TORONTO, Aug. 01, 2018 (GLOBE NEWSWIRE) — Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported its financial results for the second quarter ended June 30, 2018 and reviewed its operating, exploration and development activities.
“With near record production in the second quarter, we came in slightly ahead of expectations and remain well positioned to achieve full year guidance. This reflected another strong outperformance from Mulatos and Island Gold, with production guidance for both mines increased for the second consecutive quarter,” said John A. McCluskey, President and Chief Executive Officer.
“We’re also making excellent progress on the exploration and development fronts. At Island Gold, the mill expansion is nearing completion and ongoing exploration success continues to demonstrate further resource growth. We also achieved a major breakthrough at Kirazl?, securing the GSM permit allowing for the start of full scale construction. With a strong cash position, no debt, and growing cash flow from operations, we are well positioned to fund this growth and continue to deliver shareholder value.”
Second Quarter 2018 Highlights
- Produced 126,500 ounces of gold, ahead of guidance of 125,000 ounces and 19% higher than the second quarter of 2017
- Increased production guidance at Island Gold for the second time this year to a range of between 100,000 to 110,000 ounces, an 11% increase from original guidance (based on the mid-point of guidance)
- Increased production guidance at Mulatos for the second time this year to a range of between 170,000 to 180,000 ounces, a 13% increase from original guidance (based on the mid-point of guidance)
- Maintained 2018 Company-wide production guidance of 490,000 to 530,000 ounces of gold, with increased guidance at both Mulatos and Island Gold offset by decreased guidance at Young-Davidson. Company-wide all-in sustaining cost guidance for the year has been maintained at $950 per ounce with lower costs anticipated in the second half of 2018
- Sold 129,272 ounces of gold at an average realized price of $1,307 per ounce for revenues of $168.9 million. Cost of sales of $1,160 per ounce, total cash costs1 of $832 per ounce and all-in sustaining costs (“AISC”)1 of $996 per ounce were all higher than full year guidance as a result of lower production from Young-Davidson in the quarter
- Reported adjusted net earnings1 of $4.9 million or $0.01 per share1, reflecting adjustments for unrealized foreign exchange losses recorded within both deferred taxes and foreign exchange of $15.3 million, as well as other one-time items
- Realized a net loss of $8.9 million, or $0.02 per share
- Generated cash flow from operating activities of $62.5 million ($54.7 million or $0.14 per share, before changes in working capital1), reflecting strong quarterly gold production. In addition, the Company generated $22.4 million in mine-site free cash flow1, and $9.1 million of company-wide free-cash flow1 in the quarter, both ahead of budget
- Increased cash and cash equivalents to $235.1 million up from $231.8 million as of March 31, 2018. The Company remains debt free
- Paid a semi-annual dividend of $0.01 per share, or $3.9 million, to shareholders on April 30, 2018
- As outlined in May, recent exploration results at Island Gold continue to exceed expectations with a significant increase in Mineral Resources anticipated. The Company will be providing an interim Mineral Reserve and Resource update for Island Gold in the third quarter
- Subsequent to quarter-end, announced the receipt of the GSM (Business Opening and Operation) permit and commencement of full construction activities at the Kirazl? project in Turkey
(1) Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release for a description and calculation of these measures.
| Highlight Summary |
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| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Financial Results (in millions) | ||||||||||||
| Operating revenues | $168.9 | $131.3 | $342.0 | $252.3 | ||||||||
| Cost of sales (1) | $150.0 | $109.5 | $294.7 | $219.6 | ||||||||
| Earnings from operations | $9.6 | $15.8 | $28.1 | $18.0 | ||||||||
| Net (loss) earnings | ($8.9) | $2.4 | ($8.3 | ) | $2.5 | |||||||
| Adjusted net earnings (2) | $4.9 | $9.8 | $17.2 | $4.7 | ||||||||
| Cash provided by operations before working capital and cash taxes(2) | $54.7 | $45.1 | $117.3 | $79.3 | ||||||||
| Cash provided by operating activities | $62.5 | $51.4 | $121.3 | $71.5 | ||||||||
| Capital expenditures (sustaining) (2) | $12.1 | $11.1 | $22.8 | $20.4 | ||||||||
| Capital expenditures (growth) (2) | $35.7 | $38.2 | $72.3 | $60.1 | ||||||||
| Capital expenditures (capitalized exploration) (3) | $5.6 | $2.2 | $9.8 | $4.6 | ||||||||
| Operating Results | ||||||||||||
| Gold production (ounces) (4) | 126,500 | 105,900 | 255,400 | 202,100 | ||||||||
| Gold sales (ounces) | 129,272 | 104,023 | 259,317 | 202,778 | ||||||||
| Per Ounce Data | ||||||||||||
| Average realized gold price | $1,307 | $1,262 | $1,319 | $1,244 | ||||||||
| Average spot gold price (London PM Fix) | $1,306 | $1,257 | $1,318 | $1,238 | ||||||||
| Cost of sales per ounce of gold sold (includes amortization) (1) |
$1,160 | $1,053 | $1,136 | $1,083 | ||||||||
| Total cash costs per ounce of gold sold (2) | $832 | $784 | $811 | $805 | ||||||||
| All-in sustaining costs per ounce of gold sold (2) | $996 | $942 | $966 | $977 | ||||||||
| Share Data | ||||||||||||
| Earnings per share, basic | ($0.02) | $0.01 | ($0.02 | ) | $0.01 | |||||||
| Adjusted earnings per share, basic (2) | $0.01 | $0.03 | $0.04 | $0.02 | ||||||||
| Weighted average common shares outstanding (basic) (000’s) | 389,602 | 299,189 | 389,429 | 292,008 | ||||||||
| Financial Position (in millions) | ||||||||||||
| Cash and cash equivalents (5) | $235.1 | $200.8 | ||||||||||
| (1) | Cost of sales includes mining and processing costs, royalties, and amortization expense. | |
| (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 capitalized exploration and Mulatos and Island Gold. | |
| (4) | Gold production from Island Gold has been included in this table for the period subsequent to November 23, 2017 only. Gold production from Island Gold for the three and six months ended June 30, 2017 was 26,110 and 49,882 ounces respectively. | |
| (5) | Comparative Cash and cash equivalents balance as at December 31, 2017. |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2018 | 2017(1) | 2018 | 2017(1) | |||||||||
| Gold production (ounces) | ||||||||||||
| Young-Davidson | 39,100 | 47,300 | 80,100 | 87,700 | ||||||||
| Mulatos | 50,600 | 41,000 | 96,600 | 81,000 | ||||||||
| Island Gold (1) | 26,700 | — | 54,800 | — | ||||||||
| El Chanate | 10,100 | 17,600 | 23,900 | 33,400 | ||||||||
| Gold sales (ounces) | ||||||||||||
| Young-Davidson | 42,006 | 46,368 | 86,796 | 90,195 | ||||||||
| Mulatos | 49,326 | 40,265 | 93,985 | 78,940 | ||||||||
| Island Gold (1) | 27,257 | — | 54,760 | — | ||||||||
| El Chanate | 10,683 | 17,390 | 23,776 | 33,643 | ||||||||
| Cost of sales (in millions)(2) | ||||||||||||
| Young-Davidson | $56.7 | $51.6 | $113.7 | $101.9 | ||||||||
| Mulatos | $49.2 | $36.3 | $92.8 | $76.3 | ||||||||
| Island Gold (1) | $28.0 | — | $55.5 | — | ||||||||
| El Chanate | $16.1 | $21.6 | $32.7 | $41.4 | ||||||||
| Cost of sales per ounce of gold sold (includes amortization) | ||||||||||||
| Young-Davidson | $1,350 | $1,113 | ||||||||||