On May 31, Minera Alamos (TSXV: MAI) provided an update on their Santana Gold project. The company said that the development of the Nicho Main Zone is now underway as access to roads and removal of vegetation and surface cover are largely completed.
They add that “as the pit working areas open up, the much larger scale of the NMZ compared to the current starter pit at Nicho Norte will help drive project mining rates to planned levels for the overall commercial operation.”
The company said that it has entered into a US$3 million unsecured working capital facility. The proceeds will help “bolster the company’s existing working capital and provide added financial flexibility.” Lastly, the company said that their on-site lab at Nicho Norte should be complete and operational in the coming weeks.
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There are currently 5 analysts covering the stock with an average 12-month price target of C$1.07, or an upside of 73%. All 5 analysts have buy ratings on the stock and the street high price target sits at C$1.30, or an upside of 110%.
On the news release, Haywood Capital Markets’ reiterated their buy rating and C$1.05 12-month price target saying that the Nicho Main Zone will provide the company with access “to the main source of known mineralization, supplementing current ore feed from the much smaller Nicho Norte pit.”
Haywood continues to model that the company produces 25,000 ounces of gold this year, ramping up to 33,000 ounces next year.
They say that the company has currently stacked 18,000 ounces of gold on the leach pad, and roughly 7,000 ounces have been recovered. They note that the company has been impacted by an ongoing drought in the region. Though the upcoming rainy season, which is between July and September, should help “recharge water reservoirs and allow for the acceleration of recovery of gold stacked.”
Haywood says that the company currently has a “decent cash balance” to start commercial production. They believe with the current raise, the company will have roughly $11.2 million of cash.
Lastly, Haywood says that there are a few near and medium-term catalysts. The first would be the maiden resource estimate for Santana, which is expected to be announced this quarter. The EIA for Cerro do Oro is expected to be submitted by mid-2022, while a resource update is also expected for the mine, both of which are expected to be announced in late 2022. Haywood is currently modeling for a half year of production out of the Cerro de Oro mine in 2023, but they admit that this could be a bit aggressive and they will revisit the estimate once the EIA is submitted.
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
