Minera Alamos Inc (CVE:MAI) shares surged 10% as it reached a major milestone for its La Fortuna gold project in Durango state, Mexico.
The company has received a positive notification from the Mexican environmental authorities over its permit application to develop the site.
Following completion of the change of land use payments, they will issue the firm with formal approval documentation for the project.
"The receipt of this notification represents a major milestone for the company," said Darren Koningen, chief executive of Minera Alamos.
"Despite some procedural changes in the MIA/ETJ application process that caused early delays, the notice was received a little over a year following the completion of our strategic partnership with Osisko Gold Royalties and starts the transformation of the company from a junior explorer to a growing gold producer," he added.
Receipt of the permits for the Fortuna project will allow Minera to initiate applications for other state/local permits that will be required in advance of any commercial mine production, the company noted. These cover activities such as water use and explosives.
Notably, the company also said today it had kicked off discussions with a number of project finance groups that can provide debt facilities complementary to the Fortuna royalty structure arranged with Minera's strategic partner Osisko Gold Royalties.
The recently completed PEA (preliminary economic assessment) for the project showed an after-tax internal rate-of-return (IRR) 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 year operation.
The project is permitted for a 2,000 tpd (tons per day) operation with the PEA based on a starting rate of 1,100 tpd.
As well as its engineering activities, Minera is also preparing for some new exploration at the Fortuna project.
The footprint of the currently drilled deposit is small compared to the overall land position (6,200 hectares ) and a number of other areas of historical mining activity have been identified with most having never been evaluated using modern exploration methods.
Shares in Toronto advanced 10% to stand at $0.11 each.
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