Minera Alamos (MAI.V) recently provided a construction update on its Santana gold project in Sonora, Mexico. The company had to deal with some adverse weather circumstances but remains on track to start recovering gold this month, a bit later than the ‘early 2021’ the company was hoping for back in January, but so be it. With the gold price trading around $1800/oz the company certainly didn’t miss out on a window of higher gold prices. And thanks to the smart liquidation of its position in Prime Mining (PRYM.V), Minera Alamos was able to avoid running into working capital issues and did not have to issue more shares or to take on more debt to bridge the additional months until it starts producing gold and until it starts generating a positive free cash flow. Well played.
According to CEO Darren Koningen, mining activities to open up the Nicho Norte pit have now reached the desired status to bring in the larger equipment to start mining the pit in a more efficient way during the ramp-up process to full production. Until now, the Santana rock was hauled to the leach pads using smaller trucks provided by the mine contractor that took care of the site construction activities. Those smaller trucks will now be upgraded to higher capacity trucks which will also activate the contract rates for the mining and hauling operations that were previously agreed upon.
The boring months are now almost over and as Minera Alamos ramps up its mining and production activities, we hope to see regular production and cost updates. Minera Alamos is in an excellent financial position (with a working capital position of approximately C$20M as of the end of March), so it has plenty of time to figure things out during the ramp-up period.
Disclosure: The author has a long position in Minera Alamos. Please read our disclaimer.
