No more toll milling for Alexis (July 26, 2010)

Alexis Minerals (AMC-T) will save $12-$15 per tonne by processing ore from the Lac Herbin gold mine near Val d’Or, Que., at its recently refurbished Aurbel mill.

Up until now, Alexis has been shipping ore from Lac Herbin to be custom milled at Richmont Mines’ (RIC-T) Camflow mill located 35 km away, costing the company $145 per tonne during 2009.

By comparison, the Aurbel mill is 1.8 km east of Lac Herbin and is now ready to handle up to 800 tonnes per day. Fully refurbished, the mill could handle up to 1,400 tonnes per day.

The mill uses a gravity-flotationcyanidation process and is currently operating at 650 tonnes per day.

Alexis is still fine-tuning the process to improve the gold recovery rate from the current 88-92% to the expected 94-96%.

Alexis officially reopened the mine in September 2008 and started refurbishing the mill in July 2009.

The company began commissioning with crushing low-grade ore in late March this year.

The mill, which Alexis bought in 2006 from Aur Resources (acquired by Teck Resources [TCK. A-T, TCK. B-T, TCK-N] in mid- 2007), is located above the past-producing Ferdeber gold mine and is very close to the Dumont gold mine.

Both mines closed in the mid- 1990s and are owned by Alexis. Alexis has recently done some drilling at the Dumont mine in search of new resources.

Alexis mined nearly 33,000 oz. gold from Lac Herbin in 2009 and finished the year with 7,400 oz. in a stockpile.

The company aims to produce 150,000 oz. gold per year by 2011 with the help of its recently acquired New Britannia gold mine near Snow Lake, Man., which the company acquired when it bought Garson Gold. The mine includes a 2,150-tonne-per-day mill.

The New Britannia mine has measured and indicated resources of 4.4 million tonnes grading 6.1 grams gold per tonne for 865,000 oz. gold.

Alexis shares were trading at 17¢ apiece on July 15. The company has a 52-week trading range of 15.5¢ – 49¢, 221.9 million shares outstanding and a market cap of $37.7 million.

It says the replacement cost for the mill, site and infrastructure has been independently estimated at $36 million.