Progress of two Minera Alamos projects relies on the Mexican … – BNamericas English

The progress of twoMinera Alamos projects in Mexico Cerro de Oro and Santana depends on how quickly the environment ministry responds to the company's permit requests amid industry concern about delays due to retroactive application of the mining reform.

The procedures unduly subject to the new legislation which went into force in May mainly entail obtaining approval for environmental impact statements (EIS) from the environment ministry (Semarnat) and gaining authorization for changes in land use from the national forestry commission, which is also part of the ministry, BNamericas reportedthis week.

In mid-August, Mexicos mining chamber Camimex called on authorities to resolve the general delays in responses to requests for environmental permits, adding that it was "crucial that the environment and natural resources ministry act in an agile and efficient manner in the evaluation processes and in the issuance of resolutions, especially when companies strictly comply with the requirements established by law."

In an operations update for 2Q23, the Toronto-based gold miner said that permit applications were completed at the Cerro de Oro project in Zacatecas state and handed to the companys permitting consultants to guide the proposed gold mine through the permitting process.

Minera Alamos president Doug Ramshawsaidlast month in a webinar that the company hopes to have the permits in place for Cerro de Oro by the first quarter of 2024, before the presidential elections in June.

He added that the biggest concern about Mexico's mining reform concerns water. I think water management and permits are probably the biggest two challenges facing the industry at large, not just in Mexico, so we are already looking to secure local water rights at Cerro de Oro, even independent of the water concessions that we've drilled down there as part of our hydrological work."

In September last year, Ramshaw said construction of Cerro de Oro would begin in 2H23. Now, the miner expects the works to begin in the first half of next year if Mexican authorities allow it.

Last April, the miner completed the necessary documentation to formally proceed with the permitting process for the project, six months later than expected and after meeting its initial commercial production threshold at the Santana project in Sonora state at the end of 2022.

Cerro de Oro represents the future growth of Minera Alamos gold mining activities in Mexico, supporting its model of building low-capex projects, which can quickly establish meaningful production, according to the miner.

The mine, for which the company has put pre-production capital costs at US$28.1mn, will have estimated average gold production of 60,000oz-70,000oz/y in the first four years, with a mine life of 8.2 years.

During the third quarter of this year, Minera Alamos expects to close the US$25mn loan and royalty funding package for Cerro de Oro that was announcedin 2Q23, which would cover the anticipated construction costs of the planned mine, it said in its latest report.

SANTANA

At the Santana gold mine in Sonora state, Minera Alamos said the company continued constructive communications with Semarnat regarding the planned permit amendments, which will allow it to triple its overall pad capacity and provide the necessary efficiency for full development of the Nicho main zone.

Requested follow-up information has been submitted by the company as part of the ongoing dialogue, the miner added, without providing details of any response.

In the MD&A section of its report, the Mexico-focused firm said it continues to utilize existing leach pad space while waiting for the pending permit amendments that would allow the construction of the pad expansion.

Plans are being finalized to initiate construction activities in Q4, allowing for a return to much improved and consistent 2024 production guidance closer to levels reached in the second half of 2022. Any construction activities would be planned to follow the end of the current rainy season, the firm added.

Precipitation levels in 2023 have been returning to more typical patterns, allowing the company conduct more normal mining and production plans, according to its Q2 report. However, the expansion plans ultimately depend on Semarnat.

In 4Q19, the company received the EIS approval from Semarnat for the development of Santana. The Santana applications were structured to provide the company with significant flexibility to further optimize the development approach for the project and the ability to expand the project operations organically once resources are increased, it stated in its 2Q23 report.

During April-June, a total of 1,071oz of gold was sold from Santana. Some 5,446oz of recoverable inventory was on the pad as of June 30, which has begun to increase with the expansion of mining rates in July and August, the miner said.

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Progress of two Minera Alamos projects relies on the Mexican ... - BNamericas English