Lac Pelletier’s gold looks good to Alexis

A scoping study of Alexis Minerals’ (AMC-V, AXSMF-O) Lac Pelletier gold project, located 4 km southwest of Rouyn-Noranda, Que., concludes that a mine could be brought into production within a year and operated profitably.

Kirk Rogers of engineering firm Golder Associates prepared the study, which makes use of a recent resource estimate by Carl Pelletier of consultants Innovexplom.

Pelletier has tallied measured and indicated resources at Lac Pelletier of 1.2 million tonnes grading 5.42 grams gold per tonne, or 217,000 contained ounces gold, plus another 491,000 inferred tonnes at 4.94 grams gold, or 78,000 contained ounces gold.

The scoping study sketches out a preliminary plan to produce at least 40,000 oz. gold per year from Lac Pelletier at a cash cost of US$423 per oz., with first production within a year.

Mining would be carried out for at least three years as a satellite operation to Alexis’ larger Lac Herbin gold project in the Val d’Or camp.

It is assumed that Lac Pelletier ore would be trucked 130 km east to Alexis’s recently purchased, 1,400-tonne-per day Aurbel gold mill in Val d’Or, which may be converted to a total cyanidation plant.

The study produced the following numbers for Lac Pelletier: a daily mining rate of 700 tonnes; capital costs of $4 million; sustaining capital of $4.5 million over a minimum 3-year mine life; operating costs estimated to be C$77.55 per tonne; and a 6-month period to bring the deposit into full production.

The study assumes a US$550-per-oz. gold price, a 90% recovery of gold from ore, and a C$1.10-to-US$1 exchange ratio.

Based on these early results, Golder is recommending Alexis take steps to move the project towards a commercial production decision.

“The scoping study clearly makes the case for the potential to develop a robust underground mining operation at a US$550-per-ounce gold price with considerable upside potential,” Alexis president and CEO David Rigg said in a release.

He added there is “good potential for further resource expansion, improved mining costs and approach, and better milling recoveries.”

Once the required permits are in hand, Alexis will dewater Lac Pelletier’s underground workings developed in 1990-91 and carry out underground exploration to upgrade and expand the resource. The company will also test mine to confirm grade and generate material for further metallurgical work.

In May, Alexis will begin drilling the deposit from surface, both on land for near-surface mineralized zones and from a barge for down-plunge extensions.

Alexis has a large portfolio of gold and base metals properties, both wholly owned and under option, in the Val-d’Or and Rouyn-Noranda camps.

Alexis’s shares doubled from around 50 to above the $1 mark in January, when it reported a new intersection at Lac Herbin grading 35.42 grams gold per tonne over 9.2 metres starting at 300 metres depth — some 80 metres below any past drilling in the area.