AGI.TO · 2017-12-14 12:00:00

Alamos Gold Announces Positive Feasibility Study for the Lynn Lake Project

Economic Studies

ALAMOS GOLD INC.

Brookfield Place, 181 Bay Street, Suite 3910, P.O. Box #823

Toronto, Ontario, Canada M5J 2T3

Telephone: (416) 368-9932 or 1 (866) 788-8801

All amounts are in United States dollars, unless otherwise stated.

F O R I M M E D I A T E R E L E A S E

W E B S I T E : w w w . a l a m o s g o l d . c o m T R A D I N G S Y M B O L : T S X : A G I N Y S E : A G I

Alamos Gold Announces Positive Feasibility Study for the Lynn Lake Project

Toronto, Ontario (December 14, 2017) – Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos”

or the “Company”) today reported results from the positive feasibility study conducted on its

Lynn Lake Gold Project (“Lynn Lake”), located in Manitoba, Canada. All amounts are in

United States dollars, unless otherwise stated.

Feasibility Study Highlights

 Declared an initial Proven and Probable mineral reserve of 26.8 million tonnes (“Mt”)

grading 1.89 grams per tonne of gold (“g/t Au”), containing 1.6 million ounces of gold

 Average annual gold production of 170,000 ounces over the first six years and 143,000

ounces over the first 10 years with life of mine production of 1.5 million ounces

 Life of mine total cash costs of $645 per ounce of gold and attractive mine-site all-in

sustaining costs of $745 per ounce

 Initial capital estimate of $338 million and total life of mine capital, including sustaining

capital and reclamation costs, of $486 million

 After-tax net present value (“NPV”) of $123 million at a 5% discount rate and an after-

tax internal rate of return (“IRR”) of 12.5%, representing a 4.6 year payback using base

case gold and silver price assumptions of $1,250 and $16.00 per ounce, respectively

and a USD/CAD foreign exchange rate of $0.75:1

 The Company has also identified a number of opportunities to enhance the overall

economics of the project through an evaluation of a smaller, higher grade mine plan,

employing contract mining, and incorporating exploration success over the past year

which has not be factored into the feasibility study

“We acquired the Lynn Lake project in 2016 for $20 million and with the completion of the

feasibility study, have outlined solid base case economics for the project with an after-tax net

present value over $120 million. As we advance the project through permitting over the next

two years, we see excellent potential to further enhance its overall economics through a

number of avenues, including incorporating recent exploration success. We expect stronger

economics prior to making a construction decision. With its location in one of the best mining

jurisdictions in the world, Lynn Lake is an important piece of our longer term growth strategy,”

said John A. McCluskey, President and Chief Executive Officer.

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1. Average annual production excludes pre-commercial production

2. Reported waste-to-ore ratio is over the life of mine and includes overburden as waste. The waste-to-ore ratio during commercial

production is 7.06:1

3. Total unit cost per tonne (“t”) of ore includes royalties and silver as a by-product credit

4. Total cash costs and mine-site all-in sustaining costs include royalties and silver as a by-product credit

Feasibility Study Highlights - December 2017

Production

Mine life (years) 10.4

Total gold production (000 ounces) 1,495

Total silver production (000 ounces) 1,263

Average annual gold production 1

Years 1 to 6 (000 ounces) 170

Years 1 to 10 (000 ounces) 143

Total ore mined (000 tonnes) 26,803

Total waste mined (000 tonnes) 195,188

Total material mined (000 tonnes) 221,991

Waste-to-ore ratio 2 7.28

Average grade (grams per tonne)

Gold 1.89

Silver 2.99

Recovery (%)

Gold (Average MacLellan and Gordon) 92%

Silver (MacLellan only) 49%

Average mill throughput (tonnes per day (“tpd”)) 7,000

Operating Costs

Total cost per tonne of ore3 $36.06

Total cash cost (per ounce sold) 4 $645

Mine-site all-in sustaining cost (per ounce sold) 4 $745

Capital Costs (millions)

Pre-production capital expenditure $338.0

Sustaining capital expenditure $126.6

Reclamation costs $21.1

Total capital expenditure $485.6

Base Case Economic Analysis

IRR (after-tax) 12.5%

NPV @ 0% discount rate (millions, after-tax) $279.0

NPV @ 5% discount rate (millions, after-tax) $123.4

Gold price assumption (average, per ounce sold) $1,250

Silver price assumption (average, per ounce sold) $16.00

Exchange Rate (US Dollar/Canadian Dollar) 0.75

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Mineral Reserves and Resources

An initial Proven and Probable Mineral Reserve totaling 26.8 Mt, grading 1.89 g/t Au and 2.99

g/t Ag, containing 1.6 million ounces of gold and 2.6 million ounces of silver has been

declared at Lynn Lake reflecting the successful conversion of Measured, Indicated and

Inferred Mineral Resources at the Gordon and MacLellan deposits. Only Mineral Reserves

have been incorporated into the mine plan and economic analysis.

Mineral Reserves – Effective as of December 1, 2017

Classification Tonnage

(Mt)

Au Grade

(g/t)

Ag Grade

(g/t)

Au Oz

Contained

(x1000)

Ag Oz

Contained

(x1000)

Gordon Proven 2.31 2.82 210

Probable 6.41 2.27 468

Proven & Probable 8.72 2.42 678

MacLellan Proven 9.55 1.91 5.01 586 1,539

Probable 8.53 1.32 3.79 361 1,039

Proven & Probable 18.08 1.63 4.43 947 2,578

Total Lynn

Lake

Proven 11.86 2.09 4.03 796 1,539

Probable 14.94 1.73 2.16 829 1,039

Total Proven and Probable 26.80 1.89 2.99 1,625 2,578

 Mineral Reserves reported are in agreement with the CIM Definition Standards for Mineral Resources and Mineral Reserves

 The Mineral Reserve is estimated using metal prices of US$1,250/Au oz and US$15.00/Ag oz.

 Totals may not add up due to rounding.

 The estimates were carried out using cut-off grades of 0.69 Au g/t for Gordon and 0.47 Equivalent Au g/t for MacLellan and

a metallurgical Au recovery of 89-94% for Gordon and 91-92% for MacLellan.

 The estimate of Mineral Reserves was carried out under the supervision of Efthymios Koniaris, PhD., P.Eng. of Q’Pit Inc.

Mineral resources from the Gordon and MacLellan deposits detailed below have not currently

been included in the mine plan but represent potential upside through their incorporation into

the mine plan with higher metal prices and additional infill drilling.

Open Pit Mineral Resources – Effective as of December 1, 2017

MacLellan

Category Tonnage

(Mt)

Au Grade

(g/t) Ag Grade (g/t)

Au oz

Contained

(x1000)

Ag oz

Contained

(x1000)

Measured 2.11 1.86 5.34 126 362

Indicated 2.24 1.24 4.24 89 305

Measured & Indicated 4.35 1.57 4.77 215 667

Inferred 0.75 1.62 2.80 39 67

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Gordon

Category

Tonnage

(Mt)

Au Grade

(g/t)

Ag Grade (g/t) Au oz

Contained

(x1000)

Ag oz

Contained

(x1000)

Measured 2.12 1.86 5.31 127 362

Indicated 2.69 1.36 3.53 118 305

Measured & Indicated 4.81 1.58 4.32 244 667

Inferred 1.37 1.48 1.53 68 67

 The Mineral Resources are reported at an assumed gold price of US$1,400/ounce, and an assumed silver price of

US$22.00/ounce

 The Mineral Resource estimate was completed by Mr. Jeffrey Volk, CPG, FAusIMM, Director of Reserves and Resources

for Alamos Gold Inc.

 Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that

all or any part of the Mineral Resources estimated will be converted into Mineral Reserves.

 Mineral Resources are stated as contained within potentially economically o pen pit above a 0.4 2 g/t AuEq cut -off for

MacLellan and a 0.62 g/t Au cut-off for Gordon. Mineral Resources include external dilution from outside the 0.50 g/t Au

grade solid.

 Numbers may not add due to rounding.

 Mineral Resources are exclusive of Mineral Reserves.

Economic Analysis

Lynn Lake’s estimated base case after-tax IRR is 12.5% and after-tax NPV is $123 million,

using a 5% discount rate based on an economic analysis conducted as part of the Feasibility

Study. This represents a 4.6 year payback assuming a gold price of $1,250 per ounce, a

USD/CAD foreign exchange rate of $0.75:1, and incorporates only Proven and Probable

mineral reserves. The project economics are sensitive to metal price assumptions and input

costs as detailed in the tables below.

Lynn Lake After-Tax NPV (5%) Sensitivity ($ Millions)

-10% -5% Base Case 5% 10%

Gold Price $36.5 $83.2 $123.4 $166.8 $206.1

Canadian Dollar $186.0 $156.9 $123.4 $93.5 $57.2

Capital Costs $154.4 $139.2 $123.4 $107.5 $97.5

Operating Costs $169.0 $146.7 $123.4 $99.7 $81.4

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Lynn Lake After-Tax NPV (5%) and IRR Sensitivity to Gold Price

Gold Price After-Tax NPV5% ($M) After-Tax IRR (%)

$1,100 $17.5 6.1%

$1,200 $92.7 10.6%

$1,250 $123.4 12.5%

$1,300 $158.3 14.5%

$1,400 $222.7 18.0%

$1,500 $289.8 21.5%

Project Overview

The Lynn Lake project is comprised of the Gordon and MacLellan deposits which are located

approximately 30 kilometres (“km”) apart (straight line). The two deposits will be mined using

conventional open pit mining methods with a centralized processing plant and tailings

management facility to be located at MacLellan.

Permitting

The Project Description for Lynn Lake was submitted to the Canadian Environmental

Assessment Agency (CEAA) in July 2017, initiating the federal Environmental Assessment

(EA) process. Final Guidelines for the Preparation of an Environmental Impact Study (EIS)

were received in November 2017. An EIS document is currently being prepared that will be

submitted to satisfy federal and provincial EA requirements. The EIS is being prepared

utilizing environmental baseline information that has been compiled through extensive field

investigations over a two-year period. The Company has also engaged area First Nation

communities and Métis organizations in its project planning activities. The permitting process

is expected to take approximately two years followed by two years of construction.

Mining

Both the Gordon and MacLellan deposits will be developed using conventional shovel/truck

open pit mining methods with owner mining assumed within the Feasibility Study. The Gordon

and MacLellan deposits are expected to operate concurrently for the first six years of

operation, with Gordon to be depleted first given its higher grades and lower stripping ratio. As

the Gordon pit nears depletion, mining equipment will be transferred to MacLellan and utilized

over the remainder of its mine life.

Following a one year pre-production period at Gordon and two-year pre-production period at

MacLellan, combined mining rates are expected to range between 20.5 and 27.0 Mt of

material per year over the first seven years. This includes peak mining rates of 13 Mt at

Gordon and 24.7 Mt at MacLellan.

Loading of ore and waste rock is planned to be carried out with two 300 t class hydraulic

shovels and two front end loaders, paired primarily with 144 t capacity mine trucks. Ore from

MacLellan will be hauled to the primary crusher (located to the south of the pit). All ore from

Gordon will be transported approximately 55 km to the process facility at MacLellan via a fleet

of 23 highway trucks, each with a capacity of approximately 30 t.

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Processing, Metallurgy and Infrastructure

Lynn Lake’s process plant has been designed as a conventional milling operation with a

nominal capacity of 7,000 tpd. The proposed plant design is based on leach/carbon in pulp

(“CIP”), and will consist of crushing, grinding, thickening, pre-aeration and leaching, CIP,

cyanide detoxification, carbon elution and regeneration, and gold smelting.

The flow sheet incorporates the following major process operations:

 Two-stage crushing and stockpile,

 Semi-autogenous grinding (SAG),

 Ball mill grinding and classification,

 Leaching and CIP adsorption,

 Desorption and gold room,

 Tailings detoxification and disposal,

 Fresh and reclaim water supply, and

 Reagent preparation and distribution

Based on test work, gold recoveries from Gordon are expected to average 92.9% and gold

and silver recoveries from MacLellan are expected to average 91.4% and 49%, respectively.

Over the life of mine, combined gold recoveries are expected to average 92.0%.

Power to the MacLellan site, which will host all the process facilities and major infrastructure,

will be supplied from Manitoba Hydro through the commercial electricity grid. The existing

power line to the Town of Lynn Lake will be modified from 69kV to 138 kV, and a 7 km 138kV

overhead line will be built to the MacLellan site.

The G ordon site ’s electrical demands will be met by two 300 kW diesel generators in

duty/standby configuration.

The tailings management facility (“TMF”) will be constructed approximately 3 km northeast of

the planned open pit and plant site at MacLellan. Additional dam raises are planned for years

two, six and nine to accommodate the life of the mining operation. The majority of operational

water required for the process plant will be reclaimed from the TMF.

Operating Costs

Total cash costs are expected to average $645 per ounce and mine-site all-in sustaining costs

$745 per ounce, net of silver as a by-product credit over the life of mine. Total operating costs

are expected to average $36.06 per tonne of ore processed. This includes average mining

costs of $2.21 per tonne of material mined across the Gordon and MacLellan deposits and

haulage costs of $7.45 per tonne of ore from the Gordon deposit.

The breakdown of unit costs is summarized as follows.

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Operating Cost1 $/t Processed LOM $M

Mining2 $17.77 $470.5

Haulage3 $2.43 $64.5

Processing $10.84 $287.1

G&A $5.33 $141.1

Refining, Transport, Royalties and Ag Credit ($0.31) ($8.2)

TOTAL Operating Costs $36.06 $954.9

1. Operating costs exclude working capital

2. Average mining cost during the production period is $ 2.21/t mined with a strip ratio of 7.06:1 (7.28:1 including pre -

commercial production)

3. Haulage costs are reported per total tonne milled. Haulage costs per tonne of Gordon ore hauled average $7.45

Royalty

There is a third-party royalty on a portion of the production in the first two years coming from

the Gordon deposit which totals approximately $8.1 million.

Capital Costs

The initial capital cost for the Lynn Lake project is $338 million. The main components of this

include pre-production mining activities, site preparation, construction of the process plant and

tailings management facility and other onsite and offsite infrastructure. The Feasibility Study

assumes capital leasing of mobile equipment. The onsite pre-production period spans 24

months.

Camp infrastructure to accommodate the workforce will be located within the Town of Lynn

Lake and will be utilized throughout the construction and operations phases.

A breakdown of the capital requirements is detailed as follows.

Capital Cost ($ Millions)

Mining $61.3

Process Plant $72.3

Utilities and Services $17.1

Onsite Infrastructure $41.9

Offsite Infrastructure $24.5

Tailings Management $17.1

Indirects $40.9

EPCM $21.7

Owner's Cost $12.2

Contingency $28.8

Total Initial Capital $338.0

Sustaining Capital $126.6

Reclamation and Closure Costs $21.1

Total Capital $485.6

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Taxes

The Lynn Lake project will be subject to provincial, federal and mining taxes. Over the 11

year mine life, Lynn Lake is expected to pay total taxes of approximately $131 million for an

effective tax rate of approximately 32%, with no taxes payable until year four.

Additional Opportunities

Incorporating exploration success to date and ongoing potential

Alamos has a large exploration package with more than 40,000 hectares of mineral tenure in

northern Manitoba covering the majority of the Lynn Lake Greenstone Belt. This belt consists

of the Northern Agassiz Shear (55 km long) and Southern Johnson Shear (40 km long)

complexes (see Figure 1 at the end of this press release).

Since consolidating ownership of Lynn Lake in early 2016, the primary exploration focus has

been on infill drilling the main deposits (MacLellan and Gordon), re-assessment of the data,

structural and vein studies, reprocessing and re-interpretation of geophysics, mappings and

sampling and target generation. More recently, additional scout drilling programs along strike

from known deposits has also been undertaken.

The Feasibility Study has not incorporated exploration success over the past year including

newly outlined mineralization adjacent to both the Gordon and MacLellan pits. Both have the

potential to increase the mineable ounces within the mine plan. Drilling from the Burnt Timber

deposit has also yielded encouraging results.

MacLellan

Drilling to the northeast has identified a new zone of mineralization along strike and adjacent

to the MacLellan pit. This zone and the following intercepts are located outside of existing

mineral reserves and resources in the pit wall in an area defined as waste. Additional drilling

will be completed to further assess this new zone during the winter freeze when access is

possible.

Previously released highlight intercepts include:

 17MCX003: 10.5 metres (“m”) at 1.49 g/t Au (71.0 – 81.5 m) and 39.0 m at 1.78 g/t Au

(89.0 - 128.0 m)

 17MCX012: 18.5 m at 3.67 g/t Au (8.0 – 26.5 m)

 17MCX013: 13.5 m at 2.58 g/t Au (34.0 – 47.5 m)

 17MCX014: 38.0 m at 2.03 g/t Au (67.5 – 105.5 m)

 17MCX019: 7.0 m at 3.57 g/t Au (148.5 – 155.5 m) and 16.0 m at 6.68 g/t Au (169.0 –

185.0 m)

Gordon

Similar to MacLellan, drilling immediately south of the Gordon mine area has identified

mineralization outside of current mineral reserves and resources, in an area in the pit wall

defined as waste. The higher grade nature of some of these intercepts including, 20.69 g/t Au

over 6.1 m (17FLX007, previously released), outline the potential for additional high-grade

mineralization. Follow up drilling and study is scheduled for the winter drilling season.

 17FLX007: 2.6 m at 8.36 g/t Au (1.6 - 4.2 m), 6.1 m at 20.69 g/t Au (14.4 - 20.5 m) and

4.0 m at 5.97 g/t Au (126.5 - 130.5 m)

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