Lynn Lake key to Alamos’ growth aspirations
A new feasibility study for Lynn Lake details plans for a larger, longer-life operation.
Precious metals miner Alamos Gold has the potential to sustain 650 000 oz/y of production in Canada, with the Lynn Lake project, in Manitoba, being an important part of its long-term plans, says CEO John McCluskey.
“Good projects are becoming increasingly rare, especially within top jurisdictions like Canada, highlighting the attractiveness of Lynn Lake,” he says.
The company on Thursday published an updated feasibility study for Lynn Lake, outlining plans for a larger, longer-life, low-cost operation.
The study, which incorporates a 44% larger mineral reserve totalling 2.3-million ounces and a 14% increase in milling rates to 8 000 t/d, pitches average gold production at 207 000 oz/y over the first five years and 176 000 oz/y over the initial ten years.
The total mine life is 16.5 years, over which time it will produce 2.19-million ounces of gold and 2.62-million ounces of silver.
Initial capital of $632-million increased from the 2017 study to reflect inflation and scope changes with the larger operation.
The feasibility study yielded attractive economics, with an after-tax net present value, using a 5% discount, of $428-million and an after-tax internal rate of return of 17%.
At a base case gold price of $1 675/oz, the payback will be less than four years and less than three years at current gold prices.
Alamos’ current priority is the Phase 3+ expansion at Island Gold and the company does not anticipate spending any significant capital on developing Lynn Lake until the Island Gold expansion is well advanced.
“Through Lynn Lake, Island Gold and Young-Davidson, we have three high-quality assets that can support over 650 000 oz of annual production in Canada, at an all-in sustaining costs below $1 000/oz over the long term,” says McCluskey.
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