Alamos Gold Inc. (
TSX:AGI;
NYSE:AGI) (“Alamos” or the “Company”) today reported
fourth quarter and annual 2022 production. The Company also
provided updated three-year production and operating guidance.
“With our strongest performance of the year coming in the fourth
quarter, including record production, we met full year 2022
production guidance. We also expect to meet cost guidance with a
significant decrease in costs in the second half of the year driven
by the ramp up of low-cost production from La Yaqui Grande. We
expect this trend to continue over the next several years with a 9%
increase in production and 5% decrease in all-in sustaining costs
in 2023 driven by a full year of production from La Yaqui Grande,
and strong ongoing performances at our Canadian operations,” said
John A. McCluskey, President and Chief Executive Officer.
“As outlined in our updated three-year guidance, our strong
outlook remains intact. We have increased our production guidance
for 2023 and 2024, reflecting a stronger outlook at both Mulatos
and Island Gold, and we remain on track to deliver a substantial
decrease in costs over the next three years. With higher production
and lower costs, we expect to generate growing free cash flow while
funding the Phase 3+ Expansion at Island Gold. Once completed in
2026, we expect this to drive a significant increase in production,
a further reduction in costs and substantial free cash flow
growth,” Mr. McCluskey added.
2023 – 2025 Guidance Summary: Operating
Mines
|
2023 |
2024 |
2025 |
|
Current |
Previous |
Current |
Previous |
Current |
|
|
|
|
|
|
Total Gold
Production (000 oz) |
480 - 520 |
460 - 500 |
470 - 510 |
460 - 500 |
470 - 510 |
|
|
|
|
|
|
Total Cash
Costs(1) ($/oz) |
$825 - $875 |
$775 - $875 |
$675 - $775 |
$650 - $750 |
$650 - $750 |
|
|
|
|
|
|
All-in Sustaining
Costs(1),(2) ($/oz) |
$1,125 - $1,175 |
$1,075 - $1,175 |
$975 - $1,075 |
$950 - $1,050 |
$950 - $1,050 |
|
|
|
|
|
|
Total sustaining & growth
capital(1),(3) (Operating mines; ex.
exploration) ($ millions) |
$280 - 320 |
$280 - 320 |
$290 - 330 |
$290 - 330 |
$290 - 330 |
(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 2024 and 2025 includes the same
assumptions for G&A and stock based compensation as included in
2023. |
(3) |
Sustaining and growth capital guidance is for producing mines and
excludes capital for Lynn Lake, other development projects, and
capitalized exploration. Growth capital and total capital were
revised higher by $60m in each of 2023 and 2024 with the release of
the Island Gold Phase 3+ Expansion Study on June 28, 2022. |
Fourth Quarter and Full Year 2022 Operating
Highlights
- Record quarterly production: of 134,200 ounces
of gold, a 9% increase from the third quarter. This was driven by
solid performances from all three operations, including a
substantial increase at Mulatos with the ramp up of La Yaqui
Grande
- Met 2022 annual production guidance: with the
strong fourth quarter performance, production of 460,400 ounces was
in line with annual guidance and consistent with 2021
- Costs expected to meet 2022 guidance: total
cash costs and all-in sustaining costs (“AISC”) for 2022 have not
been finalized but are expected to decrease in the fourth quarter
to the lowest levels of the year. Full year costs are expected to
be in line with guidance for total cash costs of between $875 and
$925 per ounce and AISC of between $1,190 and $1,240 per ounce, a
solid performance given industry-wide inflationary pressures
- Record revenues: sold 133,164 ounces of gold
in the fourth quarter at an average realized price of $1,741 per
ounce for record revenues of $232 million. Full year sales totaled
456,574 ounces of gold at an average realized price of $1,799 per
ounce for revenues of $821 million
- Stronger cash position: ended the year with
approximately $130 million of cash and cash equivalents, up from
$117 million as of September 30, 2022. The Company remains
debt-free
Fourth Quarter and Full Year 2022 Operating
Results
|
Q4 2022 |
Q4 2021 |
2022 |
2021 |
2022 Guidance |
Gold production (ounces) |
|
|
|
|
|
Young-Davidson |
44,500 |
51,900 |
192,200 |
195,000 |
185,000 – 200,000 |
Island Gold |
40,600 |
37,500 |
133,700 |
140,900 |
125,000 – 135,000 |
Mulatos District |
49,100 |
23,100 |
134,500 |
121,300 |
130,000 – 145,000 |
Total gold production |
134,200 |
112,500 |
460,400 |
457,200 |
440,000 – 480,000 |
Three Year Guidance Overview1
– Operating Mines
- Multi-year production guidance increased with 9% growth
expected in 2023: production is expected to increase to
between 480,000 and 520,000 ounces in 2023 and remain at similar
levels in 2024 and 2025. Production guidance was increased for 2023
and 2024 with stronger production expected from Island Gold and
Mulatos
- Additional upside potential in 2025 with further growth
expected in 2026: newly issued 2025 guidance excludes the
higher-grade Puerto Del Aire (“PDA”) project which represents
potential production upside at Mulatos. This upside is expected to
be outlined in a new development plan for PDA to be completed in
the second half of 2023. A further increase in production is
expected in 2026 with the completion of the Phase 3+ Expansion at
Island Gold
- Total cash costs expected to decrease 6% in 2023 to
between $825 and $875 per ounce, and 22% by 2025 to $650 to $750
per ounce: costs are expected to decrease substantially
over the next three years driven by low-cost production growth from
La Yaqui Grande and Island Gold. A further improvement in costs is
expected in 2026 following the completion of the Phase 3+
Expansion. Cost guidance for 2023 and 2024 increased a modest 3% on
average over previous guidance reflecting industry-wide cost
pressures
- All-in sustaining costs expected to decrease 5% to
$1,125 to $1,175 per ounce in 2023, and 18% by 2025 to $950 to
$1,050 per ounce: consistent with total cash costs, AISC
are expected to decrease significantly over the next three years
with a further improvement expected in 2026 following the
completion of the Phase 3+ Expansion at Island Gold
- Total capital guidance maintained and stable over the
next three years: total capital (excluding capitalized
exploration) is expected to range between $292 to $332 million in
2023, consistent with 2022 guidance. This includes $280 to $320
million of capital at producing mines, with a similar rate expected
in 2024, both unchanged from previous guidance. Capital spending
for producing mines is expected to remain at similar levels in 2025
and decrease significantly in 2026 following the completion of the
Phase 3+ Expansion. The total capital budget for 2023 includes:
- Sustaining capital guidance of $105 to $115
million: up approximately 13% from 2022, primarily
reflecting higher sustaining capital at Island Gold. Sustaining
capital is expected to remain at similar levels through 2025
- Growth capital guidance for producing mines of $175 to
$205 million: down 11% from 2022 with the increase in
growth capital at Island Gold more than offset by the decrease at
Mulatos with the completion of construction at La Yaqui Grande in
2022
- Exploration budget of $47 million: similar to
expected 2022 spending with the majority allocated towards
following up on ongoing exploration success at Island Gold and the
Mulatos District, including at the higher-grade underground PDA
deposit
- Fully funded growth with strong free cash
flow: higher production and declining costs are expected
to drive strong free cash flow over the next three years while
continuing to fund the Phase 3+ Expansion at Island Gold. A further
increase in free cash flow is expected in 2026 with the completion
of the Phase 3+ Expansion
- Strong ongoing returns to shareholders:
through the existing $0.10 per share annualized dividend (paid
quarterly) and share repurchases under the Normal Course Issuer
Bid. In 2022, the Company returned $48 million to shareholders
between dividends and share repurchases, consistent with 2021
1 Guidance statements in this release are forward-looking
information. See the Assumptions and Sensitives section of this
release along with the cautionary note at the end of this
release.
Upcoming 2023 catalysts
- 2022 year-end Mineral Reserve and Resource
update: February 2023
- Island Gold and Mulatos exploration updates:
ongoing
- Lynn Lake Environmental Impact Statement Approval and
updated Feasibility Study: H1 2023
- PDA development plan: H2 2023
2023 Guidance
2023 Guidance |
2022 Guidance |
|
Young-Davidson |
Island Gold |
Mulatos District |
Lynn Lake |
Total |
Total |
Gold production (000 oz) |
185 - 200 |
120 - 135 |
175 - 185 |
|
480 - 520 |
460 (actual) |
Cost of sales, including
amortization ($ millions)(2) |
|
|
|
|
$625 |
$610 |
Cost of sales, including
amortization ($/oz)(2) |
|
|
|
|
$1,250 |
$1,325 |
Total cash costs ($/oz)(1) |
$900 - 950 |
$600 - 650 |
$900 - 950 |
- |
$825 - 875 |
$875 - 925 |
All-in sustaining costs ($/oz)(1) |
|
|
|
|
$1,125 - 1,175 |
$1,190 - 1,240 |
Mine-site all-in sustaining costs
($/oz)(1)(3) |
$1,175 - 1,225 |
$950 - 1,000 |
$950 - 1,000 |
- |
|
|
Capital expenditures ($ millions) |
|
|
|
|
|
|
Sustaining capital(1) |
$50 - 55 |
$45 - 50 |
$10 |
- |
$105 - 115 |
$90 - 105 |
Growth capital(1) |
$5 - 10 |
$165 - 185 |
$5 - 10 |
$12 |
$187- 217 |
$215 - 240 |
Total Sustaining and Growth
Capital(1) ($ millions) |
$55 - 65 |
$210 - 235 |
$15 - 20 |
$12 |
$292 - 332 |
$305 - 345 |
Capitalized exploration(1) ($ millions) |
$5 |
$11 |
$4 |
$5 |
$25 |
$27 |
Total capital expenditures and capitalized
exploration(1) ($ millions) |
$60 - 70 |
$221 - 246 |
$19 - 24 |
$17 |
$317 - 357 |
$332 - 372 |
(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 2023 is expected to increase approximately 9%
over 2022 (based on the mid-point of guidance) driven by higher
production from the Mulatos District, with La Yaqui Grande
contributing a full year of production. Production guidance for
2023 has increased 4% from previous three-year guidance provided in
January 2022 reflecting stronger outlooks for both Mulatos and
Island Gold. Production is expected to be relatively balanced
between the first and second half of the 2023.
Total cash costs and AISC are expected to decrease 6% and 5%,
respectively, from 2022 (based on the mid-point of guidance)
reflecting a full year of low-cost production from La Yaqui Grande.
Costs are expected to decrease through the year, primarily driven
by increasing grades and declining costs at Young-Davidson.
Capital spending is expected to decrease slightly from 2022 and
is consistent with previous three-year guidance for 2023.
Approximately 55% of full year capital is expected to be spent
during the first half of the year. Capital spending and costs are
expected to decline in the second half of the year, which is
anticipated to drive stronger free cash flow.
Despite significant industry-wide inflationary pressures, the
Company has maintained 2023 capital guidance and the upper end of
the range of its total cash cost and AISC guidance. Furthermore,
the Company remains on track to deliver a substantial decrease in
costs over the next three years highlighting the strength and
quality of its asset base.
2023 – 2025 Guidance: Operating Mines
|
2023 |
2024 |
2025 |
|
Current |
Previous |
Current |
Previous |
Current |
Gold
Production (000 oz) |
|
|
|
|
|
Young-Davidson |
185 - 200 |
185 - 200 |
185 - 200 |
185 - 200 |
185 - 200 |
Island Gold |
120 - 135 |
115 - 125 |
145 - 160 |
140 - 155 |
175 - 190 |
Mulatos District |
175 - 185 |
160 - 175 |
140 - 150 |
135 - 145 |
110 - 120 |
Total Gold Production (000 oz) |
480 - 520 |
460 - 500 |
470 - 510 |
460 - 500 |
470 - 510 |
|
|
|
|
|
|
Total Cash Costs(1) ($/oz) |
$825 - $875 |
$775 - $875 |
$675 - $775 |
$650 - $750 |
$650 - $750 |
All-in Sustaining Costs(1),(2)
($/oz) |
$1,125 - $1,175 |
$1,075 - $1,175 |
$975 - $1,075 |
$950 - $1,050 |
$950 - $1,050 |
|
|
|
|
|
|
Sustaining capital(1),(3) ($
millions) |
$105 - 115 |
$95 - 110 |
$105 - 115 |
$95 - 110 |
$105 - 115 |
Growth
capital(1),(3),(4)
($ millions) |
$175 - 205 |
$185 - 210 |
$185 - 215 |
$195 - 220 |
$185 - 215 |
Total sustaining & growth
capital(1),(3) (Operating mines; ex.
exploration) ($ millions) |
$280 - 320 |
$280 - 320 |
$290 - 330 |
$290 - 330 |
$290 - 330 |
(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 2024 and 2025 includes the same
assumptions for G&A and stock based compensation as included in
2023. |
(3) |
Sustaining and growth capital guidance is for producing mines and
excludes capital for Lynn Lake and other development projects, and
capitalized exploration. |
(4) |
Growth capital was revised higher by $60m in each of 2023 and 2024
to reflect the Island Gold Phase 3+ Expansion Study released on
June 29, 2022. |
Gold production is expected to remain at similar levels in 2024
and 2025, with increasing production from Island Gold offsetting a
decrease in production at Mulatos. Consistent with 2023, production
guidance for 2024 was increased reflecting stronger outlooks for
both Island Gold and Mulatos. Production guidance for 2025 excludes
any production from the higher-grade PDA project which represents
potential upside within the Mulatos District. This potential upside
is expected to be outlined in a new development plan for the
project to be completed in the second half of 2023. The completion
of the Phase 3+ Expansion at Island Gold is expected to drive a
further increase in production in 2026, with additional growth
potential from Lynn Lake beyond that.
Total cash costs and AISC are expected to improve significantly
in 2024, decreasing 15% and 11%, respectively, from 2023. This
reflects a further decrease in costs from the Mulatos District,
with La Yaqui Grande providing the majority of production, as well
as lower costs at Island Gold, reflecting the mining and processing
of higher grades. A growing contribution of low-cost production
from Island Gold is expected to drive a further decrease in costs
in 2025 such that total cash costs and AISC are expected to
decrease 22% and 18%, respectively, from 2022. Costs are expected
to decrease further in 2026 following the completion of the Phase
3+ Expansion at Island Gold.
Capital spending at existing operations (excluding Lynn Lake) is
expected to decrease slightly in 2023, primarily driven by lower
capital at Mulatos with the completion of construction of La Yaqui
Grande in 2022, offset in-part by a higher rate of capital spending
on the Phase 3+ Expansion at Island Gold. Capital spending at
existing operations is expected to remain at similar levels in 2024
and 2025 and then decrease substantially following the completion
of the Phase 3+ Expansion at Island Gold in 2026. Sustaining
capital spending at existing operations is expected to remain
relatively stable over the next several years.
(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 2022 |
Q4 2022 |
2022A |
2022E
(3) |
2023E |
2024E |
2025E |
Gold
Production (000 oz) |
148 |
45 |
192 |
185 - 200 |
185 - 200 |
185 - 200 |
185 - 200 |
Previous Guidance (000 oz) |
|
|
|
|
185 - 200 |
185 - 200 |
|
|
|
|
|
|
|
|
|
Total Cash Costs(1) ($/oz) |
$858 |
- |
- |
$850 - 900 |
$900 - 950 |
|
|
Mine-site AISC(1),(2) ($/oz) |
$1,087 |
- |
- |
$1,125 - 1,175 |
$1,175 - 1,225 |
|
|
|
|
|
|
|
|
|
|
Tonnes of ore processed (tpd) |
7,919 |
7,585 |
7,835 |
8,000 |
8,000 |
|
|
Grade processed (g/t Au) |
2.31 |
2.31 |
2.31 |
2.15 - 2.35 |
2.15 - 2.35 |
|
|
Average recovery rate (%) |
91% |
91% |
91% |
90 - 92% |
90 - 92% |
|
|
|
|
|
|
|
|
|
|
Sustaining capital(1) ($
millions) |
$34 |
- |
- |
$50 - 55 |
$50 - 55 |
|
|
Growth capital(1) ($
millions) |
$14 |
- |
- |
$5 - 10 |
$5 - 10 |
|
|
Total sustaining & growth
capital(1) (ex. exploration) ($
millions) |
$47 |
- |
- |
$55 - 65 |
$55 - 65 |
|
|
|
|
|
|
|
|
|
|
Capitalized exploration(1) ($
millions) |
$4 |
- |
- |
$4 |
$5 |
|
|
(1) |
Refer to the "Non-GAAP Measures and Additional GAAP" disclosure at
the end of this press release and the Q3 2022 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 2022 guidance announced on January 17, 2022. |
Gold production at Young-Davidson over the next three years is
expected to be consistent with 2022 and previous guidance for 2023
and 2024, reflecting similar grades and mining and processing
rates.
Grades mined and processed are expected to range between 2.15
and 2.35 grams per tonne of gold (“g/t Au”) in 2023 and remain at
similar levels through 2025. 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 and mine-site AISC are expected to increase
slightly from 2022 levels, primarily reflecting industry-wide cost
inflation. Costs are expected to remain at similar levels over the
next three years.
Capital spending in 2023 (excluding exploration) is expected to
range between $55 and $65 million, similar to 2022. Capital
spending is expected to remain at similar levels in 2024 and
2025.
Young-Davidson is expected to generate mine-site free cash flow
of approximately $100 million in 2022, a significant milestone for
the second consecutive year. Given the strong ongoing performance
of the operation since the completion of the lower mine expansion,
and with a 15-year Mineral Reserve life as of the end of 2021,
Young-Davidson is well positioned to generate similar free cash
flow in 2023 and over the long-term.
Island Gold
|
|
|
|
Guidance |
Island Gold |
Q3 YTD 2022 |
Q4 2022 |
2022A |
2022E(3) |
2023E |
2024E |
2025E |
Gold
Production (000 oz) |
93 |
41 |
134 |
125 - 135 |
120 - 135 |
145 - 160 |
175 - 190 |
Previous Guidance (000 oz) |
|
|
|
|
115 - 125 |
140 - 155 |
|
|
|
|
|
|
|
|
|
Total Cash Costs(1) ($/oz) |
$650 |
- |
- |
$550 - 600 |
$600 - 650 |
|
|
Mine-site AISC(1),(2) ($/oz) |
$941 |
- |
- |
$850 - 900 |
$950 - 1,000 |
|
|
|
|
|
|
|
|
|
|
Tonnes of ore processed (tpd) |
1,233 |
1,304 |
1,251 |
1,200 |
1,200 |
|
|
Grade processed (g/t Au) |
9.25 |
10.70 |
9.64 |
8.8 - 10.8 |
8.6 - 10.2 |
|
|
Average recovery rate (%) |
95% |
97% |
96% |
96 - 97% |
96 - 97% |
|
|
|
|
|
|
|
|
|
|
Sustaining capital(1) ($
millions) |
$26 |
- |
- |
$35 - 40 |
$45 - 50 |
|
|
Growth capital(1) ($
millions) |
$63 |
- |
- |
$145 - 160 |
$165 - 185 |
|
|
Total sustaining & growth
capital(1) (ex. exploration) ($
millions) |
$90 |
- |
- |
$180 - 200 |
$210 - 235 |
|
|
|
|
|
|
|
|
|
|
Capitalized
exploration(1) ($
millions) |
$14 |
- |
- |
$20 |
$11 |
|
|
(1) |
Refer to the "Non-GAAP Measures and Additional GAAP" disclosure at
the end of this press release and the Q3 2022 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 2022 guidance announced on January 17, 2022. |
Production guidance for Island Gold has increased 6% for 2023
and 3% for 2024, relative to previous three-year guidance,
reflecting increased grades. Gold production in 2023 is expected to
remain at similar levels as 2022 with similar grades and mining and
processing rates. As outlined in the Phase 3+ Expansion study
released in June 2022, grades mined are expected to increase in
2024, driving production higher. A further increase in grades and
increase in mining rates toward the latter part of 2025, are
expected to drive another increase in production in 2025. Mining
rates are expected to increase in 2026 following the completion of
the Phase 3+ Expansion, driving a more significant increase in
production.
Total cash costs and mine-site AISC are expected to increase
slightly in 2023 compared to 2022, reflecting industry-wide cost
inflation. Costs are expected to decrease slightly in 2024 and
2025, reflecting higher grades processed. A further decrease in
mine-site AISC is expected in 2026 and beyond following the
completion of the Phase 3+ Expansion.
Capital spending at Island Gold (excluding exploration) is
expected to be between $210 and $235 million in 2023 as spending on
the Phase 3+ Expansion ramps up. The first half of 2023 will be
focused on construction of the hoist house and headframe, with the
sinking of the shaft expected to commence in the latter part of the
year. Capital spending is expected to be weighted earlier in the
year with approximately 55% of the full year budget planned to be
spent in the first half of the year. Consistent with the Phase 3+
Study, capital spending is expected to remain at similar levels in
2024 and 2025 and then drop considerably in 2026 once the expansion
is complete.
Mulatos District
|
|
|
|
Guidance |
Mulatos District |
Q3 YTD 2022 |
Q4 2022 |
2022A |
2022E(3) |
2023E |
2024E |
2025E |
Gold
Production (000 oz) |
85.4 |
49 |
134 |
130 - 145 |
175 - 185 |
140 - 150 |
110 - 120 |
Previous Guidance (000 oz) |
|
|
|
|
160 - 175 |
135 - 145 |
|
|
|
|
|
|
|
|
|
Total Cash
Costs(1)
($/oz) |
$1,298 |
- |
- |
$1,225 - 1,275 |
$900 - 950 |
|
|
Mine-site
AISC(1),(2)
($/oz) |
$1,426 |
- |
- |
$1,325 - 1,375 |
$950 - 1,000 |
|
|
|
|
|
|
|
|
|
|
Tonnes of ore stacked - Mulatos crusher (tpd)
(4) |
16,600 |
16,100 |
16,500 |
17,000 |
15,000 - 17,000 |
|
|
Grades stacked - Mulatos (g/t Au) |
0.72 |
0.78 |
0.73 |
0.7 - 1.0 |
0.8 - 1.0 |
|
|
Recovery ratio (%) |
52% |
32% |
47% |
- |
50 - 55% |
|
|
|
|
|
|
|
|
|
|
Tonnes of ore stacked - La Yaqui Grande (tpd) |
6,159 |
11,100 |
7,800 |
- |
10,000 |
- |
- |
Grades stacked - La Yaqui Grande (g/t Au) |
1.33 |
1.43 |
1.38 |
- |
1.15 - 1.45 |
- |
- |
Recovery ratio (%) |
63 % |
79 % |
71% |
- |
80 - 85% |
- |
- |
|
|
|
|
|
|
|
|
Sustaining
capital(1)
($ millions) |
$9 |
- |
- |
$5 - 10 |
$10 |
|
|
Growth
capital(1)
($ millions) |
$47 |
- |
- |
$50 - 55 |
$5 - 10 |
|
|
Total sustaining & growth
capital(1)
(ex. exploration) ($ millions) |
$56 |
- |
- |
$55 - 65 |
$15 - 20 |
|
|
|
|
|
|
|
|
|
|
Capitalized
exploration(1)
($ millions) |
$1 |
- |
- |
- |
$4 |
|
|
(1) |
Refer to the "Non-GAAP Measures and Additional GAAP" disclosure at
the end of this press release and the Q3 2022 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 2022 guidance announced on January 17, 2022. |
(4) |
Tonnes stacked are expected to range between 15,000 – 17,000 tpd
during the first half of the year until the main Mulatos pit has
been depleted. |
Combined gold production from the Mulatos District (including La
Yaqui Grande) is expected to be between 175,000 and 185,000 ounces
in 2023. This represents a 34% increase from 2022 (based on the
mid-point of guidance) driven by a full year of low-cost production
from La Yaqui Grande. Production guidance for 2023 and 2024 has
increased 7% and 4%, respectively, from previous three-year
guidance, primarily reflecting the stacking and processing of
additional stockpiled ore during the first half of
2023.
Production from the Mulatos District will be weighted towards
the first half of 2023 with the main Mulatos pit, including El
Salto, expected to be depleted mid-year. Grades stacked at La Yaqui
Grande are also expected to decrease in the second half of the year
and range between 1.15 and 1.45 g/t Au for the full year. In
addition to ongoing production from La Yaqui Grande, the Mulatos
District will benefit from residual leaching of El Salto and
stockpiled ore at declining rates of production in the second half
of 2023, through to the middle of 2024.
Total cash costs are expected to remain relatively stable
through the year while mine-site AISC are expected to decrease in
the second half of 2023 with the majority of sustaining capital
expected to be spent during the first half of the year.
Gold production is expected to decrease to a range of 140,000 to
150,000 ounces in 2024 with La Yaqui Grande providing the majority
of production and driving a further improvement in costs.
Production guidance was increased for 2024 reflecting additional
expected production through residual leaching at Mulatos.
Production guidance for 2025 of 110,000 to 120,000 ounces is for
La Yaqui Grande only and excludes potential upside from the PDA
higher-grade underground deposit. This upside is expected to be
outlined in a new development plan for PDA to be completed in the
second half of 2023.
Grades at La Yaqui Grande are expected to average slightly below
the Mineral Reserve grade of 1.25 g/t Au in 2025 after averaging
above in 2023 and 2024. Mulatos District production is expected to
increase in 2026 reflecting higher grades at La Yaqui Grande and
the potential ramp up of production from PDA.
Capital spending is expected to total $15 to $20 million in
2023, a considerable decrease from 2022, with La Yaqui Grande
construction complete. Capital spending is expected to decrease
further in 2024 and 2025 (excluding PDA development).
2023 Global Operating and Development Capital
Budget
|
|
2023 Guidance |
2022 Guidance |
|
Sustaining Capital(1) |
Growth Capital(1) |
Total |
Total |
Operating Mines ($ millions) |
|
|
|
|
Young-Davidson |
$50 - 55 |
$5 - 10 |
$55 - 65 |
$55 - 65 |
Island Gold |
$45 - 50 |
$165 - 185 |
$210 - 235 |
$180 - 210 |
Mulatos District |
$10 |
$5 - 10 |
$15 - 20 |
$55 - 65 |
Total – Operating Mines |
$105 - 115 |
$175 - 205 |
$280 - 320 |
$290 - 330 |
Development Projects ($ millions) |
|
|
|
|
Lynn Lake |
- |
$12 |
$12 |
$11 |
Total – Development Projects |
- |
$12 |
$12 |
$15(2) |
Capitalized Exploration(1) ($
millions) |
|
|
|
|
Young-Davidson |
- |
$5 |
$5 |
$4 |
Island Gold |
- |
$11 |
$11 |
$20 |
Mulatos District |
- |
$4 |
$4 |
- |
Lynn Lake |
- |
$5 |
$5 |
$3 |
Total – Capitalized
Exploration(1) |
- |
$25 |
$25 |
$27 |
Total Consolidated Budget ($ millions) |
$105 - 115 |
$212 - 242 |
$317 - 357 |
$332 - 372 |
(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. |
(2) |
Includes $4 million of other capital largely attributed to the
Esperanza project that was sold on April 12, 2022. |
2023 Capital Budget for Lynn Lake
Capital spending on the Lynn Lake project, excluding
exploration, is expected to total $12 million. The focus will be on
advancing detailed engineering and permitting, as well as
completing an updated Feasibility Study. The Environmental Impact
Statement for Lynn Lake is expected to be approved during the first
half of 2023 after which the Company expects to release an updated
Feasibility Study. Additionally, $5 million has been budgeted for
exploration at Lynn Lake for a total capital budget of $17 million
at the project.
As part of the Company's balanced approach to growth and capital
allocation, no significant capital is expected to be spent on the
construction of Lynn Lake until the Phase 3+ Expansion at Island
Gold is well underway.
2023 Exploration Budget
The global exploration budget for 2023 is $47 million, similar
to expected spending in 2022. Mulatos District accounts for the
largest portion with an increased budget of $17 million. This is
followed by $14 million at Island Gold, $8 million at
Young-Davidson and $5 million at Lynn Lake. The increased budget at
Mulatos was partially offset by a lower exploration budget at
Island Gold reflecting an expanded underground drilling program,
which is lower cost than surface directional drilling.
Approximately 55% of the 2023 budget will be capitalized.
Mulatos District
A total of $17 million has been budgeted at Mulatos for
exploration in 2023, more than double the $7 million budget for
2022. This includes 16,000 metres (“m”) of surface exploration
drilling at PDA, a higher-grade underground deposit, adjacent to
the main Mulatos pit. PDA is comprised of five zones including
PDA1, PDA2, Gap, Victor and Estrella. The 2023 program will include
drilling at all five zones, continuing to expand on a successful
2022 drill program that extended high-grade mineralization beyond
currently defined Mineral Reserves and Resources.
Additionally, the regional exploration budget has doubled to
34,000 m with the focus on several high priority targets including
Halcon, Halcon West, Carricito, Bajios, and Jaspe.
Island Gold
A total of $14 million has been budgeted primarily for
underground exploration at Island Gold in 2023. This is down from
the 2022 budget of $22 million, reflecting the transition from
higher cost surface directional drilling to a more cost effective
expanded underground drilling program.
For the past several years, the exploration focus has been on
adding high-grade Mineral Resources at depth in advance of the
Phase 3+ Expansion study, primarily through surface directional
drilling. This exploration strategy has been successful in nearly
tripling the Mineral Reserve and Resource base since 2017 to over
five million ounces of gold. With an 18-year mine life, and with
work on the expansion ramping up, the focus will be shifting to a
more cost-effective expanded underground drilling program that will
leverage existing underground infrastructure. This drilling is much
lower cost on a per metre basis, is less technically challenging,
and requires significantly fewer metres per exploration target.
The underground exploration drilling program has been expanded
from 27,500 m in 2022 to 45,000 m in 2023. The program is focused
on defining new Mineral Reserves and Resources in proximity to
existing production horizons and infrastructure including along
strike, and in the hanging-wall and footwall. 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, further increasing the value of the
operation. To support the underground exploration drilling program,
444 m of underground exploration drift development is planned to
extend drill platforms on the 490, 790, 945, and 980-levels. In
addition to the exploration budget, 36,000 m of underground
delineation drilling has been planned and included in sustaining
capital for Island Gold.
The 2022 exploration program was successful at further extending
high-grade gold mineralization laterally and at depth within Island
East, Main and West, as well as within newly defined sub-parallel
structures adjacent to existing infrastructure. This included
extending high-grade mineralization 225 m west of existing Mineral
Reserves and Resources in Island West (97.21 g/t Au (58.55 g/t cut)
over 5.05 m (MH33-01)). High-grade gold mineralization was also
extended 160 m below Inferred Mineral Resources in Island Main in
one of the deepest intersections to date at Island Gold with a
vertical depth of 1,666 m (23.21 g/t Au over 2.50 m in drill hole
MH30-02; see press release dated November 29, 2022). With the
deposit open laterally and at depth, these results highlight the
significant potential for further growth in Mineral Reserves and
Resources .
A regional exploration program including 7,500 m of drilling is
also budgeted in 2023. The focus will be on evaluating and
advancing exploration targets outside the Island Gold Deposit on
the 15,500-hectare Island Gold property.
Young-Davidson
A total of $8 million has been budgeted for exploration at
Young-Davidson in 2023, up from $5 million in 2022. The 2023
program includes 21,600 m of underground exploration drilling, and
400 m of underground exploration development to extend drill
platforms on the 9220, 9270, and 9590-levels.
The focus of the underground exploration drilling program will
be to expand Mineral Reserves and Resources in five target areas in
proximity to existing underground infrastructure. This includes
targeting additional gold mineralization within the syenite which
hosts the majority of Mineral Reserves and Resources, as well as
within the hanging wall and footwall of the deposit where higher
grades have been previously intersected.
Through ongoing exploration success, Young-Davidson has
maintained at least a 13-year Mineral Reserve life since 2011 and
more recently increased to 15-years as of the end of 2021. With the
deposit open at depth and to the west, there is excellent potential
for this track record to continue.
In addition, 5,000 m of surface drilling is planned to test
near-surface targets across the 5,900 hectare Young-Davidson
Property.
Lynn Lake
A total of $5 million has been budgeted for exploration at the
Lynn Lake project in 2023. This includes 8,000 m of drilling
focused on several advanced regional targets, expansion of Mineral
Reserves and Resources in proximity to the Gordon deposit, as well
as the targeting and evaluation of the Burnt Timber and Linkwood
deposits. 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, 2021 and represent potential
future upside.
The other key area of focus for 2023 is the continued evaluation
and advancement of a pipeline of prospective exploration targets
within the 58,000-hectare Lynn Lake Property including the Tulune
greenfields discovery and Maynard.
Assumptions and Sensitivities
Assumptions & Expenses |
|
2023 |
Gold
price |
$/oz |
$1,650 |
Canadian
dollar |
USD/CAD |
$0.75:1 |
Mexican
peso |
MXN/USD |
20.0:1 |
Amortization |
$/oz |
$400 |
General &
Administrative(1) |
$ millions |
$25 |
(1) |
Excludes stock-based compensation. |
The 2023 to 2025 production forecast, operating cost and capital
estimates are based on a gold price assumption of $1,650 per ounce,
a USD/CAD foreign exchange rate of $0.75:1 and MXN/USD foreign
exchange rate of 20.0:1. Cost assumptions for 2024 and 2025 are
based on 2023 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 2023.
Amortization expense in 2023 is expected to total approximately
$400 per ounce, a decrease from 2022, reflecting the increase in
Mineral Reserves at all three operations announced in February
2022. General and administrative expenses in 2023 are expected to
total $25 million (excluding stock-based compensation), consistent
with 2022 spending.
Sensitivities |
2023 |
Operating Sites Local Currency Exposure |
Change |
Free Cash Flow Sensitivity
(1) |
Gold
price |
$1,650 |
- |
$100 |
~$45 - 50 million |
USD/CAD |
$0.75:1 |
95% |
$0.05 |
~$20 - 25 million |
MXN/USD |
20.0:1 |
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 75% of Canadian dollar-denominated
operating and capital costs for 2023 have been hedged, ensuring a
maximum USD/CAD foreign exchange rate of $0.77:1 and allowing the
Company to participate in weakness in the USD/CAD down to an
average rate of $0.72:1 (if the USD/CAD rate weakens beyond
$0.72:1, the average rate increases to $0.74:1).
- Mexican
peso: approximately 49% of Mexican peso-denominated
operating and capital costs in 2023 have been hedged, ensuring a
minimum MXN/USD foreign exchange rate of 20.5:1 and allowing the
Company to participate in weakness in the MXN/USD up to an average
rate of 24.9:1 (if the MXN/USD rate weakens beyond 24.9:1, the
average rate decreases to 22.7:1).
- Gold collar
contracts: The Company also periodically enters into short
term gold hedging arrangements. Currently, the Company has hedged
56,100 ounces in 2023, ensuring an average minimum gold price of
$1,765 per ounce and participation up to an average gold price of
$2,148 per ounce. This represents approximately 11% of 2023
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”, “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 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; budgets; growth
capital; sustaining capital; cash flow; gold prices; anticipated
gold production, production rates, timing of production, production
potential and growth; returns to stakeholders; effects of the La
Yaqui Grande project and production therefrom on aggregate
production and costs; the mine plan for and expected results from
the Phase 3+ expansion at Island Gold and timing of its progress
and completion; timing of completion of permitting approvals,
updated feasibility study and construction decisions at Lynn Lake
and potential growth in production resulting from the Lynn Lake
development project; completion of an updated development plan for
the Puerto Del Air (PDA) project (Mulatos); potential contribution
to production from Young Davidson West; anticipated growth in high
grade Mineral Reserves and Resources; mining processing and rates;
mined and processed gold grades and weights; mine life; reserve
life; exploration potential; 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, expected exploration and drilling targets, forecasted
cash shortfalls and the Company's ability to fund them, cost
estimates, projected exploration results, projected development and
permitting timelines, expected production rates and use of the
stockpile inventory, expected recoveries, sufficiency of working
capital for future commitments, Mineral Reserve and Mineral
Resource estimates, 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 press release, include, but are
not limited to: changes to current estimates of Mineral Reserves
and Resources; changes to production estimates (which assume
accuracy of projected ore grade, mining rates, recovery timing and
recovery rate estimates and may be impacted by unscheduled
maintenance, weather issues, labour and contractor availability and
other operating or technical difficulties); operations may be
exposed to new diseases, epidemics and pandemics, including the
ongoing and potential further effects of the global COVID-19
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 Türkiye; 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 (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.);
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);
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.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 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. “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 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”, and “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
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.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a0d24441-b588-45bc-9abd-f59b9508eecf
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