Alamos Gold Inc. (
TSX:AGI;
NYSE:AGI) (“Alamos” or the “Company”) today reported an
updated National Instrument 43-101 compliant Mineral Reserve and
Resource estimate for its Island Gold Mine as of June 30, 2018.
This incorporates exploration drilling completed during the first
half of 2018, the majority of which was released in the May 24,
2018 exploration update. A summary of updated Mineral Reserves and
Resources by category as at June 30, 2018 compared to December 31,
2017 is outlined in the table below.
Island Gold Mineral Reserves and Resources
(Mineral Resources Exclusive of Reserves) |
|
June 30, 2018 |
December 31, 2017 |
Change |
|
Tonnes |
Grade |
Ounces |
Tonnes |
Grade |
Ounces |
Ounces |
Grade |
|
(000's) |
(g/t Au) |
(000's) |
(000's) |
(g/t Au) |
(000's) |
(000's) |
% |
% |
Proven Mineral Reserves |
906 |
12.86 |
375 |
807 |
11.14 |
289 |
86 |
30 |
% |
16 |
% |
Probable Mineral Reserves |
1,884 |
9.64 |
584 |
1,896 |
9.81 |
598 |
-14 |
-2 |
% |
-2 |
% |
Proven & Probable Mineral Reserves |
2,790 |
10.69 |
959 |
2,703 |
10.20 |
887 |
72 |
8 |
% |
5 |
% |
Measured Mineral Resources |
35 |
4.83 |
5 |
48 |
4.46 |
7 |
-1 |
-21 |
% |
8 |
% |
Indicated Mineral Resources |
806 |
8.32 |
216 |
542 |
5.98 |
104 |
111 |
107 |
% |
39 |
% |
Measured & Indicated Mineral Resources |
841 |
8.18 |
221 |
591 |
5.86 |
111 |
110 |
99 |
% |
40 |
% |
Inferred Mineral Resources |
3,673 |
9.99 |
1,180 |
2,958 |
9.55 |
908 |
271 |
30 |
% |
5 |
% |
- Proven and Probable Mineral Reserves increased 129,000
ounces before mining depletion. Net of mining depletion, Mineral
Reserves increased 8%, or 72,000 ounces, to 959,000
ounces, (2,790 thousand tonnes (“kt”) grading 10.69 grams
per tonne of gold (“g/t Au”)).
- Mineral Reserve grades increased 5% to 10.69 g/t
Au
- Measured and Indicated Mineral Resources increased 99%,
or 110,000 ounces, to 221,000 ounces while grades increased 40% to
8.18 g/t Au (841 kt grading 8.18 g/t Au)
- Inferred Mineral Resources increased 30%, or 271,000
ounces, to 1,180,000 ounces with grades increasing 5% to 9.99 g/t
Au (3,673 kt grading 9.99 g/t Au)
- Since the acquisition of Island Gold in November 2017,
Mineral Reserves and Resources have continued to grow:
- Proven and Probable Mineral Reserves have increased
365,000 ounces before mining depletion, or 207,000 ounces, net of
mining depletion of 158,000 ounces since the start of 2017. Mineral
Reserve grades have increased 17%
- Measured and Indicated Mineral Resources have increased
142%, or 130,000 ounces
- Inferred Mineral Resources have increased 18%, or
184,000 ounces
- An $18 million exploration budget in 2018 is driving
growth. This Mineral Reserve and Resource update
incorporated a total of 65,500 metres (“m”) of drilling completed
across 432 holes during the first half of 2018. A further
84,000 m of surface and underground exploration and delineation
drilling has been budgeted for the second half of 2018
“Island Gold continues to grow in both size and
quality. In the nine months since we acquired Island Gold, Mineral
Reserves and Resources have grown in all categories while Mineral
Reserve grades have increased 17%. As 2018 drilling unfolds, we see
excellent potential for this growth to continue,” said John A.
McCluskey, President and Chief Executive Officer.
2018 Exploration Program
The focus of the 2018 exploration drilling
program is on expanding the down-plunge and lateral extensions of
the Island Gold deposit with the objective of adding new near mine
Mineral Resources. Drilling is being conducted across three
main areas of focus along the two kilometre long Island Gold Main
Zone including; the Main Extension; the Eastern Extension; and the
Western Extension. The 2018 program has been successful in
extending high grade gold mineralization across all three areas
with the bulk of the Mineral Resource increase coming in the Main
Extension where the majority of the surface exploration drill holes
have been concentrated. The exploration program has also been
successful in adding to Mineral Reserves within the Eastern
Extension as well as in the Main C Zone.
A total of 65,500 m of drilling across 432 holes
was completed during the first half of 2018 and incorporated into
Mineral Reserves and Resources as of June 30, 2018. This included
22,500 m of surface directional exploration drilling, 16,300 m of
underground exploration drilling, 11,100 m of underground
delineation drilling and 15,600 m of underground definition
drilling. New highlight intercepts that were incorporated into
updated Mineral Reserves and Resources can be found in Figures 1 to
4 and Tables 1 to 3 at the end of this release.
A further 84,000 m has been budgeted for the
second half of 2018 with the objective of extending high grade
mineralization and adding near-mine Mineral Resources across all
three areas of focus. A significant portion of the surface
exploration drilling planned for the second half of 2018 will be at
wider drill spacing than required for inclusion to Inferred Mineral
Resources and focused on regional targets. As such the
Company is not expecting the same pace of Mineral Resource growth
with the December 31, 2018 update.
Mineral Reserves
Proven and Probable Mineral Reserves increased
by 129,000 ounces, or 72,000 ounces net of mining depletion through
the first half of 2018, to 959,000 ounces of gold. Mineral Reserve
grades increased 5% to 10.69 g/t Au. Since the acquisition of
Island Gold in November 2017, Mineral Reserves have increased
365,000 ounces, or 207,000 ounces net of mining depletion of
158,000 ounces since the start of 2017. Mineral Reserve grades have
also increased 17% as the deposit continues to grow in size and
quality. Since the end of 2014, mineral reserves have increased by
nearly 800,000 ounces, net of mining depletion of nearly 300,000
ounces, while grades have increased nearly 70% from 6.39 g/t Au to
10.69 g/t Au.
Approximately 65% of the 129,000 ounce increase
in Mineral Reserves (as of June 30, 2018), prior to mining
depletion, came through a combination of underground delineation
and exploration drilling in the Main Zone and Eastern Extension.
Underground drilling conducted from the 340, 620 and 840 metre
level exploration drifts was successful in converting existing
Inferred Mineral Resources to higher classifications including
Indicated Mineral Resources and Proven and Probable Mineral
Reserves. The program was also successful in adding new Indicated
and Inferred Mineral Resources (as discussed below).
The remaining growth in Mineral Reserves was
driven by an increase in grades within developed ore blocks in the
Main C Zone. The higher grades were the result of an increase in
the capping factor applied to face samples in development headings
in the Main C Zone to 125 g/t Au, from 65 g/t Au. The
increase in the capping factor was supported by a statistical
analysis incorporating ongoing channel sampling and positive grade
reconciliation of 15% from actual mining results since the end of
2016.
Mineral Resources
Measured and Indicated Mineral Resources
(exclusive of Mineral Reserves) nearly doubled to 221,000 ounces
while grades increased 40% to 8.18 g/t Au. The majority of the
increase was within the Eastern Extension.
Inferred Mineral Resources increased 30% to
1,180,000 ounces while grades increased 5% to 9.99 g/t Au. This
included the addition of 510,000 ounces during the first six months
of 2018 prior to mining depletion and the conversion to higher
classifications for a net increase of 271,000 ounces.
Inferred Mineral Resources were added in all three areas of focus
with the majority coming in the Main Extension where most of the
surface exploration drilling has been concentrated.
Mineral Resource additions by area are detailed
as follows.
Main Extension (Figure 2)
A total of 390,000 ounces of Inferred Mineral
Resources were added within the Main Extension. The bulk of the
increase was in an area of focus down-plunge from existing Mineral
Reserves where gold mineralization had been extended up to 1.2
kilometres. Exploration drilling in 2017 and through the first half
of 2018 has successfully defined a new Inferred Mineral Resource in
this area totaling 314,000 ounces and grading 11.20 g/t Au.
This has extended Inferred Mineral Resources a
further 500 m and this east-plunging high-grade ore shoot remains
open down-plunge. Surface directional drilling in the second half
of 2018 will be focused on further extending high-grade
mineralization with the objective of defining additional Mineral
Resources.
Eastern Extension (Figure
3)
Indicated Mineral Resources increased 77,000
ounces within the Eastern Extension while Inferred Mineral
Resources decreased 22,000 ounces reflecting the conversion to
higher categories. Through a mix of underground delineation and
exploration drilling, new Indicated and Inferred Mineral Resources
were defined below existing Mineral Reserves while existing
Inferred Mineral Resources were upgraded to higher Resource and
Reserve classifications (as noted above). This area remains open at
depth and will be an ongoing focus of underground drilling from the
620 level in the second half of 2018. Surface directional drilling
is also planned to test this area between a depth of 900 and 1,300
m this fall.
Western Extension (Figure
4)
A total of 30,000 ounces of Inferred Mineral
Resources were added in the Western Extension through limited
drilling with two holes completed through first half of 2018.
Surface directional drilling during the second half of 2018 will be
focused on expanding high-grade mineralization which remains open
laterally and down-plunge from existing Inferred Mineral Resource
blocks.
Approximately 88,000 ounces of the increase in
Inferred Mineral Resources came through an increase in the capping
factor applied to drilling assays east of the post mineralization
dykes (Figure 1). This represents less than 8% of the total
Inferred Mineral Resource of 1,180,000 ounces. The majority of
Mineral Resources are located east of the dykes and ongoing
drilling has been incorporated into a statistical study supporting
an increase in the capping factor to 100 g/t Au, from 70 g/t
Au.
A $1,250 per ounce gold price assumption was
used in estimating Mineral Reserves and $1,400 per ounce assumption
was used for estimating Mineral Resources as of June 30, 2018, both
unchanged from 2017. Mineral Resources are not Mineral Reserves and
do not have demonstrated economic viability. With the exception of
the above noted change in capping factors in the C and E1E Zones,
all other parameters used in estimating Mineral Reserves and
Resources as of June 30, 2018 are unchanged from 2017.
Qualified Persons
Chris Bostwick, FAusIMM, Alamos Gold’s Vice
President, Technical Services, has reviewed and approved the
scientific and technical information contained in this news
release. Chris Bostwick is a Qualified Person within the meaning of
Canadian Securities Administrator’s National Instrument 43-101 (“NI
43-101”).
Exploration programs at the Island Gold Mine are
directed by Raynald Vincent, P.Eng., M.G.P., Chief Geologist at the
Island Gold Mine and a Qualified Person within the meaning of NI
43-101.
Quality Control
Assays for the delineation and exploration
drilling were done at LabExpert in Rouyn-Noranda, PQ. The
Corporation inserts at regular intervals quality control (QC)
samples (blanks and reference materials) to monitor laboratory
performance. Cross check assays are done on a regular basis in a
second accredited laboratory.
About Alamos
Alamos is a Canadian-based intermediate gold
producer with diversified production from four operating mines in
North America. This includes the Young-Davidson and Island Gold
mines in northern Ontario, Canada and the Mulatos and El Chanate
mines in Sonora State, Mexico. Additionally, the Company has a
significant portfolio of development stage projects in Canada,
Mexico, Turkey, and the United States. Alamos employs more than
1,700 people and is committed to the highest standards of
sustainable development. The Company’s shares are traded on the TSX
and NYSE under the symbol “AGI”.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Scott K. Parsons |
|
Vice President, Investor Relations |
|
(416)
368-9932 x 5439 |
|
All amounts are in United States dollars, unless otherwise
stated.
The TSX and NYSE have not reviewed and do not accept
responsibility for the adequacy or accuracy of this release.
Cautionary Note
This news release includes certain statements
that constitute forward-looking information within the meaning of
applicable securities laws ("Forward-looking Statements"). All
statements in this news release, other than statements of
historical fact, which address events, results, outcomes or
developments that Alamos expects to occur are Forward-looking
Statements. Forward-looking Statements are generally, but not
always, identified by the use of forward-looking terminology such
as "expects", is expected", "anticipates", "plans" or “is planned”,
“trends”, "estimates", "intends" or “potential” or variations of
such words and phrases and similar expressions or statements that
certain actions, events or results "may", "could", "would",
"might" or "will" be taken, occur or be achieved or the negative
connotation of such terms. Forward-looking Statements in this news
release include the statements with respect to planned exploration
programs, costs and expenditures, changes in Mineral Resources and
conversion of Mineral Resources to Proven and Probable Mineral
Reserves, and other information that is based on forecasts and
projections of future operational, geological or financial results,
estimates of amounts not yet determinable and assumptions of
management.
Alamos cautions readers not to place undue
reliance on the forward-looking statements in the information and
content on this news release as a number of factors could cause
actual future results, conditions, actions or events to differ
materially from the targets, outlooks, expectations, goals,
estimates or intentions expressed in the Forward-looking
Statements. These factors include, but are not limited to:
risks related to obtaining and maintaining necessary permits,
licenses and authorizations required to carry out planned
exploration or development work, the actual results of current
exploration activities, conclusions of economic and geological
evaluations, changes in project parameters as plans continue to be
refined and fluctuations the price of gold.
Exploration results that include geophysics,
sampling, and drill results on wide spacings may not be indicative
of the occurrence of a mineral deposit. Such results do not provide
assurance that further work will establish sufficient grade,
continuity, metallurgical characteristics and economic potential to
be classed as a category of Mineral Resource. A Mineral Resource
that is classified as "Inferred" or "Indicated" has a great amount
of uncertainty as to its existence and economic and legal
feasibility. It cannot be assumed that any or part of an "Indicated
Mineral Resource" or "Inferred Mineral Resource" will ever be
upgraded to a higher category of Mineral Resource. Investors are
cautioned not to assume that all or any part of mineral deposits in
these categories will ever be converted into Proven and Probable
Mineral Reserves.
Additional risk factors and details with respect
to risk factors affecting the Company are set out in the Company’s
latest Annual Information From and MD&A, each under the heading
“Risk Factors”, available on the SEDAR website at
www.sedar.com or on EDGAR at www.sec.gov. The foregoing should be
reviewed in conjunction with the information found in this news
release. The Company disclaims any intention or obligation to
update or revise any forward-looking statements, whether written or
oral, or whether as a result of new information, future events or
otherwise, except as required by applicable law.
Cautionary Note to U.S. Investors –
Mineral Reserve and Resource Estimates
All Mineral Resource and Reserve estimates
included in this news release or documents referenced in this news
release have been prepared in accordance with Canadian National
Instrument 43-101 - Standards of Disclosure for Mineral Projects
("NI 43-101") and the Canadian Institute of Mining, Metallurgy and
Petroleum (the "CIM") - CIM Definition Standards on Mineral
Resources and Mineral Reserves, adopted by the CIM Council, as
amended (the "CIM Standards"). NI 43-101 is a rule developed by the
Canadian Securities Administrators, which established standards for
all public disclosure an issuer makes of scientific and technical
information concerning mineral projects. The terms "Mineral
Reserve", "Proven Mineral Reserve" and "Probable Mineral Reserve"
are Canadian mining terms as defined in accordance with NI 43-101
and the CIM Standards. These definitions differ materially from the
definitions in the Securities and Exchange Commission Industry
Guide 7 ("SEC Industry Guide 7") under the United States Securities
Act of 1933, as amended, and the Exchange Act. Under SEC Industry
Guide 7 standards, a "final" or "bankable" feasibility study is
required to report reserves, the three-year historical average
price is used in any reserve or cash flow analysis to designate
reserves and the primary environmental analysis or report must be
filed with the appropriate governmental authority.
In addition, the terms "Mineral Resource",
"Measured Mineral Resource", "Indicated Mineral Resource" and
"Inferred Mineral Resource" are defined in and required to be
disclosed by NI 43-101 and the CIM Standards; however, these terms
are not defined terms under SEC Industry Guide 7 and are normally
not permitted to be used in reports and registration statements
filed with the U.S. Securities and Exchange Commission (the "SEC").
Investors are cautioned not to assume that all or any part of
mineral deposits in these categories will ever be converted into
Mineral Reserves. "Inferred Mineral Resources" have a great amount
of uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an Inferred Mineral Resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of Inferred
Mineral Resources may not form the basis of feasibility or
pre-feasibility studies, except in very limited circumstances.
Investors are cautioned not to assume that all or any part of an
Inferred Mineral Resource exists or is economically or legally
mineable. Disclosure of "contained ounces" in a Mineral Resource is
permitted disclosure under Canadian regulations; however, the SEC
normally only permits issuers to report mineralization that does
not constitute "reserves" by SEC standards as in place tonnage and
grade without reference to unit measures.
Figure 1: Island Gold Mine Main Zone Longitudinal –
Mineral Reserves and Resources as of June 30, 2018
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/11caa871-22f9-4aec-86c3-ceeea79da8de
Figure 2: Island Gold Mine Main Zone Longitudinal – Main
Extension
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/31ff1e3e-6ed5-4a10-9bce-e67d39140af7
Figure 3: Island Gold Mine Main Zone Longitudinal–
Eastern Extension
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/dac68061-acd8-465a-97af-6f1f62e4c421
Figure 4: Island Gold Mine Main Zone Longitudinal –
Western Extension
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/528e3667-9649-44bb-8bcd-1ac4089eb243
Table 1: Island Gold – Previously
Unreleased Select Composite Intervals from Surface Directional
Exploration Drilling used in the June 30, 2018 Mineral Reserve and
Resource Update
Composite intervals greater than 3 g/t Au
weighted average, capping values per zone: Zone E1E @ 100 g/t
Au; Zone Unknown @ 70 g/t. Target area: Main Extension
(Main Ext), Western Extension (Western Ext)
Hole ID |
Zone |
Target Area |
From (m) |
To (m) |
Core Length (m) |
True Width (m) |
Au Uncut (g/t) |
Au Cut (g/t) |
Vertical Depth |
MH9-10 |
E1E |
Main Ext |
1,435.55 |
1,439.80 |
4.25 |
3.36 |
8.22 |
8.22 |
1,349 |
MH9-11 |
E1E |
Main Ext |
1,482.50 |
1,489.08 |
6.58 |
4.40 |
15.18 |
15.18 |
1,414 |
MH10-9 |
E1E |
Main Ext |
1,506.60 |
1,513.30 |
6.70 |
5.38 |
13.77 |
13.77 |
1,404 |
LC-415-04-3 |
Unknown |
Western Ext |
1,076.00 |
1,078.00 |
2.00 |
1.37 |
11.06 |
11.06 |
1,034 |
MH4-7 |
Unknown |
Western Ext |
1,175.50 |
1,180.25 |
4.75 |
3.21 |
20.81 |
20.81 |
987 |
MH4-7 |
Unknown |
Western Ext |
1,188.35 |
1,200.40 |
12.05 |
8.10 |
10.44 |
10.44 |
1,000 |
MH4-7 |
Unknown |
Western Ext |
1,220.40 |
1,225.65 |
5.25 |
3.51 |
16.04 |
16.04 |
1,024 |
Note: Unknown zone corresponds to gold
intercepts outside known ore zones and for which continuity is not
yet established.
Table 2: Island Gold – Previously
Unreleased Select Composite Intervals from Underground Exploration
Drilling used in the June 30, 2018 Mineral Reserve and Resource
Update
Composite intervals greater than 3 g/t Au
weighted average, capping values per zone: E1E @ 100 g/t Au; Zone
Unknown @ 70 g/t. Target areas: Eastern Extension (Eastern
Ext)
Hole ID |
Zone |
Target Area |
From (m) |
To (m) |
Core Length (m) |
True Width (m) |
Au Uncut (g/t) |
Au Cut (g/t) |
Vertical Depth |
620-543-61 |
E1E |
Eastern Ext |
161.84 |
165.45 |
3.61 |
3.12 |
21.59 |
21.59 |
621 |
620-592-38 |
E1E |
Eastern Ext |
142.50 |
147.60 |
5.10 |
2.21 |
22.23 |
17.05 |
632 |
620-592-40 |
E1E |
Eastern Ext |
273.00 |
279.00 |
6.00 |
2.15 |
4.33 |
4.33 |
771 |
620-592-45 |
E1E |
Eastern Ext |
271.00 |
276.70 |
5.70 |
2.34 |
35.44 |
31.28 |
771 |
620-592-47 |
E1E |
Eastern Ext |
117.00 |
121.00 |
4.00 |
2.11 |
10.50 |
10.50 |
615 |
620-592-48 |
E1E |
Eastern Ext |
325.50 |
337.30 |
11.80 |
3.04 |
17.83 |
17.35 |
817 |
620-598-05 |
E1E |
Eastern Ext |
178.00 |
181.80 |
3.80 |
2.41 |
8.97 |
8.97 |
663 |
620-598-07 |
E1E |
Eastern Ext |
141.43 |
145.50 |
4.07 |
2.73 |
7.30 |
7.30 |
451 |
620-592-43 |
Unknown |
Eastern Ext |
58.12 |
63.00 |
4.88 |
4.53 |
5.61 |
5.61 |
590 |
620-592-40 |
Unknown |
Eastern Ext |
45.90 |
49.70 |
3.80 |
3.45 |
7.02 |
7.02 |
627 |
620-592-48 |
Unknown |
Eastern Ext |
48.70 |
55.30 |
6.60 |
1.75 |
8.34 |
7.94 |
631 |
Note: Unknown zone corresponds to gold
intercepts outside known ore zones and for which continuity is not
yet established.
Table 3: Island Gold – Previously
Unreleased Select Composite Intervals from Underground Delineation
Drilling used in the June 30, 2018 Mineral Reserve and Resource
Update
Composite intervals greater than 3 g/t Au
weighted average, capping values Zone E1E @ 100 g/t Au, Eastern
Extension (Eastern Ext)
Hole ID |
Zone |
Target Area |
From (m) |
To (m) |
Core Length (m) |
True Width (m) |
Au Uncut (g/t) |
Au Cut (g/t) |
Vertical Depth |
620-543-63 |
E1E |
Eastern Ext |
135.40 |
138.00 |
2.60 |
2.18 |
6.48 |
6.48 |
585 |
620-598-01 |
E1E |
Eastern Ext |
137.70 |
143.00 |
5.30 |
3.20 |
12.26 |
12.26 |
454 |
620-598-02 |
E1E |
Eastern Ext |
128.50 |
133.50 |
5.00 |
3.20 |
22.34 |
22.34 |
464 |
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