Alamos Gold Inc. (
TSX:AGI;
NYSE:AGI) (“Alamos” or the “Company”) today reported its
financial results for the quarter and year ended December 31, 2019.
“We reported a solid fourth quarter and 2019. We
met our production guidance for the fifth consecutive year, and we
met our cost guidance with a 10% reduction in total cash costs from
a year ago. Stronger gold prices and lower costs drove a 40%
increase in operating cash flow,” said John A. McCluskey, President
and Chief Executive Officer.
“We expect 2020 will be a transformational year
for Alamos driven by several significant catalysts. On the back of
another substantial increase in Mineral Reserves and Resources at
Island Gold it is clear the ore body is evolving into a world class
deposit. A Phase III expansion study will be completed in the
second quarter and is expected to showcase a larger, highly
profitable and longer-life operation. The lower mine expansion at
Young-Davidson is on track for completion in June after which we
expect to transition to strong free cash flow growth,” Mr.
McCluskey added.
Fourth Quarter 2019
- Produced 122,100 ounces of gold, consistent with guidance,
driven by strong performances at Young-Davidson and Island
Gold
- Island Gold produced 38,600 ounces of gold and generated
mine-site free cash flow1 of $9.4 million
- Young-Davidson produced 48,000 ounces of gold and achieved
underground mining rates of 7,000 tonnes per day ("tpd"), exceeding
budgeted mining rates for the fourth consecutive quarter and
marking the second highest quarterly mining rate ever.
Construction of the lower mine expansion remains on schedule with
the tie-in of the upper and lower mines on track for completion in
June 2020
- Sold 127,148 ounces of gold at an average realized price of
$1,463 per ounce for record revenues of $186.0 million
- Record cash flow from operating activities of $77.8 million
(and a record $85.7 million, or $0.22 per share, before changes in
working capital1), reflecting higher gold prices and operating
margins
- Consolidated total cash costs1 of $722 per ounce were in line
with annual guidance and 6% lower than the fourth quarter of 2018,
driven by low cost production growth at Island Gold
- All-in sustaining costs ("AISC")1 decreased slightly from the
fourth quarter of 2018 to $972 per ounce, reflecting the timing of
capital spending. Full year AISC of $951 per ounce were in line
with guidance
- Reported adjusted net earnings1 of $32.1 million, or $0.08 per
share1, include adjustments for unrealized foreign exchange gains
recorded within deferred taxes of $8.6 million, partially offset by
other one-time losses and tax adjustments totaling $2.7
million
- Realized net earnings of $38.0 million, or $0.10 per share
- Ended the quarter with no debt, cash and cash equivalents of
$182.8 million, and equity securities of $22.8 million
- Completed construction of the Cerro Pelon mine ahead of
schedule and achieved initial production in the fourth quarter
- Announced a 50% increase to the quarterly dividend, commencing
in the first quarter of 2020
Full Year 2019
- Produced 494,500 ounces of gold, meeting production guidance
for the fifth consecutive year
- Island Gold exceeded guidance with record production of 150,400
ounces, driving record mine-site free cash flow1 of $64.5
million
- Sold 494,702 ounces of gold at an average realized price of
$1,381 per ounce for record revenues of $683.1 million
- Total cash costs1 of $720 per ounce and AISC1 of $951 per ounce
were both in line with guidance. Cost of sales of $1,054 per ounce
were 2% below guidance reflecting lower amortization charges
- Realized adjusted net earnings1 of $83.5 million, or $0.21 per
share1, a 326% increase compared to 2018. Adjusted net earnings
include adjustments for unrealized foreign exchange gains recorded
within both deferred taxes and foreign exchange of $13.5 million,
partially offset by other items totaling $0.9 million
- Reported net earnings of $96.1 million, or $0.25 per share
- Record cash flow from operating activities of $260.4 million
($296.9 million, or $0.76 per share, before changes in working
capital1, a 40% increase from 2018)
- Generated total mine-site free cash flow of $61.7 million1 with
strong cash flow more than funding the lower mine expansion at
Young-Davidson, exploration activities at Island Gold, and
construction of Cerro Pelon
- Reported year end 2019 Mineral Reserves of 9.7 million ounces,
a slight increase over 2018 with additions at Island Gold, La Yaqui
Grande and Kirazlı more than offsetting mining depletion (2)
- Ongoing exploration success at Island Gold drove a 21% increase
in Mineral Reserves and 46% increase in Inferred Mineral Resources
from the end of 2018 for a combined increase of nearly one million
ounces
- Received permit approval for the Phase II expansion of Island
Gold to 1,200 tpd in May 2019
- Completed permitting of the La Yaqui Grande project in Mexico
in July 2019
- Announced the suspension of construction activities at the
Kirazlı project in Turkey pending the renewal of the Company's
mining concessions which expired on October 13, 2019
- Received the "Best Corporate Social Responsibility Practice
2019" award from the Mexican Center for Philanthropy (Cemefi) and
the Alliance for Corporate Social Responsibility in Mexico
(AliaRSE) for the Company's voluntary relocation program of
residents from Mulatos to Matarachi in Mexico
- Repurchased 2.7 million shares at a cost of $11.4 million, or
$4.17 per share under the Normal Course Issuer Bid ("NCIB")
- Paid $15.6 million in dividends, double the amount paid in
2018
- Sold non-core royalties to Metalla Royalty & Streaming Ltd.
("Metalla") for 2.1 million shares of Metalla, currently valued at
$12.4 million
(1) Refer to the “Non-GAAP Measures and
Additional GAAP Measures” disclosure at the end of this press
release and associated MD&A for a description and calculation
of these measures.(2) Refer to press release dated February 18,
2020 entitled: “Alamos Gold Reports Mineral Reserves and Resources
for the Year-Ended 2019”.
Highlight Summary
|
Three Months Ended December 31, |
Years Ended December 31, |
|
2019 |
2018 |
2019 |
|
2018 |
|
Financial Results (in millions) |
|
|
|
|
Operating revenues |
$186.0 |
|
$163.1 |
|
$683.1 |
|
$651.8 |
|
Cost of sales (1) |
$136.0 |
|
$207.1 |
|
$521.4 |
|
$639.4 |
|
Earnings (loss) from operations |
$41.6 |
|
($51.3 |
) |
$126.0 |
|
($22.6 |
) |
Net earnings (loss) |
$38.0 |
|
($71.5 |
) |
$96.1 |
|
($72.6 |
) |
Adjusted net earnings (2) |
$32.1 |
|
$4.3 |
|
$83.5 |
|
$19.6 |
|
Earnings before interest, depreciation and amortization (2) |
$88.4 |
|
$43.0 |
|
$296.4 |
|
$195.2 |
|
Cash provided by operations before working capital and cash
taxes(2) |
$85.7 |
|
$52.8 |
|
$296.9 |
|
$212.7 |
|
Cash provided by operating activities |
$77.8 |
|
$47.4 |
|
$260.4 |
|
$213.9 |
|
Capital expenditures (sustaining) (2) |
$23.3 |
|
$21.4 |
|
$76.8 |
|
$63.8 |
|
Capital expenditures (growth) (2) |
$43.6 |
|
$36.4 |
|
$169.1 |
|
$139.2 |
|
Capital expenditures (capitalized exploration) (3) |
$6.0 |
|
$3.7 |
|
$17.7 |
|
$18.5 |
|
Operating
Results |
|
|
|
|
Gold
production (ounces) |
122,100 |
|
125,600 |
|
494,500 |
|
505,000 |
|
Gold
sales (ounces) |
127,148 |
|
131,161 |
|
494,702 |
|
509,879 |
|
Per Ounce
Data |
|
|
|
|
Average realized gold price |
$1,463 |
|
$1,244 |
|
$1,381 |
|
$1,278 |
|
Average spot gold price (London PM Fix) |
$1,481 |
|
$1,227 |
|
$1,393 |
|
$1,268 |
|
Cost of sales per ounce of gold sold (includes amortization)
(1) |
$1,070 |
|
$1,579 |
|
$1,054 |
|
$1,254 |
|
Total cash costs per ounce of gold sold (2) |
$722 |
|
$770 |
|
$720 |
|
$802 |
|
All-in sustaining costs per ounce of gold sold (2) |
$972 |
|
$983 |
|
$951 |
|
$989 |
|
Share Data |
|
|
|
|
Earnings per share,
basic and diluted |
$0.10 |
|
($0.18 |
) |
$0.25 |
|
($0.19 |
) |
Adjusted earnings per
share, basic and diluted(2) |
$0.08 |
|
$0.01 |
|
$0.21 |
|
$0.05 |
|
Weighted average
common shares outstanding (basic) (000’s) |
391,076 |
|
390,540 |
|
390,160 |
|
389,816 |
|
Financial Position (in millions) |
|
|
|
|
Cash and cash
equivalents |
|
|
$182.8 |
|
$206.0 |
|
(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 at Mulatos and Island Gold.
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Gold production (ounces) |
|
|
|
|
Young-Davidson |
|
48,000 |
|
|
50,900 |
|
|
188,000 |
|
|
180,000 |
|
Mulatos |
|
34,100 |
|
|
35,600 |
|
|
142,000 |
|
|
175,500 |
|
Island Gold |
|
38,600 |
|
|
29,000 |
|
|
150,400 |
|
|
105,800 |
|
El Chanate (1) |
|
1,400 |
|
|
10,100 |
|
|
14,100 |
|
|
43,700 |
|
Gold sales (ounces) |
|
|
|
|
Young-Davidson |
|
51,694 |
|
|
51,944 |
|
|
188,785 |
|
|
185,593 |
|
Mulatos |
|
34,127 |
|
|
38,819 |
|
|
141,496 |
|
|
175,104 |
|
Island Gold |
|
39,652 |
|
|
30,199 |
|
|
149,746 |
|
|
105,520 |
|
El Chanate (1) |
|
1,675 |
|
|
10,199 |
|
|
14,675 |
|
|
43,662 |
|
Cost of sales (in millions)(2) |
|
|
|
|
Young-Davidson |
$59.4 |
|
$61.5 |
|
$231.1 |
|
$235.0 |
|
Mulatos |
$35.8 |
|
$38.4 |
|
$138.9 |
|
$173.1 |
|
Island Gold |
$36.4 |
|
$28.7 |
|
$129.4 |
|
$106.5 |
|
El Chanate |
$4.4 |
|
$78.5 |
|
$22.0 |
|
$124.8 |
|
Cost of
sales per ounce of gold sold (includes amortization) |
|
|
|
Young-Davidson |
$1,149 |
|
$1,184 |
|
$1,224 |
|
$1,266 |
|
Mulatos |
$1,049 |
|
$989 |
|
$982 |
|
$989 |
|
Island Gold |
$918 |
|
$950 |
|
$864 |
|
$1,009 |
|
El Chanate |
$2,627 |
|
$7,697 |
|
$1,499 |
|
$2,858 |
|
Total cash costs per ounce of gold sold (3) |
|
|
|
|
Young-Davidson |
$766 |
|
$764 |
|
$800 |
|
$822 |
|
Mulatos |
$820 |
|
$793 |
|
$784 |
|
$786 |
|
Island Gold |
$507 |
|
$570 |
|
$495 |
|
$589 |
|
El Chanate |
$2,448 |
|
$1,304 |
|
$1,390 |
|
$1,289 |
|
Mine-site
all-in sustaining costs per ounce of gold sold
(3),(4) |
|
|
|
Young-Davidson |
$1,083 |
|
$974 |
|
$1,047 |
|
$1,017 |
|
Mulatos |
$891 |
|
$881 |
|
$868 |
|
$855 |
|
Island Gold |
$653 |
|
$834 |
|
$656 |
|
$781 |
|
El Chanate |
$2,448 |
|
$1,333 |
|
$1,411 |
|
$1,317 |
|
Capital
expenditures (sustaining, growth and capitalized exploration) (in
millions)(3) |
|
|
Young-Davidson |
$27.0 |
|
$23.1 |
|
$99.9 |
|
$86.6 |
|
Mulatos(5) |
$9.5 |
|
$11.8 |
|
$54.2 |
|
$35.3 |
|
Island Gold (6) |
$24.7 |
|
$16.8 |
|
$68.9 |
|
$66.1 |
|
El Chanate |
$— |
|
$0.1 |
|
$— |
|
$0.6 |
|
Other |
$11.7 |
|
$9.7 |
|
$40.6 |
|
$32.9 |
|
(1) El Chanate ceased mining activities in October
2018 and transitioned to residual leaching.(2) Cost of
sales includes mining and processing costs, royalties and
amortization.(3) Refer to the “Non-GAAP Measures and
Additional GAAP Measures” disclosure at the end of this press
release and associated MD&A for a description and calculation
of these measures.(4) For the purposes of calculating
mine-site all-in sustaining costs, the Company does not include an
allocation of corporate and administrative and share based
compensation expenses.(5) Includes capitalized
exploration at Mulatos of $1.3 for the three and twelve months
ended December 31, 2019 ($0.6 million and $2.9 million for the
three and twelve months ended December 31, 2018).(6)
Includes capitalized exploration at Island Gold of $4.7
million and $16.4 million for the three and twelve months ended
December 31, 2019 ($3.1 million and $15.6 million for the three and
twelve months ended December 31, 2018)
Outlook and Strategy
2020
Guidance |
|
Young-Davidson |
Island Gold |
Mulatos |
Other (2) |
Total |
Gold
production (000’s ounces) |
145-160 |
130-145 |
150-160 |
|
425-465 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales,
including amortization (in
millions)(4) |
$207 |
$120 |
$168 |
— |
$495 |
Cost of sales, including amortization ($ per
ounce)(4) |
$1,360 |
$880 |
$1,085 |
— |
$1,130 |
Total cash
costs ($ per ounce)(1) |
$910-950 |
$520-560 |
$840-880 |
— |
$770-810 |
All-in sustaining costs ($ per ounce)(1) |
|
|
|
— |
$1,020-1,060 |
Mine-site all-in
sustaining costs ($ per ounce)(1),(3) |
$1,110-1,150 |
$780-820 |
$940-980 |
— |
— |
Amortization costs ($ per ounce)(1) |
$430 |
$340 |
$225 |
— |
$340 |
Capital
expenditures (in millions) |
|
|
|
|
|
Sustaining capital(1) |
$30-35 |
$35-40 |
$15-20 |
— |
$80-95 |
Growth capital(1) |
$45-50 |
$15-20 |
$5 |
$10 |
$75-85 |
Capitalized exploration(1) |
$1 |
$19 |
— |
$5 |
$25 |
Total capital expenditures and capitalized
exploration(1) |
$76-86 |
$69-79 |
$20-25 |
$15 |
$180-205 |
(1) Refer to the "Non-GAAP Measures and Additional
GAAP" disclosure at the end of this press release and associated
MD&A for a description of these measures.(2)
Includes growth capital and capitalized exploration at the
Company's development projects (Turkey, Lynn Lake, Esperanza and
Quartz Mountain).(3) For the purposes of calculating
mine-site all-in sustaining costs at individual mine sites, the
Company does not include an allocation of corporate and
administrative and share based compensation expenses to the mine
sites.(4) Cost of sales includes mining and processing
costs, royalties, and amortization expense, and is calculated based
on the mid-point of guidance.
The Company’s long-term strategic objective is
to generate increasing returns for its shareholders through
low-cost production and free cash flow growth from its existing
operations and portfolio of development projects. The Company was
successful in achieving these objectives in 2019, with production
of 494,500 ounces of gold and a 10% reduction in total cash costs
driving record operating cash flow. In addition, the Company made
substantial progress on its growth initiatives having completed
construction of the low-cost Cerro Pelon mine in Mexico, and
advancing construction of the lower mine expansion at
Young-Davidson.
With several significant near term positive
catalysts, 2020 is expected to be a transformational year for
Alamos. These include the recently announced substantial increase
in high-grade Mineral Reserves and Resources at Island Gold; the
Phase III expansion study of Island Gold which is expected to be
competed in June and demonstrate a larger, very profitable,
long-life operation; the completion of the lower mine expansion at
Young-Davidson which remains on track for June; and the transition
to strong company-wide free cash flow starting in the second half
of 2020.
Production is expected to temporarily decrease
in 2020 to between 425,000 and 465,000 ounces of gold. This
reflects the previously guided lower production from Young-Davidson
during the first half of 2020 while completing the tie-in of the
upper and lower mines, as well as the end of production at El
Chanate. Total cash cost guidance of $770 to $810 per ounce and
AISC guidance of $1,020 to $1,060 per ounce are temporarily higher
reflecting lower gold production at Young-Davidson during the
tie-in period in the first half of 2020. Gold production in the
first quarter of 2020 is expected to be within a range of 105,000
to 110,000 ounces, consistent with annual guidance. Costs are
expected to be higher in the first half of 2020 and decrease in the
second half with the completion of the lower mine tie-in at
Young-Davidson. In 2021, production is expected to increase to
approximately 500,000 ounces at lower costs driven by higher mining
and production rates at Young-Davidson.
The construction of the lower mine
infrastructure at Young-Davidson is in the final stages. The tie-in
of the lower mine recently commenced and remains on schedule to be
completed in June 2020. During this previously guided
downtime of the Northgate shaft, ore will be trucked to surface
from the upper mine at a rate of approximately 2,500 tpd. Given the
lower production rate and a full workforce to support ongoing
development during this period, total cash costs and mine-site AISC
are expected to increase significantly in the first half of the
year. Following completion of the tie-in, underground mining rates
are anticipated to increase from approximately 6,500 tpd to a rate
of 7,500 tpd by the end of 2020. This is expected to drive
Young-Davidson production higher and costs significantly lower in
the second half of 2020.
Capital spending at Young-Davidson in 2020 is
expected to be between $75 and $85 million, down from 2019 levels.
Capital spending is expected to be lower during the second half of
2020 with approximately 60% of the capital budget planned for the
first half of the year to complete the lower mine expansion.
Combined with higher production and lower costs, Young-Davidson is
expected to generate strong free cash flow in the second half of
2020. Higher mining rates are expected to drive annual gold
production to approximately 200,000 ounces at lower costs in
2021.
Gold production at Island Gold in 2020 is
expected to be marginally lower than 2019, with higher throughput
offset by lower grades. Mined grades are expected to be higher
during the first half of 2020 and lower during the second half of
the year reflecting mine sequencing. Total cash costs and mine-site
all-in sustaining costs are expected to increase slightly from
2019.
Capital spending at Island Gold is expected to
be between $50 and $60 million in 2020, excluding capitalized
exploration. The Company is undertaking a number of projects to
support the growing operation and mine life. This includes an
expansion of the tailings facility and the construction of a new
administration building, dry facility, and underground
workshop.
The Company is currently conducting a Phase III
expansion study at Island Gold beyond 1,200 tpd, which is expected
to be completed during the second quarter of 2020. This study will
incorporate the recently released 2019 year end Mineral Reserve and
Resource update for Island Gold which included substantial growth
in Mineral Reserves and Resources. The Company expects this study
will demonstrate Island Gold as a larger, more profitable,
long-life operation.
A total of $21 million has been budgeted in 2020
for surface and underground exploration at Island Gold to follow up
on ongoing exploration success. The 2020 program will be
focused on continuing to define new near mine Mineral Resources
across the two-kilometre long Island Gold Main Zone which remains
open laterally and down-plunge across multiple areas of focus.
Production from the Mulatos District in 2020 is
expected to be consistent with long term guidance of 150,000 to
160,000 ounces of gold. Ore will be mined and stacked from multiple
sources in 2020, including the Mulatos, El Victor and San Carlos
open pits, as well as the newly constructed Cerro Pelon mine. In
addition, the crushing and stacking of surface stockpiles will ramp
up through the year as mining activities wind down in the San
Carlos and El Victor pits in the first half of 2020.
Total cash costs are expected to increase
slightly from 2019 reflecting the processing of lower recovery
stockpiles, which carry non-cash historical inventory costs
resulting in a higher reported cash cost per ounce. Mine-site
all-in sustaining costs are also expected to increase due to higher
sustaining capital, mainly related to waste stripping activities at
Cerro Pelon.
Capital spending across the Mulatos District is
expected to total $20 to $25 million, the majority of which is
sustaining capital. The Company expects to make a construction
decision on the La Yaqui Grande project during the second quarter
of 2020. La Yaqui Grande is fully permitted having received the
approval of the environmental impact assessment during the second
quarter of 2019 and the Change in Land Use permit in July 2019.
Capital spending on the Company’s development
projects and capitalized exploration at existing operations is
expected to total $35 million in 2020. The majority of this
spending will be focused on exploration at Island Gold and
exploration, permitting and development activities at Lynn
Lake.
With $183 million of cash and cash equivalents,
no debt, and growing cash flow from its operations, the Company is
well positioned to fund its internal growth initiatives, and
expects to transition to strong free cash flow generation in the
second half of 2020.
Fourth Quarter and Year End 2019
Results
Young-Davidson Financial and Operational
Review
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
|
2018 |
2019 |
|
2018 |
|
Gold production (ounces) |
|
48,000 |
|
|
50,900 |
|
188,000 |
|
180,000 |
|
Gold sales
(ounces) |
|
51,694 |
|
|
51,944 |
|
188,785 |
|
185,593 |
|
Financial Review (in
millions) |
|
|
|
|
Operating Revenues |
$75.9 |
|
$64.4 |
|
$262.1 |
|
$236.3 |
|
Cost of sales (1) |
$59.4 |
|
$61.5 |
|
$231.1 |
|
$235.0 |
|
Earnings from operations |
$16.5 |
|
$2.9 |
|
$31.0 |
|
$1.3 |
|
Cash provided by operating activities |
$38.9 |
|
$23.6 |
|
$112.7 |
|
$97.5 |
|
Capital expenditures (sustaining) (2) |
$16.4 |
|
$10.8 |
|
$46.2 |
|
$35.8 |
|
Capital expenditures (growth) (2) |
$10.6 |
|
$12.3 |
|
$53.7 |
|
$50.8 |
|
Mine-site free cash flow (2) |
$11.9 |
|
$0.5 |
|
$12.8 |
|
$10.9 |
|
Cost of sales, including amortization per ounce of gold sold
(1) |
$1,149 |
|
$1,184 |
|
$1,224 |
|
$1,266 |
|
Total cash costs per
ounce of gold sold (2) |
$766 |
|
$764 |
|
$800 |
|
$822 |
|
Mine-site all-in
sustaining costs per ounce of gold sold (2),(3) |
$1,083 |
|
$974 |
|
$1,047 |
|
$1,017 |
|
Underground Operations |
|
|
|
|
Tonnes of ore mined |
|
644,010 |
|
|
588,956 |
|
2,452,623 |
|
2,280,399 |
|
Tonnes of ore mined per day ("tpd") |
|
7,000 |
|
|
6,402 |
|
6,720 |
|
6,248 |
|
Average grade of gold (4) |
|
2.65 |
|
|
2.71 |
|
2.56 |
|
2.51 |
|
Metres developed |
|
2,925 |
|
|
2,975 |
|
11,519 |
|
12,009 |
|
Mill
Operations |
|
|
|
|
Tonnes of ore processed |
|
622,002 |
|
|
745,567 |
|
2,571,319 |
|
2,683,692 |
|
Tonnes of ore processed per day |
|
6,761 |
|
|
8,104 |
|
7,045 |
|
7,353 |
|
Average grade of gold (4) |
|
2.65 |
|
|
2.39 |
|
2.46 |
|
2.31 |
|
Contained ounces milled |
|
53,043 |
|
|
57,192 |
|
203,452 |
|
190,701 |
|
Average recovery rate |
|
92 |
% |
|
92 |
% |
91 |
% |
92 |
% |
(1) Cost of sales includes mining and processing
costs, royalties and amortization.(2) Refer to the
“Non-GAAP Measures and Additional GAAP Measures” disclosure at the
end of this press release and associated MD&A for a description
and calculation of these measures.(3) For the purposes
of calculating mine-site all-in sustaining costs, the Company does
not include an allocation of corporate and administrative and share
based compensation expenses.(4) Grams per tonne of gold
("g/t Au").
Young-Davidson produced 48,000 ounces of gold in
the fourth quarter of 2019, 6% below the same period of 2018 due to
lower tonnes processed as a result of depleting low grade
stockpiles in the third quarter of 2019. For the full year,
Young-Davidson met the high end of guidance with production of
188,000 ounces.
Underground mining rates averaged 7,000 tpd in
the fourth quarter, exceeding guidance and marking a 9% increase
from the prior year. Mining rates exceeded full year guidance of
6,500 tpd in every quarter this year, with the fourth quarter being
the highest quarter since 2017 and second highest quarterly mining
rate ever. Mining rates averaged 6,720 tpd for the year, an 8%
increase compared to 2018 due to improved operating performance
from the mid-mine infrastructure. Underground grades mined in the
fourth quarter of 2.65 g/t Au were consistent with annual
guidance. For the full year, underground grades mined of 2.56
g/t Au were slightly below annual guidance, reflecting lower grades
mined during the first half of the year.
Mill throughput of 6,761 tpd was lower than the
prior year period as only underground ore was processed in the
fourth quarter with low-grade surface stockpiles having been
largely depleted. For the full year, mill throughput was relatively
consistent with 2018, with more underground ore processed in 2019
offset by a reduction in the processing of surface stockpiles. Mill
recoveries of 92% in the quarter and 91% for the year were in line
with guidance and the prior year.
Lower Mine Construction and Tie-In
Substantial progress on the lower mine expansion
was made in the fourth quarter of 2019, including completion of the
ore passes from the upper mine (9590 level) feeding the lower mine
coarse ore bin (9025 level) above the crusher. Installation of the
grizzlies and rock breaker have commenced and are expected to be
completed in the second quarter of 2020.
In addition, the three fine ore bins have been
excavated with the two ore bins at the Northgate shaft now
commissioned and the feeder from the ore bin on the 8930 level
below the crusher currently being installed. Installation and
commissioning of the crusher will be completed in February. The
shaft bottom steel, ore and waste bins at the Northgate shaft, and
the 8940 level loading pocket have been completed, with the shaft
ready to be roped up following removal of the pentice. Installation
of the hangers and trays for the main conveyor (CV21) from the
crusher loadout level to the top of the shaft bins has progressed
and is awaiting completion of the 8930 loadout.
The Northgate shaft was shutdown in mid-February
2020 and removal of the ropes has commenced. All supplies and
equipment required to complete the tie-in are now on site. During
the shutdown, the shaft steel at the mid-shaft location will be
removed, the pentice will be excavated, and the new head, tail and
guide ropes will be installed. Hoisting from the lower mine (8940
level) is expected to commence in June 2020.
A photo of the Lower mine loadout is
available: https://www.globenewswire.com/NewsRoom/AttachmentNg/d3ae5d4f-d292-4d7a-8aee-4681a317b576
A photo of the Lower mine crusher
installation is
available: https://www.globenewswire.com/NewsRoom/AttachmentNg/632e761f-c1b3-4209-8757-a366f311d189
A photo of the Lower mine conveyor is available:
https://www.globenewswire.com/NewsRoom/AttachmentNg/d19e3fa9-a67c-4dc2-b9ad-8b9b7359f863
Financial Review
Fourth quarter revenues of $75.9 million were
18% above the prior year quarter, reflecting higher realized gold
prices. For the year ended December 31, 2019, revenues of $262.1
million were $25.8 million higher than the prior year, attributable
to a 2% increase in ounces sold, as well as higher realized
prices.
Cost of sales (which includes mining and
processing costs, royalties, and amortization expense) of $59.4
million in the fourth quarter were consistent with the comparative
quarter of 2018, as were underground mining costs of CAD$51 per
tonne. Cost of sales for the year ended December 31, 2019 were
$231.1 million, slightly lower than the prior year period due to
lower mining costs per tonne and lower tonnes processed.
Total cash costs of $766 per ounce in the fourth
quarter were consistent with the comparative period and in line
with annual guidance. Total cash costs improved significantly
in the fourth quarter compared to the first half of the year, as a
result of higher grades mined, and lower mining and milling costs.
For the year ended December 31, 2019, total cash costs of $800 per
ounce were 3% lower than the prior year period, and slightly above
guidance. Total cash costs are expected to be higher in the first
half of 2020, due to lower production during the lower mine tie-in,
decreasing significantly in the second half of the year.
Mine-site AISC of $1,083 per ounce in the fourth
quarter were higher than the comparative quarter of 2019 and higher
than annual guidance, reflecting the timing of sustaining capital
expenditures. Mine-site AISC for the year were $1,047 per ounce,
above guidance as a result of higher sustaining capital
expenditures.
Capital expenditures were $27.0 million in the
fourth quarter. This included $16.4 million of sustaining capital
and $10.6 million of growth capital. Growth capital spending was
focused on construction of the new TIA1 tailings facility and
continued lower mine construction. For the full year, capital
expenditures of $99.9 million were focused on lower mine
construction, lateral development in the upper and lower mines, and
construction of the new TIA1 tailings facility. Capital spending
was above guidance due to additional grouting requirements and a
change in scope of the new tailings facility from an upstream to a
centreline design.
Young-Davidson generated $11.9 million of
mine-site free cash flow in the fourth quarter, significantly
higher than the same period of 2018 due to a higher gold price, and
improved operating costs. For the full year, mine-site free cash
flow was $12.8 million, generating a return after self financing
the lower mine expansion. Since the acquisition of Young-Davidson
in 2015, the mine has generated operating cash flow of $467.4
million and invested $420.0 million in capital expenditures, the
majority of which has been focused on the lower mine expansion.
With declining capital spending following the completion of the
lower mine expansion in June 2020, and a corresponding increase in
gold production and lower operating costs, Young-Davidson is
expected to generate strong free cash flow starting in the second
half of 2020.
Island Gold Financial and Operational
Review
|
Three Months Ended December 31, |
Years Ended December 31, |
|
2019 |
2018 |
2019 |
2018 |
Gold
production (ounces) |
38,600 |
|
29,000 |
|
150,400 |
|
105,800 |
|
Gold sales (ounces) |
39,652 |
|
30,199 |
|
149,746 |
|
105,520 |
|
Financial Review (in millions) |
|
|
|
|
Operating Revenues |
$58.2 |
|
$37.5 |
|
$207.3 |
|
$135.1 |
|
Cost of sales (1) |
$36.4 |
|
$28.7 |
|
$129.4 |
|
$106.5 |
|
Earnings from operations |
$21.5 |
|
$7.8 |
|
$76.8 |
|
$27.2 |
|
Cash provided by operating activities |
$34.1 |
|
$16.3 |
|
$133.4 |
|
$75.9 |
|
Capital expenditures (sustaining) (2) |
$5.7 |
|
$8.0 |
|
$24.1 |
|
$20.2 |
|
Capital expenditures (growth) (2) |
$14.3 |
|
$5.7 |
|
$28.4 |
|
$30.3 |
|
Capital expenditures (capitalized exploration) (2) |
$4.7 |
|
$3.1 |
|
$16.4 |
|
$15.6 |
|
Mine-site free cash flow (2) |
$9.4 |
|
($0.5 |
) |
$64.5 |
|
$9.8 |
|
Cost of sales, including amortization per ounce of gold sold
(1) |
$918 |
|
$950 |
|
$864 |
|
$1,009 |
|
Total cash costs per
ounce of gold sold (2) |
$507 |
|
$570 |
|
$495 |
|
$589 |
|
Mine-site all-in
sustaining costs per ounce of gold sold (2),(3) |
$653 |
|
$834 |
|
$656 |
|
$781 |
|
Underground Operations |
|
|
|
|
Tonnes of ore mined |
102,652 |
|
102,692 |
|
380,266 |
|
344,336 |
|
Tonnes of ore mined per day ("tpd") |
1,116 |
|
1,116 |
|
1,042 |
|
943 |
|
Average grade of gold (4) |
12.44 |
|
8.95 |
|
12.28 |
|
9.07 |
|
Metres developed |
1,831 |
|
1,560 |
|
6,031 |
6,477 |
|
Mill
Operations |
|
|
|
|
Tonnes of ore processed |
93,912 |
|
105,432 |
|
401,276 |
|
369,767 |
|
Tonnes of ore processed per day |
1,021 |
|
1,146 |
|
1,099 |
|
1,013 |
|
Average grade of gold (4) |
13.03 |
|
9.02 |
|
11.85 |
|
9.20 |
|
Contained ounces milled |
39,345 |
|
30,585 |
|
152,905 |
|
109,383 |
|
Average recovery rate |
97 |
% |
96 |
% |
97 |
% |
96 |
% |
(1) Cost of sales includes mining and processing
costs, royalties and amortization.(2) Refer to the
“Non-GAAP Measures and Additional GAAP Measures” disclosure at the
end of this press release and associated MD&A for a description
and calculation of these measures.(3) For the purposes
of calculating mine-site all-in sustaining costs, the Company does
not include an allocation of corporate and administrative and share
based compensation expenses.(4) Grams per tonne of gold
("g/t Au").
Island Gold produced 38,600 ounces in the fourth
quarter, marking a 33% increase from the fourth quarter of 2018
driven by higher grades mined and milled. For the full year, Island
Gold produced a record 150,400 ounces, 4% above the high end of
guidance, and 42% higher than 2018 reflecting higher grades mined
and milled. The operation generated mine-site free cash flow of
$9.4 million in the fourth quarter, bringing the 2019 total to a
record $64.5 million.
Underground mining rates were 1,116 tpd in the
fourth quarter, consistent with the prior year period. For the full
year, underground mining rates increased 10% to average 1,042 tpd.
Underground grades mined averaged 12.44 g/t Au in the fourth
quarter, higher than annual guidance and 39% higher than the fourth
quarter of 2018 due to mine sequencing. Full year grades mined of
12.28 g/t Au were above guided levels due
to a combination of positive grade reconciliation and mine
sequencing.
Mill throughput of 1,021 tpd in the fourth
quarter was down from the prior year period; however, throughput of
1,099 tpd for the full year was in line with annual guidance. Mill
recoveries were 97% in the fourth quarter, in line with the prior
year quarter and guidance.
Financial Review
Island Gold generated record revenues of $58.2
million in the fourth quarter, an increase of 55% compared to the
prior year period, reflecting significantly more ounces sold and a
higher realized gold price. For the full year, revenues of $207.3
million were also a record and $72.2 million, or 53% higher than
the prior year, primarily attributable to more ounces sold.
Cost of sales (includes mining and processing
costs, royalties, and amortization expense) of $36.4 million in the
fourth quarter were 27% higher than the comparative period,
reflecting more ounces sold and higher unit mining costs. However,
on a per ounce basis, cost of sales decreased 3%, driven by higher
grades mined and lower amortization charges. Cost of sales for the
full year of $129.4 million increased 22% from the prior year
period due to higher mining and processing rates.
Total cash costs were $507 per ounce in the
fourth quarter, an 11% improvement from the comparative quarter,
driven by higher grades mined partially offset by higher mining
costs. Unit mining costs were CAD$165 per tonne in the quarter due
to higher contractor and maintenance costs. For the full year,
total cash costs of $495 per ounce were 16% lower than the prior
year due to higher grades mined, and in line with annual
guidance.
Mine-site AISC of $653 per ounce in the fourth
quarter were below the full year guidance range of $730 to $770 per
ounce, reflecting lower sustaining capital spending. Mine-site AISC
for the full year of $656 per ounce were 16% lower than the prior
year and below guidance due to the deferral of certain sustaining
capital spending to 2020.
Total capital expenditures were $24.7 million in
the fourth quarter, with spending focused on lateral development,
tailings construction, mining equipment, and capitalized
exploration. This included $5.7 million of sustaining capital and
$19.0 million of growth capital (inclusive of $4.7 million of
capitalized exploration). For the full year, total capital
expenditures, including capitalized exploration, were $68.9
million, consistent with the prior year.
Island Gold generated mine-site free cash flow
of $9.4 million during the fourth quarter driven by strong gold
production and operating margins. For the full year, Island Gold
generated a record $64.5 million of mine-site free cash flow, net
of all investment in capital and exploration. Since the acquisition
of Island Gold in November 2017, the mine has generated $81 million
of free cash flow, while funding an expansion of the operation from
900 tpd to 1,200 tpd, and more than doubling Mineral Reserves and
Resources.
Mulatos Financial and Operational
Review
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
|
2018 |
|
Gold production (ounces) |
|
34,100 |
|
35,600 |
|
142,000 |
|
175,500 |
|
Gold sales
(ounces) |
|
34,127 |
|
38,819 |
|
141,496 |
|
175,104 |
|
Financial
Review (in millions) |
|
|
|
|
Operating Revenues |
$49.7 |
|
$48.1 |
|
$194.4 |
|
$223.3 |
|
Cost of sales (1) |
$35.8 |
|
$38.4 |
|
$138.9 |
|
$173.1 |
|
Earnings from operations |
$13.0 |
|
$8.8 |
|
$51.9 |
|
$42.7 |
|
Cash provided by operating activities |
$10.5 |
|
$14.7 |
|
$41.5 |
|
$71.0 |
|
Capital expenditures (sustaining) (2) |
$1.2 |
|
$2.5 |
|
$6.5 |
|
$7.2 |
|
Capital expenditures (growth) (2) |
$7.0 |
|
$8.7 |
|
$46.4 |
|
$25.2 |
|
Capital expenditures
(capitalized exploration) (2) |
$1.3 |
|
$0.6 |
|
$1.3 |
|
$2.9 |
|
Mine-site free cash flow
(2) |
$1.0 |
|
$2.9 |
|
($12.7 |
) |
$35.7 |
|
Cost of sales, including amortization per ounce of gold sold
(1) |
$1,049 |
|
$989 |
|
$982 |
|
$989 |
|
Total
cash costs per ounce of gold sold (2) |
$820 |
|
$793 |
|
$784 |
|
$786 |
|
Mine
site all-in sustaining costs per ounce of gold sold (2),(3) |
$891 |
|
$881 |
|
$868 |
|
$855 |
|
Open Pit &
Underground Operations |
|
|
|
|
Tonnes of ore mined - open pit (4) |
|
1,558,458 |
|
2,118,300 |
|
7,166,679 |
|
8,479,211 |
|
Total waste mined - open pit (6) |
|
2,058,732 |
|
2,151,749 |
|
7,095,650 |
|
8,788,488 |
|
Total tonnes mined - open pit |
|
3,617,190 |
|
4,270,049 |
|
14,262,329 |
|
17,267,699 |
|
Waste-to-ore ratio (operating) |
|
0.98 |
|
0.51 |
|
0.73 |
|
0.71 |
|
Tonnes of ore mined -
underground |
|
— |
|
— |
|
— |
|
48,772 |
|
Crushing and Heap
Leach Operations |
|
|
|
|
Tonnes of ore stacked |
|
1,823,418 |
|
1,776,719 |
|
7,289,811 |
|
6,795,175 |
|
Average grade of gold processed (5) |
|
0.99 |
|
0.92 |
|
0.94 |
|
0.90 |
|
Contained ounces stacked |
|
58,205 |
|
52,296 |
|
219,655 |
|
195,606 |
|
Mill Operations |
|
|
|
|
Tonnes of high-grade ore milled |
|
— |
|
— |
|
— |
|
91,680 |
|
Average grade of gold processed (5) |
|
— |
|
— |
|
— |
|
6.70 |
|
Contained ounces milled |
|
— |
|
— |
|
— |
|
19,744 |
|
Total contained ounces stacked and milled |
|
58,205 |
|
52,296 |
|
219,655 |
|
215,350 |
|
Average recovery
rate |
|
59 |
% |
68 |
% |
65 |
% |
81 |
% |
Ore crushed per day
(tonnes) - combined |
|
19,800 |
|
19,300 |
|
20,000 |
|
18,900 |
|
(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 MD&A for a description and calculation of these
measures.(3) For the purposes of calculating mine-site
all-in sustaining costs, the Company does not include an allocation
of corporate and administrative and share based compensation
expenses.(4) Includes ore stockpiled during the
quarter.(5) Grams per tonne of gold ("g/t
Au").(6) Total waste mined includes operating waste and
capitalized stripping.
Mulatos produced 34,100 ounces in the fourth
quarter of 2019, including initial production from Cerro Pelon
which commenced stacking ore in the quarter ahead of schedule. For
the year, Mulatos produced 142,000 ounces, down 19% from 2018 due
to lower recoveries, as well as the completion of mining from the
San Carlos underground deposit in 2018 and La Yaqui Phase I deposit
in the third quarter of 2019.
The Company is currently mining from the
Mulatos, Victor, San Carlos, and Cerro Pelon open pits. Mining and
stacking rates were impacted by abnormally high rainfall in
September over a short period of time which temporarily restricted
mining activities in the main Mulatos pit early in the quarter, as
well as the wind-down of mining activities at La Yaqui Phase I,
partially offset by the start up of mining at Cerro Pelon.
Total crusher throughput averaged 19,800 tpd for
a total of 1,823,418 tonnes stacked in the fourth quarter at a
grade of 0.99 g/t Au. Grades stacked for the full year
were in line with guidance at 0.94 g/t Au, including mining from La
Yaqui Phase I and Cerro Pelon. The recovery rate of 59% in
the fourth quarter was mainly impacted by the timing of stacking
higher grade ore from Cerro Pelon later in the quarter, with those
ounces expected to be recovered in 2020. For the full year,
the recovery rate of 65% was slightly below guidance due to
stacking of higher grade, lower recovery SAS ore during the
year.
Financial Review
Fourth quarter revenues of $49.7 million were in
line with the prior year quarter. For the full year of 2019,
revenues of $194.4 million were $28.9 million lower than the prior
year, primarily due to less ounces sold.
Cost of sales (includes mining and processing
costs, royalties, and amortization expense) were $35.8 million in
the fourth quarter, lower than the prior year period due to a lower
number of tonnes mined and lower ounces sold. On a per ounce basis,
cost of sales were slightly higher in the fourth quarter of
2019 driven by higher mining costs and a higher waste to ore ratio.
Cost of sales for the full year were $138.9 million, 20% lower due
to fewer tonnes mined and the completion of underground mining
operations at San Carlos in the prior year.
Total cash costs of $820 per ounce in the fourth
quarter were higher than the prior year quarter, due to a higher
waste-to-ore ratio, partially offset by higher grades processed.
For the full year, total cash costs of $784 per ounce were
consistent with the prior year period, and below annual guidance,
as the Company benefited from higher grades and the sale of
concentrate ounces early in the year that had not been
budgeted.
Mine-site AISC of $891 per ounce in the fourth
quarter were higher than the prior year quarter as a result of
higher total cash costs. Mine-site AISC of $868 per ounce for the
full year were in line with the prior year and the low end of
guidance.
Capital spending in the fourth quarter was
focused on completion of construction at Cerro Pelon, including
stripping of the open pit and commissioning of the crusher. Total
capital spending for the quarter was $9.5 million, of which $1.2
million was sustaining capital. For the full year, capital
expenditures of $54.2 million were $18.9 million higher than the
prior year reflecting $21.8 million spent in 2019 to construct the
Cerro Pelon mine.
Mulatos generated mine-site free cash-flow of
$1.0 million in the fourth quarter as capital spending decreased
with the completion of Cerro Pelon development in October. For the
full year, mine-site free-cash flow was negative $12.7 million
reflecting the construction costs of Cerro Pelon. With the
construction of Cerro Pelon now complete, Mulatos is expected to
generate strong free cash flow growth in 2020.
El Chanate Financial and Operational
Review
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
|
2018 |
|
Gold production (ounces) |
|
1,400 |
|
10,100 |
|
14,100 |
|
43,700 |
|
Gold sales
(ounces) |
|
1,675 |
|
10,199 |
|
14,675 |
|
43,662 |
|
Financial
Review (in millions) |
|
|
|
|
Operating Revenues |
$2.2 |
|
$13.1 |
|
$19.3 |
|
$57.1 |
|
Cost of sales (1) |
$4.4 |
|
$78.5 |
|
$22.0 |
|
$124.8 |
|
Loss from operations |
($2.2 |
) |
($65.4 |
) |
($2.7 |
) |
($67.7 |
) |
Cash (used in) provided by operating activities |
($4.1 |
) |
$2.4 |
|
($2.9 |
) |
$0.6 |
|
Capital expenditures |
$— |
|
$0.1 |
|
$— |
|
$0.6 |
|
Mine-site free cash flow (2) |
($4.1 |
) |
$2.3 |
|
($2.9 |
) |
$— |
|
Cost of sales, including amortization per ounce of gold sold
(1) |
$2,627 |
|
$7,697 |
|
$1,499 |
|
$2,858 |
|
Total cash costs per
ounce of gold sold (2) |
$2,448 |
|
$1,304 |
|
$1,390 |
|
$1,289 |
|
Mine site all-in
sustaining costs per ounce of gold sold (2),(3) |
$2,448 |
|
$1,333 |
|
$1,411 |
|
$1,317 |
|
(1) Cost of sales includes mining and processing
costs, royalties and amortization.(2) Refer to the
“Non-GAAP Measures and Additional GAAP Measures” disclosure at the
end of this press release and associated MD&A for a description
and calculation of these measures.(3) For the purposes
of calculating mine-site all-in sustaining costs, the Company does
not include an allocation of corporate and administrative and share
based compensation expenses.
El Chanate produced 1,400 ounces of gold in the
fourth quarter, and 14,100 ounces for the full year. The operation
concluded residual leaching in October 2019, and has now
transitioned to reclamation activities with rinsing of the leach
pad in the fourth quarter.
Financial Review
Fourth quarter revenues of $2.2 million were
lower than the prior year quarter due to fewer ounces sold, as
mining activities and ore stacking ceased in 2018. Total cash costs
and mine-site AISC were both $2,448 per ounce in the fourth
quarter, increasing from the prior year period due to higher fixed
costs.
El Chanate generated negative mine-site free
cash flow of $4.1 million in the quarter and $2.9 million for the
full year. Margins generated from residual leaching throughout the
year funded reclamation spend of approximately $2.0 million in the
year.
Fourth Quarter 2019 Development Activities
Kirazlı (Çanakkale, Turkey)
On October, 14, 2019, the Company suspended all
construction activities on its Kirazlı project pending the renewal
of its Turkish mining concessions which expired on October 13,
2019. Although the mining concessions have not been revoked and can
be renewed following this expiration date, no further construction
activities can be completed until the concessions have been
renewed.
There has been false information about the
project circulated through social media, which resulted in project
opposition and related protests. The Company continues to share
correct information about the project and dispel this
misinformation.
The Company has met all the regulatory
requirements and conditions for the concessions to be renewed and
reasonably expected the renewal by the expiration date. The
communities local to the Kirazlı project remain supportive. As
such, the Company is working with the Turkish Department of Energy
and Natural Resources on securing the renewal of the mining
concessions which will allow for a resumption of construction
activities. The renewal is required from the same government
department that granted the Operating Permit for Kirazlı in March
2019.
The Company will provide updated guidance on the construction
schedule and budget for Kirazlı following the receipt of the
concession renewal and resumption of construction activities.
During the fourth quarter of 2019, the Company
spent $8.2 million at Kirazlı, including completing construction of
the reservoir and annual forestry fee, bringing year-to-date
spending to $28.1 million.
Mulatos District (Sonora,
Mexico)
Cerro Pelon
During the fourth quarter, the Company completed
construction of the Cerro Pelon mine, including commissioning of
the crushing circuit and conveyor. The Company commenced stacking
ore from Cerro Pelon in the fourth quarter and declared commercial
production. Cerro Pelon is expected to be a significant contributor
to production at Mulatos in 2020.
The Company spent $4.0 million at Cerro Pelon in
the fourth quarter, bringing total construction costs to $25.2
million (of which $21.8 million was spent in 2019). Spending in the
fourth quarter was focused on installation and testing of the
crushing and conveying system, and final pre-stripping of the open
pit.
La Yaqui Grande
The Company received approval of the
environmental impact assessment ("MIA") for La Yaqui Grande during
the second quarter of 2019 and the Change in Land Use permit in the
third quarter of 2019. The Company is currently finalizing project
design and plans to finalize the project economics and announce a
construction decision in the second quarter of 2020.
During the fourth quarter, the Company spent
$0.7 million, bringing 2019 spending to $4.9 million, focused on
detailed engineering and project design.
Lynn Lake (Manitoba,
Canada)
The Company released a positive Feasibility
Study on the Lynn Lake project in December 2017 outlining average
annual production of 143,000 ounces over a 10 year mine life at
average mine-site all-in sustaining costs of $745 per ounce.
The project economics detailed in the 2017
Feasibility Study outlined a 12.5% IRR at a $1,250 per ounce gold
price (21.5% IRR and NPV of $290 million at a $1,500 per ounce gold
price). Since the release of the 2017 Feasibility Study, the
Company has undertaken several initiatives designed to improve the
project economics. These include a detailed review of construction
capital, the evaluation of various production scenarios and the
inclusion of the results of more detailed engineering.
Development spending (excluding exploration) in
the fourth quarter of 2019 of $0.9 million and $3.4 million for the
year related to project optimization activities, as well as
supporting drafting of the Environmental Impact Study (“EIS”) for
the project that will be submitted to satisfy Federal and
Provincial environmental assessment requirements . The EIS is
expected to be submitted in the second quarter of 2020. The
permitting process is expected to take approximately two years
followed by two years of construction.
Fourth Quarter 2019 Exploration Activities
Island Gold (Ontario, Canada)
The 2019 exploration drilling program was
focused on further expanding the down-plunge and lateral extensions
of the Island Gold deposit with the objective of adding new near
mine Mineral Resources across the two-kilometre long Island Gold
Main Zone. The program was successful in extending high grade
gold mineralization across all three areas of focus, most notably
in the Main and Eastern Extensions. This resulted in 21% increase
in Mineral Reserves to 1.2 million ounces (3.6 mt grading 10.37 g/t
Au), net of mining depletion, and a 46% increase in Inferred
Mineral Resources to 2.3 million ounces (5.4 mt grading 13.26 g/t
Au) as outlined in the 2019 Mineral Reserve and Resource statement
issued on February 18, 2020.
A total of 47,608 m of surface directional
drilling, 24,462 m of underground exploration drilling, and 993 m
of underground exploration drift development was completed in
2019. The Company issued four press releases during the year
highlighting the results from the exploration program in 2019.
Surface exploration drilling
A total of 17 holes (13,682 m) were completed in
the fourth quarter as part of the directional exploration drilling
program. Directional drilling targeted areas peripheral to the
Inferred Mineral Resource blocks below the 1,000 m level, with
drill hole spacing ranging from 75 m to 100 m. The area that was
targeted by the surface directional drill program extends
approximately 2,000 m in strike length between the 1,000 m and
1,500 m elevation below surface.
Underground exploration drilling
During the fourth quarter of 2019, a total of
2,689 m of underground exploration drilling was completed in 11
holes from the 190, 340, 620 and 840 levels. The objective of the
underground drilling is to identify new Mineral Resources close to
existing Mineral Resource or Reserve blocks. A total of 267 m of
underground exploration drift development was completed on the 620
and 840 levels during the fourth quarter of 2019.
As outlined in a press release issued on January
15, 2020, highlights from drilling in the fourth quarter included
the following:
Main Extension Down-Plunge - fourth quarter
previously released highlights included:
- 121.32 g/t Au (96.47 g/t cut) over 3.81 m (MH20-01);
- 108.17 g/t Au (94.56 g/t cut) over 2.57 m
(MH17-11); and
- 36.45 g/t Au (13.23 g/t cut) over 8.04 m (MH17-12)
Eastern Extension - fourth quarter previously
released highlights included:
- 32.19 g/t Au (25.48 g/t cut) over 4.68 m (620-610-01); and
- 20.18 g/t Au (20.18 g/t cut) over 3.24 m (620-610-07)
Gap between Main and Eastern Extensions - fourth
quarter previously released highlights include:
- 21.28 g/t Au (21.28 g/t cut) over 9.01 m (MH18-09); and
- 28.50 g/t Au (23.13 g/t cut) over 4.38 m (MH18-10)
Total exploration expenditures during the fourth
quarter were $5.0 million, of which $4.7 million was capitalized.
For the full year, $17.4 million was spent, of which $16.4 million
was capitalized.
Mulatos District (Sonora,
Mexico)
The Company has a large exploration package
covering 28,972 hectares with the majority of past exploration
efforts focused around the Mulatos mine. Over the last three years,
exploration has moved beyond the main Mulatos pit area and is
focused on earlier stage prospects throughout the wider
district.
In the fourth quarter, the Company invested $0.9
million in exploration activities within the Mulatos District, and
$5.0 million for the full year, of which $1.3 million was
capitalized. Spending in the quarter primarily related to drilling
on early stage projects, ground geophysical surveys, and
administrative costs.
Lynn Lake (Manitoba,
Canada)
In the fourth quarter of 2019, 1,553 m of
drilling was completed in 6 holes focused on testing exploration
targets in proximity to the Gordon Deposit. Interpretation of data
collected during the 2019 field program continued through the
fourth quarter with the focus on developing a pipeline of
prospective regional exploration targets for further evaluation in
2020. Spending in the fourth quarter totaled $0.6 million,
bringing the full year spend to $4.3 million.
Review of Fourth Quarter Financial
Results
During the fourth quarter of 2019, the Company
sold 127,148 ounces of gold for record quarterly revenue of $186.0
million, a 14% increase from the prior year period due to an
increase in realized gold prices. The average realized gold price
in the quarter was $1,463 per ounce compared to $1,244 per ounce in
the prior year period.
Cost of sales were $136.0 million in the fourth
quarter of 2019, a 34% decrease compared to the prior year period,
primarily due to the prior year including a $64.0 million non-cash
inventory impairment charge at El Chanate.
Mining and processing costs were $87.4 million
compared to $96.2 million in the prior year period. This decline
was attributable to lower operating costs at Island Gold and
Young-Davidson, and the completion of mining activities at El
Chanate in the fourth quarter of 2018.
Consolidated total cash costs for the quarter
were $722 per ounce compared to $770 per ounce in the prior year
period, a 6% decrease driven by low cost production growth at
Island Gold.
AISC were $972 per ounce in the quarter, $11 per
ounce lower than the prior year period driven by lower total cash
costs, partially offset by higher sustaining capital spending.
Royalty expense was $4.4 million in the quarter,
lower than the prior year period of $4.8 million, as the 5% Mulatos
royalty commitment ceased in the first quarter of 2019, partially
offset by a higher number of ounces sold at Island Gold and higher
realized gold prices.
Amortization of $44.2 million in the quarter was
consistent with the prior year period expense of $42.1 million.
Amortization of $348 per ounce was in line with guidance.
The Company recognized earnings from operations
of $41.6 million in the quarter, higher than the prior year period
due to higher realized gold prices combined with lower mining and
processing expense, driving stronger margins. Further, the prior
year period included a $64.0 million non-cash inventory impairment
charge at El Chanate which impacted earnings in 2018.
The Company reported net earnings of $38.0
million in the quarter, compared to net loss of $71.5 million in
the same period of 2018. The increase in earnings is due to
stronger operating margins, the benefit of foreign exchange gains
recorded within deferred taxes, as well as the prior year period
impacted by the non-cash inventory impairment charge at El Chanate.
On an adjusted basis, earnings of $32.1 million or $0.08 per share
increased compared to the prior year driven by higher realized gold
prices and improved costs. Adjusted earnings reflect
adjustments for one-time gains and losses, as well as foreign
exchange movements related to the Canadian dollar and Mexican Peso,
which generated a foreign exchange gain of $8.6 million in the
fourth quarter of 2019 recorded within both foreign exchange and
deferred income taxes.
Review of 2019 Financial
Results
For the full year of 2019, the Company sold
494,702 ounces of gold for record revenue of $683.1 million, a 5%
increase compared to 2018. This was primarily driven by higher
realized gold prices and record production at Island gold,
partially offset by less ounces sold at Mulatos and El Chanate
which transitioned to residual leaching at the end of 2018. Revenue
benefited from a higher realized gold price of $1,381 per ounce
compared to $1,278 per ounce in 2018, a $52.5 million impact.
Cost of sales were $521.4 million in 2019
compared to $639.4 million in 2018, as the prior year included a
$64.0 million non-cash inventory impairment charge at El Chanate.
Cost of sales was also driven lower by lower mining and processing
costs, royalties and amortization charges.
Mining and processing costs decreased to $339.0
million in 2019 from $387.2 million in the prior year, primarily
due to lower operating costs at Young-Davidson and Mulatos which
drove down total cash costs. In addition, mining and processing
costs decreased significantly at El Chanate as mining activities
ceased in the fourth quarter of 2018.
Consolidated total cash costs per ounce
decreased 10% in 2019 to $720 per ounce compared to $802 per ounce
in the prior year. The decline in total cash costs was driven by
low cost production growth at Island Gold, and lower operating
costs and higher grades mined at both Young-Davidson and
Mulatos.
AISC decreased to $951 per ounce in 2019 from
$989 per ounce in the prior year. The decrease was primarily driven
by the reduction in total cash costs, partially offset by higher
sustaining capital spending at Young-Davidson.
Royalty expense was $17.4 million in 2019, a 19%
decrease compared to $21.6 million in 2018, primarily due to a
lower royalty obligation at Mulatos with the completion of the
third-party royalty commitment in the first quarter of 2019.
Amortization of $165.0 million in 2019 was lower
than the prior year due to fewer ounces sold. On a per ounce basis,
amortization was $334 per ounce, in line with guidance and slightly
higher than the prior year due to a higher proportion of sales
coming from Island Gold and Young-Davidson, which include higher
amortization charges.
The Company recognized earnings from operations
of $126.0 million in 2019, compared to loss of $22.6 million in
2018. The substantial increase in earnings from operations was
driven by higher gold prices, and increased production from
Island Gold which generates stronger margins. Further, the prior
year included a $64.0 million non-cash inventory impairment charge
at El Chanate.
The Company reported net earnings of $96.1
million in 2019 compared to a net loss of $72.6 million in 2018,
driven by improved margins, and the 2018 inventory impairment
charge at El Chanate. On an adjusted basis, earnings of $83.5
million or $0.21 per share for the year were 326% higher than in
the prior year. Adjusted net earnings reflect adjustments for other
gains, as well as foreign exchange movements related to the
Canadian dollar and Mexican Peso, which generated a foreign
exchange gain of $13.5 million in 2019 recorded within both foreign
exchange gain and deferred income taxes.
Associated Documents
This press release should be read in conjunction
with the Company’s interim consolidated financial statements for
the year ended December 31, 2019 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 Fourth Quarter and Year-End 2019 Results
Conference Call
The Company's senior management will host a conference call on
Thursday, February 20, 2020 at 11:00 am ET to discuss the fourth
quarter and year-end 2019 results.
Participants may join the conference call by dialling (416)
340-2216 or (800) 273-9672 for calls within Canada and the United
States, or via webcast at www.alamosgold.com.
A playback will be available until March 23, 2020 by dialling
(905) 694-9451 or (800) 408-3053 within Canada and the United
States. The pass code is 1735825#. The webcast will be archived at
www.alamosgold.com.
Qualified Persons
Chris Bostwick, FAusIMM, Alamos’ Vice President, Technical
Services, who is a qualified person within the meaning of National
Instrument 43-101 ("Qualified Person"), has reviewed and approved
the scientific and technical information contained in this press
release.
About Alamos
Alamos is a Canadian-based intermediate gold
producer with diversified production from three operating mines in
North America. This includes the Young-Davidson and Island Gold
mines in northern Ontario, Canada and the Mulatos mine in Sonora
State, Mexico. Additionally, the Company has a significant
portfolio of development stage projects in Canada, Mexico, Turkey,
and the United States. Alamos employs more than 1,700 people and is
committed to the highest standards of sustainable development. The
Company’s shares are traded on the TSX and NYSE under the symbol
“AGI”.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Scott K.
Parsons |
|
Vice-President, Investor
Relations |
|
(416) 368-9932 x 5439 |
|
All amounts are in United States dollars, unless otherwise
stated.
The TSX and NYSE have not reviewed and do not accept
responsibility for the adequacy or accuracy of this release.
Cautionary Note
This press release contains statements which
are, or may be deemed to be, forward-looking information as defined
under applicable Canadian and U.S. securities laws
("forward-looking statement(s)"). All statements in this
press release, other than statements of historical fact, which
address events, results, outcomes or developments that the Company
expects to occur are, or may be deemed to be forward-looking
statements. Forward-looking statements are generally, but not
always, identified by the use of forward-looking terminology such
as "expect", "believe", "anticipate”, “intend", "estimate",
"forecast", "budget", “contemplates”, “continues”, “plan” or
variations of such words and phrases and similar expressions or
statements that certain actions, events or results “may",
"could", "would", "might" or "will" be taken, occur or be
achieved.
Forward-looking statements include information
as to strategy, plans or future financial or operating performance,
such as the Company’s expansion plans, project timelines,
production plans and expected sustainable productivity increases,
expected increases in mining activities and corresponding cost
efficiencies, expected drilling targets, expected sustaining costs,
expected improvements in cash flows and margins, expectations of
changes in capital expenditures, forecasted cash shortfalls and the
Company’s ability to fund them, cost estimates, projected
exploration results, reserve and resource estimates, expected
production rates and use of the stockpile inventory, expected
recoveries, sufficiency of working capital for future commitments
and other statements that express management’s expectations or
estimates of future performance.
Alamos cautions that forward-looking statements
are necessarily based upon several factors and assumptions that,
while considered reasonable by the Company at the time of making
such statements, are inherently subject to significant business,
economic, legal, political and competitive uncertainties and
contingencies. Known and unknown factors could cause actual results
to differ materially from those projected in the forward-looking
statements.
Such factors and assumptions underlying the
forward-looking statements in this press release include, but are
not limited to: changes to current estimates of mineral reserves
and resources; changes to production estimates (which assume
accuracy of projected ore grade, mining rates, recovery timing and
recovery rate estimates and may be impacted by unscheduled
maintenance, labour and contractor availability and other operating
or technical difficulties); fluctuations in the price of gold;
changes in foreign exchange rates (particularly the Canadian
dollar, Mexican peso, Turkish Lira and U.S. dollar); the impact of
inflation; employee and community relations; litigation and
administrative proceedings; disruptions affecting operations;
availability of and increased costs associated with mining inputs
and labour; development delays at the Kirazlı project or
Young-Davidson mine; inherent risks associated with mining and
mineral processing; the risk that the Company’s mines may not
perform as planned; uncertainty with the Company’s ability to
secure additional capital to execute its business plans; the
speculative nature of mineral exploration and development,
including the risks of obtaining and maintaining necessary
licenses, permits and authorizations for the Company’s
development and operating assets; contests over title to
properties; expropriation or nationalization of property; inherent
risks and hazards associated with mining including environmental
hazards, industrial accidents, unusual or unexpected formations,
pressures and cave-ins; changes in national and local government
legislation (including tax legislation), controls or regulations in
Canada, Mexico, Turkey, the United States and other jurisdictions
in which the Company does or may carry on business in the future;
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 or
on EDGAR at www.sec.gov. The foregoing should be reviewed in
conjunction with the information found in this press release.
The Company disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
except as required by applicable law.
Cautionary Note to U.S. Investors
Concerning Measured, Indicated and Inferred Resources
The Company is required to prepare its resource
estimates in accordance with standards of the Canadian
Institute of Mining, Metallurgy and Petroleum referred to in
Canadian National Instrument 43-101. These standards are materially
different from the standards generally permitted in reports filed
with the United States Securities and Exchange Commission.
When describing resources we use the terms "measured", "indicated"
or "inferred” resources which are not recognized by the United
States Securities and Exchange Commission. The estimation of
measured resources and indicated resources involve greater
uncertainty as to their existence and economic feasibility than the
estimation of proven and probable reserves. U.S. investors are
cautioned not to assume that any part of measured or indicated
resources will ever be converted into economically or legally
mineable proven or probable reserves. The estimation of inferred
resources may not form the basis of a feasibility or other economic
studies and involves far greater uncertainty as to their existence
and economic viability than the estimation of other categories of
resources.
Non-GAAP Measures and Additional GAAP
Measures
The Company has included certain non-GAAP
financial measures to supplement its Consolidated Financial
Statements, which are presented in accordance with IFRS, including
the following:
- adjusted net earnings and adjusted earnings per share;
- cash flow from operating activities before changes in working
capital and taxes received;
- Company-wide free cash flow;
- total mine-site free cash flow;
- mine-site free cash flow;
- total cash cost per ounce of gold sold;
- all-in sustaining cost ("AISC") per ounce of gold sold;
- mine-site all-in sustaining cost ("Mine-site AISC") per ounce
of gold sold;
- sustaining and non-sustaining capital expenditures; and
- earnings before interest, taxes, depreciation, and
amortization
The Company believes that these measures,
together with measures determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying
performance of the Company. Non-GAAP financial measures do not have
any standardized meaning prescribed under IFRS, and therefore they
may not be comparable to similar measures employed by other
companies. The data is intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
Management's determination of the components of non-GAAP and
additional measures are evaluated on a periodic basis influenced by
new items and transactions, a review of investor uses and new
regulations as applicable. Any changes in to the measures are dully
noted and retrospectively applied as applicable.
Adjusted Net Earnings and Adjusted
Earnings per Share
“Adjusted net earnings” and “adjusted earnings
per share” are non-GAAP financial measures with no standard meaning
under IFRS which exclude the following from net earnings:
- Foreign exchange gain (loss)
- Items included in other gain (loss)
- Certain non-reoccurring items
- Foreign exchange gain (loss) recorded in deferred tax
expense
Net earnings have been adjusted, including the
associated tax impact, for the group of costs in “Other loss” on
the consolidated statement of comprehensive income. Transactions
within this grouping are: the fair value changes on non-hedged
derivatives; the renunciation of flow-through exploration
expenditures; and loss on disposal of assets. The adjusted entries
are also impacted for tax to the extent that the underlying entries
are impacted for tax in the unadjusted net earnings.
The Company uses adjusted net earnings for its
own internal purposes. Management’s internal budgets and forecasts
and public guidance do not reflect the items which have been
excluded from the determination of adjusted net earnings.
Consequently, the presentation of adjusted net earnings enables
shareholders to better understand the underlying operating
performance of the core mining business through the eyes of
management. Management periodically evaluates the components of
adjusted net earnings based on an internal assessment of
performance measures that are useful for evaluating the operating
performance of our business and a review of the non-GAAP measures
used by mining industry analysts and other mining companies.
Adjusted net earnings is intended to provide
additional information only and does not have any standardized
meaning under IFRS and may not be comparable to similar measures
presented by other companies. It should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS. The measure is not necessarily indicative
of operating profit or cash flows from operations as determined
under IFRS. The following table reconciles this non-GAAP measure to
the most directly comparable IFRS measure.
(in millions) |
|
|
|
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
2017 |
Net earnings (loss) |
$38.0 |
|
($71.5 |
) |
$96.1 |
|
($72.6 |
) |
$26.6 |
|
Adjustments: |
|
|
|
|
|
Impairment of El Chanate inventory |
|
— |
|
|
64.0 |
|
|
— |
|
|
64.0 |
|
|
— |
|
Tax impact on Impairment of El Chanate inventory |
|
— |
|
|
(14.1 |
) |
|
— |
|
|
(14.1 |
) |
|
— |
|
Foreign exchange (gain) loss |
|
— |
|
|
1.7 |
|
|
(0.3 |
) |
|
4.4 |
|
|
5.0 |
|
Other gain |
|
(2.6 |
) |
|
10.1 |
|
|
(5.1 |
) |
|
8.4 |
|
|
3.1 |
|
Unrealized foreign exchange loss (gain) recorded in deferred tax
expense |
|
(8.6 |
) |
|
14.1 |
|
|
(13.2 |
) |
|
28.8 |
|
|
(22.5 |
) |
Transaction costs related to the Richmont acquisition |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3.8 |
|
Acquisition fair value adjustment on Richmont acquisition |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1.3 |
|
Loss on redemption of senior secured notes |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
29.1 |
|
Other income tax and mining tax adjustments |
|
5.3 |
|
|
— |
|
|
6.0 |
|
|
0.7 |
|
|
(7.5 |
) |
Adjusted net earnings |
$32.1 |
|
$4.3 |
|
$83.5 |
|
$19.6 |
|
$38.9 |
|
Adjusted earnings per
share - basic and diluted |
$0.08 |
|
$0.01 |
|
$0.21 |
|
$0.05 |
|
$0.13 |
|
Cash Flow from Operating Activities
before Changes in Working Capital and Cash Taxes
“Cash flow from operating activities before
changes in working capital and cash taxes” is a non-GAAP
performance measure that could provide an indication of the
Company’s ability to generate cash flows from operations, and is
calculated by adding back the change in working capital and taxes
received to “Cash provided by (used in) operating activities” as
presented on the Company’s consolidated statements of cash flows.
“Cash flow from operating activities before changes in working
capital” is a non-GAAP financial measure with no standard
meaning under IFRS.
The following table reconciles the non-GAAP
measure to the consolidated statements of cash flows.
(in millions) |
|
|
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
Cash flow from operating
activities |
$77.8 |
|
$47.4 |
|
$260.4 |
|
$213.9 |
|
Add (less):
Changes in working capital and cash taxes |
|
7.9 |
|
5.4 |
|
36.5 |
|
(1.2 |
) |
Cash flow from operating activities before changes in
working capital and cash taxes |
$85.7 |
|
$52.8 |
|
$296.9 |
|
$212.7 |
|
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 December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
Cash flow from operating
activities |
$77.8 |
|
$47.4 |
|
$260.4 |
|
$213.9 |
|
Less: mineral
property, plant and equipment expenditures |
|
(72.9 |
) |
(61.5 |
) |
(263.6 |
) |
(221.5 |
) |
Company-wide free cash flow |
$4.9 |
|
($14.1 |
) |
($3.2 |
) |
($7.6 |
) |
Mine-site Free Cash Flow
"Mine-site free cash flow" is a non-GAAP
financial performance measure calculated as cash flow from
mine-site operating activities, less mineral property, plant and
equipment expenditures. The Company believes this to be a useful
indicator of our ability to operate without reliance on additional
borrowing or usage of existing cash. Mine-site free cash flow is
intended to provide additional information only and does not have
any standardized meaning under IFRS and may not be comparable to
similar measures of performance presented by other mining
companies. Mine-site free cash flow should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
Total Mine-Site Free
Cash Flow |
|
|
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
(in millions) |
|
|
|
|
Cash flow from operating activities |
$77.8 |
|
$47.4 |
|
$260.4 |
|
$213.9 |
|
Less:
operating cash flow used by non-mine site activity |
|
(1.6 |
) |
(9.6 |
) |
(24.3 |
) |
(31.1 |
) |
Cash flow from operating mine-sites |
$79.4 |
|
$57.0 |
|
$284.7 |
|
$245.0 |
|
|
|
|
|
|
Mineral property, plant and equipment expenditure |
$72.9 |
|
$61.5 |
|
$263.6 |
|
$221.5 |
|
Less: capital expenditures from development projects, and
corporate |
|
(11.7 |
) |
(9.7 |
) |
(40.6 |
) |
(32.9 |
) |
Capital expenditure from mine-sites |
$61.2 |
|
$51.8 |
|
$223.0 |
|
$188.6 |
|
|
|
|
|
|
Total
mine-site free cash flow |
$18.2 |
|
$5.2 |
|
$61.7 |
|
$56.4 |
|
Young-Davidson
Mine-Site Free Cash Flow |
|
|
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
(in millions) |
|
|
|
|
Cash flow from operating activities |
$38.9 |
|
$23.6 |
|
$112.7 |
|
$97.5 |
|
Mineral
property, plant and equipment expenditure |
|
(27.0 |
) |
(23.1 |
) |
(99.9 |
) |
(86.6 |
) |
Mine-site free cash flow |
$11.9 |
|
$0.5 |
|
$12.8 |
|
$10.9 |
|
Mulatos Mine-Site Free
Cash Flow |
|
|
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
(in millions) |
|
|
|
|
Cash flow from operating activities |
$10.5 |
|
$14.7 |
|
$41.5 |
|
$71.0 |
|
Mineral
property, plant and equipment expenditure |
|
(9.5 |
) |
(11.8 |
) |
(54.2 |
) |
(35.3 |
) |
Mine-site free cash flow |
$1.0 |
|
$2.9 |
|
($12.7 |
) |
$35.7 |
|
Island Gold Mine-Site
Free Cash Flow |
|
|
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
(in millions) |
|
|
|
|
Cash flow from operating activities |
$34.1 |
|
$16.3 |
|
$133.4 |
|
$75.9 |
|
Mineral
property, plant and equipment expenditure |
|
(24.7 |
) |
(16.8 |
) |
(68.9 |
) |
(66.1 |
) |
Mine-site free cash flow |
$9.4 |
|
($0.5 |
) |
$64.5 |
|
$9.8 |
|
El Chanate Mine-Site
Free Cash Flow |
|
|
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
(in millions) |
|
|
|
|
Cash flow from operating activities |
($4.1 |
) |
$2.4 |
|
($2.9 |
) |
$0.6 |
|
Mineral
property, plant and equipment expenditure |
|
— |
|
(0.1 |
) |
— |
|
(0.6 |
) |
Mine-site free cash flow |
($4.1 |
) |
$2.3 |
|
($2.9 |
) |
$— |
|
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 December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
2017 |
(in millions, except ounces and per ounce figures) |
|
|
|
|
|
Mining and processing |
$87.4 |
|
$96.2 |
|
$339.0 |
|
$387.2 |
|
$315.6 |
|
Royalties |
|
4.4 |
|
4.8 |
|
17.4 |
|
21.6 |
|
15.6 |
|
Total cash costs |
$91.8 |
|
$101.0 |
|
$356.4 |
|
$408.8 |
|
$331.2 |
|
Gold ounces sold |
|
127,148 |
|
131,161 |
|
494,702 |
|
509,879 |
|
430,115 |
|
Total cash costs per ounce |
$722 |
|
$770 |
|
$720 |
|
$802 |
|
$770 |
|
|
|
|
|
|
|
Total cash costs |
$91.8 |
|
$101.0 |
|
$356.4 |
|
$408.8 |
|
$331.2 |
|
Corporate and administrative(1) |
|
5.2 |
|
3.5 |
|
19.8 |
|
17.4 |
|
15.5 |
|
Sustaining capital expenditures(2) |
|
23.3 |
|
21.4 |
|
76.8 |
|
63.8 |
|
42.7 |
|
Share-based compensation |
|
1.5 |
|
1.3 |
|
9.2 |
|
6.6 |
|
6.2 |
|
Sustaining exploration |
|
1.2 |
|
0.9 |
|
5.4 |
|
4.8 |
|
3.9 |
|
Accretion of decommissioning liabilities |
|
0.6 |
|
0.8 |
|
2.8 |
|
3.0 |
|
2.7 |
|
Realized gains on FX options |
|
— |
|
— |
|
— |
|
— |
|
(0.8 |
) |
Total all-in sustaining
costs |
$123.6 |
|
$128.9 |
|
$470.4 |
|
$504.4 |
|
$401.4 |
|
Gold ounces sold |
|
127,148 |
|
131,161 |
|
494,702 |
|
509,879 |
|
430,115 |
|
All-in sustaining costs per ounce |
$972 |
|
$983 |
|
$951 |
|
$989 |
|
$933 |
|
(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 December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
2017 |
(in millions) |
|
|
|
|
|
Capital expenditures per cash
flow statement |
$72.9 |
|
$61.5 |
|
$263.6 |
|
$221.5 |
|
$162.5 |
|
Less: non-sustaining capital
expenditures at: |
|
|
|
|
|
Young-Davidson |
|
(10.6 |
) |
(12.3 |
) |
(53.7 |
) |
(50.8 |
) |
(46.2 |
) |
Mulatos |
|
(8.3 |
) |
(9.3 |
) |
(47.7 |
) |
(28.1 |
) |
(38.4 |
) |
Island Gold |
|
(19.0 |
) |
(8.8 |
) |
(44.8 |
) |
(45.9 |
) |
(3.1 |
) |
Corporate and other |
|
(11.7 |
) |
(9.7 |
) |
(40.6 |
) |
(32.9 |
) |
(32.1 |
) |
Sustaining capital expenditures |
$23.3 |
|
$21.4 |
|
$76.8 |
|
$63.8 |
|
$42.7 |
|
Young-Davidson Total Cash Costs and Mine-site AISC
Reconciliation |
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
(in millions, except ounces and per ounce figures) |
|
|
|
|
Mining and processing |
$38.1 |
|
$38.7 |
|
$146.6 |
|
$149.0 |
|
Royalties |
|
1.5 |
|
1.0 |
|
4.4 |
|
3.6 |
|
Total cash costs |
$39.6 |
|
$39.7 |
|
$151.0 |
|
$152.6 |
|
Gold ounces sold |
|
51,694 |
|
51,944 |
|
188,785 |
|
185,593 |
|
Total cash costs per ounce |
$766 |
|
$764 |
|
$800 |
|
$822 |
|
|
|
|
|
|
Total cash costs |
$39.6 |
|
$39.7 |
|
$151.0 |
|
$152.6 |
|
Sustaining capital expenditures |
|
16.4 |
|
10.8 |
|
46.2 |
|
35.8 |
|
Sustaining exploration |
|
— |
|
0.1 |
|
0.3 |
|
0.2 |
|
Accretion of decommissioning liabilities |
|
— |
|
— |
|
0.1 |
|
0.2 |
|
Total all-in sustaining
costs |
$56.0 |
|
$50.6 |
|
$197.6 |
|
$188.8 |
|
Gold ounces sold |
|
51,694 |
|
51,944 |
|
188,785 |
|
185,593 |
|
Mine-site all-in sustaining costs per ounce |
$1,083 |
|
$974 |
|
$1,047 |
|
$1,017 |
|
Mulatos
Total Cash Costs and Mine-site AISC Reconciliation |
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
(in millions, except ounces and per ounce figures) |
|
|
|
|
Mining and processing |
$27.8 |
|
$28.7 |
|
$107.8 |
|
$125.9 |
|
Royalties |
|
0.2 |
|
2.1 |
|
3.1 |
|
11.8 |
|
Total cash costs |
$28.0 |
|
$30.8 |
|
$110.9 |
|
$137.7 |
|
Gold ounces sold |
|
34,127 |
|
38,819 |
|
141,496 |
|
175,104 |
|
Total cash costs per ounce |
$820 |
|
$793 |
|
$784 |
|
$786 |
|
|
|
|
|
|
Total cash costs |
$28.0 |
|
$30.8 |
|
$110.9 |
|
$137.7 |
|
Sustaining capital expenditures |
|
1.2 |
|
2.5 |
|
6.5 |
|
7.2 |
|
Sustaining exploration |
|
0.7 |
|
0.3 |
|
3.1 |
|
2.6 |
|
Accretion of decommissioning liabilities |
|
0.5 |
|
0.6 |
|
2.3 |
|
2.2 |
|
Total all-in sustaining
costs |
$30.4 |
|
$34.2 |
|
$122.8 |
|
$149.7 |
|
Gold ounces sold |
|
34,127 |
|
38,819 |
|
141,496 |
|
175,104 |
|
Mine-site all-in sustaining costs per ounce |
$891 |
|
$881 |
|
$868 |
|
$855 |
|
Island
Gold Total Cash Costs and Mine-site AISC
Reconciliation |
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
(in millions, except ounces and per ounce figures) |
|
|
|
|
Mining and processing |
$17.4 |
|
$15.5 |
|
$64.2 |
|
$56.0 |
|
Royalties |
|
2.7 |
|
1.7 |
|
9.9 |
|
6.2 |
|
Total cash costs |
$20.1 |
|
$17.2 |
|
$74.1 |
|
$62.2 |
|
Gold ounces sold |
|
39,652 |
|
30,199 |
|
149,746 |
|
105,520 |
|
Total cash costs per ounce |
$507 |
|
$570 |
|
$495 |
|
$589 |
|
|
|
|
|
|
Total cash costs |
$20.1 |
|
$17.2 |
|
$74.1 |
|
$62.2 |
|
Sustaining capital expenditures |
|
5.7 |
|
8.0 |
|
24.1 |
|
20.2 |
|
Accretion of decommissioning liabilities |
|
0.1 |
|
— |
|
0.1 |
|
— |
|
Total all-in sustaining
costs |
$25.9 |
|
$25.2 |
|
$98.3 |
|
$82.4 |
|
Gold ounces sold |
|
39,652 |
|
30,199 |
|
149,746 |
|
105,520 |
|
Mine-site all-in sustaining costs per ounce |
$653 |
|
$834 |
|
$656 |
|
$781 |
|
El Chanate
Total Cash Costs and Mine-site AISC Reconciliation |
|
|
|
Three Months Ended December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
(in millions, except ounces and per ounce figures) |
|
|
|
|
Mining and processing |
$4.1 |
|
$13.3 |
|
$20.4 |
|
$56.3 |
|
Total cash costs |
$4.1 |
|
$13.3 |
|
$20.4 |
|
$56.3 |
|
Gold ounces sold |
|
1,675 |
|
10,199 |
|
14,675 |
|
43,662 |
|
Total cash costs per ounce |
$2,448 |
|
$1,304 |
|
$1,390 |
|
$1,289 |
|
|
|
|
|
|
Total cash costs |
$4.1 |
|
$13.3 |
|
$20.4 |
|
$56.3 |
|
Sustaining capital expenditures |
|
— |
|
0.1 |
|
— |
|
0.6 |
|
Accretion of decommissioning liabilities |
|
— |
|
0.2 |
|
0.3 |
|
0.6 |
|
Total all-in sustaining
costs |
$4.1 |
|
$13.6 |
|
$20.7 |
|
$57.5 |
|
Gold ounces sold |
|
1,675 |
|
10,199 |
|
14,675 |
|
43,662 |
|
Mine-site all-in sustaining costs per ounce |
$2,448 |
|
$1,333 |
|
$1,411 |
|
$1,317 |
|
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 December 31, |
Years Ended December 31, |
|
|
2019 |
2018 |
2019 |
2018 |
Net earnings (loss) |
$38.0 |
|
($71.5 |
) |
$96.1 |
|
($72.6 |
) |
Add back: |
|
|
|
|
Finance expense |
|
0.4 |
|
0.2 |
|
2.5 |
|
3.0 |
|
Amortization |
|
44.2 |
|
42.1 |
|
165.0 |
|
166.6 |
|
Impairment of El Chanate inventory |
|
— |
|
64.0 |
|
— |
|
64.0 |
|
Loss on redemption of senior secured notes |
|
— |
|
— |
|
— |
|
— |
|
Deferred income tax expense |
|
11.6 |
|
8.8 |
|
20.1 |
|
16.9 |
|
Current income tax (recovery) expense |
|
(5.8 |
) |
(0.6 |
) |
12.7 |
|
17.3 |
|
EBITDA |
$88.4 |
|
$43.0 |
|
$296.4 |
|
$195.2 |
|
Additional GAAP Measures
Additional GAAP measures are presented on the
face of the Company’s consolidated statements of comprehensive
income (loss) and are not meant to be a substitute for other
subtotals or totals presented in accordance with IFRS, but rather
should be evaluated in conjunction with such IFRS measures.
The following additional GAAP measures are used and are intended to
provide an indication of the Company’s mine and operating
performance:
- Earnings from operations - represents the amount of earnings
before net finance income/expense, foreign exchange gain/loss,
other income/loss, loss on redemption of senior secured notes and
income tax expense
Unaudited Consolidated Statements of
Financial Position, ComprehensiveIncome, and Cash
Flow
ALAMOS GOLD
INC.Consolidated Statements of Financial
Position(Unaudited - stated in millions of United States
dollars)
|
December 31, 2019 |
|
December 31, 2018 |
A S S E T
S |
|
|
|
Current
Assets |
|
|
|
Cash and cash equivalents |
$182.8 |
|
|
$206.0 |
|
Equity securities |
22.8 |
|
|
7.8 |
|
Amounts receivable |
37.4 |
|
|
39.5 |
|
Income taxes receivable |
4.6 |
|
|
8.0 |
|
Inventory |
126.9 |
|
|
110.2 |
|
Other current assets |
19.8 |
|
|
15.5 |
|
Total Current
Assets |
394.3 |
|
|
387.0 |
|
|
|
|
|
Non-Current
Assets |
|
|
|
Long-term inventory |
25.7 |
|
|
30.0 |
|
Mineral property, plant and
equipment |
2,933.4 |
|
|
2,813.3 |
|
Other non-current assets |
43.1 |
|
|
41.9 |
|
Total Assets |
$3,396.5 |
|
|
$3,272.2 |
|
|
|
|
|
L I A B I L I T I E
S |
|
|
|
Current
Liabilities |
|
|
|
Accounts payable and accrued
liabilities |
$127.3 |
|
|
$131.9 |
|
Total Current
Liabilities |
127.3 |
|
|
131.9 |
|
|
|
|
|
Non-Current
Liabilities |
|
|
|
Deferred income taxes |
513.7 |
|
|
491.5 |
|
Decommissioning
liabilities |
57.1 |
|
|
44.9 |
|
Other non-current
liabilities |
3.1 |
|
|
1.6 |
|
Total Liabilities |
701.2 |
|
|
669.9 |
|
|
|
|
|
E Q U I T
Y |
|
|
|
Share capital |
$3,693.3 |
|
|
$3,705.2 |
|
Contributed surplus |
90.7 |
|
|
87.3 |
|
Warrants |
— |
|
|
3.9 |
|
Accumulated other
comprehensive loss |
(0.2 |
) |
|
(9.2 |
) |
Deficit |
(1,088.5 |
) |
|
(1,184.9 |
) |
Total Equity |
2,695.3 |
|
|
2,602.3 |
|
Total Liabilities and Equity |
$3,396.5 |
|
|
$3,272.2 |
|
ALAMOS GOLD
INC.Consolidated Statements of Comprehensive
Income (Loss)(Unaudited - stated in millions of United
States dollars, except share and per share amounts)
|
For three months ended |
|
For twelve months ended |
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
OPERATING REVENUES |
$186.0 |
|
|
$163.1 |
|
|
$683.1 |
|
|
$651.8 |
|
|
|
|
|
|
|
|
|
COST OF
SALES |
|
|
|
|
|
|
|
Mining and processing |
87.4 |
|
|
96.2 |
|
|
339.0 |
|
|
387.2 |
|
Impairment of El Chanate
inventory |
— |
|
|
64.0 |
|
|
— |
|
|
64.0 |
|
Royalties |
4.4 |
|
|
4.8 |
|
|
17.4 |
|
|
21.6 |
|
Amortization |
44.2 |
|
|
42.1 |
|
|
165.0 |
|
|
166.6 |
|
|
136.0 |
|
|
207.1 |
|
|
521.4 |
|
|
639.4 |
|
EXPENSES |
|
|
|
|
|
|
|
Exploration |
1.7 |
|
|
2.5 |
|
|
6.7 |
|
|
11.0 |
|
Corporate and
administrative |
5.2 |
|
|
3.5 |
|
|
19.8 |
|
|
17.4 |
|
Share-based compensation |
1.5 |
|
|
1.3 |
|
|
9.2 |
|
|
6.6 |
|
|
144.4 |
|
|
214.4 |
|
|
557.1 |
|
|
674.4 |
|
EARNINGS (LOSS) FROM
OPERATIONS |
41.6 |
|
|
(51.3 |
) |
|
126.0 |
|
|
(22.6 |
) |
|
|
|
|
|
|
|
|
OTHER
EXPENSES |
|
|
|
|
|
|
|
Finance expense |
(0.4 |
) |
|
(0.2 |
) |
|
(2.5 |
) |
|
(3.0 |
) |
Foreign exchange gain
(loss) |
— |
|
|
(1.7 |
) |
|
0.3 |
|
|
(4.4 |
) |
Other gain (loss) |
2.6 |
|
|
(10.1 |
) |
|
5.1 |
|
|
(8.4 |
) |
EARNINGS (LOSS) BEFORE
INCOME TAXES |
$43.8 |
|
|
($63.3 |
) |
|
$128.9 |
|
|
($38.4 |
) |
|
|
|
|
|
|
|
|
INCOME
TAXES |
|
|
|
|
|
|
|
Current income tax recovery
(expense) |
5.8 |
|
|
0.6 |
|
|
(12.7 |
) |
|
(17.3 |
) |
Deferred income tax
expense |
(11.6 |
) |
|
(8.8 |
) |
|
(20.1 |
) |
|
(16.9 |
) |
NET EARNINGS
(LOSS) |
$38.0 |
|
|
($71.5 |
) |
|
$96.1 |
|
|
($72.6 |
) |
|
|
|
|
|
|
|
|
Items that may be subsequently
reclassified to net earnings: |
|
|
|
|
|
|
|
Unrealized gain (loss) on currency hedging instruments, net of
taxes |
1.8 |
|
|
(4.5 |
) |
|
6.0 |
|
|
(7.4 |
) |
Unrealized gain on fuel hedging instruments, net of taxes |
— |
|
|
(0.5 |
) |
|
0.5 |
|
|
(0.5 |
) |
Items that will not be
reclassified to net earnings: |
|
|
|
|
|
|
|
Unrealized gain (loss) on equity securities, net of taxes |
3.5 |
|
|
3.2 |
|
|
2.5 |
|
|
(1.8 |
) |
Total other
comprehensive income (loss) |
$5.3 |
|
|
($1.8 |
) |
|
$9.0 |
|
|
($9.7 |
) |
COMPREHENSIVE INCOME
(LOSS) |
$43.3 |
|
|
($73.3 |
) |
|
$105.1 |
|
|
($82.3 |
) |
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE |
|
|
|
|
|
|
|
– basic |
$0.10 |
|
|
($0.18 |
) |
|
$0.25 |
|
|
($0.19 |
) |
–
diluted |
$0.10 |
|
|
($0.18 |
) |
|
$0.24 |
|
|
($0.19 |
) |
Weighted average number of
common shares outstanding (000's) |
|
|
|
|
|
|
|
– basic |
391,076 |
|
|
390,540 |
|
|
390,160 |
|
|
389,816 |
|
– diluted |
394,353 |
|
|
390,540 |
|
|
393,427 |
|
|
389,816 |
|
ALAMOS GOLD
INC.Consolidated Statements of Cash
Flows(Unaudited - stated in millions of United States
dollars)
|
For three months ended |
|
For twelve months ended |
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
CASH PROVIDED BY (USED
IN): |
|
|
|
|
|
|
|
OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
Net earnings (loss) for the period |
$38.0 |
|
|
($71.5 |
) |
|
$96.1 |
|
|
($72.6 |
) |
Adjustments for items not
involving cash: |
|
|
|
|
|
|
|
Amortization |
44.2 |
|
|
42.1 |
|
|
165.0 |
|
|
166.6 |
|
Foreign exchange (gain) loss |
— |
|
|
1.7 |
|
|
(0.3 |
) |
|
4.4 |
|
Current income tax expense |
(5.8 |
) |
|
(0.6 |
) |
|
12.7 |
|
|
17.3 |
|
Deferred income tax expense (recovery) |
11.6 |
|
|
8.8 |
|
|
20.1 |
|
|
16.9 |
|
Share-based compensation |
1.5 |
|
|
1.3 |
|
|
9.2 |
|
|
6.6 |
|
Finance expense |
0.4 |
|
|
0.2 |
|
|
2.5 |
|
|
3.0 |
|
Impairment of El Chanate inventory |
— |
|
|
64.0 |
|
|
— |
|
|
64.0 |
|
Other items |
(4.2 |
) |
|
6.8 |
|
|
(8.4 |
) |
|
6.5 |
|
Changes in working capital and
cash taxes |
(7.9 |
) |
|
(5.4 |
) |
|
(36.5 |
) |
|
1.2 |
|
|
77.8 |
|
|
47.4 |
|
|
260.4 |
|
|
213.9 |
|
INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
Mineral property, plant and
equipment |
(72.9 |
) |
|
(61.5 |
) |
|
(263.6 |
) |
|
(221.5 |
) |
Proceeds from sale of equity
securities |
— |
|
|
— |
|
|
— |
|
|
24.9 |
|
Other |
(2.4 |
) |
|
— |
|
|
(4.0 |
) |
|
— |
|
|
(75.3 |
) |
|
(61.5 |
) |
|
(267.6 |
) |
|
(196.6 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
Repayment of equipment
financing obligations |
(0.7 |
) |
|
(0.9 |
) |
|
(3.3 |
) |
|
(4.1 |
) |
Revolving credit facility
transaction fees |
(1.2 |
) |
|
0.0 |
|
|
(1.2 |
) |
|
(0.8 |
) |
Repurchase and cancellation of
common shares |
— |
|
|
— |
|
|
(11.4 |
) |
|
— |
|
Proceeds from the exercise of
options and warrants |
0.0 |
|
|
2.2 |
|
|
7.0 |
|
|
3.9 |
|
Dividends paid |
(3.9 |
) |
|
(3.9 |
) |
|
(15.6 |
) |
|
(7.8 |
) |
|
|
|
|
|
|
|
|
Proceeds from issuance of
flow-through shares |
— |
|
|
— |
|
|
7.5 |
|
|
— |
|
|
(5.8 |
) |
|
(2.6 |
) |
|
(17.0 |
) |
|
(8.8 |
) |
Effect of exchange rates on
cash and cash equivalents |
0.5 |
|
|
(2.1 |
) |
|
1.0 |
|
|
(3.3 |
) |
Net increase (decrease) in
cash and cash equivalents |
(2.8 |
) |
|
(18.8 |
) |
|
(23.2 |
) |
|
5.2 |
|
Cash and cash equivalents -
beginning of period |
185.6 |
|
|
224.8 |
|
|
206.0 |
|
|
200.8 |
|
CASH AND CASH
EQUIVALENTS - END OF PERIOD |
$182.8 |
|
|
$206.0 |
|
|
$182.8 |
|
|
$206.0 |
|
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