Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or
the “Company”) today reported its financial results for the quarter
ended March 31, 2020.
“We had a solid start to the year amidst a
challenging environment with the COVID-19 pandemic. With strong
operational performances at Island Gold and Mulatos, we exceeded
the top end of our first quarter production guidance while
completing several critical path items on the lower mine expansion
at Young-Davidson,” said John A. McCluskey, President and Chief
Executive Officer.
“Despite the temporary challenges with COVID-19,
Alamos remains well positioned for a strong second half of the
year. We expect to start ramping up operations at Island Gold in a
safe manner in early May and will do the same at Mulatos once the
government suspension has been lifted. We are making solid progress
on the Phase III expansion study at Island Gold and the lower mine
expansion at Young-Davidson with both expected to be completed in
the middle of this year. We expect both will be significant
catalysts for the Company. Combined with a robust balance sheet and
strong free cash flow growth starting in the second half of this
year, the outlook for Alamos has never been stronger,” Mr.
McCluskey added.
First Quarter 2020
- Produced 110,800 ounces of gold,
driven by strong performances at Island Gold and Mulatos
- Island Gold produced 38,800 ounces
of gold and generated quarterly mine-site free cash flow1 of $19.6
million
- Achieved record underground mining
rates of 1,240 tonnes per day ("tpd") in the first quarter at
Island Gold, a 14% improvement over the prior year period
- Mulatos produced 42,600 ounces of
gold and generated $14.1 million of mine-site free cash flow1
- In response to COVID-19,
proactively implemented preventative measures across all
operations; to date, the Company has not had any confirmed cases of
COVID-19 among any of its employees or contractors
- Commenced the tie-in of the upper
and lower mines at Young-Davidson and completed several critical
path items during and subsequent to the quarter. This included
connecting the upper and lower mine ramp system and connecting the
upper and lower portions of the Northgate shaft through removal of
the rock pentice. The tie-in is anticipated to be completed in July
2020, a slight delay from June reflecting labour and productivity
constraints related to COVID-19
- Sold 111,854 ounces of gold at an
average realized price of $1,582 per ounce for revenues of $176.9
million
- Cash flow from operating activities
of $56.6 million ($81.7 million, or $0.21 per share, before changes
in working capital1)
- Consolidated total cash costs1 of
$759 per ounce and all-in sustaining costs ("AISC")1 of $1,010 per
ounce were both at the low end of 2020 annual guidance, driven by
lower costs at Mulatos and Island Gold
- Reported adjusted net earnings1 of
$29.4 million, or $0.08 per share1, which includes adjustments for
unrealized foreign exchange losses of $41.9 million, of which $36.8
million is recorded within deferred taxes, partially offset by
other one-time gains of $0.2 million
- Realized a net loss of $12.3
million, or $0.03 per share
- Drew $100.0 million from the
Company's credit facility, leaving $400.0 million undrawn at March
31, 2020
- Ended the quarter with cash and
cash equivalents of $214.7 million and equity securities of $15.6
million
- Repurchased a 3% net smelter return
("NSR") royalty payable on the majority of Mineral Reserves and
Resources at Island Gold for cash consideration of $54.8 million.
This has reduced the effective royalty rate from 4.4% to 2.2% on
Mineral Reserves, and has reduced 2020 total cash costs at Island
Gold by approximately $45 per ounce
- Paid a quarterly dividend of $5.9
million, representing a 50% increase in the quarterly dividend to
an annual rate of $0.06 per share, and adopted a Dividend
Reinvestment and Share Purchase Plan ("DRIP")
- Repurchased 1,133,561 common shares
at a cost of $5.5 million, or $4.90 per share, under the Company's
Normal Course Issuer Bid ("NCIB")
- Reported updated year-end 2019
Mineral Reserves and Resources, highlighted by a substantial
increase in Mineral Reserves and Resources at Island Gold totaling
0.9 million ounces
- Announced the temporary suspension
at Island Gold on March 24, 2020 and Mulatos on April 2, 2020;
subsequent to quarter-end, withdrew 2020 guidance
(1) Refer to the “Non-GAAP Measures and
Additional GAAP Measures” disclosure at the end of this press
release and associated MD&A for a description and calculation
of these measures.
Highlight Summary
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
Financial Results (in millions) |
|
|
Operating revenues |
$176.9 |
|
$156.1 |
|
Cost of sales (1) |
$120.3 |
|
$127.0 |
|
Earnings from operations |
$46.2 |
|
$18.7 |
|
Earnings before income taxes |
$40.5 |
|
$20.6 |
|
Net (loss) earnings |
($12.3 |
) |
$16.8 |
|
Adjusted net earnings (2) |
$29.4 |
|
$10.3 |
|
Earnings before interest, depreciation and amortization (2) |
$76.7 |
|
$60.5 |
|
Cash provided by operations before working capital and cash
taxes(2) |
$81.7 |
|
$62.1 |
|
Cash provided by operating activities |
$56.6 |
|
$42.4 |
|
Capital expenditures (sustaining) (2) |
$17.5 |
|
$16.1 |
|
Capital expenditures (growth) (2) (3) |
$41.3 |
|
$34.1 |
|
Capital expenditures (capitalized exploration) (4) |
$4.5 |
|
$3.1 |
|
Operating
Results |
|
|
Gold
production (ounces) |
|
110,800 |
|
|
125,300 |
|
Gold
sales (ounces) |
|
111,854 |
|
|
119,705 |
|
Per Ounce
Data |
|
|
Average realized gold price |
$1,582 |
|
$1,304 |
|
Average spot gold price (London PM Fix) |
$1,583 |
|
$1,304 |
|
Cost of sales per ounce of gold sold (includes amortization)
(1) |
$1,076 |
|
$1,061 |
|
Total cash costs per ounce of gold sold (2) |
$759 |
|
$732 |
|
All-in sustaining costs per ounce of gold sold (2) |
$1,010 |
|
$957 |
|
Share Data |
|
|
(Loss) earnings per
share, basic and diluted |
($0.03 |
) |
$0.04 |
|
Adjusted earnings per
share, basic and diluted(2) |
$0.08 |
|
$0.03 |
|
Weighted average
common shares outstanding (basic) (000’s) |
|
391,341 |
|
|
389,735 |
|
Financial Position (in millions) |
|
|
Cash and cash
equivalents (5) |
$214.7 |
|
$182.8 |
|
Long-term debt
(5) |
$100.0 |
|
|
$— |
|
(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 growth capital from
operating sites and excludes the Island Gold royalty repurchase of
$54.8 million.(4) Includes capitalized exploration at
Mulatos and Island Gold.(5) Comparative cash and cash
equivalents and long-term debt balance as at December 31, 2019.
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
Gold production (ounces) |
|
|
Young-Davidson |
|
28,700 |
|
|
45,000 |
|
Mulatos |
|
42,600 |
|
|
38,900 |
|
Island Gold |
|
38,800 |
|
|
35,600 |
|
El Chanate (1) |
|
700 |
|
|
5,800 |
|
Gold sales (ounces) |
|
|
Young-Davidson |
|
28,905 |
|
|
43,996 |
|
Mulatos |
|
43,822 |
|
|
36,089 |
|
Island Gold |
|
39,127 |
|
|
33,585 |
|
El Chanate (1) |
|
— |
|
|
6,035 |
|
Cost of sales (in millions)(2) |
|
|
Young-Davidson |
$43.8 |
|
$56.9 |
|
Mulatos |
$46.0 |
|
$33.8 |
|
Island Gold |
$30.5 |
|
$28.6 |
|
El Chanate (1) |
|
$— |
|
$7.7 |
|
Cost of sales per
ounce of gold sold (includes amortization) |
|
|
Young-Davidson |
$1,515 |
|
$1,293 |
|
Mulatos |
$1,050 |
|
$937 |
|
Island Gold |
$780 |
|
$852 |
|
El Chanate (1) |
|
$— |
|
$1,276 |
|
Total cash costs per ounce of gold sold (3) |
|
|
Young-Davidson |
$1,093 |
|
$839 |
|
Mulatos |
$812 |
|
$743 |
|
Island Gold |
$452 |
|
$497 |
|
El Chanate (1) |
|
$— |
|
$1,193 |
|
Mine-site all-in
sustaining costs per ounce of gold sold (3),(4) |
|
|
Young-Davidson |
$1,242 |
|
$1,068 |
|
Mulatos |
$958 |
|
$809 |
|
Island Gold |
$670 |
|
$649 |
|
El Chanate (1) |
|
$— |
|
$1,193 |
|
Capital expenditures
(sustaining, growth and capitalized exploration) (in
millions)(3) |
|
|
Young-Davidson |
$27.0 |
|
$22.3 |
|
Mulatos(5) |
$7.4 |
|
$12.6 |
|
Island Gold (6) |
$22.1 |
|
$12.4 |
|
Other |
$6.8 |
|
$6.0 |
|
(1) El Chanate transitioned to the
reclamation phase of the mine life in the fourth quarter of 2019.
Incremental production is a result of rinsing the leach pad.
Gold sales from El Chanate in 2020 are not included in revenue and
cost of sales.(2) Cost of sales includes mining and
processing costs, royalties and amortization.(3) Refer to the
“Non-GAAP Measures and Additional GAAP Measures” disclosure at the
end of this press release and associated MD&A for a description
and calculation of these measures.(4) For the purposes
of calculating mine-site all-in sustaining costs, the Company does
not include an allocation of corporate and administrative and share
based compensation expenses.(5) Includes capitalized
exploration at Mulatos of $0.5 for the three months ended March 31,
2020 (for the three months ended March 31, 2019 -
$nil).(6) Includes capitalized exploration at Island
Gold of $4.0 million for the three months ended March 31, 2020 (for
the three months ended March 31, 2019 - $3.1 million), and excludes
the royalty repurchase of $54.8 million.
Management's Response to the COVID-19
Pandemic
The World Health Organization declared COVID-19
a pandemic on March 11, 2020. The Company responded rapidly and
proactively to COVID-19 and has implemented several initiatives to
help protect the health and safety of our employees, their families
and the communities in which we operate. To date, Alamos has not
had any confirmed cases of COVID-19 among any of its employees or
contractors.
Specifically, each of our operating mine sites
has activated established crisis management plans and developed
site-specific plans that enable them to meet and respond to
changing conditions associated with COVID-19. The Company is
adopting the advice of public health authorities and adhering to
government regulations with respect to COVID-19 in the
jurisdictions in which it operates.
The following measures have been instituted across the Company
to prevent the potential spread of the virus:
- Medical screening for all personnel prior to entry to site for
symptoms of COVID-19
- Training on proper hand hygiene and self protection
- Remote work options have been implemented for eligible
employees
- Mandatory use of PPE for cleaners, nursing staff and security
personnel
- Rigid camp and site hygiene protocols have been instituted and
are being followed
- Social distancing practices have been implemented for all
meetings, huddles and transportation
- Elimination of all non-essential business travel
- Required 14-day quarantine for any employees returning from out
of country travel
Impact on Operations
In order to protect nearby communities and align
with government requirements, two of the Company's mines have been
placed temporarily on care and maintenance. These mines are
positioned to safely and quickly resume normal operations once
restrictions are lifted.
At Island Gold, operations were suspended on
March 25, 2020 given the unique set up of the operation with a
large portion of the workforce operating on a fly-in, fly-out basis
and being housed within a camp located directly within the local
community. A number of essential employees remain on site to
provide security, water management and other environmental
protection activities. The Company expects to begin a phased
restart of the operations in early May 2020.
Operations at Mulatos were suspended in early
April following a mandate by the Mexican government to suspend all
non-essential businesses in response to the COVID-19 crisis. The
original suspension period has been extended to May 31, 2020;
however, the government is reviewing the possibility of lifting
restrictions in certain regions on May 18, 2020, provided those
regions remain without positive cases. Essential employees remain
on site to continue processing and other critical site activities.
The Company will look to restart mining, crushing and stacking ore
on the leach pad at the conclusion of the government mandated
suspension. Although mining activities were suspended in April, the
Company continues to recover gold from the leach pad given the
significant amount of contained ounces stacked in the first
quarter.
To date, operating activities at Young-Davidson
have not been significantly impacted with mining and processing
activities and work on the lower mine expansion ongoing. However,
as a result of labour and productivity constraints resulting from
the above noted health and safety measures, the lower mine
expansion project is now expected to be completed in July 2020, a
slight delay from previous guidance of June 2020.
Impact on 2020 Guidance
Given the downtime at both Island Gold and
Mulatos, and the potential for further voluntary or
government-mandated business interruptions, the Company withdrew
its 2020 production, cost and capital guidance on April 2,
2020.
Outlook and Strategy
2020
Guidance for Reference Purposes (Withdrawn in April
2020) |
|
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 |
$116 |
$168 |
— |
$491 |
Cost of sales, including amortization
($ per ounce)(4) |
$1,360 |
$840 |
$1,085 |
— |
$1,103 |
Total cash
costs ($ per ounce)(1)(5) |
$910-950 |
$480-520 |
$840-880 |
— |
$757-797 |
All-in sustaining costs ($ per ounce)(1)(5) |
|
|
|
|
$1,007-1,047 |
Mine-site all-in sustaining costs ($ per
ounce)(1)(3)(5) |
$1,110-1,150 |
$740-780 |
$940-980 |
— |
|
— |
Amortization costs ($ 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.(5) On March 16, 2020, the Company updated
total cash cost and AISC guidance to reflect the repurchase and
cancellation of a royalty at Island Gold
The Company’s long-term strategic objective is
to generate increasing returns for its shareholders through
low-cost production and free cash flow growth from its 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.
With the strong start to 2020, the Company
exceeded the top end of first quarter 2020 guidance with production
of 110,800 ounces. In addition, total cash costs and all-in
sustaining costs in the first quarter were at the low end of annual
guidance issued in December 2019, driving strong margins and cash
flow. However, given the temporary suspension of operations at
Mulatos and Island Gold, the Company made the decision to withdraw
its 2020 production and cost guidance on April 2, 2020.
Despite the temporary challenges associated with
COVID-19, the Company's strong outlook remains intact with several
significant near term positive catalysts. These include the Phase
III expansion study of Island Gold which is expected to be competed
mid-2020 and showcase a larger, very profitable, long-life
operation; the completion of the lower mine expansion at
Young-Davidson in July; and the transition to strong company-wide
free cash flow starting in the second half of 2020.
Island Gold and Mulatos are well positioned for
a quick and safe resumption of operations. The Company expects to
begin a phased restart of operations at Island Gold in early May
2020. At Mulatos, operations remain suspended as per the mandate by
the Mexican government to suspend all non-essential businesses. The
suspension has been extended to May 31, 2020; however, the
government is reviewing the possibility of lifting restrictions in
certain regions that have not been affected on May 18, 2020. The
Company has scaled down mining and other activities and continues
to recover gold from the leach pad given the significant leach pad
inventory. The Company is not aware of any confirmed cases of
COVID-19 in the region surrounding Mulatos and will look to restart
full operations once the government suspension is lifted. Following
the resumption of normal operating activities at both Island Gold
and Mulatos, the Company will provide updated 2020 guidance.
At Young-Davidson, the lower mine expansion is
in the final stages with the tie-in having commenced in February
2020. Several critical path items have recently been completed
including the installation of the crusher, the breakthrough of the
upper and lower mine ramp system and connecting the upper and lower
portions of the Northgate shaft through removal of the rock
pentice. The lower mine tie-in is now expected to be completed in
July 2020, given some labour and productivity constraints related
to COVID-19.
During this previously guided downtime of the
Northgate shaft, the Company continues to truck ore to surface from
the upper mine at a rate of 3,000 tpd. Following completion of the
tie-in in July, underground mining rates are anticipated to
increase to 7,500 tpd by the end of 2020. This is expected to drive
production higher and costs significantly lower at Young-Davidson
in the second half of 2020.
The Phase III expansion study at Island Gold is
scheduled to be completed by mid-2020. The expansion 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 showcase Island Gold as a larger, more profitable, long-life
operation.
The surface and underground exploration program
at Island Gold continued through most of the first quarter but was
temporarily suspended. The 2020 program is 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.
At Mulatos, the Company has progressed detailed
engineering and project design for La Yaqui Grande, and expects to
make a construction decision on the 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.
The Company's liquidity remains strong, ending
the quarter with $214.7 million of cash and cash equivalents. This
reflects the repurchase of the Island Gold royalty in March for
$54.8 million and the drawdown of $100.0 million on the Company’s
$500.0 million revolving credit facility. The Company has no debt
other than the $100.0 million drawn on the revolving facility and
is well positioned to fund its internal growth initiatives. The
Company expects to transition to strong free cash flow generation
in the second half of 2020.
First Quarter 2020 Results
Young-Davidson Financial and Operational
Review
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
Gold production
(ounces) |
|
28,700 |
|
|
45,000 |
|
Gold sales
(ounces) |
|
28,905 |
|
|
43,996 |
|
Financial Review (in
millions) |
|
|
Operating Revenues |
$45.7 |
|
$57.4 |
|
Cost of sales (1) |
$43.8 |
|
$56.9 |
|
Earnings from operations |
$1.9 |
|
$0.5 |
|
Cash provided by operating activities |
$8.1 |
|
$22.9 |
|
Capital expenditures (sustaining) (2) |
$4.2 |
|
$10.0 |
|
Capital expenditures (growth) (2) |
$22.8 |
|
$12.3 |
|
Mine-site free cash flow (2) |
($18.9 |
) |
$0.6 |
|
Cost of sales, including amortization per ounce of gold sold
(1) |
$1,515 |
|
$1,293 |
|
Total cash costs per
ounce of gold sold (2) |
$1,093 |
|
$839 |
|
Mine-site all-in
sustaining costs per ounce of gold sold (2),(3) |
$1,242 |
|
$1,068 |
|
Underground Operations |
|
|
Tonnes of ore mined |
|
390,367 |
|
|
588,634 |
|
Tonnes of ore mined per day |
|
4,290 |
|
|
6,540 |
|
Average grade of gold (4) |
|
2.17 |
|
|
2.54 |
|
Metres developed |
|
3,202 |
|
|
2,900 |
|
Mill
Operations |
|
|
Tonnes of ore processed |
|
464,744 |
|
|
609,927 |
|
Tonnes of ore processed per day |
|
5,107 |
|
|
6,777 |
|
Average grade of gold (4) |
|
1.93 |
|
|
2.47 |
|
Contained ounces milled |
|
28,851 |
|
|
48,515 |
|
Average recovery rate |
|
91 |
% |
|
90 |
% |
(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 28,700 ounces of gold in
the first quarter of 2020, a decrease from the same period in 2019
due to lower tonnes mined and processed as a result of shutting
down the Northgate shaft in early February to complete the lower
mine construction and tie-in. As previously guided, ore was trucked
to surface from the upper mine during the downtime of the
Northgate shaft which resulted in lower tonnes mined during
February and March.
Underground mining rates averaged 4,290 tpd in
the first quarter, with January mining rates in line with the prior
year period at 6,700 tpd, lowering to 3,000 tpd in the months of
February and March using the ramp system. Tonnes mined in February
and March exceeded budgeted rates of 2,500 tpd.
Mill throughput was 5,107 tpd in the first
quarter, a decrease from the same period of 2019 due to the lower
mining rates in February and March of this year. Mill
throughput was supplemented by existing lower grade stockpiles in
the quarter, which have essentially been exhausted at the end of
the quarter.
Mining activities in the first quarter focused
on remnant stopes in the upper part of the mine to facilitate
trucking up the ramp. The average mined grade was 2.17 g/t Au in
the quarter.
Lower Mine Construction and Tie-In
Substantial progress on the lower mine expansion
was made in the first quarter of 2020, despite the personnel
challenges resulting from COVID-19 discussed previously. The
main activities included the following:
- Completed the main ramp system to the lower mine
infrastructure
- 8940 level loading pocket, including the conveyor and ore/waste
bins, completed and ready for commissioning
- 8930 level ore and waste loadout substantially completed
- Installation of the hangers and trays for the main conveyor
from the crusher loadout level to the top of the shaft bins are
two-thirds complete
- Crusher installed and ready for commissioning
- Skips, ropes and shaft bottom steel has been removed from the
mid shaft loading pocket
- Pentice excavation drilled off and blasted, and ground support
completed by the end of April
As a result of COVID-19-related labour and
productivity challenges, the tie-in is now expected to be completed
in July 2020. All supplies and equipment required to complete the
tie-in are on site. Remaining activities to be completed in the
second quarter include the following:
- Completion of the 9025 rockbreaker station and coarse ore
bin
- Permanent installation and changeover of new ropes and
installation of new skips
- Completion of the 8930 loadout, including conveyor drive
Lower mine crusher
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/41234b15-f8f8-4540-9647-7643964f6d5d
Financial Review
First quarter revenues of $45.7 million were 20%
lower than the prior year quarter, reflecting a 34% decrease in
ounces sold, partially offset by a higher realized gold
price. Ounces sold were lower due to lower mining rates in
February and March during the temporary shutdown of the Northgate
shaft to enable completion of the lower mine tie-in.
Cost of sales (which includes mining and
processing costs, royalties, and amortization expense) of $43.8
million in the first quarter were lower than the comparative
quarter in 2019, due to lower mining and processing rates during
the tie-in of the upper and lower mine. Underground mining costs
increased to CAD$77 per tonne as result of a combination of
increased costs relating to hauling rather than skipping ore to
surface and the impact of fixed costs on lower mining rates.
Total cash costs of $1,093 per ounce in the
first quarter were higher than the comparative period last year due
to higher mining costs per tonne, and lower grades mined. Mine-site
AISC of $1,242 per ounce in the first quarter were higher than the
comparative quarter in 2019, reflecting the impact of higher total
cash costs. Sustaining capital spending in the quarter was lower
than the prior year period, as the focus in the first quarter of
2020 was the lower mine construction and tie-in.
Capital expenditures were $27.0 million in the
first quarter. This included $4.2 million of sustaining capital and
$22.8 million of growth capital. Growth capital spending included
lower mine construction, as well as work on the north dam and east
dam for the TIA 1 tailings project.
Consistent with planned downtime and capital
spending on the lower mine expansion, mine-site free cash flow at
Young-Davidson was negative $18.9 million in the first quarter.
With declining capital spending following the completion of the
lower mine expansion in July 2020, and a corresponding increase in
gold production and lower operating costs as mining rates ramp up,
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 March 31, |
|
|
|
2020 |
|
|
2019 |
|
Gold production (ounces) |
|
38,800 |
|
|
35,600 |
|
Gold sales (ounces) |
|
39,127 |
|
|
33,585 |
|
Financial Review (in millions) |
|
|
Operating Revenues |
$61.9 |
|
$43.8 |
|
Cost of sales (1) |
$30.5 |
|
$28.6 |
|
Earnings from operations |
$31.2 |
|
$15.0 |
|
Cash provided by operating activities |
$41.7 |
|
$29.0 |
|
Capital expenditures (sustaining) (2) |
$8.5 |
|
$5.1 |
|
Capital expenditures (growth) (2) |
$9.6 |
|
$4.2 |
|
Capital expenditures (capitalized exploration) (2) |
$4.0 |
|
$3.1 |
|
Mine-site free cash flow (2) |
$19.6 |
|
$16.6 |
|
Cost of sales, including amortization per ounce of gold sold
(1) |
$780 |
|
$852 |
|
Total cash costs per
ounce of gold sold (2) |
$452 |
|
$497 |
|
Mine-site all-in
sustaining costs per ounce of gold sold (2),(3) |
$670 |
|
$649 |
|
Underground Operations |
|
|
Tonnes of ore mined |
|
112,881 |
|
|
97,513 |
|
Tonnes of ore mined per day ("tpd") |
|
1,240 |
|
|
1,083 |
|
Average grade of gold (4) |
|
11.69 |
|
|
11.40 |
|
Metres developed |
|
1,952 |
|
|
1,557 |
|
Mill
Operations |
|
|
Tonnes of ore processed |
|
105,927 |
|
|
101,997 |
|
Tonnes of ore processed per day |
|
1,164 |
|
|
1,133 |
|
Average grade of gold (4) |
|
11.73 |
|
|
11.11 |
|
Contained ounces milled |
|
39,945 |
|
|
36,441 |
|
Average recovery rate |
|
97 |
% |
|
97 |
% |
(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 38,800 ounces in the first
quarter, a 9% increase from the comparative period in 2019, despite
losing approximately one week of mining and processing as the mine
suspended operations on March 25, 2020 in response to COVID-19.
Underground mining rates were 1,240 tpd in the
first quarter, a 14% improvement compared to the prior year period
and above guidance of 1,200 tpd, despite the one week
downtime at the end of the quarter. Underground grades mined
averaged 11.69 g/t Au in the quarter, or 3% higher than the
comparative quarter and higher than guidance, due to mine
sequencing.
Mill throughput of 1,164 tpd in the first
quarter was higher than the prior year period as a result of higher
tonnes mined. Prior to the temporary suspension, milling
rates were 1,261 tpd, ahead of guidance. Mill recoveries were 97%
in the first quarter, in line with the prior year quarter and
guidance.
Financial Review
Island Gold generated record revenues of $61.9
million in the first quarter, an increase of 41% compared to the
prior year period, reflecting both an increase in ounces sold and a
higher realized gold price.
Cost of sales (includes mining and processing
costs, royalties, and amortization expense) of $30.5 million in the
first quarter were 7% higher than the comparative period in 2019,
reflecting more ounces sold, offset by lower unit mining costs. On
a per ounce basis, cost of sales decreased 8%, driven by higher
grades mined and lower amortization charges. Amortization per
ounce decreased compared to 2019 as a result of additional ounces
reported in the 2019 Mineral Reserves and Resources statement.
Total cash costs were $452 per ounce in the
first quarter, a 9% improvement from the comparative quarter last
year, driven by higher grades mined partially offset by higher
mining costs. In addition, the Company was notified during the
quarter that it has been approved for the Northern Industrial
Electrical Rebate (NIER), which is expected to reduce electricity
costs by approximately 20% going forward. Mine-site AISC of $670
per ounce in the first quarter were 3% higher than the prior year
period due to the timing of sustaining capital expenditures.
During the quarter, the Company acquired and
canceled a 3% NSR royalty payable on a majority of production from
the Island Gold mine for cash consideration of $54.8 million. The
royalty was applicable to all future gold production from the
Goudreau Lake claims, which comprise the majority of the Island
Gold deposit. As of December 31, 2019, these claims
contained 0.9 million ounces of Mineral Reserves, representing
71% of Island Gold’s total Mineral Reserves, and 1.1 million ounces
of Inferred Mineral Resources. The acquisition of the royalty
is expected to decrease 2020 total cash costs by $45 per ounce,
based on a $1,700 per ounce gold price. In addition, the
acquisition reduces the effective NSR royalty rate on Island Gold’s
Mineral Reserves to 2.2% from 4.4%.
Total capital expenditures, excluding the
royalty repurchase, were $22.1 million in the first quarter.
Spending was focused on lateral development, camp improvements,
tailings construction, and the Phase III study. This included $8.5
million of sustaining capital and $13.6 million of growth
capital. Growth capital is inclusive of $4.0 million of
capitalized exploration.
Island Gold generated mine-site free cash flow
of $19.6 million during the first quarter, excluding the royalty
repurchase, driven by strong gold production and increased
operating margins. The Company expects to resume production
activities in a phased approach starting in early May.
Mulatos Financial and Operational
Review
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
Gold production
(ounces) |
|
42,600 |
|
|
38,900 |
|
Gold sales
(ounces) |
|
43,822 |
|
|
36,089 |
|
Financial
Review (in millions) |
|
|
Operating Revenues |
$69.3 |
|
$47.1 |
|
Cost of sales (1) |
$46.0 |
|
$33.8 |
|
Earnings from operations |
$22.0 |
|
$12.4 |
|
Cash provided by operating activities |
$21.5 |
|
$0.6 |
|
Capital expenditures (sustaining) (2) |
$4.8 |
|
$1.0 |
|
Capital expenditures (growth) (2) |
$2.1 |
|
$11.6 |
|
Capital expenditures
(capitalized exploration) (2) |
$0.5 |
|
|
$— |
|
Mine-site free cash flow
(2) |
$14.1 |
|
($12.0 |
) |
Cost of sales, including amortization per ounce of gold sold
(1) |
$1,050 |
|
$937 |
|
Total
cash costs per ounce of gold sold (2) |
$812 |
|
$743 |
|
Mine
site all-in sustaining costs per ounce of gold sold (2),(3) |
$958 |
|
$809 |
|
Open Pit
Operations |
|
|
Tonnes of ore mined - open pit (4) |
|
1,918,464 |
|
|
1,835,733 |
|
Total waste mined - open pit (6) |
|
2,338,917 |
|
|
1,977,839 |
|
Total tonnes mined - open pit |
|
4,257,380 |
|
|
3,813,572 |
|
Waste-to-ore ratio (operating) |
|
0.59 |
|
|
0.51 |
|
Crushing and Heap
Leach Operations |
|
|
Tonnes of ore stacked |
|
2,033,111 |
|
|
1,875,556 |
|
Average grade of gold processed (5) |
|
1.25 |
|
|
0.98 |
|
Contained ounces stacked |
|
81,933 |
|
|
59,174 |
|
Average recovery
rate |
|
52 |
% |
|
66 |
% |
Ore crushed per day
(tonnes) - combined |
|
22,342 |
|
|
20,800 |
|
(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) 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 42,600 ounces in the first
quarter, a 10% increase from the comparative period in 2019, driven
by higher grades mined and more tonnes stacked. Contained ounces
stacked increased 38% in the quarter, reflecting higher grade ore
from Cerro Pelon being stacked on the leach pad. Mining activities
were suspended in April as a result of the COVID-19 related
government decree requiring the suspension of non-essential
businesses. The Company has scaled down mining and other activities
and continues to recover gold from the leach pad given the
significant leach pad inventory.
Total tonnes mined increased compared to the
first quarter of 2019, driven by increased stripping activities at
Cerro Pelon. The excess tonnes above the life-of-mine waste-to-ore
ratio were capitalized in the period and are not included in the
operating waste-to-ore ratio of 0.59:1 for the quarter.
Total crusher throughput in the first quarter
averaged 22,342 tpd for a total of 2,033,111 tonnes stacked at a
grade of 1.25 g/t Au. Grades stacked were 28% higher than in the
comparative period of 2019, reflecting the contribution of higher
grade ore from Cerro Pelon. The recovery rate of 52% in the first
quarter was mainly impacted by the timing of stacking of higher
grade ore, which is expected to be recovered throughout 2020.
Financial Review
First quarter revenues of $69.3 million were 47%
higher than the prior year quarter as a result of both higher
realized gold prices and an increase in ounces sold.
Cost of sales (includes mining and processing
costs, royalties, and amortization expense) were $46.0 million in
the first quarter, $12.2 million higher than the prior year period
due to a higher number of tonnes mined, higher unit costs, and more
ounces sold. On a per ounce basis, cost of sales were slightly
higher in the first quarter of 2019 driven by higher mining costs
associated with longer haulage distances and a higher waste to ore
ratio, partially offset by higher grades processed. This also drove
total cash costs higher to $812 per ounce.
Total capital spending for the quarter was $7.4
million, of which $4.8 million was sustaining capital primarily
comprised of capitalized stripping in both the Mulatos and Cerro
Pelon pits to benefit future periods. The higher sustaining capital
spending contributed to an increase in mine-site AISC to $958 per
ounce compared to the prior year period of $809 per ounce.
Capital spending was lower than the comparative period in 2019
given the prior year capital included construction capital for
Cerro Pelon.
Mulatos generated mine-site free cash-flow of
$14.1 million in the first quarter, a significant improvement from
the prior year period. The increase in cash flow was driven
by an increase in ounces sold, higher operating margins as gold
prices increased, and lower capital spending.
First Quarter 2020 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.
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 first quarter of 2020, the Company
spent $1.6 million at Kirazlı, with an additional $1.4 million of
working capital payments from prior periods.
Mulatos District (Sonora,
Mexico)
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. La Yaqui
Grande is a significantly larger project than La Yaqui Phase I
(constructed in 2017) and Cerro Pelon (constructed in 2019), with
724,000 ounces in Mineral Reserves (19.2 million tonnes at 1.17 g/t
Au) as reported in the 2019 Mineral Reserve and Resource
statement.
During the first quarter, the Company invested
$1.8 million at La Yaqui Grande, focused on detailed engineering,
project design and costing, and exploration activities.
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 first quarter of 2020 was $1.5 million, primarily related to
baseline work and drafting of the Environmental Impact Study
(“EIS”) for the project that will be submitted to satisfy Federal
and Provincial regulatory 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.
First Quarter 2019 Exploration Activities
Island Gold (Ontario, Canada)
The 2020 exploration drilling program is focused
on continuing to expand the down-plunge and lateral extensions of
the Island Gold deposit with the objective of adding new near mine
Mineral Resources across the two-kilometre long Island Gold Main
Zone. The exploration drilling program in the quarter was designed
to follow up on the exploration success in 2019, where high grade
gold mineralization was extended across all three areas of focus,
most notably in the Main and Eastern Extensions. This resulted in a
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 $21 million has been budgeted in 2020
for surface and underground exploration at Island Gold and includes
46,000 metres (“m”) of surface directional drilling, 30,000 m of
underground exploration drilling, and 900 m of underground
exploration development to extend drill platforms on the 620, 740,
and 840 levels.
A regional exploration program which includes
10,000 m of drilling is also planned in 2020 and is focused on
evaluating and advancing exploration targets outside the main
Island Gold Mine area on the 9,750-hectare Island Gold
Property.
Surface exploration drilling
A total of 11 holes totalling 9,719 m were
completed in the first quarter as part of the surface directional
drilling program. Directional drilling targeted areas peripheral to
the Inferred Mineral Resource blocks below the 1,000 m level, with
drill hole spacing ranging from 75 m to 100 m. The area that was
targeted by the surface directional drill program extends
approximately 2,000 m in strike length between the 1,000 m and
1,500 m elevation below surface.
Underground exploration drilling
During the first quarter of 2020, a total of
6,568 m of underground exploration drilling was completed in 22
holes from the 620 and 840 levels. The objective of the underground
drilling is to identify new Mineral Resources close to existing
Mineral Resource or Reserve blocks. A total of 266.5 m of
underground exploration drift development was completed on the 340,
490, 620 and 840 levels during the first quarter of 2020.
Total exploration expenditures during the first
quarter were $4.2 million, of which $4.0 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 first quarter, the Company invested $1.8
million in exploration activities within the Mulatos District, of
which $0.5 million was capitalized related to La Yaqui Grande.
Other spending in the quarter related to drilling to identify
potential underground targets, ground geophysical surveys, and
administrative costs.
Lynn Lake (Manitoba,
Canada)
During the first quarter of 2020, a total of
7,612 m of drilling was completed in 35 holes focused on testing
exploration targets in proximity to the Gordon and MacLellan
Deposits. Targeting and planning for the 2020 field program
continued in the first quarter with a focus on developing
exploration programs to evaluate and further advance a pipeline of
prospective regional exploration targets. Exploration spending in
the first quarter totaled $1.5 million.
Review of First Quarter Financial
Results
Operating Revenue
During the first quarter of 2019, the Company
sold 111,854 ounces of gold for revenue of $176.9 million, a 13%
increase from the prior year period driven by an increase in
realized gold prices, partially offset by lower ounces sold. The
decrease in ounces sold is primarily a result of the temporary
shutdown of the Northgate shaft at Young-Davidson to facilitate the
tie in of the lower mine infrastructure. In addition, El Chanate
concluded residual leaching during the fourth quarter of 2019,
further reducing gold sales compared to the prior year.
The average realized gold price in the quarter
was $1,582 per ounce, a 21% increase compared to $1,304 per ounce
realized in the prior year period.
Cost of sales were $120.3 million in the first
quarter of 2020, a 5% decrease compared to the prior year period,
driven by Young-Davidson and El Chanate.
Mining and processing costs were consistent with
the comparative period at $82.5 million, as lower tonnes mined and
processed at Young-Davidson during the lower mine tie-in were
offset by higher costs at Mulatos.
Consolidated total cash costs for the quarter
were $759 per ounce, a 4% increase compared to $732 per ounce in
the prior year period, driven by higher unit costs at
Young-Davidson.
AISC were $1,010 per ounce in the quarter, a 6%
increase driven by higher total cash costs, and timing of
sustaining capital spending at Mulatos and Island Gold.
Royalty expense was $2.4 million in the quarter,
substantially lower than the prior year period of $5.4 million.
During the quarter, the Company repurchased and cancelled a 3% NSR
royalty at Island Gold, significantly reducing the royalty expense.
In addition, the prior year royalty expense included a 5% royalty
on production at Mulatos, which ceased in the first quarter of
2019, driving royalty expense lower in 2020.
Amortization of $35.4 million in the quarter was
lower than the prior year period expense of $39.4 million due to
lower production. Amortization of $316 per ounce was in line with
guidance and the prior year.
The Company recognized earnings from operations
of $46.2 million in the quarter, higher than the prior year period
due to higher realized gold prices, driving stronger margins.
The Company reported a net loss of $12.3 million
in the quarter, compared to net earnings of $16.8 million in the
same period in 2019. The decrease is primarily due to the impact of
the weakening Canadian dollar and Mexican Peso, which resulted in a
$5.1 million foreign exchange loss, as well as a $36.8 million
foreign exchange loss recorded within deferred tax expense. On an
adjusted basis, earnings of $29.4 million or $0.08 per share
increased compared to the prior year driven by higher realized gold
prices and improved operating margins. Adjusted earnings
reflect adjustments for one-time gains and losses, as well as
foreign exchange movements, which generated a combined foreign
exchange loss of $41.9 million in the first quarter of 2020.
Associated Documents
This press release should be read in conjunction
with the Company’s interim consolidated financial statements for
the three-month period ended March 31, 2020 and associated
Management’s Discussion and Analysis (“MD&A”), which are
available from the Company's website, www.alamosgold.com, in the
"Investors" section under "Reports and Financials", and on SEDAR
(www.sedar.com) and EDGAR (www.sec.gov).
Reminder of First Quarter 2020 Results
Conference Call
The Company's senior management will host a
conference call on Thursday, April 30, 2020 at 11:00 am ET to
discuss the first quarter 2020 results.
Participants may join the conference call by
dialling (416) 764-8659 or (888) 664-6392 for calls within Canada
and the United States, or via webcast
at www.alamosgold.com.
A playback will be available until May 30, 2020
by dialling (416) 764-8677 or (888) 390-0541 within Canada and the
United States. The pass code is 223183#. 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", “target”,
"estimate", "forecast", "budget", “potential’, “continues”,
“plan”, “schedule” or variations of such words and phrases and
similar expressions or statements that certain actions, events or
results “may", "could", "would", “should”, "might" or "will" be
taken, occur or be achieved.
Forward-looking statements in this press release
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, the impact of COVID-19 on the Company’s
operations, the Company’s response to COVID-19 including
preventative measures 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: operations may be exposed to new diseases,
epidemics and pandemics, including the effects and potential
effects of the global COVID-19 widespread pandemic; the impact of
the COVID-19 pandemic on the broader market and the trading price
of the Company's shares; provincial and federal orders or mandates
(including with respect to mining operations generally or auxiliary
businesses or services required for our operations) in Canada,
Mexico, the United States and Turkey; the duration of regulatory
responses to the COVID-19 pandemic; governments and the Company’s
attempts to reduce the spread of COVID-19 which may affect many
aspects of the Company's operations including the ability to
transport personnel to and from site, contractor and supply
availability and the ability to sell or deliver gold dore bars;
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 or certain other
commodities such as, diesel fuel, natural gas, and electricity;
changes in foreign exchange rates (particularly the Canadian
dollar, Mexican peso, U.S. dollar and Turkish lira); the impact of
inflation; 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 40F/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
Unless otherwise indicated, all Mineral Resource
and Mineral Reserve estimates included in this press release have
been prepared in accordance with National Instrument 43-101 -
Standards of Disclosure for Mineral Projects (“NI
43-101”) and the Canadian Institute of Mining, Metallurgy
and Petroleum (the “CIM”) - CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the
CIM Council, as amended (the “CIM Standards”).
NI 43-101 is a rule developed by the Canadian
Securities Administrators, which established standards for all
public disclosure an issuer makes of scientific and technical
information concerning mineral projects. The terms “Mineral
Reserve”, “Proven Mineral Reserve” and “Probable Mineral Reserve”
are Canadian mining terms as defined in accordance with NI 43-101
and the CIM Standards. These definitions differ materially from the
definitions in SEC Industry Guide 7 (“SEC Industry Guide
7”) under the United States Securities Exchange Act of
1934, as amended. Under SEC (defined below) Industry Guide 7
standards, a “final” or “bankable” feasibility study is required to
report Mineral Reserves, the three-year historical average price is
used in any reserve or cash flow analysis to designate reserves and
the primary environmental analysis or report must be filed with the
appropriate governmental authority. In addition, the terms “Mineral
Resource”, “Measured Mineral Resource”, “Indicated Mineral
Resource” and “Inferred Mineral Resource” are defined in and
required to be disclosed by NI 43-101 and the CIM Standards;
however, these terms are not defined terms under SEC Industry Guide
7 and are normally not permitted to be used in reports and
registration statements filed with the U.S. Securities and Exchange
Commission (the “SEC”). Investors are cautioned
not to assume that all or any part of mineral deposits in these
categories will ever be converted into Mineral Reserves. “Inferred
Mineral Resources” have a great amount of uncertainty as to their
existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or pre-feasibility
studies, except in very limited circumstances.
Investors are cautioned not to assume that all
or any part of an Inferred Mineral Resource exists or is
economically or legally mineable. Disclosure of “contained ounces”
in a Mineral Resource is permitted disclosure under Canadian
regulations; however, the SEC normally only permits issuers to
report mineralization that does not constitute “Mineral Reserves”
by SEC standards as in place tonnage and grade without reference to
unit measures. The SEC has adopted final rules, effective February
25, 2019, to replace SEC Industry Guide 7 with new mining
disclosure rules under sub-part 1300 of Regulation S-K of the U.S.
Securities Act (the “SEC Modernization Rules”).
The SEC Modernization Rules replace the historical property
disclosure requirements included in SEC Industry Guide 7. As a
result of the adoption of the SEC Modernization Rules, the SEC now
recognizes estimates of “Measured Mineral Resources”, “Indicated
Mineral Resources” and “Inferred Mineral Resources”. In addition,
the SEC has amended its definitions of “Proven Mineral Reserves”
and “Probable Mineral Reserves” to be substantially similar to
international standards. The SEC Modernization Rules will become
mandatory for U.S. reporting companies beginning with the first
fiscal year commencing on or after January 1, 2021.
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 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 March 31, |
|
|
|
2020 |
|
|
2019 |
|
Net (loss) earnings |
($12.3 |
) |
$16.8 |
|
Adjustments: |
|
|
Foreign exchange loss (gain) |
|
5.1 |
|
|
(0.2 |
) |
Other gain |
|
(0.2 |
) |
|
(2.2 |
) |
Unrealized foreign exchange loss (gain) recorded in deferred tax
expense |
|
36.8 |
|
|
(4.1 |
) |
Adjusted net earnings |
$29.4 |
|
$10.3 |
|
Adjusted earnings per share - basic and diluted |
$0.08 |
|
$0.03 |
|
Cash Flow from Operating Activities
before Changes in Working Capital and Cash Taxes
“Cash flow from operating activities before
changes in working capital and cash taxes” is a non-GAAP
performance measure that could provide an indication of the
Company’s ability to generate cash flows from operations, and is
calculated by adding back the change in working capital and taxes
received to “Cash provided by (used in) operating activities” as
presented on the Company’s consolidated statements of cash flows.
“Cash flow from operating activities before changes in working
capital” is a non-GAAP financial measure with no standard meaning
under IFRS.
The following table reconciles the non-GAAP
measure to the consolidated statements of cash flows.
(in
millions) |
|
|
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
Cash flow from operating activities |
$56.6 |
|
$42.4 |
|
Add (less): Changes in working
capital and cash taxes |
|
25.1 |
|
|
19.7 |
|
Cash flow from operating activities before changes in
working capital and cash taxes |
$81.7 |
|
$62.1 |
|
Company-wide Free Cash Flow
“Company-wide free cash flow" is a non-GAAP
performance measure calculated from the consolidated operating cash
flow, less consolidated mineral property, plant and equipment
expenditures. The Company believes this to be a useful indicator of
our ability to operate without reliance on additional borrowing or
usage of existing cash company-wide. Company-wide free cash flow is
intended to provide additional information only and does not have
any standardized meaning under IFRS and may not be comparable to
similar measures of performance presented by other mining
companies. Company-wide free cash flow should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
(in
millions) |
|
|
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
Cash flow from operating activities |
$56.6 |
|
$42.4 |
|
Less: mineral property, plant
and equipment expenditures |
|
(63.3 |
) |
|
(53.3 |
) |
Company-wide free cash flow |
($6.7 |
) |
($10.9 |
) |
Mine-site Free Cash Flow
"Mine-site free cash flow" is a non-GAAP
financial performance measure calculated as cash flow from
mine-site operating activities, less mineral property, plant and
equipment expenditures. The Company believes this to be a useful
indicator of our ability to operate without reliance on additional
borrowing or usage of existing cash. Mine-site free cash flow is
intended to provide additional information only and does not have
any standardized meaning under IFRS and may not be comparable to
similar measures of performance presented by other mining
companies. Mine-site free cash flow should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
Total Mine-Site Free Cash Flow |
|
|
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
Cash flow from operating
activities |
$56.6 |
|
$42.4 |
|
Add: operating cash flow used
by non-mine site activity |
|
14.7 |
|
|
11.3 |
|
Cash flow from operating mine-sites |
$71.3 |
|
$53.7 |
|
|
|
|
Mineral property, plant and
equipment expenditure 1 |
$63.3 |
|
$53.3 |
|
Less: capital expenditures
from development projects, and corporate |
|
(6.8 |
) |
|
(6.0 |
) |
Capital expenditure from mine-sites |
$56.5 |
|
$47.3 |
|
|
|
|
Total mine-site free cash flow |
$14.8 |
|
$6.4 |
|
(1) Excludes royalty repurchase of
$54.8 million at Island Gold for the three months ended March 31,
2020
Young-Davidson Mine-Site Free Cash Flow |
|
|
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
Cash flow from operating
activities |
$8.1 |
|
$22.9 |
|
Mineral property, plant and
equipment expenditure |
|
(27.0 |
) |
|
(22.3 |
) |
Mine-site free cash flow |
($18.9 |
) |
$0.6 |
|
Mulatos Mine-Site Free Cash Flow |
|
|
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
Cash flow from operating
activities |
$21.5 |
|
$0.6 |
|
Mineral property, plant and
equipment expenditure |
|
(7.4 |
) |
|
(12.6 |
) |
Mine-site free cash flow |
$14.1 |
|
($12.0 |
) |
Island Gold Mine-Site Free Cash Flow |
|
|
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
Cash flow from operating
activities |
$41.7 |
|
$29.0 |
|
Mineral property, plant and
equipment expenditure 1 |
|
(22.1 |
) |
|
(12.4 |
) |
Mine-site free cash flow |
$19.6 |
|
$16.6 |
|
(1) Excludes royalty repurchase of
$54.8 million at Island Gold for the three months ended March 31,
2020
Total Cash Costs per ounce
Total cash costs per ounce is a non-GAAP term
typically used by gold mining companies to assess the level of
gross margin available to the Company by subtracting these costs
from the unit price realized during the period. This non-GAAP term
is also used to assess the ability of a mining company to generate
cash flow from operations. Total cash costs per ounce includes
mining and processing costs plus applicable royalties, and net of
by-product revenue and net realizable value adjustments. Total cash
costs per ounce is exclusive of exploration costs.
Total cash costs per ounce is intended to
provide additional information only and does not have any
standardized meaning under IFRS and may not be comparable to
similar measures presented by other mining companies. It should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. The measure is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under IFRS.
All-in Sustaining Costs per ounce and
Mine-site All-in Sustaining Costs
The Company adopted an “all-in sustaining costs
per ounce” non-GAAP performance measure in accordance with the
World Gold Council published in June 2013. The Company believes the
measure more fully defines the total costs associated with
producing gold; however, this performance measure has no
standardized meaning. Accordingly, there may be some
variation in the method of computation of “all-in sustaining costs
per ounce” as determined by the Company compared with other mining
companies. In this context, “all-in sustaining costs per ounce” for
the consolidated Company reflects total mining and processing
costs, corporate and administrative costs, share-based
compensation, exploration costs, sustaining capital, and other
operating costs.
For the purposes of calculating "mine-site
all-in sustaining costs" at the individual mine-sites, the Company
does not include an allocation of corporate and administrative
costs and share-based compensation, as detailed in the
reconciliations below.
Sustaining capital expenditures are expenditures
that do not increase annual gold ounce production at a mine site
and excludes all expenditures at the Company’s development projects
as well as certain expenditures at the Company’s operating sites
that are deemed expansionary in nature. For each mine-site
reconciliation, corporate and administrative costs, and non-site
specific costs are not included in the all-in sustaining cost per
ounce calculation.
All-in
sustaining costs per gold ounce is
intended to provide additional information only and does not
have any standardized
meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be
considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.
Total Cash Costs and All-in Sustaining
Costs per Ounce Reconciliation Tables
The following tables reconciles these non-GAAP
measures to the most directly comparable IFRS measures on a
Company-wide and individual mine-site basis.
Total Cash
Costs and AISC Reconciliation - Company-wide |
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
(in millions, except ounces
and per ounce figures) |
|
|
Mining and processing |
$82.5 |
|
$82.2 |
|
Royalties |
|
2.4 |
|
|
5.4 |
|
Total cash costs |
$84.9 |
|
$87.6 |
|
Gold
ounces sold |
|
111,854 |
|
|
119,705 |
|
Total cash costs per
ounce |
$759 |
|
$732 |
|
|
|
|
Total cash costs |
$84.9 |
|
$87.6 |
|
Corporate and
administrative(1) |
|
6.2 |
|
|
5.5 |
|
Sustaining capital
expenditures(2) |
|
17.5 |
|
|
16.1 |
|
Share-based compensation |
|
2.2 |
|
|
3.3 |
|
Sustaining exploration |
|
1.5 |
|
|
1.4 |
|
Accretion of decommissioning
liabilities |
|
0.7 |
|
|
0.6 |
|
Total all-in sustaining costs |
$113.0 |
|
$114.5 |
|
Gold ounces sold |
|
111,854 |
|
|
119,705 |
|
All-in sustaining costs per ounce |
$1,010 |
|
$957 |
|
(1) Corporate and administrative
expenses exclude expenses incurred at development
properties.(2) Sustaining capital expenditures are
defined as those expenditures which do not increase annual gold
ounce production at a mine site and exclude all expenditures at
growth projects and certain expenditures at operating sites which
are deemed expansionary in nature. Total sustaining capital for the
period is as follows:
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
(in millions) |
|
|
Capital expenditures per cash
flow statement |
$63.3 |
|
$53.3 |
|
Less: non-sustaining capital
expenditures at: |
|
|
Young-Davidson |
|
(22.8 |
) |
|
(12.3 |
) |
Mulatos |
|
(2.6 |
) |
|
(11.6 |
) |
Island Gold |
|
(13.6 |
) |
|
(7.3 |
) |
Corporate and other |
|
(6.8 |
) |
|
(6.0 |
) |
Sustaining capital expenditures |
$17.5 |
|
$16.1 |
|
Young-Davidson Total Cash Costs and Mine-site AISC
Reconciliation |
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
(in millions, except ounces
and per ounce figures) |
|
|
Mining and processing |
$30.8 |
|
$35.9 |
|
Royalties |
|
0.8 |
|
|
1.0 |
|
Total cash costs |
$31.6 |
|
$36.9 |
|
Gold
ounces sold |
|
28,905 |
|
|
43,996 |
|
Total cash costs per
ounce |
$1,093 |
|
$839 |
|
|
|
|
Total cash costs |
$31.6 |
|
$36.9 |
|
Sustaining capital
expenditures |
|
4.2 |
|
|
10.0 |
|
Sustaining exploration |
|
— |
|
|
0.1 |
|
Accretion of decommissioning
liabilities |
|
0.1 |
|
|
— |
|
Total all-in sustaining costs |
$35.9 |
|
$47.0 |
|
Gold ounces sold |
|
28,905 |
|
|
43,996 |
|
Mine-site all-in sustaining costs per ounce |
$1,242 |
|
$1,068 |
|
Mulatos
Total Cash Costs and Mine-site AISC
Reconciliation |
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
(in millions, except ounces
and per ounce figures) |
|
|
Mining and processing |
$35.3 |
|
$24.5 |
|
Royalties |
|
0.3 |
|
|
2.3 |
|
Total cash costs |
$35.6 |
|
$26.8 |
|
Gold
ounces sold |
|
43,822 |
|
|
36,089 |
|
Total cash costs per
ounce |
$812 |
|
$743 |
|
|
|
|
Total cash costs |
$35.6 |
|
$26.8 |
|
Sustaining capital
expenditures |
|
4.8 |
|
|
1.0 |
|
Sustaining exploration |
|
1.0 |
|
|
0.8 |
|
Accretion of decommissioning
liabilities |
|
0.6 |
|
|
0.6 |
|
Total all-in sustaining costs |
$42.0 |
|
$29.2 |
|
Gold ounces sold |
|
43,822 |
|
|
36,089 |
|
Mine-site all-in sustaining costs per ounce |
$958 |
|
$809 |
|
Island
Gold Total Cash Costs and Mine-site AISC
Reconciliation |
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
(in millions, except ounces
and per ounce figures) |
|
|
Mining and processing |
$16.4 |
|
$14.6 |
|
Royalties |
|
1.3 |
|
|
2.1 |
|
Total cash costs |
$17.7 |
|
$16.7 |
|
Gold
ounces sold |
|
39,127 |
|
|
33,585 |
|
Total cash costs per
ounce |
$452 |
|
$497 |
|
|
|
|
Total cash costs |
$17.7 |
|
$16.7 |
|
Sustaining capital
expenditures |
|
8.5 |
|
|
5.1 |
|
Total all-in sustaining costs |
$26.2 |
|
$21.8 |
|
Gold ounces sold |
|
39,127 |
|
|
33,585 |
|
Mine-site all-in sustaining costs per ounce |
$670 |
|
$649 |
|
Earnings Before Interest, Taxes, Depreciation, and
Amortization (“EBITDA”)
EBITDA represents net earnings before interest,
taxes, depreciation, and amortization. EBITDA is an indicator of
the Company’s ability to generate liquidity by producing operating
cash flow to fund working capital needs, service debt obligations,
and fund capital expenditures.
EBITDA does not have any standardized meaning
under IFRS and may not be comparable to similar measures presented
by other mining companies. It should not be considered in isolation
or as a substitute for measures of performance prepared in
accordance with IFRS.
The following is a reconciliation of EBITDA to
the consolidated financial statements:
(in
millions) |
|
|
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
Net (loss) earnings |
($12.3 |
) |
$16.8 |
|
Add back: |
|
|
Finance expense |
|
0.8 |
|
|
0.5 |
|
Amortization |
|
35.4 |
|
|
39.4 |
|
Deferred income tax expense (recovery) |
|
53.1 |
|
|
(3.7 |
) |
Current income tax (recovery) expense |
|
(0.3 |
) |
|
7.5 |
|
EBITDA |
$76.7 |
|
$60.5 |
|
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
FlowALAMOS GOLD INC.Consolidated
Statements of Financial Position(Unaudited - stated in
millions of United States dollars)
|
March 31, 2020 |
|
|
December 31, 2019 |
|
A S S E T
S |
|
|
|
Current
Assets |
|
|
|
Cash and cash equivalents |
$214.7 |
|
|
$182.8 |
|
Equity securities |
|
15.6 |
|
|
|
22.8 |
|
Amounts receivable |
|
42.8 |
|
|
|
37.4 |
|
Income taxes receivable |
|
6.6 |
|
|
|
4.6 |
|
Inventory |
|
132.0 |
|
|
|
126.9 |
|
Other current assets |
|
15.9 |
|
|
|
19.8 |
|
Total Current
Assets |
|
427.6 |
|
|
|
394.3 |
|
|
|
|
|
Non-Current
Assets |
|
|
|
Long-term inventory |
|
25.3 |
|
|
|
25.7 |
|
Mineral property, plant and
equipment |
|
3,009.7 |
|
|
|
2,933.4 |
|
Other non-current assets |
|
41.2 |
|
|
|
43.1 |
|
Total Assets |
$3,503.8 |
|
|
$3,396.5 |
|
|
|
|
|
L I A B I L I T I E
S |
|
|
|
Current
Liabilities |
|
|
|
Accounts payable and accrued
liabilities |
$124.2 |
|
|
$127.3 |
|
Total Current
Liabilities |
|
124.2 |
|
|
|
127.3 |
|
|
|
|
|
Non-Current
Liabilities |
|
|
|
Deferred income taxes |
|
563.0 |
|
|
|
513.7 |
|
Decommissioning
liabilities |
|
55.7 |
|
|
|
57.1 |
|
Debt and financing
obligations |
|
100.0 |
|
|
|
— |
|
Other non-current
liabilities |
|
3.0 |
|
|
|
3.1 |
|
Total Liabilities |
|
845.9 |
|
|
|
701.2 |
|
|
|
|
|
E Q U I T
Y |
|
|
|
Share capital |
$3,690.5 |
|
|
$3,693.3 |
|
Contributed surplus |
|
89.7 |
|
|
|
90.7 |
|
Accumulated other
comprehensive loss |
|
(18.4 |
) |
|
|
(0.2 |
) |
Deficit |
|
(1,103.9 |
) |
|
|
(1,088.5 |
) |
Total Equity |
|
2,657.9 |
|
|
|
2,695.3 |
|
Total Liabilities and Equity |
$3,503.8 |
|
|
$3,396.5 |
|
ALAMOS GOLD
INC.Consolidated Statements of Comprehensive
(Loss) Income(Unaudited - stated in millions of United
States dollars, except share and per share amounts)
|
For three months ended |
|
March 31, |
|
March 31, |
|
2020 |
|
2019 |
OPERATING
REVENUES |
$176.9 |
|
|
$156.1 |
|
|
|
|
|
COST OF
SALES |
|
|
|
Mining and processing |
|
82.5 |
|
|
|
82.2 |
|
Royalties |
|
2.4 |
|
|
|
5.4 |
|
Amortization |
|
35.4 |
|
|
|
39.4 |
|
|
|
120.3 |
|
|
|
127.0 |
|
EXPENSES |
|
|
|
Exploration |
|
2.0 |
|
|
|
1.6 |
|
Corporate and
administrative |
|
6.2 |
|
|
|
5.5 |
|
Share-based compensation |
|
2.2 |
|
|
|
3.3 |
|
|
|
130.7 |
|
|
|
137.4 |
|
EARNINGS FROM
OPERATIONS |
|
46.2 |
|
|
|
18.7 |
|
|
|
|
|
OTHER
EXPENSES |
|
|
|
Finance expense |
|
(0.8 |
) |
|
|
(0.5 |
) |
Foreign exchange (loss)
gain |
|
(5.1 |
) |
|
|
0.2 |
|
Other gain |
|
0.2 |
|
|
|
2.2 |
|
EARNINGS BEFORE INCOME
TAXES |
$40.5 |
|
|
$20.6 |
|
|
|
|
|
INCOME
TAXES |
|
|
|
Current income tax recovery
(expense) |
|
0.3 |
|
|
|
(7.5 |
) |
Deferred income tax (expense)
recovery |
|
(53.1 |
) |
|
|
3.7 |
|
NET (LOSS)
EARNINGS |
($12.3 |
) |
|
$16.8 |
|
|
|
|
|
Items that may be subsequently
reclassified to net earnings: |
|
|
|
Unrealized gain (loss) on currency hedging instruments, net of
taxes |
|
(11.4 |
) |
|
|
3.3 |
|
Unrealized gain on fuel hedging instruments, net of taxes |
|
(0.8 |
) |
|
|
0.6 |
|
Items that will not be
reclassified to net earnings: |
|
|
|
Unrealized gain (loss) on equity securities, net of taxes |
|
(6.0 |
) |
|
|
2.3 |
|
Total other
comprehensive income (loss) |
($18.2 |
) |
|
$6.2 |
|
COMPREHENSIVE INCOME
(LOSS) |
($30.5 |
) |
|
$23.0 |
|
|
|
|
|
EARNINGS PER
SHARE |
|
|
|
– basic |
($0.03 |
) |
|
$0.04 |
|
–
diluted |
($0.03 |
) |
|
$0.04 |
|
Weighted average number of
common shares outstanding (000's) |
|
|
|
– basic |
|
391,341 |
|
|
|
389,735 |
|
– diluted |
|
391,341 |
|
|
|
394,196 |
|
ALAMOS GOLD
INC.Consolidated Statements of Cash
Flows(Unaudited - stated in millions of United States
dollars)
|
For three months ended |
|
March 31, |
|
March 31, |
|
2020 |
|
2019 |
CASH PROVIDED BY (USED
IN): |
|
|
|
OPERATING
ACTIVITIES |
|
|
|
Net (loss) earnings for the
period |
($12.3 |
) |
|
$16.8 |
|
Adjustments for items not
involving cash: |
|
|
|
Amortization |
|
35.4 |
|
|
|
39.4 |
|
Foreign exchange loss (gain) |
|
5.1 |
|
|
|
(0.2 |
) |
Current income tax (recovery) expense |
|
(0.3 |
) |
|
|
7.5 |
|
Deferred income tax expense (recovery) |
|
53.1 |
|
|
|
(3.7 |
) |
Share-based compensation |
|
2.2 |
|
|
|
3.3 |
|
Finance expense |
|
0.8 |
|
|
|
0.5 |
|
Other items |
|
(2.3 |
) |
|
|
(1.5 |
) |
Changes in working capital and
cash taxes |
|
(25.1 |
) |
|
|
(19.7 |
) |
|
|
56.6 |
|
|
|
42.4 |
|
INVESTING
ACTIVITIES |
|
|
|
Mineral property, plant and
equipment |
|
(63.3 |
) |
|
|
(53.3 |
) |
Repurchase of Island Gold
royalty |
|
(54.8 |
) |
|
|
— |
|
|
|
(118.1 |
) |
|
|
(53.3 |
) |
FINANCING
ACTIVITIES |
|
|
|
Proceeds from draw down of
credit facility |
|
100.0 |
|
|
|
— |
|
Repayment of equipment
financing obligations |
|
(0.2 |
) |
|
|
(1.1 |
) |
Repurchase and cancellation of
common shares |
|
(2.9 |
) |
|
|
(10.6 |
) |
Proceeds from the exercise of
options |
|
3.9 |
|
|
|
0.6 |
|
Dividends paid |
|
(5.6 |
) |
|
|
(3.9 |
) |
|
|
95.2 |
|
|
|
(15.0 |
) |
Effect of exchange rates on
cash and cash equivalents |
|
(1.8 |
) |
|
|
0.5 |
|
Net increase (decrease) in
cash and cash equivalents |
|
31.9 |
|
|
|
(25.4 |
) |
Cash and cash equivalents -
beginning of period |
|
182.8 |
|
|
|
206.0 |
|
CASH AND CASH
EQUIVALENTS - END OF PERIOD |
$214.7 |
|
|
$180.6 |
|
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