Alamos gets water rights for Mulatos

Vancouver-based Alamos Gold (AGI-V) has secured water rights for the Mulatos gold-silver project in Mexico’s Sierra Madre region.

The company obtained the green light from a bureau of the federal government following negotiations with local communities. In exchange for rights to draw water from the Mulatos River, Alamos agreed to finance the drilling of five water wells for agricultural irrigation. It will also pay a local association US$310,000 so that the wells can be developed.

A bankable feasibility study for Mulatos is scheduled for completion by mid-year. An open-pit, heap-leach operation is envisioned. Capital costs will be released in the final study, though considerable savings should be realized through the company’s recent purchase of a 3-stage crushing plant, complete with a stacker and conveyor system (and related spare parts), for US$1 million.

The company has proposed a 10,000-tonne-per-day operation in the first phase of operations, with annual production pegged at 150,000 oz.

Alamos hopes that a second phase of exploration will boost daily production to 20,000 tonnes.

Mulatos has measured and indicated resources (at a 0.2-gram cutoff) of 140 million tonnes grading 0.88 gram gold per tonne. At a 1-gram cutoff, resources in these categories total 33 million tonnes grading 2.17 grams, or about 2.3 million contained ounces. The project also has an inferred resource, which brings the total to 4.8 million contained ounces at a cutoff of 0.2 grams gold, or 2.5 million oz. at a cutoff of 1 gram gold.