Strong outlook with multi-year production guidance increased, capital guidance maintained, and all-in sustaining costs expected to decrease 18% over the next three years driving strong margin expansion
TORONTO, Jan. 12, 2023 (GLOBE NEWSWIRE) -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported fourth quarter and annual 2022 production. The Company also provided updated three-year production and operating guidance.

“With our strongest performance of the year coming in the fourth quarter, including record production, we met full year 2022 production guidance. We also expect to meet cost guidance with a significant decrease in costs in the second half of the year driven by the ramp up of low-cost production from La Yaqui Grande. We expect this trend to continue over the next several years with a 9% increase in production and 5% decrease in all-in sustaining costs in 2023 driven by a full year of production from La Yaqui Grande, and strong ongoing performances at our Canadian operations,” said John A. McCluskey, President and Chief Executive Officer.

“As outlined in our updated three-year guidance, our strong outlook remains intact. We have increased our production guidance for 2023 and 2024, reflecting a stronger outlook at both Mulatos and Island Gold, and we remain on track to deliver a substantial decrease in costs over the next three years. With higher production and lower costs, we expect to generate growing free cash flow while funding the Phase 3+ Expansion at Island Gold. Once completed in 2026, we expect this to drive a significant increase in production, a further reduction in costs and substantial free cash flow growth,” Mr. McCluskey added.

2023 – 2025 Guidance Summary: Operating Mines

2023 2024 2025
Current Previous Current Previous Current

Total Gold Production (000 oz) 480 - 520 460 - 500 470 - 510 460 - 500 470 - 510

Total Cash Costs (1) ($/oz) $825 - $875 $775 - $875 $675 - $775 $650 - $750 $650 - $750

All-in Sustaining Costs (1),(2) ($/oz) $1,125 - $1,175 $1,075 - $1,175 $975 - $1,075 $950 - $1,050 $950 - $1,050

Total sustaining & growth capital (1),(3)
(Operating mines; ex. exploration)
($ millions) $280 - 320 $280 - 320 $290 - 330 $290 - 330 $290 - 330


(1) Refer to the “Non-GAAP Measures and Additional GAAP” disclosure at the end of this press release for a description of these measures.
(2) All-in sustaining cost guidance for 2024 and 2025 includes the same assumptions for G&A and stock based compensation as included in 2023.
(3) Sustaining and growth capital guidance is for producing mines and excludes capital for Lynn Lake, other development projects, and capitalized exploration. Growth capital and total capital were revised higher by $60m in each of 2023 and 2024 with the release of the Island Gold Phase 3+ Expansion Study on June 28, 2022.

Fourth Quarter and Full Year 2022 Operating Highlights

Record quarterly production: of 134,200 ounces of gold, a 9% increase from the third quarter. This was driven by solid performances from all three operations, including a substantial increase at Mulatos with the ramp up of La Yaqui Grande
Met 2022 annual production guidance: with the strong fourth quarter performance, production of 460,400 ounces was in line with annual guidance and consistent with 2021
Costs expected to meet 2022 guidance: total cash costs and all-in sustaining costs (“AISC”) for 2022 have not been finalized but are expected to decrease in the fourth quarter to the lowest levels of the year. Full year costs are expected to be in line with guidance for total cash costs of between $875 and $925 per ounce and AISC of between $1,190 and $1,240 per ounce, a solid performance given industry-wide inflationary pressures
Record revenues: sold 133,164 ounces of gold in the fourth quarter at an average realized price of $1,741 per ounce for record revenues of $232 million. Full year sales totaled 456,574 ounces of gold at an average realized price of $1,799 per ounce for revenues of $821 million
Stronger cash position: ended the year with approximately $130 million of cash and cash equivalents, up from $117 million as of September 30, 2022. The Company remains debt-free

Fourth Quarter and Full Year 2022 Operating Results

Q4 2022 Q4 2021 2022 2021 2022 Guidance
Gold production (ounces)
Young-Davidson 44,500 51,900 192,200 195,000 185,000 – 200,000
Island Gold 40,600 37,500 133,700 140,900 125,000 – 135,000
Mulatos District 49,100 23,100 134,500 121,300 130,000 – 145,000
Total gold production 134,200 112,500 460,400 457,200 440,000 – 480,000

Three Year Guidance Overview 1 – Operating Mines

Multi-year production guidance increased with 9% growth expected in 2023: production is expected to increase to between 480,000 and 520,000 ounces in 2023 and remain at similar levels in 2024 and 2025. Production guidance was increased for 2023 and 2024 with stronger production expected from Island Gold and Mulatos
Additional upside potential in 2025 with further growth expected in 2026: newly issued 2025 guidance excludes the higher-grade Puerto Del Aire (“PDA”) project which represents potential production upside at Mulatos. This upside is expected to be outlined in a new development plan for PDA to be completed in the second half of 2023. A further increase in production is expected in 2026 with the completion of the Phase 3+ Expansion at Island Gold
Total cash costs expected to decrease 6% in 2023 to between $825 and $875 per ounce, and 22% by 2025 to $650 to $750 per ounce: costs are expected to decrease substantially over the next three years driven by low-cost production growth from La Yaqui Grande and Island Gold. A further improvement in costs is expected in 2026 following the completion of the Phase 3+ Expansion. Cost guidance for 2023 and 2024 increased a modest 3% on average over previous guidance reflecting industry-wide cost pressures
All-in sustaining costs expected to decrease 5% to $1,125 to $1,175 per ounce in 2023, and 18% by 2025 to $950 to $1,050 per ounce: consistent with total cash costs, AISC are expected to decrease significantly over the next three years with a further improvement expected in 2026 following the completion of the Phase 3+ Expansion at Island Gold
Total capital guidance maintained and stable over the next three years: total capital (excluding capitalized exploration) is expected to range between $292 to $332 million in 2023, consistent with 2022 guidance. This includes $280 to $320 million of capital at producing mines, with a similar rate expected in 2024, both unchanged from previous guidance. Capital spending for producing mines is expected to remain at similar levels in 2025 and decrease significantly in 2026 following the completion of the Phase 3+ Expansion. The total capital budget for 2023 includes:
Sustaining capital guidance of $105 to $115 million: up approximately 13% from 2022, primarily reflecting higher sustaining capital at Island Gold. Sustaining capital is expected to remain at similar levels through 2025
Growth capital guidance for producing mines of $175 to $205 million: down 11% from 2022 with the increase in growth capital at Island Gold more than offset by the decrease at Mulatos with the completion of construction at La Yaqui Grande in 2022
Exploration budget of $47 million: similar to expected 2022 spending with the majority allocated towards following up on ongoing exploration success at Island Gold and the Mulatos District, including at the higher-grade underground PDA deposit
Fully funded growth with strong free cash flow: higher production and declining costs are expected to drive strong free cash flow over the next three years while continuing to fund the Phase 3+ Expansion at Island Gold. A further increase in free cash flow is expected in 2026 with the completion of the Phase 3+ Expansion
Strong ongoing returns to shareholders: through the existing $0.10 per share annualized dividend (paid quarterly) and share repurchases under the Normal Course Issuer Bid. In 2022, the Company returned $48 million to shareholders between dividends and share repurchases, consistent with 2021
1 Guidance statements in this release are forward-looking information. See the Assumptions and Sensitives section of this release along with the cautionary note at the end of this release.


Upcoming 2023 catalysts

2022 year-end Mineral Reserve and Resource update: February 2023
Island Gold and Mulatos exploration updates: ongoing
Lynn Lake Environmental Impact Statement Approval and updated Feasibility Study: H1 2023
PDA development plan: H2 2023

2023 Guidance

2023 Guidance 2022 Guidance
Young-Davidson Island Gold Mulatos District Lynn Lake Total Total
Gold production (000 oz) 185 - 200 120 - 135 175 - 185 480 - 520 460 (actual)
Cost of sales, including
amortization ($ millions)(2) $625 $610
Cost of sales, including
amortization ($/oz) ( 2 ) $1,250 $1,325
Total cash costs ($/oz) (1) $900 - 950 $600 - 650 $900 - 950 - $825 - 875 $875 - 925
All-in sustaining costs ($/oz) (1) $1,125 - 1,175 $1,190 - 1,240
Mine-site all-in sustaining costs ($/oz) (1)( 3 ) $1,175 - 1,225 $950 - 1,000 $950 - 1,000 -
Capital expenditures ($ millions)
Sustaining capital(1) $50 - 55 $45 - 50 $10 - $105 - 115 $90 - 105
Growth capital(1) $5 - 10 $165 - 185 $5 - 10 $12 $187- 217 $215 - 240
Total Sustaining and Growth Capital (1) ($ millions) $55 - 65 $210 - 235 $15 - 20 $ 12 $292 - 332 $305 - 345
Capitalized exploration(1) ($ millions) $5 $11 $4 $5 $ 25 $ 27
Total capital expenditures and capitalized exploration ( 1) ($ millions) $60 - 70 $221 - 246 $19 - 24 $ 17 $317 - 357 $332 - 372


(1) Refer to the "Non-GAAP Measures and Additional GAAP" disclosure at the end of this press release for a description of these measures.
(2) Cost of sales includes mining and processing costs, royalties, and amortization expense, and is calculated based on the mid-point of total cash cost guidance.
(3) For the purposes of calculating mine-site all-in sustaining costs at individual mine sites, the Company does not include an allocation of corporate and administrative and share based compensation expenses to the mine sites.

Gold production in 2023 is expected to increase approximately 9% over 2022 (based on the mid-point of guidance) driven by higher production from the Mulatos District, with La Yaqui Grande contributing a full year of production. Production guidance for 2023 has increased 4% from previous three-year guidance provided in January 2022 reflecting stronger outlooks for both Mulatos and Island Gold. Production is expected to be relatively balanced between the first and second half of the 2023.

Total cash costs and AISC are expected to decrease 6% and 5%, respectively, from 2022 (based on the mid-point of guidance) reflecting a full year of low-cost production from La Yaqui Grande. Costs are expected to decrease through the year, primarily driven by increasing grades and declining costs at Young-Davidson.

Capital spending is expected to decrease slightly from 2022 and is consistent with previous three-year guidance for 2023. Approximately 55% of full year capital is expected to be spent during the first half of the year. Capital spending and costs are expected to decline in the second half of the year, which is anticipated to drive stronger free cash flow.

Despite significant industry-wide inflationary pressures, the Company has maintained 2023 capital guidance and the upper end of the range of its total cash cost and AISC guidance. Furthermore, the Company remains on track to deliver a substantial decrease in costs over the next three years highlighting the strength and quality of its asset base.


2023 – 2025 Guidance: Operating Mines

2023 2024 2025
Current Previous Current Previous Current
Gold Production (000 oz)
Young-Davidson 185 - 200 185 - 200 185 - 200 185 - 200 185 - 200
Island Gold 120 - 135 115 - 125 145 - 160 140 - 155 175 - 190
Mulatos District 175 - 185 160 - 175 140 - 150 135 - 145 110 - 120
Total Gold Production (000 oz) 480 - 520 460 - 500 470 - 510 460 - 500 470 - 510

Total Cash Costs (1) ($/oz) $825 - $875 $775 - $875 $675 - $775 $650 - $750 $650 - $750
All-in Sustaining Costs (1),(2) ($/oz) $1,125 - $1,175 $1,075 - $1,175 $975 - $1,075 $950 - $1,050 $950 - $1,050

Sustaining capital (1),(3) ($ millions) $105 - 115 $95 - 110 $105 - 115 $95 - 110 $105 - 115
Growth capital (1), (3), ( 4 ) ($ millions) $175 - 205 $185 - 210 $185 - 215 $195 - 220 $185 - 215
Total sustaining & growth capital (1),(3) (Operating mines; ex. exploration)
($ millions) $280 - 320 $280 - 320 $290 - 330 $290 - 330 $290 - 330


(1) Refer to the “Non-GAAP Measures and Additional GAAP” disclosure at the end of this press release for a description of these measures.
(2) All-in sustaining cost guidance for 2024 and 2025 includes the same assumptions for G&A and stock based compensation as included in 2023.
(3) Sustaining and growth capital guidance is for producing mines and excludes capital for Lynn Lake and other development projects, and capitalized exploration.
(4) Growth capital was revised higher by $60m in each of 2023 and 2024 to reflect the Island Gold Phase 3+ Expansion Study released on June 29, 2022.

Gold production is expected to remain at similar levels in 2024 and 2025, with increasing production from Island Gold offsetting a decrease in production at Mulatos. Consistent with 2023, production guidance for 2024 was increased reflecting stronger outlooks for both Island Gold and Mulatos. Production guidance for 2025 excludes any production from the higher-grade PDA project which represents potential upside within the Mulatos District. This potential upside is expected to be outlined in a new development plan for the project to be completed in the second half of 2023. The completion of the Phase 3+ Expansion at Island Gold is expected to drive a further increase in production in 2026, with additional growth potential from Lynn Lake beyond that.

Total cash costs and AISC are expected to improve significantly in 2024, decreasing 15% and 11%, respectively, from 2023. This reflects a further decrease in costs from the Mulatos District, with La Yaqui Grande providing the majority of production, as well as lower costs at Island Gold, reflecting the mining and processing of higher grades. A growing contribution of low-cost production from Island Gold is expected to drive a further decrease in costs in 2025 such that total cash costs and AISC are expected to decrease 22% and 18%, respectively, from 2022. Costs are expected to decrease further in 2026 following the completion of the Phase 3+ Expansion at Island Gold.

Capital spending at existing operations (excluding Lynn Lake) is expected to decrease slightly in 2023, primarily driven by lower capital at Mulatos with the completion of construction of La Yaqui Grande in 2022, offset in-part by a higher rate of capital spending on the Phase 3+ Expansion at Island Gold. Capital spending at existing operations is expected to remain at similar levels in 2024 and 2025 and then decrease substantially following the completion of the Phase 3+ Expansion at Island Gold in 2026. Sustaining capital spending at existing operations is expected to remain relatively stable over the next several years.

see & read more on
https://www.alamosgold.com/news-and-events/default.aspx