Alamos predicts gold reserve increase in Mexico
Alamos Gold Inc. [AGI-TSX, NYSE] has reported one of the best results from drilling at its Puerto Del Aire (PDA) project in Sonora, Mexico.
PDA is a higher-grade underground deposit adjacent to the main pit at the company’s Mulatos mine, and consists of five zones, including PDA1, PDA2, Gap, Victor and Estrella.
The company said high-grade gold mineralization has been extended within a 200-metre gap between mineral reserves and resources at PDA1 and PDA2 as drilling continues to close the gap between the two zones.
The latest results include the best hold drill during a 2022 program and one of the best holes drilled to date at PDA. It returned 33.40 g/t gold (11.48 g/t cut) over 25.95 metres (true width).
In February, 2022, Alamos announced an initial mineral reserve at PDA of 428,000 ounces (2.85 million tonnes of grade 4.67 g/t gold. In addition to the mineral reserves, the company also announced a indicated resource of 124,000 ounces (0.77 million tonnes of grade 5.05 g/t gold.
“We expect these results to drive a significant increase in mineral reserves at PDA in our year end update to be released later this month,’’ said Alamos President and CEO John McCluskey. “With the deposit open in multiple directions, and an expected exploration program planned at Mulatos in 2023, we expect this growth to continue,’’ he said.
McCluskey said the latest results will be included into an updated development plan to be released in the second half of 2023.
“Given PDA’s higher grades and proximity to the Mulatos pit, we see excellent potential for this to be another low-cost, high-return project, further extending the mine life at Mulatos,’’ he said.
Over the past 18 years, Mulatos has produced 2.5 million ounces of gold, while maintaining a similar reserve life today as it had in 2005. “Given our ongoing exploration success at PDA, and the potential within the District, we expect this trend to continue,’’ McCluskey said.
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.
Since April, 2021, 92 drill holes covering 27,117 metres have been completed at PDA which were not included in the 2021 year-end mineral reserve and resource. The exploration at Mulatos is expected to ramp up significantly in 2023 with $17 million budgeted. This includes $4 million budgeted at PDA with 16,000 metres of drilling focused on expanding higher-grade mineral reserves and resources.
On February 1, 2023, Alamos Gold shares closed at $14.93. The shares are currently trading in a 52-week range of $15.54 and $8.31.