Phase III Expansion Of Island Gold To 2,000 tpd
TORONTO - Alamos Gold Inc. reported results of the positive Phase III Expansion Study conducted on its Island Gold mine, located in Ontario. Based on the results of the study, the Company is proceeding with an expansion of the operation to 2,000 tonnes per day (tpd) (Shaft Expansion). This follows a detailed evaluation of several scenarios which demonstrated the Shaft Expansion as the best option, having the strongest economics, being the most efficient and productive scenario, and the best positioned to capitalize on further growth in Mineral Reserves and Resources.
“Island Gold has been a tremendous acquisition for Alamos Gold. We acquired Island Gold in 2017 at a cost of approximately $600 million when it had 1.8 million ounces of Mineral Reserves and Resources. This high-grade deposit has more than doubled to 3.7 million ounces and we expect further growth yet. The Phase III Expansion Study showcases the growing value of Island Gold. Already one of the most profitable mines in Canada, the expansion will increase production, lower costs, and make this operation even more profitable. The expansion will also best position the operation to benefit from additional exploration success,” said John A. McCluskey, President and Chief Executive Officer.
The Phase III Expansion of Island Gold to 2,000 tpd from a current rate of approximately 1,200 tpd will involve various infrastructure investments. These include the installation of a shaft, paste plant, and an expansion of the mill and tailings facility. Following the completion of the shaft construction in 2025, the operation will transition from trucking ore and waste to skipping ore and waste to surface through the new shaft infrastructure, driving production higher and costs significantly lower.
Long-hole open stoping will continue to be utilized as the primary mining method; however, increased development and key infrastructure changes including the addition of a paste plant and shaft will allow for mining rates to increase to 2,000 tpd.
A 5.0 meter diameter concrete lined shaft will be constructed with a steel head frame. The shaft will house two 12 tonne skips in dedicated compartments for ore and waste movement, and a double-deck service cage for the transport of personnel and materials. The shaft will be sunk to an initial depth of 1,373 metres. The hoisting plant is designed for an ultimate depth of 2,000 metres providing flexibility to accommodate future exploration success. At the initial depth of 1,373 metres, the shaft has a capacity of 4,500 tpd, more than sufficient to accommodate the peak mining rates of 3,300 tpd (ore & waste).
A conventional blind sink methodology will be utilized providing improved schedule reliability with minimal impact on existing operations. A combined raise-bore from the 840 meter level, and blind sink option below the 840 meter level was evaluated; however, this option would significantly impact existing operations. The cuttings from the raise bore in the upper mine, and waste generated from the conventional sink in the lower mine would displace underground throughput capacity and significantly reduce mining rates below 1,200 tpd by as much as 400 tpd over the next several years.
The underground ore and waste handling and loading pocket will be a conventional configuration similar to that of Young-Davidson. Once skipped to surface, ore will be trucked to the expanded mill circuit.
Ventilation requirements under the Shaft Expansion are lower than under the ramp scenarios given the significantly smaller mobile fleet allowing the shaft to serve as the only new required fresh air source. The total construction capital for the shaft installation including all supporting infrastructure is $232 million.
With the exception of the current base case operation, the addition of a paste plant was included in all scenarios for a number of reasons, principally the high project returns with an after-tax IRR of 32%. The addition of paste fill underground will allow for faster stope cycling, thereby supporting higher mining rates and providing increased geotechnical stability. It will also increase mining recovery resulting in an additional 100,000 ounces of gold recovered over the life of mine, an in-situ value of $145 million at a gold price of $1,450 per ounce. Further, 56% of tailings will be placed underground reducing tailings dam raise requirements, a capital savings of $13 million. The paste plant will have a capacity of 2,000 tpd and capital cost of $34 million4 with the plant expected to be completed in the fourth quarter of 2023.
Mining rates are expected to ramp up to 2,000 tpd following the completion of the shaft in 2025. This will be supported by a significantly smaller mobile fleet than required under the ramp scenarios. Post completion of the shaft, a total of five haul trucks will be required to support a mining rate of 2,000 tpd. This compares to a peak of 18 haul trucks required to sustain ramp haulage at 1,200 tpd and 25 haul trucks for ramp haulage at 1,600 tpd. This contributes to the lower ventilation requirements with the Shaft Expansion, and significantly lower diesel usage and green house gas emissions.
The expanded mill will be a conventional milling operation with a nominal capacity of 2,000 tpd, up from approximately 1,200 tpd currently. The expansion will include upgrading the crushing circuit, adding a second parallel ball mill, and a new elution and carbon in pulp (“CIP”) circuit with carbon screens. The total cost of the mill expansion is $40 million.
To accommodate the increased electricity requirements with the larger mill and shaft, the power line to site will be upgraded at a cost of $14 million. The same power line upgrade is required under all scenarios including maintaining the existing operating rates of 1,200 tpd. This reflects increased ventilation requirements with the ramp scenarios as mining progresses deeper.
An expansion of the existing tailings impoundment area is underway and required under all scenarios to accommodate the growth in the deposit over the last several years. With two planned future raises beyond 2020 and the addition of the paste plant, the tailings facility has sufficient capacity to accommodate existing Mineral Reserves and Resources.
The Shaft Expansion, as currently configured is not expected to require a lengthy environmental assessment process and the majority of the permitting requirements fall within the provincial government jurisdiction. These include amendments to existing authorizations and new authorizations for construction activities. All of the Shaft Expansion permitting requirements are expected to be completed within an 18 to 24 month timeframe. This is a well known jurisdiction within which Alamos has successfully operated for years, achieving various permitting milestones at both of its Young-Davidson and Island Gold mines.