Record Quarter Drives Increase in Full Year Production
Guidance
Alamos Gold Inc. (TSX:AGI) (NYSE:AGI) (“Alamos” or
the “Company”) today reported its financial results for the first
quarter ended March 31, 2018 and reviewed its operating,
exploration and development activities.
“We delivered another record quarter of
production and given the strong start to the year, we’ve increased
full year production guidance to a range of 490,000 to 530,000
ounces. The increase was driven by stronger than expected
performances from our Mulatos and Island Gold mines, the latter
establishing a new record in its first full quarter as part of
Alamos. Our financial performance continues to improve with strong
free cash flow growth expected from our operations into the second
half of the year reflecting higher production and lower costs,”
said John A. McCluskey, President and Chief Executive Officer.
First Quarter 2018
Highlights
- Produced a record 128,900 ounces of gold, above budget and 34%
higher than the first quarter of 2017 driven by strong performances
from Mulatos and Island Gold. This marks the fourth consecutive
quarter of record production
- Increased 2018 production guidance at both Mulatos and Island
Gold, bringing Company-wide guidance to a range of 490,000 to
530,000 ounces of gold
- Island Gold reported record quarterly gold production of 28,100
ounces, in its first full quarter as part of Alamos. Mine-site
all-in sustaining costs1 of $633 per ounce were well below guidance
and the operation generated $9.8 million in mine-site free cash
flow1. As a result of this strong performance, production guidance
at Island Gold has been increased to between 95,000 and 105,000
ounces for 2018
- Sold 130,045 ounces of gold at an average realized price of
$1,331 per ounce for record revenues of $173.1 million
- Cost of sales of $1,113 per ounce, total cash costs1 of $789
per ounce and all-in sustaining costs ("AISC")1 of $935 per ounce
were all down from the first quarter of 2017, with total cash costs
and AISC decreasing 5% and 8%, respectively
- Reported adjusted net earnings1 of $12.3 million or $0.03 per
share1, reflecting adjustments for unrealized foreign exchange
losses recorded within both deferred taxes and foreign exchange of
$10.8 million, as well as other one-time items
- Reported net earnings of $0.6 million, or $0.00 per share
- Generated cash flow from operating activities of $58.8 million
($62.6 million or $0.16 per share, before changes in working
capital1), reflecting record production, lower cash costs and
stronger operating margins
- Generated $24.3 million in mine-site free cash flow1, and $7.3
million of company-wide free-cash flow1 in the first quarter, both
ahead of budget, reflecting a higher realized gold price and
stronger production at Mulatos and Island Gold
- Ended the quarter with no debt and $231.8 million in cash and
cash equivalents, up from $200.8 million as of December 31,
2017
- Liquidated the Company's equity positions in AuRico Metals and
Corex Gold, generating proceeds of $24.9 million and realizing a
gain of $14.3 million recorded directly in retained earnings
(deficit)
- Announced a semi-annual dividend of $0.01 per share, or $3.9
million, paid to shareholders on April 30, 2018
(1) Refer to the “Non-GAAP Measures and
Additional GAAP Measures” disclosure at the end of this press
release for a description and calculation of these measures.
|
|
Highlight
Summary |
|
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
Financial Results (in millions) |
|
|
Operating revenues |
$ |
173.1 |
|
$ |
121.0 |
|
Cost of sales (1) |
$ |
144.7 |
|
$ |
110.1 |
|
Earnings from operations |
$ |
18.5 |
|
$ |
2.2 |
|
Net earnings |
$ |
0.6 |
|
$ |
0.1 |
|
Adjusted net earnings (loss) (2) |
$ |
12.3 |
|
($ |
5.1 |
) |
Cash provided by operations before working capital and cash
taxes(2) |
$ |
62.6 |
|
$ |
34.2 |
|
Cash provided by operating activities |
$ |
58.8 |
|
$ |
20.1 |
|
Capital expenditures (sustaining) (2) |
$ |
10.7 |
|
$ |
9.3 |
|
Capital expenditures (growth) (2),(3) |
$ |
40.8 |
|
$ |
24.3 |
|
Operating Results |
|
|
Gold
production (ounces) (4) |
|
128,900 |
|
|
96,200 |
|
Gold
sales (ounces) |
|
130,045 |
|
|
98,755 |
|
Per Ounce Data |
|
|
Average realized gold price |
$ |
1,331 |
|
$ |
1,225 |
|
Average spot gold price (London PM Fix) |
$ |
1,329 |
|
$ |
1,219 |
|
Cost of sales per ounce of gold sold (includes amortization)
(1) |
$ |
1,113 |
|
$ |
1,115 |
|
Total cash costs per ounce of gold sold (2) |
$ |
789 |
|
$ |
827 |
|
All-in sustaining costs per ounce of gold sold (2) |
$ |
935 |
|
$ |
1,014 |
|
Share Data |
|
|
Earnings
per share, basic |
$ |
0.00 |
|
$ |
0.00 |
|
Adjusted
earnings per share, basic (2) |
$ |
0.03 |
|
($ |
0.02 |
) |
Weighted
average common shares outstanding (basic) (000’s) |
|
389,254 |
|
|
284,748 |
|
Financial Position (in millions) |
|
|
Cash and
cash equivalents (5) |
$ |
231.8 |
|
$ |
200.8 |
|
(1) Cost of sales includes mining and processing
costs, royalties, and amortization expense.(2) Refer to
the “Non-GAAP Measures and Additional GAAP Measures” disclosure at
the end of this press release and associated MD&A for a
description and calculation of these measures.(3)
Includes capitalized exploration and La Yaqui Phase I
development.(4) Gold production from Island Gold has
been included in this table for the period subsequent to November
23, 2017 only. Gold production from Island Gold for the three
months ended March 31, 2017 was 23,772 ounces.(5)
Comparative Cash and cash equivalents balance as at December 31,
2017.
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
2017(1) |
Gold production (ounces) |
|
|
Young-Davidson |
|
41,000 |
|
|
40,400 |
|
Mulatos |
|
46,000 |
|
|
40,000 |
|
Island Gold (1) |
|
28,100 |
|
|
— |
|
El Chanate |
|
13,800 |
|
|
15,800 |
|
Gold sales (ounces) |
|
|
Young-Davidson |
|
44,790 |
|
|
43,827 |
|
Mulatos |
|
44,659 |
|
|
38,675 |
|
Island Gold (1) |
|
27,503 |
|
|
— |
|
El Chanate |
|
13,093 |
|
|
16,253 |
|
Cost of sales (in millions)(2) |
|
|
Young-Davidson |
$ |
57.0 |
|
$ |
50.3 |
|
Mulatos |
$ |
43.6 |
|
$ |
40.0 |
|
Island Gold (1) |
$ |
27.5 |
|
|
— |
|
El Chanate |
$ |
16.6 |
|
$ |
19.8 |
|
Cost of sales
per ounce of gold sold (includes amortization) |
|
|
Young-Davidson |
$ |
1,273 |
|
$ |
1,148 |
|
Mulatos |
$ |
976 |
|
$ |
1,034 |
|
Island Gold (1) |
$ |
1,000 |
|
|
— |
|
El Chanate |
$ |
1,268 |
|
$ |
1,218 |
|
Total cash costs per ounce of gold sold (3) |
|
|
Young-Davidson |
$ |
824 |
|
$ |
710 |
|
Mulatos |
$ |
786 |
|
$ |
827 |
|
Island Gold (1) |
$ |
553 |
|
|
— |
|
El Chanate |
$ |
1,176 |
|
$ |
1,144 |
|
Mine-site
all-in sustaining costs per ounce of gold sold
(3),(4) |
|
|
Young-Davidson |
$ |
994 |
|
$ |
851 |
|
Mulatos |
$ |
842 |
|
$ |
920 |
|
Island Gold (1) |
$ |
633 |
|
|
— |
|
El
Chanate |
$ |
1,191 |
|
$ |
1,187 |
|
Capital expenditures (growth and sustaining) (in
millions)(3) |
|
|
Young-Davidson |
$ |
22.9 |
|
$ |
18.6 |
|
Mulatos(5) |
$ |
7.2 |
|
$ |
11.4 |
|
Island Gold (1),(5) |
$ |
13.9 |
|
|
— |
|
El Chanate |
$ |
0.1 |
|
$ |
0.6 |
|
Other |
$ |
7.4 |
|
$ |
3.0 |
|
(1) Operating and financial results
from Island Gold are included in Alamos’ consolidated financial
statements for the period subsequent to November 23, 2017. Gold
production from Island Gold for the three months ended March 31,
2017 was 23,772.(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 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.
|
|
|
Outlook and Strategy |
|
|
2018
Guidance |
Total |
|
Young-Davidson |
Mulatos |
Island
Gold |
ElChanate |
Turkey (5) |
Other (2) |
Original |
Revised |
Gold
production (000’s ounces) |
|
|
|
|
|
|
|
|
Revised Guidance |
200-210 |
155-165 |
95-105 |
40-50 |
|
— |
|
— |
|
490-530 |
Original Guidance |
200-210 |
150-160 |
90-100 |
40-50 |
|
— |
|
— |
480-520 |
|
Cost of sales,
including
amortization (in millions)(4) |
$233 |
$160 |
$102 |
$58 |
|
— |
|
— |
$536 |
$550 |
Cost of sales, including
amortization ($ per ounce)(4) |
$1,125 |
$1,000 |
$1,025 |
$1,285 |
|
— |
|
— |
$1,075 |
$1,080 |
Total cash
costs ($ per ounce)(1) |
$675 |
$800 |
$575 |
$1,200 |
|
— |
|
— |
$740 |
$740 |
All-in sustaining costs ($ per ounce)(1) |
|
|
|
|
|
— |
|
— |
$950 |
$950 |
Mine-site
all-in sustaining costs ($ per ounce)(1),(3) |
$850 |
$900 |
$825 |
$1,200 |
|
— |
|
— |
|
— |
|
— |
Amortization costs ($ per ounce)(1) |
$450 |
$200 |
$450 |
$85 |
|
— |
|
— |
$335 |
$340 |
Capital
expenditures (in millions) |
|
|
|
|
|
|
|
|
Sustaining capital(1) |
$35-40 |
$8-10 |
$25-27 |
|
— |
|
— |
|
— |
$68-77 |
$68-77 |
Growth capital(1) |
$35-40 |
$18-20 |
$25-28 |
|
— |
$25 |
$46 (2) |
$224-234 |
$149-159 |
Total capital expenditures(1) |
$70-80 |
$26-30 |
$50-55 |
|
— |
$25 |
$46 |
$292-$311 |
$217-$236 |
(1) Refer to the "Non-GAAP Measures and Additional
GAAP" disclosure at the end of this press release and associated
MD&A for a description of these measures.(2)
Includes capitalized exploration at all operating sites and
development projects.(3) For the purposes of
calculating mine-site all-in sustaining costs at individual mine
sites, the Company does not include an allocation of corporate and
administrative and share based compensation expenses to the mine
sites.(4) Cost of sales includes mining and processing
costs, royalties, and amortization expense.(5) Capital
guidance at Kirazlı reduced to $25 million from the original
budget of $100 million.
The Company continues to deliver on its
strategic priorities of increasing cash flow from its operations
while advancing its portfolio of low-cost development projects. In
2017, this included reporting record gold production and an 8%
reduction in all-in sustaining costs.
This strong operational performance continued
into the first quarter of 2018 with production of 128,900 ounces of
gold, exceeding budget and setting a new quarterly record. This
marks the fourth consecutive quarter of record production.
Reflecting the strong start to the year, the Company has increased
its 2018 production guidance at both Island Gold and Mulatos by
5,000 ounces, bringing the revised production guidance to a range
of 490,000 to 530,000 ounces, representing a 19% increase over 2017
(based on the mid-point of guidance). All-in sustaining costs are
expected to average $950 per ounce, supporting increasing operating
margins and mine-site free cash flow. Capital spending at the four
operating mines is expected to total between $146 and $165 million
for the year.
Consistent with budget, production in the second
quarter of 2018 is expected to be approximately 125,000 ounces, at
slightly higher all-in sustaining costs than the first quarter as a
result of additional sustaining capital. The Company expects
stronger production from Young-Davidson to offset slightly lower
production from Island Gold and Mulatos. In the second half of
2018, the Company anticipates stronger gold production, lower total
cash costs and a lower rate of capital spending, all of which is
expected to contribute to higher mine-site free cash flow compared
to the first half of the year.
Young-Davidson produced 41,000 ounces in the
first quarter and is expected to produce between 200,000 and
210,000 ounces for the full year at mine-site all-in sustaining
costs of $850 per ounce. Similar to 2017, the Company expects
stronger gold production in the second quarter and more notably in
the second half of 2018 driven by higher underground grades and
mining rates. Combined with lower total cash costs and a reduced
rate of capital spending, this will drive stronger mine-site free
cash flow in the second half of 2018.
Island Gold produced 28,100 ounces of gold in
the first quarter, exceeding its budget and setting a new quarterly
record. Given the outperformance in the first quarter, the
operation is now expected to produce between 95,000 and 105,000
ounces in 2018, a 5% increase from previously guided levels, at
mine-site all-in sustaining costs of $825 per ounce. The Phase I
expansion of the Island Gold mill to 1,100 tpd remains on track and
is expected to be completed by the end of the third quarter. This
is anticipated to drive production growth at lower costs in 2019
and beyond. Accordingly, the Company expects significant free cash
flow growth in 2019.
In parallel to the Phase I mill expansion, the
Company is pursuing an aggressive exploration program at Island
Gold which has been successful in driving nearly a 400% increase in
Mineral Reserves and a 60% increase in the Mineral Reserve grade
since 2014.
Ongoing exploration success will be incorporated
into an evaluation of the most effective and economic approach to a
Phase II expansion of the operation beyond 1,100 tpd.
Total production from the Mulatos district
(including La Yaqui Phase I) increased to 46,000 ounces in the
first quarter, also exceeding budget. As a result, Mulatos is now
expected to produce between 155,000 to 165,000 ounces in 2018, a 3%
increase from previously guided levels, at mine-site all-in
sustaining costs of $900 per ounce.
El Chanate produced 13,800 ounces in the first
quarter and is expected to produce 40,000 to 50,000 ounces for the
full year. This is down from 2017 reflecting lower mining rates
with mining activities expected to cease mid-2018. Given the long
leach cycle at El Chanate, the Company expects to benefit from
ongoing gold production beyond 2018 through residual leaching. This
will be lower cost and higher margin production, with mining
activities completed, and is expected to drive higher mine-site
free cash flow from the operation.
The Company expects combined annual gold
production of at least 500,000 ounces from its existing operations
in 2019 and 2020 with low cost production growth from Island Gold
replacing production from El Chanate. Consolidated all-in
sustaining costs are expected to decrease in 2019 reflecting the
completion of the Phase I expansion at Island Gold and end of the
5% royalty at Mulatos, with a further decline expected in 2020
reflecting higher underground mining rates at Young-Davidson.
Similarly, capital spending at existing operations is expected to
trend lower in 2019 and 2020 reflecting the completion of the Phase
I expansion at Island Gold and lower mine infrastructure at
Young-Davidson. Increased production combined with declining
operating costs is expected to result in strong free cash flow
growth over the next three years.
Capital spending on development projects,
including capitalized exploration, is dependent on timing of
receipt of the GSM (Business Opening and Operation) permit for the
Kirazlı project, located in Turkey. On April 18, 2018, a snap
election was called in Turkey with early parliamentary and
presidential elections scheduled to be held on June 24, 2018. The
Company does not anticipate receiving the GSM permit until after
the election, which will delay construction activities planned for
this year. As a result, the Company is revising its 2018 capital
budget for Kirazlı to $25 million, down from $100 million, with
spending focused on specific infrastructure projects, notably road,
powerline, and water reservoir construction. The Company will
update its 2018 capital budget once the GSM permit has been
received allowing for the ramp up of full scale construction
activities.
In addition to capital spending in Turkey, a
total of $46 million is budgeted for development at Cerro Pelon, La
Yaqui Grande and Lynn Lake as well as capitalized exploration at
all sites. Total exploration spending of $36 million will be
focused on Island Gold and Mulatos for the remainder of the
year.
The Company is well positioned to fund this
growth having significantly de-risked its balance sheet over the
past year. The Company is debt free with growing cash flow from its
operations and over $630 million of cash and available liquidity
under the Company's credit facility.
|
|
First Quarter 2018 Results |
Young-Davidson Operational and Financial
Review |
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
Gold production (ounces) |
|
41,000 |
|
|
40,400 |
|
Gold
sales (ounces) |
|
44,790 |
|
|
43,827 |
|
Financial
Review (in millions) |
|
|
Operating Revenues |
$ |
59.5 |
|
$ |
53.6 |
|
Cost of sales (1) |
$ |
57.0 |
|
$ |
50.3 |
|
Earnings from
operations |
$ |
2.5 |
|
$ |
3.3 |
|
Cash provided by
operating activities |
$ |
27.4 |
|
$ |
18.5 |
|
Capital expenditures
(sustaining) (2) |
$ |
7.6 |
|
$ |
6.1 |
|
Capital expenditures
(growth) (2) |
$ |
15.3 |
|
$ |
12.5 |
|
Mine-site free cash
flow (2) |
$ |
4.5 |
|
$ |
(0.1 |
) |
Cost of sales, including amortization per ounce of gold sold
(1) |
$ |
1,273 |
|
$ |
1,148 |
|
Total
cash costs per ounce of gold sold (2) |
$ |
824 |
|
$ |
710 |
|
Mine-site
all-in sustaining costs per ounce of gold sold (2),(3) |
$ |
994 |
|
$ |
851 |
|
Underground
Operations |
|
|
Tonnes of
ore mined |
|
585,060 |
|
|
576,019 |
|
Tonnes of
ore mined per day ("tpd") |
|
6,501 |
|
|
6,400 |
|
Average
grade of gold (4) |
|
2.35 |
|
|
2.56 |
|
Metres
developed |
|
3,144 |
|
|
3,242 |
|
Mill Operations |
|
|
Tonnes of
ore processed |
|
669,287 |
|
|
694,624 |
|
Tonnes of
ore processed per day |
|
7,437 |
|
|
7,718 |
|
Average
grade of gold (4) |
|
2.22 |
|
|
2.18 |
|
Contained
ounces milled |
|
46,193 |
|
|
48,774 |
|
Average recovery rate |
|
90 |
% |
|
89 |
% |
(1) Cost of sales includes mining and processing
costs, royalties and amortization.(2) Refer to the
“Non-GAAP Measures and Additional GAAP Measures” disclosure at the
end of this press release and associated MD&A for a description
and calculation of these measures. Total cash costs and
mine-site AISC are exclusive of net-realizable value
adjustments.(3) For the purposes of calculating
mine-site all-in sustaining costs, the Company does not include an
allocation of corporate and administrative and share based
compensation expenses.(4) Grams per tonne of gold ("g/t
Au").
Young-Davidson produced 41,000 ounces of gold in
the first quarter of 2018, higher than the same period of 2017 but
lower than the fourth quarter of 2017 due to lower underground
mining rates and mined grades. The Company mined 585,060 tonnes of
ore from underground in the first quarter, or 6,501 tpd,
representing an increase over the prior year period. Underground
mining rates were lower in the first quarter than in the fourth
quarter of 2017, as a result of temporary constraints related to
the paste fill sequence.
In addition, underground grades in the first
quarter of 2.35 g/t Au were lower than the previous quarter and the
same period of 2017 primarily as a result of mine sequencing. As
previously guided, gold production is expected to increase in the
second quarter and second half of 2018, with grades and underground
mining rates expected to increase through the year.
During the first quarter, 669,287 tonnes, or
7,437 tpd, were processed through the mill with grades averaging
2.22 g/t Au, slightly higher from the prior year period. Mill
throughput decreased compared to the fourth quarter of 2017 due to
a scheduled liner change in January. Mill recoveries of 90% were in
line with expectations and marginally higher than the prior year
period.
Financial Review
For the three months ended March 31, 2018,
revenues of $59.5 million were $5.9 million higher than the
prior-year period, reflecting more ounces sold and a higher
realized gold price.
In the first quarter of 2018, cost of sales of
$57.0 million were higher than the prior year period reflecting
higher tonnes mined and input costs. Cost of sales reflects mining
and processing costs, royalties, and amortization expense.
Total cash costs in the first quarter were $824
per ounce, representing a 16% increase from the first quarter of
2017. The increase was attributable to higher gross costs
driven by an increase in paste fill, maintenance and labour costs.
Underground mining costs were higher than the prior year period due
to a combination of increased paste fill activities and a higher
allocation of development costs to operating expense, which impacts
cost per tonne. The stronger Canadian dollar had a nominal impact
on total cash costs compared to the prior year as the Company has
hedged the majority of its Canadian dollar operating and capital
costs at budgeted foreign exchange rates for the first half of
2018. Mine-site AISC were $994 per ounce, 17% higher than the prior
year period reflecting higher total cash costs and sustaining
capital expenditures.
Capital expenditures totaled $22.9 million in
the first quarter, 23% higher than the same period of 2017,
reflecting the higher proportion of capital expected in the first
half of 2018 as outlined in the Company's guidance. Capital
spending in the first quarter was focused primarily on lateral
development in the upper and lower mines, and lower mine
infrastructure. Total capital expenditures in the first quarter
included $7.6 million of sustaining capital and $15.3 million of
growth capital.
Young-Davidson generated mine-site free cash
flow of $4.5 million in the first quarter, lower than in recent
quarters as a result of lower production and higher costs. The
Company expects mine-site free cash flow to grow in subsequent
quarters as production and operating margins increase and capital
spending declines.
|
|
Island Gold Operational and Financial Review |
|
Three Months Ended March 31, |
|
|
2018 |
2017 (1) |
Gold production
(ounces) (1) |
|
28,100 |
|
— |
|
Gold sales (ounces)
(1) |
|
27,503 |
|
— |
|
Financial Review (in millions) |
|
|
Operating Revenues |
$ |
36.6 |
|
— |
|
Cost of sales (2) |
$ |
27.5 |
|
— |
|
Earnings from
operations |
$ |
9.0 |
|
— |
|
Cash provided by
operating activities |
$ |
23.7 |
|
— |
|
Capital expenditures
(sustaining) (3) |
$ |
2.2 |
|
— |
|
Capital expenditures
(growth) (3),(6) |
$ |
11.7 |
|
— |
|
Mine-site free cash
flow (3) |
$ |
9.8 |
|
— |
|
Cost of sales, including amortization per ounce of gold sold
(2) |
$ |
1,000 |
|
— |
|
Total
cash costs per ounce of gold sold (3) |
$ |
553 |
|
— |
|
Mine-site
all-in sustaining costs per ounce of gold sold (3),(4) |
$ |
633 |
|
— |
|
Underground
Operations |
|
|
Tonnes of
ore mined |
|
84,655 |
|
91,710 |
|
Tonnes of
ore mined per day ("tpd") |
|
941 |
|
1,019 |
|
Average
grade of gold (5) |
|
11.06 |
|
8.64 |
|
Metres
developed |
|
1,555 |
|
2,083 |
|
Mill Operations |
|
|
Tonnes of
ore processed |
|
82,105 |
|
83,365 |
|
Tonnes of
ore processed per day |
|
912 |
|
926 |
|
Average
grade of gold (5) |
|
11.07 |
|
9.18 |
|
Contained
ounces milled |
|
29,224 |
|
24,594 |
|
Average recovery rate |
|
96 |
% |
97 |
% |
(1) Financial results from Island
Gold are included in Alamos’ consolidated financial statements for
the period subsequent to November 23, 2017. Gold production from
Island Gold for the three months ended March 31, 2017 was
23,772.(2) Cost of sales includes mining and processing
costs, royalties and amortization.(3) Refer to the
“Non-GAAP Measures and Additional GAAP Measures” disclosure at the
end of this press release and associated MD&A for a description
and calculation of these measures. Total cash costs and
mine-site AISC are exclusive of net-realizable value
adjustments.(4) For the purposes of calculating
mine-site all-in sustaining costs, the Company does not include an
allocation of corporate and administrative and share based
compensation expenses.(5) Grams per tonne of gold ("g/t
Au").(6) Includes capitalized exploration of $3.1
million for the three months ended March 31, 2018.
The first quarter of 2018 was the first full
quarter that the Company owned and operated Island Gold. Operating
and financial results exceeded budget with record production of
28,100 ounces of gold, an increase of 18% from the prior year
period reflecting higher grades mined and milled. Given the strong
first quarter performance, the Company is increasing 2018
production guidance to a range of 95,000 to 105,000 ounces.
The Company mined 84,655 tonnes of ore from
underground in the first quarter of 2018, or 941 tpd, lower than
the prior year period. The Company expects to ramp up mining rates
in the second half of 2018 concurrent with the completion of the
mill expansion to 1,100 tpd. Underground mining rates are expected
to average 1,000 tpd in 2018, consistent with the rates achieved in
2017. Underground grades in the first quarter of 11.06 g/t Au were
above budget and higher than the prior year period due to a
combination of mine sequencing and a positive grade reconciliation.
Grades are expected to be lower throughout the remainder of
2018.
During the first quarter, 82,105 tonnes or 912
tpd were processed through the mill, in line with the prior year
period. Milled grades averaged 11.07 g/t Au, higher than the prior
year period and previous quarter. Mill throughput is expected to
average 980 tpd for the full year with milled grades expected to
return to budgeted grades of between 8.3 and 8.9 g/t Au for the
remainder of the year. Reflecting the return to budgeted grades,
gold production is expected to decrease in the second and third
quarters and ramp up in the fourth quarter following completion of
the mill expansion.
Financial Review
With the Company acquiring Island Gold in
November 2017, financial information prior to the acquisition date
has not been included in the comparative table above.
For the three months ended March 31, 2018,
Island Gold generated revenues of $36.6 million, on record
production and higher realized gold prices. Cost of sales of $27.5
million reflect an ongoing amortization charge related to the
purchase price of the asset, which increases amortization to
approximately $450 per ounce based on current mineral reserves and
resources.
Total cash costs of $553 per ounce were below
guidance levels of $575 per ounce, reflecting higher grades mined
in the quarter. In addition, mine-site AISC of $633 per ounce
were well below guidance of $825 per ounce driven primarily by
lower sustaining capital spending in the first quarter. Mine-site
AISC are expected to be higher for the remainder of 2018.
Capital expenditures totaled $13.9 million in
the first quarter, with spending focused primarily on capitalized
exploration, lateral development and the mill expansion. Total
capital expenditures in the first quarter included $2.2 million of
sustaining capital and $11.7 million of growth capital. Island Gold
generated mine-site free cash flow of $9.8 million in the first
quarter driven by stronger production and operating margins. The
Company expects Island Gold to generate sufficient cash flow to
fully fund its significant exploration program and the expansion to
1,100 tpd.
|
|
Mulatos Operational and Financial Review |
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
Gold production (ounces) |
|
46,000 |
|
|
40,000 |
|
Gold
sales (ounces) |
|
44,659 |
|
|
38,675 |
|
Financial
Review (in millions) |
|
|
Operating Revenues |
$ |
59.6 |
|
$ |
47.6 |
|
Cost of sales (1) |
$ |
43.6 |
|
$ |
40.0 |
|
Earnings from
operations |
$ |
12.7 |
|
$ |
6.7 |
|
Cash provided by
operating activities |
$ |
16.1 |
|
$ |
9.1 |
|
Capital expenditures
(sustaining) (2) |
$ |
0.8 |
|
$ |
2.6 |
|
Capital expenditures
(Mulatos growth) (2),(6) |
$ |
6.4 |
|
$ |
3.5 |
|
La Yaqui Phase I
construction cost (2) |
$ |
— |
|
$ |
5.3 |
|
Mine-site free cash
flow, excluding La Yaqui construction costs (2) |
$ |
8.9 |
|
$ |
3.0 |
|
Cost of sales, including amortization per ounce of gold sold
(1) |
$ |
976 |
|
$ |
1,034 |
|
Total
cash costs per ounce of gold sold (2) |
$ |
786 |
|
$ |
827 |
|
Mine site
all-in sustaining costs per ounce of gold sold (2),(3) |
$ |
842 |
|
$ |
920 |
|
Open Pit &
Underground Operations |
|
|
Tonnes of
ore mined - open pit (4) |
|
2,189,735 |
|
|
1,810,642 |
|
Total
waste mined - open pit |
|
1,998,605 |
|
|
1,890,744 |
|
Total
tonnes mined - open pit |
|
4,870,381 |
|
|
3,701,386 |
|
Waste-to-ore ratio (operating) |
|
0.91 |
|
|
1.04 |
|
Tonnes of
ore mined - underground |
|
17,623 |
|
|
28,355 |
|
Crushing and
Heap Leach Operations |
|
|
Tonnes of
ore stacked |
|
1,750,471 |
|
|
1,686,961 |
|
Average
grade of gold processed (5) |
|
0.84 |
|
|
0.86 |
|
Contained ounces stacked |
|
47,358 |
|
|
46,731 |
|
Mill
Operations |
|
|
Tonnes of
high grade ore milled |
|
30,389 |
|
|
35,764 |
|
Average
grade of gold processed (5) |
|
8.11 |
|
|
8.88 |
|
Contained
ounces milled |
|
7,917 |
|
|
10,204 |
|
Total contained ounces stacked and milled |
|
55,275 |
|
|
56,935 |
|
Recovery
ratio (ratio of ounces produced to contained ounces stacked and
milled) |
|
83 |
% |
|
70 |
% |
Ore
crushed per day (tonnes) - combined |
|
19,800 |
|
|
19,100 |
|
(1) Cost of sales includes mining and processing
costs, royalties and amortization.(2) Refer to the
“Non-GAAP Measures and Additional GAAP Measures” disclosure at the
end of this press release and associated MD&A for a description
and calculation of these measures. Total cash costs and
mine-site AISC are exclusive of net-realizable value
adjustments.(3) For the purposes of calculating
mine-site all-in sustaining costs, the Company does not include an
allocation of corporate and administrative and share based
compensation expenses.(4) Includes ore stockpiled
during the quarter.(5) Grams per tonne of gold ("g/t
Au").(6) Includes capitalized exploration, of $1.1
million for the three months ended March 31, 2018.
Mulatos exceeded budget for the first quarter of
2018 with gold production of 46,000 ounces, including approximately
8,000 ounces from La Yaqui Phase I which achieved initial
production in September 2017. Production in the quarter was higher
than the prior year period mainly due to the contribution from La
Yaqui Phase I, slightly offset by lower grades mined at the main
Mulatos pit. As a result of the strong start to the year, and
continued underground mining at San Carlos, the Company has
increased 2018 production guidance to a range of 155,000 to 165,000
ounces. Consistent with annual guidance, the Company expects
production to decrease in the second half of the year following the
end of production from San Carlos.
Total crusher throughput averaged a record
19,800 tpd, higher than the same period of 2017 reflecting the
addition of La Yaqui Phase I. A total of 1,750,471 tonnes were
stacked in the first quarter at a grade of 0.84 g/t Au, consistent
with annual guidance. The waste-to-ore ratio of 0.91:1 decreased
relative to the prior year period as a result of the addition of La
Yaqui Phase I, which has a minimal waste-to-ore ratio.
In the first quarter of 2018, 30,389 tonnes were
milled at an average grade of 8.11 g/t Au from San Carlos.
Consistent with budget, the tonnes mined during the quarter were
lower than the same period of 2017 and the fourth quarter of 2017
as the underground mine nears the end of its life. San Carlos and
existing stockpiles had been expected to be depleted by the end of
the first quarter, however; the Company has identified additional
ore, which is expected to extend the life to mid-2018.
The ratio of ounces produced to contained ounces
stacked and milled (or recovery ratio) was 83% in the quarter
compared to 70% in the prior year period and guidance of 75%. The
higher recoveries in the first quarter reflect the recovery of
deferred production from the fourth quarter of 2017, as well as
stronger than budgeted recoveries at La Yaqui Phase I.
Financial Review
For the three months ended March 31, 2018,
revenues of $59.6 million were $12.0 million or 25% higher than the
prior-year period reflecting a 15% increase in the number of ounces
sold and a 10% higher realized gold price.
Cost of sales in the first quarter of $43.6
million were higher than the prior-year period as gross costs
reflected higher tonnes stacked. Cost of sales reflects mining and
processing costs, royalties, and amortization expense.
Total cash costs of $786 per ounce in the first
quarter were 5% lower than $827 per ounce in the prior year period,
reflecting the addition of lower cost La Yaqui Phase I production.
Mine-site AISC in the quarter were $842 per ounce, 8% lower than
the prior year period reflecting lower total cash costs and lower
sustaining capital due to the timing of capital expenditures.
The substantial production and sales growth
combined with higher gold prices and lower costs drove another
strong quarter of cash flow, with Mulatos generating $8.9 million
in mine-site free cash flow. The Mulatos operation is expected to
generate strong cash flow in 2018, which will be used to advance
the La Yaqui Grande and Cerro Pelon deposits through permitting, as
well as funding exploration activities.
|
|
El
Chanate Operational and Financial Review |
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
Gold production (ounces) |
|
13,800 |
|
|
15,800 |
|
Gold
sales (ounces) |
|
13,093 |
|
|
16,253 |
|
Financial
Review (in millions) |
|
|
Operating Revenues |
$ |
17.4 |
|
$ |
19.8 |
|
Cost of sales (1) |
$ |
16.6 |
|
$ |
19.8 |
|
Earnings from
operations |
$ |
0.8 |
|
$ |
— |
|
Cash provided by (used
by) operating activities |
$ |
1.2 |
|
($ |
1.0 |
) |
Capital
expenditures |
$ |
0.1 |
|
$ |
0.6 |
|
Mine-site free cash
flow (2) |
$ |
1.1 |
|
($ |
1.6 |
) |
Cost of sales, including amortization per ounce of gold sold
(1) |
$ |
1,268 |
|
$ |
1,218 |
|
Total
cash costs per ounce of gold sold (2) |
$ |
1,176 |
|
$ |
1,144 |
|
Mine site
all-in sustaining costs per ounce of gold sold (2),(3) |
$ |
1,191 |
|
$ |
1,187 |
|
Open Pit
Operations |
|
|
Tonnes of
ore mined |
|
1,006,371 |
|
|
905,915 |
|
Total
tonnes mined |
|
2,965,280 |
|
|
7,559,325 |
|
Waste-to-ore ratio (operating) |
|
1.95 |
|
|
7.34 |
|
Average grade of gold (4) |
|
0.60 |
|
|
0.53 |
|
Crushing and
Heap Leach Operations |
|
|
Total tonnes of ore stacked |
|
1,009,177 |
|
|
919,244 |
|
Average grade of gold (4) |
|
0.60 |
|
|
0.54 |
|
Total contained ounces stacked |
|
19,467 |
|
|
15,959 |
|
Ore crushed and run-of-mine ore stacked per day (tonnes) -
combined |
|
11,200 |
|
|
10,200 |
|
Recovery ratio (ratio of ounces produced to contained ounces
stacked) |
|
71 |
% |
|
99 |
% |
(1) Cost of sales includes mining and processing
costs, royalties and amortization(2) Refer to the
“Non-GAAP Measures and Additional GAAP Measures” disclosure at the
end of this press release and associated MD&A for a description
and calculation of these measures. Total cash costs and
mine-site AISC are exclusive of net-realizable value
adjustments.(3) For the purposes of calculating
mine-site all-in sustaining costs, the Company does not include an
allocation of corporate and administrative and share based
compensation expenses.(4) Grams per tonne of gold ("g/t
Au").
El Chanate produced 13,800 ounces of gold in the
first quarter of 2018, down from 15,800 ounces in the prior year
period reflecting lower stacking rates throughout 2017.
El Chanate is expected to continue to produce at
lower than historical rates in 2018 as the mine reaches the end of
mining activities by mid-year. Given the long leach cycle at El
Chanate, the Company expects to benefit from ongoing gold
production at decreasing rates into the second half of 2018 and
beyond through residual leaching. This is expected to drive higher
mine-site free cash flow the second half of the year.
In 2018 El Chanate continued to demonstrate an
industry leading safety performance achieving milestones of over 3
years and 5.2 million hours without a lost time injury by the end
of the first quarter.
Financial Review
For the three months ended March 31, 2018,
revenue of $17.4 million was $2.4 million lower than the prior year
period, reflecting fewer ounces sold, partially offset by higher
realized gold prices.
Total cash costs of $1,176 per ounce and
mine-site all-in sustaining costs of $1,191 per ounce in the first
quarter were similar to the prior year period, reflecting a lower
waste-to-ore ratio, and higher grades, offset by higher unit
costs.
El Chanate generated positive mine-site free
cash flow of $1.1 million in the quarter. This is expected to
increase in the second half of the year as the mine transitions to
residual leaching. Given El Chanate's higher cost structure, the
Company has hedged all of its expected 2018 gold production through
gold collar contracts, ensuring a minimum gold price of $1,290 and
participation up to a price of $1,458 per ounce.
First Quarter 2018 Development
Activities
Mulatos District
La Yaqui Grande and Cerro
Pelon
The capital budget for Cerro Pelon in 2018 is $8
million which will be spent on engineering, permitting and early
stage construction activities. The Cerro Pelon deposit is located
approximately three kilometres from the existing Mulatos operation.
Given its proximity to Mulatos’ infrastructure, ore from the Cerro
Pelon open pit is expected to be trucked to the existing heap leach
circuit for processing. The environmental impact assessment (“MIA”)
for Cerro Pelon is expected to be finalized and submitted mid-2018.
Following approval, construction and pre-stripping activities are
expected to take approximately 18 months with initial production
expected in 2020. Recently completed work includes the design of
the waste rock dump, haulage road and crushing circuit.
La Yaqui Grande’s capital budget for 2018 is $5
million with spending focused on permitting and project
engineering. The MIA is expected to be completed and submitted by
the end of 2018 with construction and pre-stripping activities
commencing in the latter part of 2019 and production in 2021.
Similar to La Yaqui Phase I, La Yaqui Grande will be developed as a
standalone, open pit, heap leach operation. La Yaqui Grande
exploration activities in 2017 were successful in increasing
Mineral Reserves by 28% to 644,000 ounces as at December 31, 2017
(14.3 million tonnes grading 1.4 g/t Au).
During the first quarter, spending on La Yaqui
Grande and Cerro Pelon was $2.0 million, which included $1.1
million of capitalized exploration. The Company recently awarded
the Engineering, Procurement and Construction Management contract
for its Cerro Pelon and La Yaqui Grande projects.
Lynn Lake
The Company owns 100% of the Lynn Lake
development project, in Manitoba, Canada. The Company released a
positive Feasibility Study on the project in December 2017
outlining average annual production of 143,000 ounces over a 10
year mine life (170,000 ounces over its first six years) at average
mine-site all-in sustaining costs of $745 per ounce.
The 2018 capital budget for Lynn Lake is $12
million, comprised of $8 million for development activities and $4
million for exploration. Development spending will be focused on
baseline work in support of the Environmental Impact Study (“EIS”)
for the project that will be submitted to satisfy federal and
provincial environmental assessment requirements. The permitting
process is expected to take approximately two years followed by two
years of construction.
The Company began evaluating various
opportunities to enhance the project’s economics, including
modifications to the overall site layout, plant design and water
management. During the first quarter, $1.3 million was spent at
Lynn Lake mainly on project optimization and exploration
activities.
Turkey
The Company has been granted the Environmental
Impact Assessment and Forestry Permits for Kirazlı and is awaiting
the GSM (Business Opening and Operation) permit, which is granted
by the Çanakkale Governorship.
On April 18, 2018, a snap election was called in
Turkey with early parliamentary and presidential elections
scheduled to be held on June 24, 2018. The Company does not
anticipate receiving the GSM permit until after the election, which
will delay construction activities planned for this year. As a
result, the Company is revising its 2018 capital budget for Kirazlı
to $25 million, down from $100 million, with spending focused on
surrounding infrastructure projects. The Company will update its
2018 capital budget once the GSM permit has been received allowing
for the ramp up of full scale construction activities.
Ongoing development activities include power
line construction, tree clearing, road relocation and construction
of the water reservoir. Approximately 70% of tree clearing and 15%
of the road realignment earthworks and have now completed. The
Company has awarded several key contracts, including civil works,
subject to the receipt of the GSM. For the first quarter,
development expenditures at Kirazlı were $5.1 million.
Kirazlı is expected to produce more than 100,000
ounces of gold in its first full year of production at mine-site
AISC of less than $400 per ounce. This is expected to drive
company-wide production growth, while significantly lowering the
Company’s cost profile.
Other
The Company capitalized $0.5 million related to
the Esperanza Project and $0.2 million to Quartz Mountain during
the quarter.
First Quarter 2018 Exploration
Activities
Mulatos District, Mexico
The Company has a large exploration package
covering 28,777 hectares with the majority of past exploration
efforts focused around the Mulatos mine. Over the last three years,
exploration has moved beyond the main Mulatos pit area and focused
on prospects throughout the wider district. After significant
exploration success at La Yaqui Grande over the past few years, the
focus in 2018 has shifted to other parts of the district including
El Carricito, El Halcon and El Jaspe.
In the first quarter of 2018, the Company
invested $4.5 million in exploration activities within the Mulatos
District, of which $1.1 million was capitalized and the remainder
expensed. This included 14,792 metres (“m”) of diamond drilling and
1,059 m of reverse circulation drilling focused on both near-mine
targets and regional targets including El Halcon and El Jaspe.
Additionally, underground exploration of the San Carlos deposit
concluded during the quarter.
At El Carricito, mapping and sampling continued
during the first quarter with approximately 70% of the concession
having been mapped to date. El Carricito will be a key focus of the
2018 exploration program with 10,000 m of scout drilling planned
for the second half of this year.
Island Gold, Canada
Delineation drilling at Island Gold in 2017 was
successful in increasing mineral reserves by 18%, net of mining
depletion. In addition, the 2017 exploration drilling resulted in
the addition of new mineral resources. The 2017 exploration program
was also successful in outlining additional gold mineralization
down plunge to the east. The majority of the exploration drill
results in this area are not yet at the required drill spacing to
allow for inclusion into the Inferred mineral resource
category.
A key focus of the 2018 exploration program is
on converting this newly outlined zone of mineralization into the
Inferred mineral resource category. Other areas of focus include
drilling, both beneath the existing mine infrastructure and to the
west.
Surface exploration
drilling
Surface exploration drilling totaled 9,187 m
during the first quarter of 2018, with 12 holes completed as part
of the directional exploration drilling campaign. The directional
drilling targeted areas peripheral to the inferred mineral resource
blocks below the 1,000 m level, with drill hole spacing ranging
from 75 m to 100 m. The area being targeted by the surface
directional drill program extends approximately 2,000 m in strike
length between the 1,000 m and 1,500 m elevation below surface.
The surface directional drilling programs will
continue in 2018 with a focus on defining new inferred mineral
resources.
Underground exploration
drilling
During the first quarter of 2018, a total of
8,865 m of underground exploration diamond drilling was completed
in 44 holes from the 620 and 840 levels. The objective of the
underground drilling is to identify new mineral resources close to
existing mineral resource or reserve blocks.
Total expenditures across the surface and
underground exploration drilling program at Island Gold during the
first quarter of 2018 were $3.3 million, with $3.1 million
capitalized.
Lynn Lake, Canada
Surface exploration drilling continued at Lynn
Lake in the first quarter of 2018 with a total of 4,047 m drilled
in nine holes. Exploration drilling was focused in the southern
portion of the Lynn Lake Greenstone belt testing for the
continuation of structures related to gold mineralization along
strike of Burnt Timber and Linkwood, and testing two regional
targets in the southern portion of the Lynn Lake Greenstone
Belt.
Drilling will continue into the second quarter
of 2018, and a regional exploration program will commence focused
on refining existing high-priority exploration targets and
generating a pipeline of prospective targets across the Lynn Lake
Greenstone Belt.
A total of $4 million and 10,000 m of drilling
is budgeted at the Lynn Lake project for 2018. Spending in the
first quarter totaled $0.8 million.
Review of First Quarter Financial
Results
During the first quarter of 2018, the Company
sold 130,045 ounces of gold for total revenue of $173.1 million, a
43% increase compared to the prior year period. This was primarily
driven by the Island Gold acquisition, which contributed 27,503
ounces, or $36.6 million in sales for the quarter, and a higher
realized price of $1,331 per ounce compared to $1,225 per ounce in
the prior year period (a $10.5 million benefit). The
Company's realized gold price in the first quarter was $1,331 per
ounce, above the average London PM fix of $1,329 per
ounce.
For the first quarter of 2018, cost of sales
were $144.7 million, compared to $110.1 million in the prior-year
period.
Mining and processing costs were $96.9 million
compared to $77.9 million in the prior-year period. The increased
costs were mainly the result of the addition of Island Gold, which
added $13.6 million of mining and processing costs in the
period.
Consolidated total cash costs for the quarter
were $789 per ounce, compared to $827 in the prior year period. The
decrease in total cash costs is attributable to the addition of
lower cost ounces from Island Gold and improved cost profile at
Mulatos, partially offset by higher costs at Young-Davidson.
In the first quarter, AISC per ounce decreased
to $935 from $1,014 in the prior year period. This was primarily
driven by the addition of lower cost ounces from Island Gold, and
lower sustaining capital expenditures.
Royalty expense was higher in the first quarter
at $5.7 million, compared to $3.8 million in the prior year period,
primarily due to the addition of Island Gold, and higher ounces
sold at Mulatos.
Amortization of $42.1 million in the quarter was
higher than the prior year period expense of $28.4 million.
Amortization was $324 per ounce, up from $289 per ounce in the
prior year period, though consistent with the fourth quarter of
2017. This reflected higher amortization at all operating sites and
the addition of Island Gold which carries a higher amortization per
ounce charge.
The Company recognized earnings from operations
of $18.5 million in the quarter, compared to $2.2 million in the
same period of 2017, driven by record production and gold sales and
stronger operating margins at Mulatos and Island Gold.
The Company reported a net earnings of $0.6
million in the quarter, compared to net earnings of $0.1 million in
the same period of 2017. Net earnings in the period were
significantly impacted by foreign exchange movements, as the
Company recorded a foreign exchange loss of $1.3 million, in
addition to foreign exchange losses recorded within deferred income
taxes. Reflecting these foreign exchange adjustments, the
Company recorded adjusted net earnings1 of $12.3 million or $0.03
per share.
Associated Documents
This press release should be read in conjunction
with the Company’s interim consolidated financial statements for
the three-month period ended March 31, 2018 and associated
Management’s Discussion and Analysis (“MD&A”), which are
available from the Company's website, www.alamosgold.com, in the
"Investors" section under "Reports and Financials", and on SEDAR
(www.sedar.com) and EDGAR (www.sec.gov).
Reminder of First Quarter 2018 Results Conference
Call
The Company's senior management will host a
conference call on Wednesday, May 2, 2018 at 11:00 am ET to discuss
the first quarter 2018 results.
Participants may join the conference call by
dialling (416) 340-2216 or 1-800-273-9672 for calls within Canada
and the United States, or via webcast at www.alamosgold.com.
A playback will be available until May 30, 2018
by dialling (905) 694-9451 or (800) 408-3053 within Canada and the
United States. The pass code is 4178075#. 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.
(1) Refer to the “Non-GAAP Measures and
Additional GAAP Measures” disclosure at the end of this press
release for a description and calculation of these measures.
About Alamos
Alamos is a Canadian-based intermediate gold producer with
diversified production from four operating mines in North America.
This includes the Young-Davidson and Island Gold mines in northern
Ontario, Canada and the Mulatos and El Chanate mines in Sonora
State, Mexico. Additionally, the Company has a significant
portfolio of development stage projects in Canada, Mexico, Turkey,
and the United States. Alamos employs more than 1,700 people and is
committed to the highest standards of sustainable development. The
Company’s shares are traded on the TSX and NYSE under the symbol
“AGI”.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Scott K.
Parsons |
|
Vice-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
This news release contains forward-looking
statements and forward-looking information as defined under
Canadian and U.S. securities laws. All statements, other than
statements of historical fact, are, or may be deemed to be,
forward-looking statements. Words such as "expect", "believe",
"anticipate", "will", "intend", "estimate", "forecast", "budget"
and similar expressions identify forward-looking statements.
Forward-looking statements include information
as to strategy, plans or future financial or operating performance,
such as the Company’s expansion plans, project timelines,
production plans and expected sustainable productivity increases,
expected increases in mining activities and corresponding cost
efficiencies, expected drilling targets, expected sustaining costs,
expected improvements in cash flows and margins, expectations of
changes in capital expenditures, forecasted cash shortfalls and the
Company’s ability to fund them, cost estimates, projected
exploration results, projected development and permitting
timelines, reserve and resource estimates, expected production
rates and use of the stockpile inventory, expected recoveries,
sufficiency of working capital for future commitments and other
statements that express management’s expectations or estimates of
future performance.
Forward-looking statements are necessarily based
upon a number of factors and assumptions that, while considered
reasonable by management at the time of making such statements, are
inherently subject to significant business, economic, political and
competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking statements.
Such factors and assumptions underlying the
forward-looking statements in this document include, but are not
limited to: changes to current estimates of mineral reserves and
resources; changes to production estimates (which assume accuracy
of projected ore grade, mining rates, recovery timing and recovery
rate estimates and may be impacted by unscheduled maintenance;
labour and contractor availability and other operating or technical
difficulties); fluctuations in the price of gold; changes in
foreign exchange rates (particularly the Canadian dollar, Mexican
peso, Turkish Lira and U.S. dollar); the impact of inflation;
changes in our credit rating; any decision to declare a dividend;
employee relations; litigation; disruptions affecting operations;
availability of and increased costs associated with mining inputs
and labour; development delays at the Young-Davidson mine; inherent
risks associated with mining and mineral processing; the risk that
the Young-Davidson, Island Gold, Mulatos and El Chanate mines may
not perform as planned; uncertainty with the Company’s ability to
secure additional capital to execute its business plans; the
speculative nature of mineral exploration and development,
including the risks of obtaining necessary licenses and permits,
including the necessary licenses, permits, authorizations and/or
approvals from the appropriate regulatory authorities for the
Company’s development stage assets, including specifically its
Turkish mineral properties; contests over title to properties;
changes in national and local government legislation (including tax
legislation) in Canada, Mexico, Turkey, the United States and other
jurisdictions in which the Company does or may carry on business in
the future; risk of loss due to sabotage and civil disturbances;
the impact of global liquidity and credit availability and the
values of assets and liabilities based on projected future cash
flows; risks arising from holding derivative instruments; and
business opportunities that may be pursued by the
Company.
Additional risk factors and details with respect
to risk factors affecting the Company are set out in the Company’s
latest Annual Information Form and MD&A, each under the heading
“Risk Factors”, available on the SEDAR website at www.sedar.com.
The foregoing should be reviewed in conjunction with the
information found in this news release. The Company disclaims
any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required by applicable law.
Cautionary Note to U.S. Investors
Concerning Measured, Indicated and Inferred Resources
The Company is required to prepare its resource
estimates in accordance with standards of the Canadian
Institute of Mining, Metallurgy and Petroleum referred to in
Canadian National Instrument 43-101 (NI 43-101). These standards
are materially different from the standards generally permitted in
reports filed with the United States Securities and Exchange
Commission. When describing resources we use the terms "measured",
"indicated" or "inferred” resources which are not recognized by the
United States Securities and Exchange Commission. The
estimation of measured resources and indicated resources involve
greater uncertainty as to their existence and economic feasibility
than the estimation of proven and probable reserves. U.S. investors
are cautioned not to assume that any part of measured or indicated
resources will ever be converted into economically or legally
mineable proven or probable reserves. The estimation of inferred
resources may not form the basis of a feasibility or other economic
studies and involves far greater uncertainty as to their existence
and economic viability than the estimation of other categories of
resources.
Non-GAAP Measures and Additional GAAP
Measures
The Company has included certain non-GAAP
financial measures to supplement its Consolidated Financial
Statements, which are presented in accordance with IFRS, including
the following:
- adjusted net earnings and adjusted earnings per share;
- cash flow from operating activities before changes in working
capital and taxes received;
- company-wide free cash flow;
- total mine-site free cash flow;
- mine-site free cash flow;
- total cash cost per ounce of gold sold;
- all-in sustaining cost ("AISC") per ounce of gold sold;
- mine-site all-in sustaining cost ("Mine-site AISC") per ounce
of gold sold;
- sustaining and non-sustaining capital expenditures; and
- earnings before interest, taxes, depreciation, and
amortization
The Company believes that these measures,
together with measures determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying
performance of the Company. Non-GAAP financial measures do not have
any standardized meaning prescribed under IFRS, and therefore they
may not be comparable to similar measures employed by other
companies. The data is intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
Management's determination of the components of non-GAAP and
additional measures are evaluated on a periodic basis influenced by
new items and transactions, a review of investor uses and new
regulations as applicable. Any changes in to the measures are dully
noted and retrospectively applied as applicable.
Adjusted Net Earnings and Adjusted
Earnings per Share
“Adjusted net earnings” and “adjusted earnings
per share” are non-GAAP financial measures with no standard meaning
under IFRS which exclude the following from net earnings:
- Foreign exchange gain (loss)
- Items included in Other loss
- Certain non-reoccurring items
- Foreign exchange gain (loss) recorded in deferred tax
expense
Net earnings have been adjusted, including the
associated tax impact, for the group of costs in “Other loss” on
the consolidated statement of comprehensive income. Transactions
within this grouping are: the fair value changes on non-hedged
derivatives; the renunciation of flow-through exploration
expenditures; and loss on disposal of assets. The adjusted entries
are also impacted for tax to the extent that the underlying entries
are impacted for tax in the unadjusted net earnings.
The Company uses adjusted net earnings for its
own internal purposes. Management’s internal budgets and forecasts
and public guidance do not reflect the items which have been
excluded from the determination of adjusted net earnings.
Consequently, the presentation of adjusted net earnings enables
shareholders to better understand the underlying operating
performance of the core mining business through the eyes of
management. Management periodically evaluates the components of
adjusted net earnings based on an internal assessment of
performance measures that are useful for evaluating the operating
performance of our business and a review of the non-GAAP measures
used by mining industry analysts and other mining companies.
Adjusted net earnings is intended to provide
additional information only and does not have any standardized
meaning under IFRS and may not be comparable to similar measures
presented by other companies. It should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS. The measure is not necessarily indicative
of operating profit or cash flows from operations as determined
under IFRS. The following table reconciles this non-GAAP measure to
the most directly comparable IFRS measure.
|
|
|
(in millions) |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
Net Earnings |
$ |
0.6 |
|
$ |
0.1 |
|
Adjustments: |
|
|
Foreign
exchange loss (gain) |
|
1.3 |
|
|
(5.9 |
) |
Other
loss |
|
0.7 |
|
|
2.0 |
|
Unrealized foreign exchange loss (gain) recorded in deferred tax
expense |
|
9.5 |
|
|
(1.1 |
) |
Other
income and mining tax adjustments (1) |
|
0.2 |
|
|
(0.2 |
) |
Adjusted net earnings (loss) |
$ |
12.3 |
|
$ |
(5.1 |
) |
Adjusted
earnings (loss) per share - basic |
$ |
0.03 |
|
$ |
(0.02 |
) |
(1) This reflects the recognition of previously
unrecognized capital losses.
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 March 31, |
|
|
2018 |
|
|
2017 |
|
Cash flow from operating activities |
$ |
58.8 |
|
$ |
20.1 |
|
Add back: Changes in
working capital and cash taxes |
|
3.8 |
|
|
14.1 |
|
Cash flow from operating activities before changes in
working capital and cash taxes |
$ |
62.6 |
|
$ |
34.2 |
|
|
|
|
|
|
|
|
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 March 31, |
|
|
2018 |
|
|
2017 |
|
Cash flow from operating activities |
$ |
58.8 |
|
$ |
20.1 |
|
Less: mineral property,
plant and equipment expenditures |
|
(51.5 |
) |
|
(33.6 |
) |
Company-wide free cash flow |
$ |
7.3 |
|
$ |
(13.5 |
) |
|
|
|
|
|
|
|
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 March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
Cash flow from
operating activities |
$ |
58.8 |
|
$ |
20.1 |
|
Less: operating cash
flow used by non-mine site activity |
|
(9.6 |
) |
|
(6.5 |
) |
Cash flow from operating mine-sites |
$ |
68.4 |
|
$ |
26.6 |
|
|
|
|
Mineral property, plant
and equipment expenditure |
$ |
51.5 |
|
$ |
33.6 |
|
Less: capital
expenditures from development projects, and corporate |
|
(7.4 |
) |
|
(8.3 |
) |
Capital expenditure from mine-sites |
$ |
44.1 |
|
$ |
25.3 |
|
|
|
|
Total mine-site free cash flow |
$ |
24.3 |
|
$ |
1.3 |
|
|
|
|
|
|
|
|
|
|
|
Young-Davidson Mine-Site Free Cash Flow |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
Cash flow from
operating activities |
$ |
27.4 |
|
$ |
18.5 |
|
Mineral property, plant
and equipment expenditure |
|
(22.9 |
) |
|
(18.6 |
) |
Mine-site free cash flow |
$ |
4.5 |
|
$ |
0.1 |
) |
|
|
|
|
|
|
Mulatos Mine-Site Free Cash Flow |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
Cash flow from
operating activities |
$ |
16.1 |
|
$ |
9.1 |
|
Mineral property, plant
and equipment expenditure |
|
(7.2 |
) |
|
(11.4 |
) |
Less: La
Yaqui Phase I construction cost |
|
— |
|
|
5.3 |
|
Mulatos
mineral property, plant and equipment expenditure |
$ |
(7.2 |
) |
$ |
(6.1 |
) |
Mine-site free cash flow1 |
$ |
8.9 |
|
$ |
3.0 |
|
1. Excludes construction capital at La Yaqui Phase I.
|
|
|
|
|
|
Island Gold Mine-Site Free Cash Flow |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
Cash flow from
operating activities |
$ |
23.7 |
|
|
— |
|
Mineral property, plant
and equipment expenditure |
|
(13.9 |
) |
|
— |
|
Mine-site free cash flow |
$ |
9.8 |
|
$ |
— |
|
|
|
|
|
|
|
El Chanate Mine-Site Free Cash Flow |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions) |
|
|
Cash flow from
operating activities |
$ |
1.2 |
|
$ |
(1.0 |
) |
Mineral property, plant
and equipment expenditure |
|
(0.1 |
) |
|
(0.6 |
) |
Mine-site free cash flow |
$ |
1.1 |
|
$ |
(1.6 |
) |
|
|
|
|
|
|
|
Total Cash Costs per ounce
Total cash costs per ounce is a non-GAAP term
typically used by gold mining companies to assess the level of
gross margin available to the Company by subtracting these costs
from the unit price realized during the period. This non-GAAP term
is also used to assess the ability of a mining company to generate
cash flow from operations. Total cash costs per ounce includes
mining and processing costs plus applicable royalties, and net of
by-product revenue and net realizable value adjustments. Total cash
costs per ounce is exclusive of exploration costs.
Total cash costs per ounce is intended to
provide additional information only and does not have any
standardized meaning under IFRS and may not be comparable to
similar measures presented by other mining companies. It should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. The measure is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under IFRS.
All-in Sustaining Costs per ounce and
Mine-site All-in Sustaining Costs
The Company adopted an “all-in sustaining costs
per ounce” non-GAAP performance measure in accordance with the
World Gold Council published in June 2013. The Company
believes the measure more fully defines the total costs associated
with producing gold; however, this performance measure has no
standardized meaning. Accordingly, there may be some
variation in the method of computation of “all-in sustaining costs
per ounce” as determined by the Company compared with other mining
companies. In this context, “all-in sustaining costs per ounce” for
the consolidated Company reflects total mining and processing
costs, corporate and administrative costs, share-based
compensation, exploration costs, sustaining capital, and other
operating costs.
For the purposes of calculating "mine-site
all-in sustaining costs" at the individual mine-sites, the Company
does not include an allocation of corporate and administrative
costs and share-based compensation, as detailed in the
reconciliations below.
Sustaining capital expenditures are expenditures
that do not increase annual gold ounce production at a mine site
and excludes all expenditures at the Company’s development projects
as well as certain expenditures at the Company’s operating sites
that are deemed expansionary in nature. For each mine-site
reconciliation, corporate and administrative costs, and non-site
specific costs are not included in the all-in sustaining cost per
ounce calculation.
All-in
sustaining costs per gold ounce is
intended to provide additional information only and does not
have any standardized
meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be
considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The measure is not
necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.
Total Cash Costs and All-in Sustaining
Costs per Ounce Reconciliation Tables
The following tables reconciles these non-GAAP
measures to the most directly comparable IFRS measures on a
Company-wide and individual mine-site basis.
|
|
|
Total Cash Costs and AISC Reconciliation -
Company-wide |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions, except
ounces and per ounce figures) |
|
|
Mining and
processing |
$ |
96.9 |
|
$ |
77.9 |
|
Royalties |
|
5.7 |
|
|
3.8 |
|
Total cash costs |
$ |
102.6 |
|
$ |
81.7 |
|
Gold
ounces sold |
|
130,045 |
|
|
98,755 |
|
Total cash
costs per ounce |
$ |
789 |
|
$ |
827 |
|
|
|
|
Total cash costs |
$ |
102.6 |
|
$ |
81.7 |
|
Corporate and
administrative(1) |
|
4.4 |
|
|
3.7 |
|
Sustaining capital
expenditures(2) |
|
10.7 |
|
|
9.3 |
|
Share-based
compensation |
|
1.6 |
|
|
3.8 |
|
Sustaining
exploration |
|
1.7 |
|
|
1.0 |
|
Accretion of
decommissioning liabilities |
|
0.6 |
|
|
0.6 |
|
Total all-in sustaining costs |
$ |
121.6 |
|
$ |
100.1 |
|
Gold ounces sold |
|
130,045 |
|
|
98,755 |
|
All-in sustaining costs per ounce |
$ |
935 |
|
$ |
1,014 |
|
(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 March 31, |
|
|
2018 |
|
|
2017 |
|
Capital expenditures
per cash flow statement |
$ |
51.5 |
|
$ |
33.6 |
|
Less: non-sustaining
capital expenditures at: |
|
|
Young-Davidson |
|
(15.3 |
) |
|
(12.5 |
) |
Mulatos |
|
(6.4 |
) |
|
(8.8 |
) |
Island
Gold |
|
(11.7 |
) |
|
— |
|
El
Chanate |
|
— |
|
|
— |
|
Corporate
and other |
|
(7.4 |
) |
|
(3.0 |
) |
|
$ |
10.7 |
|
$ |
9.3 |
|
|
|
|
|
|
|
Young-Davidson Total Cash Costs and Mine-site AISC
Reconciliation |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions, except
ounces and per ounce figures) |
|
|
Mining and
processing |
$ |
36.0 |
|
$ |
29.9 |
|
Royalties |
|
0.9 |
|
|
1.2 |
|
Total cash costs |
$ |
36.9 |
|
$ |
31.1 |
|
Gold
ounces sold |
|
44,790 |
|
|
43,827 |
|
Total cash
costs per ounce |
$ |
824 |
|
$ |
710 |
|
|
|
|
Total cash costs |
$ |
36.9 |
|
$ |
31.1 |
|
Sustaining capital
expenditures |
|
7.6 |
|
|
6.1 |
|
Exploration |
|
— |
|
|
0.1 |
|
Total all-in sustaining costs |
$ |
44.5 |
|
$ |
37.3 |
|
Gold ounces sold |
|
44,790 |
|
|
43,827 |
|
Mine-site all-in sustaining costs per ounce |
$ |
994 |
|
$ |
851 |
|
|
|
|
|
|
|
Mulatos Total Cash Costs and Mine-site AISC
Reconciliation |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions, except
ounces and per ounce figures) |
|
|
Mining and
processing |
$ |
31.9 |
|
$ |
29.4 |
|
Royalties |
|
3.2 |
|
|
2.6 |
|
Total cash costs |
$ |
35.1 |
|
$ |
32.0 |
|
Gold
ounces sold |
|
44,659 |
|
|
38,675 |
|
Total cash
costs per ounce |
$ |
786 |
|
$ |
827 |
|
|
|
|
Total cash costs |
$ |
35.1 |
|
$ |
32.0 |
|
Sustaining capital
expenditures |
|
0.8 |
|
|
2.6 |
|
Exploration |
|
1.2 |
|
|
0.5 |
|
Accretion of
decommissioning liabilities |
|
0.5 |
|
|
0.5 |
|
Total all-in sustaining costs |
$ |
37.6 |
|
$ |
35.6 |
|
Gold ounces sold |
|
44,659 |
|
|
38,675 |
|
Mine-site all-in sustaining costs per ounce |
$ |
842 |
|
$ |
920 |
|
|
|
|
|
|
|
Island Gold Total Cash Costs and Mine-site AISC
Reconciliation |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions, except
ounces and per ounce figures) |
|
|
Mining and
processing |
$ |
13.6 |
|
$ |
— |
|
Royalties |
|
1.6 |
|
|
— |
|
Total cash costs |
$ |
15.2 |
|
$ |
— |
|
Gold
ounces sold |
|
27,503 |
|
|
— |
|
Total cash
costs per ounce |
$ |
553 |
|
$ |
— |
|
|
|
|
Total cash costs |
$ |
15.2 |
|
$ |
— |
|
Sustaining capital
expenditures |
|
2.2 |
|
|
— |
|
Total all-in sustaining costs |
$ |
17.4 |
|
$ |
— |
|
Gold ounces sold |
|
27,503 |
|
|
— |
|
Mine-site all-in sustaining costs per ounce |
$ |
633 |
|
$ |
— |
|
|
|
|
|
|
|
El Chanate Total Cash Costs and Mine-site AISC
Reconciliation |
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
|
(in millions, except
ounces and per ounce figures) |
|
|
Mining and
processing |
$ |
15.4 |
|
$ |
18.6 |
|
Total cash costs |
$ |
15.4 |
|
$ |
18.6 |
|
Gold
ounces sold |
|
13,093 |
|
|
16,253 |
|
Total cash
costs per ounce |
$ |
1,176 |
|
$ |
1,144 |
|
|
|
|
Total cash costs |
$ |
15.4 |
|
$ |
18.6 |
|
Sustaining capital
expenditures |
|
0.1 |
|
|
0.6 |
|
Accretion of
decommissioning liabilities |
|
0.1 |
|
|
0.1 |
|
Total all-in sustaining costs |
$ |
15.6 |
|
$ |
19.3 |
|
Gold ounces sold |
|
13,093 |
|
|
16,253 |
|
Mine-site all-in sustaining costs per ounce |
$ |
1,191 |
|
$ |
1,187 |
|
|
|
|
|
|
|
|
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 March 31, |
|
|
2018 |
|
|
2017 |
|
Net earnings |
$ |
0.6 |
|
$ |
0.1 |
|
Add back: |
|
|
Finance
expense |
|
0.9 |
|
|
4.2 |
|
Amortization |
|
42.1 |
|
|
28.4 |
|
Deferred
income tax expense |
|
7.0 |
|
|
0.7 |
|
Current income tax expense |
|
8.0 |
|
|
1.1 |
|
EBITDA |
$ |
58.6 |
|
$ |
34.5 |
|
|
|
|
|
|
|
|
Additional GAAP Measures
Additional GAAP measures are presented on the
face of the Company’s consolidated statements of comprehensive
income and are not meant to be a substitute for other subtotals or
totals presented in accordance with IFRS, but rather should be
evaluated in conjunction with such IFRS measures. The
following additional GAAP measures are used and are intended to
provide an indication of the Company’s mine and operating
performance:
- Earnings from operations - represents the amount of earnings
before net finance income/expense, foreign exchange gain/loss,
other income/loss, loss on redemption of senior secured notes and
income tax expense
Unaudited Consolidated Statements of
Financial Position, ComprehensiveIncome, and Cash
Flows
|
ALAMOS GOLD INC.Condensed Interim Consolidated
Statements of Financial Position(Unaudited - stated in millions of
United States dollars) |
|
March 31, 2018 |
|
December 31, 2017 |
ASSETS |
|
|
|
Current
Assets |
|
|
|
Cash and cash
equivalents |
$ |
231.8 |
|
|
$ |
200.8 |
|
Equity securities |
|
11.4 |
|
|
|
35.8 |
|
Amounts receivable |
|
35.6 |
|
|
|
41.0 |
|
Inventory |
|
160.8 |
|
|
|
161.2 |
|
Other current
assets |
|
16.6 |
|
|
|
14.4 |
|
Total Current
Assets |
|
456.2 |
|
|
|
453.2 |
|
|
|
|
|
Non-Current
Assets |
|
|
|
Long-term
inventory |
|
68.4 |
|
|
|
68.7 |
|
Mineral property, plant
and equipment |
|
2,758.6 |
|
|
|
2,753.4 |
|
Other non-current
assets |
|
44.3 |
|
|
|
45.0 |
|
Total Assets |
$ |
3,327.5 |
|
|
$ |
3,320.3 |
|
|
|
|
|
LIABILITIES |
|
|
|
Current
Liabilities |
|
|
|
Accounts payable and
accrued liabilities |
$ |
96.0 |
|
|
$ |
101.0 |
|
Income taxes
payable |
|
15.2 |
|
|
|
12.2 |
|
Dividends payable |
|
3.9 |
|
|
|
— |
|
Total Current
Liabilities |
|
115.1 |
|
|
|
113.2 |
|
|
|
|
|
Non-Current
Liabilities |
|
|
|
Deferred income
taxes |
|
483.9 |
|
|
|
477.0 |
|
Decommissioning
liabilities |
|
45.0 |
|
|
|
44.6 |
|
Other non-current
liabilities |
|
3.6 |
|
|
|
4.3 |
|
Total Liabilities |
|
647.6 |
|
|
|
639.1 |
|
|
|
|
|
EQUITY |
|
|
|
Share capital |
$ |
3,692.5 |
|
|
$ |
3,691.7 |
|
Contributed
surplus |
|
91.2 |
|
|
|
89.5 |
|
Warrants |
|
3.9 |
|
|
|
4.0 |
|
Accumulated other
comprehensive income |
|
0.1 |
|
|
|
13.0 |
|
Deficit |
|
(1,107.8 |
) |
|
|
(1,117.0 |
) |
Total Equity |
|
2,679.9 |
|
|
|
2,681.2 |
|
Total Liabilities and Equity |
$ |
3,327.5 |
|
|
$ |
3,320.3 |
|
|
|
|
ALAMOS GOLD INC.Condensed Interim
Consolidated Statements of Comprehensive Income (Unaudited
- stated in millions of United States dollars, except per share
amounts) |
|
|
|
|
|
For three months ended |
|
|
March 31, |
|
March 31, |
|
|
2018 |
|
2017 |
OPERATING
REVENUES |
|
$ |
173.1 |
|
|
$ |
121.0 |
|
|
|
|
|
|
COST OF
SALES |
|
|
|
|
Mining and
processing |
|
|
96.9 |
|
|
|
77.9 |
|
Royalties |
|
|
5.7 |
|
|
|
3.8 |
|
Amortization |
|
|
42.1 |
|
|
|
28.4 |
|
|
|
|
144.7 |
|
|
|
110.1 |
|
EXPENSES |
|
|
|
|
Exploration |
|
|
3.9 |
|
|
|
1.2 |
|
Corporate and
administrative |
|
|
4.4 |
|
|
|
3.7 |
|
Share-based
compensation |
|
|
1.6 |
|
|
|
3.8 |
|
|
|
|
154.6 |
|
|
|
118.8 |
|
EARNINGS FROM
OPERATIONS |
|
|
18.5 |
|
|
|
2.2 |
|
|
|
|
|
|
OTHER
EXPENSES |
|
|
|
|
Finance expense |
|
|
(0.9 |
) |
|
|
(4.2 |
) |
Foreign exchange (loss)
gain |
|
|
(1.3 |
) |
|
|
5.9 |
|
Other loss |
|
|
(0.7 |
) |
|
|
(2.0 |
) |
EARNINGS BEFORE
INCOME TAXES |
|
$ |
15.6 |
|
|
$ |
1.9 |
|
|
|
|
|
|
INCOME
TAXES |
|
|
|
|
Current income tax
expense |
|
|
(8.0 |
) |
|
|
(1.1 |
) |
Deferred income tax
expense |
|
|
(7.0 |
) |
|
|
(0.7 |
) |
NET
EARNINGS |
|
$ |
0.6 |
|
|
$ |
0.1 |
|
|
|
|
|
|
Items that may be
subsequently reclassified to net earnings: |
|
|
|
|
(Loss)
gain on currency hedging instruments, net of taxes |
|
|
(1.4 |
) |
|
|
1.9 |
|
Items that will not be
reclassified to net earnings: |
|
|
|
|
Unrealized gain on equity securities, net of taxes |
|
|
1.0 |
|
|
|
1.7 |
|
Total other
comprehensive (loss) income |
|
($ |
0.4 |
) |
|
$ |
3.6 |
|
COMPREHENSIVE
INCOME |
|
$ |
0.2 |
|
|
$ |
3.7 |
|
|
|
|
|
|
EARNINGS PER
SHARE |
|
|
|
|
–
basic |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
–
diluted |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
Weighted average number
of common shares outstanding (000's) |
|
|
|
|
– basic |
|
|
389,254 |
|
|
|
284,748 |
|
– diluted |
|
|
392,413 |
|
|
|
289,450 |
|
|
|
|
ALAMOS GOLD INC.Condensed Interim
Consolidated Statements of Cash Flows(Unaudited - stated
in millions of United States dollars) |
|
|
|
|
|
For three months ended |
|
|
March 31, |
|
March 31, |
|
|
|
2018 |
|
|
|
2017 |
|
CASH PROVIDED
BY (USED IN): |
|
|
|
|
OPERATING
ACTIVITIES |
|
|
|
|
Net earnings for the
period |
|
$ |
0.6 |
|
|
$ |
0.1 |
|
Adjustments for items
not involving cash: |
|
|
|
|
Amortization |
|
|
42.1 |
|
|
|
28.4 |
|
Foreign
exchange loss (gain) |
|
|
1.3 |
|
|
|
(5.9 |
) |
Current
income tax expense |
|
|
8.0 |
|
|
|
1.1 |
|
Deferred
income tax expense |
|
|
7.0 |
|
|
|
0.7 |
|
Share-based compensation |
|
|
1.6 |
|
|
|
3.8 |
|
Finance
expense |
|
|
0.9 |
|
|
|
4.2 |
|
Other
items |
|
|
1.1 |
|
|
|
1.8 |
|
Changes in working
capital and cash taxes |
|
|
(3.8 |
) |
|
|
(14.1 |
) |
|
|
|
58.8 |
|
|
|
20.1 |
|
INVESTING
ACTIVITIES |
|
|
|
|
Mineral property, plant
and equipment |
|
|
(51.5 |
) |
|
|
(33.6 |
) |
Proceeds from sale of
equity securities |
|
|
24.9 |
|
|
|
— |
|
|
|
|
(26.6 |
) |
|
|
(33.6 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
Net proceeds from
equity financing |
|
|
— |
|
|
|
239.1 |
|
Repayment of equipment
financing obligations |
|
|
(1.2 |
) |
|
|
(1.4 |
) |
Proceeds from the
exercise of options and warrants |
|
|
0.7 |
|
|
|
2.3 |
|
|
|
|
(0.5 |
) |
|
|
240.0 |
|
Effect of exchange
rates on cash and cash equivalents |
|
|
(0.7 |
) |
|
|
0.5 |
|
Net increase in cash
and cash equivalents |
|
|
31.0 |
|
|
|
227.0 |
|
Cash and cash
equivalents - beginning of period |
|
|
200.8 |
|
|
|
252.2 |
|
CASH AND CASH
EQUIVALENTS - END OF PERIOD |
|
$ |
231.8 |
|
|
$ |
479.2 |
|
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