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TSX:AGI 10.08 -0.19 -1.85% Volume: 778,135 2017-04-24 20 mins delay | Get full quote
NYSE:AGI 7.46 -0.16 -2.1% Volume: 2,536,133 April 24, 2017
GOLD PRICE 1,276.85 +0.80 +0.06% Volume: April 24, 2017

The El Chanate Mine is an open pit, heap leach gold operation located in Sonora, Mexico. The mine has been and continues to be a consistent and reliable gold producer.

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El Chanate Mine

Ownership 100%
Location Sonora, Mexico
Status Operating
Operation Open pit, heap leach
Commodity Gold
Annual Operating Data 2015A 2016a 2017e
Production oz Au 79,312 68,000 50,000 - 60,000
Cost of Sales2 US$/oz $1,504 $1,177 $1,265
Total Cash Costs1 US$/oz $808 $1,052 $1,200
Mine-Site All-in Sustaining Costs1 US$/oz $978 $1,069
$1,200
Tonnes
(000)
GRADE
(g/t Au)
Contained
Ounces
Proven & Probable Reserves - Open Pit 10,812 0.56 193,000
Proven & Probable Reserves - Leach Pad Inventory -100,000 
Measured & Indicated Resources3 4,415 0.66 93,000

2Cost of sales includes mining and processing costs, royalties and amortization

3M&I resources exclusive of Reserves

Please see 2016 year end Reserves and Resources statement for additional detail.

HIGHLIGHTS

El Chanate is an open-pit, heap leach gold mine located in Sonora, Mexico.

 

In 2017, the operation is expected to produce 50,000 – 60,000 ounces of gold at mine-site AISC1 of $1,200.

 

El Chanate is expected to generate significant free cash flow at the end of its mine life through residual leaching.

OVERVIEW

The El Chanate Mine is a conventional open-pit, heap-leach operation, located in Sonora State, Mexico. The mine is located 4,618 hectares encompassed within 22 mineral concessions.

Location

El Chanate is located in northern Mexico in the northwest corner of the State of Sonora. The mine site is 37 kilometres northeast of Caborca, 280 kilometres northwest of Hermosillo, 150 kilometres southeast of Sonoyta, and 170 kilometres southwest of Tucson, Arizona. Caborca is the largest town in the area with a population of approximately 100,000.

History

Historical workings suggest the area has been mined for gold since the early 19th century. The current open pit mine has now been developed below the level of those historical small-scale mine workings. The open pit mine plan covers an area approximately 1,700 metres long, 845 metres wide, and 300 metres deep

GEOLOGY AND MINERALIZATION

Geology

El Chanate’s main structural feature is the Chanate fault zone, a 7 km-long northwest-striking, variably southwest-dipping structure. The area is underlain by deformed sedimentary rocks of the Late Jurassic-Early Cretaceous Bisbee Group and the Late Cretaceous Chanate Group, which locally are overlain by andesites of the Cretaceous El Charro volcanic complex.

The sedimentary strata are locally intruded by andesitic sills and dikes, a microporphyritic latite, and a diorite stock. These strata comprise mudstone, siltstone, sandstone, conglomerate, shale, and limestone.

Sandstone, conglomerate, and lesser mudstone that lie above the Chanate fault are of the Middle Cretaceous Chanate Group. Below the fault, siltstone and sandstone lenses are assigned to the Arroyo Sasabe Formation of the Lower Cretaceous Bisbee Group.

Mineralization

Alteration and mineralization associated with the Chanate fault zone are exposed across a northwest strike length of over 3.5 km. The rock units in this zone are altered to varying degrees by sericite, pyrite, ankerite, and quartz veining.

In surface outcrops the mineralized zone is distinguished by its bleached appearance relative to unmineralized rock. Sub-parallel sheeted zones of quartz veinlets form thick, mineralized lenses, within a larger area of sub-economic but anomalous gold concentrations.

MINING AND PROCESSING

Conventional open pit mining methods are employed at El Chanate. Ore is trucked from the open pit to the three stage crushing circuit after which crushed ore and lower grade run of mine ore is placed on the heap leach pad where it is irrigated with an alkaline cyanide bearing solution. This is used to extract, or dissolve the gold and silver contained within the ore. The resulting “pregnant” solution is further processed in an ADR plant, followed by electro-winning and refining. The processing is a closed circuit, zero-discharge operation where solution is continuously re-used.

Technical Information and Cautionary Notes on non-GAAP Measures and Additional GAAP Measures

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Non-GAAP Information

In addition to disclosing results determined in accordance with GAAP, AGI may also disclose certain non-GAAP and pro forma non-GAAP results of operations, including certain ratios, operational and miscellaneous data, as well as net income, diluted earnings per share, operating expenses, and operating income that make certain adjustments or exclude certain charges and gains that are outlined in the schedules included in this website. Management believes that this non-GAAP and pro forma non-GAAP information provides investors with additional information to assess AGI operating performance by making certain adjustments or excluding costs or gains and assists investors in comparing our operating performance to prior periods. Management uses this non-GAAP and pro forma non-GAAP information, along with GAAP information, in evaluating its historical operating performance. AGI and Virtua also take no responsibility for third party pricing data provided for informational purposes and certain ratio results formulated from the provided third party pricing data.

The non-GAAP information is not prepared in accordance with GAAP and may not be comparable to non-GAAP information used by other companies. The non-GAAP information should not be viewed as a substitute for, or superior to, other data prepared in accordance with GAAP.

Disclaimer

Reconciliation of non-GAAP and additional GAAP measures

General Disclaimer

Alamos Gold Inc. ("Alamos" or the “Company”), has taken all reasonable care in producing and publishing information contained in this website, and will endeavour to do so regularly. Material on this site may contain technical or other inaccuracies, omissions, or typographic errors, for which Alamos assumes no responsibility. Alamos does not warrant or make any representations regarding the use, validity, accuracy, completeness, or reliability of any claims, statements, or information on this site. Under no circumstances, including but not limited to, negligence, shall Alamos be liable for any direct, indirect, special, incidental, consequential, or other damages, including but not limited to, loss of programs, loss of data, loss of use of computer or other systems, or loss of profits, whether or not advised of the possibility of damage, arising from your use, or inability to use, the material on this site. The information is not a substitute for independent professional advice before making any investment decisions. Furthermore, you may not modify or reproduce in any form, electronic or otherwise, any information on this site, except for personal use, unless you have obtained our express written permission. The TSX and NYSE have not reviewed and do not accept responsibility for the adequacy or accuracy of information on this website.

Cautionary Notes – Forward Looking Statements

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Certain statements in this website are “forward-looking statements”, including within the meaning of the United States Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this website, including without limitation statements regarding forecast gold production, gold grades, recoveries, waste-to-ore ratios, total cash costs, potential mineralization and reserves, exploration results, and future plans and objectives of Alamos, are forward-looking statements based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management that involve various risks and uncertainties. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be “forward-looking statements.” Alamos cautions that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause Alamos' actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to, gold and silver price volatility; fluctuations in foreign exchange rates and interest rates; the impact of any hedging activities; discrepancies between actual and estimated production, between actual and estimated reserves and resources or between actual and estimated metallurgical recoveries; costs of production; capital expenditure requirements; the costs and timing of construction and development of new deposits; and the success of exploration and permitting activities. In addition, the factors described or referred to in the section entitled “Risk Factors” in both Alamos Gold Inc.’s Annual Information Form for the year ended December 31, 2014 and the Annual Information Form for the year ended December 31, 2014 of AuRico Gold Inc., (each a predecessor to Alamos Gold Inc.), along with each of these entities’ subsequent public filings available on the SEDAR website at www.sedar.com, should be reviewed in conjunction with the information found in this website. Although Alamos has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information.

Note to U.S. Investors

Alamos prepares its disclosure in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. Terms relating to mineral resources in this website are defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Standards on Mineral Resources and Mineral Reserves. The United States Securities and Exchange Commission (the “SEC”) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. Alamos may use certain terms, such as “measured mineral resources”, “indicated mineral resources”, “inferred mineral resources” and “probable mineral reserves” that the SEC does not recognize (these terms may be used in this website and are included in the public filings of Alamos, which have been filed with the SEC and the securities commissions or similar authorities in Canada).

Cautionary non-GAAP Measures and Additional GAAP Measures

Note that for purposes of this section, GAAP refers to IFRS. The Company believes that investors use certain non-GAAP and additional GAAP measures as indicators to assess gold mining companies. They are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.
Additional GAAP measures that are presented on the face of the Company’s consolidated statements of comprehensive income include “Mine operating costs”, “Earnings from mine operations” and “Earnings from operations”. These measures are intended to provide an indication of the Company’s mine and operating performance. “Cash flow from operating activities before changes in non-cash working capital” is a non-GAAP performance measure that could provide an indication of the Company’s ability to generate cash flows from operations, and is calculated by adding back the change in non-cash working capital to “Cash provided by (used in) operating activities” as presented on the Company’s consolidated statements of cash flows. “Free cash flow” is a non-GAAP performance measure that is calculated as cash flows from operations net of cash flows invested in mineral property, plant and equipment and exploration and evaluation assets as presented on the Company’s consolidated statements of cash flows and that would provide an indication of the Company’s ability to generate cash flows from its mineral projects. Return on Equity is defined as Earnings from Continuing Operations divided by the average Total Equity for the current and previous year. “Mining cost per tonne of ore” and “Cost per tonne of ore” are non-GAAP performance measures that could provide an indication of the mining and processing efficiency and effectiveness of the mine. These measures are calculated by dividing the relevant mining and processing costs and total costs by the tonnes of ore processed in the period. “Cost per tonne of ore” is usually affected by operating efficiencies and waste-to-ore ratios in the period. “Cash operating costs per ounce”, “total cash costs per ounce” and “all-in sustaining costs per ounce” as used in this analysis are non-GAAP terms typically used by gold mining companies to assess the level of gross margin available to the Company by subtracting these costs from the unit price realized during the period. These non-GAAP terms are also used to assess the ability of a mining company to generate cash flow from operations. There may be some variation in the method of computation of these metrics as determined by the Company compared with other mining companies. In this context, “cash operating costs per ounce” reflects the cash operating costs allocated from in-process and dore inventory associated with ounces of gold sold in the period. “Cash operating costs per ounce” may vary from one period to another due to operating efficiencies, waste-to-ore ratios, grade of ore processed and gold recovery rates in the period. “Total cash costs per ounce” includes “cash operating costs per ounce” plus applicable royalties. Cash operating costs per ounce and total cash costs per ounce are exclusive of exploration costs. “All-in sustaining costs per ounce” include total cash costs, exploration, corporate and administrative, share based compensation and sustaining capital costs. Non-GAAP and additional GAAP measures do not have a standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures presented by other companies. For a reconciliation of non-GAAP and GAAP measures, please refer to Alamos’ Managements’ Discussion and Analysis as presented on SEDAR and the Company’s website.

Technical Information

Except as otherwise noted herein, Chris Bostwick, FAusIMM, Alamos Gold’s Vice President, Technical Services, has reviewed and approved the scientific and technical information contained in this website. Chris Bostwick is a Qualified Person within the meaning of Canadian Securities Administrator’s National Instrument 43-101. For more information, please refer to the Alamos Gold Inc. and AuRico Gold Inc. 2014 Annual Information Forms and the technical reports referenced therein and in this website, available on SEDAR (www.sedar.com).

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