Alamos Gold Reports Fourth Quarter and Year-End 2021 Results
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 2021 Results
Toronto, Ontario (February 23, 2022) - Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today
reported its financial results for the quarter and year ended December 31, 2021.
“Our Canadian operations performed well in the fourth quarter driving a stronger finish to 2021 and meeting our
revised full year production and cost guidance. Young-Davidson had a record year in terms of mining rates and free
cash flow and Island Gold had another strong year operationally while advancing the Phase III expansion, offsetting
the temporary challenges at Mulatos,” said John A. McCluskey, President and Chief Executive Officer.
“We look forward to delivering on our 2022 milestones, all of which support our longer -term objective of growing
production at substantially lower costs. Our global reserves increased 4% over the past year driven by growth at all
three mines, demonstrating increasing value within our operating base. La Yaqui Grande remains on track to achieve
commercial production in the third quarter and will be key to driving near-term production higher and costs lower. The
updated and optimized mine plan for Island Gold to be released mid-year, is expected to improve already impressive
economics and highlight further low-cost growth. We are well positioned to fund these growth projects internally, which
will in turn support growing returns to shareholders over the long term,” Mr. McCluskey added.
Fourth Quarter 2021
• Production of 112,500 ounces of gold, a 7% increase from the third quarter of 2021 with strong performances at
Young-Davidson and Island Gold offsetting weaker production at Mulatos. Full year production was in -line with
revised guidance
• Young-Davidson achieved record mining rates of 8,240 tonnes per day ("tpd"), driving production of 51,900
ounces of gold and mine-site free cash flow1 of $30.4 million
• Island Gold produced 37,500 ounces and generated mine-site free cash flow1 of $15.8 million
• Consolidated total cash costs 1 of $843 per ounce, all-in sustaining costs ("AISC")1 of $1,237 per ounce and cost
of sales of $1,225 per ounce, all increased from earlier in the year reflecting higher costs at Mulatos, as previously
guided. Full year total cash costs and AISC were in-line with revised guidance
• La Yaqui Grande remains on track for commercial production in the third quarter of 2022, and is expected to
significantly reduce the cost profile at Mulatos starting in the second half of 2022
• Sold 112,966 ounces of gold at an average realized price of $1,798 per ounce for revenues of $203.1 million
• Generated cash flow from operating activities of $88.1 million ($91.8 million, or $0.23 per share, before changes
in working capital1)
• Free cash flow1 was negative in the quarter, driven by higher capital spending mainly related to La Yaqui Grande
and the Phase III expansion at Island Gold
• Realized adjusted net earnings 1 of $36.7 million, or $0.09 per share 1, which includes adjustments for an
unrealized foreign exchange loss of $3.3 million recorded within deferred taxes and foreign exchange and other
losses of $3.9 million
• Recorded net earnings of $29.5 million, or $0.08 per share
• Ended the quarter with cash and cash equivalents of $172.5 million, equity securities of $23.9 million, and no debt
TRADING SYMBOL: TSX:AGI NYSE:AGI
2 | Alamos Gold Inc
• Paid a quarterly dividend of $9.8 million, or US$0.025 per share (annualized rate of US$0.10 per share) and
repurchased an additional 783,300 shares in the quarter at a cost of $5.7 million under the Company's Normal
Course Issuer Bid ("NCIB"). The NCIB was renewed for another year on December 20, 2021
• Repurchased a Net Profits Interest ("NPI") royalty on Island Gold for $15.7 million which was applicable to certain
claims that made up the majority of Mineral Reserves and Resources on the property
• Reported results from the ongoing exploration program at Island Gold including extending high -grade gold
mineralization up to 300 metres (“m”) down -plunge from existing Inferred Mineral Resources in Island East as
well as to a depth of more than 1,700 m in the deepest hole drilled to date
• Provided an exploration update for Lynn Lake, highlighting the potential for further Mineral Reserve and Resource
growth around the existing deposits as well as a new greenfields discovery
• Achieved a top 15% ranking within Canadian corporate boards in the 2021 Globe and Mail Board Games in
recognition of strong governance practices. This included ranking as the third highest company in the materials
sector listed on the Toronto Stock Exchange
• Received a Medium ESG Risk Rating from Sustainalytics, positioning Alamos in the top 20th percentile of its
industry; in addition, received a B - climate change score from the Carbon Disclosure Project ("CDP"), ahead of
the industry average
Full Year 2021
• Produced 457,200 ounces of gold, meeting revised production guidance. Young -Davidson and Island Gold
performed well with both meeting full year initial guidance, offsetting temporary weaker production at Mulatos
• Young-Davidson produced 195,000 ounces, driving record mine-site free cash flow1 of $100.3 million
• Island Gold produced 140,900 ounces, generating $53.1 million of mine -site free cash flow 1 net of $23.5 million
of exploration expenditures and $101.2 million of capital spending, primarily related to the Phase III expansion
• Sold 457,517 ounces of gold at an average realized price of $1,800 per ounce for record revenues of $823.6
million
• Total cash costs1 of $794 per ounce, AISC1 of $1,135 per ounce and Cost o f sales of $1,167 per ounce were in
line with revised guidance
• Realized adjusted net earnings1 for the year of $162.1 million, or $0.41 per share1. Adjusted net earnings include
adjustments for the non -cash, after tax impairment charge of $213.8 million o n the Company's Turkish projects
incurred in the second quarter, unrealized foreign exchange losses recorded within both deferred taxes and
foreign exchange of $7.8 million, and other losses totaling $7.2 million
• Reported a net loss of $66.7 million, or $0.17 per share, reflecting the impairment charge on the Turkish projects
• Cash flow from operating activities of $356.5 million (including a record $410.9 million, or $1.05 per share, before
changes in working capital1), a 7% increase from 2020
• Declared $39 .1 million in dividends, a 53% increase compared to 2020. Combined with 1.6 million shares
repurchased at a cost of $11.7 million, the Company returned $50.8 million to shareholders in 2021
• During the year, the Company generated $25.8 million in cash on th e liquidation of certain equity securities and
realized an after-tax gain of $12.0 million (recorded within equity)
• In the second quarter of 2021, filed an investment treaty claim against the Republic of Turkey for expropriation
and unfair and inequitable treatment with respect to its Turkey projects.
• Reported inaugural three -year guidance in January 2022, outlining a strong outlook with growing production at
significantly lower costs over the next three years. This includes AISC decreasing to a range of $950 to $1,050
per ounce in 2024, an 18% improvement from 2022 (based on the mid-point of guidance)
• Reported year end 2021 Mineral Reserves of 10.3 million ounces of gold, a 4% increase from the end of 2020
with growth at all three operating mines more tha n offsetting mining depletion. This included a 5% increase in
global Mineral Reserve Grades reflecting higher grade additions at Island Gold and Mulatos. Island Gold
continues to grow with combined Mineral Reserves and Resources increasing 8% to 5.1 millio n ounces of gold,
net of mining depletion, marking a key milestone for the operation and highlighting its significant upside potential
.(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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3 | Alamos Gold Inc
Highlight Summary
Three Months Ended December 31, Years Ended December 31,
2021 2020 2021 2020
Financial Results (in millions)
Operating revenues $203.1 $226.6 $823.6 $748.1
Cost of sales (1) $138.4 $135.8 $534.1 $482.0
Earnings (Loss) from operations $49.8 $81.3 $14.9 $227.6
Earnings (Loss) before income taxes $43.6 $85.8 $2.3 $218.2
Net earnings (loss) $29.5 $76.9 ($66.7) $144.2
Adjusted net earnings (2) $36.7 $58.2 $162.1 $156.5
Earnings before interest, depreciation and amortization (2) $88.0 $133.6 $402.0 $381.7
Cash provided by operations before working capital and
cash taxes(2) $91.8 $126.5 $410.9 $382.9
Cash provided by operating activities $88.1 $131.4 $356.5 $368.4
Capital expenditures (sustaining) (2) $32.2 $27.5 $113.4 $82.1
Capital expenditures (growth) (2) (3) (5) $51.2 $41.9 $218.0 $151.2
Capital expenditures (capitalized exploration) (4) $8.2 $4.0 $27.0 $12.8
Free cash flow (2) ($3.5) $58.0 ($1.9) $122.3
Operating Results
Gold production (ounces) 112,500 120,400 457,200 426,800
Gold sales (ounces) 112,966 121,831 457,517 424,325
Per Ounce Data
Average realized gold price $1,798 $1,860 $1,800 $1,763
Average spot gold price (London PM Fix) $1,795 $1,874 $1,799 $1,770
Cost of sales per ounce of gold sold (includes
amortization) (1) $1,225 $1,115 $1,167 $1,136
Total cash costs per ounce of gold sold (2) $843 $733 $794 $761
All-in sustaining costs per ounce of gold sold (2) $1,237 $1,030 $1,135 $1,046
Share Data
Earnings (Loss) per share, basic and diluted $0.08 $0.20 ($0.17) $0.37
Adjusted earnings per share, basic and diluted(2) $0.09 $0.15 $0.41 $0.40
Weighted average common shares outstanding (basic)
(000’s) 392,333 392,720 392,649 391,675
Financial Position (in millions)
Cash and cash equivalents(5) $172.5 $220.5
(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. Growth capital excludes an Island Gold Net Profits Interest royalty repurchased in December 2021 for $15.7 million , a
Net Smelter Return royalty repurchased in March 2020 for $54.8 million, and the acquisition of Trillium Mining Corp for $19.5 million in December 2020 .
(4) Includes capitalized exploration at Island Gold, Young-Davidson and Mulatos.
(5) Includes capital advances of $nil and $9.8 million for the three and twelve months ended December 31, 2021 ($nil for the three and twelve months ended December
31, 2020).
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4 | Alamos Gold Inc
Three Months Ended December 31, Years Ended December 31,
2021 2020 2021 2020
Gold production (ounces) (1)
Young-Davidson 51,900 48,000 195,000 136,200
Island Gold 37,500 41,200 140,900 139,000
Mulatos 23,100 31,200 121,300 150,800
Gold sales (ounces)
Young-Davidson 53,006 48,094 194,937 134,987
Island Gold 38,101 42,605 139,946 139,614
Mulatos 21,859 31,132 122,634 149,724
Cost of sales (in millions)(2)
Young-Davidson $62.6 $60.8 $244.4 $201.3
Island Gold $33.1 $33.7 $112.3 $111.9
Mulatos $42.7 $41.3 $177.4 $168.8
Cost of sales per ounce of gold sold (includes amortization)
Young-Davidson $1,181 $1,264 $1,254 $1,491
Island Gold $869 $791 $802 $801
Mulatos $1,953 $1,327 $1,447 $1,127
Total cash costs per ounce of gold sold (3)
Young-Davidson $775 $792 $846 $1,019
Island Gold $575 $481 $529 $451
Mulatos $1,473 $986 $1,013 $816
Mine-site all-in sustaining costs per ounce of gold sold (3),(4)
Young-Davidson $1,017 $934 $1,072 $1,214
Island Gold $871 $676 $863 $660
Mulatos $1,899 $1,426 $1,240 $1,032
Capital expenditures (sustaining, growth, capitalized exploration and capital advances) (in millions)(3)
Young-Davidson(5) $24.8 $19.5 $88.6 $101.7
Island Gold (6) $27.4 $26.9 $120.0 $80.8
Mulatos(7) $34.2 $20.5 $128.3 $42.1
Other $5.2 $6.5 $21.5 $21.5
(1) Production for the three and twelve months ended December 31, 2020 included nil and 800 ounces, respectively, from El Chanate which transitioned to the
reclamation phase of the mine life in 2019. There was no production from El Chanate for the three and tw elve months ended December 31, 2021.
(2) Cost of sales includes mining and processing costs, royalties, COVID -19 costs, and amortization.
(3) 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.
(4) 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.
(5) Includes capitalized exploration at Young-Davidson of $1.3 million and $3.8 million for the three and twelve months ended December 31, 2021 ($nil for the three and
twelve months ended December 31, 2020).
(6) Includes capitalized exploration at Island Gold of $ 5.2 million and $18.8 million for the three and twelve months ended December 31, 2021 ($3.8 million and $11.9
million for the three and twelve months ended December 31, 2020); Island Gold capital expenditures exclude the NPI royalty repurchased in December 2021 for
$15.7 million, a Net Smelter Return royalty repurchased in March 2020 for $54.8 million and the acquisition of Trillium Mining Corp for $19.5 million in December
2020.
(7) Includes capitalized exploration at Mulatos of $0.3 million and $1.7 m illion for the three and twelve months ended December 31, 2021 ($0.2 million and $0.9 million
for the three and twelve months ended December 31, 2020).
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5 | Alamos Gold Inc
Environment, Social and Governance Summary Performance
Health and Safety
• Recordable injury frequency rate1 of 2.77 in the quarter and 2.46 for the year, an increase from 2.25 in 2020
• Lost time injury frequency rate1 of 0.25 in the quarter and 0.21 for the year, an increase from 0.14 in 2020
• Performed over 100,000 COVID-19 tests in 2021 on employees, contractors and visitors as part of enhanced
screening practices
During the fourth quarter of 2021, the recordable injury frequency rate increased with 33 recordable injuries, up from
29 in the third quarter of 2021. Three lost time injuries were reported in the quarter, down from four in the third quarter
of 2021, resulting in an overall decrease to the Company’s lost time injury frequency rate from the previous 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. During
the quarter, the Company finalized and introduced three new safety standards to its sites, part of the Company’s
ongoing development of its Sustainability Performance Management Framework which includes standards specific
to safety leadership and managing higher -risk activities. The Company’s flagship Home Safe Every Day safety
leadership program was a lso restarted at both the Young -Davidson and Mulatos mines following their temporary
suspension for safety reasons due to COVID -19. The Company’s overarching commitment is to have all employees
and contractors return Home Safe Every Day.
The World Health Organization declared COVID-19 a pandemic on March 11, 2020. The Company responded rapidly
and proactively and implemented several initiatives to help protect the health and safety of our employees, their
families and the communities in which we operate.
Specifically, each mine site activated established crisis management plans and developed site -specific plans that
have enabled them to meet and respond to changing conditions associated with COVID -19. The Company has
adopted the advice of public health authorities and is adhering to government regulations with respect to COVID -19
in the jurisdictions in which it operates
The following measures have been instituted at sites to prevent the potential spread of the COVID -19 virus:
• Medical screening for all personnel prior to entry to site for symptoms of COVID-19
• Testing of personnel at all operating sites prior to starting their work rotation
• Vaccinations offered to employees at Island Gold and Mulatos given their unique camp set-up
• Training on proper hand hygiene and social distancing
• Remote work options have been implemented for eligible employees
• Social distancing practices have been implemented for all meetings, huddles and transportation
• Mandatory use of personal protective equipment for employees where social distancing is not practicable
• Rigid camp and site hygiene protocols have been instituted and are being followed
• In addition, since the COVID-19 pandemic began the Company’s teams in Canada, Mexico, and Turkey have
donated their time, medical supplies, and funds to help combat the effects and spread of the virus
COVID 19 - Impact on Operations
Given the significant precautionary measures taken by the Company, and thanks to the dedication of its employees,
contractors and stakeholders , operations remain relatively unaffected by COVID -19. All the Company's operations
continue to incur additional costs related to testing of personnel, lodging and transportation, which have been included
in mining and processing costs. These incremental c osts have increased total cash costs globally by approximately
$25 per ounce.
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6 | Alamos Gold Inc
Environment
• Zero significant environmental incidents in the fourth quarter and for the year
• Advanced permitting of the Lynn Lake Project and the Phase III expansion of Island Gold – a project that will
significantly increase automation and reduce fleet diesel usage resulting in 35% lower life -of-mine greenhouse
gas ("GHG") emissions
• Advanced the power line project at the Mulatos and La Yaqui Grande which will connect the operations to grid
power and eliminate the need for site diesel power generation, reducing GHG emissions
Sixteen minor spills occurred during the fourth quarter, i ncluding one at Young-Davidson, ten at Island Gold and five
at Mulatos. All spills were immediately cleaned and remediated with no anticipated long -term effects. The Company
is committed to preserving the long -term health and viability of the natural envir onment that surround 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 mitig ated or rehabilitated.
Community
• Donated time, medical supplies, food supplies and funds across select operations and projects to help combat
the effects and spread of COVID-19 in local communities
• Young-Davidson employees participated in the Great Cycle Challenge in support of the Sick Kids Foundation,
raising money through sponsorship and participation with the Company matching all contributions
• Continued partnership with Tech Manitoba and the Northern Manitoba Sector Council to deliver digital literacy
classes in Lynn Lake, and continued to support the Mining Matters charitable organization in providing the Lynn
Lake high school with educational resources and curriculum related to Earth sciences, the minerals industry and
their roles in society
• Together with community representatives, completed an annual evaluation of the Mi Matarachi Program to
review our progress and shape community development efforts for 2022 and beyond
• Continued to support local students in Sahuaripa, Matarachi and Hermosillo, Mexico with 180 students
supported through the Company’s Scholarship Program
• In addition to ongoing COVID-19 and influenza vaccination clinics, and community nutrition programs, several
new health initiatives were introduced during the quarter in collaboration w ith the Matarachi community. These
included a breast cancer awareness campaign, healthy eating campaign, and training to the Matarachi
Community Health Committee on using a defibrillator that we donated to the Matarachi Health Clinic
• Made various donations to local communities including medicine, cleaning and hygiene equipment, fans, toys,
and school supplies for teachers and students returning to classrooms
Alamos believes that excellence in sustainability provides a net benefit to all stakeholders. The Co mpany continues
to engage with local communities to understand local challenges and priorities, and to offer support during the COVID-
19 pandemic. Ongoing investments in local infrastructure, health care, education, cultural and community programs
have continued through the COVID-19 pandemic, with appropriate health and safety protocols.
Governance and Disclosure
• Finalized 12 sustainability standards during the quarter and 22 to date as part of Alamos’ Sustainability
Performance Management Framework that addresses governance, health & safety, security, environment and
community relations management
• Achieved a top 15% ranking within Canadian corporate boards in the 2021 Globe and Mail Board Games in
recognition of strong governance practices. This included ranking as the third highest company in the materials
sector listed on the Toronto Stock Exchange
• Received a B- climate change score from the Carbon Disclosure Project in response to the Company's 2021
CDP Report, ahead of the industry C average
TRADING SYMBOL: TSX:AGI NYSE:AGI
7 | Alamos Gold Inc
• Received a Medium ESG Risk Rating from Sustainalytics, positioning Alamos in the top 20th percentile of its
industry
• Received a BBB ESG rating within Alamos’ most recent MSCI ESG Ratings Report
Alamos 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 implementat ion 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.
(1) Frequency rate is calculated as incidents per 200,000 hours worked.
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8 | Alamos Gold Inc
Outlook and Strategy
2022 Guidance
Young-
Davidson Island Gold Mulatos Other (2) Total
Gold production (000’s ounces) 185 - 200 125 - 135 130 - 145 440 - 480
Cost of sales, including amortization (in millions)(4) $610
Cost of sales, including amortization ($ per ounce)(4) $1,325
Total cash costs ($ per ounce)(1) $850 - $900 $550 - $600 $1,225 - $1,275 — $875- $925
All-in sustaining costs ($ per ounce)(1) $1,190 - $1,240
Mine-site all-in sustaining costs ($ per ounce)(1)(3) $1,125 - $1,175 $850 - $900 $1,325 - $1,375 —
Capital expenditures (in millions)
Sustaining capital(1) $50 - $55 $35 - $40 $5 - $10 — $90 - $105
Growth capital(1) $5 - $10 $145 - $160 $50 - $55 $15 $215 - $240
Total Sustaining and Growth Capital(1) $55 - $65 $180 - $200 $55 - $65 $15 $305 - $345
Capitalized exploration(1) $4 $20 — $3 $27
Total capital expenditures and capitalized exploration(1) $59 - $69 $200 - $220 $55 - $65 $18 $332 - $372
(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) Includes growth capital and capitalized exploration at the Company's development projects (Lynn Lake and Esperanza).
(3) For the purposes of calculating mine-site all-in sustaining costs at individual mine sites, the Company does not include an allocation of corporate and administrative
and share based compensation expenses to the mine sites.
(4) 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.
The Company continues to deliver on its key long -term objectives, with strong performances at its Canadian
operations and significant progress made on it s high-return growth projects. Young-Davidson and Island Gold both
met full year production guidance and revised cost guidance. This included a record performance from Young -
Davidson with the operation achieving record mining rates and mine -site free cash flow. Mulatos had a challenging
year as the operation works through a transitional phase with higher costs while making excellent progress on the
development of the higher -grade, low -cost La Yaqui Grande project. La Yaqui Grande remains on track achieve
commercial production in the third quarter of 2022 and is expected drive costs significantly lower in the second half
of the year. Finally, the Phase III expansion at Island Gold continues to advance while ongoing exploration success
drove another substantia l increase in Mineral Reserves and Resources to more than five million ounces. This
represents another key milestone for the operation and highlights the significant upside potential to the Phase III
expansion study ("Phase III Study") with Mineral Reserves and Resources having increased 37% since the completion
of the study in 2020.
The Company provided inaugural three -year production and operating guidance in January 2022, which outlined
growing production at significantly lower costs over the 2022 to 20 24 period. Refer to the Company’s January 17,
2022 guidance press release for a summary of the key assumptions and related risks associated with the
comprehensive 2022 guidance and three -year production, cost and capital outlook . Production is expected to be
between 440,000 and 480,000 ounces of gold in 2022, consistent with 2021, and increase approximately 4% (based
on the mid-point of guidance) to between 460,000 and 500,000 ounces in 2023 and 2024. Total cash costs and AISC
are expected to increase in 2022 compared to 2021, reflecting industry -wide cost inflation and a temporary increase
in costs at Mulatos. La Yaqui Grade is expected to drive Mulatos and consolidated costs lower in the second half of
2022 and will be a key contributor to an expected 18% decrease in AISC between 2022 and 2024. The Company
expects a further reduction of costs following the completion of the Phase III expansion at Island Gold in 2025, and
over the longer term.