For Alamos, 2017 was a transformational year. In this, our fifteenth year, we outperformed nearly every expectation: we broke company records for production, costs and safety, and solidified our financial foundation. And we gained a fourth producing mine, the Island Gold mine in Ontario, Canada.
In a time of wide fluctuations in the gold price, we feel it is critical to position ourselves for sustained production, while steadily reducing our cost profile. In 2017, we achieved a 10 percent increase in gold production to 429,400 ounces, and an 8 percent decrease in all-in sustaining costs to $933/ounce. The financial arrangements that we procured will provide tremendous financial flexibility: a $250 million dollar bought-deal financing arrangement made us debt-free, and we expanded our credit facility from $150 to $400 million.
The acquisition of Richmont Mines in November added the Island Gold mine to our portfolio. Island Gold is a well-managed, long-life underground mine in Ontario with a strong record of safety and environmental performance and active engagement with local communities.
Young-Davidson, our cornerstone mine, produced 200,000 ounces of gold for the first time in its history, with strong safety performance and ongoing partnership with local First Nations. At the Mulatos mine, which produced 160,000 ounces, we installed new water management facilities to ensure that no untreated mine contact water leaves the site. The mine’s Industria Limpia (clean industry) recertification is in progress, in recognition of their continued excellence in environmental management. Over the year, we moved forward on relocating the town of Mulatos and building an entirely new town site. This multi-year project is proceeding in close collaboration with the local ejido (community landholders’ association) and we will continue to work with, and assist, the community for years to come.
Both the Mulatos and El Chanate mines were again recognized as Socially Responsible Mining Companies by CEMEFI, the Mexican Center for Philanthropy. El Chanate is nearing the end of its mining life, and the reclamation process has begun, but the mine still produced over 60,000 ounces. In these early stages of closure, our efforts are focused on reforestation.
Our development projects made great progress in 2017: positive feasibility studies were completed in Turkey, for the Kirazlı and Aği Daği projects, and in Manitoba, Canada, at the Lynn Lake project. At Kirazlı, work was initiated on the reservoir, and on relocating the project’s access road and power lines. The Lynn Lake project received the environmental guidelines that allowed the Environmental Assessment process to begin, and our team continued with community engagement efforts. Our La Yaqui project, which is in the Mulatos district, completed Phase I of development on budget and ahead of schedule, and first gold was poured in August.
I want to make special mention of the diligence of our site safety teams, at every operation. Over the past two years we have rolled out the Home Safe Every Day safety program and its success is evident: in 2017 the El Chanate mine reached 4.8 million work hours, and 1,104 days, without a Lost Time Incident (LTI). The Young-Davidson mine has reached over 2.7 million work hours, and 699 days, without an LTI, and Mulatos, nearly 2.7 million work hours and 244 days. These remarkable statistics attest to a safety-first work culture that reaches from management to safety leadership to each individual worker. Island Gold, the newest member of the Alamos team, joins us with a solid safety record.
In closing, I want to express my gratitude to the people of Alamos and the Board, and their significant contributions to this year of transformation.
We entered 2018 with four producing mines, a solid operation base of 500,000 ounces of annual production, and a strong development pipeline. In 2018 and beyond, we expect continued growth, expanding margins and cash flow, and a relentless commitment to safe, sustainable production, and social and environmental stewardship in all our operations.
John A. McCluskey
President and Chief Executive Officer