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Island Gold gets nod for Phase II expansion

The operating permits for Alamos Gold’s Island Gold mine have been amended to allow a phase-two expansion.
Island Gold gets nod for Phase II expansion Island Gold gets nod for Phase II expansion Island Gold gets nod for Phase II expansion Island Gold gets nod for Phase II expansion Island Gold gets nod for Phase II expansion

Alamos Gold has received approval to increase Island Gold's production rate

Staff Reporter

The Ontario Environment, Conservation and Parks Ministry agreed to amend the permit to allow the mine to use its completed phase-one expansion to 1,200t/d, which was completed in 2018.

The amendments came ahead of schedule (originally expected late in 2019) and will allow underground mining and mill throughput rates to increase from the previously permitted rate of 1,100t/d.

Underground mining rates were expected to increase to 1,200t/d in 2020, the company said, adding it would pursue opportunities to ramp up mining rates to 1,200t/d before the end of 2019. The new permit does not affect the company's 2019 production and cost guidance.

It does not expect the Phase II expansion to require more capex since the mine and mill can both already support throughput rates of 1,200t/d.

In parallel, Alamos said it was moving ahead with a large exploration programme at Island Gold that had to date been successful in driving significant growth in reserves and resources the past several years.

This was feeding a Phase III expansion study beyond 1,200t/d, expected to be completed over the next year.

Alamos, with a market capitalisation of C$2.31 billion, has seen its Toronto-listed equity grow 21.62% in value in the year to date, but the stock is down 15% over the past 12 months. At $6.02 apiece on Tuesday, the stock was trading at about the midpoint of its 12-month range.