Phase four expansion considered
Alamos is considering a fourth phase expansion at its Island Gold operation in Ontario, Canada in the future that would take its production up towards 500,000ozpa."A fourth phase could look to increase the Magino mill throughout to 20,000tpd and possibly increase underground throughput from 2400tpd to 3000tpd," Alamos Gold chief executive John McCluskey told Mining Journal.
This could see production at Magino potentially double from 100,000ozpa to 200,000ozpa, with the Island Gold mine to produce 300,000ozpa. An expansion study is due to be delivered towards the end of 2025. The phase three expansion currently underway at Island Gold will increase underground operations to about 300,000ozpa in 2026, or 400,000ozpa, including the ounces from Magino, which it acquired with Argonaut Gold in July.Alamos already benefits from synergies between Island and Magino, which will be reported as a single operation going forward. Initial benefits include not having to do a tailings storage facility lift at Island this year and postponing a mill expansion. The company anticipates $515 million in synergies.The company is replacing the Magino mill secondary and primary crushers, which will increase the throughput capacity to 11,500 tpd. "That will allow us to process the ore for both projects. The union of Island Gold and Magino will facilitate exploration, where the company sees potential to expand the Magino pit to the east, which was previously constrained by the boundary between the two properties. "Now that boundary no longer exists, there's drilling underway that will see that pit expanded in the direction of what was formerly Alamo's ground. It is very likely that that's going to continue to grow," said McCluskey.AISC spikeHaving closed the acquisition of Argonaut Gold for its Magino mine in July, Alamos saw a temporary spike in its all-in sustaining costs in the September quarter, which rose 30% from the June quarter to $1425/oz. This included transaction costs and housekeeping to clean the financial instruments that came with the acquisition, which included a hedge book, term loan, revolving credit facility and convertible debentures."When we acquired Argonaut, they were in pretty dire financial circumstances. We had to pay off the outstanding liabilities that had been accruing. It all comes in in that quarter and that the accountants like to call a noisy quarter. Most of those things were one-offs. … Effectively, our costs will come back down to about $1100/oz, McCluskey said.Drilling at Island Gold continues to grow resources and more than replace depletion. Total reserves are currently 11.3Moz. The grade is also increasing. "We are going to see a big growth jump by virtue of the drilling we've been doing on the Island Gold side of things. This year we're also expecting the grade to go up again, the third time the grade has increased since we've been exploring it. As we've been going to depth, the grade has been getting higher," McCluskey said.Shares in Alamos Gold have increased in value by 36% this year. They are trading at $18.34, valuing the company at $7.7 billion.
Island Gold Magino Argonaut Gold Alamos Gold
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