Alamos Gold Reports First Quarter 2024 Results Production exceeds guidance driving record quarterly revenues and strong ongoing free cash flow
Alamos Gold Reports First Quarter 2024 Results
Production exceeds guidance driving record quarterly revenues and strong ongoing free cash flow
All amounts are in United States dollars, unless otherwise stated.
TORONTO, April 24, 2024 -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported its
financial results for the quarter ended March 31, 2024.
“We delivered another strong start to the year across a number of fronts, following a record performance in 2023. Costs were in
line with guidance for the quarter and production exceeded guidance led by record production from La Yaqui Grande. With the
solid first quarter, we are on track to achieve our full year production and cost guidance. We also continued to demonstrate our
long-term track record of value creation through exploration and M&A. Our Mineral Reserves increased for the fifth consecutive
year, and we expect to unlock significant value through our acquisition of the Magino mine and its integration with Island Gold.
We expect the combination to create one of Canada’s largest and lowest cost gold mines, drive significant synergies, and
solidify our unique positioning as a Canadian focused intermediate gold producer, with growing production and declining
costs,” said John A. McCluskey, President and Chief Executive Officer.
First Quarter 2024 Operational and Financial Highlights
• Produced 135,700 ounces of gold, exceeding quarterly guidance and representing a 6% increase from the first quarter
of 2023. This was driven by another strong performance from the Mulatos District, including record quarterly production
from La Yaqui Grande
• Sold 132,849 ounces of gold at an average realized price of $2,069 per ounce, generating record quarterly revenue of
$277.6 million, a 10% increase from the first quarter of 2023
• Total cash costs 1 were $910 per ounce, all-in sustaining costs ("AISC" 1) were $1,265 per ounce, and cost of sales were
$1,307 per ounce. As previously guided, costs were above full year guidance in the first quarter, with AISC also
impacted by an increase in share-based compensation reflecting the Company's higher share price in the quarter.
Costs are expected to decrease through the remainder of the year to be consistent with full year guidance
• Strong ongoing free cash flow1 generation of $24.4 million, while funding the Phase 3+ Expansion at Island Gold, and
net of $45.3 million of cash tax payments in Mexico
• Cash flow from operating activities of $108.9 million (including $134.9 million, or $0.34 per share before changes in
working capital1)
• Realized adjusted net earnings1 for the first quarter of $51.2 million, or $0.13 per share1. Adjusted net earnings includes
adjustments for net unrealized foreign exchange losses recorded within deferred taxes and foreign exchange of $4.5
million, and other adjustments, net of taxes totaling $4.6 million.
• Reported net earnings were $42.1 million, or $0.11 per share
• Cash and cash equivalents increased 7% from the end of 2023 to $240.2 million, with no debt and $16.3 million in
equity securities
• Paid dividends of $9.8 million, or $0.025 per share for the quarter
• Reported year-end 2023 Mineral Reserves of 10.7 million ounces of gold, a 2% increase from 2022, with grades also
increasing 1%. This marked the fifth consecutive year Mineral Reserves have grown for a combined increase of 10%
with grades also increasing 9% over that time frame. Additionally, Measured and Indicated Mineral Resources
increased 12% to 4.4 million ounces, with grades increasing 9%, and Inferred Mineral Resources increased 3% to 7.3
million ounces, at 1% higher grades
• Announced a definitive agreement to acquire Argonaut Gold Inc. ("Argonaut") and its Magino mine, located adjacent to
the Company's Island Gold mine in Ontario, Canada. The integration of the two operations is expected to create one of
the largest and lowest cost gold mines in Canada and unlock significant value with pre-tax synergies expected to total
$515 million2 through the use of shared infrastructure
• On April 4, 2024, announced the closing of the previously announced non-brokered private placement for common
shares of Argonaut, representing approximately 13.8% of Argonaut's outstanding common shares for CAD $50 million
• Completed the acquisition of Orford Mining Corporation ("Orford") on April 3, 2024, through which the Company
consolidated its existing ownership of Orford shares and added the highly prospective Qiqavik Gold Project, located in
Quebec, Canada
(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.
(2) Synergies are pre-tax and undiscounted. On a discounted basis, this represents an after-tax net present value of $250
million
Highlight Summary
Three Months Ended March 31,
2024 2023
Financial Results (in millions)
Operating revenues $277.6 $251.5
Cost of sales (1) $173.6 $155.2
Earnings from operations $81.4 $75.0
Earnings before income taxes $75.6 $72.2
Net earnings $42.1 $48.4
Adjusted net earnings (2) $51.2 $45.4
Earnings before interest, taxes, depreciation and amortization (2) $125.7 $119.9
Cash provided by operations before working capital and taxes paid (2) $134.9 $127.2
Cash provided by operating activities $108.9 $94.3
Capital expenditures (sustaining) (2) $26.5 $26.9
Capital expenditures (growth) (2) $51.6 $52.0
Capital expenditures (capitalized exploration) $6.4 $4.9
Free cash flow (2) $24.4 $10.5
Operating Results
Gold production (ounces) 135,700 128,400
Gold sales (ounces) 132,849 132,668
Per Ounce Data
Average realized gold price $2,069 $1,896
Average spot gold price (London PM Fix) $2,070 $1,890
Cost of sales per ounce of gold sold (includes amortization) (1) $1,307 $1,170
Total cash costs per ounce of gold sold (2) $910 $821
All-in sustaining costs per ounce of gold sold (2) $1,265 $1,176
Share Data
Earnings per share, basic and diluted $0.11 $0.12
Adjusted earnings per share, basic (2) $0.13 $0.12
Weighted average common shares outstanding (basic) (000’s) 396,817 393,960
Financial Position (in millions)
Cash and cash equivalents $240.2 $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.
Three Months Ended March 31,
2024 2023
Gold production (ounces)
Young-Davidson 40,100 45,000
Island Gold 33,400 32,900
Mulatos District (7) 62,200 50,500
Gold sales (ounces)
Young-Davidson 39,810 45,676
Island Gold 34,130 33,727
Mulatos District 58,909 53,265
Cost of sales (in millions) (1)
Young-Davidson $65.4 $61.9
Island Gold $33.4 $30.9
Mulatos District $74.8 $62.4
Cost of sales per ounce of gold sold (includes amortization) (1)
Young-Davidson $1,643 $1,355
Island Gold $979 $916
Mulatos District $1,270 $1,172
Total cash costs per ounce of gold sold (2)
Young-Davidson $1,188 $941
Island Gold $706 $629
Mulatos District $840 $839
Mine-site all-in sustaining costs per ounce of gold sold (2),(3)
Young-Davidson $1,482 $1,233
Island Gold $1,105 $970
Mulatos District $905 $914
Capital expenditures (sustaining, growth, and capitalized exploration) (in millions) (2)
Young-Davidson (4) $20.2 $17.4
Island Gold (5) $54.6 $57.0
Mulatos District (6) $3.9 $5.7
Other $5.8 $3.7
(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 $1.0 million for the three months ended March 31, 2024 ($1.4 million
for the three months ended March 31, 2023).
(5) Includes capitalized exploration at Island Gold of $3.5 million for the three months ended March 31, 2024 ($2.4 million for
the three months ended March 31, 2023).
(6) Includes capitalized exploration at Mulatos District of $1.9 million for the three months ended March, 2024 ($1.1 million for
the three months ended March 31, 2023).
(7) The Mulatos District includes the Mulatos pit and La Yaqui Grande.
Environment, Social and Governance Summary Performance
Health and Safety
• Total recordable injury frequency rate1 ("TRIFR") of 1.79 in the first quarter of 2024, an increase from 1.45 in the fourth
quarter of 2023
• Lost time injury frequency rate1 ("LTIFR") of nil, a decrease from 0.10 in the fourth quarter of 2023
• La Yaqui Grande Mine celebrated four million hours without a lost time injury
• Alamos’ Home Safe Every Day safety leadership training was implemented at the Island Gold Mine, where it will be
delivered to all employees as part of the site’s safety training. This program is now available at all Alamos operations
• During the first quarter of 2024, Alamos had 18 recordable injuries across its sites and zero lost time injuries
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 2024
• One externally reportable non-compliance in the first quarter that resulted in a fine. At Young-Davidson, environmental
testing of treated mine water determined a toxicity failure for Daphnia magna (water fleas), resulting in an environmental
penalty of $14,000. The investigation determined the cause of the failure to be algae build-up in the mine water
discharge pond and remediation measures were taken. Water treatment and discharge were not impacted and the mine
has been in full compliance subsequent to the event
• Finalized a fish habitat compensation project for Davidson Creek at Young-Davidson
• Reclamation work underway at Mulatos focused on the closed Cerro Pelon, El Victor and San Carlos pits
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
Ongoing donations, medical support and infrastructure investments were provided to local communities, including:
• Various sponsorships to support local youth sports teams and community events, and donations to local charities and
organizations around the Company's mines
• Partnered with a local foundation (Fundación Vamos Juntos a Ganar) to organize an entrepreneurship workshop for
residents of Matarachi to increase their capacity for opening or improving local businesses
• Provided ongoing health services to local community members around the Mulatos Mine. During the quarter, free dental
services, vaccinations, and Pap tests were provided to residents
• Upgraded public lighting in Matarachi with the installation of 96 solar street lights throughout the town
• Completed the annual Mi Matarachi evaluation and planning meeting with residents of Matarachi, working together to
develop actions that promote education, health and infrastructure that improve the quality of life for residents
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
• Completed annual fieldwork and assurance of Alamos’ compliance with the World Gold Council’s Responsible Gold
Mining Principles (RGMPs). Alamos will publish its 2023 RGMP Report in the second quarter of 2024
• Prepared Alamos’ inaugural Modern Slavery Report in accordance with Canada’s Fighting Against Forced Labour and
Child Labour in Supply Chains Act. Alamos will publish its 2023 Modern Slavery Report in May 2024
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.
Outlook and Strategy
2024 Guidance (4)
Young-
Davidson Island Gold Mulatos Lynn Lake Total
Gold production (000's ounces) 180 - 195 145 - 160 160 - 170 485 - 525
Cost of sales, including amortization (in millions)(3) $620
Cost of sales, including amortization ($ per ounce)(3) $1,225
Total cash costs ($ per ounce)(1) $950 -
$1,000 $550 - $600 $925 - $975 — $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 $875 - $925 $1,000 -
$1,050 —
Capital expenditures (in millions)
Sustaining capital(1) $40 - $45 $50 - $55 $3 - $5 — $93 - $105
Growth capital(1) $20 - $25 $210 - $230 $2 - $5 — $232 - $260
Total Sustaining and Growth Capital (1) - producing
mines $60 - $70 $260 - $285 $5 - $10 — $325 - $365
Growth capital - development projects $25 $25
Capitalized exploration(1) $10 $13 $9 $9 $41
Total capital expenditures and capitalized
exploration (1) $70 - $80 $273 - $298 $14 - $19 $34 $391 - $431
(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.
(4) 2024 Guidance does not reflect the proposed acquisition of the Magino Mine and will be updated following close of the
transaction
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 re-investing in high-return internal growth
opportunities, and supporting higher returns to shareholders.
Following a record operational and financial performance in 2023, the Company continued to deliver across multiple fronts in
the first quarter of 2024. Production of 135,700 ounces exceeded quarterly guidance, reflecting another strong performance
from Mulatos driven by record quarterly production from La Yaqui Grande. Costs were in line with quarterly guidance and
expected to decrease through the rest of the year to be consistent with annual guidance. With the strong operational
performance, and higher gold prices, the Company generated record quarterly revenues, and solid ongoing free cash flow of
$24.4 million while funding the Phase 3+ Expansion at Island Gold, and net of $45.3 million of cash tax payments in Mexico.
The Phase 3+ Expansion remains on track for completion during the first half of 2026 and will be a key driver of the Company's
growing production base and declining cost profile over the next several years. Work on the expansion continues to advance
with shaft sinking well underway and reaching a depth of 185 metres by the end of March.
Additionally, the Company continued to demonstrate its long-term track record of value creation through exploration and M&A
during the quarter. Global Mineral Reserves increased to 10.7 million ounces of gold (202 mt grading 1.65 g/t Au), a 2%
increase from 2022, with a further 1% increase in grades. This marked the fifth consecutive year of growth in Mineral Reserves
for a combined increase of 10% over that time frame. Grades have also increased 9% over the same timeframe as Mineral
Reserves continue to grow both in size and quality. The increase in 2023 was driven by higher-grade additions at Island Gold
and PDA, as well as growth at Lynn Lake.
The acquisition of Argonaut's Magino mine is expected to unlock significant value given its proximity to Island Gold. The
integration of the two operations is expected to create one of the largest and lowest cost gold mines in Canada and drive pre-
tax synergies of approximately $515 million through the use of shared infrastructure. This includes immediate capital savings
with the mill and tailings expansions at Island Gold no longer required, and significant ongoing operating savings through the
use of the larger and more efficient Magino mill. This not only de-risks the Phase 3+ Expansion, but also creates opportunities
for further expansions of the combined Island Gold and Magino operations. The addition of Magino is expected to increase
company-wide gold production to over 600,000 ounces per year with longer term production potential of over 900,000 ounces
per year. The transaction is expected to close in July 2024.
Additionally, the Company continues to invest in its longer-term portfolio of growth projects with the acquisition of Orford,
adding the highly prospective Qiqavik Gold Project, located in Quebec, Canada.
The Company provided three-year production and operating guidance in January 2024 (excluding Magino), which outlined
growing production at declining costs over the next three years. Refer to the Company’s January 10, 2024 guidance press
release for a summary of the key assumptions and related risks associated with the comprehensive 2024 guidance and three-
year production, cost and capital outlook. Gold production in 2024 is expected to range between 485,000 and 525,000 ounces.
Total cash costs and AISC are expected to be consistent with 2023.
Production is expected to be slightly higher during the first half of 2024, reflecting higher grades at La Yaqui Grande and
stronger rates of production through residual leaching at Mulatos. Second quarter gold production is expected to be between
123,000 and 133,000 ounces with costs decreasing slightly from the first quarter driven by lower costs at both Island Gold and
Young-Davidson. Consistent with annual guidance, costs are expected to decrease through the remainder of the year
reflecting a declining contribution of higher cost production from residual leaching at Mulatos.
Production is expected to increase 7% by 2026 to between 520,000 and 560,000 ounces, with AISC decreasing 11% to
between $975 and $1,075 per ounce reflecting low-cost production growth from Island Gold with the completion of the Phase
3+ Expansion. The three year guidance excludes the higher grade PDA project which represents potential production upside
at Mulatos as early as 2026. This upside is expected to be outlined in a development plan for PDA to be released during the
second quarter of 2024. Looking beyond 2026, the Lynn Lake project is expected to support further potential growth as early
as the end of 2027.
The majority of capital spending in 2024 remains focused on advancing the Phase 3+ Expansion at Island Gold. Following the
closing of the acquisition of Argonaut in July, the Company will revise its 2024 capital guidance to reflect the addition of
Magino and lower planned capital spending on the mill and tailings expansions at Island Gold.
Other areas of focus in 2024 include a larger capital budget for Lynn Lake and increased capitalized exploration. Spending at
Lynn Lake will be focused on upgrades to site access and infrastructure, including early work on the power line upgrade, in
advance of a construction decision anticipated in 2025. Additionally, a portion of the 2024 exploration program will be focused
on converting Mineral Resources at the Burnt Timber and Linkwood satellite deposits into a smaller, higher quality Mineral
Reserve. A study incorporating these deposits into the Lynn Lake project is expected to be competed in the fourth quarter of
2024, and represents potential production and economic upside to the 2023 Feasibility Study.
Given the strong profitability of the Mulatos operation in 2023, the Company expects to pay significantly higher cash tax
payments in Mexico in 2024. This included $45.3 million of cash tax payments made in the first quarter, the majority of which
related to the 2023 year-end tax payment. Cash tax payments in Mexico are expected to decrease to approximately $10
million in the second quarter and remain at similar levels through the remainder of the year. The Company expects stronger
company-wide free cash flow starting in the second quarter of 2024 given lower cash tax burden and an expected decrease in
costs.
The global exploration budget for 2024 is $62 million, a 19% increase from $52 million spent in 2023. The increase reflects
expanded budgets across all key assets following up on broad-based exploration success in 2023. Island Gold and the
Mulatos District account for approximately 60% of the total budget with $19 million planned for each asset. This is followed by
$12 million at Young-Davidson, $9 million at Lynn Lake and $2 million at Golden Arrow.
The Company's liquidity position remains strong, ending the quarter with $240.2 million of cash and cash equivalents, $16.3
million in equity securities, and no debt. Additionally, the Company has a $500 million undrawn credit facility, providing total
liquidity of $756.5 million. Combined with strong ongoing cash flow generation, the Company remains well positioned to
internally fund its organic growth initiatives including the Phase 3+ Expansion, optimization of the Magino mill, and
development of PDA and Lynn Lake.
First Quarter 2024 Results
Young-Davidson Financial and Operational Review
Three Months Ended March 31,
2024 2023
Gold production (ounces) 40,100 45,000
Gold sales (ounces) 39,810 45,676
Financial Review (in millions)
Operating Revenues $82.7 $86.3
Cost of sales (1) $65.4 $61.9
Earnings from operations $16.8 $24.0
Cash provided by operating activities $34.8 $33.7
Capital expenditures (sustaining) (2) $11.6 $13.2
Capital expenditures (growth) (2) $7.6 $2.8
Capital expenditures (capitalized exploration) (2) $1.0 $1.4
Mine-site free cash flow (2) $14.6 $16.3
Cost of sales, including amortization per ounce of gold sold (1) $1,643 $1,355
Total cash costs per ounce of gold sold (2) $1,188 $941
Mine-site all-in sustaining costs per ounce of gold sold (2),(3) $1,482 $1,233
Underground Operations
Tonnes of ore mined 667,062 720,927
Tonnes of ore mined per day 7,330 8,010
Average grade of gold (4) 1.94 2.22
Metres developed 1,914 2,695
Mill Operations
Tonnes of ore processed 665,778 701,954
Tonnes of ore processed per day 7,316 7,799
Average grade of gold (4) 1.94 2.22
Contained ounces milled 41,609 50,212
Average recovery rate 89.4% 90.0%
(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 40,100 ounces of gold in the first quarter, an 11% decrease compared to the prior year period.
Underground mining rates averaged 7,330 tpd in the first quarter, lower than the prior year period reflecting temporary downtime
to replace the head ropes in the Northgate shaft, which had previously been scheduled in the second quarter. Additionally,
delays in receiving two production scoops also impacted mining rates earlier in the quarter. Following the completion of the
head rope change and receipt of two new hybrid production scoops, mining rates returned to design capacity of 8,000 tpd in
March and are expected to remain at similar rates through the rest of the year. Milling rates averaged 7,316 tpd in the quarter,
as a result of the lower underground mining rates.
Grades mined averaged 1.94 g/t Au in the quarter, a 13% decrease from the prior year period, and below the range of full year
guidance, due to mine sequencing. Given the lower mining rates, higher grade stopes that had been planned for March were
deferred into April. Grades mined are expected to increase to within the range of annual guidance in the second quarter and
through the remainder of the year. Mill recoveries averaged 89% in the quarter, at the low end of the range of annual guidance.
Financial Review
First quarter revenues of $82.7 million were 4% lower than the prior year period, resulting from lower ounces sold, partially
offset by a higher realized gold price.
Cost of sales of $65.4 million in the first quarter were 6% higher than the prior year period, reflecting inflationary pressures on
unit costs. Underground mining costs were CAD $62 per tonne in the first quarter, reflecting the lower tonnes mined.
Total cash costs and mine-site AISC were $1,188 per ounce and $1,482 per ounce, respectively, in the first quarter. Both
metrics were higher than the prior year period and annual guidance, resulting from the temporary downtime for the hoist rope
changeover as well as lower grades. Costs are expected to decrease through the remainder of the year to be consistent with
annual guidance, reflecting higher grades and mining rates.
Capital expenditures in the first quarter included $11.6 million of sustaining capital and $7.6 million of growth capital.
Additionally, $1.0 million was invested in capitalized exploration in the quarter. Capital expenditures, inclusive of capitalized
exploration, totaled $20.2 million in the first quarter, a 16% increase from the prior year period driven by timing of payments.
Young-Davidson continues to demonstrate operational and financial consistency with mine-site free cash flow of $14.6 million
in the first quarter, and stronger free cash flow expected through the remainder of the year. Young-Davidson has generated
over $100 million in mine-site free cash flow for three consecutive years. The operation is well positioned to generate similar
free cash flow in 2024 and over the long-term, with a 15 year Mineral Reserve life.
Island Gold Financial and Operational Review
Three Months Ended March 31,
2024 2023
Gold production (ounces) 33,400 32,900
Gold sales (ounces) 34,130 33,727
Financial Review (in millions)
Operating Revenues $71.0 $63.9
Cost of sales (1) $33.4 $30.9
Earnings from operations $36.9 $32.6
Cash provided by operating activities $40.9 $36.5
Capital expenditures (sustaining) (2) $13.5 $11.4
Capital expenditures (growth) (2) $37.6 $43.2
Capital expenditures (capitalized exploration) (2) $3.5 $2.4
Mine-site free cash flow (2) ($13.7) ($20.5)
Cost of sales, including amortization per ounce of gold sold (1) $979 $916
Total cash costs per ounce of gold sold (2) $706 $629
Mine-site all-in sustaining costs per ounce of gold sold (2),(3) $1,105 $970
Underground Operations
Tonnes of ore mined 106,737 108,396
Tonnes of ore mined per day ("tpd") 1,173 1,204
Average grade of gold (4) 10.53 9.56
Metres developed 1,787 2,103
Mill Operations
Tonnes of ore processed 107,215 107,507
Tonnes of ore processed per day 1,178 1,195
Average grade of gold (4) 10.63 9.57
Contained ounces milled 36,651 33,082
Average recovery rate 97.3% 97.0%
(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
Island Gold produced 33,400 ounces in the first quarter of 2024, consistent with the prior year period. Underground mining
rates averaged 1,173 tpd in the first quarter, a 3% decrease from the prior year period and slightly below annual guidance of
1,200 tpd. Grades mined averaged 10.53 g/t Au in the quarter, consistent with annual guidance and 10% higher than in the
prior year period.
Mill throughput averaged 1,178 tpd for the quarter, slightly lower than the prior year period reflecting mining rates in the quarter.
Mill recoveries averaged 97% in the first quarter, consistent with guidance.
Financial Review
Revenues of $71.0 million in the first quarter were 11% higher than the prior year period, primarily driven by the higher realized
gold price.
Cost of sales of $33.4 million in the first quarter was 8% higher than the prior year period, driven by inflationary pressures on
mining and processing costs, driven mainly by labour and certain consumables.
Total cash costs of $706 per ounce and mine-site AISC of $1,105 per ounce in the first quarter were both higher than the prior
year period, reflecting inflationary pressures. Costs are expected to decrease through the remainder of the year to be
consistent with annual guidance.
Total capital expenditures were $54.6 million in the first quarter, including $37.6 million of growth capital and $3.5 million of
capitalized exploration. Growth capital spending remained focused on the Phase 3+ Expansion shaft site infrastructure and
shaft sinking, with the shaft reaching a depth of 185 metres by the end of the quarter. Additionally, capital spending was
focused on lateral development and other surface infrastructure. Certain other capital activities planned for 2024 have been
deferred as a result of the planned acquisition of Argonaut.
Mine-site free cash flow was negative $13.7 million for the first quarter given the significant capital investment related to the
Phase 3+ Expansion. At current gold prices, Island Gold is expected to continue funding the majority of the Phase 3+
Expansion capital. 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,
2024 2023
Gold production (ounces) 62,200 50,500
Gold sales (ounces) 58,909 53,265
Financial Review (in millions)
Operating Revenues $123.9 $101.3
Cost of sales (1) $74.8 $62.4
Earnings from operations $45.8 $36.6
Cash provided by operating activities $53.6 $42.5
Capital expenditures (sustaining) (2) $1.4 $2.3
Capital expenditures (growth) (2) $0.6 $2.3
Capital expenditures (capitalized exploration) (2) $1.9 $1.1
Mine-site free cash flow (2) $49.7 $36.8
Cost of sales, including amortization per ounce of gold sold (1) $1,270 $1,172
Total cash costs per ounce of gold sold (2) $840 $839
Mine site all-in sustaining costs per ounce of gold sold (2),(3) $905 $914
La Yaqui Grande Mine
Open Pit Operations
Tonnes of ore mined - open pit (4) 986,214 1,032,944
Total waste mined - open pit (6) 4,076,910 5,830,815
Total tonnes mined - open pit 5,063,125 6,863,759
Waste-to-ore ratio (operating) 4.13 5.64
Crushing and Heap Leach Operations
Tonnes of ore stacked 981,740 1,019,634
Average grade of gold processed (5) 1.31 1.55
Contained ounces stacked 41,398 50,922
Average recovery rate 120.8% 75.0%
Ore crushed per day (tonnes) 10,800 11,329
Mulatos Mine
Open Pit Operations
Tonnes of ore mined - open pit (4) — 1,001,785
Total waste mined - open pit (6) — 611,755
Total tonnes mined - open pit — 1,613,539
Waste-to-ore ratio (operating) — 0.61
Crushing and Heap Leach Operations
Tonnes of ore stacked — 1,229,076
Average grade of gold processed (5) — 0.92
Contained ounces stacked — 36,541
Average recovery rate — 33%
Ore crushed per day (tonnes) — 13,700
(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 ore stockpiled during the quarter.
(5) Grams per tonne of gold ("g/t Au").