Alamos Gold Exceeds Expectations in 1Q21By Paloma Duran | Mon, 05/03/2021 - 14:44
Alamos Gold (Alamos) announced its financial results and activities for 1Q21, reporting a strong production exceeding expectations. The company also announced that for its Mexican asset, the La Yaqui Grande project in Sonora, it generated US$9.9 million of free cash flow.
Among the company´s highlights for 1Q21 was production totaling 125,800oz of gold and generating a cash flow of US$99.3 million from operating activities, which are 14 percent and 75 percent higher respectively than last year´s 1Q20 records. In addition, La Yaqui Grande generated a net amount of US$16.8 million in capital advances.
La Yaqui Grande represents the company's next low-cost, high-performance project in the Mulatos district. The development of the project was announced in 2020, expected to produce 123,000oz of gold per year in 3Q22. The project is located 7km from the company's Mulatos district and due to its high-quality metallurgy, La Yaqui Grande is expected to reduce combined costs at Mulatos.
Furthermore, community relations at the La Yaqui Grande project are expected to take place while abiding to the highest international standards. In fact, Alamos Gold has a proven an impeccable track record in Mexico for successful social engagement based on respect for human rights, reported MBN.
First quarter activities at La Yaqui Grande included safe construction activities with more than 450,000 hours worked; advanced work on the waste dump, the heap leach facility and the water treatment plant; more than three million tons of waste mined, and the camp facilities were completed.
Meanwhile, activities in the Mulatos district included exploration at the Mulatos mine and other key district areas . The company also announced the construction of the power lines that will connect the mine to the power grid, which is expected to reduce greenhouse gas emissions by 12 percent annually.
“We made good progress on our internal growth initiatives while continuing to generate solid free cash flow. Development activities are ramping up at La Yaqui Grande and on the Phase III expansion at Island Gold, and we continue to advance permitting of our Lynn Lake project. All are key components of our strong outlook with approximately 50 percent production growth at significantly lower costs supporting substantial free cash flow growth over the long-term,” John A. McCluskey, President and CEO of Alamos Gold, said in a press release.
The company also explained that thanks to Alamos' measures and work culture, its operations remain relatively unaffected by COVID-19. Furthermore, additional costs related to COVID-19 testing, accommodation, and transportation have been added to mining costs. These costs have increased total costs by US$25 per oz and are expected to be incurred through 2021.
During Mexico Mining Forum 2021, McCluskey said that a key factor during this uncertain year marked by the pandemic has been meeting safety standards, ensuring that staff and communities are safe. "If you do not see that mining has a purpose that goes far beyond metal production, you have not understood," McCluskey said.