Alamos gets busy after losing out on Aurizon

Alamos Gold (AGI-T, AGI-N) isn’t letting its failed Aurizon Mines (ARZ-T) bid get it down.

It was a busy March for the Toronto-based miner as evidenced by a just released reserve and resource update, the closing-in on the completion of environmental permits and the announcement of a dividend for its shareholders.

The latest developments begin with its flagship Mulatos Mine in Mexico where it updated reserves and resources at both the site proper and at its nearby satellite deposits.

Proven and Probable mineral reserves for Mulatos, La Yaqui and Cerro Pelon now total 68.8 million tonnes grading 1.07 grams gold for 2.37 million oz. of gold.

That is enough to replace all of the reserves that Alamos mined-out over the course of last year and further demonstrates the consistency of the deposit as last year it also replaced all of the mined-out mineral reserves from 2011.

At anticipated milling rates of 17,000 tonnes per day and 500 tonnes per day feeding a high grade mill, the replacement of reserves means that the mine life remains at nine years.

Mulatos, San Carlos, El Realito and Carricito all have measured and indicated resources for the area, and combined the deposits now have 81.8 million tonnes grading 1.01 grams gold for 2.64 million oz. of gold.

When a global perspective is taken and its assets in Turkey are considered alongside those in Mexico, its recent drilling has managed to boost overall measured and indicated resources by 2% as they now stand at 5.08 million oz. of gold and 19.7 million oz. of silver.

The company’s Turkish assets are composed of Kirazl, Ag Dag, and Camyurt

Kirazli now has measured and indicated resources of 32.3 million tonnes grading 0.71 grams gold and 8.61 grams silver for 739,000 oz. of gold and 8.95 million oz. of silver. It also has inferred resources of 6.7 million tonnes grading 0.59 grams gold and 8.17 grams silver for 127,000 oz. of gold and 1.8 million oz. of silver

At Agi Dagi measured and indicated resources now total 93.9 million tonnes grading 0.56 grams gold and 3.56 grams silver for 1.7 million oz. of gold and 10.7 million oz. of silver.

Taken together, gold resources at Kirazli and Agi Dagi are up 9.9% and silver resource are up 17%.

Some of that increase did, however, come at the expense of inferred resources at Agi Dagi, which dropped to 18.9 million tonnes grading 0.41 grams gold and 2.54 grams silver for 251,202 oz. of gold and 1.55 million oz. of silver.

The company completed an initial inferred resource estimate at Camyurt in June of last year which outlined 24.6 million tonnes grading 0.81 grams gold and 4.77 grams silver for 639,531 oz. of gold and 3.8 million oz. of silver. It expects to have an updated resource out for Camyurt in the second quarter of this year.

The company’s primary focus in Turkey, however, remains Kirazli and Agi Dagi.

While it expected to have its environmental impact assessment (EIA) report on Kirazli finalized by the end of the first quarter, it now says it will take slightly longer.

The approval process is in its final stages and the main parts of the review are done but some additional signatures from Turkish officials are still needed before it can be finalized. The Ministry of the Environment appointed commission charged with reviewing the EIA said in late January that the report was sufficient and “accepted as final”.  After that, a mandatory public notice period yielded no opposition of any kind, the company says.

When and if approval is granted it will immediately turn towards submitting an EIA for Ag Dag, which is roughly 20-km southeast of Kirazli and contains the Camyurt deposit within its property boundary.

It expects that the report would be approved along a similar timeline as that for Kirazli.

From the time the EIA approvals are granted it should take a year and a half to finish permitting and construction of each mine. It expects to have front-end engineering design done in May of this year at Kirazli.

With the withdrawal of its $780 million offer for Aurizon — the hostile bid was taken off the table after Hecla Mining (HL-N) made a higher friendly bid — Alamos is flush with cash.

The company’s coffers are currently filled with $480 million in cash and cash equivalents, enough to finance the development of both Kirazli and Agi Dagi it says.

Those enviable coffers have also allowed it to join an emerging and much applauded trend in the gold mining industry: the paying-out of dividends.

Alamos declared a semi-annual dividend of 10¢ per common share that is payable on April 30, 2013 to shareholders holding stock as of April 15.