Alamos Gold hit new highs for gold production in 2017.
The Toronto gold miner released its 2017 and fourth-quarter production numbers and provided an outlook on the year ahead.
The company’s mines in Canada and Mexico produced a record 429,400 ounces of gold in 2017, up 10 per cent from the previous year.
Included in the mix was one month of production from Island Gold, the Wawa-area mine that Alamos acquired last fall from Richmont Mines for $933 million.
It was also a record fourth quarter with 120,000 ounces posted, including 56,500 ounces from the Young-Davidson Mine near Matachewan and 9,000 ounces from Island Gold. Quarterly sales amounted to $162 million.
The company-wide production plans for 2018 are to mine between 480,000 to 520,000 ounces of gold, a 16 per cent increase over last year.
"With record fourth quarter gold production, Alamos achieved a new annual record, producing 429,400 ounces of gold, while delivering a significant reduction in operating costs and capital spending. This translated into strong free cash flow growth from our operations," said Alamos Gold president-CEO John McCluskey in a Jan. 11 news release.
"We significantly improved our outlook over the past year. With a stable operating base of 500,000 ounces of annual production, improving margins, near-term growth, and a peer-leading, debt-free balance sheet, we are well positioned to deliver significant free cash flow growth over the next several years," he added.
On the development side, Alamos is budgeting $146 million for construction at its Kirazli project in Turkey and for exploration at Island Gold and its Mulatos Mine in Mexico.
Gold production for Young-Davidson in 2018 is expected to range between 200,000 and 210,000 ounces.
Mining rates will increase to an average rate of 7,000 tonnes per day, an increase from 6,600 tonnes.
Capital spending at Young-Davidson this year will be between $70 million and $80 million, mostly focused on the ongoing upper and lower mine development and lower mine infrastructure.
Gold production will marginally decrease due to six weeks of downtime at the Northgate shaft to complete the tie-in between the upper and lower mines.
The targeted production for Island Gold in 2018 is between 90,000 and 100,000 ounces. Mining rates are expected to average 1,000 tonnes per day.
The capital budget for Island Gold is between $50 million and $55 million.
Spending is focused on going underground development and upgrades to the mill.
An expansion to the mill to 1,100 tonnes per day is expected to be completed in the second half of this year.
The company’s global exploration budget is $36 million, up 50 per cent over last year’s budget.
Island Gold will receive $15 million for an aggressive and ongoing 84,000-metre program to expand the mineral reserve there.