Alamos Gold Reports First Quarter 2023 Results Strong operational performance drives record quarterly revenues and growing cash flow from operations
Alamos Gold Reports First Quarter 2023 Results
Strong operational performance drives record quarterly revenues and growing cash flow from operations
TORONTO, April 26, 2023 -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported its
financial results for the quarter ended March 31, 2023.
“Following up on a strong performance in 2022, we had an excellent start to the year operationally and financially. Production
exceeded our first quarter guidance and costs were once again in line with guidance. All three operations continue to perform
well, including another standout performance from La Yaqui Grande, the key driver of our expected production growth and
decrease in costs this year,” said John A. McCluskey, President and Chief Executive Officer.
“Financially, we generated record quarterly revenues and our operating cash flow increased 16% from the fourth quarter,
marking the fourth consecutive quarterly increase. With declining costs and expanding margins over the next several years,
this is a trend we expect to continue, supporting strong free cash flow generation while completing the Phase 3+ Expansion at
Island Gold. Our growth initiatives continue to advance with the Phase 3+ Expansion on track for completion in 2026 and
having achieved a significant permitting milestone with the approval of the Environmental Impact Statement for Lynn Lake, an
important part of our longer-term growth strategy. With all of this growth coming in Canada, we remain uniquely positioned as
a growing intermediate gold producer with declining costs, increasing profitability, and one of the lowest political risk profiles in
the sector,” Mr. McCluskey added.
First Quarter 2023
• Produced 128,400 ounces of gold, exceeding quarterly guidance and marking a 30% increase from the first quarter of
2022, driven by a significant increase in production from the Mulatos District
• Mulatos District production more than doubled from the first quarter of 2022 to 50,500 ounces, at substantially lower
costs, with La Yaqui Grande driving a significant increase in mine-site free cash flow to $36.8 million
• Island Gold produced 32,900 ounces, a 34% increase from the first quarter of 2022, while continuing to make significant
progress on the Phase 3+ Expansion including the start of construction of the hoist house and other shaft infrastructure
• Young-Davidson produced 45,000 ounces and generated mine-site free cash flow 1 of $16.3 million with mining rates
averaging 8,010 tonnes per day, in line with guidance
• Sold 132,668 ounces of gold at an average realized price of $1,896 per ounce, for record quarterly revenues of $251.5
million. The average realized gold price was $6 per ounce above the London PM fix for the quarter
• Total cash costs 1 of $821 per ounce, and all-in sustaining costs ("AISC" 1) of $1,176 per ounce were 17% and 14%
lower than the first quarter of 2022, respectively, reflecting low-cost production growth from La Yaqui Grande. Total cash
costs were slightly below annual guidance, while AISC were at the top end of annual guidance, reflecting higher stock
based compensation charges resulting from the increase in the Company's share price in the period
• Realized adjusted net earnings 1 for the quarter of $45.4 million, or $0.12 per share 1. Adjusted net earnings includes
adjustments for net unrealized foreign exchange gains recorded within both deferred taxes and foreign exchange of $4.1
million, partially offset by other losses totaling $1.1 million
• Reported net earnings of $48.4 million
• Generated cash flow from operating activities of $94.3 million ($127.2 million, or $0.32 per share, before changes in
working capital 1). Working capital in the quarter was impacted by a temporary build up of sales tax receivables in
Canada, of which $20 million was collected subsequent to quarter end in April
• Free cash flow 1 of $10.5 million was impacted by the above noted delay in collecting sales tax receivables. The $20
million collected in April is expected to contribute to stronger free cash flow in the second quarter. The Company
expects to continue generating strong free cash flow over the next several years while funding the Phase 3+ Expansion
at Island Gold
• Paid a quarterly dividend of $9.8 million, or $0.025 per share (annualized rate of $0.10)
• Cash and cash equivalents increased to $133.8 million, and equity securities increased to $25.8 million. The Company
remains debt free
• Achieved a significant permitting milestone for the Lynn Lake project with a positive Decision Statement issued by the
Ministry of Environment and Climate Change Canada based on the completed Federal Environmental Impact
Statement, and Environment Act Licenses issued by the Province of Manitoba
• Reported year-end 2022 Mineral Reserves of 10.5 million ounces of gold, a 2% increase from the end of 2021 having
more than replaced mining depletion for the fourth consecutive year. Mineral Reserve grades also increased 3% driven
by higher grade additions at Island Gold and Mulatos. Additionally, Measured and Indicated Mineral Resources
increased 14% to 3.9 million ounces and Inferred Mineral Resources increased 2% to 7.1 million ounces
• Announced that the Company has entered into a definitive agreement to acquire Manitou Gold Inc., which is expected
to more than triple the regional land package adjacent to and along strike from Island Gold, adding significant
exploration potential across the Michipicoten Greenstone Belt
• Announced the appointment of Greg Fisher as Chief Financial Officer effective May 1, 2023
(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.
Highlight Summary
Three Months Ended March 31,
2023 2022
Financial Results (in millions)
Operating revenues $251.5 $184.5
Cost of sales (1) $155.2 $135.5
Earnings (loss) from operations $75.0 ($5.7)
Earnings (loss) before income taxes $72.2 ($14.3)
Net earnings (loss) $48.4 ($8.5)
Adjusted net earnings (2) $45.4 $18.0
Earnings before interest, depreciation and amortization (2) $119.9 $62.9
Cash provided by operations before working capital and taxes paid(2) $127.2 $70.9
Cash provided by operating activities $94.3 $46.5
Capital expenditures (sustaining) (2) $26.9 $22.5
Capital expenditures (growth) (2) (3) $52.0 $58.7
Capital expenditures (capitalized exploration) (4) $4.9 $6.1
Free cash flow (2) $10.5 ($40.8)
Operating Results
Gold production (ounces) 128,400 98,900
Gold sales (ounces) 132,668 98,466
Per Ounce Data
Average realized gold price $1,896 $1,874
Average spot gold price (London PM Fix) $1,890 $1,874
Cost of sales per ounce of gold sold (includes amortization) (1) $1,170 $1,376
Total cash costs per ounce of gold sold (2) $821 $992
All-in sustaining costs per ounce of gold sold (2) $1,176 $1,360
Share Data
Earnings (loss) per share, basic and diluted $0.12 ($0.02)
Adjusted earnings per share, basic(2) $0.12 $0.05
Weighted average common shares outstanding (basic) (000’s) 393,960 391,913
Weighted average common shares outstanding (diluted) (000’s) 396,954 391,913
Financial Position (in millions)
Cash and cash equivalents(5) $133.8 $129.8
(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) Includes growth capital from operating sites.
(4) Includes capitalized exploration at Island Gold, Young-Davidson and Mulatos District.
(5) Comparative cash and cash equivalents balance as at December 31, 2022.
Three Months Ended March 31,
2023 2022
Gold production (ounces)
Young-Davidson 45,000 51,900
Island Gold 32,900 24,500
Mulatos District (7) 50,500 22,500
Gold sales (ounces)
Young-Davidson 45,676 51,525
Island Gold 33,727 23,368
Mulatos District 53,265 23,573
Cost of sales (in millions)(1)
Young-Davidson $61.9 $64.6
Island Gold $30.9 $24.2
Mulatos District $62.4 $46.7
Cost of sales per ounce of gold sold (includes amortization) (1)
Young-Davidson $1,355 $1,254
Island Gold $916 $1,036
Mulatos District $1,172 $1,981
Total cash costs per ounce of gold sold (2)
Young-Davidson $941 $840
Island Gold $629 $745
Mulatos District $839 $1,570
Mine-site all-in sustaining costs per ounce of gold sold (2),(3)
Young-Davidson $1,233 $1,044
Island Gold $970 $1,083
Mulatos District $914 $1,782
Capital expenditures (sustaining, growth, capitalized exploration) (in millions) (2)
Young-Davidson (4) $17.4 $22.7
Island Gold (5) $57.0 $33.4
Mulatos District (6) $5.7 $26.0
Other $3.7 $5.2
(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 $1.4 million for the three months ended March 31, 2023 ($1.0 million for
the three months ended March 31, 2022).
(5) Includes capitalized exploration at Island Gold of $2.4 million for the three months ended March 31, 2023 ($5.1 million for
the three months ended March 31, 2022).
(6) Includes capitalized exploration at Mulatos District of $1.1 million for the three months ended March 31, 2023 ($nil for the
three months ended March 31, 2022).
(7) The Mulatos District includes both the Mulatos pit, as well as La Yaqui Grande.
Environment, Social and Governance Summary Performance
Health and Safety
• Total recordable injury frequency rate1("TRIFR") of 1.57, up from 1.26 in the fourth quarter of 2022, and in line with the
2022 average of 1.59
• Lost time injury frequency rate1 ("LTIFR") of 0.00, a 100% decrease from the fourth quarter of 2022
During the first quarter of 2023, the TRIFR increased with 17 recordable injuries, three more than the prior quarter. There were
zero lost time injuries recorded in the quarter. 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 and zero reportable spills in the first quarter of 2023
• Receipt of a positive Decision Statement from the Minister of Environment and Climate Change Canada for completion
of the federal Environmental Impact Statement (EIS) for the Lynn Lake Project
• Receipt of Environment Act Licenses from the Province of Manitoba for the Lynn Lake Project
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 our environmental footprint with the goal of
minimizing the environmental impacts of our activities and offsetting any impacts that cannot be fully mitigated or rehabilitated.
Community
• Completion of a Definitive Agreement with Batchewana First Nation with respect to Island Gold, recognizing positive and
ongoing collaboration and engagement
In addition, ongoing donations, medical support and infrastructure investments were provided to local communities, including:
• Donation to the Wawa Adult Learning Centre, supporting the skills and training needs of adult learners in north Algoma,
Ontario
• Donations to restore and upgrade the Elk Lake Playground, support Zack’s Crib for homeless housing in New Liskeard,
purchase of new gym equipment for the Matachewan township, and complete building repairs for the “Le Coeur du
Village” community centre in Earlton, Ontario
• Various donations to support annual fish derbies in communities around Island Gold and Young-Davidson
• Ongoing social investments to support public health, education, road maintenance, and community infrastructure
around the Mulatos mine
• Scholarship payments and bursaries for students living near Mulatos and Young-Davidson
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
• Publication of Alamos' annual Women in Mining newsletter, showcasing a selection of leaders from across the
Company
• Alamos Gold’s CEO John McCluskey was awarded the 2023 Viola R. MacMillan Award by the Prospectors &
Developers Association of Canada, in recognition of John’s leadership and Alamos’ willingness to take risks in the
acquisition and development of Island Gold in Northern Ontario
• Recipient of the Empresa Socialmente Responsible Award from the Mexican Center for Philanthropy for the 15th
consecutive year
• Alamos was the joint winner of the 2023 Best in Sector (Materials) Award by IR Magazine Canada Awards
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. During the quarter, the Company continued to
advance its implementation of the Responsible Gold Mining Principles, developed by the World Gold Council as a framework
that sets clear expectations as to what constitutes responsible gold mining. Alamos’ 2022 Report on Conformance to the
Responsible Gold Mining Principles and independent limited assurance report will be published in the second quarter of 2023.
(1) Frequency rate is calculated as incidents per 200,000 hours worked.
Outlook and Strategy
2023 Guidance
Young-
Davidson Island Gold Mulatos Lynn Lake Total
Gold production (000’s ounces) 185 - 200 120 - 135 175 - 185 480 - 520
Cost of sales, including amortization (in
millions)(3) $625
Cost of sales, including amortization ($ per
ounce)(3) $1,250
Total cash costs ($ per ounce)(1) $900 - $950 $600 - $650 $900 - $950 — $825- $875
All-in sustaining costs ($ per ounce)(1)
$1,125 -
$1,175
Mine-site all-in sustaining costs ($ per ounce)(1)
(2)
$1,175 -
$1,225 $950 - $1,000 $950 - $1,000 —
Capital expenditures (in millions)
Sustaining capital(1) $50 - $55 $45 - $50 $10 — $105 - $115
Growth capital(1) $5 - $10 $165 - $185 $5 - $10 $12 $187 - $217
Total Sustaining and Growth Capital (1) $55 - $65 $210 - $235 $15 - $20 $12 $292 - $332
Capitalized exploration(1) $5 $11 $4 $5 $25
Total capital expenditures and capitalized
exploration (1) $60 - $70 $221 - $246 $19 - $24 $17 $317 - $357
(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 can support 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 re-investing in high-return internal growth
opportunities and supporting higher returns to shareholders.
Following a successful 2022, the Company continues to execute operationally with production of 128,400 ounces exceeding
first quarter guidance and costs consistent with annual guidance. All three operations performed well, including another strong
quarter from Mulatos driven by low-cost production growth from La Yaqui Grande. This contributed to a solid quarter financially
with record quarterly revenues and strong ongoing free cash flow while continuing to reinvest in organic growth. Second quarter
gold production of 2023 is expected to be between 120,000 and 130,000 ounces, with costs expected to be within the annual
guidance range.
The Company continues to advance its growth initiatives supporting its strong outlook with growing production and declining
costs. The Phase 3+ Expansion at Island Gold is progressing well, with construction of the hoist house well underway and
shaft sinking on track to begin in the latter part of the year. In addition, a significant permitting milestone was achieved at the
Lynn Lake Project with the receipt of a positive Decision Statement for the Federal Environmental Impact Statement (“EIS”).
The Company also continues to add value through exploration including a 70% increase in Mineral Reserves at Puerto Del Aire
("PDA") in the Mulatos District to 728,000 ounces with grades also increasing 4%. An expanded exploration program is
underway at PDA during the first half of 2023 with excellent potential for further growth with the deposit open in multiple
directions. This growth will be incorporated into a new development plan for PDA to be completed in the fourth quarter of 2023
which is expected to outline a significant mine life extension at Mulatos.
As outlined in the three-year production and operating guidance provided in January 2023, the Company expects higher
production at significantly lower costs over the next three years. Refer to the Company’s January 12, 2023 guidance press
release for a summary of the key assumptions and related risks associated with the comprehensive 2023 guidance and three-
year production, cost and capital outlook. Production is expected to increase to between 480,000 and 520,000 ounces in
2023, a 9% increase from 2022, and remain at similar levels in 2024 and 2025. Additional upside potential exists in 2025 as
production guidance excludes the higher-grade PDA project in the Mulatos District. Company-wide AISC is expected to
decrease 4% in 2023 and 17% by 2025 to between $950 and $1,050 per ounce.
In the first quarter of 2023, Young-Davidson achieved mining rates of 8,000 tpd, in line with guidance, driving production of
45,000 ounces. Production is expected to be between 185,000 and 200,000 ounces for the year, with an increase in future
quarters driven by higher grades mined. The operation generated mine-site free cash flow of $16.3 million, slightly lower than
previous quarters, reflecting a delay in the collection of sales tax receivables.
Island Gold produced 32,900 ounces in the first quarter at total cash costs and mine-site AISC in line with annual guidance.
Island Gold is expected to produce between 120,000 and 135,000 ounces, consistent with 2022 given similar grades 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 an increase in mining rates toward the latter part of 2025 is
expected to drive an increase in production and reduction in costs.
Combined gold production from the Mulatos District (including La Yaqui Grande) more than doubled from the first quarter of
2022, totaling 50,500 ounces driven by low-cost production growth at La Yaqui Grande. With the strong start to the year,
Mulatos is well positioned to meet production guidance of between 175,000 and 185,000 ounces in 2023. Total cash costs and
mine-site AISC were below annual guidance in the first quarter driven by a higher proportion of production coming from La
Yaqui Grande, but are expected to be in line with guidance for the year.
Capital spending, including capitalized exploration, of $83.8 million in the quarter was in line with annual guidance of $317
million to $357 million. The most significant spending is expected at Island Gold as the Phase 3+ Expansion ramps up, with
full year capital spending expected to be between $221 and $246 million in 2023, inclusive of capitalized exploration. Capital
spending at Island Gold is expected to remain at similar levels in 2024 and 2025 and then drop considerably in 2026 once the
expansion is complete.
The global exploration budget for 2023 is consistent with spending in 2022. The Mulatos District accounts for the largest
portion with an increased budget of $21 million, followed by $14 million at Island Gold, $8 million at Young-Davidson and $5
million at Lynn Lake. The exploration focus in 2023 will follow up on a successful year in 2022, with Mineral Reserves
increasing for the fourth consecutive year to 10.5 million ounces of gold, and grades increasing 3%.
The Company's liquidity position remains strong, ending the quarter with $133.8 million of cash and cash equivalents, $25.8
million in equity securities, and no debt. Additionally, the Company has a $500 million undrawn credit facility, providing total
liquidity of $633.8 million. As part of a balanced approach to growth and capital allocation, the current focus of growth capital
is the Phase 3+ Expansion at Island Gold. With no significant capital expected to be spent on developing Lynn Lake until the
Phase 3+ Expansion is well underway, the Company remains well positioned to fund this growth internally while generating
strong free cash flow over the next several years. The Company expects a further increase in free cash flow in 2026 with the
completion of the Phase 3+ Expansion.
First Quarter 2023 results
Young-Davidson Financial and Operational Review
Three Months Ended March 31,
2023 2022
Gold production (ounces) 45,000 51,900
Gold sales (ounces) 45,676 51,525
Financial Review (in millions)
Operating Revenues $86.3 $96.8
Cost of sales (1) $61.9 $64.6
Earnings from operations $24.0 $30.6
Cash provided by operating activities $33.7 $45.9
Capital expenditures (sustaining) (2) $13.2 $10.4
Capital expenditures (growth) (2) $2.8 $11.3
Capital expenditures (capitalized exploration) (2) $1.4 $1.0
Mine-site free cash flow (2) $16.3 $23.2
Cost of sales, including amortization per ounce of gold sold (1) $1,355 $1,254
Total cash costs per ounce of gold sold (2) $941 $840
Mine-site all-in sustaining costs per ounce of gold sold (2),(3) $1,233 $1,044
Underground Operations
Tonnes of ore mined 720,927 736,304
Tonnes of ore mined per day 8,010 8,181
Average grade of gold (4) 2.22 2.37
Metres developed 2,695 3,246
Mill Operations
Tonnes of ore processed 701,954 737,728
Tonnes of ore processed per day 7,799 8,197
Average grade of gold (4) 2.22 2.38
Contained ounces milled 50,212 56,740
Average recovery rate 90% 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").
Young-Davidson produced 45,000 ounces of gold in the first quarter, lower than the prior year period reflecting both lower
tonnes and grades processed.
Underground mining rates were in line with guidance, averaging 8,010 tpd in the first quarter. Grades mined averaged 2.22 g/t
Au in the first quarter, consistent with annual guidance of between 2.15 and 2.35 g/t Au. Grades mined are expected to remain
at similar levels in the second quarter, and increase through the second half of the year.
Mill throughput averaged 7,799 tpd in the first quarter with grades processed averaging 2.22 g/t Au. Tonnes milled were lower
than mined as planned, given a scheduled liner change in January. With mining rates exceeding milling rates during the
quarter, surface stockpiles increased and will be processed throughout the remainder of the year. Mill recoveries averaged
90% in the quarter, in line with guidance and the prior year period.
Financial Review
First quarter revenues of $86.3 million were 11% lower than the prior year period reflecting less ounces sold, partially offset by
a higher realized gold price.
Cost of sales (which includes mining and processing costs, royalties, and amortization expense) of $61.9 million in the first
quarter were consistent with the prior year period, due to less ounces sold offset by higher unit mining and milling costs.
Underground unit mining costs were CAD $52 per tonne in the quarter, in line with budget and higher than the prior year period
reflecting cost inflation. Inflationary pressures on mining and milling costs have been in line with expectations and incorporated
into 2023 cost guidance.
Total cash costs of $941 per ounce in the first quarter were towards the higher end of guidance due to mine sequencing with
lower grades mined. Grades mined are expected to increase in the second half of the year driving total cash costs lower. Total
cash costs were 12% higher than the prior year period reflecting the higher unit mining costs and lower grades processed,
partially offset by the weaker Canadian dollar. Mine-site AISC of $1,233 per ounce in the first quarter were 18% higher than the
prior year period, consistent with the increase in total cash costs, and slightly higher than guidance due to lower grades
mined.
Capital expenditures in the quarter included $13.2 million of sustaining capital and $2.8 million of growth capital. In addition,
$1.4 million was invested in capitalized exploration in the quarter.
Young-Davidson continues to consistently generate strong free cash flow, including mine-site free cash flow of $16.3 million in
the first quarter of 2023. Mine-site free cash flow in the quarter was impacted by a temporary build up of $8 million of sales tax
receivables for Young-Davidson which were collected in April and will benefit the second quarter. Young-Davidson has
generated over $100 million in mine-site free cash flow in each of the past two years. Young-Davidson is well positioned to
generate similar free cash flow in 2023 and over the long-term, with a 15 year Mineral Reserve life.
Island Gold Financial and Operational Review
Three Months Ended March 31,
2023 2022
Gold production (ounces) 32,900 24,500
Gold sales (ounces) 33,727 23,368
Financial Review (in millions)
Operating Revenues $63.9 $43.7
Cost of sales (1) $30.9 $24.2
Earnings from operations $32.6 $18.9
Cash provided by operating activities $36.5 $27.4
Capital expenditures (sustaining) (2) $11.4 $7.8
Capital expenditures (growth) (2) (5) $43.2 $20.5
Capital expenditures (capitalized exploration) (2) $2.4 $5.1
Mine-site free cash flow (2) ($20.5) ($6.0)
Cost of sales, including amortization per ounce of gold sold (1) $916 $1,036
Total cash costs per ounce of gold sold (2) $629 $745
Mine-site all-in sustaining costs per ounce of gold sold (2),(3) $970 $1,083
Underground Operations
Tonnes of ore mined 108,396 102,989
Tonnes of ore mined per day ("tpd") 1,204 1,144
Average grade of gold (4) 9.56 8.35
Metres developed 2,103 1,439
Mill Operations
Tonnes of ore processed 107,507 100,649
Tonnes of ore processed per day 1,195 1,118
Average grade of gold (4) 9.57 8.14
Contained ounces milled 33,082 26,327
Average recovery rate 97% 96%
(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").
(5) Includes capital advances of $1.4 million for the three months ended March 31, 2022.
Island Gold produced 32,900 ounces in the first quarter of 2023, a 34% improvement from the prior year period reflecting higher
grades mined and tonnes processed.
Underground mining rates averaged 1,204 tpd in the first quarter, in line with annual guidance and higher than the prior year
period. Grades mined averaged 9.56 g/t Au in the quarter, consistent with annual guidance.
Mill throughput averaged 1,195 tpd, consistent with annual guidance, and 7% higher than the prior year period. Mill recoveries
averaged 97% in the quarter, slightly above the prior year period.
Financial Review
Island Gold generated revenues of $63.9 million in the first quarter, 46% higher than the prior year period, driven by more
ounces sold and a higher realized gold price.
Cost of sales (includes mining and processing costs, royalties and amortization expense) of $30.9 million in the first quarter
were 28% higher than the prior year period, reflecting more tonnes processed and higher mining and processing costs,
partially offset by a weaker Canadian dollar. Inflationary pressures on mining and milling costs have been in line with
expectations.
Total cash costs of $629 per ounce in the first quarter were in line with annual guidance, and lower than the prior year period,
primarily due to 18% higher grades processed and a weaker Canadian dollar. Mine-site AISC of $970 per ounce were also in
line with guidance and lower than the prior year period.
Total capital expenditures were $57.0 million in the first quarter, including $2.4 million of capitalized exploration. Spending on
the Phase 3+ Expansion continued through the first quarter with construction activities focused on shaft site surface
preparation and erection of the hoist house. In addition, capital spending was focused on lateral development and other surface
infrastructure.
Mine-site free cash flow was negative $20.5 million in the first quarter given higher capital spending related to the Phase 3+
Expansion. Mine-site free cash flow at Island Gold was also impacted by a temporary build up of $11 million of sales tax
receivables, which were collected in April and will benefit the second quarter. At current gold prices, Island Gold is expected to
largely self-finance the Phase 3+ Expansion capital over the next three years. The operation is expected to generate
significant free cash flow from 2026 onward with the completion of the expansion.
Mulatos District Financial and Operational Review
Three Months Ended March 31,
2023 2022
Gold production (ounces) 50,500 22,500
Gold sales (ounces) 53,265 23,573
Financial Review (in millions)
Operating Revenues $101.3 $44.0
Cost of sales (1) $62.4 $46.7
Earnings (loss) from operations $36.6 ($4.3)
Cash provided (used) by operating activities $42.5 ($11.4)
Capital expenditures (sustaining) (2) $2.3 $4.3
Capital expenditures (growth) (2) $2.3 $21.7
Capital expenditures (capitalized exploration) (2) $1.1 $—
Mine-site free cash flow (2) $36.8 ($37.4)
Cost of sales, including amortization per ounce of gold sold (1) $1,172 $1,981
Total cash costs per ounce of gold sold (2) $839 $1,570
Mine site all-in sustaining costs per ounce of gold sold (2),(3) $914 $1,782
La Yaqui Grande Mine
Open Pit Operations
Tonnes of ore mined - open pit (4) 1,032,944 —
Total waste mined - open pit (6) 5,830,815 —
Total tonnes mined - open pit 6,863,759 —
Waste-to-ore ratio (operating) 5.64 —
Crushing and Heap Leach Operations
Tonnes of ore stacked 1,019,634 —
Average grade of gold processed (5) 1.55 —
Contained ounces stacked 50,922 —
Average recovery rate 75% —
Ore crushed per day (tonnes) 11,329 —
Mulatos Mine
Open Pit Operations
Tonnes of ore mined - open pit (4) 1,001,785 613,813
Total waste mined - open pit (6) 611,755 1,972,552
Total tonnes mined - open pit 1,613,539 2,586,365
Waste-to-ore ratio (operating) 0.61 1.60
Crushing and Heap Leach Operations
Tonnes of ore stacked 1,229,076 1,741,483
Average grade of gold processed (5) 0.92 0.73
Contained ounces stacked 36,541 40,852