Minera Alamos – Recapping The Robust PEA Economics For The Cerro De Oro Gold Project
Doug Ramshaw, President and CEO of Minera Alamos (TSX.V:MAI – OTCQX:MAIFF), joins us to review the PEA at their key development Cerro De Oro gold project in Zacatecas, Mexico. We start off by recapping the robust economics:
- LOM All-In Sustaining Cost (AISC) of $873/oz — averaging $763/oz in Years 1 through 4.
- After-Tax NPV at 5% of $150.5M and IRR of 111%.
- Average annual gold production approaching 60,000oz (~60,000oz to 70,000oz in Years 1 through 4).
- 8.2 year mine life based on initial mineable total of 59 Mt of mineralization
- – Pre-production capital costs of $28.1M (includes 30% contingency).
- Payback period of 11 months.
The company is still advancing permitting, engineering, metallurgical work, geological, and other geotechnical work to continue to de-risk the Cerro de Oro Gold Project as it moves down the pathway into production as the Company’s second operating gold mine next year.
We discuss the growth-oriented production profile where Santana will be able to grow from 30k ounces per year in gold production up to over 40k ounces, and where Cerro De Oro is projected to produce 60k-65k ounces of gold per year taking the company up to a 100,000+ ounces per annum mid-tier gold producer. After that the 3rd Project, La Fortuna, is projected to produce about 50k ounce of gold per year taking things up to about 150,000 ounces per year production in just the next few years. In addition to all the production growth on tap over the next few years, the company also has is continuing to explore and expand on all projects and Doug highlights how there is management upside expectation to continue to grow resources at all 3 Projects, funded by organic revenue growth.
We wrapped up with Doug outlining the general plan for financing the Cerro de Oro project into production, and that with the modest $28 million capex, and about $13 million already in house at present, that it’s likely going to be something like a $20 million debt facility, slated to be paid right back in about 11 months, based on the economics in the PEA.
Please email us with any follow up questions for Doug regarding Minera Alamos. Our email addresses are Fleck@kereport.com and Shad@kereport.com.