Canada-based Alamos Gold produced 124 000 oz of gold in the third quarter, which is in line with its guidance and 16% above the third quarter of 2017, reflecting the inclusion of the Island Gold mine, which it bought earlier this year.

Year-to-date production hit a record of 379 400 oz – 23% increase from the same period in 2017 – and positions the company well to achieve its full-year guidance of 490 000 oz to 530 000 oz.

In Ontario, the Island Gold mine contributed 22 000 oz and the Young-Davidson mine 49 000 oz in the third quarter. Although substantially less than production in the third quarter of 2017, Young-Davidson improved output by 25% on the second quarter and is on track to achieve its revised guidance of 180 000  oz to 190 000 oz for the year.

Alamos explained that the near-term focus at Young-Davidson remained on maximising efficiency from the upper mine infrastructure, while completing development and construction of the lower mine. The upper mine infrastructure was designed for 6 000 t/d and has been operated at up to 7 200 t/d in the fourth quarter of 2017, but has averaged 6 500 t/d over the past two years.

The lower mine infrastructure, which will be used over the long term, is designed for 8 000 t/d. Construction of the lower mine and tie-in to the upper mine is scheduled to be completed in the first half of 2020.

The lower mine expansion at Young-Davidson would unlock the full potential of the mine and drive “significant free cash flow growth”, president and CEO John McCluskey said.

Alamos has completed the Phase I expansion of the Island Gold mill to 1 100 t/d on schedule in September. The mill was successfully  commissioned with throughput increasing to average approximately 1 100 t/d in September and October. Higher milling rates and grades are expected to drive stronger production and lower costs in 2019 and beyond. The company expects a 30% increase in gold production and significant free cash flow growth at Island Gold in 2019.

In Mexico, the Mulatos district (including La Yaqui Phase I) produced 43 300 oz in the third quarter, exceeding the budget for the third consecutive quarter. Production decreased from the second quarter of 2018 as expected, with underground mining at San Carlos coming to an end. With year-to-date production of 139 900 oz, Mulatos is well positioned to meet its increased 2018 production guidance of between 170 000 oz and 180 000 pz, representing a 13% increase from the mid-point of original guidance. The company expects 2019 production to return to the previously guided range of 150 000 oz/y to 160 000 oz/y.

El Chanate produced 9 700 oz in the third quarter, and remains on track to meet production guidance of 40 000 oz to 50 000 ozfor the full year. This is down from 2017 reflecting lower mining rates with mining activities having ceased on October 30. Given the long leach cycle at El Chanate, the company expects to benefit from ongoing gold production beyond 2018 through residual leaching.

Alamos sold 119 401 oz in the third quarter at an average price of $1 229/oz, which was below the second quarter’s price, resulting in revenue declining on a quarter-on-quarter basis to $146.7-milion. Compared with the third quarter of 2017; however, revenue increased by 14%.

The miner reported net earnings of $7.2-million, down from $28.8-million a year earlier, and an adjusted loss of $1.9-million, compared with adjusted earnings of $28.8-million.