Home > News > Betting big on Island Gold

Betting big on Island Gold

Aug 31, 2022

By Kevin Vincent, Mining Life
When you round it up, USD $756 million is, essentially, a billion Canadian dollars. Okay, at the time of this article, it’s closer to $972 million but who’s counting?
The town of Dubreuilville, Ontario – that’s who.
Alamos Gold announced in late June, that the company wants to double production at the nearby Island Gold Mine.
The goal is 2400 tonnes per day over the next four years. The numbers look highly favourable - double production and incredibly low costs. The announcement means good-paying jobs and a boost to the local economy for the next 18 years.  
To put the impact of the announcement into perspective, here’s a snapshot of the community that was founded in 1961 by the Dubreil Brothers Lumber Company.
Dubreuilville was incorporated as a municipality in 1977. Dubreuilville hosted the Canada’s Strongest Man contests in 2015, 2016, and 2019. Population? 576.
When the expansion is finished, Island Gold Mine is on target to become Canada’s seventh largest gold mine. Annual production could be as high as 287,000 ounces.
There’s work for anyone who is qualified. The company says 1,200 construction jobs will be created over the duration of the expansion project. When it’s all said and done, 600 jobs expected to be sustained at Island Gold Mine until 2039.
And that’s not all. Operational activities during the life of mine are expected to contribute $16 million on goods and services, $14 million to the regional economy, and $56 million in wages and salaries.
“Island Gold continues to grow in every sense with our planned Phase 3+ Expansion driving the value of Island Gold to $2 billion at current gold prices. Mineral Reserves and Resources have increased to 5.1 million ounces, supporting the Phase 3+ increase in production rates, which will create a bigger, longer-life, more profitable and valuable operation,” said John McCluskey, President and Chief Executive Officer.
“As a producing mine with a well-understood cost structure, this expansion is low risk from an execution perspective, and has a significantly reduced carbon footprint. The exploration story continues to unfold with a Mineral Reserve and Resource base that has nearly tripled over the past four years, and with the deposit open laterally and down-plunge, we expect Island Gold will be one of the lowest cost and most profitable mines for decades to come,” said McCluskey.

Phase 3+ Expansion Study Highlights

Higher production:

- Average annual gold production of 287,000 ounces starting in 2026 upon completion of the shaft. This represents a 22% increase from the P3 2000 Study and a 121% increase from the mid-point of 2022 production guidance of 130,000 ounces. Industry low costs, consistent cost structure with the P3 2000 Study, with productivity gains and economies of scale offsetting inflation.
- Average total cash costs of $432 per ounce (average $425 per ounce from 2026), consistent with the P3 2000 Study and 25% lower than the mid-point of 2022 guidance of $575 per ounce.
- Average mine-site all-in sustaining costs of $610 per ounce (average $576 per ounce from 2026), a 30% decrease from the mid-point of 2022 guidance of $875 per ounce.
- Larger, longer-life operation supported by significantly increased Mineral Reserve and Resource
- 43% increase in mineable resource to 4.6 million ounces of gold grading 10.59 grams per tonne (“g/t Au”).
- 18 year mine life to 2039, a four year increase from the P3 2000 Study, while operating at 20% higher production rates of 2,400 tpd.

Lower capital intensity:

- Lower total capital per ounce over the life of mine
- Growth capital of $756 million and sustaining capital of $777 million, both up from the P3 2000 Study reflecting the expansion, a larger mineable resource, and industry-wide inflation.


Come visit Austin Hemphill, Mine General Manger from the Alamos Island Gold Mine as he will be speaking at the Projects in the Pipeline Conference during the CEN CAN Expo in Thunder Bay, September 15th at the Cineplex Silver City Theatre on the Canadian Lakehead Exhibition Grounds. You can register online at www.cencanexpo.ca seating is limited.

Tags: Northern Ontario / Investment / Gold / All Articles