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TSX:AGI 10.92 +0.36 +3.46% Volume: 223,184 2017-02-23 20 mins delay | Get full quote
NYSE:AGI 8.35 +0.32 +3.98% Volume: 1,075,448 February 23, 2017
GOLD PRICE 1,250.34 +12.80 +1.03% Volume: February 23, 2017

Aği Daği represents our next leg of growth in Turkey with significant low cost production expected approximately 18 months after the start of production at Kirazlı.

Ağı Dağı and Çamyurt Project Animation

Slide table

Ağı Dağı Gold Project

Ownership 100%
Location Çanakkale, Turkey
Status Permitting
Operation Open Pit, heap leach
Commodity Gold & Silver
2012 Positive Pre-feasibility Study - Summary (excluding Çamyurt)
Mine Life Years 7
Average Annual Production oz Au
oz Ag
143,000
271,000
Average Throughput tpd 30,000
Average Grade g/t Au
g/t Ag
0.55
3.30
Cash Operating Costs1 $US/oz $569
Total Cash Costs1 $US/oz $611
Pre-production Capex US$m $278.3
Total Capex US$m $326.6
Base Case IRR (after tax)2 % 14.0%
Tonnes Grade Contained Ounces
(000) (g/t Au) (g/t Ag) Au Ag
Measured & Indicated Resources3 90,052 0.59 4.09 1,694,736 11,849,336
Inferred Resources 16,760 0.46 2.85 245,214 1,533,608

2Base Case IRR was calculated assuming a $1,206/oz gold and $22.15/oz silver price

3M&I resources exclusive of Reserves

Please see 2015 year end Reserves and Resources statement for additional detail.

HIGHLIGHTS

Acquired along with the Kirazlı project for approximately $90 million in 2010.

 

Average annual production of 143,000 ounces of gold over a 7 year mine life based on 2012 PFS.

 

Low cost and low technical risk production growth expected 18 months after the startup of Kirazlı.

 

Significant opportunity to boost the economics through incorporating nearby, higher grade Çamyurt project.

FEATURED VIDEO:

In 2012, Alamos achieved a significant milestone at Mulatos with the mine producing both its millionth ounce of production and generating its billionth dollar of revenue.

OVERVIEW

The 100% owned Ağı Dağı and Kirazlı gold development projects are located in Çanakkale Province on the Biga Peninsula of northwestern Turkey. Ağı Dağı is located about 50 kilometres southeast of Çanakkale, and Kirazlı is located approximately 25 kilometres northwest of Ağı Dağı. The Company also owns the Çamyurt deposit located approximately 3 km from Agi Dagi. Alamos acquired the projects January 6, 2010 from Teck and Fronteer Development for total consideration of approximately $90m.

A positive pre-feasibility study (PFS) was completed on Ağı Dağı and Kirazlı in 2012 with both projects contemplated as stand-alone open-pit, heap-leach operations. Under the the PFS, Ağı Dağı is expected to produce an average of 143,000 oz of gold per year at total cash costs1 of $611/oz (inclusive of royalty) over a 7 year mine life. The nearby Çamyurt deposit was not incorporated into the PFS though significant capital spending on infrastructure that is expected to benefit the economics of the Çamyurt project was included. Given the higher grades of Çamyurt and proximity to Ağı Dağı, its inclusion into the Company’s development plan is expected to positively impact the economics of the project. Initial production from Ağı Dağı is expected approximately 18 months after first production at Kirazlı.

Location

Ağı Dağı is located approximately 50 km southeast of Çanakkale. Kirazlı and the early stage Çamyurt Project are located approximately 25 km northwest and 3km, respectively from Ağı Dağı. The projects are located in the Çanakkale Province in the Biga Peninsula of northwestern Turkey, some 250 km by air southwest of Istanbul or 800 km west of Ankara, Turkey’s capital. The Company maintains an administrative office in Ankara, Turkey, and exploration offices in Etili and Sogutalan, both small towns located in the Biga District of Turkey. These offices support all activities for the Aği Daği and Kirazlı Projects. Çanakkale is the largest centre on the Biga Peninsula with a population of approximately 100,000. Infrastructure in close proximity to the project is excellent and well-serviced with paved roads, electricity, transmission lines, and electricity generating facilities, the most significant being a large coal-fired power plant adjacent to the nearby Town of Çan, which has a population of approximately 30,000.

The Aği Daği property currently consists of a total of 10,514 hectares of mineral tenure in fifteen contiguous operation and exploration licenses covering a prominent ridge with 900 m of relief and includes the Çamyurt Project. Subsequent to December 31, 2011, the Company acquired an additional 5,171 hectares in three concessions at Aği Daği through auction. Mineral rights for all concessions comprising the Turkish assets are controlled by Kuzey Biga and Doğu Biga, Turkish subsidiaries of the Company. As all projects are located in a forestry reserve, surface rights are controlled by the State government of Çanakkale.

History

On January 6, 2010, the Company acquired the Ağı Dağı and Kirazlı advanced-stage development projects through the purchase of three Turkish companies held by Teck Resources (“Teck”) and Fronteer Development Group (“Fronteer”). The Company paid a total of $40 million cash and issued an aggregate of 4 million common shares to Teck (as to 60%) and Fronteer (as to 40%), for total consideration amounting to $90 million at the closing of the sale.

In March 2010, the Company published a positive preliminary economic assessment technical report (“Scoping Study”) evaluating the economic potential of developing Ağı Dağı and Kirazlı into gold mines. In addition, since acquiring the project, the Company began to delineate the Çamyurt exploration project, located approximately three kilometres southeast of Ağı Dağı.

GEOLOGY AND MINERALIZATION

Geology

The Aği Daği and Kirazlı deposits are epithermal, high-sulphidation, disseminated gold systems where gold mineralization is hosted within Miocene-age rocks.

At Ağı Dağı the Oligo-Miocene volcanics mainly consist of andesite porphyry, porphyritic andesites and dacite-rhyolite flows and tuffs. The andesite porphyry facies occurs at the base of the sequence and the dacite-rhyolite facies at the top. This sequence appears to occur in two parallel, northeast trending basins along the length of Ağı Mountain. Phreatic and phreatomagmatic breccias cut the entire volcanic sequence. These breccias were emplaced as mushroom shape pipes with northeast trending roots that were identified to a vertical depth of 400 m and over a 2 km strike extent.

There are five main zones of gold mineralization present at Ağı Dağı. The Baba, Fire Tower and Deli zones occur within the interpreted southeastern basin and the Ayi Tepe to Ihlamur mineralized zones occur in the interpreted northwestern basin.

Hydrothermal alteration at Ağı Dağı covers an area in excess of 25 km² and exhibits many of the alteration facies that typically relate to high-sulphidation, epithermal gold deposits including: silicic, vuggy silica, advanced-argillic, argillic, propyllitic, and sericitic facies. Silicification with vuggy and massive silica is the most prominent alteration type surrounded by several facies of advanced argillic then argillic alteration.

Mineralization

At Ağı Dağı, gold mineralization is associated with a northeast trending silica cap rock about four km by two km in extent which forms a topographic high 700 to 900 metres in relief. The gold mineralization is disseminated and is associated with intense silicic alteration comprised of both massive and vuggy silica. Host rocks include volcanic felsic to intermediate tuffs and flows and phreatic breccias. Pyrite is the most abundant primary sulfide mineral associated with gold in the sulphide rocks. Trace to minor amounts of enargite, covellite, galena, and molybdenum are present locally.

Gold mineralization appears to be continuous from Baba through Fire Tower zone and into the Deli zone, which is a total distance of over 4 km. Minable resources have been generated for the Baba and Deli zones of the Agi Dagi deposit and have also been developed for the Fire Tower zone.

The bulk of the gold resources have been defined at the Baba and Deli zones. Gold mineralization in the Baba zone occurs within or spatially associated with a large, upward-flaring, matrix-supported heterolithic phreatic breccia that cuts dacite tuffs and andesite flows. Silicification (often vuggy and/or crackle-brecciated) appears to be related to this breccia body and overprints the breccia and the dacite. Gold mineralization largely occurs within the breccia body but occasionally extends into the dacite tuffs.

Some lower-grade mineralization also occurs in the andesite adjacent to the breccia. The bulk of gold mineralization occurs within the oxide zone.

Gold mineralization at Deli appears to be related to a more classic high-sulphidation epithermal model with elevated gold-lead-arsenic-silver. It occurs in an intensely silicified package of rhyolite – andesite volcanics that are intruded by EW-elongated breccias. Gold is again associated with the breccias and (mainly silica) altered volcanics. Most of this package has been oxidized.

Mineralization along the Ayi Tepe – Ihlamur trend has only been sporadically drilled and additional drilling is required to quantify the very favorable mineral potential.

MINING AND PROCESSING

Mining

Mining of the Ağı Dağı deposit will be done by open pit methods utilizing a traditional drill, blast, load and haul sequence to deliver ore to the primary crusher and waste to waste dumps, pit backfill and/or as heap leach pad construction fill. The pit designs are based on a 5 metre bench height to match the resource model bench height.

The Pre-feasibility assumes that a contract miner will be hired to provide mine equipment and operating personnel during pre-production and throughout the life of mine operations.

The mine plan calls for the delivery of 30,000 tpd of ore to the crusher at Ağı Dağı. Mining activity after the pre-production periods will be approximately seven years at Ağı Dağı.

The recommended pit slope angles range from 18 to 42 degrees, in compliance with best practices for safety standards.

Processing and Infrastructure

The Ağı Dağı projects has been designed as a heap leach operation utilizing a multiple-lift, single-use leach pad. Ore will be processed by primary crushing and open circuit secondary crushing to a nominal size of one inch. The secondary crushed ore will be agglomerated with cement in an agglomeration drum, stacked on the heap leach pad by conveyor stacking and processed by conventional heap leaching methods.

A single heap leach facility is planned at the northern side of the Ağı Dağı site with a capacity of approximately 70 million tonnes. The capacity of the heap leach facility at Ağı Dağı was based upon the estimated measured and indicated resources at the time of the PFS; however, has the potential to be expanded to accommodate an additional 20 million tonnes.

Processing at Ağı Dağı includes heap leaching of crushed ore with dilute cyanide solutions with precious metals production in carbon adsorption-desorption-recovery (“ADR”) plants to produce gold/silver doré bars. Sufficient metallurgical testing has been completed on samples from the project to support the Pre-feasibility level design of the process facilities. Wherever practical, identical equipment was used at both Ağı Dağı and Kirazlı to minimize spare parts handling and inventories, and to facilitate major equipment operations and maintenance.

Gold and silver recoveries by alteration type were estimated based on a column leach testing program. Testing results indicated crushing with cement agglomeration is required to achieve the estimated recoveries. The overall gold recoveries at Ağı Dağı are expected to average 81% while silver recoveries are lower and expected to averaged 26%. Reagent consumptions are low to moderate and leach times are at 90 days at both projects.

Preferred sites have been selected for heap leach facilities and waste rock dump sites at Ağı Dağı. Preliminary designs were completed for these facilities, and geotechnical characterization and engineering analyses were conducted to confirm stability and support the Pre-feasibility cost model for both projects.

The power connection for Ağı Dağı will be from a substation at the coal powered generating station at Çan. Approximately 20 kilometers of new power lines will be required to feed power from Çan to Ağı Dağı.

Operational water will be used at the project to wet new ore stacked on the leach pad, replace evaporation losses on the heap leach pad facilities, provide dust-control for haul roads, access roads, crushing and ADR operations, and construction activities. Water will be supplied to the projects mainly via a pipeline from the planned reservoir, from wells, and/or from surface water collected at each site.

Alamos has initiated an engineering design and feasibility study for a reservoir which will supply potable water to nearby communities in Ağı Dağı and Kirazlı, comprising over 20 villages, and sustainable process water to Ağı Dağı and Kirazlı mining operations. Alamos has committed to design and construct the reservoir in partnership with the government agency, the State Hydraulic Works (“DSI”). Dam design includes sufficient capacity for peak process water requirements and has been sized to accommodate drinking water requirements for the projected population for the year 2065 of the surrounding communities.

Since acquiring the Ağı Dağı and Kirazlı projects in early 2010 and in line with the Company’s objectives of sustainable development and social responsibility, the Company recognized the importance of improving the quality of potable water delivered to the local communities within its project areas and has committed to the development of the reservoir.

A 2% Net Smelter Return Royalty in favour of Franco Nevada Corporation is registered against the Aği Daği property (which includes a portion of the Çamyurt Project).

Technical Information and Cautionary Notes on non-GAAP Measures and Additional GAAP Measures

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Please note the information presented is deemed representative at the time of its original release. Changes in historical information may occur due to adjustments in accounting and reporting standards & procedures.

Non-GAAP Information

In addition to disclosing results determined in accordance with GAAP, AGI may also disclose certain non-GAAP and pro forma non-GAAP results of operations, including certain ratios, operational and miscellaneous data, as well as net income, diluted earnings per share, operating expenses, and operating income that make certain adjustments or exclude certain charges and gains that are outlined in the schedules included in this website. Management believes that this non-GAAP and pro forma non-GAAP information provides investors with additional information to assess AGI operating performance by making certain adjustments or excluding costs or gains and assists investors in comparing our operating performance to prior periods. Management uses this non-GAAP and pro forma non-GAAP information, along with GAAP information, in evaluating its historical operating performance. AGI and Virtua also take no responsibility for third party pricing data provided for informational purposes and certain ratio results formulated from the provided third party pricing data.

The non-GAAP information is not prepared in accordance with GAAP and may not be comparable to non-GAAP information used by other companies. The non-GAAP information should not be viewed as a substitute for, or superior to, other data prepared in accordance with GAAP.

Disclaimer

Reconciliation of non-GAAP and additional GAAP measures

General Disclaimer

Alamos Gold Inc. ("Alamos" or the “Company”), has taken all reasonable care in producing and publishing information contained in this website, and will endeavour to do so regularly. Material on this site may contain technical or other inaccuracies, omissions, or typographic errors, for which Alamos assumes no responsibility. Alamos does not warrant or make any representations regarding the use, validity, accuracy, completeness, or reliability of any claims, statements, or information on this site. Under no circumstances, including but not limited to, negligence, shall Alamos be liable for any direct, indirect, special, incidental, consequential, or other damages, including but not limited to, loss of programs, loss of data, loss of use of computer or other systems, or loss of profits, whether or not advised of the possibility of damage, arising from your use, or inability to use, the material on this site. The information is not a substitute for independent professional advice before making any investment decisions. Furthermore, you may not modify or reproduce in any form, electronic or otherwise, any information on this site, except for personal use, unless you have obtained our express written permission. The TSX and NYSE have not reviewed and do not accept responsibility for the adequacy or accuracy of information on this website.

Cautionary Notes – Forward Looking Statements

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Certain statements in this website are “forward-looking statements”, including within the meaning of the United States Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this website, including without limitation statements regarding forecast gold production, gold grades, recoveries, waste-to-ore ratios, total cash costs, potential mineralization and reserves, exploration results, and future plans and objectives of Alamos, are forward-looking statements based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management that involve various risks and uncertainties. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be “forward-looking statements.” Alamos cautions that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause Alamos' actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to, gold and silver price volatility; fluctuations in foreign exchange rates and interest rates; the impact of any hedging activities; discrepancies between actual and estimated production, between actual and estimated reserves and resources or between actual and estimated metallurgical recoveries; costs of production; capital expenditure requirements; the costs and timing of construction and development of new deposits; and the success of exploration and permitting activities. In addition, the factors described or referred to in the section entitled “Risk Factors” in both Alamos Gold Inc.’s Annual Information Form for the year ended December 31, 2014 and the Annual Information Form for the year ended December 31, 2014 of AuRico Gold Inc., (each a predecessor to Alamos Gold Inc.), along with each of these entities’ subsequent public filings available on the SEDAR website at www.sedar.com, should be reviewed in conjunction with the information found in this website. Although Alamos has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information.

Note to U.S. Investors

Alamos prepares its disclosure in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. Terms relating to mineral resources in this website are defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Standards on Mineral Resources and Mineral Reserves. The United States Securities and Exchange Commission (the “SEC”) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. Alamos may use certain terms, such as “measured mineral resources”, “indicated mineral resources”, “inferred mineral resources” and “probable mineral reserves” that the SEC does not recognize (these terms may be used in this website and are included in the public filings of Alamos, which have been filed with the SEC and the securities commissions or similar authorities in Canada).

Cautionary non-GAAP Measures and Additional GAAP Measures

Note that for purposes of this section, GAAP refers to IFRS. The Company believes that investors use certain non-GAAP and additional GAAP measures as indicators to assess gold mining companies. They are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.
Additional GAAP measures that are presented on the face of the Company’s consolidated statements of comprehensive income include “Mine operating costs”, “Earnings from mine operations” and “Earnings from operations”. These measures are intended to provide an indication of the Company’s mine and operating performance. “Cash flow from operating activities before changes in non-cash working capital” is a non-GAAP performance measure that could provide an indication of the Company’s ability to generate cash flows from operations, and is calculated by adding back the change in non-cash working capital to “Cash provided by (used in) operating activities” as presented on the Company’s consolidated statements of cash flows. “Free cash flow” is a non-GAAP performance measure that is calculated as cash flows from operations net of cash flows invested in mineral property, plant and equipment and exploration and evaluation assets as presented on the Company’s consolidated statements of cash flows and that would provide an indication of the Company’s ability to generate cash flows from its mineral projects. Return on Equity is defined as Earnings from Continuing Operations divided by the average Total Equity for the current and previous year. “Mining cost per tonne of ore” and “Cost per tonne of ore” are non-GAAP performance measures that could provide an indication of the mining and processing efficiency and effectiveness of the mine. These measures are calculated by dividing the relevant mining and processing costs and total costs by the tonnes of ore processed in the period. “Cost per tonne of ore” is usually affected by operating efficiencies and waste-to-ore ratios in the period. “Cash operating costs per ounce”, “total cash costs per ounce” and “all-in sustaining costs per ounce” as used in this analysis are non-GAAP terms typically used by gold mining companies to assess the level of gross margin available to the Company by subtracting these costs from the unit price realized during the period. These non-GAAP terms are also used to assess the ability of a mining company to generate cash flow from operations. There may be some variation in the method of computation of these metrics as determined by the Company compared with other mining companies. In this context, “cash operating costs per ounce” reflects the cash operating costs allocated from in-process and dore inventory associated with ounces of gold sold in the period. “Cash operating costs per ounce” may vary from one period to another due to operating efficiencies, waste-to-ore ratios, grade of ore processed and gold recovery rates in the period. “Total cash costs per ounce” includes “cash operating costs per ounce” plus applicable royalties. Cash operating costs per ounce and total cash costs per ounce are exclusive of exploration costs. “All-in sustaining costs per ounce” include total cash costs, exploration, corporate and administrative, share based compensation and sustaining capital costs. Non-GAAP and additional GAAP measures do not have a standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures presented by other companies. For a reconciliation of non-GAAP and GAAP measures, please refer to Alamos’ Managements’ Discussion and Analysis as presented on SEDAR and the Company’s website.

Technical Information

Except as otherwise noted herein, Chris Bostwick, FAusIMM, Alamos Gold’s Vice President, Technical Services, has reviewed and approved the scientific and technical information contained in this website. Chris Bostwick is a Qualified Person within the meaning of Canadian Securities Administrator’s National Instrument 43-101. For more information, please refer to the Alamos Gold Inc. and AuRico Gold Inc. 2014 Annual Information Forms and the technical reports referenced therein and in this website, available on SEDAR (www.sedar.com).

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