Alamos Gold Inc. (
TSX:AGI;
NYSE:AGI) (“Alamos” or the “Company”) today reported
results from the updated Feasibility Study (“2023 Study”) conducted
on the Lynn Lake project (“Lynn Lake”), located in Manitoba,
Canada. The 2023 Study replaces the previous Feasibility Study
completed in 2017 (“2017 Study”) and incorporates a 44% larger
Mineral Reserve and 14% increase in milling rates to 8,000 tonnes
per day (“tpd”) supporting a larger, longer-life, low-cost
operation.
The 2023 Study has been updated to reflect the current costing
environment, as well as a significant amount of additional
engineering, on-site geotechnical investigation work, and
requirements outlined during the permitting process with the
Environmental Impact Statement ("EIS”) granted in March 2023. All
amounts are in United States dollars, unless otherwise stated.
2023 Study Highlights:
Higher production: average annual gold production of
207,000 ounces over the first five years and 176,000 ounces over
the initial 10 years
- The 10-year average represents a 23% increase over the annual
average of 143,000 ounces in the 2017 Study
Low-cost profile: average mine-site all-in sustaining
costs of $699 per ounce over the first 10-years and $814 per ounce
over the life of mine
- Average mine-site all-in sustaining costs decreased 6% from the
2017 Study over the initial 10-years with economies of scale
provided by the larger operation, and higher average grades, more
than offsetting cost inflation
Larger, longer-life operation supported by 44% larger
Mineral Reserve with further upside potential
- 44% larger Mineral Reserve totaling 2.3 million ounces grading
1.52 grams per tonne of gold (“g/t Au”) (47.6 million tonnes
(“mt”))
- 17-year mine life, up from 10 years in the 2017 Study
- Life of mine production of 2.2 million ounces, a 46% increase
from 1.5 million ounces reported in 2017
Modest increase in capital intensity with larger
operation and 46% increase in life of mine production partly
offsetting inflation
- Initial capital of $632 million, and life of mine capital
including sustaining capital and reclamation of $832 million,
increased from the 2017 Study reflecting inflation and scope
changes with the larger operation and Mineral Reserve
- Total life of mine capital of $381 per ounce increased 17% from
$325 per ounce in the 2017 Study with the larger Mineral Reserve
and economies of scale partly offsetting the significant
industry-wide capital inflation experienced since 2017
Project de-risked given advanced level of engineering,
additional geotechnical work, and EIS approval
- Detailed engineering 55% complete; basic engineering 100%
complete
- EIS approval and Provincial licenses received in March 2023
with requirements outlined through the permitting process
incorporated into the 2023 Study
- Extensive geotechnical drilling, test pits, and ground
penetrating radar employed across the project area including the
mill, open pits and tailings locations providing higher degree of
confidence around required earthworks, tailings design and mine
plan
Attractive economics with significant long-term
exploration upside potential
- After-tax net present value (“NPV”) (5%) of $428 million (base
case gold price assumption of $1,675 per ounce and USD/CAD foreign
exchange rate of $0.75:1)
- After-tax internal rate of return (“IRR”) of 17%
- After-tax NPV (5%) of $670 million, and an after-tax IRR of
22%, at current gold prices of approximately $1,950 per ounce
- Payback of less than four years at the base case gold price of
$1,675 per ounce and less than three years at current gold
prices
Significant near-mine and regional exploration upside
potential
- The Lynn Lake project encompasses most of the east-trending,
125 km long, Lynn Lake Greenstone Belt in northwestern Manitoba,
with a total of 58,000 hectares of mineral tenure, representing
significant exploration potential, including:
- Gordon deposit: higher-grade gold mineralization extended
outside of Mineral Reserves and Resources in the northeastern
extent of the planned Gordon pit, in an area modeled as waste in
the 2023 Study
- Burnt Timber and Linkwood: potential for smaller, higher-grade
Mineral Resource that could be trucked and processed at the planned
MacLellan mill later in the mine life
- Regional targets: extensive pipeline of highly prospective
exploration targets at various stages of exploration across the
Lynn Lake greenstone belt. This includes the Maynard and Tulune
targets where ongoing drilling continues to intersect gold
mineralization. Both targets are within trucking distance of the
MacLellan mill
Low Greenhouse Gas (“GHG”) emission
intensity
- 18% decrease in GHG emissions per ounce from the 2017 Study
reflecting the incorporation of electric shovels and drills at
MacLellan, and productivity improvements with the larger
operation
- 58% lower emissions per ounce produced than the industry
average. The project will be connected to Manitoba’s electric grid,
of which nearly all electricity is produced from clean, renewable
power, supporting the company-wide target of a 30% reduction in
absolute GHG emissions by 2030
Fully funded growth
- As outlined previously, the Company does not anticipate
spending any significant capital on developing the Lynn Lake
project until the Phase 3+ Expansion at Island Gold is well
advanced
- With $189 million of cash as of June 30, 2023, no debt, strong
ongoing free cash flow generation, and significant free cash flow
growth expected from Island Gold in 2026 and beyond, the Company is
well positioned to fund development of Lynn Lake internally
“The 2023 Study has confirmed Lynn Lake as a long-life, low-cost
project in Canada, with attractive economics, and significant
upside potential. Good projects are becoming increasingly rare,
especially within top jurisdictions like Canada, highlighting the
attractiveness of Lynn Lake. We have completed an extensive amount
of additional engineering, permitting and other work over the last
several years to de-risk the project and assess the exploration
potential. We’ve increased Mineral Reserves by 44% since the 2017
Study, and as outlined in the exploration update earlier this week,
we see excellent potential for that growth to continue. This
includes the Burnt Timber and Linkwood deposits that were not
factored into the 2023 Study, and a number of other high-value
regional targets where we continue to intersect gold mineralization
in proximity to the planned MacLellan mill,” said John A.
McCluskey, President and Chief Executive Officer.
“Our current priority is the Phase 3+ Expansion at Island Gold
with Lynn Lake an important part of our strong longer-term outlook.
Through Lynn Lake, Island Gold, and Young-Davidson, we have three
high-quality assets that can support over 650,000 ounces of annual
production in Canada, at all-in sustaining costs below $1,000 per
ounce over the long-term,” Mr. McCluskey added.
2023 Feasibility Study Highlights |
|
Production |
|
Mine life (years) |
16.5 |
|
|
Total gold production (000 ounces) |
2,185 |
Total silver production (000 ounces) |
2,623 |
|
|
Average annual gold production |
|
Years 1 to 5 (000 ounces) |
207 |
Years 1 to 10 (000 ounces) |
176 |
Years 1 to 16 (000 ounces) |
135 |
|
|
Total ore mined (000 tonnes) |
47,607 |
Total waste mined (000 tonnes) |
324,215 |
Total material mined (000 tones) |
371,822 |
Total waste-to-ore ratio |
6.81 |
|
|
Average gold grade (grams per tonne) |
1.52 |
Average silver grade (grams per tonne) |
3.57 |
|
|
Gold Recovery (%) |
93.7% |
Silver Recovery (%) |
48.0% |
|
|
Average mill throughput (tpd) |
8,000 |
|
|
Operating Costs |
|
Total cost per tonne of ore (C$)1 |
$44.21 |
|
|
Total cash cost (per ounce sold)2,3 |
$722 |
Mine-site all-in sustaining cost (per ounce sold)2,3 |
|
Years 1 to 5 (per ounce sold) |
$629 |
Years 1 to 10 (per ounce sold) |
$699 |
Years 1 to 17 (per ounce sold) |
$814 |
|
|
Capital Costs (millions) |
|
Initial capital expenditure |
$632 |
Sustaining capital expenditure |
$174 |
Reclamation costs |
$27 |
Total capital expenditure – life of mine |
$832 |
Total capital expenditure (per ounce sold) – life of mine3 |
$381 |
|
|
Base Case Economic Analysis: $1,675 per ounce Gold
Price(USD/CAD foreign exchange rate of
$0.75:1) |
|
IRR (after-tax) |
17% |
|
|
NPV @ 0% discount rate (millions, after-tax) |
$875 |
NPV @ 5% discount rate (millions, after-tax) |
$428 |
Payback (years) |
3.7 |
|
|
Economic Analysis at $1,950 per ounce Gold Price
(USD/CAD foreign exchange rate of $0.75:1) |
|
IRR (after-tax) |
22% |
|
|
NPV @ 0% discount rate (millions, after-tax) |
$1,240 |
NPV @ 5% discount rate (millions, after-tax) |
$670 |
Payback (years) |
2.7 |
|
|
- Total unit cost per tonne (“t”) of ore
includes royalties and silver as a by-product credit
- Total cash costs and mine-site all-in
sustaining costs include royalties and silver as a by-product
credit
- Please refer to the Cautionary Notes on
non-GAAP Measures and Additional GAAP Measures
Mineral Reserves and Resources
An updated Proven and Probable Mineral Reserve totaling 47.6 mt,
grading 1.52 g/t Au and 3.57 g/t Ag, containing 2.3 million ounces
of gold and 5.5 million ounces of silver has been declared at Lynn
Lake. This represents a 44% increase from the 1.6 million ounces
included in the 2017 Study, reflecting the successful conversion of
Measured, Indicated and Inferred Mineral Resources at the Gordon
and MacLellan deposits, and 13% increase from the end of 2022
reflecting the higher gold price assumption. Only Mineral Reserves
have been incorporated into the 2023 Study mine plan and economic
analysis.
Mineral Reserves – Effective as of June 30,
2023
|
Classification |
Tonnage (000’s) |
Au Grade (g/t) |
Ag Grade (g/t) |
Au Oz Contained(000’s) |
Ag Oz Contained(000’s) |
MacLellan |
Proven |
16,498 |
1.66 |
5.31 |
883 |
2,815 |
Probable |
23,240 |
1.12 |
3.55 |
834 |
2,650 |
Proven & Probable |
39,738 |
1.34 |
4.28 |
1,717 |
5,464 |
Gordon |
Proven |
3,502 |
2.63 |
- |
296 |
- |
Probable |
4,370 |
2.27 |
- |
319 |
- |
Proven & Probable |
7,873 |
2.43 |
- |
615 |
- |
Total Lynn Lake |
Proven |
20,000 |
1.83 |
4.38 |
1,179 |
2,815 |
Probable |
27,610 |
1.30 |
2.98 |
1,153 |
2,650 |
Total Proven and Probable |
47,610 |
1.52 |
3.57 |
2,332 |
5,464 |
- Mineral Reserves reported are
consistent with the CIM Definition Standards for Mineral Resources
and Mineral Reserves.
- Mineral Reserves are reported to a
cut-off grade of 0.796 Au g/t at Gordon and 0.355 Au g/t for
MacLellan.
- The cut-off grades are based on a
gold price of US$1,250/oz Au at Gordon, US$1,600/oz Au at
MacLellan.
- Silver is not used in the cut-off
grade calculation.
- Metallurgical Au recovery is 92.4%
for Gordon and a feed grade-based formula for MacLellan.
- Totals may not add up due to
rounding.
- Chris Bostwick, FAusIMM, Senior Vice President, Technical
Services is the Qualified Person for the Mineral Reserve estimate.
Mr. Bostwick is a Qualified Person within the meaning of Canadian
Securities Administrator's National Instrument 43-101 ("NI
43-101").
Mineral Resources for the Gordon and MacLellan deposits detailed
below have not been included in the mine plan but represent
potential upside through their incorporation into the mine plan
with higher metal prices and additional infill drilling.
Open Pit Mineral Resources – Effective as of June 30,
2023
MacLellan |
|
Category |
Tonnage (000’s) |
Au Grade (g/t) |
Ag Grade (g/t) |
Au oz Contained (000’s) |
Ag oz Contained (000’s) |
|
Measured |
786 |
1.63 |
3.09 |
41 |
78 |
|
Indicated |
3,200 |
1.52 |
3.44 |
156 |
354 |
|
Measured & Indicated |
3,986 |
1.54 |
3.37 |
197 |
432 |
|
Inferred |
4,192 |
0.98 |
1.49 |
133 |
201 |
|
|
|
|
|
|
|
|
Gordon |
|
Category |
Tonnage (000’s) |
Au Grade (g/t) |
Ag Grade (g/t) |
Au oz Contained (000’s) |
Ag oz Contained (000’s) |
|
Measured |
571 |
0.84 |
- |
15 |
- |
|
Indicated |
1,286 |
1.2 |
- |
50 |
- |
|
Measured & Indicated |
1,857 |
1.09 |
- |
65 |
- |
|
Inferred |
51 |
0.98 |
- |
2 |
- |
|
|
|
|
|
|
|
|
Total |
|
Category |
Tonnage (000’s) |
Au Grade (g/t) |
Ag Grade (g/t) |
Au oz Contained (000’s) |
Ag oz Contained (000’s) |
|
Measured |
1,357 |
1.29 |
1.79 |
56 |
78 |
|
Indicated |
4,486 |
1.43 |
2.45 |
206 |
354 |
|
Measured & Indicated |
5,843 |
1.4 |
2.3 |
262 |
432 |
|
Inferred |
4,243 |
0.98 |
1.47 |
134 |
201 |
|
- Mineral Resources reported are
consistent with the CIM Definition Standards for Mineral Resources
and Mineral Reserves.
- The Mineral Resources are reported at
an assumed gold price of US$1,600/oz, and an assumed silver price
of US$23.00/oz.
- Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability. There is
no certainty that all or any part of the Mineral Resources
estimated will be converted into Mineral Reserves.
- Open pit Mineral Resources are stated
as contained within a potentially economic open pit above a 0.355
g/t AuEq cut-off for MacLellan and 0.621 g/t Au for Gordon and
includes external dilution at zero grade outside the constraining
Au solids.
- Contained Au and Ag ounces are in-situ
and do not include metallurgical recovery losses.
- Mineral Resources are exclusive of
Mineral Reserves.
- Totals may not add up due to
rounding.
-
Jeffrey Volk, CPG, FAusIMM, Director of Reserves and Resources for
Alamos Gold Inc is the Qualified Person for the Mineral Resource
estimate. Mr. Volk is a Qualified Person within the meaning of
Canadian Securities Administrator's National Instrument 43-101 ("NI
43-101").
Economic Analysis
Lynn Lake’s estimated base case after-tax IRR is 17% and
after-tax NPV (5%) is $428 million assuming a gold price of $1,675
per ounce and USD/CAD foreign exchange rate of $0.75:1. Payback is
expected to be achieved in 3.7 years under the base case
scenario.
Assuming spot gold prices of approximately $1,950 per ounce, the
after-tax NPV (5%) increases to $670 million and after-tax IRR
increases to 22%, with the payback decreasing to 2.7 years.
Lynn Lake’s economics were estimated as part of the Feasibility
Study process and incorporate only Proven and Probable Mineral
Reserves. The project economics are sensitive to metal price
assumptions, foreign exchange, and input costs as detailed in the
tables below.
Lynn Lake After-Tax NPV (5%) Sensitivity ($
Millions)
|
-10% |
-5% |
Base Case |
5% |
10% |
Gold Price |
$282.4 |
$352.2 |
$427.9 |
$503.3 |
$576.8 |
Canadian Dollar |
$535.9 |
$482.8 |
$427.9 |
$372.5 |
$316.1 |
Capital Costs |
$476.3 |
$452.8 |
$427.9 |
$403.8 |
$379.9 |
Operating Costs |
$494.5 |
$462.1 |
$427.9 |
$394.5 |
$361.2 |
Lynn Lake After-Tax NPV (5%) and IRR Sensitivity to Gold
Price
Gold Price ($/oz) |
After-Tax NPV5%
($M) |
After-Tax IRR (%) |
$1,500 |
$275.6 |
12.6% |
$1,600 |
$360.3 |
14.8% |
$1,675 |
$427.9 |
16.6% |
$1,750 |
$495.8 |
18.2% |
$1,850 |
$583.5 |
20.3% |
$1,950 |
$670.3 |
22.4% |
Project Overview
The Lynn Lake project is comprised of the Gordon and MacLellan
deposits which are located approximately 30 kilometres (“km”) apart
(straight line). The two deposits will be mined using conventional
open pit mining methods with a centralized processing plant and
tailings management facility to be located at MacLellan.
The 2023 Study includes a number of scope changes from the 2017
Study to support a larger operation and 44% increase in Mineral
Reserves. The scope changes include a larger mobile fleet to
support the higher mining rates, and a larger mill with a 14%
increase in throughput rates to 8,000 tpd. The larger operation and
Mineral Reserve support a significantly longer mine life of 17
years and a 23% increase in average annual production over the
first 10 years.
Project
Significantly De-Risked Given Advanced Level of Engineering,
Permitting and other Geotechnical Work Completed to
Date
Since the 2017 Study, a significant amount of additional work
has been completed and progress made on the Lynn Lake project,
which has significantly de-risked the project and provided a high
degree of confidence in the capital and operating cost estimates.
This includes:
- Basic engineering 100% complete with detailed engineering
underway and 55% complete
- Geotechnical investigations, including drilling and test
pitting, to support designs for the MacLellan and Gordon pits,
waste stockpiles, tailings dam, process plant, site access roads,
and water management infrastructure
- Geophysical (Ground Penetrating Radar) investigations completed
to map bedrock depth beneath the process plant infrastructure
- Mill relocated to reduce the haulage distance, allow site
access via the existing road, reduce the overall footprint of the
site, improve the construction schedule, reduce the flood risk, and
minimize the amount of earthworks needed due to the elevated
topography and shallow bedrock of the chosen location
- With EIS approval received in March 2023, the 2023 Study
incorporates the design and costs associated with the EIS process
and Provincial licenses/Federal Decision Statement and associated
Conditions, including for:
- Fugitive air emissions
- Noise
- The management of acid-generating and potentially acid
generating material
- Site reclamation and restoration
- Surface and groundwater, vegetation and wildlife monitoring and
reporting
- Contact and noncontact water management including the use of
lined water collection ponds at both sites
Mining – Expanded Mining Fleet
Relative to the 2017 Study, mining rates have been accelerated
over the initial five years of the operation to support access to
higher grades earlier in the mine life. The Gordon and MacLellan
deposits will be developed using conventional shovel/truck open pit
mining methods, with owner mining to be employed over the mine
life. Concurrent mining of the Gordon and MacLellan deposits is
planned for the first five years, with a two-year pre-production
period at MacLellan and one year at Gordon included in capital.
Given its higher grades, mining at Gordon will be accelerated with
the deposit to be depleted after five years. As the Gordon pit
nears depletion, mining equipment will be transferred to MacLellan
and utilized over the remainder of its mine life.
The mine plan includes total mining in the range of 4 to 49
million tonnes per annum (“Mtpa”) over 11 years of mining. This
includes a peak mining rate of 16 Mtpa at Gordon and 33 Mtpa at
MacLellan, up from peak rates of 13 Mtpa and 25 Mtpa, respectively
in the 2017 Study. A larger mining fleet will be utilised at both
sites to support the higher mining rates. This includes larger 23.5
m3 hydraulic shovels at MacLellan, versus 14 m3 in the 2017 Study,
and 16 x 140 t trucks hauling ore, up from 13 trucks in the 2017
Study. A larger fleet of 12 x 70 t trucks will also be utilised at
Gordon, compared to 7 x 144 t trucks in the 2017 Study. The larger
fleet of smaller trucks will allow for more selective mining.
At MacLellan, two drills and the two 23.5 m3 hydraulic shovels
will be electric, lowering operating costs as well as reducing the
operation’s carbon footprint. Ore from Gordon will be transported
55 kilometres to the MacLellan mill utilizing 43 t side dump
trailers, up from 30 t trucks in the 2017 Study, resulting in fewer
trucks on the road. The Company will continue to evaluate
opportunities to further electrify the fleet of mobile
equipment.
Processing and Infrastructure – Larger, Optimized Mill
and Tailings Facility
Lynn Lake’s process plant has been designed as a conventional
milling operation with a nominal capacity of 8,000 tpd. The
proposed plant design is based on leach/carbon in pulp (“CIP”), and
will consist of crushing, grinding, thickening, pre-aeration and
leaching, CIP, cyanide detoxification, carbon elution and
regeneration, and gold smelting. The size of the mill has been
expanded from 7,000 tpd in the 2017 Study with a number of scope
changes to support the 14% higher throughput rates. The primary
crusher dump pocket has been optimized in order to have dual dump
capacity, providing improved reliability and efficiency. The size
of, and power to the SAG mill and ball mills have also been
increased to accommodate the higher throughput rate. The fine ore
storage area will consist of steel bins with apron feeders versus a
covered stockpile in the 2017 Study. This will provide improved
dust control, operability, and reliability. The plant layout has
been optimized and two extra tanks have been added to the leach
circuit, increasing circuit retention time, and thereby improving
recovery.
The flow sheet incorporates the following major process
operations:
- Two-stage crushing and crushed ore silo,
- Semi-autogenous grinding (SAG),
- Ball mill grinding and classification,
- Leaching and CIP adsorption,
- Desorption and gold room,
- Tailings detoxification and disposal,
- Fresh and reclaim water supply, and
- Reagent preparation and distribution
Mill recoveries are expected to average 93.7% for gold and 48%
for silver over the life of mine. This is up from 92.0% recovery
for gold and consistent with the 49% recovery expected for silver
in the 2017 Study. The increase in gold recovery reflects
optimizations to the mill with two additional tanks added to the
leach circuit providing increased circuit retention time, as well
as an increased proportion of MacLellan ore which has higher
recoveries than Gordon.
Power to the MacLellan site, which will host all the process
facilities and major infrastructure, will be supplied from Manitoba
Hydro through the commercial electricity grid. The existing power
line to the Town of Lynn Lake will be modified from 69 kV to 138
kV, and an 8 km 34.5 kV overhead line will be built to the
MacLellan site. The Gordon site’s electrical demands will be met by
two 1,000 kW diesel generators in duty/standby configuration.
The tailings management facility (“TMF”) will be constructed
approximately 2 km northeast of the planned open pit and plant site
at MacLellan. Additional dam raises are planned for years two, six
and 12 to accommodate the life of the mining operation. The
majority of operational water required for the process plant will
be reclaimed from the TMF.
Electric shovels and drills will be utilized within the
MacLellan open pit, and the operation will be connected to
Manitoba’s electric grid, of which nearly all electricity is
produced from clean, renewable power. Combined with productivity
improvements through the larger operation, this is expected to
drive an 18% reduction in GHG emissions per ounce relative to the
2017 Study. This will further reduce Lynn Lake’s GHG emission
intensity which is expected to be 58% below the industry average
and 65% below the open pit average.
Source: S&P Global Market Intelligence, ‘Greenhouse gas and
gold mines – Emissions intensities unaffected by lockdowns’,
https://www.spglobal.com/marketintelligence/en/news-insights/blog/greenhouse-gas-and-gold-mines-emissions-intensities-unaffected-by-lockdowns
Operating Costs
Total cash costs are expected to average $722 per ounce and
mine-site all-in sustaining costs $814 per ounce, net of silver as
a by-product credit over the life of mine. Over the initial
10-years of operations, mine-site all-in sustaining costs are
expected to average $699 per ounce, a 6% decrease from the 2017
Study with the economies of scale from a larger, more efficient
operation, and higher average grades, more than offsetting cost
inflation.
Over the life of mine, mine-site all-in sustaining costs have
increased 9% from the 2017 Study with the larger, more efficient
operation and economies scale offsetting the majority of cost
inflation, and lower average grades over a 44% larger Mineral
Reserve.
Total operating costs are expected to average C$44.21 per tonne
of ore processed. This includes average mining costs of C$3.04 per
tonne of material mined across the Gordon and MacLellan deposits
and haulage costs of C$9.43 per tonne of ore from the Gordon
deposit.
The breakdown of unit costs is summarized as follows.
Operating Costs1 |
|
C$/t |
LOM US$M |
Mining2 |
C$/t mined |
$3.04 |
$798.1 |
|
|
|
|
Mining2 |
C$/t ore |
$22.35 |
$798.1 |
Haulage (Gordon ore)3 |
C$/t ore |
$9.43 |
$55.7 |
Processing |
C$/t ore |
$14.33 |
$511.5 |
G&A |
C$/t ore |
$7.20 |
$257.1 |
Refining, Transport, Royalties and Ag Credit |
C$/t ore |
($1.23) |
($43.8) |
TOTAL Operating Costs |
C$/t ore |
$44.21 |
$1,578.7 |
|
|
|
|
Total Cash Costs4 |
US$/oz |
$722 |
|
Mine-site All-in Sustaining Costs4 |
US$/oz |
$814 |
|
- Operating costs exclude working
capital
- Average mining cost per tonne is
for the production years
- Haulage costs are reported per
total tonne of ore from the Gordon deposit – average haulage cost
is C$1.56 per tonne of total ore processed
- Please refer to the Cautionary
Notes on non-GAAP Measures and Additional GAAP Measures
Royalty
There is a capped third-party royalty on a portion of
production. Based on a $1,675 gold price, the cap is expected to be
reached in the first three years and will total approximately $10
million in royalty payments over that period. The project is
expected to be unencumbered by third party royalties for the
majority of the mine life.
Capital Costs
The initial capital cost for the Lynn Lake project is $632
million. This has increased from $338 million in the 2017 Study
with the main drivers being scope changes to support the larger
operation, including a 44% increase in Mineral Reserves, as well as
the impact of six years of inflation. The scope changes include a
larger mining fleet, tailings facility and mill to support a 14%
increase in throughput rates to 8,000 tpd. The main components of
the initial capital spending include pre-production mining
activities, site preparation, construction of the process plant and
tailings management facility and other onsite and offsite
infrastructure. The 2023 Study assumes capital leasing of mobile
equipment. The onsite pre-production period is expected to span 27
months.
Camp infrastructure to accommodate the workforce will be located
on-site and will be utilized throughout the construction and
operations phases.
Combined initial and sustaining capital is expected to total
$832 million over the life of mine, or $381 per ounce produced.
This represents a 17% increase in capital intensity from $325 per
ounce in the 2017 Study with the increase in Mineral Reserves and
economies of scale from a larger operation partly offsetting
inflation.
A breakdown of the capital requirements is detailed as
follows.
Capital Cost ($ Millions) |
|
Mining Infrastructure |
$61.6 |
Pre-production Mining |
$30.6 |
Mobile Equipment (Initial Lease Payments) |
$24.7 |
Process Plant |
$141.8 |
Utilities and Services |
$34.7 |
Onsite Infrastructure |
$105.9 |
Offsite Infrastructure |
$26.9 |
Tailings Management |
$38.5 |
Indirects |
$83.2 |
EPCM |
$13.9 |
Owner's Cost |
$17.0 |
Contingency |
$53.0 |
Total Initial Capital |
$631.8 |
|
|
Sustaining Capital |
$173.7 |
Reclamation and Closure Costs |
$27.0 |
Total Capital |
$832.4 |
Taxes
The Lynn Lake project will be subject to provincial, federal,
and mining taxes. Based on a $1,675 gold price, the operation is
not expected to pay cash taxes until its third year of operation.
Over the 17-year mine life, the operation is expected to pay total
taxes of approximately $374 million for an effective tax rate of
approximately 30%.
Permitting
In March 2023, the Company achieved a significant permitting
milestone for the Lynn Lake project with a positive Decision
Statement issued by the Ministry of Environment and Climate Change
Canada based on the completed Federal EIS, and Environment Act
Licenses issued by the Province of Manitoba.
In June 2023, the Company completed an Impact Benefit Agreement
and participated in a signing ceremony with the Marcel Colomb First
Nation for the Lynn Lake project. The goal of the agreement is to
provide long-term socio-economic benefits to the community and
collaboration on economic development, jobs, training, and
environmental stewardship of the project.
The Mathias Colomb Cree Nation has brought an application for
judicial review of the Decision Statement issued by the Ministry of
Environment and Climate Change and an internal appeal of the
Environment Act Licenses issued by the Province of Manitoba. At
this time, the application and appeal are not expected to impact
overall Lynn Lake project timelines. Discussions with directly
affected First Nations remain ongoing throughout the judicial
review process.
Given the increase in Mineral Reserves, the Company will be
submitting a notification of alteration for the EIS while pursuing
other project related permits.
Additional Opportunities
Incorporating Burnt Timber and Linkwood Mineral
Resource, Exploration success to date, and significant regional
potential
The Lynn Lake project encompasses most of the east-trending, 125
km long, Paleoproterozoic Lynn Lake greenstone belt (“LLGB”) in
northwestern Manitoba (Figure 1) with a total of 58,000 hectares of
mineral tenure. This belt consists of the Northern Agassiz Shear
(55 km long) and Southern Johnson Shear (40 km long) complexes.
The Lynn Lake project has significant near-mine and regional
exploration upside potential. The 2022 and 2023 exploration
programs have focused on the Gordon, Burnt Timber, and Linkwood
deposits, as well as several advanced stage greenfield targets
including the Maynard and Tulune targets. As highlighted in the
exploration update press release on August 1, 2023, drilling
continues to successfully intersect significant gold mineralization
at both brownfield sites, as well as at Maynard and Tulune. In
addition, the Company has established an extensive pipeline of
highly prospective exploration targets at various stages of
exploration across the LLGB.
Near-mine exploration - Gordon Deposit
Exploration drilling results received after April 2022 have not
been factored into the 2023 Study. This includes the 2022 and 2023
drilling program at Gordon which consisted of 11 holes totaling
1,823 m. The programs were successful in extending gold
mineralization outside of currently defined Mineral Reserves and
Resources in the northeastern extent of the planned Gordon pit, in
an area modeled as waste in the 2023 Study. This has the potential
to both increase the Mineral Reserve and reduce the strip ratio,
representing upside to the 2023 Study. Highlights announced earlier
this week include1:
- 11.19 g/t Au
over 10.40 m (5.87 m true width) (22GDX082);
- 2.51 g/t Au
over 25.10 m (17.30 m true width) (22GDX081); and
- 2.86 g/t Au
over 10.59 m (7.74 m true width), and 4.72 g/t Au over 5.35 m (3.55
m true width) (22GDX080).
1Drillhole composite intervals reported as “cut”
include higher grade samples which have been cut to 40 g/t Au at
the Gordon deposit.
Burnt Timber and Linkwood Deposits - geological
evaluation of deposits identifies potential for smaller
higher-grade Mineral Resource within trucking distance of MacLellan
mill, with potential for expansion of mineralization
The Burnt Timber and Linkwood deposits contain Inferred Mineral
Resources totaling 1.6 million ounces grading 1.1 g/t Au (44.4
million tonnes “mt”) as of December 31, 2022. This was not factored
into the 2023 Study which contains only Mineral Reserves from the
Gordon and MacLellan deposits.
Updated deposit-scale geological models have now been completed
for the Burnt Timber and Linkwood deposits, demonstrating excellent
potential for a smaller, higher-grade Mineral Resource that could
provide additional ore to the MacLellan mill. In addition, there is
signficant potential to expand near-surface gold mineralization at
both deposits.
Burnt Timber and Linkwood are connected by an existing
all-season road to the planned MacLellan site and mill. The
deposits are being evaluated as an additional source of ore feed
once mining activities are completed in year 11 with the depletion
of the MacLellan pit. This represents additional upside potential
to the 2023 Study.
The updated deposit-scale geological models will form the basis
for infill drilling at both deposits in 2024, as well as to
evaluate the potential to expand gold mineralization outside of
currently defined Mineral Resources.
In 2022, six holes totalling 1,516 m were
completed at the Burnt Timber gold deposit with highlights
announced earlier this week as follows:
- 2.48 g/t
Au over 5.91 m (5.35 m true width) (22BTX050);
- 0.89 g/t
Au over 13.52 m (12.35 m true width) (22BTX053); and
- 1.22 g/t
Au over 8.72 m (7.99 m true width (22BTX054).
Maynard Regional Target
The Maynard target is located 8 km northwest of the Burnt Timber
deposit, 5 km northwest of the Linkwood deposit, and 20 km by road
from the proposed MacLellan mill. Maynard, represents a
high-priority target as a potential satellite deposit within
trucking distance of the MacLellan mill.
As announced earlier this week, significant gold mineralization
has been extended over a 700 m strike length and to a depth of 280
m at Maynard. To date, all 16 holes drilled within the Maynard
target have intersected gold mineralization. Highlights announced
earlier this week include2:
- 5.87 g/t Au
over 11.88 m, including 13.81 g/t Au over 2.80 m, and 20.29 g/t Au
over 1.22 m (23LLX066);
- 1.01 g/t Au
over 56.90 m, including 6.09 g/t Au over 2.50 m
(22LLX031);
- 2.63 g/t Au
over 13.00 m, including 39.70 g/t Au over 0.73 m, and 0.80 g/t Au
over 16.00 m, and 0.58 g/t Au over 23.15 m
(22LLX027);
- 0.68 g/t Au
over 40.13 m (22LLX028); and
- 1.09 g/t Au
over 23.75 m, including 4.72 g/t over 4.01 m
(22LLX030).
2Gold grades reported as uncut, composite
intervals reported as core length, true width is unknown at this
time.
Tulune Regional Target
Tulune is a greenfields discovery made in 2020, and is located
between the Gordon and MacLellan deposits. Ongoing drilling has
extended broad zones of near surface gold mineralization over a 1.5
km strike length, including in a 350 m step out hole to the east.
Assay results are pending from the 2023 drill program at Tulune,
however, all 29 holes drilled within the granite and granodiorite
prior to 2023 have intersected gold mineralization. Highlights from
the 2022 drilling program include2:
-
1.12 g/t Au over 23.00 m (22LLX059);
-
1.08 g/t Au over 16.10 m, including 34.30 g/t Au over 0.30
m (22LLX054); and
-
0.75 g/t Au over 21.90 m (22LLX060).
Updated interpretations and additional targeting
will be completed at Tulune once the results have been received
from the 2023 program. Drilling results to date have demonstrated a
significant gold system, with gold mineralization intersected in
every drill hole over a 1.5 km strike within the felsic intrusive.
The focus for future targeting will be continuing to define and
test a variety of structural and lithological settings with the
objective of defining higher-grade mineralization within this newly
discovered gold system.
2Gold grades reported as uncut, composite
intervals reported as core length, true width is unknown at this
time.
Consultant Contributions
The Lynn Lake Feasibility Study was consolidated by Alamos
Gold’s technical team in collaboration with the following third
party consulting firms in their respective areas of expertise:
- Worley Canada Inc.: Process plant and general infrastructure
design and costing
- AGP Mining Consultants Inc.: Open pit design and mine plan,
equipment selection, open pit capital and operating costs
- Stantec Consulting Ltd.: Support for environmental planning,
assessment, licensing, and permitting
- WSP Canada Inc.: Tailings management facility design,
geotechnical investigations, pit slope design, water management
design
Project Background
The Lynn Lake project is located in northern Manitoba,
approximately 820 km northwest of Winnipeg. The project is
comprised of two historical gold mines, MacLellan and Gordon
respectively located approximately 7 km northeast and 37 km east of
the Town of Lynn Lake. The straight-line distance between the
Gordon and MacLellan sites is approximately 30 km. Private
all-weather gravel access roads connect both the MacLellan and
Gordon sites to Provincial Road (PR) 391 which is connected to
Thompson and then to Winnipeg.
The MacLellan mine was formerly operated as an underground gold
and silver mine between 1986 and 1989. The Gordon site,
historically referred to as the Farley Lake Open Pit Mine,
previously operated as two open pit gold mines from 1996 to
1999.
Technical Disclosure
Chris Bostwick, FAusIMM, Alamos Gold’s Senior Vice
President, Technical Services, has reviewed and approved the
scientific and technical information contained in this news
release. Mr. Bostwick is a Qualified Person within the
meaning of Canadian Securities Administrator's National
Instrument 43-101 ("NI 43-101").
The Company will file a technical report prepared in accordance
with NI 43-101 on SEDAR at www.sedar.com within 45 days of the date
of this release.
About Alamos
Alamos is a Canadian-based intermediate gold producer with
diversified production from three operating mines in North America.
This includes the Young-Davidson and Island Gold mines in northern
Ontario, Canada and the Mulatos mine in Sonora State, Mexico.
Additionally, the Company has a strong portfolio of growth
projects, including the Phase 3+ Expansion at Island Gold, and the
Lynn Lake project in Manitoba, Canada. Alamos employs more than
1,900 people and is committed to the highest standards of
sustainable development. The Company’s shares are traded on the TSX
and NYSE under the symbol “AGI”.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Scott K. Parsons |
Senior Vice President, Investor Relations |
(416) 368-9932 x 5439 |
The TSX and NYSE have not reviewed and do not accept
responsibility for the adequacy or accuracy of this release.
Cautionary Note
This news release contains or incorporates by reference
“forward-looking statements” and “forward-looking information” as
defined under applicable Canadian and U.S. securities laws. All
statements in this news release, other than statements of
historical fact, which address events, results, outcomes or
developments that the Company expects to occur are, or may be
deemed to be, forward-looking statements and are generally, but not
always, identified by the use of forward-looking terminology such
as “future”, "expect", “assume”, “believe”, “anticipate”, “intend”,
“potential”, “proposed”, “prospective”, “plan”, “outlook”,
“estimate”, “continue”, “ongoing”, “evaluating”, “forecast”,
“budget”, “target” or variations of such words and phrases and
similar expressions or statements that certain actions, events or
results “may", “could”, “would”, "might" or "will" be taken, occur
or be achieved or the negative connotation of such terms.
Forward-looking statements contained in this news release are based
on information, expectations, estimates and projections as of the
date of this news release.
Forward-looking statements in this news release include, but may
not be limited to, information as to strategy, plans, expectations
or future financial or operating performance pertaining to, or
anticipated to result from, the Lynn Lake Project, such as
expectations, assumptions and estimations regarding: the
feasibility of the Project and its attractive economics and
significant exploration upside; construction decision and
development of the Project; the effect of court and administrative
proceedings in Manitoba on Project timelines; the mine plan; the
method of mining the Project, location of centralized processing
plant and tailings management facility and proposed plant design;
timing of on-site pre-production period; camp infrastructure; size
of operation and anticipated mining fleet size; degree of
confidence around required earthworks, tailings designs and mine
plan; mine life; anticipated rates of mining, milling, throughput
and annual production; timing of annual production and access to
higher grades within overall mine life; anticipated average mill
recoveries for gold and silver over the life of mine; greenhouse
gas emissions intensity (including the Company-wide target for
reduction in greenhouse gas emissions and the anticipated timing of
meeting such target); exploration potential and targets; gold
grades; mineralization; Mineral Reserves and Resources (and
potential growth in Mineral Reserves as exploration continues);
Proven and Probable Mineral Reserves; Inferred Mineral Resources;
operating costs including mine-site all-in sustaining costs,
initial capital costs (including main components of the initial
capital spending) and life of mine capital costs (including
sustaining capital and reclamation); economic analysis including
anticipated after-tax net present value, internal rate of return
and timing of payback; timing of payment of applicable taxes, total
life of mine taxes and effective tax rate; gold price, other metal
prices and foreign exchange rates; third-party royalty payments;
timing of spending any significant capital on development of the
Project; the free cash flow growth to be generated from the
Company’s Island Gold mine in 2026 and beyond and the effect
thereof on the Company’s position to fund the Lynn Lake Project
internally; and other statements that express management's
expectations or estimates of future performance, operational,
geological or financial results.
Exploration results that include geophysics, sampling, and drill
results on wide spacings may not be indicative of the occurrence of
a mineral deposit. Such results do not provide assurance that
further work will establish sufficient grade, continuity,
metallurgical characteristics and economic potential to be classed
as a category of Mineral Resource. A Mineral Resource that is
classified as "Inferred" or "Indicated" has a great amount of
uncertainty as to its existence and economic and legal feasibility.
It cannot be assumed that any or part of an "Indicated Mineral
Resource" or "Inferred Mineral Resource" will ever be upgraded to a
higher category of Mineral Resource. Investors are cautioned not to
assume that all or any part of mineral deposits in these categories
will ever be converted into Proven and Probable Mineral
Reserves.
The Company cautions that forward-looking statements are
necessarily based upon several factors and assumptions that, while
considered reasonable by management at the time of making such
statements, are inherently subject to significant business,
economic, technical, legal, political, and competitive
uncertainties, and contingencies. Known and unknown factors could
cause actual results to differ materially from those projected in
the forward-looking statements, and undue reliance should not be
placed on such statements and information.
Such factors include (without limitation): the actual results of
current and future exploration activities; changes to current
estimates of mineral reserves and mineral resources; conclusions of
economic and geological evaluations; changes in project parameters
as plans continue to be refined; the speculative nature of mineral
exploration and development; risks in obtaining and maintaining
necessary licenses, permits and authorizations for the Company’s
development stage and operating assets; operations may be exposed
to new diseases, epidemics and pandemics, including any ongoing or
future effects of COVID-19 (and any related ongoing or future
regulatory or government responses) and its impact on the broader
market and the trading price of the Company's shares; provincial
and federal orders or mandates (including with respect to mining
operations generally or auxiliary businesses or services required
for operations) in Canada, Mexico, the United States and Türkiye,
all of which may affect many aspects of the Company's operations
including the ability to transport personnel to and from site,
contractor and supply availability and the ability to sell or
deliver gold doré bars; changes in national and local government
legislation, controls or regulations; failure to comply with
environmental and health and safety laws and regulations; labour
and contractor availability (and being able to secure the same on
favourable terms); disruptions in the maintenance or provision of
required infrastructure and information technology systems;
fluctuations in the price of gold or certain other commodities such
as, diesel fuel, natural gas, and electricity; operating or
technical difficulties in connection with mining or development
activities, including geotechnical challenges and changes to
production estimates (which assume accuracy of projected ore grade,
mining rates, recovery timing and recovery rate estimates and may
be impacted by unscheduled maintenance); changes in foreign
exchange rates (particularly the Canadian dollar, U.S. dollar,
Mexican peso and Turkish Lira); the impact of inflation; employee
and community relations; the impact of litigation and
administrative proceedings (including but not limited to the
application for judicial review of the positive Decision Statement
issued by the Ministry of Environment and Climate Change Canada
commenced by the Mathias Colomb Cree Nation (MCCN) in respect of
the Lynn Lake Project and the MCCN’s corresponding internal appeal
of the Environment Act Licences issued by the Province of Manitoba
for the Project) and any interim or final court, arbitral and/or
administrative decisions; disruptions affecting operations;
availability of and increased costs associated with mining inputs
and labour; delays in the Phase 3+ Expansion at Island Gold; delays
in construction decisions and any development of the Lynn Lake
Project; changes with respect to the intended method of mining and
processing ore from the Lynn Lake Project; inherent risks and
hazards associated with mining and mineral processing including
environmental hazards, industrial accidents, unusual or unexpected
formations, pressures and cave-ins; the risk that the Company’s
mines may not perform as planned; uncertainty with the Company's
ability to secure additional capital to execute its business plans;
contests over title to properties; expropriation or nationalization
of property; political or economic developments in Canada, Mexico,
the United States, Türkiye and other jurisdictions in which the
Company may carry on business in the future; increased costs and
risks related to the potential impact of climate change; the costs
and timing of exploration, construction and development of new
deposits; risk of loss due to sabotage, protests and other civil
disturbances; the impact of global liquidity and credit
availability and the values of assets and liabilities based on
projected future cash flows; risks arising from holding derivative
instruments; and business opportunities that may be pursued by the
Company.
For a more detailed discussion of such risks and other risk
factors that may affect the Company's ability to achieve the
expectations set forth in the forward-looking statements contained
in this news release, see the Company’s latest 40-F/Annual
Information Form and Management’s Discussion and Analysis, each
under the heading “Risk Factors” available on the SEDAR website at
www.sedar.com or on EDGAR at www.sec.gov. The foregoing should be
reviewed in conjunction with the information, risk factors and
assumptions found in this news release.
The Company disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
applicable law.
Market data and other statistical information used in this news
release, such as the reference to S&P Global Market
Intelligence, is based on internal company research, independent
industry publications, government publications, reports by market
research firms or their published independent sources. Industry
publications, governmental publications, market research surveys
and forecasts generally state that the information contained
therein has been obtained from sources believed to be reliable,
however such content providers do not guarantee the accuracy,
adequacy, completeness, timeliness, or availability of such content
and generally disclaim liability for any errors, omissions or
losses of any kind suffered in connection with the use of such
content. Although the Company believes such information is accurate
and reliable, it has not independently verified any of the data
from third party sources cited or used for the Company’s
management’s industry estimates, nor has the Company ascertained
the underlying economic assumptions relied upon therein. While the
Company believes internal company estimates are reliable, such
estimates have not been verified by any independent sources, and
the Company makes no representations as to the accuracy of such
estimates.
Cautionary Note to U.S. Investors
Alamos prepares its disclosure in accordance with the
requirements of securities laws in effect in Canada. Unless
otherwise indicated, all Mineral Resource and Mineral Reserve
estimates included in this document have been prepared in
accordance with Canadian National Instrument 43-101 - Standards of
Disclosure for Mineral Projects (“NI 43-101”) and the Canadian
Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the “CIM Standards”). NI
43-101 is a rule developed by the Canadian Securities
Administrators, which established standards for all public
disclosure an issuer makes of scientific and technical information
concerning mineral projects. Mining disclosure in the United States
was previously required to comply with SEC Industry Guide 7 (“SEC
Industry Guide 7”) under the United States Securities Exchange Act
of 1934, as amended. The U.S. Securities and Exchange Commission
(the “SEC”) has adopted final rules, to replace SEC Industry Guide
7 with new mining disclosure rules under sub-part 1300 of
Regulation S-K of the U.S. Securities Act (“Regulation S-K 1300”)
which became mandatory for U.S. reporting companies beginning with
the first fiscal year commencing on or after January 1, 2021. Under
Regulation S-K 1300, the SEC now recognizes estimates of “Measured
Mineral Resources”, “Indicated Mineral Resources” and “Inferred
Mineral Resources”. In addition, the SEC has amended its
definitions of “Proven Mineral Reserves” and “Probable Mineral
Reserves” to be substantially similar to international
standards.
Investors are cautioned that while the above terms are
“substantially similar” to CIM Definitions, there are differences
in the definitions under Regulation S-K 1300 and the CIM Standards.
Accordingly, there is no assurance any mineral reserves or mineral
resources that the Company may report as “proven mineral reserves”,
“probable mineral reserves”, “measured mineral resources”,
“indicated mineral resources” and “inferred mineral resources”
under NI 43-101 would be the same had the Company prepared the
mineral reserve or mineral resource estimates under the standards
adopted under Regulation S-K 1300. U.S. investors are also
cautioned that while the SEC recognizes “measured mineral
resources”, “indicated mineral resources” and “inferred mineral
resources” under Regulation S-K 1300, investors should not assume
that any part or all of the mineralization in these categories will
ever be converted into a higher category of mineral resources or
into mineral reserves. Mineralization described using these terms
has a greater degree of uncertainty as to its existence and
feasibility than mineralization that has been characterized as
reserves. Accordingly, investors are cautioned not to assume that
any measured mineral resources, indicated mineral resources, or
inferred mineral resources that the Company reports are or will be
economically or legally mineable.
Cautionary non-GAAP Measures and Additional GAAP
Measures
Note that for purposes of this section, GAAP refers to IFRS. The
Company believes that investors use certain non-GAAP and additional
GAAP measures as indicators to assess gold mining companies. They
are intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared with GAAP.
“Cash flow from operating activities before changes in non-cash
working capital” is a non-GAAP performance measure that could
provide an indication of the Company’s ability to generate cash
flows from operations and is calculated by adding back the change
in non-cash working capital to “cash provided by (used in)
operating activities” as presented on the Company’s consolidated
statements of cash flows. “Cash flow per share” is calculated by
dividing “cash flow from operations before changes in working
capital” by the weighted average number of shares outstanding for
the period. “Free cash flow” is a non-GAAP performance measure that
is calculated as cash flows from operations net of cash flows
invested in mineral property, plant and equipment and exploration
and evaluation assets as presented on the Company’s consolidated
statements of cash flows and that would provide an indication of
the Company’s ability to generate cash flows from its mineral
projects. “Mine site free cash flow” is a non-GAAP measure which
includes cash flow from operating activities at, less capital
expenditures at each mine site. “Return on equity” is defined as
earnings from continuing operations divided by the average total
equity for the current and previous year. “Mining cost per tonne of
ore” and “cost per tonne of ore” are non-GAAP performance measures
that could provide an indication of the mining and processing
efficiency and effectiveness of the mine. These measures are
calculated by dividing the relevant mining and processing costs and
total costs by the tonnes of ore processed in the period. “Cost per
tonne of ore” is usually affected by operating efficiencies and
waste-to-ore ratios in the period. “Total capital expenditures per
ounce produced” is a non-GAAP term used to assess the level of
capital intensity of a project and is calculated by taking the
total growth and sustaining capital of a project divided by ounces
produced life of mine. “Total cash costs per ounce”, “all-in
sustaining costs per ounce”, “mine-site all-in sustaining costs”,
and “all-in costs per ounce” as used in this analysis are non-GAAP
terms typically used by gold mining companies to assess the level
of gross margin available to the Company by subtracting these costs
from the unit price realized during the period. These non-GAAP
terms are also used to assess the ability of a mining company to
generate cash flow from operations. There may be some variation in
the method of computation of these metrics as determined by the
Company compared with other mining companies. In this context,
“total cash costs” reflects mining and processing costs allocated
from in-process and doré inventory and associated royalties with
ounces of gold sold in the period. Total cash costs per ounce are
exclusive of exploration costs. “All-in sustaining costs per ounce”
include total cash costs, exploration, corporate and
administrative, share based compensation and sustaining capital
costs. “Mine-site all-in sustaining costs” include total cash
costs, exploration, and sustaining capital costs for the mine-site,
but exclude an allocation of corporate and administrative and share
based compensation. “Adjusted net earnings” and “adjusted earnings
per share” are non-GAAP financial measures with no standard meaning
under IFRS. “Adjusted net earnings” excludes the following from net
earnings: foreign exchange gain (loss), items included in other
loss, certain non-reoccurring items, and foreign exchange gain
(loss) recorded in deferred tax expense. “Adjusted earnings per
share” is calculated by dividing “adjusted net earnings” by the
weighted average number of shares outstanding for the period.
Additional GAAP measures that are presented on the face of the
Company’s consolidated statements of comprehensive income and are
not meant to be a substitute for other subtotals or totals
presented in accordance with IFRS, but rather should be evaluated
in conjunction with such IFRS measures. This includes “Earnings
from operations”, which is intended to provide an indication of the
Company’s operating performance and represents the amount of
earnings before net finance income/expense, foreign exchange
gain/loss, other income/loss, and income tax expense. Non-GAAP and
additional GAAP measures do not have a standardized meaning
prescribed under IFRS and therefore may not be comparable to
similar measures presented by other companies. A reconciliation of
historical non-GAAP and additional GAAP measures are detailed in
the Company’s latest Management’s Discussion and Analysis available
online on the SEDAR website at www.sedar.com or on EDGAR at
www.sec.gov and at www.alamosgold.com.
Table 1: Lynn Lake Life of Mine
Production Schedule
|
Y-3 |
Y-2 |
Y-1 |
Y+1 |
Y+2 |
Y+3 |
Y+4 |
Y+5 |
Y+6 |
Y+7 |
Y+8 |
Y+9 |
Y+10 |
Y+11 |
Y+12 |
Y+13 |
Y+14 |
Y+15 |
Y+16 |
Y+17 |
Y+18 |
Mining - Gordon |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore Mined (000 tonnes) |
- |
- |
6 |
790 |
1,631 |
2,946 |
1,679 |
817 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Au Grade (g/t) |
- |
- |
3.08 |
2.11 |
2.36 |
2.36 |
2.34 |
3.33 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Waste Mined (000 tonnes) |
- |
- |
4,389 |
14,210 |
14,369 |
13,054 |
8,623 |
2,628 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Mining -
MacLellan |
Ore Mined (000 tonnes) |
- |
67 |
520 |
4,286 |
7,507 |
2,729 |
1,090 |
1,875 |
2,781 |
4,611 |
5,381 |
4,503 |
2,726 |
1,663 |
- |
- |
- |
- |
- |
- |
- |
Au Grade (g/t) |
- |
0.92 |
0.92 |
1.38 |
1.41 |
1.31 |
1.02 |
1.04 |
1.20 |
1.28 |
1.26 |
1.36 |
1.70 |
1.79 |
- |
- |
- |
- |
- |
- |
- |
Ag Grade (g/t) |
- |
2.95 |
2.95 |
5.25 |
4.49 |
3.69 |
3.30 |
2.89 |
3.22 |
3.59 |
4.17 |
4.83 |
5.19 |
5.49 |
- |
- |
- |
- |
- |
- |
- |
Waste Mined (000 tonnes) |
- |
4,170 |
12,931 |
19,714 |
25,493 |
30,271 |
31,910 |
31,125 |
30,219 |
28,389 |
26,310 |
15,873 |
7,832 |
2,704 |
- |
- |
- |
- |
- |
- |
- |
Processing - Total Lynn
Lake |
Mill Feed (000 tonnes) |
- |
- |
- |
2,259 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
2,920 |
1,548 |
- |
Au Grade (g/t) |
- |
- |
- |
2.55 |
3.07 |
2.85 |
1.96 |
1.91 |
1.52 |
1.71 |
1.71 |
1.69 |
1.56 |
1.23 |
0.74 |
0.73 |
0.87 |
0.53 |
0.52 |
0.52 |
- |
Ag Grade (g/t) |
- |
- |
- |
5.42 |
5.50 |
2.51 |
1.69 |
2.21 |
2.20 |
3.60 |
5.25 |
5.70 |
4.83 |
4.30 |
3.36 |
3.18 |
3.55 |
2.48 |
2.39 |
2.41 |
- |
Au Production (000 oz) |
- |
- |
- |
175 |
272 |
250 |
171 |
167 |
133 |
151 |
152 |
150 |
137 |
109 |
65 |
64 |
76 |
46 |
45 |
24 |
- |
Ag Production (000 oz) |
- |
- |
- |
189 |
248 |
113 |
76 |
99 |
99 |
162 |
236 |
257 |
218 |
194 |
151 |
143 |
160 |
112 |
108 |
58 |
- |
Operating
Costs |
Mining (C$/tonne mined) |
- |
- |
- |
$2.61 |
$2.67 |
$2.79 |
$2.99 |
$3.04 |
$2.86 |
$2.86 |
$2.88 |
$3.56 |
$4.88 |
$6.85 |
- |
- |
- |
- |
- |
- |
- |
Haulage (C$/tonne of Gordon ore processed) |
- |
- |
- |
$9.43 |
$9.43 |
$9.43 |
$9.43 |
$9.43 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Milling (C$/tonne processed) |
- |
- |
- |
$14.52 |
$14.52 |
$14.52 |
$14.52 |
$14.52 |
$14.52 |
$14.52 |
$14.52 |
$14.52 |
$14.52 |
$14.52 |
$13.95 |
$13.95 |
$13.95 |
$13.95 |
$13.95 |
$13.95 |
- |
G&A (C$/tonne processed) |
- |
- |
- |
$8.92 |
$8.45 |
$8.10 |
$8.38 |
$8.67 |
$8.96 |
$8.95 |
$8.65 |
$8.04 |
$8.43 |
$7.20 |
$5.23 |
$4.68 |
$4.69 |
$4.87 |
$4.28 |
$5.56 |
- |
Total Cash Costs (US$/oz)
1,2 |
- |
- |
- |
$431 |
$316 |
$368 |
$650 |
$849 |
$972 |
$814 |
$784 |
$655 |
$618 |
$759 |
$1,196 |
$1,224 |
$1,033 |
$1,724 |
$1,785 |
$1,794 |
- |
Mine-site AISC (US$/oz) 1,2 |
- |
- |
- |
$641 |
$456 |
$512 |
$798 |
$898 |
$1,002 |
$844 |
$808 |
$697 |
$661 |
$787 |
$1,224 |
$1,224 |
$1,033 |
$1,724 |
$1,785 |
$1,794 |
- |
Capital
Expenditures |
Initial Capital (US$M) |
$53 |
$232 |
$347 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Sustaining Capital and Reclamation (US$M) |
- |
- |
- |
$37 |
$38 |
$36 |
$25 |
$8 |
$4 |
$4 |
$4 |
$6 |
$6 |
$3 |
$2 |
- |
- |
- |
- |
- |
$27 |
Total Capital (US$M) |
$53 |
$232 |
$347 |
$37 |
$38 |
$36 |
$25 |
$8 |
$4 |
$4 |
$4 |
$6 |
$6 |
$3 |
$2 |
- |
- |
- |
- |
- |
$27 |
1 Please refer to Cautionary Notes on non-GAAP
Measures and Additional GAAP Measures.2 Total cash
costs and mine-site all-in sustaining costs are inclusive of silver
credits, royalties, and refining costs while unit operating costs
are reported exclusive of these costs
Figure 1: Lynn Lake District
Map
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