Alamos Gold Inc.
(TSX:AGI; NYSE:AGI)
(“Alamos” or the “Company”) today reported its financial results
for the quarter ended September 30, 2020.
“We had an excellent third quarter financially
and operationally with strong performances at all three operations
driving costs significantly lower. This included another record
quarter at Island Gold, and Young-Davidson starting to demonstrate
its full potential following the completion of the lower mine
expansion. We previously outlined our expectation to transition to
strong free cash flow generation in the second half of 2020, and we
delivered with record free cash flow of $76 million in the
quarter,” said John A. McCluskey, President and Chief Executive
Officer.
“We remain focused on operating a sustainable
business model that can support growing returns to shareholders
over the long term. Given our strong free cash flow outlook, we are
pleased to announce a 33% increase in our dividend, which has now
grown by 300% since 2018. We expect to continue to generate strong
free cash flow while reinvesting in high-return projects like La
Yaqui Grande and the Phase III Expansion at Island Gold which will
support further growth and returns to shareholders,” Mr. McCluskey
added.
Third Quarter 2020
- Generated record quarterly free cash flow1 of $76.0 million
driven by higher margins at all operations
- Announced a 33% increase in the
dividend to an annual rate of US$0.08 per share, starting with the
dividend payable in December 2020. The increase is supported by the
record free cash flow in the quarter and strong outlook. With the
December dividend, the Company will have returned $31.0 million to
shareholders in the form of dividends and share repurchases under
the Company's Normal Course Issuer Bid ("NCIB") in 2020
- Produced 117,100 ounces of gold, a
49% increase from the second quarter of 2020 with production
returning to budgeted levels following the temporary suspension of
operations at Island Gold and Mulatos in the second quarter due to
COVID-19
- Year-to-date the Company has
produced 306,400 ounces of gold and remains well positioned to
achieve revised full year guidance of 405,000 to 435,000 ounces of
gold
- Island Gold produced a record
39,600 ounces of gold and generated record mine-site free cash
flow1 of $40.8 million, benefiting from higher grades mined in the
quarter
- Mulatos produced 41,100 ounces of
gold and generated mine-site free cash flow1 of $30.9 million,
driven by lower total cash costs
- Following the completion of the
lower mine expansion at Young-Davidson in July, underground mining
rates increased to average 6,713 tonnes per day ("tpd") for the
quarter and remain on track to achieve 7,500 tpd by the end of
2020
- Sold 116,035 ounces of gold at an average realized price of
$1,882 per ounce for revenues of $218.4 million
- Generated record cash flow from
operating activities of $130.8 million ($130.0 million, or $0.33
per share, before changes in working capital1), a 62% increase from
the third quarter of 2019
- Consolidated total cash costs1 of
$681 per ounce and all-in sustaining costs ("AISC")1 of $949 per
ounce both decreased significantly from the first half of the year
and were lower than revised guidance. The Company remains on track
to achieve full year cost guidance
- Reported record adjusted net
earnings1 of $56.9 million, or $0.15 per share1, which includes
adjustments for unrealized foreign exchange gains of $10.7 million
recorded within deferred taxes and foreign exchange, and other
one time gains of $0.3 million. Adjusted net earnings
increased 143% compared to the third quarter of 2019
- Realized record net earnings of $67.9 million, or $0.17 per
share
- Ended the quarter with cash and
cash equivalents of $274.1 million and equity securities of $40.0
million. Subsequent to quarter-end, the Company repaid $100.0
million outstanding on its revolving credit facility and is
currently debt-free
- Reported results of the Phase III
Expansion Study conducted on Island Gold, which is expected to
drive a 72% increase in average annual production to 236,000 ounces
and a 30% decrease in mine-site AISC to $534 per ounce starting in
2025
- Announced a construction decision
on the low-cost, high-return La Yaqui Grande project. The project
has a 58% after-tax internal rate of return ("IRR") at a $1,750 per
ounce gold price and is expected to significantly reduce Mulatos
District costs with mine-site AISC expected to average $578 per
ounce over the life of the project
(1) 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.
Highlight Summary
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Financial Results (in millions) |
|
|
|
|
Operating revenues |
$218.4 |
|
$172.9 |
|
$521.5 |
|
$497.1 |
|
Cost of sales (1) |
$122.6 |
|
$127.3 |
|
$346.2 |
|
$385.4 |
|
Earnings from operations |
$88.0 |
|
$37.5 |
|
$146.3 |
|
$84.4 |
|
Earnings before income taxes |
$85.9 |
|
$37.4 |
|
$132.4 |
|
$85.1 |
|
Net earnings |
$67.9 |
|
$17.7 |
|
$67.3 |
|
$58.1 |
|
Adjusted net earnings (2) |
$56.9 |
|
$23.4 |
|
$96.2 |
|
$51.4 |
|
Earnings before interest, depreciation and amortization(2) |
$130.5 |
|
$78.4 |
|
$248.1 |
|
$208.0 |
|
Cash provided by operations before working capital and cash
taxes(2) |
$130.0 |
|
$80.2 |
|
$256.4 |
|
$211.4 |
|
Cash provided by operating activities |
$130.8 |
|
$67.9 |
|
$237.0 |
|
$182.6 |
|
Capital expenditures (sustaining) (2) |
$22.7 |
|
$17.8 |
|
$54.6 |
|
$53.5 |
|
Capital expenditures (growth) (2) (3) |
$29.2 |
|
$44.2 |
|
$109.3 |
|
$125.5 |
|
Capital expenditures (capitalized exploration) (4) |
$2.9 |
|
$4.3 |
|
$8.8 |
|
$11.7 |
|
Operating Results |
|
|
|
|
Gold production (ounces) |
|
117,100 |
|
|
121,900 |
|
|
306,400 |
|
|
372,400 |
|
Gold sales (ounces) |
|
116,035 |
|
|
119,392 |
|
|
302,494 |
|
|
367,554 |
|
Per Ounce Data |
|
|
|
|
Average realized gold price |
$1,882 |
|
$1,448 |
|
$1,724 |
|
$1,352 |
|
Average spot gold price (London PM Fix) |
$1,909 |
|
$1,472 |
|
$1,735 |
|
$1,362 |
|
Cost of sales per ounce of gold sold (includes amortization)
(1) |
$1,057 |
|
$1,066 |
|
$1,144 |
|
$1,049 |
|
Total cash costs per ounce of gold sold (2) |
$681 |
|
$730 |
|
$772 |
|
$720 |
|
All-in sustaining costs per ounce of gold sold (2) |
$949 |
|
$950 |
|
$1,052 |
|
$944 |
|
Share Data |
|
|
|
|
Earnings per share, basic and diluted |
$0.17 |
|
$0.05 |
|
$0.17 |
|
$0.15 |
|
Adjusted earnings per share, basic and diluted(2) |
$0.15 |
|
$0.06 |
|
$0.25 |
|
$0.13 |
|
Weighted average common shares outstanding (basic) (000’s) |
|
391,553 |
|
|
390,593 |
|
|
391,325 |
|
|
389,852 |
|
Financial Position (in millions) |
|
|
|
|
Cash and cash equivalents (5) |
|
|
$274.1 |
|
$182.8 |
|
Debt and financing obligations (5) |
|
|
$100.0 |
|
|
$— |
|
(1) Cost of sales includes mining and
processing costs, royalties, and amortization expense. For the
three months and nine months ended September 30, 2020, cost of
sales also includes COVID-19 costs of $nil and $6.5 million,
respectively.(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 growth capital from
operating sites and excludes the Island Gold royalty repurchase of
$54.8 million in March 2020.(4) Includes capitalized
exploration at Mulatos and Island Gold.(5) Comparative
cash and cash equivalents and debt and financing obligations
balance as at December 31, 2019. The Company repaid the $100
million debt balance in October 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Gold production (ounces) |
|
|
|
|
|
|
|
|
Young-Davidson |
|
36,400 |
|
|
50,000 |
|
|
88,200 |
|
|
140,000 |
|
Mulatos |
|
41,100 |
|
|
32,700 |
|
|
119,600 |
|
|
107,900 |
|
Island Gold |
|
39,600 |
|
|
36,700 |
|
|
97,800 |
|
|
111,800 |
|
El Chanate (1) |
|
— |
|
|
2,500 |
|
|
800 |
|
|
12,700 |
|
Gold sales (ounces) |
|
|
|
|
|
|
|
|
Young-Davidson |
|
35,548 |
|
|
48,430 |
|
|
86,893 |
|
|
137,091 |
|
Mulatos |
|
41,165 |
|
|
31,164 |
|
|
118,592 |
|
|
107,369 |
|
Island Gold |
|
39,322 |
|
|
37,209 |
|
|
97,009 |
|
|
110,094 |
|
El Chanate (1) |
|
— |
|
|
2,589 |
|
|
— |
|
|
13,000 |
|
Cost of sales (in
millions)(2) |
|
|
|
|
|
|
|
|
Young-Davidson |
$50.5 |
|
$57.7 |
|
$140.5 |
|
$171.7 |
|
Mulatos |
$44.0 |
|
$33.5 |
|
$127.5 |
|
$103.1 |
|
Island Gold |
$28.1 |
|
$32.0 |
|
$78.2 |
|
$93.0 |
|
El Chanate (1) |
|
$— |
|
$4.1 |
|
|
$— |
|
$17.6 |
|
Cost of
sales per ounce of gold sold (includes amortization) |
|
|
|
|
|
|
|
Young-Davidson |
$1,421 |
|
$1,191 |
|
$1,617 |
|
$1,252 |
|
Mulatos |
$1,069 |
|
$1,075 |
|
$1,075 |
|
$960 |
|
Island Gold |
$715 |
|
$860 |
|
$806 |
|
$845 |
|
El Chanate (1) |
|
$— |
|
$1,584 |
|
|
$— |
|
$1,354 |
|
Total cash costs per ounce of gold sold
(3) |
|
|
|
|
|
|
|
|
Young-Davidson |
$923 |
|
$781 |
|
$1,145 |
|
$813 |
|
Mulatos |
$746 |
|
$866 |
|
$772 |
|
$772 |
|
Island Gold |
$394 |
|
$503 |
|
$438 |
|
$490 |
|
El Chanate (1) |
|
$— |
|
$1,429 |
|
|
$— |
|
$1,254 |
|
Mine-site
all-in sustaining costs per ounce of gold sold
(3),(4) |
|
|
|
|
|
|
|
Young-Davidson |
$1,196 |
|
$960 |
|
$1,370 |
|
$1,033 |
|
Mulatos |
$928 |
|
$979 |
|
$928 |
|
$861 |
|
Island Gold |
$575 |
|
$693 |
|
$653 |
|
$658 |
|
El Chanate (1) |
|
$— |
|
$1,506 |
|
|
$— |
|
$1,277 |
|
Capital expenditures
(sustaining, growth and capitalized exploration) (in
millions)(3) |
|
|
|
|
|
|
|
|
|
|
Young-Davidson |
$25.6 |
|
$23.9 |
|
$82.2 |
|
$72.9 |
|
Mulatos(5) |
$9.1 |
|
$12.9 |
|
$21.6 |
|
$44.7 |
|
Island Gold (6) |
$15.9 |
|
$13.8 |
|
$53.9 |
|
$44.2 |
|
Other |
$4.2 |
|
$15.7 |
|
$15.0 |
|
$28.9 |
|
(1) El Chanate transitioned to the
reclamation phase of the mine life in the fourth quarter of 2019.
Incremental production is a result of rinsing the leach pad. Gold
sales from El Chanate in 2020 are not included in revenue and cost
of sales.(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 $nil and $0.7 million for the three and nine months ended
September 30, 2020 (spending of $nil for the three and nine months
ended September 30, 2019).(6) Includes capitalized
exploration at Island Gold of $2.9 million and $8.1 million for the
three and nine months ended September 30, 2020 (for the three and
nine months ended September 30, 2019 - $4.3 million and $11.7
million), and excludes the royalty repurchase of $54.8 million.
Management's Response to the COVID-19
Pandemic
The World Health Organization declared COVID-19
a pandemic on March 11, 2020. The Company responded rapidly and
proactively and implemented several initiatives to help protect the
health and safety of our employees, their families and the
communities in which we operate.
Specifically, each of our operating mine sites
has activated established crisis management plans and developed
site-specific plans that enable them to meet and respond to
changing conditions associated with COVID-19. The Company is
adopting the advice of public health authorities and adhering to
government regulations with respect to COVID-19 in the
jurisdictions in which it operates.
The following measures have been instituted across the Company
to prevent the potential spread of the virus:
- Medical screening for all personnel
prior to entry to site for symptoms of COVID-19
- Testing of personnel at Mulatos and
Island Gold prior to starting their rotation at the camp
- Training on proper hand hygiene and
social distancing
- Remote work options have been
implemented for eligible employees
- Social distancing practices have
been implemented for all meetings, huddles and transportation
- Mandatory use of personal protective
equipment for employees where social distancing is not
practicable
- Rigid camp and site hygiene
protocols have been instituted and are being followed
- Elimination of all non-essential
business travel
- Required 14-day quarantine for any
employees returning from out of country travel
- In addition, since the COVID-19
pandemic began the Company’s teams in Canada, Mexico, and Turkey
have donated their time, medical supplies, food supplies and funds
to help combat the effects and spread of the virus
Impact on Operations
In order to protect nearby communities and align with government
requirements, two of the Company's mines were temporarily suspended
earlier in the year, but resumed normal operations during the
second quarter. During the temporary suspensions, indirect
production costs that exceeded normal operating capacity were
expensed as incurred and not included in the inventory valuation.
The Company identified indirect production costs of $5.4 million
that were directly expensed as COVID-19 costs as incurred in the
second quarter of 2020 and not included in inventory. All operating
costs incurred subsequent to the mine sites, returning to planned
operating levels have been included in mining and processing costs.
As a result, there were no amounts classified as COVID-19 costs for
the three months ended September 30, 2020.
In July 2020, the Company provided updated production and cost
guidance resulting from the impact of COVID-19 on the operations.
With operations at Mulatos and Island Gold having both been
suspended for more than a month and the completion of the lower
mine expansion at Young-Davidson delayed into July due to COVID-19,
consolidated 2020 production guidance was revised to 405,000 to
435,000 ounces.
In the third quarter of 2020, both Island Gold
and Mulatos continued to incur additional costs related to testing
of personnel, lodging and transportation, which have been included
in mining and processing costs rather than COVID-19 costs. These
incremental costs have increased total cash costs at these
operations by approximately $25 per ounce. These additional costs
are expected to be incurred throughout the fourth quarter and into
2021.
Outlook and Strategy
2020 Updated Guidance |
|
Young-Davidson |
Island Gold |
Mulatos |
Other(2) |
Total |
PreCOVID-19Guidance |
Gold
production (000’s ounces) |
135 - 145 |
130 - 140 |
140 - 150 |
|
405 - 435 |
425 - 465 |
Cost of sales, including amortization (in
millions)(4) |
$209 |
$113 |
$165 |
— |
$487 |
$491 |
Cost of sales, including
amortization ($ per ounce)(4) |
$1,490 |
$840 |
$1,135 |
— |
$1,160 |
$1,103 |
Total cash costs ($ per ounce)(1)(5) |
$990 - $1,030 |
$480 - $520 |
$840 - $880 |
— |
$780 - $820 |
$757 - $797 |
All-in sustaining costs ($ per ounce)(1)(5) |
|
|
|
|
$1,030 - $1,070 |
$1,007 -$1,047 |
Mine-site all-in sustaining costs ($ per
ounce)(1)(3)(5) |
$1,180 - $1,220 |
$740 - $780 |
$940 - $980 |
— |
|
|
Amortization costs ($ per ounce)(1) |
$480 |
$340 |
$275 |
— |
$365 |
$340 |
Capital expenditures (in
millions) |
|
|
|
|
|
|
Sustaining capital(1) |
$30 - $35 |
$35 - $40 |
$15 - $20 |
$— |
$80-$95 |
$80-$95 |
Growth capital(1) |
$45 - $50 |
$35 - $40 |
$15 - $20 |
$10 |
$105 - $120 |
$75-$85 |
Capitalized exploration(1) |
$1 |
$15 |
$— |
$4 |
$20 |
$25 |
Total capital expenditures and capitalized
exploration(1) |
$76 - 86 |
$85 - 95 |
$30 - 40 |
$14 |
$205 - $235 |
$180 - $205 |
(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 growth capital and capitalized
exploration at the Company's development projects (Turkey, Lynn
Lake, Esperanza and Quartz Mountain).(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) On March 16, 2020, the Company updated
total cash cost and AISC guidance to reflect the repurchase and
cancellation of a royalty at Island Gold.
The Company’s long-term strategic objective is
to generate increasing returns for its shareholders through
low-cost production and free cash flow growth from its portfolio of
operating mines and development projects. During the third quarter,
the Company delivered on several catalysts that form key parts of a
transformational year for Alamos and provide the foundation for the
Company's strong outlook. These include the announcement of a Phase
III expansion at Island Gold, a construction decision on the La
Yaqui Grande project, and the completion of the lower mine
expansion at Young-Davidson. The latter marked the transition to
strong free cash flow growth with all three operations contributing
to record free cash flow generation of $76.0 million during the
quarter.
The Company expects this strong free cash flow
to continue supporting higher dividends while also reinvesting in
high return internal growth projects, such as those at Island Gold
and Mulatos. These projects will in turn drive free cash flow
higher and support growing, sustainable returns to shareholders
over the long-term.
The record financial performance in the third
quarter reflected higher gold prices and a very strong operational
performance with production increasing 49% from the second quarter
to 117,100 ounces at significantly lower total cash costs of $681
per ounce. With fourth quarter production expected to be at similar
levels, the Company is well positioned to meet 2020 production and
cost guidance which had been revised in July given the impact of
COVID-19 on the second quarter.
Following the temporary operational suspensions
during the second quarter, all of the Company's mines are operating
at normal capacity, albeit under strict health and safety
protocols. These include regular testing for COVID-19 at a cost of
approximately $25 per ounce. These costs are expected to continue
through the fourth quarter and into 2021 with the Company's
foremost priority being to protect the health and safety of its
workforce, their families and communities.
Production increased significantly at
Young-Davidson compared to the second quarter following the
completion of the lower mine expansion and tie-in of the Northgate
shaft. This marked the end of a multi year expansion at
Young-Davidson and a step change for the operation. The lower mine
infrastructure has been operating as designed since completion in
July, with mining rates steadily increasing each month to average
over 6,700 tpd for the quarter. The transition to the lower mine
infrastructure drove production higher and costs lower, resulting
in the operation generating mine-site free cash flow of $10.8
million in the quarter. Mining rates are expected to increase to a
rate of 7,500 tpd by the end of 2020, driving strong free cash flow
growth from the operation in the fourth quarter and into 2021.
After temporarily suspending operations at
Island Gold on March 25, 2020 due to COVID-19, the Company began a
phased restart in early May and returned to normal operating levels
in June. Strong mining rates continued in the third quarter,
averaging 1,200 tpd. Combined with higher grades mined, Island Gold
generated record mine-site free cash flow of $40.8 million in the
quarter.
The Phase III expansion of Island Gold announced
in July has outlined a bigger, more profitable, long-life
operation. The expansion is expected to increase throughput rates
67% to 2,000 tpd, driving production significantly higher, at
industry low costs over a mine life that has doubled to 16 years.
This has driven a substantial increase in value with the expanded
operation having an estimated after-tax NPV of $1.02 billion at a
5% discount rate and base case gold price of $1,450 per ounce. At a
gold price of $1,750 per ounce, the after-tax NPV is $1.45 billion,
more than double the acquisition cost.
Exploration programs at Island Gold resumed in
June following the temporary suspension, with the focus on
continuing to expand mineralization and adding new near mine
Mineral Resources. In the third quarter, Island Gold reported the
best surface exploration hole to date, with high-grade
mineralization intersected across significantly greater widths
down-plunge from existing Mineral Resources in Island East (28.97
g/t Au (26.89 g/t cut) over 21.76 m (MH25-04)). The recent results
continue to demonstrate the significant potential for additional
growth in Mineral Reserves and Resources at the operation.
Mulatos began ramping up to full operations in
the latter part of May 2020 after the suspension of mining
activities in early April as mandated by the government due to
COVID-19. Following the restart, operations ramped up quickly with
mining and stacking rates reaching budgeted levels throughout the
third quarter. In addition, the impact of the rainy season was
minimal, as Mulatos produced 41,100 ounces in the third quarter at
significantly lower costs than guidance, generating mine-site free
cash flow of $30.9 million.
As announced in July, 2020, the Company is
proceeding with development of the high-return La Yaqui Grande
project located within the Mulatos District. With an after-tax IRR
of 41% and after-tax NPV of $165 million (assuming a $1,450 per
ounce gold price), La Yaqui Grande represents the next low-cost
source of production at Mulatos. Construction activities on La
Yaqui Grande commenced in the third quarter and are expected to
ramp up during the fourth quarter of 2020. Construction is expected
to take approximately 24 months to complete with initial production
in the second half of 2022. Given its lower costs, La Yaqui Grande
is expected to drive combined costs across the Mulatos District
lower.
The Company submitted its Environmental Impact
Statement ("EIS") for the Lynn Lake project in the second quarter
and continues along the anticipated two-year permitting process. In
Turkey, the Company is pursuing renewal of the mine concession for
the Kirazli project.
The Company's liquidity position remains strong,
ending the quarter with $274.1 million of cash and cash equivalents
and $100.0 million drawn on its $500.0 million revolving facility.
Given the strong free cash flow outlook, the Company repaid the
$100.0 million drawn on its revolving facility in October 2020 and
is currently debt-free. The Company expects strong ongoing free
cash flow generation in the fourth quarter and into 2021, and
remains well positioned to fund its internal growth
initiatives.
Third Quarter 2020
Results
Young-Davidson Financial and Operational
Review
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Gold production (ounces) |
|
36,400 |
|
|
50,000 |
|
|
88,200 |
|
|
140,000 |
|
Gold
sales (ounces) |
|
35,548 |
|
|
48,430 |
|
|
86,893 |
|
|
137,091 |
|
Financial Review (in millions) |
|
|
|
|
Operating Revenues |
$66.7 |
|
$70.2 |
|
$150.1 |
|
$186.2 |
|
Cost of sales (1) |
$50.5 |
|
$57.7 |
|
$140.5 |
|
$171.7 |
|
Earnings from operations |
$16.2 |
|
$12.5 |
|
$9.6 |
|
$14.5 |
|
Cash provided by operating
activities |
$36.4 |
|
$27.3 |
|
$51.0 |
|
$73.8 |
|
Capital expenditures
(sustaining) (2) |
$9.6 |
|
$8.6 |
|
$19.3 |
|
$29.8 |
|
Capital expenditures (growth)
(2) |
$16.0 |
|
$15.3 |
|
$62.9 |
|
$43.1 |
|
Mine-site free cash flow
(2) |
$10.8 |
|
$3.4 |
|
($31.2 |
) |
$0.9 |
|
Cost of sales, including amortization per ounce of gold sold
(1) |
$1,421 |
|
$1,191 |
|
$1,617 |
|
$1,252 |
|
Total cash costs per ounce of gold sold (2) |
$923 |
|
$781 |
|
$1,145 |
|
$813 |
|
Mine-site all-in sustaining costs per ounce of gold sold
(2),(3) |
$1,196 |
|
$960 |
|
$1,370 |
|
$1,033 |
|
Underground
Operations |
|
|
|
|
Tonnes of ore mined |
|
617,551 |
|
|
607,766 |
|
|
1,252,300 |
|
|
1,808,613 |
|
Tonnes of ore mined per day |
|
6,713 |
|
|
6,606 |
|
|
4,570 |
|
|
6,625 |
|
Average grade of gold (4) |
|
2.24 |
|
|
2.62 |
|
|
2.27 |
|
|
2.53 |
|
Metres developed |
|
3,231 |
|
|
2,817 |
|
|
9,326 |
|
|
8,594 |
|
Mill Operations |
|
|
|
|
Tonnes of ore processed |
|
591,544 |
|
|
655,443 |
|
|
1,451,577 |
|
|
1,949,316 |
|
Tonnes of ore processed per day |
|
6,430 |
|
|
7,124 |
|
|
5,298 |
|
|
7,140 |
|
Average grade of gold (4) |
|
2.19 |
|
|
2.48 |
|
|
2.01 |
|
|
2.40 |
|
Contained ounces milled |
|
41,598 |
|
|
52,233 |
|
|
93,959 |
|
|
150,409 |
|
Average recovery rate |
|
93 |
% |
|
92 |
% |
|
92 |
% |
|
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.(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 36,400 ounces of gold in
the third quarter of 2020, a decrease from the same period in 2019
due to lower grades mined and lower tonnes processed. This reflects
the planned downtime of the Northgate shaft in July to complete the
tie-in of the lower mine.
Following completion of the lower mine expansion
in July, underground mining rates increased through the quarter to
average 6,713 tpd. In September, underground mining rates increased
to average 8,000 tpd, with the operation benefiting from
significant broken ore inventory built up during the shutdown. This
strong performance demonstrates the expanded capacity of the
lower-mine infrastructure. Underground mining rates are expected to
increase to sustainable rates of 7,500 tpd by the end of 2020. The
average mined grade was 2.24 g/t Au in the quarter, lower than full
year guidance due to mine sequencing. Grades mined and processed
are expected to increase in the fourth quarter.
Mill throughput was 6,430 tpd in the third
quarter, a decrease from the same period of 2019 with low grade
surface stockpiles having been depleted in the second quarter of
2020. Mining rates temporarily exceeded milling rates in the third
quarter during which time excess underground ore was stockpiled.
These stockpiles will be processed in the fourth quarter. Mill
throughput is expected to equal underground mining rates moving
forward. Mill recoveries averaged 93% in the quarter, slightly
above the prior year period.
Young-Davidson is on track to meet production
guidance of between 135,000 and 145,000 ounces, with higher mining
rates and grades mined expected to drive a further increase in
production in the fourth quarter. Combined with lower mining costs
and capital spending, Young-Davidson is expected to generate
substantially higher free cash flow in the fourth quarter of
2020.
Financial Review
Third quarter revenues of $66.7 million were 5%
lower than the prior year quarter, reflecting a 27% decrease in
ounces sold, partially offset by a higher realized gold price.
Ounces sold decreased as a result of lower processing rates and
lower grades mined in the quarter. Revenues for the first nine
months of 2020 were also lower than the prior year period due to
the temporary shutdown of the Northgate shaft to complete the lower
mine expansion, which commenced in February and was completed in
July 2020.
Cost of sales (which includes mining and
processing costs, royalties, and amortization expense) of $50.5
million in the third quarter were lower than the comparative
quarter in 2019, due to lower processing rates and lower
underground mining costs. Underground mining cost per tonne
decreased to $45 CAD per tonne in the quarter, with the operation
beginning to realize the efficiencies of operating from the lower
mine infrastructure. Cost of sales for the nine months ended
September 30, 2020 of $140.5 million were lower than the prior year
period mainly due to lower underground mining rates during the
tie-in period from February through July 2020.
Total cash costs of $923 per ounce in the third
quarter were higher than the comparative period in 2019 due to a
15% reduction in grades mined, but substantially improved from the
first half of 2020 when fewer tonnes were mined. In addition, lower
grade stockpiled ore, which carries a higher cost per ounce, made
up a larger proportion of mill feed compared to the prior year.
Mine-site AISC of $1,196 per ounce in the third quarter were higher
than the comparative quarter in 2019, reflecting the impact of
higher total cash costs. Sustaining capital spending in the quarter
was lower than the prior year period, with spending focused on
growth projects including the completion of the lower mine
expansion and the new TIA-1 tailings facility. Capital expenditures
in the quarter included $9.6 million of sustaining capital and
$16.0 million of growth capital.
With the transition to the new lower mine
infrastructure and the associated reduction in underground mining
costs and lower capital, Young-Davidson generated mine-site free
cash flow of $10.8 million in the third quarter. Mining rates are
anticipated to improve further in the fourth quarter, driving
higher production and lower costs which is expected to result in
significant free cash flow growth.
Island Gold Financial and Operational
Review
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Gold production (ounces) |
|
39,600 |
|
|
36,700 |
|
|
97,800 |
|
|
111,800 |
|
Gold sales (ounces) |
|
39,322 |
|
|
37,209 |
|
|
97,009 |
|
|
110,094 |
|
Financial Review (in millions) |
|
|
|
|
Operating Revenues |
$74.1 |
|
$54.0 |
|
$167.4 |
|
$149.1 |
|
Cost of sales (1) |
$28.1 |
|
$32.0 |
|
$78.2 |
|
$93.0 |
|
Earnings from operations |
$45.9 |
|
$21.6 |
|
$88.7 |
|
$55.3 |
|
Cash provided by operating
activities |
$56.7 |
|
$40.6 |
|
$123.5 |
|
$99.3 |
|
Capital expenditures
(sustaining) (2) |
$7.0 |
|
$7.1 |
|
$20.7 |
|
$18.4 |
|
Capital expenditures (growth)
(2) |
$6.0 |
|
$2.4 |
|
$25.1 |
|
$14.1 |
|
Capital expenditures
(capitalized exploration) (2) |
$2.9 |
|
$4.3 |
|
$8.1 |
|
$11.7 |
|
Mine-site free cash flow
(2) |
$40.8 |
|
$26.8 |
|
$69.6 |
|
$55.1 |
|
Cost of sales, including amortization per ounce of gold sold
(1) |
$715 |
|
$860 |
|
$806 |
|
$845 |
|
Total cash costs per ounce of gold sold (2) |
$394 |
|
$503 |
|
$438 |
|
$490 |
|
Mine-site all-in sustaining costs per ounce of gold sold
(2),(3) |
$575 |
|
$693 |
|
$653 |
|
$658 |
|
Underground
Operations |
|
|
|
|
Tonnes of ore mined |
|
111,263 |
|
|
89,959 |
|
|
298,629 |
|
|
277,614 |
|
Tonnes of ore mined per day ("tpd") |
|
1,209 |
|
|
978 |
|
|
1,090 |
|
|
1,017 |
|
Average grade of gold (4) |
|
13.68 |
|
|
10.81 |
|
|
11.33 |
|
|
12.22 |
|
Metres developed |
|
1,430 |
|
|
1,211 |
|
|
4,313 |
|
|
4,200 |
|
Mill Operations |
|
|
|
|
Tonnes of ore processed |
|
101,447 |
|
|
102,564 |
|
|
281,082 |
|
|
307,364 |
|
Tonnes of ore processed per day |
|
1,103 |
|
|
1,115 |
|
|
1,026 |
|
|
1,126 |
|
Average grade of gold (4) |
|
13.62 |
|
|
11.12 |
|
|
11.52 |
|
|
11.49 |
|
Contained ounces milled |
|
44,414 |
|
|
36,675 |
|
|
104,072 |
|
|
113,560 |
|
Average recovery rate |
|
97 |
% |
|
97 |
% |
|
97 |
% |
|
97 |
% |
(1) Cost of sales includes mining and processing
costs, royalties, COVID-19 costs and maintenance costs 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.(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").
Island Gold produced a record 39,600 ounces in
the third quarter, an 8% increase from the comparative period in
2019, reflecting higher grades mined and processed. The operation
also generated record mine-site free cash flow of $40.8 million
driven by a significant reduction in total cash costs to $394 per
ounce. For the first nine months of 2020, Island Gold produced
97,800 ounces, and despite the temporary shutdown in the second
quarter in response to COVID-19, is well positioned to achieve
annual guidance of 130,000 to 140,000 ounces.
Underground mining rates averaged 1,209 tpd in
the quarter, a 24% increase from the prior year period and in line
with annual guidance of 1,200 tpd. Underground grades mined
averaged 13.68 g/t Au, above full year guidance due to mine
sequencing with higher grade transverse stopes mined in the
quarter. Mined grades are expected to return to full year guided
levels in the fourth quarter.
Mill throughput of 1,103 tpd in the third
quarter was consistent with the prior year period, but lower than
tonnes mined due to unplanned down time. A bearing on the primary
ball mill failed prematurely in mid-September, resulting in
approximately 8 days of downtime. The bearing was replaced with the
mill operating at budgeted levels before the end of September. Mill
recoveries of 97% were in line with the prior year quarter and
budget.
Phase III Expansion Study
On July 14, the Company reported results of the
positive Phase III Expansion Study conducted on its Island Gold
mine. Based on the results of the study, the Company is proceeding
with an expansion of the operation to 2,000 tpd. This follows a
detailed evaluation of several scenarios which demonstrated the
Shaft Expansion as the best option, having the strongest economics,
being the most efficient and productive, and the best positioned to
capitalize on further growth in Mineral Reserves and Resources.
Highlights of the study include the following:
- Average annual
gold production of 236,000 ounces per year starting in 2025
upon completion of the shaft. This represents a 72% increase from
the mid-point of initial 2020 production guidance
- Industry low
average total cash costs of $403 per ounce of gold and mine-site
all-in sustaining costs of $534 per ounce starting in 2025, a
19% and 30% decrease from the mid-point of 2020 guidance,
respectively
- After-tax net
present value (“NPV”) of $1.02 billion at a 5% discount rate
and an after-tax internal rate of return (“IRR”) of 17%, using a
base case gold price assumption of $1,450 per ounce and a USD/CAD
foreign exchange rate of $0.75:1
- After-tax NPV of
$1.45 billion and an after-tax IRR of 22%, at a 5% discount rate
using a gold price assumption of $1,750 per ounce and a USD/CAD
foreign exchange rate of $0.75:1
- Mine life of 16
years, double the current eight-year Mineral Reserve
life. This is based on a mineable Mineral Resource of 9.6
million tonnes grading 10.45 grams per tonne of gold (“g/t Au”)
containing 3.2 million ounces of gold
- Lowest combined
capital and operating costs of all scenarios evaluated. Total
life of mine capital of $1.07 billion including sustaining capital.
Higher life-of-mine growth capital of $514 million with the Shaft
Expansion is more than offset by the lowest sustaining capital and
operating costs of all scenarios evaluated.
For the remainder of 2020, the focus will be on
progressing permitting and detailed engineering on the shaft and
associated infrastructure. This includes the power supply upgrade
and planning for the procurement of long lead time items. All of
the Shaft Expansion permitting requirements are expected to be
completed in 2022.
Financial Review
Island Gold generated revenues of $74.1 million
in the third quarter, a 37% increase compared to the prior year
period, reflecting a 6% increase in ounces sold, and a
significantly higher realized gold price. For the first nine months
of 2020, revenues of $167.4 million were higher than the
comparative period as higher realized prices were partially offset
by lower sales due to the temporary suspension of operations for
part of the second quarter.
Cost of sales (includes mining and processing
costs, royalties, COVID-19 costs and amortization expense) of $28.1
million in the third quarter were 12% lower than the comparative
period of 2019. The decrease was driven by lower unit mining costs,
and lower royalty rates following the repurchase of a third-party
royalty earlier in the year. This was partially offset by the
inclusion of additional expenses in the quarter related to COVID-19
testing, transportation and lodging costs, which have been included
in mining and processing costs. All operating costs incurred
subsequent to the mine site returning to planned operating levels
have been included in mining and processing costs. As a result,
there were no amounts classified as COVID-19 costs for the three
months ended September 30, 2020. Cost of sales for the first nine
months of 2020 of $78.2 million were lower than the prior year for
similar reasons.
Total cash costs were $394 per ounce in the
third quarter, a 22% decrease from the comparative quarter in 2019,
driven by lower unit mining costs, significantly higher grades, and
a lower royalty charge per ounce. Mine-site AISC of $575 per ounce
in the third quarter were lower than the prior year period driven
by the lower total cash costs.
Total capital expenditures were $15.9 million in
the third quarter, including capitalized exploration. Spending was
focused on lateral development, camp improvements, tailings
construction, and the Phase III study. This included $7.0 million
of sustaining capital and $8.9 million of growth capital, inclusive
of capitalized exploration. Both capital and exploration spending
were lower than planned due to the timing of spending, and are
expected to increase in the fourth quarter. For the first nine
months of the year, capital spending was $53.9 million including
capitalized exploration, higher than the prior year period
reflecting spending on tailings construction and Phase III
engineering.
Earlier in 2020, the Company acquired and
canceled a 3% NSR royalty payable on a majority of production from
the Island Gold mine for cash consideration of $54.8 million. The
royalty was applicable to all future gold production from the
Goudreau Lake claims, which comprise the majority of the Island
Gold deposit. As of December 31, 2019, these claims
contained 0.9 million ounces of Mineral Reserves, representing
71% of Island Gold’s total Mineral Reserves, and 1.1 million ounces
of Inferred Mineral Resources. The acquisition of the royalty has
reduced total cash costs by $45 per ounce, and has reduced the
effective NSR royalty rate on Island Gold’s Mineral Reserves from
4.4% to 2.2%.
Island Gold generated record mine-site free cash
flow of $40.8 million during the third quarter and $69.6 million
for the first nine months of 2020 despite over one month of
downtime due to COVID-19, driven by strong operating margins. The
Company expects strong free cash flow to continue in the fourth
quarter, though lower than the third quarter due to planned higher
capital spending.
Mulatos Financial and
Operational Review
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Gold production (ounces) |
|
41,100 |
|
|
32,700 |
|
|
119,600 |
|
|
107,900 |
|
Gold
sales (ounces) |
|
41,165 |
|
|
31,164 |
|
|
118,592 |
|
|
107,369 |
|
Financial Review (in millions) |
|
|
|
|
Operating Revenues |
$77.6 |
|
$45.1 |
|
$204.0 |
|
$144.7 |
|
Cost of sales (1) |
$44.0 |
|
$33.5 |
|
$127.5 |
|
$103.1 |
|
Earnings from operations |
$32.7 |
|
$10.6 |
|
$73.9 |
|
$38.9 |
|
Cash provided by operating
activities |
$40.0 |
|
$7.2 |
|
$85.9 |
|
$31.0 |
|
Capital expenditures
(sustaining) (2) |
$6.1 |
|
$2.1 |
|
$14.6 |
|
$5.3 |
|
Capital expenditures (growth)
(2) |
$3.0 |
|
$10.8 |
|
$6.3 |
|
$39.4 |
|
Capital expenditures
(capitalized exploration) (2) |
|
$— |
|
|
$— |
|
$0.7 |
|
|
$— |
|
Mine-site free cash flow
(2) |
$30.9 |
|
($5.7 |
) |
$64.3 |
|
($13.7 |
) |
Cost of sales, including amortization per ounce of gold sold
(1) |
$1,069 |
|
$1,075 |
|
$1,075 |
|
$960 |
|
Total cash costs per ounce of gold sold (2) |
$746 |
|
$866 |
|
$772 |
|
$772 |
|
Mine
site all-in sustaining costs per ounce of gold sold (2),(3) |
$928 |
|
$979 |
|
$928 |
|
$861 |
|
Open Pit
Operations |
|
|
|
|
Tonnes of ore mined - open pit (4) |
|
1,320,034 |
|
|
1,664,898 |
|
|
4,370,921 |
|
|
5,608,221 |
|
Total waste mined - open pit (6) |
|
2,130,232 |
|
|
1,361,660 |
|
|
5,621,000 |
|
|
5,036,918 |
|
Total tonnes mined - open pit |
|
3,450,266 |
|
|
3,026,558 |
|
|
9,991,921 |
|
|
10,645,139 |
|
Waste-to-ore ratio (operating) |
|
0.76 |
|
|
0.63 |
|
|
0.70 |
|
|
0.66 |
|
Crushing and Heap
Leach Operations |
|
|
|
|
Tonnes of ore stacked |
|
1,894,725 |
|
|
1,628,401 |
|
|
5,338,725 |
|
|
5,466,393 |
|
Average grade of gold processed (5) |
|
0.91 |
|
|
0.81 |
|
|
1.17 |
|
|
0.92 |
|
Contained ounces stacked |
|
55,411 |
|
|
42,667 |
|
|
201,455 |
|
|
161,450 |
|
Average recovery rate |
|
74 |
% |
|
77 |
% |
|
59 |
% |
|
67 |
% |
Ore crushed per day (tonnes) - combined |
|
20,600 |
|
|
17,700 |
|
|
19,484 |
|
|
20,000 |
|
(1) Cost of sales includes mining and processing
costs, royalties, COVID-19 costs 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.(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").(6) Total waste mined includes operating waste and
capitalized stripping.
Mulatos produced 41,100 ounces in the third
quarter, 26% higher than the prior year quarter. The increase is
primarily due to the contribution of higher grade ore from Cerro
Pelon which commenced operations in the fourth quarter of 2019.
Production for the first nine months of 2020 was 119,600
ounces.
Total tonnes mined increased slightly compared
to the third quarter of 2019, reflecting increased stripping
activities at Cerro Pelon and the El Salto portion of the Mulatos
pit. Pre-stripping at El Salto and the excess tonnes of waste mined
above the life-of-mine waste-to-ore ratio at Cerro Pelon were
capitalized in the period. Tonnes of ore mined decreased compared
to the prior year period given the additional stripping
requirements in the current year.
Total crusher throughput in the third quarter
averaged 20,600 tpd for a total of 1,894,725 tonnes stacked at a
grade of 0.91 g/t Au. Tonnes stacked in the quarter exceeded tonnes
mined due to the processing of SAS stockpiles, and the minimal
impact of the rainy season on crusher performance in 2020. Grades
stacked were 12% higher than the comparative period of 2019,
reflecting the contribution of higher-grade ore from Cerro Pelon.
The recovery rate of 74% in the third quarter was in line with
budget bringing year-to-date recoveries to 59%. The decrease in
recoveries in the current year reflects both the timing of ore
stacked on the leach pad, as well as the stacking of some lower
recovery SAS ore. The Company expects full year recoveries to be in
line with guidance.
Financial Review
Third quarter revenues of $77.6 million were 72%
higher than the prior year quarter driven by a 32% increase in
ounces sold and higher realized gold prices. For the first nine
months of 2020, revenues of $204.0 million were 41% higher than the
prior year.
Cost of sales (includes mining and processing
costs, royalties, COVID-19 costs and amortization expense) of $44.0
million in the third quarter were $10.5 million higher than the
prior year quarter. Mining and processing costs were higher due to
higher inventory costs associated with an increase in ounces sold,
as well as higher mining cost per tonne related to longer haulage
distances. Mulatos continued to incur COVID-19 testing,
transportation and lodging costs in the third quarter, which have
been included in mining and processing costs. All operating costs
incurred subsequent to the mine site returning to planned operating
levels have been included in mining and processing costs. As a
result, there were no amounts classified as COVID-19 costs for the
three months ended September 30, 2020. On a per ounce basis, cost
of sales decreased in the third quarter of 2020 compared to the
prior year period due to higher grades processed, offset by higher
depreciation related to Cerro Pelon production. Cost of sales for
the first nine months of 2020 of $127.5 million were 24% higher
than the prior year.
Total cash costs in the quarter and year-to-date
were lower compared to the prior year as a result of higher grades
stacked, driven by Cerro Pelon. Total capital spending for the
quarter was $9.1 million, of which $6.1 million was sustaining
capital primarily relating to capitalized stripping at El Salto and
Cerro Pelon. Mine-site AISC of $928 per ounce was lower than the
prior year period of $979 per ounce driven by lower total cash
costs. Capital spending in 2020 was lower than the comparative
period, as 2019 capital included the construction of Cerro
Pelon.
Mulatos generated mine-site free cash-flow of
$30.9 million in the third quarter, a significant improvement from
the prior year period. The increase in cash flow was driven by
increased operating margins and higher ounces sold. For the first
nine months of 2020, Mulatos generated $64.3 million in free cash
flow.
Third Quarter 2020 Development Activities
Mulatos District
(Sonora, Mexico)
La Yaqui Grande
On July 28, 2020, the Company reported results
of an internal study completed on its fully permitted La Yaqui
Grande project located in the Mulatos District in Sonora, Mexico.
La Yaqui Grande is located approximately 7 kilometres (straight
line) from the existing Mulatos operation and adjacent to the past
producing La Yaqui Phase I operation. As with La Yaqui Phase I, La
Yaqui Grande will be developed with an independent heap leach pad
and crushing circuit. Construction activities began ramping up
during the third quarter with initial production expected in the
second half of 2022.
La Yaqui Grande Project Highlights:
- Average annual gold production of
123,000 ounces per year starting in the third quarter of 2022. This
will replace higher cost production from the main Mulatos pit,
keeping combined production at approximately 150,000 ounces per
year
- Mine-site all-in sustaining costs of
$578 per ounce, significantly reducing Mulatos District all-in
sustaining costs from the mid-point of previous 2020 guidance of
$960 per ounce
- After-tax net present value (“NPV”)
of $165 million at a 5% discount rate and an after-tax internal
rate of return (“IRR”) of 41%, using a base case gold price
assumption of $1,450 per ounce and a MXN/USD foreign exchange rate
of 21:1
- After-tax NPV of $260 million and an
after-tax IRR of 58% at a 5% discount rate using a gold price
assumption of $1,750 per ounce and a MXN/USD foreign exchange rate
of 21:1
- Mine life of five years, extending
production from the Mulatos District to 2027, based on current
Mineral Reserves
- Initial capital of $137 million to
be spent over a two year period starting in the second half of
2020. At a $1,750 per ounce gold price, Mulatos is expected to self
finance the development of La Yaqui Grande following which the
operation is expected to generate strong free cash flow
During the third quarter, the Company incurred
$2.3 million ($4.2 million for the first nine months of 2020)
focused on detailed engineering, initial camp construction, and
clearing and grubbing the pit area. The Company expects to spend
approximately $10 million in the fourth quarter of 2020 focused on
construction of haul roads and initial stripping activities.
La Yaqui Grande Site Overview
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/39979c13-e430-473c-9721-f110767cd716
Kirazlı
(Çanakkale, Turkey)
On October 14, 2019, the Company suspended all
construction activities on its Kirazlı project pending the renewal
of its Turkish mining concessions which expired on October 13,
2019. Although the mining concessions have not been revoked and can
be renewed following this expiration date, no further construction
activities can be completed until the concessions have been
renewed.
The Company has met all the regulatory
requirements and conditions for the concessions to be renewed and
reasonably expected the renewal by the expiration date. The
communities local to the Kirazlı project remain supportive. As
such, the Company is working with the Turkish Department of Energy
and Natural Resources on securing the renewal of the mining
concessions which will allow for a resumption of construction
activities. The renewal is required from the same government
department that granted the Operating Permit for Kirazlı in March
2019. The Company will provide updated guidance on the construction
schedule and budget for Kirazlı following the receipt of the
concession renewal and resumption of construction activities.
The Company spent $1.3 million at Kirazlı during
the third quarter of 2020, and $4.9 million for the first nine
months of 2020.
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 at
average mine-site all-in sustaining costs of $745 per ounce.
The project economics based on the 2017
Feasibility Study at $1,500 per ounce gold price include an
after-tax IRR of 21.5% and an after-tax NPV of $290 million (12.5%
IRR at a $1,250 per ounce gold price). During the second quarter of
2020, the Company filed the Environmental Impact Statement ("EIS")
with the federal government. The federal and provincial permitting
process is expected to take approximately two years, with a
construction decision planned for 2022.
Development spending (excluding exploration) was
$0.6 million in the third quarter of 2020 and $3.4 million for the
first nine months of 2020. Spending earlier in the year was
primarily related to baseline work and preparation of the EIS
submission.
Third Quarter 2020 Exploration Activities
Island Gold (Ontario, Canada)
The 2020 exploration drilling program is focused
on continuing to expand the down-plunge and lateral extensions of
the Island Gold deposit with the objective of adding new near mine
Mineral Resources across the two-kilometre long Island Gold Main
Zone.
Underground diamond drilling program continued
through the third quarter with four drill rigs currently operating,
including two focused on underground directional drilling. The
surface directional diamond drilling program resumed in early June,
after being suspended in April 2020 due to COVID-19, with three
surface diamond drill rigs active throughout the third quarter.
An initial 4,000 m regional exploration program
is also planned in the fourth quarter of 2020 focused on evaluating
and advancing exploration targets outside the main Island Gold Mine
area on the 9,511-hectare Island Gold Property.
Surface exploration drilling
A total of 5,539 m was completed in six holes
during the third quarter as part of the surface directional
drilling program. 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 that was
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.
Previously reported highlights in the third
quarter from the surface drilling program in Island Lower East
(E1E-Zone) include:
- 28.97 g/t Au (26.89 g/t cut) over
21.76 m (true width) (MH25-04); and
- 15.38 g/t Au (14.19 g/t cut) over
15.02 m (true width) (MH25-03).
Drill holes MH25-03 and MH25-04 intersected
wide, high-grade gold mineralization 40 m and 100 m, respectively
down-plunge from the high-grade Inferred Mineral Resource block
which contained 719,800 ounces, grading 18.74 g/t Au (1.2 million
tonnes) as of December 31, 2019. These intercepts have true widths
approximately three to four times greater than the 5.3 m average
width of this Inferred Mineral Resource block indicating the zone
has widened in the area of these holes. Using the cut weighted gold
grade for metal factor calculation, drill hole MH25-04 is the best
surface directional hole drilled to date at Island Gold in terms of
gold content for a drill hole intersect.
Underground exploration drilling
During the third quarter of 2020, a total of
8,262 m of underground exploration drilling was completed in 21
holes from the 620, 740 and 840 levels. The objective of the
underground drilling is to identify new Mineral Resources close to
existing Mineral Resource or Reserve blocks. A total of 34 m of
underground exploration drift development was completed on the 340,
740, and 840 levels during the third quarter of 2020.
Total exploration expenditures during the third
quarter were $3.0 million, of which $2.9 million was capitalized.
For the first nine months of 2020, $8.6 million was spent, of which
$8.1 million was capitalized.
Mulatos District
(Sonora, Mexico)
The Company has a large exploration package
covering 28,972 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 is
focused on earlier stage prospects throughout the wider
district.
Exploration activities were suspended at the
beginning of the second quarter of 2020 in response to COVID-19. As
a result, limited exploration activities were undertaken in the
third quarter. Exploration activities restarted early in the fourth
quarter of 2020, primarily at El Carricito. During the third
quarter, the Company incurred $0.6 million, mainly related to
administrative costs. For the first nine months of 2020,
exploration expenditures were $3.3 million, of which $0.7 million
was capitalized related to La Yaqui Grande project.
Lynn Lake (Manitoba,
Canada)
Exploration activities at the Lynn Lake Project
were restarted in mid-July after being suspended in March due to
COVID-19. In the third quarter of 2020, 4,907 m of drilling was
completed in 19 holes. Field work in the third quarter was focused
on advancing a pipeline of prospective regional exploration
targets. Exploration spending totaled $1.3 million in the third
quarter and $3.5 million for the first nine months of 2020.
Review of Third Quarter Financial Results
During the third quarter of 2020, the Company
sold 116,035 ounces of gold for revenue of $218.4 million, a 26%
increase from the prior year period driven by higher realized gold
prices. Ounces sold were consistent with the prior year period,
with lower production at Young-Davidson offset by higher production
at Mulatos and Island Gold. All operations successfully mitigated
the impact of COVID-19 on production and sales in the third
quarter.
The average realized gold price in the third
quarter was $1,882 per ounce, a 30% increase compared to $1,448 per
ounce realized in the prior year period. The average realized gold
price was below the average London PM Fix price of $1,909 per ounce
due to the impact of gold hedges entered into earlier in the
year.
Cost of sales were $122.6 million in the third
quarter, a 4% decrease compared to the prior year period, driven by
lower mining and processing costs at Island Gold and
Young-Davidson, partially offset by higher amortization costs.
Mining and processing costs were $76.2 million,
8% lower than the comparative period, driven by lower mining costs
at Young-Davidson as operations commenced from the more efficient
lower mine infrastructure in July, and lower mining costs at Island
Gold. For the three months ended September 30, 2020, mining and
processing costs included COVID-19 testing and other incremental
costs, which have been included in total cash costs for the period.
All operating costs incurred subsequent to the mine-sites returning
to planned operating levels at the end of the second quarter have
been included in mining and processing costs and have not been
separately classified.
Consolidated total cash costs for the quarter
were $681 per ounce, a 7% decrease compared to $730 per ounce in
the prior year period, driven by record low total cash costs at
Island Gold of $394 per ounce. Offsetting this was higher total
cash costs per ounce at Young-Davidson as a result of lower grades
mined in the quarter.
AISC were $949 per ounce in the quarter,
consistent with the comparative period in 2019 as lower total cash
costs were offset by higher sustaining capital, mainly attributable
to stripping activities at Mulatos.
Royalty expense was $2.8 million in the quarter,
lower than the prior year period of $4.2 million due to a reduced
royalty obligation at Island Gold following the repurchase of a
royalty earlier this year. The repurchase reduced the effective
royalty rate on Mineral Reserves from 4.4% to 2.2% at Island
Gold.
Amortization of $43.6 million in the quarter was
higher than the prior year period due to higher amortization
charges at Young-Davidson and Mulatos. Amortization of $375 per
ounce was $39 per ounce higher than the prior year, reflecting the
higher contribution of Cerro Pelon production at Mulatos which
carries a higher amortization per ounce expense, and the start of
amortization of the lower-mine infrastructure at Young-Davidson
following completion in July 2020.
The Company recognized earnings from operations
of $88.0 million in the quarter, 135% higher than the prior year
period due to improved operating margins driven by an increase in
realized gold prices and a reduction in total cash costs.
The Company reported net earnings of $67.9
million in the quarter, compared to net earnings of $17.7 million
in the comparative period. Net earnings benefited from an
increasing gold price as well as the strengthening Canadian dollar
and Mexican Peso, which resulted in a $0.8 million foreign exchange
gain, as well as a $9.9 million foreign exchange gain recorded
within deferred tax expense. On an adjusted basis, earnings of
$56.9 million or $0.15 per share were 150% higher compared to the
prior year primarily driven by improved operating margins. Adjusted
earnings reflect adjustments for one-time gains and losses, as well
as foreign exchange movements.
Associated Documents
This press release should be read in conjunction
with the Company’s interim consolidated financial statements for
the three-month period ended September 30, 2020 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 Third
Quarter 2020 Results
Conference Call
The Company's senior management will host a
conference call on Thursday, October 29, 2020 at 10:00 am ET to
discuss the third quarter 2020 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 November 29,
2020 by dialling (905) 694-9451 or (800) 408-3053 within Canada and
the United States. The pass code is 6141441#. 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 three operating mines in
North America. This includes the Young-Davidson and Island Gold
mines in northern Ontario, Canada and the Mulatos mine 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
The TSX and NYSE have not reviewed and do not accept
responsibility for the adequacy or accuracy of this
release.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains or incorporates by
reference “forward-looking statements” and “forward-looking
information” as defined under applicable Canadian and U.S.
securities legislation. All statements, other than statements of
historical fact, which address events, results, outcomes or
developments 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", "intend", "estimate", "forecast", "budget", “target”,
“outlook”, “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.
Such 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.
Alamos cautions that 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); operations may be exposed to new diseases, epidemics
and pandemics, including the effects and potential effects of the
global COVID-19 widespread pandemic; the impact of the COVID-19
pandemic on the broader market and the trading price of the
Company's shares; provincial and federal orders or mandates
(including with respect to mining operations generally or auxiliary
businesses or services required for our operations) in Canada,
Mexico, the United States and Turkey; the duration of regulatory
responses to the COVID-19 pandemic; governments and the Company’s
attempts to reduce the spread of COVID-19 which may affect many
aspects of the Company's operations including the ability to
transport personnel to and from site, contractor and supply
availability and the ability to sell or deliver gold dore bars;
fluctuations in the price of gold or certain other commodities such
as, diesel fuel, natural gas, and electricity; changes in foreign
exchange rates (particularly the Canadian Dollar, Mexican Peso,
U.S. Dollar and Turkish Lira); the impact of inflation; changes in
our credit rating; any decision to declare a quarterly dividend;
employee and community relations (including maintaining social
license to operate in Turkey); litigation and administrative
proceedings; disruptions affecting operations; availability of and
increased costs associated with mining inputs and labour;
development delays at the Kirazlı project or those that may be
related to future developments and expansion at the Island Gold
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 and
maintaining necessary licenses and permits, including the necessary
licenses, permits, authorizations and/or approvals from the
appropriate regulatory authorities for the Company’s development
stage and operating assets, including the renewal of the Company’s
mining concessions in Turkey; the timely resumption of construction
and development at the Kirazlı project; labour and contractor
availability (and being able to secure the same on favourable
terms); contests over title to properties; expropriation or
nationalization of property; inherent risks and hazards associated
with mining including environmental hazards, industrial accidents,
unusual or unexpected formations, pressures and cave-ins; changes
in national and local government legislation (including tax
legislation), controls or regulations in Canada, Mexico, Turkey,
the United States and other jurisdictions in which the Company does
or may carry on business in the future; increased costs and risks
related to the potential impact of climate change; failure to
comply with environmental and health and safety laws and
regulations; disruptions in the maintenance or provision of
required infrastructure and information technology systems; risk of
loss due to sabotage, protests and other 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’s ability to achieve the
expectations set forth in the forward-looking statements contained
in this press release are set out in the Company's 40-F/Annual
Information Form for the year ended December 31, 2019 under the
heading “Risk Factors”, which is available on the SEDAR website at
www.sedar.com or on EDGAR at www.sec.gov. The foregoing should be
reviewed in conjunction with the information found in this press
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
Unless otherwise indicated, all Mineral Resource
and Mineral Reserve estimates included in this press release have
been prepared in accordance with National Instrument 43-101 -
Standards of Disclosure for Mineral Projects (“NI
43-101”) and the Canadian Institute of Mining, Metallurgy
and Petroleum (the “CIM”) - CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the
CIM Council, as amended (the “CIM Standards”).
NI 43-101 is a rule developed by the Canadian
Securities Administrators, which established standards for all
public disclosure an issuer makes of scientific and technical
information concerning mineral projects. The terms “Mineral
Reserve”, “Proven Mineral Reserve” and “Probable Mineral Reserve”
are Canadian mining terms as defined in accordance with NI 43-101
and the CIM Standards. These definitions differ materially from the
definitions in SEC Industry Guide 7 (“SEC Industry Guide 7”) under
the United States Securities Exchange Act of 1934, as amended.
Under SEC (defined below) Industry Guide 7 standards, a “final” or
“bankable” feasibility study is required to report Mineral
Reserves, the three-year historical average price is used in any
reserve or cash flow analysis to designate reserves and the primary
environmental analysis or report must be filed with the appropriate
governmental authority. In addition, the terms “Mineral Resource”,
“Measured Mineral Resource”, “Indicated Mineral Resource” and
“Inferred Mineral Resource” are defined in and required to be
disclosed by NI 43-101 and the CIM Standards; however, these terms
are not defined terms under SEC Industry Guide 7 and are normally
not permitted to be used in reports and registration statements
filed with the U.S. Securities and Exchange Commission (the “SEC”).
Investors are cautioned not to assume that all or any part of
mineral deposits in these categories will ever be converted into
Mineral Reserves. “Inferred Mineral Resources” have a great amount
of uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an Inferred Mineral Resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of Inferred
Mineral Resources may not form the basis of feasibility or
pre-feasibility studies, except in very limited circumstances.
Investors are cautioned not to assume that all
or any part of an Inferred Mineral Resource exists or is
economically or legally mineable. Disclosure of “contained ounces”
in a Mineral Resource is permitted disclosure under Canadian
regulations; however, the SEC normally only permits issuers to
report mineralization that does not constitute “Mineral Reserves”
by SEC standards as in place tonnage and grade without reference to
unit measures. The SEC has adopted final rules, effective February
25, 2019, to replace SEC Industry Guide 7 with new mining
disclosure rules under sub-part 1300 of Regulation S-K of the U.S.
Securities Act (the “SEC Modernization Rules”).
The SEC Modernization Rules replace the historical property
disclosure requirements included in SEC Industry Guide 7. As a
result of the adoption of the SEC Modernization Rules, the SEC now
recognizes estimates of “Measured Mineral Resources”, “Indicated
Mineral Resources” and “Inferred Mineral Resources”. In addition,
the SEC has amended its definitions of “Proven Mineral Reserves”
and “Probable Mineral Reserves” to be substantially similar to
international standards. The SEC Modernization Rules will become
mandatory for U.S. reporting companies beginning with the first
fiscal year commencing on or after January 1, 2021.
International Financial Reporting
Standards: The condensed consolidated financial statements
of the Company have been prepared by management in accordance with
International Accounting Standard 34, Interim Financial Reporting,
as issued by the International Accounting Standards Board. These
accounting principles differ in certain material respects from
accounting principles generally accepted in the United States of
America. The Company’s reporting currency is the United States
dollar unless otherwise noted.
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;
- net cash;
- 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 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 gain
(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 September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net earnings |
$67.9 |
|
$17.7 |
|
$67.3 |
|
$58.1 |
|
Adjustments: |
|
|
|
|
COVID-19 costs |
|
— |
|
|
— |
|
|
6.5 |
|
|
— |
|
Foreign exchange (gain) loss |
|
(0.8 |
) |
|
— |
|
|
4.1 |
|
|
(0.3 |
) |
Other loss (gain) |
|
1.9 |
|
|
(0.8 |
) |
|
6.8 |
|
|
(2.5 |
) |
Unrealized foreign exchange (gain) loss recorded in deferred tax
expense |
|
(9.9 |
) |
|
6.5 |
|
|
16.8 |
|
|
(4.6 |
) |
Other income tax and mining tax adjustments |
|
(2.2 |
) |
|
— |
|
|
(5.3 |
) |
|
0.7 |
|
Adjusted net earnings |
$56.9 |
|
$23.4 |
|
$96.2 |
|
$51.4 |
|
Adjusted earnings per share - basic and diluted |
$0.15 |
|
$0.06 |
|
$0.25 |
|
$0.13 |
|
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 September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Cash flow from operating activities |
$130.8 |
|
$67.9 |
|
$237.0 |
|
$182.6 |
|
Add (less): Changes in working
capital and cash taxes |
|
(0.8 |
) |
|
12.3 |
|
|
19.4 |
|
|
28.8 |
|
Cash flow from operating activities before changes in
working capital and cash taxes |
$130.0 |
|
$80.2 |
|
$256.4 |
|
$211.4 |
|
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 September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Cash flow from operating activities |
$130.8 |
|
$67.9 |
|
$237.0 |
|
$182.6 |
|
Less: mineral property, plant
and equipment expenditures |
|
(54.8 |
) |
|
(66.3 |
) |
|
(172.7 |
) |
|
(190.7 |
) |
Company-wide free cash flow |
$76.0 |
|
$1.6 |
|
$64.3 |
|
($8.1 |
) |
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 September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
|
|
Cash flow from operating
activities |
$130.8 |
|
$67.9 |
|
$237.0 |
|
$182.6 |
|
Add: operating cash flow used
by non-mine site activity |
|
2.3 |
|
|
6.2 |
|
|
23.4 |
|
|
22.7 |
|
Cash flow from operating mine-sites |
$133.1 |
|
$74.1 |
|
$260.4 |
|
$205.3 |
|
|
|
|
|
|
Mineral property, plant and
equipment expenditure 1 |
$54.8 |
|
$66.3 |
|
$172.7 |
|
$190.7 |
|
Less: capital expenditures
from development projects, and corporate |
|
(4.2 |
) |
|
(15.7 |
) |
|
(15.0 |
) |
|
(28.9 |
) |
Capital expenditure from mine-sites |
$50.6 |
|
$50.6 |
|
$157.7 |
|
$161.8 |
|
|
|
|
|
|
Total mine-site free cash flow |
$82.5 |
|
$23.5 |
|
$102.7 |
|
$43.5 |
|
(1) Excludes royalty repurchase of $54.8 million at
Island Gold in the first quarter of 2020
Young-Davidson Mine-Site Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
|
|
Cash flow from operating
activities |
$36.4 |
|
$27.3 |
|
$51.0 |
|
$73.8 |
|
Mineral property, plant and
equipment expenditure |
|
(25.6 |
) |
|
(23.9 |
) |
|
(82.2 |
) |
|
(72.9 |
) |
Mine-site free cash flow |
$10.8 |
|
$3.4 |
|
($31.2 |
) |
$0.9 |
|
Mulatos Mine-Site Free Cash
Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operating
activities |
$40.0 |
|
$7.2 |
|
$85.9 |
|
$31.0 |
|
Mineral property, plant and
equipment expenditure |
|
(9.1 |
) |
|
(12.9 |
) |
|
(21.6 |
) |
|
(44.7 |
) |
Mine-site free cash flow |
$30.9 |
|
($5.7 |
) |
$64.3 |
|
($13.7 |
) |
Island Gold Mine-Site Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
|
|
Cash flow from operating
activities |
$56.7 |
|
$40.6 |
|
$123.5 |
|
$99.3 |
|
Mineral property, plant and
equipment expenditure 1 |
|
(15.9 |
) |
|
(13.8 |
) |
|
(53.9 |
) |
|
(44.2 |
) |
Mine-site free cash flow |
$40.8 |
|
$26.8 |
|
$69.6 |
|
$55.1 |
|
(1) Excludes royalty repurchase of $54.8 million at
Island Gold that occurred in March 2020
Net Cash
The Company defines net cash as cash and cash equivalents less
long-term debt, as this metric reflects the financial position at
the end of the period and the ability to fund its future
development.
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. This
metric excludes COVID-19 costs incurred in the period. 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 September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(in millions, except ounces
and per ounce figures) |
|
|
|
|
|
|
|
|
|
|
|
|
Mining and processing |
$76.2 |
|
$83.0 |
|
$226.6 |
|
$251.6 |
|
Royalties |
|
2.8 |
|
|
4.2 |
|
|
6.9 |
|
|
13.0 |
|
Total cash costs |
$79.0 |
|
$87.2 |
|
$233.5 |
|
$264.6 |
|
Gold
ounces sold |
|
116,035 |
|
|
119,392 |
|
|
302,494 |
|
|
367,554 |
|
Total cash costs per ounce |
$681 |
|
$730 |
|
$772 |
|
$720 |
|
|
|
|
|
|
Total cash costs |
$79.0 |
|
$87.2 |
|
$233.5 |
|
$264.6 |
|
Corporate and
administrative(1) |
|
5.0 |
|
|
4.5 |
|
|
15.3 |
|
|
14.6 |
|
Sustaining capital
expenditures(2) |
|
22.7 |
|
|
17.8 |
|
|
54.6 |
|
|
53.5 |
|
Share-based compensation |
|
1.3 |
|
|
1.7 |
|
|
9.1 |
|
|
7.7 |
|
Sustaining exploration |
|
1.3 |
|
|
1.4 |
|
|
3.8 |
|
|
4.2 |
|
Accretion of decommissioning
liabilities |
|
0.8 |
|
|
0.8 |
|
|
2.0 |
|
|
2.2 |
|
Total all-in sustaining costs |
$110.1 |
|
$113.4 |
|
$318.3 |
|
$346.8 |
|
Gold ounces sold |
|
116,035 |
|
|
119,392 |
|
|
302,494 |
|
|
367,554 |
|
All-in sustaining costs per ounce |
$949 |
|
$950 |
|
$1,052 |
|
$944 |
|
(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 September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
|
|
Capital expenditures per cash
flow statement |
$54.8 |
|
$66.3 |
|
$172.7 |
|
$190.7 |
|
Less: non-sustaining capital
expenditures at: |
|
|
|
|
Young-Davidson |
|
(16.0 |
) |
|
(15.3 |
) |
|
(62.9 |
) |
|
(43.1 |
) |
Mulatos |
|
(3.0 |
) |
|
(10.8 |
) |
|
(7.0 |
) |
|
(39.4 |
) |
Island Gold |
|
(8.9 |
) |
|
(6.7 |
) |
|
(33.2 |
) |
|
(25.8 |
) |
Corporate and other |
|
(4.2 |
) |
|
(15.7 |
) |
|
(15.0 |
) |
|
(28.9 |
) |
Sustaining capital expenditures |
$22.7 |
|
$17.8 |
|
$54.6 |
|
$53.5 |
|
Young-Davidson Total Cash Costs and Mine-site AISC
Reconciliation |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(in millions, except ounces
and per ounce figures) |
|
|
|
|
Mining and processing |
$31.8 |
|
$36.6 |
|
$97.0 |
|
$108.5 |
|
Royalties |
|
1.0 |
|
|
1.2 |
|
|
2.5 |
|
|
2.9 |
|
Total cash costs |
$32.8 |
|
$37.8 |
|
$99.5 |
|
$111.4 |
|
Gold
ounces sold |
|
35,548 |
|
|
48,430 |
|
|
86,893 |
|
|
137,091 |
|
Total cash costs per ounce |
$923 |
|
$781 |
|
$1,145 |
|
$813 |
|
|
|
|
|
|
Total cash costs |
$32.8 |
|
$37.8 |
|
$99.5 |
|
$111.4 |
|
Sustaining capital
expenditures |
|
9.6 |
|
|
8.6 |
|
|
19.3 |
|
|
29.8 |
|
Sustaining exploration |
|
— |
|
|
0.1 |
|
|
— |
|
|
0.3 |
|
Accretion of decommissioning
liabilities |
|
0.1 |
|
|
— |
|
|
0.2 |
|
|
0.1 |
|
Total all-in sustaining costs |
$42.5 |
|
$46.5 |
|
$119.0 |
|
$141.6 |
|
Gold ounces sold |
|
35,548 |
|
|
48,430 |
|
|
86,893 |
|
|
137,091 |
|
Mine-site all-in sustaining costs per ounce |
$1,196 |
|
$960 |
|
$1,370 |
|
$1,033 |
|
Mulatos Total Cash Costs and Mine-site
AISC Reconciliation |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(in millions, except ounces
and per ounce figures) |
|
|
|
|
Mining and processing |
$30.3 |
|
$26.7 |
|
$90.5 |
|
$80.0 |
|
Royalties |
|
0.4 |
|
|
0.3 |
|
|
1.0 |
|
|
2.9 |
|
Total cash costs |
$30.7 |
|
$27.0 |
|
$91.5 |
|
$82.9 |
|
Gold
ounces sold |
|
41,165 |
|
|
31,164 |
|
|
118,592 |
|
|
107,369 |
|
Total cash costs per ounce |
$746 |
|
$866 |
|
$772 |
|
$772 |
|
|
|
|
|
|
Total cash costs |
$30.7 |
|
$27.0 |
|
$91.5 |
|
$82.9 |
|
Sustaining capital
expenditures |
|
6.1 |
|
|
2.1 |
|
|
14.6 |
|
|
5.3 |
|
Sustaining exploration |
|
0.8 |
|
|
0.8 |
|
|
2.3 |
|
|
2.4 |
|
Accretion of decommissioning
liabilities |
|
0.6 |
|
|
0.6 |
|
|
1.7 |
|
|
1.8 |
|
Total all-in sustaining costs |
$38.2 |
|
$30.5 |
|
$110.1 |
|
$92.4 |
|
Gold ounces sold |
|
41,165 |
|
|
31,164 |
|
|
118,592 |
|
|
107,369 |
|
Mine-site all-in sustaining costs per ounce |
$928 |
|
$979 |
|
$928 |
|
$861 |
|
Island
Gold Total Cash Costs and Mine-site AISC
Reconciliation |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(in millions, except ounces
and per ounce figures) |
|
|
|
|
Mining and processing |
$14.1 |
|
$16.0 |
|
$39.1 |
|
$46.8 |
|
Royalties |
|
1.4 |
|
|
2.7 |
|
|
3.4 |
|
|
7.2 |
|
Total cash costs |
$15.5 |
|
$18.7 |
|
$42.5 |
|
$54.0 |
|
Gold
ounces sold |
|
39,322 |
|
|
37,209 |
|
|
97,009 |
|
|
110,094 |
|
Total cash costs per ounce |
$394 |
|
$503 |
|
$438 |
|
$490 |
|
|
|
|
|
|
Total cash costs |
$15.5 |
|
$18.7 |
|
$42.5 |
|
$54.0 |
|
Sustaining capital
expenditures |
|
7.0 |
|
|
7.1 |
|
|
20.7 |
|
|
18.4 |
|
Total all-in sustaining costs |
$22.6 |
|
$25.8 |
|
$63.3 |
|
$72.4 |
|
Gold ounces sold |
|
39,322 |
|
|
37,209 |
|
|
97,009 |
|
|
110,094 |
|
Mine-site all-in sustaining costs per ounce |
$575 |
|
$693 |
|
$653 |
|
$658 |
|
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 September 30, |
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net earnings |
$67.9 |
|
$17.7 |
|
$67.3 |
|
$58.1 |
|
Add back: |
|
|
|
|
COVID-19 costs |
|
— |
|
|
— |
|
|
6.5 |
|
|
— |
|
Finance expense |
|
1.0 |
|
|
0.9 |
|
|
3.0 |
|
|
2.1 |
|
Amortization |
|
43.6 |
|
|
40.1 |
|
|
106.2 |
|
|
120.8 |
|
Deferred income tax (recovery) expense |
|
6.4 |
|
|
15.9 |
|
|
44.7 |
|
|
8.5 |
|
Current income tax expense |
|
11.6 |
|
|
3.8 |
|
|
20.4 |
|
|
18.5 |
|
EBITDA |
$130.5 |
|
$78.4 |
|
$248.1 |
|
$208.0 |
|
Additional GAAP Measures
Additional GAAP measures are presented on the
face of the Company’s consolidated statements of comprehensive
income (loss) 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 Flow |
|
ALAMOS
GOLD INC.Consolidated Statements of Financial
Position(Unaudited - stated in millions of United States
dollars) |
|
|
September 30, 2020 |
|
|
December 31, 2019 |
|
A S S E T S |
|
|
|
|
|
|
|
Current
Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$274.1 |
|
|
$182.8 |
|
Equity securities |
|
40.0 |
|
|
|
22.8 |
|
Amounts receivable |
|
41.6 |
|
|
|
37.4 |
|
Income taxes receivable |
|
— |
|
|
|
4.6 |
|
Inventory |
|
136.1 |
|
|
|
126.9 |
|
Other current assets |
|
19.3 |
|
|
|
19.8 |
|
Total Current
Assets |
|
511.1 |
|
|
|
394.3 |
|
|
|
|
|
Non-Current
Assets |
|
|
|
Long-term inventory |
|
22.9 |
|
|
|
25.7 |
|
Mineral property, plant and
equipment |
|
3,040.2 |
|
|
|
2,933.4 |
|
Other non-current assets |
|
42.5 |
|
|
|
43.1 |
|
Total Assets |
$3,616.7 |
|
|
$3,396.5 |
|
|
|
|
|
L I A B I L I T I E
S |
|
|
|
Current
Liabilities |
|
|
|
Accounts payable and accrued
liabilities |
$116.2 |
|
|
$127.3 |
|
Debt and financing
obligations |
|
100.0 |
|
|
|
— |
|
Income taxes payable |
|
11.4 |
|
|
|
— |
|
Total Current
Liabilities |
|
227.6 |
|
|
|
127.3 |
|
|
|
|
|
Non-Current
Liabilities |
|
|
|
Deferred income taxes |
|
559.4 |
|
|
|
513.7 |
|
Decommissioning
liabilities |
|
57.0 |
|
|
|
57.1 |
|
Other non-current
liabilities |
|
3.1 |
|
|
|
3.1 |
|
Total Liabilities |
|
847.1 |
|
|
|
701.2 |
|
|
|
|
|
E Q U I T
Y |
|
|
|
Share capital |
$3,702.2 |
|
|
$3,693.3 |
|
Contributed surplus |
|
90.3 |
|
|
|
90.7 |
|
Accumulated other
comprehensive loss |
|
10.2 |
|
|
|
(0.2 |
) |
Deficit |
|
(1,033.1 |
) |
|
|
(1,088.5 |
) |
Total Equity |
|
2,769.6 |
|
|
|
2,695.3 |
|
Total Liabilities and Equity |
$3,616.7 |
|
|
$3,396.5 |
|
|
|
|
|
ALAMOS
GOLD INC.Consolidated Statements of Comprehensive
Income(Unaudited - stated in millions of United States
dollars, except share and per share amounts) |
|
|
For three months ended |
|
For nine months ended |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
OPERATING REVENUES |
$218.4 |
|
|
$172.9 |
|
|
$521.5 |
|
|
$497.1 |
|
|
|
|
|
|
|
|
|
COST OF
SALES |
|
|
|
|
|
|
|
Mining and processing |
|
76.2 |
|
|
|
83.0 |
|
|
|
226.6 |
|
|
|
251.6 |
|
Royalties |
|
2.8 |
|
|
|
4.2 |
|
|
|
6.9 |
|
|
|
13.0 |
|
COVID-19 costs |
|
— |
|
|
|
— |
|
|
|
6.5 |
|
|
|
— |
|
Amortization |
|
43.6 |
|
|
|
40.1 |
|
|
|
106.2 |
|
|
|
120.8 |
|
|
|
122.6 |
|
|
|
127.3 |
|
|
|
346.2 |
|
|
|
385.4 |
|
EXPENSES |
|
|
|
|
|
|
|
Exploration |
|
1.5 |
|
|
|
1.9 |
|
|
|
4.6 |
|
|
|
5.0 |
|
Corporate and
administrative |
|
5.0 |
|
|
|
4.5 |
|
|
|
15.3 |
|
|
|
14.6 |
|
Share-based compensation |
|
1.3 |
|
|
|
1.7 |
|
|
|
9.1 |
|
|
|
7.7 |
|
|
|
130.4 |
|
|
|
135.4 |
|
|
|
375.2 |
|
|
|
412.7 |
|
EARNINGS FROM
OPERATIONS |
|
88.0 |
|
|
|
37.5 |
|
|
|
146.3 |
|
|
|
84.4 |
|
|
|
|
|
|
|
|
|
OTHER
EXPENSES |
|
|
|
|
|
|
|
Finance expense |
|
(1.0 |
) |
|
|
(0.9 |
) |
|
|
(3.0 |
) |
|
|
(2.1 |
) |
Foreign exchange gain
(loss) |
|
0.8 |
|
|
|
— |
|
|
|
(4.1 |
) |
|
|
0.3 |
|
Other (loss) gain |
|
(1.9 |
) |
|
|
0.8 |
|
|
|
(6.8 |
) |
|
|
2.5 |
|
EARNINGS BEFORE INCOME
TAXES |
$85.9 |
|
|
$37.4 |
|
|
$132.4 |
|
|
$85.1 |
|
|
|
|
|
|
|
|
|
INCOME
TAXES |
|
|
|
|
|
|
|
Current income tax
expense |
|
(11.6 |
) |
|
|
(3.8 |
) |
|
|
(20.4 |
) |
|
|
(18.5 |
) |
Deferred income tax
expense |
|
(6.4 |
) |
|
|
(15.9 |
) |
|
|
(44.7 |
) |
|
|
(8.5 |
) |
NET
EARNINGS |
$67.9 |
|
|
$17.7 |
|
|
$67.3 |
|
|
$58.1 |
|
|
|
|
|
|
|
|
|
Items that may be subsequently
reclassified to net earnings: |
|
|
|
|
|
|
|
Unrealized gain (loss) on currency hedging instruments, net of
taxes |
|
2.5 |
|
|
|
(0.8 |
) |
|
|
(2.6 |
) |
|
|
4.2 |
|
Unrealized gain (loss) on fuel hedging instruments, net of
taxes |
|
0.2 |
|
|
|
— |
|
|
|
(0.3 |
) |
|
|
0.5 |
|
Items that will not be
reclassified to net earnings: |
|
|
|
|
|
|
|
Unrealized gain (loss) on equity securities, net of taxes |
|
7.2 |
|
|
|
0.3 |
|
|
|
13.3 |
|
|
|
(1.0 |
) |
Total other
comprehensive income (loss) |
$9.9 |
|
|
($0.5 |
) |
|
$10.4 |
|
|
$3.7 |
|
COMPREHENSIVE
INCOME |
$77.8 |
|
|
$17.2 |
|
|
$77.7 |
|
|
$61.8 |
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE |
|
|
|
|
|
|
|
– basic |
$0.17 |
|
|
$0.05 |
|
|
$0.17 |
|
|
$0.15 |
|
–
diluted |
$0.17 |
|
|
$0.04 |
|
|
$0.17 |
|
|
$0.15 |
|
Weighted average number of
common shares outstanding (000's) |
|
|
|
|
|
|
|
– basic |
|
391,553 |
|
|
|
390,593 |
|
|
|
391,325 |
|
|
|
389,852 |
|
– diluted |
|
395,641 |
|
|
|
394,355 |
|
|
|
394,948 |
|
|
|
393,183 |
|
ALAMOS
GOLD INC.Consolidated Statements of Cash
Flows(Unaudited - stated in millions of United States
dollars) |
|
|
|
|
|
For three months ended |
|
For nine months ended |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
CASH PROVIDED BY (USED
IN): |
|
|
|
|
|
|
|
OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
Net earnings for the period |
$67.9 |
|
|
$17.7 |
|
|
$67.3 |
|
|
$58.1 |
|
Adjustments for items not
involving cash: |
|
|
|
|
|
|
|
Amortization |
|
43.6 |
|
|
|
40.1 |
|
|
|
107.3 |
|
|
|
120.8 |
|
Foreign exchange (gain) loss |
|
(0.8 |
) |
|
|
0.0 |
|
|
|
4.1 |
|
|
|
(0.3 |
) |
Current income tax expense |
|
11.6 |
|
|
|
3.8 |
|
|
|
20.4 |
|
|
|
18.5 |
|
Deferred income tax expense |
|
6.4 |
|
|
|
15.9 |
|
|
|
44.7 |
|
|
|
8.5 |
|
Share-based compensation |
|
1.3 |
|
|
|
1.7 |
|
|
|
9.1 |
|
|
|
7.7 |
|
Finance expense |
|
1.0 |
|
|
|
0.9 |
|
|
|
3.0 |
|
|
|
2.1 |
|
Other items |
|
(1.0 |
) |
|
|
0.1 |
|
|
|
0.5 |
|
|
|
(4.0 |
) |
Changes in working capital and
cash taxes |
|
0.8 |
|
|
|
(12.3 |
) |
|
|
(19.4 |
) |
|
|
(28.8 |
) |
|
|
130.8 |
|
|
|
67.9 |
|
|
|
237.0 |
|
|
|
182.6 |
|
INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
Mineral property, plant and
equipment |
|
(54.8 |
) |
|
|
(66.3 |
) |
|
|
(172.7 |
) |
|
|
(190.7 |
) |
Repurchase of Island Gold
royalty |
|
— |
|
|
|
— |
|
|
|
(54.8 |
) |
|
|
— |
|
Other |
|
1.1 |
|
|
|
(0.5 |
) |
|
|
(1.2 |
) |
|
|
(1.6 |
) |
|
|
(53.7 |
) |
|
|
(66.8 |
) |
|
|
(228.7 |
) |
|
|
(192.3 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
Proceeds from draw down of
credit facility |
|
— |
|
|
|
— |
|
|
|
100.0 |
|
|
|
— |
|
Repayment of equipment
financing obligations |
|
(0.1 |
) |
|
|
(0.8 |
) |
|
|
(0.4 |
) |
|
|
(2.6 |
) |
Interest paid |
|
— |
|
|
|
— |
|
|
|
(0.8 |
) |
|
|
— |
|
Repurchase and cancellation of
common shares |
|
— |
|
|
|
— |
|
|
|
(5.5 |
) |
|
|
(11.4 |
) |
Proceeds from the exercise of
options |
|
1.1 |
|
|
|
6.4 |
|
|
|
7.4 |
|
|
|
7.0 |
|
Dividends paid |
|
(5.4 |
) |
|
|
(3.9 |
) |
|
|
(16.5 |
) |
|
|
(11.7 |
) |
Proceeds from issuance of
flow-through shares |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7.5 |
|
|
|
(4.4 |
) |
|
|
1.7 |
|
|
|
84.2 |
|
|
|
(11.2 |
) |
Effect of exchange rates on
cash and cash equivalents |
|
0.1 |
|
|
|
(0.4 |
) |
|
|
(1.2 |
) |
|
|
0.5 |
|
Net increase (decrease) in
cash and cash equivalents |
|
72.8 |
|
|
|
2.4 |
|
|
|
91.3 |
|
|
|
(20.4 |
) |
Cash and cash equivalents -
beginning of period |
|
201.3 |
|
|
|
183.2 |
|
|
|
182.8 |
|
|
|
206.0 |
|
CASH AND CASH
EQUIVALENTS - END OF PERIOD |
$274.1 |
|
|
$185.6 |
|
|
$274.1 |
|
|
$185.6 |
|
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