Alamos Gold Reports Second Quarter 2022 Results

TORONTO, July 27, 2022 (GLOBE NEWSWIRE) — Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported its financial results for the quarter ended June 30, 2022.

“We achieved several key short- and long-term objectives in the second quarter. Production was in-line with guidance and costs well below quarterly guidance reflecting solid performances at our Canadian operations and a strong start from La Yaqui Grande which achieved initial production ahead of schedule. With La Yaqui Grande expected to drive stronger production in the second half of the year, we remain on track to achieve full year guidance,” said John A. McCluskey, President and Chief Executive Officer.

“La Yaqui Grande will be a key contributor to stronger operational and financial results over the shorter term, and as outlined in our Phase 3+ Expansion Study, Island Gold will be the driver of higher production, lower costs and significantly stronger free cash flow generation over the long term. The Phase 3+ expansion will transform Island Gold into one of the largest, lowest cost and most profitable gold mines in Canada. With increasing cash flow from our operations, we can fund this high-return growth internally while generating strong free cash flow over the next several years,” Mr. McCluskey added.

Second Quarter 2022

• Produced 103,900 ounces of gold, a 5% increase from the first quarter and in line with guidance
• Young-Davidson continued its strong operational performance, with mining rates exceeding 8,000 tonnes per day (“tpd”) for the fourth consecutive quarter, driving production of 46,400 ounces and record mine-site free cash flow¹ of $30.8 million
• Island Gold produced 37,300 ounces, a 52% increase from the first quarter of 2022 leading to mine-site free cash flow¹ of $20.2 million
• Announced the Phase 3+ Expansion of Island Gold to 2,400 tpd outlining a larger, more profitable, and valuable operation with production expected to more than double to an average of 287,000 ounces per year at industry low mine-site all-in sustaining costs of $576 per ounce starting in 2026
• Completed construction of La Yaqui Grande ahead of schedule in June, and produced 5,000 ounces at total cash costs of $451 per ounce. Mining and stacking rates continue to ramp up and are expected to drive stronger consolidated production from the Mulatos District at significantly lower costs in the second half of the year
• Sold 102,164 ounces of gold at an average realized price of $1,871 per ounce for revenues of $191.2 million
• Total cash costs¹ of $895 per ounce, and AISC¹ of $1,170 per ounce per ounce were significantly lower than the first quarter and consistent with annual guidance, reflecting higher grades mined at Island Gold, the strong start at La Yaqui Grande, and the weaker Canadian dollar
• Realized adjusted net earnings¹ for the quarter of $29.3 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 $14.7 million and unrealized foreign exchange losses recorded within both deferred taxes and foreign exchange of $12.5 million, partially offset by other gains totaling $4.3 million
• Reported net earnings of $6.4 million, or $0.02 per share
• Cash flow from operating activities was $75.7 million ($85.3 million, or $0.22 per share, before changes in working capital¹)
• Free cash flow¹ was $6.7 million in the quarter, driven by strong operating results at Young-Davidson and Island Gold. With the completion of construction at La Yaqui Grande, free cash flow is expected to increase in the second half of the year
• Shareholder returns totaled $18.0 million in the quarter. This included the quarterly dividend of $9.8 million, or $0.025 per share (annualized rate of $0.10), as well as 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”)
• Closed the sale of the Esperanza Gold Project to Zacatecas Silver for total consideration of up to $60 million, including up front consideration of $5 million cash, and $10 million of Zacatecas Silver shares
• Ended the quarter with cash and cash equivalents of $121.5 million, equity securities of $22.5 million, and no debt
• Announced a Company-wide target of a 30% reduction in absolute Greenhouse Gas (“GHG”) emissions by 2030 which is expected to further improve the Company’s industry low GHG emissions intensity
• Recipient of the Casco De Plata safety award by the Mining Chamber of Mexico (CAMIMEX) in recognition of outstanding health and safety performance and governance at Mulatos

^.(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

⁽¹⁾  Cost of sales includes mining and processing costs, royalties, and amortization expense. For the three and six months ended June 30, 2022, cost of sales includes a $22.3 million non-cash inventory net realizable value adjustment at Mulatos District.
⁽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 six months ended June 30, 2022 ($3.4 million and $20.2 million for the three and six months ended June 30, 2021).
⁽⁶⁾  Comparative cash and cash equivalents balance as at December 31, 2021.

⁽¹⁾  Cost of sales includes mining and processing costs, royalties, and amortization. For the three and six months ended June 30, 2022, cost of sales at Mulatos District includes $22.3 million non-cash inventory net realizable value adjustment.
⁽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 $1.3 million and $2.3 million for the three and six months ended June 30, 2022 ($1.5 million and $2.5 million for the three and six months ended June 30, 2021).
⁽⁵⁾  Includes capitalized exploration at Island Gold of $4.1 million and $9.2 million for the three and six months ended June 30, 2022 ($3.9 million and $8.4 million for the three and six months ended June 30, 2021).
⁽⁶⁾  Includes capitalized exploration at Mulatos District of $0.2 million for the three and six months ended June 30, 2022 ($1.0…