After acquiring the Cerro de Oro project in August, Minera Alamos (TSXV: MAI) has released an initial resource estimate for the 65-sq.-km property in Mexico’s Zacatecas state.
The resource estimate features 48 million inferred pit-constrained tonnes, grading 0.41 gram gold per tonne, containing 630,000 oxide oz. gold. This estimate is based on a 0.18 gram gold per tonne cutoff grade, and was prepared using an economic pit shell derived at US$1,450 per oz. gold.
“This mineral resource estimate is an excellent start for the Cerro de Oro gold project,” Darren Koningen, Minera Alamos’ chief executive, said in a statement. “With this in hand we are confident about rapidly advancing the work required to put us on a path toward a production decision at Cerro de Oro following the initial start-up of operations at Santana.”
Koningen noted that the company has a fast-track development roadmap for the project, with plans to submit permit applications early next year for the construction of a gold heap leach operation. In addition, Minera Alamos sees the potential to expand the initial resource through additional drilling, which is also planned for next year.
Priority targets include expansions of the known mineralized zones. Limited diamond drilling also indicates the potential for deeper sulphide mineralization below the current resource estimate, according to Koningen, and this unit was overlooked during past exploration at the site. Metallurgical studies are ongoing to assess the material.
Over the coming months, the developer also plans to prepare a detailed geological model for the entire land package and complete additional metallurgical testing to optimize size-recovery relationships for the oxide gold mineralization. Minera Alamos also expects to complete surface rights agreements for permitting and development at the site, and develop a hydrogeological study to locate high priority water source targets.
The initial resource is based on 84 reverse circulation drill holes and 12 diamond drill holes. The oxide holes were drilled to depths of 60-160 metres.
Cerro de Oro features a porphyry gold system with skarn haloes and disseminated and veinlet-controlled gold mineralization.
Minera Alamos acquired a 100% stake in Cerro de Oro from a private vendor for a total of US$2.9 million in cash and four million shares of the company, payable over a four-year period.
The company’s most advanced asset is the wholly owned Santana heap leach development in Mexico’s Sonora state, where construction is underway and first gold production is expected in 2021.
In the last 52 weeks, Miner Alamos has traded within a range of 16¢ and 78¢, and at press time was trading at 71¢ per share. The company has 439 million common shares outstanding for a $308-million market capitalization.