Lynn Lake looms as key Alamos add-on

Staff reporter

An updated feasibility study on Alamos Gold’s proposed Lynn Lake gold mine in Manitoba, Canada, has come up with ways to shave 18% off greenhouse gas emissions per ounce versus a 2017 study, while outlining 23% higher average annual production for the first 10 years. Alamos retains the benefit of being able to plug into Manitoba’s hydro-powered electricity grid.

In six years it has added the use of electric shovels and drills at the MacLellan pit, one of two primary ore sources in the FS mine plan, into the mix, plus “productivity improvements with the larger operation”.

Alamos says Lynn Lake can produce 58% lower emissions per ounce than the industry average.

The circa-C$6.1 billion market cap company says a 44% larger mineral reserve – 2.3 million ounces grading an average 1.52 grams per tonne – supports a 17-year mine life, up from 10 years in the 2017 study, and life-of-mine (LOM) recovery of 2.2Moz, up 46% on the earlier FS.

Planned initial capex of US$632 million and LOM capital of $832 million gives a $381/oz LOM capital intensity, up 17% from 2017, “with the larger mineral reserve and economies of scale partly offsetting the significant industry-wide capital inflation experienced since 2017”.

Alamos said detailed engineering work on the project was 55% complete and basic engineering 100% complete. Its new numbers project an after-tax internal rate of return of 17%.

“Good projects are becoming increasingly rare, especially within top jurisdictions like Canada, highlighting the attractiveness of Lynn Lake,” said Alamos CEO John McCluskey.

“Our current priority is the Phase 3+ expansion at Island Gold with Lynn Lake an important part of our strong longer-term outlook. Through Lynn Lake, Island Gold and Young-Davidson we have three high-quality assets that can support over 650,000 ounces of annual production in Canada, at all-in sustaining costs below $1000 per ounce over the long-term.”


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