Canada's Alamos Gold posted record gold production of 107,000 oz in the third quarter of 2017, with its flagship Young-Davidson underground mine in northern Ontario accounting for more than half of that total.
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The Q3 output raised the Toronto-based company's total production to 309,100 oz in 2017, putting Alamos on track to turn out 400,000 oz of gold for the entire year from Young-Davidson and its Mulatos and El Chanate mines in Sonora, Mexico.
Although Young-Davidson, located near the town of Matachewan, began commercial production underground October 31, 2013, following the commissioning of a shaft hoisting system, it is still ramping up, said Scott Parsons, Alamos' vice president of investor relations, in an interview.
The mine started as an open-pit operation September 1, 2012 before going underground. Open-pit mining ceased in June 2014.
Young-Davidson's Q3 output was 55,800 oz, well above its year-ago total of 43,629 oz, the company said in its quarterly earnings release. From January through September, Young-Davidson produced 143,500 oz, or just under half of Alamos' total output. The mine produced 125,338 oz in the same period of 2016.
Total Q3 production of 107,000 oz easily eclipsed last year's output of 99,228 oz through the first three quarters of 2016.
"Operationally, we delivered a strong third quarter with record production and significant milestones achieved at both our key operations," John McCluskey, Alamos president and CEO, said in a statement. "This included the completion of the MCM waste pass at Young-Davidson, contributing to higher underground mining rates in September, and initial production from our Le Yaqui mine in the Mulatos district. We expect both will be key drivers of strong free cash flow growth in the fourth quarter and we remain well-positioned to achieve full-year guidance."
Alamos in Q3 sold 100,551 oz of gold at an average price of $1,281/oz, for revenue of $129 million.
Alamos said it remains debt free, with cash and cash equivalents and equity securities rising to about $165 million as of September 30.
On a related matter, Parsons said Alamos is expected to close on its pending C$770 million ($947 million) all-share acquisition of Richmont Mines November 23. The agreed merger between the two Canada-based gold miners should enable Alamos to boost its yearly gold output 100,000 oz to about 500,000 oz next year.
--Bob Matyi, firstname.lastname@example.org
--Edited by Valarie Jackson, email@example.com