MINERAL EXPLORATION
Alamos Gold is anticipating gold output of 130,000-145,000 oz from Island this year
Drilling the golden goods at Island
Dan Gleeson talks exploration – specifically directional drilling – with the Alamos Gold team after they hit Island Gold Mine ’ s best-ever drill intersection
John A McCluskey , President and CEO of Alamos Gold , tends to look forward , not back , when talking about strategic decisions the Toronto- and New York-listed miner has made during his 18 years heading up the company .
When discussing the acquisition of Richmont Mines , which included the flagship Island Gold Mine asset in Ontario , he allows himself a brief rumination on the market ’ s first impressions of the deal : “ We acquired the asset for around $ 620 million in November of 2017 . The consensus view in the market was we had overpaid for the asset .”
That consensus view considered 1.8 Moz of mineral reserves and resources and production around the 100,000 oz / y mark , among other factors .
“ In less than three years , we had Island over the 4 Moz reserve and resource threshold – we ’ re now nearer to 5 Moz – and the consensus valuation for the asset from analysts covering us is around $ 1.4 billion .”
That new valuation factors in a production rise – the company is anticipating gold output of 130,000-145,000 oz this year – and long-term growth prospects for the asset . The latter is evidenced by an Island Phase Three Expansion study published last year that envisaged a 2,000 t / d operation ( currently 1,200 t / d ) able to produce 236,000 oz / y starting in 2025 .
While McCluskey says the company was aware of these growth prospects back in November 2017 , most market observers will be surprised they have been proven up so quickly after the Richmont Mines transaction .
They probably underestimated what the use of surface directional drilling could do at Island .
Originally leveraged by Richmont Mines ’ Chief Geologist and now Island Gold Chief Geologist , Raynald Vincent , back in 2015 , the exploration technique has allowed Alamos to successfully step out from and infill holes Richmont and predecessors previously drilled .
Scott R . G . Parsons , VP of Exploration for Alamos , says surface directional drilling , in combination with the exploration team ’ s
understanding on the controls on gold mineralisation at Island and Alamos ’ financial backing for exploration , has helped the company grow the asset rapidly .
“ The significant resource and reserve growth at Island in the last three years – adding 3 Moz net of 500,000 of mining depletion – was largely driven by surface directional drilling ,” he told IM . “ We could not have moved the asset forward in such a significant way without it .”
The use of what Parsons says are “ standard ” surface drill rigs and Devico ’ s DeviDrill™ steerable wireline core barrels are allowing the company to hit mineralisation far below the mine ’ s existing underground infrastructure . The DeviDrill tool can make multiple branches from a pilot hole , dramatically reducing both the time spent and the cost of drilling when compared with standard core drilling methods . At the same time , no time is lost on moving the drill rig between branch holes , as the core barrel can be steered from surface to complete the optimal drill patterns .
The company has drilled 240 surface directional drill holes at Island for about 200,000 m of drilling using only 27 drill sites , Parsons explained .
“ Using conventional surface drilling , the 240 holes would have required significantly more drill sites ,” he said .
This would have involved moving the rig more frequently , making the process that much slower and expensive .
Instead , thanks to this directional drilling technique , the company is sitting on an additional 3 Moz of gold resources and reserves garnered in the last three years . This has come with a discovery cost of just $ 11 / oz .
Accuracy , as Devico indicated , is another benefit of this technology .
“ Surface directional drilling is not only more effective than standard drilling practices , but we can hit our targets with 1 % accuracy ,” Parsons added . “ So , if we ’ re drilling a 1,500 m hole , we can typically intersect our target within 15 m from plan , 1,500 m downhole . This predictable drilling spacing is critical for defining a mineral resource with the appropriate confidence level .
“ You ’ d never be able to do that with standard surface drilling .”
This technique is not a silver exploration bullet , though . According to Parsons , it does not work everywhere .
The DeviDrill tool can make multiple branches from a pilot hole , dramatically reducing both the time spent and the cost of drilling when compared with standard core drilling methods ( photo : Devico )
30 International Mining | SEPTEMBER 2021