Alamos Gold (TSX, NYSE: AGI) has re-acquired a 3% net smelter return (NSR) royalty on production from the Island Gold mine in Ontario, Canada, for C$75 million ($54m), lowering its cost guidance for 2020 as a result.
The royalty was acquired from a privately held company and
was payable on gold production within four patented claims comprising the
majority of currently defined mineral reserves and resources within the Island
Gold deposit.
The Canadian miner also reported a decrease of $40 per
ounce, or 7%, in Island Gold’s 2020 total cash cost guidance to between $480
and $520. It also logged a $40 per ounce drop in mine-site all-in sustaining
cost guidance to between $740 and $780 per ounce.
“Since we acquired Island Gold in 2017, the mineral reserve
and resource base has doubled with the deposit approaching 4 million ounces
across all categories,” president and chief executive officer, John A.
McCluskey, said.
“With the deposit open laterally and down-plunge across
several areas of focus, we see excellent potential for this growth to continue
at a greatly reduced royalty on future production,” McCluskey noted.
The company has other two producing mines — Young-Davison in
Canada and Mulatos in Mexico.