Alamos Gold Secures SEMARNAT Approval for PDA Construction

Alamos Gold has confirmed SEMARNAT’s approval of an amendment to its existing environmental impact assessment (MIA), allowing for construction to start on the Puerto Del Aire (PDA) project within the Mulatos District. PDA, a high-potential underground deposit, is expected to produce an average of 127,000oz of gold annually over the first four years, providing significant growth prospects for the district.

John A. McCluskey, President and CEO, Alamos Gold, stated that the approval was secured with the support of local communities, state authorities, and federal agencies. The PDA project, an underground deposit adjacent to the main Mulatos pit, is expected to play a key role in extending the mine life of the district. "PDA represents the next high-return project with significant exploration potential, highlighting growth prospects within the district. The swift transition from discovery to construction reflects the project's potential," McCluskey said.

As previously announced, construction activities for PDA are scheduled for mid-2025. Capital expenditures for 2025 are projected between US$37 million and US$40 million for underground development and procurement of long-lead items for the mill. The remainder of the initial capital investment of US$165 million will be spent through 2026 and 2027, with first production expected in mid-2027. Mine-site all-in sustaining costs are estimated to average US$1,003 per payable ounce.

An internal economic study, released in September 2024, indicates that over the first four years, production is projected to average 127,000oz annually. The total mine life, based on Mineral Reserves as of December 2023, is expected to span eight years, with an average annual production of 104,000oz.

PDA has an estimated after-tax Net Present Value (NPV) of US$269 million at a 5% discount rate and an after-tax Internal Rate of Return (IRR) of 46%, assuming a gold price of US$1,950/oz and a peso-dollar exchange rate of 18:1. At a gold price of US$2,500/oz, PDA’s after-tax NPV (5%) increases to US$492 million, with an after-tax IRR of 73%.

The project also holds substantial exploration upside, with PDA open in several directions and high-grade mineralization found below the former Cerro Pelon open pit. This is expected to support the development of an initial underground Mineral Resource at Cerro Pelon, with an updated resource estimate to be released in February 2025. Cerro Pelon offers a potential additional source for the PDA sulphide mill, providing the opportunity to extend higher production rates beyond the first four years of the current mine plan.