Alamos Gold Reports Third Quarter 2022 Results
Alamos Gold Inc. (AGI) reported strong third-quarter results for 2022, achieving its highest gold production in nearly two years at 123,400 ounces, a 19% increase from the second quarter. The company expects to meet its full-year production guidance of 440,000 to 480,000 ounces. Significant cash flow was driven by La Yaqui Grande operations. Total cash costs decreased 8% to $868 per ounce. Adjusted net earnings for the quarter were $26.9 million, or $0.07 per share. Despite a net loss of $1.4 million, the company ended the quarter with $116.7 million in cash and no debt, reinforcing a strong liquidity position.
- Gold production reached 123,400 ounces, a 19% increase from Q2.
- Total cash costs decreased by 8% to $868 per ounce.
- La Yaqui Grande's first full quarter drove cash flow growth.
- Adjusted net earnings of $26.9 million or $0.07 per share.
- Strong liquidity with $116.7 million in cash and no debt.
- Reported a net loss of $1.4 million.
- Year-to-date gold production of 326,200 ounces, lower than expected guidance.
All amounts are in United States dollars, unless otherwise stated.
TORONTO, Oct. 26, 2022 (GLOBE NEWSWIRE) -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported its financial results for the quarter ended September 30, 2022.
“We had a solid third quarter overall, including our highest production in nearly two years. Our operations performed well with production near the top end of quarterly guidance and representing a
“La Yaqui Grande was the key driver of our operational and financial performance with an excellent first full quarter of operations. Its low-cost production growth more than offset the lower gold price to drive stronger cash flow from operations. This is a trend we expect to continue with La Yaqui Grande contributing higher production and lower costs over the next few years and Island Gold continuing that trend over the longer term through the Phase 3+ Expansion. Given our growing cash flow from operations, we can fund this growth internally while generating strong free cash flow and supporting solid ongoing returns to shareholders,” Mr. McCluskey added.
Third Quarter 2022
- Produced 123,400 ounces of gold, a
19% increase from the second quarter and near the top end of the range for quarterly guidance. This represented the highest quarterly production in nearly two years driven by a solid first full quarter of production from La Yaqui Grande in Mexico - With year-to-date production of 326,200 ounces of gold and a further increase in production expected in the fourth quarter, the Company remains on track to achieve full year guidance of 440,000 to 480,000 ounces
- Mulatos District production totaled 42,700 ounces, more than double the second quarter at substantially lower costs driven by low-cost production growth from La Yaqui Grande
- Young-Davidson continued its strong operational performance, producing 49,300 ounces and generating mine-site free cash flow1 of
$23.3 million . Year-to-date, Young-Davidson generated$77.3 million of mine-site free cash flow and is on track to generate$100 million for the second consecutive year - Construction activities on the Phase 3+ Expansion ramped up at Island Gold, including the start of the pre-sink of the shaft in August
- Sold 122,780 ounces of gold at an average realized price of
$1,740 per ounce, for revenues of$213.6 million . The average realized gold price was$11 per ounce above the London PM fix - Total cash costs1 of
$868 per ounce, and AISC1 of$1,178 per ounce per ounce decreased8% and7% , respectively, from the first half of the year and were both lower than annual guidance, reflecting low-cost production growth at La Yaqui Grande, and the weaker Canadian dollar. The Company remains on track to meet full year cost guidance - Realized adjusted net earnings1 for the quarter of
$26.9 million , or$0.07 per share1. Adjusted net earnings includes adjustments for a non-cash, after tax inventory net realizable value adjustment at Mulatos of$7.7 million and unrealized foreign exchange losses recorded within both deferred taxes and foreign exchange of$23.0 million , partially offset by other gains totaling$2.4 million - Reported a net loss of
$1.4 million - Generated cash flow from operating activities of
$74.0 million ($96.1 million , or$0.25 per share, before changes in working capital1) - Free cash flow1 was
$1.4 million in the quarter; despite the lower gold price in the quarter, the Company continues to fund its growth initiatives, including the Phase 3+ Expansion, through cash flow from existing operations - Paid a quarterly dividend of
$9.8 million , or$0.02 5 per share (annualized rate of$0.10) . On a year-to-date basis,$37.5 million has been returned to shareholders through dividends and share buy backs. This includes the repurchase of 1.1 million shares at a cost of$8.2 million ($7.41 per share) under the Company's Normal Course Issuer Bid ("NCIB") - Ended the quarter with cash and cash equivalents of
$116.7 million , equity securities of$15.3 million , and no debt - Released its 2021 Environmental, Social, and Corporate Governance ("ESG") Report, which outlines the Company’s progress on its ESG performance and initiatives
- Zero lost time injuries recorded across the Company's operations in the quarter
- Announced the appointment of Luc Guimond as Chief Operating Officer effective September 1, 2022
(1) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures.
Highlight Summary
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Financial Results (in millions) | ||||||||||||
| Operating revenues | ||||||||||||
| Cost of sales(1) | ||||||||||||
| Earnings (loss) from operations | ( | ) | ||||||||||
| Earnings (loss) before income taxes | ( | ) | ||||||||||
| Net (loss) earnings | ( | ) | ( | ) | ( | ) | ||||||
| Adjusted net earnings(2) | ||||||||||||
| Earnings before interest, depreciation and amortization(2) | ||||||||||||
| Cash provided by operations before working capital and cash taxes(2) | ||||||||||||
| Cash provided by operating activities | ||||||||||||
| Capital expenditures (sustaining)(2) | ||||||||||||
| Capital expenditures (growth)(2) (3) (5) | ||||||||||||
| Capital expenditures (capitalized exploration)(4) | ||||||||||||
| Free cash flow(2) | ( | ) | ( | ) | ||||||||
| Operating Results | ||||||||||||
| Gold production (ounces) | 123,400 | 104,700 | 326,200 | 344,700 | ||||||||
| Gold sales (ounces) | 122,780 | 110,488 | 323,410 | 344,551 | ||||||||
| Per Ounce Data | ||||||||||||
| Average realized gold price | ||||||||||||
| Average spot gold price (London PM Fix) | ||||||||||||
| Cost of sales per ounce of gold sold (includes amortization)(1) | ||||||||||||
| Total cash costs per ounce of gold sold(2) | ||||||||||||
| All-in sustaining costs per ounce of gold sold(2) | ||||||||||||
| Share Data | ||||||||||||
| Earnings (loss) earnings per share, basic and diluted | ( | ) | ( | ) | ||||||||
| Adjusted earnings per share, basic and diluted(2) | ||||||||||||
| Weighted average common shares outstanding (basic) (000’s) | 391,794 | 392,742 | 391,882 | 392,755 | ||||||||
| Financial Position (in millions) | ||||||||||||
| Cash and cash equivalents(6) | ||||||||||||
(1) Cost of sales includes mining and processing costs, royalties, and amortization expense. For the three and nine months ended September 30, 2022, cost of sales includes a
(2) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures.
(3) Includes growth capital from operating sites.
(4) Includes capitalized exploration at Island Gold, Young-Davidson and Mulatos District.
(5) Includes capital advances of nil for the three and nine months ended September 30, 2022 (
(6) Comparative cash and cash equivalents balance as at December 31, 2021
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| Gold production (ounces) | ||||||||
| Young-Davidson | 49,300 | 50,000 | 147,600 | 143,100 | ||||
| Island Gold | 31,400 | 28,000 | 93,200 | 103,400 | ||||
| Mulatos District(7) | 42,700 | 26,700 | 85,400 | 98,200 | ||||
| Gold sales (ounces) | ||||||||
| Young-Davidson | 49,218 | 48,625 | 147,405 | 141,931 | ||||
| Island Gold | 31,342 | 28,331 | 91,507 | 101,845 | ||||
| Mulatos District | 42,220 | 33,532 | 84,498 | 100,775 | ||||
| Cost of sales (in millions)(1) | ||||||||
| Young-Davidson | ||||||||
| Island Gold | ||||||||
| Mulatos District | ||||||||
| Cost of sales per ounce of gold sold (includes amortization) | ||||||||
| Young-Davidson | ||||||||
| Island Gold | ||||||||
| Mulatos District(1) | ||||||||
| Total cash costs per ounce of gold sold(2) | ||||||||
| Young-Davidson | ||||||||
| Island Gold | ||||||||
| Mulatos District | ||||||||
| Mine-site all-in sustaining costs per ounce of gold sold(2),(3) | ||||||||
| Young-Davidson | ||||||||
| Island Gold | ||||||||
| Mulatos District | ||||||||
| Capital expenditures (sustaining, growth, capitalized exploration and capital advances) (in millions)(2) | ||||||||
| Young-Davidson(4) | ||||||||
| Island Gold(5) | ||||||||
| Mulatos District(6) | ||||||||
| Other | ||||||||
(1) Cost of sales includes mining and processing costs, royalties, and amortization. For the three and nine months ended September 30, 2022, cost of sales includes
(2) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures.
(3) For the purposes of calculating mine-site all-in sustaining costs, the Company does not include an allocation of corporate and administrative and share based compensation expenses.
(4) Includes capitalized exploration at Young-Davidson of
(5) Includes capitalized exploration at Island Gold of
(6) Includes capitalized exploration at Mulatos District of
(7) The Mulatos district includes both the Mulatos pit, as well as La Yaqui Grande.
Environment, Social and Governance Summary Performance
Health and Safety
- Total recordable injury frequency rate1,2 ("TRIFR") of 2.08, a
39% increase from the second quarter of 2022 - Lost time injury frequency rate1 ("LTIFR") of zero
- Year-to-date TRIFR of 1.74 and LTIFR of 0.06, a decline of
15% and71% , respectively from 2021
During the third quarter of 2022, the TRIFR increased with 25 recordable injuries, seven more than the prior quarter. Zero lost time injuries were recorded in the quarter. On a year-to-date basis, the Company has significantly improved its TRIFR and LTIFR compared to 2021.
Alamos strives to maintain a safe, healthy working environment for all, with a strong safety culture where everyone is continually reminded of the importance of keeping themselves and their colleagues healthy and injury-free. The Company’s overarching commitment is to have all employees and contractors return Home Safe Every Day.
Environment
- Zero significant environmental incidents in the third quarter of 2022 and year-to-date
- Information sessions held on the Company’s cyanide management practices with the communities of Yécora, El Trigo and Matarachi in Mexico, within the framework of the International Cyanide Management Code
- Island Gold received additional construction permits for the shaft site haul road and site powerline
- Continued to advance federal and provincial permitting of the Lynn Lake project
- Completed the transition from propane to compressed natural gas at Young-Davidson, which will reduce greenhouse gas emissions at the site by an estimated
15% for mine underground heating
One reportable spill occurred during the third quarter at Island Gold when 200 litres of thickener slurry leaked due to a pinhole in a pipeline. The spill was identified and all material collected and moved back into the containment area. The area was cleaned and remediated with no anticipated long-term effects. The Company is committed to preserving the long-term health and viability of the natural environment that surround its operations and projects. This includes investing in new initiatives to reduce our environmental footprint with the goal of minimizing the environmental impacts of our activities and offsetting any impacts that cannot be fully mitigated or rehabilitated.
Community
Ongoing donations and medical support being provided to local communities, including:
- Donation of an ambulance to the Sahuaripa municipality,
- Establishment of an online high school for Matarachi residents through an agreement with Tec de Monterrey,
- Commissioning of two freshwater pumping stations in Matarachi
- New scholarship committees established in Matarachi, Sahuaripa and Yécora as part of the Company’s continued support for local students
Alamos believes that excellence in sustainability provides a net benefit to all stakeholders. The Company continues to engage with local communities to understand local challenges and priorities. Ongoing investments in local infrastructure, health care, education, cultural and community programs have continued through the COVID-19 pandemic, with appropriate health and safety protocols.
Governance and Disclosure
- Published Alamos’ 2021 ESG Report and 2021 ESG Summary Tables, outlining the Company’s progress on its ESG performance across its operations, projects and offices
- Recipient of the Ethics and Values Award by the National Confederation of Industrial Chambers (CONCAMIN) for the third consecutive year at Mulatos
Alamos maintains the highest standards of corporate governance to ensure that corporate decision-making reflects its values, including the Company’s commitment to sustainable development. During the quarter, the Company continued to advance its implementation of the Responsible Gold Mining Principles, developed by the World Gold Council as a framework that sets clear expectations as to what constitutes responsible gold mining.
(1) Frequency rate is calculated as incidents per 200,000 hours worked.
(2) The classification of medical treatment injuries was updated retroactive to 1 January 2020 to align with OSHA standards, resulting in changes to previously reported recordable injury rates.
Outlook and Strategy
| 2022 Guidance | ||||||||
| Young-Davidson | Island Gold | Mulatos | Other(2) | Total | ||||
| Gold production(000’s ounces) | 185 - 200 | 125 - 135 | 130 - 145 | 440 - 480 | ||||
| Cost of sales, including amortization(in millions)(4) | $610 | |||||||
| Cost of sales, including amortization($ per ounce)(4) | $1,325 | |||||||
| Total cash costs($ per ounce)(1) | — | |||||||
| All-in sustaining costs($ per ounce)(1) | ||||||||
| Mine-site all-in sustaining costs($ per ounce)(1)(3) | — | |||||||
| Capital expenditures(in millions) | ||||||||
| Sustaining capital(1) | — | |||||||
| Growth capital(1) | ||||||||
| Total Sustaining and Growth Capital(1) | $15 | |||||||
| Capitalized exploration(1) | — | $27 | ||||||
| Total capital expenditures and capitalized exploration(1) | $18 | |||||||
(1) Refer to the "Non-GAAP Measures and Additional GAAP" disclosure at the end of this press release and associated MD&A for a description of these measures.
(2) Includes growth capital and capitalized exploration at the Company's development projects.
(3) For the purposes of calculating mine-site all-in sustaining costs at individual mine sites, the Company does not include an allocation of corporate and administrative and share based compensation expenses to the mine sites.
(4) Cost of sales includes mining and processing costs, royalties, and amortization expense, and is calculated based on the mid-point of total cash cost guidance.
The Company’s objective is to operate a sustainable business model that can support growing returns to all stakeholders over the long-term through growing production, expanding margins, and increasing profitability. This includes a balanced approach to capital allocation focused on generating strong ongoing free cash flow while re-investing in high-return internal growth opportunities and supporting higher returns to shareholders.
The Company delivered on two key long-term objectives this year which have solidified its strong outlook. This included achieving initial low-cost production at La Yaqui Grande and announcing the Phase 3+ Expansion of Island Gold, which will create a larger, more profitable and valuable operation.
La Yaqui Grande performed well during its first full quarter of operation, driving a
With production through the first nine months of 326,200 ounces and higher production and lower costs expected in the fourth quarter, the Company is well positioned to achieve full year production and cost guidance.
Young-Davidson continues to perform well, generating
Island Gold produced 93,200 ounces through the first nine months of the year, and with higher grades expected in the fourth quarter, the operation is well positioned to achieve full year production guidance. Construction activities on the Phase 3+ Expansion are ramping up with pre-sinking of the shaft having started in August. Capital spending rates are expected to continue to increase with the ramp up of activities on the Phase 3+ Expansion; however, full year spending is expected to be lower than guidance with capital deferred to subsequent years.
The Phase 3+ Expansion of Island Gold will result in a step change in production, with mining rates increasing to 2,400 tpd from the current rate of 1,200 tpd. This is expected to more than double gold production to average 287,000 ounces per year at industry low mine-site all-in sustaining costs of
Combined production from the Mulatos District totaled 85,400 ounces through the first nine-months of 2022. This included 42,700 ounces in the third quarter, at significantly lower costs than the first half of the year driven by the ramp up of low cost production from La Yaqui Grande. Total production from the Mulatos District is expected to increase further in the fourth quarter at lower costs, and is on track to meet full year production and cost guidance.
At Lynn Lake, the Company continues to focus on environmental work in support of permitting, detailed engineering and other site access upgrades. Spending in 2022 has been focused on both development and exploration activities, with
The Company's liquidity position remains strong, ending the quarter with
As part of the Company's balanced approach to growth and capital allocation, the current focus of growth capital is the Phase 3+ Expansion at Island Gold. With no significant capital expected to be spent on developing Lynn Lake until the Phase 3+ Expansion is well underway, the Company remains well positioned to fund this growth internally while generating strong free cash flow over the next several years. The Company expects significant free cash flow growth starting in 2025 as production rates ramp up at Island Gold.
Third Quarter 2022 results
Young-Davidson Financial and Operational Review
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Gold production (ounces) | 49,300 | 50,000 | 147,600 | 143,100 | ||||||||
| Gold sales (ounces) | 49,218 | 48,625 | 147,405 | 141,931 | ||||||||
| Financial Review (in millions) | ||||||||||||
| Operating Revenues | ||||||||||||
| Cost of sales(1) | ||||||||||||
| Earnings from operations | ||||||||||||
| Cash provided by operating activities | ||||||||||||
| Capital expenditures (sustaining)(2) | ||||||||||||
| Capital expenditures (growth)(2) | ||||||||||||
| Capital expenditures (capitalized exploration)(2) | ||||||||||||
| Mine-site free cash flow(2) | ||||||||||||
| Cost of sales, including amortization per ounce of gold sold(1) | ||||||||||||
| Total cash costs per ounce of gold sold(2) | ||||||||||||
| Mine-site all-in sustaining costs per ounce of gold sold(2),(3) | ||||||||||||
| Underground Operations | ||||||||||||
| Tonnes of ore mined | 644,000 | 737,554 | 2,122,820 | 2,121,573 | ||||||||
| Tonnes of ore mined per day | 7,000 | 8,017 | 7,776 | 7,771 | ||||||||
| Average grade of gold(4) | 2.28 | 2.30 | 2.29 | 2.26 | ||||||||
| Metres developed | 2,589 | 3,031 | 8,933 | 9,251 | ||||||||
| Mill Operations | ||||||||||||
| Tonnes of ore processed | 719,050 | 738,646 | 2,161,792 | 2,159,994 | ||||||||
| Tonnes of ore processed per day | 7,816 | 8,029 | 7,919 | 7,912 | ||||||||
| Average grade of gold(4) | 2.31 | 2.30 | 2.31 | 2.25 | ||||||||
| Contained ounces milled | 53,290 | 54,640 | 160,734 | 156,310 | ||||||||
| Average recovery rate | 92 | % | 92 | % | 91 | % | 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.
(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 49,300 ounces of gold in the third quarter of 2022, consistent with the prior year period reflecting similar tonnes and grades processed. With production of 147,600 ounces for the first nine-months of 2022, the operation is on track to meet full year production guidance.
Underground mining rates were lower than the prior year period, averaging 7,000 tpd in the third quarter. Mining rates were impacted by downtime to replace the head ropes within the Northgate Shaft, a scheduled replacement of an underground conveyor belt, and an increased frequency of energy reductions during periods of peak provincial electricity demand in the summer months. Underground mining rates are expected to increase in the fourth quarter and average 8,000 tpd. Grades mined averaged 2.28 g/t Au, within the annual guidance of between 2.15 and 2.35 g/t Au.
Mill throughput averaged 7,816 tpd in the third quarter at an average grade of 2.31 g/t Au. Milling rates were consistent with the first half of 2022, though slightly lower than the prior year period and guidance, reflecting the above noted energy reduction program. Milling rates exceeded mining rates during the quarter with underground ore mined and stockpiled in previous quarters supplementing mill feed. Mill recoveries averaged
Financial Review
Third quarter revenues of
Cost of sales (which includes mining and processing costs, royalties, and amortization expense) of
Total cash costs of
Capital expenditures in the quarter included
Young-Davidson has consistently generated strong free cash flow since transitioning to the lower mine infrastructure in mid-2020, which has driven production higher and unit mining costs lower. This included mine-site free cash flow of
Island Gold Financial and Operational Review
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Gold production (ounces) | 31,400 | 28,000 | 93,200 | 103,400 | ||||||||
| Gold sales (ounces) | 31,342 | 28,331 | 91,507 | 101,845 | ||||||||
| Financial Review (in millions) | ||||||||||||
| Operating Revenues | ||||||||||||
| Cost of sales(1) | ||||||||||||
| Earnings from operations | ||||||||||||
| Cash provided by operating activities | ||||||||||||
| Capital expenditures (sustaining)(2) | ||||||||||||
| Capital expenditures (growth)(2) (5) | ||||||||||||
| Capital expenditures (capitalized exploration)(2) | ||||||||||||
| Mine-site free cash flow(2) | ( | ) | ( | ) | ||||||||
| Cost of sales, including amortization per ounce of gold sold(1) | ||||||||||||
| Total cash costs per ounce of gold sold(2) | ||||||||||||
| Mine-site all-in sustaining costs per ounce of gold sold(2),(3) | ||||||||||||
| Underground Operations | ||||||||||||
| Tonnes of ore mined | 104,565 | 108,241 | 319,757 | 329,190 | ||||||||
| Tonnes of ore mined per day ("tpd") | 1,137 | 1,177 | 1,171 | 1,206 | ||||||||
| Average grade of gold(4) | 9.67 | 8.59 | 9.37 | 10.04 | ||||||||
| Metres developed | 1,664 | 1,708 | 5,005 | 5,566 | ||||||||
| Mill Operations | ||||||||||||
| Tonnes of ore processed | 121,571 | 99,425 | 336,668 | 320,608 | ||||||||
| Tonnes of ore processed per day | 1,321 | 1,081 | 1,233 | 1,174 | ||||||||
| Average grade of gold(4) | 9.38 | 8.90 | 9.25 | 10.29 | ||||||||
| Contained ounces milled | 36,661 | 28,443 | 100,119 | 106,062 | ||||||||
| Average recovery rate | 93 | % | 95 | % | 95 | % | 96 | % | ||||
(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").
(5) Includes capital advances of nil and
Island Gold produced 31,400 ounces in the third quarter of 2022, a
Underground mining rates averaged 1,137 tpd in the third quarter, with grades averaging 9.67 g/t Au. Mining rates were slightly below guidance as a result of production drilling availability, but have improved in the fourth quarter. Mining rates and grades mined through the first nine-months of the year were in line with guidance.
Mill throughput averaged 1,321 tpd,
Mill recoveries averaged
Financial Review
Island Gold generated revenues of
Cost of sales (includes mining and processing costs, royalties and amortization expense) of
Total cash costs of
Total capital expenditures were
Island Gold generated negative mine-site free cash flow of
Mulatos Financial and Operational Review
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Gold production (ounces) | 42,700 | 26,700 | 85,400 | 98,200 | ||||||||
| Gold sales (ounces) | 42,220 | 33,532 | 84,498 | 100,775 | ||||||||
| Financial Review(in millions) | ||||||||||||
| Operating Revenues | ||||||||||||
| Cost of sales(1) | ||||||||||||
| (Loss) earnings from operations | ( | ) | ( | ) | ||||||||
| Cash (used) provided by operating activities | ( | ) | ||||||||||
| Capital expenditures (sustaining)(2) | ||||||||||||
| Capital expenditures (growth)(2) (7) | ||||||||||||
| Capital expenditures (capitalized exploration)(2) | ||||||||||||
| Mine-site free cash flow(2) | ( | ) | ( | ) | ( | ) | ||||||
| Cost of sales, including amortization per ounce of gold sold(1) | ||||||||||||
| Total cash costs per ounce of gold sold(2) | ||||||||||||
| Mine site all-in sustaining costs per ounce of gold sold(2),(3) | ||||||||||||
| Mulatos Mine | ||||||||||||
| Open Pit Operations | ||||||||||||
| Tonnes of ore mined - open pit(4) | 759,339 | 744,827 | 2,600,777 | 2,455,916 | ||||||||
| Total waste mined - open pit(6) | 1,573,334 | 1,675,335 | 5,237,360 | 6,563,305 | ||||||||
| Total tonnes mined - open pit | 2,332,673 | 2,420,162 | 7,838,137 | 9,019,222 | ||||||||
| Waste-to-ore ratio (operating) | 2.07 | 1.15 | 1.63 | 1.41 | ||||||||
| Crushing and Heap Leach Operations | ||||||||||||
| Tonnes of ore stacked | 1,274,662 | 1,580,707 | 4,542,916 | 5,313,831 | ||||||||
| Average grade of gold processed(5) | 0.75 | 1.08 | 0.72 | 1.04 | ||||||||
| Contained ounces stacked | 30,916 | 54,999 | 104,965 | 177,418 | ||||||||
| Average recovery rate | 56 | % | 49 | % | 52 | % | 55 | % | ||||
| Ore crushed per day (tonnes) | 14,000 | 17,200 | 16,600 | 19,500 | ||||||||
| La Yaqui Grande Mine | ||||||||||||
| Open Pit Operations | ||||||||||||
| Tonnes of ore mined - open pit(4) | 739,594 | — | 1,236,413 | — | ||||||||
| Total waste mined - open pit(6) | 5,327,341 | — | 17,469,454 | — | ||||||||
| Total tonnes mined - open pit | 6,066,935 | — | 18,705,867 | — | ||||||||
| Crushing and Heap Leach Operations | ||||||||||||
| Tonnes of ore stacked | 794,127 | — | 1,127,108 | — | ||||||||
| Average grade of gold processed(5) | 1.23 | — | 1.33 | — | ||||||||
| Contained ounces stacked | 31,362 | — | 48,133 | — | ||||||||
| Average recovery rate | 81 | % | — | 63 | % | — | ||||||
| Ore crushed per day (tonnes) | 8,700 | — | 6,159 | — | ||||||||
(1) Cost of sales includes mining and processing costs, royalties, and amortization. Cost of sales per ounce for the three and nine months ended September 30, 2022 includes the inventory net realizable value adjustment of
(2) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures.
(3) For the purposes of calculating mine-site all-in sustaining costs, the Company does not include an allocation of corporate and administrative and share based compensation expenses.
(4) Includes ore stockpiled during the quarter.
(5) Grams per tonne of gold ("g/t Au").
(6) Total waste mined includes operating waste and capitalized stripping.
(7) Includes a drawdown of capital advances of
The Mulatos District produced 42,700 ounces in the third quarter from the Mulatos and La Yaqui Grande operations, representing a significant increase from the prior year period given the start of production at La Yaqui Grande in June 2022. The Mulatos District remains on track to achieve full year guidance with the ongoing ramp up in mining and stacking rates at La Yaqui Grande expected to drive a further increase in production in the fourth quarter at lower costs.
Mulatos Operational Review
Mulatos produced 17,400 ounces in the third quarter, representing a
Total crusher throughput in the third quarter averaged 14,000 tpd, for a total of 1,274,662 tonnes stacked at a grade of 0.75 g/t Au, including surface stockpiles. Mining rates and tonnes stacked in the quarter were impacted by heavy rains, which limited the supply of consumables to site, including lime and diesel. With the rainy season concluded, the regular transport and supply of consumables to site has resumed and Mulatos expects to ramp up stacking rates to guided levels in the fourth quarter.
Recovery rates remained consistent with previous quarters at
La Yaqui Grande Operational Review
La Yaqui Grande is an open pit mine with an independent leach pad located approximately seven kilometres from the existing Mulatos operation. Construction was completed ahead of schedule in the second quarter with the operation achieving initial production in June 2022. La Yaqui Grande performed well in its first full quarter of operation, producing 25,300 ounces of gold.
During the third quarter, 739,594 tonnes of ore were mined. Mining and stacking rates continued to ramp up through the third quarter with the latter increasing to average 8,700 tpd, slightly below the design level of 10,000 tpd. As with Mulatos, mining and stacking rates in the quarter were impacted by heavy rains which temporarily limited the transport of consumables to site. Grades stacked on the leach pad in the quarter averaged 1.23 g/t Au, in line with the Mineral Reserve grade.
Financial Review (Mulatos District)
Revenues of
Cost of sales (includes mining and processing costs, royalties and amortization expense) of
Total cash costs for the Mulatos District of
Capital spending totaled
The Mulatos District generated mine-site free cash flow of
Third Quarter 2022 Development Activities
Island Gold (Ontario, Canada)
Phase 3+ Expansion Study
On June 28, 2022, the Company reported results of the Phase 3+ Expansion Study (“P3+ Expansion Study”) conducted on its Island Gold mine, located in Ontario, Canada. The P3+ Expansion Study was an update to the Phase 3 Study ("P3 2000 Study") released on July 14, 2020.
The P3+ Expansion Study was updated to reflect the current costing environment, as well as incorporate the significant growth in high-grade Mineral Reserves and Resources into an optimized mine plan. The P3+ Expansion Study outlines a larger, more profitable, and valuable operation than what was included in the P3 2000 Study released in 2020.
The Phase 3+ Expansion to 2,400 tpd from the current rate of 1,200 tpd will involve various infrastructure investments. These include the installation of a shaft, paste plant, and an expansion of the mill. This infrastructure was all incorporated into the P3 2000 Study with several scope changes to accommodate the
Following the completion of the expansion in 2026, the operation will transition from trucking ore and waste up the ramp to skipping ore and waste to surface through the new shaft infrastructure, driving production higher and costs significantly lower.
Phase 3+ Expansion Study Highlights
- Higher production: average annual gold production of 287,000 ounces starting in 2026 upon completion of the shaft
- This represents a
22% increase from the P3 2000 Study and a121% increase from the mid-point of 2022 production guidance of 130,000 ounces
- This represents a
- Industry low costs: consistent cost structure with the P3 2000 Study, with productivity gains and economies of scale offsetting inflation
- Average total cash costs of
$432 per ounce (average$425 per ounce from 2026), consistent with the P3 2000 Study and25% lower than the mid-point of 2022 guidance of$575 per ounce - Average mine-site all-in sustaining costs of
$610 per ounce (average$576 per ounce from 2026), a30% decrease from the mid-point of 2022 guidance of$875 per ounce
- Average total cash costs of
- Larger, longer-life operation supported by significantly increased Mineral Reserve and Resources
43% increase in mineable resource to 4.6 million ounces of gold grading 10.59 g/t Au- 18 year mine life to 2039, a four year increase from the P3 2000 Study, while operating at
20% higher production rates of 2,400 tpd
- Lower capital intensity: lower total capital per ounce over the life of mine
- Growth capital of
$756 million and sustaining capital of$777 million , both up from the P3 2000 Study reflecting the expansion, a larger mineable resource, and industry-wide inflation - Total capital intensity decreased
4% to$344 per ounce reflecting the larger mineable resource with increased ounces per vertical metre driving the lower capital intensity and contributing to the stronger economics $100 million of the increase in growth capital compared to the P3 2000 Study reflects sustaining capital that has been brought forward to the expansion period for accelerated underground development and infrastructure to support the higher mining rate- Expansion significantly de-risked given increased detailed engineering, capital committed, and projects completed to date, including the majority of earthworks
- Growth capital of
- Stronger economics with expansion and larger mineable resource more than offsetting inflation to create a more valuable operation
- After-tax net present value (“NPV”) (
5% ) of$1.6 billion , a25% increase from the P3 2000 Study (base case gold price assumption of$1,650 per ounce and USD/CAD foreign exchange rate of$0.78 :1) - After-tax internal rate of return (“IRR”) of
23% , up from20% in P3 2000 Study - After-tax NPV (
5% ) of$2.0 billion , a31% increase from the P3 2000 Study, and an after-tax IRR of25% , at gold prices of$1,850 per ounce
- After-tax net present value (“NPV”) (
- Industry low Greenhouse Gas (“GHG”) emission intensity
35% reduction in life of mine GHG emissions relative to the current operation, supporting the company-wide target of a30% reduction in GHG emissions by 203031% additional reduction in emissions per ounce of gold produced from already industry low levels
- Fully funded, balanced approach to growth: growing free cash flow expected starting in the second half of 2022
- With no significant capital expected to be spent on Lynn Lake until the P3+ Expansion is well underway; the Company is well positioned to fund the expansion internally while generating strong free cash flow over the next several years
- The Company expects significant free cash flow growth in 2025 and beyond as production rates ramp up at Island Gold
Construction activities continued to ramp up during the third quarter, with major activities including site clearing and preparation of the shaft area, pre-sinking of the shaft, and pouring the concrete foundation for shaft surface infrastructure. Further details on progress made as of the end of the quarter are noted below:
- Shaft site earthworks, access road to the shaft area and buried services excavation were more than
80% complete - Shaft pre-sink commenced in August and is approximately
90% complete to date. The pre-sink is expected to be completed down to a 42 metre depth in November - Commenced concrete foundation work on shaft surface infrastructure, including the hoist and hoist house
- Paste plant detailed engineering commenced in September
- Lateral development to support higher mining rates with the Phase 3+ Expansion remains ongoing
During the third quarter of 2022, the Company spent
Shaft site area - October 2022
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/8183fed6-f04b-4aad-9b94-4d206e170b36
Lynn Lake (Manitoba, Canada)
The Company released a positive Feasibility Study on the Lynn Lake project in December 2017 outlining average annual production of 143,000 ounces over a 10 year mine life at average mine-site AISC of
The project economics based on the 2017 Feasibility Study at a
As part of the Company's balanced approach to growth and capital allocation, no significant capital is expected to be spent on the development of Lynn Lake until the Phase 3+ Expansion at Island Gold is well underway.
Development spending (excluding exploration) was
Kirazlı (Çanakkale, Türkiye)
On October 14, 2019, the Company suspended all construction activities on its Kirazlı project following the Turkish government's failure to grant a routine renewal of the Company’s mining licenses, despite the Company having met all legal and regulatory requirements for their renewal. In October 2020, the Turkish government refused the renewal of the Company’s Forestry Permit. The Company had been granted approval of all permits required to construct Kirazlı including the Environmental Impact Assessment approval, Forestry Permit, and GSM (Business Opening and Operation) permit, and certain key permits for the nearby Ağı Dağı and Çamyurt Gold Mines. These permits were granted by the Turkish government after the project earned the support of the local communities and passed an extensive multi-year environmental review and community consultation process.
On April 20, 2021, the Company announced that its Netherlands wholly-owned subsidiaries Alamos Gold Holdings Coöperatief U.A, and Alamos Gold Holdings B.V. (the “Subsidiaries”) would be filing an investment treaty claim against the Republic of Türkiye for expropriation and unfair and inequitable treatment, among other things, with respect to the Kirazlı, Ağı Dağı and Çamyurt gold development projects in Türkiye. The claim was filed under the Netherlands-Türkiye Bilateral Investment Treaty (the “Treaty”). Alamos Gold Holdings Coöperatief U.A. and Alamos Gold Holdings B.V. had its claim against the Republic of Türkiye registered on June 7, 2021 with the International Centre for Settlement of Investment Disputes (World Bank Group).
Bilateral investment treaties are agreements between countries to assist with the protection of investments. The Treaty establishes legal protections for investment between Türkiye and the Netherlands. The Subsidiaries directly own and control the Company’s Turkish assets. The Subsidiaries invoking their rights pursuant to the Treaty does not mean that they relinquish their rights to the Turkish project, or otherwise cease the Turkish operations. The Company will continue to work towards a constructive resolution with the Republic of Türkiye.
The Company incurred
Third Quarter 2022 Exploration Activities
Island Gold (Ontario, Canada)
Total exploration spending through the first nine months was
A regional exploration program is also included in 2022 spending, with the focus on evaluating and advancing exploration targets outside the Island Gold Deposit on the 15,524-hectare Island Gold property.
During the third quarter, six diamond drill rigs were focused on the surface directional exploration program, as well as one drill rig focused on underground exploration drilling.
Surface exploration drilling
A total of 8,116 m of surface directional drilling was completed in 13 holes during the third quarter. Surface directional drilling targeted areas peripheral to Inferred Mineral Resource blocks in the Island West, Main, and East areas between 1,400 m and 1,800 m below surface with drill hole spacing ranging from 75 m to 200 m. In addition, a total of 4,077 m of surface regional diamond drilling was completed in eight holes during the third quarter in four target areas.
Underground exploration drilling
During the third quarter of 2022, a total of 5,817 m of standard underground exploration drilling was completed in 36 holes. The objective of the underground drilling is to identify new Mineral Resources close to existing Mineral Resource or Reserve blocks. A total of 80 m of underground exploration drift development was also completed during the third quarter.
Total exploration expenditures during the third quarter were
Young-Davidson (Ontario, Canada)
The focus for the 2022 drill program is following up on the success in the 2020 and 2021 programs which extended gold mineralization below existing Mineral Reserves and Resources and intersected higher grades in the hanging wall and footwall of the deposit.
The 2022 program includes 21,600 m of underground exploration drilling, and 500 m of underground exploration drift development to extend drill platforms on the 9220, 9095, and 9025-levels. The focus of the underground exploration drilling program is to expand Mineral Resources in six target areas that have been identified within proximity to existing underground infrastructure. In addition, 10,000 m of surface drilling is planned to test near-surface targets across the 5,720 hectare Young-Davidson Property.
During the third quarter, underground exploration drilling was focused on two targets with 2,682 m completed in four holes. The first target included one hole drilled from the 8960-level exploration drill bay established in the lower mine infrastructure tested to the west and down-plunge of existing Mineral Reserves and Resources. Drilling is targeting syenite-hosted mineralization as well as continuing to test mineralization in the footwall sediments and in the hanging wall mafic-ultramafic stratigraphy. A second underground drill completed three holes from the 9220 West exploration drift testing down-plunge of the existing Mineral Reserves and Resources.
A total of 876 m of surface exploration drilling was completed in one hole during the quarter, continuing to test several targets as part of the 2022 regional exploration program.
Exploration spending totaled
Mulatos District (Sonora, Mexico)
The Company has a large exploration package covering 28,972 hectares with the majority of past exploration efforts focused around the Mulatos mine. Exploration continues to follow up on near-mine sulphide opportunities at Puerto del Aire, as well as several earlier stage prospects throughout the wider district.
During the third quarter of 2022, exploration activities continued at Puerto del Aire and the near-mine areas with 7,060 m of drilling completed in 25 holes. Drilling at Puerto del Aire in 2021 was successful in establishing a new underground Mineral Reserve at Mulatos, consisting of 0.4 million ounces of gold (2.8 mt grading 4.67 g/t Au) as at December 31, 2021. The focus in 2022 is on evaluating sulphide opportunities to expand this Mineral Reserve. The higher-grade ore from Puerto del Aire is expected to be processed through the existing mill at Mulatos. Ongoing exploration results will be incorporated into an updated development plan which is expected to be finalized in 2023.
Regional drilling was also completed at the Bajios and Halcon West targets. This included three drill holes totaling 730 m at Bajios and seven drill holes totaling 2,222 m at Halcon West.
During the third quarter, the Company incurred
Lynn Lake (Manitoba, Canada)
During the third quarter of 2022, fifteen holes were drilled at the Tulune target, and two holes were completed at another regional target, totaling 5,818 m of drilling in the period. The 2022 drilling program was completed at the end of August, with a total of 57 holes, or 18,235 m completed in the year.
A summer field program progressed through the third quarter, consisting of geological mapping, prospecting and soil sampling that was designed to help advance a pipeline of prospective regional exploration targets to drill-ready stage. Interpretation of 2022 drilling and field program results and development of a 2023 program are currently in progress.
Exploration spending totaled
Review of Third Quarter Financial Results
During the third quarter of 2022, the Company sold 122,780 ounces of gold for revenues of
The average realized gold price in the third quarter was
Cost of sales (which includes mining and processing costs, inventory net realizable value adjustment, royalties, and amortization expense) were
Mining and processing costs were
The Company assesses the net realizable value of inventory at each reporting period. Given the decrease in the gold price at the end of the third quarter, and higher processing costs at Mulatos, the Company recorded an
Royalty expense was
Amortization of
The Company recognized earnings from operations of
The Company reported a net loss of
Associated Documents
This press release should be read in conjunction with the Company’s interim consolidated financial statements for the three-month period ended September 30, 2022 and associated Management’s Discussion and Analysis (“MD&A”), which are available from the Company's website, www.alamosgold.com, in the "Investors" section under "Reports and Financials", and on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).
Reminder of Third Quarter 2022 Results Conference Call
The Company's senior management will host a conference call on Thursday, October 27, 2022 at 10:00 am ET to discuss the results. Participants may join the conference call via webcast or through the following dial-in numbers:
| Toronto and International: | (416) 340-2217 | ||||
| Toll free (Canada and the United States): | (800) 806-5484 | ||||
| Participant passcode: | 2437684# | ||||
| Webcast: | www.alamosgold.com |
A playback will be available until November 27, 2022 by dialling (905) 694-9451 or (800) 408-3053 within Canada and the United States. The pass code is 4259298#. The webcast will be archived at www.alamosgold.com.
Qualified Persons
Chris Bostwick, FAusIMM, Alamos’ Senior Vice President, Technical Services, who is a qualified person within the meaning of National Instrument 43-101 ("Qualified Person"), has reviewed and approved the scientific and technical information contained in this press release.
About Alamos
Alamos is a Canadian-based intermediate gold producer with diversified production from three operating mines in North America and a strong portfolio of growth projects. This includes the Young-Davidson and Island Gold mines in northern Ontario, Canada and the Mulatos mine in Sonora State, Mexico. Alamos employs more than 1,900 people and is committed to the highest standards of sustainable development. The Company’s shares are traded on the TSX and NYSE under the symbol “AGI”.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Scott K. Parsons
Vice-President, Investor Relations
(416) 368-9932 x 5439
The TSX and NYSE have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This press release contains or incorporates by reference “forward-looking statements” and “forward-looking information” as defined under applicable Canadian and U.S. securities legislation. All statements, other than statements of historical fact, which address events, results, outcomes or developments that the Company expects to occur are, or may be deemed, to be, forward-looking statements. Forward-looking statements are generally, but not always, identified by the use of forward-looking terminology such as "expect", “assume”, “schedule”, "believe", "anticipate", "intend", "objective", "estimate", “potential”, "forecast", "budget", “target”, “on track”, “outlook”, “continue”, “plan” or variations of such words and phrases and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved or the negative connotation of such terms.
Such statements include, but may not be limited to, expectations pertaining to: remaining on track to achieve full year production and cost guidance; returns to shareholders; ramp up of mining and stacking rates at La Yaqui Grande and corresponding increases to production and decreases to costs; reductions in GHG emissions; increases to production and decreases to costs, including mine-site all-in sustaining costs, resulting from intended completion of the Phase 3+ expansion at Island Gold; intended infrastructure investments in, method of funding for, and timing of the completion of, the Phase 3+ expansion; approval of the Environmental Impact Study for the Lynn Lake Gold Project and the intended release of an updated feasibility study and timing related thereto; as well as other general information as to strategy, plans or future financial or operating performance, such as the Company’s expansion plans, project timelines, production plans and expected sustainable productivity increases, expected increases in mining activities and corresponding cost efficiencies, expected drilling targets and future exploration, expected sustaining costs, expected improvements in cash flows and margins, expectations of changes in capital expenditures, forecasted cash shortfalls and the Company’s ability to fund them, cost estimates, projected exploration results, reserve and resource estimates, expected mine life, expected production rates and use of the stockpile inventory, expected recoveries, sufficiency of working capital for future commitments and other statements that express management’s expectations or estimates of future plans and performance.
Alamos cautions that forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by the Company at the time of making such statements, are inherently subject to significant business, economic, technical, legal, political and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information.
Such factors and assumptions underlying the forward-looking statements in this document include, but are not limited to: changes to current estimates of mineral reserves and resources; changes to production estimates (which assume accuracy of projected ore grade, mining rates, recovery timing and recovery rate estimates which may be impacted by unscheduled maintenance, weather issues, labour and contractor availability and other operating or technical difficulties); operations may be exposed to new diseases, epidemics and pandemics, including the continued and potential future effects of COVID-19; the impact of COVID-19 on the broader market and the trading price of the Company's shares; provincial and federal orders or mandates (including with respect to mining operations generally or auxiliary businesses or services required for the Company’s operations) in Canada, Mexico, the United States and Türkiye; the duration of regulatory responses to the COVID-19 pandemic; government and the Company’s attempts to reduce the spread of COVID-19 which may affect many aspects of the Company's operations including the ability to transport personnel to and from site, contractor and supply availability and the ability to sell or deliver gold doré bars; fluctuations in the price of gold or certain other commodities such as, diesel fuel, natural gas, and electricity; changes in foreign exchange rates (particularly the Canadian Dollar, Mexican Peso, U.S. Dollar and Turkish Lira); the impact of inflation; changes in the Company's credit rating; any decision to declare a quarterly dividend; employee and community relations; litigation and administrative proceedings (including but not limited to the investment treaty claim announced on April 20, 2021 against the Republic of Türkiye by the Company’s wholly-owned Netherlands subsidiaries, Alamos Gold Holdings Coöperatief U.A, and Alamos Gold Holdings B.V.); disruptions affecting operations; availability of and increased costs associated with mining inputs and labour; delays with the Phase 3+ expansion project at the Island Gold mine; delays in permitting, construction decisions and any development of the Lynn Lake project; the risk that the Company’s mines may not perform as planned; uncertainty with the Company’s ability to secure additional capital to execute its business plans; the speculative nature of mineral exploration and development, including the risks of obtaining and maintaining necessary licenses and permits, including the necessary licenses, permits, authorizations and/or approvals from the appropriate regulatory authorities for the Company’s development stage and operating assets; labour and contractor availability (and being able to secure the same on favourable terms); contests over title to properties; expropriation or nationalization of property; inherent risks and hazards associated with mining and mineral processing including environmental hazards, industrial hazards, industrial accidents, unusual or unexpected formations, pressures and cave-ins; changes in national and local government legislation (including tax and employment legislation), controls or regulations in Canada, Mexico, Türkiye, the United States and other jurisdictions in which the Company does or may carry on business in the future; increased costs and risks related to the potential impact of climate change; failure to comply with environmental and health and safety laws and regulations; disruptions in the maintenance or provision of required infrastructure and information technology systems; risk of loss due to sabotage, protests and other civil disturbances; the impact of global liquidity and credit availability and the values of assets and liabilities based on projected future cash flows; risks arising from holding derivative instruments; and business opportunities that may be pursued by the Company. The litigation against the Republic of Türkiye, described above, results from the actions of the Turkish government in respect of the Company’s projects in the Republic of Türkiye. Such litigation is a mitigation effort and may not be effective or successful. If unsuccessful, the Company’s projects in Türkiye may be subject to resource nationalism and further expropriation; the Company may lose any remaining value of its assets and gold mining projects in Türkiye and its ability to operate in Türkiye. Even if successful, there is no certainty as to the quantum of any damages award or recovery of all, or any, legal costs. Any resumption of activities in Türkiye, or even retaining control of its assets and gold mining projects in Türkiye can only result from agreement with the Turkish government. The investment treaty claim described in this press release may have an impact on foreign direct investment in the Republic of Türkiye which may result in changes to the Turkish economy, including but not limited to high rates of inflation and fluctuation of the Turkish Lira which may also affect the Company’s relationship with the Turkish government, the Company’s ability to effectively operate in Türkiye, and which may have a negative effect on overall anticipated project values.
Additional risk factors and details with respect to risk factors affecting that may affect the Company’s ability to achieve the expectations set forth in the forward-looking statements contained in this press release are set out in the Company's latest 40-F/Annual Information Form under the heading “Risk Factors”, which is available on the SEDAR website at www.sedar.com or on EDGAR at www.sec.gov. The foregoing should be reviewed in conjunction with the information, risk factors and assumptions found in this press release.
The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
Cautionary Note to U.S. Investors Concerning Measured, Indicated and Inferred Resources
Measured, Indicated and Inferred Resources: All resource and reserve estimates included in this press release or documents referenced in this press release have been prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the "CIM Standards"). NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Mining disclosure in the United States was previously required to comply with SEC Industry Guide 7 (“SEC Industry Guide 7”) under the United States Securities Exchange Act of 1934, as amended. The U.S. Securities and Exchange Commission (the “SEC”) has adopted final rules, to replace SEC Industry Guide 7 with new mining disclosure rules under sub-part 1300 of Regulation S-K of the U.S. Securities Act (“Regulation S-K 1300”) which became mandatory for U.S. reporting companies beginning with the first fiscal year commencing on or after January 1, 2021. Under Regulation S-K 1300, the SEC now recognizes estimates of “Measured Mineral Resources”, “Indicated Mineral Resources” and “Inferred Mineral Resources”. In addition, the SEC has amended its definitions of “Proven Mineral Reserves” and “Probable Mineral Reserves” to be substantially similar to international standards.
Investors are cautioned that while the above terms are “substantially similar” to CIM Definitions, there are differences in the definitions under Regulation S-K 1300 and the CIM Standards. Accordingly, there is no assurance any mineral reserves or mineral resources that the Company may report as “proven mineral reserves”, “probable mineral reserves”, “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” under NI 43-101 would be the same had the Company prepared the mineral reserve or mineral resource estimates under the standards adopted under Regulation S-K 1300. U.S. investors are also cautioned that while the SEC recognizes “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” under Regulation S-K 1300, investors should not assume that any part or all of the mineralization in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralization described using these terms has a greater degree of uncertainty as to its existence and feasibility than mineralization that has been characterized as reserves. Accordingly, investors are cautioned not to assume that any measured mineral resources, indicated mineral resources, or inferred mineral resources that the Company reports are or will be economically or legally mineable.
International Financial Reporting Standards: The condensed interim consolidated financial statements of the Company have been prepared by management in accordance with International Financial Reporting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board. These accounting principles differ in certain material respects from accounting principles generally accepted in the United States of America. The Company’s reporting currency is the United States dollar unless otherwise noted.
Non-GAAP Measures and Additional GAAP Measures
The Company has included certain non-GAAP financial measures to supplement its Consolidated Financial Statements, which are presented in accordance with IFRS, including the following:
- adjusted net earnings and adjusted earnings per share;
- cash flow from operating activities before changes in working capital and taxes received;
- company-wide free cash flow;
- total mine-site free cash flow;
- mine-site free cash flow;
- net cash;
- total cash cost per ounce of gold sold;
- all-in sustaining cost ("AISC") per ounce of gold sold;
- mine-site all-in sustaining cost ("Mine-site AISC") per ounce of gold sold;
- sustaining and non-sustaining capital expenditures; and
- earnings before interest, taxes, depreciation, and amortization
The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-GAAP financial measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Management's determination of the components of non-GAAP and additional measures are evaluated on a periodic basis influenced by new items and transactions, a review of investor uses and new regulations as applicable. Any changes to the measures are dully noted and retrospectively applied as applicable.
Adjusted Net Earnings and Adjusted Earnings per Share
“Adjusted net earnings” and “adjusted earnings per share” are non-GAAP financial measures with no standard meaning under IFRS which exclude the following from net earnings:
- Foreign exchange gain (loss)
- Items included in other gain (loss)
- Certain non-reoccurring items
- Foreign exchange gain (loss) recorded in deferred tax expense
- The income and mining tax impact of items included in other gain (loss)
Net earnings have been adjusted, including the associated tax impact, for the group of costs in “other loss” on the consolidated statement of comprehensive income. Transactions within this grouping are: the fair value changes on non-hedged derivatives; the renunciation of flow-through exploration expenditures; loss on disposal of assets; severance costs related to Turkish Projects; and Turkish Projects holding costs and arbitration costs. The adjusted entries are also impacted for tax to the extent that the underlying entries are impacted for tax in the unadjusted net earnings.
The Company uses adjusted net earnings for its own internal purposes. Management’s internal budgets and forecasts and public guidance do not reflect the items which have been excluded from the determination of adjusted net earnings. Consequently, the presentation of adjusted net earnings enables shareholders to better understand the underlying operating performance of the core mining business through the eyes of management. Management periodically evaluates the components of adjusted net earnings based on an internal assessment of performance measures that are useful for evaluating the operating performance of our business and a review of the non-GAAP measures used by mining industry analysts and other mining companies.
Adjusted net earnings is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure is not necessarily indicative of operating profit or cash flows from operations as determined under IFRS. The following table reconciles this non-GAAP measure to the most directly comparable IFRS measure.
| (in millions) | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Net earnings (loss) | ( | ) | ( | ) | ( | ) | ||||||
| Adjustments: | ||||||||||||
| Inventory net realizable value adjustment, net of taxes | 7.7 | — | 22.4 | — | ||||||||
| Impairment charge, net of taxes | — | — | 26.7 | 213.8 | ||||||||
| Foreign exchange gain | (1.5 | ) | 0.1 | (1.9 | ) | (0.2 | ) | |||||
| Other (gain) loss | (3.5 | ) | (0.4 | ) | (1.5 | ) | 3.3 | |||||
| Unrealized foreign exchange loss recorded in deferred tax expense | 24.5 | 12.7 | 31.6 | 4.7 | ||||||||
| Other income tax and mining tax adjustments | 1.1 | 0.1 | 0.4 | — | ||||||||
| Adjusted net earnings | ||||||||||||
| Adjusted earnings per share - basic and diluted | ||||||||||||
Cash Flow from Operating Activities before Changes in Working Capital and Cash Taxes
“Cash flow from operating activities before changes in working capital and cash taxes” is a non-GAAP performance measure that could provide an indication of the Company’s ability to generate cash flows from operations, and is calculated by adding back the change in working capital and taxes received to “Cash provided by (used in) operating activities” as presented on the Company’s consolidated statements of cash flows. “Cash flow from operating activities before changes in working capital” is a non-GAAP financial measure with no standard meaning under IFRS.
The following table reconciles the non-GAAP measure to the consolidated statements of cash flows.
| (in millions) | ||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| Cash flow from operating activities | ||||||||
| Add: Changes in working capital and cash taxes | 22.1 | 19.9 | 56.1 | 50.7 | ||||
| Cash flow from operating activities before changes in working capital and cash taxes | $96.1 | $102.3 | $252.3 | $319.1 | ||||
Company-wide Free Cash Flow
“Company-wide free cash flow" is a non-GAAP performance measure calculated from the consolidated operating cash flow, less consolidated mineral property, plant and equipment expenditures. The Company believes this to be a useful indicator of our ability to operate without reliance on additional borrowing or usage of existing cash company-wide. Company-wide free cash flow is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures of performance presented by other mining companies. Company-wide free cash flow should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
| (in millions) | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Cash flow from operating activities | ||||||||||||
| Less: mineral property, plant and equipment expenditures(1) | (72.6 | ) | (89.2 | ) | (228.9 | ) | (245.3 | ) | ||||
| Less: capital advances | — | (1.3 | ) | — | (21.5 | ) | ||||||
| Company-wide free cash flow | $1.4 | ($8.1 | ) | ($32.7 | ) | $1.6 | ||||||
Mine-site Free Cash Flow
"Mine-site free cash flow" is a non-GAAP financial performance measure calculated as cash flow from mine-site operating activities, less mineral property, plant and equipment expenditures. The Company believes this to be a useful indicator of our ability to operate without reliance on additional borrowing or usage of existing cash. Mine-site free cash flow is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures of performance presented by other mining companies. Mine-site free cash flow should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
| Total Mine-Site Free Cash Flow | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (in millions) | ||||||||||||
| Cash flow from operating activities | ||||||||||||
| Add: operating cash flow used by non-mine site activity | 8.2 | 9.5 | 32.6 | 33.6 | ||||||||
| Cash flow from operating mine-sites | $82.2 | $91.9 | $228.8 | $302.0 | ||||||||
| Mineral property, plant and equipment expenditure | ||||||||||||
| Capital advances | — | 1.3 | — | 21.5 | ||||||||
| Less: capital expenditures from development projects, and corporate | (6.9 | ) | ( | ) | (17.4 | ) | (16.3 | ) | ||||
| Capital expenditure and capital advances from mine-sites | $65.7 | $85.2 | $211.5 | $250.5 | ||||||||
| Total mine-site free cash flow | $16.5 | $6.7 | $17.3 | $51.5 | ||||||||
| Young-Davidson Mine-Site Free Cash Flow | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (in millions) | ||||||||||||
| Cash flow from operating activities | ||||||||||||
| Mineral property, plant and equipment expenditure | (15.1 | ) | (22.3 | ) | (50.9 | ) | (63.8 | ) | ||||
| Mine-site free cash flow | $23.3 | $28.9 | $77.3 | $69.9 | ||||||||
| Island Gold Mine-Site Free Cash Flow | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (in millions) | ||||||||||||
| Cash flow from operating activities | ||||||||||||
| Mineral property, plant and equipment expenditure(1) | (40.7 | ) | (33.8 | ) | (103.4 | ) | (92.5 | ) | ||||
| Mine-site free cash flow | ($8.6 | ) | ($2.3 | ) | $5.6 | $37.4 | ||||||
(1) Includes capital advances of nil and
| Mulatos District Free Cash Flow | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (in millions) | ||||||||||||
| Cash flow from operating activities | ( | ) | ||||||||||
| Mineral property, plant and equipment expenditure(1) | (9.9 | ) | (29.1 | ) | (57.2 | ) | (94.2 | ) | ||||
| Mine-site free cash flow | $1.8 | ($19.9 | ) | ($65.6 | ) | ($55.8 | ) | |||||
(1) Includes a drawdown of capital advances of
Net Cash
The Company defines net cash as cash and cash equivalents less long-term debt.
Total Cash Costs per ounce
Total cash costs per ounce is a non-GAAP term typically used by gold mining companies to assess the level of gross margin available to the Company by subtracting these costs from the unit price realized during the period. This non-GAAP term is also used to assess the ability of a mining company to generate cash flow from operations. Total cash costs per ounce includes mining and processing costs plus applicable royalties, and net of by-product revenue and net realizable value adjustments. This metric excludes COVID-19 costs incurred in the period. Total cash costs per ounce is exclusive of exploration costs.
Total cash costs per ounce is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.
All-in Sustaining Costs per ounce and Mine-site All-in Sustaining Costs
The Company adopted an “all-in sustaining costs per ounce” non-GAAP performance measure in accordance with the World Gold Council published in June 2013. The Company believes the measure more fully defines the total costs associated with producing gold; however, this performance measure has no standardized meaning. Accordingly, there may be some variation in the method of computation of “all-in sustaining costs per ounce” as determined by the Company compared with other mining companies. In this context, “all-in sustaining costs per ounce” for the consolidated Company reflects total mining and processing costs, corporate and administrative costs, share-based compensation, exploration costs, sustaining capital, and other operating costs.
For the purposes of calculating "mine-site all-in sustaining costs" at the individual mine-sites, the Company does not include an allocation of corporate and administrative costs and share-based compensation, as detailed in the reconciliations below.
Sustaining capital expenditures are expenditures that do not increase annual gold ounce production at a mine site and excludes all expenditures at the Company’s development projects as well as certain expenditures at the Company’s operating sites that are deemed expansionary in nature. For each mine-site reconciliation, corporate and administrative costs, and non-site specific costs are not included in the all-in sustaining cost per ounce calculation.
All-in sustaining costs per gold ounce is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.
Total Cash Costs and All-in Sustaining Costs per Ounce Reconciliation Tables
The following tables reconciles these non-GAAP measures to the most directly comparable IFRS measures on a Company-wide and individual mine-site basis.
| Total Cash Costs and AISC Reconciliation - Company-wide | ||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| (in millions, except ounces and per ounce figures) | ||||||||
| Mining and processing | ||||||||
| Royalties | 2.4 | 2.6 | 6.9 | 8.7 | ||||
| Total cash costs | 106.6 | 87.1 | 295.7 | 268.0 | ||||
| Gold ounces sold | 122,780 | 110,488 | 323,410 | 344,551 | ||||
| Total cash costs per ounce | $868 | $788 | $914 | $778 | ||||
| Total cash costs | ||||||||
| Corporate and administrative(1) | 6.4 | 5.4 | 18.7 | 17.8 | ||||
| Sustaining capital expenditures(2) | 26.0 | 30.9 | 68.7 | 81.2 | ||||
| Share-based compensation | 4.5 | 2.1 | 11.2 | 7.2 | ||||
| Sustaining exploration | 0.5 | 1.3 | 1.8 | 3.8 | ||||
| Accretion of decommissioning liabilities | 0.6 | 0.5 | 2.0 | 1.8 | ||||
| Total all-in sustaining costs | ||||||||
| Gold ounces sold | 122,780 | 110,488 | 323,410 | 344,551 | ||||
| All-in sustaining costs per ounce | $1,178 | $1,152 | $1,231 | $1,102 | ||||
(1) Corporate and administrative expenses exclude expenses incurred at development properties.
(2) Sustaining capital expenditures are defined as those expenditures which do not increase annual gold ounce production at a mine site and exclude all expenditures at growth projects and certain expenditures at operating sites which are deemed expansionary in nature. Total sustaining capital for the period is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (in millions) | ||||||||||||
| Capital expenditures per cash flow statement | ||||||||||||
| Less: non-sustaining capital expenditures at: | ||||||||||||
| Young-Davidson | (2.1 | ) | (10.6 | ) | (17.3 | ) | (32.8 | ) | ||||
| Island Gold | (31.6 | ) | (19.3 | ) | (77.0 | ) | (53.6 | ) | ||||
| Mulatos District | (6.0 | ) | (23.1 | ) | (48.5 | ) | (61.4 | ) | ||||
| Corporate and other | (6.9 | ) | (5.3 | ) | (17.4 | ) | (16.3 | ) | ||||
| Sustaining capital expenditures | ||||||||||||
| Young-Davidson Total Cash Costs and Mine-site AISC Reconciliation | ||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| (in millions, except ounces and per ounce figures) | ||||||||
| Mining and processing | ||||||||
| Royalties | 1.3 | 1.2 | 4.2 | 4.0 | ||||
| Total cash costs | ||||||||
| Gold ounces sold | 49,218 | 48,625 | 147,405 | 141,931 | ||||
| Total cash costs per ounce | $870 | $810 | $858 | $873 | ||||
| Total cash costs | ||||||||
| Sustaining capital expenditures | 13.0 | 11.7 | 33.6 | 31.0 | ||||
| Accretion of decommissioning liabilities | — | — | 0.2 | 0.2 | ||||
| Total all-in sustaining costs | ||||||||
| Gold ounces sold | 49,218 | 48,625 | 147,405 | 141,931 | ||||
| Mine-site all-in sustaining costs per ounce | $1,134 | $1,051 | $1,087 | $1,093 | ||||
| Island Gold Total Cash Costs and Mine-site AISC Reconciliation | ||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| (in millions, except ounces and per ounce figures) | ||||||||
| Mining and processing | ||||||||
| Royalties | 0.7 | 1.1 | 1.9 | 3.8 | ||||
| Total cash costs | ||||||||
| Gold ounces sold | 31,342 | 28,331 | 91,507 | 101,845 | ||||
| Total cash costs per ounce | $651 | $586 | $650 | $512 | ||||
| Total cash costs | ||||||||
| Sustaining capital expenditures | 9.1 | 13.9 | 26.4 | 35.5 | ||||
| Accretion of decommissioning liabilities | 0.1 | — | 0.2 | — | ||||
| Total all-in sustaining costs | ||||||||
| Gold ounces sold | 31,342 | 28,331 | 91,507 | 101,845 | ||||
| Mine-site all-in sustaining costs per ounce | $944 | $1,077 | $941 | $860 | ||||
| Mulatos District Total Cash Costs and Mine-site AISC Reconciliation | ||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| (in millions, except ounces and per ounce figures) | ||||||||
| Mining and processing | ||||||||
| Royalties | 0.4 | 0.3 | 0.8 | 0.9 | ||||
| Total cash costs | ||||||||
| Gold ounces sold | 42,220 | 33,532 | 84,498 | 100,775 | ||||
| Total cash costs per ounce | $1,028 | $927 | $1,298 | $913 | ||||
| Total cash costs | ||||||||
| Sustaining capital expenditures | 3.9 | 5.3 | 8.7 | 14.7 | ||||
| Sustaining exploration | 0.1 | 0.8 | 0.5 | 2.3 | ||||
| Accretion of decommissioning liabilities | 0.6 | 0.5 | 1.6 | 1.6 | ||||
| Total all-in sustaining costs | ||||||||
| Gold ounces sold | 42,220 | 33,532 | 84,498 | 100,775 | ||||
| Mine-site all-in sustaining costs per ounce | $1,137 | $1,124 | $1,426 | $1,097 | ||||
Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”)
EBITDA represents net earnings before interest, taxes, depreciation, and amortization. EBITDA is an indicator of the Company’s ability to generate liquidity by producing operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.
EBITDA does not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The following is a reconciliation of EBITDA to the consolidated financial statements:
| (in millions) | |||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||
| Net (loss) earnings | ( | ) | ( | ) | ( | ) | |||||
| Add back: | |||||||||||
| Inventory net realizable value adjustment | 11.6 | — | 33.9 | — | |||||||
| Impairment charge | — | — | 38.2 | 224.3 | |||||||
| Finance expense | 1.0 | 1.3 | 3.5 | 3.3 | |||||||
| Amortization | 49.9 | 42.4 | 125.9 | 127.7 | |||||||
| Deferred income tax expense | 34.9 | 29.0 | 51.9 | 44.1 | |||||||
| Current income tax expense | 0.4 | 2.2 | 1.4 | 10.8 | |||||||
| EBITDA | $96.4 | $100.0 | $251.3 | $314.0 | |||||||
Additional GAAP Measures
Additional GAAP measures are presented on the face of the Company’s consolidated statements of comprehensive income (loss) and are not meant to be a substitute for other subtotals or totals presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. The following additional GAAP measures are used and are intended to provide an indication of the Company’s mine and operating performance:
- Earnings from operations - represents the amount of earnings before net finance income/expense, foreign exchange gain/loss, other income/loss, loss on redemption of senior secured notes and income tax expense
Unaudited Consolidated Statements of Financial Position, Comprehensive
Income, and Cash Flow
ALAMOS GOLD INC.
Consolidated Statements of Financial Position
(Unaudited - stated in millions of United States dollars)
| September 30, 2022 | December 31, 2021 | ||||||
| A S S E T S | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | |||||||
| Equity securities | 15.3 | 23.9 | |||||
| Amounts receivable | 36.7 | 31.1 | |||||
| Income taxes receivable | 9.2 | 8.7 | |||||
| Inventory | 210.6 | 199.0 | |||||
| Other current assets | 16.0 | 24.2 | |||||
| Total Current Assets | 404.5 | 459.4 | |||||
| Non-Current Assets | |||||||
| Long-term inventory | 6.4 | 10.6 | |||||
| Mineral property, plant and equipment | 3,125.0 | 3,108.5 | |||||
| Other non-current assets | 63.4 | 43.0 | |||||
| Total Assets | $3,599.3 | $3,621.5 | |||||
| L I A B I L I T I E S | |||||||
| Current Liabilities | |||||||
| Accounts payable and accrued liabilities | |||||||
| Total Current Liabilities | 168.6 | 157.4 | |||||
| Non-Current Liabilities | |||||||
| Deferred income taxes | 652.4 | 623.2 | |||||
| Decommissioning liabilities | 101.7 | 102.8 | |||||
| Other non-current liabilities | 2.5 | 2.5 | |||||
| Total Liabilities | 925.2 | 885.9 | |||||
| E Q U I T Y | |||||||
| Share capital | |||||||
| Contributed surplus | 91.6 | 89.5 | |||||
| Accumulated other comprehensive (loss) income | (33.0 | ) | 1.9 | ||||
| Deficit | (1,079.3 | ) | (1,048.7 | ) | |||
| Total Equity | 2,674.1 | 2,735.6 | |||||
| Total Liabilities and Equity | $3,599.3 | $3,621.5 | |||||
ALAMOS GOLD INC.
Consolidated Statements of Comprehensive (Loss) Income
(Unaudited - stated in millions of United States dollars, except share and per share amounts)
| For three months ended | For nine months ended | ||||||||||||||
| September 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| OPERATING REVENUES | |||||||||||||||
| COST OF SALES | |||||||||||||||
| Mining and processing | 104.2 | 84.5 | 288.8 | 259.3 | |||||||||||
| Inventory net realizable value adjustment | 11.6 | — | 33.9 | — | |||||||||||
| Royalties | 2.4 | 2.6 | 6.9 | 8.7 | |||||||||||
| Amortization | 49.9 | 42.4 | 125.9 | 127.7 | |||||||||||
| 168.1 | 129.5 | 455.5 | 395.7 | ||||||||||||
| EXPENSES | |||||||||||||||
| Exploration | 4.7 | 3.7 | 15.8 | 10.4 | |||||||||||
| Corporate and administrative | 6.4 | 5.4 | 18.7 | 17.8 | |||||||||||
| Share-based compensation | 4.5 | 2.1 | 11.2 | 7.2 | |||||||||||
| Impairment charge | — | — | 38.2 | 224.3 | |||||||||||
| 183.7 | 140.7 | 539.4 | 655.4 | ||||||||||||
| EARNINGS (LOSS) BEFORE INCOME TAXES | 29.9 | 57.3 | 49.9 | (34.9 | ) | ||||||||||
| OTHER EXPENSES | |||||||||||||||
| Finance expense | (1.0 | ) | (1.3 | ) | (3.5 | ) | (3.3 | ) | |||||||
| Foreign exchange gain (loss) | 1.5 | (0.1 | ) | 1.9 | 0.2 | ||||||||||
| Other gain (loss) | 3.5 | 0.4 | 1.5 | (3.3 | ) | ||||||||||
| EARNINGS (LOSS) FROM OPERATIONS | $33.9 | $56.3 | $49.8 | ($41.3 | ) | ||||||||||
| INCOME TAXES | |||||||||||||||
| Current income tax expense | (0.4 | ) | (2.2 | ) | (1.4 | ) | (10.8 | ) | |||||||
| Deferred income tax expense | (34.9 | ) | (29.0 | ) | (51.9 | ) | (44.1 | ) | |||||||
| NET (LOSS) EARNINGS | ($1.4 | ) | $25.1 | ($3.5 | ) | ($96.2 | ) | ||||||||
| Items that may be subsequently reclassified to net earnings: | |||||||||||||||
| Net change in fair value of currency hedging instruments, net of taxes | (14.8 | ) | (2.1 | ) | (15.9 | ) | (3.8 | ) | |||||||
| Net change in fair value of fuel hedging instruments, net of taxes | (0.9 | ) | 0.2 | 0.1 | 0.3 | ||||||||||
| Items that will not be reclassified to net earnings: | |||||||||||||||
| Unrealized loss on equity securities, net of taxes | (6.1 | ) | (0.1 | ) | (19.1 | ) | (0.6 | ) | |||||||
| Total other comprehensive loss | ($21.8 | ) | ($2.0 | ) | ($34.9 | ) | ($4.1 | ) | |||||||
| COMPREHENSIVE (LOSS) INCOME | ($23.2 | ) | $23.1 | ($38.4 | ) | ($100.3 | ) | ||||||||
| (LOSS) EARNINGS PER SHARE | |||||||||||||||
| – basic | $0.00 | $0.06 | ($0.01 | ) | ($0.24 | ) | |||||||||
| – diluted | $0.00 | $0.06 | ($0.01 | ) | ($0.24 | ) | |||||||||
| Weighted average number of common shares outstanding (000's) | |||||||||||||||
| – basic | 391,794 | 392,742 | 391,882 | 392,755 | |||||||||||
| – diluted | 391,794 | 395,850 | 391,882 | 392,755 | |||||||||||
ALAMOS GOLD INC.
Consolidated Statements of Cash Flows
(Unaudited - stated in millions of United States dollars)
| For three months ended | For nine months ended | ||||||||||||||
| September 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| CASH PROVIDED BY (USED IN): | |||||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||
| Net earnings (loss) for the period | ( | ) | ( | ) | ( | ) | |||||||||
| Adjustments for items not involving cash: | |||||||||||||||
| Amortization | 49.9 | 42.4 | 125.9 | 127.7 | |||||||||||
| Impairment charge | — | — | 38.2 | 224.3 | |||||||||||
| Inventory net realizable value adjustment | 11.6 | — | 33.9 | — | |||||||||||
| Foreign exchange (gain) loss | (1.5 | ) | 0.1 | (1.9 | ) | (0.2 | ) | ||||||||
| Current income tax expense | 0.4 | 2.2 | 1.4 | 10.8 | |||||||||||
| Deferred income tax expense (recovery) | 34.9 | 29.0 | 51.9 | 44.1 | |||||||||||
| Share-based compensation | 4.5 | 2.1 | 11.2 | 7.2 | |||||||||||
| Finance expense | 1.0 | 1.3 | 3.5 | 3.3 | |||||||||||
| Other items | (3.3 | ) | 0.1 | (8.3 | ) | (1.9 | ) | ||||||||
| Changes in working capital and taxes paid | (22.1 | ) | (19.9 | ) | (56.1 | ) | (50.7 | ) | |||||||
| 74.0 | 82.4 | 196.2 | 268.4 | ||||||||||||
| INVESTING ACTIVITIES | |||||||||||||||
| Mineral property, plant and equipment | (72.6 | ) | (89.2 | ) | (228.9 | ) | (245.3 | ) | |||||||
| Capital advances | — | (1.3 | ) | — | (21.5 | ) | |||||||||
| Proceeds from sale of Esperanza | — | — | 5.0 | — | |||||||||||
| Proceeds from disposition of equity securities | — | — | — | 25.8 | |||||||||||
| Investment in equity securities | (1.2 | ) | (0.5 | ) | (3.9 | ) | (4.8 | ) | |||||||
| (73.8 | ) | (91.0 | ) | (227.8 | ) | (245.8 | ) | ||||||||
| FINANCING ACTIVITIES | |||||||||||||||
| Dividends paid | (8.7 | ) | (8.7 | ) | (26.3 | ) | (25.9 | ) | |||||||
| Repurchase and cancellation of common shares | — | (4.5 | ) | (8.2 | ) | (6.0 | ) | ||||||||
| Proceeds from issuance of flow-through shares | 4.6 | — | 10.4 | — | |||||||||||
| Proceeds from the exercise of options | — | — | 0.7 | 0.2 | |||||||||||
| Repayment of equipment financing obligations | — | — | — | (0.1 | ) | ||||||||||
| (4.1 | ) | (13.2 | ) | (23.4 | ) | (31.8 | ) | ||||||||
| Effect of exchange rates on cash and cash equivalents | (0.9 | ) | (0.7 | ) | (0.8 | ) | 0.1 | ||||||||
| Net decrease in cash and cash equivalents | (4.8 | ) | (22.5 | ) | (55.8 | ) | (9.1 | ) | |||||||
| Cash and cash equivalents - beginning of period | 121.5 | 233.9 | 172.5 | 220.5 | |||||||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $116.7 | $211.4 | $116.7 | $211.4 | |||||||||||
FAQ
What are Alamos Gold's (AGI) Q3 2022 production results?
How has Alamos Gold's (AGI) costs changed in Q3 2022?
What were Alamos Gold's (AGI) adjusted earnings in Q3 2022?
What is Alamos Gold's (AGI) financial position as of Q3 2022?
Has Alamos Gold (AGI) met its production guidance for the year?
