Minera Alamos Achieves 2022 Commercial Production Thresholds at Santana A look ahead at 2023 Plans and Catalysts
Minera Alamos Achieves 2022 Commercial
Production Thresholds at Santana
A look ahead at 2023 Plans and Catalysts
Toronto, Ontario--(Newsfile Corp. - January 31, 2023) -
Minera Alamos Inc.
(TSXV: MAI)
("Minera" or
the "Company")
is pleased to provide an update following the completion of the Company's 2022 end-
of-year planning reviews and meetings. The Company met its initial thresholds for commercial
production at Santana during 2022 including criteria related to gold recoveries from the heap leach pad
as well as monthly mining rates in the second half of 2022.
Final approvals are pending for the next
phase of pad expansion that should more than triple the leach pad capacity at the Santana mine in
addition to providing full access to the Nicho deposits which have grown in size as a result of the 2019
and 2020 drilling campaigns subsequent to the project's initial permit approvals for the start of mining
operations.
These applications were resubmitted in the second half of 2022 after modifications to
comply with new requirements related to reductions in greenhouse gas emissions via programs of
surface reforestation
Operational plans are currently being modified following a temporary shutdown over the Christmas
holidays that allowed for a full review of 2022 operational data amongst the operations team and the
mining contractor.
As mentioned in previous announcements the drought conditions experienced in
northern Mexico since 2020 remain a challenge.
Current forecasts call for the warmer/drier conditions
related to a La Nina event now entering an unprecedented third straight winter to dissipate in the first half
of 2023.
Until such time that there is a clearer outlook on the overall water conditions in the region, the
Company remains cautious with respect to short term mine planning activities.
As a result of the continued strengthening of the balance sheet during 2022, the Company has given
priority to the acceleration of some waste removal ("pre-stripping") activities during early 2023 which are
not reliant on water availability.
In addition, the Company is currently mobilizing for further exploration
drilling to be initiated in Q1 to better define previously identified gold-bearing breccia pipes outside of
the currently mined areas (delayed during the pandemic period).
These activities combined with ongoing
planning discussions with the Company's mine contractor aim to prepare the project for growth of the
Santana operations beyond the starter pits and initial leach pad.
Minera has been working to procure
adequate supplies including pad liner to allow construction to begin rapidly upon receipt of the new
permits which should avoid major disruptions as the expansion is commissioned.
The Santana project was envisioned as a classic "bootstrapped" operation with multiple phases of
planned pit and pad expansion. Built for ~US$10 million, 2022 operational performance has already
paid back the majority of the start-up capital. In determining whether commercial production thresholds
had been reached the Company considered milestones associated with the first phase Santana
operation focused on mining rates and gold recoveries from the Santana leach pad.
In the second half of
2022, the operation demonstrated the ability to operate at the initially targeted 10,000 tpd (combined
mineralized material and waste).
In addition, overall gold recoveries have been trending in excess of
70% for material under leach for a minimum of 45-60 days with residual leaching ongoing.
"We are pleased with the results from the Santana gold project during our first year of operations in
2022.
Despite the difficulties that presented themselves during the year, both capital and operating costs
continue to meet our expectations and provide a sound basis to inform the Company's plans for the
development of the upcoming Cerro de Oro project," stated Darren Koningen, CEO.
"As we move
forward in 2023, the Company is taking advantage of the drier months ahead to prioritize waste
development activities in advance of the receipt of final approvals related to the next phase of Santana
project expansion which should give rise to a stronger second half of the year.
The restart of exploration
activities at site is especially exciting and will finally allow for better definition of the long-term potential of
the area and facilitate planning for future expansion phases."
Note to Reader: The Company does not have a feasibility study of mineral reserves, demonstrating
economic and technical viability for the Santana project, and, as a result, there may be an increased
uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery,
including increased risks associated with developing a commercially mineable deposit.
Historically,
such projects have a much higher risk of economic and technical failure. Failure to commence
production would have a material adverse impact on the Company's ability to generate revenue and
cash flow to fund operations
2022 Operational Summary
As disclosed previously the focus of mining operations shifted in Q4-2022 and will continue in Q1-2023
with some accelerated waste mining to better prepare for the future planned expansion of operations
later this year.
In total, approximately 13,000 ounces of gold were recovered over the full 2022 calendar year following
the early ramp up period as leach pad production grew into the second half of the year.
Q4-2023
recovery (2,834 ounces) declined somewhat from Q3-2024 (4,727 oz) as a result of the shift to
additional waste mining although higher gold prices offset some of this short-term decline.
Other
highlights include:
Total mine production rates exceeded initial target thresholds (+10,000 tpd) through the second
half of the year prior to the December shutdown;
Combined (ROM + crushed) average grades of mineralization stacked on the leach pad (0.66 g/t
Au average for full year) were in line with mine plan expectations;
Cut-off grade changes implemented from the 2021 end-of-year review to better balance the
division between run-of-mine ("ROM") and crushed material from the mine successfully removed
bottlenecks related to the site crushing operations;
The Company successfully commissioned their limited on-site analysis facilities for blasthole and
process solution samples and continues to expand these capabilities which will be essential for the
start of mining operations at the Nicho main zone;
As of Dec 31, 2022, estimated pad inventory of recoverable gold was ~6,950 ounces.
2023 Outlook
Santana
While the Company focused its efforts on the construction of the Santana mine during the most
challenging parts of the recent pandemic period, it was unfortunately forced to put on hold lesser priority
exploration drilling of the cluster of previously identified gold-bearing breccia pipes that surround the
initial Nicho mining areas. With an access agreement in place with the local community, this drilling will
be one of the highest priority initiatives for 2023 with initial holes scoped at the Benjamin, Zata and
Divisidero targets.
The outcome of the exploration program will assist planning for the future of the
project including potential new leach pad and pit developments as well as decisions related to potential
increases in the project production capacity.
Approximately 80 drillholes (+10,000m total) have been located for this phase of exploration (subject to
adjustment as drilling advances).
The majority of these holes are targeted to test two high priority targets
from those previously identified by Minera during previous regional reviews:
Benjamin - Located approximately 1km northwest of the Nicho area, the zone of potential gold
mineralization coincides with surface outcropping anomaly that appears to extend over a strike
length of more than 550 meters.
This area displays many characteristics similar to the intrusive
related mineralization currently defined in the Nicho area.
Past historical drilling was focused on 17
drillholes (3277 meters total) located in two sections located approximately 150 meters apart.
Intersections from those campaigns included 114 meters of 0.73 g/t Au (SR09-21) and 108 meters
of 0.35 g/t Au (SR08-09).
Zata - Located approximately 4km southeast of the current heap leach operations, the zone has
never been drilled but is coincident with a surface exposed gold anomaly of approximately 400m x
400m.
Surface rock chip samples have confirmed mineralization with grades up to 2 g/t Au and the
zone appears to be consistent with the type of feldspar porphyry system exposed at the Nicho
Norte starter pit area.
A maiden resource statement that will incorporate the Nicho gold mineralized system is being prepared
and anticipated in the second quarter of this year.
Cerro de Oro
The submission of permit applications for the construction of the Cerro de Oro gold mine are scheduled
for the end of Q1-2023. These are currently being modified to take into account recently acquired
additional surface rights that will allow for a more optimized mine plan than previously envisioned. During
Q1-2023 it is expected that some additional minor local surface rights may continue to be acquired
(beyond those necessary for permitting) in order to further reduce the possibility of any future
neighborhood problems for the mine related to dust, noise, or blasting vibrations.
Hydrological drilling has been ongoing since Q4 of 2022 with promising initial results and this work will
continue in early 2023.
The Company is currently advancing both detailed construction design work and also sourcing of critical
long-lead items that will allow for fast-track development of the mine upon receipt of permits.
Project
finance discussions are underway with the goal of ensuring a complete package is in place well in
advance of the successful conclusion of permitting activities and which can be drawn upon as required to
ensure timely construction of the Cerro de Oro mine.
A 4000-5000m drill program is planned at Cerro de Oro in 2023.
Objectives for the new program
include:
Resource expansion and infill drilling;
Samples for additional metallurgical optimization testwork (both oxide and deeper
transition/sulphide zones);
Geotechnical evaluations including in-situ densities, surface cover depths and rock structural
parameters utilized for ultimate pit limit designs;
Improved definition of lower limits of the oxidation zone and depth potential of sulphide
mineralization.
Minera Copper
The Company is continuing discussions both internally and with interested parties to surface value for
shareholders from existing copper assets within the Company's mineral property portfolio. Minera
believes there is significant scope to establish an expanding portfolio of low capital intensity copper
development and production.
The Company's Los Verdes and Poteritos copper projects located in Sonora just north of Santana (past
producers within close proximity of each other) are to serve as cornerstone assets in the potential new
venture.
Highlights from historical work at the projects are detailed below:
8-10 million tonnes of open pittable resource potential at a grade of +1% CuEq.
Extensive metallurgical testwork and basic engineering design completed for the construction of a
two product (copper and molybdenum) central flotation facility to process material from the
surrounding deposits.
Adjacent to a major state highway leading to mineral concentrate ocean port facilities at Guaymas,
Sonora
Ability to scale down the initial capital requirements through implementation of commercial ore-
sorting equipment that has demonstrated the potential to increase processing plant feed grades to
2-3% CuEq range with high recoveries from crushed mine material.
Additional exploration targets already identified including a significant IP anomaly corresponding
to a zone of intense pyritization and anomalous surface samples (copper/molybdenum) that is
located between the two known deposits.
The PEA report for Los Verdes titled "Los Verdes Cu/Mo Project - Preliminary Economic Assessment
was prepared by Golder Associates Ltd. for Virgin Metals Ltd" and dated May 2012, a copy of which is
available under MAI's profile on SEDAR (filed May 25, 2012). Mineral resources that are not mineral
reserves do not have demonstrated economic viability. The PFS report for Los Verdes titled "Pre-
Feasibiity Study - Los Verdes Project, Sonora, Mexico" was prepared by The Mines Group Inc.,
Chlumsky, Armbrust & Meyer LLC (CEM) and Mine and Quarry Engineering Services Inc. (MQes) for
Virgin Metals
with an effective date of July 28
th
, 2008, a copy of which is available under MAI's profile on
SEDAR (filed September 10
th
, 2008).
While the Company is not treating these historical estimates as current, it does believe the work of the
most recent economic study conducted by Minera's predecessor company, Virgin Metals, and Golder
Associates Ltd., is reliable and the information may be of assistance to readers. The Company intends
to prepare an updated current Mineral Resource Estimate in respect of Los Verdes and Poteritos. Once
completed, a copy of the report will be available for review under the Company's profile on SEDAR
(
www.sedar.com
).
More information on these initiatives will be disclosed in due course.
Mr. Darren Koningen, P.Eng, a 'Qualified Person' as defined under Canadian National Instrument 43-
101, is responsible for technical information in this news release.
For Further Information Please Contact:
Minera Alamos Inc.
Doug Ramshaw, President
Tel: 604-600-4423
Email:
Victoria Vargas de Szarzynski, VP Investor Relations
Tel: 289-242-3599
Email:
Website:
www.mineraalamos.com
About Minera Alamos Inc.
Minera Alamos is a gold production and development Company undergoing the operational startup of its
first gold mine that produced its first gold in October 2021. The Company has a portfolio of high-quality
Mexican assets, including the 100%-owned Santana open-pit, heap-leach mine in Sonora that is
currently going through its operational ramp up. The 100%-owned Cerro de Oro oxide gold project in
northern Zacatecas that has considerable past drilling and metallurgical work completed with plans to
enter the permitting process. The La Fortuna open pit gold project in Durango (100%-owned) has a
robust and positive preliminary economic assessment (PEA) completed and the main Federal permits
in hand. Minera Alamos is built around its operating team that together brought 3 mines into successful
production in Mexico over the last 13 years.
The Company's strategy is to develop very low capex assets while expanding the projects' resources
and continuing to pursue complementary strategic acquisitions.
Caution Regarding Forward-Looking Statements
This news release may contain forward-looking information and Minera Alamos cautions readers that
forward-looking information is based on certain assumptions and risk factors that could cause actual
results to differ materially from the expectations of Minera Alamos included in this news release. This
news release includes certain "forward-looking statements", which often, but not always, can be
identified by the use of words such as "believes", "anticipates", "expects", "estimates", "may", "could",
"would", "will", or "plan". These statements are based on information currently available to Minera
Alamos and Minera Alamos provides no assurance that actual results will meet management's
expectations. Forward-looking statements include estimates and statements with respect to Minera
Alamos' future plans with respect to the Projects, objectives or goals, to the effect that Minera Alamos or
management expects a stated condition or result to occur and the expected timing for release of a
resource and reserve estimate on the projects. Since forward-looking statements are based on
assumptions and address future events and conditions, by their very nature they involve inherent risks
and uncertainties. Actual results relating to, among other things, results of exploration, the economics of
processing methods, project development, reclamation and capital costs of Minera Alamos' mineral
properties, the ability to complete a preliminary economic assessment which supports the technical and
economic viability of mineral production could differ materially from those currently anticipated in such
statements for many reasons. Minera Alamos' financial condition and prospects could differ materially
from those currently anticipated in such statements for many reasons such as: an inability to finance
and/or complete an updated resource and reserve estimate and a preliminary economic assessment
which supports the technical and economic viability of mineral production; changes in general economic
conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation,
legislative, environmental and other judicial, regulatory, political and competitive developments;
technological and operational difficulties encountered in connection with Minera Alamos' activities; and
other matters discussed in this news release and in filings made with securities regulators. This list is not
exhaustive of the factors that may affect any of Minera Alamos' forward-looking statements. These and
other factors should be considered carefully and readers should not place undue reliance on Minera
Alamos' forward-looking statements. Minera Alamos does not undertake to update any forward-looking
statement that may be made from time to time by Minera Alamos or on its behalf, except in accordance
with applicable securities laws.
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