopted by the Corporation
 At the date of authorization of these consolidated financial statements, new standards, amendments and interpretations to existing standards have been published by the International Accounting Standards Board (“IASB”) but are not yet effective, and have not been adopted early by the Corporation. Management anticipates that all of the pronouncements not yet effective will be adopted in the Corporation’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Corporation’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Corporation’s consolidated financial statements. Amendments to IAS 1 Presentation of financial statements The Amendments to IAS 1 are effective for annual periods beginning on or after July 1, 2012 and require entities to group items presented in other comprehensive income (OCI) into those that, in accordance with other IFRSs, will not be reclassified subsequently to profit or loss and those that will be reclassified subsequently to profit or loss when specific conditions are met. The existing option to present items of OCI either before tax or net of tax remains unchanged; however, if the items are presented before tax, then the amendments to IAS 1 require the tax related to each of the two groups of OCI to be shown separately. Management does not anticipate a material impact on the consolidated financial statements from these Amendments. 8
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars) IFRS 9 Financial Instruments (IFRS 9) The IASB aims to replace IAS 39 Financial Instruments: Recognition and Measurement (IAS 39) in its entirety with IFRS 9. To date, the chapters dealing with recognition, classification, measurement and derecognition of financial assets and liabilities have been issued. These chapters are effective for annual periods beginning on or after January 1st, 2015. Chapters dealing with impairment methodology and hedge accounting are still being developed. Further, in November 2012, the IASB published an exposure draft in order to make limited modifications to IFRS 9’s financial asset classification model to address application issues. Management has not yet assessed the impact of this new standard on the consolidated financial statements. However, Management does not expect to implement IFRS 9 until all of its chapters have been published and they can comprehensively assess the impact of all changes. Consolidation standards A package of new consolidation standards is effective for annual periods beginning on or after January 1st, 2013. Information on these new standards is presented below. Management has not yet completed its assessment of the impact of these new and revised standards on the Corporation’s consolidated financial statements. IFRS 10 Consolidated Financial Statements (IFRS 10) IFRS 10 supersedes IAS 27 Consolidated and Separate Financial Statements (IAS 27) and SIC 12 Consolidation -Special Purpose Entities. IFRS 10 revises the definition of control and provides extensive new guidance on its application. These new requirements have the potential to affect which of the Corporation’s investees are considered to be subsidiaries and therefore change the scope of consolidation. However, the requirements on consolidation procedures, accounting for changes in non-controlling interests and accounting for loss of control of a subsidiary remain the same. Management’s provisional analysis is that IFRS 10 will not change the classification (as subsidiaries or otherwise) of any of the existing investees at December 31, 2012. IFRS 11 Joint Arrangements (IFRS 11) IFRS 11 supersedes IAS 31 Interests in Joint Ventures (IAS 31). It aligns more closely the accounting by the investors with their rights and obligations relating to the joint arrangement. In addition, IAS 31's option of using proportionate consolidation for joint ventures has been eliminated. IFRS 11 now requires the use of the equity accounting method, which is currently used for investments in associates. Management does not anticipate a material impact on the consolidated financial statements from these Amendments. IFRS 12 Disclosure of Interests in Other Entities (IFRS 12) IFRS 12 integrates and makes consistent the disclosure requirements for various types of investments, including unconsolidated structured entities. It introduces new disclosure requirements about the risks to which an entity is exposed from its involvement with structured entities. Transition guidance for IFRS 10, 11 and 12 Subsequent to issuing the new standards the IASB made some changes to the transitional provisions in IFRS 10, 11 and 12. The guidance confirms that the entity is not required to apply IFRS 10 retrospectively in certain circumstances and clarifies the requirements to present adjusted comparatives. The guidance also makes changes to IFRS 11 and 12 which provide similar relief from the presentation or adjustment of comparative information for periods prior to the immediately preceding period. Further, it provides additional relief by removing the requirement to present comparatives for the disclosures relating to unconsolidated structured entities for any period before the first annual period for which IFRS 12 is applied. The new guidance is also effective for annual periods on or after January 1st, 2013. Consequential amendments to IAS 27 Separate Financial Statements (IAS 27) and IAS 28 Investments in Associates and Joint Ventures (IAS 28) IAS 27 now only addresses separate financial statements. IAS 28 brings investments in joint ventures into its scope. However, IAS 28's equity accounting methodology remains unchanged. 9
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars) IFRS 13 Fair Value Measurement (IFRS 13) IFRS 13 clarifies the definition of fair value and provides related guidance and enhanced disclosures about fair value measurements. It does not affect which items are required to be fair-valued. IFRS 13 applies prospectively for annual periods beginning on or after January 1st, 2013. Management is in the process of reviewing its valuation methodologies for conformity with the new requirements and has not yet completed its assessment of their impact on the Corporation’s consolidated financial statements. Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) The Amendments to IAS 32 add application guidance to address inconsistencies in applying IAS 32’s criteria for offsetting financial assets and financial liabilities in the following two areas: the meaning of “currently has a legally enforceable right of set-off”;that some gross settlement systems may be considered equivalent to net settlement. The Amendments are effective for annual periods beginning on or after January 1st, 2014 and are required to be applied retrospectively. Management does not anticipate a material impact on the Corporation's consolidated financial statements from these Amendments. Disclosures – Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) Qualitative and quantitative disclosures have been added to IFRS 7 Financial Instruments: Disclosures (IFRS 7) relating to gross and net amounts of recognised financial instruments that are (a) set off in the statement of financial position and (b) subject to enforceable master netting arrangements and similar agreements, even if not set off in the statement of financial position. The Amendments are effective for annual reporting periods beginning on or after January 1st, 2013 and interim periods within those annual periods. The required disclosures should be provided retrospectively. Management does not anticipate a material impact on the consolidated financial statements from these Amendments. IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine This new interpretation addresses accounting issues regarding waste removal costs incurred in surface mining activities during the production phase of a mine, referred to as production stripping costs. The new interpretation addresses the classification and measurement of production stripping costs as either inventory or as a tangible or intangible non-current asset, depending on benefits obtained. This interpretation also provides guidance for the initial measurement, depreciation or amortization and impairment of such tangible non-current assets. It is applicable for annual periods beginning on or after January 1st, 2013. Management has not yet assessed the impact of the adoption of this new interpretation on its consolidated financial statements. Annual Improvements 2009-2011 The Annual Improvements 2009-2011 made several minor amendments to a number of IFRSs. The amendments relevant to the Corporation are summarised below: Clarification of the requirements for opening statement of financial position clarifies that the appropriate date for the opening statement of financial position is the beginning of the period 2010 (related notes are no longer required to be presented);addresses comparative requirements for the opening statement of financial position when an entity changes accounting policies or makes retrospective restatements or reclassifications, in accordance with IAS 8. 10
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars) Tax effect of distribution to holders of equity instruments addresses a perceived inconsistency between IAS 12 Income Taxes (IAS 12) and IAS 32 Financial Instruments: Presentation (IAS 32) with regards to recognizing the consequences of income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction;clarifies that the intention of IAS 32 is to follow the requirements in IAS 12 for accounting for income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction. Segment information for total assets and liabilities clarifies that the total assets and liabilities for a particular reportable segment are required to be disclosed if, and only if: (i) a measure of total assets or of total liabilities (or both) is regularly provided to the chief operating decision maker; (ii) there has been a material change from those measures disclosed in the last annual financial statements for that reportable segment. The Annual Improvements noted above are effective for annual periods beginning on or after January 1st, 2013. Management does not anticipate a material impact on the Corporation's consolidated financial statements from these Amendments. 2.4.

   Presentation of financial statements in accordance with IAS 1
 The consolidated financial statements are presented in accordance with IAS 1 “Presentation of Financial Statements”. The Corporation has elected to present the consolidated statement of comprehensive income in two statements: a statement displaying components of net earnings (consolidated income statement) and a statement beginning with net earnings and displaying components of other comprehensive income (consolidated statement of comprehensive income). 2.5.

   Basis of consolidation
 The consolidated financial statements consolidate those of the parent company and all of its subsidiaries as at December 31, 2012. Subsidiaries are all entities over which the Corporation has the power to control the financial and operating policies. The Corporation’s subsidiaries are all 100 % owned by the parent company. The financial year end of all subsidiaries is December 31. All transactions and balances between corporations are eliminated upon consolidation, including unrealized gains and losses on transactions between these consolidated corporations. When unrealized losses on intragroup asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Corporation perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Corporation. Earnings and loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognized from the effective date of the acquisition, or up to the effective date of disposal, as applicable. Non-controlling interests represent the portion of a subsidiary’s comprehensive income and net assets that is not held by the Corporation. The Corporation attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests. Subsidiaries Details of the Corporation’s subsidiaries at December 31, 2012, are as follows: Interest and votingName of subsidiary

   Principal activity

   Incorporation law

   shareCamflo Mill Inc.

   Ore milling

   Canada Business Corporations Act

   100%Patricia Mining Corp.

   Inactive

   Ontario Incorporation

   100%Louvem Mines Inc.

   Inactive

   Business Corporations Act (Quebec)

   100%
 11
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars) 2.6.

   Business combinations
 Business combinations occurring on or after January 1st, 2008 are accounted for using the acquisition method in accordance with the revised IFRS 3, Business combinations. The consideration transferred by the Corporation to obtain control of a subsidiary is calculated as the sum of the acquisition date fair values of assets transferred, liabilities incurred and the equity interests issued by the Corporation, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. The Corporation recognizes identifiable assets acquired and liabilities assumed, including contingent liabilities, in a business combination regardless of whether they have been previously recognized in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition date fair values. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of (a) fair value of consideration transferred, (b) the recognized amount of any non-controlling interest in the acquiree and (c) acquisition date fair value of any existing equity interest in the acquiree, over the acquisition date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognized in net earnings or losses immediately. 2.7.

   Foreign currency translation
 The consolidated financial statements are presented in Canadian dollars, which is also the functional currency of the parent company and all subsidiaries. The functional currency has remained unchanged during the reporting periods for all entities of the Corporation. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items using year-end exchange rates are recognized in the income statement in “Financial revenues” or “Financial expenses”. Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated). Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined. 2.8.

   Revenue recognition
 Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Corporation and the revenue can be reliably measured. Revenue is measured at fair value of the consideration received or receivable, excluding taxes. Revenue includes precious metals revenue and milling revenue. Precious metals revenue, based on spot metal prices, is recorded on delivery when rights and obligations related to ownership are transferred to the purchaser and assurance regarding collectability of the consideration exists. Milling revenue is recorded when the ore processing service is made by the Corporation, accepted by the client and reasonable assurance regarding collectability of the consideration exists. Interest revenue is reported on an accrual basis using the effective interest method and is included in “Financial revenues” in the income statement. 12
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars) 2.9.

   Post employment benefits and short-term employee benefits
 The Corporation provides post employment benefits through a defined contribution plan. A defined contribution plan is a pension plan under which the Corporation pays contributions, established according to a percentage of the employee’s salary, to an independent entity. The Corporation has no legal or constructive obligations to pay further contributions after its payment of the fixed contribution. The Corporation also contributes to state plans for certain employees that are considered defined contribution plans. Contributions to plans are recognized as an expense in the period that relevant employee services are received. Short-term employee benefits, including vacation entitlement, are current liabilities included in “payables, accruals and provisions", measured at the undiscounted amount that the Corporation expects to pay as a result of the unused entitlement. 2.10.

   Share-based compensation
 The Corporation offers a long-term incentive plan that permits the granting of options (“Options”), restricted share units (“RSUs”), share appreciation rights (“SARs”), deferred share unit (“DSU”) and retention awards (“Retention Awards”) to directors, officers, senior executives and other employees, consultants and service providers providing ongoing services to the Corporation. In the event that participants are rewarded using share-based payments, the fair values of participants' services are determined by reference to the fair value of the services received or of the equity instruments granted if the Corporation cannot estimates reliably the fair value of the services received. The fair value of each grant is evaluated using the Black-Scholes pricing model at the date of grant. Each share-based payment is ultimately recognized as an expense (except warrants to brokers). For grants settled in equity instruments such as Options and RSUs, the compensation is considered as “contributed surplus”. For grants settled in cash or in equity instruments, at the discretion of the participant, such as SARs and Retention Awards, the fair value is the sum of the fair values of the liability component and the equity component. The Corporation first assesses the fair value of the liability component, and then the fair value of the equity component. Any subsequent change in the fair value of the liability component is recognized in the consolidated income statement. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of grants expected to vest. Estimates are subsequently revised if there is any indication that the number expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. No adjustment is made to any expense in prior periods. At the date of settlement of Options and RSUs, the proceeds received are allocated to share capital, and the accumulated expenses recorded in contributed surplus are then transferred to share capital. At the date of settlement of SARs and Retention Awards, the Corporation shall re-measure the liability to its fair value. If the entity issues equity instruments on settlement rather than paying cash, the liability shall be transferred directly to equity, as consideration for the equity instruments issued. If the entity pays in cash on settlement rather than issuing equity instruments, that payment amount shall be applied to settle the liability in full. 2.11.

   Exploration and project evaluation
 Exploration and project evaluation expenditure comprises costs, depreciation and exploration tax credits that are directly attributable to: researching and analysing existing exploration data;conducting geological studies, exploratory drilling and sampling;examining and testing extraction and treatment methods;compiling pre-feasibility and feasibility studies. 13
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars) Exploration expenditure relates to the initial search for deposits. Project evaluation expenditure arises from a detailed assessment of deposits or other projects that have been identified as having geological potential. Exploration and project evaluation expenditure is not capitalized. Capitalization of expenditures begins when management and the Board of Directors have determined that the project has demonstrated a potential for development and a feasibility study demonstrates the commercial viability and economic benefits of the project. Although the Corporation has taken steps to verify title to the mining properties in which it holds an interest, in accordance with industry practices for the current stage of exploration and development of such properties, these procedures do not guarantee the validity of the titles. Property titles may be subject to unregistered prior agreements. They can be lost or revoked if regulatory measures are not respected. 2.12.

   Mining and income taxes
 The income tax expense is composed of current and deferred taxes. Taxes are recognized in the income statement unless they are related to items carried in other comprehensive income or directly in shareholders’ equity. Current income taxes and mining taxes Current income tax and mining tax assets and/or liabilities comprise those obligations to, or claims from, tax authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. The current income tax expense is based on income for the period adjusted for non-taxable or non-deductible items. The mining tax expense is based on income for the period for each mining site in production adjusted for non-taxable or non-deductible items. Calculation of current tax and mining tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Management regularly examines positions in tax returns where tax regulations are subject to interpretation. Where appropriate, the Corporation sets up a provision based on amount likely to be paid to tax authorities. Deferred income taxes and deferred mining taxes Deferred income taxes are recognized using the liability method on temporary differences between the tax basis of the assets and liabilities and their carrying amount in the statement of financial position. However, deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred income tax assets and liabilities are calculated without discounting at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted by the end of the reporting period. Deferred income and mining tax liabilities Are generally recognized for temporary taxable differences and are always provided in full;Are recognized for temporary differences associated with investments in subsidiaries unless the Corporation controls the timing of the reversal and it is probable that the temporary difference will not reverse in the foreseeable future;Are not recognized for temporary differences resulting from goodwill that is not deductible for tax purposes. Deferred income and mining tax assets Are recognized to the extent that it is probable that they will be able to be utilized against future taxable incomeAre examined at the end of the reporting period and reduced when, in the opinion of management, it is more likely than not that the deferred income and mining tax assets will not be realized. 14
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars) Deferred income and mining tax assets and liabilities are offset only when the Corporation has a right and intention to set off current tax assets and liabilities from the same taxation authority. Changes in deferred income and mining tax assets or liabilities are recognized as a component of tax income or expense in net earnings, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively. Under the provisions of tax legislation relating to flow-through shares, the Corporation is required to renounce its right to tax deductions for expenses related to exploration activities to the benefit of the investors. When the Corporation has renounced to its tax deductions and has incurred its admissible expenditures, the sale of tax deductions is recognized in profit or loss as a reduction to deferred tax expense and a deferred tax liability is recognized for the taxable temporary difference that arises from the difference between the carrying amount of admissible expenditures capitalized as an asset and its tax base. 2.13.

   Basic and diluted earnings per share
 Basic earnings per share are calculated by dividing the earnings attributable to common equity holders of the parent company by the weighted average number of common shares outstanding during the period. Diluted earnings per share are calculated by adjusting earnings attributable to common equity holders of the parent company, and the weighted average number of common shares outstanding, for the effects of all dilutive potential common shares which include options and warrants. The calculation considers that dilutive potential common shares are deemed to have been converted into common shares at the beginning of the period or, if later, at the date of issue of the potential common shares, at the average market price. For the purpose of calculating its diluted earnings per share, an entity assumes the exercise of dilutive options and warrants. The assumed proceeds from these instruments must be regarded as having been received from the issue of common shares at the average market price of common shares during the period. 2.14.

   Cash and cash equivalents
 Cash and cash equivalents comprise cash and term deposits with original maturities of three months or less, and that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. 2.15.

   Exploration tax credits receivable
 The Corporation is entitled to a refundable tax credit on qualified expenditures incurred in the province of Quebec. The refundable tax credits may reach 15 % of qualified exploration expenditures incurred. The corporation is also entitled to a Federal tax credit on qualified exploration expenditures incurred. The exploration tax credits have been applied against the costs incurred, either as a reduction of exploration expenses or of capitalized development costs. A valuation allowance is provided against tax credits claimed or received to the extent that recovery is not considered to be more likely than not. 2.16.

   Inventories
 Supply, ore and precious metals inventories are valued at the lower of cost and net realizable value. The cost of supply inventories is determined using the weighted average cost formula. The cost of ore and precious metals inventories includes all expenses directly attributable to the mineral extraction and processing process, including a systematic allocation of fixed and variable production overheads that are incurred in extracting and processing ore. Net realizable value is the estimated selling price in the ordinary course of business less any applicable estimated cost to completion and estimated selling expenses. The amount of inventories recognized as an expense is included in the cost of sales under operating costs (note 3). 15
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars) 2.17.

   Property, plant and equipment
 Property, plant and equipment are recorded at cost, net of related government assistance, accumulated depreciation and accumulated impairment. Cost includes all costs incurred initially to acquire or construct an item of property, plant and equipment, costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and costs incurred subsequently to add to or replace part thereof. Advanced exploration projects Expenditures incurred on properties identified as having an economic potential (note 2.11)are capitalized as property, plant and equipment under this category. The costs of advanced exploration projects are not amortised. Costs include in particular, salaries and related benefits, retirement costs (note 2.19)and secondary products generated during the advanced exploration phase. Upon commencement of commercial production, advanced exploration costs are transferred to the various categories of property, plant and equipment of mining sites in production and are depleted. Mining sites in production Property, plant and equipment of mining sites in production are depleted according to the units-of-production method to write down the cost to estimated residual value. The depletion rate is calculated in accordance with the number of ounces of gold sold using proven and probable reserves. The estimated period of depletion is determined according to the reserves of each mining site in production. The depreciation is presented as depreciation and depletion and is included in the cost of sales. Corporate office Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation of corporate assets is calculated using the straight-line method based on their anticipated useful lives as follows: Buildings: 20 yearsLease improvements: 5 yearsEquipment and rolling stock: 2 to 5 years Others Depreciation of an asset ceases when it is classified as held for sale or when it is derecognized. Therefore, depreciation does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. Material residual value estimates, estimates of useful life, proven and probable reserves and the depreciation method are updated as required, at least annually. Any changes in residual value, estimated useful life and proven and probable reserves are recognized prospectively as they occur. The carrying amount of an item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognized separately in the consolidated income statement. 2.18.

   Impairment testing of property, plant and equipment
 For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at a cash-generating unit level. Reviews of the net carrying amount of mining sites in production and advanced exploration projects are carried out on a property-by-property basis, with each site representing a potential single cash-generating unit. Whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, an asset or cash-generating unit is reviewed for impairment. 16
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 An impairment loss is recognized for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To determine the value in use, management estimates expected future cash flows from each asset or cash-generating unit, and then determines an appropriate discount rate for the calculation of the expected present value of the cash flows. Discount factors are determined individually for each asset or cash-generating unit and reflect their respective risk profiles as assessed by management. Impairment losses for cash-generating units, that is mining sites, are allocated on a pro-rata basis to the assets of that site. All the assets are assessed in each reporting period to determine whether there is any indication that an impairment loss recognized in prior periods may no longer exist. An impairment charge is reversed if the asset’s or mining site’s recoverable amount exceeds its carrying amount. However, a reversal of an impairment loss cannot exceed the carrying amount that would have been determined (net of amortization or depreciation) if no impairment loss had been recognized for the asset in prior years. 2.19.

   Provisions, contingent liabilities and contingent assets
 Provisions are recognized when present obligations as a result of a past event will probably lead to an outflow of economic resources from the Corporation and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or constructive commitment that has resulted from past events, for example, legal disputes, property, plant and equipment retirement obligations, and similar liabilities, or onerous contracts. Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Provisions are discounted when the time value of money is significant. Any reimbursement that the Corporation can be virtually certain to collect from a third party with respect to the obligation is recognized as a separate asset. However, this asset may not exceed the amount of the related provision. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognized, unless it was assumed in the course of a business combination (note 2.6). In a business combination, contingent liabilities are recognized in the course of the allocation of the purchase price to the assets and liabilities acquired in the business combination. They are subsequently measured at the higher amount of a comparable provision as described above and the amount initially recognized, less any amortization. The Corporation is subject to environmental laws and regulations enacted by federal and provincial authorities. As of the reporting date, management believes that the Corporation’s operations are in compliance with current laws and regulations. To take account of estimated cash flows required to settle the obligations arising from environmentally acceptable closure plans (such as dismantling and demolition of infrastructures, removal of residual matter and site restoration), provisions are recognized in the year that the harm to the environment occurs, that is when the Corporation has an actual obligation resulting from harm to the environment, it is likely that an outflow will be required in settlement of the obligation and the obligation is reasonably determinable. These provisions are determined on the basis of the best estimates of future costs, based on information available on the reporting date. Best estimates of future costs are the amount the Corporation would reasonably pay to settle its obligation on the closing date or to transfer it to a third party on the same date. Future costs are discounted using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the liability. A corresponding asset is recognized in property, plant and equipment when establishing the provision. 17
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 The provision is reviewed annually to reflect changes in the estimated outflow of resources as a result of changes in obligations or legislation, changes in the current market-based discount rate or an increase that reflects the passage of time. The accretion expense is recognized in net earnings as a finance expense as incurred. The cost of the related asset is adjusted to reflect changes (other than accretion) in the reporting period. Costs of asset retirement are deducted from the provision when incurred. 2.20.

   Leases
 The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards related to the ownership of the leased asset. The related asset is then recognized at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognized as a finance leasing liability. The corresponding finance leasing liability is reduced by lease payments less finance charges, which are expensed as part of finance expenses. All other leases are treated as operating leases. Payments on operating lease agreements are recognized as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred. 2.21.

   Segment information
 In identifying its operating segments, management generally uses the physical location of mining sites in production. Two segments are analyzed, sites in Quebec and sites in Ontario. Segments are reported on the same basis as the internal information reported to the chief decision makers in allocating resources to operating segments and assessing the performance of these segments. The chief decision makers are represented by the management committee. All inter-segments transfers are carried out at arm’s length prices. The measurement policies the Corporation uses for segment reporting are the same as those used in its financial statements, except that the following are not included in arriving at the operating earnings of the Corporation’s operating segments: Administration expenses (including share-based compensation and corporate office remuneration);Exploration expenses of mining properties not located on mining sites in production;Exploration tax credits of mining properties not located on mining sites in production. In addition, corporate assets which are not directly attributable to the business activities of any operating segment are not allocated to a segment. In the financial periods under review, this primarily applies to the Corporation’s assets at the headquarters. 2.22.

   Equity
 Share capital represents the amount received on the issue of shares, less issuance costs, net of any underlying income tax benefit from these issuance costs. If shares are issued when stock options and warrants are exercised, the share capital account also comprises the compensation costs previously recorded as contributed surplus. Unit placements Proceeds from unit placements are allocated between shares and warrants issued using the residual method. Proceeds are first allocated to shares according to the quoted price of existing shares at the time of issuance and any residual in the proceeds is allocated to warrants. Other elements of equity Contributed surplus includes the value attributable to warrants and charges related to share-based compensation until the exercise of options issued as remuneration. This account also includes the value of equity conversion option associated with the issuance of convertible debentures, net of tax. 18
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 Retained earnings (deficit) include all current and prior period retained profits or losses. Gains and losses on available-for-sale financial assets are included in accumulated other comprehensive income in the section entitled “available-for-sale financial assets”. All transactions with owners of the Corporation are recorded separately within equity. 2.23.

   Financial instruments
 Financial assets and financial liabilities are recognized when the Corporation becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value plus transaction costs, except for financial assets and financial liabilities carried at fair value through net earnings, which are measured initially at fair value. Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognized when it is extinguished, discharged, cancelled or when it expires. Financial assets and financial liabilities are measured subsequently as described below. Financial assets For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition: loans and receivables;financial assets at fair value through net earnings;held-to-maturity investments; andavailable-for-sale financial assets. The category determines subsequent measurement and whether any resulting income and expense is recognized in net earnings or in other comprehensive income. All financial assets, except for those at fair value through net earnings, are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below. All income and expenses relating to financial assets that are recognized in net earnings are presented within financial revenues or administrative expenses, if applicable. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. Cash and cash equivalents and receivables (except taxes receivable) fall into this category of financial instruments. Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. 19
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 Financial assets at fair value through net earnings Financial assets at fair value through net earnings include financial assets that are either classified as held-for-trading or that meet certain conditions and are designated at fair value through net earnings upon initial recognition. Assets in this category are measured at fair value with gains or losses recognized in net earnings. The Corporation has no financial asset classified in this category. Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity other than loans and receivables. Investments are classified as held-to-maturity if the Corporation has the intention and ability to hold them until maturity. Held-to-maturity investments are measured subsequently at amortized cost using the effective interest method. If there is objective evidence that the investment is impaired, determined by reference to external credit ratings, the financial asset is measured at the present value of estimated future cash flows. Any changes to the carrying amount of the investment, including impairment losses, are recognized in consolidated net earnings. The Corporation has no financial assets in this category. Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets. The Corporation’s available-for-sale financial assets include shares of publicly-traded companies. All available-for-sale financial assets are measured at fair value. Gains and losses are recognized in other comprehensive income and reported within the available-for-sale reserve within equity, except for impairment losses, which are recognized in net earnings. When the asset is disposed of or is determined to be impaired, the cumulative gain or loss recognized in other comprehensive income is reclassified to net earnings in and presented as a reclassification adjustment within other comprehensive income. Reversals of impairment losses are recognized in other comprehensive income, except for financial assets that are debt securities which are recognized in net earnings only if the reversal can be objectively related to an event occurring after the impairment loss was recognized. Financial liabilities The Corporation’s financial liabilities include payables, accruals and provisions and finance leases obligations. Financial liabilities are measured subsequently at amortized cost using the effective interest method, except for financial liabilities held for trading or designated at fair value through net earnings, that are carried subsequently at fair value with gains or losses recognized in net earnings. 2.24.

   Accounting estimates and critical judgments
 The preparation of financial statements requires management to make estimates, assumptions and judgments with respect to future events. These estimates and judgments are constantly challenged. They are based on past experience and other factors, in particular, forecasts of future events that are reasonable in the circumstances. The actual results are likely to differ from the estimates, assumptions and judgments made by management, and will seldom equal the estimated results. The following paragraphs describe: the most critical management estimates and assumptions in the recognition and measurement of assets, liabilities and expenses;the most critical management judgments in applying accounting policies. 20
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 Critical accounting estimates and assumptions Basis of depletion of mining sites in production Property, plant and equipment of mining sites in production are depleted according to the units-of-production method to write down the cost to residual value. Management estimates the residual value of property, plant and equipment based on the estimated fair value as of the financial position date. For these assets, the depletion rate is calculated based on the number of ounces of gold sold in proportion to the number of ounces in proven and probable reserves. Proven and probable reserves are estimates of the quantity of ore that could be economically and legally extracted from a mine. The Corporation estimates its reserves using information compiled by qualified persons who work for the Corporation. This information relates to geological data on the size, depth and shape of the deposit and requires geological assessments to interpret the data. The assessment of proven and probable reserves is based on factors such as the estimated exchange rate, price of metals, capital investments required and production costs stemming from geological assumptions based on the size and grade of the deposit. Changes in proven and probable reserves could have an impact on the net carrying amount of property, plant and equipment, asset retirement obligations, recognition of deferred tax assets and amortization, depreciation and depletion expenses. Asset retirement obligations The Corporation assesses its asset retirement obligations annually. Determining these obligations requires significant estimates and assumptions due to the numerous factors that affect the amount ultimately payable. Such factors include estimates of the scope and cost of restoration activities, legislative amendments, known environmental impacts, the effectiveness of reparation and restoration measures and changes in the discount rate. This uncertainty may lead to differences between the actual expense and the allowance. At the date of the statement of financial situation, asset retirement obligations represent management’s best estimate of the charge that will result when the actual obligation is terminated (note 18). Impairment test of property, plant and equipment Determining if there are any facts and circumstances indicating impairment loss or reversal of impairment losses is a subjective process involving judgment and a number of estimates and interpretations in many cases. When an indication of impairment loss or a reversal of an impairment loss exists, the recoverable amount of the individual asset must be estimated. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs must be determined. In the process of measuring expected future cash flows, management makes assumptions about future operating results, such as future metal production (proven and probable reserves), estimated future metal prices, operating costs, capital and site restoration expenses and estimated future foreign exchange rates. These assumptions relate to future events and circumstances. Actual results may differ from estimated results (note 12). Income taxes and deferred mining taxes The Corporation is subject to taxes from different tax jurisdictions. Management continually evaluates the likelihood that its deferred tax assets could be realized. This requires management to assess whether it is probable that sufficient taxable income will exist in the future to utilize these losses within the carry-forward period. The corporation also maintains allowances for uncertain tax positions that, in its opinion, appropriately reflect the risks related to the tax positions subject to discussions, audits, differences of opinion and appeals with the tax authorities or that are otherwise uncertain. These allowances are determined using best estimates of the amount payable based on a qualitative assessment of all relevant information. These allowances are reassessed at the end of each financial reporting period to determine if the amount is sufficient. However, audits by the tax authorities could subsequently result in an additional liability. Upon the definite resolution of a tax issue resulting in a tax amount that differs from the initially recognized tax expense, the difference is recognized in the tax expense of the period of definitive settlement (note 11). 21
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 Share-based compensation expenseThe estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Corporation has made estimates as to the volatility of its own shares, the probable life of options and the time of exercise of those options. The model used by the Corporation is the Black-Scholes model. The Corporation similarly evaluated the expected extinguishments for each remuneration program within the parameters of each individual program (note 6.2). Dismantling costs and severance costsThe Corporation estimates dismantling costs and severance costs by making assumptions such as retention of employees and timing of dismantling. The uncertainty of these estimations may lead to differences between the actual expenses and the estimated costs. Significant management judgments in applying accounting policies Start of advanced exploration phaseThe Corporation evaluates the potential of each project to determine when the project should progress from the exploration phase to the advanced exploration phase. Once Management has determined that a project has demonstrated a potential for development, and a feasibility study supports its commercial viability and its economic benefit, the project moves into the advanced exploration phase once approval has been given by the Board of Directors. Expenditures related to the project are capitalized as of this time (note 2.17). Start of commercial productionManagement assesses the stage of completion of each advanced exploration project to determine when it begins commercial production. The Corporation considers a number of criteria to determine when a mine enters into commercial production, thereby resulting in reclassification from “Advanced exploration project” to “Mining site in production”. The following criteria are used: Production capacity achievedRecovered gradeStage of completion of development work Provisions and contingent liabilitiesJudgments are made as to whether a past event has led to a liability that should be recognized in the consolidated financial statements or disclosed as a contingent liability. Quantifying any such liability often involves judgments and estimations. These judgments are based on a number of factors including the nature of the claims or dispute, the legal process and potential amount payable, legal advice received, past experience and the probability of a loss being realized. Several of these factors are sources of estimation uncertainty (note 2.19). 2.25.

   Earnings or loss from discontinued operation
 A discontinued operation is a component of the Corporation that either has been disposed of, or is classified as held for sale, and: represents a separate major line of business or geographical area of operations;is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; oris a subsidiary acquired exclusively with a view to resale. Earnings or loss from discontinued operation, including prior year components of earnings or loss, is presented in a single amount in the consolidated income statement. This amount, which comprises the post –tax earnings or loss of discontinued operation and the post-tax gain or loss resulting from the measurement of assets is further analysed in note 12. 22
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  3.

   Cost of sales
 The cost of sales includes the following items: 2012

   

   2011

   

   2010$

   

   $

   

   $Operating costs

   61,102

   

   59,202

   

   54,733Royalties

   2,294

   

   2,614

   

   2,075Custom milling costs

   259

   

   -

   

   1,863Depreciation and depletion

   10,143

   

   9,880

   

   7,43273,798

   

   71,696

   

   66,103
  4.

   Exploration and project evaluation
 The exploration and project evaluation expenses were incurred for the following mines and properties: 2012

   

   2011

   

   2010$

   

   $

   

   $Beaufor Mine

   1,432

   

   803

   

   2,250W Zone

   -

   

   188

   

   334Island Gold Mine

   10,969

   

   5,549

   

   4,561Wasamac property

   9,477

   

   6,647

   

   1,712Monique property

   744

   

   2,284

   

   289Other properties

   459

   

   184

   

   997Project evaluation

   511

   

   470

   

   443Exploration and project evaluation before depreciation and exploration tax credits

   23,592

   

   16,125

   

   10,586Depreciation

   200

   

   155

   

   139Exploration tax credits

   (3,527

   )

   (5,354

   )

   (3,465

   )20,265

   

   10,926

   

   7,260
  5.

   Administration
 The administration expenses include the following items: 2012

   

   2011

   

   2010$

   

   $

   

   $Salaries, director’ fees and related benefits

   2,822

   

   2,486

   

   2,077Severance compensation

   1,986

   

   117

   

   -Share-based compensation

   3,601

   

   1,079

   

   1,080Depreciation

   129

   

   62

   

   66Others

   1,732

   

   1,712

   

   1,69010,270

   

   5,456

   

   4,913
 23
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  6.

   Employee remuneration
  6.1.

   Employee benefits expense
 Expenses recognised for employee benefits are presented below: 2012

   

   2011

   

   2010$

   

   $

   

   $Salaries and related benefits

   56,379

   

   43,891

   

   33,979Severance compensation

   1,986

   

   117

   

   -Severance costs – Closure of Francoeur Mine

   4,306

   

   -

   

   -Directors’ fees and related benefits

   684

   

   557

   

   558Share-based compensation

   3,601

   

   1,079

   

   1,080Defined contribution plans

   1,109

   

   747

   

   524State plans

   1,380

   

   1,077

   

   85569,445

   

   47,468

   

   36,996Less : salaries capitalized in property, plant and equipment

   14,161

   

   12,703

   

   5,87155,284

   

   34,765

   

   31,125
  6.2.

   Share-based compensation
  a)

   The Corporation had a Stock Option Purchase Plan (the “Initial Plan”) under which options to acquire common shares were granted to its directors, officers, employees and non-employees. The exercise price of each option was determined by the market price of the Corporation’s stock on the Toronto Stock Exchange, on the day prior to the grant, and the maximum term of the options granted was ten years. 20% of the options were vested on the grant date and vested cumulatively thereafter on every anniversary date over a length of four years. However, on February 4, 2010, the Board of Directors voted to grant its members remuneration that is partly based on share options. These options vest in thirds beginning one year after the grant date, then vest cumulatively thereafter on every anniversary date over a total length of three years, and expire five years after the date of grant. Furthermore, in January 2012, a total of 400,000 options were granted to directors. Those options fully vest one year after the grant date, and expire in January 2015. However, these options may only be exercised if the Corporation’s shares have traded at $21.51 or higher at any time during any 10 days in any consecutive 20 trading day period. The Corporation ended the Initial Plan in 2012. Options in circulation that were issued under this previous plan, will continue to have the same conditions as when they were initially issued.
 24
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 A summary of the status, in 2012, 2011 and 2010, of the Corporation’s Initial Plan, and changes during the years then ended, is presented below: 2012

   

   

   2011

   

   

   2010Weighted

   

   

   Weighted

   

   

   WeightedNumber

   

   average

   Number

   

   average

   Number

   

   averageof options

   

   exercise

   of options

   

   exercise

   of options

   

   exercise(in thousands)

   

   price

   (in thousands)

   

   price

   (in thousands)

   

   price$

   

   

   $

   

   

   $Options outstanding, beginning of year

   1,637

   

   4.66

   2,311

   

   3.46

   2,480

   

   3.53Granted

   500

   

   10.60

   282

   

   9.98

   846

   

   4.52Exercised

   (484

   )

   3.15

   (899

   )

   3.12

   (401

   )

   3.69Forfeited

   (274

   )

   9.23

   (57

   )

   6.67

   (109

   )

   3.97Expired

   (1

   )

   2.88

   -

   

   -

   (505

   )

   5.27Options outstanding, end of year

   1,378

   

   6.44

   1,637

   

   4.66

   2,311

   

   3.46Exercisable options, end of year

   661

   

   4.93

   728

   

   4.06

   1,098

   

   3.11
 The following table summarizes information about the Corporation’s Initial Plan at December 31, 2012: Options outstanding at December 31, 2012

   Exercisable options atDecember 31, 2012Exercise

   

   Weighted averageprice

   Number

   remaining

   Weighted average

   Number

   Weighted averageof options

   contractual

   exercise price

   of options

   exercise price(in thousands)

   life (years)

   $

   (in thousands)

   $$1.80 to $2.07

   93

   1.0

   1.90

   63

   1.82$2.83 to $3.86

   154

   1.5

   3.37

   120

   3.33$4.12 to $5.41

   618

   2.3

   4.57

   380

   4.55$6.86 to $8.26

   122

   4.1

   7.07

   27

   7.16$10.87 to $12.03

   391

   2.7

   11.48

   71

   11.551,378

   2.4

   6.44

   661

   4.93
 The weighted average market share price at the date of exercise was $9.51 in 2012 ($8.26 in 2011 and $5.17 in 2010). b.1)

   In effect since May 2012, the Corporation’s long-term incentive plan (the “New Plan”) permits the granting of options, restricted share units (“RSUs”), share appreciation rights (“SARs”), deferred share unit (“DSU”) and retention awards (“Retention Awards”) to directors, officers, other employees, consultants and service providers providing ongoing services to the Corporation.
 The exercise price of each option granted is the market price of the Corporation’s stock on the Toronto Stock Exchange, on the day prior to the grant, and the maximum term of the options granted is ten years. Four types of options were issued: (1) options that vest in thirds one year after the grant date, then vest cumulatively thereafter on every anniversary date over a total length of three years, and expire five years after the date of grant; (2) options that fully vest one year after the grant date, expire three years after the grant date and are exercisable only if the Corporation’s shares have traded at $21.51 or higher at any time during any 10 days in any consecutive 20 trading day period; (3) options that vest in tranches of 20% beginning one year after the grant date, thereafter vesting cumulatively on every anniversary date over a length of four years, and expire six years after the date of grant; (4) options that vest 20% on the grant date and vest cumulatively thereafter on every anniversary date over a length of four years, and expire five years after the date of grant. 25
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 A summary of the status of the Corporation’s New Plan and changes during the year 2012, is presented below: 2012WeightedNumber of

   

   averageoptions

   

   exercise price(in thousands)

   

   $Granted

   912

   

   5.04Forfeited

   (12

   )

   4.36Options outstanding, end of year

   900

   

   5.05Exercisable options, end of year

   98

   

   3.65
 The following table summarizes information about the Corporation’s New Plan at December 31, 2012: Options outstanding at

   Exercisable options atDecember 31, 2012

   

   December 31, 2012Weighted average

   Weighted

   

   WeightedExercise

   Number of

   remaining

   average

   Number of

   averageprice

   options

   contractual life

   exercise price

   options

   exercise price(in thousands)

   (years)

   $

   (in thousands)

   $$3.05 to $4.36

   477

   4.8

   3.63

   98

   3.65$6.57

   352

   5.4

   6.57

   -

   -$6.98

   71

   2.7

   6.98

   -

   -900

   4.9

   5.05

   98

   3.65
  b.2)

   In March and in August 2012, the Corporation signed agreements with thirteen employees considered as key personnel. These agreements incorporate a retention payment (“Retention Awards”) provided certain conditions are met by the employee, most notably that the employee continues his or her employment with the Corporation until March and August 2017. These retention payments would be payable in 2017 in either of the Corporation’s common shares or cash, at the discretion of the employee, with the number of common shares to be determined by the current value of the common shares at the time of payment. The total amount that could be paid as Retention Awards under these agreements is 6 million dollars. The cost and liability recorded in 2012 to this effect are $639, which correspond to the best estimate of the expense and liability accrued in 2012 relating to the Retention Awards, based on estimated forfeitures and a 1.3% discount rate.
  c)

   In addition, 324,675 options were issued outside of the Corporation’s plans on May 22, 2012. These options vest in tranches of 20%, beginning one year after the date of issue, and thereafter cumulatively on every anniversary date over four years, and expire seven years after the date of grant. These options have an exercise price of $6.61. As at December 31, 2012, all options are outstanding, none are exercisable and they expire in May 2019. The fair value of these options was estimated on the value of the services rendered.
  d)

   As a result of the above, during 2012, the Corporation granted 1,736,575 share options to directors, officers and employees (281,600 in 2011 and 846,000 in 2010 to officers and employees).
 The weighted average fair value of these share options at the grant date, calculated using the Black-Scholes option pricing model was $2.73 ($4.98 in 2011 and $2.15 in 2010). 26
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 The compensation costs were calculated using the Black-Scholes option pricing model with the following assumptions: 2012

   2011

   2010Exercise price

   $7.01

   $9.98

   $4.52Share price

   $7.01

   $9.98

   $4.52Risk-free interest rate

   1.6%

   1.6%

   1.8%Expected life

   3.8 years

   4.6 years

   4.6 yearsExpected volatility

   62%

   61%

   61%Expected dividend yield

   0.0%

   0.0%

   0.0%
 The expected underlying volatility was based on the historical data of the Corporation’s shares over a period of 3.8 years, which represents a period equivalent to the expected average life. The Corporation may grant rights to acquire shares totalling up to 10% of the total issued and outstanding common shares of the Corporation at the time of the granting. Options issued outside of plans are not accounted for in this calculation. 7.

   Loss (gain) on disposal of long-term assets
 The loss (gain) on disposal of long-term assets includes the following items: 2012

   2011

   

   2010$

   $

   

   $Valentine Lake property a)

   -

   (3,000

   )

   -Corporate building b)

   -

   -

   

   (496

   )Mining equipment

   198

   (10

   )

   7198

   (3,010

   )

   (489

   )
  a)

   On January 24, 2011, the Corporation received $3,000 from Mountain Lake Resources Inc. for the sale of its 70% interest in the Valentine Lake property located in Central Newfoundland. A gain on the disposal of long-term assets was recognized for the same amount.
  b)

   On January 4, 2010, the Corporation sold a corporate building with a net book value of $34 for a cash consideration of $530.
  8.

   Other revenues
 Other revenues include revenue from silver sales and revenue from custom milling. 9.

   Financial expenses
 The financial expenses include the following items: 2012

   2011

   2010$

   $

   $Accretion expense – asset retirement obligations

   60

   115

   103Interest on finance lease obligations

   21

   -

   -Interest and accretion expenses on convertible debentures

   575

   -

   -656

   115

   103
 27
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  10.

   Financial revenues
 The financial revenues include the following items: 2012

   

   2011

   

   2010$

   

   $

   

   $Interest on cash and cash equivalents

   718

   

   570

   

   258Gain on disposal of shares of publicly-traded companies

   90

   

   142

   

   210Foreign exchange gain

   29

   

   475

   

   -837

   

   1,187

   

   468
  11.

   Mining and income taxes
 Income taxes Mining and income tax expense consists of: 2012

   

   2011

   

   2010$

   

   $

   

   $Current taxes

   4,610

   

   5,020

   

   2,175Deferred taxes

   (4,237

   )

   3,523

   

   1,568373

   

   8,543

   

   3,743
 The income tax expense attributable to earnings from continued operations differs from the amounts computed by applying the combined federal and provincial income tax rate of 26.69% (28.32% in 2011 and 30.56% in 2010) to earnings before mining and income taxes as a result of the following: 2012

   

   2011

   

   2010$

   

   $

   

   $Earnings (loss) before mining and income taxes

   (2,604

   )

   34,586

   

   13,047Tax expense (recovery) at combined statutory rate

   (694

   )

   9,795

   

   3,987Increase (decrease) in mining and income taxes resulting from:Resource allowance deduction

   (302

   )

   (620

   )

   (426

   )Deductible mining taxes

   342

   

   (824

   )

   (327

   )Part XII.6 tax

   -

   

   -

   

   176Recording of deferred income tax assets unrecognized previously

   (232

   )

   (2,627

   )

   (929

   )Impact of the change in tax rates

   272

   

   (1,247

   )

   (259

   )Adjustment of previously deferred taxes

   90

   

   (266

   )

   (8

   )Non deductible expenses

   789

   

   312

   

   341Deferred income tax assets unrecognized on temporary differences during the year

   1,225

   

   163

   

   -Other

   (65

   )

   (14

   )

   76Income taxes

   1,425

   

   4,672

   

   2,631Mining tax

   (1,052

   )

   3,871

   

   1,112Mining and income taxes related to continued operations

   373

   

   8,543

   

   3,743Mining and income taxes related to discontinued operation

   (7,028

   )

   -

   

   -Total mining and income tax expense

   (6,655

   )

   8,543

   

   3,743
 28
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  Balance

   

   

   

   Recognized

   

   BalanceJanuary 1,

   

   Recognized

   

   directly in

   

   December 31,2012

   

   in net income

   

   equity

   

   2012$

   

   $

   

   $

   

   $Deferred income and mining taxesProperty, plant and equipment - creditor

   (8,466

   )

   6,149

   

   -

   

   (2,317

   )Property, plant and equipment - debtor

   1,639

   

   6,184

   

   -

   

   7,823Shares of publicly-traded companies

   (53

   )

   49

   

   -

   

   (4

   )Asset retirement obligations

   895

   

   (754

   )

   -

   

   141Exploration credits

   (1,172

   )

   829

   

   -

   

   (343

   )Severance pay

   159

   

   (149

   )

   -

   

   10Share issue costs

   309

   

   (286

   )

   (23

   )

   -Harmonization of Ontario’s fiscal credits

   205

   

   (205

   )

   -

   

   -Deductible future mining taxes

   846

   

   (846

   )

   -

   

   -(5,638

   )

   10,971

   

   (23

   )

   5,310Presented in the consolidated statement of financial position:Deferred income and mining tax assets

   

   

   

   

   

   

   7,484Deferred income and mining tax liabilities

   

   

   

   

   

   

   (2,174

   )
  Balance

   

   

   

   Recognized

   

   BalanceJanuary 1,

   

   Recognized

   

   directly in

   

   December 31,2011

   

   in net income

   

   equity

   

   2011$

   

   $

   

   $

   

   $Deferred income and mining taxesProperty, plant and equipment - creditor

   (2,094

   )

   (6,372

   )

   -

   

   (8,466

   )Property, plant and equipment - debtor

   -

   

   1,639

   

   -

   

   1,639Shares of publicly-traded companies

   (112

   )

   59

   

   -

   

   (53

   )Asset retirement obligations

   283

   

   612

   

   -

   

   895Exploration credits

   (546

   )

   (626

   )

   -

   

   (1,172

   )Severance pay

   44

   

   115

   

   -

   

   159Share issue costs

   -

   

   189

   

   120

   

   309Harmonization of Ontario’s fiscal credits

   -

   

   205

   

   -

   

   205Deductible future mining taxes

   -

   

   846

   

   -

   

   846Losses carried forward

   190

   

   (190

   )

   -

   

   -(2,235

   )

   (3,523

   )

   120

   

   (5,638

   )Presented in the consolidated statement of financial position:Deferred income and mining tax assets

   

   

   

   

   

   

   1,067Deferred income and mining tax liabilities

   

   

   

   

   

   

   (6,705

   )
 29
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  Balance

   

   

   

   BalanceJanuary 1,

   

   Recognized

   

   December 31,2010

   

   in net income

   

   2010$

   

   $

   

   $Deferred income taxesProperty, plant and equipment

   (661

   )

   (1,433

   )

   (2,094

   )Shares of publicly-traded companies

   -

   

   (112

   )

   (112

   )Asset retirement obligations

   245

   

   38

   

   283Exploration credits

   (280

   )

   (266

   )

   (546

   )Severance pay

   29

   

   15

   

   44Losses carried forward

   -

   

   190

   

   190Deferred mining tax liabilities

   (667

   )

   (1,568

   )

   (2,235

   )
 Deferred tax assets and liabilities The following differences between the carrying amounts and tax bases from timing differences, unused tax losses and unused tax credits give rise to the following recognized deferred tax assets and liabilities: December 31, 2012Deferred tax

   

   Deferred taxassets

   

   liabilities

   

   NetRecognized deferred tax assets and liabilitiesProperty, plant and equipment

   7,823

   

   (2,317

   )

   5,506Shares of publicly-traded companies

   -

   

   (4

   )

   (4

   )Asset retirement obligations

   141

   

   -

   

   141Exploration credits

   -

   

   (343

   )

   (343

   )Severance pay

   10

   

   -

   

   10Recognized deferred tax assets and liabilities

   7,974

   

   (2,664

   )

   5,310
  December 31, 2011Deferred tax

   

   Deferred taxassets

   

   liabilities

   

   NetRecognized deferred tax assets and liabilitiesProperty, plant and equipment

   1,639

   

   (8,466

   )

   (6,827

   )Shares of publicly-traded companies

   -

   

   (53

   )

   (53

   )Asset retirement obligations

   895

   

   -

   

   895Exploration credits

   -

   

   (1,172

   )

   (1,172

   )Severance pay

   159

   

   -

   

   159Share issue costs

   309

   

   -

   

   309Harmonization of Ontario’s fiscal credits

   205

   

   -

   

   205Deductible future mining taxes

   846

   

   -

   

   846Recognized deferred tax assets and liabilities

   4,053

   

   (9,691

   )

   (5,638

   )
 30
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 The Company has the following timing differences: December 31, 2012Federal

   Provincial$

   $Property, plant and equipment

   20,153

   117,444Asset retirement obligations

   6,745

   6,745Deductible future mining taxes

   2,174

   2,174Severance pay

   1,137

   1,137Share issue costs

   1,640

   1,640Harmonization of Ontario’s fiscal credits

   2,425

   -34,274

   129,140
 The ability to realize the tax benefits is dependent upon a number of factors, including the future profitability of operations. Deferred tax assets are recognized only to the extent that it is more likely than not that the timing differences will reverse, that sufficient taxable profits will be available to allow the asset to be recovered. Accordingly, some deferred tax assets have not been recognized, these deferred tax assets not recognized equal an amount of $18,355. December 31, 2011Federal

   Provincial$

   $Property, plant and equipment

   1,069

   35,465Asset retirement obligations

   3,914

   6,685Deductible future mining taxes

   -

   5,639Severance pay

   6

   457Losses carried forward

   583

   5835,572

   48,829
 The ability to realize the tax benefits is dependent upon a number of factors, including the future profitability of operations. Deferred tax assets are recognized only to the extent that it is more likely than not that the timing differences will reverse, that sufficient taxable profits will be available to allow the asset to be recovered. Accordingly, some deferred tax assets have not been recognized, these deferred tax assets not recognized equal an amount of $4,586. 31
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  12.

   Net loss from discontinued operation
 At the end of November 2012, management made the decision to cease commercial gold production at the Francoeur Mine. This Mine is included in the Quebec segment. As a result, revenues, expenses and losses relating to the discontinuation of this operation have been segregated from the Corporation’s results from continuing operations, and are shown as a single line item in the consolidated income statement. The Francoeur Mine remaining property, plant and equipment have been valued at their recoverable amount, and management expects that the majority of these assets will be redeployed to the Corporation’s other mines. The recoverable value of assets was established by three internal experts with the necessary expertise to determine the value of mining assets. They evaluated the fair value for each asset considering the general condition of the asset as well as the actual conditions of the market. Operational results for the Francoeur Mine until its closure on November 30, 2012 and charges related to the closure are summarized as follows: 2012

   

   2011

   

   2010$

   

   $

   

   $RevenuesRevenues from precious metals

   8,709

   

   -

   

   -Cost of sales

   10,485

   

   -

   

   -Gross profit

   (1,776

   )

   -

   

   -Other expenses (revenues)Exploration and project evaluation

   290

   

   121

   

   96Loss on disposal of long-term assets

   7

   

   -

   

   -Adjustment in the asset retirement obligation

   154

   

   -

   

   -Impairment loss on Francoeur Mine’s assets

   41,161

   

   -

   

   -Dismantling costs

   1,389

   

   -

   

   -Severance costs

   4,306

   

   -

   

   -Other revenues

   (23

   )

   (8

   )

   (11

   )47,284

   

   113

   

   85Operating loss

   (49,060

   )

   (113

   )

   (85

   )Accretion expense – asset retirement obligations

   6

   

   12

   

   14Financial revenue

   -

   

   -

   

   (1

   )Loss before mining and income taxes

   (49,066

   )

   (125

   )

   (98

   )Mining and income taxes

   (7,028

   )

   -

   

   -Net loss from discontinued operation

   (42,038

   )

   (125

   )

   (98

   )
  2012

   

   2011

   

   2010$

   

   $

   

   $Cash flows from operating activities

   5,943

   

   (5,382

   )

   (11

   )Cash flows used in investing activities

   (15,450

   )

   (19,236

   )

   (9,144

   )Cash flows from financing activities

   -

   

   -

   

   -(9,507

   )

   (24,618

   )

   (9,155

   )
 32
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  13.

   Earnings per share
 Both the basic and diluted earnings per share have been calculated using net earnings attributable to Richmont Mines shareholders as the numerator. The weighted average number of shares for the purposes of diluted earnings per share can be reconciled to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows: 2012

   2011

   2010Weighted average number of shares used in basic earnings per share (in thousands)

   35,055

   31,813

   28,687Shares deemed to be issued in respect of stock option purchase plans and warrants (in thousands)

   152

   621

   329Weighted average number of shares used in diluted earnings per share (in thousands)

   35,207

   32,434

   29,016
  14.

   Receivables
 The receivables include the following items: December 31,

   December 31,2012

   2011$

   $Taxes receivable

   2,035

   2,175Prepayments and deposits

   668

   274Workers’ compensation receivable

   26

   399Others

   192

   2152,921

   3,063
  15.

   Inventories
 The inventories include the following items: December 31,

   December 31,2012

   2011$

   $Precious metals

   769

   532Ore

   2,949

   3,477Supplies

   4,046

   3,5887,764

   7,597
 During the year, a write-down of inventories of $562, including $310 from discontinued operation, was recognized as an expense (none in 2011). There was no reversal of write-down in 2012 and 2011. 33
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  16.

   Property, plant and equipment
 The property, plant and equipment includes the following items: Mining sites in production

   Corporate office and others

   Advan-cedexplora-tionprojects

   TotalMining properties

   Development costs

   Buildings

   Equipment

   Total

   Lands, buildings and leasehold improvements

   Equipment and rolling stock

   Total$

   $

   $

   $

   $

   $

   $

   $

   $

   $Gross carryingamountBalance at January 1, 2012

   2,025

   55,192

   9,205

   17,497

   83,919

   966

   433

   1,399

   32,355

   117,673Acquisitions

   154

   5,305

   1,321

   4,934

   11,714

   1,150

   1,628

   2,778

   22,258

   36,750Disposals and write-off

   -

   (3,232)

   (182)

   (5,231)

   (8,645)

   -

   (75)

   (75)

   (33,209)

   (41,929)Exploration tax credits

   -

   (25)

   -

   -

   (25)

   -

   -

   -

   3,216

   3,191Transfers

   (214)

   1,773

   (32)

   4,691

   6,218

   430

   3,275

   3,705

   (9,923)

   -Adjustments to the asset retirement obligations

   -

   (160)

   -

   -

   (160)

   -

   -

   -

   -

   (160)Balance at Decembre 31, 2012

   1,965

   58,853

   10,312

   21,891

   93,021

   2,546

   5,261

   7,807

   14,697

   115,525Depreciation anddepletionBalance at January 1, 2011

   938

   26,230

   3,989

   8,442

   39,599

   195

   347

   542

   76

   40,217Depreciation and depletion

   29

   6,694

   1,116

   2,654

   10,493

   98

   180

   278

   -

   10,771Disposals and write-off

   -

   (92)

   (23)

   (522)

   (637)

   -

   (6)

   (6)

   (6)

   (649)Exploration tax credits

   -

   36

   -

   -

   36

   -

   -

   -

   -

   36Transfers

   -

   -

   -

   80

   80

   -

   (10)

   (10)

   (70)

   -Balance at December 31, 2012

   967

   32,868

   5,082

   10,654

   49,571

   293

   511

   804

   -

   50,375Carrying amountat December 31,2012

   998

   25,985

   5,230

   11,237

   43,450

   2,253

   4,750

   7,003

   14,697

   65,150
 During the fiscal year, the Corporation judged that the Francoeur Mine had met the commercial production criteria. As a result, assets of this mine had been transferred from “advanced exploration projects” classification into the “Mining Sites in Production” classification. Revenues and expenses associated with this mine had been included in the results from continuing operations in the consolidated income statement until the decision to close the Mine (note 12), at which point the results were included in discontinued operation. 34
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  Mining sites in production

   Corporate office and others

   Advan-cedexplora-tionprojects

   TotalMining properties

   Development costs

   Buildings

   Equipment

   Total

   Lands, buildings and leasehold improvements

   Equipment and rolling stock

   Total$

   $

   $

   $

   $

   $

   $

   $

   $

   $Gross carryingamountBalance at January 1, 2011

   1,811

   50,590

   7,414

   15,853

   75,668

   1,165

   579

   1,744

   12,341

   89,753Acquisitions

   214

   4,387

   1,791

   1,703

   8,095

   51

   75

   126

   25,012

   33,233Disposals and write-off

   -

   -

   -

   (5)

   (5)

   (250)

   (202)

   (452)

   -

   (457)Exploration tax credits

   -

   -

   -

   -

   -

   -

   -

   -

   (5,071)

   (5,071)Transfers

   -

   -

   -

   (54)

   (54)

   -

   (19)

   (19)

   73

   -Adjustments to the asset retirement obligations

   -

   215

   -

   -

   215

   -

   -

   -

   -

   215Balance at Decembre 31, 2011

   2,025

   55,192

   9,205

   17,497

   83,919

   966

   433

   1,399

   32,355

   117,673Depreciation anddepletionBalance at January 1, 2011

   916

   19,293

   3,118

   6,328

   29,655

   413

   459

   872

   27

   30,554Depreciation and depletion

   22

   6,937

   871

   2,205

   10,035

   32

   30

   62

   -

   10,097Disposals and write-off

   -

   -

   -

   (42)

   (42)

   (250)

   (142)

   (392)

   -

   (434)Transfers

   -

   -

   -

   (49)

   (49)

   -

   -

   -

   49

   -Balance at December 31, 2011

   938

   26,230

   3,989

   8,442

   39,599

   195

   347

   542

   76

   40,217Carrying amountat December 31,2011

   1,087

   28,962

   5,216

   9,055

   44,320

   771

   86

   857

   32,279

   77,456
 During the year ended December 31, 2012, the Beaufor Mine’s average depletion rate was 110 dollars per ounce sold (71 dollars in 2011), the Island Gold Mine’s average depletion rate was 181 dollars per ounce sold (159 dollars in 2011). Camflo Mill has an average depletion rate of 2.70 dollars per processed tonnes for the year ended December 31, 2012 (1.17 dollars in 2011). 35
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  17.

   Long-term debt
 Long-term debt includes the following financial liabilities: December 31,

   December 31,2012

   2011$

   $Finance leases obligations a)

   995

   -Long-term share-based compensation (note 6.2)

   639

   -1,634

   -Current portion

   932

   -702

   -
  a)

   During the year, the Corporation acquired rolling stock at a cost of $1,628 via two finance leases. The Corporation benefits from an option of a lower purchase price at the end of these two contracts.The first finance lease obligation has a carrying value of $456. During the year 2012, the Corporation recorded interest on finance lease obligations of $34 in property, plant and equipement under the category “advanced exploration projects”. The net carrying value of the rolling stock under finance lease amounts to $831.The second finance lease obligation has a carrying value of $539. The net carrying value of the rolling stock under finance lease amounts to $846.Future minimum finance lease payments at December 31, 2012 are as follows: Minimum lease payments due2013

   

   2014

   

   TotalDecember 31, 2012:Lease payments

   965

   

   64

   

   1,029Finance charges

   (33

   )

   (1

   )

   (34

   )Net present values

   932

   

   63

   

   995
  b)

   Convertible debentures, issued in February 2012, were entirely retired in September 2012. The debentures bore an interest rate of 7.6% (effective rate of 9.6%).The values of the liability component and the equity conversion component had been determined at the time of issuance and were re-evaluated at the time of retirement of the convertible debentures. The fair value of the liability component was calculated using a market interest rate for an equivalent non-convertible debenture. The residual amount, representing the value of equity conversion option, was included, net of tax, in shareholders’ equity in contributed surplus. 36
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 The components of the convertible debentures were allocated as follows: December 31,

   

   December 31,2012

   

   2011$

   

   $Face value of convertible debentures issued on February 1, 2012

   10,000

   

   -Equity component

   (910

   )

   -Liability component on initial recognition

   9,090

   

   -Interest and accretion expenses (note 9)

   575

   

   -Interest paid

   (487

   )

   -Carrying value of liability component, prior to retirement

   9,178

   

   -Retirement, September 2012

   (10,000

   )

   -Transfer to Equity component

   822

   

   --

   

   -
  18.

   Asset retirement obligations
 The Corporation’s production and exploration activities are subject to various federal and provincial laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Corporation conducts its operations so as to protect public health and the environment. The Corporation has recorded the asset retirement obligations of its mining sites on the basis of management’s best estimates of future costs, based on information available on the reporting date. Best estimates of future costs are the amount the Corporation would reasonably pay to settle its obligation on the closing date. Future costs are discounted using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the liability. Such estimates are subject to change based on modifications to laws and regulations or as new information becomes available. a)

   Changes in obligations
 The following table sets forth the movement of the asset retirement obligations for the year ended December 31, 2012: 2012$Balance, beginning of year

   6,685Accretion expense

   66Changes to estimated cash flow and payment schedules

   (6

   )Balance, end of year

   6,745
 37
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  b)

   Information used in the calculation of obligations
 The rate used to determine the future value of the obligations is 3.5% (4% in 2011) while the rate reflecting the current market assessments (adjusted for the risks specific to this liability) used to determine the actual value of the obligations is 1.3% (1% in 2011). The payments schedule was determined by taking into account the proven and probable reserves and the estimated annual production level. The following table sets forth the estimated cash flows of future retirement costs used in the calculation of the asset retirement obligations for the year ended December 31, 2012: Total amount

   

   Anticipatedof the estimated

   

   cash flowcash flow

   

   payment schedule2012

   $Beaufor Mine

   785

   

   2016Island Gold Mine

   1,467

   

   2016Camflo Mill

   3,958

   

   2017Francoeur Mine

   820

   

   2013 and after7,030
 In 2012, the schedules of the estimated cash flows of future retirement costs of the Beaufor Mine and the Francoeur Mine were revised to take into account their updated estimated reserves and the closure of the Francoeur Mine.  c)

   Deposits restricted and letters of credit Certain of the restricted deposits relate specifically to site restoration. As at December 31, 2012, the Corporation has $161 in deposits restricted with the Quebec government, $184 in deposits restricted with the Ontario government and a credit facility is available to the Corporation in the amount of $3,000 for the issuance of letters of credit as guarantees for the settlement of asset retirement obligations. The credit facility has a fixed annual fee of 0.85% (0.85% in 2011). The following table provides the allocation of deposits restricted and letters of credit issued as at December 31, 2012: 2012

   

   Date of$

   

   renewalDeposits restrictedIsland Gold Mine (Lochalsh property)

   184Beaufor Mine

   107Francoeur Mine

   54345Others

   339684Letters of creditCamflo Mill

   1,332

   

   January 20, 2013Island Gold Mine (Kremzar property)

   979

   

   January 26, 20132,311
 As at December 31, 2011, the Corporation had guaranteed the restoration of its mining sites by $106 in deposits restricted with the Quebec government, $184 in deposits restricted with the Ontario government and by the pledge of letters of credit amounting to $2,311. 38
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  d)

   Distribution of the asset retirement obligations
 The following table sets forth the distribution of the asset retirement: December 31,

   December 31,2012

   2011$

   $Camflo Mill

   3,759

   3,915Island Gold Mine

   1,411

   1,355Beaufor Mine

   755

   755Francoeur Mine

   820

   6606,745

   6,685Current portion

   370

   -6,375

   6,685
  19.

   Share capital
 Authorized: Unlimited number of common shares with no par value Number

   2012

   

   Number

   2011

   

   Number

   2010of shares

   Amount

   

   of shares

   Amount

   

   of shares

   Amount(thousands)

   $

   

   (thousands)

   $

   

   (thousands)

   $Issued and paid: Common sharesBalance, beginning of year

   33,110

   104,872

   

   31,230

   91,010

   

   26,104

   67,087Issue of shares for cash a)Common

   5,972

   25,981

   

   981

   10,295

   

   3,300

   16,500Exercise of stock options

   484

   2,174

   

   899

   3,904

   

   401

   2,078Issue of shares in exchange for non- controlling interests a)

   -

   -

   

   -

   -

   

   1,425

   6,685Common shares issue costs, net of future tax asset a)

   -

   (914

   )

   -

   (337

   )

   -

   (1,340

   )Balance, end of year

   39,566

   132,113

   

   33,110

   104,872

   

   31,230

   91,010
  a)

   Issue of shares
 In 2012, the Corporation issued 483,600 common shares (899,400 in 2011 and 401,000 in 2010) following the exercise of stock options and received cash proceeds in the amount of $1,521 ($2,804 in 2011 and $1,481 in 2010). Contributed surplus was reduced by $653 ($1,100 in 2011 et $597 in 2010) which represents the fair value of the exercised stock options. In September 2012, the Corporation issued, as part of a private placement, 5,972,540 common shares at $4.35 each for a total consideration of $25,981. An expense of $914 has been incurred relating to the issuance of common shares, creating a non recorded future tax asset of $243. In October 2011, the Corporation issued, as part of a private placement, 980,500 common shares at $10.50 each and 245,125 stock warrants for a total cash consideration of $10,295. An expense of $458 has been incurred relating to the issuance of common shares, creating a future tax asset of $121. 39
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 In June 2010, the Corporation issued, through a public offering, 3,300,000 common shares at $5.00 each, for gross proceeds of $16,500. An amount of $1,340 has been incurred relating to the issuance of common shares, creating a non recorded future tax asset of $368. On June 30, 2010, the Corporation issued 1,425,407 common shares at a price of $4.69 each, which was the closing price on the date of issue, as a result of the acquisition of the non-controlling interests of a subsidiary. Consequently, an amount of $6,685 was recorded to capital stock. b)

   Warrants
 In conjunction with the October 2011 share issue, a total of 245,125 warrants were issued. Each warrant allowed for the acquisition of one common share at a price of $13.00 prior to December 31, 2012. The method use to recognize these warrants is the residual value method for which the value of the warrants corresponds to the difference between the market value of the shares at the issuance date and the consideration received at that time. Considering that the market value of the shares issued was higher than the consideration received, no value was granted to the warrants issued. The warrants expired on January 1st, 2013. 20.

   Consolidated statements of cash flows
  2012

   

   2011

   

   2010$

   

   $

   

   $Net change in non-cash working capital itemsReceivables

   114

   

   (1,118

   )

   (640

   )Exploration tax credits receivable

   (668

   )

   (4,631

   )

   (2,126

   )Inventories

   (167

   )

   (233

   )

   (4

   )Payables, accruals and provisions

   3,510

   

   1,181

   

   1,2052,789

   

   (4,801

   )

   (1,565

   )Supplemental informationsTransactions with no impact on cash flows:Property, plant and equipment increase (decrease) as a result of the revision of the estimated payment schedule and the estimated cash flow of the asset retirement obligation

   (160

   )

   215

   

   380Issue of shares in exchange for non-controlling interests

   -

   

   -

   

   6,685Payables, accruals and provisions related to property, plant and equipment

   523

   

   3,253

   

   1,691
 During 2012, an amount of $4,141 initially recorded as exploration tax credits receivable was reversed and reflected as an increase to property, plant and equipment. In 2012, an amount of $950 ($5,071 in 2011), included in exploration tax credits receivable, was registered as a reduction in property, plant and equipment. These amounts are not included in the net change in non-cash working capital items. During the year, an amount of $7,169 of exploration tax credits receivable was applied against income taxes payable after the filing of the tax return. 40
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  21.

   Related party transactions
  21.1.

   Transactions with key management personnel
 The key management personnel include members of the Board of Directors and named executive officers of the Corporation consisting of the President & Chief Executive Officer, the Executive Vice-President and Chief Financial Officer, the Executive Vice-President and Chief Operating Officer and the Financial Director. Key management personnel remuneration includes the following expenses. 2012

   2011

   2010$

   $

   $Short-term benefitsSalaries, directors’fees, bonuses and other benefits

   1,988

   1,673

   1,455Severance compensation

   1,986

   117

   -Related benefits

   159

   165

   71Total short-term benefits

   4,133

   1,955

   1,526Post-employment benefitsDefined contribution pension plan

   8

   6

   5State plan

   23

   20

   18Total post-employment benefits

   31

   26

   23Stock-based compensation

   2,438

   611

   5866,602

   2,592

   2,135
 During 2012, key management exercised 324,000 share options (368,200 in 2011 and 152,000 in 2010) with total exercise price of $1,072 ($1,165 in 2011 and $665 in 2010). 21.2.

   Other transactions
 The corporate secretary is a partner at a law firm. During 2012, the Corporation received professional services from this firm for a total consideration of $333, including taxes ($225 in 2011 and $626 in 2010). One member of the Board of Directors is a partner at another law firm. During 2011, the Corporation received professional services from this firm for a total consideration of $27, including taxes ($14 in 2010). On February 1, 2012, the Corporation completed a private placement of $10,000 with the past Vice Chairman of the Corporation’s Board of Directors and two members of his immediate family in the form of debentures convertible into the Corporation’s common shares. The convertible debentures were entirely retired in September 2012. 22.

   Commitments
 The Corporation is subject to pay royalties on 50% of the production of the Beaufor Mine at the rate of $30 per ounce produced, a 3% Net Smelter Return royalty per ounce produced at the Island Gold Mine. Royalty payments could be payable on other properties if such other properties are brought into commercial production. The Corporation is committed, under an operating lease expiring in December 2017, to pay a total sum of $682 for office space. Minimum rental payments for the next five years amount to $136 annually. 41
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 On May 9, 2011, the Corporation announced the signing of an option agreement with Globex Mining Enterprises Inc. (“Globex”) to acquire a 100% interest in five claims. Under the terms of the agreement, the Corporation paid $500, and to maintain the option had to pay an additional $500 in November 2012. In addition, the Corporation had to incur $1,000 in expenditures on the claims before November 2012 and an additional $1,000 before thirty-six months following the signing of the agreement. To exercise its option to acquire the claims, the Corporation would then have had to pay $2,000 and issue 500,000 common shares in May 2014. Finally, following the acquisition, the Corporation would have had to incur an additional $1,000 in expenditures on the claims within a twelve month period. On October 2012, the Corporation abandoned its option agreement on Globex claims by sending a written notice. As a result, the Corporation was not required to pay the amount of $500 in November 2012 and will not be required to pay any future amount. 23.

   Contingencies
 The Corporation is involved in two legal proceedings. The first one involves a lawsuit against a supplier (the “company”) for non-compliance of a supply agreement, which has resulted in additional costs for the Corporation. The company disputed the amount claimed by the Corporation, and counter-sued the Corporation for an amount higher than the Corporation’s original claim amount, on the basis that the company had to absorb substantial costs following the breach of contract. The second dispute is related to an invoice that the Corporation is contesting because the amount invoiced included costs stemming from work that the Corporation had not previously authorized. This work was not specified in the contract, and did not meet the parameters of the signed contract that stated that any additional work required prior approval. The parties have chosen to transfer the case to arbitrators as stipulated in the contract. Management is of the opinion that the basis of these litigations is unfounded and, consequently, no provision has been accounted for in the financial statements in this respect. Furthermore, a wholly owned subsidiary, acquired in December 2008, is currently subject to a tax review concerning a December 2006 financing done through the issuance of flow-through shares. The purpose of the review is to ensure that the expenditures made are acceptable Canadian Exploration Expenses under the laws of flow-through share financing. No provision has been accounted for in the financial statements as Management is of the opinion that this financing was compliant with the applicable laws. Finally, the Corporation received a draft assessment from the Quebec tax authorities, whom are not allowing the Corporation to claim certain exploration tax credits for years 2009 to 2011. An amount of $4,141 initially recorded as exploration tax credits receivable was reversed and reflected as an increase to property, plant and equipment. The management of the Corporation is contesting this position, because it believes that the Corporation had the right to claim these exploration tax credits. 24.

   Capital disclosures
 The Corporation’s objectives when managing its capital are to safeguard the Corporation’s ability to continue as a going concern in order to support ongoing exploration programs and the development of its mining assets, to provide sufficient working capital to meet its ongoing obligations and to pursue potential investments. The Corporation defines its capital as its equity. The Corporation manages its capital structure and makes adjustments to it in accordance with the aforementioned objectives, as well as in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust its capital structure, the Corporation may purchase some of its shares for cancellation pursuant to normal course issuer bids, issue new shares, issue new debt, acquire or dispose of assets or adjust the amount relating to cash and cash equivalents and shares of publicly-traded companies. The Corporation is not subject to externally imposed capital requirements. The Corporation’s management of capital remained unchanged since the previous year. 42
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  25.

   Financial instruments and risk managementa)

   Fair value of financial instrumentsThe following table presents the carrying amounts and fair values of each financial instruments category: December 31, 2012

   December 31, 2011Book

   Fair

   Book

   Fairvalue

   value

   Value

   Value$

   $

   $

   $Available-for-sale financial assetsShares of publicly-traded companies

   30

   30

   893

   893Loans and receivablesCash1

   55,927

   55,927

   59,697

   59,697Cash equivalents 1

   3,883

   3,883

   3,835

   3,835Receivables1

   192

   192

   215

   21560,002

   60,002

   63,747

   63,747Financial liabilities, at amortized cost1Payables, accruals and  provisions

   17,356

   17,356

   12,005

   12,005Finance leases obligations2

   995

   995

   -

   -18,351

   18,351

   12,005

   12,005
  1

   The Corporation owns and assumes financial assets and liabilities such as cash, cash equivalents and receivables, as well as payables, accruals and provisions. The fair value of these financial assets and liabilities approximates their book value as these items will be realized or settled in the short term.2

  The fair value was determined by calculating the discounted cash flows using market interest rates for financial instruments with similar characteristics. The fair value of the finance leases obligations approximates the book value. b)

   Fair value hierarchy
 Financial instruments recognized at fair value on the Consolidated Statement of Financial Position must be classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurement, the fair value hierarchy levels are as follow: Level 1:

   quoted prices (unadjusted) observed in active markets for identical assets or liabilities;Level 2:

   valuation techniques based on inputs other than quoted prices included in level 1, that are either directly or indirectly observable;Level 3:

   valuation techniques with significant unobservable market inputs.
 The fair value measurements of shares of publicly-traded companies have been classified at level 1 from the fair value hierarchy. This valuation is based on bid price of the stock. c)

   Market risk
 The Corporation is exposed to gold price fluctuations and to fluctuations of the US dollar compared to the Canadian dollar. The Corporation could manage its exposure to these risks through the occasional use of derivative financial instruments and gold commodity contracts. The Corporation is also exposed to share price fluctuations of the shares that it holds in shares of publicly-traded companies and to fluctuations of interest rates for its cash and cash equivalents. The risks and the management of those risks were unchanged compared to previous years. The exposure to share price fluctuations and to fluctuations of interest rates is not significant. 43
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 The Board of Directors approves all policies concerning the use of derivative financial instruments and gold sales contracts. The Corporation does not hold any financial instrument or derivative financial instrument for trading or speculative purposes. Foreign exchange riskExposure to currency exchange rates arises from revenues from the sale of precious metals and purchases that the Corporation carries out abroad. All of the Corporation’s precious metal revenues are earned in U.S. dollars, while the majority of its operating costs are in Canadian dollars. The price of gold is established in US dollars; to manage its exposure due to the fluctuation of the US dollar, the Corporation can occasionally enter into various types of foreign exchange contracts. During the years 2012 and 2011, the Corporation did not enter into any forward exchange contracts. At December 31, 2012 and 2011, assets and liabilities denominated in US dollars are not significant. The following table illustrates the sensitivity of net earnings and equity in regards to the US dollar/ Canadian dollar exchange rate, all other variables being constant. It assumes a +/- 7% change of the US dollar/ Canadian dollar exchange rate for the reporting period ended December 31, 2012 (+/- 11% for the reporting period ended December 31, 2011 and +/- 8% for the reporting period ended December 31, 2010). This percentage has been determined based on the average market volatility in exchange rates in the previous twelve months. The sensitivity analysis is based on financial transactions made in foreign currency for the reporting period. SENSITIVITY ANALYSISChange

   Impact on net earnings(in thousands of CAN$)2012

   +/- 7% (US$ / CAN$)

   +/- 5,5722011

   +/- 11% (US$ / CAN$)

   +/- 9,3732010

   +/- 8% (US$ / CAN$)

   +/- 4,660
 Commodity price riskThe Corporation’s earnings are directly related to commodity prices as revenues are derived principally from the sale of gold. For its gold production, the Corporation can reduce its risk of a decrease in the price of gold through the occasional use of forward sales contracts and put and call options. The risk related to fluctuation of gold price is unchanged from the previous years. In 2012, 2011 and 2010, the Corporation did not enter into any hedging contracts for its gold production. The following table illustrates the sensitivity of net earnings and equity to movements in the price of gold, all other variables being constant. It assumes a +/- 10% change in the average selling price of gold realized (US$ per ounce), taking into account the average exchange rate for the corresponding year. SENSITIVITY ANALYSISChange

   Impact on net earnings(in thousands of CAN$)2012

   +/- 10%

   +/- 7,903Average exchange rate (US$/CAN$) 0.99962011

   +/- 10%

   +/- 8,311Average exchange rate (US$/CAN$) 0.98912010

   +/- 10%

   +/- 5,933Average exchange rate (US$/CAN$) 1.0299
 44
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  d)

   Credit risk
 Financial instruments that expose the Corporation to a credit risk consist of receivables (except taxes receivable) and cash and cash equivalents. The receivables mainly consist of prepayments and consequently the exposure to credit risk for the receivables is considered minimal. The Corporation invests its cash and cash equivalents in high-quality securities issued by government agencies, financial institutions and major corporations, and limits the amount of credit exposure by diversifying its holdings. At December 31, 2012 and at December 31, 2011, the Corporation’s cash and term deposits are held through three financial institutions. The following table presents the composition of cash and cash equivalents: December 31,

   December 31,2012

   2011$

   $Cash a)

   55,927

   59,697Cash equivalentsTerm deposits, 1.19% (1.25% as at December 31, 2011) maturing in February and March 2013

   3,883

   3,83559,810

   63,532
  a)

   As at December 31, 2012, 99% of cash was invested with effective rates varying from 1.20% to 1.50%. (As at December 31, 2011, 72% of cash was invested with effective rates varying from 1.20% to 1.50%, and 24% at an effective rate of 0.75%.). e)

   Liquidity risk
 The objective of management with respect to liquidity risk is to hold enough cash and cash equivalents in order to ensure that the Corporation has the necessary funds to meet its obligations. The liquidity risk and its management were the same as during the previous year. Payables, accruals and provisions are due in the next financial year. Payments for the finance leases obligations are disclosed in note 17. 26.

   Segmented information
 The Corporation operates gold mines at different sites in Quebec and Ontario. These operating sites are managed separately given their different locations. The Corporation assesses the performance of each segment based on earnings before taxes and discontinued operation. Accounting policies for each segment are the same as those used for the preparation of the consolidated financial statements. 45
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
 There was no difference in 2012 compared to annual financial statements of 2011 and 2010 in the basis of segmentation or the basis of evaluation of segment result. 2012Segmented information

   

   

   

   

   

   

   Exploration,concerning the consolidated

   

   

   

   

   Total

   

   corporate

   

   Discontinuedincome statement

   Quebec

   

   Ontario

   

   segments

   

   and others

   

   operation

   

   Total$

   

   $

   

   $

   

   $

   

   $

   

   $Precious metals

   40,436

   

   69,421

   

   109,857

   

   -

   

   (8,709

   )

   101,148Cost of sales

   39,888

   

   44,395

   

   84,283

   

   -

   

   (10,485

   )

   73,798Gross profit

   548

   

   25,026

   

   25,574

   

   -

   

   1,776

   

   27,350Exploration and project evaluation

   1,722

   

   10,969

   

   12,691

   

   7,864

   

   (290

   )

   20,265Administration

   -

   

   -

   

   -

   

   10,270

   

   -

   

   10,270Loss on disposal of long-term assets

   1

   

   181

   

   182

   

   23

   

   (7

   )

   198Other revenues

   (417

   )

   (211

   )

   (628

   )

   (1

   )

   31

   

   (598

   )1,306

   

   10,939

   

   12,245

   

   18,156

   

   (266

   )

   30,135Operating earnings (loss)

   (758

   )

   14,087

   

   13,329

   

   (18,156

   )

   2,042

   

   (2,785

   )Financial expenses

   53

   

   14

   

   67

   

   595

   

   (6

   )

   656Financial revenues

   (16

   )

   (1

   )

   (17

   )

   (820

   )

   -

   

   (837

   )Earnings (loss) before taxes and discontinued operation

   (795

   )

   14,074

   

   13,279

   

   (17,931

   )

   2,048

   

   (2,604

   )Net loss from discontinued operation

   (42,038

   )

   -

   

   (42,038

   )

   -

   

   -

   

   (42,038

   )Acquisition of property, plant and equipment

   27,288

   

   8,364

   

   35,652

   

   2,202

   

   -

   

   37,854Current assets

   6,387

   

   12,854

   

   19,241

   

   55,685

   

   -

   

   74,926Restricted deposits

   107

   

   184

   

   291

   

   393

   

   -

   

   684Property, plant and equipment

   21,282

   

   35,851

   

   57,133

   

   8,017

   

   -

   

   65,150Deferred income and mining tax assets

   -

   

   -

   

   -

   

   7,484

   

   -

   

   7,484Total assets

   27,776

   

   48,889

   

   76,665

   

   71,579

   

   -

   

   148,244Current liabilities

   4,583

   

   4,723

   

   9,306

   

   11,324

   

   -

   

   20,630Long-term debt

   63

   

   -

   

   63

   

   639

   

   -

   

   702Asset retirement obligations

   4,514

   

   1,411

   

   5,925

   

   450

   

   -

   

   6,375Deferred income and mining tax liabilities

   -

   

   -

   

   -

   

   2,174

   

   -

   

   2,174Total liabilities

   9,160

   

   6,134

   

   15,294

   

   14,587

   

   -

   

   29,881
 46
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  2011Segmented information
      
      
      
      
      
      
      Exploration,concerning the consolidated
      
      
      
      
      Total
      
      corporate
      
      Discontinuedincome statement
      Quebec
      
      Ontario
      
      segments
      
      and others
      
      operation
      
      Total$
      
      $
      
      $
      
      $
      
      $
      
      $Precious metals
      42,016
      
      76,223
      
      118,239
      
      -
      
      -
      
      118,239Cost of sales
      26,597
      
      45,099
      
      71,696
      
      -
      
      -
      
      71,696Gross profit
      15,419
      
      31,124
      
      46,543
      
      -
      
      -
      
      46,543Exploration and project evaluation
      1,177
      
      5,549
      
      6,726
      
      4,321
      
      (121
      )
      10,926Administration
      -
      
      -
      
      -
      
      5,456
      
      -
      
      5,456Loss (gain) on disposal of long-term assets
      -
      
      2
      
      2
      
      (3,012
      )
      -
      
      (3,010
      )Other revenues
      (67
      )
      (283
      )
      (350
      )
      (1
      )
      8
      
      (343
      )1,110
      
      5,268
      
      6,378
      
      6,764
      
      (113
      )
      13,029Operating earnings (loss)
      14,309
      
      25,856
      
      40,165
      
      (6,764
      )
      113
      
      33,514Financial expenses
      101
      
      26
      
      127
      
      -
      
      (12
      )
      115Financial revenues
      (6
      )
      (11
      )
      (17
      )
      (1,170
      )
      -
      
      (1,187
      )Earnings (loss) before taxes and discontinued operation
      14,214
      
      25,841
      
      40,055
      
      (5,594
      )
      125
      
      34,586Net loss from discontinued operation
      (125
      )
      -
      
      (125
      )
      -
      
      -
      
      (125
      )Acquisition of property, plant and equipment
      26,168
      
      4,959
      
      31,127
      
      543
      
      -
      
      31,670Current assets
      11,179
      
      14,636
      
      25,815
      
      63,362
      
      -
      
      89,177Restricted deposits
      106
      
      184
      
      290
      
      -
      
      -
      
      290Property, plant and equipment
      40,172
      
      34,794
      
      74,966
      
      2,490
      
      -
      
      77,456Deferred income and mining tax assets
      -
      
      -
      
      -
      
      1,067
      
      -
      
      1,067Total assets
      51,457
      
      49,614
      
      101,071
      
      66,919
      
      -
      
      167,990Current liabilities
      6,164
      
      3,948
      
      10,112
      
      10,354
      
      -
      
      20,466Asset retirement obligations
      5,329
      
      1,356
      
      6,685
      
      -
      
      -
      
      6,685Deferred income and mining tax liabilities
      -
      
      -
      
      -
      
      6,705
      
      -
      
      6,705Total liabilities
      11,493
      
      5,304
      
      16,797
      
      17,059
      
      -
      
      33,856
 47
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2012, 2011 and 2010 (in thousands of Canadian dollars)
  2010Segmented information

   

   

   

   

   

   

   Exploration,concerning the consolidated

   

   

   

   

   Total

   

   corporate

   

   Discontinuedincome statement

   Quebec

   

   Ontario

   

   segments

   

   and others

   

   operation

   

   Total$

   

   $

   

   $

   

   $

   

   $

   

   $Precious metals

   28,714

   

   58,468

   

   87,182

   

   -

   

   -

   

   87,182Cost of sales

   23,432

   

   42,671

   

   66,103

   

   -

   

   -

   

   66,103Gross profit

   5,282

   

   15,797

   

   21,079

   

   -

   

   -

   

   21,079Exploration and project evaluation

   2,699

   

   4,561

   

   7,260

   

   96

   

   (96

   )

   7,260Administration

   211

   

   -

   

   211

   

   4,702

   

   -

   

   4,913Loss (gain) on disposal of long-term assets

   -

   

   7

   

   7

   

   (496

   )

   -

   

   (489

   )Other revenues

   (3,093

   )

   (205

   )

   (3,298

   )

   -

   

   11

   

   (3,287

   )(183

   )

   4,363

   

   4,180

   

   4,302

   

   (85

   )

   8,397Operating earnings (loss)

   5,465

   

   11,434

   

   16,899

   

   (4,302

   )

   85

   

   12,682Financial expenses

   95

   

   22

   

   117

   

   -

   

   (14

   )

   103Financial revenues

   (43

   )

   (8

   )

   (51

   )

   (418

   )

   1

   

   (468

   )Earnings (loss) before taxes and discontinued operation

   5,413

   

   11,420

   

   16,833

   

   (3,884

   )

   98

   

   13,047Net loss from discontinued operation

   (98

   )

   -

   

   (98

   )

   -

   

   -

   

   (98

   )Acquisition of property, plant and equipment

   11,698

   

   4,650

   

   16,348

   

   426

   

   -

   

   16,774Current assets

   4,295

   

   7,260

   

   11,555

   

   44,261

   

   -

   

   55,816Restricted deposits

   106

   

   184

   

   290

   

   -

   

   -

   

   290Property, plant and equipment

   19,332

   

   37,723

   

   57,055

   

   2,144

   

   -

   

   59,199Total assets

   23,733

   

   45,167

   

   68,900

   

   46,405

   

   -

   

   115,305Current liabilities

   4,102

   

   3,929

   

   8,031

   

   3,905

   

   -

   

   11,936Asset retirement obligations

   5,043

   

   1,300

   

   6,343

   

   -

   

   -

   

   6,343Deferred income and mining tax liabilities

   -

   

   -

   

   -

   

   2,235

   

   -

   

   2,235Total liabilities

   9,145

   

   5,229

   

   14,374

   

   6,140

   

   -

   

   20,514
 In 2012, 71% of precious metals have been sold through US financial institutions (74% in 2011 and 71% in 2010). 27.

   Approval of Financial Statements
 The consolidated financial statements for the year ended December 31, 2012 were approved for publication by the Board of Directors on February 20, 2013. 48
      EXHIBIT 4.5 Private Financing Non-brokered private placement with four institutional funds.
      SUBSCRIPTION FOR COMMON SHARES (For Non-Canadian Subscribers) TO: Richmont Mines Inc. (the "Corporation") The undersigned (hereinafter referred to as the "Subscriber") hereby subscribes for and agrees to purchase from the Corporation the number of common shares of the capital of the Corporation (each a "CommonShare") to be issued for the aggregate consideration set forth below, representing a subscription price of Cdn$4.35 per Common Share (the "Offering Price"), upon and subject to the terms and conditions set forth in "Terms and Conditions of Subscription Agreement for Common Shares of Richmont Mines Inc." attached hereto (together with the face pages and the attached Exhibit I, as applicable, the "Subscription Agreement"). Number of Common Shares: 1,360,000Brookdale International Partners, L.P.

   

   

   

   Price Per Common Share: $4.35(Name of Subscriber – please print)

   

   

   

   Aggregate Consideration:

   $5,916,000By:

   /s/ Eitan MilgramAuthorized SignatureBeneficial Subscriber Information (if not the same as Subscriber)Executive Vice President of WAM GP LLC, as General Partner of Weiss Asset Management LP, as Investment Manager of Brookdale International Partners, L.P.(Official Capacity or Title – please print)Please print name of individual whose signature appears above if different than the name of the subscriber printed above.

   

   

   

   (Name of Beneficial Subscriber for whom subscriber is contracting)Eitan Milgram(Beneficial Subscriber’s Residential Address)(Subscriber’s Residental Address)(Telephone Number)REGISTERED ADDRESS(Fax Number)(MAILING ADDRESS)(Email Address)(Telephone Number)

   (E-mail Address)Register the Common Shares as set forth below:

   

   

   

   Deliver the Common Shares as set forth below:(Name)

   

   

   

   (Name)(Account reference, if applicable)

   

   

   

   (Account reference, if applicable)(Address)

   

   

   

   (Contact Name)(Address)
       2 A.

   Present Ownership of Securities
 The Subscriber either [check appropriate box]: [ X ]

   owns directly or indirectly, or exercises control or direction over, no common shares of the Corporation or securities convertible into common shares in the capital stock of the Corporation; or[   ]

   owns directly or indirectly, or exercises control or direction over, ________,common shares of the Corporation and convertible securities entitling the Subscriber to acquire an additional ________common shares in the capital stock of the Corporation.  ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement Sept. 25, 2012 Richmont Mines Inc. Per:

   /s/ Paul CarmelAuthorized Signatory
 Paul Carmel President&CEO
      TERMS AND CONDITIONS OF SUBSCRIPTION AGREEMENTFOR COMMON SHARES OF RICHMONT MINES INC. 1.

   Definitions
 "$"means lawful money of Canada; "Agreement"or "Subscription Agreement"means this subscription agreement, as the same may be amended, supplemented or restated from time to time; "Business Day"means a day other than a Saturday, Sunday or any other day on which Canadian chartered banks are not open for the transaction of regular business in the City of Montréal, Québec; "Closing"means the closing on the Closing Date of the issue and sale of Common Shares as contemplated by this Subscription Agreement; "Closing Date"means on or about September 26, 2012, or such other date as agreed to by the Corporation; "Closing Time"means 8:00 a.m. (Montréal time) on the Closing Date or such other time as the Corporation may agree; "NI 45-106"means National Instrument 45-106 respecting Prospectus and Registration Exemptionsor Regulation 45-106 respecting Prospectus and Registration Exemptionsin Québec; "Person"means an individual (whether acting as an executor, trustee, administrator, legal representative or otherwise), a firm, a corporation, a syndicate, a partnership, a trust, an association, an unincorporated organization, a joint venture, an investment club, a government or an agency or political subdivision thereof and every other form of legal or business entity of whatsoever nature or kind; "Regulation D"means Regulation D promulgated by the SEC under the U.S. Securities Act; "Regulation S"means Regulation S promulgated by the SEC under the U.S. Securities Act; "SEC"means the United States Securities and Exchange Commission; "Securities Laws"means, as applicable, the securities laws, regulations, rules, rulings and orders in each Selling Jurisdiction, the applicable policy statements issued by the securities regulators in each Selling Jurisdiction and the rules and policies of the TSX, the NYSE MKT as well as the U.S. Securities Act and U.S. Securities Exchange Act of 1934, as amended, state securities laws and, in each case the rules and regulations adopted thereunder; "Securities Regulators"means the securities commissions or other securities regulatory authorities of all of the Selling Jurisdictions or the relevant Selling Jurisdiction as the context so requires; "Selling Jurisdiction"means, in the ease of any Subscriber, the provinces of Canada and the United States and such other jurisdictions in which any such Subscriber resides or is otherwise subject to the Securities Laws;
      2 "TSX"means the Toronto Stock Exchange; "United States"means the United States of America, its territories and possessions, any state of the United States and the District of Columbia; and "U.S. Securities Act"means the United States SecuritiesAct of 1933, as amended. 2.

   Terms of the Offering
  (a)

   The Common Shares are part of an offering (the "Offering") of up to 8,045,978 Common Shares for aggregate gross proceeds of up to $35,000,000.
  (b)

   The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) that this subscription is subject to rejection or allotment by the Corporation in whole or in part.
  3.

   Representations, Warranties and Covenants of the Subscriber
 By executing this Subscription Agreement, the Subscriber (and, if applicable, the others for whom it is contracting hereunder) represents, warrants and covenants to the Corporation (and acknowledges that the Corporation and its counsel are relying thereon) that: (a)

   it has been independently advised as to restrictions with respect to trading in the Common Shares imposed by applicable Securities Laws in the jurisdiction in which it resides, confirms that no representation has been made to it by or on behalf of the Corporation with respect thereto, acknowledges that it is aware of the characteristics of Common Shares, the risks relating to an investment therein, and that it may not be able to resell the Common Shares until the expiration of the applicable hold period except in accordance with limited exemptions under applicable securities legislation and regulatory policy and it agrees that any certificates representing the Common Shares will bear a legend indicating that the sale of such securities is restricted. The Subscriber further acknowledges that it should consult its own legal counsel in its jurisdiction for full particulars of applicable resale restrictions;
  (b)

   it has not received, nor has it requested, nor does it have any need to receive, any prospectus, sales or advertising literature, offering memorandum or any other document describing the business and affairs of the Corporation which has been prepared for delivery to, and review by, prospective purchasers in order to assist them in making an investment decision in respect of the Common Shares, and it has not become aware of any advertisement in printed public media, radio, television or telecommunications, including electronic display such as the Internet with respect to the distribution of the Common Shares;
  (c)

   it has relied solely upon publicly available information relating to the Corporation and not upon any verbal or written representation as to fact or otherwise made by or on behalf of the Corporation except as expressly set forth herein;
  (d)

   Unless it is purchasing under subparagraph 3(e), then it is purchasing the Common Shares as principal or deemed to be purchasing as principal in accordance with applicable Securities Laws, it is resident of, or otherwise subject to the laws of, the jurisdiction
      3 disclosed under "Subscriber's Address" on the face page of this Agreement, and fully complies with one of the criteria set forth below: (i)

   if the Subscriber, or the disclosed principal on whose behalf it is acting, is a person resident in Canada, it is subscribing Common Shares for an aggregate acquisition cost of not less than Cdn$150,000 payable in cash at Closing and, if it is not an individual, it was not created and is not used solely to purchase or hold securities in reliance on the exemption from the prospectus requirement of Securities Laws contained in Section 2.10 of NI 45-106; or
  (ii)

   if the Subscriber, or the disclosed principal on whose behalf it is acting, is not a person resident in Canada, the subscription for the Common Shares by the Subscriber, or such disclosed principal, does not contravene any of the applicable securities legislation in the jurisdiction in which the Subscriber, or such disclosed principal, resides and it has concurrently executed and delivered a Representation Letter in the form attached as Exhibit I to this Subscription Agreement and the representations and warranties contained therein will be true and correct both as of the date of execution of this Subscription Agreement and as of the applicable Closing Date;
  (e)

   if it is not purchasing as principal, and not deemed to be purchasing as a principal in accordance with applicable Securities Laws, it is duly authorized to enter into this Subscription Agreement and to execute all documentation in connection with the purchase on behalf of each beneficial purchaser, each of whom is named under "Name of Beneficial Subscriber" on the face page of this Agreement, and to provide and agree to all Subscriber's representations, warranties and covenants on behalf of such beneficial purchasers, it acknowledges that the Corporation may be required by law to disclose to certain regulatory authorities, the identity of each beneficial purchaser of Common Shares for whom it may be acting, and if it is acting as agent for one or more disclosed principals, each of such principals is purchasing as principal for its own account, and all of the representations, warranties and covenants, excluding this paragraph 3(e) are also given in respect of such principal, except that references to the Subscriber's address are deemed to be references to the disclosed address of the beneficial purchaser disclosed under "Beneficial Subscriber's Address" on the face page of this Agreement;
  (f)

   it acknowledges that:
  (i)

   no securities commission or similar regulatory authority has reviewed or passed on the merits of the Common Shares;
  (ii)

   there is no government or other insurance covering the Common Shares;
  (iii)

   there are restrictions on the Subscriber's ability to resell the Common Shares and it is the responsibility of the Subscriber to comply with them before selling the Common Shares;
  (iv)

   the Corporation has advised the Subscriber that the Corporation is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell securities through a person or company registered to sell securities under the applicable Securities Laws and, as a consequence of acquiring securities pursuant to this exemption, certain protections, rights and remedies provided by
      4 applicable Securities Laws, including statutory rights of rescission or damages, will not be available to the Subscriber; (v)

   an investment in the Common Shares involves a high degree of risk and the Subscriber may lose its entire investment;
  (vi)

   the Corporation may complete additional financings in the future in order to develop the business of the Corporation and fund its ongoing development, and such future financings may have a dilutive effect on current shareholders or securityholders of the Corporation, including the Subscriber;
  (vii)

   the offer, issuance, sale and delivery of the Common Shares is conditional upon such sale being exempt from the prospectus filing or registration requirements and the requirement to deliver an offering memorandum in connection with the distribution of the Common Shares under the Securities Laws of the Selling Jurisdictions or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus;
  (viii)

   in purchasing the Common Shares, the Subscriber has not relied upon any verbal or written representation, including any investor presentation delivered to Subscribers, as to any fact or otherwise made by or on behalf of the Corporation or any of its employees, agents or affiliates thereof or any other person associated therewith; the Subscriber acknowledges that the decision to purchase the Common Shares was made solely on the basis of currently available public information and this Subscription Agreement;
  (ix)

   the Corporation has the right to accept or reject the Subscriber's subscription in whole or in part;
  (x)

   the Corporation's counsel is acting as counsel to the Corporation, and not as counsel to the Subscriber;
  (g)

   it is aware that the Common Shares have not been and will not be registered under the U.S. Securities Act or the Securities Laws of any state of the United States and that these securities may not be offered or sold in the United States without registration under the U.S. Securities Act or compliance with requirements of an exemption from registration and the applicable laws of all applicable states and acknowledges that the Corporation has no present intention of filing a registration statement under the U.S. Securities Act in respect of the Common Share;
  (h)

   except if the United States is indicated as being its jurisdiction of residence on the face page of this Subscription Agreement, the Common Shares have not been offered to the Subscriber in the United States, and the Subscriber represents and warrants that the purchase of the Common Shares will occur in an "offshore transaction" (as defined under Regulation S);
  (i)

   except if the United States is indicated as being its jurisdiction of residence on the face page of this Subscription Agreement, it is not a U.S. person (as defined in Regulation S under the U.S. Securities Act, which definition includes, but is not limited to, an individual resident in the United States, an estate or trust of which any executor or administrator or trustee, respectively, is a U.S. person and any partnership or corporation
      5 organized or incorporated under the laws of the United States) and is not purchasing the Common Shares on behalf of, or for the account or benefit of, a person in the United States or a U.S. person or for resale in the United States; (j)

   it undertakes and agrees that it will not offer or sell the Common Shares in the United States unless such securities are registered under the U.S. Securities Act and the Securities Laws of all applicable states of the United States or an exemption from such registration requirements is available;
  (k)

   if it is an individual, it is of the full age of majority and is legally competent to execute this Subscription Agreement and take all action pursuant hereto;
  (l)

   this Subscription Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Subscriber;
  (m)

   if it is a company, partnership, unincorporated association or other entity, it has the legal capacity and competence to enter into and be bound by this Subscription Agreement and further certifies that all necessary approvals of directors, shareholders or otherwise have been given and obtained and it was not created solely and is not being used solely to purchase or hold securities in reliance on a prospectus exemption;
  (n)

   it has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of its investment and it is able to bear the economic risk of loss of its investment;
  (o)

   it does not act jointly or in concert with any other subscriber for Common Shares for the purpose of the acquisition of the Common Shares;
  (p)

   if required by applicable Securities Laws, regulations, rules, policies or orders or by any securities commission, stock exchange or other regulatory authority, the Subscriber will execute, deliver, file and otherwise assist the Corporation in filing, such reports, undertakings and other documents with respect to the issue of the Common Shares (including a Representation Letter in the form attached hereto as Exhibit I, as applicable);
  (q)

   the entering into of this Subscription Agreement and the transactions contemplated hereby will not result in a violation of any of the terms or provisions of any law applicable to the Subscriber or any agreement to which the Subscriber is a party or by which it is bound, or if the Subscriber is not an individual, any of the Subscriber's constating documents;
  (r)

   the Subscriber acknowledges that it has been encouraged to and should obtain independent legal and investment advice with respect to its subscription for these Common Shares and accordingly, has been independently advised as to the meanings of all terms contained herein relevant to the Subscriber for purposes of giving representations, warranties and covenants under this Subscription Agreement;
  (s)

   it acknowledges and confirms that no representation has been made to it with respect to the future value or price of any of the Common Shares;
      6 (t)

   it acknowledges that all certificates representing the Common Shares will bear the following restrictive legends required by applicable Securities Laws and stock exchange rules:
 "UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [four months and one day from the Closing Date]." "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE; HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE." (u)

   the funds which will be advanced by the Subscriber to the Corporation hereunder will not  represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) Act(Canada) (the "PCMLA") and Terrorist Financing Act(Canada) and the Subscriber acknowledges that the Corporation may in the future be required by law to disclose the Subscriber's name and other information relating to this Subscription Agreement and the Subscriber's subscription hereunder, on a confidential basis, pursuant to the PCMLA. To the best of the knowledge of the Subscriber: (a) none of the subscription funds to be provided by the Subscriber: (i) have been or will be derived from or related to any activity that is deemed criminal under the laws of Canada, the United States, or any other jurisdiction; or (ii) are being tendered on behalf of a person or entity who has not been identified to the Subscriber; and (b) it shall promptly notify the Corporation if the Subscriber discovers that any of such representations ceases to be true, and will provide the Corporation with appropriate information in connection therewith;
  (v)

   the Subscriber has no knowledge of a "material fact" or "material change" (as those terms are defined in the applicable Securities Laws) in the affairs of the Corporation that has not been generally disclosed to the public;
  (w)

   the representations, warranties and covenants of the Subscriber herein are made with the intent that they be relied upon in determining the suitability of a purchaser of Common Shares and will be true and correct at the Closing Time on the Closing Date and will survive the completion of the issuance of the Common Shares. The Subscriber undertakes to immediately notify the Corporation at 1501 McGill College, Montréal, Québec, H3A 3M8; Attention: Paul Carmel, of any change in any statement or other information relating to the Subscriber set forth herein which takes place prior to the Closing Time on the Closing Date; and
  (x)

   the Subscriber agrees to indemnify and hold harmless the Corporation, and its directors, officers, employees, agents, advisers and shareholders from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any false representation or warranty of the Subscriber contained herein or in any document furnished by the
      7 Subscriber to the Corporation in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber herein or in any document furnished by the Subscriber to the Corporation in connection herewith. 4.

   Representations, Warranties and Covenants of the Corporation
 The Corporation hereby represents, warrants and covenants and agrees to and with the Subscriber (and acknowledges that the Subscriber is relying thereon) that: (a)

   the Corporation is incorporated and organized and existing under the laws of Québec, is qualified to carry on its business and is in good standing in each jurisdiction in which the conduct of its business or the ownership, leasing or operation of its property and assets requires such qualification, and has all requisite corporate power and authority to carry on its business, to own, lease and operate its property and assets and to execute, deliver and perform its obligations under this Agreement, including the issuance of the Common Shares;
  (b)

   the Corporation has conducted and is conducting its business in compliance with all applicable laws, rules and regulations of each jurisdiction in which its business is carried on and holds all necessary licenses, permits, approvals, consents, certificates, registrations and authorizations (whether governmental, regulatory or otherwise) (the "Licenses")to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated, and the Licenses are validly existing and in good standing and none of the Licenses contains any burdensome term, provision, condition or limitation which has or may have a materially adverse effect on the operation of the business of the Corporation as now carried on or as proposed to be carried on;
  (c)

   the authorized capital of the Corporation consists of an unlimited number of common shares, with no par value;
  (d)

   the Corporation is a qualified issuing corporation under the Québec Stock Savings Plan II (QSSP II)in accordance with the Taxation Act (Québec) and the Common Shares qualify as qualifying shares upon issuance for inclusion in a QSSP II in accordance with applicable legislation for qualified investment funds;
  (e)

   the Corporation will use the net proceeds of the Offering for general working capital purposes;
  (f)

   the entering into of this Subscription Agreement and the transactions contemplated hereby will not result in a violation of any of the terms or provisions of any law applicable to the Corporation or any agreement to which the Corporation is a party or by which it is bound, or any of the Corporation's constating documents
  (g)

   this Subscription Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Corporation;
  (h)

   the Commons Shares are or will be validly issued, fully paid, free from all liens, charges, claims, encumbrances and not subject to any call;
      8 (i)

   each consent, authorization, order or approval of, or filing or registration with, any governmental authority or other regulatory body or other third party required on or prior to the Closing Date for or in connection with the execution by the Corporation of this Subscription Agreement and the performance of the obligations to be assumed by this Subscription Agreement by the Corporation has been duly obtained and made and constitutes legal, valid, binding and enforceable obligations of the Corporation in accordance with its terms;
  (j)

   all information relating to the Corporation which might be relevant or material in connection with the transactions contemplated by this Subscription Agreement has been generally disclosed to the public through public announcements or disclosures by the Corporation to the TSX and/or NYSE MKT; and
  (k)

   there are no legal proceedings started or threatened against the Corporation (to the best of the knowledge of the Corporation after making due and careful enquiries) for its winding- up or dissolution, or for it or any of them to enter into any arrangement for composition for the benefit of creditors, or for the appointment of a receiver, judicial manager, trustee or similar officer of any of them or any of their respective properties, revenues or assets.
  5.

   Closing
  (a)

   The Subscriber agrees to deliver to the Corporation at closing: (a) this duly completed and executed Subscription Agreement (including, if the Subscriber, or the disclosed principal on whose behalf it is acting, is not a person resident in Canada, a Representation Letter in the form attached as Exhibit I); and (b) payment, in such manner as is acceptable to the Corporation and as directed by the Corporation, for the aggregate subscription price of the Common Shares subscribed for under this Subscription Agreement.
  (b)

   The Closing will be held at the offices of the Corporation's counsel at the Closing Time on the Closing Date.
  (c)

   The Subscriber acknowledges that the certificates representing the Common Shares will be available for delivery upon Closing against payment of the aggregate subscription price for the Common Shares provided that the Subscriber has satisfied all applicable requirements of Section (a) hereof and the Corporation has accepted this Subscription Agreement.
  (d)

   The Corporation will be entitled to rely on delivery of a facsimile or scanned copy of executed Subscription Agreements, and acceptance by the Corporation of such agreements shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms hereof. In addition, this Subscription Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same document.
  6.

   Privacy Legislation
 The Subscriber acknowledges and consents to the fact that the Corporation is collecting the Subscriber's (and any beneficial purchaser for which the Subscriber is contracting hereunder) personal information (as that term is defined under applicable privacy legislation, including, without limitation, the Personal Information Protection and Electronic Documents Act(Canada)
      9 and any other applicable similar replacement or supplemental provincial or federal, or United States or any state, legislation or laws in effect from time to time) for the purpose of completing the Subscriber's subscription. The Subscriber acknowledges and consents to the Corporation retaining the personal information for so long as permitted or required by applicable law or business practices. The Subscriber further acknowledges and consents to the fact that the Corporation may be required by applicable Securities Laws, stock exchange rules and/or the Investment Industry Regulatory Organization of Canada rules to provide regulatory authorities any personal information provided by the Subscriber respecting itself (and any beneficial purchaser for which the Subscriber is contracting hereunder). The Subscriber represents and warrants that it has the authority to provide the consents and acknowledgements set out in this paragraph on behalf of all beneficial purchasers for which the Subscriber is contracting. 7.

   Subscriber Acknowledgement
 In addition, the Subscriber agrees and acknowledges that: (a)

   the Corporation will deliver certain personal information, including information regarding the name, address, telephone number and amount subscribed for, to the securities regulatory authorities, including the Ontario Securities Commission, the TSX, the NYSE MKT and the Autoritédes marchés financiers,as applicable;
  (b)

   the information is being collected indirectly by the securities regulatory authorities under authority granted to them in securities legislation;
  (c)

   the information is being collected for the purposes of the administration and enforcement of such securities legislation; and
  (d)

   the Subscriber can contact the Administrative Support Clerk at the Ontario Securities Commission at Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario, (416) 593-3684 for information regarding the collection and use of this personal information by the Ontario Securities Commission.
  8.

   Conditional upon NYSE MKT and TSX Approvals
 Without limitation, this subscription and the transactions contemplated hereby are conditional upon and subject to the Corporation receiving the required TSX and NYSE MKT approvals of this subscription and the transactions contemplated hereby. 9 .

   Assignment
 The terms and provisions of this Subscription Agreement shall be binding upon and enure to the benefit of the Subscriber and the Corporation and their respective heirs, executors, administrators, successors and assigns; provided however, that this Subscription Agreement may not be assigned by either party without the consent of the other party. 10 .

   General
  (a)

   The contract arising out of this Subscription Agreement shall be governed by and construed in accordance with the laws of the Province of Québec and the laws of Canada
      10 applicable therein. The Subscriber and the Corporation each irrevocably attorn to the jurisdiction of the courts of the Province of Québec. (b)

   Time shall be of the essence hereof.
  (c)

   This Subscription Agreement represents the entire agreement of the parties hereto relating to the subject matter hereof and there are no representations, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein.
  (d)

   The Subscriber acknowledges and agrees that all costs incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the sale of the Common Shares to the Subscriber shall be borne by the Subscriber.
  (e)

   The Subscriber acknowledges and agrees that the acceptance of the Subscription Agreement will be conditional among other things upon the sale of the Common Shares to the Subscriber being exempt from any prospectus requirements of all applicable Securities Laws.
  (f)

   The Subscriber acknowledges that it has consented to and requested that all documents evidencing or relating in any way to the sale of the Common Shares be drawn up in the English language only. Le souscripteur reconnaît par les présentes avoir consenti et exigéque tous les documents faisant foi ou se rapportant de quelque manièreà lavente des actions ordinaires soient rédigés en anglais seulement.
  (g)

   The covenants, representations and warranties contained herein shall survive the Closing.
      EXHIBIT I REPRESENTATION LETTERFOR NON-CANADIAN SUBSCRIBERS To: Richmont Mines Inc. The Subscriber, on its own behalf and (if applicable) on behalf of others for whom it is contracting hereunder, further represents, warrants and covenants to and with the Corporation and its counsel (and acknowledges that the Corporation and its counsel are relying thereon) that it is, and (if applicable) any disclosed beneficial purchaser for whom it is contracting hereunder is, a resident of, or otherwise subject to, the securities legislation of a jurisdiction other than Canada, and: (a)

   the Subscriber is, and (if applicable) any other purchaser for whom it is contracting hereunder, is:
  (i)

   a purchaser that is recognized by the securities regulators in the jurisdiction in which it is, and (if applicable) any other purchaser for whom it is contracting hereunder is resident or otherwise subject to the securities laws of such jurisdiction as an exempt purchaser and (subject to (b)(i) below) is purchasing the Common Shares as principal for its, or (if applicable) each such other purchaser's, own account, and not for the benefit of any other person, for investment only and not with a view to resale or distribution and no other person, corporation, firm or other organization has a beneficial interest in the said securities being purchased, or purchasing the securities as agent or trustee for the principal disclosed on the face page of this Agreement and each disclosed principal for whom the Subscriber is acting is purchasing as principal for its own account, and not for the benefit of any other person, and is purchasing for investment only and not a view to resale or distribution; or(ii)

   a purchaser which is purchasing Common Shares pursuant to an exemption from any prospectus or securities registration requirements (particulars of which are enclosed herewith) available to the Corporation, the Subscriber and any such other purchaser under applicable securities laws of their jurisdiction of residence or to which the Subscriber and any such other purchaser are otherwise subject to, and the Subscriber and any such other purchaser shall deliver to the Corporation such further particulars of the exemption and their qualification thereunder as the Corporation may reasonably request; (b)

   if the Subscriber is resident in or otherwise subject to applicable securities laws of the United States:
  (i)

   it understands and agrees that the Common Shares have not been and will not be registered under the U.S. Securities Act, or applicable state securities laws, and the Common Shares are being offered and sold by the Corporation, to the Subscriber in reliance upon Rule 506 of Regulation D or Section 4(2) under the U.S. Securities Act;
  (ii)

   the undersigned represents, warrants and covenants (which representations, warranties and covenants shall survive the Closing) to the Corporation (and acknowledges that the Corporation is relying thereon) that:
      2 (a) it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits, and risks of the investment and it is able to bear the economic risk of loss of the investment; (b) it is purchasing the Common Shares for its own account or for the account of one or more persons for investment purposes only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Common Shares in the United States; provided, however, that the Subscriber may sell or otherwise dispose of any Common Shares pursuant to registration thereof pursuant to the U.S. Securities Act and any applicable state securities laws or under an exemption from such registration requirements; (c) it, and if applicable, each person for whose account it is purchasing the Common Shares satisfies one or more of the categories of "accredited investor" indicated below (the Subscriber must initial the appropriate line(s)): ________

   Category 1.

   A bank, as defined in Section 3(a)(2) of the U.S. Securities Act, whether acting in its individual or fiduciary capacity; or
  ________

   Category 2.

   A savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act, whether acting in its individual or fiduciary capacity; or
  ________

   Category 3.

   A broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934; or
  ________

   Category 4.

   An insurance company as defined in Section 2(13) of the U.S Securities Act; or
  ________

   Category 5.

   An investment company registered under the United States Investment Company Act of 1940; or
  ________

   Category 6.

   A business development company as defined in Section 2(a)(48) of the United States Investment Company Act of 1940; or
  ________

   Category 7.

   A small business investment company licensed by the U. S. Small Business Administration under Section 301 (c) or (d) of the United States Small Business Investment Act of 1958; or
  ________

   Category 8.

   A plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, with total assets in excess of U.S. $5,000,000; or
      3 ________

   Category 9.

   An employee benefit plan within the meaning of the United States Employee Retirement Income Security Act of 1974 in which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or an employee benefit plan with total assets in excess of U. S. $5,000,000 or, if a self- directed plan, with investment decisions made solely by persons who are accredited investors; or
  ________

   Category 10.

   A private business development company as defined in Section 202(a)(22) of the United States Investment Advisers Act of 1940; or
  [EM]

   Category 11.

   An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of U.S. $5,000,000; or
  ________

   Category 12.

   Any director or executive officer of the Corporation; or
  ________

   Category 13.

   A natural person whose individual net worth, or joint net worth with that person's spouse (exclusive of the value of such person's primary residence), at the date hereof exceeds U.S.$ 1,000,000; or
  ________

   Category 14.

   A natural person who had an individual income in excess of U.S.$200,000 in each of the two most recent years or joint income with that person's spouse in excess of U.S.$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or
  ________

   Category 15.

   A trust, with total assets in excess of U.S.$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the U.S. Securities Act; or
  ________

   Category 16.

   Any entity in which all of the equity owners meet the requirements of at least one of the above categories;
 (d) it has not purchased the Common Shares as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; (e) it understands that if it decides to offer, sell or otherwise transfer the Common Shares, it will not offer, sell or otherwise transfer any of such securities directly or indirectly, unless: (i) the transfer is to the Corporation;
   4 (ii) the transfer is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations; (iii) the transfer is made in compliance with the exemption from the registration requirements under the U.S. Securities Act provided by Rule 144 thereunder, if available, and in accordance with applicable state securities laws; or (iv) the securities are transferred in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of securities; and (v) in the case of transfers pursuant to (iii) or (iv) above, it has prior to such sale furnished to the Corporation an opinion of counsel or other evidence of exemption, in either case reasonably satisfactory to the Corporation; (iii)

   it understands that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the U.S. Securities Act or applicable U.S. state securities laws and regulations, the certificates representing the Common Shares will bear a legend in substantially the following form:
 "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS, AND IN EACH CASE OF (C) OR (D) THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE CORPORATION. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. IF THE SECURITIES ARE BEING SOLD AT ANY TIME THE CORPORATION IS A "FOREIGN ISSUER" AS DEFINED IN RULE 902 UNDER THE U.S. SECURITIES ACT, A NEW CERTIFICATE, BEARING NO LEGEND, THE DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED FROM THE CORPORATION'S TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION IN THE FORM SET FORTH IN APPENDIX I OF EXHIBIT I OF THE SUBSCRIPTION AGREEMENT DATED [SEPTEMBER XX, 2012] TO THE CORPORATION AND THE CORPORATION'S TRANSFER AGENT TO THE EFFECT THAT THE SALE OF THE SECURITIES IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT."
      5 provided, that if the Common Shares are being sold under clause (B) above, at a time when the Corporation is a "foreign issuer" as defined in Rule 902 under the U.S. Securities Act, the legend set forth above may be removed by providing a declaration in the form attached as Appendix I to this Exhibit I to the effect that the sale of the securities is being made in compliance with Rule 904 of Regulation S under the U.S. Securities Act; (iv)

   if any of the Common Shares are being sold pursuant to Rule 144 of the U.S. Securities Act, the legend may be removed by delivery to the Corporation's transfer agent of an opinion reasonably satisfactory to the Corporation to the effect that the legend is no longer required under applicable requirements of the U.S. Securities Act or state securities laws;
  (v)

   it understands and acknowledges that the Corporation is not obligated to remain a "foreign issuer" within the meaning of Regulation S under the U. S. Securities Act;(vi)

  it has had the opportunity to ask questions of and receive answers from the Corporation regarding the investment, and has received all the information regarding the Corporation that it has requested;
  (vii)

   it understands that the Corporation may instruct its registrar and transfer agent not to record any transfer of any securities of the Corporation without first being notified by the Corporation that it is satisfied that such transfer is exempt from or not subject to the registration requirements of the U.S. Securities Act and applicable state securities laws;
  (viii)

   it consents to the Corporation making a notation on its records or giving instructions to the registrar and transfer agent of the Corporation in order to implement the restrictions on transfer set forth and described herein;(ix)

   it understands and acknowledges that the Corporation has no obligation or present intention of filing with the United States Securities and Exchange Commission or with any state securities administrator any registration statement in respect of resales of the Common Shares in the United States;(x)

   it understands and agrees that there may be material tax consequences to the Subscriber of an acquisition, disposition or exercise of any of the Common Shares. The Corporation gives no opinion and makes no representation with respect to the tax consequences to the Subscriber under United States, state, local or foreign tax law of the undersigned's acquisition or disposition of such securities. In particular, no determination has been made whether the Corporation will be a "passive foreign investment company" ("PFIC") within the meaning of Section 1291 of the United States Internal Revenue Code;(xi)

   the office or other address of the Subscriber at which the Subscriber received and accepted the offer to purchase the Common Shares is the address listed on the face page of the Subscription Agreement;(xii)

   it acknowledges that the representations, warranties and covenants contained in this Agreement are made by it with the intent that they may be relied upon by the Corporation in determining its eligibility or the eligibility of others on whose behalf it is contracting thereunder to purchase Common Shares. It agrees that by accepting Common Shares it shall be representing and warranting that the
      6 representations and warranties above are true as at the Closing with the same force and effect as if they had been made by it at the Closing and that they shall survive the purchase by it of Common Shares and shall continue in full force and effect notwithstanding any subsequent disposition by it of such securities; and (xiii)

   The Subscriber undertakes to notify the Corporation immediately of any change in any representation, warranty or other information relating to the Subscriber set forth herein which takes place prior to the Closing.
  Dated at Boston, MAthis 25thday of September,2012. Brookdale International Partners, L.P.Name of SubscriberBy: /s/ Eitan MilgramSignature
 Eitan Milgram Title:

   Executive Vice President of WAM GP LLC,as General Partner of Weiss Asset Management L.P.as Investment Manager of Brookdale International Partners, L.P.
      APPENDIX I FORM OF DECLARATION FOR REMOVAL OF U.S. LEGEND To

   Richmont Mines Inc.(the "Corporation")and its Transfer Agent Computershare Investor Services Inc.
 The undersigned (A) acknowledges that the sale of the securities of the Corporation to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and (B) certifies that (1) the undersigned is not (a) an "affiliate" of the Corporation (as that term is defined in Rule 405 under the U.S. Securities Act), (b) a "distributor" or (c) an affiliate of a distributor; (2) the offer of such securities was not made to a person in the United States and either (a) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (b) the transaction was executed on or through the facilities of a "designated offshore securities market", and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States; (3) neither the seller nor any affiliate of the seller nor any person acting on their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities; (4) the sale is bona fide and not for the purpose of "washing off” the resale restrictions imposed because the securities are "restricted securities" (as that term is defined in Rule 144(a)(3) under the U.S. Securities Act); (5) the seller does not intend to replace such securities with fungible unrestricted securities; and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act. Dated ________ 20__.

   XSignature of individual (if Purchaser isan individual)XAuthorized signatory (if Purchaser is notan individual)Name of Purchaser (please print)Name of authorized signatory (please print)Official capacity of authorized signatory (please print)
      SUBSCRIPTION FOR COMMON SHARES (For Non-Canadian Subscribers) TO: Richmont Mines Inc. (the "Corporation") The undersigned (hereinafter referred to as the "Subscriber") hereby subscribes for and agrees to purchase from the Corporation the number of common shares of the capital of the Corporation (each a "CommonShare") to be issued for the aggregate consideration set forth below, representing a subscription price of Cdn$4.35 per Common Share (the "Offering Price"), upon and subject to the terms and conditions set forth in "Terms and Conditions of Subscription Agreement for Common Shares of Richmont Mines Inc." attached hereto (together with the face pages and the attached Exhibit I, as applicable, the "Subscription Agreement"). Number of Common Shares: 640,000Brookdale Global Opportunity Fund

   

   

   

   Price Per Common Share: $4.35(Name of Subscriber – please print)

   

   

   

   Aggregate Consideration:

   $2,784,000By:

   /s/ Eitan MilgramAuthorized SignatureBeneficial Subscriber Information (if not the same as Subscriber)Executive Vice President of WAM GP LLC, as General Partner of Weiss Asset Management LP, as Investment Manager of Brookdale Global Opportunity Fund(Official Capacity or Title – please print)Please print name of individual whose signature appears above if different than the name of the subscriber printed above.

   

   

   

   (Name of Beneficial Subscriber for whom subscriber is contracting)Eitan Milgram(Beneficial Subscriber’s Residential Address)(Subscriber’s Residental Address)(Telephone Number)REGISTERED ADDRESS(Fax Number)(MAILING ADDRESS)(Email Address)(Telephone Number)

   (E-mail Address)Register the Common Shares as set forth below:

   

   

   

   Deliver the Common Shares as set forth below:(Name)

   

   

   

   (Name)(Account reference, if applicable)

   

   

   

   (Account reference, if applicable)(Address)

   

   

   

   (Contact Name)(Address)
       2 A.

   Present Ownership of Securities
 The Subscriber either [check appropriate box]: [ X ]

   owns directly or indirectly, or exercises control or direction over, no common shares of the Corporation or securities convertible into common shares in the capital stock of the Corporation; or[   ]

   owns directly or indirectly, or exercises control or direction over, ________,common shares of the Corporation and convertible securities entitling the Subscriber to acquire an additional ________common shares in the capital stock of the Corporation.  ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement Sept. 25, 2012 Richmont Mines Inc. Per:

   /s/ Paul CarmelAuthorized Signatory
 Paul Carmel President&CEO
      TERMS AND CONDITIONS OF SUBSCRIPTION AGREEMENTFOR COMMON SHARES OF RICHMONT MINES INC. 1.

   Definitions
 "$"means lawful money of Canada; "Agreement"or "Subscription Agreement"means this subscription agreement, as the same may be amended, supplemented or restated from time to time; "Business Day"means a day other than a Saturday, Sunday or any other day on which Canadian chartered banks are not open for the transaction of regular business in the City of Montréal, Québec; "Closing"means the closing on the Closing Date of the issue and sale of Common Shares as contemplated by this Subscription Agreement; "Closing Date"means on or about September 26, 2012, or such other date as agreed to by the Corporation; "Closing Time"means 8:00 a.m. (Montréal time) on the Closing Date or such other time as the Corporation may agree; "NI 45-106"means National Instrument 45-106 respecting Prospectus and Registration Exemptionsor Regulation 45-106 respecting Prospectus and Registration Exemptionsin Québec; "Person"means an individual (whether acting as an executor, trustee, administrator, legal representative or otherwise), a firm, a corporation, a syndicate, a partnership, a trust, an association, an unincorporated organization, a joint venture, an investment club, a government or an agency or political subdivision thereof and every other form of legal or business entity of whatsoever nature or kind; "Regulation D"means Regulation D promulgated by the SEC under the U.S. Securities Act; "Regulation S"means Regulation S promulgated by the SEC under the U.S. Securities Act; "SEC"means the United States Securities and Exchange Commission; "Securities Laws"means, as applicable, the securities laws, regulations, rules, rulings and orders in each Selling Jurisdiction, the applicable policy statements issued by the securities regulators in each Selling Jurisdiction and the rules and policies of the TSX, the NYSE MKT as well as the U.S. Securities Act and U.S. Securities Exchange Act of 1934, as amended, state securities laws and, in each case the rules and regulations adopted thereunder; "Securities Regulators"means the securities commissions or other securities regulatory authorities of all of the Selling Jurisdictions or the relevant Selling Jurisdiction as the context so requires; "Selling Jurisdiction"means, in the ease of any Subscriber, the provinces of Canada and the United States and such other jurisdictions in which any such Subscriber resides or is otherwise subject to the Securities Laws;
      2 "TSX"means the Toronto Stock Exchange; "United States"means the United States of America, its territories and possessions, any state of the United States and the District of Columbia; and "U.S. Securities Act"means the United States SecuritiesAct of 1933, as amended. 2.

   Terms of the Offering
  (a)

   The Common Shares are part of an offering (the "Offering") of up to 8,045,978 Common Shares for aggregate gross proceeds of up to $35,000,000.
  (b)

   The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) that this subscription is subject to rejection or allotment by the Corporation in whole or in part.
  3.

   Representations, Warranties and Covenants of the Subscriber
 By executing this Subscription Agreement, the Subscriber (and, if applicable, the others for whom it is contracting hereunder) represents, warrants and covenants to the Corporation (and acknowledges that the Corporation and its counsel are relying thereon) that: (a)

   it has been independently advised as to restrictions with respect to trading in the Common Shares imposed by applicable Securities Laws in the jurisdiction in which it resides, confirms that no representation has been made to it by or on behalf of the Corporation with respect thereto, acknowledges that it is aware of the characteristics of Common Shares, the risks relating to an investment therein, and that it may not be able to resell the Common Shares until the expiration of the applicable hold period except in accordance with limited exemptions under applicable securities legislation and regulatory policy and it agrees that any certificates representing the Common Shares will bear a legend indicating that the sale of such securities is restricted. The Subscriber further acknowledges that it should consult its own legal counsel in its jurisdiction for full particulars of applicable resale restrictions;
  (b)

   it has not received, nor has it requested, nor does it have any need to receive, any prospectus, sales or advertising literature, offering memorandum or any other document describing the business and affairs of the Corporation which has been prepared for delivery to, and review by, prospective purchasers in order to assist them in making an investment decision in respect of the Common Shares, and it has not become aware of any advertisement in printed public media, radio, television or telecommunications, including electronic display such as the Internet with respect to the distribution of the Common Shares;
  (c)

   it has relied solely upon publicly available information relating to the Corporation and not upon any verbal or written representation as to fact or otherwise made by or on behalf of the Corporation except as expressly set forth herein;
  (d)

   Unless it is purchasing under subparagraph 3(e), then it is purchasing the Common Shares as principal or deemed to be purchasing as principal in accordance with applicable Securities Laws, it is resident of, or otherwise subject to the laws of, the jurisdiction
      3 disclosed under "Subscriber's Address" on the face page of this Agreement, and fully complies with one of the criteria set forth below: (i)

   if the Subscriber, or the disclosed principal on whose behalf it is acting, is a person resident in Canada, it is subscribing Common Shares for an aggregate acquisition cost of not less than Cdn$150,000 payable in cash at Closing and, if it is not an individual, it was not created and is not used solely to purchase or hold securities in reliance on the exemption from the prospectus requirement of Securities Laws contained in Section 2.10 of NI 45-106; or
  (ii)

   if the Subscriber, or the disclosed principal on whose behalf it is acting, is not a person resident in Canada, the subscription for the Common Shares by the Subscriber, or such disclosed principal, does not contravene any of the applicable securities legislation in the jurisdiction in which the Subscriber, or such disclosed principal, resides and it has concurrently executed and delivered a Representation Letter in the form attached as Exhibit I to this Subscription Agreement and the representations and warranties contained therein will be true and correct both as of the date of execution of this Subscription Agreement and as of the applicable Closing Date;
  (e)

   if it is not purchasing as principal, and not deemed to be purchasing as a principal in accordance with applicable Securities Laws, it is duly authorized to enter into this Subscription Agreement and to execute all documentation in connection with the purchase on behalf of each beneficial purchaser, each of whom is named under "Name of Beneficial Subscriber" on the face page of this Agreement, and to provide and agree to all Subscriber's representations, warranties and covenants on behalf of such beneficial purchasers, it acknowledges that the Corporation may be required by law to disclose to certain regulatory authorities, the identity of each beneficial purchaser of Common Shares for whom it may be acting, and if it is acting as agent for one or more disclosed principals, each of such principals is purchasing as principal for its own account, and all of the representations, warranties and covenants, excluding this paragraph 3(e) are also given in respect of such principal, except that references to the Subscriber's address are deemed to be references to the disclosed address of the beneficial purchaser disclosed under "Beneficial Subscriber's Address" on the face page of this Agreement;
  (f)

   it acknowledges that:
  (i)

   no securities commission or similar regulatory authority has reviewed or passed on the merits of the Common Shares;
  (ii)

   there is no government or other insurance covering the Common Shares;
  (iii)

   there are restrictions on the Subscriber's ability to resell the Common Shares and it is the responsibility of the Subscriber to comply with them before selling the Common Shares;
  (iv)

   the Corporation has advised the Subscriber that the Corporation is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell securities through a person or company registered to sell securities under the applicable Securities Laws and, as a consequence of acquiring securities pursuant to this exemption, certain protections, rights and remedies provided by
      4 applicable Securities Laws, including statutory rights of rescission or damages, will not be available to the Subscriber; (v)

   an investment in the Common Shares involves a high degree of risk and the Subscriber may lose its entire investment;
  (vi)

   the Corporation may complete additional financings in the future in order to develop the business of the Corporation and fund its ongoing development, and such future financings may have a dilutive effect on current shareholders or securityholders of the Corporation, including the Subscriber;
  (vii)

   the offer, issuance, sale and delivery of the Common Shares is conditional upon such sale being exempt from the prospectus filing or registration requirements and the requirement to deliver an offering memorandum in connection with the distribution of the Common Shares under the Securities Laws of the Selling Jurisdictions or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus;
  (viii)

   in purchasing the Common Shares, the Subscriber has not relied upon any verbal or written representation, including any investor presentation delivered to Subscribers, as to any fact or otherwise made by or on behalf of the Corporation or any of its employees, agents or affiliates thereof or any other person associated therewith; the Subscriber acknowledges that the decision to purchase the Common Shares was made solely on the basis of currently available public information and this Subscription Agreement;
  (ix)

   the Corporation has the right to accept or reject the Subscriber's subscription in whole or in part;
  (x)

   the Corporation's counsel is acting as counsel to the Corporation, and not as counsel to the Subscriber;
  (g)

   it is aware that the Common Shares have not been and will not be registered under the U.S. Securities Act or the Securities Laws of any state of the United States and that these securities may not be offered or sold in the United States without registration under the U.S. Securities Act or compliance with requirements of an exemption from registration and the applicable laws of all applicable states and acknowledges that the Corporation has no present intention of filing a registration statement under the U.S. Securities Act in respect of the Common Share;
  (h)

   except if the United States is indicated as being its jurisdiction of residence on the face page of this Subscription Agreement, the Common Shares have not been offered to the Subscriber in the United States, and the Subscriber represents and warrants that the purchase of the Common Shares will occur in an "offshore transaction" (as defined under Regulation S);
  (i)

   except if the United States is indicated as being its jurisdiction of residence on the face page of this Subscription Agreement, it is not a U.S. person (as defined in Regulation S under the U.S. Securities Act, which definition includes, but is not limited to, an individual resident in the United States, an estate or trust of which any executor or administrator or trustee, respectively, is a U.S. person and any partnership or corporation
      5 organized or incorporated under the laws of the United States) and is not purchasing the Common Shares on behalf of, or for the account or benefit of, a person in the United States or a U.S. person or for resale in the United States; (j)

   it undertakes and agrees that it will not offer or sell the Common Shares in the United States unless such securities are registered under the U.S. Securities Act and the Securities Laws of all applicable states of the United States or an exemption from such registration requirements is available;
  (k)

   if it is an individual, it is of the full age of majority and is legally competent to execute this Subscription Agreement and take all action pursuant hereto;
  (l)

   this Subscription Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Subscriber;
  (m)

   if it is a company, partnership, unincorporated association or other entity, it has the legal capacity and competence to enter into and be bound by this Subscription Agreement and further certifies that all necessary approvals of directors, shareholders or otherwise have been given and obtained and it was not created solely and is not being used solely to purchase or hold securities in reliance on a prospectus exemption;
  (n)

   it has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of its investment and it is able to bear the economic risk of loss of its investment;
  (o)

   it does not act jointly or in concert with any other subscriber for Common Shares for the purpose of the acquisition of the Common Shares;
  (p)

   if required by applicable Securities Laws, regulations, rules, policies or orders or by any securities commission, stock exchange or other regulatory authority, the Subscriber will execute, deliver, file and otherwise assist the Corporation in filing, such reports, undertakings and other documents with respect to the issue of the Common Shares (including a Representation Letter in the form attached hereto as Exhibit I, as applicable);
  (q)

   the entering into of this Subscription Agreement and the transactions contemplated hereby will not result in a violation of any of the terms or provisions of any law applicable to the Subscriber or any agreement to which the Subscriber is a party or by which it is bound, or if the Subscriber is not an individual, any of the Subscriber's constating documents;
  (r)

   the Subscriber acknowledges that it has been encouraged to and should obtain independent legal and investment advice with respect to its subscription for these Common Shares and accordingly, has been independently advised as to the meanings of all terms contained herein relevant to the Subscriber for purposes of giving representations, warranties and covenants under this Subscription Agreement;
  (s)

   it acknowledges and confirms that no representation has been made to it with respect to the future value or price of any of the Common Shares;
      6 (t)

   it acknowledges that all certificates representing the Common Shares will bear the following restrictive legends required by applicable Securities Laws and stock exchange rules:
 "UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [four months and one day from the Closing Date]." "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE; HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE." (u)

   the funds which will be advanced by the Subscriber to the Corporation hereunder will not  represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) Act(Canada) (the "PCMLA") and Terrorist Financing Act(Canada) and the Subscriber acknowledges that the Corporation may in the future be required by law to disclose the Subscriber's name and other information relating to this Subscription Agreement and the Subscriber's subscription hereunder, on a confidential basis, pursuant to the PCMLA. To the best of the knowledge of the Subscriber: (a) none of the subscription funds to be provided by the Subscriber: (i) have been or will be derived from or related to any activity that is deemed criminal under the laws of Canada, the United States, or any other jurisdiction; or (ii) are being tendered on behalf of a person or entity who has not been identified to the Subscriber; and (b) it shall promptly notify the Corporation if the Subscriber discovers that any of such representations ceases to be true, and will provide the Corporation with appropriate information in connection therewith;
  (v)

   the Subscriber has no knowledge of a "material fact" or "material change" (as those terms are defined in the applicable Securities Laws) in the affairs of the Corporation that has not been generally disclosed to the public;
  (w)

   the representations, warranties and covenants of the Subscriber herein are made with the intent that they be relied upon in determining the suitability of a purchaser of Common Shares and will be true and correct at the Closing Time on the Closing Date and will survive the completion of the issuance of the Common Shares. The Subscriber undertakes to immediately notify the Corporation at 1501 McGill College, Montréal, Québec, H3A 3M8; Attention: Paul Carmel, of any change in any statement or other information relating to the Subscriber set forth herein which takes place prior to the Closing Time on the Closing Date; and
  (x)

   the Subscriber agrees to indemnify and hold harmless the Corporation, and its directors, officers, employees, agents, advisers and shareholders from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any false representation or warranty of the Subscriber contained herein or in any document furnished by the
      7 Subscriber to the Corporation in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber herein or in any document furnished by the Subscriber to the Corporation in connection herewith. 4.

   Representations, Warranties and Covenants of the Corporation
 The Corporation hereby represents, warrants and covenants and agrees to and with the Subscriber (and acknowledges that the Subscriber is relying thereon) that: (a)

   the Corporation is incorporated and organized and existing under the laws of Québec, is qualified to carry on its business and is in good standing in each jurisdiction in which the conduct of its business or the ownership, leasing or operation of its property and assets requires such qualification, and has all requisite corporate power and authority to carry on its business, to own, lease and operate its property and assets and to execute, deliver and perform its obligations under this Agreement, including the issuance of the Common Shares;
  (b)

   the Corporation has conducted and is conducting its business in compliance with all applicable laws, rules and regulations of each jurisdiction in which its business is carried on and holds all necessary licenses, permits, approvals, consents, certificates, registrations and authorizations (whether governmental, regulatory or otherwise) (the "Licenses")to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated, and the Licenses are validly existing and in good standing and none of the Licenses contains any burdensome term, provision, condition or limitation which has or may have a materially adverse effect on the operation of the business of the Corporation as now carried on or as proposed to be carried on;
  (c)

   the authorized capital of the Corporation consists of an unlimited number of common shares, with no par value;
  (d)

   the Corporation is a qualified issuing corporation under the Québec Stock Savings Plan II (QSSP II)in accordance with the Taxation Act (Québec) and the Common Shares qualify as qualifying shares upon issuance for inclusion in a QSSP II in accordance with applicable legislation for qualified investment funds;
  (e)

   the Corporation will use the net proceeds of the Offering for general working capital purposes;
  (f)

   the entering into of this Subscription Agreement and the transactions contemplated hereby will not result in a violation of any of the terms or provisions of any law applicable to the Corporation or any agreement to which the Corporation is a party or by which it is bound, or any of the Corporation's constating documents
  (g)

   this Subscription Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Corporation;
  (h)

   the Commons Shares are or will be validly issued, fully paid, free from all liens, charges, claims, encumbrances and not subject to any call;
      8 (i)

   each consent, authorization, order or approval of, or filing or registration with, any governmental authority or other regulatory body or other third party required on or prior to the Closing Date for or in connection with the execution by the Corporation of this Subscription Agreement and the performance of the obligations to be assumed by this Subscription Agreement by the Corporation has been duly obtained and made and constitutes legal, valid, binding and enforceable obligations of the Corporation in accordance with its terms;
  (j)

   all information relating to the Corporation which might be relevant or material in connection with the transactions contemplated by this Subscription Agreement has been generally disclosed to the public through public announcements or disclosures by the Corporation to the TSX and/or NYSE MKT; and
  (k)

   there are no legal proceedings started or threatened against the Corporation (to the best of the knowledge of the Corporation after making due and careful enquiries) for its winding- up or dissolution, or for it or any of them to enter into any arrangement for composition for the benefit of creditors, or for the appointment of a receiver, judicial manager, trustee or similar officer of any of them or any of their respective properties, revenues or assets.
  5.

   Closing
  (a)

   The Subscriber agrees to deliver to the Corporation at closing: (a) this duly completed and executed Subscription Agreement (including, if the Subscriber, or the disclosed principal on whose behalf it is acting, is not a person resident in Canada, a Representation Letter in the form attached as Exhibit I); and (b) payment, in such manner as is acceptable to the Corporation and as directed by the Corporation, for the aggregate subscription price of the Common Shares subscribed for under this Subscription Agreement.
  (b)

   The Closing will be held at the offices of the Corporation's counsel at the Closing Time on the Closing Date.
  (c)

   The Subscriber acknowledges that the certificates representing the Common Shares will be available for delivery upon Closing against payment of the aggregate subscription price for the Common Shares provided that the Subscriber has satisfied all applicable requirements of Section (a) hereof and the Corporation has accepted this Subscription Agreement.
  (d)

   The Corporation will be entitled to rely on delivery of a facsimile or scanned copy of executed Subscription Agreements, and acceptance by the Corporation of such agreements shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms hereof. In addition, this Subscription Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same document.
  6.

   Privacy Legislation
 The Subscriber acknowledges and consents to the fact that the Corporation is collecting the Subscriber's (and any beneficial purchaser for which the Subscriber is contracting hereunder) personal information (as that term is defined under applicable privacy legislation, including, without limitation, the Personal Information Protection and Electronic Documents Act(Canada)
      9 and any other applicable similar replacement or supplemental provincial or federal, or United States or any state, legislation or laws in effect from time to time) for the purpose of completing the Subscriber's subscription. The Subscriber acknowledges and consents to the Corporation retaining the personal information for so long as permitted or required by applicable law or business practices. The Subscriber further acknowledges and consents to the fact that the Corporation may be required by applicable Securities Laws, stock exchange rules and/or the Investment Industry Regulatory Organization of Canada rules to provide regulatory authorities any personal information provided by the Subscriber respecting itself (and any beneficial purchaser for which the Subscriber is contracting hereunder). The Subscriber represents and warrants that it has the authority to provide the consents and acknowledgements set out in this paragraph on behalf of all beneficial purchasers for which the Subscriber is contracting. 7.

   Subscriber Acknowledgement
 In addition, the Subscriber agrees and acknowledges that: (a)

   the Corporation will deliver certain personal information, including information regarding the name, address, telephone number and amount subscribed for, to the securities regulatory authorities, including the Ontario Securities Commission, the TSX, the NYSE MKT and the Autoritédes marchés financiers,as applicable;
  (b)

   the information is being collected indirectly by the securities regulatory authorities under authority granted to them in securities legislation;
  (c)

   the information is being collected for the purposes of the administration and enforcement of such securities legislation; and
  (d)

   the Subscriber can contact the Administrative Support Clerk at the Ontario Securities Commission at Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario, (416) 593-3684 for information regarding the collection and use of this personal information by the Ontario Securities Commission.
  8.

   Conditional upon NYSE MKT and TSX Approvals
 Without limitation, this subscription and the transactions contemplated hereby are conditional upon and subject to the Corporation receiving the required TSX and NYSE MKT approvals of this subscription and the transactions contemplated hereby. 9 .

   Assignment
 The terms and provisions of this Subscription Agreement shall be binding upon and enure to the benefit of the Subscriber and the Corporation and their respective heirs, executors, administrators, successors and assigns; provided however, that this Subscription Agreement may not be assigned by either party without the consent of the other party. 10 .

   General
  (a)

   The contract arising out of this Subscription Agreement shall be governed by and construed in accordance with the laws of the Province of Québec and the laws of Canada
      10 applicable therein. The Subscriber and the Corporation each irrevocably attorn to the jurisdiction of the courts of the Province of Québec. (b)

   Time shall be of the essence hereof.
  (c)

   This Subscription Agreement represents the entire agreement of the parties hereto relating to the subject matter hereof and there are no representations, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein.
  (d)

   The Subscriber acknowledges and agrees that all costs incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the sale of the Common Shares to the Subscriber shall be borne by the Subscriber.
  (e)

   The Subscriber acknowledges and agrees that the acceptance of the Subscription Agreement will be conditional among other things upon the sale of the Common Shares to the Subscriber being exempt from any prospectus requirements of all applicable Securities Laws.
  (f)

   The Subscriber acknowledges that it has consented to and requested that all documents evidencing or relating in any way to the sale of the Common Shares be drawn up in the English language only. Le souscripteur reconnaît par les présentes avoir consenti et exigéque tous les documents faisant foi ou se rapportant de quelque manièreàla vente des actions ordinaires soient rédigés en anglais seulement.
  (g)

   The covenants, representations and warranties contained herein shall survive the Closing.
      EXHIBIT I REPRESENTATION LETTERFOR NON-CANADIAN SUBSCRIBERS To: Richmont Mines Inc. The Subscriber, on its own behalf and (if applicable) on behalf of others for whom it is contracting hereunder, further represents, warrants and covenants to and with the Corporation and its counsel (and acknowledges that the Corporation and its counsel are relying thereon) that it is, and (if applicable) any disclosed beneficial purchaser for whom it is contracting hereunder is, a resident of, or otherwise subject to, the securities legislation of a jurisdiction other than Canada, and: (a)

   the Subscriber is, and (if applicable) any other purchaser for whom it is contracting hereunder, is:
  (i)

   a purchaser that is recognized by the securities regulators in the jurisdiction in which it is, and (if applicable) any other purchaser for whom it is contracting hereunder is resident or otherwise subject to the securities laws of such jurisdiction as an exempt purchaser and (subject to (b)(i) below) is purchasing the Common Shares as principal for its, or (if applicable) each such other purchaser's, own account, and not for the benefit of any other person, for investment only and not with a view to resale or distribution and no other person, corporation, firm or other organization has a beneficial interest in the said securities being purchased, or purchasing the securities as agent or trustee for the principal disclosed on the face page of this Agreement and each disclosed principal for whom the Subscriber is acting is purchasing as principal for its own account, and not for the benefit of any other person, and is purchasing for investment only and not a view to resale or distribution; or(ii)

   a purchaser which is purchasing Common Shares pursuant to an exemption from any prospectus or securities registration requirements (particulars of which are enclosed herewith) available to the Corporation, the Subscriber and any such other purchaser under applicable securities laws of their jurisdiction of residence or to which the Subscriber and any such other purchaser are otherwise subject to, and the Subscriber and any such other purchaser shall deliver to the Corporation such further particulars of the exemption and their qualification thereunder as the Corporation may reasonably request; (b)

   if the Subscriber is resident in or otherwise subject to applicable securities laws of the United States:
  (i)

   it understands and agrees that the Common Shares have not been and will not be registered under the U.S. Securities Act, or applicable state securities laws, and the Common Shares are being offered and sold by the Corporation, to the Subscriber in reliance upon Rule 506 of Regulation D or Section 4(2) under the U.S. Securities Act;
  (ii)

   the undersigned represents, warrants and covenants (which representations, warranties and covenants shall survive the Closing) to the Corporation (and acknowledges that the Corporation is relying thereon) that:
      2 (a) it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits, and risks of the investment and it is able to bear the economic risk of loss of the investment; (b) it is purchasing the Common Shares for its own account or for the account of one or more persons for investment purposes only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Common Shares in the United States; provided, however, that the Subscriber may sell or otherwise dispose of any Common Shares pursuant to registration thereof pursuant to the U.S. Securities Act and any applicable state securities laws or under an exemption from such registration requirements; (c) it, and if applicable, each person for whose account it is purchasing the Common Shares satisfies one or more of the categories of "accredited investor" indicated below (the Subscriber must initial the appropriate line(s)): ________

   Category 1.

   A bank, as defined in Section 3(a)(2) of the U.S. Securities Act, whether acting in its individual or fiduciary capacity; or
  ________

   Category 2.

   A savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act, whether acting in its individual or fiduciary capacity; or
  ________

   Category 3.

   A broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934; or
  ________

   Category 4.

   An insurance company as defined in Section 2(13) of the U.S Securities Act; or
  ________

   Category 5.

   An investment company registered under the United States Investment Company Act of 1940; or
  ________

   Category 6.

   A business development company as defined in Section 2(a)(48) of the United States Investment Company Act of 1940; or
  ________

   Category 7.

   A small business investment company licensed by the U. S. Small Business Administration under Section 301 (c) or (d) of the United States Small Business Investment Act of 1958; or
  ________

   Category 8.

   A plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, with total assets in excess of U.S. $5,000,000; or
      3 ________

   Category 9.

   An employee benefit plan within the meaning of the United States Employee Retirement Income Security Act of 1974 in which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or an employee benefit plan with total assets in excess of U. S. $5,000,000 or, if a self- directed plan, with investment decisions made solely by persons who are accredited investors; or
  ________

   Category 10.

   A private business development company as defined in Section 202(a)(22) of the United States Investment Advisers Act of 1940; or
  [EM]

   Category 11.

   An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of U.S. $5,000,000; or
  ________

   Category 12.

   Any director or executive officer of the Corporation; or
  ________

   Category 13.

   A natural person whose individual net worth, or joint net worth with that person's spouse (exclusive of the value of such person's primary residence), at the date hereof exceeds U.S.$ 1,000,000; or
  ________

   Category 14.

   A natural person who had an individual income in excess of U.S.$200,000 in each of the two most recent years or joint income with that person's spouse in excess of U.S.$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or
  ________

   Category 15.

   A trust, with total assets in excess of U.S.$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the U.S. Securities Act; or
  ________

   Category 16.

   Any entity in which all of the equity owners meet the requirements of at least one of the above categories;
 (d) it has not purchased the Common Shares as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; (e) it understands that if it decides to offer, sell or otherwise transfer the Common Shares, it will not offer, sell or otherwise transfer any of such securities directly or indirectly, unless: (i) the transfer is to the Corporation;
   4 (ii) the transfer is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations; (iii) the transfer is made in compliance with the exemption from the registration requirements under the U.S. Securities Act provided by Rule 144 thereunder, if available, and in accordance with applicable state securities laws; or (iv) the securities are transferred in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of securities; and (v) in the case of transfers pursuant to (iii) or (iv) above, it has prior to such sale furnished to the Corporation an opinion of counsel or other evidence of exemption, in either case reasonably satisfactory to the Corporation; (iii)

   it understands that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the U.S. Securities Act or applicable U.S. state securities laws and regulations, the certificates representing the Common Shares will bear a legend in substantially the following form:
 "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS, AND IN EACH CASE OF (C) OR (D) THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE CORPORATION. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. IF THE SECURITIES ARE BEING SOLD AT ANY TIME THE CORPORATION IS A "FOREIGN ISSUER" AS DEFINED IN RULE 902 UNDER THE U.S. SECURITIES ACT, A NEW CERTIFICATE, BEARING NO LEGEND, THE DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED FROM THE CORPORATION'S TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION IN THE FORM SET FORTH IN APPENDIX I OF EXHIBIT I OF THE SUBSCRIPTION AGREEMENT DATED [SEPTEMBER XX, 2012] TO THE CORPORATION AND THE CORPORATION'S TRANSFER AGENT TO THE EFFECT THAT THE SALE OF THE SECURITIES IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT."
      5 provided, that if the Common Shares are being sold under clause (B) above, at a time when the Corporation is a "foreign issuer" as defined in Rule 902 under the U.S. Securities Act, the legend set forth above may be removed by providing a declaration in the form attached as Appendix I to this Exhibit I to the effect that the sale of the securities is being made in compliance with Rule 904 of Regulation S under the U.S. Securities Act; (iv)

   if any of the Common Shares are being sold pursuant to Rule 144 of the U.S. Securities Act, the legend may be removed by delivery to the Corporation's transfer agent of an opinion reasonably satisfactory to the Corporation to the effect that the legend is no longer required under applicable requirements of the U.S. Securities Act or state securities laws;
  (v)

   it understands and acknowledges that the Corporation is not obligated to remain a "foreign issuer" within the meaning of Regulation S under the U. S. Securities Act;(vi)

  it has had the opportunity to ask questions of and receive answers from the Corporation regarding the investment, and has received all the information regarding the Corporation that it has requested;
  (vii)

   it understands that the Corporation may instruct its registrar and transfer agent not to record any transfer of any securities of the Corporation without first being notified by the Corporation that it is satisfied that such transfer is exempt from or not subject to the registration requirements of the U.S. Securities Act and applicable state securities laws;
  (viii)

   it consents to the Corporation making a notation on its records or giving instructions to the registrar and transfer agent of the Corporation in order to implement the restrictions on transfer set forth and described herein;(ix)

   it understands and acknowledges that the Corporation has no obligation or present intention of filing with the United States Securities and Exchange Commission or with any state securities administrator any registration statement in respect of resales of the Common Shares in the United States;(x)

   it understands and agrees that there may be material tax consequences to the Subscriber of an acquisition, disposition or exercise of any of the Common Shares. The Corporation gives no opinion and makes no representation with respect to the tax consequences to the Subscriber under United States, state, local or foreign tax law of the undersigned's acquisition or disposition of such securities. In particular, no determination has been made whether the Corporation will be a "passive foreign investment company" ("PFIC") within the meaning of Section 1291 of the United States Internal Revenue Code;(xi)

   the office or other address of the Subscriber at which the Subscriber received and accepted the offer to purchase the Common Shares is the address listed on the face page of the Subscription Agreement;(xii)

   it acknowledges that the representations, warranties and covenants contained in this Agreement are made by it with the intent that they may be relied upon by the Corporation in determining its eligibility or the eligibility of others on whose behalf it is contracting thereunder to purchase Common Shares. It agrees that by accepting Common Shares it shall be representing and warranting that the
      6 representations and warranties above are true as at the Closing with the same force and effect as if they had been made by it at the Closing and that they shall survive the purchase by it of Common Shares and shall continue in full force and effect notwithstanding any subsequent disposition by it of such securities; and (xiii)

   The Subscriber undertakes to notify the Corporation immediately of any change in any representation, warranty or other information relating to the Subscriber set forth herein which takes place prior to the Closing.
  Dated at Boston, MAthis 25thday of September,2012. Brookdale Global Opportunity FundName of SubscriberBy: /s/ Eitan MilgramSignature
 Eitan Milgram Title:

   Executive Vice President of WAM GP LLC,as General Partner of Weiss Asset Management L.P.as Investment Manager of Brookdale Global Opportunity Fund
      APPENDIX I FORM OF DECLARATION FOR REMOVAL OF U.S. LEGEND To

   Richmont Mines Inc.(the "Corporation")and its Transfer Agent Computershare Investor Services Inc.
 The undersigned (A) acknowledges that the sale of the securities of the Corporation to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and (B) certifies that (1) the undersigned is not (a) an "affiliate" of the Corporation (as that term is defined in Rule 405 under the U.S. Securities Act), (b) a "distributor" or (c) an affiliate of a distributor; (2) the offer of such securities was not made to a person in the United States and either (a) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (b) the transaction was executed on or through the facilities of a "designated offshore securities market", and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States; (3) neither the seller nor any affiliate of the seller nor any person acting on their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities; (4) the sale is bona fide and not for the purpose of "washing off” the resale restrictions imposed because the securities are "restricted securities" (as that term is defined in Rule 144(a)(3) under the U.S. Securities Act); (5) the seller does not intend to replace such securities with fungible unrestricted securities; and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act. Dated ________ 20__.

   XSignature of individual (if Purchaser isan individual)XAuthorized signatory (if Purchaser is notan individual)Name of Purchaser (please print)Name of authorized signatory (please print)Official capacity of authorized signatory (please print)
      SUBSCRIPTION FOR COMMON SHARES (For Canadian Subscribers) TO: Richmont Mines Inc. (the "Corporation") The undersigned (hereinafter referred to as the "Subscriber") hereby subscribes for and agrees to purchase from the Corporation the number of common shares of the capital of the Corporation (each a "Common Share") to be issued for the aggregate consideration set forth below, representing a subscription price of Cdn$4.35 per Common Share (the "Offering Price"), upon and subject to the terms and conditions set forth in "Terms and Conditions of Subscription Agreement for Common Shares of Richmont Mines Inc." attached hereto (together with the face pages, the "Subscription Agreement"). Number of Common Shares: 23,000Paul Carmel

   

   

   

   Price Per Common Share: $4.35(Name of Subscriber – please print)

   

   

   

   Aggregate Consideration:

   $100,050.00By:

   /s/ Paul CarmelAuthorized SignatureBeneficial Subscriber Information (if not the same as Subscriber)President and CEO(Official Capacity or Title – please print)Please print name of individual whose signature appears above if different than the name of the subscriber printed above.

   

   

   

   (Name of Beneficial Subscriber for whom subscriber is contracting)(Beneficial Subscriber’s Residential Address)(Subscriber’s Residental Address)(Telephone Number)(Fax Number)(Telephone Number)

   (E-mail Address)(Email Address)Register the Common Shares as set forth below:

   

   

   

   Deliver the Common Shares as set forth below:Paul Carmel

   

   

   

   Paul Carmel(Name)

   

   

   

   (Name)(Account reference, if applicable)

   

   

   

   (Account reference, if applicable)(Address)

   

   

   

   (Contact Name)(Address)
      2 A.

   Present Ownership of Securities
 The Subscriber either [check appropriate box]: [   ]

   

   owns directly or indirectly, or exercises control or direction over, no common shares of the Corporation or securities convertible into common shares in the capital stock of the Corporation; or[ X ]

   

   owns directly or indirectly, or exercises control or direction over, 30,000common shares of the Corporation and convertible securities entitling the Subscriber to acquire an additional 0common shares in the capital stock of the Corporation.
  ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement Sept. 25, 2012 Richmont Mines Inc. Per:

   /s/ H. Greg ChamandyAuthorized SignatoryH. Greg Chamandy, Chairman
      SUBSCRIPTION FOR COMMON SHARES (For Canadian Subscribers) TO: Richmont Mines Inc. (the "Corporation") The undersigned (hereinafter referred to as the "Subscriber") hereby subscribes for and agrees to purchase from the Corporation the number of common shares of the capital of the Corporation (each a "Common Share") to be issued for the aggregate consideration set forth below, representing a subscription price of Cdn$4.35 per Common Share (the "Offering Price"), upon and subject to the terms and conditions set forth in "Terms and Conditions of Subscription Agreement for Common Shares of Richmont Mines Inc." attached hereto (together with the face pages, the "Subscription Agreement"). Number of Common Shares: 10,000Christian Pichette

   

   

   

   Price Per Common Share: $4.35(Name of Subscriber – please print)

   

   

   

   Aggregate Consideration:

   $43,500By:

   /s/ Christian PichetteAuthorized SignatureBeneficial Subscriber Information (if not the same as Subscriber)Executive vice president & COO(Official Capacity or Title – please print)Please print name of individual whose signature appears above if different than the name of the subscriber printed above.

   

   

   

   (Name of Beneficial Subscriber for whom subscriber is contracting)(Beneficial Subscriber’s Residential Address)(Subscriber’s Residental Address)(Telephone Number)(Fax Number)(Telephone Number)

   (E-mail Address)(Email Address)Register the Common Shares as set forth below:

   

   

   

   Deliver the Common Shares as set forth below:(Name)

   

   

   

   (Name)(Account reference, if applicable)

   

   

   

   (Account reference, if applicable)(Address)

   

   

   

   (Contact Name)(Address)
      2 A.

   Present Ownership of Securities
 The Subscriber either [check appropriate box]: [   ]

   

   owns directly or indirectly, or exercises control or direction over, no common shares of the Corporation or securities convertible into common shares in the capital stock of the Corporation; or[ X ]

   

   owns directly or indirectly, or exercises control or direction over, 40,000 common shares of the Corporation and convertible securities entitling the Subscriber to acquire an additional 10,000common shares in the capital stock of the Corporation.
  ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement Sept. 25, 2012 Richmont Mines Inc. Per:

   /s/ Paul CarmelAuthorized SignatoryPaul Carmel
     President & CEO
      SUBSCRIPTION FOR COMMON SHARES (For Canadian Subscribers) TO: Richmont Mines Inc. (the "Corporation") The undersigned (hereinafter referred to as the "Subscriber") hereby subscribes for and agrees to purchase from the Corporation the number of common shares of the capital of the Corporation (each a "Common Share") to be issued for the aggregate consideration set forth below, representing a subscription price of Cdn$4.35 per Common Share (the "Offering Price"), upon and subject to the terms and conditions set forth in "Terms and Conditions of Subscription Agreement for Common Shares of Richmont Mines Inc." attached hereto (together with the face pages, the "Subscription Agreement"). Number of Common Shares: 60,000Eberhard Scherkus
      
      
      
      Price Per Common Share: $4.35(Name of Subscriber – please print)
      
      
      
      Aggregate Consideration:
      $261,000By:
      /s/ Eberhard ScherkusAuthorized SignatureBeneficial Subscriber Information(if not the same as Subscriber)(Official Capacity or Title – please print)Please print name of individual whose signature appears above if different than the name of the subscriber printed above.
      
      
      
      (Name of Beneficial Subscriber for whom subscriber is contracting)(Beneficial Subscriber’s Residential Address)(Subscriber’s Residental Address)(Telephone Number)(Fax Number)(Telephone Number)
      (E-mail Address)(Email Address)Register the Common Shares as set forth below:
      
      
      
      Deliver the Common Shares as set forth below:Eberhard Scherkus(Name)
      
      
      
      (Name)(Account reference, if applicable)
      
      
      
      (Account reference, if applicable)(Address)
      
      
      
      (Contact Name)(Address)
      2 A.

   Present Ownership of Securities
 The Subscriber either [check appropriate box]: [ X ]

   

   owns directly or indirectly, or exercises control or direction over, no common shares of the Corporation or securities convertible into common shares in the capital stock of the Corporation; or[   ]

   

   owns directly or indirectly, or exercises control or direction over, ________ common shares of the Corporation and convertible securities entitling the Subscriber to acquire an additional ________ common shares in the capital stock of the Corporation.
  ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement Sept. 25, 2012 Richmont Mines Inc. Per:

   /s/ Paul CarmelAuthorized SignatoryPaul CarmelPresident & CEO
      
      
      SUBSCRIPTION FOR COMMON SHARES (For Canadian Subscribers) TO: Richmont Mines Inc. (the "Corporation") The undersigned (hereinafter referred to as the "Subscriber") hereby subscribes for and agrees to purchase from the Corporation the number of common shares of the capital of the Corporation (each a "Common Share") to be issued for the aggregate consideration set forth below, representing a subscription price of Cdn$4.35 per Common Share (the "Offering Price"), upon and subject to the terms and conditions set forth in "Terms and Conditions of Subscription Agreement for Common Shares of Richmont Mines Inc." attached hereto (together with the face pages, the "Subscription Agreement"). Number of Common Shares: 919,540FDS INV REA II Natcan Transitoire acting through its manager Fiera Capital Corporation
      
      
      
      Price Per Common Share: $4.35(Name of Subscriber – please print)
      
      
      
      Aggregate Consideration:
      $3,999,999.00By:
      /s/ Robert Trepamier
        /s/ Pierre BlanchetteAuthorized Signature1. Senior Vice-President, Operations and I.T.
      
      
      
      Beneficial Subscriber Information (if not the same as Subscriber)2. Senior Vice-President, Finance(Official Capacity or Title – please print)- Not Applicable -Please print name of individual whose signature appears above if different than the name of the subscriber printed above.
      
      
      
      (Name of Beneficial Subscriber for whom subscriber is contracting)1. Robert Trepamier2. Pierre Blanchette(Beneficial Subscriber’s Residential Address)(Subscriber’s Residental Address)(Telephone Number)(Fax Number)(Telephone Number)
      (E-mail Address)(Email Address)Register the Common Shares as set forth below:
      
      
      
      Deliver the Common Shares as set forth below:(Name)
      
      
      
      (Name)- See Appendix A Attached -
      
      
      
      - See Appendix A Attached -(Account reference, if applicable)
      
      
      
      (Account reference, if applicable)(Address)
      
      
      
      (Contact Name)(Address)
      2 A.

   Present Ownership of Securities
 The Subscriber either [check appropriate box]: [   ]

   

   owns directly or indirectly, or exercises control or direction over, no common shares of the Corporation or securities convertible into common shares in the capital stock of the Corporation; or[ X ]

   

   owns directly or indirectly, or exercises control or direction over, 495,340common shares of the Corporation and convertible securities entitling the Subscriber to acquire an additional 0 common shares in the capital stock of the Corporation.
  ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement Sept. 25, 2012 Richmont Mines Inc. Per:
      /s/ Paul CarmelAuthorized SignatoryPaul Carmel
        President & CEO
      
      
     EXHIBIT 8.1List of Subsidiaries Name

   Country of Incorporation

   Proportion of OwnershipLouvem Mines Inc.

   Canada

   100%Camflo Mill Inc.

   Canada

   100%Patricia Mining Corp.

   Canada

  100%
     EXHIBIT 12.1 CERTIFICATION I, Paul Carmel, certify that: 1.

   I have reviewed this annual report on Form 20-F of Richmont Mines Inc. (the “Corporation”);2.

   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.

   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Corporation as of, and for, the periods presented in this report;4.

   The Corporation’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Corporation and have: (a)

   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;(b)

   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c)

   Evaluated the effectiveness of the Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)

   Disclosed in this report any change in the Corporation’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting; and 5.

   The Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation’s auditors and the audit committee of the Corporation’s board of directors (or persons performing the equivalent functions); (a)

   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Corporation’s ability to record, process, summarize and report financial information; and(b)

   Any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation’s internal control over financial reporting. Date:

   April 19, 2013(/s/) Paul CarmelPaul CarmelPresident and Chief Executive Officer
      CERTIFICATION I, Pierre Rougeau, certify that: 1.

   I have reviewed this annual report on Form 20-F of Richmont Mines Inc. (the “Corporation”);2.

   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.

   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Corporation as of, and for, the periods presented in this report;4.

   The Corporation’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Corporation and have: (a)

   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;(b)

   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c)

   Evaluated the effectiveness of the Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)

   Disclosed in this report any change in the Corporation’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting; and 5.

   The Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation’s auditors and the audit committee of the Corporation’s board of directors (or persons performing the equivalent functions); (a)

   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Corporation’s ability to record, process, summarize and report financial information; and(b)

   Any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation’s internal control over financial reporting. Date:

   April 19, 2013(/s/) Pierre RougeauPierre RougeauExecutive Vice-President and Chief Financial Officer
     EXHIBIT 13.1 Certification of Periodic Financial Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 In connection with the Annual Report of Richmont Mines Inc. (the “Corporation”) on Form 20-F for the period ending December 31, 2012 as filed with Securities and Exchange Commission on the date hereof (the “Report”), I, Paul Carmel, President and Chief Executive Officer of the Corporation hereby certify that the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.  Date: April 19, 2013(/s/) Paul CarmelPaul CarmelPresident and Chief Executive Officer
  A signed original of this written statement required by Section 906 or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request. This Certification is being furnished pursuant to Rule 15(d) and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (15 U.S.C. §78r), or otherwise subject to the liability of that Section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Corporation specifically incorporates it by reference.
      Certification of Periodic Financial Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 In connection with the Annual Report of Richmont Mines Inc. (the “Corporation”) on Form 20-F for the period ending December 31, 2012 as filed with Securities and Exchange Commission on the date hereof (the “Report”), I, Pierre Rougeau, Executive Vice-President and Chief Financial Officer of the Corporation hereby certify that the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.  Date: April 19, 2013(/s/) Pierre RougeauPierre RougeauExecutive Vice-President and Chief Financial Officer
  A signed original of this written statement required by Section 906 or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request. This Certification is being furnished pursuant to Rule 15(d) and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (15 U.S.C. §78r), or otherwise subject to the liability of that Section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Corporation specifically incorporates it by reference.