Alamos Gold Reports Second Quarter 2023 Results Record production and strong margin expansion drive record financial performance including free cash flow of $62 million
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 Second Quarter 2023 Results
Record production and strong margin expansion drive record financial performance including
free cash flow of $62 million
Toronto, Ontario ( July 26, 2023) - Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today
reported its financial results for the quarter ended June 30, 2023.
“We delivered a record performance in the second quarter on multiple fronts. Operationally, we produced a record
136,000 ounces, exceeding quarterly guid ance, at costs consistent with annual guidance. This was driven by
another excellent quarter from La Yaqui Grande which contributed to the highest production and free cash flow from
the Mulatos District in more than 10 years. With the solid first half, we are well positioned to achieve our full year
production and cost guidance,” said John A. McCluskey, President and Chief Executive Officer.
“The strong production growth and margin expansion led to a record quarter financially across a number of metrics
including record revenue and operating cash flow. We also generated record free cash flow of $62 million while
continuing to advance our growth initiatives that will in turn support further free cash flow growth. The Phase 3+
Expansion at Island Gold remains on track with construction of the shaft surface infrastructure well underway, a nd
the updated Feasibility Study for the Lynn Lake project is in the final stages of completion. Both projects are key
components of our strong outlook, with the capacity to nearly double our rate of production in Canada at
significantly lower costs,” Mr. McCluskey added.
Second Quarter 2023
• Produced a record 136,000 ounces of gold, exceeding quarterly guidance of 120,000 to 130,000 ounces. This
represented a 31% increase from the second quarter of 2022 and 6% increase from the first quarter of 2023
driven by strong production growth from the Mulatos District. The Company remains well positioned to achieve
2023 annual guidance
• Record free cash flow 1 of $61.6 million reflecting strong operating results and margin expansion, as well as
benefiting from the collection of sales tax receivables in Ca nada that had been temporarily delayed in the first
quarter. The Company expects to continue generating strong free cash flow over the next several years while
funding the Phase 3+ Expansion at Island Gold
• Generated record cash flow from operating activiti es of $141.8 million ( $138.3 million, or $0.35 per share,
before changes in working capital1)
• The Mulatos District produced 60,300 ounces, a 19% increase from the first quarter of 2023, and the highest
level in 10 years, reflecting another solid quarter fr om La Yaqui Grande. The strong performance drove a 28%
increase in mine-site free cash flow from the first quarter of 2023 to $47.0 million, bringing the first half total to
$83.8 million
• Young-Davidson continues to perform well , producing 45,200 ounces, consistent with the first quarter of 2023,
and generating record mine -site free cash flow 1 of $35.4 million. Through the first half of the year, Young -
Davidson generated $51.7 million of mine -site free cash flow and remains on track to generate over $100
million for the third consecutive year
• Island Gold produced 30,500 ounces and continues to self-finance the majority of the Phase 3+ Expansion. The
Expansion is progressing well with the construction of the hoist house largely complete, the headframe well
underway, and shaft sinking on track to start in the fourth quarter of 2023
• Sold 131,952 ounces of gold at an average realized price of $1,978 per ounce, for record quarterly revenues of
$261.0 million. The average realized gold price was $2 per ounce above the London PM fix for the quarter
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2 | Alamos Gold Inc
• Total cash costs1 of $847 per ounce were consistent with annual guidance , and all-in sustaining costs ("AISC" 1)
of $1,112 per ounce were below the low end of guidance and down 5% from the first quarter of 2023, reflecting
low-cost production growth from La Yaqui Grande and lower sustaining capital
• Realized adjusted net earnings 1 of $59.3 million, or $0.15 per share. Adjusted net earnings includes
adjustments for unrealized foreign exchange gains recorded within both deferred taxes and foreign exchange of
$13.4 million, and other gains totaling $2.4 million. Reported net earnings were $75.1 million, or $0.19 per share
• Paid a quarterly dividend of $9.9 million, or $0.025 per share (annualized rate of $0.10 per share)
• Cash and cash equivalents increased to $188.6 million, up from $133.8 million at the end of the first quarter,
reflecting strong free cash flow. The Company remains debt free
• Completed the acquisition of Manitou Gold on May 23, 2023, adding significant exploration potential across the
Michipicoten Greenstone Belt by more than tripling the regional land package adjacent to and along strike from
Island Gold
• Provided an exploration update at Mulatos, further extending high -grade mineralization beyond Mineral
Reserves and Resources at Puerto Del Aire ("PDA") and intersected a wide interval of significant gold
mineralization at the Capulin regional target
• Provided an exploration update at Island Gold, extending high -grade mineralization across the deposit including
within recently defined hanging wall and footwall zones in proximity to existing underground infrastructure
• Completed an Impact Benefit Agreement and signing ceremony with Marcel Colomb First Nation for the Lynn
Lake project in Manitoba, Canada
• Publication of Alamos’ inaugural Climate Change Report, outlining corporate governance around climate -related
risks and opportunities
.(1) Refer to the “Non -GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and
calculation of these measures.
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3 | Alamos Gold Inc
Highlight Summary
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Financial Results (in millions)
Operating revenues $261.0 $191.2 $512.5 $375.7
Cost of sales (1) $157.8 $151.9 $313.0 $287.4
Earnings from operations $88.6 $25.7 $163.6 $20.0
Earnings before income taxes $92.1 $30.2 $164.3 $15.9
Net earnings (loss) $75.1 $6.4 $123.5 ($2.1)
Adjusted net earnings (2) $59.3 $29.3 $104.7 $47.3
Earnings before interest, depreciation and amortization (2) $138.9 $92.0 $258.8 $154.9
Cash provided by operations before working capital and taxes
paid(2) $138.3 $85.3 $265.5 $156.2
Cash provided by operating activities $141.8 $75.7 $236.1 $122.2
Capital expenditures (sustaining) (2) $23.4 $20.1 $50.3 $42.7
Capital expenditures (growth) (2) (3) $49.8 $43.3 $101.8 $101.9
Capital expenditures (capitalized exploration) (4) $7.0 $5.6 $11.9 $11.7
Free cash flow (2) $61.6 $6.7 $72.1 ($34.1)
Operating Results
Gold production (ounces) 136,000 103,900 264,400 202,800
Gold sales (ounces) 131,952 102,164 264,620 200,630
Per Ounce Data
Average realized gold price $1,978 $1,871 $1,937 $1,873
Average spot gold price (London PM Fix) $1,976 $1,871 $1,933 $1,874
Cost of sales per ounce of gold sold (includes amortization) (1) $1,196 $1,487 $1,183 $1,432
Total cash costs per ounce of gold sold (2) $847 $895 $834 $943
All-in sustaining costs per ounce of gold sold (2) $1,112 $1,170 $1,144 $1,264
Share Data
Earnings (loss) per share, basic and diluted $0.19 $0.02 $0.31 ($0.01)
Adjusted earnings per share, basic and diluted(2) $0.15 $0.07 $0.27 $0.12
Weighted average common shares outstanding (basic) (000’s) 395,346 391,761 394,657 391,837
Financial Position (in millions)
Cash and cash equivalents(5) $188.6 $129.8
(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 growth capital from operating sites.
(4) Includes capitalized exploration at Island Gold, Young-Davidson and Mulatos District.
(5) Comparative cash and cash equivalents balance as at December 31, 2022.
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4 | Alamos Gold Inc
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Gold production (ounces)
Young-Davidson 45,200 46,400 90,200 98,300
Island Gold 30,500 37,300 63,400 61,800
Mulatos District(7) 60,300 20,200 110,800 42,700
Gold sales (ounces)
Young-Davidson 43,570 46,662 89,246 98,187
Island Gold 28,183 36,797 61,910 60,165
Mulatos District 60,199 18,705 113,464 42,278
Cost of sales (in millions)(1)
Young-Davidson $59.3 $59.8 $121.2 $124.4
Island Gold $27.6 $32.0 $58.5 $56.2
Mulatos District $70.9 $60.1 $133.3 $106.8
Cost of sales per ounce of gold sold (includes amortization) (1)
Young-Davidson $1,361 $1,282 $1,358 $1,267
Island Gold $979 $870 $945 $934
Mulatos District $1,178 $3,213 $1,175 $2,526
Total cash costs per ounce of gold sold (2)
Young-Davidson $955 $866 $948 $852
Island Gold $678 $590 $651 $650
Mulatos District $847 $1,566 $843 $1,568
Mine-site all-in sustaining costs per ounce of gold sold (2),(3)
Young-Davidson $1,212 $1,087 $1,222 $1,064
Island Gold $1,072 $848 $1,016 $939
Mulatos District $894 $1,636 $903 $1,717
Capital expenditures (sustaining, growth and capitalized exploration) (in millions)(2)
Young-Davidson (4) $13.5 $13.1 $30.9 $35.8
Island Gold (5) $54.7 $29.3 $111.7 $62.7
Mulatos District (6) $6.5 $21.3 $12.2 $47.3
Other $5.5 $5.3 $9.2 $10.5
(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) For the purposes of calculating mine -site all-in sustaining costs, the Compan y 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 $2.6 million for the three and six months ended June 30, 2023 ($1.3 million and $2.3 million
for the three and six months ended June 30, 2022).
(5) Includes capitalized exploration at Island Gold of $3.0 million and $5.4 million for the three and six months ended June 30, 2023 ($4.1 million and $9.2 million for
the three and six months ended June 30, 2022).
(6) Includes capitalized exploration at Mulatos District of $2.8 million and $3.9 million for the three and six months ended June 30, 2023 ($0.2 million for the three and
six months ended June 30, 2022).
(7) The Mulatos District includes both the Mulatos pit, as well as La Yaqui Grande.
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5 | Alamos Gold Inc
Environment, Social and Governance Summary Performance
Health and Safety
• Total recordable injury frequency rate1 ("TRIFR") of 1.23 in the second quarter, down from 1.56 in the first
quarter of 2023
• Lost time injury frequency rate1 ("LTIFR") of 0.09 in the second quarter, up from 0.00 in the first quarter of 2023
• Year-to-date TRIFR of 1.40 and LTIFR of 0.05
During the second quarter of 2023, the TRIFR decreased with 13 recordable injuries, four less than the prior
quarter. One lost time injury was recorded in the quarter involving a hand injury to an exploration drilling contractor
at Mulatos. 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 ha ve all employees and contractors return Home Safe Every
Day
Environment
• Zero significant environmental incidents and zero reportable spills in the second quarter and year -to-date
• Detailed design works completed for the reclamation of the Cerro Pelon, El Victor and San Carlos open pits
within the Mulatos District
• Completed site visits with Alamos’ Independent Tailings Review Board to Young-Davidson and Island Gold
The Company is com mitted to preserving the long -term health and viability of the natural environment that
surrounds 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
• Completed an Impact Benefit Agreement and signing ceremony with Marcel Colomb First Nation for the Lynn
Lake project, with the goal of providing l ong term socio -economic benefits to the community and collaboration
on economic development, jobs, training and environmental stewardship of the project
• Held a ceremonial signing to celebrate the Definitive Agreement announced earlier in the year between A lamos
and Batchewana First Nation for the Island Gold mine
In addition, ongoing donations, medical support and infrastructure investments were provided to local communities,
including:
• Eye health, dental health, and sexual education campaigns with residents of Matarachi
• Various contributions within the Temiskaming and Algoma districts of Ontario, including donations to the
Temiskaming Hospital Foundation, rejuvenation of the Elk Lake playground, funds to support the Matachewan
community garden, and sponsorship of various local events
• Island Gold hosted its second 'Mining Showcase' event for high school students at École St. Joseph in Wawa
• Annual clean-up in Dubreuilville with participants from Island Gold, the township and local students
The Company 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 investments in
local infrastructure, health care, education, cultural and community programs remain a focus of the Company.
Governance and Disclosure
• Publication of Alamos’ inaugural Climate Change Report, outlining corporate governance around climate -
related risks and opportunities; the Company’s processes to identify, a ssess and manage climate -related risks;
alignment to Task Force on Climate -related Financial Disclosure recommendations; and further details on
Alamos’ 30% absolute greenhouse gas emission reduction target by 2030
• Publication of Alamos’ 2022 Report on conf ormance to the World Gold Council’s Responsible Gold Mining
Principles and independent assurance report
• Publication of the annual report outlining payments to governments under Canada’s Extractive Sector
Transparency Measures Act
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6 | Alamos Gold Inc
The Company maintains the highest standards of corporate governance to ensure that corporate decision -making
reflects its values, including the Company’s commitment to sustainable development. During the quarter, the
Company continued to advance its implem entation of the Responsible Gold Mining Principles, developed by the
World Gold Council as a framework that sets clear expectations as to what constitutes responsible gold mining.
(1) Frequency rate is calculated as incidents per 200,000 hours worked.
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7 | Alamos Gold Inc
Outlook and Strategy
2023 Guidance
Young-
Davidson Island Gold Mulatos Lynn Lake Total
Gold production (000’s ounces) 185 - 200 120 - 135 175 - 185 480 - 520
Cost of sales, including amortization (in millions)(3) $625
Cost of sales, including amortization ($ per ounce)(3) $1,250
Total cash costs ($ per ounce)(1) $900 - $950 $600 - $650 $900 - $950 — $825- $875
All-in sustaining costs ($ per ounce)(1) $1,125 - $1,175
Mine-site all-in sustaining costs ($ per ounce)(1)(2) $1,175 - $1,225 $950 - $1,000 $950 - $1,000 —
Capital expenditures (in millions)
Sustaining capital(1) $50 - $55 $45 - $50 $10 — $105 - $115
Growth capital(1) $5 - $10 $165 - $185 $5 - $10 $12 $187 - $217
Total Sustaining and Growth Capital(1) $55 - $65 $210 - $235 $15 - $20 $12 $292 - $332
Capitalized exploration(1) $5 $11 $4 $5 $25
Total capital expenditures and capitalized
exploration(1) $60 - $70 $221 - $246 $19 - $24 $17 $317 - $357
(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) 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.
(3) 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.
With a record second quarter performance, the Company continues to successfully execute on this strategy on all
fronts. Production increased to a new record of 136,000 ounces, exceedi ng second quarter guidance, while AISC
decreased below the low end of full year guidance. This was driven by another strong quarter from the Mulatos
District with La Yaqui Grande contributing to the highest production and mine -site free cash flow from the operation
in more than 10 years. With the strong start to the year, the Company remains on track to achieve annual
production and cost guidance.
Financially it was a record quarter on a number of fronts reflecting the strong operational performance and hi gher
gold prices. The Company generated record quarterly revenues, cash flow from operations and free cash flow. The
significant increase in free cash flow to $61. 6 million was achieved while continuing to advance a variety of growth
initiatives that are e xpected to support growing production, declining costs, and further free cash flow growth in the
years ahead. This included substantial progress on the Phase 3+ Expansion at Island Gold. Construction of the
hoist house is largely complete, the erection of the headframe is well underway, and shaft sinking is on track to
begin in the fourth quarter of 2023.
After achieving a significant permitting milestone earlier this year at the Lynn Lake project with the receipt of a
positive Decision Statement for the F ederal Environmental Impact Statement (“EIS”), work on the updated
Feasibility Study is nearing completion. The Company expects this to outline another attractive, low -cost, long-life
growth project in Canada with significant exploration upside.
The Company continues to have broad based success adding value through its exploration programs. This includes
extending high -grade mineralization beyond Mineral Reserves and Resources at Island Gold and PDA,
demonstrating ongoing growth potential at both assets. Th is will be incorporated into a new development plan for
PDA to be completed in the fourth quarter of 2023 which is expected to outline a significant mine life extension at
the Mulatos District.
As outlined in the three -year production and operating guida nce provided in January 2023, the Company expects
higher production at significantly lower costs over the next three years. Refer to the Company’s January 12, 2023
guidance press release for a summary of the key assumptions and related risks associated wit h the comprehensive
2023 guidance and three -year production, cost and capital outlook. Production is expected to range between
480,000 and 520,000 ounces in 2023, a 9% increase from 2022, and remain at similar levels in 2024 and 2025.
Company-wide AISC is expected to decrease 4% in 2023 and 17% by 2025 to between $950 and $1,050 per
ounce.
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8 | Alamos Gold Inc
The Company is well positioned to achieve 2023 guidance with production through the first half of the year totaling
264,400 ounces and total cash costs and AISC both in -line with guidance. In the third quarter, production is
expected to be between 120,000 and 130,000 ounces, at AISC near the upper end of the annual guidance range.
Third quarter guidance reflects lower planned production from the Mulatos District with the e nd of mining in the main
Mulatos pit and the return to guided grades and stacking rates at La Yaqui Grande.
Young-Davidson had another strong quarter with mining rates exceeding targeted rates, averaging 8,089 tpd in the
second quarter and 8,050 tpd throug h the first half of the year. This contributed to first half production of 90,200
ounces and mine -site free cash flow of $51.7 million. With higher grades expected to drive stronger production in
the second half of the year, Young-Davidson is on track to achieve full year production guidance and generate more
than $100 million of mine-site free cash flow for the third consecutive year.
Island Gold produced 63,400 ounces in the first half of the year, and with higher mining and processing rates
expected in the second half of the year, the operation is on track to meet full year guidance. As outlined in the
Phase 3+ Expansion study released in June 2022, grades mined are expected to increase in 2024, driving
production higher. A further increase in grades and an increase in mining rates toward the latter part of 2025 is
expected to drive an increase in production and a reduction in costs. As demonstrated in the quarter and through
the first half of the year, Island Gold continues to generate strong cash flow f rom operations allowing the operation
to self-finance the majority of capital spending on the Phase 3+ Expansion.
Combined gold production from the Mulatos District (including La Yaqui Grande) increased to the highest level in
more than 10 years in the sec ond quarter to 60,300 ounces at total cash costs and mine -site AISC below annual
guidance. Through the first half of the year, the operation produced 110,800 ounces, more than double the prior
year, and generated $83.8 million of mine -site free cash flow d riven by low -cost production growth from La Yaqui
Grande. As previously guided, production is expected to decrease in the second half of the year reflecting the end
of mining within the main Mulatos pit as well as the return to guided stacking rates and gr ades at La Yaqui Grande.
Given the excellent start to the year, the Mulatos District remains well positioned to meet full year guidance.
Capital spending, including capitalized exploration, totaled $80. 2 million in the second quarter and $164.0 million
though the first half of the year, consistent with annual guidance of $317 million to $357 million. The majority of this
spending in 2023 is expected at Island Gold with the ramp up of construction on the Phase 3+ Expansion. Capital
spending at Island Gold i s expected to remain at similar levels in 2024 and 2025 and then drop considerably in
2026 once the expansion is complete.
The global exploration budget for 2023 is consistent with spending in 2022. The Mulatos District accounts for the
largest portion with an increased budget of $21 million, followed by $14 million at Island Gold, $8 million at Young -
Davidson and $5 million at Lynn Lake. The exploration focus in 2023 continues to follow up on a successful year in
2022, with Mineral Reserves increasing for the fourth consecutive year to 10.5 million ounces of gold, and grades
increasing 3%.
The Company's liquidity position continues to strengthen with cash and cash equivalents increasing to $188.6
million at the end of the second quarter, while remaining de bt free. Additionally, the Company has a $500 million
undrawn credit facility, providing total liquidity of $688.6 million. As part of a balanced approach to growth and
capital allocation, the current focus of growth capital is the Phase 3+ Expansion at Is land Gold. With no significant
capital expected to be spent on developing Lynn Lake until the Phase 3+ Expansion is well underway, the Company
remains well positioned to fund this growth internally while generating strong free cash flow over the next sever al
years. The Company expects a further increase in free cash flow in 2026 with the completion of the Phase 3+
Expansion.