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News Article

Alamos Gold’s La Yaqui Grande Ready to Go in 2H20

By Alejandro Ehrenberg | Wed, 07/29/2020 - 15:15

Alamos Gold reported that starting in 2H20, it will move ahead with the construction of its fully-permitted La Yaqui Grande project located in Sonora. The decision was reached after completing an internal economic study, the company reported. Production is expected to begin in 2H22.

“La Yaqui Grande represents our next low-cost, high-return project in the Mulatos District. This follows the success of the La Yaqui Phase I and Cerro Pelon projects, which were both developed on budget and ahead of schedule. Given its bigger scale and low-cost profile, La Yaqui Grande is expected to drive strong free cash flow growth from the Mulatos District in 2022 and beyond,” said John McCluskey, Alamos Gold’s President and CEO.

Alamos Gold pointed out that as of Dec. 31, 2019, the project’s mine plan and economic analysis amount to 19.2 million tons, grading 1.17 g/t Au and 15.88 g/t Ag, containing 724,000 oz of gold and 9.8 million oz of silver. La Yaqui Grande will be mined using conventional open pit methods. Ore will be mined and stacked at a rate of 10,000 tpd over a five-year period. Contract mining will be employed and a jaw crusher and cone crushers from the past producing El Chanate mine will be relocated to La Yaqui Grande. Ore will be crushed through a three-stage crushing circuit, agglomerated, stacked and leached on an independent leach pad. The resulting gold-bearing solution will be processed through carbon columns following which the loaded carbon will be transported to the existing Mulatos plant for final processing, the company explained.

Total cash costs are expected to average US$539/oz and mine-site AISC US$578/oz over the life of the operation, reported Alamos Gold. The company went on to explain that La Yaqui Grande is expected to supply the majority of its annual production from the Mulatos District starting in the second half of 2022, driving a significant reduction in total cash costs and mine-site AISC from the mid-point of previous 2020 guidance of US$860/oz and US$960/oz, respectively.

Community relations at the La Yaqui Grande project are expected to take place while following the highest international standards. In fact, Alamos Gold has a proven track record in Mexico of successful social engagement based on respect for human rights. The Mulatos resettlement process is a case in point. José Tovar, Community Relations Manager at Alamos Gold, explained during a conversation with Mexico Business News that even when displacement is highly disruptive, it can be an opportunity for companies and communities to produce positive change. “The Mulatos resettlement process involved over 70 households. We facilitated opportunities for better housing and livelihoods, as well as basic rights such as land titles, services, education and employment. In 2019, this project was awarded by CEMEFI as Best Corporate Social Responsibility Practice,” said Tovar.

Alejandro Ehrenberg Alejandro Ehrenberg Journalist and Industry Analyst