Alamos Reports Fourth Quarter 2018 Production and Provides 2019 Outlook

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Algemeen advies 15/01/2019 06:45
TORONTO, Jan. 14, 2019 (GLOBE NEWSWIRE) -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported fourth quarter and annual 2018 production. The Company also provided 2019 production and operating guidance.

“Alamos produced a record 505,000 ounces of gold in 2018, meeting production guidance and marking an 18% increase from 2017. This was driven by strong performances from Mulatos and Island Gold, the latter setting a new record for production and continuing to demonstrate strong potential for growth in mineral reserves and resources,” said John A. McCluskey, President and Chief Executive Officer.

“We expect a similar rate of production in 2019 with lower costs driving stronger margins. Lower costs are expected to result from improvements at Young-Davidson and low-cost production growth at Island Gold. Looking forward to the second half of 2020, we expect Alamos to transition from reinvesting in growth to generating strong free cash flow. With long-life production from our existing operations at declining costs, a leading portfolio of high return growth projects, and a strong, debt-free balance sheet, Alamos is well positioned to deliver on this growth,” Mr. McCluskey added.

Fourth Quarter and Full Year 2018 Operating Highlights
Record annual production: Met guidance with record production of 505,000 ounces of gold in 2018, up 18% from the previous record in 2017, reflecting the inclusion of Island Gold for the full year
Strong fourth quarter: Produced 125,600 ounces of gold in the fourth quarter, an increase from the third quarter reflecting a stronger performance from Young-Davidson and record production from Island Gold
Costs expected to meet guidance: Total cash costs and all-in sustaining costs for 2018 have not been finalized but are expected to be consistent with revised full year guidance of $810 and $990 per ounce, respectively. Costs in the fourth quarter are expected to be lower than in the first nine months of 2018
Record sales: Sold a record 131,164 ounces of gold in the fourth quarter at an average realized price of $1,244 per ounce, $17 per ounce above the average London PM Fix, for revenues of approximately $163 million
Received Schedule 2 Amendment for new tailings facility at Young-Davidson: Schedule 2 Amendment received from the Federal government in December 2018, securing tailings capacity for all existing Mineral Reserves and Resources at Young-Davidson
Successful permitting at Cerro Pelon: Received Environmental Impact Assessment (“MIA”) and Change of Land Use (“CUS”) approval in the fourth quarter of 2018 and commenced full scale construction of the high return Cerro Pelon project

2019 Guidance Overview
Stable production: Production guidance of 480,000 to 520,000 ounces of gold, consistent with 2018 production
Lower costs to drive stronger margins: Consolidated total cash cost guidance of $710 to $750 per ounce, down 10% from revised 2018 guidance of $810 per ounce. All-in sustaining cost guidance of $920 to $960 per ounce, down 5% from revised 2018 guidance of $990 per ounce. Excluding El Chanate, all-in sustaining costs are expected to be $925 per ounce in 2019 (based on mid-point of guidance)
Growth capital focused on new production: Total capital budget of $290 to $315 million, up from revised 2018 guidance of $217 to $236 million reflecting the construction of two new mines, Kirazl? in Turkey, and Cerro Pelon in Mexico. The capital budgets for Young-Davidson and Island Gold are consistent with 2018. The Company expects a reduced rate of capital spending following the completion of the lower mine expansion at Young-Davidson and construction of Kirazl? in 2020
Peer-leading, debt-free balance sheet and stronger cash flow to fund growth: The Company expects to fund the expansion of its existing operations through cash flow from operations with development of Kirazl? to be funded from the balance sheet. With approximately $206 million of cash and no debt at the end of 2018, Alamos is well positioned to fund this growth
Strong exploration budget: Global exploration budget of $33 million, consistent with 2018, including $19 million budgeted at Island Gold to follow up on ongoing exploration success
Corporate G&A among lowest in peer group: Corporate and administrative expenses are expected to total $20 million (excluding share-based compensation), or $40 per ounce (based on the mid-point of guidance), among the lowest within the intermediate gold producer peer group

Outlook to 2021
Production growth to over 600,000 ounces per year in 2021: Combined annual gold production is expected to be approximately 500,000 ounces per year in 2019 and 2020, increasing to over 600,000 ounces in 2021 reflecting a full year of production from Kirazl?
Declining cost profile: Consolidated total cash costs and all-in sustaining costs are expected to decrease substantially in 2021 driven by lower costs at each of Island Gold, Mulatos and Young-Davidson, the latter reflecting the completion of the lower mine expansion, as well as new low-cost production from Kirazl?
Capital spending to trend lower resulting in strong free cash flow growth starting in H2 2020: Capital spending is expected to trend lower in 2020 and 2021 reflecting the completion of both the lower mine at Young-Davidson and construction of Kirazl?, resulting in strong free cash flow growth starting in the second half of 2020
Increasing returns to shareholders: The Company expects to return increasing value to shareholders as it generates higher levels of free cash flow in the second half of 2020 and beyond

Fourth Quarter and Full Year 2018 Operating Results
Three months ended Twelve months ended
December 31, 2018 December 31, 2017 December 31, 2018 December 31,2017
Gold production (ounces)
Young-Davidson 50,900 56,500 180,000 200,000
Island Gold (1) 29,000 9,000 105,800 9,000
Mulatos 35,600 42,700 175,500 160,000
El Chanate 10,100 12,100 43,700 60,400
Total gold production 125,600 120,300 505,000 429,400

(1) Operating results from Island Gold have been included from November 23, 2017 following completion of the Richmont Mines acquisition. Including results prior to the completion of the acquisition, Island Gold produced 22,100 ounces of gold in the fourth quarter of 2017 and 98,600 ounces for the full year.

2019 Guidance

The Company expects a similar rate of production as 2018 with lower costs driven by operational improvements at Young-Davidson and low-cost production growth at Island Gold reflecting higher throughput rates and grades. Production rates are expected to be similar in the first and second half of the year, while costs and capital are expected to decline through the year driving stronger mine-site free cash flow in the second half of the year.

see & read more on
https://www.alamosgold.com/news-and-media/news-releases/news-releases-details/2019/Alamos-Reports-Fourth-Quarter-2018-Production-and-Provides-2019-Outlook/default.aspx



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