Alamos Gold Reports Third Quarter 2022 Results
TRADING SYMBOL: TSX:AGI NYSE:AGI
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 2022 Results
Toronto, Ontario (October 26, 2022) - Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today
reported its financial results for the quarter ended September 30, 2022.
“We had a solid third quarter overall, including our highest production in nearly two years. Our operations performed
well with production near the top end of quarterly guidance and representing a 19% increase from the second
quarter. Our costs were also down significantly from the first half of the year, coming in below full year guidance.
With the strong year-to-date performance and even stronger results expected in the fourth quarter, we remain on
track to achieve full year production and cost guidance,” said John A. McCluskey, President and Chief Executive
Officer.
“La Yaqui Grande was the key driver of our operational and financial performance with an excellent first full quarter
of operations. Its low-cost production growth more than offset the lower gold price to drive stronger cash flow from
operations. This is a trend we expect to continue with La Yaqui Grande contributing higher production and lower
costs over the next few years and Island Gold continuing that trend over the longer term through the Phase 3+
Expansion. Given our growing cash flow from operations, we can fund this growth internally while generating strong
free cash flow and supporting solid ongoing returns to shareholders,” Mr. McCluskey added.
Third Quarter 2022
• Produced 123,400 ounces of gold, a 19% increase from the second quarter and near the top end of the range
for quarterly guidance. This represented the highest quarterly production in nearly two years driven by a solid
first full quarter of production from La Yaqui Grande in Mexico
• With year-to-date production of 326,200 ounces of gold and a further increase in production expected in the
fourth quarter, the Company remains on track to achieve full year guidance of 440,000 to 480,000 ounces
• Mulatos District production totaled 42,700 ounces, more than double the second quarter at substantially lower
costs driven by low-cost production growth from La Yaqui Grande
• Young-Davidson continued its strong operational performance, producing 49,300 ounces and generating mine -
site free cash flow 1 of $23.3 million. Year-to-date, Young-Davidson generated $77.3 million of mine -site free
cash flow and is on track to generate $100 million for the second consecutive year
• Construction activities on the Phase 3 + Expansion ramped up at Island Gold, including the start of the pre -sink
of the shaft in August
• Sold 122,780 ounces of gold at an average realized price of $1,740 per ounce, for revenues of $213.6 million.
The average realized gold price was $11 per ounce above the London PM fix
• Total cash costs 1 of $868 per ounce, and AISC 1 of $1,178 per ounce per ounce decreased 8% and 7%,
respectively, from the first half of the year and were both lower than annual guidance, reflecting low -cost
production growth at La Y aqui Grande, and the weaker Canadian dollar. The Company remains on track to
meet full year cost guidance
• Realized adjusted net earnings 1 for the quarter of $26.9 million, or $0.07 per share 1. Adjusted net earnings
includes adjustments for a non-cash, after tax inventory net realizable value adjustment at Mulatos of $ 7.7
million and unrealized foreign exchange losses recorded within both deferred taxes and foreign exchange of
$23.0 million, partially offset by other gains totaling $2.4 million
• Reported a net loss of $1.4 million
• Generated cash flow from operating activities of $74.0 million ($96.1 million, or $0.25 per share, before changes
in working capital1)
• Free cash flow 1 was $1.4 million in the quarter; d espite the lower gold price in the quarter, the Company
continues to fund its growth initiatives , including the Phase 3+ Expansion , through cash flow from existing
operations
TRADING SYMBOL: TSX:AGI NYSE:AGI
2 | Alamos Gold Inc
• Paid a quarterly dividend of $9.8 million, or $0.025 per share (annualized rate of $0.10). On a year-to-date
basis, $37.5 million has been returned to shareholders through dividends and share buy backs. This includes
the repurchase of 1.1 million shares at a cost of $8.2 million ($7.41 per share) under the Company's Normal
Course Issuer Bid ("NCIB")
• Ended the quarter with cash and cash equivalents of $116.7 million, equity securities of $15.3 million, and no
debt
• Released its 2021 Environmental, Social, and Corporate Governance ("ESG") Report, which outlines the
Company’s progress on its ESG performance and initiatives
• Zero lost time injuries recorded across the Company's operations in the quarter
• Announced the appointment of Luc Guimond as Chief Operating Officer effective September 1, 2022
.(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 September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Financial Results (in millions)
Operating revenues $213.6 $198.0 $589.3 $620.5
Cost of sales (1) $168.1 $129.5 $455.5 $395.7
Earnings (loss) from operations $29.9 $57.3 $49.9 ($34.9)
Earnings (loss) before income taxes $33.9 $56.3 $49.8 ($41.3)
Net (loss) earnings ($1.4) $25.1 ($3.5) ($96.2)
Adjusted net earnings (2) $26.9 $37.6 $74.2 $125.4
Earnings before interest, depreciation and amortization (2) $96.4 $100.0 $251.3 $314.0
Cash provided by operations before working capital and
cash taxes(2) $96.1 $102.3 $252.3 $319.1
Cash provided by operating activities $74.0 $82.4 $196.2 $268.4
Capital expenditures (sustaining) (2) $26.0 $30.9 $68.7 $81.2
Capital expenditures (growth) (2) (3) (5) $39.8 $52.7 $141.7 $166.8
Capital expenditures (capitalized exploration) (4) $6.8 $6.9 $18.5 $18.8
Free cash flow (2) $1.4 ($8.1) ($32.7) $1.6
Operating Results
Gold production (ounces) 123,400 104,700 326,200 344,700
Gold sales (ounces) 122,780 110,488 323,410 344,551
Per Ounce Data
Average realized gold price $1,740 $1,792 $1,822 $1,801
Average spot gold price (London PM Fix) $1,729 $1,790 $1,824 $1,800
Cost of sales per ounce of gold sold (includes
amortization) (1) $1,369 $1,172 $1,408 $1,148
Total cash costs per ounce of gold sold (2) $868 $788 $914 $778
All-in sustaining costs per ounce of gold sold (2) $1,178 $1,152 $1,231 $1,102
Share Data
Earnings (loss) earnings per share, basic and diluted $0.00 $0.06 ($0.01) ($0.24)
Adjusted earnings per share, basic and diluted(2) $0.07 $0.10 $0.19 $0.32
Weighted average common shares outstanding (basic)
(000’s) 391,794 392,742 391,882 392,755
Financial Position (in millions)
Cash and cash equivalents(6) $116.7 $172.5
(1) Cost of sales includes mining and processing costs, royalties, and amortization expense. For the three and nine months ended September 30, 2022, cost of sales
includes a $11.6 million and $33.9 million non-cash inventory net realizable value adjustment, respectively, at Mulatos District.
(2) Refer to the “Non -GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and
calculation of these measures.
(3) Includes growth capital from operating sites.
(4) Includes capitalized exploration at Island Gold, Young-Davidson and Mulatos District.
(5) Includes capital advances of nil for the three and nine months ended September 30, 2022 ($1.3 million and $21.5 million for the three and nine months ended
September 30, 2021).
(6) Comparative cash and cash equivalents balance as at December 31, 2021
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4 | Alamos Gold Inc
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Gold production (ounces)
Young-Davidson 49,300 50,000 147,600 143,100
Island Gold 31,400 28,000 93,200 103,400
Mulatos District(7) 42,700 26,700 85,400 98,200
Gold sales (ounces)
Young-Davidson 49,218 48,625 147,405 141,931
Island Gold 31,342 28,331 91,507 101,845
Mulatos District 42,220 33,532 84,498 100,775
Cost of sales (in millions)(1)
Young-Davidson $63.9 $58.5 $188.3 $181.8
Island Gold $29.0 $24.5 $85.2 $79.2
Mulatos District $75.2 $46.5 $182.0 $134.7
Cost of sales per ounce of gold sold (includes amortization)
Young-Davidson $1,298 $1,203 $1,277 $1,281
Island Gold $925 $865 $931 $778
Mulatos District(1) $1,781 $1,387 $2,154 $1,337
Total cash costs per ounce of gold sold (2)
Young-Davidson $870 $810 $858 $873
Island Gold $651 $586 $650 $512
Mulatos District $1,028 $927 $1,298 $913
Mine-site all-in sustaining costs per ounce of gold sold (2),(3)
Young-Davidson $1,134 $1,051 $1,087 $1,093
Island Gold $944 $1,077 $941 $860
Mulatos District $1,137 $1,124 $1,426 $1,097
Capital expenditures (sustaining, growth, capitalized exploration and capital advances) (in millions)(2)
Young-Davidson (4) $15.1 $22.3 $50.9 $63.8
Island Gold (5) $40.7 $33.8 $103.4 $92.5
Mulatos District (6) $9.9 $29.1 $57.2 $94.2
Other $6.9 $5.3 $17.4 $16.3
(1) Cost of sales includes mining and processing costs, royalties, and amortization. For the three and nine months ended September 30, 2022 , cost of sales includes
$11.6 million and $33.9 million non-cash inventory net realizable value adjustment, respectively, at Mulatos District.
(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 $1.2 million and $3.5 million for the three and nine months ended September 30, 2022 ($1.3 million and $3.8
million for the three and nine months ended September 30, 2021 ).
(5) Includes capitalized exploration at Island Gold of $4.7 million and $13.9 million for the three and nine months ended September 30, 2022 ($5.2 million and $13.6
million for the three and nine months ended September 30, 2021 ).
(6) Includes capitalized exploration at Mulatos District of $0.9 million and $1.1 million for the three and nine months ended September 30, 2022 ($0.4 and $1.4 million
for the three and nine months ended September 30, 2021 ).
(7) The Mulatos district includes both the Mulatos pit, as well as La Yaqui Grande .
TRADING SYMBOL: TSX:AGI NYSE:AGI
5 | Alamos Gold Inc
Environment, Social and Governance Summary Performance
Health and Safety
• Total recordable injury frequency rate1,2 ("TRIFR") of 2.08, a 39% increase from the second quarter of 2022
• Lost time injury frequency rate1 ("LTIFR") of zero
• Year-to-date TRIFR of 1.74 and LTIFR of 0.06, a decline of 15% and 71%, respectively from 2021
During the third quarter of 2022, the TRIFR increased with 25 recordable injuries, seven more than the prior quarter.
Zero lost time injuries were recorded in the quarter. On a year-to-date basis, the Company has significantly
improved its TRIFR and LTIFR compared to 2021.
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 in the third quarter of 2022 and year-to-date
• Information sessions held on the Company’s cyanide management practices with the communities of Yécora,
El Trigo and Matarachi in Mexico, within the framework of the International Cyanide Management Code
• Island Gold received additional construction permits for the shaft site haul road and site powerline
• Continued to advance federal and provincial permitting of the Lynn Lake project
• Completed the transition from propane to compressed natural gas at Young -Davidson, which will reduce
greenhouse gas emissions at the site by an estimated 15% for mine underground heating
One reportable spill occurred during the third quarter at Island Gold when 200 litres of thickener slurry leaked due to
a pinhole in a pipeline. The spill was identified and all material collected and moved back into the containment area.
The area was 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
Ongoing donations and medical support being provided to local communities, including:
• Donation of an ambulance to the Sahuaripa municipality,
• Establishment of an online high school for Matarachi residents through an agreement with Tec de Monterrey,
• Commissioning of two freshwater pumping stations in Matarachi
• New scholarship committees established in Matarachi, Sahuaripa and Yécora as part of t he Company’s
continued support for local students
Alamos 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 in vestments 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
• Published Alamos’ 2021 ESG Report and 2021 ESG Summary Tables, outlining the Company’s progress on its
ESG performance across its operations, projects and offices
• Recipient of the Ethics and Values Award by the National Confederation of Industrial Chambers (CONCAMIN)
for the third consecutive year at Mulatos
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
TRADING SYMBOL: TSX:AGI NYSE:AGI
6 | Alamos Gold Inc
continued to advance its implementation of the Responsible Gold Mining Principles, developed by the World Gold
Council as a framework that sets clear expectations as to what constitutes responsible gold mining.
(1) Frequency rate is calculated as incidents per 200,000 hours wor ked.
(2) The classification of medical treatment injuries was updated retroactive to 1 January 2020 to align with OSHA standards, resu lting in changes to previously
reported recordable injury rates.
TRADING SYMBOL: TSX:AGI NYSE:AGI
7 | 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.
(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 delivered on two key long -term objectives this year which have solidified its strong outlook. This
included achieving initial low-cost production at La Yaqui Grande and announcing the Phase 3+ Expansion of Island
Gold, which will create a larger, more profitable and valuable operation.
La Yaqui Grande performed well during its first full quarter of operation, driving a 19% increase in consolidated
production from the second quarter, at significantly lower costs compared to the first half of the year. The Company
expects this strong performance to continue in the fourth quarter with consolidated production increasing to
between 125,000 and 135,000 ounces, driv en by further low -cost production growth at La Yaqui Grande. Despite
industry-wide inflationary pressures, total cash costs are expected to decrease in the fourth quarter to the lowest
level of the year with the ramp up of low -cost production at La Yaqui Grande, higher grades at Island Gold, and the
weaker Canadian dollar.
With production through the first nine months of 326,200 ounces and higher production and lower costs expected in
the fourth quarter, the Company is well positioned to achieve full year production and cost guidance.
Young-Davidson continues to perform well, generating $23.3 million of mine -site free cash flow in the quarter,
bringing year-to-date mine-site free cash flow to $77.3 million. With production of 147,600 ounces through the firs t
nine-months, Young -Davidson is on track to meet full year production and cost guidance, and is expected to
generate $100 million of mine-site free cash flow for the second straight year.
Island Gold produced 93,200 ounces through the first nine months o f the year, and with higher grades expected in
the fourth quarter, the operation is well positioned to achieve full year production guidance. Construction activities
on the Phase 3+ Expansion are ramping up with pre -sinking of the shaft having started in August. Capital spending
rates are expected to continue to increase with the ramp up of activities on the Phase 3+ Expansion; however, full
year spending is expected to be lower than guidance with capital deferred to subsequent years.
The Phase 3+ Exp ansion of Island Gold will result in a step change in production, with mining rates increasing to
2,400 tpd from the current rate of 1,200 tpd. This is expected to more than double gold production to average
287,000 ounces per year at industry low mine -site all-in sustaining costs of $576 per ounce starting in 2026 upon
completion of the shaft. Given strong ongoing cash flow from operations, the majority of the Phase 3+ Expansion
capital over the life of the project is expected to be self-funded by Island Gold.
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8 | Alamos Gold Inc
Combined production from the Mulatos District totaled 85,400 ounces through the first nine -months of 2022. This
included 42,700 ounces in the third quarter, at significantly lower costs than the first half of the year driven by the
ramp up of low cos t production from La Yaqui Grande. Total production from the Mulatos District is expected to
increase further in the fourth quarter at lower costs, and is on track to meet full year production and cost guidance.
At Lynn Lake, the Company continues to focu s on environmental work in support of permitting, detailed engineering
and other site access upgrades. Spending in 2022 has been focused on both development and exploration
activities, with $17 million spent through the first nine -months of the year. The approval of the Environmental Impact
Statement (“EIS”) for the project is expected by the end of 2022 or early 2023, following which the Company
expects to release an updated feasibility study.
The Company's liquidity position remains strong, ending the qu arter with $116.7 million of cash and cash
equivalents, $15.3 million in equity securities, and no debt. Additionally, the Company has a $500 million undrawn
credit facility, providing total liquidity of $616.7 million.
As part of the Company's balanced a pproach to growth and capital allocation, the current focus of growth capital is
the Phase 3+ Expansion at Island Gold. With no significant capital expected to be spent on developing Lynn Lake
until the Phase 3+ Expansion is well underway, the Company rema ins well positioned to fund this growth internally
while generating strong free cash flow over the next several years. The Company expects significant free cash flow
growth starting in 2025 as production rates ramp up at Island Gold.