Canadian miner Minera Alamos (TSXV:MAI) has received an environmental permit for its La Fortuna gold project in Mexico, the company announced on Wednesday (November 21).
By obtaining the permit, Minera will be able to move the project forward on several fronts and is now looking into initiating applications for other state and local permits.
“The receipt of this notification represents a major milestone for the company. Despite some procedural changes in the MIA/ETJ application process that caused early delays,” stated Darren Koningen, CEO.
“[T]he notice was received a little over a year following the completion of our strategic partnership with Osisko Gold Royalties (TSX:OR,NYSE:OR) and starts the transformation of the company from a junior explorer to a growing gold produce,” he added.
Moving forward, the company plans to obtain permits that cover both water use and explosives. The miner also noted that it will advance discussions with potential contractors related to mining, crushing and construction.
The project will produce approximately 43,000 ounces of gold a year, 220,000 ounces a year of silver and an average of 1,000 tonnes a year of copper.
In a recent preliminary economic assessment (PEA), it was determined that La Fortuna will require C$34.9-million in pre-production capital. The miner reported that is has initiated discussions with several project finance groups in order to provide debt facilities that fit with the royalty structure arranged with its strategic partner Osisko.
The PEA calculated an after-tax internal rate of return of 93 percent and an after-tax net present value, using a 7.5 percent discount, of C$90.6-million. The project will be paid back in 11 months.
The PEA also identified several opportunities to enhance the overall project economics, which Minera noted were currently under review.
Following the successful PEA at La Fortuna, the company said that they plan on expanding various projects within Mexico.
“Mexico remains one of the world’s premier mine development locations with respect to the timeframes required for permitting of new operations,” said Koningen.
“We now eagerly await similar notifications regarding the company’s Santana gold project which remains our first priority for construction consideration in 2019 according to the company’s current development schedule,” he added.
As of 10:43 a.m. EST on Thursday (November 22), Minera Alamos was trading at C$0.12.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
