Resource World Magazine

48 www.resourceworld.com J U N E / J U L Y 2 0 1 6 MINERA ALAMOS INC. [MAI-TSXV] has closed its acquisi- tion of the La Fortuna gold project in Durango, Mexico, from Argonaut Gold Inc. [AR-TSX]. "This acquisition is consistent with the company's objective of adding late-stage development opportunities to our grow- ing mineral property profile," said Chris Frostad, CEO of Minera Alamos. "In the coming months, we expect to issue a technical report defining the project economics. If deemed appropriate, a construction decision is scheduled to be made by the end of the year." In an interview Frostad said that the planned Pre-Feasibility Report does not require any further drilling as this was completed in 2011. He noted that La Fortuna was being developed by Castle Gold before being acquired by Argonaut Gold. Conveniently, the Minera Alamos Mexican engineering team worked on the project with Castle Gold to an advanced stage. The metallurgical work has also been completed, said Frostad, and work has started on the permitting process. "The applications should be submitted by the summer with permits in hand by early next year," he said. "We expect feasibility to be completed by the end of the summer." Frostad said a construction decision will be made by year end if the Pre-Feasibility is finished by the end of the summer. "We are also working on project financing which we expect to be about $15 million," said Frostad. "We have also been working with our agent, IBK Capital Corp., to assist with funding," said Frostad. "We have raised $4 million by private placement that will be used for the La Fortuna acquisition, development of the Los Verdes Project and for working capital. IBK will help raise further funds to place La Fortuna into production." Frostad explained that the ore sorting process may be used at La Fortuna. The company has already investigated this process for use at its Los Verdes copper project in Sonora, Mexico. Refer to Resource World 13-6 articles pages 44 and 50 for more details. "We plan to integrate the ore sorting technology into the La Fortuna Mine to upgrade sub-economic material for milling," said Frostad. "La Fortuna was originally envisioned as a heap leach proj- ect. With our recent acquisition of a grinding and flotation plant, however, we expect to increase gold recoveries from 65% to 95%. We expect to start production at about 45-50,000 ounces per year." Frostad said there is sufficient water available for ore processing as a river runs right through the property. He said that if permits are received in early 2017, the company will be looking at an approximate eight-month construction period and should be in production before the end of next year. HiGHliGHts: La Fortuna hosts measured plus indicated mineral resources of 4.8 million tonnes grading 2.0 g/t gold containing 308,100 ounces of gold with additional silver credits, presently excluded from the resource calculations. The company intends to release a new resource estimate in the coming months. The identified gold-silver mineralization at the La Fortuna deposit remains open at depth and along strike. Several other mineralized areas have already been identified and demonstrated, via surface sampling, to be gold bearing. These provide immedi- ate drill targets for the definition of additional gold resources. Under the agreement, Minera Alamos paid Argonaut US $750,000 upon closing. An additional US $250,000 will be paid in nine months and US $1 million will be paid upon a construction decision. Argonaut will receive a 2% net smelter return royalty up to US $4.5 million. At the Los Verdes Project, following drilling of the second deposit, Minera Alamos decided to start mining operations there as this deposit had grades equal to the first one (South) but is right at surface. "It would be far easier and quicker to start opera- tions on the second deposit," said Frostad. "We expect to have a new Los Verdes PEA completed in the coming weeks when we will decide on the best time frame to build the mine." Frostad said Minera Alamos is seeking to acquire other mining projects that can be built at modest capital expenditures that are not necessarily in Mexico. n minEra aLamoS acquires La Fortuna gold project Historic plant workings of the past-producing La Fortuna gold mine in Durango, Mexico which Minera Alamos is acquiring. Photo courtesy Minera Alamos Inc. miNiNg

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