Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or
the “Company”) today reported its financial results for the second
quarter ended June 30, 2018 and reviewed its operating, exploration
and development activities.
“With near record production in the second
quarter, we came in slightly ahead of expectations and remain well
positioned to achieve full year guidance. This reflected another
strong outperformance from Mulatos and Island Gold, with production
guidance for both mines increased for the second consecutive
quarter,” said John A. McCluskey, President and Chief Executive
Officer.
“We’re also making excellent progress on the
exploration and development fronts. At Island Gold, the mill
expansion is nearing completion and ongoing exploration success
continues to demonstrate further resource growth. We also achieved
a major breakthrough at Kirazlı, securing the GSM permit allowing
for the start of full scale construction. With a strong cash
position, no debt, and growing cash flow from operations, we are
well positioned to fund this growth and continue to deliver
shareholder value.”
Second Quarter 2018 Highlights
- Produced 126,500 ounces of gold, ahead of guidance of 125,000
ounces and 19% higher than the second quarter of 2017
- Increased production guidance at Island Gold for the second
time this year to a range of between 100,000 to 110,000 ounces, an
11% increase from original guidance (based on the mid-point of
guidance)
- Increased production guidance at Mulatos for the second time
this year to a range of between 170,000 to 180,000 ounces, a 13%
increase from original guidance (based on the mid-point of
guidance)
- Maintained 2018 Company-wide production guidance of 490,000 to
530,000 ounces of gold, with increased guidance at both Mulatos and
Island Gold offset by decreased guidance at Young-Davidson.
Company-wide all-in sustaining cost guidance for the year has been
maintained at $950 per ounce with lower costs anticipated in the
second half of 2018
- Sold 129,272 ounces of gold at an average realized price of
$1,307 per ounce for revenues of $168.9 million. Cost of sales of
$1,160 per ounce, total cash costs1 of $832 per ounce and all-in
sustaining costs ("AISC")1 of $996 per ounce were all higher than
full year guidance as a result of lower production from
Young-Davidson in the quarter
- Reported adjusted net earnings1 of $4.9 million or $0.01 per
share1, reflecting adjustments for unrealized foreign exchange
losses recorded within both deferred taxes and foreign exchange of
$15.3 million, as well as other one-time items
- Realized a net loss of $8.9 million, or $0.02 per share
- Generated cash flow from operating activities of $62.5 million
($54.7 million or $0.14 per share, before changes in working
capital1), reflecting strong quarterly gold production. In
addition, the Company generated $22.4 million in mine-site free
cash flow1, and $9.1 million of company-wide free-cash flow1 in the
quarter, both ahead of budget
- Increased cash and cash equivalents to $235.1 million up from
$231.8 million as of March 31, 2018. The Company remains debt
free
- Paid a semi-annual dividend of $0.01 per share, or $3.9
million, to shareholders on April 30, 2018
- As outlined in May, recent exploration results at Island Gold
continue to exceed expectations with a significant increase in
Mineral Resources anticipated. The Company will be providing an
interim Mineral Reserve and Resource update for Island Gold in the
third quarter
- Subsequent to quarter-end, announced the receipt of the GSM
(Business Opening and Operation) permit and commencement of full
construction activities at the Kirazlı project in Turkey
(1) Refer to the “Non-GAAP Measures and
Additional GAAP Measures” disclosure at the end of this press
release for a description and calculation of these measures.
Highlight Summary |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Financial Results (in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues |
|
$168.9 |
|
|
$131.3 |
|
|
$342.0 |
|
|
$252.3 |
|
Cost of sales (1) |
|
$150.0 |
|
|
$109.5 |
|
|
$294.7 |
|
|
$219.6 |
|
Earnings from operations |
|
$9.6 |
|
|
$15.8 |
|
|
$28.1 |
|
|
$18.0 |
|
Net (loss) earnings |
|
($8.9) |
|
|
$2.4 |
|
|
($8.3 |
) |
|
$2.5 |
|
Adjusted net earnings (2) |
|
$4.9 |
|
|
$9.8 |
|
|
$17.2 |
|
|
$4.7 |
|
Cash provided by operations before working capital and
cash taxes(2) |
|
$54.7 |
|
|
$45.1 |
|
|
$117.3 |
|
|
$79.3 |
|
Cash provided by operating activities |
|
$62.5 |
|
|
$51.4 |
|
|
$121.3 |
|
|
$71.5 |
|
Capital expenditures (sustaining) (2) |
|
$12.1 |
|
|
$11.1 |
|
|
$22.8 |
|
|
$20.4 |
|
Capital expenditures (growth) (2) |
|
$35.7 |
|
|
$38.2 |
|
|
$72.3 |
|
|
$60.1 |
|
Capital expenditures (capitalized exploration) (3) |
|
$5.6 |
|
|
$2.2 |
|
|
$9.8 |
|
|
$4.6 |
|
Operating Results |
|
|
|
|
Gold production (ounces) (4) |
|
126,500 |
|
|
105,900 |
|
|
255,400 |
|
|
202,100 |
|
Gold sales (ounces) |
|
129,272 |
|
|
104,023 |
|
|
259,317 |
|
|
202,778 |
|
Per Ounce Data |
|
|
|
|
Average realized gold price |
|
$1,307 |
|
|
$1,262 |
|
|
$1,319 |
|
|
$1,244 |
|
Average spot gold price (London PM Fix) |
|
$1,306 |
|
|
$1,257 |
|
|
$1,318 |
|
|
$1,238 |
|
Cost of sales per ounce of gold sold (includes
amortization) (1) |
|
$1,160 |
|
|
$1,053 |
|
|
$1,136 |
|
|
$1,083 |
|
Total cash costs per ounce of gold sold (2) |
|
$832 |
|
|
$784 |
|
|
$811 |
|
|
$805 |
|
All-in sustaining costs per ounce of gold sold (2) |
|
$996 |
|
|
$942 |
|
|
$966 |
|
|
$977 |
|
Share Data |
|
|
|
|
Earnings per share, basic |
|
($0.02) |
|
|
$0.01 |
|
|
($0.02 |
) |
|
$0.01 |
|
Adjusted earnings per share, basic (2) |
|
$0.01 |
|
|
$0.03 |
|
|
$0.04 |
|
|
$0.02 |
|
Weighted average common shares outstanding (basic)
(000’s) |
|
389,602 |
|
|
299,189 |
|
|
389,429 |
|
|
292,008 |
|
Financial Position (in millions) |
|
|
|
|
Cash and cash equivalents (5) |
|
|
|
$235.1 |
|
|
$200.8 |
|
(1) |
|
Cost of
sales includes mining and processing costs, royalties, and
amortization expense. |
(2) |
|
Refer to
the “Non-GAAP Measures and Additional GAAP Measures” disclosure at
the end of this press release and associated MD&A for a
description and calculation of these measures. |
(3) |
|
Includes
capitalized exploration and Mulatos and Island Gold. |
(4) |
|
Gold
production from Island Gold has been included in this table for the
period subsequent to November 23, 2017 only. Gold production from
Island Gold for the three and six months ended June 30, 2017 was
26,110 and 49,882 ounces respectively. |
(5) |
|
Comparative
Cash and cash equivalents balance as at December 31, 2017. |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017(1) |
|
|
2018 |
|
|
2017(1) |
|
Gold production (ounces) |
|
|
|
|
|
|
|
|
|
|
|
|
Young-Davidson |
|
39,100 |
|
|
47,300 |
|
|
80,100 |
|
|
87,700 |
|
Mulatos |
|
50,600 |
|
|
41,000 |
|
|
96,600 |
|
|
81,000 |
|
Island Gold (1) |
|
26,700 |
|
|
— |
|
|
54,800 |
|
|
— |
|
El Chanate |
|
10,100 |
|
|
17,600 |
|
|
23,900 |
|
|
33,400 |
|
Gold sales (ounces) |
|
|
|
|
Young-Davidson |
|
42,006 |
|
|
46,368 |
|
|
86,796 |
|
|
90,195 |
|
Mulatos |
|
49,326 |
|
|
40,265 |
|
|
93,985 |
|
|
78,940 |
|
Island Gold (1) |
|
27,257 |
|
|
— |
|
|
54,760 |
|
|
— |
|
El Chanate |
|
10,683 |
|
|
17,390 |
|
|
23,776 |
|
|
33,643 |
|
Cost of sales (in millions)(2) |
|
|
|
|
Young-Davidson |
|
$56.7 |
|
|
$51.6 |
|
|
$113.7 |
|
|
$101.9 |
|
Mulatos |
|
$49.2 |
|
|
$36.3 |
|
|
$92.8 |
|
|
$76.3 |
|
Island Gold (1) |
|
$28.0 |
|
|
— |
|
|
$55.5 |
|
|
— |
|
El Chanate |
|
$16.1 |
|
|
$21.6 |
|
|
$32.7 |
|
|
$41.4 |
|
Cost of sales per ounce of gold sold (includes
amortization) |
|
|
|
Young-Davidson |
|
$1,350 |
|
|
$1,113 |
|
|
$1,310 |
|
|
$1,130 |
|
Mulatos |
|
$997 |
|
|
$902 |
|
|
$987 |
|
|
$967 |
|
Island Gold (1) |
|
$1,027 |
|
|
— |
|
|
$1,014 |
|
|
— |
|
El Chanate |
|
$1,507 |
|
|
$1,242 |
|
|
$1,375 |
|
|
$1,231 |
|
Total cash costs per ounce of gold sold
(3) |
|
|
|
|
Young-Davidson |
|
$890 |
|
|
$677 |
|
|
$856 |
|
|
$693 |
|
Mulatos |
|
$795 |
|
|
$735 |
|
|
$791 |
|
|
$780 |
|
Island Gold (1) |
|
$587 |
|
|
— |
|
|
$570 |
|
|
— |
|
El Chanate |
|
$1,404 |
|
|
$1,185 |
|
|
$1,279 |
|
|
$1,165 |
|
Mine-site all-in sustaining costs per ounce of gold
sold (3),(4) |
|
|
|
Young-Davidson |
|
$1,083 |
|
|
$895 |
|
|
$1,037 |
|
|
$874 |
|
Mulatos |
|
$854 |
|
|
$777 |
|
|
$848 |
|
|
$847 |
|
Island Gold (1) |
|
$668 |
|
|
— |
|
|
$650 |
|
|
— |
|
El Chanate |
|
$1,442 |
|
|
$1,208 |
|
|
$1,304 |
|
|
$1,198 |
|
Capital expenditures (sustaining, growth and
capitalized exploration) (in millions)(3) |
|
|
Young-Davidson |
|
$18.5 |
|
|
$22.7 |
|
|
$41.4 |
|
|
$41.3 |
|
Mulatos(5) |
|
$9.5 |
|
|
$14.6 |
|
|
$16.7 |
|
|
$26.0 |
|
Island Gold (1),(6) |
|
$17.6 |
|
|
— |
|
|
$31.5 |
|
|
— |
|
El Chanate |
|
$0.2 |
|
|
$0.3 |
|
|
$0.3 |
|
|
$0.9 |
|
Other |
|
$7.6 |
|
|
$13.9 |
|
|
$15.0 |
|
|
$16.9 |
|
(1) |
|
Operating
and financial results from Island Gold are included in Alamos’
consolidated financial statements for the period subsequent to
November 23, 2017. Gold production from Island Gold for the three
and six months ended June 30, 2017 was 26,110 and 49,882 ounces
respectively. |
(2) |
|
Cost of
sales includes mining and processing costs, royalties and
amortization. |
(3) |
|
Refer to
the “Non-GAAP Measures and Additional GAAP Measures” disclosure at
the end of this press release and associated MD&A for a
description and calculation of these measures. |
(4) |
|
For the
purposes of calculating mine-site all-in sustaining costs, the
Company does not include an allocation of corporate and
administrative and share based compensation expenses. |
(5) |
|
Includes
capitalized exploration at Mulatos of $0.9 million and $2.0 million
for the three and six months ended June 30, 2018 ($2.2 million and
$4.6 million for the three and six months ended June 30,
2017). |
(6) |
|
Includes
capitalized exploration at Island Gold of $4.7 million and $7.8
million for the three and six months ended June 30, 2018. |
Outlook and Strategy |
|
2018 Guidance |
Total |
|
Young-Davidson |
Mulatos |
IslandGold |
ElChanate |
Turkey (5) |
Other (2) |
Original |
Revised |
Gold production (000’s ounces) |
|
|
|
|
|
|
|
|
Revised Guidance |
180-190 |
170-180 |
100-110 |
40-50 |
— |
— |
|
490-530 |
Original Guidance |
200-210 |
150-160 |
90-100 |
40-50 |
— |
— |
480-520 |
|
Cost of sales, including
amortization (in
millions)(4),(6) |
$208 |
$175 |
$108 |
$58 |
— |
— |
$536 |
$549 |
Cost of sales, including
amortization ($ per ounce)(4),(6) |
$1,125 |
$1,000 |
$1,025 |
$1,285 |
— |
— |
$1,075 |
$1,075 |
Total cash costs ($ per ounce)(1),(6) |
$675 |
$800 |
$575 |
$1,200 |
— |
— |
$740 |
$740 |
All-in sustaining costs ($ per
ounce)(1),(6) |
|
|
|
|
— |
— |
$950 |
$950 |
Mine-site all-in sustaining costs ($ per
ounce)(1),(3),(6) |
$850 |
$900 |
$825 |
$1,200 |
— |
— |
— |
— |
Amortization costs ($ per
ounce)(1) |
$450 |
$200 |
$450 |
$85 |
— |
— |
$335 |
$335 |
Capital expenditures (in millions) |
|
|
|
|
|
|
|
|
Sustaining capital(1) |
$35-40 |
$8-10 |
$25-27 |
— |
— |
— |
$68-77 |
$68-77 |
Growth capital(1) |
$35-40 |
$18-20 |
$25-28 |
— |
$50-60 |
$46 (2) |
$224-234 |
$174-194 |
Total capital expenditures(1) |
$70-80 |
$26-30 |
$50-55 |
— |
$50-60 |
$46 |
$292-$311 |
$242-$271 |
(1) Refer to the "Non-GAAP Measures and Additional GAAP"
disclosure at the end of this press release and associated MD&A
for a description of these measures.(2) Includes capitalized
exploration at all operating sites and development projects.(3) For
the purposes of calculating mine-site all-in sustaining costs at
individual mine sites, the Company does not include an allocation
of corporate and administrative and share based compensation
expenses to the mine sites. (4) Cost of sales includes mining
and processing costs, royalties, and amortization expense, and is
calculated based on the mid-point of guidance.(5) Capital
guidance at Kirazlı reduced to $50-60 million from the original
budget of $100 million. (6) Company-wide total cash
costs, and all-in sustaining costs guidance remains unchanged. The
Company has not revised guidance for total cash costs, and
mine-site all-in sustaining costs at individual mine sites.
The Company continues to deliver on its strategic objectives of
increasing cash flow from operations while advancing its portfolio
of low-cost development projects. Gold production in the second
quarter of 126,500 ounces exceeded guidance and increased 19% from
the second quarter of 2017. Given the strong performance in the
first half of the year, the Company is well positioned to achieve
its previously increased full year production guidance of 490,000
to 530,000 ounces.
Company-wide production guidance has been
maintained, with increased production guidance at both Island Gold
and Mulatos offsetting a reduction at Young-Davidson. Global all-in
sustaining cost guidance of $950 per ounce has been maintained with
lower than guided costs at Island Gold and Mulatos expected to
offset higher costs at Young-Davidson for the full year. Costs are
expected to trend lower in the second half of 2018.
Gold production in the third quarter is expected
to range between 120,000 and 125,000 ounces at lower all-in
sustaining costs than in the second quarter. Fourth quarter gold
production is expected to increase reflecting the completion of the
mill expansion at Island Gold and higher production at
Young-Davidson.
Young-Davidson produced 39,100 ounces in the
second quarter. This result was below expectations reflecting eight
days of downtime of the Northgate hoist and eleven days of downtime
in the mill. As a result of the unplanned downtime for maintenance
of both the Northgate hoist and the mill, as well as lower than
budgeted throughput in the first half of the year, the Company is
revising production guidance for Young-Davidson to a range of
between 180,000 and 190,000 ounces. With the maintenance completed
in late June, both the Northgate hoist and mill were fully
operational in early July which is expected to drive stronger
underground mining and milling rates in the second half of 2018.
This, combined with higher underground grades, is expected to drive
stronger production and lower costs in the second half of 2018.
Island Gold exceeded budget again in the second
quarter, producing 26,700 ounces and bringing first half production
to 54,800 ounces. Given the outperformance in both the first and
second quarters, the Company is raising 2018 production guidance at
Island Gold for the second time this year to a range of between
100,000 and 110,000 ounces, an 11% increase from original guidance
(based on the mid-point). The Phase I expansion of the Island Gold
mill to 1,100 tpd remains on track and is expected to be completed
in September. This is anticipated to drive stronger production and
lower costs in 2019 and beyond. Accordingly, the Company expects
significant free cash flow growth in 2019.
In parallel to the Phase I mill expansion, the
Company is pursuing an aggressive exploration program at Island
Gold which has been successful in driving nearly a 400% increase in
Mineral Reserves and a 60% increase in the Mineral Reserve grade
since 2014. As reported in May, the 2018 exploration program
has continued to extend high-grade gold mineralization along-strike
and down-plunge from existing Mineral Reserves and Resources across
three main areas of focus.
Exploration results at Island Gold continue to
exceed expectations with a significant increase in Mineral
Resources anticipated. The Company will be providing an interim
Mineral Reserve and Resource update for Island Gold in the third
quarter. Ongoing exploration success will be incorporated into an
evaluation of the most effective and economic approach to a Phase
II expansion of the operation beyond 1,100 tpd.
Total production from the Mulatos district
(including La Yaqui Phase I) increased to 50,600 ounces in the
second quarter, again exceeding budget and bringing first half
production to 96,600 ounces. As a result of continued strong
performance from the heap leach pad and extended production from
underground at San Carlos, Mulatos is now expected to produce
between 170,000 to 180,000 ounces in 2018, a 13% increase from the
mid-point of original guidance. With mill production winding down
in the third quarter of 2018, the Company expects 2019 production
to return to the previously guided range of 150,000 to 160,000
ounces per year, reflecting the end of production from San
Carlos.
El Chanate produced 10,100 ounces in the second
quarter and is expected to produce 40,000 to 50,000 ounces for the
full year. This is down from 2017 reflecting lower mining rates
with mining activities expected to cease early in the fourth
quarter. Given the long leach cycle at El Chanate, the Company
expects to benefit from ongoing gold production beyond 2018 through
residual leaching. This will be lower cost and higher margin
production, with mining activities completed, and is expected to
drive higher mine-site free cash flow from the operation.
The Company expects combined annual gold
production of at least 500,000 ounces from its existing operations
in 2019 and 2020 with low cost production growth from Island Gold
replacing production from El Chanate. Consolidated all-in
sustaining costs are expected to decrease in 2019 reflecting the
completion of the Phase I expansion at Island Gold and the end of
the 5% royalty at Mulatos, with a further decline expected in 2020
reflecting higher underground mining rates at Young-Davidson.
Increased production combined with declining operating costs is
expected to result in strong free cash flow growth over the next
three years.
On July 25, 2018, the Company was granted the
GSM (Business Opening and Operation) permit required for the
construction of its Kirazlı project. To date, construction
has been focused on the surrounding infrastructure projects;
however, with receipt of the GSM, full-scale construction
activities will commence over the next two months. The Company has
estimated spending for the remainder of the year of between $40 to
$50 million, bringing total 2018 capital spending to between $50
and $60 million. The remainder of the $152 million initial capital
budget for Kirazlı is expected to be spent in 2019 and the first
half of 2020, with first production expected in the second half of
2020.
In addition to capital spending in Turkey, a
total of $46 million is budgeted for development at Cerro Pelon, La
Yaqui Grande and Lynn Lake as well as capitalized exploration at
all sites. The total exploration budget of $36 million is primarily
focused on following up on the ongoing success at Island Gold.
The Company is well positioned to fund this
growth having significantly de-risked its balance sheet in 2017.
The Company is debt free with growing cash flow from its operations
and over $640 million of cash and available liquidity under the
Company's credit facility.
Second Quarter 2018 Results |
Young-Davidson Operational and Financial
Review |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Gold production (ounces) |
|
39,100 |
|
|
47,300 |
|
|
80,100 |
|
|
87,700 |
|
Gold sales (ounces) |
|
42,006 |
|
|
46,368 |
|
|
86,796 |
|
|
90,195 |
|
Financial Review (in millions) |
|
|
|
|
Operating
Revenues |
|
$55.1 |
|
|
$58.5 |
|
|
$114.6 |
|
|
$112.1 |
|
Cost of
sales (1) |
|
$56.7 |
|
|
$51.6 |
|
|
$113.7 |
|
|
$101.9 |
|
(Loss)
earnings from operations |
|
($1.6 |
) |
|
$6.9 |
|
|
$0.9 |
|
|
$10.2 |
|
Cash
provided by operating activities |
|
$22.5 |
|
|
$27.3 |
|
|
$49.9 |
|
|
$45.8 |
|
Capital
expenditures (sustaining) (2) |
|
$7.9 |
|
|
$9.9 |
|
|
$15.5 |
|
|
$16.0 |
|
Capital
expenditures (growth) (2) |
|
$10.6 |
|
|
$12.8 |
|
|
$25.9 |
|
|
$25.3 |
|
Mine-site
free cash flow (2) |
|
$4.0 |
|
|
$4.6 |
|
|
$8.5 |
|
|
$4.5 |
|
Cost of sales, including amortization per ounce of gold
sold (1) |
|
$1,350 |
|
|
$1,113 |
|
|
$1,310 |
|
|
$1,130 |
|
Total cash costs per ounce of gold sold (2) |
|
$890 |
|
|
$677 |
|
|
$856 |
|
|
$693 |
|
Mine-site all-in sustaining costs per ounce of gold
sold (2),(3) |
|
$1,083 |
|
|
$895 |
|
|
$1,037 |
|
|
$874 |
|
Underground Operations |
|
|
|
|
Tonnes of ore mined |
|
553,883 |
|
|
580,351 |
|
|
1,138,943 |
|
|
1,156,370 |
|
Tonnes of ore mined per day ("tpd") |
|
6,087 |
|
|
6,377 |
|
|
6,293 |
|
|
6,389 |
|
Average grade of gold (4) |
|
2.35 |
|
|
2.60 |
|
|
2.36 |
|
|
2.58 |
|
Metres developed |
|
3,079 |
|
|
3,425 |
|
|
6,223 |
|
|
6,667 |
|
Mill Operations |
|
|
|
|
Tonnes of ore processed |
|
598,196 |
|
|
629,470 |
|
|
1,267,483 |
|
|
1,324,094 |
|
Tonnes of ore processed per day |
|
6,574 |
|
|
6,917 |
|
|
7,003 |
|
|
7,315 |
|
Average grade of gold (4) |
|
2.17 |
|
|
2.45 |
|
|
2.20 |
|
|
2.31 |
|
Contained ounces milled |
|
41,798 |
|
|
49,619 |
|
|
87,992 |
|
|
98,393 |
|
Average recovery rate |
|
92 |
% |
|
92 |
% |
|
91 |
% |
|
91 |
% |
(1) |
|
Cost of
sales includes mining and processing costs, royalties and
amortization. |
(2) |
|
Refer to
the “Non-GAAP Measures and Additional GAAP Measures” disclosure at
the end of this press release and associated MD&A for a
description and calculation of these measures. Total cash
costs and mine-site AISC are exclusive of net-realizable value
adjustments. |
(3) |
|
For the
purposes of calculating mine-site all-in sustaining costs, the
Company does not include an allocation of corporate and
administrative and share based compensation expenses. |
(4) |
|
Grams per
tonne of gold ("g/t Au"). |
Young-Davidson produced 39,100 ounces of gold in
the second quarter of 2018, lower than the comparative quarter of
2017 due to unscheduled downtime of both the Northgate hoist and
the mill, and lower grades mined.
During the quarter, the underground operations
were impacted by an eight day shutdown of the Northgate hoist. The
Company had previously scheduled a four day shutdown to change the
head ropes on the Northgate hoist in July; however, this was moved
to June to correspond with an unplanned shutdown required to
replace a bearing on the hoist drum which failed prematurely.
During the shutdown, the Company was unable to hoist ore for a
period of eight days, which impacted throughput and production
levels for the quarter. The maintenance was completed at the end of
June and mining operations are expected to return to budgeted
levels in the third quarter.
Underground grades mined of 2.35 g/t Au for the
second quarter were in-line with the first quarter, but lower than
the prior year quarter primarily as a result of mine sequencing. As
previously guided, the Company is expecting stronger production in
the second half of the year with grades and underground mining
rates expected to increase through the remainder of the year.
During the second quarter, 598,196 tonnes or
6,574 tpd, were processed through the mill with grades averaging
2.17 g/t Au. Tonnes milled were lower than budget as a result
of the eleven-day shutdown of the mill to replace liners and for
repairs to the soleplate anchor bolts. The liner change was planned
for July, but was moved up to coincide with the other maintenance
required to the mill, and to correspond with the timing of the
Northgate hoist downtime. During this period, the Company built up
underground stockpiles of approximately 40,000 tonnes, which will
be processed during the second half of 2018.
Mill recoveries of 92% were in line with
expectations and the prior year period.
As a result of unplanned the downtime in the
second quarter and lower than budgeted throughput in the first half
of the year, the Company is amending production guidance at
Young-Davidson to between 180,000 and 190,000 ounces. The Company
expects stronger throughput and production in the second half of
the year.
Financial Review
For the quarter ended June 30, 2018, revenues of
$55.1 million were $3.4 million lower than the comparative quarter
of 2017, due to less ounces sold, partially offset by a higher
realized gold price. For the first half of 2018, revenues of $114.6
million were $2.5 million higher than the prior year, attributable
to a higher realized gold price, offset by lower ounces sold.
Cost of sales, which reflects mining and
processing costs, royalties, and amortization expense, of $56.7
million were higher than the comparative quarter due to higher
mining and processing costs. Cost of sales for the first half of
2018 were $113.7 million, an increase of $11.8 million due to
higher mining and processing costs and amortization.
Total cash costs in the second quarter were $890
per ounce, an increase of 31% from the second quarter of 2017 due
to lower grades processed and a higher mining cost per tonne,
reflecting the impact of lower throughput on fixed costs. Total
cash costs of $856 per ounce for the six-month period were 24%
higher than the prior year period. Second quarter mine-site AISC
were $1,083 per ounce, 21% higher than the prior year quarter
reflecting higher total cash costs, partially offset by lower
sustaining capital. Mine-site AISC for the six-month period were
$1,037 or 19% higher than the prior year period due to similar
factors.
Capital expenditures were in-line with budget at
$18.5 million in the second quarter, including $7.9 million for
sustaining capital and $10.6 million for growth capital. Total
capital expenditures were 19% lower than the same quarter of 2017.
Capital spending for the second quarter was focused primarily on
lateral development in the upper and lower mines, and lower mine
infrastructure. For the six-month period, capital expenditures of
$41.4 million were consistent with the prior year period.
Young-Davidson generated mine-site free cash
flow of $4.0 million in the second quarter, consistent with the
prior year quarter and the first quarter of 2018, as lower capital
expenditures were offset by lower operating cash flows.
Year-to-date free cash flow of $8.5 million was higher than the
prior year, primarily reflecting a higher gold price. The Company
expects mine-site free cash flow to grow in subsequent quarters
driven by stronger production and operating margins.
Island Gold Operational and Financial
Review |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 (1) |
|
|
2018 |
|
|
2017 (1) |
|
Gold
production (ounces) (1) |
|
26,700 |
|
|
— |
|
|
54,800 |
|
|
— |
|
Gold sales
(ounces) (1) |
|
27,257 |
|
|
— |
|
|
54,760 |
|
|
— |
|
Financial Review (in millions) |
|
|
|
|
Operating
Revenues |
|
$35.7 |
|
|
$— |
|
|
$72.3 |
|
|
$— |
|
Cost of
sales (2) |
|
$28.0 |
|
|
$— |
|
|
$55.5 |
|
|
$— |
|
Earnings
from operations |
|
$7.7 |
|
|
$— |
|
|
$16.7 |
|
|
$— |
|
Cash
provided by operating activities |
|
$22.0 |
|
|
$— |
|
|
$45.7 |
|
|
$— |
|
Capital
expenditures (sustaining) (3) |
|
$2.2 |
|
|
$— |
|
|
$4.4 |
|
|
$— |
|
Capital
expenditures (growth) (3) |
|
$10.7 |
|
|
$— |
|
|
$19.3 |
|
|
$— |
|
Capital
expenditures (capitalized exploration) (3) |
|
$4.7 |
|
|
$— |
|
|
$7.8 |
|
|
$— |
|
Mine-site
free cash flow (3) |
|
$4.4 |
|
|
$— |
|
|
$14.2 |
|
|
$— |
|
Cost of sales, including amortization per ounce of gold
sold (2) |
|
$1,027 |
|
|
$— |
|
|
$1,014 |
|
|
$— |
|
Total cash costs per ounce of gold sold (3) |
|
$587 |
|
|
$— |
|
|
$570 |
|
|
$— |
|
Mine-site all-in sustaining costs per ounce of gold
sold (3),(4) |
|
$668 |
|
|
$— |
|
|
$650 |
|
|
$— |
|
Underground Operations |
|
|
|
|
Tonnes of ore mined |
|
82,097 |
|
|
104,439 |
|
|
166,752 |
|
|
196,149 |
|
Tonnes of ore mined per day ("tpd") |
|
902 |
|
|
1,148 |
|
|
921 |
|
|
1,084 |
|
Average grade of gold (5) |
|
7.34 |
|
|
10.28 |
|
|
9.23 |
|
|
9.51 |
|
Metres developed |
|
1,771 |
|
|
1,773 |
|
|
3,327 |
|
|
3,856 |
|
Mill Operations |
|
|
|
|
Tonnes of ore processed |
|
88,776 |
|
|
85,578 |
|
|
170,881 |
|
|
168,943 |
|
Tonnes of ore processed per day |
|
976 |
|
|
940 |
|
|
944 |
|
|
933 |
|
Average grade of gold (5) |
|
8.71 |
|
|
9.73 |
|
|
9.84 |
|
|
9.46 |
|
Contained ounces milled |
|
24,861 |
|
|
26,760 |
|
|
54,085 |
|
|
51,354 |
|
Average recovery rate |
|
97 |
% |
|
98 |
% |
|
96 |
% |
|
97 |
% |
(1) Financial results from Island Gold are
included in Alamos’ consolidated financial statements for the
period subsequent to November 23, 2017. Gold production from Island
Gold for the three and six months ended June 30, 2017 was 26,110
and 49,882 ounces. (2) Cost of sales includes mining and
processing costs, royalties and amortization. (3) Refer to
the “Non-GAAP Measures and Additional GAAP Measures” disclosure at
the end of this press release and associated MD&A for a
description and calculation of these measures. Total cash
costs and mine-site AISC are exclusive of net-realizable value
adjustments.(4) For the purposes of calculating mine-site all-in
sustaining costs, the Company does not include an allocation of
corporate and administrative and share based compensation
expenses.(5) Grams per tonne of gold ("g/t Au").
Second quarter gold production of 26,700 ounces
was above budget, and consistent with the prior year quarter. With
year-to-date production of 54,800 ounces well ahead of budget, the
Company is increasing Island Gold's 2018 production guidance for
the second time this year to a range of 100,000 to 110,000 ounces,
an 11% increase from original guidance.
The Company mined 82,097 tonnes of ore from
underground in the second quarter of 2018, or 902 tpd, lower than
the prior year quarter, though consistent with the first quarter of
2018. Underground mining rates are expected to ramp up in the
latter part of 2018 concurrent with the completion of the mill
expansion to 1,100 tpd. As guided, underground grades mined of 7.34
g/t Au in the second quarter were lower than the first quarter due
to mine sequencing.
Mill throughput for the second quarter was
88,776 tonnes, or 976 tpd, an increase from 940 tpd in the prior
year quarter. Milled grades averaged 8.71 g/t Au, consistent with
full year guidance of 8.3 to 8.9 g/t Au. Milled grades were higher
than grades mined with existing high-grade stockpiles supplementing
mill feed. Mill throughput is expected to remain in a similar range
in the third quarter and ramp up during the fourth quarter
following the completion of the mill expansion to 1,100 tpd in
September.
Financial Review
With the Company acquiring Island Gold on
November 23, 2017, financial information prior to the acquisition
date has not been included in the comparative table above.
Island Gold generated revenues of $35.7 million
in the second quarter, lower than the first quarter of 2018,
reflecting lower realized gold prices. Revenues for the six-month
period were $72.3 million on sales of 54,760 ounces of gold.
Cost of sales in the second quarter and
year-to-date were $28.0 million and $55.5 million, respectively.
Cost of sales includes ongoing amortization charges related to the
purchase price of the asset, which increases amortization to
approximately $450 per ounce based on current mineral reserves and
resources.
Total cash costs of $587 per ounce were in-line
with full-year guidance of $575 per ounce, however, higher than the
prior quarter, reflecting lower grades mined. In addition,
mine-site AISC of $668 per ounce were well below guidance of $825
driven primarily by timing of sustaining capital spending.
Mine-site AISC are expected to be higher for the remainder of 2018
as sustaining capital increases in the second half of the year.
Capital expenditures totaled $17.6 million in
the second quarter, with spending focused primarily on capitalized
exploration, lateral development, mining equipment and the mill
expansion. Total capital expenditures in the second quarter
included $2.2 million of sustaining capital and $15.4 million of
growth capital. Year-to-date capital expenditures totaled $31.5
million.
Island Gold generated mine-site free cash flow
of $4.4 million during the second quarter and $14.2 million for the
six-month period driven by stronger than budgeted production and
operating margins. The Company expects Island Gold to generate
sufficient cash flow to fully fund its enhanced exploration program
and the mill expansion to 1,100 tpd.
Mulatos Operational and Financial
Review |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Gold production (ounces) |
|
50,600 |
|
|
41,000 |
|
|
96,600 |
|
|
81,000 |
|
Gold sales (ounces) |
|
49,326 |
|
|
40,265 |
|
|
93,985 |
|
|
78,940 |
|
Financial Review (in millions) |
|
|
|
|
Operating
Revenues |
|
$64.1 |
|
|
$50.9 |
|
|
$123.7 |
|
|
$98.5 |
|
Cost of
sales (1) |
|
$49.2 |
|
|
$36.3 |
|
|
$92.8 |
|
|
$76.3 |
|
Earnings
from operations |
|
$13.2 |
|
|
$12.9 |
|
|
$25.9 |
|
|
$19.6 |
|
Cash
provided by operating activities |
|
$24.1 |
|
|
$19.8 |
|
|
$40.2 |
|
|
$28.9 |
|
Capital
expenditures (sustaining) (2) |
|
$1.8 |
|
|
$0.9 |
|
|
$2.6 |
|
|
$3.5 |
|
Capital
expenditures (growth) (2) |
|
$6.8 |
|
|
$6.0 |
|
|
$12.1 |
|
|
$7.1 |
|
Capital
expenditures (capitalized exploration) (2) |
|
$0.9 |
|
|
$2.2 |
|
|
$2.0 |
|
|
$4.6 |
|
La Yaqui
Phase I construction cost (2) |
|
$— |
|
|
$5.5 |
|
|
$— |
|
|
$10.8 |
|
Mine-site
free cash flow, excluding La Yaqui construction costs (2) |
|
$14.6 |
|
|
$10.7 |
|
|
$23.5 |
|
|
$13.7 |
|
Cost of sales, including amortization per ounce of gold
sold (1) |
|
$997 |
|
|
$902 |
|
|
$987 |
|
|
$967 |
|
Total cash costs per ounce of gold sold (2) |
|
$795 |
|
|
$735 |
|
|
$791 |
|
|
$780 |
|
Mine site all-in sustaining costs per ounce of gold
sold (2),(3) |
|
$854 |
|
|
$777 |
|
|
$848 |
|
|
$847 |
|
Open Pit & Underground Operations |
|
|
|
|
Tonnes of ore mined - open pit (4) |
|
2,266,642 |
|
|
1,759,168 |
|
|
4,456,376 |
|
|
3,569,810 |
|
Total waste mined - open pit |
|
1,851,050 |
|
|
1,372,143 |
|
|
3,849,656 |
|
|
3,262,887 |
|
Total tonnes mined - open pit |
|
4,640,240 |
|
|
3,131,311 |
|
|
9,510,622 |
|
|
6,832,697 |
|
Waste-to-ore ratio (operating) |
|
0.82 |
|
|
0.78 |
|
|
0.86 |
|
|
0.91 |
|
Tonnes of ore mined - underground |
|
21,284 |
|
|
29,414 |
|
|
38,907 |
|
|
57,769 |
|
Crushing and Heap Leach Operations |
|
|
|
|
Tonnes of ore stacked |
|
1,802,109 |
|
|
1,649,330 |
|
|
3,552,580 |
|
|
3,302,314 |
|
Average grade of gold processed (5) |
|
0.88 |
|
|
0.97 |
|
|
0.86 |
|
|
0.91 |
|
Contained ounces stacked |
|
50,909 |
|
|
51,564 |
|
|
98,267 |
|
|
96,290 |
|
Mill Operations |
|
|
|
|
Tonnes of high grade ore milled |
|
31,485 |
|
|
35,346 |
|
|
61,874 |
|
|
71,110 |
|
Average grade of gold processed (5) |
|
5.94 |
|
|
10.56 |
|
|
7.00 |
|
|
9.71 |
|
Contained ounces milled |
|
6,012 |
|
|
11,998 |
|
|
13,929 |
|
|
22,202 |
|
Total contained ounces stacked and milled |
|
56,921 |
|
|
63,562 |
|
|
112,196 |
|
|
118,492 |
|
Recovery ratio (ratio of ounces produced to contained
ounces stacked and milled) |
|
89 |
% |
|
65 |
% |
|
86 |
% |
|
68 |
% |
Ore crushed per day (tonnes) - combined |
|
20,100 |
|
|
18,300 |
|
|
20,000 |
|
|
18,500 |
|
(1) Cost of sales includes mining and processing costs,
royalties and amortization.(2) Refer to the “Non-GAAP Measures
and Additional GAAP Measures” disclosure at the end of this press
release and associated MD&A for a description and calculation
of these measures. Total cash costs and mine-site AISC are
exclusive of net-realizable value adjustments.(3) For the
purposes of calculating mine-site all-in sustaining costs, the
Company does not include an allocation of corporate and
administrative and share based compensation
expenses.(4) Includes ore stockpiled during the
quarter.(5) Grams per tonne of gold ("g/t Au").
Mulatos reported another strong performance with
gold production of 50,600 ounces in the second quarter, well above
budget and higher than both the first quarter and prior year
quarter. The stronger than expected production was driven by higher
heap leach recoveries as well as continued mill production from San
Carlos.
Given the strong first half performance, with
production of 96,600 ounces, the Company is increasing full year
production guidance at Mulatos for the second time this year to a
range of 170,000 to 180,000 ounces, a 13% increase from the
original 2018 guidance.
Total crusher throughput averaged a record
20,100 tpd, reflecting the addition of La Yaqui Phase I. A total of
1,802,109 tonnes were stacked in the second quarter at a grade of
0.88 g/t Au, consistent with annual guidance. The waste-to-ore
ratio of 0.82:1 was consistent with the prior year quarter and in
line with guidance.
In the second quarter, 31,485 tonnes of ore from
the San Carlos underground mine were milled at an average grade of
5.94 g/t Au. This was not included in the original budget as mill
production was expected to have been completed by the end of the
first quarter. Based on revised estimates, San Carlos is now
expected to be completed in the third quarter with mill throughput
expected to be slightly lower than the second quarter as mining
activities wind down.
The recovery ratio of ounces produced to
contained ounces stacked and milled was 89% in the quarter compared
to 65% in the prior year period and guidance of 75%. The higher
recoveries are the result of the recovery of deferred ounces from
the leach pad, and stronger than budgeted recoveries at La Yaqui
Phase I.
Financial Review
For the three months ended June 30, 2018,
revenues of $64.1 million were 26% higher than the prior year
quarter, reflecting a 23% increase in ounces sold and higher
realized gold prices. Revenues for the six-month period were $123.7
million, 26% higher than the prior year period due to higher ounces
sold and realized gold prices.
Cost of sales of $49.2 million in the second
quarter and $92.8 million for the six-month period, were higher
than the prior year periods reflecting higher total tonnes moved
and increased amortization related to La Yaqui Phase I. Further,
heap leach costs were impacted by higher processing costs due to a
greater area under leach as compared to the prior year quarter.
Cost of sales reflects mining and processing costs, royalties, and
amortization expense.
Total cash costs of $795 per ounce in the second
quarter were 8% higher than $735 per ounce in the prior year
quarter, with the prior year benefiting from higher open pit and
underground grades mined. Total cash costs for the six-month period
of $791 per ounce were slightly higher than $780 per ounce reported
in the prior year period. Mine-site AISC in the quarter were $854
per ounce, 10% higher than the prior year quarter reflecting higher
total cash costs and higher sustaining capital. Mine-site AISC for
the six-month period of $848 per ounce were consistent with the
prior year period as higher cash costs were offset by lower
sustaining capital per ounce.
Mulatos generated mine-site free cash flow of
$14.6 million for the quarter and $23.5 million for the six-month
period, both well ahead of budget, driven by substantial production
and sales growth combined with higher gold prices. Mulatos is
expected to generate strong cash flow in 2018, which will be used
to advance the La Yaqui Grande and Cerro Pelon deposits through
permitting, as well as funding ongoing exploration activities.
El Chanate Operational and Financial
Review |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Gold production (ounces) |
|
10,100 |
|
|
17,600 |
|
|
23,900 |
|
|
33,400 |
|
Gold sales (ounces) |
|
10,683 |
|
|
17,390 |
|
|
23,776 |
|
|
33,643 |
|
Financial Review (in millions) |
|
|
|
|
Operating
Revenues |
|
$14.0 |
|
|
$21.9 |
|
|
$31.4 |
|
|
$41.7 |
|
Cost of
sales (1) |
|
$16.1 |
|
|
$21.6 |
|
|
$32.7 |
|
|
$41.4 |
|
Earnings
from operations |
|
($2.1 |
) |
|
$0.3 |
|
|
($1.3 |
) |
|
$0.3 |
|
Cash
provided by (used by) operating activities |
|
($0.4 |
) |
|
$3.2 |
|
|
$0.8 |
|
|
$2.2 |
|
Capital
expenditures |
|
$0.2 |
|
|
$0.3 |
|
|
$0.3 |
|
|
$0.9 |
|
Mine-site
free cash flow (2) |
|
($0.6 |
) |
|
$2.9 |
|
|
$0.5 |
|
|
$1.3 |
|
Cost of sales, including amortization per ounce of gold
sold (1) |
|
$1,507 |
|
|
$1,242 |
|
|
$1,375 |
|
|
$1,231 |
|
Total cash costs per ounce of gold sold (2) |
|
$1,404 |
|
|
$1,185 |
|
|
$1,279 |
|
|
$1,165 |
|
Mine site all-in sustaining costs per ounce of gold
sold (2),(3) |
|
$1,442 |
|
|
$1,208 |
|
|
$1,304 |
|
|
$1,198 |
|
Open Pit Operations |
|
|
|
|
Tonnes of ore mined |
|
245,706 |
|
|
1,048,435 |
|
|
1,252,077 |
|
|
1,954,350 |
|
Total tonnes mined |
|
2,298,354 |
|
|
5,739,576 |
|
|
5,263,634 |
|
|
13,298,901 |
|
Waste-to-ore ratio (operating) |
|
8.35 |
|
|
4.47 |
|
|
3.20 |
|
|
5.80 |
|
Average grade of gold (4) |
|
0.54 |
|
|
0.41 |
|
|
0.58 |
|
|
0.47 |
|
Crushing and Heap Leach Operations |
|
|
|
|
Total tonnes of ore stacked |
|
250,742 |
|
|
1,091,089 |
|
|
1,259,920 |
|
|
2,010,333 |
|
Average grade of gold (4) |
|
0.53 |
|
|
0.49 |
|
|
0.58 |
|
|
0.51 |
|
Total contained ounces stacked |
|
4,273 |
|
|
17,189 |
|
|
23,494 |
|
|
32,963 |
|
Ore crushed and run-of-mine ore stacked per day
(tonnes) - combined |
|
2,800 |
|
|
12,000 |
|
|
7,000 |
|
|
11,100 |
|
(1) |
|
Cost of
sales includes mining and processing costs, royalties and
amortization |
(2) |
|
Refer to
the “Non-GAAP Measures and Additional GAAP Measures” disclosure at
the end of this press release and associated MD&A for a
description and calculation of these measures. Total cash
costs and mine-site AISC are exclusive of net-realizable value
adjustments. |
(3) |
|
For the
purposes of calculating mine-site all-in sustaining costs, the
Company does not include an allocation of corporate and
administrative and share based compensation expenses. |
(4) |
|
Grams per
tonne of gold ("g/t Au"). |
El Chanate produced 10,100 ounces of gold in the
second quarter of 2018, down from 17,600 ounces in the prior year
quarter, reflecting lower stacking rates in the first half of the
year while completing the final push back of the pit. Mining rates
were slightly lower than budget in the first half of the year, and
as a result, mining activities are now expected to cease early in
the fourth quarter. The Company expects to benefit from ongoing
gold production at decreasing rates into the fourth quarter of 2018
and beyond through residual leaching which is expected to drive
higher mine-site free cash flow.
Financial Review
Second quarter revenues of $14.0 million were
lower than the comparative quarter of 2017 due to fewer ounces
sold. Revenues for the six-month period were $31.4 million compared
to $41.7 million in the prior year period, reflecting lower
production as mining activities wind down.
Total cash costs per ounce of $1,404 for the
second quarter and $1,279 for the six-month period were higher than
the respective prior year periods, reflecting lower ounces stacked
in the quarter while completing the final push back. Mine-site
all-in sustaining costs per ounce were $1,442 for the quarter and
$1,304 for the six-month period, higher than the respective prior
year periods.
Mine-site free cash flow was slightly negative
at $0.6 million in the quarter and positive $0.5 million
year-to-date. El Chanate is expected to realize higher cash flows
from residual leaching starting in the fourth quarter of 2018.
Given El Chanate's higher cost structure, the Company has hedged
all of El Chanate’s remaining 2018 gold production through gold
collar contracts, ensuring a minimum gold price of $1,289 and
participation up to a price of $1,473 per ounce.
Second Quarter 2018 Development
Activities
Kirazlı (Çanakkale, Turkey)
On July 25, 2018, the Company received the GSM
(Business Opening and Operation) permit, and now has all the major
permits required for the development of Kirazlı.
The initial capital estimate for Kirazlı is $152
million of which $50 to $60 million is expected to be spent in
2018, inclusive of $10 million spent through the first half of the
year. The bulk of the remaining initial capital will be spent in
2019 and the first half of 2020. Based on the current timelines,
the Company expects initial production from Kirazlı in the second
half of 2020.
Development activities continued during the
quarter, and included power line construction, tree clearing, road
relocation and construction of the water reservoir. Approximately
75% of tree clearing of the Kirazlı site has been completed, with
the remaining portion to be completed later this year. Water
reservoir earthworks and grouting is ongoing, with construction
expected to be completed by the end of 2018. For the three and six
months ended June 30, 2018, development expenditures at Kirazlı
were $4.8 million and $9.9 million respectively.
As outlined in the 2017 Feasibility Study,
Kirazlı has a 44% after-tax internal rate of return and is expected
to produce over 100,000 ounces of gold during its first full year
of production at mine-site all-in sustaining costs of less than
$400 per ounce. The Company is also assessing the impact of
the devaluation of the Turkish Lira on initial capital and
operating costs, given the Feasibility Study was completed at an
exchange rate of TL:USD of 2.9:1 while the current TL:USD is
4.8:1.
Mulatos District (Sonora, Mexico)
La Yaqui Grande and Cerro
Pelon
The environmental impact assessment (“MIA”) for
Cerro Pelon was submitted during the second quarter, with approval
expected by the end of the year. The capital budget for Cerro Pelon
in 2018 is $8 million which comprises engineering, permitting and
early stage construction activities. The Cerro Pelon deposit is
located approximately three kilometres from the existing Mulatos
operation. Given its proximity to Mulatos’ infrastructure, ore from
the Cerro Pelon open pit is expected to be trucked to the existing
heap leach circuit for processing. Following MIA approval,
construction and pre-stripping activities are expected to take
approximately 18 months with initial production expected in 2020.
Recently completed work includes the design of the waste rock dump,
haulage road and crushing circuit.
La Yaqui Grande’s capital budget for 2018 is $5
million with spending focused on permitting and project
engineering. The MIA is expected to be completed and submitted by
the end of 2018 with construction and pre-stripping activities
commencing in the latter part of 2019 and production in 2021.
Similar to La Yaqui Phase I, La Yaqui Grande will be developed as a
standalone, open pit, heap leach operation. La Yaqui Grande
exploration activities in 2017 were successful in increasing
Mineral Reserves by 28% to 644,000 ounces as at December 31, 2017
(14.3 million tonnes grading 1.4 g/t Au).
The Company spent $1.0 million on permitting and
engineering activities in the second quarter, and $1.9 million for
the year. The Company expects to ramp up spending in the second
half of the year.
Lynn Lake (Manitoba, Canada)
The Company released a positive Feasibility
Study on the Lynn Lake project in December 2017 outlining average
annual production of 143,000 ounces over a 10 year mine life
(170,000 ounces over its first six years) at average mine-site
all-in sustaining costs of $745 per ounce.
The 2018 capital budget for Lynn Lake is $12
million, comprised of $8 million for development activities and $4
million for exploration. Development spending will be focused
on baseline work in support of the Environmental Impact Study
(“EIS”) for the project that will be submitted to satisfy federal
and provincial environmental assessment requirements. The
permitting process is expected to take approximately two years
followed by two years of construction.
During the second quarter, the Company continued
the review of value engineering initiatives to enhance the
project’s economics, including modifications to the overall site
layout, structures and foundations for the process plant, and
review of camp location. During the second quarter, $1.5 million
was spent at Lynn Lake mainly on project optimization and
exploration activities, and $2.0 million year-to-date.
Second Quarter 2018 Exploration
Activities
Island Gold (Ontario,
Canada)
Delineation drilling at Island Gold in 2017 was
successful in increasing Mineral Reserves by 18%, net of mining
depletion. The 2017 exploration program was also successful in
outlining additional gold mineralization down plunge to the
east.
The 2018 exploration program is targeting three
main areas along the two kilometre Island Main Zone. The focus is
on expanding the down-plunge and lateral extensions of the deposit
with the objective of adding new near-mine Mineral Resources.
Drill holes in the Main and Western Extension
areas are testing high-grade, east-plunging shoots below existing
Mineral Reserves and Resources. Drill holes in the Eastern
Extension are exploring for additional plunging shoots along strike
beyond existing Mineral Reserves and Resources.
In May, the 2018 exploration budget was
increased 20% to $18 million. This includes 45,000 metres ("m") of
surface exploration drilling, up from 33,000 m. The 2018 program
also includes 30,000 m of underground exploration drilling, 35,000
m of underground delineation drilling, and 15,000 m of regional
exploration drilling.
The underground delineation drilling program is
focused on converting Inferred Mineral Resources into Indicated
Mineral Resources. This drilling is being conducted primarily from
the 620 and 840 levels.
Surface exploration
drilling
Surface exploration drilling totaled 13,250 m
during the second quarter of 2018, with 17 holes completed as part
of the directional drilling campaign. The directional drilling
targeted areas peripheral to the Inferred Mineral Resource blocks
below the 1,000 m level, with drill hole spacing ranging from 75 m
to 100 m. The area being targeted by the surface directional drill
program extends approximately 2,000 m in strike length between the
1,000 m and 1,500 m elevation below surface.
The surface directional drilling programs will
continue in 2018 with a focus on defining new Inferred Mineral
Resources.
Underground exploration
drilling
During the second quarter of 2018, a total of
7,441 m of underground exploration diamond drilling was completed
in 39 holes from the 620 and 840 levels. The objective of the
underground drilling is to identify new Mineral Resources close to
existing Mineral Resource or Reserve blocks.
Total capitalized exploration expenditures at
Island Gold during the second quarter of 2018 were $4.7 million,
with year-to-date capitalized exploration expenditures of $7.8
million.
Highlight drill results from the 2018 drilling
campaign were previously disclosed in a press release on May 24,
2018 and are summarized as follows:
Main Extension: step-out drilling continues to
intersect high-grade gold mineralization which extends up to 900 m
east of current Mineral Reserves, and remains open down-plunge.
Highlights include:
- 32.06 g/t Au (14.18 g/t cut) over 4.10 m;
- 17.10 g/t Au (12.72 g/t cut) over 6.33 m; and
- 14.89 g/t Au (10.18 g/t cut) over 3.40 m.
Eastern Extension: high-grade mineralization
extended east outside of Inferred Mineral Resources and remains
open down-plunge. Highlights include:
- 71.27 g/t Au (42.14 g/t cut) over 4.92 m;
- 44.28 g/t Au (30.55 g/t cut) over 5.97 m;
- 47.68 g/t Au (19.26 g/t cut) over 3.69 m; and
- 35.15 g/t Au (13.42 g/t cut) over 4.29 m.
Western Extension: high-grade mineralization
intersected outside of Inferred Mineral Resources, extending
mineralization down-plunge. Highlights include:
- 31.54 g/t Au (31.54 g/t cut) over 5.07 m.
Infill drilling of Inferred Mineral Resources
returns high-grade intersections, confirming continuity of
mineralization which is expected to support Mineral Resource
conversion. Highlights include:
- 127.90 g/t Au (69.18 g/t cut) over 6.38 m;
- 58.80 g/t Au (44.22 g/t cut) over 8.78 m;
- 134.37 g/t Au (15.48 g/t cut) over 3.04 m;
- 95.48 g/t Au (25.02 g/t cut) over 2.86 m;
- 93.55 g/t Au (18.59 g/t cut) over 2.66 m;
- 53.37 g/t Au (46.54 g/t cut) over 3.94 m;
- 30.37 g/t Au (30.37 g/t cut over 6.36 m; and
- 41.30 g/t Au (22.85 g/t cut) over 4.64 m.
Mulatos District (Sonora,
Mexico)
The Company has a large exploration package
covering 28,777 hectares with the majority of past exploration
efforts focused around the Mulatos mine. Over the last three years,
exploration has moved beyond the main Mulatos pit area and focused
on prospects throughout the wider district. After significant
exploration success at La Yaqui Grande over the past few years, the
focus in 2018 has shifted to other parts of the district including
El Carricito, El Halcon and El Jaspe.
In the second quarter of 2018, the Company
invested $2.6 million in exploration activities within the Mulatos
District, of which $0.9 million was capitalized and the remainder
expensed. This included 8,854 m of diamond drilling and 201 m of
reverse circulation drilling focused on both near-mine targets and
regional targets including El Halcon and El Jaspe. Year-to-date,
the Company has spent $7.0 million, of which $2.0 million
capitalized.
At El Carricito, mapping and sampling continued during the
second quarter with 100% of the concession having been mapped. El
Carricito remains a key focus of the 2018 exploration program with
5,700 m of scout drilling planned for the second half of this
year.
Lynn Lake (Manitoba,
Canada)
Surface exploration drilling continued at Lynn
Lake in the second quarter of 2018 with a total of 3,936 m drilled
in ten holes. Exploration drilling was focused in the southern
portion of the Lynn Lake Greenstone Belt testing for the
continuation of structures related to gold mineralization along
strike of Burnt Timber and Linkwood, as well as two regional
targets.
During the second quarter, a regional
exploration program was initiated focused on refining exploration
targets and generating a pipeline of prospective targets across the
Lynn Lake Greenstone Belt. This exploration program will continue
into the third quarter of 2018.
A total of $4 million and 10,000 m of drilling
is budgeted at the Lynn Lake project for 2018. Spending in the
second quarter totaled $0.9 million, bringing the year-to-date
expenditures to $1.7 million.
Review of Second Quarter Financial
Results
During the second quarter of 2018, the Company
sold 129,272 ounces of gold for total revenue of $168.9 million, a
29% increase compared to the prior year period. This was primarily
driven by the Island Gold acquisition, which contributed 27,257
ounces, or $35.7 million in sales for the quarter, a higher
realized price of $1,307 per ounce compared to $1,262 per ounce in
the prior year period (a $4.7 million benefit), partially offset by
lower ounces sold at El Chanate. The Company's realized gold price
of $1,307 per ounce was in line with the London PM fix.
For the second quarter of 2018, cost of sales
were $150.0 million, compared to $109.5 million in the prior-year
period.
Mining and processing costs were $101.3 million
compared to $77.9 million in the prior-year period. The increased
costs were mainly the result of the addition of Island Gold, which
added $14.4 million of mining and processing costs in the period,
as well as higher operating costs at Young-Davidson.
Consolidated total cash costs for the quarter
were $832 per ounce, compared to $784 in the prior year period. The
increase was driven by higher total cash costs at Young-Davidson
resulting from lower grades mined and unscheduled downtime to the
mine and mill, offset by the addition of lower cost production from
Island Gold in the current period.
In the second quarter, AISC per ounce increased
to $996 from $942 in the prior year period. This was primarily
driven by higher total cash costs as sustaining capital was
relatively in line on a per-ounce basis.
Royalty expense was higher in the second quarter
at $6.3 million, compared to $3.7 million in the prior year period,
primarily due to the addition of Island Gold, and a higher number
of ounces sold at Mulatos.
Amortization of $42.4 million in the quarter was
higher than the prior year period expense of $27.9 million.
Amortization was $328 per ounce, up from $268 per ounce in the
prior year period, though consistent with the first quarter of
2018. This reflected higher amortization at all operating sites and
the addition of Island Gold which carries a higher amortization per
ounce charge.
The Company recognized earnings from operations
of $9.6 million in the quarter compared to $15.8 million in the
same period of 2017 as a result of increased operating costs at
Young-Davidson and higher amortization charges at Island Gold,
partially offset by stronger operating margins at Mulatos.
The Company reported a net loss of $8.9 million
in the quarter, compared to net earnings of $2.4 million in the
same period of 2017. Net earnings in the period were significantly
impacted by foreign exchange movements related to the weakening
Canadian dollar, which generated a foreign exchange loss of $2.1
million, as well as foreign exchange losses of $13.2 million
recorded within deferred income taxes.
Associated Documents
This press release should be read in conjunction
with the Company’s interim consolidated financial statements for
the three-month period ended June 30, 2018 and associated
Management’s Discussion and Analysis (“MD&A”), which are
available from the Company's website, www.alamosgold.com, in the
"Investors" section under "Reports and Financials", and on SEDAR
(www.sedar.com) and EDGAR (www.sec.gov).
Reminder of Second Quarter 2018 Results Conference
Call
The Company's senior management will host a
conference call on Thursday, August 2, 2018 at 11:00 am ET to
discuss the first quarter 2018 results.
Participants may join the conference call by
dialling (416) 340-2216 or (800) 273-9672 for calls within Canada
and the United States, or via webcast
at www.alamosgold.com.
A playback will be available until August 30,
2018 by dialling (905) 694-9451 or (800) 408-3053 within Canada and
the United States. The pass code is 8683343#. The webcast will be
archived at www.alamosgold.com.
Qualified Persons
Chris Bostwick, FAusIMM, Alamos’ Vice President, Technical
Services, who is a qualified person within the meaning of National
Instrument 43-101 ("Qualified Person"), has reviewed and approved
the scientific and technical information contained in this press
release.
About Alamos
Alamos is a Canadian-based intermediate gold producer with
diversified production from four operating mines in North America.
This includes the Young-Davidson and Island Gold mines in northern
Ontario, Canada and the Mulatos and El Chanate mines in Sonora
State, Mexico. Additionally, the Company has a significant
portfolio of development stage projects in Canada, Mexico, Turkey,
and the United States. Alamos employs more than 1,700 people and is
committed to the highest standards of sustainable development. The
Company’s shares are traded on the TSX and NYSE under the symbol
“AGI”.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Scott K. ParsonsVice-President, Investor
Relations(416) 368-9932 x 5439
All amounts are in United States dollars, unless otherwise
stated.
The TSX and NYSE have not reviewed and do not accept
responsibility for the adequacy or accuracy of this release.
Cautionary Note
This press release contains statements that
constitute forward-looking information as defined under applicable
Canadian and U.S. securities laws. All statements in this
press release, other than statements of historical fact, which
address events, results, outcomes or development that the Company
expects to occur are, or may be deemed to be forward-looking
statements. Forward-looking statements are generally, but not
always, identified by the use of forward-looking terminology such
as "expect", "believe", "anticipate”, “intends", "estimates",
"forecast", "budget", “contemplate”, “continue”, “plan” or
variations of such words and phrases and similar expressions or
statements that certain actions, events or results “may",
"could", "would", "might" or "will" be taken, occur or be
achieved.
Forward-looking statements include information
as to strategy, plans or future financial or operating performance,
such as the Company’s expansion plans, project timelines,
production plans and expected sustainable productivity increases,
expected increases in mining activities and corresponding cost
efficiencies, expected drilling targets, expected sustaining costs,
expected improvements in cash flows and margins, expectations of
changes in capital expenditures, forecasted cash shortfalls and the
Company’s ability to fund them, cost estimates, projected
exploration results, reserve and resource estimates, expected
production rates and use of the stockpile inventory, expected
recoveries, sufficiency of working capital for future commitments
and other statements that express management’s expectations or
estimates of future performance.
Forward-looking statements are necessarily based
upon a number of factors and assumptions that, while considered
reasonable by the Company at the time of making such statements,
are inherently subject to significant business, economic, legal,
political and competitive uncertainties and contingencies. Known
and unknown factors could cause actual results to differ materially
from those projected in the forward-looking statements.
Such factors and assumptions underlying the
forward-looking statements in this document include, but are not
limited to: changes to current estimates of mineral reserves and
resources; changes to production estimates (which assume accuracy
of projected ore grade, mining rates, recovery timing and recovery
rate estimates and may be impacted by unscheduled maintenance,
labour and contractor availability and other operating or technical
difficulties); fluctuations in the price of gold; changes in
foreign exchange rates (particularly the Canadian dollar, Mexican
peso, Turkish Lira and U.S. dollar); the impact of inflation;
employee and community relations; litigation; disruptions affecting
operations; availability of and increased costs associated with
mining inputs and labour; development delays at the Young-Davidson
mine; inherent risks associated with mining and mineral processing;
the risk that the Company’s mines may not perform as planned;
uncertainty with the Company’s ability to secure additional capital
to execute its business plans; the speculative nature of mineral
exploration and development, including the risks of obtaining
necessary licenses, permits and authorizations for the
Company’s development and operating assets; contests over
title to properties; changes in national and local government
legislation (including tax legislation) in Canada, Mexico, Turkey,
the United States and other jurisdictions in which the Company does
or may carry on business in the future; risk of loss due to
sabotage and civil disturbances; the impact of global liquidity and
credit availability and the values of assets and liabilities based
on projected future cash flows; risks arising from holding
derivative instruments; and business opportunities that may be
pursued by the Company
Additional risk factors and details with respect
to risk factors affecting the Company are set out in the Company’s
latest Annual Information Form and MD&A, each under the heading
“Risk Factors”, available on the SEDAR website at www.sedar.com.
The foregoing should be reviewed in conjunction with the
information found in this news release.
The Company disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
except as required by applicable law.
Cautionary Note to U.S. Investors
Concerning Measured, Indicated and Inferred Resources
The Company is required to prepare its resource
estimates in accordance with standards of the Canadian
Institute of Mining, Metallurgy and Petroleum referred to in
Canadian National Instrument 43-101. These standards are materially
different from the standards generally permitted in reports filed
with the United States Securities and Exchange Commission.
When describing resources we use the terms "measured", "indicated"
or "inferred” resources which are not recognized by the United
States Securities and Exchange Commission. The estimation of
measured resources and indicated resources involve greater
uncertainty as to their existence and economic feasibility than the
estimation of proven and probable reserves. U.S. investors are
cautioned not to assume that any part of measured or indicated
resources will ever be converted into economically or legally
mineable proven or probable reserves. The estimation of inferred
resources may not form the basis of a feasibility or other economic
studies and involves far greater uncertainty as to their existence
and economic viability than the estimation of other categories of
resources.
Non-GAAP Measures and Additional GAAP
Measures
The Company has included certain non-GAAP
financial measures to supplement its Consolidated Financial
Statements, which are presented in accordance with IFRS, including
the following:
- adjusted net earnings and adjusted earnings per share;
- cash flow from operating activities before changes in working
capital and taxes received;
- Company-wide free cash flow;
- total mine-site free cash flow;
- mine-site free cash flow;
- total cash cost per ounce of gold sold;
- all-in sustaining cost ("AISC") per ounce of gold sold;
- mine-site all-in sustaining cost ("Mine-site AISC") per ounce
of gold sold;
- sustaining and non-sustaining capital expenditures; and
- earnings before interest, taxes, depreciation, and
amortization
The Company believes that these measures,
together with measures determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying
performance of the Company. Non-GAAP financial measures do not have
any standardized meaning prescribed under IFRS, and therefore they
may not be comparable to similar measures employed by other
companies. The data is intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
Management's determination of the components of non-GAAP and
additional measures are evaluated on a periodic basis influenced by
new items and transactions, a review of investor uses and new
regulations as applicable. Any changes in to the measures are dully
noted and retrospectively applied as applicable.
Adjusted Net Earnings and Adjusted
Earnings per Share
“Adjusted net earnings” and “adjusted earnings
per share” are non-GAAP financial measures with no standard meaning
under IFRS which exclude the following from net earnings:
- Foreign exchange gain (loss)
- Items included in Other loss
- Certain non-reoccurring items
- Foreign exchange gain (loss) recorded in deferred tax
expense
Net earnings have been adjusted, including the
associated tax impact, for the group of costs in “Other loss” on
the consolidated statement of comprehensive income. Transactions
within this grouping are: the fair value changes on non-hedged
derivatives; the renunciation of flow-through exploration
expenditures; and loss on disposal of assets. The adjusted entries
are also impacted for tax to the extent that the underlying entries
are impacted for tax in the unadjusted net earnings.
The Company uses adjusted net earnings for its
own internal purposes. Management’s internal budgets and forecasts
and public guidance do not reflect the items which have been
excluded from the determination of adjusted net earnings.
Consequently, the presentation of adjusted net earnings enables
shareholders to better understand the underlying operating
performance of the core mining business through the eyes of
management. Management periodically evaluates the components of
adjusted net earnings based on an internal assessment of
performance measures that are useful for evaluating the operating
performance of our business and a review of the non-GAAP measures
used by mining industry analysts and other mining companies.
Adjusted net earnings is intended to provide
additional information only and does not have any standardized
meaning under IFRS and may not be comparable to similar measures
presented by other companies. It should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS. The measure is not necessarily indicative
of operating profit or cash flows from operations as determined
under IFRS. The following table reconciles this non-GAAP measure to
the most directly comparable IFRS measure.
(in
millions) |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net (Loss) Earnings |
|
($8.9 |
) |
|
$2.4 |
|
|
($8.3 |
) |
|
$2.5 |
|
Adjustments: |
|
|
|
|
Foreign exchange loss (gain) |
|
2.1 |
|
|
(3.5 |
) |
|
3.4 |
|
|
(9.4 |
) |
Other gain |
|
(2.0 |
) |
|
(2.9 |
) |
|
(1.3 |
) |
|
(0.9 |
) |
Unrealized foreign exchange loss (gain) recorded in deferred
tax expense |
|
13.2 |
|
|
(8.0 |
) |
|
22.7 |
|
|
(9.1 |
) |
Loss on redemption of senior secured notes |
|
— |
|
|
29.1 |
|
|
— |
|
|
29.1 |
|
Other income and mining tax adjustments (1) |
|
0.5 |
|
|
(7.3 |
) |
|
0.7 |
|
|
(7.5 |
) |
Adjusted net earnings |
|
$4.9 |
|
|
$9.8 |
|
|
$17.2 |
|
|
$4.7 |
|
Adjusted earnings per share - basic |
|
$0.01 |
|
|
$0.03 |
|
|
$0.04 |
|
|
$0.02 |
|
(1) |
|
This
reflects the recognition of previously unrecognized capital losses,
and the tax impact on adjusted earnings. |
Cash Flow from Operating Activities before Changes in
Working Capital and Cash Taxes
“Cash flow from operating activities before
changes in working capital and cash taxes” is a non-GAAP
performance measure that could provide an indication of the
Company’s ability to generate cash flows from operations, and is
calculated by adding back the change in working capital and taxes
received to “Cash provided by (used in) operating activities” as
presented on the Company’s consolidated statements of cash flows.
“Cash flow from operating activities before changes in working
capital” is a non-GAAP financial measure with no standard
meaning under IFRS.
The following table reconciles the non-GAAP
measure to the consolidated statements of cash flows.
(in
millions) |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Cash flow from operating activities |
|
$62.5 |
|
|
$51.4 |
|
|
$121.3 |
|
|
$71.5 |
|
Add back:
Changes in working capital and cash taxes |
|
(7.8 |
) |
|
(6.3 |
) |
|
(4.0 |
) |
|
7.8 |
|
Cash flow from operating activities before
changes in working capital and cash taxes |
|
$54.7 |
|
|
$45.1 |
|
|
$117.3 |
|
|
$79.3 |
|
Company-wide Free Cash Flow
“Company-wide free cash flow" is a non-GAAP
performance measure calculated from the consolidated operating cash
flow, less consolidated mineral property, plant and equipment
expenditures. The Company believes this to be a useful indicator of
our ability to operate without reliance on additional borrowing or
usage of existing cash company-wide. Company-wide free cash flow is
intended to provide additional information only and does not have
any standardized meaning under IFRS and may not be comparable to
similar measures of performance presented by other mining
companies. Company-wide free cash flow should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
(in
millions) |
|
|
|
|
|
Three Months Ended June 30, |
|
Three Months Ended March 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Cash flow from operating activities |
|
$62.5 |
|
|
$51.4 |
|
|
$121.3 |
|
|
$71.5 |
|
Less:
mineral property, plant and equipment expenditures |
|
(53.4 |
) |
|
(51.5 |
) |
|
(104.9 |
) |
|
(85.1 |
) |
Company-wide free cash flow |
|
$9.1 |
|
|
($0.1 |
) |
|
$16.4 |
|
|
($13.6 |
) |
Mine-site Free Cash Flow
"Mine-site free cash flow" is a non-GAAP
financial performance measure calculated as cash flow from
mine-site operating activities, less mineral property, plant and
equipment expenditures. The Company believes this to be a useful
indicator of our ability to operate without reliance on additional
borrowing or usage of existing cash. Mine-site free cash flow is
intended to provide additional information only and does not have
any standardized meaning under IFRS and may not be comparable to
similar measures of performance presented by other mining
companies. Mine-site free cash flow should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
Total Mine-Site Free Cash Flow |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow
from operating activities |
|
$62.5 |
|
|
$51.4 |
|
|
$121.3 |
|
|
$71.5 |
|
Less:
operating cash flow used by non-mine site activity |
|
(5.7 |
) |
|
1.1 |
|
|
(15.3 |
) |
|
(5.4 |
) |
Cash flow from operating
mine-sites |
|
$68.2 |
|
|
$50.3 |
|
|
$136.6 |
|
|
$76.9 |
|
|
|
|
|
|
Mineral
property, plant and equipment expenditure |
|
$53.4 |
|
|
$51.5 |
|
|
$104.9 |
|
|
$85.1 |
|
Less:
capital expenditures from development projects, and corporate
(1) |
|
(7.6 |
) |
|
(19.4 |
) |
|
(15.0 |
) |
|
(27.7 |
) |
Capital expenditure from
mine-sites |
|
$45.8 |
|
|
$32.1 |
|
|
$89.9 |
|
|
$57.4 |
|
|
|
|
|
|
Total mine-site free cash flow |
|
$22.4 |
|
|
$18.2 |
|
|
$46.7 |
|
|
$19.5 |
|
(1) |
|
The
comparative periods include capital expenditures related to La
Yaqui Phase I of $5.5 million and 10.8 million for the three and
six months ended June 30, 2017. |
Young-Davidson Mine-Site Free Cash
Flow |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow
from operating activities |
|
$22.5 |
|
|
$27.3 |
|
|
$49.9 |
|
|
$45.8 |
|
Mineral
property, plant and equipment expenditure |
|
(18.5 |
) |
|
(22.7 |
) |
|
(41.4 |
) |
|
(41.3 |
) |
Mine-site free cash flow |
|
$4.0 |
|
|
$4.6 |
|
|
$8.5 |
|
|
$4.5 |
|
Mulatos Mine-Site Free Cash Flow |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow
from operating activities |
|
$24.1 |
|
|
$19.8 |
|
|
$40.2 |
|
|
$28.9 |
|
Mineral
property, plant and equipment expenditure |
|
(9.5 |
) |
|
(14.6 |
) |
|
(16.7 |
) |
|
(26.0 |
) |
Less: La Yaqui Phase I construction cost |
|
— |
|
|
5.5 |
|
|
— |
|
|
10.8 |
|
Mulatos mineral property, plant and equipment
expenditure |
|
($9.5 |
) |
|
($9.1 |
) |
|
($16.7 |
) |
|
($15.2 |
) |
Mine-site free cash flow |
|
$14.6 |
|
|
$10.7 |
|
|
$23.5 |
|
|
$13.7 |
|
Island Gold Mine-Site Free Cash
Flow |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow
from operating activities |
|
$22.0 |
|
|
— |
|
|
$45.7 |
|
|
— |
|
Mineral
property, plant and equipment expenditure |
|
(17.6 |
) |
|
— |
|
|
(31.5 |
) |
|
— |
|
Mine-site free cash flow |
|
$4.4 |
|
|
$— |
|
|
$14.2 |
|
|
$— |
|
El Chanate Mine-Site Free Cash
Flow |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow
from operating activities |
|
($0.4 |
) |
|
$3.2 |
|
|
$0.8 |
|
|
$2.2 |
|
Mineral
property, plant and equipment expenditure |
|
(0.2 |
) |
|
(0.3 |
) |
|
(0.3 |
) |
|
(0.9 |
) |
Mine-site free cash flow |
|
($0.6 |
) |
|
$2.9 |
|
|
$0.5 |
|
|
$1.3 |
|
Total Cash Costs per ounce
Total cash costs per ounce is a non-GAAP term
typically used by gold mining companies to assess the level of
gross margin available to the Company by subtracting these costs
from the unit price realized during the period. This non-GAAP term
is also used to assess the ability of a mining company to generate
cash flow from operations. Total cash costs per ounce includes
mining and processing costs plus applicable royalties, and net of
by-product revenue and net realizable value adjustments. Total cash
costs per ounce is exclusive of exploration costs.
Total cash costs per ounce is intended to
provide additional information only and does not have any
standardized meaning under IFRS and may not be comparable to
similar measures presented by other mining companies. It should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. The measure is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under IFRS.
All-in Sustaining Costs per ounce and
Mine-site All-in Sustaining Costs
The Company adopted an “all-in sustaining costs
per ounce” non-GAAP performance measure in accordance with the
World Gold Council published in June 2013. The Company
believes the measure more fully defines the total costs associated
with producing gold; however, this performance measure has no
standardized meaning. Accordingly, there may be some
variation in the method of computation of “all-in sustaining costs
per ounce” as determined by the Company compared with other mining
companies. In this context, “all-in sustaining costs per ounce” for
the consolidated Company reflects total mining and processing
costs, corporate and administrative costs, share-based
compensation, exploration costs, sustaining capital, and other
operating costs.
For the purposes of calculating "mine-site
all-in sustaining costs" at the individual mine-sites, the Company
does not include an allocation of corporate and administrative
costs and share-based compensation, as detailed in the
reconciliations below.
Sustaining capital expenditures are expenditures
that do not increase annual gold ounce production at a mine site
and excludes all expenditures at the Company’s development projects
as well as certain expenditures at the Company’s operating sites
that are deemed expansionary in nature. For each mine-site
reconciliation, corporate and administrative costs, and non-site
specific costs are not included in the all-in sustaining cost per
ounce calculation.
All-in
sustaining costs per gold ounce is
intended to provide additional information only and does not
have any standardized meaning under IFRS and may not be comparable
to similar measures presented
by other mining companies. It should not be
considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
The measure is not necessarily
indicative of cash flow from operations under IFRS or operating
costs presented under IFRS.
Total Cash Costs and All-in Sustaining
Costs per Ounce Reconciliation Tables
The following tables reconciles these non-GAAP
measures to the most directly comparable IFRS measures on a
Company-wide and individual mine-site basis.
Total Cash Costs and AISC
Reconciliation - Company-wide |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in
millions, except ounces and per ounce figures) |
|
|
|
|
|
|
|
|
|
|
|
|
Mining and
processing |
|
$101.3 |
|
|
$77.9 |
|
|
$198.2 |
|
|
$155.8 |
|
Royalties |
|
6.3 |
|
|
3.7 |
|
|
12.0 |
|
|
7.5 |
|
Total cash costs |
|
$107.6 |
|
|
$81.6 |
|
|
$210.2 |
|
|
$163.3 |
|
Gold ounces sold |
|
129,272 |
|
|
104,023 |
|
|
259,317 |
|
|
202,778 |
|
Total cash costs per ounce |
|
$832 |
|
|
$784 |
|
|
$811 |
|
|
$805 |
|
|
|
|
|
|
Total cash
costs |
|
$107.6 |
|
|
$81.6 |
|
|
$210.2 |
|
|
$163.3 |
|
Corporate
and administrative(1) |
|
4.6 |
|
|
3.6 |
|
|
9.0 |
|
|
7.3 |
|
Sustaining
capital expenditures(2) |
|
12.1 |
|
|
11.1 |
|
|
22.8 |
|
|
20.4 |
|
Share-based
compensation |
|
2.5 |
|
|
0.2 |
|
|
4.1 |
|
|
4.0 |
|
Sustaining
exploration |
|
1.1 |
|
|
0.8 |
|
|
2.8 |
|
|
1.8 |
|
Accretion
of decommissioning liabilities |
|
0.9 |
|
|
0.7 |
|
|
1.5 |
|
|
1.3 |
|
Total all-in sustaining costs |
|
$128.8 |
|
|
$98.0 |
|
|
$250.4 |
|
|
$198.1 |
|
Gold ounces
sold |
|
129,272 |
|
|
104,023 |
|
|
259,317 |
|
|
202,778 |
|
All-in sustaining costs per ounce |
|
$996 |
|
|
$942 |
|
|
$966 |
|
|
$977 |
|
(1) Corporate and administrative expenses exclude expenses
incurred at development properties.(2) Sustaining capital
expenditures are defined as those expenditures which do not
increase annual gold ounce production at a mine site and exclude
all expenditures at growth projects and certain expenditures at
operating sites which are deemed expansionary in nature. Total
sustaining capital for the period is as follows:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures per cash flow statement |
|
$53.4 |
|
|
$51.5 |
|
|
$104.9 |
|
|
$85.1 |
|
Less:
non-sustaining capital expenditures at: |
|
|
|
|
Young-Davidson |
|
(10.6 |
) |
|
(12.8 |
) |
|
(25.9 |
) |
|
(25.3 |
) |
Mulatos |
|
(7.7 |
) |
|
(13.7 |
) |
|
(14.1 |
) |
|
(22.5 |
) |
Island Gold |
|
(15.4 |
) |
|
— |
|
|
(27.1 |
) |
|
— |
|
Corporate and other |
|
(7.6 |
) |
|
(13.9 |
) |
|
(15.0 |
) |
|
(16.9 |
) |
|
|
$12.1 |
|
|
$11.1 |
|
|
$22.8 |
|
|
$20.4 |
|
Young-Davidson Total Cash Costs and
Mine-site AISC Reconciliation |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in
millions, except ounces and per ounce figures) |
|
|
|
|
|
|
|
|
|
|
|
|
Mining and
processing |
|
$36.5 |
|
|
$30.5 |
|
|
$72.5 |
|
|
$60.4 |
|
Royalties |
|
0.9 |
|
|
0.9 |
|
|
1.8 |
|
|
2.1 |
|
Total cash costs |
|
$37.4 |
|
|
$31.4 |
|
|
$74.3 |
|
|
$62.5 |
|
Gold ounces sold |
|
42,006 |
|
|
46,368 |
|
|
86,796 |
|
|
90,195 |
|
Total cash costs per ounce |
|
$890 |
|
|
$677 |
|
|
$856 |
|
|
$693 |
|
|
|
|
|
|
Total cash
costs |
|
$37.4 |
|
|
$31.4 |
|
|
$74.3 |
|
|
$62.5 |
|
Sustaining
capital expenditures |
|
7.9 |
|
|
9.9 |
|
|
15.5 |
|
|
16.0 |
|
Exploration |
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
0.2 |
|
Accretion
of decommissioning liabilities |
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
Total all-in sustaining costs |
|
$45.5 |
|
|
$41.5 |
|
|
$90.0 |
|
|
$78.8 |
|
Gold ounces
sold |
|
42,006 |
|
|
46,368 |
|
|
86,796 |
|
|
90,195 |
|
Mine-site all-in sustaining costs per
ounce |
|
$1,083 |
|
|
$895 |
|
|
$1,037 |
|
|
$874 |
|
Mulatos Total Cash Costs and
Mine-site AISC Reconciliation |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in
millions, except ounces and per ounce figures) |
|
|
|
|
|
|
|
|
|
|
|
|
Mining and
processing |
|
$35.4 |
|
|
$26.8 |
|
|
$67.3 |
|
|
$56.2 |
|
Royalties |
|
3.8 |
|
|
2.8 |
|
|
7.0 |
|
|
5.4 |
|
Total cash costs |
|
$39.2 |
|
|
$29.6 |
|
|
$74.3 |
|
|
$61.6 |
|
Gold ounces sold |
|
49,326 |
|
|
40,265 |
|
|
93,985 |
|
|
78,940 |
|
Total cash costs per ounce |
|
$795 |
|
|
$735 |
|
|
$791 |
|
|
$780 |
|
|
|
|
|
|
Total cash
costs |
|
$39.2 |
|
|
$29.6 |
|
|
$74.3 |
|
|
$61.6 |
|
Sustaining
capital expenditures |
|
1.8 |
|
|
0.9 |
|
|
2.6 |
|
|
3.5 |
|
Exploration |
|
0.5 |
|
|
0.3 |
|
|
1.7 |
|
|
0.8 |
|
Accretion
of decommissioning liabilities |
|
0.6 |
|
|
0.5 |
|
|
1.1 |
|
|
1.0 |
|
Total all-in sustaining costs |
|
$42.1 |
|
|
$31.3 |
|
|
$79.7 |
|
|
$66.9 |
|
Gold ounces
sold |
|
49,326 |
|
|
40,265 |
|
|
93,985 |
|
|
78,940 |
|
Mine-site all-in sustaining costs per
ounce |
|
$854 |
|
|
$777 |
|
|
$848 |
|
|
$847 |
|
Island Gold Total Cash Costs and
Mine-site AISC Reconciliation |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in
millions, except ounces and per ounce figures) |
|
|
|
|
|
|
|
|
|
|
|
|
Mining and
processing |
|
$14.4 |
|
|
$— |
|
|
$28.0 |
|
|
$— |
|
Royalties |
|
1.6 |
|
|
— |
|
|
3.2 |
|
|
— |
|
Total cash costs |
|
$16.0 |
|
|
$— |
|
|
$31.2 |
|
|
$— |
|
Gold ounces sold |
|
27,257 |
|
|
— |
|
|
54,760 |
|
|
— |
|
Total cash costs per ounce |
|
$587 |
|
|
$— |
|
|
$570 |
|
|
$— |
|
|
|
|
|
|
Total cash
costs |
|
$16.0 |
|
|
$— |
|
|
$31.2 |
|
|
$— |
|
Sustaining
capital expenditures |
|
2.2 |
|
|
— |
|
|
4.4 |
|
|
— |
|
Total all-in sustaining costs |
|
$18.2 |
|
|
$— |
|
|
$35.6 |
|
|
$— |
|
Gold ounces
sold |
|
27,257 |
|
|
— |
|
|
54,760 |
|
|
— |
|
Mine-site all-in sustaining costs per
ounce |
|
$668 |
|
|
$— |
|
|
$650 |
|
|
$— |
|
El Chanate Total Cash Costs and
Mine-site AISC Reconciliation |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
(in
millions, except ounces and per ounce figures) |
|
|
|
|
|
|
|
|
|
|
|
|
Mining and
processing |
|
$15.0 |
|
|
$20.6 |
|
|
$30.4 |
|
|
$39.2 |
|
Total cash costs |
|
$15.0 |
|
|
$20.6 |
|
|
$30.4 |
|
|
$39.2 |
|
Gold ounces sold |
|
10,683 |
|
|
17,390 |
|
|
23,776 |
|
|
33,643 |
|
Total cash costs per ounce |
|
$1,404 |
|
|
$1,185 |
|
|
$1,279 |
|
|
$1,165 |
|
|
|
|
|
|
Total cash
costs |
|
$15.0 |
|
|
$20.6 |
|
|
$30.4 |
|
|
$39.2 |
|
Sustaining
capital expenditures |
|
0.2 |
|
|
0.3 |
|
|
0.3 |
|
|
0.9 |
|
Accretion
of decommissioning liabilities |
|
0.2 |
|
|
0.1 |
|
|
0.3 |
|
|
0.2 |
|
Total all-in sustaining costs |
|
$15.4 |
|
|
$21.0 |
|
|
$31.0 |
|
|
$40.3 |
|
Gold ounces
sold |
|
10,683 |
|
|
17,390 |
|
|
23,776 |
|
|
33,643 |
|
Mine-site all-in sustaining costs per
ounce |
|
$1,442 |
|
|
$1,208 |
|
|
$1,304 |
|
|
$1,198 |
|
Earnings Before Interest, Taxes, Depreciation, and
Amortization (“EBITDA”)
EBITDA represents net earnings before interest,
taxes, depreciation, and amortization. EBITDA is an indicator of
the Company’s ability to generate liquidity by producing operating
cash flow to fund working capital needs, service debt obligations,
and fund capital expenditures.
EBITDA does not have any standardized meaning
under IFRS and may not be comparable to similar measures presented
by other mining companies. It should not be considered in isolation
or as a substitute for measures of performance prepared in
accordance with IFRS.
The following is a reconciliation of EBITDA to
the consolidated financial statements:
(in
millions) |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net
earnings |
|
($8.9 |
) |
|
$2.4 |
|
|
($8.3 |
) |
|
$2.5 |
|
Add
back: |
|
|
|
|
Finance expense |
|
0.9 |
|
|
0.5 |
|
|
1.8 |
|
|
4.7 |
|
Amortization |
|
42.4 |
|
|
27.9 |
|
|
84.5 |
|
|
56.3 |
|
Loss on redemption of senior secured notes |
|
— |
|
|
29.1 |
|
|
— |
|
|
29.1 |
|
Deferred income tax expense |
|
11.8 |
|
|
(14.8 |
) |
|
18.8 |
|
|
(14.1 |
) |
Current income tax expense |
|
5.7 |
|
|
5.0 |
|
|
13.7 |
|
|
6.1 |
|
EBITDA |
|
$51.9 |
|
|
$50.1 |
|
|
$110.5 |
|
|
$84.6 |
|
Additional GAAP Measures
Additional GAAP measures are presented on the
face of the Company’s consolidated statements of comprehensive
income and are not meant to be a substitute for other subtotals or
totals presented in accordance with IFRS, but rather should be
evaluated in conjunction with such IFRS measures. The
following additional GAAP measures are used and are intended to
provide an indication of the Company’s mine and operating
performance:
- Earnings from operations -
represents the amount of earnings before net finance
income/expense, foreign exchange gain/loss, other income/loss, loss
on redemption of senior secured notes and income tax expense
Unaudited Consolidated Statements of
Financial Position, ComprehensiveIncome, and Cash
Flows
ALAMOS GOLD INC.Condensed Interim
Consolidated Statements of Financial Position(Unaudited -
stated in millions of United States dollars)
|
June 30, 2018 |
|
December 31, 2017 |
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and
cash equivalents |
|
$235.1 |
|
|
|
$200.8 |
|
Equity
securities |
|
9.0 |
|
|
|
35.8 |
|
Amounts
receivable |
|
31.6 |
|
|
|
41.0 |
|
Inventory |
|
153.3 |
|
|
|
161.2 |
|
Other
current assets |
|
12.2 |
|
|
|
14.4 |
|
Total Current Assets |
|
441.2 |
|
|
|
453.2 |
|
|
|
|
|
Non-Current Assets |
|
|
|
Long-term
inventory |
|
64.0 |
|
|
|
68.7 |
|
Mineral
property, plant and equipment |
|
2,781.0 |
|
|
|
2,753.4 |
|
Other
non-current assets |
|
43.2 |
|
|
|
45.0 |
|
Total Assets |
|
$3,329.4 |
|
|
|
$3,320.3 |
|
|
|
|
|
LIABILITIES |
|
|
|
Current Liabilities |
|
|
|
Accounts
payable and accrued liabilities |
|
$108.7 |
|
|
|
$101.0 |
|
Income
taxes payable |
|
10.7 |
|
|
|
12.2 |
|
Total Current Liabilities |
|
119.4 |
|
|
|
113.2 |
|
|
|
|
|
Non-Current Liabilities |
|
|
|
Deferred
income taxes |
|
494.4 |
|
|
|
477.0 |
|
Decommissioning liabilities |
|
45.9 |
|
|
|
44.6 |
|
Other
non-current liabilities |
|
2.8 |
|
|
|
4.3 |
|
Total Liabilities |
|
662.5 |
|
|
|
639.1 |
|
|
|
|
|
EQUITY |
|
|
|
Share
capital |
|
$3,693.2 |
|
|
|
$3,691.7 |
|
Contributed
surplus |
|
92.9 |
|
|
|
89.5 |
|
Warrants |
|
3.9 |
|
|
|
4.0 |
|
Accumulated
other comprehensive (loss) income |
|
(6.4 |
) |
|
|
13.0 |
|
Deficit |
|
(1,116.7 |
) |
|
|
(1,117.0 |
) |
Total Equity |
|
2,666.9 |
|
|
|
2,681.2 |
|
Total Liabilities and Equity |
|
$3,329.4 |
|
|
|
$3,320.3 |
|
ALAMOS GOLD INC.Condensed Interim
Consolidated Statements of Comprehensive
Income (Unaudited - stated in millions of United
States dollars, except per share amounts)
|
For three months
ended |
|
For six months ended |
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
OPERATING REVENUES |
|
$168.9 |
|
|
|
$131.3 |
|
|
|
$342.0 |
|
|
|
$252.3 |
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
|
|
|
|
|
|
Mining and
processing |
|
101.3 |
|
|
|
77.9 |
|
|
|
198.2 |
|
|
|
155.8 |
|
Royalties |
|
6.3 |
|
|
|
3.7 |
|
|
|
12.0 |
|
|
|
7.5 |
|
Amortization |
|
42.4 |
|
|
|
27.9 |
|
|
|
84.5 |
|
|
|
56.3 |
|
|
|
150.0 |
|
|
|
109.5 |
|
|
|
294.7 |
|
|
|
219.6 |
|
EXPENSES |
|
|
|
|
|
|
|
Exploration |
|
2.2 |
|
|
|
2.2 |
|
|
|
6.1 |
|
|
|
3.4 |
|
Corporate
and administrative |
|
4.6 |
|
|
|
3.6 |
|
|
|
9.0 |
|
|
|
7.3 |
|
Share-based
compensation |
|
2.5 |
|
|
|
0.2 |
|
|
|
4.1 |
|
|
|
4.0 |
|
|
|
159.3 |
|
|
|
115.5 |
|
|
|
313.9 |
|
|
|
234.3 |
|
EARNINGS FROM OPERATIONS |
|
9.6 |
|
|
|
15.8 |
|
|
|
28.1 |
|
|
|
18.0 |
|
|
|
|
|
|
|
|
|
OTHER EXPENSES |
|
|
|
|
|
|
|
Finance
expense |
|
(0.9 |
) |
|
|
(0.5 |
) |
|
|
(1.8 |
) |
|
|
(4.7 |
) |
Foreign
exchange (loss) gain |
|
(2.1 |
) |
|
|
3.5 |
|
|
|
(3.4 |
) |
|
|
9.4 |
|
Other
gain |
|
2.0 |
|
|
|
2.9 |
|
|
|
1.3 |
|
|
|
0.9 |
|
Loss on
redemption of senior secured notes |
|
— |
|
|
|
(29.1 |
) |
|
|
— |
|
|
|
(29.1 |
) |
EARNINGS (LOSS) BEFORE INCOME TAXES |
|
$8.6 |
|
|
|
($7.4 |
) |
|
|
$24.2 |
|
|
|
($5.5 |
) |
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
|
|
|
|
|
Current
income tax expense |
|
(5.7 |
) |
|
|
(5.0 |
) |
|
|
(13.7 |
) |
|
|
(6.1 |
) |
Deferred
income tax (expense) recovery |
|
(11.8 |
) |
|
|
14.8 |
|
|
|
(18.8 |
) |
|
|
14.1 |
|
NET
(LOSS) EARNINGS |
|
($8.9 |
) |
|
|
$2.4 |
|
|
|
($8.3 |
) |
|
|
$2.5 |
|
|
|
|
|
|
|
|
|
Items that
may be subsequently reclassified to net earnings: |
|
|
|
|
|
|
|
(Loss) gain on currency hedging instruments, net of
taxes |
|
(4.0 |
) |
|
|
3.8 |
|
|
|
(5.4 |
) |
|
|
5.7 |
|
Items that
will not be reclassified to net earnings: |
|
|
|
|
|
|
|
Unrealized (loss) gain on equity securities, net of
taxes |
|
(2.5 |
) |
|
|
(0.1 |
) |
|
|
(1.5 |
) |
|
|
1.6 |
|
Total other comprehensive (loss) income |
|
($6.5 |
) |
|
|
$3.7 |
|
|
|
($6.9 |
) |
|
|
$7.3 |
|
COMPREHENSIVE (LOSS) INCOME |
|
($15.4 |
) |
|
|
$6.1 |
|
|
|
($15.2 |
) |
|
|
$9.8 |
|
|
|
|
|
|
|
|
|
(LOSS) EARNINGS PER SHARE |
|
|
|
|
|
|
|
–
basic |
|
($0.02 |
) |
|
|
$0.01 |
|
|
|
($0.02 |
) |
|
|
$0.01 |
|
–
diluted |
|
($0.02 |
) |
|
|
$0.01 |
|
|
|
($0.02 |
) |
|
|
$0.01 |
|
Weighted
average number of common shares outstanding (000's) |
|
|
|
|
|
|
|
–
basic |
|
389,602 |
|
|
|
299,189 |
|
|
|
389,429 |
|
|
|
292,008 |
|
–
diluted |
|
389,602 |
|
|
|
302,762 |
|
|
|
389,429 |
|
|
|
295,799 |
|
ALAMOS GOLD INC.Condensed Interim
Consolidated Statements of Cash Flows(Unaudited - stated
in millions of United States dollars)
|
For three months
ended |
|
For six months ended |
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
CASH PROVIDED BY (USED IN): |
|
|
|
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
Net (loss)
earnings for the period |
|
($8.9 |
) |
|
|
$2.4 |
|
|
|
($8.3 |
) |
|
|
$2.5 |
|
Adjustments
for items not involving cash: |
|
|
|
|
|
|
|
Amortization |
|
42.4 |
|
|
|
27.9 |
|
|
|
84.5 |
|
|
|
56.3 |
|
Foreign exchange loss (gain) |
|
2.1 |
|
|
|
(3.5 |
) |
|
|
3.4 |
|
|
|
(9.4 |
) |
Current income tax expense |
|
5.7 |
|
|
|
5.0 |
|
|
|
13.7 |
|
|
|
6.1 |
|
Deferred income tax expense (recovery) |
|
11.8 |
|
|
|
(14.8 |
) |
|
|
18.8 |
|
|
|
(14.1 |
) |
Share-based compensation |
|
2.5 |
|
|
|
0.2 |
|
|
|
4.1 |
|
|
|
4.0 |
|
Finance expense |
|
0.9 |
|
|
|
0.5 |
|
|
|
1.8 |
|
|
|
4.7 |
|
Loss on redemption of senior secured notes |
|
— |
|
|
|
29.1 |
|
|
|
— |
|
|
|
29.1 |
|
Other items |
|
(1.8 |
) |
|
|
(1.7 |
) |
|
|
(0.7 |
) |
|
|
0.1 |
|
Changes in
working capital and cash taxes |
|
7.8 |
|
|
|
6.3 |
|
|
|
4.0 |
|
|
|
(7.8 |
) |
|
|
62.5 |
|
|
|
51.4 |
|
|
|
121.3 |
|
|
|
71.5 |
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
Mineral
property, plant and equipment |
|
(53.4 |
) |
|
|
(51.5 |
) |
|
|
(104.9 |
) |
|
|
(85.1 |
) |
Proceeds
from sale of equity securities |
|
— |
|
|
|
— |
|
|
|
24.9 |
|
|
|
— |
|
Purchase of
Lynn Lake gold project royalty |
|
— |
|
|
|
(6.7 |
) |
|
|
— |
|
|
|
(6.7 |
) |
Other |
|
— |
|
|
|
3.6 |
|
|
|
— |
|
|
|
3.6 |
|
|
|
(53.4 |
) |
|
|
(54.6 |
) |
|
|
(80.0 |
) |
|
|
(88.2 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Net
proceeds from equity financing |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
239.1 |
|
Repayment
of senior secured notes |
|
— |
|
|
|
(327.2 |
) |
|
|
— |
|
|
|
(327.2 |
) |
Repayment
of equipment financing obligations |
|
(1.0 |
) |
|
|
(1.0 |
) |
|
|
(2.2 |
) |
|
|
(2.4 |
) |
Interest
paid |
|
— |
|
|
|
(12.2 |
) |
|
|
— |
|
|
|
(12.2 |
) |
Proceeds
from the exercise of options and warrants |
|
0.4 |
|
|
|
0.5 |
|
|
|
1.1 |
|
|
|
2.8 |
|
Dividends
paid |
|
(3.9 |
) |
|
|
(3.0 |
) |
|
|
(3.9 |
) |
|
|
(3.0 |
) |
|
|
(4.5 |
) |
|
|
(342.9 |
) |
|
|
(5.0 |
) |
|
|
(102.9 |
) |
Effect of
exchange rates on cash and cash equivalents |
|
(1.3 |
) |
|
|
0.6 |
|
|
|
(2.0 |
) |
|
|
1.1 |
|
Net
increase (decrease) in cash and cash equivalents |
|
3.3 |
|
|
|
(345.5 |
) |
|
|
34.3 |
|
|
|
(118.5 |
) |
Cash and
cash equivalents - beginning of period |
|
231.8 |
|
|
|
479.2 |
|
|
|
200.8 |
|
|
|
252.2 |
|
CASH AND CASH EQUIVALENTS - END OF PERIOD |
|
$235.1 |
|
|
|
$133.7 |
|
|
|
$235.1 |
|
|
|
$133.7 |
|
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