Alamos Reports First Quarter 2014 Results
Underground Development at San Carlos on Track
TORONTO, ONTARIO--(Marketwired - Apr 24, 2014) -
All amounts are in United States dollars, unless otherwise
stated.
Alamos Gold Inc. (TSX:AGI)(NYSE:AGI) ("Alamos" or the "Company")
today reported its financial results for the quarter ended March
31, 2014 and reviewed its operating, exploration and development
activities.
"Production of 37,000 ounces in the first quarter of 2014 was
consistent with our expectations, and total cash costs of $617 per
ounce and all-in sustaining costs of $908 per ounce were below our
cost guidance. Despite the challenging gold price environment, we
remain among the lower cost producers having another strong quarter
of cash flow generation with operating cash flow, before changes in
non-cash working capital of $15.9 million," said John A. McCluskey,
President and Chief Executive Officer.
"Underground development is progressing on schedule at San
Carlos and we look forward to a stronger second half of 2014 as
high grade production ramps up. With the 43% increase in the
underground reserve grade at San Carlos that we recently announced,
we are excited about the potential of this deposit to supply the
next four years of high grade mill feed. We continue to advance our
peer leading development pipeline and with $410 million in cash and
no debt, we are well positioned to not only internally fund our
development initiatives, but also pursue accretive acquisitions,"
Mr. McCluskey added.
First Quarter 2014 Highlights
Financial Performance
- Realized quarterly earnings of $2.7 million ($0.02 per share)
compared to earnings of $26.0 million ($0.21 per share) in 2013.
Generated cash from operating activities before changes in non-cash
working capital of $15.9 million ($0.13 per share); after changes
in non-cash working capital of $7.3 million ($0.06 per share)
- Sold 32,161 ounces of gold at an average realized price of
$1,291 per ounce for quarterly revenues of $41.5 million
- Reported cash and cash equivalents and short-term investments
of $409.9 million as at March 31, 2014
- Declared a semi-annual dividend of $0.10 per common share,
maintaining the dividend level despite a substantially lower gold
price environment. The dividend is payable on April 30, 2014 to
shareholders of record as of the close of business on April 15,
2014
- Repurchased and cancelled 351,500 common shares under the
Company's Normal Course Issuer Bid at a total purchase price of
$3.2 million
Operational Performance
- Produced 37,000 ounces of gold at total cash costs of $617 per
ounce of gold sold, 12% below the low end of the 2014 guidance
range of $700 to $740 per ounce
- Successfully transitioned from owner-operated to contract
mining at the Mulatos mine in February 2014
- Depleted the open pit Escondida high grade zone and commenced
underground mining of the Escondida Deep deposit
- All-in sustaining costs (which include total cash costs,
exploration, corporate and administrative, share based compensation
and sustaining capital costs) of $908 per ounce of gold sold, were
below 2014 annual guidance of between $960 and $1,000
- Reported updated mineral reserves and resources as at December
31, 2013, including a 43% increase in the grade of underground
Proven and Probable mineral reserves at San Carlos to 7.0 g/t Au,
and a 31% increase in Measured and Indicated mineral resources
across all of the Company's projects, despite lower gold price
assumptions used in calculating both mineral reserves and
resources
- Appointed Mr. David Fleck to the Alamos Board of Directors
effective March 10, 2014
Subsequent to quarter-end:
- Commenced underground development of San Carlos in anticipation
of high-grade production from this deposit in the second half of
2014
|
|
|
|
|
|
|
Q1 2014 |
Q1 2013 |
Change (%) |
|
|
|
|
|
|
Ounces produced |
37,000 |
55,000 |
(33%) |
|
Ounces sold |
32,161 |
53,000 |
(39%) |
|
|
|
|
|
|
Operating Revenues (000) |
$
41,511 |
$
86,272 |
(52%) |
|
Earnings before income taxes (000) |
$
4,720 |
$
38,798 |
(88%) |
|
Earnings (loss) (000) |
$
2,746 |
$
25,989 |
(89%) |
|
Earnings (loss) per share (basic and diluted) |
$
0.02 |
$
0.21 |
(90%) |
|
|
|
|
|
|
Cash flow from operating activities before changes in non-cash
working capital (000) |
$
15,939 |
$
40,407 |
(61%) |
|
Cash flow from operating activities (000) |
$
7,265 |
$
32,750 |
(78%) |
|
|
|
|
|
|
Cash and short-term investments (000) (2) |
$409,904 |
$373,274 |
10% |
|
|
|
|
|
|
Realized gold price per ounce |
$
1,291 |
$
1,628 |
(21%) |
|
Average London PM Fix gold price per ounce |
$
1,293 |
$
1,632 |
(21%) |
|
|
|
|
|
|
Total cash cost per ounce (1) |
$
617 |
$
449 |
37% |
|
All-in sustaining cost per ounce (1) |
$
908 |
$
692 |
31% |
|
All-in cost per ounce (1) |
$
1,115 |
$
864 |
29% |
|
|
|
(1) |
"Total cash cost per ounce", "All-in sustaining cost per ounce" and
"All-in cost per ounce" are non-GAAP measures. Refer to the
"Cautionary non-GAAP Measures and Additional GAAP Measures"
disclosure at the end of this press release for a description and
calculation of these measures. |
|
(2) |
Cash and short-term investments are shown as at March 31, 2014 and
March 31, 2013. |
First Quarter 2014 Financial Results
The Company continued to generate strong operating margins in
the first quarter of 2014 despite a substantial decrease in the
gold price from the corresponding period of the previous year, as
low cash costs allowed the Company to generate $15.9 million ($0.13
per share) cash from operating activities (before changes in
non-cash working capital). Cash from operating activities of $7.3
million or $0.06 per share decreased 78% relative to the same
period of 2013 as a result of lower gold sales.
Earnings before income taxes in the first quarter of 2014 were
$4.7 million or $0.04 per share, compared to $38.8 million or $0.31
per basic share in the first quarter of 2013. On an after-tax
basis, the Company recorded earnings in the first quarter of 2014
of $2.7 million or $0.02 per share compared to earnings of $26.0
million in the same period of 2013 as a result of lower gold
sales.
Capital expenditures in the first quarter of 2014 totalled $10.9
million. Sustaining capital in Mexico in the first quarter of 2014
included $1.1 million in spending related to installation of a new
reclaim tunnel, $0.6 million for component changes, $0.8 million on
leach pad capital projects and $0.8 million on other capital
projects, including upgrades to the water treatment plant.
Sustaining capital of $3.3 million was in line with annual guidance
of $13.2 million.
In addition, the Company invested $7.1 million in Mexico focused
on development activities at Escondida Deep, San Carlos, El Victor
and capitalized exploration. The Company has commenced mining from
the El Victor open pit and plans to begin underground mining at San
Carlos in the third quarter of 2014. In order to ensure timely
access to high grade ore at San Carlos, underground development has
focused on widening access within a 150 m tunnel that was part of
the historic mine workings. Separate underground mine access will
be developed over the second and third quarters of 2014 and
construction of the bridge over the Mulatos river is underway and
on schedule for completion prior to the onset of the rainy season
in July.
Key financial highlights for the three-months ended March 31,
2014 and 2013 are presented at the end of this release in Table 1.
The unaudited interim consolidated statements of financial
position, comprehensive income, and cash flows for the three-months
ended March 31, 2014 and 2013 are presented at the end of this
release in Table 2.
First Quarter 2014 Operating Results
Gold production of 37,000 ounces in the first quarter of 2014
decreased 33% compared to 55,000 ounces in 2013. Lower gold
production in the first quarter of 2014 relative to the first
quarter of 2013 was attributable to lower grades, throughput and
recoveries. The Company continued to benefit from a positive grade
reconciliation relative to the block model in the first quarter of
2014, with the grade of crushed ore stacked on the leach pad of
1.03 g/t Au being 21% higher than the budgeted annual grade of 0.85
g/t Au. This benefit was partially offset by lower than anticipated
grades mined and milled from the Escondida high grade zone of 3.28
g/t Au compared to the annual budget of 5.3 g/t Au.
Total crusher throughput in the first quarter of 2014 averaged
16,800 tpd, 5% below the annualized budget as a result of a planned
four-day shutdown in January in order to move infrastructure to
accommodate a leach pad expansion. Backing out the four-day planned
shutdown, crusher throughput was 17,600 tpd, in line with
budget.
In the first quarter, tonnes mined and milled from the Escondida
high grade zone averaged 500 tpd before the zone was depleted in
early March. Underground development of the Escondida Deep deposit
continued in the first quarter and production began ahead of
schedule at the end of March. Consistent with the earlier start and
decrease in the size of the underground mineral reserve at
Escondida Deep to 32,000 tonnes (as outlined in the 2013 mineral
reserve update), the Company expects the mill to operate below
capacity during the second quarter of 2014 until the start of
underground ore production from San Carlos early in the third
quarter.
High grade mill production is expected to increase in the second
half of 2014 relative to the first half given expected higher
grades from San Carlos and increased mill throughput. Further, the
grade variability and negative ounce reconciliation encountered in
the final quarters of the Escondida high grade zone, attributable
to the nugget effect in the deposit, is not expected to recur at
San Carlos. The San Carlos deposit is separate and distinct from
Escondida and has a more uniform grade distribution.
The annual budgeted grade of the high grade mill feed of 5.3 g/t
Au is based in part on the 2012 San Carlos underground mineral
reserve grade of 4.9 g/t Au. Given the 43% increase in the San
Carlos underground mineral reserve grade to 7.0 g/t Au in the
recent 2013 update, the Company is currently updating the San
Carlos underground mine plan to assess whether higher than budgeted
grade ore from San Carlos will be available for mining and
processing in 2014.
The ratio of ounces produced to contained ounces stacked or
milled (or recovery ratio) in the first quarter was 71%, compared
to 76% in the first quarter of 2013.
Cash operating costs of $546 per ounce of gold sold in the first
quarter of 2014 were below the Company's annual guidance range of
$630 to $670 per ounce, but were 53% higher than $358 per ounce
reported in the first quarter of 2013. This increase is primarily
attributable to lower grades mined and milled in the first quarter
of 2014 compared to 2013. Including royalties, total cash costs
were $617 per ounce of gold sold in the first quarter of 2014.
Key operational metrics and production statistics for the first
quarter 2014 compared to the same period of 2013 are presented in
Table 3 at the end of this press release.
Turkey Developments
In August 2013, the Company received an EIA Positive Decision
Certificate for Kirazlı from the Turkish Ministry of the
Environment and Urbanization (the "Ministry"). The Company's EIA
for Ağı Dağı has been submitted and is currently under review. In
January 2014, the Canakkale Administrative Court in Turkey (the
"Court") issued an injunction order regarding the Ministry's
approval of the EIA for the Company's Kirazlı project, on the basis
that the report failed to assess the "cumulative impacts" of the
Kirazlı project in conjunction with other potential mining projects
in the region. Given that there had not previously been any
requirement to include such an assessment in an EIA report, the
Ministry is formally challenging the Court's decision to
temporarily revoke the EIA approval on this basis. A hearing on the
merits of the underlying claim which led to the injunction took
place on April 17, 2014, and the decision of the Court is expected
in June 2014. In the interim, the Company is amending its EIA for
the Kirazlı project to include an assessment of the potential
cumulative impacts of proposed projects in the region. The Court's
basis for the injunction did not relate to concerns with any
technical aspect of the Kirazlı project.
Given that the Company is already awaiting forestry and
operating permits, and given the recent political developments in
Turkey as well as federal elections upcoming during the year, the
Company does not expect the injunction to significantly alter its
development timeline for the Kirazlı project.
The Company has budgeted $4.8 million in Turkey in 2014 for
permitting, community and government relations and general
administration costs only. Given the continuing delay in receipt of
key permits, the Company has reduced its headcount and curtailed
spending significantly in Turkey. A full development budget for
Kirazlı and Ağı Dağı will be re-initiated once the required permits
are received. The capital spending budget for these projects is not
expected to differ materially from the June 2012 preliminary
feasibility study, with the exception that the devaluation of the
Turkish Lira would result in significant capital and operating
savings that would improve the overall project economics.
First Quarter 2014 Exploration Update
Total exploration expenditures in the first quarter of 2014 were
$4.2 million. This was primarily focused at Mulatos where
exploration spending totalled $3.0 million, including $1.8 million
of drilling costs at Escondida Deep and San Carlos, which were
capitalized, and $1.2 million of drilling costs at regional targets
and administration costs, which were expensed.
At Mulatos, up to 5 drill rigs were active during the quarter
primarily focused on opportunities at Mina Vieja and El Realito and
further surface and underground definition drilling at Escondida
Deep and San Carlos. Building upon a successful exploration program
at San Carlos in 2013 which saw the underground mineral reserve
increase 18% in terms of ounces and 43% in terms of grade, San
Carlos remains a high priority exploration focus for the remainder
of the year. The drill program is expected to advance on a number
of fronts in an effort to convert existing mineral resources to
mineral reserves and add new mineral resources. Currently planned
holes are designed to more closely define existing resources,
extend the strike and dip of existing resources and specifically
target high-grade structures.
Further, the Company capitalized $0.9 million at the Esperanza
gold project in the first quarter as development costs. These costs
were primarily related to the collection of baseline study data to
support resubmission of the EIA.
Outlook
Gold production in the first quarter of 2014 of 37,000 ounces
benefited from 21% higher grades from the heap leach ore mined
compared to the 2014 budget. Partially offsetting this benefit were
continued lower grades from the Escondida high grade zone for the
second consecutive quarter. The negative grade reconciliation
experienced at the open pit portion of the Escondida high grade
zone may persist in the Escondida Deep deposit, given its similar
characteristics. Combined with the smaller size of Escondida Deep
as outlined in the 2013 mineral reserve update, the Company expects
that high grade production may continue to be below expectations
until the Escondida Deep deposit is depleted in the second
quarter.
Development at San Carlos is on track to provide high grade mill
feed at the start of the third quarter of 2014. The Company does
not expect similar grade reconciliation issues at San Carlos, given
it is an entirely separate deposit with a more uniform grade
distribution. Rather, the potential for higher than budgeted grades
mined and milled from San Carlos exists given the recent mineral
reserve update, which reflects a 43% increase in grade at San
Carlos to 7.0 g/t Au and an 18% increase in ounces to 210,000
relative to the prior year update.
San Carlos is expected to provide high grade mill feed for a
minimum of four years and the higher grades reported as part of the
reserve update are expected to positively impact high grade
production and operating costs over that time frame, relative to
previous expectations. The Company continues to evaluate
opportunities to enhance the high grade production outlook through
optimizing mill recoveries and/or increasing throughput.
The Company continues to anticipate full year production of
150,000 to 170,000 ounces of gold, with the majority of gold
production to be in the second half of 2014 as underground
throughput rates at San Carlos gradually ramp up to the current
mill capacity of 800 tpd.
Looking beyond 2014, the Company expects development of the
Cerro Pelon and La Yaqui satellite deposits to bring on additional
low cost production which will help drive annual production closer
to the level achieved in 2013. Both deposits are higher grade than
Mulatos and could add annualized production of between 60,000 and
70,000 ounces. The Company continues the legal process to obtain
the necessary surface rights to these areas, which is expected to
be resolved within 4 months. In the interim, the Company is
continuing negotiations with the land owners in an attempt to
resolve differences in value expectations. It is expected that
permitting and construction will take 18 months to complete after
securing the necessary land access rights.
Gold production from the first of the Company's Turkish
projects, Kirazlı, is expected within 18 months of receipt of the
outstanding forestry and operating permits. The Company remains
confident that these permits will be granted. However, recent legal
developments and political instability have increased uncertainty
of the expected timing for receipt of these permits. Accordingly,
the Company has implemented a cost reduction program in Turkey
pending further progress on permitting.
With the completion of the Esperanza and Orsa acquisitions in
2013, the Company has grown its development pipeline substantially.
Development spending at Esperanza in 2014 of approximately $11.3
million is focused on baseline work required for the resubmission
of an EIA report and an internal feasibility study to further
support development of the project. Spending at the Quartz Mountain
Property will be focused on validating the existing mineral
resources.
The Company continues to strengthen its financial position,
generating free cash flow from Mulatos in the first quarter of 2014
with approximately $410 million in cash and cash equivalents and no
debt. The Company`s development capital and exploration spending in
2014 is all expected to be financed from cash flow, and the Company
is well positioned to pursue accretive opportunities and to deliver
on its longer term growth objectives.
Associated Documents
This press release should be read in conjunction with the
Company's interim consolidated financial statements for the
three-month periods ended March 31, 2014 and March 31, 2013 and
associated Management's Discussion and Analysis ("MD&A"), which
are available from the Company's website, www.alamosgold.com, in
the "Investor Centre" tab in the "Reports and Financial Statements"
section, and on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).
Reminder of First Quarter 2014 Results Conference Call
The Company's senior management will host a conference call on
Thursday, April 24, 2014 at 12:00 pm ET to discuss the first
quarter 2014 financial results and update operating, exploration,
and development activities.
Participants may join the conference call by dialling (416)
340-8527 or (877) 677-0837 for calls within Canada and the United
States, or via webcast at www.alamosgold.com.
A playback will be available until May 8, 2014 by dialling (905)
694-9451 or (800) 408-3053 within Canada and the United States. The
pass code is 6223268. The webcast will be archived at
www.alamosgold.com.
About Alamos
Alamos is an established Canadian-based gold producer that owns
and operates the Mulatos Mine in Mexico, and has exploration and
development activities in Mexico, Turkey and the United States. The
Company employs more than 550 people and is committed to the
highest standards of sustainable development. Alamos has
approximately $410 million in cash and cash equivalents, is
debt-free, and unhedged to the price of gold. As of April 22, 2014,
Alamos had 127,357,488 common shares outstanding (139,110,887
shares fully diluted), which are traded on the TSX and NYSE under
the symbol "AGI".
The TSX and NYSE have not reviewed and do not accept
responsibility for the adequacy or accuracy of this
release.
Cautionary Note
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained
herein. This News Release includes certain "forward-looking
statements". All statements other than statements of historical
fact included in this release, including without limitation
statements regarding forecast gold production, gold grades,
recoveries, waste-to-ore ratios, total cash costs, potential
mineralization and reserves, exploration results, and future plans
and objectives of Alamos, are forward-looking statements that
involve various risks and uncertainties. These forward-looking
statements include, but are not limited to, statements with respect
to mining and processing of mined ore, achieving projected recovery
rates, anticipated production rates and mine life, operating
efficiencies, costs and expenditures, changes in mineral resources
and conversion of mineral resources to proven and probable
reserves, and other information that is based on forecasts of
future operational or financial results, estimates of amounts not
yet determinable and assumptions of management.
Exploration results that include geophysics, sampling, and drill
results on wide spacings may not be indicative of the occurrence of
a mineral deposit. Such results do not provide assurance that
further work will establish sufficient grade, continuity,
metallurgical characteristics and economic potential to be classed
as a category of mineral resource. A mineral resource that is
classified as "inferred" or "indicated" has a great amount of
uncertainty as to its existence and economic and legal feasibility.
It cannot be assumed that any or part of an "indicated mineral
resource" or "inferred mineral resource" will ever be upgraded to a
higher category of resource. Investors are cautioned not to assume
that all or any part of mineral deposits in these categories will
ever be converted into proven and probable reserves.
Any statements that express or involve discussions with respect
to predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as "expects" or "does not
expect", "is expected", "anticipates" or "does not anticipate",
"plans", "estimates" or "intends", or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved) are not statements of historical fact
and may be "forward-looking statements." Forward-looking statements
are subject to a variety of risks and uncertainties that could
cause actual events or results to differ from those reflected in
the forward-looking statements.
There can be no assurance that forward-looking statements will
prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from Alamos' expectations include, among others, risks
related to international operations, the actual results of current
exploration activities, conclusions of economic evaluations and
changes in project parameters as plans continue to be refined as
well as future prices of gold and silver, as well as those factors
discussed in the section entitled "Risk Factors" in Alamos' Annual
Information Form. Although Alamos has attempted to identify
important factors that could cause actual results to differ
materially, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements.
Note to U.S. Investors
Alamos prepares its disclosure in accordance with the
requirements of securities laws in effect in Canada, which differ
from the requirements of U.S. securities laws. Terms relating to
mineral resources in this presentation are defined in accordance
with National Instrument 43-101 - Standards of Disclosure for
Mineral Projects under the guidelines set out in the Canadian
Institute of Mining, Metallurgy, and Petroleum Standards on Mineral
Resources and Mineral Reserves. The United States Securities and
Exchange Commission (the "SEC") permits mining companies, in their
filings with the SEC, to disclose only those mineral deposits that
a company can economically and legally extract or produce. Alamos
may use certain terms, such as "measured mineral resources",
"indicated mineral resources", "inferred mineral resources" and
"probable mineral reserves" that the SEC does not recognize (these
terms may be used in this presentation and are included in the
public filings of Alamos, which have been filed with the SEC and
the securities commissions or similar authorities in Canada).
Cautionary non-GAAP Measures and Additional GAAP Measures
Note that for purposes of this section, GAAP refers to IFRS. The
Company believes that investors use certain non-GAAP and additional
GAAP measures as indicators to assess gold mining companies. They
are intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared with GAAP. Non-GAAP and additional GAAP
measures do not have a standardized meaning prescribed under IFRS
and therefore may not be comparable to similar measures presented
by other companies.
|
(i) |
Cash flow from operating activities before changes in non-cash
working capital |
"Cash flow from operating activities before changes in non-cash
working capital" 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 non-cash working capital to "Cash provided by (used in)
operating activities" as presented on the Company's consolidated
statements of cash flows.
The following table reconciles the non-GAAP measure to the
consolidated statements of cash flows.
|
|
Q1 2014 |
Q1 2013 |
|
Cash flow from operating activities - IFRS (000) |
$7,265 |
$32,750 |
|
Changes in non-cash working capital (000) |
8,674 |
7,657 |
|
Cash flow from operating activities before changes in non-cash
working capital (000) |
$15,939 |
$40,407 |
|
| (ii) |
Mining cost per tonne of ore |
"Mining cost per tonne of ore" and "Cost per tonne of ore" are
non-GAAP performance measures that could provide an indication of
the mining and processing efficiency and effectiveness of the mine.
These measures are calculated by dividing the relevant mining and
processing costs and total costs by the tonnes of ore processed in
the period. "Cost per tonne of ore" is usually affected by
operating efficiencies and waste-to-ore ratios in the period. The
following table reconciles the non-GAAP measure to the consolidated
statements of comprehensive income
|
|
Q1 2014 |
Q1 2013 |
|
Mining and processing costs - IFRS (000) |
$17,546 |
$18,959 |
|
Inventory adjustments and period costs (000) |
4,407 |
867 |
|
Total cost (000) |
$21,953 |
$19,826 |
|
Tonnes Ore stacked / milled (000) |
1,514 |
1,614 |
|
Total cost per tonne of ore |
$14.50 |
$12.28 |
|
| (iii) |
Cash operating costs per ounce and total
cash costs per ounce |
"Cash operating costs per ounce" and "total cash costs per
ounce" as used in this analysis are non-GAAP terms 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. These non-GAAP terms are also
used to assess the ability of a mining company to generate cash
flow from operations. There may be some variation in the method of
computation of "cash operating costs per ounce" as determined by
the Company compared with other mining companies. In this context,
"cash operating costs per ounce" reflects the cash operating costs
allocated from in-process and dore inventory associated with ounces
of gold sold in the period. "Cash operating costs per ounce" may
vary from one period to another due to operating efficiencies,
waste-to-ore ratios, grade of ore processed and gold recovery rates
in the period. "Total cash costs per ounce" includes "cash
operating costs per ounce" plus applicable royalties. Cash
operating costs per ounce and total cash costs per ounce are
exclusive of exploration costs.
The following table reconciles these non-GAAP measure to the
consolidated statements of comprehensive income.
|
|
Q1 2014 |
Q1 2013 |
|
Mining and processing costs - IFRS (000) |
$17,546 |
$18,959 |
|
Divided by: Gold ounces sold (1),(2) |
32,161 |
53,000 |
|
Total Cash operating costs per ounce |
$546 |
$358 |
|
|
|
|
|
Mining and processing costs - IFRS (000) |
$17,546 |
$18,959 |
|
Royalties - IFRS (000) |
2,305 |
4,822 |
|
Total Cash costs (000) |
$19,851 |
$23,781 |
|
Divided by: Gold ounces sold |
32,161 |
53,000 |
|
Total Cash costs per ounce |
$617 |
$449 |
|
| (iv) |
All-in sustaining cost per
ounce |
Effective 2013, in conjunction with a non-GAAP initiative being
undertaken by the gold mining industry, the Company is adopting an
"all-in sustaining cost per ounce" non-GAAP performance measure.
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 cost
per ounce" as determined by the Company compared with other mining
companies. In this context, "all-in sustaining cost per ounce"
reflects total mining and processing costs, corporate and
administrative costs, exploration costs, sustaining capital, and
other operating costs. 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.
The following table reconciles these non-GAAP measures to the
consolidated statements of comprehensive income.
|
|
Q1 2014 |
Q1 2013 |
|
Mining and processing costs (000) |
$17,546 |
$18,959 |
|
Royalties (000) |
2,305 |
4,822 |
|
Corporate and administration (000) (1) |
3,534 |
7,257 |
|
Share-based compensation (000) |
(784) |
(785) |
|
Exploration costs (000) (2) |
2,973 |
2,072 |
|
Reclamation cost accretion (000) |
341 |
250 |
|
Sustaining capital expenditures (000) |
3,288 |
4,122 |
|
|
$29,203 |
$36,697 |
|
Divided by: Gold ounces sold |
32,161 |
53,000 |
|
All-in sustaining cost per ounce |
$908 |
$692 |
|
(1) |
Excludes corporate and administration costs incurred at the
Company's development projects |
|
(2) |
Excludes exploration associated with the Company's development
projects |
Effective 2013, in conjunction with a non-GAAP initiative being
undertaken by the gold mining industry, the Company is adopting an
"all-in cost per ounce" non-GAAP performance measure; however, this
performance measure has no standardized meaning. Accordingly, there
may be some variation in the method of computation of "all-in cost
per ounce" as determined by the Company compared with other mining
companies. In this context, "all-in cost per ounce" reflects total
all-in sustaining cash costs, plus capital, operating, and
exploration costs associated with the Company's development
projects.
|
|
Q1 2014 |
Q1 2013 |
|
All-in sustaining cost (above) |
$29,203 |
$36,697 |
|
Add: Development and expansion capital (000) |
4,921 |
7,532 |
|
Add: Other exploration (000) |
1,179 |
1,001 |
|
Add: Development project corporate and administration (000) |
550 |
579 |
|
|
35,853 |
45,809 |
|
Divided by: Gold ounces sold |
32,161 |
53,000 |
|
All-in cost per ounce |
$1,115 |
$864 |
|
| (vi) |
Other additional GAAP measures |
Additional GAAP measures that are presented on the face of the
Company's consolidated statements of comprehensive income and are
not meant to be a substitute for other subtotals or totals
presented in accordance with IFRS, but rather should be evaluated
in conjunction with such IFRS measures. The following additional
GAAP measures are used and are intended to provide an indication of
the Company's mine and operating performance:
- Mine operating costs - represents the total of mining
and processing, royalties, and amortization expense
- Earnings from mine operations - represents the amount
of revenues in excess of mining and processing, royalties, and
amortization expense.
- Earnings from operations - represents the amount of
earnings before net finance income/expense, foreign exchange
gain/loss, other income/loss, and income tax expense
| Table 1: Financial Highlights |
|
|
|
|
|
|
|
Q1 2014 |
Q1 2013 |
|
Cash provided by operating activities before changes in non-cash
working capital (000)(1) (2) |
$15,939 |
$40,407 |
|
Changes in non-cash working capital |
($8,674) |
($7,657) |
|
Cash provided by operating activities (000) |
$7,265 |
$32,750 |
|
|
|
|
|
Earnings before income taxes (000) |
$4,720 |
$38,798 |
|
Earnings (000) |
$2,746 |
$25,989 |
|
Earnings per share |
|
|
|
- basic |
$0.02 |
$0.21 |
|
- diluted |
$0.02 |
$0.20 |
|
Comprehensive income (000) |
$2,246 |
$24,385 |
|
Weighted average number of common shares outstanding |
|
|
|
- basic |
127,483,000 |
126,675,000 |
|
- diluted |
127,499,000 |
126,938,000 |
|
Assets (000) (3) |
$898,014 |
$898,028 |
|
(1) |
A
non-GAAP measure calculated as cash provided by operating
activities as presented on the consolidated statements of cash
flows and adding back changes in non-cash working capital. |
|
(2) |
Refer to "Cautionary non-GAAP Measures and Additional GAAP
Measures" disclosure at the end of this press release for a
description and calculation of this measure. |
|
(3) |
Assets are shown as at March 31, 2014 and December 31, 2013. |
|
|
| Table 2:
Unaudited Consolidated Statements of Financial Position,
Comprehensive Income, and Cash Flows |
|
| ALAMOS GOLD INC. |
| Consolidated Statements of Financial
Position |
| (Unaudited - stated in thousands of United
States dollars) |
|
|
|
March 31, 2014 |
December 31, 2013 |
|
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$
400,040 |
$
409,663 |
|
Short-term investments |
9,864 |
7,792 |
|
Available-for-sale securities |
1,384 |
1,896 |
|
Other financial assets |
- |
442 |
|
Amounts receivable |
12,799 |
11,200 |
|
Advances and prepaid expenses |
8,610 |
9,068 |
|
Inventory |
44,458 |
37,972 |
|
Total Current Assets |
477,155 |
$
478,033 |
|
|
|
|
|
Non-Current Assets |
|
|
|
Other non-current assets |
3,374 |
2,696 |
|
Exploration and evaluation assets |
215,727 |
214,387 |
|
Mineral property, plant and equipment |
201,758 |
202,912 |
|
Total Assets |
$ 898,014 |
$ 898,028 |
|
|
|
|
|
LIABILITIES |
|
|
|
Current Liabilities |
|
|
|
Accounts payable and accrued liabilities |
$
22,390 |
$
23,487 |
|
Dividends payable |
12,736 |
- |
|
Income taxes payable |
946 |
1,783 |
|
Total Current Liabilities |
36,072 |
$
25,270 |
|
|
|
|
|
Non-Current Liabilities |
|
|
|
Deferred income taxes |
40,915 |
38,715 |
|
Decommissioning liability |
21,741 |
21,406 |
|
Other liabilities |
702 |
690 |
|
Total Liabilities |
99,430 |
86,081 |
|
|
|
|
|
EQUITY |
|
|
|
Share capital |
$
509,068 |
$
510,473 |
|
Warrants |
21,667 |
21,667 |
|
Contributed surplus |
24,596 |
24,236 |
|
Accumulated other comprehensive loss |
(1,593) |
(1,093) |
|
Retained earnings |
244,846 |
256,664 |
|
Total Equity |
798,584 |
811,947 |
|
Total Liabilities and Equity |
$ 898,014 |
$ 898,028 |
|
|
|
|
|
| ALAMOS GOLD INC. |
| Consolidated Statements of Comprehensive Income |
| For the three-month periods ended |
|
|
|
March 31, 2014 |
March 31, 2013 |
|
OPERATING REVENUES |
$ 41,511 |
$ 86,272 |
|
|
|
|
|
MINE OPERATING COSTS |
|
|
|
Mining and processing |
17,546 |
18,959 |
|
Royalties |
2,305 |
4,822 |
|
Amortization |
11,384 |
12,935 |
|
|
31,235 |
36,716 |
|
EARNINGS FROM MINE OPERATIONS |
10,276 |
49,556 |
|
EXPENSES |
|
|
|
Exploration |
1,435 |
788 |
|
Corporate and administrative |
4,084 |
7,836 |
|
Share-based compensation |
(784) |
(785) |
|
|
4,735 |
7,839 |
|
EARNINGS FROM OPERATIONS |
5,541 |
41,717 |
|
|
|
|
|
OTHER INCOME (EXPENSES) |
|
|
|
Finance income |
719 |
683 |
|
Financing expense |
(346) |
(247) |
|
Foreign exchange loss |
(311) |
(3,330) |
|
Other loss |
(883) |
(25) |
|
EARNINGS BEFORE INCOME TAXES FOR THE PERIOD |
4,720 |
38,798 |
|
|
|
|
INCOME TAXES |
|
|
|
Current tax recovery (expense) |
226 |
(14,044) |
|
Deferred tax (expense) recovery |
(2,200) |
1,235 |
|
EARNINGS FOR THE PERIOD |
$
2,746 |
$
25,989 |
|
|
|
|
|
Other comprehensive income (loss) |
|
|
| -
Unrealized loss on securities |
(500) |
(1,604) |
|
COMPREHENSIVE INCOME FOR THE PERIOD |
$ 2,246 |
$ 24,385 |
|
|
|
|
|
EARNINGS PER SHARE |
|
|
| -
basic |
$
0.02 |
$
0.21 |
| -
diluted |
$ 0.02 |
$ 0.20 |
|
Weighted average number of common shares outstanding |
|
|
| -
basic |
127,483,000 |
126,675,000 |
| -
diluted |
127,499,000 |
126,938,000 |
| (Unaudited - stated in thousands of United States dollars,
except per share amounts) |
|
|
| ALAMOS GOLD INC. |
| Consolidated Statements of Cash Flows |
| For the three-month periods ended |
| (Unaudited - stated in thousands of United
States dollars) |
|
|
March 31, 2014 |
March 31, 2013 |
| CASH PROVIDED BY (USED IN): |
|
|
| OPERATING ACTIVITIES |
|
|
| Earnings |
$
2,746 |
$
25,989 |
| Adjustments for items not involving cash: |
|
|
|
Amortization |
11,384 |
12,935 |
|
Financing expense |
346 |
247 |
|
Unrealized foreign exchange loss |
410 |
3,132 |
|
Deferred tax expense (recovery) |
2,200 |
(1,235) |
|
Share-based compensation |
(784) |
(785) |
|
Other |
(363) |
124 |
| Changes in non-cash working capital: |
|
|
|
Amounts receivable |
(2,315) |
(4,845) |
|
Inventory |
(5,238) |
(379) |
|
Advances and prepaid expenses |
1,559 |
450 |
|
Accounts payable and accrued liabilities, and income taxes
payable |
(2,680) |
(2,883) |
|
7,265 |
32,750 |
| INVESTING ACTIVITIES |
|
|
| Sales of securities |
835 |
- |
| Short-term investments (net) |
(2,072) |
47,654 |
| Contractor advances |
(1,100) |
- |
| Exploration and evaluation assets |
(1,340) |
(6,301) |
| Mineral property, plant and equipment |
(9,603) |
(7,602) |
|
(13,280) |
33,751 |
| FINANCING ACTIVITIES |
|
|
| Common shares issued |
- |
167 |
| Shares repurchased and cancelled |
(3,233) |
- |
|
(3,233) |
167 |
| Effect of exchange rates on cash and cash
equivalents |
(375) |
550 |
| Net increase in cash and cash equivalents |
(9,623) |
67,218 |
| Cash and cash equivalents - beginning of the year |
409,663 |
306,056 |
| CASH AND CASH EQUIVALENTS - END OF PERIOD |
$ 400,040 |
$ 373,274 |
|
|
|
|
| Table 3: Production Summary & Statistics (1) |
|
|
|
|
|
|
|
Production summary |
Q1 2014 |
Q1 2013 |
Change (#) |
Change (%) |
|
|
|
|
|
|
|
Ounces produced (1) |
37,000 |
55,000 |
(18,000) |
(33%) |
|
|
|
|
|
|
|
Crushed ore stacked on leach pad (tonnes) (2) |
1,483,500 |
1,568,900 |
(85,400) |
(5%) |
|
Grade (g/t Au) |
1.03 |
1.25 |
(0.22) |
(18%) |
|
Contained ounces stacked |
49,100 |
63,100 |
(14,000) |
(22%) |
|
|
|
|
|
|
|
Crushed ore milled (tonnes) |
30,100 |
45,600 |
(15,500) |
(34%) |
|
Grade (g/t Au) |
3.28 |
6.59 |
(3.31) |
(50%) |
|
Contained ounces milled |
3,200 |
9,700 |
(6,500) |
(67%) |
|
|
|
|
|
|
|
Ratio of total ounces produced to contained ounces stacked and
milled |
71% |
76% |
(5%) |
(7%) |
|
|
|
|
|
|
|
Total ore mined (tonnes) |
1,748,000 |
1,509,900 |
238,100 |
16% |
|
Waste mined (tonnes) |
950,000 |
702,000 |
248,000 |
35% |
|
Total mined (tonnes) |
2,698,000 |
2,211,900 |
486,100 |
22% |
|
|
|
|
|
|
|
Waste-to-ore ratio |
0.54 |
0.46 |
0.08 |
17% |
|
|
|
|
|
|
|
Ore crushed per day (tonnes) - combined |
16,800 |
17,900 |
(1,100) |
(6%) |
|
|
|
(1) |
Reported gold production for Q1 2014 is subject to final refinery
settlement and may be adjusted. |
|
(2) |
Excludes mill tailings stacked on the heap leach pad during the
period. |
Scott K. ParsonsDirector, Investor Relations(416) 368-9932 x
439
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