Gold miner Alamos Gold is on a path of strong production growth in the next five years, driven by expansions at existing mines and additional growth potential from its Lynn Lake project, in Manitoba, Canada.

The company, which has two operating mines in Canada and one in Mexico, expects to increase its production to about 600 000 oz/y from existing mines in 2025, driven by low-cost growth at Island Gold, in Ontario, with the completion of the Phase 3 expansion project.

If the Lynn Lake project comes into play, production will increase to about 750 000 oz/y in 2025 – a substantial increase from the company’s current production. Alamos expects to wrap up the permitting for the Lynne Lake project, which involves the redevelopment of two historic gold mines, in 2022.

The miner will produce between 405 000 oz and 435 000 oz in 2020, increasing to between 470 000 oz and 510 000 oz in 2021, driven by the ramp-up of mining rates at Young-Davidson, in Ontario.

Alamos has recently completed an expansion at Young-Davidson and has announced an expansion at Island Gold. In mid-2020 it also approved the construction of the La Yaqui Grande mine, adjacent to the existing Mulatos operation, in Mexico.

“The ramp up of mining rates at Young-Davidson is expected to drive a 17% increase in our production in 2021. Young-Davidson will also be a key driver of strong ongoing free cash flow generation supporting both higher returns to shareholders and the reinvestment into high-return growth opportunities at Island Gold and Mulatos,” said CEO John McCluskey.

The ramp-up of mining rates at Young-Davidson will also result in lower group costs in 2021, with Alamos forecasting cash costs of $710/oz to $760/oz. All-in sustaining costs (AISC) will remain consistent with 2020 at between $1 025/oz and $1 075/oz.

AISC will drop to about $800/oz by 2025, with the completion La Yaqui Grande and the Phase 3 expansion at Island Gold.

Reflecting the higher capital spending on growth initiatives, Alamos bolstered its capital expenditure (capex) guidance for 2021. The total capex guidance for next year is between $320-million and $350-million, of which $210-million to $225-million will be growth capital.

This is nearly double what was spent in 2020 on growth capex.