Alamos Gold (TSX: AGI) has obtained the necessary approvals to begin the construction of its newest mine in Mexico. The company has received approvals for an amended environmental impact assessment for the Puerto Del Air project, which is found within Alamos’ Mulatos District.
The PDA project focuses on an underground deposit found adjacent to the Mulatos pit. An economic study released last year outlined an operation with a net present value of $269 million on an after tax basis and an IRR of 46%, using a five percent discount rate and a base case gold price of $1,950 per ounce.
That valuation is based on an operation with an eight year mine life, with annual production averaging 127,000 ounces a year for the first four years, and 104,000 ounces a year over the eight year mine life. All in sustaining costs meanwhile are forecasted as just $1,003 per ounce.
Higher rates of production meanwhile are said to be possible after the first four years of operation, which is dependent upon further exploration of the region.
Construction activity at the PDA project is said to ramp up towards the middle of this year, with capital spending expected to total between $37 and $40 million. Initial spending will focus on the advancement of underground development, as well as long lead time items for the mill. A further $165 million in initial capital expenditures has been allocated for 2026 and and 2027, with production expected to commence mid-way through 2027.
“Mulatos is our founding operation and a steady producer since 2005. Through a long-track record of exploration success, we have discovered and developed a number of high-return projects that have continued to extend the mine life of the Mulatos District. Having achieved this key permitting milestone through long-standing community, state, and federal government support, PDA is expected to significantly extend the mine life of the District, as our next high-return project with significant exploration upside,” commented John McCluskey, CEO of Alamos Gold.
Alamos Gold last traded at $29.48 on the TSX.
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