Alamos Gold Inc. (
TSX:AGI;
NYSE:AGI) (“Alamos” or the “Company”) today reported
fourth quarter and annual 2023 production. The Company also
provided updated three-year production and operating guidance.
“We finished 2023 with another strong quarter, achieving the top
end of our increased annual guidance with record production of
529,300 ounces of gold. This represented a 15% increase from 2022,
at lower costs, driving a record financial performance and strong
free cash flow, all while continuing to invest in high-return,
low-cost growth,” said John A. McCluskey, President and Chief
Executive Officer.
“We expect this strong performance to continue with growing
production and declining costs over the next several years. Mulatos
continues to outperform, supporting an increase in our 2024
production guidance. The Phase 3+ Expansion at Island Gold remains
on track to deliver further production growth, decreasing costs,
and substantial free cash flow growth into 2026 and beyond. We are
advancing our other growth initiatives with the development plan
for PDA expected to be completed later this quarter, outlining
additional production upside as early as 2026, and with Lynn Lake
to provide further low-cost production growth as early as 2027. We
have also increased our exploration budget to the highest level in
our history reflecting the ongoing success and significant upside
we see across our asset base,” Mr. McCluskey added.
Fourth Quarter and Full Year 2023 Operating
Results
|
Q4 2023 |
Q4 2022 |
2023 |
2022 |
2023 Guidance |
Gold production (ounces) |
|
|
|
|
|
Young-Davidson |
49,800 |
44,600 |
185,100 |
192,200 |
185,000 – 200,000 |
Island Gold |
31,600 |
40,500 |
131,400 |
133,700 |
120,000 – 135,000 |
Mulatos District |
48,100 |
49,100 |
212,800 |
134,500 |
175,000 – 185,000 |
Total gold production – Original guidance |
|
|
|
|
480,000 – 520,000 |
Total gold production – Revised guidance |
129,500 |
134,200 |
529,300 |
460,400 |
515,000 – 530,000 |
- Record annual production; met top end of increased
production guidance: produced a record 529,300 ounces,
achieving the top end of revised guidance which had been increased
5% in October 2023. This included a strong finish to the year from
all three operations with fourth quarter production of 129,500
ounces. Full year production increased 15% from 2022 driven by
low-cost growth from La Yaqui Grande
- Costs expected to meet 2023 guidance: total
cash costs and all-in sustaining costs (“AISC”) for 2023 have not
been finalized but are expected to be consistent with full year
guidance. As previously guided, AISC are expected to be above full
year guidance in the fourth quarter, but in-line with guidance on a
full year basis
- Record financial performance: sold 129,005
ounces of gold in the fourth quarter at an average realized price
of $1,973 per ounce for revenues of $255 million. Full year sales
totaled 526,257 ounces of gold at an average realized price of
$1,944 per ounce for record revenues of $1.0 billion
- Growing cash position: ended the year with
approximately $225 million of cash and cash equivalents, up from
$130 million at the end of 2022 reflecting strong free cash flow
generation through the year. The Company remains debt-free
Three Year Guidance Overview: Operating
Mines1
|
2024 |
2025 |
2026 |
|
Current |
Previous |
Current |
Previous |
Current |
|
|
|
|
|
|
Total Gold Production (000 oz) |
485 - 525 |
470 - 510 |
470 - 510 |
470 - 510 |
520 - 560 |
|
|
|
|
|
|
Total Cash Costs(1) ($/oz) |
$825 - 875 |
$675 - 775 |
$700 - 800 |
$650 - 750 |
$675 - 775 |
|
|
|
|
|
|
All-in Sustaining Costs(1),(2)
($/oz) |
$1,125 - 1,175 |
$975 - 1,075 |
$1,050 - 1,150 |
$950 - 1,050 |
$975 - 1,075 |
|
|
|
|
|
|
Total sustaining & growth
capital(1),(3)(Operating mines; ex.
Exploration, Lynn Lake & PDA; $ millions) |
$325 - 365 |
$290 - 330 |
$310 - 350 |
$290 - 330 |
$175 - 200 |
(1) Refer to the “Non-GAAP Measures and Additional GAAP”
disclosure at the end of this press release for a description of
these measures.(2) All-in sustaining cost guidance for 2025 and
2026 includes the same assumptions for G&A and stock based
compensation as included in 2024.(3) Sustaining and growth capital
guidance is for producing mines and excludes capital for Lynn Lake,
PDA, other development projects, and capitalized exploration.
- 2024 production guidance increased; 7% growth expected
by 2026: production guidance increased to between 485,000
and 525,000 ounces in 2024, a 3% increase from previous guidance
issued in January 2023 driven by increased production from the
Mulatos District through residual leaching of the main leach pad.
Production is expected to increase 7% by 2026 reflecting low-cost
production growth from Island Gold with the completion of the Phase
3+ Expansion
- PDA to provide additional upside potential in 2026 with
further growth potential in 2027 through Lynn Lake:
three-year guidance excludes the higher-grade Puerto Del Aire
(“PDA”) project, which represents potential production upside at
Mulatos as early as 2026. This upside is expected to be outlined in
a development plan for PDA to be completed in the first quarter of
2024, which will incorporate ongoing exploration success in 2023.
Looking beyond 2026, the Lynn Lake project is expected to support
further potential growth with first production as early as the
second half of 2027
- Total cash costs and AISC per ounce expected to remain
flat in 2024 and decrease 15% and 11%, respectively, by
2026:
- Total cash costs of $825 and $875 per ounce in 2024 are
expected to be consistent with 2023, and decrease 15% by 2026 to
$675 to $775 per ounce: costs are expected to decrease
steadily into 2025 and 2026 reflecting the end of higher-cost
residual leaching at Mulatos and low-cost production growth from
Island Gold
- Cost guidance for 2024 has increased from previous guidance
primarily reflecting higher than previously guided production from
the Mulatos District, the stronger Mexican Peso, as well as ongoing
inflation
- The additional production from Mulatos is expected to come
through residual leaching which carries higher reported costs,
though is expected to provide strong free cash flow with the
majority of these costs previously incurred. Excluding this impact
and the stronger Mexican peso, total cash costs increased
approximately 5% relative to previous guidance with the main driver
being inflation
- AISC expected to be between $1,125 to $1,175 per ounce
in 2024, and decrease 11% by 2026 to $975 to $1,075 per
ounce: consistent with total cash costs, the end of
residual leaching at Mulatos and low-cost production growth from
Island Gold is expected to drive a significant decrease in costs
into 2025 and 2026
- Capital spending expected to decrease 46% by 2026 at
existing operations: total capital (excluding capitalized
exploration) is expected to range between $350 to $390 million in
2024, an increase from 2023 reflecting inflation, as well as higher
spending at Island Gold and Lynn Lake. This includes $325 to $365
million of capital at producing mines (excluding PDA and Lynn
Lake). Capital spending for producing mines is expected to decrease
slightly into 2025, followed by a substantial reduction in 2026 to
$175 to $200 million reflecting the completion of the Phase 3+
Expansion. The total capital budget for 2024 includes:
- Sustaining capital guidance of $93 to $105
million: down from 2023 and expected to increase slightly
in 2025 and 2026
- Growth capital guidance for producing mines of $232 to
$260 million: up from 2023 reflecting higher growth
capital at Young-Davidson and Island Gold. Growth capital is
expected to decrease by nearly 70% in 2026 with the completion of
the Phase 3+ Expansion
- Exploration budget of $62 million: up from
expected spending of approximately $50 million in 2023. This
represents the largest exploration budget in the history of the
Company with expanded budgets across all key assets following up on
broad based exploration success in 2023. This success was most
notable at Island Gold and the Mulatos District with both assets
expected to account for approximately 60% of the total budget in
2024
- Strong ongoing free cash flow while funding low-cost
growth: the Company expects to continue generating strong
ongoing free cash flow at current gold prices while funding the
Phase 3+ Expansion at Island Gold. Free cash flow generation from
existing operations is expected to increase substantially in 2026
following the completion of the Phase 3+ Expansion, reflecting
higher production, lower costs, and lower capital spending
(1) Guidance statements in this release are forward-looking
information. See the Assumptions and Sensitives section of this
release along with the cautionary note at the end of this
release.
Upcoming 2024 catalysts
- PDA development plan: Q1 2024
- 2023 year-end Mineral Reserve and Resource
update: February 2024
- Island Gold and Mulatos exploration updates:
ongoing
- Burnt Timber and Linkwood study (satellite deposits to
Lynn Lake): Q4 2024
2024 Guidance
2024 Guidance |
2023 Guidance |
|
Young-Davidson |
Island Gold |
Mulatos District |
Lynn Lake |
Total |
Total |
Gold production (000 oz) |
180 - 195 |
145 - 160 |
160 - 170 |
|
485 - 525 |
529 (actual) |
Cost of sales,
including amortization ($
millions)(2) |
|
|
|
|
$620 |
$625 |
Cost of sales,
including amortization
($/oz)(2) |
|
|
|
|
$1,225 |
$1,250 |
Total cash costs ($/oz)(1) |
$950 - 1,000 |
$550 - 600 |
$925 - 975 |
- |
$825 - 875 |
$825 - 875 |
All-in sustaining costs ($/oz)(1) |
|
|
|
|
$1,125 - 1,175 |
$1,125 - 1,175 |
Mine-site all-in sustaining costs
($/oz)(1)(3) |
$1,175 - 1,225 |
$875 - 925 |
$1,000 - 1,050 |
- |
|
|
Capital expenditures ($ millions) |
|
|
|
|
|
|
Sustaining capital(1) |
$40 - 45 |
$50 - 55 |
$3 - 5 |
- |
$93 - 105 |
$105 - 115 |
Growth capital(1) |
$20 - 25 |
$210 - 230 |
$2 - 5 |
- |
$232 - 260 |
$175 - 205 |
Total Sustaining and Growth
Capital(1) - producing
mines ($ millions) |
$60 - 70 |
$260 - 285 |
$5 - 10 |
- |
$325 - 365 |
$280 - 320 |
Growth capital – development projects ($
millions) |
|
|
|
$25 |
$25 |
$12 |
Capitalized exploration(1) ($ millions) |
$10 |
$13 |
$9 |
$9 |
$41 |
$25 |
Total capital expenditures and capitalized
exploration(1) ($ millions) |
$70 - 80 |
$273 - 298 |
$14 - 19 |
$34 |
$391 - 431 |
$317 - 357 |
(1) Refer to the "Non-GAAP Measures and Additional
GAAP" disclosure at the end of this press release for a description
of these measures.(2) Cost of sales includes mining and
processing costs, royalties, and amortization expense, and is
calculated based on the mid-point of total cash cost
guidance.(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.
Gold production in 2024 is expected to range between 485,000 and
525,000 ounces, a 3% increase from the previous three-year guidance
provided in January 2023 (based on the mid-point). The increase is
driven by higher expected production from the Mulatos District
through residual leaching of the Mulatos leach pad, in addition to
ongoing production from La Yaqui Grande. Production is expected to
be slightly higher during the first half of 2024 with the recovery
of ounces through residual leaching at Mulatos expected to decline
through the year.
Total cash costs and AISC are expected to be consistent with
2023. Costs are expected to be towards the upper end of guidance to
start the year and trend lower through the year reflecting
declining rates of production from residual leaching at
Mulatos.
AISC guidance has increased 12% relative to previous guidance
(based on the mid-point) with the majority related to the increase
in production from the Mulatos District through residual leaching,
the stronger Mexican peso, as well as inflation, partly offset by
lower sustaining capital.
The main driver of the increase in AISC is higher costs at the
Mulatos District. La Yaqui Grande is expected to supply
approximately 75% of Mulatos District production at a similar
low-cost structure as 2023. The remaining production is expected to
come from residual leaching of the main Mulatos leach pad which
carries higher reported AISC of approximately $1,850 per ounce. The
majority of these costs were previously incurred and recorded in
inventory. The cash component to recover these ounces in 2024 is
expected to be approximately $800 per ounce providing stronger free
cash flow than implied by the higher reportable costs.
Additionally, the stronger Mexican Peso of 17:1 (MXN:USD),
compared to 20:1 in previous guidance, increased costs by
approximately $20 per ounce. The other key component of the
increase in costs is inflation of 4% company-wide, with the largest
driver being ongoing labour inflation, particularly in Canada.
(1) Refer to the “Non-GAAP Measures and Additional GAAP”
disclosure at the end of this press release for a description of
these measures.(2) Total consolidated all-in sustaining costs
include corporate and administrative and share based compensation
expenses.
Capital spending is expected to increase from 2023 reflecting
inflation, higher capital at Island Gold and Lynn Lake, and an
increased capitalized exploration budget. The largest driver of the
increase in capital at Island Gold is for a planned tailings lift
to be completed in 2024, as well as increased underground
development costs, reflecting labour and cost inflation. Capital
spending on the Lynn Lake project is expected to more than double
the amount spent in 2023. Spending at Lynn Lake will be focused on
upgrades to site access and infrastructure, including early work on
the power line upgrade, in advance of a construction decision
anticipated in 2025. Capital spending is expected to be balanced
between the first and second half of the year.
Given the strong profitability of the Mulatos operation in 2023,
the Company expects to pay significantly higher cash tax payments
in Mexico in 2024, which includes the 2023 year-end tax payment due
in the first quarter. Combined with an expected decrease in costs
through the year, the Company expects stronger free cash flow
starting in the second quarter of 2024.
2024 – 2026 Guidance: Operating Mines
|
2024 |
2025 |
2026 |
|
Current |
Previous |
Current |
Previous |
Current |
Gold Production (000 oz) |
|
|
|
|
|
Young-Davidson |
180 - 195 |
185 - 200 |
180 - 195 |
185 - 200 |
180 - 195 |
Island Gold |
145 - 160 |
145 - 160 |
170 - 185 |
175 - 190 |
220 - 235 |
Mulatos District |
160 - 170 |
140 - 150 |
120 - 130 |
110 - 120 |
120 - 130 |
Total Gold Production (000 oz) |
485 - 525 |
470 - 510 |
470 - 510 |
470 - 510 |
520 - 560 |
|
|
|
|
|
|
Total Cash Costs(1) ($/oz) |
$825 - 875 |
$675 - 775 |
$700 - 800 |
$650 - 750 |
$675 - 775 |
All-in Sustaining Costs(1),(2)
($/oz) |
$1,125 - 1,175 |
$975 - 1,075 |
$1,050 - 1,150 |
$950 - 1,050 |
$975 - 1,075 |
|
|
|
|
|
|
Sustaining capital(1),(3) ($
millions) |
$93 - 105 |
$105 - 115 |
$115 - 125 |
$105 - 115 |
$105 - 115 |
Growth
capital(1),(3) ($
millions) |
$232 - 260 |
$185 - 215 |
$195 - 225 |
$185 - 215 |
$70 - 85 |
Total sustaining & growth
capital(1),(3) (Operating mines; ex.
Exploration) ($ millions) |
$325 - 365 |
$290 - 330 |
$310 - 350 |
$290 - 330 |
$175 - 200 |
(1) Refer to the “Non-GAAP Measures and Additional GAAP”
disclosure at the end of this press release for a description of
these measures.(2) All-in sustaining cost guidance for 2025 and
2026 includes the same assumptions for G&A and stock based
compensation as included in 2024.(3) Sustaining and growth capital
guidance is for producing mines and excludes capital for Lynn Lake
and other development projects, and capitalized exploration.
Consistent with previous guidance, gold production is expected
to decrease slightly in 2025 reflecting the end of residual
leaching at the main Mulatos leach pad, partly offset by further
low-cost growth from Island Gold. The completion of the Phase 3+
Expansion at Island Gold is expected to drive production
approximately 10% higher into 2026, from 2025.
Production guidance for 2026 excludes any production from the
higher-grade PDA project which represents an excellent opportunity
for additional production within the Mulatos District. A
development plan outlining this upside potential at PDA is expected
to be completed during the first quarter of 2024. Looking into 2027
and beyond, the Lynn Lake project represents further growth
potential as detailed in the 2023 Feasibility Study which outlined
another long-life, low-cost asset in Canada, with attractive
economics and significant exploration upside.
Total cash costs and AISC in 2025 are expected to decrease 12%
and 4%, respectively, from 2024. This is expected to be driven by
low-cost growth from Island Gold, and the end of higher-cost
residual leaching at Mulatos. A further increase in low-cost
production at Island Gold is expected to drive costs lower into
2026, representing a 15% decrease in total cash costs, and 11%
decrease in AISC, relative to 2024.
Capital spending at existing operations (excluding PDA and Lynn
Lake) is expected to decrease 4% in 2025, reflecting lower capital
at Mulatos and Island Gold. The increase in capital relative to
previous guidance is primarily driven by inflation. A more
substantial decrease in capital is expected in 2026 with the
completion of the Phase 3+ Expansion at Island Gold. Sustaining
capital spending at existing operations is expected to increase
slightly in 2025 and 2026.
(1) Production and AISC are based on mid-point of guidance.(2)
Refer to the “Non-GAAP Measures and Additional GAAP” disclosure at
the end of this press release for a description of these
measures.(3) Total consolidated all-in sustaining costs include
corporate and administrative and share based compensation
expenses.
Young-Davidson
|
|
|
|
Guidance |
Young-Davidson |
Q3 YTD 2023 |
Q4 2023 |
2023A |
2023E
(3) |
2024E |
2025E |
2026E |
Gold
Production (000 oz) |
135 |
50 |
185 |
185 - 200 |
180 - 195 |
180 - 195 |
180 - 195 |
Previous Guidance (000 oz) |
|
|
|
|
185 - 200 |
185 - 200 |
|
|
|
|
|
|
|
|
|
Total Cash Costs(1) ($/oz) |
$945 |
- |
- |
$900 - 950 |
$950 - 1,000 |
|
|
Mine-site AISC(1),(2) ($/oz) |
$1,207 |
- |
- |
$1,175 - 1,225 |
$1,175 - 1,225 |
|
|
|
|
|
|
|
|
|
|
Tonnes of ore processed (tpd) |
7,888 |
7,877 |
7,885 |
8,000 |
8,000 |
|
|
Grade processed (g/t Au) |
2.14 |
2.38 |
2.20 |
2.15 - 2.35 |
2.15 - 2.30 |
|
|
Average recovery rate (%) |
90% |
91% |
91% |
90 - 92% |
90 - 92% |
|
|
|
|
|
|
|
|
|
|
Sustaining capital(1) ($
millions) |
$35 |
- |
- |
$50 - 55 |
$40 - 45 |
|
|
Growth capital(1) ($
millions) |
$4 |
- |
- |
$5 - 10 |
$20 - 25 |
|
|
Total sustaining & growth
capital(1) (ex. exploration) ($
millions) |
$39 |
- |
- |
$55 - 65 |
$60 - 70 |
|
|
|
|
|
|
|
|
|
|
Capitalized exploration(1) ($
millions) |
$4 |
- |
- |
$5 |
$10 |
|
|
(1) Refer to the "Non-GAAP Measures and Additional GAAP"
disclosure at the end of this press release and the Q3 2023
MD&A for a description and calculation of these measures.(2)
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.(3) Refers to 2023 guidance
announced on January 12, 2023.
Gold production at Young-Davidson is expected to remain
consistent with 2023 over the next three years reflecting similar
grades and mining and processing rates.
Grades mined and processed are expected to range between 2.15
and 2.30 grams per tonne of gold (“g/t Au”) in 2024 and remain at
similar levels through 2026. Grades mined are expected to increase
in 2027 and beyond and average closer to Mineral Reserve grade, as
YD West becomes more of a significant contributor to
production.
Total cash costs are expected to increase approximately 5% from
2023 guidance reflecting ongoing cost inflation with the largest
driver being labour inflation in Northern Ontario. Mine-site AISC
are expected to be consistent with 2023 with the increase in total
cash costs offset by lower sustaining capital. Mine-site AISC are
expected to increase in 2025 and 2026 reflecting slightly higher
sustaining capital.
Capital spending in 2024 (excluding exploration) is expected to
range between $60 and $70 million. This is up from 2023 reflecting
inflation and higher growth capital, partly offset by lower
sustaining capital. The largest component of the increase in growth
capital is for an expansion of the water treatment plant at the
operation. Capital spending is expected to remain at similar levels
in 2025 and 2026.
Young-Davidson remains on track to generate more than $100
million of free cash flow for the third consecutive year in 2023.
At current gold prices, the operation is well positioned to
generate similar free cash flow in 2024 and over the long term
given its 15-year Mineral Reserve life.
Island Gold
|
|
|
|
Guidance |
Island Gold |
Q3 YTD 2023 |
Q4 2023 |
2023A |
2023E(3) |
2024E |
2025E |
2026E |
Gold Production (000 oz) |
100 |
32 |
131 |
120 - 135 |
145 - 160 |
170 - 185 |
220 - 235 |
Previous Guidance (000 oz) |
|
|
|
|
145 - 160 |
175 - 190 |
|
|
|
|
|
|
|
|
|
Total Cash Costs(1) ($/oz) |
$636 |
- |
- |
$600 - 650 |
$550 - 600 |
|
|
Mine-site AISC(1),(2) ($/oz) |
$980 |
- |
- |
$950 - 1,000 |
$875 - 925 |
|
|
|
|
|
|
|
|
|
|
Tonnes of ore processed (tpd) |
1,182 |
1,265 |
1,203 |
1,200 |
1,200 |
|
|
Grade processed (g/t Au) |
9.74 |
8.82 |
9.48 |
8.6 - 10.2 |
9.3 - 13.3 |
|
|
Average recovery rate (%) |
97% |
98% |
97% |
96 - 97% |
96 - 97% |
|
|
|
|
|
|
|
|
|
|
Sustaining capital(1) ($
millions) |
$33 |
- |
- |
$45 - 50 |
$50 - 55 |
|
|
Growth capital(1) ($
millions) |
$118 |
- |
- |
$165 - 185 |
$210 - 230 |
|
|
Total sustaining & growth
capital(1) (ex. Exploration) ($
millions) |
$151 |
- |
- |
$210 - 235 |
$260 - 285 |
|
|
|
|
|
|
|
|
|
|
Capitalized
exploration(1) ($ millions) |
$8 |
- |
- |
$11 |
$13 |
|
|
(1) Refer to the “Non-GAAP Measures and Additional GAAP”
disclosure at the end of this press release and the Q3 2023
MD&A for a description and calculation of these measures.(2)
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.(3) Refers to 2023 guidance
announced on January 12, 2023.
Production guidance for Island Gold in 2024 is consistent with
previous guidance and represents a 16% increase from 2023
production, reflecting higher grades. Grades are expected to
increase further into 2025 and combined with higher mining and
processing rates towards the latter part of the year, this is
expected to drive an additional 16% increase in production.
Following the completion of the Phase 3+ Expansion in 2026, mining
rates are expected to begin ramping up towards 2,400 tpd
contributing to a further 28% increase in production. As outlined
in the Phase 3+ Study, production rates are expected to increase to
average 287,000 ounces per year in 2027 and beyond.
Total cash costs and mine-site AISC are expected to decrease 8%
from 2023 reflecting higher grades, partly offset by ongoing cost
inflation, particularly labour in Northern Ontario. Costs are
expected to decrease further into 2025 and 2026 reflecting higher
grades in 2025, and higher mining rates and productivity
improvements with the completion of the Phase 3+ Expansion in
2026.
Capital spending at Island Gold (excluding exploration) is
expected to be between $260 and $285 million in 2024. This is up
from 2023 reflecting the timing of capital spending, with some
capital on the Phase 3+ Expansion expected to be spent late in 2023
deferred into 2024, additional capital for a planned tailings dam
lift, as well as cost and labour inflation. Construction activities
in 2024 will be focused on the shaft sinking, which began in
December 2023, and the start of work on the paste plant and mill
expansion. Capital spending is expected to remain at similar levels
in 2025 and decrease substantially in 2026 with the Phase 3+
Expansion on schedule to be completed during the first half of
2026.
Mulatos District
|
|
|
|
Guidance |
Mulatos District |
Q3 YTD 2023 |
Q4 2023 |
2023A |
2023E(3) |
2024E |
2025E |
2026E |
Gold Production (000 oz) |
165 |
48 |
213 |
175 - 185 |
160 - 170 |
120 - 130 |
120 - 130 |
Previous Guidance (000 oz) |
|
|
|
|
140 - 150 |
110 - 120 |
|
|
|
|
|
|
|
|
|
Total Cash
Costs(1)
($/oz) |
$861 |
- |
- |
$900 - 950 |
$925 - 975 |
|
|
Mine-site
AISC(1),(2)
($/oz) |
$948 |
- |
- |
$950 - 1,000 |
$1,000 - 1,050 |
|
|
|
|
|
|
|
|
|
|
Tonnes of ore stacked - La Yaqui Grande (tpd) |
10,900 |
10,370 |
10,784 |
10,000 |
10,000 |
- |
- |
Grades stacked - La Yaqui Grande (g/t Au) |
1.52 |
1.64 |
1.55 |
1.15 - 1.45 |
0.90 - 1.50 |
- |
- |
Recovery ratio (%) |
82% |
70% |
78% |
80 - 85% |
80 - 90% |
- |
- |
Tonnes of ore stacked - Mulatos crusher (tpd)
(4) |
13,700 |
8,097 |
12,260 |
15,000 - 17,000 |
- |
|
|
Grades stacked - Mulatos (g/t Au) |
1.17 |
2.19 |
1.34 |
0.8 - 1.0 |
- |
|
|
Recovery ratio (%) |
32% |
27% |
31% |
50 - 55% |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining
capital(1)
($ millions) |
$10 |
- |
- |
$10 |
$3 - 5 |
|
|
Growth
capital(1)
($ millions) |
$6 |
- |
- |
$5 - 10 |
$2 - 5 |
|
|
Total sustaining & growth
capital(1) (ex.
exploration) ($ millions) |
$16 |
- |
- |
$15 - 20 |
$5 - 10 |
|
|
|
|
|
|
|
|
|
|
Capitalized
exploration(1)
($ millions) |
$6 |
- |
- |
$4 |
$9 |
|
|
(1) Refer to the "Non-GAAP Measures and Additional GAAP"
disclosure at the end of this press release and the Q3 2023
MD&A for a description and calculation of these measures.(2)
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.(3) Refers to 2023 guidance
announced on January 12, 2023.
Combined gold production from the Mulatos District is expected
to be between 160,000 and 170,000 ounces in 2024, a 14% increase
from previous guidance (based on the mid-point). The higher
production is expected to come from residual leaching of the main
Mulatos leach pad which carries higher reported costs; however, is
very profitable from a cash flow perspective with the majority of
these costs previously incurred and recorded in inventory.
La Yaqui Grande is expected to provide approximately 75% of
Mulatos District production in 2024. The remaining production is
expected to come from residual leaching of the Mulatos leach pad
with mining in the main Mulatos pit having ended in July 2023, and
stacking of stockpiled ore on the pad concluding in December 2023.
Production is expected to be weighted towards the first half of the
year and decline through the year. This reflects higher grades at
La Yaqui Grande during the first half of the year, and declining
rates of production through residual leaching.
Total cash costs and mine-site AISC in 2024 are expected to be
similar to 2023, though higher than what was incorporated into
previous guidance reflecting the increase in production expected
from residual leaching. The ounces recovered through residual
leaching are expected to carry a reported mine-site AISC of
approximately $1,850 per ounce with the majority of these costs
having been previously incurred and sitting in inventory. The cash
component to be spent to recover these ounces in 2024 is expected
to be approximately $800 per ounce, providing significant free cash
flow. Total cash costs and AISC are expected to increase slightly
through the year driven primarily by the grade sequence at La Yaqui
Grande.
Production guidance for 2025 was also increased to between
120,000 and 130,000 ounces reflecting slightly higher grades from
La Yaqui Grande compared to previous guidance. Production is
expected to decrease relative to 2024 with no production currently
anticipated from residual leaching of the main Mulatos leach pad
beyond 2024.
Production is expected to remain at similar levels in 2026 with
guidance based on La Yaqui Grande only. Guidance for 2026 excludes
the higher-grade PDA project which represents an excellent
opportunity for additional production within the Mulatos District.
A development plan outlining this upside potential at PDA is
expected to be completed during the first quarter of 2024.
Capital spending is expected to total $5 to $10 million in 2024,
down from 2023 with no major capital projects remaining at La Yaqui
Grande. Capital spending is expected to remain at similar levels in
2025 and 2026, excluding PDA. Additional details on the PDA
development plan are expected to be published in the first quarter
of 2024.
2024 Global Operating and Development Capital
Budget
|
2024 Guidance |
2023 Guidance |
|
Sustaining Capital(1) |
Growth Capital(1) |
Total |
Total |
Operating Mines ($ millions) |
|
|
|
|
Young-Davidson |
$40 - 45 |
$20 - 25 |
$60 - 70 |
$55 - 65 |
Island Gold |
$50 - 55 |
$210 - 230 |
$260 - 285 |
$210 - 235 |
Mulatos District |
$3 - 5 |
$2 - 5 |
$5 - 10 |
$15 - 20 |
Total – Operating Mines |
$93 - 105 |
$232 - 260 |
$325 - 365 |
$280 - 320 |
Development Projects ($ millions) |
|
|
|
|
Lynn Lake |
- |
$25 |
$25 |
$12 |
Total – Development Projects |
- |
$25 |
$25 |
$12 |
Capitalized Exploration(1) ($
millions) |
|
|
|
|
Young-Davidson |
- |
$10 |
$10 |
$5 |
Island Gold |
- |
$13 |
$13 |
$11 |
Mulatos District |
- |
$9 |
$9 |
$4 |
Lynn Lake |
- |
$9 |
$9 |
$5 |
Total – Capitalized
Exploration(1) |
- |
$41 |
$41 |
$25 |
Total Consolidated Budget ($ millions) |
$93 - 105 |
$298 - 326 |
$391 - 431 |
$317 - 357 |
(1) Refer to the "Non-GAAP Measures and Additional GAAP"
disclosure at the end of this press release for a description and
calculation of these measures.
2024 Capital Budget for Lynn Lake
Capital spending on the Lynn Lake project, excluding
exploration, is expected to total $25 million. This is up from 2023
reflecting planned upgrades to the site access and infrastructure.
With approval of the Environmental Impact Statement and Provincial
licenses received in March 2023, and the positive Feasibility Study
completed in August 2023, the focus in 2024 will be on further
de-risking and advancing the project ahead of an anticipated
construction decision in 2025. This includes finishing detailed
engineering, which is 75% complete, upgrading road access, and
early work on the power line upgrade.
The majority of the $25 million capital budget in 2024 is
spending included as initial capital in the 2023 Feasibility Study.
Additionally, $9 million has been budgeted for exploration at Lynn
Lake for a total capital budget of $34 million.
2024 Exploration Budget
The global exploration budget for 2024 is $62 million, a 24%
increase from expected spending of $50 million in 2023. The
increase reflects expanded budgets across all key assets following
up on broad based exploration success in 2023. Island Gold and the
Mulatos District account for approximately 60% of the total budget
with $19 million planned for each asset. This is followed by $12
million at Young-Davidson, $9 million at Lynn Lake and $2 million
at Golden Arrow. Approximately $41 million, or 66% of the 2024
budget will be capitalized.
Island Gold
A total of $19 million has been budgeted for exploration at
Island Gold in 2024, up from $14 million in 2023 with both a larger
near mine and regional exploration program.
The 2024 exploration program will follow up on a successful 2023
program with high-grade gold mineralization extended laterally to
the West and East as well as within multiple structures within the
hanging wall and footwall (see press release dated November 9,
2023). With the deposit open laterally and at depth, this ongoing
exploration success highlights the significant potential for
further growth in Mineral Reserves and Resources.
Consistent with the 2023 program, the majority of the 2024 mine
exploration program will be comprised of underground drilling with
41,000 metres ("m") planned. The focus will be the definition of
new Mineral Reserves and Resources in proximity to existing
production horizons and infrastructure, as well as the conversion
of the large existing Mineral Resource base to Reserves. This
includes drilling across the strike extent of main Island Gold
Deposit (E1E and C-Zones), as well as within a growing number of
newly defined hanging-wall and footwall zones. These potential
high-grade Mineral Reserve and Resource additions would be low cost
to develop and could be incorporated into the mine plan and mined
within the next several years providing increased operational
flexibility, and further increasing the value of the operation.
Additionally, 12,500 m of surface exploration drilling has been
budgeted targeting 1) high potential areas within the Island West,
Main and East ore shoots, 2) the up-plunge extension of the Island
West ore shoot, and 3) evaluating the potential for high-grade
mineralized hanging wall structures near surface.
To support the underground exploration drilling program, 460 m
of underground exploration drift development is planned to extend
drill platforms on the 850, 945, and 1025-levels. In addition to
the exploration budget, 32,000 m of underground delineation
drilling has been planned and included in sustaining capital for
Island Gold which will be focused on the conversion of the large
Mineral Resource base to Mineral Reserves.
The regional exploration program has also been expanded to
10,000 m, up from 7,500 m in 2023. The 2024 program will follow up
on high-grade mineralization intersected at the Pine-Breccia and
88-60 targets, located 4 kilometres (“km”) and 7 km, respectively,
from the Island Gold mine. Drilling will also be completed in
proximity to the past-producing Cline and Edwards mines, as well as
at the Island Gold North Shear target. A comprehensive data
compilation project will also commence across the broader 40,000
hectare Manitou land package that was acquired in 2023 in support
of future exploration targeting.
Mulatos District
A total of $19 million has been budgeted at Mulatos for
exploration in 2024, similar to expected spending in 2023. The
near-mine and regional drilling program is expected to total 55,000
m. This includes 27,000 m of surface exploration drilling at PDA
and the surrounding area. This drilling will follow up on another
successful year of exploration at PDA with high-grade
mineralization expanded in multiple directions beyond Mineral
Reserves and Resources at the higher-grade underground deposit.
Given the ongoing growth of the PDA deposit, other higher-grade
sulphide opportunities will be targeted within the Mulatos District
in 2024. This includes an initial 2,000 m of follow up drilling at
the previously mined Cerro Pelon deposit where high-grade
mineralization was intersected north of the mined-out open pit in
2015. This included 14.47 g/t Au over 50.30 m (15PEL012) and 9.65
g/t Au over 34.60 m (15PEL020).
Within the regional exploration program, 26,000 m has been
budgeted. Nearly half will be focused on the Capulin target located
4 km from the Mulatos pit where significant, wide intervals of
oxide and sulphide gold mineralization were intersected in 2023.
This included the previously reported 2.01 g/t Au over 82.45 m core
length (23REF012), and 2.73 g/t Au over 120.85 m core length,
including 9.31 g/t Au over 29.05 m (23REF022). The remainder of the
regional program will be focused on drilling at other high priority
targets, including Cerro Pelon West and South.
Young-Davidson
A total of $12 million has been budgeted for exploration at
Young-Davidson in 2024, up from $8 million in 2023. This includes
21,600 m of underground exploration drilling, and 1,070 m of
underground exploration development to extend drill platforms on
multiple levels.
The majority of the underground exploration drilling program
will be focused on extending mineralization within the
Young-Davidson syenite, which hosts the majority of Mineral
Reserves and Resources. Drilling will also test the hanging wall
and footwall of the deposit where higher grades have been
previously intersected.
Young-Davidson has a 15-year Mineral Reserve life as of the end
of 2022 and has maintained at least a 13-year Mineral Reserve life
since 2011 reflecting ongoing exploration success. With the deposit
open at depth and to the west, there is excellent potential for
this track record to continue.
The regional program has been expanded with 7,000 m of surface
drilling planned in 2024, up from 5,000 m in 2023. The focus will
be on testing multiple near-surface targets across the 5,900
hectare Young-Davidson Property that could potentially provide
supplemental mill feed.
Additionally, $2 million is budgeted at Golden Arrow with 5,000
m of drilling planned. The focus of the drilling will be the
conversion of existing Mineral Resources into Reserves, and testing
near-deposit and early stage exploration targets across the
property. Geotechnical and condemnation drilling will also be
conducted as part of a development plan for the project. The Golden
Arrow deposit is located 95 km from the Young-Davidson mill and is
being evaluated as a source of supplemental mill feed.
Lynn Lake
A total of $9 million has been budgeted for exploration at the
Lynn Lake project in 2024, up from $5 million in 2023. This
includes 15,500 m of drilling focused on the conversion of Mineral
Resources to Mineral Reserves at the Burnt Timber and Linkwood
deposits, and to evaluate the potential for Mineral Resources at
Maynard, an advanced stage greenfield target.
Burnt Timber and Linkwood contain Inferred Mineral Resources
totaling 1.6 million ounces grading 1.1 g/t Au (44 million tonnes)
as of December 31, 2022. The Company sees excellent potential for
this to be converted into a smaller, higher quality Mineral Reserve
which could be incorporated into the Lynn Lake project given its
proximity to the planned mill. This represents potential production
and economic upside to the Feasibility Study completed on Lynn Lake
in August 2023.
Burnt Timber and Linkwood are accessible by an all-season gravel
road from Highway 397, 24 km and 28 km from the proposed MacLellan
mill, respectively. The Maynard target is located 5 km northwest of
the Linkwood deposit, 1 km from the all-season gravel road, and 20
km from the proposed MacLellan mill.
The Company will also continue evaluating and advancing a
pipeline of prospective exploration targets within the
58,000-hectare Lynn Lake Property in 2024.
Assumptions and Sensitivities
Assumptions & Expenses |
|
2024 |
Gold
price |
$/oz |
$1,800 |
Canadian
dollar |
USD/CAD |
$0.75:1 |
Mexican
peso |
MXN/USD |
17.0:1 |
Amortization |
$/oz |
$375 |
General &
Administrative(1) |
$ millions |
$28 |
(1) Excludes stock-based compensation.
The 2024 to 2026 production forecast, operating cost and capital
estimates are based on a gold price assumption of $1,800 per ounce,
a USD/CAD foreign exchange rate of $0.75:1 and MXN/USD foreign
exchange rate of 17.0:1. Cost assumptions for 2025 and 2026 are
based on 2024 input costs and have not been increased to reflect
potential inflation in those years. These estimates may be updated
in the future to reflect inflation beyond what is currently
forecast for 2024.
Amortization expense in 2024 is expected to total approximately
$375 per ounce, consistent with 2023 amortization. General and
administrative expenses in 2024 are expected to total $28 million
(excluding stock-based compensation), consistent with 2023
spending.
Sensitivities |
2024 |
Operating Sites Local Currency Exposure |
Change |
Free Cash Flow Sensitivity
(1) |
Gold
price |
$1,800 |
- |
$100 |
~$50 million |
USD/CAD |
$0.75:1 |
95% |
$0.05 |
~$30 - 35 million |
MXN/USD |
17.0:1 |
40% |
1.00 |
~$3 - 4 million |
(1) Free cash flow sensitivities include the impact of foreign
exchange and short-term gold hedging arrangements noted below.
Current foreign exchange and gold hedging
commitments
The Company has entered into the following foreign exchange and
short-term hedging arrangements to date:
- Canadian
dollar: approximately 55% of Canadian dollar-denominated
operating and capital costs for 2024 have been hedged, ensuring a
maximum USD/CAD foreign exchange rate of $0.75:1 and allowing the
Company to participate in weakness in the USD/CAD down to an
average rate of $0.70:1 (if the USD/CAD rate weakens beyond
$0.70:1, the average rate increases to $0.72:1).
- Mexican
peso: approximately 17% of Mexican peso-denominated
operating and capital costs in 2024 have been hedged, ensuring a
minimum MXN/USD foreign exchange rate of 18.0:1 and allowing the
Company to participate in weakness in the MXN/USD up to an average
rate of 19.8:1.
- Gold collar
contracts: The Company also periodically enters into short
term gold hedging arrangements. Currently, the Company has hedged
69,750 ounces in 2024, ensuring an average minimum gold price of
$1,926 per ounce and participation up to an average gold price of
$2,356 per ounce. This represents approximately 14% of 2024
production (based on mid-point of guidance).
Qualified Persons
Chris Bostwick, Alamos’ Senior Vice President, Technical
Services, who is a qualified person within the meaning of National
Instrument 43-101 Standards of Disclosure for Mineral Projects, 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 strong portfolio of growth
projects, including the Phase 3+ Expansion at Island Gold, and the
Lynn Lake project in Manitoba, Canada. Alamos employs more than
1,900 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 Senior 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 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", “assume”, “estimate”,
“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 press release are
based on expectations, estimates and projections as of the date of
this press release.
Forward-looking statements in this press release include, but
may not be limited to, information as to strategy, plans,
expectations or future financial or operating performance, such as
expectations and guidance regarding: costs (including cash costs,
AISC, capital expenditures, exploration spending), cost structure
and anticipated declining cost profile; budgets; growth capital;
sustaining capital; cash flow; foreign exchange rates; gold and
other metal price assumptions; anticipated gold production,
production rates, timing of production, production potential and
growth; returns to stakeholders; the mine plan for and expected
results from the Phase 3+ expansion at Island Gold and timing of
its progress and completion; feasibility of, development of, and
mine plan for, the Lynn Lake project and potential growth in
production resulting from the Lynn Lake project; development plan
for the Puerto Del Air (PDA) project (Mulatos); mining, milling and
processing and rates; mined and processed gold grades and weights;
mine life; Mineral Reserve life; planned exploration, drilling
targets, exploration potential and results; as well as any other
statements related to the Company's production forecasts and plans,
expected sustaining costs, expected improvements in cash flows and
margins, expectations of changes in capital expenditures, expansion
plans, project timelines, and expected sustainable productivity
increases, expected increases in mining activities and
corresponding cost efficiencies, cost estimates, sufficiency of
working capital for future commitments, Mineral Reserve and Mineral
Resource estimates, and other statements or information that
express management's expectations or estimates of future
performance, operational, geological or financial results.
The Company cautions that forward-looking statements are
necessarily based upon several 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 press release, include (without limitation):
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 any ongoing or future effects of
COVID-19 (and any related ongoing or future regulatory or
government responses) 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 Türkiye, all of 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); the impact of litigation and
administrative proceedings (including but not limited to the
investment treaty claim announced on April 20, 2021 against the
Republic of Türkiye by the Company’s wholly-owned Netherlands
subsidiaries, Alamos Gold Holdings Coöperatief U.A. and Alamos Gold
Holdings B.V., the application for judicial review of the positive
Decision Statement issued by the Ministry of Environment and
Climate Change Canada commenced by the Mathias Colomb Cree Nation
(MCCN) in respect of the Lynn Lake project and the MCCN’s
corresponding internal appeal of the Environment Act Licences
issued by the Province of Manitoba for the project) and any
resulting court, arbitral and/or administrative decisions;
disruptions affecting operations; availability of and increased
costs associated with mining inputs and labour; permitting,
construction or other delays with the Phase 3+ expansion or the
Lynn Lake project; delays in the completion of an updated
development plan for PDA and/or production from PDA (Mulatos);
exploration opportunities and potential in the Mulatos District, at
Young Davidson and/or Island Gold not coming to fruition; 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, Türkiye 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 press
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.sedarplus.ca 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 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
All resource and reserve estimates included in this press
release or documents referenced in this press release have been
prepared in accordance with Canadian 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. “Cash flow per share” is calculated by
dividing “cash flow from operations before changes in working
capital” by the weighted average number of shares outstanding for
the period. “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. “Sustaining capital” are
expenditures that do not increase annual gold ounce production at a
mine site and excludes all expenditures at the Company’s
development projects. “Growth capital” are expenditures primarily
incurred at development projects and costs related to major
projects at existing operations, where these projects will
materially benefit the mine site. “Capitalized exploration” are
expenditures that meet the IFRS definition for capitalization, and
are incurred to further expand the known Mineral Reserve and
Resource at existing operations or development projects. “Total
capital expenditures per ounce produced” is a non-GAAP term used to
assess the level of capital intensity of a project and is
calculated by taking the total growth and sustaining capital of a
project divided by ounces produced life of mine. “Total cash costs
per ounce”, “all-in sustaining costs per ounce”, “mine-site all-in
sustaining costs”, and “all-in costs per ounce” as used in this
analysis are non-GAAP terms typically used by gold mining companies
to assess the level of gross margin available to the Company by
subtracting these costs from the unit price realized during the
period. These non-GAAP terms are also used to assess the ability of
a mining company to generate cash flow from operations. There may
be some variation in the method of computation of 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 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. “Adjusted net earnings” and “adjusted earnings
per share” are non-GAAP financial measures with no standard meaning
under IFRS. “Adjusted net earnings” excludes the following from net
earnings: foreign exchange gain (loss), items included in other
loss, certain non-reoccurring items and foreign exchange gain
(loss) recorded in deferred tax expense. “Adjusted earnings per
share” is calculated by dividing “adjusted net earnings” by the
weighted average number of shares outstanding for the period.
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.sedarplus.ca or on EDGAR at
www.sec.gov and at www.alamosgold.com.
Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/092ee4fd-6450-43b1-b5ff-d934c3476534
https://www.globenewswire.com/NewsRoom/AttachmentNg/233df61b-d294-4959-977d-a3760292352c
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