Alamos Gold keeps finding more gold than it’s extracting out of the ground. And its Island Gold Mine, outside Dubreuilville, has a lot of do with that.
In its 2022 year-end mineral reserves and reserves report from its mines in Northern Ontario and Mexico, the Toronto gold company said its gold reserves are growing in size and quality,"mainly driven by Island Gold and Mulatos Mines at Sonora, Mexico.
The company’s total proven and probably mineral reserves increased 2 per cent to 10.5 million ounces of gold, grading 1.63 grams per tonne, which “more than replaced” mining depletion at a rate of 13 per cent.
For 2022, Alamos produced 460,000 ounces in total among its three mines. All met their gold production targets, the company said. Net earnings for the year was $37.1 million.
Island Gold’s contribution to the cause was writ large in company news releases this week. The mine produced 134,500 ounces for the year, at the high end of its production target.
Gold reserves and resources increased four per cent – net of mining depletion – to total 5.3 million ounces for 2022.
In the six years since Island Gold has been in the Alamos stable, there’s been an increase of 187 per cent in discovered gold from the original 1.8 million ounces charted at the time of acquisition in 2017.
The reserve grade increased six per cent to 10.78 grams per tonne. Gold reserves at Island Gold have increased for ten consecutive years, a trend that’s expected to continue given the property’s large and growing high-grade mineral base.
A reserve is part of a mineral resource that’s been fully evaluated and is deemed economical to mine. Resources are found during the discovery stage and are put through an evaluation process to determine form, grade, quality and quantity with a reasonable prospect of eventually being mined.
The Island East zone of the mine seems to be the epicentre of where higher grades are found and where there’s potential for growth. It's described as a high-grade ore shoot that's yielded some of the best holes ever drilled at Island Gold.
This zone now holds 1.9 million ounces with grades increasing by 10 per cent a year ago to now averaging 16.97 grams per tonne of gold.
Island Gold currently has an 18-year mine life, but exploration successes and a major mine expansion underway dictate there surely is more production to come.
The operation has always been rewarded with a lion's share of the Alamos exploration budget, and that continues today.
Out of Alamos' entire $47-million exploration budget for 2023, $14 million is slotted for Island Gold.
The size of this year’s drilling program has increased from 27,500 metres in 2022 to 45,000 metres. Most of the work will be underground, which is cheaper on a per metre basis than from the surface, is less technically challenging, and requires significantly fewer metres to hit the target.
The mine planners are focussed on areas that will be brought into production over the next few years.
A smaller 7,500-metre program of regional exploration will focus on targets outside the Island Gold deposit on the rest of the company’s 15,500-hectare property.
Way to the east, outside Matachewan, Alamos said reserves at the Young-Davidson Mine dipped slightly to 3.3 million ounces with grades slipping from 3 per cent to 2.35 grams per tonne.
Less than what was planned exploration drilling took place in 2022. A shortage of drillers hampered progress lead to a limited program. But Alamos said more than 70 per cent of what was mined in 2022 has been replaced.
The exploration budget has been boosted from $5 million last year to $8 million this year with 21,000 metres of underground drilling on tap.
The focus will be to push the boundaries of the deposit within the syenite host rock and into the hanging wall and footwall where higher grades are found.
A smaller 5,000-metre surface drilling program is planned to test near-surface targets over the rest of the 5,900-hectare property.
The gold reserve at Young-Davidson stands at 15 years. That remains squarely in Alamos' comfort zone.
The company said the deposit still remains open-ended deeper down and to the west with plenty of operating life in the years ahead.
Gold production for Young-Davidson for 2022 tallied 192,000 ounces, hitting the midway point of its annual production target.
"We continue to have broad-based success with our exploration programs having more than replaced what we have mined to drive an increase in our global mineral reserves for the fourth consecutive year,” said John McCluskey, Alamos president-CEO, in a statement.
"We see excellent opportunities for growth across our portfolio of assets, mostly notably at Island Gold and Mulatos where we have allocated the majority of our 2023 budget. Both higher-grade deposits have grown significantly over the last several years and with both open in multiple directions, we see excellent potential for this to continue."