Alamos Gold, Inc. Q2 FY2025 earnings call

• Second quarter production totaled 137,000 ounces, in line with quarterly guidance and up 10% from the first quarter.
• All-in sustaining costs decreased 18% compared to the first quarter, expected to decline further in the second half of the year.
• Released the base case life of mine plan for the Island Gold District, integrating Island Gold underground and Magino open pit operations, expecting it to be one of the largest, lowest cost and most profitable gold mines in Canada.
• Expansion study underway, evaluating expansion to 20,000 tonnes per day and incorporating more mineral reserves through infill drilling.
• Regional exploration program successful in intersecting high-grade gold mineralization near past producing mines, highlighting significant potential across the 60,000 hectare land package.
• Phase 3+ expansion continues to progress well, with the shaft sink at 92% of its ultimate planned depth, and other progress made on bin house cladding, paste plant, and administrative complex earthworks.

Island Gold District

• Second quarter production totaled 64,400 ounces, a 9% increase over the first quarter, driven by higher combined milling rates from the Island Gold and Magino mills.

Magino mill

• Milling rates increased 18% from the first quarter to average 8,500 tonnes per day, with throughput rates improving to average approximately 9,500 tonnes per day in the second half of July and on track to reach 11,200 tonnes per day later in the quarter.

Young-Davidson

• Produced 38,700 ounces, a 9% increase from the first quarter, with mine site free cash flow increasing to $52 million, more than double the first quarter. However, earlier issues with groundwater inflow and power outages impacted mining rates but are expected to be resolved.

Mulatos District

• Delivered a solid quarter, producing its 3 millionth ounce of gold over its 20-year history, with production totaling 34,100 ounces, a 12% increase over the first quarter, and costs decreased 18% compared to the first quarter.

• Full year all-in sustaining costs are expected to be 12% higher than original guidance, with approximately 40% of that increase attributable to external factors.
• Expect significant improvement in production and costs in the second half of the year, with production and cost trends expected to continue growing and declining over the next several years.
• Q3 production guidance is between 145,000 and 155,000 ounces, with Q4 expected to be even higher. Key drivers include higher milling rates at Young-Davidson, ramping up at Island Gold with Magino mill, and strong grades at Mulatos District.

• Young-Davidson was impacted by higher-than-average snowfall and precipitation leading to increased groundwater inflow and power outages from storms, causing nearly one week of downtime in May.
• Canadian weather conditions affected operations at Young-Davidson and Island Gold in the first half of the year, impacting cost guidance.

Q: How confident are you in meeting the production guidance comfortably and what levers you have within your portfolio to make sure the production guidance remains on track?

A: John McCluskey stated they've been remarkably accurate over 14 consecutive quarters up to Q1 of this year, got off to a slow start due to Canadian conditions but are very confident in production guidance. Greg Fisher mentioned key drivers include higher milling rates at Young-Davidson, ramping up at Island Gold with Magino mill, and strong grades at Mulatos District.

Q: Has the higher levels of groundwater due to the spring melt at Young-Davidson been fully resolved?

A: Luc Guimond stated it has been resolved, with additional pumping capacity added and enhanced regional watershed management practices to prevent recurrence.

Q: What should we expect the throughput profile to be through the rest of the quarter at Magino mill?

A: Luc Guimond said it will be a gradual ramp-up through the quarter, but expect to hit stride in Q4, with Q3 running around 1,300 tonnes per day and Q4 at about 1,400 tonnes per day.