AGI.TO · 2020-07-29 12:00:00

Alamos Reports Second Quarter 2020 Results

Financials

TORONTO, July 29, 2020 -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported its financial

results for the quarter ended June 30, 2020.

“The second quarter of 2020 will be remembered as one of the most challenging times in our history given the COVID-19

pandemic. We started the quarter with two of our operations being temporarily suspended, but we adapted well and by June

both Island Gold and Mulatos had safely returned to normal operating levels,” said John A. McCluskey, President and Chief

Executive Officer.

At the same time we made good progress on several catalysts that form key parts of what is a transformational year for

Alamos. These include the completion of the lower mine expansion at Young-Davidson earlier this month, the announcement

of a Phase III expansion of Island Gold, and a construction decision on the La Yaqui Grande project. These have greatly

enhanced the long-term outlook for each of our operating mines. We look forward to creating additional value for our

stakeholders in the second half of 2020 with higher production and lower costs expected to drive strong free cash flow growth,”

Mr. McCluskey added.

Second Quarter 2020

• Produced 78,400 ounces of gold, with production impacted by the previously guided downtime of the Northgate shaft at

Young-Davidson and temporary suspension of operations at Island Gold and Mulatos due to COVID-19. Mulatos and

Island Gold resumed operations in May with both returning to normal operating levels in June

• Mulatos produced 35,900 ounces of gold and generated mine-site free cash flow 1 of $19.3 million, with the operation

benefiting from the ongoing recovery of gold from the leach pad during the temporary suspension

• Island Gold produced 19,400 ounces of gold and generated mine-site free cash flow 1 of $9.2 million. Production was

lower than previous quarters due to the temporary suspension of operations which began the last week of March. After

a phased ramp up in May, mining and milling rates increased to average more than 1,200 tpd for the month of June

• Advanced the tie-in of the upper and lower mines at Young-Davidson, successfully commissioning the Northgate shaft

and new lower mine infrastructure in July. Underground mining rates increased to 6,500 tpd by the end of July and are

expected to ramp up to 7,500 tpd by the end of 2020

• Sold 74,605 ounces of gold at an average realized price of $1,692 per ounce for revenues of $126.2 million

• Generated cash flow from operating activities of $49.6 million ($44.7 million, or $0.11 per share, before changes in

working capital1)

• Consolidated total cash costs 1 of $933 per ounce and all-in sustaining costs ("AISC") 1 of $1,276 per ounce were both

temporarily higher, due to higher costs at Young-Davidson during the lower mine tie-in. AISC were higher than usual as

a result of the impact of the 79% increase in the Company’s share price on the revaluation of outstanding stock-based

awards. In addition, sustaining capital was allocated to lower ounces of gold sold given the above noted temporary

suspensions. Total cash costs and AISC are expected to decrease significantly in the second half of 2020

• Realized net earnings of $11.7 million, or $0.03 per share

• Reported adjusted net earnings1 of $9.8 million, or $0.03 per share 1, which includes adjustments for unrealized foreign

exchange gains of $10.3 million recorded within deferred taxes, partially offset by COVID-19 costs of $6.5 million

related to the suspension of operations at Island Gold and Mulatos, and other one-time losses of $1.9 million

• Ended the quarter with cash and cash equivalents of $201.3 million and equity securities of $30.2 million

• Paid a quarterly dividend of $5.9 million and repurchased 527,100 common shares at a cost of $2.6 million, or $5.05 per

share, under the Company's Normal Course Issuer Bid ("NCIB"). To date in 2020, the Company has returned $17.3

million to shareholders in the form of dividends and share repurchases

Subsequent to the Second Quarter:

• Reported results of the positive Phase III Expansion Study conducted on Island Gold, which is expected to drive a 72%

increase in average annual production to 236,000 ounces and a 30% decrease in mine-site AISC to $534 per ounce at

the operation

• Announced a construction decision on the high-return La Yaqui Grande project, which generates a 58% after-tax

internal rate of return ("IRR") at a $1,750 gold price and is expected to significantly reduce Mulatos District AISC

starting in 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.

Highlight Summary

Three Months Ended June Six Months Ended June

30, 30,

2020 2019 2020 2019

Financial Results (in millions)

Operating revenues $ 126.2 $ 168.1 $ 303.1 $ 324.2

Cost of sales (1) $ 103.3 $ 131.1 $ 223.6 $ 258.1

Earnings from operations $ 12.1 $ 28.2 $ 58.3 $ 46.9

Earnings before income taxes $ 6.0 $ 27.1 $ 46.5 $ 47.7

Net earnings (loss) $ 11.7 $ 23.6 ($ 0.6 ) $ 40.4

Adjusted net earnings (2) $ 9.8 $ 17.7 $ 39.2 $ 28.0

Earnings before interest, depreciation and amortization (2) $ 40.9 $ 69.1 $ 117.6 $ 129.6

Cash provided by operations before working capital and cash

taxes(2) $ 44.7 $ 68.6 $ 126.4 $ 131.2

Cash provided by operating activities $ 49.6 $ 72.3 $ 106.2 $ 114.7

Capital expenditures (sustaining) (2) $ 14.4 $ 19.6 $ 31.9 $ 35.7

Capital expenditures (growth) (2) (3) $ 38.8 $ 47.2 $ 80.1 $ 81.3

Capital expenditures (capitalized exploration) (4) $ 1.4 $ 4.3 $ 5.9 $ 7.4

Operating Results

Gold production (ounces) 78,400 125,200 189,300 250,500

Gold sales (ounces) 74,605 128,457 186,459 248,162

Per Ounce Data

Average realized gold price $ 1,692 $ 1,309 $ 1,626 $ 1,306

Average spot gold price (London PM Fix) $ 1,711 $ 1,309 $ 1,647 $ 1,307

Cost of sales per ounce of gold sold (includes amortization) (1) $ 1,385 $ 1,021 $ 1,199 $ 1,040

Total cash costs per ounce of gold sold (2) $ 933 $ 699 $ 829 $ 715

All-in sustaining costs per ounce of gold sold (2) $ 1,276 $ 926 $ 1,117 $ 941

Share Data

Earnings (loss) per share, basic and diluted $ 0.03 $ 0.06 $ 0.00 $ 0.10

Adjusted earnings per share, basic and diluted(2) $ 0.03 $ 0.05 $ 0.10 $ 0.07

Weighted average common shares outstanding (basic) (000’s) 391,076 389,218 391,208 389,475

Financial Position (in millions)

Cash and cash equivalents (5) $ 201.3 $ 182.8

Long-term debt (5) $ 100.0 $ —

(1) Cost of sales includes mining and processing costs, royalties, and amortization expense. For the three months and six

months ended June 30, 2020, cost of sales also includes COVID-19 costs of $6.5 million

(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 and excludes the Island Gold royalty repurchase of $54.8 million in March 2020

(4) Includes capitalized exploration at Mulatos and Island Gold

(5) Comparative cash and cash equivalents and Long-term debt balance as at December 31, 2019

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Gold production (ounces)

Young-Davidson 23,100 45,000 51,800 90,000

Mulatos 35,900 36,300 78,500 75,200

Island Gold 19,400 39,500 58,200 75,100

El Chanate (1) — 4,400 800 10,200

Gold sales (ounces)

Young-Davidson 22,440 44,665 51,345 88,661

Mulatos 33,605 40,116 77,427 76,205

Island Gold 18,560 39,300 57,687 72,885

El Chanate (1) — 4,376 — 10,411

Cost of sales (in millions)(2)

Young-Davidson $ 46.2 $ 57.1 $ 90.0 $ 114.0

Mulatos $ 37.5 $ 35.8 $ 83.5 $ 69.6

Island Gold $ 19.6 $ 32.4 $ 50.1 $ 61.0

El Chanate (1) $ — $ 5.8 $ — $ 13.5

Cost of sales per ounce of gold sold (includes amortization)

Young-Davidson $ 2,059 $ 1,278 $ 1,753 $ 1,286

Mulatos $ 1,116 $ 892 $ 1,078 $ 913

Island Gold $ 1,056 $ 824 $ 868 $ 837

El Chanate (1) $ — $ 1,325 $ — $ 1,297

Total cash costs per ounce of gold sold (3)

Young-Davidson $ 1,564 $ 822 $ 1,299 $ 830

Mulatos $ 750 $ 725 $ 785 $ 734

Island Gold $ 501 $ 473 $ 468 $ 484

El Chanate (1) $ — $ 1,234 $ — $ 1,210

Mine-site all-in sustaining costs per ounce of gold sold (3),(4)

Young-Davidson $ 1,809 $ 1,077 $ 1,490 $ 1,073

Mulatos $ 890 $ 815 $ 929 $ 812

Island Gold $ 781 $ 631 $ 706 $ 639

El Chanate (1) $ — $ 1,257 $ — $ 1,220

Capital expenditures (sustaining, growth and capitalized exploration) (in millions) (3)

Young-Davidson $ 29.6 $ 26.7 $ 56.6 $ 49.0

Mulatos(5) $ 5.1 $ 19.2 $ 12.5 $ 31.8

Island Gold (6) $ 15.9 $ 18.0 $ 38.0 $ 30.4

Other $ 4.0 $ 7.2 $ 10.8 $ 13.2

(1) El Chanate transitioned to the reclamation phase of the mine life in the fourth quarter of 2019. Incremental production is a

result of rinsing the leach pad. Gold sales from El Chanate in 2020 are not included in revenue and cost of sales.

(2) Cost of sales includes mining and processing costs, royalties 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 Mulatos of $0.2 million and $0.7 for the three and six months ended June 30, 2020

(spending of $nil for the three and six months ended June 30, 2019).

(6) Includes capitalized exploration at Island Gold of $1.2 million and $5.2 million for the three and six months ended June 30,

2020 (for the three and six months ended June 30, 2019 - $4.3 million and $7.4 million), and excludes the royalty repurchase

of $54.8 million.

Management's Response to the COVID-19 Pandemic

The World Health Organization declared COVID-19 a pandemic on March 11, 2020. The Company responded rapidly and

proactively to COVID-19 and has implemented several initiatives to help protect the health and safety of our employees, their

families and the communities in which we operate.

Specifically, each of our operating mine sites has activated established crisis management plans and developed site-specific

plans that enable them to meet and respond to changing conditions associated with COVID-19. The Company is adopting the

advice of public health authorities and adhering to government regulations with respect to COVID-19 in the jurisdictions in

which it operates.

The following measures have been instituted across the Company to prevent the potential spread of the virus:

• Medical screening for all personnel prior to entry to site for symptoms of COVID-19

• Testing of personnel at Mulatos and Island Gold prior to starting their rotation at the camp

• 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

• Required 14-day quarantine for any employees returning from out of country travel

Impact on Operations

In order to protect nearby communities and align with government requirements, two of the Company's mines were temporarily

suspended, but resumed normal operations during the second quarter.

At Island Gold, operations were suspended on March 25, 2020 given the unique set up of the operation with a large portion of

the workforce operating on a fly-in, fly-out basis and being housed within a camp located directly within the local community.

The Company restarted operations in a phased approach at the beginning of May 2020 and ramped up to budgeted mining and

milling rates of 1,200 tpd in the month of June. The Company incurred $4.5 million in COVID-19 costs at Island Gold in the

quarter, mainly related to labour costs for idle employees and additional transportation and lodging costs.

Operations at Mulatos were suspended in early April following a mandate by the Mexican government to suspend all non-

essential businesses in response to the COVID-19 crisis. The suspension period was lifted in May and mining, crushing and

stacking ore on the leach pad was restarted. Although mining activities were suspended for part of the quarter, the Company

continued to recover gold from the leach pad given the significant amount of contained ounces stacked in the first quarter. The

Company incurred $2.0 million in COVID-19 costs at Mulatos in the quarter mainly related to labour costs for idle employees

and additional transportation costs.

To date, operating activities at Young-Davidson have not been significantly impacted with mining and processing activities and

construction and commissioning of the lower mine ongoing throughout the quarter. Completion of the lower mine expansion

was delayed slightly but was completed on July 8, 2020.

Revised 2020 Guidance

Revised

2020 Guidance

Gold production (000's ounces)

Young-Davidson 135 - 145 145 - 160

Mulatos 140 - 150 150 - 160

Island Gold 130 - 140 130 - 145

Total gold production 405 - 435 425 - 465

Cost of sales per ounce of gold sold (includes amortization) (4)

Young-Davidson $1,490 $1,360

Mulatos $1,135 $1,085

Island Gold $840 $840

Total $1,160 $1,103

Total cash cost per ounce of gold sold (1)

Young-Davidson $990 - $1,030 $910 - $950

Mulatos $840 - $880 $840 - $880

Island Gold $480 - $520 $480 - $520

Consolidated total cash cost per ounce of gold sold $780 - $820 $757 - $797

Mine-site all-in sustaining costs per ounce of gold sold (1)(3)

Young-Davidson $1,180 - $1,220 $1,110 - $1,150

Mulatos $940 - $980 $940 - $980

Island Gold $740 - $780 $740 - $780

Consolidated all-in sustaining costs per ounce of gold sold (1) $1,030 - $1,070 $1,007 - $1,047

Capital expenditures (sustaining) (1)

Young-Davidson $30 - $35 $30 - $35

Mulatos $15 - $20 $15 - $20

Island Gold $35 - $40 $35 - $40

Total Capital expenditures (sustaining) $80 - $95 $80 - $95

Capital expenditures (growth) (1)

Young-Davidson $45 - $50 $45 - $50

Mulatos $15 - $20 $5

Island Gold $35 - $40 $15 - $20

Other (2) $10 $10

Total Capital expenditures (growth) $105 - $120 $75 - $85

Capital expenditures (capitalized exploration) (1)

Young-Davidson $1 $1

Island Gold $15 $19

Other (2) $4 $5

Total capital expenditures (capitalized exploration) $20 $25

Total consolidated capital expenditures and capitalized exploration (1) $205 - $235 $180 - $205

(1) Refer to the "Non-GAAP Measures and Additional GAAP" disclosure at the end of this MD&A for a description of these

measures.

(2) Includes growth capital and capitalized exploration at the Company's development projects (Turkey, 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.

The Company is providing revised 2020 production, cost, and capital guidance. Guidance was withdrawn in April 2020 following

the temporary suspension of operations at Island Gold and Mulatos in response to COVID-19. With operations at Mulatos and

Island Gold having both been suspended for more than a month and the completion of the lower mine expansion at Young-

Davidson delayed into July due to COVID-19, consolidated 2020 production guidance has been revised to 405,000 to 435,000

ounces. This represents a 6% decrease from the mid-point of previous guidance. Total cash cost guidance has also been

revised to $780 to $820 per ounce and all-in sustaining cost guidance to $1,030 to $1,070 per ounce, a 3% and 2% increase,

respectively. This reflects higher costs at Young-Davidson in the second quarter due to the COVID-19-related delay in the

completion of the lower mine expansion. With Island Gold and Mulatos both returning to normal operating levels in June and

the lower mine expansion completed at Young-Davidson in July, the Company expects higher production at significantly lower

costs in the second half of 2020.

Consolidated 2020 capital guidance of $205 to $235 million has increased by $25 to $30 million with all of the increase related

to the Phase III Expansion at Island Gold and the La Yaqui Grande project following the recently announced construction

decisions, partially offset by lower exploration spending.

At Young-Davidson, full year production guidance has been revised to between 135,000 and 145,000 ounces and cost

guidance increased due to the previously announced COVID-19-related delay in the completion of the lower mine expansion.

Despite the full year revisions, the second half outlook remains strong with the lower mine expansion completed in July.

Production is expected to increase in the second half of 2020 at significantly lower costs, with total cash costs expected to

decrease to a range of $800 to $840 per ounce and mine-site all-in sustaining costs to a range of $990 to $1,030 per ounce.

Despite the operation being suspended for more than one month, production guidance at Island Gold has narrowed slightly to

130,000 to 140,000 ounces while total cash cost guidance of $480 to $520 per ounce and mine-site all-in sustaining cost

guidance of $740 to $780 per ounce remain unchanged. Growth capital guidance has increased $20 million, reflecting planned

spending associated with the Phase III Expansion in the second half of 2020. Given the temporary suspension of exploration

programs at Island Gold, the full year exploration budget has been reduced from $19 million to $15 million.

At Mulatos full year production guidance has been reduced by 10,000 ounces to 140,000 to 150,000 ounces reflecting the

suspension of operations in April and May. Lower stacked tonnes during the second quarter is expected to affect gold

production slightly in the second half of 2020. Total cash cost and mine-site AISC guidance remains unchanged. Growth

capital guidance has increased by between $10 and $15 million to advance the La Yaqui Grande project following the

construction decision earlier this week.

Outlook and Strategy

2020 Updated Guidance

Young-

Davidson

Island

Gold Mulatos

Other

(2) Total

Guidance

Gold production (000’s ounces) 135 - 145 130 - 140 140 - 150 405 - 435 425 - 465

Cost of sales, including amortization (in

millions)(4) $209 $113 $165 — $487 $491

Cost of sales, including amortization ($ per

ounce)(4) $1,490 $840 $1,135 — $1,160 $1,103

Total cash costs ($ per ounce)(1)(5) $990 - $1,030 $480 -

$520

$840 -

$880 — $780 - $820 $757 - $797

All-in sustaining costs ($ per ounce)(1)(5) $1,030 -

$1,070

$1,007 -

$1,047

Mine-site all-in sustaining costs ($ per ounce)(1)

(3)(5)

$1,180 -

$1,220

$740 -

$780

$940 -

$980 —

Amortization costs ($ per ounce)(1) $480 $340 $275 — $365 $340

Capital expenditures (in millions)

Sustaining capital(1) $30 - $35 $35 - $40 $15 - $20 $ — $80-$95 $80-$95

Growth capital(1) $45 - $50 $35 - $40 $15 - $20 $10 $105 - $120 $75-$85

Capitalized exploration(1) $1 $15 $ — $4 $20 $25

Total capital expenditures and capitalized

exploration (1) $76-86 $85-95 $30-40 $14 $205-$235 $180-$205

(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 (Turkey, 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) On March 16, 2020, the Company updated previous total cash cost and AISC guidance to reflect the repurchase and

cancellation of a royalty at Island Gold.

The Company’s long-term strategic objective is to generate increasing returns for its shareholders through low-cost production

and free cash flow growth from its portfolio of operating mines and development projects. Year-to-date, the Company has made

excellent progress with the completion of the lower mine expansion at Young-Davidson, the announcement of a Phase III

expansion of Island Gold, and a construction decision on the La Yaqui Grande project.

All are key parts of a transformational year for Alamos and provide the foundation for the Company's strong outlook. With

mining rates ramping up at Young-Davidson, and Mulatos and Island Gold returning to normal operating levels during the

second quarter, the Company expects to deliver strong company-wide free cash flow growth in the second half of 2020.

Production of 78,400 ounces and total cash costs of $933 per ounce in the second quarter of 2020 were impacted by the

planned downtime of the Northgate shaft at Young-Davidson to complete the final step in the lower mine expansion, and

temporary suspensions at Mulatos and Island Gold due to the COVID-19 pandemic. Production is expected to increase

sharply in the third quarter at significantly lower costs.

Young-Davidson's production and costs were impacted by the previously guided downtime for the entire second quarter to

complete the tie-in of the upper and lower mines. During this planned downtime, ore was trucked to surface from the upper

mine at a rate of 2,700 tpd. The lower mine expansion and associated infrastructure was completed on July 8, 2020 with

mining rates ramping up to 6,500 tpd by the end of July. Mining rates are expected to continue to increase to a rate of 7,500

tpd by the end of 2020.

The completion of the lower mine marks the end of a multi year expansion at Young-Davidson and is a step change for the

operation. The transition to the highly productive lower mine infrastructure is expected to drive production higher and costs

lower in the second half of 2020, driving strong free cash flow growth.

After temporarily suspending operations at Island Gold on March 25, 2020 due to COVID-19, the Company began a phased

restart in early May. Mining rates increased through May and returned to normal levels in June, averaging over 1,200 tpd for the

month. Mining rates are expected to remain at approximately 1,200 tpd for the remainder of 2020. Combined with higher

grades, this is expected to drive production significantly higher.

The Phase III expansion of Island Gold announced earlier this month has outlined a bigger, more profitable, long-life operation.

The expansion is expected to take throughput rates 67% higher to 2,000 tpd, driving production significantly higher, at industry

low costs over a mine life that has doubled to 16 years. This has driven a substantial increase in value with the expanded

operation having an estimated after-tax NPV of $1.02 billion at a 5% discount rate and base case gold price of $1,450 per

ounce. At a gold price of $1,750 per ounce, the after-tax NPV is $1.45 billion, more than double the acquisition cost.

Exploration programs at Island Gold were also temporarily suspended in March with surface and underground diamond drill

programs resuming by early June. The 2020 program remains focused on continuing to define new near mine Mineral

Resources across the two-kilometre long Island Gold Main Zone which remains open laterally and down-plunge across

multiple areas of focus.

Mulatos began ramping up full operations in the latter part of May 2020 after mining was declared an essential activity by the

Mexican government. This followed the suspension of mining activities in early April as mandated by the government due to

COVID-19. Given the significant leach pad inventory at the end of the first quarter and ongoing leaching activities, production in

the second quarter of 2020 was not significantly impacted by the suspension. Lower contained ounces stacked in the second

quarter is however expected to have a slight impact on production in the second half of the year.

As announced earlier this week, the Company is proceeding with development of the high-return La Yaqui Grande project

located within the Mulatos District. With an after-tax IRR of 41% and after-tax NPV of $165 million (assuming a $1,450 gold

price), La Yaqui Grande represents the next low-cost source of production at Mulatos. Construction activities on La Yaqui

Grande are expected to ramp up during the second half of 2020 and take approximately 24 months to complete with initial

production in 2022. Given its lower costs, La Yaqui Grande is expected to drive combined costs across the Mulatos District

significantly lower.

In the second quarter, the Company submitted its Environmental Impact Statement ("EIS") for the Lynn Lake project, which

begins an anticipated two-year permitting process. In Turkey, the Company continues to pursue renewal of the mine

concession for the Kirazli project.

The Company's liquidity position remains strong, ending the quarter with $201.3 million of cash and cash equivalents and no

debt other than $100.0 million drawn on its $500.0 million revolving facility. The Company expects to transition to strong free

cash flow generation in the second half of 2020 and remains well positioned to fund its internal growth initiatives.

Fourth Quarter 2020 Results

Young-Davidson Financial and Operational Review

Three Months Ended June

30,

Six Months Ended June

30,

2020 2019 2020 2019

Gold production (ounces) 23,100 45,000 51,800 90,000

Gold sales (ounces) 22,440 44,665 51,345 88,661

Financial Review (in millions)

Operating Revenues $ 37.7 $ 58.6 $ 83.4 $ 116.0

Cost of sales (1) $ 46.2 $ 57.1 $ 90.0 $ 114.0

Earnings from operations ($8.5) $ 1.5 ($6.6) $ 2.0

Cash provided by operating activities $ 6.5 $ 23.6 $ 14.6 $ 46.5

Capital expenditures (sustaining) (2) $ 5.5 $ 11.2 $ 9.7 $ 21.2

Capital expenditures (growth) (2) $ 24.1 $ 15.5 $ 46.9 $ 27.8

Mine-site free cash flow (2) ($23.1) ($3.1) ($42.0) ($2.5)

Cost of sales, including amortization per ounce of gold sold

(1) $ 2,059 $ 1,278 $ 1,753 $ 1,286

Total cash costs per ounce of gold sold (2) $ 1,564 $ 822 $ 1,299 $ 830

Mine-site all-in sustaining costs per ounce of gold sold (2),

(3) $ 1,809 $ 1,077 $ 1,490 $ 1,073

Underground Operations

Tonnes of ore mined 244,382 612,231 634,749 1,200,847

Tonnes of ore mined per day 2,686 6,728 3,488 6,635

Average grade of gold (4) 2.50 2.42 2.30 2.48

Metres developed 2,894 2,877 6,095 5,777

Mill Operations

Tonnes of ore processed 395,289 683,946 860,033 1,293,873

Tonnes of ore processed per day 4,344 7,516 4,725 7,148

Average grade of gold (4) 1.85 2.26 1.89 2.36

Contained ounces milled 23,511 49,661 52,361 98,176

Average recovery rate 93% 91% 92% 91%

(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.

(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 produced 23,100 ounces of gold in the second quarter of 2020, a decrease from the same period in 2019 due

to lower tonnes mined and processed. This reflects the planned downtime of the Northgate shaft starting in early February to

complete the tie-in of the lower mine. Ore was trucked to surface from the upper mine during the downtime, which resulted in

lower tonnes mined during the quarter and the first half of the year.

Underground mining rates averaged 2,686 tpd in the second quarter, slightly above budgeted rates of 2,500 tpd. Similar to the

first quarter, mining activities focused on remnant stopes in the upper part of the mine to facilitate trucking up the ramp. The

average mined grade was 2.50 g/t Au in the quarter. With the completion of the lower mine expansion in July, mining rates are

expected to ramp up to 7,500 tpd by the end of 2020.

Mill throughput was 4,344 tpd in the second quarter, a decrease from the same period of 2019 due to the lower mining rates.

Mill throughput was supplemented by lower grade stockpiles, which were exhausted at the end of the quarter. Mill throughput

is expected to equal underground mining rates moving forward. Mill recoveries averaged 93% in the quarter, in line with budget.

Lower Mine Construction and Tie-In

The lower mine expansion and associated infrastructure was completed on July 8, 2020 with mining rates ramping up to 6,500

tpd by the end of July. Mining rates are expected to continue to increase to a rate of 7,500 tpd by the end of 2020. With the

completion of the lower mine, capital spending for the second half of 2020 is expected to decrease substantially from the

$56.6 million spent in the first half of the year. The transition to the highly productive lower mine infrastructure is expected to

drive production higher and costs lower in the second half of 2020, driving strong company-wide free cash flow growth.

Photos accompanying this announcement are available at:

https://www.globenewswire.com/NewsRoom/AttachmentNg/66e3c217-4b0b-410d-86ef-c1d08b900b2f

https://www.globenewswire.com/NewsRoom/AttachmentNg/c40a137c-c10f-46aa-971b-e4c73f261531

Financial Review

Second quarter revenues of $37.7 million were 36% lower than the prior year quarter, reflecting a 50% decrease in ounces

sold, partially offset by a higher realized gold price. Ounces sold decreased as a result of lower mining rates during the

temporary shutdown of the Northgate shaft to enable completion of the lower mine tie-in. Revenues for the first half of 2020

were also lower than the prior year period due to the shutdown, which commenced in February.

Cost of sales (which includes mining and processing costs, royalties, and amortization expense) of $46.2 million in the

second quarter were lower than the comparative quarter in 2019, due to lower mining and processing rates during the tie-in of

the upper and lower mine. This was partially offset by a significant increase in underground mining cost per tonne, reflecting

hauling rather than skipping ore to surface and the impact of fixed costs on lower mining rates. With the lower mine

construction completed in July 2020, underground mining cost per tonne is expected to decrease substantially in the second

half of the year. Cost of sales for the first half of 2020 of $90.0 million were lower than the prior year period for the same

reasons.

Total cash costs of $1,564 per ounce in the second quarter were higher than the comparative period in 2019 due to higher

underground mining costs and less tonnes mined. In addition, lower grade stockpiled ore, which carries a higher cost per

ounce, made up a larger proportion of mill feed compared to the prior year. Mine-site AISC of $1,809 per ounce in the second

quarter were higher than the comparative quarter in 2019, reflecting the impact of higher total cash costs. Sustaining capital

spending in the quarter was lower than the prior year period, with spending focused on growth projects including completion of

the lower mine expansion and the new TIA-1 tailings facility. Capital expenditures in the quarter included $5.5 million of

sustaining capital and $24.1 million of growth capital.

As a result of the planned downtime and growth capital associated with the lower mine expansion, mine-site free cash flow at

Young-Davidson was negative $23.1 million in the second quarter, and negative $42.0 million for the first half of 2020. With the

completion of the lower mine expansion in July, Young-Davidson is expected to generate strong free cash flow in the second

half of the year as production increases, and operating costs and capital spending decrease.

Island Gold Financial and Operational Review

Three Months Ended June

30,

Six Months Ended June

30,

2020 2019 2020 2019

Gold production (ounces) 19,400 39,500 58,200 75,100

Gold sales (ounces) 18,560 39,300 57,687 72,885

Financial Review (in millions)

Operating Revenues $ 31.4 $ 51.3 $ 93.3 $ 95.1

Cost of sales (1) $ 19.6 $ 32.4 $ 50.1 $ 61.0

Earnings from operations $ 11.6 $ 18.7 $ 42.8 $ 33.7

Cash provided by operating activities $ 25.1 $ 29.7 $ 66.8 $ 58.7

Capital expenditures (sustaining) (2) $ 5.2 $ 6.2 $ 13.7 $ 11.3

Capital expenditures (growth) (2) $ 9.5 $ 7.5 $ 19.1 $ 11.7

Capital expenditures (capitalized exploration) (2) $ 1.2 $ 4.3 $ 5.2 $ 7.4

Mine-site free cash flow (2) $ 9.2 $ 11.7 $ 28.8 $ 28.3

Cost of sales, including amortization per ounce of gold sold

(1) $ 1,056 $ 824 $ 868 $ 837

Total cash costs per ounce of gold sold (2) $ 501 $ 473 $ 468 $ 484

Mine-site all-in sustaining costs per ounce of gold sold (2),

(3) $ 781 $ 631 $ 706 $ 639

Underground Operations

Tonnes of ore mined 74,485 90,141 187,366 187,653

Tonnes of ore mined per day ("tpd") 819 991 1,029 1,037

Average grade of gold (4) 7.28 14.53 9.93 12.90

Metres developed 931 1,568 2,883 2,989

Mill Operations

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