Alamos Gold Inc. [AGI-TSX, NYSE] on Tuesday said drilling has extended high-grade gold mineralization beyond current estimated mineral reserves and resources at the Puerto Del Aire deposit within its Mulatos District operation in Mexico.
Alamos is a Canadian-based intermediate gold producer with diversified production from four operating mines in North America, including the Young-Davidson, and Island Gold mines in northern Ontario, and the Mulatos and El Chanate mines in Sonora Mexico.
Puerto Del Aire is a higher-grade underground deposit, adjacent to the main Mulatos pit, and consists of five zones, including PDA1, PDA2, Gap, Victor, and Estrella.
In February, 2022, Alamos announced an initial mineral reserve estimate at Puerto Del Aire of 428,000 ounces (2.85 million tonnes of grade 4.67 g/t gold. At that time it said measured and indicated resources stood at 124,000 ounces (77,000 tonnes of grade 5.05 g/t gold).
On Tuesday, Alamos said gold mineralization has been extended beyond the existing reserves and resources across multiple mineralized zones, including within a 200- metre gap between PDA1 and PDA2. This includes multiple intercepts that are well above the current reserve grade.
Highlights include 31.97 g/t gold (11.80 g/t cut) over 12.90 metres at Victor Gap.
“These exploration results highlight the significant potential to add higher-grade mineral reserves and resources at Puerto Del Aire,’’ said Alamos President and CEO John A. McCluskey. “They are also a further demonstration of the potential within the Mulatos District and our long-term track record of exploration success,’’ he said.
Mulatos begin production in 2005 with a mine life of approximately seven years. Seventeen years later, the mine has produced 2.5 million ounces of gold and still had a six-year mineral reserve life as of the end of 2021.
Alamos expects Puerto Del Aire will extend that life further with excellent potential to be another low-cost, high return project.
Meanwhile, four rigs continue to drill at Puerto Del Aire. The company said the latest results will be incorporated into a 2022 mineral reserve and resource update to be released in February, 2023. This will be used as the basis for a new development plan for Puerto Del Aire, which is expected to be completed in the third quarter of 2023.
On November 14, 2022, Alamos shares closed at $11.88 and currently trade in a 52-week range of $11.97 and $8.30.
Earlier this year, Alamos repurchased a 3% net smelter return (NSR) royalty on its Island Gold mine in northern Ontario from a privately-held company for US$54 million in cash.
The royalty is located on four patented claims, which cover about 900,000 ounces of reserves or about 71% of the total Island reserves.