Alamos Gold Reports Fourth Quarter and Year-End 2024 Results Record production and strong margin expansion drive record free cash flow of $272 million while funding high-return growth
Alamos Gold Inc.
Brookfield Place, 181 Bay Street, Suite 3910, P.O. Box #823 Toronto, Ontario M5J 2T3 Telephone: (416) 368-9932 or 1 (866) 788-8801
All amounts are in United States dollars, unless otherwise stated.
Alamos Gold Reports Fourth Quarter and Year-End 2024 Results Record production and strong margin expansion drive record free cash flow of $272 million while funding high-return growth
Toronto, Ontario (February 19, 2025) - Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported its financial results for the quarter and year ended December 31, 2024.
“We delivered another record year operationally and financially driven by strong performances across our operations. Production grew 7% to 567,000 ounces, meeting our increased guidance and achieving a new annual record for the second consecutive year. Full year costs were in line with guidance and combined with the rising gold price, we set a number of financial records. This included record free cash flow of $272 million while funding additional high-return growth, including the Phase 3+ Expansion and our largest exploration budget ever,” said John A. McCluskey, President and Chief Executive Officer.
“Our significant investment in exploration continues to create value with global Mineral Reserves increasing 31% to 14 million ounces, including another substantial increase in higher-grade Reserves and Resources at Island Gold. We will be incorporating this growth into the Island Gold District Life of Mine Plan and Expansion Study to be released later this year that we expect will outline a larger, and more valuable operation,” Mr. McCluskey added.
Fourth Quarter and Full Year 2024 Highlights
Operational and Financial Highlights
- Produced a record 567,000 ounces of gold in 2024, in-line with the mid-point of the revised guidance and a 7% increase from 2023. This reflected the inclusion of the Magino mine after the acquisition of Argonaut Gold Inc. ("Argonaut"), as well as strong performances from the Mulatos District and Island Gold. Fourth quarter production was 140,200 ounces, in-line with quarterly guidance
- The Mulatos District produced 205,000 ounces of gold in 2024, exceeding the top end of increased guidance by 5% reflecting another outstanding performance from La Yaqui Grande. This contributed to record mine-site free cash flow1 of $239.9 million in 2024, including $53.4 million in the fourth quarter
- Island Gold produced 155,000 ounces of gold in 2024, meeting the high-end of the annual guidance range and self-funding all Phase 3+ Expansion capital and exploration initiatives during the year
- Young-Davidson produced 174,000 ounces of gold in 2024 while generating record mine-site free cash flow1 of $140.9 million, including a record $50.3 million in the fourth quarter
- Cost of sales were $751.1 million or $1,341 per ounce in 2024, and $200.9 million, or $1,422 per ounce in the fourth quarter
- Total cash costs1 of $927 per ounce and all-in sustaining costs ("AISC"1) of $1,281 per ounce for the full year were in-line with revised annual guidance. Total cash costs of $981 per ounce and AISC of $1,333 per ounce for the fourth quarter decreased from the third quarter of 2024, as previously guided reflecting lower costs at Young-Davidson and Magino
- Record financial performance achieved across all key metrics. This included record free cash flow1 of $272.3 million in 2024 while continuing to fund high-return growth initiatives including the Phase 3+ Expansion at Island Gold and a record exploration program. Fourth quarter free cash flow was $53.5 million
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- Full year sales totaled 560,234 ounces of gold at an average realized price of $2,379 per ounce, generating record annual revenues of $1.3 billion, a 32% increase from 2023. This included fourth quarter sales of 141,258 ounces of gold at an average realized price of $2,632 per ounce, generating quarterly revenues of $375.8 million, inclusive of silver sales. This represented a 48% increase from the fourth quarter of 2023 and marked the fourth consecutive quarter of record revenues
- Record annual cash flow from operating activities of $661.1 million (including $726.2 million before changes in working capital and taxes paid1, or $1.78 per share), a 40% increase from 2023. Fourth quarter cash flow from operating activities was $192.2 million (including $207.9 million before changes in working capital and taxes paid1, or $0.49 per share). Working capital in the fourth quarter was impacted by a temporary buildup of sales tax receivables in Canada, of which $14.1 million was collected in January 2025
- Adjusted net earnings1 were $328.9 million in 2024, or $0.81 per share1. Reported net earnings were $284.3 million in 2024, or $0.70 per share. Adjusted net earnings includes adjustments for unrealized losses on commodity derivatives, an impairment reversal on Young-Davidson, a net unrealized foreign exchange loss recorded within deferred taxes and foreign exchange, and other losses including transaction and integration costs on the acquisition of Argonaut
- Adjusted net earnings1 for the fourth quarter were $103.2 million, or $0.25 per share. Adjusted net earnings includes adjustments for unrealized gains on commodity hedge derivatives, net of tax, of $4.4 million, adjustments for unrealized net foreign exchange losses recorded within deferred taxes and foreign exchange of $19.6 million, and other adjustments totaling $0.4 million. Reported net earnings for the fourth quarter were $87.6 million, or $0.21 per share
- Cash and cash equivalents were $327.2 million at December 31, 2024, up from $224.8 million at the end of 2023. The Company remains in a net cash position with $250 million drawn on its credit facility (the "Facility"), the proceeds of which were used to retire debt inherited from Argonaut in the third quarter. The Company remains well-positioned to internally fund all its growth initiatives with strong ongoing free cash flow and $827.2 million of total liquidity.
- Amended and upsized the Facility from $500.0 million to $750.0 million on February 18, 2025, increasing financial capacity on more attractive terms, reflecting the growth of the Company
- Paid dividends of $41 million for the full year, based on a quarterly dividend of $0.025 per share
Mineral Reserves and Resources, Growth Projects, Acquisitions, and Other Highlights
- Issued three-year guidance on January 13, 2025, with production expected to increase 7% in 2025 to between 580,000 and 630,000 ounces, and 24% by 2027 to 680,000 to 730,000 ounces. AISC are expected to decrease 8% over that time frame, relative to 2024, driven by low-cost growth from Island Gold following the completion of the Phase 3+ Expansion in the first half of 2026
- Announced a construction decision on the Lynn Lake project in January 2025 with initial production expected during the first half of 2028. With average annual production of 176,000 ounces over its first ten years at first quartile mine-site AISC, Lynn Lake is expected to increase consolidated production to approximately 900,000 ounces per year and provide additional free cash flow growth
- The Closure Plan for the MacLellan Site (the “Closure Plan”) was approved by the province of Manitoba in January 2025 and the required permitting and pre-construction conditions have been met allowing for the start of construction on the Lynn Lake project
- Received approval of an amendment to the existing MIA by Mexico’s Secretariat of Environment and Natural Resources (“SEMARNAT”) in January 2025, allowing for the start of construction on the PDA project within the Mulatos District
- Reported year-end 2024 Mineral Reserves of 14.0 million ounces of gold (298 million tonnes ("mt")) grading 1.45 grams per tonne of gold (“g/t Au”), a 31% increase from 2023 reflecting the acquisition of Magino in 2024, continued high-grade additions at Island Gold, and an initial Mineral Reserve at Burnt Timber and Linkwood. This marked the sixth consecutive year Mineral Reserves have grown for a cumulative increase of 44%. Additionally, Measured and Indicated Mineral Resources increased 50% to 6.6 million ounces, while Inferred Mineral Resources decreased 2% to 7.1 million ounces
- Island Gold continues to be a significant driver of growth with its combined Mineral Reserve and Resources increasing 9% to 6.7 million ounces at substantially higher grades. This includes an 11% increase in Mineral Reserve grades to 11.40 g/t Au, and 13% increase in Inferred Mineral Resource grades to 16.52 g/t Au
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- Completed the acquisition of Argonaut in July 2024 through which the Company acquired the Magino mine, located adjacent to its Island Gold mine
- Completed the acquisition of Orford Mining Corporation ("Orford") in April 2024, consolidating its existing ownership of Orford and adding the highly prospective Qiqavik Gold Project, located in Quebec, Canada
- Announced a significant contribution to The Princess Margaret Cancer Foundation in September 2024 to create the new Alamos Gold Chair in Gastrointestinal Surgical Oncology. The Company will contribute $2 million to support the new Chair in making a meaningful impact on cancer research aimed at better understanding, diagnosing, and treating gastrointestinal cancers
- Alamos was recognized as a TSX30 2024 winner by the Toronto Stock Exchange in September 2024. The annual ranking recognizes the 30 top performing stocks over a three-year period. Alamos’ share price increased 134% over the trailing three-year period
- Announced the appointment of J. Robert S. Prichard as Chairman of the Board of Directors in January 2025
(1) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures.
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Highlight Summary
| Three Months Ended December 31, | Years Ended December 31, | ||
|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 |
Financial Results (in millions)
| Operating revenues | $375.8 | $254.6 | $1,346.9 | $1,023.3 |
| Cost of sales(1) | $200.9 | $166.7 | $751.1 | $637.7 |
| Earnings from operations | $158.4 | $71.9 | $561.9 | $318.1 |
| Earnings before income taxes | $157.2 | $51.2 | $502.2 | $293.7 |
| Net earnings | $87.6 | $47.1 | $284.3 | $210.0 |
| Adjusted net earnings(2) | $103.2 | $49.2 | $328.9 | $208.4 |
Adjusted earnings before interest, taxes, depreciation and $207.2 $103.6 $691.5 $487.3 amortization (2)
Cash provided by operations before working capital and taxes $207.9 $120.2 $726.2 $518.9 paid (2)
| Cash provided by operating activities | $192.2 | $124.1 | $661.1 | $472.7 |
| Capital expenditures (sustaining)(2)(3) | $30.0 | $26.6 | $110.1 | $104.2 |
| Sustaining finance leases | $5.2 | $— | $10.6 | $— |
| Free cash flow(2) | $53.5 | $14.4 | $272.3 | $123.8 |
| Capital expenditures (growth) (2) $101.2 | $73.0 | $279.5 | $216.7 |
| Capital expenditures (capitalized exploration) $7.5 | $10.1 | $28.0 | $28.0 |
Operating Results
Gold production (ounces) 140,200 129,500 567,000 529,300 Gold sales (ounces) 141,258 129,005 560,234 526,258
Per Ounce Data
Average realized gold price $2,632 $1,974 $2,379 $1,944 Average spot gold price (London PM Fix) $2,663 $1,971 $2,386 $1,941 Cost of sales per ounce of gold sold $1,422 $1,292 $1,341 $1,212 (includes amortization) (1)
Total cash costs per ounce of gold sold (2) $981 $900 $927 $850 All-in sustaining costs per ounce of gold sold (2) $1,333 $1,233 $1,281 $1,160
Share Data
| Earnings per share, basic | $0.21 | $0.12 | $0.70 | $0.53 |
| Earnings per share, diluted | $0.21 | $0.12 | $0.69 | $0.53 |
| Adjusted earnings per share, basic(2) | $0.25 | $0.12 | $0.81 | $0.53 |
| Weighted average common shares outstanding (basic) (000’s) | 420,192 | 396,577 | 408,165 | 395,509 |
Financial Position (in millions)
Cash and cash equivalents $327.2 $224.8
(1) Cost of sales includes mining and processing costs, royalties, and amortization expense.
(2) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures.
(3) Sustaining capital expenditures include sustaining capital lease expenditures at Magino, which are not included as additions to mineral property, plant and equipment in cash flows used from investing activities.
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| Three Months Ended December 31, | Years Ended December 31, | ||
|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 |
Gold production (ounces)
| Young-Davidson | 45,700 | 49,800 | 174,000 | 185,100 |
| Island Gold | 39,400 | 31,600 | 155,000 | 131,400 |
| Magino(9) | 16,200 | — | 33,000 | — |
| Mulatos District(8) | 38,900 | 48,100 | 205,000 | 212,800 |
Gold sales (ounces)
| Young-Davidson | 45,441 | 48,052 | 173,274 | 182,796 |
| Island Gold | 39,595 | 30,464 | 152,170 | 127,629 |
| Magino(9) | 16,505 | — | 31,271 | — |
| Mulatos District(8) | 39,717 | 50,489 | 203,519 | 215,833 |
Cost of sales (in millions) (1)
| Young-Davidson | $65.9 | $64.6 | $261.9 | $248.2 |
| Island Gold | $34.7 | $33.8 | $132.2 | $123.6 |
| Magino(9) | $35.4 | — | $73.9 | — |
| Mulatos District(8) | $64.9 | $68.3 | $283.1 | $265.9 |
Cost of sales per ounce of gold sold (includes amortization) (1)
| Young-Davidson | $1,450 | $1,344 | $1,511 | $1,358 |
| Island Gold | $876 | $1,110 | $869 | $968 |
| Magino(9) | $2,145 | — | $2,363 | — |
| Mulatos District(8) | $1,634 | $1,353 | $1,391 | $1,232 |
Total cash costs per ounce of gold sold (2)
| Young-Davidson | $955 | $920 | $1,047 | $938 |
| Island Gold | $594 | $775 | $592 | $669 |
| Magino(9) | $1,672 | — | $1,836 | — |
| Mulatos District(8) | $1,113 | $957 | $935 | $883 |
Mine-site all-in sustaining costs per ounce of gold sold (2)(3)
| Young-Davidson | $1,191 | $1,211 | $1,314 | $1,208 |
| Island Gold | $791 | $1,136 | $865 | $1,017 |
| Magino(9) | $2,666 | — | $2,824 | — |
| Mulatos District(8) | $1,198 | $1,030 | $1,001 | $967 |
Capital expenditures (sustaining, growth, and capitalized exploration) (in millions) (2)
| Young-Davidson(4) | $21.3 | $24.0 | $86.1 | $67.2 |
| Island Gold(5) | $83.7 | $73.9 | $257.0 | $233.1 |
| Magino(7)(9)(10) | $24.7 | — | $38.6 | — |
| Mulatos District(6)(8) | $5.3 | $8.4 | $20.1 | $30.4 |
| Other | $8.9 | $3.4 | $26.4 | $18.2 |
(1) Cost of sales includes mining and processing costs, royalties, and amortization expense.
(2) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures.
(3) For the purposes of calculating mine-site all-in sustaining costs, the Company does not include an allocation of corporate and administrative and share-based compensation expenses.
(4) Includes capitalized exploration at Young-Davidson of $2.0 million and $5.9 million for the three months and year ended December 31, 2024 ($1.3 million and $5.1 million for the three months and year ended December 31, 2023, respectively).
(5) Includes capitalized exploration at Island Gold of $1.7 million and $12.4 million for the three months and year ended December 31, 2024 ($3.3 million and $11.1 million for the three months and year ended December 31, 2023, respectively).
(6) Includes capitalized exploration at Mulatos District of $1.6 million and $7.5 million for the three months and year ended December 31, 2024 ($5.5 million and $11.8 million for the three months and year ended December 31, 2023).
(7) Includes capitalized exploration at Magino of $2.2 million and $2.2 million for the three months and year ended December 31, 2024.
(8) The Mulatos District includes La Yaqui Grande and Mulatos pit.
(9) The 2024 full year results for Magino are for Alamos’ ownership period from July 12, 2024 to December 31, 2024.
(10) Sustaining capital expenditures for Magino include certain finance leases classified as sustaining.
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Environment, Social and Governance Summary Performance
Health and Safety
- Total recordable injury frequency rate1 ("TRIFR") of 2.25 in the fourth quarter, an increase from 2.01 in the third quarter
- Lost time injury frequency rate1 ("LTIFR") of 0.09 in the fourth quarter, consistent with the third quarter
- Full year TRIFR of 1.96 and LTIFR of 0.09
During the fourth quarter of 2024, Alamos had 25 recordable injuries across its sites including one lost time injury ("LTI"). For the full year, Alamos had 84 recordable injuries across its sites including 4 LTIs.
Alamos strives to maintain a safe, healthy working environment for all, with a strong safety culture where everyone is continually reminded of the importance of keeping themselves and their colleagues healthy and injury-free. The Company’s overarching commitment is to have all employees and contractors return Home Safe Every Day.
Environment
- Zero significant environmental incidents in the fourth quarter and full year, and two minor reportable events in the fourth quarter
- Completed the connection of the Mulatos District to the national electric grid in December 2024. This has eliminated the need for on-site diesel generated power, significantly reducing ongoing greenhouse gas ("GHG") emissions
- Continued reclamation activities at Mulatos for the Cerro Pelon, El Victor and San Carlos pits
Two minor reportable events occurred during the fourth quarter. At the Magino mine, an effluent grab sample slightly exceeded the daily limit for phosphorus, which has since been rectified. The other minor reportable event was at Young-Davidson, where minor seepage was identified at the toe of the dam and quickly contained within the tailings management facility with no impact to the surrounding environment.
The Company is committed to preserving the long-term health and viability of the natural environment that surrounds its operations and projects. This includes investing in new initiatives to reduce the Company's environmental footprint with the goal of minimizing the impacts of our activities.
Community
Ongoing donations, medical support and infrastructure investments were provided to local communities, including:
- Charitable donations to shelters, food banks and gift programs to coincide with the holiday season.
- A CAD$100,000 donation was made to the Lady Dunn Health Center Foundation in Wawa, Ontario to support the purchase of a new ultrasound machine
- Various sponsorships to support youth sports, mental health programs, and equipment upgrades for local library and elementary schools
- Continued to provide local community support for student scholarships, health care, community infrastructure and recreation activities
- In January 2025, the Company committed CAD$300,000 over three years to the Museum of Northern History in Kirkland Lake, Ontario, to reopen and continue operations
The Company believes that excellence in sustainability provides a net benefit to all stakeholders. The Company continues to engage with local communities to understand local challenges and priorities. Ongoing investments in local infrastructure, health care, education, cultural and community programs remain a focus of the Company.
Governance and Disclosure
- The Mulatos District was recognized with the Vite Picazo Award from the Sonora chapter of the Association of Mining Engineers, Metallurgists and Geologists of Mexico in recognition of its strong social and environmental practices
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- Mulatos District was also the recipient of Empresa Socialmente Responsible award by the Mexican Center for Philanthropy for the 16th consecutive year
The Company maintains the highest standards of corporate governance to ensure that corporate decision-making reflects its values, including the Company’s commitment to sustainable development.
(1) Frequency rate is calculated as incidents per 200,000 hours worked.
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Outlook and Strategy
| 2025 Guidance | |||||
| Island Gold | Young- | Mulatos | |||
| District | Davidson | Lynn Lake | Total |
Gold production (000's ounces) 275 - 300 175 - 190 130 - 140 — 580 - 630 Cost of sales, including amortization (in millions)(3) $805 Cost of sales, including amortization ($ per ounce)(3) $1,330 Total cash costs ($ per ounce)(1) $725 - $775 $1,075 - $1,125 $925 -$975 — $875- $925 All-in sustaining costs ($ per ounce)(1) $1,250 - $1,300 Mine-site all-in sustaining costs ($ per ounce)(1)(2) $1,100 - $1,150 $1,390 - $1,440 $1,025 - $1,075 — Capital expenditures (in millions)
| Sustaining capital(1) | $80 - $85 | $55 - $60 | $3 - $5 | — | $138 - $150 | |
| Growth capital(1) | $270 - $300 | $15 - $20 | $37 - $40 | $100-120 | $422- $480 | |
| Total Sustaining and Growth Capital(1) | $350 - $385 | $70 - $80 | $40 - $45 | $100-120 | $560 - $630 | |
| Capitalized exploration(1) | $20 | $9 | $6 | $4 | $39 | |
| Total capital expenditures and capitalized exploration(1) | $370 - $405 | $79 - $89 | $46 - $51 | $104-124 | $599- $699 |
(1) Refer to the "Non-GAAP Measures and Additional GAAP" disclosure at the end of this press release and associated MD&A for a description of these measures.
(2) 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) 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.
The Company’s objective is to operate a sustainable business model that supports growing returns to all stakeholders over the long-term, through growing production, expanding margins, and increasing profitability. This includes a balanced approach to capital allocation focused on generating strong ongoing free cash flow while reinvesting in high-return internal growth opportunities and supporting higher returns to shareholders.
2024 Year in Review
The Company delivered another record operational and financial performance in 2024. Full year production was inline with guidance and increased 7% from 2023 to a record 567,000 ounces, reflecting the acquisition of the Magino mine in July, and strong ongoing performances from Island Gold and the Mulatos District. Through record production, sales, and gold prices, 2024 revenues increased 32% from 2023 to a record $1.3 billion. Full year costs were also in-line with guidance contributing to strong margin expansion. Through growing production and increasing margins, the Company generated record free cash flow of $272.3 million while continuing to fund its high-return growth initiatives including the Phase 3+ Expansion at Island Gold, and a record exploration program.
The Mulatos District had another strong year with production exceeding increased guidance, and the operation generating record mine-site free cash flow of $239.9 million in 2024. Young-Davidson also generated a record $140.9 million in mine-site free cash flow, marking the fourth consecutive year free cash flow has exceeded $100 million. Island Gold had another solid year on multiple fronts with production at the top end of guidance, significant progress made on the Phase 3+ Expansion, and ongoing exploration success driving another year of substantial growth in Mineral Reserves and Resources. With the strong operational performance, this significant investment in growth was all self-financed by Island Gold.
The integration of the Magino and Island Gold operations continues to advance providing significant synergies. Immediate capital savings have already been realized, with the previously planned mill and tailings expansions at Island Gold no longer required. The utilization of the larger and more efficient Magino mill to process Island Gold ore is expected to drive operating cost synergies starting in 2025 with further improvements in 2026 upon completion of the Phase 3+ Expansion. The Magino mill is expected to ramp up to 11,200 tpd by the end of the first quarter of 2025 after which it will begin processing ore from Island Gold at significantly lower processing costs.
The acquisition has also de-risked the Phase 3+ Expansion and unlocked longer term upside potential across the Island Gold District. The shaft sink has advanced to a depth of 1,000 metres as of mid-February and is expected to reach the ultimate planned depth of 1,373 metres in the third quarter. The expansion remains on track to be completed in the first half of 2026, which will be a significant driver of further free cash flow growth over the longerterm through increasing production and declining costs.
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The Company continues to advance its other high-return internal growth opportunities, including PDA and Lynn Lake. As outlined in the September 2024 development plan, PDA is an attractive, low-cost, high-return underground project with an estimated after-tax IRR of 46% at a conservative gold price of $1,950 per ounce, increasing to 73% at $2,500 per ounce. Based on its existing Mineral Reserves at year-end 2024, PDA is expected to more than triple the Mulatos District mine life to at least 2036, with excellent exploration upside. In January 2025, an amendment to the existing MIA was received allowing for the start of construction. Development activities are expected to ramp up in the second half of the year with initial production expected mid-2027.
Detailed engineering on the Lynn Lake project continued through 2024 in advance of the construction decision made in January 2025. With the Closure Plan filed, and all key permits needed to start development of the project approved, construction activities are expected to ramp up starting in the first quarter of 2025 putting first gold production on track for the first half of 2028.
Additionally, a positive internal study on the Burnt Timber and Linkwood satellite deposits was completed in February 2025 outlining a low capital intensity, high-return project that will leverage existing infrastructure from the Lynn Lake project. As satellite deposits to the Lynn Lake project, the incorporation of Burnt Timber and Linkwood is expected to extend the combined mine life, and increase longer term production rates at a low all in cost, enhancing already attractive economics.
Global Mineral Reserves and Resources continue to grow supporting this strong portfolio of growth assets. Mineral Reserves increased 31% in 2024 to 14.0 million ounces (298 mt grading 1.45 g/t Au), reflecting the addition of Magino, an initial Reserve at Burnt Timber and Linkwood, and tremendous ongoing exploration success at Island Gold. This marks the sixth consecutive year of growth in Mineral Reserves for a cumulative increase of 44% over that time frame.
Island Gold continues to be a significant driver of growth with its combined Mineral Reserve and Resources increasing 9% to 6.7 million ounces at substantially higher grades. This included a 32% increase in Mineral Reserves to 2.3 million ounces with grades increasing 11% to 11.40 g/t Au. Inferred Mineral Resources also increased 2% to 3.8 million ounces, with additions more than replacing the conversion to Mineral Reserves, while grades increased an impressive 13% to 16.52 g/t Au. Island Gold continues to establish itself as one of the highestgrade and fastest growing deposits in the world.
This growth will be incorporated into the Island Gold District Life of Mine plan to be released mid-2025 and an Expansion Study expected to be released in the fourth quarter. The growing deposit and significant increase in grades are expected to support higher average annual gold production over the longer term.
2025 Outlook
The Company provided three-year production and operating guidance in January 2025, which outlined growing production at declining costs over the next three years. Refer to the Company’s January 13, 2025 guidance press release for a summary of the key assumptions and related risks associated with the comprehensive 2025 guidance and three-year production, cost and capital outlook.
On February 1, 2025, the United States introduced tariffs on imports from countries including Canada and Mexico. In response, the Canadian and Mexican governments announced retaliatory tariffs on imports from the United States. Subsequently, all three countries postponed their previously announced tariffs for 30 days. The Company does not expect its revenue structure will be impacted by the tariffs as its gold production is refined in Canada or Europe. While there is uncertainty as to whether the tariffs or retaliatory tariffs will be implemented, and the quantum of such tariffs, the Company’s cost structure predominantly relates to input costs which are not expected to be directly affected by the tariffs, including labour and contractors. The Company will continue to monitor developments and may take steps to limit the impact of any tariffs as may be appropriate in the circumstances. The Company's cost and capital guidance released in January 2025 does not factor any potential impact from such tariffs.
Gold production in 2025 is expected to range between 580,000 and 630,000 ounces, a 7% increase from 2024 (based on the mid-point) driven by the ramp up of production at Island Gold, and a full year of operation at Magino. First quarter production is expected to be between 125,000 and 140,000 ounces at costs consistent with the top end of guidance for the first half of the year. Production is expected to increase and costs decrease into the second quarter, with a more significant improvement expected in the second half of the year.
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Total cash costs and AISC are expected to decrease slightly in 2025 compared with 2024, with costs higher in the first half of the year and decreasing in the second half of the year. AISC are expected to decrease approximately 15% in the second half of 2025, relative to the first half of the year, driven by higher grades and mining rates at Island Gold, higher grades at La Yaqui Grande, as well as a lower contribution from residual leaching from Mulatos. Production from residual leaching carries higher reported costs though is very profitable from a cash flow perspective, with the majority of these costs previously incurred and recorded in inventory.
By 2027, production is expected to increase 24% to a range of 680,000 to 730,000 ounces, and AISC to decrease 8%, relative to 2024, driven by low-cost growth from Island Gold following the completion of the Phase 3+ Expansion. A further increase in production and decrease in costs is expected into 2028 with the startup of production from Lynn Lake. With average annual production of 176,000 ounces over its first 10 years at first quartile mine-site AISC, Lynn Lake is expected to increase consolidated production to approximately 900,000 ounces per year.
Capital spending is expected to increase in 2025 reflecting the inclusion of development capital for Lynn Lake and PDA, with the start of construction on both projects in 2025, as well as the final full year of capital on the Phase 3+ Expansion. Capital spending is expected to increase modestly into 2026 with the lower capital at the Island Gold District offset by the ramp up in spending on Lynn Lake and PDA. In 2027, capital spending is expected to decrease 27% relative to 2026 driven by significantly lower capital at the Island Gold District, and the completion of construction of PDA. A further decrease in capital is expected in 2028 with the completion of construction of Lynn Lake.
The global exploration budget for 2025 is $72 million, a 16% increase from $62 million spent in 2024, and the largest in the Company's history reflecting broad based exploration success across its assets. This includes expanded exploration programs at the Island Gold District and Qiqavik, as well as significant ongoing programs at Young-Davidson and the Mulatos District.
Given the strong ongoing profitability of the Mulatos District operation, the Company expects to pay between $70 and $80 million in cash tax payments in Mexico in 2025, which includes the 2024 year-end tax payment due in the first quarter of 2025 of approximately $45 million. Additionally, as previously guided, the Company's cash flow during 2025 will be impacted by the planned delivery of 49,384 ounces into the gold prepayment facility. The ounces will be delivered monthly in 2025 (approximately 4,115 ounces per month) and recorded as revenue based on the prepay price of $2,524 per ounce. There will be no cash flow associated with the sale of these ounces in 2025, with proceeds already received in 2024.
The Company remains well positioned to fund its high-return growth projects internally with strong ongoing free cash flow, $327.2 million of cash and cash equivalents at the end of 2024, and approximately $827.2 million of total liquidity. Cash and cash equivalents increased by 12% from the third quarter driven by continued free cash flow generation. At current gold prices, the Company expects to continue generating positive free cash flow while funding its growth projects, with a significant increase in free cash flow expected following the completion of the Phase 3+ Expansion in 2026, PDA in 2027, and Lynn Lake in 2028.
10 | Alamos Gold Inc
Fourth Quarter and Year-End 2024 results
Young-Davidson Financial and Operational Review
| Three Months Ended December 31, | Years Ended December 31, | ||
|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 |
Gold production (ounces) 45,700 49,800 174,000 185,100 Gold sales (ounces) 45,441 48,052 173,274 182,796
Financial Review (in millions)
| Operating Revenues | $120.5 | $94.8 | $415.3 | $355.3 |
| Cost of sales(1) | $65.9 | $64.6 | $261.9 | $248.2 |
| Earnings from operations | $53.7 | $29.8 | $207.5 | $104.2 |
| Cash provided by operating activities | $71.6 | $59.0 | $227.0 | $184.8 |
| Capital expenditures (sustaining)(2) | $10.6 | $13.9 | $45.7 | $49.0 |
| Capital expenditures (growth)(2) | $8.7 | $8.8 | $34.5 | $13.1 |
| Capital expenditures (capitalized exploration)(2) | $2.0 | $1.3 | $5.9 | $5.1 |
| Mine-site free cash flow(2) | $50.3 | $35.0 | $140.9 | $117.6 |
| Cost of sales, including amortization per ounce of gold sold(1) | $1,450 | $1,344 | $1,511 | $1,358 |
| Total cash costs per ounce of gold sold(2) | $955 | $920 | $1,047 | $938 |
| Mine-site all-in sustaining costs per ounce of gold sold(2),(3) | $1,191 | $1,211 | $1,314 | $1,208 |
Underground Operations
| Tonnes of ore mined | 738,717 | 687,738 | 2,786,639 | 2,878,155 |
| Tonnes of ore mined per day | 8,030 | 7,475 | 7,614 | 7,885 |
| Average grade of gold(4) | 2.10 | 2.39 | 2.08 | 2.20 |
| Metres developed | 1,953 | 2,045 | 8,274 | 9,085 |
Mill Operations
| Tonnes of ore processed | 746,709 | 724,670 | 2,806,192 | 2,878,047 |
| Tonnes of ore processed per day | 8,116 | 7,877 | 7,667 | 7,885 |
| Average grade of gold(4) | 2.10 | 2.38 | 2.08 | 2.20 |
| Contained ounces milled | 50,325 | 55,412 | 187,321 | 203,791 |
| Average recovery rate | 91% | 91% | 91% | 90% |
(1) Cost of sales includes mining and processing costs, royalties and amortization.
(2) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures.
(3) For the purposes of calculating mine-site all-in sustaining costs, the Company does not include an allocation of corporate and administrative and share based compensation expenses.
(4) Grams per tonne of gold ("g/t Au").
Operational review
Young-Davidson produced 45,700 ounces of gold in the fourth quarter, 8% lower than the prior year period with lower grades mined partially offset by stronger mining rates. Production for the full year totaled 174,000 ounces, slightly below guidance and the prior year, due to lower tonnes and grades mined.
Mining rates averaged 8,030 tonnes per day ("tpd") in the fourth quarter, in-line with guidance and a 7% increase compared to the prior year period. Mining rates averaged 7,614 tpd for the full year, reflecting temporary lower scoop availability earlier in the year.
Milling rates averaged 8,116 tpd in the fourth quarter, 3% higher than the prior year period. For the full year, milling rates averaged 7,667 tpd, 3% lower than the prior year. Milling rates for both the fourth quarter and full year were consistent with mining rates. For the fourth quarter, milled grades averaged 2.10 g/t Au, up slightly from the third quarter. Mill recoveries averaged 91% for the fourth quarter and full year, in-line with annual guidance.
Financial Review
Revenues increased to $120.5 million in the fourth quarter, 27% higher than the prior year period, driven by higher realized gold prices, partially offset by lower ounces sold. Similarly, revenues for the full year of $415.3 million were 17% higher than the prior year with higher realized gold prices partially offset by lower ounces sold.
11 | Alamos Gold Inc
Cost of sales were $65.9 million in the fourth quarter, marginally higher than the prior year period. Cost of sales were $261.9 million for the full year, a 6% increase compared to the prior year, primarily driven by labour inflation.
Total cash costs were $955 per ounce in the fourth quarter, a 4% increase compared to the prior year period. Total cash costs were $1,047 per ounce for the full year, higher than the prior year as a result of inflation, but in-line with annual guidance.
Mine-site AISC were $1,191 per ounce for the fourth quarter, a 2% decrease compared to the prior year period due to timing of sustaining capital expenditures. Mine-site AISC averaged $1,314 per ounce for the full year, above the prior year and annual guidance reflecting higher sustaining capital per ounce.
Capital expenditures in the fourth quarter totaled $21.3 million, including $10.6 million of sustaining capital and $8.7 million of growth capital. Additionally, $2.0 million was invested in capitalized exploration during the quarter. Capital expenditures, inclusive of capitalized exploration, totaled $86.1 million for the full year.
Young-Davidson generated record mine-site free cash flow of $50.3 million in the fourth quarter, and a record $140.9 million for 2024. This marked the fourth consecutive year the operation has generated more than $100 million of mine-site free cash flow. With a 14-year Mineral Reserve life, Young-Davidson is well positioned to generate similar levels of free cash flow over the long-term.
12 | Alamos Gold Inc