Alamos Gold Inc. [AGI-TSX, NYSE] on Thursday May 9 released new exploration results from its Island Gold Mine in northern Ontario. The company said drilling continues to extend gold mineralization in the Main, Western, and Eastern extensions, highlighted by drilling results that included 46.11 g/t gold over 4.67 metres, 71.17 g/t gold over 5.1 metres and 31.62 g/t gold over 3.3 metres.
Alamos shares advanced on the news, rising 3.9% or 17.5 cents to $4.63 on volume of almost 1.6 million. The shares are trading in a 52-week range of $2.90 and $6.13.
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.
The company expects to produce between 480,000 and 520,000 ounces of gold this year, rising to 600,000 ounces in 2021. The expected increase in 2021 will reflect a full year of production from the Kirazli Project in Turkey.
The Island Gold Mine is a high-grade, low cost underground mining operation located 83 km northeast of Wawa, Ontario, and began production in 2007 and has produced over 500,000 ounces of gold so far. The mine is located just west of the town of Dubreuilville.
Island Gold accounts for about 28% of Alamos Gold’s net asset value (according to a Scotiabank report) and the operation is currently in the permitting phase to expand throughput to 1,200 tonnes per day from 1,100 tonnes. The permit for this expansion is expected to be received in the second half of 2019.
A resource update was not included in Thursday’s press release. A total of 29,832 metres of drilling in 99 holes has been completed so far in 2019. As part of the 2018 regional exploration drilling program, two drill holes were started late in 2018 and completed in 2019. This included drill hole AR-415-04, which returned 9.31 g/t over 3.31 metres, approximately 250 metres west of the most westerly inferred mineral resource block of the Island Gold deposit.
This gold-bearing structure has similar alteration and mineralization that is associated with gold mineralization at the Island Gold Mine within the Goudreau Deformation Zone.
The focus of 2019 exploration drilling is to continue to expand the down-plunge and lateral extensions of the Island Gold deposit with the objective of adding new near-mine mineral resources across the 2-km long Island Gold Main Zone.
As of December 31, 2018, mineral reserves at Island Gold stood at 1.0 million ounces or (3.0 million tonnes grading 1.28 g/t gold). Measured and indicated resources are estimated at 196,000 ounces, while inferred resources stand at 1.6 million ounces.