Alamos Gold records strong quarter

29th April 2021 By: Tasneem Bulbulia - Creamer Media Contributing Editor Online

Dual-listed Alamos Gold produced 125 800 oz of gold for the quarter ended March 31, above the top end of its guidance, and a 14% increase compared with production in the first quarter of 2020.

The higher output was driven by significantly higher production at its Young-Davidson mine, in Ontario, Canada, and another record quarter at Island Gold, also in Ontario.

Young-Davidson produced 48 000 oz of gold and generated mine-site free cash flow of $22.3-million.

Island Gold produced a record 42 200 oz of gold and generated mine-site free cash flow of $26-million, net of growth expenditures and capitalised exploration of $16.8-million

The company generated free cash flow of $9.9-million, net of $16.8-million of capital advances for the La Yaqui Grande project, in Mexico, and the Phase III expansion at Island Gold, and $18.2-million in cash taxes paid in Mexico, primarily related to 2020.

Alamos sold 126 482 oz of gold at an average realized price of $1 798/oz for record revenues of $227.4-million.

It generated cash flow from operating activities of $99.3-million, a 75% increase compared with the first quarter of 2020.

Consolidated total cash costs of $757/oz, all-in sustaining costs (AISC) of $1 030/oz and cost of sales of $1 101/oz were all in line with yearly guidance, despite the impact of the stronger than budgeted Canadian dollar.

The company recorded net earnings of $51.2-million, or $0.13 apiece.

It ended the quarter with cash and cash equivalents of $238.2-million and equity securities of $26.7-million.

Alamos paid a quarterly dividend of $9.8-million, representing a 25% increase from the previous quarter.

The company reported year-end 2020 mineral reserves of 9.9-million ounces, up from 9.7-million ounces at the end of 2019, with additions at Island Gold, Young-Davidson and Lynn Lake, in Manitoba, offsetting mining depletion.

John Fitzgerald was appointed projects VP, and he will lead all engineering, procurement and construction activities for the company’s development projects.

The company advanced the development of the La Yaqui Grande mine in Mexico, with pre-stripping rates ramping up to 48 000 t/d by the end of March and the project on track to achieve commercial production in the third quarter of 2022.

Subsequent to quarter-end, Alamos announced it would file a $1-billion investment treaty claim against the Republic of Turkey for expropriation and unfair and inequitable treatment, among other things, with respect to its Turkish projects.

Meanwhile, gold production in the second quarter is expected to be between 115 000 oz and 120 000 oz, a slight decrease from the first quarter, reflecting lower planned grades at Island Gold.

Total cash costs and AISC in the second quarter are expected to be slightly above yearly guidance assuming the Canadian dollar and Mexican peso remain at current levels.