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TSX:AGI 9.89 +0.26 +2.7% Volume: 422,261 2017-06-23 20 mins delay | Get full quote
NYSE:AGI 7.44 +0.15 +2.06% Volume: 2,054,505 June 23, 2017
GOLD PRICE 1,257.65 +6.28 +0.5% Volume: June 23, 2017

Young-Davidson is one of our flagship operations and among Canada’s largest underground gold mines. With growing production and a large mineral reserve base, Young-Davidson is a long-life gold mine that will serve as the Company’s foundation for growth for many years to come.

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Young-Davidson Mine

Ownership 100%
Location Ontario, Canada
Status Operating
Operation Underground
Commodity Gold
Annual Operating Data 2015A 2016A 2017E
Production oz Au 160,358 170,000 200,000 - 210,000
Cost of Sales2US$/oz $1,162  $1,087$1,050 
Total Cash Costs1 US$/oz $683 $657 $625
Mine-Site All-in Sustaining Costs1 US$/oz $986 $897
$775
Tonnes
(000)
GRADE
(g/t Au)
Contained
Ounces
Proven & Probable Reserves 43,2202.653,687,000
Measured & Indicated Resources312,5313.091,246,000
Inferred Resources 3,5552.75314,000

2Cost of sales includes mining and processing costs, royalties and amortization.

3M&I resources exclusive of Reserves.

Please see 2016 year end Reserves and Resources statement for additional detail.

HIGHLIGHTS

Young-Davidson is one of Canada’s largest underground gold mines.

 

The mine has a 15 year reserve life based on year end 2016 reserves with a large resource base and exploration potential to support mine life extension.

 

The mine met 2016 guidance with record production of 170,000 ounces of gold.

 

In 2017 Young-Davidson is expected to see production increase to between 200,000 and 210,000 ounces of gold with mine-site AISC1 decreasing to $775 per ounce.

 

The Company continues to ramp up underground mining rates having achieved its target of 7,000 tpd by the end of 2016.

OVERVIEW

The Young-Davidson mine is an underground mining operation located in Northern Ontario, Canada. The property consists of contiguous mineral leases and claims totaling 11,000 acres, and is situated on the site of two past producing mines that produced one million ounces from 1934-1957. The Young-Davidson open pit mine achieved commercial production on September 1, 2012, and on October 31, 2013, the Company declared commercial production at the Young-Davidson underground mine following the commissioning of the shaft hoisting system. Open pit mining ceased in June 2014 upon depletion of the reserve; however, stockpiled open pit ore will supplement mill feed until underground production rates have ramped up to design levels of 8,000 tpd.

The underground mine has been designed for low operating costs through the use of large modern equipment, gravity movement of ore and waste through raises, shaft hoisting, minimal ore and waste re-handling, high productivity bulk mining methods and paste backfill. The mine operates scooptrams to load, haul and transfer stope production to the ore pass system from where it is hoisted to the surface via 18 tonne skips.

Location

The Young-Davidson gold mine is located near the town of Matachewan, approximately 60 km west of Kirkland Lake in Northern Ontario, within the southwestern part of the Abitibi Greenstone Belt. The mine is centrally located between Timmins, Kirkland Lake, North Bay and Sudbury and accessed by paved highway.

History

The initial discovery of gold in the project area was made by prospector Jake Davidson in 1916 on what became the former Young Davidson mine. This sparked a staking rush that resulted in a second discovery by Samuel Otisse on what became the MCM Mine property. Surface prospecting, trenching and outcrop stripping continued intermittently for the next several years and a joint venture was established between Hollinger Corporation and Young Davidson Mines Limited which led to initial underground production in 1934. Between 1934 and 1957, one million ounces of gold was produced from the Young Davidson and MCM Mine properties. Following closure of the mines, the properties remained dormant for a number of years with some before seeing some exploration and other activities in the 1980s and 1990s. In 2002, a private company vended the asset into Young Davidson Mines Limited, the same company that had discovered the property, and exploration activities were re-initiated. In late 2005, Northgate Minerals amalgamated with Young Davidson Mines Limited, and proceeded with surface exploration, environmental and engineering studies and underground exploration and development. In 2011, AuRico acquired Northgate Minerals, which included Young Davidson.

Open pit mining operations commenced in November 2011 and the first gold pour was achieved in April 2012. In October 2012, the first two underground stopes came into production and on October 31, 2013, the underground mine achieved commercial production following the commissioning of the shaft hoisting system.

GEOLOGY AND MINERALIZATION

Geology

Young-Davidson is situated within the southwestern part of the Abitibi Greenstone Belt, one of the largest greenstone belts in the world with historic production of 160 million ounces of gold. The Abitibi consists of a complex and diverse array of volcanic, sedimentary, and plutonic rocks typically metamorphosed to greenschist facies grade, but locally attaining amphibolite facies grade. Volcanic rocks range in composition from rhyolitic to komatiitic and commonly occur as mafic to felsic volcanic cycles. Sedimentary rocks consist of both chemical and clastic varieties and occur as both intravolcanic sequences and as uncomformably overlying sequences. A wide spectrum of mafic to felsic, pre-tectonic, syn-tectonic and post-tectonic intrusive rocks are present. All lithologies are cut by late, generally northeast-trending proterozoic diabase dikes. Within the Abitibi lies the Kirkland-Larder Lake trend, home to several gold camps including Young-Davidson, with combined historic production of 34 million ounces of gold.

Mineralization

Gold mineralization at Young-Davidson is associated with a syenite intrusive rock (a quartz granite). Within this syenite, the gold mineralization is associated with a stockwork of quartz veinlets and narrow quartz veins, rarely greater than a few centimetres thick that are within a broader halo of disseminated pyrite and potassic alteration. Historic mining demonstrated the continuity of mineralization from surface to a depth of approximately 500 metres. Mineralization is known to extend beyond 1,500 metres below surface (orebody open at depth); however, current drilling below this level will not be initiated until suitable underground drill platforms become available. Other mines along the Kirkland-Larder Lake trend were mined to depths of over 2,000 metres.

MINING AND PROCESSING

The Young-Davidson underground mine has been designed for low operating costs through the use of large modern equipment, gravity movement of ore and waste through raises, shaft hoisting, minimal ore and waste re-handling, high productivity bulk mining methods (long hole open stoping) and paste backfill. The mine operates scooptrams to load, haul and transfer stope production to the ore pass system from where it is hoisted to the surface via 18 tonne skips.

The underground mine is accessed via shaft and ramp. The sinking of the Northgate shaft was completed down to the mid-shaft loading pocket in 2013, which accesses the first eight years of mine production. Work continues on developing vertical access in the underground mine below that of the mid-shaft loading pocket, to an eventual depth of 1,500 metres. The existing MCM shaft reached its ultimate depth of 1,500 metres in 2015 and will provide for the hoisting of personnel, materials, ore and waste. The mine will also be accessed by a ramp, which will be extended to the bottom of the mine from the existing exploration ramp.

The underground ore and stockpiled open pit ore is processing through and 8,000 tpd single stage semi-autogenous grinding circuit with a gravity circuit followed by flotation. The flotation concentrate is further ground and leached in a conventional carbon-in-leach. The flotation tailings are also leached in a carbon-in-leach circuit. The gold is recovered from the carbon followed by electro-winning and pouring doré bars. The Young Davidson carbon-in-leach tailings are treated with the SO2/Air cyanide destruction method. The paste backfill plant was commissioned in 2014 and is capable of supplying paste fill to the underground voids at a rate in excess of 8,000 tonnes per day.

Young-Davidson Mine – 2016 Toxics Reduction Act Public Summary Report

Young-Davidson Mine – 2015 Toxics Reduction Act Public Summary Report

Young-Davidson Mine – 2014 Toxics Reduction Act Public Summary Report

Young-Davidson Mine – Toxic Substance Reduction Plan Summary

Young-Davidson Mine - Draft Environmental Study Report

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

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Non-GAAP Information

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Disclaimer

Reconciliation of non-GAAP and additional GAAP measures

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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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