Alamos Gold Inc. (
TSX:AGI;
NYSE:AGI) (“Alamos” or the “Company”) today announced the
groundbreaking for the Island Gold Mine expansion. Already one of
the most profitable mines in Canada, the expansion will increase
production, lower costs, and be an economic engine for the Algoma
region. The expansion will also best position the operation to
benefit from additional exploration success.
John A. McCluskey, President and Chief Executive Officer,
stated: “When we first acquired the Island Gold Mine we were aware
of its potential. It had 1.8 million ounces of Mineral Reserves and
Resources, and through exploration investment we have increased
this high-grade deposit to 5.1 million ounces of Mineral Reserves
and Resources. By further investing in the Phase III expansion, we
will more than double the mine life. This mine will be an economic
engine for this region for years to come, and positively impact the
closest town of Dubreuilville and surrounding communities.”
The Honourable Greg Rickford, Ontario Minister of
Northern Development, Mines, Natural Resources and Forestry,
stated: "The Island Gold expansion will help to strengthen the
Algoma economy and is the latest in a series of recent success
stories in Ontario's mining sector—successes that our
government is proud to support. The project will bring good-paying
jobs and prosperity throughout the region including northern and
Indigenous communities."
The Honourable Todd Smith, Ontario Minister of Energy, stated:
“Our government has reduced electricity prices for large industrial
customers like Alamos Gold by 15 per cent through our Comprehensive
Electricity Plan. We are pleased to support expansions like today’s
at Alamos Gold that will support good-paying jobs for communities
in the north.”
Phase III Expansion Highlights
- Island Gold Mine is a significant employer in the region,
sustaining over 600 jobs annually which will continue over the life
of mine. During the construction phase of the expansion, employment
is expected to double to 1,200 jobs
- The Phase III Expansion study published in July 2020 outlined a
16 year mine life during which Island Gold is expected to expand
from 1,200 tonnes per day (“tpd”) to 2,000 tpd following the
completion of the shaft in 2025. This is expected to drive
production approximately 70% higher to average 236,000 ounces of
gold per year at significantly lower costs
- Since the completion of the Phase III Expansion study, Mineral
Reserves and Resources have increased 37% to total 5.1 million
ounces of gold as of the end of 2021. This growth will be
incorporated into an updated mine plan which is expected to be
released mid-2022. The optimized mine plan is also expected to
incorporate higher-grade additions in proximity to the planned
shaft bottom earlier in the mine life, further increasing the value
of the operation
- The addition of a shaft connected to low-carbon intensity grid
power in Ontario will support higher mining rates with a smaller
mobile fleet of haul trucks resulting in significantly lower diesel
consumption. This is expected to drive a 35% reduction in
greenhouse gas emissions over the Phase III mine life
Island Gold Highlights
- Island Gold’s employees account for over 20% of total mining
employment in the Algoma region. Among Island Gold employees,
approximately 6% belong to Indigenous communities, which is more
than twice the mining industry average of 2.4% in Ontario
- Island Gold’s practice of local hiring has increased economic
stability in the local communities of Dubreuilville, Wawa, and
White River, offering allowances and incentives to employees to
move near the mine in Dubreuilville, indirectly helping to increase
rural population as well as local resources and infrastructure
- The Island Gold mine also helps contribute towards the
formation of a highly skilled mining workforce and the accumulation
of human capital in the local communities: it employs a wide range
of tradespersons, such as welders, truckers, surveyors, scoop
operators, electricians, mechanics, bolters, millwrights,
construction miners, geologists, blasters, conventional miners,
engineers, and drillers
- Alamos provides employees with opportunities to further develop
their skills, expand their trades and attend training programs
- Alamos offers training and education to community members to
maintain a local qualified workforce and help residents acquire the
qualifications for long-term employment in the mining industry
- Island Gold’s employees help augment the local economy, through
a host of related activities by supporting local businesses while
residing in Dubreuilville
- The Island Gold Property is comprised of patented owned,
patented Crown leased, Crown mining licences of occupation, and
Crown unpatented cell claims, which total approximately 15,524
hectares
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/e329f3ff-d9f8-4aa0-b38c-5303c05c835d
Qualified Persons
Chris Bostwick, FAusIMM, Alamos Gold’s Senior Vice President,
Technical Services, has reviewed and approved the scientific and
technical information contained in this news release. Chris
Bostwick is a Qualified Person within the meaning of Canadian
Securities Administrator’s National Instrument 43-101 (“NI
43-101”). For further information pertaining to the 2020 Phase III
Expansion Study, please see press release titled “Alamos Gold
Announces Phase III Expansion of Island Gold to 2,000 tpd”, dated
July 14, 2020, and the corresponding technical report, both
available under the Company's profile on SEDAR at www.sedar.com and
on the Alamos website at www.alamosgold.com.
About Alamos
Alamos is a Canadian-based intermediate gold producer with
diversified production from three operating mines in North America.
This includes the Young-Davidson and Island Gold mines in northern
Ontario, Canada and the Mulatos mine in Sonora State, Mexico.
Additionally, the Company has a significant portfolio of
development stage projects in Canada, Mexico, Turkey, and the
United States. Alamos employs more than 1,700 people and is
committed to the highest standards of sustainable development. The
Company’s shares are traded on the TSX and NYSE under the symbol
“AGI”.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Scott K. ParsonsVice President, Investor
Relations(416) 368-9932 x 5439
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 news release contains or incorporates by
reference “forward-looking statements” and “forward-looking
information” as defined under applicable Canadian and U.S.
securities laws. All statements, other than statements of
historical fact, which address events, results, outcomes or
developments that the Company expects to occur are, or may be
deemed to be, forward-looking statements and are generally, but not
always, identified by the use of forward-looking terminology such
as "expect", “is expected”, “assume”, “inferred”, “potential”,
“outlook”, “on track”, “continue”, “ongoing”, "will", “believe”,
“anticipate”, "intend", "estimate", "forecast", "budget", “target”,
“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 or the negative connotation of such terms. Forward-looking
statements contained in this news release are based on
expectations, estimates and projections as of the date of this news
release.
Forward-looking statements in this news release
include, but may not be limited to, information as to strategy,
plans, expectations or future financial or operating performance
resulting from the Phase III expansion at the Island Gold mine,
such as expectations regarding: increased production levels; lower
costs; potential exploration successes; extended mine life; timing
of completion of the Phase III expansion; timing of the release of
a mine plan and its potential optimization; increases to the value
of the operation; increases to mining rates; reduction to diesel
consumption and greenhouse gas emissions; the positive impact to
the Algoma region, the Town of Dubreuilville and surrounding
communities including but not limited to anticipated job creation;
and other statements that express management's expectations or
estimates of future performance.
The Company cautions that forward-looking
statements are necessarily based upon a number of factors and
assumptions that, while considered reasonable by management at the
time of making such statements, are inherently subject to
significant business, economic, technical, 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, and undue reliance
should not be placed on such statements and information.
Such factors and assumptions underlying the
forward-looking statements in this news 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, weather issues, labour and contractor availability and
other operating or technical difficulties); operations may be
exposed to new diseases, epidemics and pandemics, including the
effects and potential effects of the global COVID-19 widespread
pandemic and its impact on the broader market and the trading price
of the Company’s shares; provincial, state and federal orders or
mandates (including with respect to mining operations generally or
auxiliary businesses or services required for the Company’s
operations) in Canada, Mexico, the United States and Turkey; the
duration of regulatory responses to the COVID-19 pandemic;
government 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 doré bars; fluctuations in the price of gold or
certain other commodities such as, diesel fuel, natural gas and
electricity; changes in foreign exchange rates (particularly the
Canadian dollar, U.S. dollar, Mexican peso and Turkish Lira); the
impact of inflation; changes in the Company’s credit rating; any
decision to declare a dividend; employee and community relations;
labour and contractor availability (and being able to secure the
same on favourable terms); litigation and administrative
proceedings; disruptions affecting operations; availability of and
increased costs associated with mining inputs and labour; expansion
delays with the Phase III expansion project at the Island Gold
mine; inherent risks and hazards associated with mining and mineral
processing including environmental hazards, industrial accidents,
unusual or unexpected formations, pressures and cave-ins; 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;
contests over title to properties; expropriation or nationalization
of property; political or economic developments in Canada, Mexico,
the United States, Turkey and other jurisdictions in which the
Company may carry on business in the future; increased costs and
risks related to the potential impact of climate change; changes in
national and local government legislation, controls or regulations
(including tax and employment legislation) in jurisdictions in
which the Company does or may carry on business in the future; the
costs and timing of construction and development of new deposits;
risk of loss due to sabotage, protests and other civil
disturbances; disruptions in the maintenance or provision of
required infrastructure and information technology systems, 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.
For a more detailed discussion of such risks and
other factors that may affect the Company's ability to achieve the
expectations set forth in the forward-looking statements contained
in this news release, see the Company’s latest 40-F/Annual
Information Form and Management’s Discussion and Analysis, 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 and risk factors and
assumptions found in this news release.
The Company disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
except as required by applicable law.
Cautionary Note to U.S. Investors
Alamos prepares its disclosure in accordance with the
requirements of securities laws in effect in Canada. Unless
otherwise indicated, all Mineral Resource and Mineral Reserve
estimates included in this news 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. Mining disclosure in the United States
was previously required to comply with SEC Industry Guide 7 (“SEC
Industry Guide 7”) under the United States Securities Exchange Act
of 1934, as amended. The U.S. Securities and Exchange Commission
(the “SEC”) has adopted final rules, 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 (“Regulation S-K 1300”)
which became mandatory for U.S. reporting companies beginning with
the first fiscal year commencing on or after January 1, 2021. Under
Regulation S-K 1300, 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.
Investors are cautioned that while the above terms are
“substantially similar” to CIM Definitions, there are differences
in the definitions under Regulation S-K 1300 and the CIM Standards.
Accordingly, there is no assurance any mineral reserves or mineral
resources that the Company may report as “proven mineral reserves”,
“probable mineral reserves”, “measured mineral resources”,
“indicated mineral resources” and “inferred mineral resources”
under NI 43-101 would be the same had the Company prepared the
mineral reserve or mineral resource estimates under the standards
adopted under Regulation S-K 1300. U.S. investors are also
cautioned that while the SEC recognizes “measured mineral
resources”, “indicated mineral resources” and “inferred mineral
resources” under Regulation S-K 1300, investors should not assume
that any part or all of the mineralization in these categories will
ever be converted into a higher category of mineral resources or
into mineral reserves. Mineralization described using these terms
has a greater degree of uncertainty as to its existence and
feasibility than mineralization that has been characterized as
reserves. Accordingly, investors are cautioned not to assume that
any measured mineral resources, indicated mineral resources, or
inferred mineral resources that the Company reports are or will be
economically or legally mineable.
Cautionary non-GAAP Measures and Additional GAAP
Measures
Note that for purposes of this section, GAAP
refers to IFRS. The Company believes that investors use certain
non-GAAP and additional GAAP measures as indicators to assess gold
mining companies. They are intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared with GAAP.
“Cash flow from operating activities before
changes in non-cash working capital” is a non-GAAP performance
measure that could provide an indication of the Company’s ability
to generate cash flows from operations, and is calculated by adding
back the change in non-cash working capital to “Cash provided by
(used in) operating activities” as presented on the Company’s
consolidated statements of cash flows. “Free cash flow” is a
non-GAAP performance measure that is calculated as cash flows from
operations net of cash flows invested in mineral property, plant
and equipment and exploration and evaluation assets as presented on
the Company’s consolidated statements of cash flows and that would
provide an indication of the Company’s ability to generate cash
flows from its mineral projects. “Mine site free cash flow” is a
non-GAAP measure which includes cash flow from operating activities
at, less capital expenditures at each mine site. Return on Equity
is defined as Earnings from Continuing Operations divided by the
average Total Equity for the current and previous year. “Mining
cost per tonne of ore” and “Cost per tonne of ore” are non-GAAP
performance measures that could provide an indication of the mining
and processing efficiency and effectiveness of the mine. These
measures are calculated by dividing the relevant mining and
processing costs and total costs by the tonnes of ore processed in
the period. “Cost per tonne of ore” is usually affected by
operating efficiencies and waste-to-ore ratios in the period.
“Total cash costs per ounce”, “all-in sustaining costs per ounce”,
and “mine-site all-in sustaining costs” as used in this analysis
are non-GAAP terms typically used by gold mining companies to
assess the level of gross margin available to the Company by
subtracting these costs from the unit price realized during the
period. These non-GAAP terms are also used to assess the ability of
a mining company to generate cash flow from operations. There may
be some variation in the method of computation of these metrics as
determined by the Company compared with other mining companies. In
this context, “total cash costs” reflects mining and processing
costs allocated from in-process and doré inventory associated and
associated royalties with ounces of gold sold in the period. Total
cash costs per ounce are exclusive of exploration costs. “All-in
sustaining costs per ounce” include total cash costs, exploration,
corporate and administrative, share based compensation and
sustaining capital costs. “Mine-site all-in sustaining costs”
include total cash costs, exploration, and sustaining capital costs
for the mine-site, but exclude an allocation of corporate and
administrative and share based compensation.
Additional GAAP measures that are presented on
the face of the Company’s consolidated statements of comprehensive
income and are not meant to be a substitute for other subtotals or
totals presented in accordance with IFRS, but rather should be
evaluated in conjunction with such IFRS measures. This includes
“Earnings from operations”, which is intended to provide an
indication of the Company’s operating performance, and represents
the amount of earnings before net finance income/expense, foreign
exchange gain/loss, other income/loss, and income tax expense.
Non-GAAP and additional GAAP measures do not have a standardized
meaning prescribed under IFRS and therefore may not be comparable
to similar measures presented by other companies. A reconciliation
of historical non-GAAP and additional GAAP measures are available
in the Company’s latest Management’s Discussion and Analysis
available online on the SEDAR website at www.sedar.com or on EDGAR
at www.sec.gov and at www.alamosgold.com.
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