Record production and revenue support strong ongoing free cash flow while funding growth
All amounts are in United States dollars, unless otherwise stated.
TORONTO, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) ("Alamos” or the "Company”) today reported its financial results for the quarter ended September 30, 2024.
"We achieved a number of operational and financial records in the third quarter. Production increased to a record 152,000 ounces reflecting the addition of Magino and continued strong performances from Island Gold and Mulatos. With growing gold production and record gold prices, we generated record revenue and cash flow from operations before working capital, supporting strong ongoing free cash flow while funding our high-return growth initiatives,” said John A. McCluskey, President and Chief Executive Officer.
"The addition of Magino has enhanced our strong outlook, increasing our near-term production rate by approximately 20%, and providing longer-term growth opportunities through expansions of the Island Gold District. We are making excellent progress on our growth projects with the Phase 3+ Expansion more than halfway complete, and the recently announced development plan for PDA outlining another low-cost, high-return project that will triple the mine life of Mulatos. Both projects are key drivers of our strong outlook, supporting growing production at declining costs over the coming years,” Mr. McCluskey added.
Third Quarter 2024 Operational and Financial Highlights
- Produced a record 152,000 ounces of gold, in-line with quarterly guidance and a 9% increase from the second quarter. This reflected the inclusion of the recently acquired Magino mine as well as strong ongoing performances from Island Gold and the Mulatos District. The acquisition of Argonaut Gold Inc. ("Argonaut") was completed on July 12, 2024
- Increased 2024 production guidance to between 550,000 and 590,000 ounces in September 2024. This represented a 13% increase from original guidance (based on the mid-point), reflecting the inclusion of the Magino mine from July 12, 2024 onward, as well as increased guidance for the Mulatos District
- Sold a record 145,204 ounces of gold at an average realized price of $2,458 per ounce, generating record quarterly revenues of $360.9 million. This represented a 41% increase from the third quarter of 2023 and marks the third consecutive quarter of record revenue. Ounces sold were 4% lower than production in the quarter due to timing, with the sale of these ounces to benefit future quarters
- Generated strong ongoing free cash flow1 of $87.5 million while continuing to fund high-return growth initiatives including a record exploration budget, and the Phase 3+ Expansion at Island Gold. Reported free cash flow excludes $28.8 million of one-time payments related to the Argonaut acquisition, including transaction costs and overdue payables at Magino incurred by Argonaut but paid by Alamos post-close
- Solid consolidated free cash flow performance was led by the Mulatos District which generated $66.9 million of mine-site free cash flow in the quarter, and $186.5 million year-to-date
- Cash flow from operating activities was $165.5 million, including a record $192.8 million before changes in working capital1 ($0.46 per share). Cash flow from operating activities was impacted by working capital adjustments and transaction costs incurred on the acquisition of Argonaut
- Cost of sales were $204.0 million or $1,405 per ounce
- Total cash costs1 of $984 per ounce and all-in sustaining costs ("AISC"1) of $1,425 per ounce increased from the second quarter of 2024, reflecting the contribution of higher-cost ounces from Magino with the operation undergoing downtime to implement a number of improvements to the mill. Excluding Magino, total cash costs and AISC for the third quarter would have been $118 and $184 per ounce lower, respectively. AISC were also impacted by higher share-based compensation driven by an increase in the Company's share price during the quarter
- Costs are expected to decrease slightly in the fourth quarter. The Company remains on track to achieve full year cost guidance
- Adjusted net earnings1 for the third quarter were $78.1 million, or $0.19 per share1. Adjusted net earnings include adjustments for an impairment reversal on Young Davidson of $38.6 million, net of tax; unrealized losses on hedge derivatives of $21.2 million, net of tax, net unrealized foreign exchange losses recorded within deferred taxes and foreign exchange of $1.8 million; and other adjustments, net of taxes totaling $9.2 million. Reported net earnings for the quarter were $84.5 million, or $0.20 per share
- Cash and cash equivalents were $291.6 million at September 30, 2024. The Company withdrew $250 million on its credit facility during the quarter, which was used to retire the credit facility, term loan, and gold prepay inherited from Argonaut. Additionally, $57.5 million of convertible notes inherited from Argonaut were retired during the quarter, resulting in a net cash outflow of $308.3 million related to Argonaut. The Company remains well positioned to fund its growth initiatives with strong ongoing free cash flow and $542 million of total liquidity
- On July 15, the Company entered into a gold sale prepayment agreement for total consideration of $116 million in exchange for the delivery of 49,384 ounces in 2025. The proceeds of the gold prepayment were used to eliminate gold forward sale contracts, previously entered into by Argonaut, totaling 179,417 ounces in 2024 and 2025 with an average price of $1,838 per ounce. The transaction eliminated more than half of the Argonaut hedge book and associated mark-to-market liability
- Paid dividends of $10.5 million in the quarter, or $0.025 per share
- Released a development plan for the Puerto Del Aire ("PDA”) project located within the Mulatos District, outlining a high-return project with an after-tax internal rate of return ("IRR") of 46% at a base case gold price assumption of $1,950 per ounce. PDA is expected to nearly triple the mine life of the Mulatos District, extending production into 2035
- Outlined exploration upside to the PDA project, with high-grade mineralization extended at PDA, which is expected to support further growth in Mineral Reserves and Resources, and multiple new high-grade zones defined at Cerro Pelon
- Provided a comprehensive exploration update at Island Gold, with high-grade gold mineralization extended across the Island Gold Deposit, as well as within several hanging wall and footwall structures. The ongoing success is expected to drive further growth in high-grade Mineral Reserves and Resources with the 2024 year-end update
- Alamos was recognized as a TSX30, 2024 winner by the Toronto Stock Exchange. The annual ranking recognizes the 30 top performing stocks over a three-year period. Alamos' share price increased 134% over the trailing three-year period
- Announced a significant contribution to The Princess Margaret Cancer Foundation to create the new Alamos Gold Chair in Gastrointestinal Surgical Oncology. The Company will contribute $2 million to support the new Chair in making a meaningful impact on cancer research aimed at better understanding, diagnosing, and treating gastrointestinal cancers
- Announced the appointment of Tony Giardini to its Board of Directors, in September, as well as the appointment of Scott K. Parsons as Senior Vice President, Corporate Development and Investor Relations, and Khalid Elhaj as Vice President, Business Development and Investor Relations. Nils F. Engelstad, Senior Vice President, General Counsel, is departing the Company effective November 8, 2024 to pursue other opportunities.
Highlight Summary
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Financial Results (in millions) | ||||||||
| Operating revenues | $360.9 | $256.2 | $971.1 | $768.7 | ||||
| Cost of sales (1) | $204.0 | $158.0 | $550.2 | $471.0 | ||||
| Earnings from operations | $183.3 | $82.6 | $403.5 | $246.2 | ||||
| Earnings before income taxes | $141.2 | $78.2 | $345.0 | $242.5 | ||||
| Net earnings | $84.5 | $39.4 | $196.7 | $162.9 | ||||
| Adjusted net earnings (2) | $78.1 | $54.5 | $225.7 | $159.2 | ||||
| Adjusted earnings before interest, taxes, depreciation and
amortization (2) | $176.2 | $125.4 | $484.3 | $383.7 | ||||
| Cash provided by operations before working capital and taxes paid (2) | $192.8 | $133.2 | $518.3 | $398.7 | ||||
| Cash provided by operating activities | $165.5 | $112.5 | $468.9 | $348.6 | ||||
| Capital expenditures (sustaining) (2)(3) | $38.1 | $27.3 | $85.5 | $77.6 | ||||
| Capital expenditures (growth) (2) | $67.9 | $41.9 | $178.3 | $143.7 | ||||
| Capital expenditures (capitalized exploration) | $6.2 | $6.0 | $20.5 | $17.9 | ||||
| Free cash flow (2) | $87.5 | $37.3 | $218.8 | $109.4 | ||||
| Operating Results | ||||||||
| Gold production (ounces) | 152,000 | 135,400 | 426,800 | 399,800 | ||||
| Gold sales (ounces) | 145,204 | 132,633 | 418,976 | 397,253 | ||||
| Per Ounce Data | ||||||||
| Average realized gold price | $2,458 | $1,932 | $2,294 | $1,935 | ||||
| Average spot gold price (London PM Fix) | $2,475 | $1,928 | $2,296 | $1,931 | ||||
| Cost of sales per ounce of gold sold
(includes amortization) (1) | $1,405 | $1,191 | $1,313 | $1,186 | ||||
| Total cash costs per ounce of gold sold (2) | $984 | $835 | $909 | $834 | ||||
| All-in sustaining costs per ounce of gold sold (2) | $1,425 | $1,121 | $1,263 | $1,136 | ||||
| Share Data | ||||||||
| Earnings per share, basic | $0.20 | $0.10 | $0.49 | $0.41 | ||||
| Earnings per share, diluted | $0.20 | $0.10 | $0.48 | $0.41 | ||||
| Adjusted earnings per share, basic (2) | $0.19 | $0.14 | $0.56 | $0.40 | ||||
| Weighted average common shares outstanding (basic) (000's) | 417,147 | 396,117 | 404,127 | 395,149 | ||||
| Financial Position (in millions) | ||||||||
| Cash and cash equivalents | $291.6 | $224.8 | ||||||
(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) Sustaining capital expenditures include sustaining capital lease expenditures at Magino, which are not included as additions to mineral property, plant and equipment in cash flows used from investing activities.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Gold production (ounces) | ||||||||
| Young-Davidson | 44,200 | 45,100 | 128,300 | 135,300 | ||||
| Island Gold | 40,500 | 36,400 | 115,600 | 99,800 | ||||
| Magino (8) | 16,800 | - | 16,800 | - | ||||
| Mulatos District (7) | 50,500 | 53,900 | 166,100 | 164,700 | ||||
| Gold sales (ounces) | ||||||||
| Young-Davidson | 42,966 | 45,498 | 127,833 | 134,744 | ||||
| Island Gold | 38,679 | 35,255 | 112,575 | 97,165 | ||||
| Magino (8) | 14,766 | - | 14,766 | - | ||||
| Mulatos District | 48,793 | 51,880 | 163,802 | 165,344 | ||||
| Cost of sales (in millions) (1) | ||||||||
| Young-Davidson | $63.9 | $62.4 | $196.0 | $183.6 | ||||
| Island Gold | $33.4 | $31.3 | $97.5 | $89.8 | ||||
| Magino (8) | $38.5 | - | $38.5 | - | ||||
| Mulatos District | $68.2 | $64.3 | $218.2 | $197.6 | ||||
| Cost of sales per ounce of gold sold (includes amortization) (1) | ||||||||
| Young-Davidson | $1,487 | $1,371 | $1,533 | $1,363 | ||||
| Island Gold | $864 | $888 | $866 | $924 | ||||
| Magino (8) | $2,607 | - | $2,607 | - | ||||
| Mulatos District | $1,398 | $1,239 | $1,332 | $1,195 | ||||
| Total cash costs per ounce of gold sold (2) | ||||||||
| Young-Davidson |
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