Alamos Gold Surpasses Production Guidance for 2Q24

Alamos Gold Inc. reported a record-setting performance for 2Q24, showcasing significant achievements in production, financial metrics, and operational growth. The company’s increased gold production surpassed its quarterly guidance, positioning it to meet its full-year cost and production guidance. 

Alamos Gold reported a record production of 139,100oz of gold in 2Q24, surpassing its guidance of 123,000oz to 133,000oz. This robust output was driven by strong performances at its Island Gold and La Yaqui Grande operations in Canada and Mexico, respectively. With these results,  Alamos Gold said it is on track to meet its full-year production and cost guidance.

Regarding financial performance, Alamos Gold achieved record quarterly revenue of US$332.6 million, an increase of 27% from the same period in 2023. This was driven by the sale of 140,923oz Au at an average realized price of US$2,336/oz. The company also reported record free cash flow of US$106.9 million, reflecting substantial cash generation from all three of its operations, including a notable contribution of US$69.9 million from Mulatos and US$40.1 million from Young-Davidson.

Alamos Gold’s cash flow from operating activities also set a new record at US$194.5 million, an 80% increase from 1Q24. This strong performance was achieved despite sales costs reaching US$172.6 million. Total cash costs and all-in-sustaining costs were reduced by 9% and 13%, respectively, from the previous quarter due to higher grades at Island Gold and Young-Davidson.

John McCluskey, President and CEO, Alamos Gold, noted that production exceeded quarterly guidance, combined with lower costs. This drove a number of financial records including free cash flow of US$107 million. “We continue to create value through exploration and our various growth initiatives. The Phase 3+ Expansion is progressing well, and the integration of Island Gold with our recently acquired Magino mine is well underway. We expect the integration to drive substantial synergies and unlock significant longer-term upside potential,” he added.

Alamos Gold announced the successful integration of Argonaut Gold’s Magino mine into its portfolio following the acquisition completed on July 12, 2024. This strategic move is expected to enhance synergies and leverage exploration success in the Island Gold District. The acquisition positions Alamos as Canada’s third-largest gold producer. 

Alamos Gold in Mexico

In Mexico, Alamos Gold ranks as the third-largest gold producer, following Fresnillo in first place and Torex Gold in second. Alamos Gold's Distrito Mulatos mine ranked as the third-largest gold mining operation in the country, with a production of 212,800oz, according to the 2024 CAMIMEX Annual Report.

Exploration for Mulatos during 2024 totaled US$19 million, matching 2023’s allocated budget for the same purpose. During 2Q24, Alamos Gold completed 14,292m of drilling in 53 holes at the Puerto del Aire (PDA) zone and surrounding areas, primarily focused on infill drilling in the GAP-Victor zone. At Cerro Pelon, 5,914m were drilled in 25 holes targeting high-grade sulfide potential, while 2,886m in nine holes were drilled at Refugio to explore the Capulin area. An additional 407m were drilled on greenfield targets.

In total, 1H24 saw 34,883m of near-mine drilling across 125 holes and 8,702m of regional drilling in 26 holes. The company's exploration expenditures were US$7 million in 2Q24, with US$3.1 million capitalized, and US$12.2 million for the first half, with US$5 million capitalized, reads Alamos quarterly report.