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UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

FORM 20-F

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
      EXCHANGE ACT OF 1934ORANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE THE SECURITIES
      EXCHANGE ACT OF 1934XXX
      
      For the fiscal year ended December 31, 2004ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE THE SECURITIES
      EXCHANGE ACT OF 1934For the transition period from ____  to ______


Commission
      file number 0-28816RICHMONT MINES INC.(Exact name of Registrant as
      specified in its charter)Quebec, Canada(Jurisdiction of incorporation
      or organization)110, Avenue Principale,
      Rouyn-Noranda, Quebec J9X 4P2(Address of principal executive
      offices)


|                                                           
|-----------------------------------------------------------
|Securities registered pursuant to Section 12(b) of the Act:
|                                                           
|Title of each Class                                        
|Common Stock, no par value                                 

Securities registered
or to be registered pursuant to Section 12(g) of the Act: None

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: 16,169,653

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
ninety days. Yes XXX        
No

Indicate by check
mark which financial statement item the registrant has elected to follow: Item
17 XXXItem 18
____

Page 1 of 71 
Index to Exhibits on Page 71

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|TABLE OF CONTENTS
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    16. A.  
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    16.B.   
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    16.C.   
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    16.D.   
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    16.E.   
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    17.     
|ITEM
    18.     
|ITEM
    19.     

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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 Company'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 Company 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. Important factors that could
cause actual results to differ materially from the Company's expectations are
disclosed under "Risk Factors" and elsewhere in this Annual Report including,
without limitation, in conjunction with the forward-looking statements included
in this Annual Report.ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

> Not applicable.

ITEM 2.

> Not applicable.

ITEM 3.

> A.

The selected financial data of Richmont Mines Inc.
(consolidated with its wholly-owned subsidiary, Camflo Mill Inc., and its
majority-owned subsidiary, Louvem Mines Inc., "Richmont Mines" or the "Company")
set forth below are derived from the consolidated financial statements of the
Company which have been audited by KPMG

The selected financial data was extracted from the more
detailed consolidated financial statements and related notes included herein and
should be read in conjunction with such consolidated financial statements and
with the information appearing under the heading "item 5 - Operating and
Financial Review and Prospects."

The Company's consolidated financial statements are stated in
Canadian dollars (CAN$) and are prepared in accordance with Canadian Generally
Accepted Accounting Principles ("Canadian GAAP"). Reference is made to notes to
the consolidated financial statements of the Company included herein for a
discussion of the material differences between Canadian GAAP and U.S. GAAP, and
their effect on the Company's consolidated financial statements.

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 Form 20-F is current as at December 31,
2004, except where a different date is specified.

1

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The Company has not declared or paid any dividends on its capital stock
during the past five years.Selected Financial Data 
(Canadian GAAP)

|                                  | Year Ended
    December 31                           
|--------------------------------- | -----------------------------------------------------
|                                  | (thousands of Canadian dollars except per share data)
|                                  |                                                      
|                                  | 2004                                                 
|                                  |                                                      
|Total revenues                    | 39,641                                               
|                                  |                                                      
|Net earnings
    (loss)           | 732                                                  
|                                  |                                                      
|Net earnings
    (loss) per share |                                                      
|Basic                             | 0.05                                                 
|Diluted                           | 0.04                                                 
|                                  |                                                      
|Total assets                      | 56,194                                               
|                                  |                                                      
|Long-term debt                    | -                                                    
|                                  |                                                      
|Working capital                   | 25,925                                               
|                                  |                                                      
|Shareholders' equity              |                                                      
|                                  |                                                      
|Total                             | 45,412                                               
|                                  |                                                      
|Per share                         | 2.81                                                 
|                                  |                                                      
|Capital stock                     | 29,237                                               
|                                  |                                                      
|Number of
    outstanding         |                                                      
|common shares end of period       | 16,170                                               

2

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|Selected
    Financial Data                              
|---------------------------------------------------------
|(thousands of
    Canadian dollars except per share data)
|(U.S. GAAP
    Reconciliation)                           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|Net Income (loss)                                        
|                                                         
|Net earnings
    (loss) per share                        
|Basic                                                    
|Diluted                                                  
|                                                         
|Weighted average
    number of                           
|common shares outstanding                                
|                                                         
|Shareholders'
    Equity                                 
|                                                         
|Total Assets                                             

Exchange Rates

The Government of Canada permits a floating exchange rate to determine the
value of the Canadian dollar against the US dollar.

Set forth below are the average rates of exchange for the
Canadian dollar and the US 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 means the noon buying rate in New
York City for cable transfers in Canadian dollars as certified for customs
purposes by the Federal Reserve Bank of New York. The tables set forth the
number of Canadian dollars required under that formula to buy one US dollar. The
average rate means the average of the exchange rates on the last day of each
month during the period.

US Dollar/Canadian Dollar Exchange Rates

Year endedDecember 31
      Average2000
      1.48522001
      1.54842002
      1.57042003
      1.40152004
      1.3015


The following table sets forth the high and low exchange rate for the past
six months. As of May 31, 2005, the exchange rate was 1.2552.

3

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US Dollar/Canadian Dollar
      Exchange RatesMonth
      High
      LowDecember 2004
      1.2408
      1.1855January 2005
      1.2403
      1.1993February 2005
      1.2553
      1.2245March 2005
      1.2430
      1.2012April 2005
      1.2618
      1.2065May 2005
      1.2697
      1.2372


> B.

Not applicable.

> C.

Not applicable.

> D.

See the discussion regarding forward-looking statements at page 1.

Speculative Nature of the Mining Industry

The mining industry is intensely competitive and Richmont Mines competes with
many companies possessing greater financial resources and technical facilities.

The market price of precious metals and other metals is
volatile and cannot be controlled. If the price of precious metals should drop
significantly, the economic prospects of operations in which Richmont Mines has
an interest could be significantly reduced or rendered uneconomic.

There is no assurance that Richmont Mines' mineral development and
exploration activities will be successful.

Mining Risks

The mining operations of Richmont Mines are subject to the
risks normally encountered in the mining business. Hazards such as unusual or
unexpected geological formations, rock bursts, cave-ins, floods and other
conditions are involved in the drilling and mining of ore. The processing of ore
may subject Richmont Mines to liability under environmental legislation
resulting from a failure to maintain dams around tailing disposal areas.
Richmont Mines may become subject to liability for pollution, cave-ins or other
hazards against which it cannot insure or against which it may elect not to
insure because of high premium costs or for other reasons.

The ore reserves presented in this Annual Information Form
are in large part estimates, and no assurance can be given that the anticipated
tonnages and grades will be achieved or that the indicated level of recovery
will be realized. The grade of ore mined may differ from that indicated by
drilling results, which variation may have an adverse impact on production
results.

4

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In addition, the reliability of estimates of future production might also be
affected by factors such as weather, strikes and environmental occurrences.

> Reliance on Estimates of Proven and Probable Reserves

There are numerous uncertainties inherent in estimating
quantities of proven and probable reserves and in projecting future rates of
production, including many factors beyond the control of the Company. The
reserve data included in this Annual Report represents only estimates and actual
results may vary from such estimates. No assurance can be given that the
anticipated tonnages and grades will be achieved or that the indicated level of
recovery will be realized. The grade of ore mined may differ from that indicated
by drilling results, which 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.

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, and other relevant factors that demonstrate, at the
time of reporting, that economic extraction is justified.

Probable Mineral Reserves

A probable mineral reserve is the economically mineable part
of an indicated and, in some circumstances, a measured mineral resource,
demonstrated by at least a preliminary feasibility study. This study must
include adequate information on mining, processing, metallurgical, economic, and
other relevant factors that demonstrate, at the time of reporting, that economic
extraction can be justified.

> Depletion of Reserves

The life of mineral properties declines as reserves are
depleted. Except to the extent the Company acquires additional properties
containing proven reserves, conducts successful exploration and development
activities or, through engineering studies, identifies additional zones or
reserves, the proven reserves of the Company will decline as they are produced.
Future gold production is therefore highly dependent upon the Company's level of
success in acquiring or finding additional reserves.

Fluctuations in Gold Prices and Currencies (see Item 4.4 "Information on
the Company - Gold Marketing and Sales"

The profitability of the Company is directly related to the
market price of gold. Gold prices fluctuate considerably and are affected by
numerous factors beyond the Company's control, such as changes in investment
trends and international monetary systems, political events and changes in the
supply and demand for gold on the public and private markets.

5

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Furthermore, since gold price is established in US dollars, a
significant increase in the value of the Canadian dollar relative to the US
dollar coupled with stable or declining gold prices could adversely affect
Richmont Mines' results with respect to the sale of gold.

See Item 11 "Quantitative and Qualitative Disclosure about Market Risk
Foreign Currency Risk Disclosure."

As at December 31, 2004, Richmont Mines had no gold hedging contracts and no
future US dollar exchange contracts for the coming year.

Exploration and Development Risks

Mining exploration and the development of mineral deposits
involve significant financial risks which even a combination of careful
evaluation, experience and knowledge may not eliminate. While the discovery of
an ore body may result in substantial rewards, few properties which are explored
are ultimately developed into producing mines. The exploration process generally
begins with the identification and appraisal of mineral prospects. Substantial
expenditures may be required in an attempt to establish ore reserves through
drilling and other techniques, to develop metallurgical processes to extract
metals from ore and to construct mining processing facilities at the site chosen
for mining. No assurance can be given that current exploration programs will
result in any commercial mining operation.

Laws and Regulations

The Company's mining operations and exploration activities in
the Provinces of Quebec, Ontario and Newfoundland are subject to various laws
and regulations governing the environment, agricultural zoning, prospecting,
development, production, exports, taxes, labor standards, occupational health,
waste disposal, toxic substances, mine safety and other matters.

The Canadian mining industry is subject to federal and
provincial environmental protection legislation. This legislation imposes 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 this 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 government bodies.

Canadian federal, provincial, and local laws and regulations
relating to the exploration for and development, production and marketing of
mineral production, as well as environmental and safety matters have generally
become more stringent in recent years, often imposing greater liability on a
larger number of potentially responsible parties. Because the requirements
imposed by such laws and regulations are frequently changed, the Company is
unable to predict the ultimate cost of compliance with such requirements. There
is no assurance that laws and regulations enacted in the future will not
adversely affect the Company's financial condition and results of operations.

6

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The Company believes that it is in substantial compliance
with all current laws and regulations material to its activities. However,
changing government regulations may have an adverse effect on the Company.

Competition

The gold mining industry is marked by strong competition from
major mining companies and independent operators in acquiring properties and
leases for the exploration and production of gold. Competition is particularly
intense with respect to the acquisition of desirable undeveloped mineral
properties. The Company anticipates encountering such competition in connection
with any expansion of its activities. The principal competitive factors in the
acquisition of such undeveloped properties include the staff and data necessary
to identify, investigate and acquire interests in such properties, close working
relationships with governmental authorities and the financial resources
necessary to acquire and develop such properties. Many of the Company's
competitors have financial resources, staff and facilities substantially greater
than those of the Company. In addition, the producing, processing and marketing
of gold is affected by a number of factors which are beyond the control of the
Company, the effect of which cannot be accurately predicted.

The principal raw materials and resources necessary for the
exploration and production of gold are interests in prospective properties under
which reserves may be discovered, equipment to explore for and produce such
reserves and knowledgeable personnel to conduct all phases of operations. The
Company must compete for such raw materials and resources with both major mining
companies and independent operators. Although the Company believes that its
current operating and financial resources are adequate to preclude any
significant disruption of its operations in the immediate future, the continued
availability of such materials and resources to the Company cannot be assured.

ITEM 4.

> A.

General

The legal and commercial name of the Company is Richmont
Mines Inc. The Company is a corporation domiciled in Quebec, Canada. The Company
was incorporated pursuant to Part 1A of the Companies Act (Quebec) on February 12, 1981 (File number 1843-2286)
under the name Resources Minières Rouyn Inc. By Article of Amendment filed
February 10, 1987 the Company added the English version Rouyn Mining Resources
Inc. and by another amendment filed with the Government of Quebec on June 20,
1991, the Company changed its name to Richmont Mines Inc. The Articles of
Incorporation of the Company are registered by the Government of Quebec in
register S02473, folio 10.

The Company has no specific objects or purposes set forth in its Articles of
Incorporation or Bylaws.

The head office and principal place of business of the Company are located at
rented offices of approximately 3,400 square feet at 110 avenue Principale,
Rouyn-Noranda, Quebec, J9X 4P2,

7

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telephone number: (819) 797-2465. The Company also utilizes
an office of approximately 1,200 square feet in rented premises at 1 Place
Ville-Marie, Suite #2130, Montreal, Quebec H3B 2C6. The common shares of
Richmont Mines are listed and posted for trading on the Toronto Stock Exchange
and the American Stock Exchange. The co-transfer agent for the Company in the
United States is Computershare Trust Company of Canada, 350 Indiana Street,
Suite 800, Golden Colorado, 80401.

Richmont Mines is principally engaged in exploration,
operation, financing, development of mineral properties and in the business
acquisition. Richmont Mines 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-Years History

In Quebec, Richmont Mines acquired a 50% interest in the
Beaufor Mine in April 2001 and became the operator. The work required to secure
the mine was initiated in July 2001 and commercial production began at the
beginning of January 2002, thus replacing the supply of ore lost when the
Francoeur Mine ceased its operations in November 2001. Over the year 2002,
Richmont Mines did not complete any significant acquisition or disposition.

In September 2003, Richmont Mines invested $1 million in
Patricia Mining Corp. for an option to acquire a 55% undivided interest in the
Island Gold project, located 15 km from Dubreuilville in northeastern Ontario.
Richmont Mines' investment was used to finance a portion of a $3 million
exploration program involving surface drilling, the dewatering of the access
ramp, and the lateral and vertical underground infrastructures. Work was
completed in September 2004. On December 3, 2004, Richmont Mines exercised its
option to acquire a 55% interest in the Island Gold project. Patricia Mining
Corp. continued to serve as manager during a transition period, after which
Richmont Mines assumed responsibility for operations on January 1, 2005.

In December 2003, Richmont Mines acquired the East Amphi
property, located near Malartic, in Abitibi, for a cash amount of $7 million,
thus committing itself to completing a $6 million exploration program on this
property by December 31, 2004. The work was conducted during the course of the
year 2004 and details of such work are presented in Item 4.B. 3.2 below.

The following table sets forth the Company's capital expenditures on its
properties for the past three fiscal years.

8

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|                        | Year Ended 
|----------------------- | -----------
|                        | December 31
|                        | 2004       
|                        | $          
|                        |            
|Hammerdown Mine         | -          
|Beaufor Mine            | 1,478,118  
|East Amphi
    property | 10,504,244 
|Other investments       | 642,216    
|                        |            
|                        | 12,624,578 

The Company's major investment for 2004, was the $10,504,244
to carry out a major exploration program on the East Amphi property. Over 2,100
m were drilled to create an exploration ramp as well as bays, drifts and
crosscuts. A total of 12,700 m of surface drilling and 1,350 m of underground
drilling were completed.

In 2003, Richmont Mines' principal investment was the
$7,104,894 to acquire East Amphi property. In 2003, the Company also invested
$1,255,345 at the Beaufor Mine. These investments included the construction of
an office for administrative, engineering and geology departments, as well as
the purchase of new production equipment. Richmont Mines also invested a total
of $915,615 in its other properties, including about $681,000 at the Camflo Mill
and about $195,000 for the administrative office at the East Amphi property.

In 2002, the Company invested $1,293,246 at the Beaufor Mine
to complete the work required to secure infrastructure as well as to construct a
warehouse and to purchase mining equipment. Richmont Mines also invested a total
of $801,842 in its other properties, including $318,000 to acquire the Sewell
and Cripple Creek exploration properties near Timmins, Ontario.

Richmont Mines forecasts a budget of more than $20 million in
2005 for exploration at all of its properties. The East Amphi project is
expected to receive an investment of $10 million, while investments in the
Island Gold property are expected to total $8 million. In addition, $1.5 million
is expected to be invested in the Beaufor Mine. Richmont Mines also expects to
invest $0.5 million in the Valentine Lake property, the Company's primary target
of exploration in Newfoundland. The Company plans to finance these expenditures
with cash on hand and cash flow from operations but may also resort to various
sources of financing if it deems such a move appropriate.

9

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B.Business Overview

Description of Properties

Beaufor Mine, Quebec, Canada

Property Description and Location

1.1.1Location

The Beaufor Mine property along with other adjacent
properties such as Pascalis, Perron, Colombière and Courvan, are located
approximately 27 km to the northeast of the town of Val-d'Or, in the Abitibi-Est
county, Province of Quebec.

1.1.2Description of Mineral Rights

The property includes the mineral reserves and resources of
the Beaufor Mine consisting of a series of adjacent mining rights subdivided
into four projects: Perron, Beaufor, Pascalis and Colombière. The projects are
made of two mining leases, one mining concession and 23 claims for a total area
of 591 ha. The Courvan project and Perron blocks 2 and 3 form another group of
mining titles with high economic potential but currently presenting no mining
activities. This group consists of two mining concessions and 64 claims for a
total area of 1,255 ha.

1.1.3Ownership of Mineral Rights

All the mining titles of the Beaufor property are jointly
held by Richmont Mines (50%) (the operator) and by Louvem Mines Inc. (50%).
Richmont Mines holds 70% of the shares of Louvem Mines.

1.1.4Mineral Royalties

All the properties jointly held by Richmont Mines Inc. and Louvem Mines Inc.
are subject to the payment of royalties and financial contractual obligations as
follows:

For Beaufor (50 % of the production)

> a) Royalties
>   Royalties on production from the Beaufor Mine are payable
>   by Richmont Mines to Aurizon Mines Ltd. The determination of the amount of
>   royalties to be paid by Richmont Mines is based on the price and the quantity
>   of gold produced as per the following rules:

10

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For the first 220,000 oz of gold produced from the Beaufor Mine

|                                                                 | Royalties payable by Richmont Mines
|---------------------------------------------------------------- | -----------------------------------
|Gold price (US$/oz)                                              | (CAN$ per oz gold produced)        
|below 280                                                        | $0.00                              
|280 - 300                                                        | $5.00                              
|above 300                                                        | $12.50                             
|                                                                 |                                    
|For all gold produced from the Beaufor Mine above 220,000 ounces
|                                                                 | Royalties payable by Richmont Mines
|Gold price (US$/oz)                                              | (CAN$ per oz gold produced)        
|below 300                                                        | $
    0.00                         
|300 - 325                                                        | $17.00                             
|325 - 350                                                        | $18.50                             
|350 - 375                                                        | $20.00                             
|375 - 400                                                        | $22.50                             
|400 - 500                                                        | $24.00                             
|above 500                                                        | $30.00                             

> Payments of the royalty are required to be made quarterly within 30 days of
>   the end of each calendar quarter.
>   b) Total grant value of $2,700,000 to be
>   reimbursed in accordance with conditions stipulated in an agreement reached
>   with the Ministry of Natural Resources as described below.
>   1) Each reimbursement is due for payment as per
>     the following conditions:
>     Beaufor Mine is in production
>       full time during the reference year (August 1st 2004 to July 31st
>       2005) corresponding to the 4th, 5th and 6th
>       year.
>       The annual average gold price as per
>       the London AM Fixing equals or exceeds US$325/oz during the reference year
>       4, 5 and 6.
>     
>     2) If
>     all conditions are fulfilled, the grant will be reimbursed in three (3)
>     equal annual instalments, the first instalment being due for repayment on
>     July 31st, 2005.
>   Perron and Perron Block-1
>   For each ounce of gold produced from the Perron property,
>   the royalty calculation is based on the price of gold and is to be paid by
>   Richmont Mines and Louvem Mines quarterly to Aurizon Mines Ltd as follows:

11

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|                    | Royalties payable by Richmont Mines and 
|------------------- | ----------------------------------------
|Gold price (US$/oz) | Louvem Mines (CAN$ per oz gold produced)
|below 300           | $0.00                                   
|300 - 325           | $17.00                                  
|325 - 350           | $18.50                                  
|350 - 375           | $20.00                                  
|375 - 400           | $22.50                                  
|400 - 500           | $24.00                                  
|above 500           | $30.00                                  

> Perron Block-2 (Claims 3493171, 3493172 and 3493173)

If there is gold production from those claims, a 2% Net
  Smelter Return amount is payable on a monthly basis to Northwest Gold Corp.
  provided that the average monthly gold price is greater than US$300/oz. The
  Net Smelter Return is calculated by multiplying each ounce of gold produced by
  the market value of the gold produced.

Pascalis

If the property is brought into commercial production, a
  Net Profit Interest of 25% is payable by Richmont Mines and Louvem Mines to
  New Pascalis Mines Limited. The Net Profit Interest is payable after all costs
  incurred on the property, including exploration, capital assets costs and all
  operating costs are recovered.

Colombière

If the property is brought into commercial production, a 2%
  Net Smelter Return calculated as described above is payable by Richmont Mines
  and Louvem Mines quarterly to Cambior Inc.

Courvan

If the property is brought into commercial production, a 2%
  Net Smelter Return calculated as described above is payable by Richmont Mines
  and Louvem Mines to Courvan Mines Ltd.

1.1.5Environmental Obligations

Approximately 75% of the development waste material is
hoisted from the underground mine to the surface and placed on a waste dump. The
waste rock is not acid generating and does not require any particular
environmental measures.

There is presently no indication that the groundwater level could adversely
be affected by the mining operations.

12

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Accessibility, Climate, Local Resources, Infrastructures and Physiography

1.1.6Access

The mine can be accessed from the main road 117, going East
from Val-d'Or to the Perron road and then north bound towards the village of
Perron. The mine can also be accessed using the secondary road 397 from Val-d'Or
to Val-Senneville, and going south on the Paré road to the Perron village.

A railroad is located a few kilometers to the south of the property.

The population of the town of Val-d'Or is approximately
32,500 people according to latest Canada Census in 2001. This town is accessible
from the national road network and commercial flights are available daily at the
local airport.

1.1.7Climate

According to meteorological data covering a period of 30 years, the average
temperature in the month of January is -17.2oC while July's average
mean temperature is +17.2oC.

1.1.8Local Resources

The local manpower is well trained. Since the mining town of
Val-d'Or is very active, it is generally easy to recruit and keep a mining
workforce. Professionals, engineers, geologists and technicians are usually also
well trained and available.

1.1.9Infrastructures

Two mine shafts are located on the Beaufor property, the old Perron shaft No.
5 presently used for hoisting and the Pascalis shaft, used as the ventilation
air intake shaft.

A series of buildings comprising warehouses, workshops, offices, etc. are
used to service a workforce of about 123 employees and approximately 25
contractuals as of December 31, 2004.

1.1.10Historical

Intermittent exploration fieldwork has been conducted on the
Beaufor property since the 1930s. Following a development period, Aurizon Mines
(50%) and Louvem Mines (50%) started commercial production at the Beaufor Mine
in January 1996. In August 2000, Aurizon Mines stopped the mining operation at
Beaufor Mine for reasons of risk instability of the crown pillar. In spring
2001, Aurizon Mines transferred the mining rights of the Perron, Beaufor,
Pascalis and Colombière properties to Richmont Mines Inc. for an amount of 1.8
million dollars. In September 2001, Richmont Mines undertook construction work
to secure the crown pillar and commercial production resumed at Beaufor Mine
jointly with Louvem Mines in January 2002.

13

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Geological Setting

1.1.11Regional geology

The mining town of Val-d'Or is located in the South-East of
the Abitibi greenstone belt formed of archean volcanic and sedimentary rocks
from the Superior Province. The mining town of Val-d'Or belongs to the Malartic
group corresponding to a volcanic pile including ultramafic, basaltic and
rhyolitic flows.

1.1.12Beaufor Mine geology

The Beaufor, Perron and Pascalis properties belong to the
same gold bearing hydrothermal system with a similar geometry. 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 Beaufor deposit is
included in the Bourlamarque granodiorite and is limited by the Perron fault in
the north and by the south fault in the South. The faults strike East-West and
dip 80o to the north and 60o to 70o to the
south respectively. 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. The eastern contact
between the batholith and the volcanic rocks forms the eastern limit of the
Beaufor deposit and gently dips to the east.

Mineralization

The gold mineralization of the Beaufor Mine lies within a
complex network of veins intersected by late faults associated with a regular
shear grid. This network of veins is one of the most complex in the Val-d'Or
district.

Exploration Work

1.1.13Recent work in 2003 and 2004

In 2003, a total of 23,800 m of diamond drilling, including
8,800 m for definition and 15,000 m for exploration, was carried out from
underground workings. In addition, an amount of 2,400 m have been drilled from
the surface. The overall cost of the exploration work for 2003 exceeded 1.2
million dollars.

In the course of the year 2004, an amount of $980,166 was invested in
exploration to carry out 231 m of drifts, 11,793 m of underground drilling and
1,603 m of surface drilling.

Richmont Mines expects to invest $3 million, evenly
distributed, in the completion of the drilling of several targets for
exploration and in underground development and the purchase of equipment.

1.1.14Methodology and Planning

Most of the drill holes are planned on vertical cross-sections in order to
undercut at right angles the shear veins.

14

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The drilling program is sub-divided into two main categories as follows:





1.1.15Recoveries

The core recovery is better than 95%, including the fault
zones where the Rock Quality Design (RQD) is more than 75%. The ore recovery,
with a rate of above 90% in the mineralized zones in the definition drilling, is
high.

1.1.16Geology and analysis

A detailed description of the drill cores is logged by
experienced and highly competent personnel as per established Beaufor Mine
guidelines. A computerized log is prepared with the following information:

- Location of main and secondary units;
- Veins: mineralogy, attitude, thickness, type;
- Structures.

The drilling data is mainly used in the resource calculation.

Sampling Methodology

The 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 in the ore pass and in the car wagon are taken into account during
the mineral reserve calculation. There is currently no face sampling "chips" at
the Beaufor Mine.

Sample Preparation, Analyses and Security

There is no quality control program as such established at
the Beaufor Mine for the shipment of drill core samples. Drill core samples are
gathered in plastic boxes and collected daily by the laboratory. No
check-sample, duplicates or blanks are inserted in the samples for analysis.
Samples taken from development or stopes mining are not subject to quality
control during shipment to the laboratory. Historical production and milling
data indicate reliability of the laboratory results. When there is a doubt such
as the location of a sample, the sampling number or any other anomaly, the data
is not used for the resource calculation.

Integrity and data base audit

All the geo-scientific data collected at the Beaufor Mine are grouped into
two main databases:

15

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All drilling data are input in an
  Access database developed and programmed by Beaufor Mine personnel;

Internal procedures have been prepared in order to validate
the information in the databases. The entire work, all 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 database is restricted to selected personnel for complete integrity.

Adjacent Properties

Adjacent properties to the Beaufor Mine lie in a similar
geological setting, with the exception of the eastern limit of the property
where volcanic rocks from the Dubuisson formation can be found. These volcanic
rocks also bear vein-type deposits but are of a different type. The Bourlamarque
granodiorite batholith, host to the Beaufor deposit, can also be found to the
north, south and west of the property.

Mineral Processing

The Beaufor Mine ore is trucked to the Camflo Mill located
approximately 49 km from the mine site. A contractor under a three-year contract
carries out ore haulage. Camflo Mill Inc. is 100% owned by Richmont Mines. The
Camflo Mill, with a rated capacity of 1,300 short tons per day, is a
Merrill-Crow conventional type mill with crushing, grinding circuits and
cyanidation using zinc powder gold precipitation method.

The historic average rate of recovery of the mill is 98.5%
when Beaufor material is milled. No major operating problem was experienced at
this mill nor is anticipated in the near future except for usual maintenance and
repairs.

Mineral Reserve Estimates

Methodology and procedures for mineral reserve estimates have
been established by Beaufor Mine personnel. All estimates are performed under
the direct supervision of the following qualified persons, as per the National
Standard 43-101: Donald Trudel (chief geologist) and Marcel Beaudoin (chief
engineer). Jules Riopel (Principal Geologist - Exploration) is also involved in
the determination of mineral inventory.

1.1.17Mineral Reserve Estimate

General

The database and the parameters used to estimate the mineral
reserve are based on past mining experience and knowledge to the current
situation as of December 31, 2004. For instance, both the dilution and the ore
recovery factors by mining methods used in the reserve estimate are

16

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based on actual results obtained in 2004. All the 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 calculation with the level of accuracy of a feasibility study done by
engineers of Beaufor Mine. As per National Instrument 43-101 rules, only mineral
resources in the measured and indicated categories can be used to outline the
estimate of mineral reserves.

The budget costs used in this economic study 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 economical situation.
All standards generally accepted in the mineral industry as well as National
Instrument 43-101 recommendations and ICM regulations for both mineral resource
and reserve estimates have been fully applied in this study.

Estimation Parameters

The basis and the parameters used in the economic study for reserve
estimation are given in the following sections.

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 Beaufor Mine, which are rooms
and pillars and long-holes.

The main criteria are as follows:

- No profit margin is built-in in the estimate;
- Deferred or capitalized capital is not used;
- Only the gold price is taken into account in the economic calculation;
- The gold price is CAN$525/oz.

The results of the cut-off grade study by mining methods for both developed
and un-developed underground working are listed in the following table:

|Mining Methods  | Workings     | Cut-off Grade
|--------------- | ------------ | -------------
|                |              | (g/t)        
|Room and pillar | Developed    | 6.31         
|Room and pillar | Un-developed | 7.87         
|Long-holes      | Developed    | 4.26         
|Long-holes      | Un-developed | 5.07         

17

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Mining Methods

The two major underground extraction methods currently used at Beaufor Mine
are the room and pillar and long-holes methods:

> Room and Pillar
>   Geometry: stopes
>     width from six meters to ten meters in the plane of the vein with in-stope
>     pillars of three meters by three meters section or two meters long in the
>     plane of the vein;
>     Maximum vein dip: 40°;
>     Ore mining recovery: 80% used in the economic evaluation;
>     Internal dilution: the ore block is designed with a true
>     thickness of 2.2 m to 2.4 m. The drilling intersects are projected to the
>     same lengths. The minimum mining width is 2.2 m. The dilution grade is
>     assumed to be 0 g/t Au.
>     External dilution: an dilution amounting 5% at a grade of
>     0 g/t Au is added in the determination of the economic mineral reserves.
>   
>   Long-Holes
>   Geometry: maximum panel length
>     of 40 m;
>     Minimum dip of vein: 45°;
>     Ore mining recovery: 100% for designed stopes with all recoverable
>     pillars between stopes clearly identified during the process of mineral
>     reserve estimation;
>     Internal dilution: minimum mining width is three meters. The drilling
>     intersects are projected to a minimum length of three meters;
>     External dilution: a dilution rate of 15% for waste at a grade of 0 g/t
>     Au is assumed for primary stopes.

Operating Costs and Capital Expenses

Ounces of gold sold from the Beaufor Mine in 2004 were 52,623
compared to 55,774 in 2003. The production cash costs was $401 (US$308) compared
with $344 (US$245) in 2003. This 17% increase in cost is primarily attributable
to the 6% decrease in gold production and to a 9% decrease in gold grades.
Capital expenses in 2004, which contributed principally to the development of
the mine, were $1.48 million compared with $1.26 million in 2003.

18

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Reserve Classification

Descriptions with more details about classification of reserves at the
Beaufor Mine are presented below:

Proven Mineral Reserve

The geologists and the mining engineers of Beaufor Mine have
estimated the tonnage of mineral reserve in the Proven category based on an
economic study in order to determine the economically mineable part of a
Measured Mineral Resource. At the Beaufor Mine, proven reserves are based on ore
blocks developed from drifts or raises up to a maximum of eight meters from
these workings. The level of accuracy of the economic evaluation is for a
feasibility study.

Probable Mineral Reserve

The mineral reserve estimate in the Probable category has
been 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 ten meters from drilling data. In the advent of drilling
intersections of more than three meters length, reserves can be projected by a
multiple of five meters to a maximum of 30 m. Dilution and mining recovery rates
are included in the reserve calculation.

Beaufor Mine

Gold Reserves as at December 31, 2004

|Categories of reserves    | Tonnage  | Grade    | Au     
|------------------------- | -------- | -------- | -------
|                          | (tonnes) | (g/t Au) | (oz)   
|Proven                    | 165,000  | 6.98     | 37,000 
|Probable                  | 500,000  | 8.66     | 139,000
|Total (proven + probable) | 665,000  | 8.24     | 176,000

19

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|Summary of
    Production       |              |              |              |            |     |           
|------------------------------- | ------------ | ------------ | ------------ | ---------- | --- | ----------
|                                | Year ended   | Year ended   | Year ended  
|                                | December 31, | December 31, | December 31,
|                                | 2004         | 2003         | 2002        
|                                |              |              |              |            |     |           
|Revenues                        |              | 28,088,714   |              | 28,942,244 |     | 26,803,819
|                                |              |              |              |            |     |           
|Tonnes processed                |              | 266,793      |              | 255,845    |     | 194,847   
|Grade (g/t)                     |              | 6.22         |              | 6.87       |     | 8.77      
|Gold recovery (%)               |              | 98.6         |              | 98.7       |     | 99.0      
|Recovered grade
    (g/t)       |              | 6.13         |              | 6.78       |     | 8.68      
|Ounces sold                     |              | 52,623       |              | 55,774     |     | 54,374    
|                                |              |              |              |            |     |           
|Data per ounce of
    gold sold | US$          | CAN$         | US$          | CAN$       | US$ | CAN$      
|Cash cost                       | 308          | 401          | 245          | 344        | 163 | 256       
|Depreciation and depletion      | 12           | 16           | 10           | 14         | 24  | 38        
|                                |              |              |              |            |     |           
|Total                           | 320          | 417          | 255          | 358        | 187 | 294       
|                                |              |              |              |            |     |           
|Average price
    obtained      |              |              |              |            |     |           
|per
    ounce                   | 410          | 534          | 370          | 518        | 309 | 485       

Hammerdown Mine, Newfoundland, Canada

Property Description and Location

The Hammerdown Mine is located near King's Point in northeast Newfoundland
and includes claims block 3498 and mining lease 153, covering an area of 96
hectares.

Richmont Mines purchased a 100% interest in the Hammerdown
property in Newfoundland in March 2000 for $6 million, $5.4 million of which was
paid in cash. Following the completion of this development work, the Hammerdown
Mine started up in July 2001.

In 2004, production reached 14,985 ounces of gold.
Exploration did not lead to the identification of new reserves, and therefore
Richmont Mines closed the mine down. Work to restore the site, at a cost of
$188,037 that was charged to the provision already accounted for, was begun in
the second quarter of 2004. All of the buildings and equipment were removed, the
site was secured, and revegetation carried out. In February 2005, Richmont Mines
received a letter from the relevant authorities that confirmed that the work had
been completed in accordance with the law.

20

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|Summary of
    Production       |              |              |              |            |     |           
|------------------------------- | ------------ | ------------ | ------------ | ---------- | --- | ----------
|                                | Year ended   | Year ended   | Year ended  
|                                | December 31, | December 31, | December 31,
|                                |              | 2004         |              | 2003       |     | 2002      
|Revenues                        |              | 8,892,302    |              | 19,161,286 |     | 23,011,263
|Tonnes processed                |              | 40,058       |              | 87,659     |     | 94,495    
|Grade (g/t)                     |              | 13.24        |              | 13.60      |     | 16.40     
|Gold recovery (%)               |              | 97.3         |              | 96.9       |     | 96.9      
|Recovered grade
    (g/t)       |              | 12.88        |              | 13.17      |     | 15.9      
|Ounces sold                     |              | 16,584       |              | 37,118     |     | 48,316    
|                                |              |              |              |            |     |           
|Data per ounce of
    gold sold | US$          | CAN$         | US$          | CAN$       | US$ | CAN$      
|Cash cost                       | 251          | 326          | 230          | 323        | 159 | 251       
|Depreciation and depletion      | 104          | 135          | 72           | 101        | 55  | 86        
|                                |              |              |              |            |     |           
|Total                           | 355          | 461          | 302          | 424        | 214 | 337       
|                                |              |              |              |            |     |           
|Average price
    obtained      |              |              |              |            |     |           
|per
    ounce                   | 410          | 534          | 370          | 518        | 309 | 485       

Exploration Properties

General

Richmont Mines owns or holds interests in certain other
mining properties at different stages of exploration. The following table
outlines Richmont Mines' interest in these exploration properties as at December
31, 2004.

|Property                                                                                                                | Year of acquisition | Number of claims                 | Participation(1)
|----------------------------------------------------------------------------------------------------------------------- | ------------------- | -------------------------------- | ----------------
|                                                                                                                        |                     |                                  |                 
|Quebec                                                                                                                  |                     |                                  |                 
|East Amphi                                                                                                              | 2003                | 30                               | 100%            
|Francoeur                                                                                                               | 1992                | 13                               | 100%            
|                                                                                                                        |                     |                                  | 81% by Louvem   
|Monique                                                                                                                 | 1994                | 21                               | Mines           
|Wasamac                                                                                                                 | 1988                | 3 mining
    concessions         | 100%            
|Newfoundland                                                                                                            |                     |                                  |                 
|Valentine Lake                                                                                                          | 2003                | 443 claims + 2 «
    Reid Lots » | Option for 70%  
|Ontario                                                                                                                 |                     |                                  |                 
|Island Gold                                                                                                             | 2003                | 286                              | Option for 55%  
|Sewell                                                                                                                  | 2002                | 6                                | 100%            
|Cripple Creek                                                                                                           | 2002                | 55                               | 100%            
|                                                                                                                        |                     |                                  |                 
|(1)
    The Company is subject to pay royalties if some of these properties are
    brought into commercial production.

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Those exploration properties identified above and not described in detail in
this Item 4.B. are not currently believed to be material to the Company's
business.

The following table presents Richmont Mines' exploration and evaluation of
projects expenses in 2002, 2003 and 2004 and the budgeted amounts for 2005.

|                            | 2002      | 2003        | 2004        | 2005       
|--------------------------- | --------- | ----------- | ----------- | -----------
|                            |           |             | $           | $          
|                            |           |             |             | Budgeted   
|Quebec                      |           |             |             |            
|Beaufor Mine                | 808,244   | 1,221,682   | 980,166     | 1,500,000  
|East Amphi                  | -         | 52,997      | 11,535,297  | 12,000,000 
|Francoeur Mine              | 2,331,734 | 1,776,152   | 10,864      | -          
|Monique                     | -         | -           | 270,047     | -          
|Wasamac                     | 29,412    | 551,320     | 290,982     | 100,000    
|Newfoundland                |           |             |             |            
|Hammerdown Mine             | 384,595   | 718,609     | 248,109     | -          
|Valentine Lake              | -         | 33,649      | 1,025,491   | 500,000    
|Ontario                     |           |             |             |            
|Island Gold                 | -         | 86,822      | 359,567     | 8,800,000  
|Sewell and Cripple Creek    | -         | 4,006       | 253,443     | 150,000    
|                            |           |             |             |            
|Other properties            | 20,008    | 116,430     | 42,304      | -          
|Evaluation of
    projects  | 153,607   | 312,036     | 474,358     | -          
|Exploration tax
    credits | -         | (1,194,599) | (1,511,095) | (2,800,000)
|                            |           |             |             |            
|                            | 3,727,600 | 3,679,104   | 13,979,533  | 20,250,000 

East Amphi Property, Quebec, Canada

In 2004, the Company spent $10.5 million to carry out a major
exploration program on the East Amphi property. Over 2,100 m were drilled to
create an exploration ramp as well as bays, drifts and crosscuts. A total of
12,700 m of surface drilling and 1,350 m of underground drilling was completed.

Drilling is scheduled to continue until the end of June 2005,
when the Company will decide if the East Amphi deposit will be brought into
commercial production. If the decision is favorable, the information available
at present indicates that production at the East Amphi mine could begin during
the fourth quarter of 2005.

A major exploration program totalling $10 million will be
carried out on the East Amphi Property during the year 2005. Set to run from
January to September, the exploration program will aim to convert resources into
reserves and to identify additional resources and reserves. The work will
consist primarily of driving the ramp between levels 175 and 200, finishing the
lateral extension of the two exploration drifts in the main deposit area and
completing a major underground drilling program.

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1.1.18Property Description

Location and Access

The East Amphi property is located within the limits of the
city of Malartic, some 30 km to the west from the center of Val-d'Or. A gravel
road of about two kilometers, bordering the Malartic-Fournière township line in
an east-west direction allows easy access. The road leads to the old East Amphi
Gold Mines shaft and the open pit, in the south-central part of the property,
two kilometers west of the TransCanada highway 117 which links Val-d'Or and
Rouyn-Noranda.

Mining Claims

The property consists of 29 claims (943.43 hectares) and of a
mining lease (ML #848 of 119.1 hectares). The property belongs to Richmont
Mines, which also holds contiguous mining claims (project #522). The property
covers part of Rang I (lots 8 to 31 incl.) and part of Rang II (lots 16 to 20
incl.) in Malartic township. The surface rights are held by the Canadian
government. This land is contiguous to the city of Malartic which is part of the
Vallée de l'Or MRC (township regional municipality).

Royalty

McWatters Mining Inc. will be entitled to receive a 2% Net
Smelter Returns royalty, applicable after 300,000 ounces of gold is produced
from the East Amphi property. Richmont Mines has the option to purchase the 2%
royalty for CAN$1.5 million at any time after the start of production.

Infrastructure

The area is well served with the existing infrastructure. The
city of Malartic is located less than three kilometers east from the center of
the mining property. The property is crossed by the TransCanada highway 117 from
Val-d'Or and Rouyn-Noranda.

The Camflo Mill is less than 16 km from the property. A
railroad line crosses the south west part of the property. Two 120 kV hydro
lines linking the Cadillac and Malartic stations pass less than two kilometers
north of the property and a 25 kV line, located 1.5 km east of the property,
could meet the energy requirements.

The city of Malartic gets its drinking water from Milhaut
Lake (located four kilometers west of the mine site), which constitutes the head
of the Malartic River. Water from the lake is pumped onto the gravel banks
located some 1.2 km north west of the property. It percolates through the soil
and is re-pumped by two wells (six meters deep) and distributed by an aqueduct
system. Therefore, the Company does not expect any effect on the Malartic
drinking water source.

1.1.19Physiography and Climate

The property is located in the low lands of the Abitibi which
are part of the James Bay physiographic area. The East Amphi deposit is located
in a very flat sector where swamps occupy the poorly drained zones. A few rocky
hills, roughly oriented east-west, mark the area's southern and western
territory.

23

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The overburden on the site of the project consists of two
major groups. The first is related to the last glaciation and includes the till
covered by lake deposits. The second group corresponds to recent formations and
includes organic matter (bog and marsh) as well as alluvial deposits associated
with flood plains.

The project site is located in a major swamp for which the
drainage is poorly defined. The swamp either drains towards the north in the
direction of Lake Malartic through an unnamed brook, or it drains via the
Malartic River into Lake Malartic, which is actually a widening of the Harricana
River.

Most of the area affected by the project is either slightly
wooded or clear of trees. A small wooded area close to the site is dominated by
black spruce, which heights vary between 10 to 15 m, and which has a density of
40 to 60%. No clearing will be required to carry out the project.

The average annual precipitation is some 954 mm and the most
falls in September (some 102 mm). Snow falls between October and May with the
most snowfall occurring between November and March. The average for that period
is about 54 mm (expressed in mm of water).

The average daily temperature in Val-d'Or is slightly above
freezing namely 1.2C. The average
temperature for July reaches 17.1C
while in January the temperature falls to -17.0C. The lowest temperature measured was -43.9C and the highest temperature measured was 36.1C. It freezes an average of 209 days per year.

Between August and January, a southern wind is dominant while between
February and July north-western wind is more frequent. The average velocity
varies between 9 and 17 km/h.

1.1.20History

The discovery of gold on the property was made by an
independent prospector in 1923. East Amphi Gold Mines Ltd. became the owner in
1940 and carried out surface drilling between 1940 and 1945. At the beginning of
1946, the company considered the results from the surface drilling sufficiently
positive to justify underground development. Following the sinking of a three
compartment shaft to a depth of 155 m, 1,490 m of drifting and 415 m of
cross-cuts were excavated, on the -100 m and -145 m levels. The geological work
in 1946, allowed the identification of six mineralized zones on the -100 level
and one zone on the -145 m level. In each case the gold was associated with
porphyry dykes. Early in 1948, the mining industry went through a difficult
period and East Amphi Gold Mines Ltd. announced its decision to suspend the
underground activities.

In 1987-88 Breakwater Resources Ltd. carried out a surface
drilling program in the mine area consisting of 56 diamond drill holes (for a
total of 12,335 m) In 1988-89, the positive results of this program made them
decide to undertake an underground exploration program. The former East Amphi
Gold Mines shaft were dewatered and the underground openings were mapped and
sampled. A total of 92 underground drill holes were drilled (for a total of
3,246 m). Additional surface drilling was carried out as well, in 1989 and 1990.
A resource calculation was prepared in 1990 (758,015 tonnes of indicated
resources with an average grade of 11.02 g/t).

24

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In 1995 Placer Dome optioned the property and started an
exploration program. Two surface diamond drilling program were done in 1995 and
1996. A resource calculation was carried out, based on their geological model
(850,000 tonnes of indicated resources with an average grade of 8.11 g/t).

In 1998 McWatters bought the property and carried out a
surface drilling program. Using this information and all other data, McWatters
reviewed the geological interpretation, in particular the link between the work
of Breakwater (which was concentrated around the east of the property), and the
Placer Dome work (which was concentrated in the west of the property). Following
this work, the zones were redefined and renamed for consistency. A new resource
calculation was carried out resulting in an estimated 2.29 million tonnes of
measured and indicated resources (cut-off grade of 3.0 g/t) with an average
grade of 5.98 g/t.

In the winter of 1999, an additional surface drill holes were
drilled to delineate and validate the portion of the indicated resources in the
Zone B-West block which was planned to be mined as an open pit.

Two mineralogical studies were carried out on the East Amphi
ore. One study took place in 1998 at the Centre de Recherche minérale du Québec
where the distribution, association and liberation level of gold was examined,
using granulometric and gravimetric separation. A second study was carried out
in 1999 using macro and microscopic examinations.

McWatters also completed sampling and analytic studies to
confirm the results of earlier studies made by Breakwater (1988) and Placer Dome
(1995) in which it was shown that the East Amphi deposit and the surrounding
host rocks are not acid generators.

Ore was excavated from an open pit from December 1998 to
August 1999 and a total of 120,427 tonnes of ore was transported to the Sigma
mill for treatment. Average diluted grade of the ore was 5.66 g/t, which
correlated well with the reserve estimate.

1.1.21Geology

Regional Geology

The East Amphi property is located in the Abitibi greenstone belt.

The property is located in the Piché Group volcanics, which
are sandwiched between sedimentary rocks of the Cadillac Group to the north and
of the Pontiac Group to the south. The Piché Group is of basaltic and ultramafic
composition, consisting of massive and pillowed volcanic flows and related
breccias.

The property straddles the major, regional Larder-Cadillac
fault, which lies within the Piché Group, and follows its southern margin. The
metavolcanics of this dominant stratigrafic unit form a thick band (450 to 1,000
m) in a NW-SE direction. This unit which hosts the Cadillac tectonic Zone
represent the most promising zone on the East Amphi property for hosting gold.

25

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The Cadillac tectonic Zone, comprised of a series of shears,
is about 50 to 350 m wide and is situated in the lower sequence of the Piché
Group. The rocks are intensely deformed and sheared with abundant talc-chlorite
schists and minor diorite and feldspar porphyries.

To the South of the Cadillac fault, rocks of the Pontiac
Group occur. These are predominantly sediments, mainly massive greywackes but
with some intercalations of sandstone or siltstone, with occurrences of minor
felsic intrusive rocks (granite) in the southern part of the property.

Local Geology

Five principal lithologies are observed on the property from North to South (Piché
Group to Pontiac Group):

> 1. Mafic Volcanics (North Contact)
>   Comprised principally of massive to occasionally pillowed basalts with
>   inclusions of dykes of diorite, which form the northern margin of the Cadillac
>   fault.
>   2. Diorite-Gabbro Dykes (North Contact)
>   Diorite and/or gabbro dykes are included particularly in
>   the mafic volcanites (south margin) and in the schists and rarely within the
>   porphyry (following the northern border and occasionally the southern border).
>   These dykes often possess a moderate to high magnetism, and
>   their thickness varies between 5 and 30 m. Locally the thickness of the
>   diorite/gabbro dykes may attain 50-90 m. Gold values are generally associated
>   with these diorite dykes. The importance of the dykes increases towards the
>   west.
>   3. Ultramafic Rocks (Cadillac Deformation
>   Corridor)
>   The dominant lithology within the Cadillac fault is the
>   talc-chlorite schist; the result of an intense deformation/alteration of an
>   ultramafic protolith. There are abundant units of talc-carbonate (dolomite)
>   and chlorite layers and quartz veins. Minor specks of pyrite occur in the
>   unit. Chloritic schists are less voluminous and are usually situated within
>   the diorite dykes. Basaltic flows are often observed within the talc-chlorite
>   schists.
>   Within the East Amphi project area, the schist, comprising
>   both the chlorite and talc-chlorite members, has an average thickness of some
>   60 m and may attain up to 100 m at depth.
>   Mineralized diorite dykes of variable thickness (1-20 m)
>   are often intersected in the talc-chlorite schists unit. These diorites are
>   altered with biotites and carbonates and may be locally silicified. Small
>   quartz veins are also found. The gold values are often associated with the
>   presence of coarse pyrite.

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> 4. Porphyry Zone
>   This lithologic unit, which forms the footwall of the open
>   pit in the B-1 Zone, is often the site of anomalous gold values to the north
>   contact and has an average thickness of 100 m in the center of the property.
>   Low grade potential also exists in the center of the unit and close to the
>   south contact, and occurs in metric bands attaining up to 500 m in width.
>   A mass of feldspar porphyry is found within the southern
>   border of the Cadillac fault Zone. This unit generally occurs as dykes and
>   discrete bodies along the southern contact of the Cadillac shear and within
>   the talc-chlorite schist. It is characterized by a massive, undeformed rock,
>   (post-tectonic deformation), with a predominantly porphyritic texture (1-12
>   mm). The unit is often cut by mafic dykes and small quartz veins. Fine pyrite
>   is disseminated in the matrix (trace to 5%).
>   5. Sediments
>   This lithological unit consists of massive to rippled
>   greywacke with silty to microsilty beds in places. The north contact with the
>   porphyry is located some 200 m south of the base line. This contact is
>   irregular and volcanic and diorite bands and felsic dykes are often present.

1.1.22Mineralization

The Cadillac Tectonic Zone, which crosses the ultramafic
rocks of the Piché Group on the property, produced a gold bearing talc-chlorite
schist unit into which the gold rich diorite dykes were injected. The two
principal gold-bearing zones, the Zones A and B, were developed within this
structural corridor. Other zones, the Zones P1 and P2 are located within the
feldspar porphyry unit to the south. The Zone B-West, or the contact zone, is
located at the north contact of the porphyry with the talc-chlorite schist. The
principal zones have been traced over one kilometer east-west, 150 m north-south
and to 400 m vertical depth. Structure and lithology act as strong controls on
the mineralization. The altered and mineralized diorites are lenticular and
boudinaged.

Characteristics of Zones A and B (talc-chlorite schist corridor)

- The mineralization in Zones A and B is localized within the diorite dykes
  which are often biotized and pyritized (up to 5% coarse grained pyrite). These
  intrusives are lens shaped and boudinaged with thickness varying generally
  between 1 and 20 m.
- The mineralization in Zones A and B also extends outwards into the schists
  and is associated with quartz veins, coarse pyrite and biotite alteration that
  is generally found around the edges of the intrusives, defining a mineralized
  envelope traceable over hundreds of meters strike and tens of meters wide.

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Characteristics of the Zones P1 and P2 (porphyry zones)

- 

> Generally the gold zones located within the diorite-schist
>   have higher gold grade (5.0 - 8.0 g/tonne) that are wider but less continuous
>   than the zones within the porphyry.
>   The porphyry zones generally cover a greater area though
>   the individual lenses are thinner (1.5 to 8 m) and contain gold grades in the
>   order of 3.0 to 6.0 g/tonne, over a thickness which varies from one to ten
>   meters, with an average of four meters.

1.1.23

The plan to restore the East Amphi site was reviewed by an
independent environmental firm. This review was filed with the Ministry of
Natural Resources, Wildlife and Parks of Quebec (MNRWP) and the Environment
Ministry of Quebec (MENV) on October 19, 2004. Richmont Mines expects to receive
their comments soon.

Island Gold Property, Ontario, Canada

1.1.24Property location and claims status

The Island Gold Project is located approximately 85 km by
road from Wawa, Ontario, in the Sault Ste. Marie Mining Division. Dubreuilville
is approximately 15 km to the northwest of the Project. The Island Gold Project
consists of 120 patented and leased claims totalling 1,735 ha and 48 staked
claims totalling 6,001 ha.

|Property    | Number of claims | Area (ha) | Patricia Mining
|----------- | ---------------- | --------- | ---------------
|            |                  |           | Ownership      
|Kremzar     | 19               | 364       | 100%           
|Lochalsh    | 27               | 424       | 100%           
|Goudreau    | 74               | 948       | 53,4%          
|Island Gold | 166              | 2,657     | 100%           

1.1.25Agreements summary

Richmont Mines entered into an agreement with Patricia Mining Corp. (Patricia
Mining or Patricia) on August 28, 2003. Under the agreement, Richmont Mines
completed a private

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placement investment of $1.0 million in common shares of
Patricia Mining at $0.50 cents per share. This investment was used to partly
finance a $3 million exploration program on the Island Gold project. On December
3, 2004, Richmont Mines has exercised its option to acquire a 55% interest in
this project. Patricia Mining retained its role as project manager during a
transition period, and Richmont Mines became project operator as of January 1,
2005.

1.1.26Environmental and permitting status

Patricia has kept the mill on care and maintenance and has
kept the certificate of approval, no. 4-105-86-876, in good standing. The
existing Lochalsh and Kremzar closure plans will need to be updated if the joint
venture decides to bring the mine into operation. An environmental Consulting
firm has been retained to manage the environment reporting issues on Patricia
Mining's behalf and has developed timelines and cost estimates to bring the
permits to a fully operational mine status. Patricia reports that the permits to
reopen the former Kremzar mine, including mining and milling operations have
been maintained. Miller lake, west of the Kremzar mine, is a fully permitted
tailing area presently capable of holding approximately two years of tailings.
The tailings pond life could be extended for an additional 10 years by raising
the dam height. The most important permit being maintained at this time is the
ministry of the environment permit number 4-105-86-876 - permit to dispose of
Kremzar Mill effluents. A closure plan for the Kremzar mine was filed with the
ministry of northern development and mining (mndm) in 1998 by Patricia Mining
and was approved. Patricia reports that financial assurance for the closure
costs will be satisfied by payment of $10,000 cash, which has been paid, a
collateral mortgage of $577,800 using the Kremzar Mill as security and a further
letter of credit for $144,000 for the Lochalsh closure plan. Patricia Mining
reports that there are no environmental issues on the property at this time.

1.1.27Exploration history

In 1983, Canamax Resources Inc. (Canamax) and Algoma Steel
Inc. (Algoma) formed a joint venture to evaluate the mineral potential of
Algoma's 117 patented claims covering the Goudreau iron range. In 1983, Canamax
began to acquire claims through staking and purchase in southern finan township.
In 1985, drilling by Canamax about two kilometers 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). Detailed
diamond drilling through 1987 and 1988 was used to define the higher-grade
lenses, known as the Lochalsh, Island Gold, Shore, and Goudreau lake Zones. The
Island Gold Zone is now referred to as the Island deposit. During 1989 and 1990,
a 1,280 m long ramp was driven into the Island deposit beneath Goudreau lake
from an adit on the north shore. Drifts and raises totalling 382 m were
developed on two levels at depths of 125 m and 140 m below the Goudreau lake
elevation at approximately 382 m. A 400 m drift was established north of the
zone to provide stations for underground diamond drilling. Systematic chip and
muck sampling was carried out on both levels. A bulk sample weighing 4,167
tonnes was extracted from the underground workings and processed at the Kremzar
Mill. The bulk sample head grade was reported to be approximately 6.5 g/t Au,
however, the final grade of the bulk sample is somewhat unclear due to
uncertainty related to some of the mill samples, not taking inventory samples
from the five leach tanks at the commencement of the test, and the relatively
small size of the bulk sample. Also, the exact location from which the bulk
sample was extracted from April 1996 to September 1997 is unknown. Patricia
Mining

29

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completed 15,545 m of diamond drilling in 42 holes on the
Island deposit and Lochalsh Zone. In November 1997, Patricia Mining retained an
engineering firm to estimate the mineral resources contained in the Island
deposit, Lochalsh Zone, and other mineralized zones. In 2000 and 2001, Patricia
Mining drilled seven holes for a total of 1,317 m. These holes mainly targeted
the North Shear Zone.

1.1.28Geology and mineralization

The Goudreau iron range, a pyrite-rich iron formation, occurs
between the Wawa and Catfish assemblages (sage and heather, 1991). A 30 km long
and 4.5 km wide northeasterly trending, structurally deformed zone, called the
Goudreau lake deformation Zone (gldz), occurs between the two assemblages, in
the project area. East-northeast striking, steeply dipping, sub-parallel zones
of gold mineralization are present within the quartz-sericite-pyrite-carbonate
alteration of the gldz. North trending diabase dikes crosscut all stratigraphy.
The gldz hosts the Island deposit, Lochalsh, Goudreau, North Shear, and Shore
Zones in the project area. Past producing mines associated with the gldz are the
Magino Mine to the southwest, the Edwards Mine to the northeast, and the Cline
Mine to the northeast. In the project area, the gldz has two main strands
separated by about 150 m of country rock. The northern gldz strand contains the
magino felsite within the Webb Lake stock. It hosts the magino mine and North
Shear Zones and is likely the controlling structure influencing the Shore and
Goudreau Zones, which flank the southern contact. The southern gldz strand hosts
the Island deposit, Lochalsh, and Goudreau Zones. It comprises intermediate to
felsic tuffs and agglomerates, overlain by up to 30 m of glacial overburden
under the waters of Goudreau lake. A continuous 900 m long mineralized structure
marked by alteration and gold values of one gram per tonne or more is indicated
in the drill core from the Lochalsh Zone to the Island deposit. Within this
broad mineralized structure, lenses of higher grade mineralization are present.
These include several lenses at the Island deposit, the Lochalsh Zone, and the
area between them. The lenses are generally narrow, with short strike lengths
and variable plunges. Regional mapping supported by detailed core logging
observations has outlined iron formation marker beds and correlative lithologies
that appear to be a conformable monoclinal volcano-stratigraphic sequence,
facing and younging to the north in the project area. At the Island deposit, two
gold-bearing alteration envelopes are stratabound between a phyric flow sequence
and a distinct magnetic chloritic mafic flow sequence dipping steeply to the
south. Underlying the phyric flows, which are relatively unaltered and only
weakly strained, is the Zone E alteration envelope ranging in thickness from six
to eight meters. The upper contact of the Zone E envelope (Zone E1) is usually
sharply bounded, characterized by pervasive silicification and albitization and
quartz-carbonate-tourmaline veining destroying the primary rock fabric. The
lower contact of the Zone E envelope (Zone E) shows enrichment in gold tenure
compared with the c/d envelope where gold values are more consistent at the
upper contact of the envelope where opalescent grey-white quartz veins are
commonly observed. The c/d alteration envelope is similar in character to the
Zone E envelope with moderate to strong strain deformation defining the north
contact (stratigraphic hangingwall-Zone D) and the south contact (stratigraphic
footwall-Zone c). The entire assemblage of felsic tuffs can be altered. The
felsic tuffs represent approximately 40 m to 60 m of stratigraphy between the
mafic flow sequence to the south and the phyric flow sequence to the north. The
alteration envelope varies in thickness from four to eight meters and can expand
in flexural hinges along strike and in vertical section. Discrete alteration
zones are characterized by a progressive change from moderately sericitized,
carbonatized, pyritized host lithotypes to pervasive silicification and
pyritization of host

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lithotypes with the primary fabric unrecognizable. Pyrite
content can range from 5% to 10% where ribbon-banded fabric containing fine
grained and coarse grained cubes or aggregates are observed. Strong strain
deformation in the c/d envelope develops s-type shear fabrics, crenulated and
boudinage structures of quartz veins that can be locally brecciated. Intense
deformation is also observed with the development of mylonitic and ribbon-banded
fabrics (millimeters to 10 cm widths) in the c\d and e alteration envelopes.
Five zones, named from south to north, c, d, d1, e, and e1, were used to
estimate the Island deposit mineral resource. In addition to the five zones, a
number of subzones have been identified.

1.1.29Exploration potential

Island deposit

The Island Deposit is open at depth and along strike in some areas. There is
good potential to increase the Island Deposit Mineral Resource.

Lochalsh Zone

Based on a preliminary review of the Lochalsh drilling
results, generally on 50 m spaced sections, the Lochalsh Zone has good
exploration potential and warrants further work. This work is expected to
include geological interpretation and correlation work based on the current
understanding of the Island Deposit and more diamond drilling. A minimum of 400
m of drifting would be required to advance the Lochalsh Ramp underground
openings westward to reach the middle of the Lochalsh Zone at approximately
section 14,400E. There may be a cost effective method for exploring the Lochalsh
Zone by drilling to the south and the Shore and North Shear Zones by drilling to
the north. A surface drilling program may also be needed to test areas that
cannot be targeted from underground, particularly further to the west.

Goudreau Zone

Based on a preliminary review of the Goudreau drilling
results, generally on 50 m spaced sections, the Goudreau Zone has good
exploration potential and warrants further work. This work is expected to
include geological interpretation and correlation work based on the current
understanding of the Island Deposit and more diamond drilling. A surface
drilling program is warranted on the relatively unexplored region from section
15,450E to 15,800E. The drilling layout would target the Shore Zone near the
south contact of the Webb Lake granodiorite sill as well as Zone E at the basal
contact of the phyric flow sequence. In the event that this drilling discovers
extensions to these zones, then an underground program would be considered. A
minimum of 600 m of drifting is required to extend the 125 level drill drift
eastward to reach section 15,800E. A geological interpretation of previous
drilling supported by additional surface drilling should determine if the
northward displacement of the Goudreau Zone is fault or facies controlled.

Additional surface exploration targets

Based on the current interpretation, there are three volcano-stratigraphic
settings in the Project area that are less explored and considered to be highly
prospective. Folding and shearing

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deformation events are expected to result in high strain zones at these
contacts, where competency contrast of lithotypes is extreme.

> 1. Island Deposit Stratigraphic
>   Footwall: mafic flows intercalated with interflow sulphide iron formations,
>   synvolcanic feeder dikes and pipes, at the mafic flow/felsic tuff transition.
>   2. Island Deposit Stratigraphic Hangingwall: basal
>   contact of phyric flow sequence underlying the Webb Lake sill.
>   3. Island Deposit Stratigraphic
>   Hangingwall: upper and lower contact of Webb Lake Sill near caldera collapse
>   boundary faults where block and ash flows are deposited. A number of
>   additional surface exploration targets have been identified at the Island Gold
>   Project and more compilation work needs to be carried out.

1.1.30Plan work for 2005

During 2005, Richmont Mines plans to invest $8 million in
exploration in order to complete 14,000 m of drilling and 2,400 m of underground
development, which will consist of extending the ramp vertically by
approximately 150 m, starting a drift in the Lochalsh Zone and finishing work to
fix the ventilation system which will be an emergency exit.

1.1.31Table of reserves

|                                                                                                                                                       | December 31,
    2004 | December 31,
    2003
|------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------- | ---------------------
|                                                                                                                                                       | Tonnes                | Grade                
|                                                                                                                                                       | (metric)              | (g/t Au)             
|                                                                                                                                                       |                       |                      
|Beaufor Mine                                                                                                                                           |                       |                      
|Proven reserves1                                                                                                                                       | 165,000               | 6.98                 
|Probable reserves1                                                                                                                                     | 500,000               | 8.66                 
|                                                                                                                                                       |                       |                      
|Hammerdown Mine                                                                                                                                        |                       |                      
|Proven reserves                                                                                                                                        | -                     | -                    
|Probable reserves                                                                                                                                      | -                     | -                    
|                                                                                                                                                       |                       |                      
|TOTAL GOLD                                                                                                                                             |                       |                      
|Proven and                                                                                                                                             |                       |                      
|probable reserves                                                                                                                                      | 665,000               | 8.24                 
|For 2004,
    based on a gold price of US$400 per ounce and an exchange rate of 1.31; for
    2003, US$380 per ounce and an
    exchange rate of 1.31.

Other Aspects

Environmental Regulation

The principal operations of Richmont Mines are the production of gold from
mining development, extraction and processing of minerals and mining exploration
to maintain and

32

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increase its ore reserves. These operations are subject to
various levels of control and strict government regulations, such as laws and
regulations in respect of activities related to natural resources and the
protection of the environment. The current legislation is a matter of public
knowledge, and Richmont Mines cannot foresee any further legislation and
amendments that may have a bearing on its operations.

Legislation in matters of environmental protection, to which
the Canadian mining industry is subject, imposes, in particular, high standards
for the reduction or elimination of the emission, deposit, 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 the emission, deposit, issuance or release of
contaminants into the environment or may change the quality of the environment.

Quebec

Provincial legislation in mining matters contemplates the
acquisition and ownership of mining titles, safety standards, royalties and
mining taxes. The Mining Act
(Quebec) ensures the rehabilitation and restoration of lands affected by mining
activities. Thus, a person who carries out certain mining work, who operates a
mill in respect of certain mineral substances or who carries out certain mining
operations in respect of tailings must obtain the approval of the Minister of
Natural Resources, Wildlife and Parks (Quebec) (the "MNRWP") for any plan for
the rehabilitation and restoration of land affected by its operations; such
person must comply with the plan and provide a financial guarantee to that
effect. Where a person commences mining operations, it must submit its
rehabilitation and restoration plan within one year following the beginning of
its activities. The MNRWP may require or impose additional conditions or
obligations before giving its approval to the rehabilitation and restoration
plan. Such plan, once approved, must be resubmitted every five years for
approval by the MNRWP. The MNRWP may review the financial guarantee at any time
if it is of the opinion that the guarantee is insufficient and may require
additional guarantees. Such amendments also provide that the MNRWP may enjoin a
person 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 person does not comply with any of the aforementioned
amendments and regulations, the MNRWP may have the rehabilitation and
restoration work executed by a third party at the cost of such person. Richmont
Mines does not foresee any difficulty in meeting the requirements under the
Mining Act. (Quebec).

Richmont Mines holds certificates of authorization issued by
the Minister of the Environment (Quebec) (the "MENV") with respect to its mining
operations at the Francoeur Mine, at the Beaufor Mine and of its subsidiary,
Camflo Mill Inc. The Company also benefits from acquired rights with respect to
the construction of its mill prior to the coming into force of the
Environment Quality Act (Quebec).
The restoration plan was submitted to the MNRWP and to the MENV on October, 19,
2004.

33

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Newfoundland

Tailings disposal and waste-water control are the key
environmental issues for the Nugget Pond and Hammerdown projects. The
approximately 500,000 tons of tailings solids produced during the active life of
the Nugget Pond Mine and the 300,000 tonnes from the Hammerdown Mine 
were subjected to the INCO S02-air destruction
process for cyanide destruction prior to being
released to the tailings pond. Since
these submerged tailings occupy only 20% of the pond volume, plenty of space
remains for the Hammerdown tailings.

The intention of the environmental program is to return the sites and the
watershed to their pre-development state. Reclamation activities should restore
the sites' natural capabilities.

Failure to comply with the legislation mentioned above may
result in the issuance of an order for the interruption or decrease of
operations or even the installation of additional equipment. Richmont Mines may
be required to indemnify those who suffer loss or damages due to its mining
operations and may be subject to a penalty if it is convicted under the
provisions of this legislation.

As planned, the Company closed the Hammerdown Mine in May
2004 and subsequently ensured that the site rehabilitation work was carried out
in compliance with the standards established by the province of Newfoundland and
Labrador.

In 2004, Richmont Mines guaranteed the restoration of its mining sites
through letters of credit in the amount of $1,478,190, whereas in 2003 it
resorted to certificates of deposit.

Foreign Sales/Assets

At December 31, 2004, all assets of the Company were located in Canada.

All gold production during the three previous years was
generated in Canada, although final sales of gold made to purchasers resident in
the United States represented 73% of the Company's total gold revenues in 2004,
94% in 2003 and 92% in 2002.

As at December 31, 2004 and 2003, the Company did not have
forward exchange contracts for 2005. As at December 31, 2002, the Company had
forward exchange contracts maturing in the year 2003 of US$3,500,000 at an
average rate of 1.5686, having a negative fair value of $48,198.

See item 11. "Quantitative and Qualitative Disclosure about Market Risk -
Foreign Currency Risk Disclosure" below.

Employees

Richmont Mines offers its employees competitive compensation
including attractive benefits and a Stock Option Purchase Plan for management.
As at December 31, 2004, Richmont Mines employed a total of 180 workers compared
with 232 a year earlier.

During the year 2003, the hourly employees of the Camflo Mill unionized. The
negotiations were conducted without any negative impact on the operations and in
May 2004, the parties concluded

34

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a first bargaining agreement for a three-year period ending
December 31, 2006. Richmont Mines' Management is currently negotiating a
bargaining agreement for the East Amphi Property. The employees of the Beaufor
Mine and Hammerdown mines are not unionized and labour relations are
satisfactory.Gold Marketing and SalesThe 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 US
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 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
US dollars over the past five years:

|                           | (US$) | Exchange rate | (CAN$)
|-------------------------- | ----- | ------------- | ------
|                           |       |               |       
|2000                       | 280   | 1.49          | 416   
|2001                       | 271   | 1.55          | 420   
|2002                       | 310   | 1.57          | 487   
|2003                       | 363   | 1.40          | 509   
|2004                       | 410   | 1.30          | 534   
|2005 (January 1 to May 31) | 426   | 1.23          | 524   

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 occasionally uses put and call options on
gold, and forward sales contracts on gold and US dollars. All such hedging
policies are previously approved by the Company's Board of Directors. Financial
derivatives are used only in accordance with the Company's hedging policy, and
not for speculative purposes.

Gold bars are carried between the mills and the refinery by
commercial armored truck. These bars are refined at the Royal Canadian Mint
refinery in Ottawa under a service contract at competitive rates. Refined metal
is sold under forward sales contracts or on the spot market to commercial
bullion dealers.

As at December 31, 2004 and 2003, Richmont Mines had no gold hedging
contracts.

35

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C. Organization Structure

See Exhibit 8.1

> D. Property, Plants and Equipment

See Item 4.B. "Business Overview - Description of Properties."

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The discussion and analysis of the operating results and
financial position of the Company for the three years ended December 31, 2002,
2003 and 2004 should be read in conjunction with the Company's consolidated
financial statements and the accompanying notes.

> A. Operating Results

Year ended December 31, 2004 compared to year ended December 31, 2003

General

In 2004, the markets experienced not only a significant rise
in the price of gold, which exceeded the mark of US$450, but also an increase in
the value of the Canadian dollar, which averaged US$0.77 in 2004 compared with
US$0.71 during the previous year. Although the average price of gold climbed to
US$410 in 2004 from US$363 in 2003, the appreciation of the Canadian currency
led to a decrease in cash receipts from gold sales and thus limited the benefits
associated with the rising gold price for Canadian producers.

Production in 2004

Richmont Mines' gold sales decreased to 69,207 ounces in
2004, compared with 92,892 ounces in 2003. The decline in gold sales in 2004 was
due primarily to the reduction of Richmont Mines' gold production, which came to
67,094 ounces, compared with 92,601 ounces in 2003, because of the decrease in
grades at the Beaufor Mine and the closure of the Hammerdown Mine in May 2004 as
a result of the depletion of its ore reserves.

In 2004, the Hammerdown Mine yielded 40,058 tonnes of ore
with an average recovered grade of 12.88 grams per tonne, for total sales of
16,584 ounces of gold produced at a cash cost of US$251, compared with 87,659
tonnes of ore with an average recovered grade of 13.17 grams per tonne, for
total sales of 37,118 ounces of gold produced at a cash cost of US$230, in the
previous year.

Mining activities at the Beaufor Mine in 2004 generated
266,793 tonnes of ore with an average recovered grade of 6.13 grams per tonne,
for total sales of 52,623 ounces of gold produced at a cash cost of US$308,
compared with 255,845 tonnes of ore with an average recovered grade of 6.78
grams per tonne, for total sales of 55,774 ounces of gold produced at a cash
cost of US$245 in 2003.

These increases in the costs of production are attributable primarily to the
decline in the grades of ore extracted from the Beaufor and Hammerdown mines. In
addition, since these costs are

36

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incurred in Canadian dollars but reported in US dollars,
production cash costs were also increased by the appreciation of the Canadian
dollar, which rose in value from an average of US$0.71 in 2003 to US$0.77 in
2004.Summary of operational and financial results for 2004During 2004, the Company delivered net earnings of $732,096, or $0.05 per
share, compared with net earnings of $5,034,541, or $0.32 per share, in 2003.
The Company's mining operations generated annual cash flow of
$7,217,715 in 2004 compared with $8,577,419 in 2003, which represents,
respectively, 18% and 17% of revenues for each of these years.
The Company has no long-term debt and possessed working
capital of $25,925,031 as at December 31, 2004. The Company would have access to
various sources of financing if additional capital became necessary to finance
its expansion.

> Financial aspects

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.

Changes in accounting policies

In 2004, the Company adopted the following new accounting
policies, which are detailed in note 1 to the Company's consolidated financial
statements, that have had a significant impact on the financial statements.

> a) In 2003, the Company early
>   adopted the recommendations of the Canadian Institute of Chartered Accountants
>   (CICA) Handbook Section 1100 "Generally Accepted Accounting Principles". In
>   this respect, the Company no longer includes future required additions to
>   property, plant and equipment to extract proven and probable reserves nor
>   those required to classify resources in reserves; this change constitutes a
>   change in accounting principle. In accordance with paragraph 33 c) of Section
>   1100, this change has been applied prospectively. Following this change in
>   accounting principle, depreciation expense in 2003 amounted to $4,817,968
>   compared to $6,812,412 in 2002.
>   b) Effective January 1, 2002, the
>   Company early adopted the new accounting policy related to the recognition of
>   stock-based compensation charge. Since then, the Company uses the fair value
>   method based on the Black & Scholes option pricing model to record the
>   compensation cost related to the issuance of stock options to employees over
>   the vesting period and a related credit to the contributed surplus. The charge
>   for stock-based compensation has been reported as an administration expense in
>   the consolidated

37

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> statements of earnings. The amounts were, respectively, $902,370 for 2004,
>   $354,102 in 2003 and $1,831,437 for 2002.

Revenues

Precious metal revenues

Other revenues

Expenses

Operating costs

For the 69,207 ounces of gold sold, the average production
cost per ounce was $383 (US$294) in 2004, compared with $336 (US$240) for 2003,
when 92,892 ounces of gold were sold. For the two years being compared, these
increases can be explained, first of all, by the decline in grades of ore
extracted from the Beaufor and Hammerdown mines. Second, the costs per ounce in
US dollars are also affected by the appreciation of the Canadian dollar when the
costs of production, which are incurred in Canadian dollars but expressed in US
dollars, are converted.

Royalties -

Custom milling

Administration

38

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due to the transfer of a portion of administrative salaries to the entry
"Exploration and evaluation of projects" as a result of the increase in Richmont
Mines' exploration-related activities in 2004.

Exploration and evaluation of projects -

At the Beaufor mine, investments in 2004 totalled $980,166,
compared with $1,221,682 in 2003. From year to year, these amounts are invested
in exploration in order to extend the lifespan of the mine.

At the Hammerdown Mine, the amounts of $248,109 and $515,200
were invested in exploration in 2004 and 2003, respectively. Because the work
completed did not yield conclusive results, Richmont Mines had to close the mine
in 2004, due to the depletion of the reserves.

In 2004, no major exploration work was performed at the
Francoeur Mine. Nonetheless, an agreement was concluded in 2004 between Richmont
Mines and Cadillac-West Explorations, which committed itself to investing $0.5
million in exploration by November 22, 2005, after which it will be able to
acquire from Richmont Mines a 50% interest in the Norcoeur and Lac Fortune group
of properties, which is located in the area of the Francoeur Mine, by completing
$2.2 million in exploration work and $1.5 million over three years. In 2003 and
2002, the Francoeur Mine saw exploration work totalling $1,776,152 and
$2,331,734, respectively, which was undertaken with the aim of resuming
production.

In 2004, an investment of $1,025,491 was made in the
Valentine Lake property. Richmont Mines expects to acquire a 70% interest in
this project from Mountain Lake Resources by investing an additional amount of
$1.5 million before October 31, 2007.

At the Wasamac property, the amount of $290,982 was invested in 2004,
compared with $551,320 in 2003.

Investments of approximately $925,361 in 2004 and $421,041 in
2003 were made in Richmont Mines' other properties. These amounts include
exploration work done at the Island Gold, Sewell and Cripple Creek properties,
located in Ontario, and at Camflo Northwest and Monique, located in Quebec.

Accretion expense of asset retirement obligations

Depreciation and depletion -

39

---

Mining and income taxes -In 2004, mining and income taxes were $631,437, compared with $1,725,596 in
2003. This decline is attributable primarily to the reduction in earnings before
taxes.

Minority interest -

Net earnings

The Company's net earnings reached $732,096, or $0.05 per
share, in 2004, compared with $5,034,541, or $0.32 per share, in 2003. The
decline is attributable primarily to the decline in precious metal revenues that
is due to lower production and lower sales and to the decrease in grades, which
entailed an increase in operating expenses.

Assets

The total assets of Richmont Mines increased from $53,495,197
as at December 31, 2003, to $56,193,554 as at December 31, 2004. This increase
in assets is primarily the result of expenses incurred in costs of development
for the East Amphi property. These expenses contributed to the $10,504,244
increase in fixed assets in 2004. Since these investments were financed with the
Company's cash reserves, short-term assets fell by 15% relative to the previous
year, to total $30,700,076 as at December 31, 2004.

Future mining and income taxes

Future income and mining taxes were recognized as both assets
and liabilities, since the amounts pertain to different corporate entities and
various legislations as federal, provincial and mining taxes. Note 6 to the
Company's consolidated financial statements provides detailed information about
tax rate reconciliation as well as future income tax assets and liabilities.

As at December 31, 2004, future income tax assets totalled
$1,689,760, after valuation allowance was accounted for in the balance sheet,
compared to $1,134,452 in 2003. The increase is due to the decrease in the
valuation allowance because the Company consider it is more probable to recover
the tax assets.

All future income tax liabilities, which total $1,490,336, were recorded as
of December 31, 2004, compared to $672,061 as of December 31, 2003.

The available non-refundable provincial tax credits of
$961,338 that can be carried forward for ten years were not recorded as tax
assets because the Company is not confident that they will be used in future
years.

Shareholders' equity

The change in shareholders' equity results mainly from the
increase in capital stock and contributed surplus. Capital stock rose from
$28,346,424 in 2003 to $29,236,630 in 2004 as a result of the issue of common
shares following the exercise of options as well as private flow-

40

---



through share financing. The contributed surplus rose from
$2,008,971 in 2003 to $2,894,356 in 2004. The difference of $885,385 is
primarily attributable to the charge for stock-based compensation.

At year-end 2004, Richmont Mines had 16,169,653 shares outstanding and had
1,842,500 options under its stock-option purchase plan.

Commitments and contingency

In July 2001, Richmont Mines reached an agreement with the
Quebec Ministry of Natural Resources entitling the Company to a total of $2.7
million in government assistance. However, if the conditions stated below arise,
the amount may become repayable in three equal payments of $900,000:

- 

The average price of gold for each of the reference years
  exceeds US$325 per ounce.

Since it was not possible to determine the amount of any such repayment as at
December 31, 2004, no provision was recorded for this purpose.

In addition, the Company is subject to royalty payments on
the output of the Beaufor Mine and also on certain other properties, if they
enter into commercial production which are detailed under Item 4.B, 1.1.4 above.

U.S. GAAP Reconciliation

Please refer to note 18 to the audited consolidated financial statements
included herein.

> A. Operating Results

Year ended December 31, 2003 compared to year ended December 31, 2002

General

In 2003, the price of gold ranged from US$278 to US$349 per
ounce. In terms of the increase in the market price of gold, 2003 was a
particularly remarkable year. Indeed, the average price of gold in 2003 was
US$363 per ounce compared with an average price of US$310 in 2002. However, the
rebounding Canadian dollar, which rose in value from an average of US$0.64 in
2002 to an average of US$0.71 in 2003, limited the benefits of the increase in
the gold price for Canadian producers.

41

---

Production in 2003

Richmont Mines' gold sales were slightly lower than
anticipated, declining from 102,690 ounces in 2002 to 92,892 ounces in 2003. The Hammerdown Mine sold 37,118 ounces of gold at a cash cost of US$230 per ounce
compared with 48,316 ounces at a cash cost of US$159 in 2002. As for the Beaufor
Mine, it sold 55,774 ounces of gold at a cash cost of US$245 compared with
54,374 ounces at a cash cost of US$163 in 2002. The increase in production costs
is primarily attributable to the fact that the grades of ore obtained at the
Beaufor and Hammerdown mines in 2003 were closer to reserve grades. Because cash
costs are incurred in Canadian dollars and presented in American dollars, the
appreciation of the Canadian dollar, which rose in value from an average of
US$0.64 in 2002 to US$0.71 in 2003, also increased production costs.

Summary of operational and financial results for 2003

Richmont Mines reported solid results for 2003, despite a
slight decline in earnings compared with last year. With the objective of
increasing reserves and resources, the Company invested $4,820,706 in
exploration and project evaluation. These initiatives contributed to the
acquisition of the East Amphi property in December 2003 and an option to acquire
the Island Gold project, two very promising properties. Furthermore, exploration
replaced the majority of reserves mined at the Beaufor Mine during the year.

Richmont Mines continued to deliver good financial results in
2003, with net earnings of $5 million, or $0.32 per share (basic), compared with
net earnings of $7.1 million, or $0.46 per share (basic) in 2002.

Richmont Mines maintains its excellent financial position,
with no long-term debt and, as at December 31, 2003, working capital of $31.2
million. Thanks to sound management, cash flow from operations has amounted to
more than $8.6 million per year, or approximately 17% of revenues, over the past
two years.

Change in an accounting policy

The Company's accounting policies are in accordance with
Canadian generally accepted accounting principles and with mining industry
practices. In 2003, the Company adopted the following three new accounting
policies:

- 

> 

The method used to measure these obligations, estimated to
  be $3,207,529 on December 31, 2003, is described in note 5 of the consolidated
  financial statements.

- 

> In 2002, the settlement-value method was used to record the
>   stock options granted to employees. However, in 2003, the Company decided to
>   retroactively adopt to January 1, 2002, the fair-value method, calculated
>   using the Black &

42

---



> Scholes option pricing model, to record such options. Stock-based
>   compensation was $1,831,437 for 2002 and $354,102 for 2003.

- 

> The Company has no guarantees other than those disclosed in
>   notes 5, 14 and 15 of the consolidated financial statements, its main
>   guarantees being asset retirement obligations.

These changes, described in note 1 of the consolidated financial statements,
had a significant impact on earnings, results and balance sheets.

Revenues

Given the increase in the market price of gold in 2003,
Richmont Mines maintained its revenues at a level similar to that attained in
2002, despite a slight decrease in production. The average selling price of gold
obtained in 2003 was $518 (US$370) per ounce compared with $487 (US$310) per
ounce in 2002. In fact, Richmont Mines posted precious metal revenues of
$48,103,530 in 2003 compared with revenues of $49,815,082 in 2002.

Expenses

Operating cost

Royalties -

Administration

Exploration and evaluation of projects

At the Beaufor Mine, investments in 2003 totalled $1,221,682
compared with $808,244. These amounts were invested in exploration in order to
extend the lifespan of the mine. At Hammerdown Mine, the amounts of $515,200 and
$384,595 were invested in exploration to increase reserves in 2003 and 2002,
respectively. In 2003 and 2002, the Francoeur Mine saw exploration work
totalling $1,776,172 and $2,331,734 respectively, which was undertaken with the
aim of resuming production.

43

---



At the Wasamac property, the amount of $551,320 was invested
in 2003 and $29,412 in 2002. The exploration programs completed yielded
interesting results, and additional amounts will be invested with the goal of
completing work in the coming years to evaluate the property's potential.

The amount of $421,021 in 2003 and $20,008 in 2002 were made
in Richmont Mines other properties. These amounts include exploration work done
at the Sewell and Cripple Creek properties, located in Ontario, and at Camflo
Northwest and Monique, located in Quebec.

Accretion expense of asset retirement obligations

Depreciation and depletion

Mining and income taxes

Minority interest

Net earnings

The Company's net earnings reached $5,034,541, or $0.32 per
share in 2003, compared with $7,072,568, or $0.46 per share in 2002. The decline
is attributable to the decrease in grades, which entailed an increase in
operating expenses. The decrease in grades give a total of $92,892 ounces sold
in 2003 compared to 102,690 in 2002.

Assets

The total assets of Richmont Mines increased from $46,038,700
as at December 31, 2002 to $53,495,197 as at December 31, 2003. Short-term
assets remained relatively stable, standing at $36,135,906 at year-end 2003, and
representing almost 68% of total assets. The other items accounting for this
increase in assets are:

> -

-

44

---

- Future mining and income
  taxes, which amounted to $1,134,452.

Future mining and income taxes

Since the Company anticipates that it is more likely than not
that it will recover a portion of its future tax assets, an amount of $1,134,452
was accounted for in the balance sheet. Note that future income and mining taxes
were recognized as both assets and liabilities, since the amounts pertain to
different corporate entities and various legislations as federal, provincial and
mining taxes. All tax liabilities, which total $672,061, were recorded. Note 7
of the consolidated financial statements provides detailed information about tax
conciliation as well as future income tax assets and liabilities.

Shareholders' equity

The change in shareholders' equity results mainly from the
annual earnings recorded as retained earnings. Furthermore, capital stock
increased from $26,740,292 in 2002 to $28,189,056 in 2003 as a result of the
issue of common shares following the exercise of options as well as private
flow-through share financing.

The Stock Option Purchase Plan was amended at the 2003
meeting of shareholders. At year-end 2003, Richmont Mines had only 16,073,653
shares outstanding and had granted 1,845,500 options.

> B.

As at December 31, 2004, the Company had $25,269,901 in cash
and cash equivalents, compared with $29,083,879 in 2003. The change of 13%
compared with 2003 is essentially attributable ot the major investments incurred
in 2004. Capital expenditures were 12.6 million dollars, of which 10.5 million
dollars is attributable to the East Amphi property.

Cash flow from operations

The decline in the Company's net earnings affected cash flow
from operations before net change in non-cash working capital and payments of
asset retirement obligations, which fell from $10,900,358 in 2003 to $6,075,315
in 2004 mainly due to decrease in net earnings.

Cash flow used in investments

In 2004, Richmont Mines made major investments in exploration
at the East Amphi Property at a total cost of $10,504,244. In 2003, a total of
$7,104,894 was invested in the acquisition of the property. Just as last year,
much development work was performed at the Beaufor Mine, at a cost of
$1,478,118, whereas these costs totalled $1,255,345 in 2003.

In 2004, security deposits totalling $1,286,061 were made,
principally to ensure the restoration of Richmont Mines' mining sites. On the
other hand, the Company now has a credit facility of $3 million, with no
security requirement other than the maintenance of cash and cash equivalents in
excess of $10 million, for the issuance of letters of credit in regard to the
settlement of asset retirement obligations.

45

---



In 2004, an investment of $642,216 is recorded under the
caption "Other investments". This investment contributed primarily to site
improvement work at the Camflo Mill for the restoration of its tailings site. In
2003, the sum of $681,020 was also invested to restore the mill building and its
equipment. In addition, in the course of the year 2003, $318,003 went to the
purchase of the Sewell and Cripple Creek properties in Ontario.

Cash flow from financing activities

During fiscal year 2004, the Company issued 203,000 shares
following the exercise of stock options for an amount of $705,650. It also
completed a private placement by issuing 110,000 common shares for an amount of
$770,000. Through its share buyback program, Richmont Mines also redeemed
217,000 common shares for a total amount of $1,088,001.

In 2003, the Company issued 380,900 shares following the
exercise of stock options for an amount of $1,158,320 in. It completed a private
placement by issuing 60,753 common flow-through shares for a net amount of
$500,000. The same year, Richmont Mines redeemed 115,300 common shares through
its share buyback program for a total amount of $577,201.

As at December 31, 2003, Richmont Mines Inc. had working
capital of $31,183,975, cash and cash equivalents of $29,083,879 and no
long-term debt. Consequently the Company has sufficient liquidity for the
present requirements. Capital expenditures were 9.3 million dollars, of which
7.10 million dollars is attributable to the East Amphi property.

Commitments and contingency

During 2004, the Company intends to invest up to $6 million
in exploration on the East Amphi mining property. Initiated in January 2004,
this work will mainly involve the driving of an access ramp, the lateral
development of exploration drifts and a major drilling campaign.

In July 2001, Richmont Mines reached an agreement with the
Quebec Ministry of Natural Resources entitling the Company to a total of $2.7
million in government assistance, an amount which may become repayable under
certain conditions. Since it was not possible to determine the amount of any
such repayment as at December 31, 2003, no provision was recorded for this
purpose.

U.S. GAAP Reconciliation

Please refer to note 18 to the audited consolidated financial statements
included herein.

> C.

None

> D.

Richmont Mines experienced a slight decline in gold
production during for the first quarter of 2005 compared to the same period in
2004. This decline is expected to continue in 2005 compared to 2004 because
Richmont recently announced an eight-week shut down at the Beaufor

46

---



Mine during the third quarter of 2005 to advance development and underground
definition drilling.

> E.

The Company did not have any off-balance sheet arrangements
as of December 31, 2004 that have or are reasonably likely to have a current or
future effect on the Company's financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.

> F.

As of December 31, 2004, the Company had the following
long-term liabilities required to be reflected on the Company's balance sheet
under Canadian generally accepted accounting principles.

|                             |            | Payments due by period
|---------------------------- | ---------- | ----------------------
|                             |            | Less than             
|Contractual obligations      | Total      | 1 year                
|Asset retirement obligations | $2,967,867 | -                     

As of December 31, 2004, the Company had no long-term debt obligations,
capital lease obligations, operating lease obligations or purchase obligations.

ITEM 6.

> A.

Names, municipalities of residence, offices and principal occupations of the
directors and senior executives of the Company are as follows

47

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|                            |                             |                                        |               
|--------------------------- | --------------------------- | -------------------------------------- | --------------
|Name and Municipality       | Office held with the        |                                        | Director or   
|of Residence                | Company                     | Principal Occupation                   | Officer since 
|                            |                             |                                        |               
|Jean-Guy Rivard             | Chairman of the
    Board   | Chairman of the
    Board of           | Feb. 25, 1981 
|Rouyn-Noranda
    (QC)      | and Director                | Richmont Mines                         |               
|Canada                      |                             |                                        |               
|                            |                             |                                        |               
|Louis Dionne,
    Eng.      | President, Chief            | President of
    Richmont Mines        | Dec. 2, 2002  
|Oakville (ON)               | Executive Officer
    and   |                                        |               
|Canada                      | Director                    |                                        |               
|                            |                             |                                        |               
|Denis Arcand                | Director                    | President of
    149220 Canada Inc. (a | Sept. 28, 1995
|Brossard (QC)               |                             | financial holding
    and consulting   |               
|Canada                      |                             | company)                               |               
|                            |                             |                                        |               
|Gilles Loiselle,
    CP     | Director                    | Advisor to the
    Chairman of the     | July 8, 1996  
|Montreal (QC)               |                             | Executive
    Committee, Power         |               
|Canada                      |                             | Corporation of
    Canada (holding     |               
|                            |                             | and management
    company)            |               
|                            |                             |                                        |               
|Réjean Houle                | Director                    | Ambassador,
    Canadien Hockey        | Jan. 27, 1989 
|Montreal (QC)               |                             | Club Inc.                              |               
|Canada                      |                             |                                        |               
|                            |                             |                                        |               
|Martin Rivard               | Executive                   | Executive Vice
    President of        | Nov. 14. 2000 
|Rouyn-Noranda
    (QC)      | Vice Président              | Richmont Mines                         |               
|Canada                      |                             |                                        |               
|                            |                             |                                        |               
|Jean-Yves
    Laliberté, CA | Vice President,
    Finance | Vice President,
    Finance of         | Sept. 5, 1989 
|Rouyn-Noranda
    (QC)      |                             | Richmont Mines                         |               
|Canada                      |                             |                                        |               
|                            |                             |                                        |               
|Campbell Stuart             | Secretary                   | Partner, Colby,
    Monet, Demers,     | July 23, 2002 
|Montreal (QC)               |                             | Delage & Crevier,
    law firm         |               
|Canada                      |                             |                                        |               

The above-mentioned individuals have held their principal
occupation as indicated opposite their respective names during the last five
years, except for Mr. Louis Dionne, who was, prior to December 2002, Senior Vice
President of Underground Operations for Barrick Gold Corporation.

Martin Rivard is the son of Jean-Guy Rivard. There are no
other family relationships between any director or executive officer. Other than
discussed above, there are no arrangements or understandings with major
shareholders, customers, suppliers or others, pursuant to which any director or
executive officer was selected as a director or member of senior management.

48

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B.

Remuneration of Directors

On April 24, 2003, the board of directors of the Company
adopted an amendment to the remuneration plan for the directors who are not
senior officers of the Company or its affiliates or who do not receive any
remuneration as such. Pursuant to the remuneration plan as amended, an annual
fee of $3,500 is paid to each such director plus an attendance fee of $500 per
meeting. As such, four directors have received an aggregate remuneration of
$25,500 during the year ended December 31, 2004.

Remuneration of senior officers

During the year ended December 31, 2004, an aggregate of $749,638 (including
all personal benefits) was paid to the four (4) senior officers of the Company.

The following information indicates the remuneration paid for
the financial year ended December 31, 2004 to the Company's Chairman of the
Board, President and Chief Executive Officer and Vice-President, Finance
(collectively, the "Named Executive Officers").

Summary Compensation Table

|                    | Annual          |                            |         |               |         |              |               |           
|------------------- | --------------- | -------------------------- | ------- | ------------- | ------- | ------------ | ------------- | ----------
|                    | Compensation(1) | Long-Term
    Compensation |        
|                    |                 |                            | Awards  |              
|                    |                 |                            |         |               |         |              | Market value  |           
|                    |                 |                            |         |               |         |              | of securities |           
|                    |                 |                            | Shares  | Options       |         |              | underlying    |           
|                    |                 |                            | Under   | exercisable / | % of    | Exercise     | option on the | Expiration
|Name and Principal  | Salary          | Bonus                      | Options | not           | Options | price        | date of grant | date      
|Position            | ($)             | ($)                        | (#)     | exercisable   | granted | ($/security) | ($/Security)  |           
|Jean-Guy Rivard     |                 |                            |         |               |         |              |               |           
|Chairman of the     | 284,521         | Nil                        | 150,000 | 150,000/0     | 44.1%   | $6.60        | $6.60         | 09-01-14  
|Board               |                 |                            |         |               |         |              |               |           
|                    |                 |                            |         |               |         |              |               |           
|Louis Dionne        |                 |                            |         |               |         |              |               |           
|President and Chief | 204,775         | Nil                        | Nil     | Nil           | N/A     | N/A          | N/A           | N/A       
|Executive Officer   |                 |                            |         |               |         |              |               |           
|                    |                 |                            |         |               |         |              |               |           
|Jean-Yves Laliberté |                 |                            |         |               |         |              |               |           
|Vice President,     | 110,583         | Nil                        | 50,000  | 10,000/40,000 | 14.7%   | $6.60        | $6.60         | 09-01-14  
|Finance             |                 |                            |         |               |         |              |               |           

> (1)

The Company has an Employee and Director Stock Option Plan
(the "Plan"), adopted April 18, 1995 amended May 22, 1997, April 23, 2002, May
15, 2002 and May 14, 2003 for the benefit of senior officers, employees and
directors of the Company and its affiliates. Subject to the requirements of the
Plan, the Board of Directors of the Company has the authority to select those

49

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directors and employees to whom stock options will be
granted, the number of stock options to be granted to each director and employee
and the price at which shares of common stock may be purchased. The exercise
price for purchasing shares of common stock upon exercise of a stock option
granted under the Plan will be determined by the Board of Directors at the time
the stock option is granted but cannot be less than the closing price of the
common stock on the Toronto Stock Exchange on the trading day preceding the date
of grant. The stock options are not transferable. The aggregate number of shares
of common stock at any time that will be available for issuance under the Plan
or pursuant to other outstanding stock options to insiders will not be permitted
to exceed 10% of the shares of common stock then outstanding and the aggregate
number of shares of common stock at any time available for issuance under the
Plan or pursuant to other outstanding stock options to any one person will not
be permitted to exceed 5% of the shares of common stock then outstanding. Each
stock option, unless sooner terminated pursuant to the provisions of the Plan,
will expire on a date to be determined by the Board of Directors at the time the
stock option is granted, which date will not be later than ten (10) years from
the date the stock option is granted. The Plan does not provide for the Company
to provide any financial assistance to optionees to enable them to exercise
stock options granted thereunder. The Board of Directors may amend or terminate
the Plan provided that amendments which materially increase benefits under the
Plan, materially increase the number of shares of common stock which may be
issued thereunder or materially modify the eligibility requirements therefor
will require shareholder approval and any material amendment will require
approval of the Toronto Stock Exchange.

The following table sets forth information concerning stock options granted
during 2004 to the Company's directors and executive officers.

|                        | Shares under    | Options         |                |                
|----------------------- | --------------- | --------------- | -------------- | ---------------
|Name and Principal      | options granted | exercisable /   |                |                
|Position                | during 2004     | not exercisable | Exercise price | Expiration date
|                        | (#)             |                 | ($/security)   |                
|                        |                 |                 |                |                
|Jean-Guy Rivard         | 150,000         | 150,000/0       | $6.60          | 09-01-14       
|Chairman of the Board   |                 |                 |                |                
|                        |                 |                 |                |                
|Jean-Yves Laliberté     | 50,000          | 10,000/40,000   | $6.60          | 09-01-14       
|Vice President, Finance |                 |                 |                |                

The Company has directors' and officers' liability insurance
for a maximum amount of $5,000,000 for which the Company pays an annual premium
of $61,312. The insurance policy does not contain a deductible for the directors
and officers but a deductible of $100,000 per event.

No director or executive officer of the Company is currently indebted to the
Company or was indebted to the Company during the year ended December 31, 2004.

No funds were set aside or accrued by the Company during 2004 to provide
pension, retirement or similar benefits.

50

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Except for the Company's Employee and Director Stock Option
Plan, the Company has no bonus or profit sharing plans pursuant to which cash or
non-cash compensation is or may be paid to the Company's directors or officers.

Stock options to purchase securities from Company can be
granted to directors and employees of the Company on terms and conditions
acceptable to the regulatory authorities in Canada, notably the Toronto Stock
Exchange and the Ontario Securities Commission.

> C.

The directors serve as directors of the Company from their
election on the day of the Annual General Meeting of the Company, last held on
May 12, 2005, until the next Annual General Meeting or until a successor is duly
elected.

Directors (1)

Name
      Elected orAppointedJean-Guy Rivard (3)
      February 1981Denis Arcand (2)
      September 1995Louis Dionne
      December 2002Réjean Houle (2) (3)
      January 1989Gilles Loiselle, PC (2) (3)
      July 1996(1) All Directors are residents and citizens of
      Canada.(2) Member of the Audit Committee.(3) Member of the Compensation Committee.


There are no director's service contracts with the Company or any of its
subsidiaries providing for benefits upon termination of employment.

The Compensation Committee reviews annually the compensation
paid to the directors by taking into account and comparing it with compensation
paid to directors of comparable companies. At its last meeting held on February
17, 2005, the Compensation Committee decided to maintain the directors'
compensation to an annual fee of $3,500 and an attendance fee of $500 per
meeting for the coming year. The Compensation Committee meets at least annually.
In 2004 the Compensation Committee held one meeting.

The Compensation Committee takes into account senior
management's responsibilities and workload in setting each member's
compensation. The Committee favours competitive compensation in order to keep
competent key employees.

The Audit Committee meets at least twice a year in order to
review the Company's financial position, meets with auditors and analyzes
performance, existing and potential investments and the mining property
portfolio. In 2004, the Audit Committee met two times. The Audit Committee
Charter is annexed hereto as Exhibit 15.1.

51

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D.Employees

The number of employees of the Company as of December 31, 2004, 2003 and 2002
was 180, 232 and 234, respectively. The distribution of the employees was the
following:

|Category of Activity or | December 31,
|----------------------- | ------------
|Geographical Location   | 2004        
|Corporate Office        | 12          
|Exploration             | 11          
|Beaufor                 | 123         
|Camflo                  | 28          
|Newfoundland            | 6           
|Francoeur               | 0           
|Total                   | 180         

> E.

Set forth below is the amount of the Company's common stock and options owned
by the Company's directors and executive officers as of May 31, 2005.

> Shareholdings of Directors and Executive Officers

|Shareholdings of Directors and Executive Officers
|-------------------------------------------------
|                                                 
|Title of                                         
|class                                            
|                                                 
|                                                 
|                                                 
|                                                 
|Common                                           
|Common                                           
|Common                                           
|Common                                           
|Common                                           
|Common                                           
|Common                                           
|                                                 

> (1)

(2) 1,000,000 are held indirectly through Les
  Entreprises Tremoy Ltee, a private company controlled by Mr. Rivard and 50,000
  are directly held.

52

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Information regarding the outstanding stock options held by directors and
executive officers of the Company as of May 31, 2005, is set forth below.

Stock Options Outstanding

|Name                    | Number of shares of | CAN$           | Expiration
|----------------------- | ------------------- | -------------- | ----------
|                        | common stock option | Exercise price | date      
|Jean-Guy Rivard         | 100,000             | 1.75           | 06-22-2005
|Jean-Guy Rivard         | 100,000             | 1.65           | 05-30-2006
|Jean-Guy Rivard         | 100,000             | 1.78           | 01-08-2007
|Jean-Guy Rivard         | 100,000             | 3.10           | 03-18-2007
|Jean-Guy Rivard         | 200,000             | 4.72           | 12-01-2007
|Jean-Guy Rivard         | 150,000             | 6.60           | 01-14-2009
|Denis Arcand            | 20,000              | 1.75           | 06-22-2005
|Denis Arcand            | 10,000              | 1.92           | 09-27-2005
|Louis Dionne            | 100,000             | 4.60           | 05-01-2007
|Louis Dionne            | 400,000             | 4.72           | 12-01-2007
|Martin Rivard           | 50,000              | 4.25           | 07-07-2007
|Martin Rivard           | 100,000             | 4.72           | 12-01-2007
|Jean-Yves
    Laliberté | 50,000              | 6.60           | 01-14-2009
|Campbell Stuart         | 20,000              | 5.50           | 12-19-2007
|Total                   | 1,500,000           |                |           

ITEM 7.

A.

Except for Jean-Guy Rivard, as disclosed in item 6.E
"Directors, Senior Management and Employees - Share Ownership" above, the
Company does not know of any person who owns, beneficially, directly or
indirectly, more than 5% of any class of the Company's voting securities, other
than:

> -

-

There has been no significant change in the percentage ownership of company
common stock held by Jean-Guy Rivard during the past three years.

Such major shareholders do not have different voting rights from the
Company's other shareholders.

53

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On December 31, 2004, the shareholders' list for the
Company's common stock showed 276 registered shareholders and 16,169,653 shares
outstanding. 135 (48.9%) of these shareholders were US residents, owning
3,060,057 shares representing approximately 18.9% of the issued and outstanding
shares of common stock.

The Company is not directly or indirectly owned or controlled by another
corporation(s) or by any foreign government or by any other national or legal
person(s), severally or jointly.

The Company has no knowledge of any arrangements that may, at a subsequent
date, result in a change of control of the Company.

> B.

None

> C.

Not applicable.

ITEM 8.

> A.

> The following consolidated financial statements of the Company are
>     attached to this Annual Report:
>     Report of the Independent Registered Public Accounting Firm dated January
>     21, 2005
>     Consolidated Balance Sheets at December 31, 2004 and December 31, 2003
>     Consolidated Statements of Earnings for the Years ended December 31,
>     2004, December 31, 2003 and December 31, 2002
>     Consolidated Statements of Retained Earnings for the Years ended December
>     31, 2004, December 31, 2003 and December 31, 2002
>     Consolidated Statements of Cash Flow for the Years ended December 31,
>     2004, December 31, 2003 and December 31, 2002
>     Notes to consolidated financial statements

Reference is made to Items 10 A. 2. and 17 for further details relating to
the consolidated financial statements of the Company included in this Annual
Report.

The Company 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
will declare dividends according to its assessment of the financial position of

54

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the Company, taking into account its financing requirements for future growth
and other factors that the Board of Directors may deem relevant in the
circumstances.

The Company knows of no active, pending or overtly threatened
legal or arbitration proceeding to which the Company 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 Company's financial position or profitability.

> B.

No significant change has occurred since December 31, 2004 in the Company's
financial condition or results of operations.

ITEM 9.

The Company's common stock is traded on the Toronto Stock Exchange and the
American Stock Exchange.

> Toronto Stock Exchange

Set forth below are the high and low sales prices on the Toronto Stock
Exchange for actual trades of shares of the Company's common stock for the
periods indicated.

Last Five Full Years 
Toronto Stock Exchange 
Common Stock Trading Activity

- Sales -Canadian DollarsYear Ended
      High
      LowDecember 31, 2000
      $2.75
      $1.20December 31,
      2001
      $2.24
      $1.20December 31,
      2002
      $6.74
      $1.75December 31,
      2003
      $6.90
      $3.80December 31, 2004
      $6.90
      $4.00


55

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Last Two Full Years 
Toronto Stock Exchange 
Common Stock Trading Activity

- Sales -Canadian DollarsQuarter Ended
      High
      LowMarch 31, 2003
      $6.40
      $4.35June 30, 2003
      $5.00
      $3.82September 30, 2003
      $6.48
      $3.80December 31, 2003
      $6.90
      $5.50March 31, 2004
      $6.90
      $5.54June 30, 2004
      $6.30
      $4.26September 30, 2004
      $5.05
      $4.00December 31, 2004
      $5.60
      $4.60


Last Six Months 
Toronto Stock Exchange 
Common Stock Trading Activity

- Price -Canadian DollarsMonth Ended
      High
      LowDecember 31, 2004
      $5.51
      $4.80January 31, 2005
      $5.35
      $4.90February 28, 2005
      $5.20
      $4.58March 31, 2005
      $4.95
      $4.00April 30, 2005
      $4.30
      $4.00May 31, 2005
      $5.00
      $4.24


On May 31, 2005, the closing price for the Company's common stock on the
Toronto Stock Exchange $4.98.

> American Stock Exchange

Effective on March 6, 1997, the Company's common stock was
listed for trading on the American Stock Exchange under the symbol RIC. Set
forth below are the high and low sales prices on the American Stock Exchange for
actual trades of shares of the Company's Common Stock for the periods indicated.

56

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Last Five Full Years 
American Stock Exchange 
Common Stock Trading Activity

- Sales -US DollarsYear Ended
      High
      LowDecember 31, 2000
      $2.00
      $0.75December 31,
      2001
      $1.47
      $0.80December 31,
      2002
      $4.40
      $1.05December 31,
      2003
      $5.29
      $2.78December 31, 2004
      $5.39
      $3.00


Last Two Full YearsAmerican Stock ExchangeCommon Stock Trading Activity- Sales -US DollarsQuarter Ended
      High
      LowMarch 31, 2003
      $4.33
      $2.95June 30, 2003
      $3.58
      $2.78September 30, 2003
      $4.77
      $2.85December 31, 2003
      $5.29
      $4.16March 31, 2004
      $5.39
      $4.12June 30, 2004
      $4.81
      $3.15September 30, 2004
      $4.05
      $3.00December 31, 2004
      $4.76
      $3.85Last Six MonthsAmerican Stock ExchangeCommon Stock Trading Activity- Sales -US DollarsMonth Ended
      High
      LowDecember 31, 2004
      $4.72
      $3.90January 31, 2005
      $4.50
      $4.00February 28, 2005
      $4.15
      $3.71March 31, 2005
      $3.98
      $3.29April 30, 2005
      $3.46
      $3.20May 31, 2005
      $3.99
      $3.35


On May 31, 2005, the closing price for the Company's common stock on the
American Stock Exchange was US$3.98.

57

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ITEM 10.ADDITIONAL INFORMATION

> A.

Not applicable.

> B.

The Company was incorporated pursuant to Part 1A of the
Companies Act (Quebec) on February
12, 1981 (File number 1843-2286) under the name Resources Minières Rouyn Inc. By
Article of Amendment filed February 10, 1987 the Company added the English
version Rouyn Mining Resources Inc. and another amendment filed with the
Government of Quebec on June 20, 1991, the Company changed its name to Richmont
Mines Inc. The Articles of Incorporation of the Company are registered by the
Government of Quebec in register S02473, folio 10.

The Company has no specific objects or purposes set forth in its Articles of
Incorporation or Bylaws.

> Directors

A director who is a party to a contract or proposed contract
with the Company or who is a director or officer of a company which is a party
to a contract or proposed contract with the Company must disclose such interest
in writing to the Company and ask that the nature and extent of his interest be
recorded in the minutes of the Board of Director's meetings.

Such director may not attend nor participate in discussions
relating to such contract or proposed contract, unless authorized by the Board,
nor vote on any resolution regarding approval of the contract or proposed
contract.

However, notwithstanding the foregoing, directors have the
right to vote on determining the compensation of directors; provided that no
director who is a paid employee or officer of the Company may receive fees from
the Company.

The directors of the Company may:

> (a)borrow funds on
>   the Company's credit for the amounts and on the conditions are deemed
>   suitable;
>   (b)
>   hypothecate or pledge all or part of the real property of the Company, or pawn
>   or otherwise encumber all or part of the moveable property of the Company, or
>   give various guarantees to ensure payment of loans other than through the
>   issue of bonds, as well as the payment or execution of other debts, contracts
>   or commitments of the Company;
>   (c)
>   issue bills, bonds (debentures) and debenture-stock or other securities of the
>   Company for such amounts and on such conditions they deem appropriate, and
>   give as security or sell them for the amounts and prices deemed suitable

58

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> (d)
>   hypothecate, pledge, pawn, assign and convey the movable or immovable
>   property, present or future, of the Company, to secure payment of such bonds
>   or other securities, or give only part of such guarantees for the same
>   purposes; and constitute the aforementioned hypothecation, pledge, pawn,
>   assignment and conveyance by way of a trust deed, or in any other manner; and
>   (e)
>   delegate to one or more members of management or to one or more directors of
>   the Company who may be designated by the Directors, all or part of the powers
>   conferred by the aforementioned clause to the extent and in the manner that
>   the Board of Directors determines in such delegation of the said powers.

There is no age limitation, or minimum share ownership requirement, for the
Company's directors. Directors are elected for one year terms.

Capital Stock

There is only one authorized class of capital stock of the
Company: common stock. All issued and outstanding common shares are fully paid
and non-assessable. Each holder of record of common shares is entitled to one
vote for each common share so held on all matters requiring a vote of
shareholders, including the election of directors. The holders of common shares
will be entitled to dividends on a pro-rata basis, if and when as declared by
the board of directors. There are no preferences, conversion rights, preemptive
rights, subscription rights, or restrictions or transfers attached to the common
shares. In the event of liquidation, dissolution, or winding up of the Company,
the holders of common shares are entitled to participate in the assets of the
Company available for distribution after satisfaction of the claims of
creditors. There are no redemption or sinking fund provisions applicable to the
common shares or any liability to further capital calls by the Company.

Under Quebec law (i) the Articles of Incorporation of the
Company may be amended by the affirmative vote of the holders of two thirds
(2/3) of the vote cast by the shareholders at a special meeting and (ii) the
Bylaws of the Company may be amended by the Company's directors and ratified by
the majority of the vote cast by the shareholders at the meeting.

The annual meeting of shareholders must be held each year
within six (6) months of the end of the fiscal year. For any general meeting, a
notice specifying the date, time and place of the meeting and the items to be
discussed at the meeting must be sent to each shareholder entitled to vote at
that meeting at least twenty-one (21) days before the date of such a meeting at
the address indicated in the books of the Company or, if no address is
indicated, the last address known by the registrar.

Quorum at any shareholders' meeting is two (2) shareholders
attending in person and holding or representing by proxies at least ten per cent
(10%) of the voting shares issued by the Company and carrying the right to vote
at the meeting. Two shareholders attending in person and entitled to vote will
constitute the quorum at any meeting of shareholders for the choice of the
Chairman and adjournment of the meeting.

No business may be transacted unless the required quorum has been achieved.

59

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There is no limitation imposed by the laws of Canada or by
the charter or other constituent documents of the Company on the right of a
non-resident to hold or vote the common shares, other than as provided in the
Investment Canada Act, (the
"Investment Act") discussed below
under item 10.D. "Additional Information - Exchange Controls."

> C.

Patricia Mining Purchase Agreement

Richmont Mines signed on August 28, 2003, the Option/Joint
Venture Agreement for the Island Gold project between Patricia Mining Corp. and
Richmont Mines Inc., whereby it will invest $1.0 million, by way of a private
placement, to purchase from Patricia Mining Corp. 1,400,000 flow-through shares
and 600,000 common shares. With this investment, Richmont Mines is granted an
option to earn a 55% undivided interest in Patricia Mining's Island Gold
property. This option is conditional upon regulatory approvals and closing of
financing.

Richmont Mines' investment in Patricia Mining will be used to
partly finance a $2.5 million exploration program on the Island Gold project
situated in Ontario. The exploration program is expected to begin shortly and
will include surface drilling, dewatering of the Lochalsh ramp, underground
drilling, and both lateral and vertical underground development. The planned
underground program is aimed at defining resources at the Island Gold project.
Patricia Mining is expected to complete this program before the end of September
2004. Richmont Mines will then be able to exercise its option and advance the
project towards commercial production by funding development work up to a
maximum of $10.0 million within 24 months in order to acquire a 55% managing
interest in the joint venture.

> East Amphi Purchase Agreement

On December 5, 2003, Richmont Mines signed with McWatters
Mining Inc. a Memorandum of Agreement and Management Agreement, a transaction
whereby Richmont Mines acquired from McWatters the East Amphi Property and the
Fourax Property, located near Malartic in northwestern Quebec, for a cash
consideration paid on closing of CAN$7 million. McWatters is to complete a CAN$6
million exploration program on the East Amphi Property by December 31, 2004,
which will also constitute additional consideration for Richmont Mines under the
agreement. Richmont Mines, on behalf of McWatters, will manage the exploration
work. Subject to completion of this exploration program, McWatters will be
entitled to receive a 2% Net Smelter Returns royalty, which gives the right to
McWatters to receive 2% of the ounces produced from the East Amphi and Fourax
properties in excess of 300,000 ounces of gold. Richmont Mines has the option to
purchase the 2% royalty for CAN$1.5 million at any time after the start of
production.

> D.

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 Company's common shares, except that any remittance of dividends to United
States residents are subject to a 15% withholding tax (5% if the shareholder is
a

60

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corporation owning at least 10% of the common shares of the Company) pursuant
to Article X of the reciprocal income treaty between Canada and the United
States.

Except as provided in the Investment Canada Act, there are no limitations under the laws of
Canada, the Province of Quebec or in the Articles of Incorporation of the
Company on the right of foreigners to hold or vote the common shares of the
Company.

The Investment Canada Act
(the "ICA"), which became effective on June 30, 1985, regulates the acquisition
by non-Canadians of control of a Canadian business enterprise. In effect, the
ICA required review by Investment Canada, the agency which administers the ICA,
and approval by the Canadian government in the case of an acquisition of control
of a Canadian business by a non-Canadian where: (i) in the case of a direct
acquisition (for example, through a share purchase or asset purchase), the
assets of the Canadian business are $5 million or more in value; or (ii) in the
case of an indirect acquisition (for example, the acquisition of the foreign
parent of the Canadian business) where the Canadian business has assets of $50
million or more in value or if the Canadian business represents more than 50% of
the assets of the original group and the Canadian business has assets of $5
million or more in value. Review and approval are also required to the
acquisition or establishment of a new business in areas concerning "Canada's
cultural heritage or national identity" such as book publishing, film production
and distribution, television and radio, production and distribution of music,
and the oil and natural gas industry, regardless of the size of the investment.

In the context of the Company, in essence, three methods of
acquiring control of a Canadian business are regulated by the ICA: (i) the
acquisition of all or substantially all of the assets used in carrying on the
Canadian business; (ii) the acquisition, directly or indirectly, of voting
shares of a Canadian corporation carrying on the Canadian business; (iii) the
acquisition of voting shares of an entity which controls, directly or
indirectly, another entity carrying on a Canadian business. An acquisition of a
majority of the voting interests of an entity, including a corporation, is
deemed to be an acquisition of control under the ICA. An acquisition of less
than one-third of the voting shares of a corporation is deemed not to be an
acquisition of control. An acquisition of less than a majority, but one-third or
more, of the voting shares of a corporation is presumed to be an acquisition of
control unless it can be established that on the acquisition, the corporation is
not, in fact, controlled by the acquirer through the ownership of voting shares.
For partnerships, trusts, joint ventures or other unincorporated entities, an
acquisition of less than a majority of the voting interests is deemed not to be
an acquisition of control.

In 1988, the ICA was amended pursuant to the North American
Free Trade Agreement dated January 2, 1988 between Canada and the United States
to relax the restrictions of the ICA. As a result of these amendments, except
where the Canadian business is in the cultural, oil and gas, uranium, financial
services or transportation sectors, the threshold for direct acquisition of
control by US investors and other foreign investors acquiring control of a
Canadian business from US investors has been raised from $5 million to $150
million of gross assets, and indirect acquisitions are not reviewable.

In addition to the foregoing, the ICA requires that all other acquisitions of
control of Canadian businesses by non-Canadians are subject to formal
notification to the Canadian government.

61

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E.Taxation

The following summary of the material Canadian federal income
tax considerations generally applicable in respect of the common stock reflects
the Company's opinion. The tax consequences to any particular holder of common
stock 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 Company, hold their common stock as
capital property and who will not use or hold the common stock 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 stock 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 Stock

If a non-resident were to dispose of common stock of the
Company 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 Company (i.e., the nonresident 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 Company),
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
stock 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 stock of the Company by a non-resident
will not be subject to Canadian tax since the common stock of the Company is
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 Company (25% or more of the shares of any class of the
Company'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 stock is not derived
principally from real property situated in Canada.

> Dividend

In the case of any dividends paid to non-residents, the
Canadian tax is withheld by the Company, 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

62

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Company'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 nonresidents from the Company
are taxable by Canada as ordinary dividends.

If a non-resident holder disposes of common stock to the
Company (unless the Company acquired the common stock 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 Company exceeds the paid-up
capital of such stock. The amount of such dividend will be subject to
withholding tax as described above.

> 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 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 other holder thereof. A common share of the Company 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 nonresident 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 Company. In the
case of a non-resident holder to whom shares of the Company 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 US federal income
tax consequences of the acquisition, ownership and disposition of common shares
of the Company by a US Holder (as defined below) that holds the common shares as
a capital asset. The discussion does not cover all aspects of US 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 Company 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 Company'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 US 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 organisations, dealers in securities or
currencies, persons that hold the common shares as part of straddles, hedging
transactions or conversion transactions for US federal income tax purposes or
persons whose functional currency is not the US dollar).

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As used herein, the term "US Holder" means a beneficial owner
of the Company's common shares that is (i) a citizen or resident of the United
States for US 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
US 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 US persons have the authority to
control all substantial.

The summary is based on the tax laws of the United States,
including the Internal Revenue Code of 1986, as amended, 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 Company

General

The

64

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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 US 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
US Holder generally will not be required to recognize foreign currency gain or
loss with respect to the dividend income.

Effect of Canadian Withholding Taxes.

US Holders that are accrual basis taxpayers must translate
Canadian taxes into US dollars at a rate equal to the average exchange rate for
the taxable year in which the taxes accrue, while all US Holders must translate
taxable dividend income into US dollars at the spot rate on the date received.
This difference in exchange rates may reduce the US dollar value of the credits
for Canadian taxes relative to the US Holder's US federal income tax liability
attributable to a dividend.

> Foreign Tax Credit

Subject to certain limitations, a US Holder who pays (or has
withheld from distributions) Canadian income tax with respect to the ownership
of common shares of the Company may be entitled, at the option of the US Holder,
to either a deduction or a tax credit for such foreign tax paid or withheld. US
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 US
Holder can obtain a refund from the Canadian taxing authorities. Generally, it
will be more advantageous to claim a credit because a credit reduces United
States Federal income taxes on a dollar-for-dollar basis, while a deduction
merely reduces the taxpayer's income subject to tax. This election is made on
year-by-year basis and applies to all foreign income taxes (or taxes in lieu of
income tax) paid by (or withheld from) the US Holder during the year. There are
significant and complex limitations which apply to the credit, among which is
the general limitation that the credit cannot exceed the proportionate share of
the US Holder's United States income tax liability that the US Holder's foreign
source income bears to his/her or its worldwide taxable income. In the
determination of the application of this limitation, the various items of income
and deduction must be classified into foreign and domestic sources. Under the
Act, beginning in 2003, taxpayers also must account for the rate differential on
dividend income (i.e., the difference between the highest applicable tax rate
and the highest dividend tax rate) in applying these limitations. Complex rules
govern this classification process. There are further limitations on the foreign
tax credit for certain types of income such as "passive income", "high
withholding tax interest", "financial services income",

65

---



"shipping income", and certain other classifications of
income. The availability of the foreign tax credit and the application of the
limitations on the credit are fact specific and holders and prospective holders
of common shares of the Company should consult their own tax advisors regarding
their individual circumstances.

> Disposition of Common Shares of the Company

A US Holder will recognize gain or loss from the sale of
common shares of the Company 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 Company. This gain or loss
will be capital gain or loss if the common shares are a capital asset in the
hands of the US Holder, which will be a short-term or long-term capital gain or
loss depending upon the holding period of the US 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 US Holders that are
individuals, 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 US 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 five years from the loss
year to be offset against capital gains until such net capital loss is thereby
exhausted.

> Backup Withholding and Information Reporting

Payments of dividends or other proceeds with respect to
common shares of the Company by a US paying agent or other US intermediary will
be reported to the IRS and to the US Holder as may be required under applicable
regulations. Backup withholding at a rate of 28 per cent may apply to these
payments if the US 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 US federal income tax
returns. Certain US Holders (including, among others, corporations) are not
subject to backup withholding. US Holders should consult their tax advisors as
to their qualification for exemption from backup withholding and the procedure
for obtaining exemption.

> F.

Not applicable.

> G.Statement by Experts

Not applicable.

> H.Documents on Display

Subject to confidentiality concerns, all documents concerning
the Company that are referred to in this Annual Report on Form 20-F may be
inspected by shareholders upon reasonable advance notice, at the Company's
headquarters at 110, Avenue Principale, Rouyn-Noranda, Quebec J9X 4P2. A summary
in English of any such document not in English will be provided.

66

---

I.Subsidiary Information

Not applicable.

ITEM 11.

RISK

> Commodity Price Risk Disclosure

See Item 4.4 "Information on the Company - Gold Marketing and Sales" above.

At current 2005 estimates of production of 54,000 ounces of
gold and at an estimated average gold price of US$420, including management's
estimates of the Company's operating expenses, a US$42 change in the market
price of gold would result in an increase or decrease of approximately
CAN$1,700,000 in annual net income and in annual cash flows.

> Foreign Currency Risk Disclosure

The Company's revenues are mainly denominated in US dollars,
while investments and operating costs, primarily accrue in Canadian dollars. The
Company's cash flow and results of operations will therefore be affected by
fluctuations in the US/CAN dollar exchange rate.

At current 2005 estimates of production of 54,000 ounces of
gold and at an estimated average gold price of US$420 excluding management's
estimates of the Company's operating expenses, a $0.10 change in the CAN dollar
exchange rate would result in an increase or decrease of CAN approximately
CAN$2,150,000 in annual net income and in annual cash flow.

To reduce the effects of fluctuations in US/CAN dollar
exchange rates, the Company may use financial instruments to hedge currency
exposures in the ordinary course of business. It is current Company policy to
seek to harmonize the amount and duration of its gold and US/CAN hedging
policies.

The Company does not require or place collateral for its
foreign currency and gold hedging derivatives. However, the Company seeks to
minimize its credit risk by dealing with only major international banks and
financial institutions.

> Interest Rate Risk Disclosure

At December 31, 2004, the Company had no outstanding long-term debt.
Therefore, the Company does not believe it is exposed to significant interest
rate risk.

ITEM 12.

Not applicable.

67

---

PART II
ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None

ITEM 14.

None

ITEM 15.

As of December 31, 2004, the Company's management, including
its Chief Executive Officer and Chief Financial Officer, conducted an evaluation
of the effectiveness of the Company's disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended). Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that the disclosure controls and procedures
were effective to ensure that all material information required to be filed in
this Annual Report on Form 20-F was made known to them in a timely fashion.
There has been no change in the Company's internal control over financial
reporting during 2004 that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.

ITEM 16.

The Company's board of directors has determined that Gilles
Loiselle 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 American Stock Exchange.

ITEM 16.B. CODE OF ETHICS

The Company has adopted a Code of Ethics that applies to the
Company's principal executive officer, principal financial officer and principal
accounting officer or controller. This Code of Ethics is included as Exhibit
14.1 to this Annual Report on Form 20-F. The Company will provide to any person,
without charge a copy of the Company's Code of Ethics, upon a request in writing
made to Richmont Mines, Inc., 110, Avenue Principale, Rouyn - Noranda, Quebec,
JPX 4P2, Canada, Attention: Corporation Secretary.

ITEM 16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

> Audit Committee's Pre-Approval Policies and Procedures

Starting with the year 2004, the Company's audit committee
provided to the external auditor of the Company a list of services preapproved.
If officers of Richmont Mines ask for other services, the external auditor must
have the approval of the audit committee president before accepting the mandate,
which must also be formally approved by the audit committee at the next audit
committee meeting. The list of services provided to the external auditor will be
revised every year by the audit committee and can be modified by the audit
committee at any time by sending a written notice to the external auditor.

68

---



The following table shows the total fees billed for each of
the two past fiscal years by the Company's external auditor and the percentage
of such fees for services approved by the audit committee or the audit committee
president.

|                  |         | 2003       |         | 2004      
|----------------- | ------- | ---------- | ------- | ----------
|                  |         | % approved |         | % approved
|                  |         | by Audit   |         | by Audit  
|                  | $       | Committee  | $       | Committee 
|Audit fees        | 141,775 | 100        | 150,224 | 100       
|Tax fees(1)       | 57,605  | 100        | 27,860  | 100       
|All other fees(2) | 51,269  | 100        | 31,300  | 100       
|                  |         |            |         |           
|Total             | 250,649 |            | 209,384 |           

> 1

2

ITEM 16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

None.

ITEM 16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS

|                     |              |                | Total Number     | Maximum        
|-------------------- | ------------ | -------------- | ---------------- | ---------------
|                     |              |                | of Shares        | Number of      
|                     |              |                | Purchased as     | Shares that May
|                     |              |                | Part of Publicly | Yet be         
|                     | Total Number |                | Announced        | Purchased      
|                     | of Shares    | Average Price  | Plans or         | Under the Plans
|Period               | Purchased    | Paid per Share | Programs         | or Programs    
|                     |              |                |                  |                
|January 1-31, 2004   | 14,200       | 6.05           | 14,200           | 665,500        
|February 1-29, 2004  | 22,200       | 5.83           | 22,200           | 643,300        
|March 1-31, 2004     | 2,100        | 5.62           | 2,100            | 641,200        
|April 1-30, 2004     | 59,700       | 5.23           | 59,700           | 581,500        
|May 1-31, 2004       | 37,600       | 4.79           | 37,600           | 543,900        
|June 1-30, 2004      | 29,900       | 4.50           | 29,900           | 514,000        
|July 1-31, 2004      | 10,000       | 4.30           | 10,000           | 790,000        
|August 1-31, 2004    | 18,900       | 4.11           | 18,900           | 771,100        
|September 1-30, 2004 | 0            | 0              | 0                | 771,100        
|October 1-31, 2004   | 10,000       | 4.95           | 10,000           | 761,100        
|November 1-30, 2004  | 2,900        | 5.26           | 2,900            | 758,200        
|December 1-31, 2004  | 9,500        | 5.11           | 9,500            | 748,700        

69

---



_________________

*

PART III

ITEM 17.

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 Company's auditors on such consolidated
financial statements is included herein immediately preceding such audited
consolidated financial statements.

Audited Consolidated Financial Statements

Auditors' Report dated January 21, 2005

> Consolidated Balance Sheets at December 31, 2004 and December 31, 2003
>   Consolidated Statements of Earnings for the Years ended December 31, 2004,
>   December 31, 2003 and December 31, 2002
>   Consolidated Statements of Retained Earnings for the Years ended December
>   31, 2004, December 31, 2003 and December 31, 2002
>   Consolidated Statements of Cash Flow for the Years ended December 31, 2004,
>   December 31, 2003 and December 31, 2002
>   Notes to Consolidated Financial Statements

ITEM 18.

The Company has elected to provide consolidated financial statements pursuant
to Item 17 of Form 20-F.

70

---

ITEM 19.EXHIBITS

|Exhibit |                                                                               |     
|------- | ----------------------------------------------------------------------------- | ----
|No.     | Exhibit                                                                       | Page
|        |                                                                               |     
|1.1     | Articles of
    Incorporation of the Company, including all amendments        |     
|        | thereto(1)                                                                    |     
|        |                                                                               |     
|1.2     | Bylaws of the Company,
    including all amendments thereto(1)                |     
|        |                                                                               |     
|2.1     | Shareholder Rights
    Plan                                                   |     
|        |                                                                               |     
|5.1     | Option/Joint Venture
    Agreement for the Island Gold projectbetween         |     
|        | Patricia Mining Corp.
    and Richmont Mines Inc. dated August 28, 2003(2)    |     
|        |                                                                               |     
|5.2     | Memorandum of
    Agreementand Management Agreement between                   |     
|        | McWatters Mining Inc.
    and Richmont Mines Inc. dated December 5,           |     
|        | 2003(2)                                                                       |     
|        |                                                                               |     
|5.3     | Beaufor Mine Purchase
    Agreement                                           |     
|        |                                                                               |     
|8.1     | List of Subsidiaries                                                          |     
|        |                                                                               |     
|14.1    | Code of Ethics(2)                                                             |     
|        |                                                                               |     
|15.1    | Audit Committee
    Charter                                                   |     
|        |                                                                               |     
|32.1    | Rule
    13a-14(a)/15d-14(a) Certifications                                   |     
|        |                                                                               |     
|32.2    | Certification of
    periodic financial report pursuant to Section 906 of the |     
|        | Sarbanes-Oxley Actof 2002, 18 U.S.C. Section 1350                             |     

_______________________________
(1)

(2)

71

---



SIGNATURES

The registrant 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.          
|-------------------- | -----------------------------
|                     | Registrant                   
|                     |                              
|                     |                              
|                     |                              
|Dated: June 16, 2005 | By: (/s/) Jean-Yves Laliberté
|                     | Jean-Yves Laliberté          
|                     | Vice
    President, Finance  

---

Consolidated Financial Statements of
RICHMONT MINES INC.

Years ended December 31, 2004, 2003 and 2002

---

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the consolidated balance sheets of Richmont
Mines Inc. and its subsidiaries as at December 31, 2004 and 2003 and the
consolidated statements of earnings, retained earnings and cash flow for each of
the years in the three-year period ended December 31, 2004. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, these consolidated financial statements
present fairly, in all material respects, the financial position of the Company
and its subsidiaries as at December 31, 2004 and 2003 and the results of their
operations and their cash flow for each of the years in the three-year period
ended December 31, 2004 in conformity with Canadian generally accepted
accounting principles.
/s/ KPMG LLP
Chartered Accountants
Montreal, Canada January 21, 2005

---



RICHMONT MINES INC. Consolidated Financial Statements 
Years ended December 31, 2004, 2003 and 2002

|CONSOLIDATED FINANCIAL STATEMENTS            |  
|-------------------------------------------- | -
|                                             |  
|                                             |  
|Consolidated Statements of Earnings          | 1
|                                             |  
|Consolidated Statements of Retained Earnings | 2
|                                             |  
|Consolidated Balance Sheets                  | 3
|                                             |  
|Consolidated Statements of Cash Flow         | 4
|                                             |  
|Notes to Consolidated Financial Statements   | 5

---



|RICHMONT MINES INC.                
|-----------------------------------
|Consolidated Statements of Earnings
|Years ended December 31            
|(in Canadian dollars)              



|                                                               | 2004       | 2003       | 2002      
|-------------------------------------------------------------- | ---------- | ---------- | ----------
|                                                               | $          | $          | $         
|                                                               |            |            |           
|REVENUES                                                       |            |            |           
|Precious metals                                                | 36,981,017 | 48 103 530 | 49 815 082
|Other revenues (note 3)                                        | 2,660,390  | 2 205 511  | 1 960 728 
|                                                               |            |            |           
|                                                               | 39,641,407 | 50 309 041 | 51 775 810
|                                                               |            |            |           
|EXPENSES                                                       |            |            |           
|Operating costs                                                | 26,094,650 | 30,324,791 | 25,403,492
|Royalties                                                      | 430,325    | 851,242    | 675,177   
|Custom milling                                                 | 973,056    | -          | -         
|Administration                                                 | 3,036,622  | 2,772,658  | 3,874,181 
|Exploration and
    evaluation of projects (note 4)            | 3,475,339  | 3,626,107  | 3,727,600 
|Accretion expense of
    asset retirement obligations (note 5) | 159,726    | 150,848    | 142,984   
|Expense of asset
    retirement                                | -          | -          | 100,000   
|Depreciation and
    depletion                                 | 3,548,287  | 4,817,968  | 6,812,412 
|                                                               |            |            |           
|                                                               | 37,718,005 | 42,543,614 | 40,735,846
|                                                               |            |            |           
|EARNINGS BEFORE OTHER ITEMS                                    | 1,923,402  | 7,765,427  | 11,039,964
|                                                               |            |            |           
|MINING AND INCOME TAXES (note 6)                               | 631,437    | 1,725,596  | 3,935,969 
|                                                               |            |            |           
|                                                               | 1,291,965  | 6,039,831  | 7,103,995 
|                                                               |            |            |           
|MINORITY INTEREST                                              | 559,869    | 1,005,290  | 31,427    
|                                                               |            |            |           
|NET EARNINGS                                                   | 732,096    | 5,034,541  | 7,072,568 
|                                                               |            |            |           
|NET EARNINGS PER SHARE (note 7)                                |            |            |           
|Basic                                                          | 0.05       | 0.32       | 0.46      
|Diluted                                                        | 0.04       | 0.31       | 0.45      
|                                                               |            |            |           
|WEIGHTED AVERAGE NUMBER OF                                     |            |            |           
|COMMON SHARES OUTSTANDING                                      | 16,126,784 | 15,926,191 | 15,339,497

See accompanying notes to consolidated financial statements.

1

---



|RICHMONT MINES INC.                         
|--------------------------------------------
|Consolidated Statements of Retained Earnings
|Years ended December 31                     
|(in Canadian dollars)                       



|                                   | 2004       | 2003       | 2002     
|---------------------------------- | ---------- | ---------- | ---------
|                                   | $          | $          | $        
|                                   |            |            |          
|BALANCE, BEGINNING OF YEAR         | 13,252,364 | 8,596,132  | 1,523,564
|                                   |            |            |          
|Net earnings                       | 732,096    | 5,034,541  | 7,072,568
|                                   |            |            |          
|Redemption of shares
    (note 12) | (703,911)  | (378,309)  | -        
|                                   |            |            |          
|BALANCE, END OF YEAR               | 13,280,549 | 13,252,364 | 8,596,132

See accompanying notes to consolidated financial statements.

2

---



|RICHMONT MINES INC.        
|---------------------------
|Consolidated Balance Sheets
|Years ended December 31    
|(in Canadian dollars)      



|                                         | 2004       | 2003      
|---------------------------------------- | ---------- | ----------
|                                         | $          | $         
|                                         |            |           
|ASSETS                                   |            |           
|                                         |            |           
|CURRENT ASSETS                           |            |           
|Cash and cash
    equivalents            | 25,269,901 | 29,083,879
|Short-term
    investments (note 8)      | 809,900    | 1,000,000 
|Accounts receivable
    (note 9)         | 3,274,976  | 3,203,269 
|Inventories (note
    10)                | 1,345,299  | 2,848,758 
|                                         |            |           
|                                         | 30,700,076 | 36,135,906
|                                         |            |           
|SECURITY DEPOSITS                        | -          | 1,286,061 
|                                         |            |           
|PROPERTY, PLANT AND EQUIPMENT (note 11)  | 23,803,718 | 14,938,778
|                                         |            |           
|FUTURE MINING AND INCOME TAXES (note 6)  | 1,689,760  | 1,134,452 
|                                         |            |           
|                                         | 56,193,554 | 53,495,197
|                                         |            |           
|LIABILITIES                              |            |           
|                                         |            |           
|CURRENT LIABILITIES                      |            |           
|Accounts payable and
    accrued charges | 4,349,430  | 3,507,213 
|Mining and income
    taxes payable      | 425,615    | 1,444,718 
|                                         |            |           
|                                         | 4,775,045  | 4,951,931 
|                                         |            |           
|ASSET RETIREMENT OBLIGATIONS (note 5)    | 2,967,867  | 3,207,529 
|                                         |            |           
|MINORITY INTEREST                        | 1,548,771  | 1,055,917 
|                                         |            |           
|FUTURE MINING AND INCOME TAXES (note 6)  | 1,490,336  | 672,061   
|                                         |            |           
|                                         | 10,782,019 | 9,887,438 
|                                         |            |           
|SHAREHOLDERS' EQUITY                     |            |           
|                                         |            |           
|Capital stock (note 12)                  | 29,236,630 | 28,346,424
|Contributed surplus
    (note 13)        | 2,894,356  | 2,008,971 
|Retained earnings                        | 13,280,549 | 13,252,364
|                                         |            |           
|                                         | 45,411,535 | 43,607,759
|                                         |            |           
|Commitments (note
    14)                |            |           
|Contingency (note
    15)                |            |           
|                                         |            |           
|                                         | 56,193,554 | 53,495,197

See accompanying notes to consolidated financial statements.

On behalf of the Board:

|______________________________ | ____________________________
|------------------------------ | ----------------------------
|Jean-Guy Rivard                | Réjean Houle                
|Chairman                       | Director                    

3

---



|RICHMONT MINES INC.                  
|-------------------------------------
|Consolidated Statements of Cash Flows
|Years ended December 31              
|(in Canadian dollars)                



|                                                         | 2004         | 2003        | 2002        
|-------------------------------------------------------- | ------------ | ----------- | ------------
|                                                         | $            | $           | $           
|                                                         |              |             |             
|CASH FLOW FROM OPERATIONS                                |              |             |             
|Net earnings                                             | 732,096      | 5,034,541   | 7,072,568   
|Adjustments for:                                         |              |             |             
|Depreciation and
    depletion                           | 3,548,287    | 4,817,968   | 6,812,412   
|Stock-based
    compensation                             | 902,370      | 354,102     | 1,831,437   
|Accretion expense of
    asset retirement obligations    | 159,726      | 150,848     | 142,984     
|Write-down of
    short-term investments                 | 110,000      | -           | 219,372     
|Minority interest                                        | 559,869      | 1,005,290   | 31,427      
|Future mining and
    income taxes                       | 62,967       | (462,391)   | (78,143)    
|                                                         |              |             |             
|                                                         | 6,075,315    | 10,900,358  | 16,032,057  
|                                                         |              |             |             
|Net change in non-cash working capital
    items         |              |             |             
|and payment of asset
    retirement obligations          | 1,142,400    | (2,322,939) | (96,309)    
|                                                         |              |             |             
|                                                         | 7,217,715    | 8,577,419   | 15,935,748  
|                                                         |              |             |             
|CASH FLOW USED IN INVESTMENTS                            |              |             |             
|Short-term investments                                   | 80,100       | 10,505,685  | (11,725,057)
|Security deposits                                        | 1,286,061    | (1,267,061) | (19,000)    
|Property, plant and equipment                            |              |             |             
|Beaufor Mine                                             | (1,478,118)  | (1,255,345) | (1,293,246) 
|Hammerdown Mine                                          | -            | -           | (62,854)    
|Property in development East Amphi                       | (10,504,244) | (7,104,894) | -           
|Other investments                                        | (642,216)    | (915,615)   | (738,988)   
|                                                         |              |             |             
|                                                         | (11,258,417) | (37,230)    | (13,839,145)
|                                                         |              |             |             
|CASH FLOW FROM FINANCING ACTIVITIES                      |              |             |             
|Issue of common shares                                   | 1,475,650    | 1,658,320   | 1,770,855   
|Redemption of common shares                              | (1,088,001)  | (577,201)   | -           
|Redemption of shares by a subsidiary                     | (142,586)    | -           | -           
|Common share issuance costs                              | (18,339)     | (10,664)    | -           
|                                                         |              |             |             
|                                                         | 226,724      | 1,070,455   | 1,770,855   
|                                                         |              |             |             
|                                                         |              |             |             
|                                                         |              |             |             
|Net increase (decrease) in cash and cash
    equivalents | (3,813,978)  | 9,610,644   | 3,867,458   
|                                                         |              |             |             
|Cash and cash equivalents, beginning of year             | 29,083,879   | 19,473,235  | 15,605,777  
|                                                         |              |             |             
|Cash and cash equivalents, end of year                   | 25,269,901   | 29,083,879  | 19,473,235  
|                                                         |              |             |             
|                                                         |              |             |             
|SUPPLEMENTAL INFORMATION                                 |              |             |             
|Cash paid (received) during the year:                    |              |             |             
|Mining and income
    taxes                              | (133,984)    | 3,984,254   | 2,840,445   

See accompanying notes to consolidated financial statements.

4

---



|RICHMONT MINES INC.                         
|--------------------------------------------
|Notes to Consolidated Financial Statements  
|Years ended December 31, 2004, 2003 and 2002
|(in Canadian dollars)                       

Richmont Mines Inc. (the "Company"), incorporated under Part 1A of the Quebec
Companies Act, is engaged in mining, exploration and development of mining
properties, principally gold.

1. Changes in accounting policies

> a) In 2004, the Company has
>     adopted the recommendations of the Emerging Issues Committee (EIC-128)
>     relating to the accounting for trading, speculative or non-hedging
>     derivative financial instruments. Derivative financial instruments for which
>     the documentation does not respect the standards of hedge accounting, the
>     instruments that do not qualify for hedge accounting are recognized in the
>     balance sheet and measured at fair value, with changes in fair value
>     recognized currently in income. Previously, gains or losses on forward gold
>     sales contract were recorded in income upon delivery of the production. This
>     change had no material impact on the financial statements.
>     b) The Company renounces tax deductions relating
>     to resource expenditure that are financed by the issuance of flow-through
>     shares for the benefit of its shareholders, as permitted by the tax
>     legislation.
>     Under the asset and liability method used to account for
>     income taxes, future income taxes related to the temporary differences
>     created by this renouncement are recorded in accordance with EIC-146 when
>     the Company renounces these deductions and a corresponding cost of issuing
>     the securities is also recorded.
>     c) In 2003, the Company early
>     adopted the recommendations of the Canadian Institute of Chartered
>     Accountants (CICA) Handbook Section 1100 "Generally Accepted Accounting
>     Principles". In this respect, the Company does not include anymore future
>     required additions to property, plant and equipment to extract proven and
>     probable reserves nor those required to classify resources in reserves; this
>     change constitutes a change in accounting principle. In accordance with
>     paragraph 33 c) of Section 1100, this change has been applied prospectively.
>     Following this change in accounting principle, depreciation expense in 2003
>     amounted to $4,817,968 compared to $6,812,412 in 2002.
>     d) During the fourth quarter of
>     2003, the Company retroactively early adopted the new accounting
>     recommendations of Section 3110 of the CICA Handbook relating to "Asset
>     Retirement Obligations." This section defines the standards for the
>     recognition, measurement and disclosure of asset retirement obligations.
>     Prior to this quarter, the provision for site restoration costs was
>     recognized in expenses.
>     According to this section, the total amount of the
>     estimated cash flows required to settle the obligations arising from
>     environmentally acceptable closure and post-closure plans is discounted
>     based on the credit-adjusted risk-free rate and is recorded as a liability.
>     In way of compensation, the total discounted estimated cash flow is
>     capitalized to the associated long-lived assets, and depreciated in
>     accordance with the units-of-production method calculated on proven and
>     probable reserves. The asset retirement obligations recorded are adjusted
>     for accumulated accretion in accordance with the expected timing of payment
>     of the cash flow required to settle these obligations.
>     Consequently and as permitted under the transition rules
>     of this section, the financial statements of the year ended December 31,
>     2001 have been restated following this change in accounting policy.
>     Therefore, retained earnings as at December 31, 2001 have been increased by
>     $1,132,852, from $390,712 to $1,523,564.
>     e) Effective January 1, 2002,
>     the Company early adopted the new accounting policy related to the
>     recognition of stock-based compensation charge. Since then, the Company uses
>     the fair value method based on the Black & Scholes option pricing model to
>     record the compensation cost related to the issuance of stock options to
>     employees over the vesting period and a related credit to the contributed
>     surplus.

5

---



|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Significant accounting policies

> The consolidated financial statements are prepared in
>   accordance with Canadian generally accepted accounting principles. As
>   described in note 18, these principles differ in certain material respects
>   from the principles that the Company would have followed had its consolidated
>   financial statements been prepared in accordance with generally accepted
>   accounting principles in the United States. The significant accounting
>   policies followed by the Company are as follows:

> a) Basis of consolidation

The consolidated financial statements include the accounts of the Company
    and those of its subsidiaries, Camflo Mill Inc. (100%) and Louvem Mines Inc.
    (70%).

b) Revenue recognition

Precious metals revenue, based upon spot metal prices or
    forward sales contracts, is recorded when rights and obligations related to
    ownership are transferred to the purchaser. Milling revenue is recorded when
    the service of ore processing is rendered.

c) Cash and cash equivalents

Cash and cash equivalents comprise cash and short-term investments with
    original maturity dates of less than 90 days.

d) Short-term investments

Short-term investments are carried at the lower of cost and market value.

e) Inventories

Supply inventories and ore inventories are valued at the lower of average
    cost and replacement cost. Precious metals inventories are valued at the
    lower of average cost and net realizable value.

f) Exploration properties

Mining exploration expenditures are expensed as incurred.
    The acquisition costs of exploration properties and expenditures incurred on
    properties identified as having development potential are capitalized in
    accordance with the policies described in note 2 g).

g) Property, plant and equipment

Property, plant and equipment are recorded at cost, net
    of government assistance. Development costs are capitalized when a decision
    is made to bring an ore body into production. When a project is brought into
    commercial production, related costs are transferred to the various
    fixed-asset categories and are depreciated according to the
    units-of-production method calculated on proven and probable reserves.
    Depreciation of rolling stock is calculated using the straight-line method
    based on its anticipated useful life.

Construction costs include interest on funds borrowed and
    future costs of asset retirement. Upon commencement of commercial
    production, construction costs are transferred to the various categories of
    buildings and equipment and amortized on their respective bases.

When the net carrying value of a capital asset is not recoverable and
    exceeds its fair value, a write-down is recorded in the books.

h) Future mining and income taxes

The Company accounts for income taxes under the asset and
    liability method. Under this method, future tax assets and liabilities are
    recognized for the future tax consequences attributable to differences
    between the financial statement carrying amounts of existing assets and
    liabilities and their respective tax bases. Future tax assets and
    liabilities are measured using enacted or substantively enacted tax rates
    expected to apply to taxable income in the years in which those temporary
    differences are expected to be recovered or settled. The effect on future
    tax assets and liabilities of a change in tax rates is recognized in the
    income statement in the period that includes the enactment date.

6

---



|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Significant accounting policies (continued)

> i) Foreign currency translations
>     Transactions pertaining to the statement of earnings are
>     translated at the rate of exchange prevailing at the date of the
>     transaction. Monetary assets and liabilities resulting from these
>     transactions are translated at the rate of exchange in effect at the balance
>     sheet date. Exchange gains or losses are included in earnings and presented
>     under the caption Other revenues (nil in 2004, 2003 and 2002).
>     j) Government assistance
>     Grants originating from government assistance are recorded as a revenue
>     or as a reduction of property, plant and equipment, based on the nature of
>     the grant.k) Net earnings per shareEarnings per share are the result of net earnings divided
>     by the average outstanding number of shares during the period. Diluted
>     earnings per share are determined taking into account the dilutive effect of
>     arrangements to issue common shares as if these arrangements were exercised
>     at the beginning of the year or at the grant date. Diluted earnings per
>     share are determined using the treasury-stock method. This method assumes
>     that the proceeds from the exercise of stock options are used to redeem
>     common shares at the average trade price during the period.
>     l) Guarantees
>     Under Accounting Guideline 14 ("AcG-14") a guarantee is a
>     contract or an indemnification agreement that contingently requires the
>     Company to make payments to the other party to the contract or agreement,
>     based on charges in an underlying obligation that is related to an asset, a
>     liability or an equity security of the other party, or based on a third
>     party failure to perform under an obligation agreement. It could also be an
>     indirect guarantee of the indebtedness of another party, even though the
>     payment to the other party may not be based on changes in an underlying
>     obligation that is related to an asset, a liability or an equity security of
>     the other party. In management's opinion, the Company does not have
>     guarantees, other than those disclosed in notes 5, 14 and 15.
>     m) Use of estimates
>     The preparation of financial statements in conformity
>     with generally accepted accounting principles requires management to make
>     estimates and assumptions that affect the reported amounts of assets and
>     liabilities, disclosure of contingent assets and liabilities and the
>     reported amounts of revenues and expenses. Significant areas requiring the
>     use of management estimates relate to the useful life of assets for
>     amortization purposes and for the evaluation of their net recoverable
>     amount, the provisions for site restoration costs and income and mining
>     taxes. Accordingly, actual results could differ from these estimates.

1. Other revenues

> There was no government assistance recorded in the books in 2004
>   ($1,006,196 in 2003 and $1,522,996 in 2002).

7

---



|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Exploration and
  evaluation of projects

> 2004
>       2003
>       2002$
>       $
>       $Beaufor Mine
>       980,166
>       1,221,682
>       808,244Hammerdown Mine
>       248,109
>       515,200
>       384,595Francoeur Mine
>       10,864
>       1,776,152
>       2,331,734Valentine Lake property
>       1,025,491
>       -
>       -Wasamac property
>       290,982
>       551,320
>       29,412Other properties
>       925,361
>       421,041
>       20,008Evaluation of projects
>       474,358
>       335,311
>       153,6073,955,331
>       4,820,706
>       3,727,600Exploration tax credits
>       479,992
>       1,194,599
>       -3,475,339
>       3,626,107
>       3,727,600

1. Asset retirement obligations

> The Company'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 Company conducts its
>   operations so as to protect public health and the environment. The Company has
>   therefore recorded its asset retirement obligations of the mining sites based
>   on management's best estimate of the costs. Such estimates are, however,
>   subject to change based on modifications to laws and regulations or as new
>   information becomes available.
>   a) Changes in obligations
>     The following tables set forth the evolution of the asset retirement
>     obligations for the years ended December 31, 2004, 2003 and 2002:

|                     | Liability     |               |              |            | Liability    
|-------------------- | ------------- | ------------- | ------------ | ---------- | -------------
|                     | balance as at | Accretion     | Subsequent   | Liability  | balance as at
|2004                 | January 1     | expense       | measurements | settlement | December 31  
|                     | $             | $             | $            | $          | $            
|                     |               |               |              |            |              
|Nugget Pond Mill and |               |               |              |            |              
|Hammerdown Mine      | 830,299       | 40,604        | -            | (188,037)  | 682,866      
|Francoeur Mine       | 155,334       | 8,544         | -            | -          | 163,878      
|Beaufor Mine         | 271,080       | 14,908        | -            | -          | 285,988      
|Camflo Mill          | 1,636,825     | 90,025        | -            | -          | 1,726,850    
|East Amphi property  | 313,991       | 5,645         | (211,351)    | -          | 108,285      
|                     |               |               |              |            |              
|                     | 3,207,529     | 159,726       | (211,351)    | (188,037)  | 2,967,867    
|                     |               |               |              |            |              
|                     |               |               |              |            |              
|                     |               | Liability     |              |            | Liability    
|                     |               | balance as at | Accretion    | New        | balance as at
|2003                 |               | January 1     | expense      | liability  | December 31  
|                     |               | $             | $            | $          | $            
|                     |               |               |              |            |              
|Nugget Pond Mill and |               |               |              |            |              
|Hammerdown Mine      |               | 787,013       | 43,286       | -          | 830,299      
|Francoeur Mine       |               | 147,236       | 8,098        | -          | 155,334      
|Beaufor Mine         |               | 256,948       | 14,132       | -          | 271,080      
|Camflo Mill          |               | 1,551,493     | 85,332       | -          | 1,636,825    
|East Amphi property  |               | -             | -            | 313,991    | 313,991      
|                     |               |               |              |            |              
|                     |               | 2,742,690     | 150,848      | 313,991    | 3,207,529    

8

---



|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Asset retirement
  obligations (continued)

> a) Changes in obligations (continued)
>   Liability
>       
>       Liabilitybalance as at
>       Accretion
>       balance as at2002
>       January 1
>       expense
>       December 31$
>       $
>       $Nugget Pond Mill and Hammerdown Mine
>       745,984
>       41,029
>       787,013Francoeur Mine
>       139,561
>       7,675
>       147,236Beaufor Mine
>       243,552
>       13,396
>       256,948Camflo Mill
>       1,470,609
>       80,884
>       1,551,4932,599,706
>       142,984
>       2,742,690b) Information used in the calculation of obligations
>   The following table sets forth the assumptions used in the calculation of
>   the asset retirement obligations for the year ended December 31, 2004:
>   Total amountof the estimated
>       Cash flow
>       Credit-adjustedcash flow
>       payment schedule
>       risk-free rate$
>       
>       %Nugget Pond Mill
>       759,191
>       2007
>       5.5Francoeur Mine
>       192,432
>       2007
>       5.5Beaufor Mine
>       354,290
>       2008
>       5.5Camflo Mill
>       2,381,055
>       2010
>       5.5East Amphi property
>       149,308
>       2010
>       5.53,836,276

c) Fair value of asset obligations

As at December 31, 2004, the Company has guaranteed the
  settlement of asset retirement obligations through the issuance of letters of
  credit amounting to $3,000,000. The following table discloses the allocation
  of these letters of credit as at December 31, 2004:

|                    | 2004     
|------------------- | ---------
|                    | $        
|                    |          
|Camflo Mill         | 1,227,261
|East Amphi property | 170,000  
|Francoeur Mine      | 53,809   
|Beaufor Mine        | 27,120   
|                    |          
|                    | 1,478,190

As at December 31, 2003, the Company had guaranteed the restoration costs
  of its mining sites by the pledge of term deposits amounting to $1,286,061.

9

---



|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Mining and income
  taxes

> Mining and income tax expense attributable to earnings consists of:

|        | 2004    | 2003      | 2002     
|------- | ------- | --------- | ---------
|        | $       | $         | $        
|        |         |           |          
|Current | 568,470 | 2,187,987 | 4,014,112
|Future  | 62,967  | (462,391) | (78,143) 
|        |         |           |          
|        | 631,437 | 1,725,596 | 3,935,969

Income tax expense attributed to earnings differs from the
  amounts computed by applying the combined federal and provincial income tax
  rate of 32.99% (33.07% in 2003 and 34.09% in 2002) to earnings before mining
  and income taxes as a result of the following:

|                                         | 2004      | 2003      | 2002       
|---------------------------------------- | --------- | --------- | -----------
|                                         | $         | $         | $          
|                                         |           |           |            
|Earnings before mining and income taxes: | 1,923,402 | 7,765,427 | 11,039,964 
|                                         |           |           |            
|Computed "expected" tax expense          | 634,530   | 2,568,027 | 3,763,745  
|Increase (decrease) in mining and income |           |           |            
|taxes resulting from:                    |           |           |            
|Resource
      allowance deduction       | (528,410) | (696,616) | (1,124,713)
|Tax benefits
      not recognized        | (553,706) | (987,202) | (810,941)  
|Other                                    | 364,795   | (267,621) | 122,274    
|                                         |           |           |            
|Income taxes                             | (82,791)  | 616,588   | 1,950,365  
|Mining duties                            | 714,228   | 1,109,008 | 1,985,604  
|                                         |           |           |            
|Total current and future mining          |           |           |            
|and income tax
      provision           | 631,437   | 1,725,596 | 3,935,969  

The tax effects of temporary differences that give rise to significant
  portions of the future tax assets and future tax liabilities at December 31,
  2004 and 2003, are presented below:

|                                  | 2004        | 2003       
|--------------------------------- | ----------- | -----------
|                                  | $           | $          
|                                  |             |            
|Long-term future tax assets:      |             |            
|Property, plant and equipment     | 1,311,075   | 1,390,019  
|Asset retirement obligations      | 1,063,643   | 1,406,399  
|Losses carry forward              | 200,923     | 238,779    
|                                  |             |            
|Future tax assets                 | 2,575,641   | 3,035,197  
|Less valuation allowance          | (885,881)   | (1,900,745)
|                                  |             |            
|                                  | 1,689,760   | 1,134,452  
|                                  |             |            
|Long-term future tax liabilities: |             |            
|Property, plant and equipment     | (1,207,634) | (420,044)  
|Other                             | (282,702)   | (252,017)  
|                                  |             |            
|                                  | (1,490,336) | (672,061)  
|                                  |             |            
|Net long-term future tax assets   | 199,424     | 462,391    

The Company has capital losses without expiry dates
  amounting to $869,540. Non-refundable provincial tax credits of $961,338 may
  be used within the next ten years to reduce income taxes otherwise payable.
  The tax benefits of these tax credits are not recognized in the books.

10

---



|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Net earnings per
  share

|                                                             | 2004       | 2003       | 2002      
|------------------------------------------------------------ | ---------- | ---------- | ----------
|                                                             |            |            |           
|Net earnings attributed to                                   |            |            |           
|common shareholders ($)                                      | 732,096    | 5,034,541  | 7,072,568 
|                                                             |            |            |           
|Weighted average number of outstanding
      shares          | 16,126,784 | 15,926,191 | 15,339,497
|Effect of dilutive share purchase options                    | 456,746    | 550,088    | 511,156   
|                                                             |            |            |           
|Weighted average number of dilutive
      outstanding shares | 16,583,530 | 16,476,279 | 15,850,653
|                                                             |            |            |           
|Basic earnings per share ($)                                 | 0.05       | 0.32       | 0.46      
|Diluted earnings per share ($)                               | 0.04       | 0.31       | 0.45      

1. Short-term
  investments

> Short-term investments include investments in shares of
>   publicly-traded companies and short-term investments with an original term of
>   more than 90 days, but no longer than one year. The fair market value is
>   $1,346,800 ($1,540,000 in 2003).

1. 

> 2004
>       2003$
>       $Sales taxes and exploration credits
>       2,546,843
>       2,499,572Other
>       728,133
>       703,6973,274,976
>       3,203,269

1. Inventories

> 2004
>       2003$
>       $Precious metals
>       72,108
>       801,706Ore
>       354,562
>       625,900Supplies
>       918,629
>       1,421,1521,345,299
>       2,848,758

11

---



|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Property, plant and
  equipment

> 2004
>       
>       
>       2003Accumulated
>       
>       
>       Accumulateddepreciation
>       Net book
>       
>       depreciation
>       Net bookCost
>       and depletion
>       value
>       Cost
>       and depletion
>       value$
>       $
>       $
>       $
>       $
>       $Mining properties
>       13,704,014
>       5,915,144
>       7,788,870
>       13,631,637
>       4,830,650
>       8,800,987Development costs
>       7,221,257
>       5,329,650
>       1,891,607
>       6,182,163
>       4,739,536
>       1,442,627Buildings
>       7,143,644
>       5,869,081
>       1,274,563
>       6,985,400
>       5,136,954
>       1,848,446Equipment
>       13,326,640
>       11,693,195
>       1,633,445
>       13,070,609
>       11,159,433
>       1,911,176Asset retirement
>       1,944,770
>       1,481,779
>       462,991
>       2,156,121
>       1,273,576
>       882,54543,340,325
>       30,288,849
>       13,051,476
>       42,025,930
>       27,140,149
>       14,885,781Project indevelopment a)
>       10,752,242
>       -
>       10,752,242
>       52,997
>       -
>       52,997Total
>       54,092,567
>       30,288,849
>       23,803,718
>       42,078,927
>       27,140,149
>       14,938,778a) Government assistance of $1,031,053 has been recorded as a reduction of
>   the cost of the project in development (nil in 2003).

1. Capital stock

> Authorized: Unlimited number of common shares, no par value
>   
>   2004
>       
>       2003Number
>       Amount
>       Number
>       Amountof shares
>       $
>       of shares
>       $Issued and paid: Common sharesBalance, beginning of year
>       16,073,653
>       28,346,424
>       15,747,300
>       26,869,747Issue of shares for cash a)Common
>       203,000
>       722,635
>       380,900
>       1,186,233Accredited
>       110,000
>       770,000
>       60,753
>       500,000Share issue costs
>       -
>       (218,339)
>       -
>       (10,664)Redemption of shares b)
>       (217,000)
>       (384,090)
>       (115,300)
>       (198,892)Balance, end of year
>       16,169,653
>       29,236,630
>       16,073,653
>       28,346,424a) Issue of shares
>   
>   In 2004, the Company issued, through the exercise of stock
>   options 203,000 common shares and 110,000 flow-through shares from a private
>   investment for a cash consideration of $705,650 and $770,000 respectively and
>   has decreased the contributed surplus of an amount of $16,985, representing
>   the fair value recorded in the books for the stock options that were
>   exercised. Furthermore, share capital has been reduced by the future income
>   tax expense related to the flow-through shares at the time of renouncement to
>   the tax deductions.
>   The Company is committed, as per the flow-through shares agreement, to
>   incur exploration expenses in Canada of $770,000 before December 31, 2005.
>   In 2003, the Company issued, through the exercise of stock
>   options 380,900 common shares and 60,753 flow-through shares from a private
>   investment for a cash consideration of $1,158,320 and $500,000 respectively
>   and had decreased the contributed surplus of an amount of $27,913,
>   representing the fair value recorded in the books for the stock options that
>   were exercised.

12

---



|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Capital stock (continued)

> b) Redemption of shares



In 2003, the Company redeemed 115,300 common shares for $577,201 in cash.
  This transaction reduced retained earnings by $378,309.

c) Stock Option Purchase Plan

The Company offers a Stock Option Purchase Plan under which
  options to acquire common shares may be granted to its directors, officers,
  employees and non-employees. According to this plan, established in 1995 and
  amended in 1997, 2002 and 2003, the Company may grant options for up to
  4,444,400 common shares. The exercise price of each option is the market price
  of the Company's stock on the date of grant and the maximum term of the
  granted options is 10 years.

A summary of the status, as at December 31, 2004 and 2003, of the Company's
  Stock Option Purchase Plan, and changes during the years then ended, is
  presented below:

|                                       |           | 2004           |           | 2003          
|-------------------------------------- | --------- | -------------- | --------- | --------------
|                                       |           | Weighted       |           | Weighted      
|                                       | Number of | average        | Number of | average       
|                                       | options   | exercise price | options   | exercise price
|                                       |           | $              |           | $             
|                                       |           |                |           |               
|Options outstanding, beginning of year | 1,745,500 | 3.84           | 1,903,900 | 3.53          
|Granted                                | 340,000   | 6.28           | 155,000   | 4.87          
|Exercised                              | (203,000) | 3.48           | (300,900) | 2.47          
|Cancelled or expired                   | (40,000)  | 5.80           | (12,500)  | 2.28          
|                                       |           |                |           |               
|Options outstanding, end of year       | 1,842,500 | 4.29           | 1,745,500 | 3.84          
|                                       |           |                |           |               
|Exercisable options, end of year       | 1,520,500 | 4.11           | 1,459,500 | 3.71          

The following table summarizes information about the
  Stock Option Plan at December 31, 2004:

|               |                                          |                       |                  | Exercisable options at
|-------------- | ---------------------------------------- | --------------------- | ---------------- | ----------------------
|               | Options outstanding at December 31, 2004 | December 31, 2004    
|               |                                          |                       |                  |                       
|Exercise       | Number of                                | Weighted average      | Weighted average | Number of             
|price          | options                                  | remaining contractual | exercise price   | options               
|               |                                          | life (years)          | $                |                       
|               |                                          |                       |                  |                       
|$1.65 to $2.28 | 362,500                                  | 1.2                   | 1.76             | 352,500               
|$3.10 to $4.42 | 295,000                                  | 2.8                   | 3.84             | 184,000               
|$4.60 to $6.60 | 1,185,000                                | 3.2                   | 5.17             | 984,000               
|               |                                          |                       |                  |                       
|               | 1,842,500                                | 2.8                   | 4.29             | 1,520,500             

During fiscal year 2004, the Company allocated 340,000
  stock options to senior executives and management. The weighted average fair
  value of these stock options at the allocation date, calculated using the
  Black & Scholes option pricing model, is $3.07.

13

---



|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Capital stock
  (continued)

> c) Stock Option Purchase Plan (continued)

The compensation costs were calculated using the Black & Scholes option
  pricing model with the following assumptions:

|                        | 2004    | 2003   
|----------------------- | ------- | -------
|Risk-free interest rate | 3.5%    | 4.0%   
|Expected life           | 4 years | 4 years
|Expected volatility     | 60%     | 60%    
|Expected dividend yield | 0.0%    | 0.0%   

In 2004, the compensation cost recorded in expenses related
  to the grant of stock-based compensation for the benefit of employees is
  $902,370 ($354,102 in 2003 and $1,812,237 in 2002). The same amounts have been
  credited to contributed surplus for these grants.

d) Other stock options

|                                       |           | 2004           |           | 2003          
|-------------------------------------- | --------- | -------------- | --------- | --------------
|                                       |           | Weighted       |           | Weighted      
|                                       | Number of | average        | Number of | average       
|                                       | options   | exercise price | options   | exercise price
|                                       |           | $              |           | $             
|                                       |           |                |           |               
|Options outstanding, beginning of year | 100,000   | 2.00           | 180,000   | 3.42          
|Exercised                              | -         | -              | (80,000)  | 5.20          
|                                       |           |                |           |               
|Options outstanding, end of year       |           |                |           |               
|and exercisable                        | 100,000   | 2.00           | 100,000   | 2.00          

As at December 31, 2004, the other 100,000 stock options have an exercise
  price of $2.00 and a weighted average remaining life of 0.3 year.

1. Contributed surplus

> 2004
>       2003$
>       $Balance, beginning of year
>       2,008,971
>       1,682,782Stock-based compensation
>       902,370
>       354,102Options exercised
>       (16,985)
>       (27,913)Balance, end of year
>       2,894,356
>       2,008,971

1. Commitments

> The Company is subject to pay royalties on the production of the Beaufor
>   Mine and on that of other properties if they are brought into commercial
>   production.

14

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|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Contingency

> Since the signing of an agreement in July 2001 with the
>   Quebec Ministry of Natural Resources, the amounts of government assistance
>   recorded in earnings and as a reduction of the cost of property, plant and
>   equipment are $2,125,756 and $574,244, respectively. This government
>   assistance may become payable in three annual equal installments of $900,000
>   on July 31, 2005, 2006 and 2007, if the Beaufor mine is in operation during
>   the last twelve months preceeding the date of the repayment and if the annual
>   average daily price per ounce of gold on "AMFIX" at the London exchange is
>   equal to or greater than US$325. It is not currently possible to determine the
>   amount that may become payable and, accordingly, no amount is recorded in
>   these financial statements.

1. Financial
  instruments and risk management

> The value of precious metals exposes the Company to
>   commodity price fluctuations and to foreign currency exchange risks. The
>   Company manages its exposure to these risks through the use of derivative
>   financial instruments and gold commodity contracts.
>   The Board of Directors approves all policies concerning the
>   use of derivative financial instruments and commodity contracts. The Company
>   does not enter into any financial instruments or derivative financial
>   instruments for trading or speculative purposes.
>   a) Foreign exchange risk 
>     The Company realizes a significant portion of its
>     revenues in U.S. dollars and enters into various types of foreign exchange
>     contracts in managing its foreign exchange risk. As at December 31, 2004 and
>     2003, the Company did not have any forward exchange contracts.
>     b) Commodity price risk
>     
>     For its gold production, the Company reduces its risk in
>     case of a decrease in the gold price through the use of forward sales
>     contracts and put and call options. As at December 31, 2004 and 2003, the
>     Company did not have any forward sales contracts.
>     c) Credit risk
>     
>     Financial instruments that expose the Company to market
>     risk and concentrations of credit risk consist primarily of cash and cash
>     equivalents, short-term investments, accounts receivable, forward contracts
>     and option contracts for currencies and gold. The Company 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. The Company is
>     exposed to credit risk in the event of nonperformance by counterparties in
>     connection with its currency and gold forward option contracts. The Company
>     does not obtain any security to support financial instruments subject to
>     credit risk but mitigates this risk by dealing only with a diverse group of
>     financially sound counterparties and, accordingly, does not anticipate loss
>     for non-performance. The Company continually monitors the market risk of its
>     hedging activities.
>     d) The fair value of
>     financial instruments
>     The Company owns and assumes assets and liabilities such
>     as cash and cash equivalents, short-term investments, accounts receivable,
>     as well as accounts payable and accrued charges. The fair value of these
>     financial assets and liabilities approximates their book value as these
>     items will be realized or paid within one year.

15

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|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Segmented
  information

> The Company operates gold mines at different sites in
>   Quebec and Newfoundland. These sites are managed separately given their
>   different locations. The Company assesses the performance of each segment
>   based on earnings (loss) before other items. Accounting policies for each
>   segment are the same as those used for the preparation of the consolidated
>   financial statements:

|2004                                               |            |              | Corporate   |           
|-------------------------------------------------- | ---------- | ------------ | ----------- | ----------
|                                                   | Quebec     | Newfoundland | and other   | Total     
|                                                   | $          | $            | $           | $         
|                                                   |            |              |             |           
|Revenues                                           | 29,678,614 | 9,195,356    | 767,437     | 39,641,407
|Mining operation                                   |            |              |             |           
|and other expenses                                 | 22,136,003 | 5,629,770    | 2,928,606   | 30,694,379
|Exploration and evaluation of projects             | 1,101,766  | 1,438,462    | 935,111     | 3,475,339 
|Depreciation and depletion                         | 1,155,016  | 2,243,898    | 149,373     | 3,548,287 
|                                                   |            |              |             |           
|Earnings (loss) before other items                 | 5,285,829  | (116,774)    | (3,245,653) | 1,923,402 
|                                                   |            |              |             |           
|                                                   |            |              |             |           
|Acquisition of property, plant and
      equipment | 1,951,062  | -            | 10,673,516  | 12,624,578
|                                                   |            |              |             |           
|                                                   |            |              |             |           
|Current assets                                     | 5,945,879  | 181,102      | 24,573,095  | 30,700,076
|Property, plant and equipment                      | 5,325,418  | -            | 18,478,300  | 23,803,718
|Future mining and income taxes                     | 863,877    | -            | 825,883     | 1,689,760 
|                                                   |            |              |             |           
|Total assets                                       | 12,135,174 | 181,102      | 43,877,278  | 56,193,554
|                                                   |            |              |             |           
|                                                   |            |              |             |           
|                                                   |            |              |             |           
|2003                                               |            |              | Corporate   |           
|                                                   | Quebec     | Newfoundland | and other   | Total     
|                                                   | $          | $            | $           | $         
|                                                   |            |              |             |           
|Revenues                                           | 30,053,401 | 19,161,730   | 1,093,910   | 50,309,041
|Mining operation                                   |            |              |             |           
|and other expenses                                 | 19,481,450 | 12,027,015   | 2,591,074   | 34,099,539
|Exploration and evaluation of projects             | 1,202,249  | 703,200      | 1,720,658   | 3,626,107 
|Depreciation and depletion                         | 899,155    | 3,825,046    | 93,767      | 4,817,968 
|                                                   |            |              |             |           
|Earnings (loss) before other items                 | 8,470,547  | 2,606,469    | (3,311,589) | 7,765,427 
|                                                   |            |              |             |           
|                                                   |            |              |             |           
|Acquisition of property, plant and
      equipment | 1,936,366  | -            | 7,339,488   | 9,275,854 
|                                                   |            |              |             |           
|                                                   |            |              |             |           
|Current assets                                     | 5,182,808  | 1,473,211    | 29,479,887  | 36,135,906
|Security deposits                                  | 1,237,061  | 30,000       | 19,000      | 1,286,061 
|Property, plant and equipment                      | 4,431,964  | 2,285,634    | 8,221,180   | 14,938,778
|Future mining and income taxes                     | 424,299    | -            | 710,153     | 1,134,452 
|                                                   |            |              |             |           
|Total assets                                       | 11,276,132 | 3,788,845    | 38,430,220  | 53,495,197

16

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|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Segmented
  information (continued)

> 2002
>       
>       
>       CorporateQuebec
>       Newfoundland
>       and other
>       Total$
>       $
>       $
>       $(Restated)Revenues
>       27,671,858
>       23,190,787
>       913,165
>       51,775,810Mining operationand other expenses
>       14,283,067
>       12,175,856
>       3,736,911
>       30,195,834Exploration and evaluation of projects
>       809,014
>       400,659
>       2,517,927
>       3,727,600Depreciation and depletion
>       2,457,203
>       4,281,450
>       73,759
>       6,812,412Earnings (loss) before other items
>       10,122,574
>       6,332,822
>       (5,415,432)
>       11,039,964Acquisition of property, plant and
>       equipment
>       1,293,246
>       62,854
>       738,988
>       2,095,088Current assets
>       3,970,083
>       1,554,770
>       30,327,946
>       35,852,799Security deposits
>       -
>       -
>       19,000
>       19,000Property, plant and equipment
>       3,394,752
>       6,110,680
>       661,469
>       10,166,901Total assets
>       7,364,835
>       7,665,450
>       31,008,415
>       46,038,700

17

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|RICHMONT MINES INC.                                   
|------------------------------------------------------
|Notes to Consolidated Financial Statements (continued)
|Years ended December 31, 2004, 2003 and 2002          
|(in Canadian dollars)                                 

1. Effect of applying
  United States generally accepted accounting principles

> These consolidated financial statements have been prepared
>   in accordance with Canadian generally accepted accounting principles (GAAP).
>   Had these consolidated financial statements been prepared in accordance with
>   United States generally accepted accounting principles (U.S. GAAP), the effect
>   on net earnings would have been as follows:
>   2004
>       2003
>       2002$
>       $
>       $Net earnings reported under Canadian
>       GAAP
>       732,096
>       5,034,541
>       7,072,568Add (deduct):Differences in accounting
>       related to forward contracts a)
>       -
>       254,153
>       (254,153)Differences in accounting
>       related to investments b)
>       (3,100)
>       540,000
>       -Flow-through shares c)
>       (59,053)
>       -
>       -Income taxes d)
>       (56,504)
>       (128,630)
>       86,640613,439
>       5,700,064
>       6,905,055Cumulative effect of changes in accountingpolicies e)
>       -
>       (880,398)
>       2,013,250Net earnings reported under U.S. GAAP
>       613,439
>       4,819,666
>       8,918,305Net earnings per share under U.S. GAAP:Basic
>       0.04
>       0.30
>       0.58Diluted
>       0.04
>       0.29
>       0.56Shareholders' equity reported under
>       Canadian GAAP
>       45,411,535
>       43,607,759Differences in accounting
>       related to investments b)
>       536,900
>       540,000Income taxes d)
>       (98,494)
>       (41,990)Flow-through shares c)
>       (178,000)
>       (140,947)Shareholders' equity reported under U.S.
>       GAAP
>       45,671,941
>       43,964,822a) The standards on the
>   designation and the documentation of hedging transactions under U.S. GAAP are
>   different than those applicable in Canada prior to January 1, 2004. When hedge
>   accounting is not applicable, U.S. GAAP requires that the changes in the fair
>   value of the financial instruments be recorded in the income statement of the
>   related year, and taken into account in the calculation of net earnings.
>   b) Under U.S. GAAP, short-term investments
>   classified as trading securities must be recorded at fair value and all
>   changes in the value must be accounted for in the income statement.
>   c) Under U.S. GAAP, the premium
>   paid on flow-through shares issued shall be recognized in the liabilities when
>   these shares are issued; under GAAP in Canada, the tax effect of the
>   renouncement to the deductibility of exploration expenses by the Company is
>   charged to shareholders' equity upon the date of the renouncement.
>   d) These amounts represent the tax impacts
>   relating to the above a), b) and c) adjustments.
>   e) Under U.S. GAAP, the cumulative effect of
>   changes in accounting policies must be recorded in the income statement of the
>   year during which the modifications are applied.

1. Comparative figures

> Certain comparative figures provided for fiscal years 2003 and 2002 have
>   been reclassified to conform with the presentation adopted for the fiscal year
>   ended December 31, 2004.

18

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