Alamos Gold said on Tuesday it will be proceeding with a 2,000 tonnes per day expansion after a positive Phase III Expansion Study conducted on its Island Gold mine, located in Ontario, Canada.
The company forecasts an average annual gold production of 236,000 ounces per year starting in 2025 upon completion of the shaft.
The total cash costs will be $403 per ounce of gold and mine-site all-in sustaining costs of $534 per ounce starting in 2025, a 19% and 30% decrease from the mid-point of previously issued 2020 guidance, respectively.
The company’s CEO said the study shows the benefit of acquiring Island Gold.
“Island Gold has been a tremendous acquisition for Alamos Gold. We acquired Island Gold in 2017 at a cost of approximately $600 million when it had 1.8 million ounces of Mineral Reserves and Resources. This high-grade deposit has more than doubled to 3.7 million ounces and we expect further growth yet. The Phase III Expansion Study showcases the growing value of Island Gold. Already one of the most profitable mines in Canada, the expansion will increase production, lower costs, and make this operation even more profitable. The expansion will also best position the operation to benefit from additional exploration success,” said John A. McCluskey, President and Chief Executive Officer.
Alamos operates mines in Mexico and Canada. It was formed after the merger of Alamos Minerals and National Gold.