The Mulatos Mine operates 365 days a year and produces gold on-site as dore containing approximately 60 to 80% gold by weight, which is sent to a refinery for final processing prior to sale. Construction of the mine began in the third quarter of 2004, and the mine was completed in January 2006 at a cost of approximately $74 million. Commercial production was declared on April 1, 2006.
Although the 2004 Feasibility Study called for only a 10,000-tonnes-per-day ore crushing operation, Alamos sized the major components of the Mulatos Mine, including the crusher, conveyor, and gold recovery plant, to handle a mining and processing operation with a capacity of up to 15,000 tonnes per day. In 2005, an expansion budget of $20 million was approved to increase the scale of mining operations from the 2004 Feasibility Study level of 10,000 tonnes of ore per day. At the start of 2010, the Company commissioned a closed circuit crushing system designed to improve the size consistency of stacked ore. In October 2010, the Company added a scalping screen plant to the crushing circuit designed to increase throughput.
Actual average daily crusher throughput for 2010 was 13,000 tonnes per day. In 2011, the Company expects average daily crusher throughput to be at a minimum of approximately 14,300 tonnes per day.
Based on current proven and probable mineral reserves and current throughput rates, Mulatos has an expected mine life of approximately nine years. Initial capital costs incurred to construct the mine have been recovered, however, the Company is investing further in its current heap leach operations to improve recoveries and throughput, and in a planned mill expansion in order to increase global production.
In 2011, the Company will construct a gravity mill in order to increase global production. The mill has been designed to process high-grade ores, such as those found within the Escondida zone.
In the year-ended December 31, 2010, the Company produced 156,000 ounces of gold at a cash operating cost of $302 per ounce.