Alamos Gold Inc. (
TSX:AGI;
NYSE:AGI) (“Alamos” or the “Company”) is pleased to
announce initial gold production from the La Yaqui Grande mine,
following the completion of construction this month, ahead of
schedule. Stacking rates continue to ramp up with leaching
activities beginning earlier in June.
To mark the occasion, the Company held a ceremony at site with
President and Chief Executive Officer John A. McCluskey, members of
the Alamos Gold Board of Directors, and employees from the La Yaqui
Grande mine.
“This represents a significant achievement with construction of
La Yaqui Grande having been completed ahead of schedule while
navigating a challenging environment over the past few years with
COVID-19. On behalf of Alamos, I would like to congratulate our
entire team at Mulatos. La Yaqui Grande represents another in a
long line of discoveries that have continued to extend the mine
life of the overall Mulatos Complex since it began producing in
2005. Given its higher grades and recoveries, La Yaqui Grande
underpins a strong outlook for Mulatos with higher production and
lower costs driving growing free cash flow in the second half of
this year and beyond,” said Mr. McCluskey.
A total of 991 ounces of gold were produced from the initial
pour. La Yaqui Grande is expected to produce approximately 3,000
ounces in June which is already factored into second quarter
consolidated production guidance of between 100,000 and 110,000
ounces of gold. Consistent with full year 2022 guidance, stacking
rates at La Yaqui Grande are expected to ramp up through the second
half of the year driving production higher and costs lower at
Mulatos and company-wide starting in the third quarter. Combined
with lower capital spending with construction of La Yaqui Grande
completed, Mulatos is expected to generate strong mine-site free
cash flow starting in the second half of the year. Costs are
expected to continue to improve into 2023 reflecting a full year of
production from La Yaqui Grande.
First announced in July 2020 as Alamos Gold’s next low-cost,
high-return project in the Mulatos District, this large-scale
construction project will extend the life of mine for at least five
years thus sustaining the Company’s presence and importance in the
production of gold in the state of Sonora, Mexico. La Yaqui Grande
was completed ahead of schedule generating more than 1,000 jobs
during the construction phase and will continue to sustain 450
direct jobs.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/14bcb23f-ab0c-4e1d-83fa-2d656cfe80e2
A ribbon cutting marked the launch of operations at La Yaqui
Grande. From left to right: Construction Administrator Monica
Rodriguez, Mexico Projects Director Marcelo Martinez, Alamos Gold
President and CEO John McCluskey, Safety Supervisor Monica Suarez,
Sahuaripa Mayor Luis Carlos Galindo, and Mine Trainer Vianney
Barragan.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/3dc02b51-dc99-48ca-a362-24cfbe7c1015
La Yaqui Grande’s first bar of gold.
About Alamos
Alamos is a Canadian-based intermediate gold producer with
diversified production from three operating mines in North America.
This includes the Young-Davidson and Island Gold mines in northern
Ontario, Canada and the Mulatos mine in Sonora State, Mexico.
Additionally, the Company has a significant portfolio of
development stage projects in Canada, Mexico, Turkey, and the
United States. Alamos employs more than 1,700 people and is
committed to the highest standards of sustainable development. The
Company’s shares are traded on the TSX and NYSE under the symbol
“AGI”.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Scott K. Parsons |
|
Vice President, Investor Relations |
|
(416) 368-9932 x 5439 |
|
All amounts are in United States dollars, unless otherwise
stated.
The TSX and NYSE have not reviewed and do not accept
responsibility for the adequacy or accuracy of this release.
Cautionary Note
This news release contains or incorporates by
reference “forward-looking statements” and “forward-looking
information” as defined under applicable Canadian and U.S.
securities laws. All statements, other than statements of
historical fact, which address events, results, outcomes or
developments that the Company expects to occur are, or may be
deemed to be, forward-looking statements and are generally, but not
always, identified by the use of forward-looking terminology such
as "expect", “is expected”, "will", “plan”, “planned”, “outlook” or
variations of such words and phrases and similar expressions or
statements that certain actions, events or results “may", “could”,
“would”, "might" or "will" be taken, occur or be achieved or the
negative connotation of such terms. Forward-looking statements
contained in this news release are based on expectations, estimates
and projections as of the date of this news release.
Forward-looking statements in this news release
include, but may not be limited to, information as to strategy,
plans, expectations or future financial or operating performance
such as: expectations pertaining to the continued ramp up of
stacking rates at the La Yaqui Grande mine; expected mine life at
the overall Mulatos Complex; expectations pertaining to production
amounts and timing of production from the La Yaqui Grande mine; the
expected reduction in costs at Mulatos and company-wide;
expectations around free cash flow, mine-site free cash flow and
capital spending; expectations around grades and recovery rates;
expected sustainability of the Company’s presence and importance in
the production of gold in the state of Sonora, Mexico; expected
number of jobs that the project will continue to sustain and other
statements that express management’s expectations or estimates of
future plans and performance.
The Company cautions that forward-looking
statements are necessarily based upon a number of factors and
assumptions that, while considered reasonable by management at the
time of making such statements, are inherently subject to
significant business, economic, technical, legal, political and
competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking statements, and undue reliance
should not be placed on such statements and information.
Such factors and assumptions underlying the
forward-looking statements in this news release, include, but are
not limited to: changes to current estimates of Mineral Reserves
and Resources; changes to production estimates (which assume
accuracy of projected ore grade, mining rates, recovery timing and
recovery rate estimates and may be impacted by unscheduled
maintenance, weather issues, labour and contractor availability and
other operating or technical difficulties); operations may be
exposed to new diseases, epidemics and pandemics, including the
continued and potential effects of COVID-19 and its impact on the
broader market and the trading price of the Company’s shares;
provincial, state and federal orders or mandates (including with
respect to mining operations generally or auxiliary businesses or
services required for the Company’s operations) in Canada, Mexico,
the United States and Turkey; the duration of regulatory responses
to COVID-19 and government and the Company’s attempts to reduce the
spread of COVID-19 which may affect many aspects of the Company’s
operations including the ability to transport personnel to and from
site, contractor and supply availability and the ability to sell or
deliver gold doré bars; fluctuations in the price of gold or
certain other commodities such as, diesel fuel, natural gas and
electricity; changes in foreign exchange rates (particularly the
Canadian dollar, U.S. dollar, Mexican peso and Turkish Lira); the
impact of inflation; changes in the Company’s credit rating; any
decision to declare a dividend; employee and community relations;
labour and contractor availability (and being able to secure the
same on favourable terms); litigation and administrative
proceedings; disruptions affecting operations; availability of and
increased costs associated with mining inputs and labour; inherent
risks and hazards associated with mining and mineral processing
including environmental hazards, industrial accidents, unusual or
unexpected formations, pressures and cave-ins; the risk that
the Company’s mines may not perform as planned; uncertainty
with the Company's ability to secure additional capital to execute
its business plans; the speculative nature of mineral exploration
and development, including the risks of obtaining and maintaining
necessary licenses, permits and authorizations, contests over title
to properties; expropriation or nationalization of property;
political or economic developments in Canada, Mexico, the United
States, Turkey and other jurisdictions in which the Company may
carry on business in the future; increased costs and risks related
to the potential impact of climate change; changes in national and
local government legislation, controls or regulations (including
tax and employment legislation) in jurisdictions in which the
Company does or may carry on business in the future; the costs and
timing of construction and development of new deposits; risk of
loss due to sabotage, protests and other civil disturbances;
disruptions in the maintenance or provision of required
infrastructure and information technology systems, the impact of
global liquidity and credit availability and the values of assets
and liabilities based on projected future cash flows; risks arising
from holding derivative instruments; and business opportunities
that may be pursued by the Company.
For a more detailed discussion of such risks and
other factors that may affect the Company's ability to achieve the
expectations set forth in the forward-looking statements contained
in this news release, see the Company’s latest 40-F/Annual
Information Form and Management’s Discussion and Analysis, each
under the heading “Risk Factors” available on the SEDAR website at
www.sedar.com or on EDGAR at www.sec.gov. The foregoing should be
reviewed in conjunction with the information and risk factors and
assumptions found in this news release.
The Company disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
except as required by applicable law.
Cautionary Note to U.S.
Investors
Alamos prepares its disclosure in accordance
with the requirements of securities laws in effect in Canada.
Unless otherwise indicated, all Mineral Resource and Mineral
Reserve estimates included in this document have been prepared in
accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects (“NI 43-101”) and the Canadian
Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the “CIM Standards”). NI
43-101 is a rule developed by the Canadian Securities
Administrators, which established standards for all public
disclosure an issuer makes of scientific and technical information
concerning mineral projects. Mining disclosure in the United States
was previously required to comply with SEC Industry Guide 7 (“SEC
Industry Guide 7”) under the United States Securities Exchange Act
of 1934, as amended. The U.S. Securities and Exchange Commission
(the “SEC”) has adopted final rules, to replace SEC Industry Guide
7 with new mining disclosure rules under sub-part 1300 of
Regulation S-K of the U.S. Securities Act (“Regulation S-K 1300”)
which became mandatory for U.S. reporting companies beginning with
the first fiscal year commencing on or after January 1, 2021. Under
Regulation S-K 1300, the SEC now recognizes estimates of “Measured
Mineral Resources”, “Indicated Mineral Resources” and “Inferred
Mineral Resources”. In addition, the SEC has amended its
definitions of “Proven Mineral Reserves” and “Probable Mineral
Reserves” to be substantially similar to international
standards.
Investors are cautioned that while the above
terms are “substantially similar” to CIM Definitions, there are
differences in the definitions under Regulation S-K 1300 and the
CIM Standards. Accordingly, there is no assurance any mineral
reserves or mineral resources that the Company may report as
“proven mineral reserves”, “probable mineral reserves”, “measured
mineral resources”, “indicated mineral resources” and “inferred
mineral resources” under NI 43-101 would be the same had the
Company prepared the mineral reserve or mineral resource estimates
under the standards adopted under Regulation S-K 1300. U.S.
investors are also cautioned that while the SEC recognizes
“measured mineral resources”, “indicated mineral resources” and
“inferred mineral resources” under Regulation S-K 1300, investors
should not assume that any part or all of the mineralization in
these categories will ever be converted into a higher category of
mineral resources or into mineral reserves. Mineralization
described using these terms has a greater degree of uncertainty as
to its existence and feasibility than mineralization that has been
characterized as reserves. Accordingly, investors are cautioned not
to assume that any measured mineral resources, indicated mineral
resources, or inferred mineral resources that the Company reports
are or will be economically or legally mineable.
Cautionary non-GAAP Measures and
Additional GAAP Measures
Note that for purposes of this section, GAAP
refers to IFRS. The Company believes that investors use certain
non-GAAP and additional GAAP measures as indicators to assess gold
mining companies. They are intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared with GAAP.
“Cash flow from operating activities before
changes in non-cash working capital” is a non-GAAP performance
measure that could provide an indication of the Company’s ability
to generate cash flows from operations, and is calculated by adding
back the change in non-cash working capital to “Cash provided by
(used in) operating activities” as presented on the Company’s
consolidated statements of cash flows. “Free cash flow” is a
non-GAAP performance measure that is calculated as cash flows from
operations net of cash flows invested in mineral property, plant
and equipment and exploration and evaluation assets as presented on
the Company’s consolidated statements of cash flows and that would
provide an indication of the Company’s ability to generate cash
flows from its mineral projects. “Mine site free cash flow” is a
non-GAAP measure which includes cash flow from operating activities
at, less capital expenditures at each mine site. Return on Equity
is defined as Earnings from Continuing Operations divided by the
average Total Equity for the current and previous year. “Mining
cost per tonne of ore” and “Cost per tonne of ore” are non-GAAP
performance measures that could provide an indication of the mining
and processing efficiency and effectiveness of the mine. These
measures are calculated by dividing the relevant mining and
processing costs and total costs by the tonnes of ore processed in
the period. “Cost per tonne of ore” is usually affected by
operating efficiencies and waste-to-ore ratios in the period.
“Total cash costs per ounce”, “all-in sustaining costs per ounce”,
and “mine-site all-in sustaining costs” as used in this analysis
are non-GAAP terms typically used by gold mining companies to
assess the level of gross margin available to the Company by
subtracting these costs from the unit price realized during the
period. These non-GAAP terms are also used to assess the ability of
a mining company to generate cash flow from operations. There may
be some variation in the method of computation of these metrics as
determined by the Company compared with other mining companies. In
this context, “total cash costs” reflects mining and processing
costs allocated from in-process and doré inventory associated and
associated royalties with ounces of gold sold in the period. Total
cash costs per ounce are exclusive of exploration costs. “All-in
sustaining costs per ounce” include total cash costs, exploration,
corporate and administrative, share based compensation and
sustaining capital costs. “Mine-site all-in sustaining costs”
include total cash costs, exploration, and sustaining capital costs
for the mine-site, but exclude an allocation of corporate and
administrative and share based compensation.
Additional GAAP measures that are presented on
the face of the Company’s consolidated statements of comprehensive
income and are not meant to be a substitute for other subtotals or
totals presented in accordance with IFRS, but rather should be
evaluated in conjunction with such IFRS measures. This includes
“Earnings from operations”, which is intended to provide an
indication of the Company’s operating performance, and represents
the amount of earnings before net finance income/expense, foreign
exchange gain/loss, other income/loss, and income tax expense.
Non-GAAP and additional GAAP measures do not have a standardized
meaning prescribed under IFRS and therefore may not be comparable
to similar measures presented by other companies. A reconciliation
of historical non-GAAP and additional GAAP measures are available
in the Company’s latest Management’s Discussion and Analysis
available online on the SEDAR website at www.sedar.com or on EDGAR
at www.sec.gov and at www.alamosgold.com.
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