Minera Alamos (TSXV: MAI) just received $2 million in early funding in connection with a royalty agreement through the execution of a secured senior convertible-to-loan agreement with Osisko Gold Royalties (TSX: OR).
In a media statement, the Toronto-based miner said the loan may be converted into a 1% NSR on the La Fortuna gold project pursuant to the Royalty Option Agreement entered into with Osisko in May 2017.
According to Minera Alamos, most of the new funds will be used to make a land use payment requested by the Mexican authorities in conjunction with the La Fortuna permit applications.
Following the completion of the change of land use payment, the Environment and Natural Resources Secretariat will be in a position to issue the formal approval documentation for the project.
"The receipt of formal permit notifications for the La Fortuna gold project represents a major milestone for the company. We are appreciative of the support provided by Osisko Gold Royalties allowing for us to meet the permitting payment deadlines," Minera Alamos CEO Darren Koningen said in the media brief. "We can now look forward to 2019 and the beginning of site preparation work leading to a construction decision later in the year."
The La Fortuna open-pit gold project is located in the northwestern Durango state, about 100 kilometres northeast of the city of Culiac??n in the neighbouring Sinaloa state. It includes the historic La Fortuna mine together with the surrounding concessions, which total more than 6,200 hectares.
Exploration surveys performed between 1991 and 2008 led to the development of a resource block model which produced a Measured and Indicated resource of 4,800,000 tonnes at 2.0 g/t gold (308,000 contained ounces) at a 0.50 g/t gold cutoff grade.
Minera Alamos reported that a recently completed a PEA for the project demonstrated an after-tax internal rate-of-return in excess of 90%, a rapid payback of capital of approximately one year and low production costs for an initial 50,000 oz (AuEq) per annum operation.