Tag Archives: Alamos Gold

Alamos Gold boosts Young-Davidson mining rates with Cat R2900XEs

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Alamos Gold has become the latest company to add Cat R2900 XE diesel-electric loaders to its fleet, with the Canada-based miner reporting in its latest quarterly results that the LHDs have contributed to a significant increase in mining rates at the Young-Davidson mine in Ontario.

The R2900 XE features a switch reluctance electric drive system alongside a Cat C15 diesel engine, which offers up to 335 kW of power. Caterpillar says the machine comes with about 30% increased fuel efficiency compared with the R2900G, with its lower engine revolutions per minute resulting in reduced fuel burn, heat, noise, vibration and exhaust emissions.

Since being launched in 2023, these loaders have had significant market uptake – thanks to these traits, as well as the increased payload benefits they offer over the diesel-only equivalent.

In Australia, Gold Fields, MMG and WestGold now have units on their books. In Egypt, Centamin’s Sukari underground gold mine also has R2900 XEs within its fleet. Other loaders have also made their way to Africa, with the first two of a nine-strong fleet having already arrived at the Newmont-owned Subika underground mine in Ghana.

Alamos Gold is the latest company to joint this list.

In its June quarter results, the company said its Young-Davidson mine had been positively impacted by the arrival of two of these machines.

Young-Davidson is accessed via two shafts and a ramp system to a depth of 1,500 m. The operation uses large modern equipment, high productivity bulk mining methods (long hole open stoping) and paste backfill. LHDs load, haul and transfer stope production to the ore pass system from where it is hoisted to the surface with minimal ore and waste re-handling. A multi-year expansion of Young-Davidson was completed July 2020 with the transition to newly constructed lower mine infrastructure which is larger, highly automated and more productive. The lower mine infrastructure is designed to operate at 8,000 t/d and replaces the mid-mine infrastructure which was designed for 6,000 t/d.

In the three-month period ended June 30, Young-Davidson produced 44,000 oz of gold, 10% higher than the March quarter and slightly lower than the prior year period. Underground mining rates averaged 7,885 t/d in this quarter, a significant increase from the March quarter, reflecting the delivery of these new “hybrid production scoops” and temporary downtime during the previous quarter to replace the head ropes in the Northgate shaft, Alamos noted.

The new loaders have replaced two R2900G XTRA loaders and one R1700 loader, the company told IM. The standard R2900G comes with a payload of 17.2 t, whereas the R1700 has a 15-t payload. The R2900 XE offers 18.5 t of payload. The gold miner said it was expecting this increased payload and power to boost the loader’s productivity by 101.6% (on a tonnes per hour basis) when compared with the R2900G.

Alamos also highlighted the reduction in emissions expected to be achieved with the new diesel-electric loaders, explaining that fuel consumption was estimated to come in 34% lower than the R2900G, with 54.9% lower CO2 emissions during “high idle”.

The gold miner said its Young-Davidson operation was planning to purchase one new Cat R2900 XE unit “every year” for the foreseeable future.

Alamos’ Island Gold mine keeps giving up its goods

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The latest drill intercepts from Alamos Gold’s Island Gold Mine in Ontario, Canada, have continued to showcase the potential of an asset that already has a more than 17-year mine life ahead of it, John McCluskey, President and Chief Executive Officer, says.

On the same day as releasing an assortment of promising drill intercepts outside of the existing reserves and resources – namely 110.17 g/t Au over 7.79 m, 97.21 g/t Au over 5.05 m and 525.28 g/t Au over 2.33 m – McCluskey continued to highlight the credentials of an asset that had just 1.8 Moz of mineral reserves and resources, and production around the 100,000 oz/y mark when it was acquired by Alamos in 2017 in a $620 million all-share deal for mine owner Richmont Mines.

“We’re now looking at one of the biggest, most profitable underground gold mines in Ontario,” he told IM in a meeting in London this week. “That is a far cry from what the market saw when we first acquired the company. We have since more than tripled the reserve and resource base and continue to build confidence in adding further ounces.”

The Phase 3+ Expansion Study released earlier this year outlined a 2,400 t/d shaft-supported operation with average annual gold production of 287,000 oz, starting in 2026 upon completion of the sinking and equipping of a 1,373-m-deep shaft. This represents a 22% increase from the previous Phase 3 study and a 121% increase from the mid-point of 2022 production guidance of 130,000 oz.

McCluskey confirmed this week that pre-sinking activities at the expansion project had been completed by contractor Redpath, going down to 42 m depth (pictured). He expected full sinking activities to start up next year in line with the above guidance.

The addition of a shaft connected to low-carbon intensity grid power in Ontario will support higher mining rates with a smaller mobile fleet of haul trucks resulting in significantly lower diesel consumption at Island, according to the company. This is expected to drive a 35% reduction in greenhouse gas emissions over the mine life.

While the current plan at Island is to sink down to circa-1,400 m, the company made the decision to acquire a hoisting plant for the expansion that could operate down to depths of 2,000 m. This is an indication of the undefined potential at the mine, according to McCluskey, who admitted the shaft could be sunk to even deeper depths should drilling results justify this.

“It would not require too much more engineering or money to extend the shaft below the circa-1,400 m level, so that is something we will continue to weigh up as we conduct further drilling,” he said. “The Island story continues to grow and we continue to see a very profitable future at what will become one of the lowest cost underground mining operations in the province.”

Alamos upgrades expansion plans for Island Gold mine, targeting 2,400 t/d

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Following further exploration success, Alamos Gold Inc has upgraded its expansion plans for the Island Gold mine in Ontario, Canada.

In the results of the Phase 3+ Expansion Study for Island, the company outlined a larger, more profitable and valuable operation than the Phase III Expansion Study released in 2020. This 2020 iteration looked to expand throughput to 2,000 t/d, from 1,200 t/d, through a shaft and paste plant build, costing $1.07 billion. It would result in output rising to 236,000 oz/y starting in 2025 at mine-site all-in sustaining costs of $534/oz.

Based on the results of the P3+ Expansion Study, the company says it is now proceeding with an expansion of the operation to 2,400 t/d.

This development would see average annual gold production of 287,000 oz, starting in 2026 upon completion of the sinking and equipping of a 1,373-m-deep shaft. This represents a 22% increase from the previous study and a 121% increase from the mid-point of 2022 production guidance of 130,000 oz.

While the growth capital of $756 million and sustaining capital of $777 million are both up from the 2020 study – reflecting the expansion, a larger mineable resource, and industry-wide inflation – the total capital intensity associated with the new plan has decreased 4% to $344/oz reflecting the larger mineable resource with increased ounces per vertical metre.

This infrastructure was all incorporated into the 2020 study with several scope changes to accommodate the 20% increase in production rates to 2,400 t/d including a larger mill expansion and paste plant, as well as accelerated development to support the higher mining rates. The Phase 3+ Expansion also includes 30% more development over the mine life to accommodate the 43% larger mineable resource.

Following the completion of the expansion in 2026, the operation will transition from trucking ore and waste to skipping ore and waste to surface through the new shaft infrastructure, driving production higher and costs significantly lower.

With no significant capital expected to be spent on the company’s other development project, Lynn Lake, until the P3+ Expansion is well underway, Alamos said it is well positioned to fund the expansion internally while generating strong free cash flow over the next several years.

John A McCluskey, President and Chief Executive Officer, said: “Island Gold continues to grow in every sense with our planned Phase 3+ Expansion driving the value of Island Gold to $2 billion at current gold prices. Mineral reserves and resources have increased to 5.1 Moz, supporting the Phase 3+ increase in production rates, which will create a bigger, longer-life, more profitable and valuable operation.

“As a producing mine with a well-understood cost structure, this expansion is low risk from an execution perspective, and has a significantly reduced carbon footprint. The exploration story continues to unfold with a mineral reserve and resource base that has nearly tripled over the past four years, and with the deposit open laterally and down-plunge, we expect Island Gold will be one of the lowest cost and most profitable mines for decades to come.”

Alamos Gold hits production milestone at La Yaqui Grande

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Alamos Gold Inc has announced initial gold production from the La Yaqui Grande mine, in Mexico, following the completion of construction this month, ahead of schedule.

Stacking rates continue to ramp up with leaching activities beginning earlier in June, it noted.

To mark the occasion, the company held a ceremony at site with President and Chief Executive Officer, John A McCluskey, members of the Alamos Gold Board of Directors, and employees from the La Yaqui Grande mine.

McCluskey said: “This represents a significant achievement with construction of La Yaqui Grande having been completed ahead of schedule while navigating a challenging environment over the past few years with COVID-19. On behalf of Alamos, I would like to congratulate our entire team at Mulatos. La Yaqui Grande represents another in a long line of discoveries that have continued
to extend the mine life of the overall Mulatos Complex since it began producing in 2005.

“Given its higher grades and recoveries, La Yaqui Grande underpins a strong outlook for Mulatos with higher production and lower costs driving growing free cash flow in the second half of this year and beyond.”

The Mulatos mine is a conventional open-pit, heap-leach operation with gold recovered through a carbon-in-column circuit.

A total of 991 oz of gold were produced from the initial pour.

La Yaqui Grande is expected to produce approximately 3,000 oz in June, which is already factored into June quarter consolidated production guidance of between 100,000-110,000 oz of gold.

Consistent with full year 2022 guidance, stacking rates at La Yaqui Grande are expected to ramp up through the second half of the year driving production higher and costs lower at Mulatos and company-wide, starting in the September quarter.

First announced in July 2020 as Alamos Gold’s next low-cost, high-return project in the Mulatos District, this large-scale construction project will extend the life of mine for at least five years, thus sustaining the company’s presence and importance in the production of gold in the state of Sonora, Mexico, the company said. La Yaqui Grande was completed ahead of schedule generating more than 1,000 jobs during the construction phase and will continue to sustain 450 direct jobs.

Miller sells first BEV converted light utility vehicle to Alamos’ Young-Davidson

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Miller Technology has announced the first sale of its new battery-electric utility vehicle for mining to the Young-Davidson gold mine, in Ontario, Canada, owned by Alamos Gold Inc.

The sale, a battery-electric conversion of a diesel-powered light utility vehicle called the Miller BEV Land Cruiser, follows trials of a Miller Land Cruiser and Miller’s ground-up battery-electric vehicle − the Relay − at Young-Davidson.

“Miller Technology’s electric vehicle is a prime example of how Canada is leading the world in green technology, reducing operating costs, reducing greenhouse gas emissions and most importantly improving employee health,” Anthony Rota, the Member of Parliament for Nipissing—Timiskaming, Ontario, said at a press conference to announce the sale. “We are proud to see them serve the world from North Bay in the riding of Nipissing-Timiskaming.”

Light utility vehicles are driven underground to safely move mining staff around the mine site. Historically, these utility vehicles have had diesel engines, which emit greenhouse gas emissions and impairs underground air quality. Miller has developed a conversion kit to exchange the diesel engine for an electric motor, in addition to a number of other mining-specific modifications to the vehicle. These vehicles are often run 24 hours a day, and Miller has patented certain aspects of its IONIC Drive system. Prior to releasing this BEV conversion, Miller had built the Relay platform.

Dan Bachand, the CEO of Miller, said: “With our original build Relay, BEV conversion kit and new projects such as an E-grader, the Ionic Drive System that Miller has developed has arrived at the top of the battery-electric heavy duty-cycle drive systems. I want to thank our team members for their hard work. All of our staff have helped get us to this point.”

He added: “I want to thank Alamos Gold for their courage and commitment to battery-electric vehicles and emissions reductions. This is a great step forward by Alamos Gold to reduce diesel fumes and emissions, helping with employee health, fossil fuel reductions and to slow global warming.”

Léon Grondin-Leblanc, General Manager, Young-Davidson, said: “The Young-Davidson mine’s emission intensity is less than half the industry underground mine average as a result of increased electrification and automation of our lower mine infrastructure, which we completed two years ago, and today’s announcement is yet another step forward.”

Drilling innovation directs Alamos to golden goods at Island

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John A McCluskey, President and CEO of Alamos Gold, tends to look forward, not back, when talking about strategic decisions the Toronto- and New York-listed miner has made during his 18 years heading up the company.

When discussing the acquisition of Richmont Mines, which included the flagship Island Gold Mine asset in Ontario, he allows himself a brief rumination on the market’s first impressions of the deal: “We acquired the asset for around $620 million in November of 2017. The consensus view in the market was we had overpaid for the asset.”

That consensus view considered 1.8 Moz of mineral reserves and resources and production around the 100,000 oz/y mark, among other factors.

“In less than three years, we had Island over the 4 Moz reserve and resource threshold – we’re now nearer to 5 Moz – and the consensus valuation for the asset from analysts covering us is around $1.4 billion.”

That new valuation factors in a production rise – the company is anticipating gold output of 130,000-145,000 oz this year – and long-term growth prospects for the asset. The latter is evidenced by an Island Phase Three Expansion study published last year that envisaged a 2,000 t/d operation (currently 1,200 t/d) able to produce 236,000 oz/y starting in 2025.

While McCluskey says the company was aware of these growth prospects back in November 2017, most market observers will be surprised they have been proven up so quickly after the Richmont Mines transaction.

They probably underestimated what the use of surface directional drilling could do at Island.

Originally leveraged by Richmont Mines’ Chief Geologist and now Island Gold Chief Geologist, Raynald Vincent, back in 2015, the exploration technique has allowed Alamos to successfully step out from and infill holes Richmont and predecessors previously drilled.

Scott R.G. Parsons, VP of Exploration for Alamos, says surface directional drilling, in combination with the exploration team’s understanding on the controls on gold mineralisation at Island and Alamos’ financial backing for exploration, has helped the company grow the asset rapidly.

“The significant resource and reserve growth at Island in the last three years – adding 3 Moz net of 500,000 of mining depletion – was largely driven by surface directional drilling,” he told IM. “We could not have moved the asset forward in such a significant way without it.”

The use of what Parsons says are “standard” surface drill rigs and Devico’s DeviDrill™ steerable wireline core barrels are allowing the company to hit mineralisation far below the mine’s existing underground infrastructure. The DeviDrill tool can make multiple branches from a pilot hole, dramatically reducing both the time spent and the cost of drilling when compared with standard core drilling methods. At the same time, no time is lost on moving the drill rig between branch holes, as the core barrel can be steered from surface to complete the optimal drill patterns.

The DeviDrill tool can make multiple branches from a pilot hole, dramatically reducing both the time spent and the cost of drilling when compared with standard core drilling methods (photo: Devico)

The company has drilled 240 surface directional drill holes at Island for about 200,000 m of drilling using only 27 drill sites, Parsons explained.

“Using conventional surface drilling, the 240 holes would have required significantly more drill sites,” he said.

This would have involved moving the rig more frequently, making the process that much slower and expensive.

Instead, thanks to this directional drilling technique, the company is sitting on an additional 3 Moz of gold resources and reserves garnered in the last three years. This has come with a discovery cost of just $11/oz.

Accuracy, as Devico indicated, is another benefit of this technology.

“Surface directional drilling is not only more effective than standard drilling practices, but we can hit our targets with 1% accuracy,” Parsons added. “So, if we’re drilling a 1,500 m hole, we can typically intersect our target within 15 m from plan, 1,500 m downhole. This predictable drilling spacing is critical for defining a mineral resource with the appropriate confidence level.

“You’d never be able to do that with standard surface drilling.”

This technique is not a silver exploration bullet, though. According to Parsons, it does not work everywhere.

“It really all hinges around the quality of the orebody and our understanding of the deposit and the controls and the mineralisation,” he said. “Knowing we require a certain drill spacing to be able to define inferred mineral resources, we strategically target the down-plunge extensions of the ore shoots.”

At Island, these ore shoots – which are the high-grade portions of the deposit – are laterally extensive in the lateral and vertical sense, Parsons explained.

“With the surface directional drilling, we are able to specifically target these down-plunge extensions,” he said. “With one or two pilot holes and branch patterns, we can evaluate a large area down-plunge and along strike of the existing mineral reserves and resources. In some cases, other gold deposits can have ore shoots that are less predictable, or are not as extensive, so it would be a challenge to apply surface directional drilling without having a strong understanding of the controls of these shoots for targeting.”

And, it should not be forgotten, it requires an investment in exploration that goes beyond simply reserve and resource replacement on an annual basis. Richmont, a much smaller company, was unable to bankroll such a strategy.

Alamos has made a commitment to do this, as evidenced in the 16-year mine life outlined in the Island Phase III study and the $25 million it intends to invest in exploration this year.

The use of surface directional drilling looks set to continue paying off beyond this study, with the company recently drilling its best-ever hole to date by leveraging the technique.

Drill hole MH25-08 – 71.21 g/t Au (39.24 g/t cut) over 21.33 m – in addition to MH25-04 (28.97 g/t Au (26.89 g/t cut) over 21.76 m) have true widths approximately four times greater than the average width of the large high-grade inferred resource block defined up-plunge of them (photo: Alamos Gold)

Drill hole MH25-08 – 71.21 g/t Au (39.24 g/t cut) over 21.33 m – is the hole in question. This hole, in addition to the previously reported MH25-04 (28.97 g/t Au (26.89 g/t cut) over 21.76 m), have true widths approximately four times greater than the average width of the large high-grade inferred resource block defined up-plunge of them. This, the company said, demonstrates the zone has widened in this area, providing even further potential beyond the company’s current growth plans.

“That one – MH25-08 – is the best drill hole ever drilled at Island,” Parsons said. “And that is after 1.3 million metres of drilling and over 7,000 drill holes dating back nearly 100-years.

“That speaks to the potential of this deposit to continue to grow through exploration, and also highlights the prospectivity of the Michipicoten Greenstone Belt.”

More to come

With 27,500 m of surface directional drilling scheduled for 2021 – and only 6,683 m carried out as of May 31 – more of these high-grade intercepts could soon come to the fore.

And Parsons says the company can continue to use surface directional drilling some 500 m below where it is currently drilling down to at Island.

On top of that, the company, having established the necessary underground exploration infrastructure, is equipping its underground drill rigs at Island for directional drilling, with 24,000 m of underground directional drilling planned this year (3,233 m completed as of the end of May).

“This is allowing us to reduce our cost per metre compared with surface directional drilling and allowing us to drill more targets in a shorter amount of time,” Parsons said. “We will continue applying directional drilling technology as long as the orebody is continuing at depth to drill off those ore shoots.”

At Young-Davidson, the company’s other core asset in Ontario, Canada, the company is also making plans to use underground directional drilling.

“One of our plans going into 2022 is to evaluate opportunities to utilise directional drilling from underground exploration drifts established in lower and mid mines at Young-Davidson to target mineralisation down-plunge at depth,” Parsons said.

More broadly, Parsons thinks the company’s exploration team can leverage their understanding of the technology at other assets.

“For us, it is a competitive advantage,” he said. “With a solid geological understanding of the deposit you are looking at and an understanding of the application and the benefits of directional drilling, we can recognise opportunities of what could be occurring at depth where others might not see potential until well into the future after underground infrastructure is established at depth.”

There are obvious cost, time and accuracy benefits to using directional drilling, yet there is another benefit that may get lost along the way.

Without the need to constantly move the surface drill rigs between drill pads, the footprint of these rigs is reduced.

McCluskey says the technology has brought another ESG advantage to Island too.

By being able to quickly drill off more targets and convert these into the resource base, Alamos has been able to think long term with its Island Gold Phase III Expansion and justify the expense of a shaft and paste backfill plant.

This comes with a 35% reduction in emissions compared with using the mine’s existing ramp and diesel-powered truck haulage, he said, explaining that much of the Ontario grid is powered by renewable hydroelectricity.

“This technology has given us the exploration success that has been converted into scale and allowed us to think longer term and afford the infrastructure to make it a ‘greener’ operation,” he said.

With such a long list of benefits, more companies will be looking at directional drilling to prolong the life of their assets and make long-term decisions that make economic and sustainable sense.

Miller Technology’s Relay battery-electric utility vehicles heading to Australia

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Miller Technology has sealed a significant contract for its Relay battery-electric utility vehicles, with units set to start up underground at an operation owned by an Australian major miner.

Having passed the evaluation stage and been selected for purchase over competitors’ units, the Relays are en route to Australia, Miller Technology’s Dean Robinson, Vice President (Asia-Pacific & Africa) Director, Global Sales, told IM.

Designed for the harsh environment and rigorous duty cycle required to operate in underground mines, the Relay features an industry first dual charging system allowing for both off-board DC fast charging and on-board AC opportunity charging, according to the company. This can see a single 25-minute charge time provide enough power for a 10-hour mining shift, according to Robinson.

The Relay comes with a mid-ship mounted dual output motor, 100 kW continuous mechanical power output rating (170 kW peak), 680 Nm continuous mechanical torque output rating (1,770 Nm peak) and IP67 ingress protection.

At least one Relay unit has already had an outing in the industry, running at Alamos Gold’s Young-Davidson mine, in Ontario, Canada. On reviewing data from this trial, Paul Summers, Lead Developer, Electric Drive Systems, at Miller, previously told IM that it was clear battery-electric vehicles were suitable for utility and support applications, even in hard-rock mines with steep ramps.

On top of the Relay, Miller Technology also produces a Toyota Land Cruiser BEV, “believed to the best of its type by all those miners who have compared the three major units on the market”, Robinson says, while the company is also preparing to release a battery-electric underground grader.

“Around Q2 (June quarter) next year, we’ll also have an underground grader available utilising the same drivetrain as the Relay and, therefore, the same fast chargers,” he said.

The company has also received requests from the unnamed major Australian miner to produce 12-seat personnel carriers based on the Relay platform, according to Robinson.

Alamos’ Island III goes on sinking mission for more gold

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Having weighed five scenarios for a Phase III expansion at the Island gold mine, in Ontario, Canada, Alamos Gold is proceeding with a plan to carry out a blind sink down to the 1,373 m level, build a paste plant, and expand the mill and tailings facility at the operation to boost production.

The company is no stranger to shaft sinking; its Young-Davidson mine, also in Ontario, has just had its Northgate shaft commissioned after Cementation used large diameter raiseboring technology to establish it as part of an engineer, procure and construct contract.

Yet, the shaft sinking route was not a foregone conclusion, with three of the five scenarios involving ramp haulage.

The Phase III Expansion Study, carried out with assistance from Hatch, Cementation, Airfinders, Golder, Halyard, SRK and DRC Estimating, looked at these scenarios using Deswik planning software to find further growth at the mine.

Having added 900,000 oz of the yellow metal to its reserve base already this year and hit a rate of 1,240 t/d in the March quarter (ahead of the nameplate 1,200 t/d rate), the company was keen to leverage these ounces at the same time as come up with a sound economic proposition for expanding and extending the mine.

Of the five scenarios, three involved ramp haulage (two retaining the 1,200 t/d capacity and one at 1,600 t/d) and two would see a shaft installed (at 1,600 t/d or 2,000 t/d). All apart from one option included the addition of a paste plant.

The company settled on expanding throughput to 2,000 t/d, from 1,200 t/d, through a shaft and paste plant build, explaining that this option presented the best economics.

As a result, the Phase III expansion will involve an initial blind sink down to 1,373 m, that new paste plant, and an expansion of the mill and tailings facility.

These investments, which would see the mine life double to 16 years from the eight years currently outlined in the reserve base, are covered in the total capital of $1.07 billion, which the company says is offset by the lower sustaining capital and operating costs of this scenario versus all that were evaluated.

Following the completion of the shaft construction in 2025, it is envisaged the operation will transition from trucking ore and waste to skipping ore and waste to surface through the new shaft infrastructure.

Output would rise to 236,000 oz/y starting in 2025, 72% higher than the mid-point of previously issued guidance for the mine in 2020, while mine-site all-in sustaining costs would fall to $534/oz, a 30% drop on the 2020 guidance.

Combined, this made for an after-tax net present value (NPV) of $1.02 billion at a 5% discount rate, and an after-tax internal rate of return of 17%, using a base case gold price assumption of $1,450/oz.

“These are also the lowest costs of any scenario evaluated reflecting the significant productivity improvements, decreased ventilation requirements, increased automation, and higher throughput rates associated with the shaft,” the company said.

While the company did not spell out what automation elements would be included in this expansion, on a webcast discussing the results, Chris Bostwick, VP, Technical Services, included details of an LTE network underground installation at Island as one continuous improvement project for 2020.

An Alamos Gold spokesperson later confirmed to IM that the LTE network was in the process of being installed with the project expected to be completed by the end of this year. “The network is primarily being installed for voice communications and real-time data gathering,” the spokesperson said.

Asked whether it was a pre-cursor to the use of autonomous haulage at the operation ahead of the expansion, the spokesperson replied: “We don’t have any firm plans for increased automation of our mobile equipment currently, but are actively monitoring the progress with the technology and this remains a potential down the road.”

With regards to automation within the expanded mine scenario, the only aspect currently being considered is the automation or tele-remote operation of the rock breakers and skipping, the spokesperson confirmed.

“Some of the trucking requirements could be automated down the road as noted above,” the spokesperson said. “The shaft expansion will make the entire operation more automated and productive.”

John A McCluskey, President and Chief Executive Officer of Alamos Gold, reviewing the study, said Island Gold had proven to be a “tremendous acquisition” for Alamos.

“We acquired Island Gold in 2017 at a cost of approximately $600 million when it had 1.8 Moz of mineral reserves and resources,” he said. “This high-grade deposit has more than doubled to 3.7 Moz and we expect further growth yet.”

While the planned expansion would make Island more profitable through increased production and lower costs, it would also “best position the operation to benefit from additional exploration success”, he said.

Long-hole open stoping will continue to be utilised as the primary mining method at Island, however, increased development and key infrastructure changes including the addition of a paste plant and shaft will allow for mining rates to increase to 2,000 t/d, it said.

The addition of paste fill underground will allow for faster stope cycling, thereby supporting higher mining rates and providing increased geotechnical stability, according to Alamos. It will also increase mining recovery, resulting in an additional 100,000 oz of gold recovered over the life of mine (from existing pillars). This represented an in-situ value of $145 million at a gold price of $1,450/oz.

The paste plant will have a capacity of 2,000 t/d and capital cost of $34 million with the plant expected to be completed in the December quarter of 2023, Alamos said.

When it comes to the shaft options, which Alamos Gold evaluated with the help of Cementation, it was decided that a conventional blind sink methodology would be used to provide “improved schedule reliability with minimal impact on existing operations”.

A combined raisebore from the 840 m level, and blind sink option below the 840 m level was evaluated, however, this option would significantly impact existing operations, Alamos said. “The cuttings from the raisebore in the upper mine, and waste generated from the conventional sink in the lower mine, would displace underground throughput capacity and significantly reduce mining rates below 1,200 t/d by as much as 400 t/d over the next several years,” it said.

The settled-on option will see a 5 m diameter concrete-lined shaft constructed with a steel head frame. The shaft will house two 12 t skips in dedicated compartments for ore and waste movement and a double-deck service cage for the transport of personnel and materials.

The company estimated an overall shaft sinking rate of around 9.6 ft (2.9 m)/d, which included a ramp-up period.

While the shaft will be sunk to an initial depth of 1,373 m, the hoisting plant will be designed for an ultimate depth of 2,000 m providing flexibility to accommodate future exploration success, the company said.

At the initial depth of 1,373 m, the shaft has a capacity of 4,500 t/d, more than sufficient to accommodate the peak mining rates of 3,300 t/d (ore and waste), according to Alamos.

The underground ore and waste handling and loading pocket will be a conventional configuration like that of Young-Davidson, the company said.

Once skipped to surface, ore will be trucked to the expanded mill circuit.

On top of the payback being sweeter for the shaft expansion, ventilation requirements are also lower than under the ramp scenarios given the significantly smaller mobile fleet, Alamos said. This allows the shaft to serve as the only new required fresh air source.

The total construction capital for the shaft installation including all supporting infrastructure is anticipated to be $232 million.

Further, 56% of tailings will be placed underground reducing tailings dam raise requirements, a capital saving of $13 million, according to Alamos.

The mining rate ramp-up to 2,000 t/d after the shaft expansion will be supported by a total of five 42 t haul trucks. This compares with a peak of 18 haul trucks required to sustain ramp haulage at 1,200 t/d and 25 haul trucks for ramp haulage at 1,600 t/d, the company said.

“This contributes to the lower ventilation requirements with the shaft expansion, and significantly lower diesel usage and greenhouse gas emissions,” the company said.

The mill expansion will include upgrading the crushing circuit, adding a second parallel ball mill, and a new elution and carbon in pulp (CIP) circuit with carbon screens. The total cost of the mill expansion is expected to be around $40 million.

The flowsheet of the new circuit includes upgrades and expansions for the following major process operations:

  • New vibratory grizzly feeder;
  • New primary crusher;
  • New fine ore stockpile and conveyors;
  • Additional primary ball mill;
  • Primary ball mill screen for both ball mill circuits;
  • Existing thickener converted to high rate thickener;
  • Two additional leach tanks;
  • New elution plant and kiln (ADR); and
  • Tailing pumps.

Mill recoveries are expected to average 96.5% over the life of mine, consistent with the historical performance of the existing operation, it said.

To accommodate the increased electricity requirements with the larger mill and shaft, the power line to site will be upgraded at a cost of $14 million, it added.

Despite the backfill options with the envisaged paste plant, an expansion of the existing tailings impoundment area is underway and required under all scenarios to accommodate the growth in the deposit over the last several years, Alamos said.

“With two planned future raises beyond 2020 and the addition of the paste plant, the tailings facility has sufficient capacity to accommodate existing mineral reserves and resources,” it added.

Alamos Gold to hit new highs after reaching new depth at Young-Davidson

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Alamos Gold says it has completed the lower mine expansion at Young-Davidson, in Ontario, Canada, with the successful commissioning of the Northgate shaft.

The lower mine expansion project was designed to boost underground production at Young-Davidson from 6,000 t/d to 8,000 t/d as the existing mid-mine infrastructure was replaced with the new lower mine infrastructure.

The project involved Cementation using large diameter raiseboring technology to establish the new shaft at Young-Davidson as part of an engineer, procure and construct contract.

Alamos Gold says the newly constructed lower mine infrastructure is larger, highly automated and more productive, with the transition expected to drive gold production higher and costs lower starting in the second half of 2020.

John A McCluskey, President and Chief Executive Officer of Alamos Gold, said: “This marks a significant milestone for Young-Davidson and turning point for Alamos as we transition from a reinvestment phase to a period of strong free cash flow growth.

“I would like to congratulate the entire team at Young-Davidson for this historic achievement, which will unlock the full potential of the operation. With a 13-year mineral reserve life, large resource base, and significant exploration potential, Young-Davidson is well positioned to deliver solid free cash flow over the long term.”

In addition to the Northgate shaft (pictured), the underground crusher and conveyor system have also been successfully commissioned, Alamos Gold said. Mining rates are expected to ramp up through the second half of the year to 7,500 t/d by the end of 2020.

The mine produced 188,000 oz of gold in 2019 at mine site all-in sustaining costs of $1,047/oz, Alamos said.