VANCOUVER (miningweekly.com) – Dual-listed Canadian gold producer Alamos Gold has substantially completed construction of the first phase of the La Yaqui mine, near its cornerstone Mulatos mine, in Mexico, the Toronto-based company said on Thursday.

Gold production at the satellite deposit has started and is expected to contribute significantly to a growing production profile and substantially lower costs going forward.

The mine produced 410 oz of gold from the initial pour. Gold production rates are increasing with the stacking of the first lift of ore on the leach pad completed and placed under irrigation in August, the company advised.

"The first phase of the La Yaqui mine was brought into production in eight months, a significant achievement and indicative of how quickly we can develop these types of deposits. Alamos will apply this same approach as we look to grow and develop La Yaqui Grande and other targets within the Mulatos district," said president and CEO John McCluskey.

La Yaqui is a standalone heap leach operation located abut 7 km as the crow flies from the Mulatos mine, in Sonora. The mine is expected to produce about 25 000 oz/y of gold at substantially lower costs than the main Mulatos pit complex, given its higher grades and recoveries.

Alamos expects La Yaqui to evolve into a larger operation over the coming years, with the development of the La Yaqui Grande project. La Yaqui Grande was discovered in 2015 and through ongoing exploration success, the project has grown to include mineral reserves of 521 000 oz of gold held in 11.5-million tonnes grading 1.4 g/t gold - about six times the size of La Yaqui Phase I.

Based on year-end 2016 reserves, Mulatos has a five-year mine life remaining, excluding La Yaqui and other surrounding deposits.

Having produced 202 100 oz of gold in the first half of 2017, and with stronger output expected in the second half of the year, Alamos is on track to meet full-year guidance of 400 000 oz to 430 000 oz. Guidance also calls for all-in sustaining costs to decrease in the second half of the year.