in dieser schweren Zeit von der Corona Pandemie.
ORONTO, March 16, 2020 (GLOBE NEWSWIRE) -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today announced that it has entered into an agreement to acquire and cancel a 3% net smelter return (“NSR”) royalty payable on production from the Island Gold mine (the “Royalty”) for total cash consideration of C$75 million ($54 million).
The Royalty was acquired from a privately held company and is payable on gold production within four patented claims (the “Subject Claims”) that comprise the majority of currently defined Mineral Reserves and Resources within the Island Gold deposit. The acquisition and elimination of the royalty will immediately reduce operating costs and increase operating cash flow while providing increased exposure to Island Gold’s significant exploration potential.
Transaction highlights:
Acquisition and cancellation of the Royalty on all future gold production from the Subject Claims that comprise the majority of the Island Gold deposit. As of December 31, 2019, the Subject Claims contained:
• 0.9 million ounces of Mineral Reserves, representing 71% of Island Gold’s total Mineral Reserves, and
• 1.1 million ounces of Inferred Mineral Resources (see Table 1)
$40 per ounce, or 7%, decrease in Island Gold’s 2020 total cash cost guidance to between $480 and $520 per ounce and $40 per ounce decrease in mine-site all-in sustaining cost guidance to between $740 and $780 per ounce
Increased exposure to Island Gold’s substantial exploration potential with combined Mineral Reserves and Resources having doubled to 2.0 million ounces within the Subject Claims since the end of 2016, including:
• 0.5 million ounce increase in Mineral Reserves to 0.9 million ounces, net of 0.3 million ounces of mining depletion. This reflects the discovery of new Mineral Reserves and strong conversion rate of Inferred Mineral Resources to Reserves of 83% since the end of 2016, and
• 0.5 million ounce increase in Inferred Mineral Resources to 1.1 million ounces
Increased exposure to higher gold prices. At spot gold prices of approximately $1,530 per ounce, Alamos will save $46 per ounce on production from the Subject Claims. In 2019, royalty payments to the Subject Claims totalled C$8 million
Reduction in effective NSR royalty rate on Island Gold’s Mineral Reserves to 2.2% from approximately 4.4%
“The acquisition of the royalty further reduces costs at what is already a low-cost operation while also increasing our exposure to the tremendous exploration upside. Since we acquired Island Gold in 2017, the Mineral Reserve and Resource base has doubled with the deposit approaching four million ounces across all categories. With the deposit open laterally and down-plunge across several areas of focus, we see excellent potential for this growth to continue at a greatly reduced royalty on future production,” said John A. McCluskey, President and Chief Executive Officer.
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