The hoist is complete, the headframe is near completion, and the sinking of a new shaft at the Island Gold Mine, outside Dubreuilville, begins at year’s end.
In delivering its third-quarter results, Alamos Gold updated progress on the third phase of expansion of the high-grade underground operation ,which will double production once construction is finished in 2026.
The infrastructure being installed also includes a paste plant and a processing mill expansion to support boosting the mining rate from 1,200 tonnes per day to 2,400. Instead of trucking ore and waste rock to surface, that material will be skipped through the new shaft infrastructure.
Capital spending for this expansion during 2023 is expected to be between $165 million and $185 million. That level will remain largely the same in 2024 and 2025.
On the production front, Island Gold produced 36,400 ounces during the quarter, up 19 per cent from the previous quarter, with 99,800 ounces produced so far this year. Island Gold is on track to achieve its year-end production target. Gold grades averaged 9.94 grams per tonne during the quarter.
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Island Gold continues to generate strong cash flow allowing this mine to fund the majority of capital spending on this expansion. Quarterly cash flow was negative $9.2 million in the quarter and negative $34.2 million so far this year.
Alamos said Young-Davidson, its other Ontario mine, outside Matachewan, remains a “consistent performer” with mining rates in-line with target rates and the operation generating $30.9 million of mine-site free cash flow in the quarter and $82.6 million year-to-date. With higher grades expected in the fourth quarter, the operation is on track to meet full year production guidance and generate more than $100 million of mine-site free cash flow for the third consecutive year.
Young-Davidson produced 45,100 ounces of gold in the third quarter, down 9 per cent from the same period last year due to 10 per cent lower grades processed. The operation generated $30.9 million cash flow during the quarter and $82.3 million over the first nine months of this year. It’s on track on surpass $100 million in mine-site free cash flow for the third consecutive year. The company said Young-Davidson is well positioned to generate similar levels for the long haul.
The company said it’s still on the hunt for people for Island Gold and Young-Davidson, having attended job fairs in Kirkland Lake, Wawa and Thunder Bay.