Alamos posts first-quarter net loss as gold production slumps 21%, says on track to meet 2022 guidance

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(Kitco News) – Alamos Gold (TSX: AGI) announced on Wednesday that the company produced 98,900 ounces of gold in the first quarter of 2022, down 21% from the first quarter of 2021 (125,800 ounces) and in line with forecast for the first quarter.

“As expected, gold production is expected to increase over the remainder of the year, reflecting higher grades at Island Gold in the second quarter and with La Yaqui Grande on track for initial production in the third quarter,” said the company said in a press release. Release.

Alamos added that, as previously reported, first quarter 2022 total cash costs of $992 per ounce, AISC of $1,360 per ounce and cost of sales of $1,376 per ounce were all above cost guidance. annual. Costs are expected to decline during the year due to higher grades at Island Gold and the start of low cost production at La Yaqui Grande.

The company noted that it remains on track to meet its full-year goals. Production is expected to increase to between 100,000 and 110,000 ounces in the second quarter at similar costs to the first quarter. Production should increase further and costs decrease in the second half.

The company also reported a net loss of $8.5 million in the first quarter of 2022, or $0.02 per share, compared to net profit of $51.2 million a year ago. Adjusted net income realized for the quarter was $18.0 million (Q1 2021: $49.1 million), or $0.05 per share.

Cash flow from operating activities was $46.5 million. Free cash flow was negative during the quarter, primarily due to lower planned production from Mulatos as well as ongoing capital expenditures on the La Yaqui Grande project.

The company said it expects to transition to free cash flow positive in the second half of the year, due to lower capital expenditures and low-cost production of La Yaqui Grande.

Alamos also declared a quarterly dividend of $9.8 million, or $0.025 per share ($0.10 annualized rate).

The company noted that its liquidity position remained strong, ending the first quarter with $124.2 million in cash and cash equivalents, $21.6 million in equity securities and no debt. Additionally, the company has an undrawn credit facility of $500 million, providing total liquidity of $624.2 million.

“Combined with continued strong cash flow generation, the company’s high-yield organic growth initiatives are fully funded, with the ability to increase production by more than 60% and reduce AISC by more than 30% by 2025,” Alamos said in a statement.

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 the state of Sonora, Mexico. In addition, the company has a large portfolio of projects in the development phase in Canada, Mexico, Turkey and the United States.

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Ann J. Cox