Alamos Reports Third Quarter 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 Third Quarter 2018 Results
Toronto, Ontario (November 1, 2018) - Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today
reported its financial results for the third quarter ended September 30, 2018 and reviewed its operating, exploration
and development activities.
“We made excellent progress in the third quarter towards both our near and long-term objectives. We met our quarterly
production guidance and remain well positioned to achieve full year guidance. We completed the Phase I expansion
at Island Gold on schedule and are having ongoing success on the exploration front which has translated into
significant Mineral Reserve and Resource growth in the year since we acquired the mine. We’ re also advancing on
the lower mine expansion at Young-Davidson which will unlock the full potential of the mine and drive significant free
cash flow growth,” said John A. McCluskey, President and Chief Executive Officer.
Third Quarter 2018 Highlights
• Produced 124,000 ounces of gold, consistent with quarterly guidance of 120,000 to 125,000 ounces, and
16% above the third quarter of 2017, reflecting the inclusion of production from Island Gold
• Gold production for the first nine months of 2018 achieved a record 379,400 ounces, a 23% increase from
the same period in 2017. The Company remains well positioned to achieve full -year production guidance of
490,000 to 530,000 ounces
• Sold 119,401 ounces of gold in the third quarter at an average realized price of $1,229 per ounce, $16 per
ounce above the average London PM Fix, for revenues of $146.7 million. Revenues declined relative to the
second quarter reflecting lower gold sales and a $78 per ounce decline in the realized gold price
• Cost of sales of $1,152 per ounce, total cash costs 1 of $817 per ounce and all -in sustaining costs ("AISC")1
of $1,048 per ounce were higher than full year guidance reflecting lower mining rates at Young- Davidson,
higher costs at El Chanate and planned higher sustaining capital at Island Gold
• Given higher than budgeted costs at Young-Davidson and El Chanate through the first nine months of 2018,
the Company is revising its full year consolidated total cash cost guidance from $740 to $810 per ounce and
AISC guidance from $950 to $990 per ounce
• Realized net earnings of $7.2 million, or $0.02 per share
• Reported an adjusted net loss 1 of $1.9 million or $0.00 per share 1, primarily reflecting adjustments for
unrealized foreign exchange gains recorded within both deferred taxes and foreign exchange of $8.7 million
• Generated cash flow from operating activities of $45.2 million ($41.6 million, or $0.11 per share, before
changes in working capital 1), a decrease from the second quarter primarily reflecting a lower realized gold
price and lower gold sales
• Ended the quarter with no debt and cash and cash equivalents of $224.8 million
• Announced a significant increase in Mineral Reserves and Resources at Island Gold as of June 30, 2018
• Successfully commissioned the Phase I expansion at Island Gold on schedule, increasing mill capacity to
1,100 tonnes per day
• Paid a semi -annual dividend of $0.01 per common share, or $3.9 million, to shareholders on October 30,
2018, representing the Company's 18th consecutive semi-annual dividend
(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
2 | Alamos Gold Inc
Highlight Summary
Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Financial Results (in millions)
Operating revenues $146.7 $128.8 $488.7 $381.1
Cost of sales (1) $137.6 $100.6 $432.3 $320.2
Earnings from operations $0.6 $20.9 $28.7 $38.9
Net earnings (loss) $7.2 $28.8 ($1.1 ) $31.3
Adjusted net (loss) earnings (2) ($1.9 ) $13.7 $15.3 $18.4
Cash provided by operations before working capital and
cash taxes(2) $41.6 $51.3 $158.9 $130.6
Cash provided by operating activities $45.2 $43.4 $166.5 $114.9
Capital expenditures (sustaining) (2) $19.6 $10.8 $42.4 $31.2
Capital expenditures (growth) (2) $30.5 $26.2 $102.8 $86.2
Capital expenditures (capitalized exploration) (3) $5.0 $1.2 $14.8 $5.9
Operating Results
Gold production (ounces) (4) 124,000 107,000 379,400 309,100
Gold sales (ounces) 119,401 100,551 378,718 303,329
Per Ounce Data
Average realized gold price $1,229 $1,281 $1,290 $1,256
Average spot gold price (London PM Fix) $1,213 $1,278 $1,282 $1,251
Cost of sales per ounce of gold sold
(includes amortization) (1) $1,152 $1,000 $1,141 $1,056
Total cash costs per ounce of gold sold (2) $817 $720 $813 $777
All-in sustaining costs per ounce of gold sold (2) $1,048 $884 $992 $946
Share Data
Earnings per share, basic $0.02 $0.10 $0.00 $0.11
Adjusted earnings per share, basic (2) $0.00 $0.05 $0.04 $0.06
Weighted average common shares outstanding (basic)
(000’s) 389,854 300,448 389,572 294,853
Financial Position (in millions)
Cash and cash equivalents (5) $224.8 $200.8
(1) Cost of sales includes mining and processing costs, royalties, and amortization expense.
(2) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation
of these measures.
(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 pr oduction from Island Gold for the
three and nine months ended September 30, 2017 was 26,659 and 76,541 ounces respectively.
(5) Comparative Cash and cash equivalents balance as at December 31, 2017.
TRADING SYMBOL: TSX:AGI NYSE:AGI
3 | Alamos Gold Inc
Three Months Ended September 30, Nine Months Ended September 30,
2018 2017(1) 2018 2017(1)
Gold production (ounces)
Young-Davidson 49,000 55,800 129,100 143,500
Mulatos 43,300 36,300 139,900 117,300
Island Gold (1) 22,000 — 76,800 —
El Chanate 9,700 14,900 33,600 48,300
Gold sales (ounces)
Young-Davidson 46,853 55,267 133,649 145,462
Mulatos 42,300 30,330 136,285 109,270
Island Gold (1) 20,561 — 75,321 —
El Chanate 9,687 14,954 33,463 48,597
Cost of sales (in millions)(2)
Young-Davidson $59.8 $53.4 $173.5 $155.3
Mulatos $41.9 $29.0 $134.7 $105.3
Island Gold (1) $22.3 — $77.8 —
El Chanate $13.6 $18.2 $46.3 $59.6
Cost of sales per ounce of gold sold (includes amortization)
Young-Davidson $1,276 $966 $1,298 $1,068
Mulatos $991 $956 $988 $964
Island Gold (1) $1,085 — $1,033 —
El Chanate $1,404 $1,217 $1,384 $1,226
Total cash costs per ounce of gold sold (3)
Young-Davidson $824 $572 $845 $647
Mulatos $771 $785 $784 $782
Island Gold (1) $671 — $597 —
El Chanate $1,301 $1,137 $1,285 $1,156
Mine-site all-in sustaining costs per ounce of gold sold (3),(4)
Young-Davidson $1,029 $744 $1,034 $824
Mulatos $846 $864 $847 $852
Island Gold (1) $1,051 — $759 —
El Chanate $1,332 $1,164 $1,312 $1,187
Capital expenditures (sustaining, growth and capitalized exploration) (in millions)(3)
Young-Davidson $22.1 $22.0 $63.5 $63.3
Mulatos(5) $6.8 $8.9 $23.5 $34.9
Island Gold (1),(6) $17.8 — $49.3 —
El Chanate $0.2 $0.3 $0.5 $1.2
Other $8.2 $7.0 $23.2 $23.9
(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 nine months ended September 30, 2017 was 26,659 and 76,541 ounces, respectively .
(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 $0.3 million and $2.3 million for t he three and nine months ended September 30, 2018 ($1.2 million and $5.9 million
for the three and nine months ended September 30, 2017).
(6) Includes capitalized exploration at Island Gold of $4.7 million and $12.5 million for the three and nine months ended September 30, 2018.
TRADING SYMBOL: TSX:AGI NYSE:AGI
4 | Alamos Gold Inc
Outlook and Strategy
2018 Guidance
Total
Young-
Davidson Mulatos
Island
Gold
El
Chanate Turkey (5) Other (2) Original Current
Gold production (000’s ounces)
Current Guidance 180-190 170-180 100-110 40-50 — — 490-530
Original Guidance 200-210 150-160 90-100 40-50 — — 480-520
Cost of sales, including
amortization (in millions)(4),(6) $208 $175 $108 $58 — — $536 $549
Cost of sales, including
amortization ($ per ounce)(4),(6) $1,125 $1,000 $1,025 $1,285 — — $1,075 $1,145
Total cash costs ($ per ounce)(1),(6) $675 $800 $575 $1,200 — — $740 $810
All-in sustaining costs
($ per ounce)(1),(6) — — $950 $990
Mine-site all-in sustaining costs
($ per ounce)(1),(3),(6) $850 $900 $825 $1,200 — — — —
Amortization costs
($ per ounce)(1) $450 $200 $450 $85 — — $335 $335
Capital expenditures (in millions)
Sustaining capital(1) $35-40 $8-10 $25-27 — — — $68-77 $68-77
Growth capital(1) $35-40 $18-20 $25-28 — $25 $46 (2) $224-234
$149-159
Total capital expenditures(1) $70-80 $26-30 $50-55 — $25 $46 $292-$311 $217-$236
(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.
(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) Capital guidance at Kirazlı has been reduced to $25 million from the origi nal budget of $100 million.
(6) 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.
The Company continues to deliver on its strategic objectives of increasing cash flow from operations while advancing
its portfolio of low-cost development projects. Gold production in the third quarter of 124,000 ounces was at the top
end of the Company ’s forecast of between 120,000 and 125,000 ounces, and represented a 16% increase relative
to the third quarter of 2017, reflecting the inclusion of production from Island Gold. With record production of 379,400
ounces through the first nine months of 2018, the Company is well positioned to achieve full year production guidance
of 490,000 to 530,000 ounces, which was increased earlier in the year.
Gold production in the fourth quarter is expected to increase slightly relati ve to the third quarter at lower total cash
costs and AISC, bringing full-year production above 500,000 ounces. The reduction in costs is expected to be driven
by higher grades and throughput at both Young-Davidson and Island Gold.
Total cash costs of $817 per ounce and AISC of $1,048 per ounce were higher than budget in the third quarter, driven
primarily by higher costs at Young- Davidson and El Chanate, as well as planned higher sustaining capital at Island
Gold. As a result of higher than budgeted costs at Young-Davidson and El Chanate through the first three quarters,
the Company has increased 2018 total cash cost guidance from $740 to $810 per ounce, and AISC guidance from
$950 to $990 per ounce. The Company expects lower costs in 2019.
Young-Davidson produced 49,000 ounces in the third quarter, a 25% increase from the second quarter. The operation
is on track to achieve revised guidance of between 180,000 and 190,000 ounces for the year.
The near-term focus at Young-Davidson remains on maximizing eff iciency from the upper mine infrastructure, while
completing development and construction of the lower mine. The upper mine infrastructure was designed for 6,000
tpd and has been operated at up to 7,200 tpd in the fourth quarter of 2017, but has averaged 6,500 tpd over the past
two years. The lower mine infrastructure, which will be used over the long term, is designed for 8,000 tpd. Construction
of the lower mine and tie-in to the upper mine is scheduled to be completed in the first half of 2020.
Young-Davidson is expected to be operating from the lower mine in the second half of 2020, after which higher
underground mining rates will drive production higher and operating costs lower. Combined with a significant
reduction in capital, this will result in su bstantial free cash flow growth. Until such time, gold production, operating
TRADING SYMBOL: TSX:AGI NYSE:AGI
5 | Alamos Gold Inc
costs and capital spending are expected to remain at levels consistent with the past two years. Young-Davidson has
generated $48 million of positive free cash flow over the past t wo years and will continue to fund the lower mine
construction from operating cash flow.
Island Gold produced 22,000 ounces in the third quarter, consistent with budget. With year -to-date production of
76,800 ounces, the operation is well positioned to meet its 2018 production guidance of between 100,000 and 110,000
ounces, an 11% increase from original guidance (based on the mid-point).
The Phase I expansion of the Island Gold mill to 1,100 tpd was completed on schedule in September. The mill was
successfully commissioned with throughput increasing to average approximately 1,100 tpd in September and
October. Higher milling rates and grades are expected to drive stronger production and lower costs in 2019 and
beyond. The Company expects a 30% increase in gold production and significant free cash flow growth at Island Gold
in 2019.
Exploration results at Island Gold continue to exceed expectations with a significant increase in Mineral Reserves
and Resources announced in the third quarter of 2018. Since the acquisition of Island Gold in November 2017, Mineral
Reserves have increased 365,000 ounces, before mining depletion, with Mineral Reserve grades also increasing
17% to 10.69 g/t Au as the deposit continues to grow in size and quality. Measured and Indicated Mineral Resources
have also increased 130,000 ounces while Inferred Mineral Resources have increased 184,000 ounces. Ongoing
exploration success will be incorporated into an evaluation of the most effective and economic approach to a further
expansion of the operation beyond 1,100 tpd.
Total production from the Mulatos district (including La Yaqui Phase I) was 43,300 ounces in the third quarter,
exceeding budget for the third consecutive quarter. Production decreased from the second quarter of 2018 as
expected, with underground mining at San Carlos coming to an end. With year-to-date production of 139,900 ounces,
Mulatos is well positioned to meet its increased 2018 production guidance of between 170,000 and 180,000 ounces,
representing a 13% increase from the mid-point of original guidance. The Company expects 2019 production to return
to the previously guided range of 150,000 to 160,000 ounces per year.
El Chanate produced 9,700 ounces in the third quarter, and remains on track to meet production guidance of 40,000
to 50,000 ounces for the full year. This is down from 2017 reflecting lower mining rates with mining activities having
ceased on October 30, 2018. Given the long leach cycle at El Chanate, the Company expects to benefit from ongoing
gold production beyond 2018 through residual leaching.
The Company expects combined annual gold production of approximately 500,000 ounces in 2019 and 2020 with
low cost production growth from Island Gold replacing higher cost production from El Chanate. Consoli dated all-in
sustaining costs are expected to decrease in 2019 reflecting the completion of the Phase I expansion at Island Gold
and the end of the 5% royalty at Mulatos, with a further decline expected following the completion of the lower mine
tie-in at Young-Davidson in 2020.
On July 25, 2018, the Company was granted the GSM (Business Opening and Operation) permit required for the
construction of its Kirazlı project. To date, construction has been focused on the infrastructure projects required to
support the mine development. The Company now estimates spending $25 million in 2018. This is down from the
previous estimate as the Company delayed finalization of the mining services and earthworks contract pending clarity
on recent amendments to a decree in Turkey requiring that cer tain contracts be denominated in Turkish Lira. The
Company has now assessed the applicability of these changes and believes this decree is applicable to our mining
services and earthworks contract. This contract is now being finalized, with construction ac tivities expected to ramp
up through the end of this year. The remainder of the $152 million initial capital budget for Kirazlı is expected to be
spent in 2019 and 2020, with first production expected in the second half of 2020.
In addition to capital spending in Turkey, the Company has invested $5.2 million in development expenditures at
Cerro Pelon, La Yaqui Grande and Lynn Lake thus far in 2018. Exploration spending of $27.0 million to date has been
focused primarily at Island Gold.
With over $625 million of cash and available liquidity, no debt, and growing cash flow from its operations, the Company
is well positioned to fund its growth.
TRADING SYMBOL: TSX:AGI NYSE:AGI
6 | Alamos Gold Inc
Young-Davidson Financial and Operational Review
Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Gold production (ounces) 49,000 55,800 129,100 143,500
Gold sales (ounces) 46,853 55,267 133,649 145,462
Financial Review (in millions)
Operating Revenues $57.3 $70.8 $171.9 $182.9
Cost of sales (1) $59.8 $53.4 $173.5 $155.3
(Loss) earnings from operations ($2.5 ) $17.4 ($1.6 ) $27.6
Cash provided by operating activities $24.0 $35.3 $73.9 $81.1
Capital expenditures (sustaining) (2) $9.5 $9.4 $25.0 $25.4
Capital expenditures (growth) (2) $12.6 $12.6 $38.5 $37.9
Mine-site free cash flow (2) $1.9 $13.3 $10.4 $17.8
Cost of sales, including amortization per ounce of gold sold (1) $1,276 $966 $1,298 $1,068
Total cash costs per ounce of gold sold (2) $824 $572 $845 $647
Mine-site all-in sustaining costs per ounce of gold sold (2),(3) $1,029 $744 $1,034 $824
Underground Operations
Tonnes of ore mined 552,500 602,072 1,691,443 1,758,442
Tonnes of ore mined per day ("tpd") 6,005 6,544 6,196 6,441
Average grade of gold (4) 2.59 2.89 2.44 2.69
Metres developed 2,811 3,344 9,034 10,011
Mill Operations
Tonnes of ore processed 670,912 694,900 1,938,395 2,018,994
Tonnes of ore processed per day 7,293 7,553 7,100 7,396
Average grade of gold (4) 2.43 2.65 2.28 2.43
Contained ounces milled 52,517 59,230 140,509 157,623
Average recovery rate 93 % 93 % 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.
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 produced 49,000 ounces of gold in the third quarter of 2018, lower than the comparative quarter of
2017; however, a 25% improvement from the second quarter of 2018 driven by higher milling rates and underground
grades mined. This improvement has continued into October with production of 18,000 ounces for the month driven
by higher grades and underground mining rates.
Underground mining rates of 6,005 tpd were below budgeted levels in the third quarter. During the second quarter
mill shutdown, underground ore was stockpiled, which was subsequently processed, and supplemented ore mined
in the quarter. During July, mining rates were impacted by forest fires in proximity to the mine which impacted air
quality and resulted in cancelled shifts and three days of downtime. In addition, power outages due to extreme
weather caused another two days of downtime to both the mine and mill. This downtime impacted mining rates by
approximately 400 tpd over the quarter. Mining rates improved in the latter part of the quarter and in October to
average 6,500 tpd. Underground mining rates are expected to increase substantially following the completion of the
lower mine tie-in in 2020.
Underground grades mined of 2.59 g/t Au for the third quarter increased 10% from the second quarter of 2018. The
Company expects a further improvement in grades mined in the fourth quarter.
During the third quarter, 670,912 tonnes, or 7,293 tpd, were processed through the mill with grades averaging 2.43
g/t Au, representing a 12% increase from the second quarter of 2018. Mill throughput was below budgeted levels,
primarily due to the mill shutdown in the early part of the quarter.
Mill recoveries of 93% were in line with expectations and the prior year period.
The Company remains on track to meet the updated production guidance at Young- Davidson of between 180,000
and 190,000 ounces, with the fourth quarter expected to be the strongest of the year.
TRADING SYMBOL: TSX:AGI NYSE:AGI
7 | Alamos Gold Inc
Financial Review
For the third quarter ended September 30, 2018, revenues of $57.3 million were $13.5 million lower than the
comparative quarter, due to lower ounces sold and a lower realized gold price. Year-to-date 2018 revenues of $171.9
million were $11.0 million lower than the prior year with lower ounces sold partially offset by a higher realized gold
price.
Cost of sales, which reflects mining and processing costs, ro yalties, and amortization expense of $59.8 million were
higher than the comparative quarter of 2017 reflecting higher mining and processing costs. Year-to-date cost of sales
were $173.5 million, an increase of $18.2 million due to higher mining and processing costs and amortization charges.
Total cash costs in the third quarter were $824 per ounce, a 44% increase from the third quarter of 2017 due to lower
grades processed and a higher mining cost per tonne. Mining costs of CAD $54 per tonne in the quarter were above
budget, reflecting the impact of lower throughput on fixed costs, as well as higher diesel and maintenance costs. Total
cash costs of $845 per ounce for the nine-month period were 31% higher than the prior year period.
Mine-site AISC were $1,029 per ounce in the third quarter, 38% higher than the prior year quarter reflecting higher
total cash costs and higher sustaining capital. Mine- site AISC for the nine-month period were $1,034 or 25% higher
than the prior year period. Mine-site AISC have been above guidance throughout 2018 as a result of higher per -unit
mining and milling costs, as well as the impact of higher sustaining capital on lower ounce production.
Capital expenditures were $22.1 million in the third quarter, including $9.5 million f or sustaining capital and $12.6
million for growth capital, consistent with the same quarter of 2017. Major capital spending during the quarter included
lateral development in the upper and lower mines, as well as expenditures on the water treatment plant. Capital
expenditures of $63.5 million for the nine-month period were consistent with the prior year period and guidance.
Young-Davidson generated mine- site free cash flow of $1.9 million in the third quarter, lower than the prior year
quarter, primarily due to lower gold sales and gross margins. Year -to-date free cash flow of $10.4 million was lower
due to gold sales and higher costs.
TRADING SYMBOL: TSX:AGI NYSE:AGI
8 | Alamos Gold Inc
Island Gold Financial and Operational Review
Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 (1) 2018 2017 (1)
Gold production (ounces) (1) 22,000 — 76,800 —
Gold sales (ounces) (1) 20,561 — 75,321 —
Financial Review (in millions)
Operating Revenues $25.3 $— $97.6 $—
Cost of sales (2) $22.3 $— $77.8 $—
Earnings from operations $2.7 $— $19.4 $—
Cash provided by operating activities $13.9 $— $59.6 $—
Capital expenditures (sustaining) (3) $7.8 $— $12.2 $—
Capital expenditures (growth) (3) $5.3 $— $24.6 $—
Capital expenditures (capitalized exploration) (3) $4.7 $— $12.5 $—
Mine-site free cash flow (3) ($3.9 ) $— $10.3 $—
Cost of sales, including amortization per ounce of gold sold (2) $1,085 $— $1,033 $—
Total cash costs per ounce of gold sold (3) $671 $— $597 $—
Mine-site all-in sustaining costs per ounce of gold sold (3),(4) $1,051 $— $759 $—
Underground Operations
Tonnes of ore mined 74,892 84,405 241,644 280,555
Tonnes of ore mined per day ("tpd") 814 917 885 1,028
Average grade of gold (5) 8.96 9.16 9.12 9.41
Metres developed 1,591 1,383 4,917 5,239
Mill Operations
Tonnes of ore processed 93,454 85,101 264,335 254,044
Tonnes of ore processed per day 1,016 925 968 931
Average grade of gold (5) 8.22 10.04 9.27 9.65
Contained ounces milled 24,708 27,470 78,793 78,818
Average recovery rate 96 % 97 % 97 % 97 %
(1) Financial results from Island Gold are included in Alamos’ consolidated financial statements for the period subsequent to Nov ember 23, 2017. Gold production from Island Gold for the three
and nine-months ended September 30, 2017 was 26,659 and 76,541 ounces.
(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.
Total cash costs and mine-site AISC are exclusive of net-realizable value adjustments.
(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) Grams per tonne of gold ("g/t Au").
Island Gold produced 22,000 ounces in the third quarter bringing year -to-date production to 76,800 ounces, well
ahead of budget. The Company remains well positioned to achieve 2018 production guidance of 100,000 to 110,000
ounces which was increased earlier in the year from original guidance of 90,000 to 100,000 ounces.
Underground mining rates in the third quarter of 74,892 tonnes or 814 tpd were impacted by low contractor production
drilling performance, as well as a scheduled one- week shutdown of the ramp. Underground mining rates improved
later in the quarter, averaging approximately 1,100 tpd in September as well as October and are expected to remain
at similar levels going forward, to match the expanded mill capacity. Underground grades mined of 8.96 g/t Au were
higher than the second quarter and slightly above budget.
Mill throughput for the third quarter was 93,454 tonnes, or 1,016 tpd, an increase from 976 tpd in the second quarter
and 925 tpd in the prior year quarter. The Phase I expansion was completed and commissioned during the month of
September, with October mill throughput averaging over 1,100 tpd. Milled grades averaged 8.22 g/t Au, 18% lower
than the prior year quarter, but consistent with the budget.
Financial Review
With the Company acquiring Island Gold on November 23, 2017, financial information prior to the acquisition date
has not been included in the comparative table above.
Island Gold generated revenues of $25.3 million in the third quarter, lower than the first two quarters of 2018, resulting
from lower ounces sold during the quarter. Revenues for the nine-month period were $97.6 million.