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Minera Alamos Inc.: DEEP DIVE

Minera Alamos has the assets and team to realize its Mexican gold mine aims

At the Santana project, the group s now awaiting final permit approval for commercial operations
A gold pour
OVERVIEW: MAI The Big Picture
Minera Alamos is looking to produce gold in Mexico
  • Three high-quality development assets in Mexico with two at permitting stage
  • Further exploration potential
  • Strong management with operational expertise in heap leach mining and proven mine builders
  • Cornerstone partner in Osisko Gold Royalties

What does Minera Alamos do?

The firm is advancing three development projects in Mexico - Santana is located in Sonora state, while the La Fortuna and Guadalupe De Los Reyes properties  are in Durango.

Santana is the group's "near term production opportunity" and has seen a successful bulk test mining program. The firm is now awaiting  final permit approval for commercial operation at the open-pit heap leach project.

Minera has also now completed plans for second phase exploration at Santana, which  includes over 10,000 m (meters) of drilling and is expected to run throughout the year, to include expansion drilling at the Nicho and Nicho Norte deposits and exploration drilling at a number of high priority targets.

The company expects to make a construction decision at Santana this year.

At La Fortuna,  a preliminary economic assessment (PEA) released last August demonstrated robust project economics including an after-tax internal rate-of-return of 93% and an all-in sustaining cost (AISC) of $440 per ounce.

The net present value of the starter pit, with a discount of 7.5%, was put at US$69.8M (starter pit). The report envisages a simple open-pit mine with initial 40-50,000  ounce annual production and a low CAPEX start-up.

The project already has 300,000 ounces of resource defined. A 2,000 tpd (tonnes per day) mill was acquired in 2017 and a 1,100 tpd starter operation is contemplated, which could be expanded to 2,000 tpd.

Minera has received notification confirming the completion of the technical review phase for the change of land use to construct mining facilities at the site, allowing initial groundworks to begin, and is now waiting for the next stage of the permit process.

At Guadalupe, Minera plans a heap leach project like Santana and plans for a PEA, permit submission in the first half of 2019. The firm has said that the  project could start generating at around the 40,000 ounces a  year mark.

The site is in a significant regional gold system with estimated historical production of 500  to 600 ,000 ounces gold and more than 40 million ounces of silver.

Minera plans to develop Santana first, followed by La Fortuna and then Guadalupe De Los Reyes, with cashflow from Santana used to advance the other two.

Strong team

The Minera Alamos team, headed up by chief executive Darren Koningen and president Doug Ramshaw, is trying to replicate the success of junior Castle Gold, which advanced its El Castillo mine in Durango state from generating around 30,000 ounces a year to 75,000 ounces of the yellow metal, before the group was sold nine years ago for C$130mln (and El Castillo is now generating around 100,000 oz annually).

Koningen was vice president of operations at Castle Gold and worked alongside Chester Miller, a huge figure in mining and the pioneer of heap leaching, to advance El Castillo.

Koningen and Miller are now on the board of Minera Alamos – a firm, which underwent a transformational shift through its merger with Corex Gold (CVE:CGE), where Ramshaw was CEO.

The union added Corex's Santana gold project to Minera's La Fortuna project, the Guadelupe De Los Reyes project and the Los Verdes property (which, significantly lies directly north of Santana and thus consolidates the land position).

Mexico is mining friendly

Minera Alamos understands the jurisdiction.  According to an annual survey of mining companies in 2017, ranked on a country versus country basis against the rest of Central and Latin America, Mexico came third for investment attractiveness.

It is said to have a transparent and structured permitting process, typically between six and 12 months from submission.

Inflection points

Santana drilling results and permit news

A construction decision

More on permitting at La Fortuna

Exploration to expand current resource at Guadalupe de Los Reyes

What the president said: 

In November last year Doug Ramshaw said the goals going into 2019 was to "continue to de-risk these projects" and in doing so  de-risk the company for the shareholders.



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Minera Alamos Inc. Timeline

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