Alamos Gold revealed potential growth at the Mulatos district in Mexico as part of its ongoing surface drilling within the district. 

New high-grade drill results from the Puerto Del Aire (PDA) and Cerro Pelon deposits, which are adjacent to Alamos' Mulatos open pit mine, could potentially increase PDA's reserves and resources and Cerro Pelon's initial underground mineral resources.

At PDA, the Canadian gold miner found additional high-grade gold mineralisation within the GAP-Victor, PDA3, and PDA Extension zones. Highlights include 5.43gpt over 19.05m at GAP-Victor, 3.03gpt over 28.4m at PDA3, and 36.2gpt over 0.9m at PDA Extension.

At Cerro Pelon, it identified several high-grade feeder structures ranging from 45-125m in width and 170m vertically, including 5.45gpt over 27.9m and 12.47gpt over 6.46m

Our continued exploration success at PDA in 2024 highlights the significant upside potential to the project through further growth in higher-grade mineral reserves and resources," chief executive John McCluskey said.

"The addition of a mill to process higher-grade sulphide mineralization will also open up additional opportunities within the Mulatos district, including Cerro Pelon, where we expect to declare an initial mineral resource in early 2025," he added.

Later in the day, Alamos also released a development plan for PDA that included the potential development of the project in 2025, with the first production expected in mid-2027.

The project could nearly triple the mine life of the Mulatos district and extend production into 2035, the company said.

"There are excellent opportunities currently being tested that could extend the mine life further and enhance already robust economics through the significant exploration upside potential at both PDA and Cerro Pelon," according to the gold miner.

PDA is projected to produce an average of 127,000tpa over the first four years and 104,000tpa over the life-of-mine, at total cash costs of $921/oz and mine-site all-in sustaining costs of around $2,500/oz.

The project's after-tax net present value is $269 million, with a 5% discount, and its after-tax internal rate of return is 46%.

"Mulatos has been operating for nearly 20 years, reflecting a long-term track record of exploration success with the discovery of multiple new deposits in the district," McCluskey said. "PDA is an extension of that success, having discovered and outlined another attractive, high-return project that we expect will extend the Mulatos district mine life to at least 2035, representing 30 years since it began producing."

Following its expansion of the Island Gold Mine and the Lynn Lake project in Canada last year, Alamos told Mining Journal at the end of 2023 that it could increase production to around 800,000ozpa by 2028, up from almost 530,000oz of gold in 2023.

The Canadian miner's share price has risen 41.3% since the beginning of the year, trading at C$24.70 and with a market cap of C$10.33 billion.