Alamos Gold Reports Second Quarter 2024 Results Record production and lower costs drive record free cash flow of $107 million
TRADING SYMBOL: TSX:AGI NYSE:AGI
1 | Alamos Gold Inc
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 Second Quarter 2024 Results
Record production and lower costs drive record free cash flow of $107 million
Toronto, Ontario ( July 31, 202 4) - Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today
reported its financial results for the quarter ended June 30, 2024.
“Alamos delivered a record performance in the second quarter. Production exceeded quarterly guidance, increasing
to a record 139,100 ounces. Combined with lower costs, this drove a number of financial records including free
cash flow of $10 7 million,” said John A. McCluskey, President and Chief Executive Officer. “We also continue to
create value through exploration and our various growth initiatives. The Phase 3+ Expansion is progressing well,
and the integration of Island Gold with our recently acquired Magino mine is well underway. We expect the
integration of the two operations to drive substantial synergies and unlock significant longer -term upside potential
supported by the broad -based exploration success we are seeing across the Island Gold District. We remain well
positioned to achieve full year guidance, and deliver significant production growth, at declining costs over the next
several years,” Mr. McCluskey added.
Second Quarter 2024 Operational and Financial Highlights
• Produced a record 139,100 ounces of gold, exceeding quarterly guidance of 123,000 to 133,000 ounces,
driven by strong performances from Island Gold and La Yaqui Grande. With the solid first half performance,
the Company is well positioned to achieve full year production and cost guidance
• Sold 140,923 ounces of gold at an average realized price of $2,336 per ounce, generating record quarterly
revenue of $332.6 million. This represented a 27% increase from the second quarter of 2023 and marked
the second consecutive quarter of record revenue
• Record free cash flow 1 of $106.9 million, reflecting strong mine-site free cash flow from all three operations,
including quarterly free cash flow of $69.9 million at Mulatos and record quarterly free cash flow from
Young-Davidson of $40.1 million. This was a significant increase from consolidated free cash flow of $24.4
million in the first quarter of 2024, while continuing to fund the Phase 3+ Expansion at Island Gold
• Record cash flow from operating activities of $194.5 million (including $190.6 million, or $0.48 per share
before changes in working capital 1), an 80% increase from the first quarter of 2024 reflecting strong
operating performance and margin expansion
• Cost of sales of $172.6 million or $1,225 per ounce were in line with full year guidance
• Total cash costs 1 of $830 per ounce and all -in sustaining costs ("AISC" 1) of $1,096 per ounce decreased
9% and 13%, respectively, from the first quarter of 2024, driven by higher grades at both Island Gold and
Young-Davidson
• Adjusted net earnings1 for the second quarter were $96.9 million, or $0.24 per share1. Adjusted net earnings
includes adjustments for net unrealized foreign exchange losses recorded within deferred taxes and foreign
exchange of $15.9 million, and other adjustments, net of taxes totaling $10.9 million. Reported net earnings
were $70.1 million, or $0.18 per share
• Cash and cash equivalents increased 31% from the first quarter of 2024 to $313.6 million on June 30, 2024.
This was net of a $ 36.9 million private placement into Argonaut Gold ("Argonaut") in April, and ongoing
investment in the Phase 3+ Expansion. The Company was debt -free as the end of the second quarter.
Subsequent to quarter -end, the Company drew down $250 million on its credit facility to extinguish
Argonaut's term loan, revolving credit facility and gold prepaid advance of 10,000 ounces, all inherited as
part of the acquisition
TRADING SYMBOL: TSX:AGI NYSE:AGI
2 | Alamos Gold Inc
• Paid dividends of $10.0 million, or $0.025 per share for the quarter
• Provided an exploration update at Young -Davidson having intersected a new style of higher -grade gold
mineralization from the mid mine, in zones within the hanging wall of the Young -Davidson deposit. These
zones are located between 10 and up to 200 metres (“m”) south of existing infrastructure and Mineral
Reserves and Resources, highlighting the upside potential with grades intersected well above the current
Mineral Reserve grade of 2.31 g/t of gold
• Announced the completion of the acquisition of Argonaut on July 12, 2024. As part of the acquisition,
Alamos acquired Argonaut’s Magino mine, located adjacent to Alamos’ Island Gold mine in Ontario,
Canada. Argonaut’s assets in the United States and Mexico have been spun out as a newly created junior
gold producer named Florida Canyon Gold Inc. (“Florida Canyon Gold”) of which the Company owns an
equity interest of 19.9%
• Completed a gold sale prepayment agreement (“gold prepayment”) on July 15, 2024 for total consideration
of $116 million in exchange for the delivery of 49,384 ounces in 2025. The proceeds of the gold prepayment
were used to eliminate gold forward sale contracts, previously entered into by Argonaut, totaling 179,417
ounces in 2024 and 2025 with an average price of $1,838 per ounce. The transaction has eliminated more
than half of the Argonaut hedge book and associated mark -to-market liability, while providing significantly
increased exposure to rising gold prices
• Provided a comprehensive exploration update at Island Gold where exploration drilling continues to extend
high-grade gold mineralization across the Island Gold Deposit, as well as within several hanging wall and
footwall structures. Delineation and definition drilling has also defined wide, higher -grade zones within the
Island East area. The success on both fronts is expected to drive further growth in high -grade Mineral
Reserves and Resources with the 2024 year end update
• Published Alamos’ 2023 ESG Report, outlining the Company’s progress on its ESG performance
.(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.
TRADING SYMBOL: TSX:AGI NYSE:AGI
3 | Alamos Gold Inc
Highlight Summary
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Financial Results (in millions)
Operating revenues $332.6 $261.0 $610.2 $512.5
Cost of sales (1) $172.6 $157.8 $346.2 $313.0
Earnings from operations $138.8 $88.6 $220.2 $163.6
Earnings before income taxes $128.2 $92.1 $203.8 $164.3
Net earnings $70.1 $75.1 $112.2 $123.5
Adjusted net earnings (2) $96.9 $59.3 $148.1 $104.7
Earnings before interest, taxes, depreciation and
amortization (2) $180.5 $138.9 $306.2 $258.8
Cash provided by operations before working capital and taxes
paid (2) $190.6 $138.3 $325.5 $265.5
Cash provided by operating activities $194.5 $141.8 $303.4 $236.1
Capital expenditures (sustaining) (2) $20.9 $23.4 $47.4 $50.3
Capital expenditures (growth) (2) $58.8 $49.8 $110.4 $101.8
Capital expenditures (capitalized exploration) $7.9 $7.0 $14.3 $11.9
Free cash flow (2) $106.9 $61.6 $131.3 $72.1
Operating Results
Gold production (ounces) 139,100 136,000 274,800 264,400
Gold sales (ounces) 140,923 131,952 273,772 264,620
Per Ounce Data
Average realized gold price $2,336 $1,978 $2,207 $1,937
Average spot gold price (London PM Fix) $2,338 $1,976 $2,208 $1,933
Cost of sales per ounce of gold sold
(includes amortization) (1) $1,225 $1,196 $1,265 $1,183
Total cash costs per ounce of gold sold (2) $830 $847 $869 $834
All-in sustaining costs per ounce of gold sold (2) $1,096 $1,112 $1,178 $1,144
Share Data
Earnings per share, basic $0.18 $0.19 $0.28 $0.31
Earnings per share, diluted $0.17 $0.19 $0.28 $0.31
Adjusted earnings per share, basic (2) $0.24 $0.15 $0.37 $0.27
Weighted average common shares outstanding (basic) (000’s) 398,275 395,346 397,546 394,657
Financial Position (in millions)
Cash and cash equivalents $313.6 $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.
TRADING SYMBOL: TSX:AGI NYSE:AGI
4 | Alamos Gold Inc
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Gold production (ounces)
Young-Davidson 44,000 45,200 84,100 90,200
Island Gold 41,700 30,500 75,100 63,400
Mulatos District (7) 53,400 60,300 115,600 110,800
Gold sales (ounces)
Young-Davidson 45,057 43,570 84,867 89,246
Island Gold 39,766 28,183 73,896 61,910
Mulatos District 56,100 60,199 115,009 113,464
Cost of sales (in millions) (1)
Young-Davidson $66.7 $59.3 $132.1 $121.2
Island Gold $30.7 $27.6 $64.1 $58.5
Mulatos District $75.2 $70.9 $150.0 $133.3
Cost of sales per ounce of gold sold (includes amortization) (1)
Young-Davidson $1,480 $1,361 $1,557 $1,358
Island Gold $772 $979 $867 $945
Mulatos District $1,340 $1,178 $1,304 $1,175
Total cash costs per ounce of gold sold (2)
Young-Davidson $1,030 $955 $1,104 $948
Island Gold $493 $678 $591 $651
Mulatos District $907 $847 $873 $843
Mine-site all-in sustaining costs per ounce of gold sold (2),(3)
Young-Davidson $1,203 $1,212 $1,334 $1,222
Island Gold $805 $1,072 $943 $1,016
Mulatos District $963 $894 $933 $903
Capital expenditures (sustaining, growth, and capitalized exploration) (in millions) (2)
Young-Davidson (4) $19.0 $13.5 $39.2 $30.9
Island Gold (5) $56.1 $54.7 $110.7 $111.7
Mulatos District (6) $7.8 $6.5 $11.7 $12.2
Other $4.7 $5.5 $10.5 $9.2
(1) Cost of sales includes mining and processing costs, royalties, and amortization expense.
(2) Refer to the “Non -GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and
calculation of these measures.
(3) For the purposes of calculating mine -site all-in sustaining costs, the Company does not include an allocation of corporate and administrative and share based
compensation expenses.
(4) Includes capitalized exploration at Young -Davidson of $1.4 million and $2.4 million for the three and six months ended June 30, 2024 ($1.2 million and $2.6 million
for the three and six months ended June 30, 2023).
(5) Includes capitalized exploration at Island Gold of $3.4 million and $6.9 million for the three and six months ended June 30, 2024 ($3.0 million and $5.4 million for
the three and six months ended June 30, 2023).
(6) Includes capitalized exploration at Mulatos District of $3.1 million and $5.0 million for the three and six months ended June 30, 2024 ($2.8 million and $3.9 million
for the three and six months ended June 30, 2023).
(7) The Mulatos District includes La Yaqui Grande and Mulatos.
TRADING SYMBOL: TSX:AGI NYSE:AGI
5 | Alamos Gold Inc
Environment, Social and Governance Summary Performance
Health and Safety
• Total recordable injury frequency rate 1 ("TRIFR") of 1.76 in the second quarter, down from 1.79 in the first
quarter
• Lost time injury frequency rate1 ("LTIFR") of 0.20 in the second quarter as compared to nil in the first quarter
• Year-to-date TRIFR of 1.78 and LTIFR of 0.10
During the second quarter of 2024, Alamos had 18 recordable injuries across its sites including two lost time injuries
(“LTI”).
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 two minor reportable events in the second quarter of 2024
• Received approval from the province for a routine tailings raise at the Island Gold and Young -Davidson
Mines
• Received Environmental Compliance Approval Air and Noise from the Ministry of Environment,
Conservation and Parks at Island Gold
• Continued reclamation activities at Mulatos for the Cerro Pelon, El Victor and San Carlos pits
The two minor reportable events during the quarter involved an oil spill (1,000 litres) following the accidental
puncture of a container, and a dust concern due to strong winds, at the Young -Davidson mine. The area of the oil
spill was contained and remediated with no anticipated long-term effects for either event.
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
• Continued to advance a long-term power project at Island Gold in partnership with Batchewana First Nation
• Continued to provide local community support including road maintenance, dust suppression, and water
distribution to Matarachi and surrounding areas around the Mulatos Mine
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
• Published Alamos' 2023 Environmental, Social and Governance ("ESG") Report, outlining the Company's
progress on its ESG performance across its operations, projects and offices
• Mulatos was awarded the Empresa Socialmente Responsable award for the 16 th consecutive year in
recognition of the mine’s ethical and sustainable practices
• Published Alamos’ 2023 Report on Conformance to the Responsible Gold Mining Principles ("RGMP"s) in
accordance with the World Gold Council’s RGMP framework
• Published Alamos’ inaugural 2023 Report on Modern Slavery in accordance with Canada’s Fighting Against
Forced Labour and Child Labour in Supply Chains Act
• Published Alamos’ Extractive Sector Transparency Measures Act 2023 Annual Report, outlining payments
made to governments in Canada and abroad related to our activities on a country and project basis
TRADING SYMBOL: TSX:AGI NYSE:AGI
6 | Alamos Gold Inc
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.
TRADING SYMBOL: TSX:AGI NYSE:AGI
7 | Alamos Gold Inc
Outlook and Strategy
2024 Guidance - excludes Magino (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 include the Magino Mine with the acquisition closing in July. Updated guidance is expected to be provided in September 2024.
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.
The Company's outstanding operational and financial performance continued in the second quarter of 2024 ,
achieving a number of new records. This included record production of 139,100 ounces, which exceeded quarterly
guidance, at substantially lower costs reflecting strong performances at all three operations. With the solid first half
performance, the Company is well positioned to achieve full year production and cost guidance issued in January
2024. Updated 2024 guidance, incorporating the recently acquired Magino mine , is expected to be released in
September 2024.
Record production and rising gold prices drove record revenue in the quarter. In addition, lower costs generated a
significant increase in operating margins, driving operating cash flow and free cash flow sharply higher to new
records. Free cash flow increased to $106.9 million in the second quarter, up more than 300% from the first quarter
of 2024 while continuing to fund the Phase 3+ Expansion at Island Gold. The expansion is progressing well and
remains on track to be completed during the first half of 2026 , which will be a significant driver of further free cash
flow growth over the longer-term through growing production and declining costs.
With the completion of the acquisition of Argonaut earlier this month, the integration of the Magino and Island Gold
mines is well underway. Given their close proximity, 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 over
the life of the mine 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 has increased company -wide gold production to an annual rate of approximately 600,000
ounces per year with longer term production potential of over 900,000 ounces per year. Production in the third
quarter of 2024 is expected to be between 14 5,000 and 155,000 ounces, including ounces produced from Magino
from the acquisition date of July 12, 2024. Costs will be above the top end of the current guidance range, reflecting
higher production costs from Magino.
TRADING SYMBOL: TSX:AGI NYSE:AGI
8 | Alamos Gold Inc
The Company's other growth initiatives continue to advance including preparatory work on the Lynn Lake project
ahead of an expected construction decision in 2025, and finalizing work on a development plan for the Puerto Del
Aire ("PDA") project, expected to be released in early September. The PDA development plan is expected to outline
another attractive project and significantly extend the mine life of the Mulatos District.
Additionally, the Company continues to create value through ongoing exploration success across its asset base. As
outlined in May, underground exploration drilling at Young -Davidson from the mid -mine intersected a new style of
higher-grade gold mineralization in zones within the hanging wall of the deposit. These zones are located between
10 and up to 200 m south of existing infrastructure and Mineral Reserves and Resources, highlighting the upside
potential with grades intersected well above the current Mineral Reserve grade of 2.31 g/t Au. In addition, as
announced earlier this month, underground and surface exploration programs at Island Gold continue to extend
high-grade mineralization beyond the extent of the main deposit as well as within the hanging wall and footwall. This
is expected to drive another increase in high -grade Mineral Reserves and Resources at Island Gold. Near -mine
exploration success also highlighted the longer -term upside opportunities to supply multiple sources of ore through
the expanded Magino mill.
The Company ended the second quarter with $313.6 million of cash and cash equivalents, up 31% from the first
quarter. The Company was debt -free at the end of the second quarter. Subsequent to quarter -end, the Company
withdrew $250 million on its credit facility to extinguish Argonaut's term loan, revolving credit facility, and gold
prepaid advances, all inherited as part of the acquisition, and continued to maintain a strong liquidity position of
more than $550 million. Combined with strong ongoing free 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 the PDA and Lynn Lake projects.