Alamos Gold Reports Third Quarter 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 Third Quarter 2021 Results
Toronto, Ontario (October 27, 2021) - Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today
reported its financial results for the quarter ended September 30, 2021.
“We had a challenging third quarter at our Mulatos mine which offset strong performances at our Canadian operations.
The challenges at Mulatos are temporary with the operation transitioning to low-cost production from La Yaqui Grande
in 2022; however, given the weaker quarter, we reduced 2021 guidance at the operation by 15,000 ounces. We have
also increased our consolidated cost guidance for the yea r given the stronger than budgeted Canadian dollar and
higher than planned costs at Mulatos,” said John A. McCluskey, President and Chief Executive Officer.
“We expect higher production in the fourth quarter with our Canadian operations continuing to perform well. This has
been led by Young-Davidson which achieved a new record for underground mining rates in the third quarter. We are
also making good progress on our growth initiatives including the Phase III expansion at Island Gold and construction
of La Yaqui Grande. Both are key drivers of our strong outlook with production potential of 750,000 ounces per year
by 2025 at significantly lower all-in sustaining costs of approximately $800 per ounce,” Mr. McCluskey added.
Third Quarter 2021
• Production of 104,700 ounces of gold, an 11% decrease from the third quarter of 2020, with lower than anticipated
production from Mulatos more than offsetting a strong performance at Young-Davidson
• Gold production at Mulatos of 26,700 ounces was well below expectations due to an above average rainy season
in Mexico which impacted stacking rates, and a longer than anticipated leach cycle for stockpiled ore stacked in
the quarter. With Cerro Pelon winding down, stockpiled ore w ill represent a larger proportion of stacked ore at
Mulatos until production from La Yaqui Grande ramps up in the second half of 2022
• Given the lower production at Mulatos in the quarter and longer than anticipated leach cycle for stockpiled ore,
the Comp any has revised production guidance lower by 15,000 ounces at Mulatos. Production guidance for
Young-Davidson and Island Gold remains unchanged with both operations continuing to perform well
• Young-Davidson achieved record mining rates of 8,017 tonnes per day ("tpd"), driving production of 50,000
ounces of gold and mine -site free cash flow 1 of $28.9 million. With a further increase in production expected in
the fourth quarter, Young-Davidson is expected to generate approximately $100 million in mine-site free cash flow
in 2021
• Consolidated total cash costs1 of $788 per ounce, all-in sustaining costs ("AISC")1 of $1,152 per ounce and cost
of sales of $1,172 per ounce were higher than annual guidance reflecting the stronger than budgeted Canadian
dollar, and higher costs at Mulatos. The USD/CAD foreign exchange rate averaged $0.79:1 in the third quarter
and $0.80:1 year-to-date relative to the budgeted rate of $0.75:1 which has increased total cash costs by $30 per
ounce and AISC by $45 per ounce. In addition, Mulatos costs increased in the third quarter and are expected to
increase further in the fourth quarter, reflecting higher reagent costs associated with processing stockpiled ore
• Given the stronger than budgeted Canadian dollar, and higher than planned costs at Mulatos, the Company has
revised its 2021 total cash cost guidance to $790 to $810 per ounce and all-in sustaining costs to $1,120 to $1,140
per ounce
• Construction of La Yaqui Grande is progressing well and remains on track for commercial production in the third
quarter of 2022. La Yaqui Grande is expected to significantly reduce the cost profile at Mulatos as production
ramps up towards the end of 2022. Despite inflationary cost pressures and other challenges related to COVID -
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2 | Alamos Gold Inc
19, capital spending for La Yaqui Grande remains on budget
• Sold 110,488 ounces of gold at an average realized price of $1,792 per ounce for revenues of $198.0 million, a
9% decrease compared to the third quarter of 2020
• Generated cash flow from operating activities of $82.4 million ($102.3 million, or $0.26 per share, before changes
in working capital1), a decrease from the prior year period due to lower realized gold prices and less ounces sold
• 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 earnings1 of $37.6 million, or $0.10 per share1, which includes adjustments for unrealized
foreign exchange loss of $12.8 million recorded within deferred taxes and foreign exchange, and other gains of
$0.3 million
• Recorded net earnings of $25.1 million, or $0.06 per share
• Ended the quarter with cash and cash equivalents of $211.4 million, equity securities of $22.9 million, and no debt
• Paid a quarterly dividend of $9.8 million, or US$0.025 per share (annualized rate of US$0.10 per share), bringing
total dividends through the first nine months of 2021 to $29.4 million
• Repurchased an additional 600,000 shares in the quarter at a cost of $4.5 million under the Comp any's Normal
Course Issuer Bid ("NCIB") bringing the total amount repurchased year-to-date to $6.0 million
• Reported results from the underground exploration drill program at Young -Davidson which has successfully
extended gold mineralization below existing Mineral Reserves and Resources and intersected higher grades in
the hanging wall and footwall of the deposit
.(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 September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Financial Results (in millions)
Operating revenues $198.0 $218.4 $620.5 $521.5
Cost of sales (1) $129.5 $122.6 $395.7 $346.2
Earnings (Loss) from operations $57.3 $88.0 ($34.9) $146.3
Earnings (Loss) before income taxes $56.3 $85.9 ($41.3) $132.4
Net earnings (loss) $25.1 $67.9 ($96.2) $67.3
Adjusted net earnings (2) $37.6 $56.9 $125.4 $96.2
Earnings before interest, depreciation and amortization (2) $100.0 $130.5 $314.0 $248.1
Cash provided by operations before working capital and
cash taxes (2) $102.3 $130.0 $319.1 $256.4
Cash provided by operating activities $82.4 $130.8 $268.4 $237.0
Capital expenditures (sustaining) (2) $30.9 $22.7 $81.2 $54.6
Capital expenditures (growth) (2) (3) $51.4 $29.2 $145.3 $109.3
Capital expenditures (capitalized exploration) (4) $6.9 $2.9 $18.8 $8.8
Free cash flow (2) ($8.1) $76.0 $1.6 $64.3
Operating Results
Gold production (ounces) 104,700 117,100 344,700 306,400
Gold sales (ounces) 110,488 116,035 344,551 302,494
Per Ounce Data
Average realized gold price $1,792 $1,882 $1,801 $1,724
Average spot gold price (London PM Fix) $1,790 $1,909 $1,800 $1,735
Cost of sales per ounce of gold sold (includes
amortization) (1) $1,172 $1,057 $1,148 $1,144
Total cash costs per ounce of gold sold (2) $788 $681 $778 $772
All-in sustaining costs per ounce of gold sold (2) $1,152 $949 $1,102 $1,052
Share Data
Earnings (Loss) per share, basic and diluted $0.06 $0.17 ($0.24) $0.17
Adjusted earnings per share, basic and diluted (2) $0.10 $0.15 $0.32 $0.25
Weighted average common shares outstanding (basic)
(000’s) 392,742 391,553 392,755 391,325
Financial Position (in millions)
Cash and cash equivalents (5) $211.4 $220.5
(1) Cost of sales includes mining and processing costs, royalties, COVID-19 costs 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. 2020 growth capital excludes the Island Gold royalty repurchase completed in March 2020 for $54.8 million.
(4) Includes capitalized exploration at Island Gold, Young-Davidson and Mulatos.
(5) Comparative cash and cash equivalents balance as at December 31, 2020.
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Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Gold production (ounces) (1)
Young-Davidson 50,000 36,400 143,100 88,200
Island Gold 28,000 39,600 103,400 97,800
Mulatos 26,700 41,100 98,200 119,600
Gold sales (ounces)
Young-Davidson 48,625 35,548 141,931 86,893
Island Gold 28,331 39,322 101,845 97,009
Mulatos 33,532 41,165 100,775 118,592
Cost of sales (in millions) (2)
Young-Davidson $58.5 $50.5 $181.8 $140.5
Island Gold $24.5 $28.1 $79.2 $78.2
Mulatos $46.5 $44.0 $134.7 $127.5
Cost of sales per ounce of gold sold (includes amortization)
Young-Davidson $1,203 $1,421 $1,281 $1,617
Island Gold $865 $715 $778 $806
Mulatos $1,387 $1,069 $1,337 $1,075
Total cash costs per ounce of gold sold (3)
Young-Davidson $810 $923 $873 $1,145
Island Gold $586 $394 $512 $438
Mulatos $927 $746 $913 $772
Mine-site all-in sustaining costs per ounce of gold sold (3),(4)
Young-Davidson $1,051 $1,196 $1,093 $1,370
Island Gold $1,077 $575 $860 $653
Mulatos $1,124 $928 $1,097 $928
Capital expenditures (sustaining, growth and capitalized exploration) (in millions) (3)
Young-Davidson (5) $22.3 $25.6 $63.8 $82.2
Island Gold (6) $33.2 $15.9 $89.1 $53.9
Mulatos (7) $28.4 $9.1 $76.1 $21.6
Other $5.3 $4.2 $16.3 $15.0
(1) Production for the three and nine months ended September 30, 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 nine months ended September 30, 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 $3.8 million for the three and nine months ended September 30, 2021 ($nil for the three and
nine months ended September 30, 2020).
(6) Includes capitalized exploration at Island Gold of $5.2 mill ion and $13.6 million for the three and nine months ended September 30, 2021 ($2.9 million and $8.1
million for the three and nine months ended September 30, 2020); Capital expenditures exclude the Island Gold royalty repurch ase for $54.8 million for the n ine
months ended September 30, 2020.
(7) Includes capitalized exploration at Mulatos of $0.4 million and $1.4 million for the three and nine months ended September 30 , 2021 ($nil and $0.7 million for the
three and nine months ended September 30, 2020).
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Environment, Social and Governance Summary Performance
Health and Safety
• Recordable injury frequency rate 1 of 2.37 in the quarter and 2.35 year -to-date, a 7% increase from 2.20 in
2020
• Lost time injury frequency rate1 of 0.33 in the quarter and 0.20 year-to-date, consistent with 0.20 in 2020
• Performed over 65,000 COVID -19 tests to -date on employees, contractors and visitors as part of an
enhanced screening program
During the third quarter of 2021, the recordable injury frequency rate decreased with 29 recordable injuries reported,
down from 35 in the second quarter of 2021. Four lost time injuries were reported in the quarter, up from one in the
second quarter of 20 21, resulting in an overall increase to the Company’s lost time injury frequency rate. 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. At Mulatos,
where three lost time injuries occurred in the quarter, safety teams increased communications, meetings and safety
huddles to reinforce site safety standards and procedures and underscore that all injuries are avoidable. Throughout
the quarter, the Company continued to advance implementation of its Sustainability Performance Management
Framework, which includes standards specific to safety leadership and managing higher -risk activities. Th e
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 init iatives 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 at Island Gold for employees
• 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
• Elimination of all non-essential business travel
• 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 costs have increased total cash costs globally by approximately
$25 per ounce and are expected to be incurred through the remainder of 2021.
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Environment
• Zero significant environmental incidents in the third quarter and year-to-date
• Completed independent reviews of cyanide management practices at all operations in accordance with the
International Cyanide Management Code
• Completed independent reviews of energy and greenhouse gas management practices at all operations in
accordance with the ISO 50001 Energy Management Systems Standard, to develop and/or improve site
energy management plans
• 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
• Nearing the completion of the power line which will connect the Mulatos Mine to grid power and eliminate the
need for site diesel power generation, reducing GHG emissions by 12% annually
Seven minor spills occurred during the third quarter, including one at Young-Davidson, one 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 environment 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 mitigated 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
• Organized several community health initiatives during the third qua rter in collaboration with the Matarachi
community, located near the Mulatos mine. These included ongoing COVID -19 vaccination clinics, nutrition
health programs, improvements to local water network infrastructure, and installation planning for solar -
powered street lighting
• In partnership with local educational organization Educatón, we introduced a program at Mulatos to support
local youth and adults to finish their intermediate level studies
• Supported the construction of new military barracks and facilities in Yécora
• Partnered with Tech Manitoba and the Northern Manitoba Sector Council to deliver digital literacy classes in
Lynn Lake. The DigitALL initiative targets Indigenous youth, low-income earners and seniors to improve their
skills and confidence wit h computers and the internet through hands on training courses, creating
opportunities for further education, employment and overall participation in the online world
Alamos believes that excellence in sustainability provides a net benefit to all stakehold ers. The Company 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 progra ms
has continued through the COVID-19 pandemic, with appropriate health and safety protocols.
Governance and Disclosure
• Received the Socially Responsible Company Award by CEMEFI, the Mexican Center for Philanthropy, for the
13th consecutive year at Mulatos
• Received the “Award for Corporate Ethics and Values in Industry” by CONCAMIN, the Industrial Chambers
Confederation of Mexico, for the second consecutive year at Mulatos. The award is in recognition of strong
progress and maturity in corporate social responsibility
• Received the “Award for Outstanding Practice in Action for Climate” by CONCAMIN, in recognition of strong
practices supporting the UN Sustainable Development Goals at Mulatos. The award recognized strong
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7 | Alamos Gold Inc
performance in four categories: Good Health and Well-Being, Gender Equality, Decent Work and Economic
Growth, and Climate Action.
• Completed the Carbon Disclosure Project’s 2021 Climate Change Questionnaire
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 implementati on 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
2021 Guidance
Young-
Davidson Island Gold Mulatos Other (2)
Revised
Guidance
Previous
Guidance
Gold production (000’s ounces) 190 - 205 130 - 145 135 - 145 455 - 495 470 - 510
Total cash costs ($ per ounce)(1)(5) ~ $850 ~ $525 ~ $1,000 — $790 - $810 $710 - $760
All-in sustaining costs ($ per ounce)(1) $1,120 - $1,140 $1,025 - $1,075
Mine-site all-in sustaining costs ($ per
ounce)(1)(3)(6) ~ $1,060 ~ $865 ~ $1,235 —
Capital expenditures (in millions)
Sustaining capital(1) $40 - $45 $40 - $45 $30 - $35 — $110 - $125 $110 - $125
Growth capital(1) $25 - $30 $80 - $85 $95 - $100 $10 $210 - $225 $210 - $225
Total Sustaining and Growth
Capital(1) $65 - $75 $120 - $130 $125 - $135 $10 $320 - $350 $320 - $350
Capitalized exploration(1) $7 $20 — $7 $34 $34
Total capital expenditures and
capitalized exploration(1) $72 - $82 $140 - $150 $125 - $135 $17 $354 - $384 $354 - $384
(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, Esperanza and Quartz Mountain).
(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 guidance.
(5) Total cash cost guidance for Young-Davidson has been revised from between $790 - $840 per ounce to approximately $850 per ounce; for Island Gold, revised from
between $430 - $480 per ounce to approximately $525 per ounce; and for Mulatos, revised from between $840 - $890 per ounce to approximately $1,000 per ounce
(6) Mine-site AISC guidance for Young-Davidson has been revised from between $1,000 - $1,050 per ounce to approximately $1,060 per ounce; for Island Gold, revised
from between $750 - $800 per ounce to approximately $865 per ounce; and for Mulatos, revised from between $1,060 - $1,110 per ounce to approximately $1,235
per ounce
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 pro fitability. 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 while managing temporary challenges at Mulatos
as the operation transitions to the higher grade, low -cost La Yaqui Grande deposit. The Company expects stronger
production in the fourth quarter at all three operations ; however, given the challenging third quarter at Mulatos, the
Company has reduced full year production guidance at Mulatos. Production guidance at the Canadian operations
remains unchanged with both operations continuing to perform well and on track to ac hieve full year guidance. This
included another strong quarter from Young -Davidson with mining rates increasing to average 8,017 tpd for the
quarter, a new record for the operation.
Total cash costs and all-in sustaining costs ("AISC") in the third quarter and through the first nine months of the year
were above initial annual guidance reflecting the impact of the stronger than budgeted Canadian dollar. Full year cost
guidance was based on a USD/CAD foreign exchange rate of $0.75:1 compared to the actual US D/CAD rate of
$0.79:1 in the third quarter and $0.80:1 average year-to-date. This has increased Company-wide total cash costs by
$30 per ounce, and AISC by $45 per ounce relative to initial guidance. Excluding this impact, total cash costs and
AISC through the first three quarters of 2021 are consistent with initial annual guidance. Given the ongoing impact of
the stronger Canadian dollar and higher than planned costs at Mulatos, the Company is increasing full year
consolidated total cash cost guidance to a range of $790 to $810 per ounce and AISC guidance to a range of $1,120
to $1,140 per ounce. Although the Company has managed inflationary pressures on operating costs through the first
nine-months of the year, price increases for certain consumables are expected to start having more of an impact on
costs in the fourth quarter and into 2022.
The Company continues to advance its high -return organic growth initiatives. Construction of the higher grade La
Yaqui Grande project remains on budget and on schedule to begin supplying low-cost production in the third quarter
of 2022. Development activities on the Phase III expansion at Island Gold are also advancing while ongoing