Cerro de Oro Will Launch Minera Alamos Into a New Era

Minera Alamos provided the results of its Preliminary Economic Assessment (PEA) for its Cerro de Oro Project in Zacatecas, highlighting the project promise as the company expects an internal rate of return of 111 percent. In addition, the company said that despite inflationary pressures, a new low capital intensity mine could be developed, ushering in a new era for the company.

In a press release, the company highlighted that the PEA was prepared following National Instrument 43-101. Among the main production highlights of the PEA is that average annual gold production is expected to be between 60,000 and 70,000oz from years one to four. In addition, the project is expected to have a mine life of 8.2 years at a mining rate of 20,000t/d.

The Cerro Oro project shows robust economics: In addition to a high rate of return, an after-tax net present value of US$150.5 million is projected. Furthermore, life-of-mine all-in sustaining costs are expected to be US$873/oz in the first four years. The project is expected to require a low initial capital of US$28.1 million and a payback period of 11 months. Doug Ramshaw, President, Minera Alamos, noted that although the industry is being pressured by inflation, the project's PEA shows that the mine’s development remains feasible.

The company highlighted that it looks forward to taking advantage of the many opportunities at Cerro de Oro, especially since the deposit remains open in multiple directions and depths. Minera Alamos announced that it will conduct further metallurgical testing to examine options for recovering gold from deeper sulfide zones.

“Leaning on our team’s collective experience in mine building in Mexico with capital and operating costs informed by the recent construction and ramp up of the Santana gold mine, the Cerro de Oro PEA is a game changer for Minera as we strive to reach our initial target of an over 100,000 oz/y gold producer. Given the rampant inflationary pressures across the industry, it is a testament to Minera’s smart and nimble business model that a new mine could be developed at Cerro de Oro for the low capital intensity presented in the PEA,” said Ramshaw.       

Minera Alamos highlighted that according to the results of the PEA, the construction of an 11km access road is required to start the development of the project site and early production. In addition, the company explained that the closest CFE connection is 0.5km to the east. Minera Alamos is already discussing the project's requirements with the state electric utility to confirm the network's capacity and be able to connect it to the power grid.