Minera Alamos financing in place for Mexico gold project

Minera Alamos secured funding to construct its Santana gold project in Mexico.

The company completed a royalty and financing package with Osisko Gold Royalties worth up to Cdn$14mn (US$9.9mn), it said in a release.

The figure includes Cdn$5mn from a recently-completed royalty agreement and a Cdn$6mn equity placement which concluded in January.

Alamos also has the option to draw down an optional royalty facility of up to Cdn$3mn.

“We remain fortunate we can access their [Osisko’s] financing and technical resources that allow us to remain on track to transition to [a] gold producer in late 2020,” Alamos company president Doug Ramshaw said.

“Currently, our current working capital remains sufficient to execute our previously announced construction plans at Santana.”

The company plans to begin small-scale open pit mining at Santana in Sonora state, cash flows from which may be used to advance the La Fortuna asset in Durango state.

COVID-19 STATEMENT

Alamos has begun limiting work at Santana in the wake of a suspension of non-essential activities in Mexico aimed at controlling the spread of the COVID-19 pandemic.

Drilling has been halted, with heavy equipment mobilized to the site to be available once the suspension has lifted, the company said.

The slowdown of activity in April may push completion of construction to the upper end of guidance of 6-8 months, it added.