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viewMinera Alamos Inc

Minera Alamos has the assets and team to realize its Mexican gold mine aims

Snapshot

The Minera Alamos team, headed up by chief executive Darren Koningen and president Doug Ramshaw, is trying to replicate the success of junior producer Castle Gold

A gold pour

Quick facts: Minera Alamos Inc

Price: 0.22 CAD

TSX-V:MAI
Market: TSX-V
Market Cap: $82.28 m
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  • High-quality development assets in Mexico; Santana nearing production

  • Advancing development projects in Mexico

  • Strong management with operational expertise in heap leach mining and proven mine builders

  • Cornerstone partner in Osisko Gold Royalties

What Minera Alamos does?

Minera Alamos Inc (CVE:MAI) is advancing high-quality development gold projects in the Sonora and Durango states of Mexico.

The Minera Alamos team, headed up by chief executive Darren Koningen and president Doug Ramshaw, is trying to replicate the success of junior Castle Gold, which advanced its El Castillo mine in Durango state from generating around 30,000 ounces a year up to 75,000 ounces of the yellow metal, before the group was sold nine years ago for C$130mln. El Castillo is now generating around 100,000 ounces annually.

Koningen was vice president of operations at Castle Gold and worked alongside Chester Miller, a huge figure in mining and the pioneer of heap leaching, to advance El Castillo.

Ramshaw was CEO of Corex Gold (CVE:CGE), which announced a merger with Minera Alamos in January 2018. That union added Corex's Santana gold project in Sonora to Minera's La Fortuna project, the Guadelupe De Los Reyes project, both in Durango, and the Los Verdes property which, significantly, lies directly north of Santana and thus consolidated the land position.

Minera Alamos understands the jurisdiction.  According to an annual survey of mining companies in 2017, ranked on a country versus country basis against the rest of Central and Latin America, Mexico came third for investment attractiveness. It is said to have a transparent and structured permitting process, typically between six and 12 months from submission.

Santana is the group's "near term production opportunity" and has seen a successful bulk test mining program. The firm is nearing commercial production at the open-pit heap leach project. First gold is earmarked for the middle of 2020. Minera plans to develop Santana first and use cashflow from that mine used to advance its other projects..

How is it doing:

Minera Alamos has completed plans for second phase exploration at Santana, which includes over 10,000 meters (m) of drilling and is expected to run throughout the year, to include expansion drilling at the Nicho and Nicho Norte deposits and exploration drilling at a number of high priority targets.

On August 8 this year, the firm marked a major milestone as it received what's called an MIA (Manifestacion de Impacto Ambiental) or environmental impact statement for the Santana project, meaning it can start applying for other local permits required ahead of mining, and begin initial earthworks.

"We are extremely proud of our technical team's efforts to successfully obtain operating permits for the Santana project in a little over a year following their submission," said Darren Koningen, CEO of Minera Alamos."The company is currently well positioned to initiate construction activities late this year with first gold production planned mid-2020."

Meanwhile, at La Fortuna, a preliminary economic assessment (PEA) released last August demonstrated robust project economics including an after-tax internal rate- of-return of 93% and an all-in sustaining cost (AISC) of $440 per ounce. The net present value of the starter pit, with a discount of 7.5%, was put at US$69.8 million. The report enVisages a simple open-pit mine with an initial 40,000-50,000 ounce annual production and a low CAPEX start-up.

The project already has 300,000 ounces of resource defined. A 2,000 tonnes per day (tpd) mill was acquired in 2017 and a 1,100 tpd starter operation is contemplated, which could be expanded to 2,000 tpd.

Minera has received notification confirming the completion of the technical review phase for the change of land use to construct mining facilities at the site, allowing initial groundworks to begin, and it is waiting for the next stage of the permit process.

Guadalupe is a heap leach project like Santana. The site is in a significant regional gold system with estimated historical production of 500,000 to 600 ,000 ounces gold and more than 40 million ounces of silver. The firm has said the project could start generating at around the 40,000 ounces-a-year mark.

In late June 2019, however, Minera Alamos announced it had agreed to option the Guadalupe de los Reyes gold project to ePower Metals Inc (CVE:EPWR).

To acquire the company’s interest in Guadalupe, ePower must complete a cash payment of US$1.5 million to Minera Alamos and assume the company’s remaining payments of US$3 million owed to Visa Gold. ePower has entered into a loan agreement with arm’s length lenders for C$2 million in order to finance its deposit payments.

ePower must also issue Minera Alamos 9.45 million shares and 3.35 million warrants. In order to complete the deal, ePower must consolidate its shares on a two-for-one bases and complete a C$6 million financing.

Inflection points:

  • Santana drilling and permit receipts
  • More on permitting at La Fortuna

What the boss says: 

In June this year, Minera Alamost president Doug Ramshaw noted that the firm raised $4.9 million in March from a placing in a difficult mining climate.

"We have the funding we require a this stage to get all our work plans in place and have the necessary working capital along some project finance that we'll be working on in the summer to get Santana up and running."

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Watch

Full interview: Minera Alamos starts phase 2 drilling program at Santana...

Minera Alamos (CVE:MAI) President Doug Ramshaw joined Steve Darling from Proactive Investors Vancouver on Skype with news the company has begun phase 2 of their drilling program in Mexico. Ramshaw talked about the work that is happening right now even though it's is the raining season. 

on 08/15/2019

5 min read