Alamos Reports Fourth Quarter and Year-End 2018 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 Reports Fourth Quarter and Year-End 2018 Results
Toronto, Ontario (February 20, 2019) - Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today
reported its financial results for the quarter and year ended December 31, 2018.
“Alamos closed 2018 on a high note with record production from Island Gold and a stronger performance from Young-
Davidson driving production higher and costs lower in the fourth quarter. This contributed to an 18% increase in full year
production to 505,000 ounces, meeting guidance and achieving a new record. We expect similar production in 2019 at
lower costs contributing to stronger margins and financial performance,” said John A. McCluskey, President and Chief
Executive Officer.
“We also advanced various growth initiatives at our existing operations. This was highlighted by the completion of the
Phase I expansion and the addition of nearly one million ounces of mineral reserves and resources at Island Gold,
which will support future expansions. We also advanced construction of the lower mine expansion at Young-Davidson.
Combined with declining costs at Mulatos, we expect these initiatives to drive strong free cash flow growth starting in the
second half of 2020. Aligned with our strong outlook and focus on returning value to shareholders, we have doubled our
annual dividend and have been active in buying back stock,” Mr. McCluskey added.
Fourth Quarter 2018 Highlights
• Produced 125,600 ounces of gold, an increase from the third quarter reflecting a stronger performance from
Young-Davidson and record quarterly production from Island Gold
• Sold a record 131,161 ounces of gold at an average realized price of $1,244 per ounce, $17 above the average
London PM Fix, for revenues of $163.1 million
• Total cash costs1 decreased to $770 per ounce, the lowest in 2018 reflecting improved performance at Young-
Davidson; all-in sustaining costs ("AISC")1 of $983 per ounce also decreased from the third quarter
• Cost of sales of $1,579 per ounce were higher than guidance reflecting a non- cash inventory impairment
charge at El Chanate of $64.0 million, or $488 per ounce
• Reported adjusted net earnings1 of $4.3 million, or $0.01 per share1, which includes one-time adjustments for a
$64.0 million ($49.9 million after -tax) non- cash inventory impairment charge at El Chanate, as well as
unrealized foreign exchange losses recorded within both deferred taxes and foreign exchange of $15.8 million,
and other items totaling $10.1 million
• Realized a net loss of $71.5 million, or $0.18 per share
• Generated cash flow from operating activities 1 of $47.4 million ($52.8 million, or $0.14 per share, before
changes in working capital 1), an increase from the t hird quarter primarily reflecting lower costs, higher gold
sales and a higher realized gold price
• Ended the quarter with no debt and cash and cash equivalents of $206.0 million
• Announced a Normal Course Issuer Bid permitting Alamos to purchase for cancellation up to 25,513,043
common shares, representing 10% of the Company’s public float
• Received the Schedule 2 Amendment from the Federal government for a new tailings facility at Young-
Davidson, securing tailings capacity for all existing Mineral Reserves and Resources
• Successfully obtained permits for the high return Cerro Pelon project in Mexico and commenced full scale
construction
TRADING SYMBOL: TSX:AGI NYSE:AGI
2 | Alamos Gold Inc
Full year 2018 Highlights
• Met the mid-point of guidance with record production of 505,000 ounces of gold, representing an 18% increase from
the previous record in 2017
• Achieved increased production guidance at both Island Gold and Mulatos, with guidance having been revised
higher twice at both operations in 2018
• Sold a record 509,879 ounces of gold at an average realized price of $1,278 per ounce for record revenues of
$651.8 million
• Total cash costs1 of $802 and AISC1 of $989 per ounce were in line with revised cost guidance. Cost of sales of
$1,254 per ounce were above guidance reflecting the non-cash inventory impairment charge at El Chanate
• Reported adjusted net earnings1 of $19.6 million, or $0.05 per share1 which includes one-time adjustments for the El
Chanate non-cash inventory impairment, as well as unrealized foreign exchange losses recorded within both
deferred taxes and foreign exchange of $33.2 million, and other items totaling $9.1 million
• Realized a net loss of $72.6 million, or $0.19 per share
• Reported record cash flow from operating activities 1 of $213.9 million ($211.7 million, or $0.54 per share, before
changes in working capital1), a 15% increase from 2017
• Generated positive free cash flow at each of the Company's operations for total mine- site free cash flow of
$56.4 million1
• Continued exploration success at Island Gold, driving a 14% increase in Mineral Reserv es, 76% increase in
Measured and Indicated Mineral Resources and 73% increase in Inferred Mineral Resources at Island Gold,
compared to the end of 2017
• Successfully commissioned the Phase I expansion at Island Gold on schedule in the third quarter, increasing mill
capacity to 1,100 tonnes per day
• Liquidated the Company's equity positions in AuRico Metals and Corex Gold, generating proceeds of $24.9 million
and realizing a gain of $14.3 million reported in retained earnings (deficit)
Subsequent to Year-End
• The Company re-purchased and canceled 2,444,352 common shares at a cost of $10.0 million, or $4.07 per share
under its Normal Course Issuer Bid
• Announced a doubling of the annual dividend, with a $0.01 per share dividend to be paid quarterly in 2019 (up from
$0.01 semi-annually previously). The first quarterly dividend of $0.01 per share will be payable to shareholders of
record on March 15, 2019, to be paid on March 29, 2019
.
(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 December 31, Years Ended December 31,
2018 2017 2018 2017
Financial Results (in millions)
Operating revenues $163.1 $161.7 $651.8 $542.8
Cost of sales (1) $207.1 $136.6 $639.4 $456.8
Earnings from operations ($51.3 ) $17.1 ($22.6 ) $56.0
Net earnings (loss) ($71.5 ) ($4.7 ) ($72.6 ) $26.6
Adjusted net (loss) earnings (2) $4.3 $0.3 $19.6 $38.9
Cash provided by operations before working capital and
cash taxes(2) $52.8 $52.7 $211.7 $183.3
Cash provided by operating activities $47.4 $48.6 $213.9 $163.5
Capital expenditures (sustaining) (2) $21.4 $11.5 $63.8 $42.7
Capital expenditures (growth) (2) $36.4 $25.6 $139.2 $111.8
Capital expenditures (capitalized exploration) (3) $3.7 $2.1 $18.5 $8.0
Operating Results
Gold production (ounces) (4) 125,600 120,300 505,000 429,400
Gold sales (ounces) 131,161 126,786 509,879 430,115
Per Ounce Data
Average realized gold price $1,244 $1,275 $1,278 $1,262
Average spot gold price (London PM Fix) $1,227 $1,275 $1,268 $1,257
Cost of sales per ounce of gold sold
(includes amortization) (1) $1,579 $1,077 $1,254 $1,062
Total cash costs per ounce of gold sold (2) $770 $753 $802 $770
All-in sustaining costs per ounce of gold sold (2) $983 $902 $989 $933
Share Data
Earnings per share, basic ($0.18 ) ($0.01 ) ($0.19 ) $0.09
Adjusted earnings per share, basic (2) $0.01 $— $0.05 $0.13
Weighted average common shares outstanding (basic)
(000’s) 390,540 337,178 389,816 305,521
Financial Position (in millions)
Cash and cash equivalents (5) $206.0 $200.8
(1) Cost of sales includes mining and processing costs, royalties, and amortization expense. For the three months and year ended December 31, 2018, cost of sales
includes a $64.0 million non-cash inventory charge at El Chanate.
(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 capitalized exploration at Mulatos and Island Gold.
(4) Gold production from Island Gold has been included in this table for the period subsequent to November 23, 2017 only. Gold production from Island Gold for the three
and twelve months ended December 31, 2017 was 22,100 and 98,600 ounces respectively.
TRADING SYMBOL: TSX:AGI NYSE:AGI
4 | Alamos Gold Inc
Three Months Ended December 31, Years Ended December 31,
2018 2017(1) 2018 2017(1)
Gold production (ounces)
Young-Davidson 50,900 56,500 180,000 200,000
Mulatos 35,600 42,700 175,500 160,000
Island Gold (1) 29,000 9,000 105,800 9,000
El Chanate 10,100 12,100 43,700 60,400
Gold sales (ounces)
Young-Davidson 51,944 52,475 185,593 197,937
Mulatos 38,819 50,006 175,104 159,276
Island Gold (1) 30,199 11,720 105,520 11,720
El Chanate 10,199 12,585 43,662 61,182
Cost of sales (in millions)(2)
Young-Davidson $61.5 $58.1 $235.0 $213.4
Mulatos $38.4 $47.7 $173.1 $153.0
Island Gold (1) $28.7 $13.4 $106.5 $13.4
El Chanate(2) $78.5 $17.4 $124.8 $77.0
Cost of sales per ounce of gold sold (includes amortization)
Young-Davidson $1,184 $1,107 $1,266 $1,078
Mulatos $989 $954 $989 $961
Island Gold (1) $950 $1,143 $1,009 $1,143
El Chanate $7,697 $1,383 $2,858 $1,259
Total cash costs per ounce of gold sold (3)
Young-Davidson $764 $690 $822 $658
Mulatos $793 $762 $786 $775
Island Gold (1) $570 $401 $589 $401
El Chanate $1,304 $1,311 $1,289 $1,188
Mine-site all-in sustaining costs per ounce of gold sold (3),(4)
Young-Davidson $974 $859 $1,017 $834
Mulatos $881 $798 $855 $835
Island Gold (1) $834 $546 $781 $546
El Chanate $1,333 $1,335 $1,317 $1,218
Capital expenditures (sustaining, growth and capitalized exploration) (in millions)(3)
Young-Davidson $23.1 $17.0 $86.6 $80.3
Mulatos(5) $11.8 $9.0 $35.3 $43.9
Island Gold (1),(6) $16.8 $4.8 $66.1 $4.8
El Chanate $0.1 $0.2 $0.6 $1.4
Other $9.7 $8.2 $32.9 $32.1
(1) Operating and financial results from Island Gold are included in Alamos’ consolidated financial statements for the period subsequent to November 23, 2017. Gold
production from Island Gold for the three and twelve months ended December 31, 2017 was 22,100 and 98,600 ounces respectively .
(2) Cost of sales includes mining and processing costs, royalties and amortization. For the three months and year ended December 31, 2018, cost of sales includes a $64.0
million non-cash inventory impairment charge at El Chanate.
(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 Mulatos of $0.6 million and $2.9 million for the three and twelve months ended December 31, 2018 ($1.0 million and $6.9 million for
the three and twelve months ended December 31, 2017).
(6) Includes capitalized exploration at Island Gold of $3.1 million and $15.6 million for the three and twelve months ended December 31, 2018.
TRADING SYMBOL: TSX:AGI NYSE:AGI
5 | Alamos Gold Inc
Outlook and Strategy
2019 Guidance
Young-
Davidson Mulatos
Island
Gold El Chanate Turkey Other (2) Total
Gold production (000’s ounces) 180-190 150-160 135-145 15-25 480-520
Cost of sales, including
amortization (in millions)(4),(5) $226 $165 $123 $26 — — $540
Cost of sales, including
amortization ($ per ounce)(4),(5) $1,220 $1,065 $880 $1,300 — — $1,080
Total cash costs ($ per ounce)(1),(5) $750-790 $820-860 $460-500 $1,200 — — $710-750
All-in sustaining costs
($ per ounce)(1),(5) — — $920-960
Mine-site all-in sustaining costs
($ per ounce)(1),(3),(5) $940-980 $860-900 $730-770 $1,200 — — —
Amortization costs
($ per ounce)(1) $450 $225 $400 $100 — — $350
Capital expenditures (in millions)
Sustaining capital(1) $35-40 $5.0 $35-40 — — — $75-85
Growth capital(1) $45-50 $45-50 (6) $15-20 — $75 $35 (2) $215-230
Total capital expenditures(1) $80-90 $50-55 $50-60 — $75 $35 $290-315
(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 capitalized exploration at all operating sites and development projects (excluding Turkey which is separately disclo sed).
(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) Company-wide cost of sales, total cash costs, and all-in sustaining costs guidance have been updated from original guidance. The Company has not revised guidance
for cost of sales, total cash costs, and mine-site all-in sustaining costs at individual mine sites.
(6) Includes capital spending at Cerro Pelon and La Yaqui Grande of approximately $33 million
The Company’s long-term strategic objective is to generate increasing cash flow through low-cost production growth
from its existing operations and portfolio of development projects. In 2018, the Company produced a record 505,000
ounces of gold, an 18% increase from 2017, driven by strong operational performances from both Island Gold and
Mulatos. Since 2014, Alamos has transformed from a single asset producer with 140,000 ounces of annualized
production to producing 505,000 ounces from four operating mines. This transformational growth has been
accomplished while also improving margins through lower operating costs. Looking forward, the Company anticipates a
substantial reduction in growth capital in 2020 and beyond and a further reduction in costs, which will lead to strong free
cash flow growth.
In 2018, the Company continued to execute on its various internal growth initiatives. This included advancing the lower
mine expansion at Young-Davidson, as well as the successful completion of the Phase I expansion at Island Gold while
also delivering a significant increase in Mineral Reserves and Resources which will support future expansions. Within
the development pipeline, the permits for the Cerro Pelon project in Mexico were received in 2018 and construction has
now commenced. In addition, the GSM permit for the Kirazlı project in Turkey was received with full scale construction
anticipated to commence following the receipt of the Operating License.
The Company expects a similar level of production in 2019, relative to 2018, with total cash costs and all-in sustaining
costs expected to decrease 9% and 5%, respecti vely (based on the mid- point of guidance) driven by operational
improvements at Young-Davidson and low-cost production growth at Island Gold. Costs and capital are expected to
decline through the year driving stronger mine-site free cash flow in the second half of the year.
The near-term focus at Young-Davidson remains on maximizing efficiency from the upper mine infrastructure, while
completing development and construction of the lower mine. Gold production at Young-Davidson is expected to increase
slightly in 2019 to a range of 180,000 to 190,000 ounces, compared to 2018 production of 180,000 ounces. Total cash
costs and mine- site all- in sustaining costs are expected to decrease 6% compared to 2018, driven by higher
underground mining rates and grades mined. Young-Davidson’s 2019 guidance for production, mining rates, operating
costs and capital are all consistent with its average performance over the past two years.
Capital spending at Young-Davidson is expected to total $80 to $90 million, consistent with 2018. Spending will be
focused on completing development and infrastructure of the lower mine as well as starting construction of a newly
permitted tailings facility (“TIA 1”). The Company successfully completed permitting of TIA 1 during the fourth quarter of
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6 | Alamos Gold Inc
2018 with receipt of the Schedule 2 Amendment from the Federal government. TIA 1 will provide sufficient capacity for
the remaining Mineral Reserves and Resources at Young-Davidson at substantially lower costs than the current facility.
Gold production from Young- Davidson is expected to decrease in 2020 reflecting approximately three months of
downtime of the Northgate shaft to complete the tie- in of the upper and lower mines. This will temporarily limit
underground throughput and impact three months of production during the first half of 2020. Following completion of the
tie-in, underground mining rates are expected to ramp up above 7,500 tpd in the second half of 2020 and towards the
long-term target of 8,000 tpd in 2021. This is expected to drive annual gold production above 200,000 ounces per year
in 2021 and beyond. Combined with declining costs and capital spending, the Company expects strong free cash flow
growth from Young-Davidson starting in the second half of 2020.
Island Gold is expected to produce between 135,000 to 145,000 ounces in 2019, a 32% increase relative to the
previous record in 2018, reflecting higher grades and throughput with the completion of the Phase I expansion last year.
Combined with an expected 19% decrease in total cash costs and 4% decrease in mine- site all-in sustaining costs,
Island Gold is expected to generate strong free cash flow growth in 2019, net of a continued significant investment of
$19 million in exploration to further expand Mineral Reserves and Resources.
Capital spending at Island Gold is expected to total $50 to $60 million in 2019, consistent with 2018. This includes $35
to $40 million of sustaining capital with underground development being accelerated to bring the significant growth in
Mineral Reserves and Resources into the mine plan as well as support mining rates above 1,100 tpd. Lateral exploration
development has also been increased to support the expanded exploration program.
The Phase I expansion at Island Gold was completed in September 2018, expanding the mill to a design capacity of
approximately 1,200 tpd. The current mine infrastructure can support similar mining rates; however, the operation is
currently permitted to operate at an average annual rate of 1,100 tpd. With a mine and mill that can support higher
throughput rates, the Company is in the process of permitting an amendment to 1,200 tpd which is expected to be
received by the end of 2019 as part of a Phase II expansion. In parallel, the Company has started an evaluation of a
potential Phase III expansion of the operation beyond 1,200 tpd.
Total production from the Mulatos District is expected to be between 150,000 to 160,000 ounces of gold in 2019,
consistent with long term guidance provided in January 2018. Mulatos significantly outperformed this production range
in 2018 reflecting higher than expected recoveries at La Yaqui and Mulatos, and extended production from the high-
grade San Carlos underground deposit which reached the end of its mine life in the third quarter of 2018. Mine-site all-in
sustaining costs are expected to decrease relative to 2018 guidance of $900 per ounce reflecting the end of the 5%
royalty early in 2019. Mine-site all-in sustaining costs are expected to increase slightly from 2018 with the operation
having outperformed in 2018 given the above noted factors.
Capital spending across the Mulatos District is expected to total $50 to $55 million in 2019 including $5 million of
sustaining capital. This increased from 2018 reflecting $25 million budgeted in 2019 for development of the Cerro Pelon
project. Cerro Pelon is higher grade, higher return project and is expected to start contributing low cost production in
2020.
Mining activities ceased at El Chanate in the fourth quarter of 2018 and the operation has transitioned to residual
leaching which will result in a declining rate of production through 2019. Mine-site all-in sustaining costs are expected to
average $1,200 per ounce in 2019, with approximately 25% of those costs having been already incurred.
Development capital spending in 2019 will be primarily focused on the construction of the Kirazlı project, with the bulk of
the remainder comprised of capitalized exploration at Island Gold and exploration, permitting and development activities
at Lynn Lake.
The 2019 global exploration budget is $33 million, down slightly from the 2018 budget reflecting lower exploration
spending at Mulatos. Island Gold continues to be the main focus of exploration with $19 million budgeted, an increase
from the 2018 initial budget of $15 million. Mulatos and Lynn Lake remain the other two areas of focus with $6 million
budgeted for each.
With over $600 million of cash and available liquidity, no debt, and growing cash flow from its operations, the Company
is well positioned to fund its internal growth initiatives.
TRADING SYMBOL: TSX:AGI NYSE:AGI
7 | Alamos Gold Inc
Fourth Quarter and Full Year 2018 Results
Young-Davidson Financial and Operational Review
Three Months Ended December 31, Years Ended December 31,
2018 2017 2018 2017
Gold production (ounces) 50,900 56,500 180,000 200,000
Gold sales (ounces) 51,944 52,475 185,593 197,937
Financial Review (in millions)
Operating Revenues $64.4 $66.8 $236.3 $249.7
Cost of sales (1) $61.5 $58.1 $235.0 $213.4
Earnings from operations $2.9 $8.7 $1.3 $36.3
Cash provided by operating activities $23.6 $33.4 $97.5 $114.5
Capital expenditures (sustaining) (2) $10.8 $8.7 $35.8 $34.1
Capital expenditures (growth) (2) $12.3 $8.3 $50.8 $46.2
Mine-site free cash flow (2) $0.5 $16.4 $10.9 $34.2
Cost of sales, including amortization per ounce of gold sold (1) $1,184 $1,107 $1,266 $1,078
Total cash costs per ounce of gold sold (2) $764 $690 $822 $658
Mine-site all-in sustaining costs per ounce of gold sold (2),(3) $974 $859 $1,017 $834
Underground Operations
Tonnes of ore mined 588,956 664,847 2,280,399 2,423,289
Tonnes of ore mined per day ("tpd") 6,402 7,227 6,248 6,639
Average grade of gold (4) 2.71 2.70 2.51 2.69
Metres developed 2,975 2,776 12,009 12,787
Mill Operations
Tonnes of ore processed 745,567 716,273 2,683,962 2,735,267
Tonnes of ore processed per day 8,104 7,786 7,353 7,494
Average grade of gold (4) 2.39 2.59 2.31 2.47
Contained ounces milled 57,192 59,561 197,701 217,184
Average recovery rate 92 % 92 % 92 % 92 %
(1) Cost of sales includes mining and processing costs, royalties and amortization.
(2) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures. Total
cash costs and mine-site AISC are exclusive of net-realizable value adjustments.
(3) For the purposes of calculating mine-site all-in sustaining costs, the Company does not include an allocation of corporate and administrative and share based compensation expenses.
(4) Grams per tonne of gold ("g/t Au").
Young-Davidson met revised production guidance with strong fourth quarter production of 50,900 ounces of gold. This
was lower than the comparative quarter of 2017; however, a 4% improvement from the third quarter of 2018 and the
highest quarterly production of the year reflecting higher underground mining rates and grades. Full year production of
180,000 ounces decreased 10% from 2017 primarily due to unscheduled downtime encountered in the first half of 2018
to both the Northgate hoist and the mill.
Underground mining rates increased to 6,402 tpd in the fourth quarter, a 7% increase from the third quarter and in-line
with revised near-term guidance of 6,500 tpd until the tie-in of the lower mine in the first half of 2020 is completed. For
the full year, underground mining rates were below prior year rates at 6,248 tpd due to temporary ore pass challenges
experienced in the first half of the year, and eight days of downtime to the Northgate shaft in the second quarter.
Underground mining rates are expected to increase substantially in the second half of 2020 following completion of the
lower mine tie-in.
Underground grades mined also improved significantly to 2.71 g/t Au in the fourth quarter, a 5% increase from the third
quarter and the highest grades of the year. Underground grades mined of 2.51 g/t Au for the year were slightly below
guided levels and reserve grade of 2.69 g/t Au, due primarily to mine sequencing.
Mill throughput increased to a record 745,567 tonnes, or 8,104 tpd, in the fourth quarter, an 11% increase from the third
quarter, bringing full year mill throughput to 7,353 tpd. Mill throughput is expected to average 7,800 tpd in the first half of
2019 before decreasing to match underground mining rates in the second half of the year once lower grade surface
stockpiles have been depleted.
Mill recoveries of 92% in the quarter and year-to-date were in line with expectations and the prior year period.
TRADING SYMBOL: TSX:AGI NYSE:AGI
8 | Alamos Gold Inc
Financial Review
Fourth quarter revenues of $64.4 million were consistent with the comparative prior year quarter, and 12% higher than
the third quarter of 2018 reflecting higher ounces sold and a higher realized gold price. Revenues of $236.3 million in
2018 were $13.4 million lower than the prior year due to a 6% decline in ounces sold, partially offset by a higher realized
gold price.
Cost of sales, which reflects mining and processing costs, royalties, and amortization expense of $61.5 million were
higher than the comparative quarter of 2017 reflecting higher per tonne underground mining costs and processing costs.
For 2018, cost of sales were $235.0 million, an increase of $21.6 million due to higher underground mining costs,
primarily attributable to increased maintenance and input costs.
Total cash costs decreased to $7 64 per ounce in the fourth quarter, down 7% from the third quarter and the lowest
quarterly costs in 2018. Total cash costs were 11% higher than the fourth quarter of 2017 due to lower grades processed
and a higher mining cost per tonne. Mining costs of CAD $51 per tonne in the quarter were above budget, reflecting the
impact of lower mining rates on fixed costs, as well as higher diesel and maintenance costs. Total cash costs of $822
per ounce for 2018 were 25% higher than the prior year period reflecting 7% lower grades mined, and a 16% increase in
mining cost per tonne.
Mine-site AISC also decreased to $974 per ounce in the fourth quarter, down 5% from the third quarter. For the full year,
mine-site AISC averaged $1,017 per ounce. Mine-site AISC were 13% and 22% higher than the prior year quarter and
prior year, respectively, reflecting higher total cash costs and higher sustaining capital. Total cash costs and mine-site
AISC are both expected to decrease by approximately 6% in 2019.
Capital expenditures were $23.1 million in the fourth quarter, higher than the same quarter of 2017. This included $10.8
million of sustaining capital and $12.3 million of growth capital. Major capital spending in the fourth quarter was focused
on lower mine development and lateral development in the upper and lower mines. Capital expenditures of $86.6 million
for the twelve- month period were higher than the prior year period and guidance reflecting increased spending on
tailings and water management.
Young-Davidson generated mine-site free cash flow of $0.5 million in the fourth quarter and $10.9 million for the full
year, lower than the same periods of 2017 due to less ounces sold, lower gross margins and higher capital spending.