Alamos eyes stable output, falling costs at Mulatos

Friday, January 12, 2018

Alamos Gold expects three years of stable output and falling costs at its Mulatos mine in Mexico, with operations ending at El Chanate this year.

Mulatos, in Sonora state, is expected to produce 150,000-160,000oz/y gold in 2018-20, following 160,000oz in 2017, 6,000oz more than the previous year, the company said in its latest production report.

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Toronto-based Alamos expects cash costs of US$800/oz and all-in sustaining costs (AISCs) of US$900/oz this year at the mine, broadly unchanged from 2017 guidance of US$815/oz and US$890/oz. Final cost figures for last year have not yet been released.

Costs are expected to drop in the following years in part driven by the end of a 5% net smelter return royalty in early 2019, which will lower costs by about US$65/oz at a US$1,300/oz gold price.


Total crusher throughput is expected to increase to 20,000t/d at Mulatos (pictured) in 2018 from 18,500t/d last year reflecting a full year of production from the La Yaqui phase 1 operation, which was completed in 2017.

Underground production from the San Carlos deposit and high-grade surface stockpiles are expected to be depleted during Q1, Alamos said.

The company plans to invest US$13mn in engineering, permitting and early-stage construction of the La Yaqui Grande and Cerro Pelón deposits this year.

Alamos also plans to spend US$13mn on exploration at Mulatos, with the main focus on the El Carricito, La Yaqui Norte-Halcón, El Refugio and San Carlos zones.


Gold output at El Chanate, also in Sonora state, is expected to drop to 40,000-50,000oz in 2018 from 60,400oz last year, with mining ending mid-year.

Production will continue beyond 2018 through residual leaching of the pad, with cash flow growth expected once mining ceases.

Alamos also plans to invest US$2mn in growth capital shared between its Esperanza and Quartz Mountain gold projects in Mexico and the US, respectively.


Alamos produced 120,300oz gold in Q4, up from 105,676oz in the same quarter of 2016, mainly due to the addition of the Island Gold mine in Canada to its portfolio.

Mulatos produced 42,700oz, down from 44,900oz, with 12,100oz at El Chanate, down from 16,114oz. Alamos also has projects in Turkey and Canada.