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.”