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Alamos Gold delivers record cash flow in Q3

Oct 29, 2020

“We had an excellent third quarter financially and operationally with strong performances at all three operations driving costs significantly lower," said John A. McCluskey, President and Chief Executive Officer. 

Alamos Gold Inc. today reported its financial results for the quarter ended September 30, 2020.

"This included another record quarter at Island Gold, and Young-Davidson starting to demonstrate its full potential following the completion of the lower mine expansion. We previously outlined our expectation to transition to strong free cash flow generation in the second half of 2020, and we delivered with record free cash flow of $76 million in the quarter.”

“We remain focused on operating a sustainable business model that can support growing returns to shareholders over the long term. Given our strong free cash flow outlook, we are pleased to announce a 33% increase in our dividend, which has now grown by 300% since 2018. We expect to continue to generate strong free cash flow while reinvesting in high-return projects like La Yaqui Grande and the Phase III Expansion at Island Gold which will support further growth and returns to shareholders,” Mr. McCluskey added.

Third Quarter 2020

  • Generated record quarterly free cash flow1 of $76.0 million driven by higher margins at all operations
  • Announced a 33% increase in the dividend to an annual rate of US$0.08 per share, starting with the dividend payable in December 2020. The increase is supported by the record free cash flow in the quarter and strong outlook. With the December dividend, the Company will have returned $31.0 million to shareholders in the form of dividends and share repurchases under the Company's Normal Course Issuer Bid ("NCIB") in 2020
  • Produced 117,100 ounces of gold, a 49% increase from the second quarter of 2020 with production returning to budgeted levels following the temporary suspension of operations at Island Gold and Mulatos in the second quarter due to COVID-19
  • Year-to-date the Company has produced 306,400 ounces of gold and remains well positioned to achieve revised full year guidance of 405,000 to 435,000 ounces of gold
  • Island Gold produced a record 39,600 ounces of gold and generated record mine-site free cash flow1 of $40.8 million, benefiting from higher grades mined in the quarter
  • Mulatos produced 41,100 ounces of gold and generated mine-site free cash flow1 of $30.9 million, driven by lower total cash costs
  • Following the completion of the lower mine expansion at Young-Davidson in July, underground mining rates increased to average 6,713 tonnes per day ("tpd") for the quarter and remain on track to achieve 7,500 tpd by the end of 2020
  • Sold 116,035 ounces of gold at an average realized price of $1,882 per ounce for revenues of $218.4 million
  • Generated record cash flow from operating activities of $130.8 million ($130.0 million, or $0.33 per share, before changes in working capital1), a 62% increase from the third quarter of 2019
  • Consolidated total cash costs1 of $681 per ounce and all-in sustaining costs ("AISC")1 of $949 per ounce both decreased significantly from the first half of the year and were lower than revised guidance. The Company remains on track to achieve full year cost guidance
  • Reported record adjusted net earnings1 of $56.9 million, or $0.15 per share1, which includes adjustments for unrealized foreign exchange gains of $10.7 million recorded within deferred taxes and foreign exchange, and other one time gains of $0.3 million. Adjusted net earnings increased 143% compared to the third quarter of 2019
  • Realized record net earnings of $67.9 million, or $0.17 per share
  • Ended the quarter with cash and cash equivalents of $274.1 million and equity securities of $40.0 million. Subsequent to quarter-end, the Company repaid $100.0 million outstanding on its revolving credit facility and is currently debt-free
  • Reported results of the Phase III Expansion Study conducted on Island Gold, which is expected to drive a 72% increase in average annual production to 236,000 ounces and a 30% decrease in mine-site AISC to $534 per ounce starting in 2025
  • Announced a construction decision on the low-cost, high-return La Yaqui Grande project. The project has a 58% after-tax internal rate of return ("IRR") at a $1,750 per ounce gold price and is expected to significantly reduce Mulatos District costs with mine-site AISC expected to average $578 per ounce over the life of the project

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