Alamos Gold (AGI) 30 Apr 212021 Q1 Earnings call transcript

Good morning. I would now like to turn the meeting over to Mr. Jamie Porter, Chief Financial Officer. Please go ahead.

Thank you operator and apologies to everyone on the line.

minutes there. started, few with some a operator the are late given getting issues We are to we But ready go now. And first thank quarter Alamos's XXXX conference you call. for attending

the McCluskey, In today COO. and have myself, addition our on to Peter MacPhail, both, President our John and CEO we line

Q&A is website. that be will a I followed like remind everyone that would presentation a the will webcast by the conference presentation also We through during and our be to call referring available session. on our to

Vice As the will noted. statements with as in by Services of Chris in the release been this to that a we form. factors making be all Also, during information mentioned information cautionary an to Bostwick, MD&A over annual risk person. States the Technical call, United forward-looking has the provide will reviewed Technical to in set dollars, and call mind you John notes overview. qualified please And our in please presentation out with dollar that, well otherwise and amounts presentation, approved I keep of turn refer it are as President our and the included in in unless news this

sustaining had all-in We costs Thank you per cash of total producing the per the to first at and ounces year, $X,XXX solid Jamie. a of start XXX,XXX quarter in $XXX gold cost ounce ounce. of

our year This the production another a was Our new its set at end were Gold, driven performances targeted costs strong positioned exceeded production our exceeded record and quarter high particularly mining record. Island to first drove quarterly and line financially. while another achieving well guidance guidance. Young-Davidson guidance. rates by with of quarter This production which in for which cost We remain full meet underground

Phase and Our at ongoing increased ramp-up Yaqui cash Grande development year flow Gold. Island strong activities of $XXX expansion of La supporting at with III free XX% even operating the million a ago from flow, the cash

billion Moving In our and expired, claim required we respect we week, the legal have and of Kirazli, This and met $X we permits Republic into development to we treaty build to investment with to a received since inequitable well expropriation Turkish filing had our all four. against announced project. XX treatment and for were slide past unfair will be mining our we the of for regulatory license licenses. months construction all renewal Turkey requirements

for work renewed. we we to attempted have cooperatively have received government for not a received We a Turkish when have timeline reason nor licenses the our will yet the non-renewal be with

We are optimistic that the positive a arbitration about process will bring resolution.

slide looking five. Now at

third Yaqui published next with on construction latter to quarter of and to in a XXXX. in is production putting advancing around of part continue track to low-cost ramp-up year. year, at the us position make project Permitting of the activities middle in Lake projects. III get the La a resources. We increase the attractive pipeline significant of activities upside continue reserves already American ounce growth Phase announced Phase outlining to up expansion a the at ongoing recently to success This our one strong potential economics on million Island ramping growth and Gold Development North the study we where the in completed Construction last the Lynn XXXX. advance are at and Grande be to expansion expected exploration III high-grade decision highlights

the We few past success years. over exploration have had good

kilometer X.X we reserves belt across along see in potential to million increased XX and that by excellent the XX% have We further deposit greenstone existing around We consolidated. regionally ounces.

free our outlook ounce. ounces with potential XX% sustaining around cash of significantly are key per XXXX support lower for up CFO, our our long by the We Jamie exploration all to our cash XXX,XXX In review year dividend. growth all-in generate call over financial accordingly. substantial Porter, approximately more and to the term. ongoing efforts turn $XXX components strong while to of our performance. These at ramping costs support the will internally this increased projects free we flow flow continuing per are meantime, production This strong will over fund growth recently than growth I can now

Thank you John.

costs peso. dollar revenues per We Moving of guidance the despite for and were of Mexican million ounces the on cash in ounce cost per quarter. Canadian all-in line stronger to a of slide $X,XXX six. in $XXX of ounce sold gold and ounce first at XXX,XXX realized Total price of $XXX sustaining $X,XXX with impact the record per of

dollar quarter. per was December approximately last first with costs improved in provided realized current the XX% impact the exchange cash by $XX year-over-year $X.XX, changing Operating similar flow Canadian ounce to in a million total foreign cash and the first all-in our dollar rate non-cash guidance quarter. to of would costs capital based working $X.XX share a or approximately exchange rate per on the XXXX foreign before increase sustaining Our $XXX Canadian $X.XX. At of

first the reported share period. net or earnings the represented prior $XX per for Our year earnings million XX% of were a net Adjusted $XX million. $X.XX quarter increase over

trigger to ahead decision the of for accounting is Republic treaty quarter, investment the Turkey the to an the second proceed Looking purposes. against with claim bilateral impairment

charge our an of the a of and second from $X including non-cash earnings. sustaining is carrying Turkish approximately As spending quarter, in million after-tax $XX exclude million that such, incur our the value of of growth capital first million This $XXX assets. we full representing expect of adjusted $XX capitalized charge the million to to expect million quarter, Capital $XX exploration. in impairment capital, we totaled

more to million $XX and and Yaqui of million and ended the with for shares. the we increase active from $X.X we prior and is million $XX expansion share generated Island Gold. La was increase returned to the $XX track of incurred work first the of million dividend quarter million of of shareholders for activities are XX% majority full of related cash tax million advances, capital XXXX million paid our to a total, our between of in under capital year. quarter In $XX The in million guidance which with related also securities projects $XXX cash on and COO, We grow the a the worth advances Mexico, while are of buyback, of more Grande repurchasing first than internal $XXX quarter year. on ramp-up the shareholders. equipment This to We flow. return of than in in well million payments the that, we in capital $XX With to growth Net aggregate III representing full net the position our million and fund growth quarter, all quarter continuing Phase $XXX of and of and a our of million our year returns to reflects to the $XX operations. of capital I projects. spending free in equity undrawn an spending cash development provide We remain quarterly MacPhail, We million call to our cash, consistent and $XXX $XX turn credit overview Peter positioned to will over capacity. also

Thank you Jamie.

a operating million. the infrastructure a targeted day, We generating at This record mine-site rate to slide had tons exceeding and of to to Young-Davidson, $XX the with X,XXX cash operation full ounces average XX,XXX mine quarter new our seven. of flow lower to was free quarter producing continues potential the tons X,XXX second of excellent another day. mining demonstrate increasing per its and rates Moving

tons Mill that of X,XXX expect added XXXX continue tons the in We also quarter in increased additional rates of the rates record half X,XXX day. being was exceeded last of mining horizon tons day. reflecting mining quarter per and second to that day stockpiled mined X,XXX mining processing year. us of second will fourth rates, average mining a throughput increase with sustain a another to This a to in the enable ore

Total mining the rates year. to expected in the are generated well second Over cash production in the all-in the to Canadian to flow more combined Young-Davidson and is XXXX. cash quarter to Costs this shaft of lower Gold and above $XX and stronger as Higher were rates per lower capital half $X,XXX of the both are higher cash when lower ounces, all mine-site shut Island $XXX through grades from complete increase guidance grades from to higher expected the spending cost Grades costs as with rates, record somewhat mined. dollar of milling free the free mining ago of significantly mine. tie-in slide cost in in production, to mine-site lower annual ounce mining first a higher to year sustaining was contribute due costs lower record expect down of XXXX. the by driven of drive to mine-site eight. mines million than earlier and year XX,XXX flow from were production of and million expected planned match ounce Northgate $XXX We per forward. of down going

As Total and year. $XXX both of all-in despite dollar. and previously of to cash grades were per cost mined with grams the consistent full the guidance approximately processed the stronger mine-site cost annual guided, year expected average decrease through Canadian ton are per and per for $XXX ounce XX sustaining ounce

infrastructure capital is year, million But we longer through up spending expected for majority given up expecting with $XX are engineering of we detailed remain capital Following across first in the shaft campaign, quarter successful that up increase is have and and Island the improve associated the items. to procurement of III XXXX very growth the our the results rest totaled Gold of on on efforts the exploration ramping the Phase million lead we quarter. annual ramped the guidance to The the million. and industry. first expansion permitting of the focus a exploration long of of seen Work times advancing quarter. $XX Growth $XX at with in to assays pending, consistent in second the the turnaround and

quarter activities Moving surface ores the of majority per the ounces which in the Pelon, total along on were all-in with Cerro Mining in to the activities sustaining within Salto pre-stripping nine. focused existing pit. costs $X,XXX produced of focused pit and the on Mining first Mulatos respectively. stacked with the $XXX main XX,XXX of quarter. mine-site in quarter portion and cash first supplied ounce Mulatos cost the El stockpile slide were

to $XX spending late last million and $XX Mulatos' ramp-up flow was and La cash tax related mostly of the at With year cash mine-site payments free Yaqui the million. Grande, of negative

Mulatos of $XX Grande, to related million million free cash growth flow. $X the capital La capital and advances Yaqui would have generated Excluding mine-site of

Moving XX. to slide

all-in reaching contractor in tons La The about ounce, achieve is the on the photo, the Capital spending rotation. of construction see sustaining was approximately complete per Yaqui March. nearly the cost underway. Yaqui of As XXX significantly are mine-site open for to and the the now is focused mining we commercial the Over average back by quarter tons the facility heap contractors to treatment Mulatos of the the third La and I during reduce and With can on of turn $XXX XX,XXX facilities Grande three advancing day have of you million well per leach end pit. will track Camp mined dump, profile with John. cost were on that, quarter, earthworks rates waste With expected expected call and production project in Grande XXXX. pre-stripping waste water plant to employees to of of remains the rock operation.

much, Thank Peter. you very

questions. Now the your are to to we going open call

operator, turn now started. the the get who will I call will over to So that

[Operator Instructions].

is of JPMorgan. first ahead. from Langton question go Please The Tyler

is open. now Your line

run for morning. I process be we to that can near just course. take And looking Good mean any recognizing full to term taking But that some milestones sort Yes. of should I my its guess the kind time guess, I there are Kirazli, for? question. thanks with start of

Not particularly.

going auspices the next the some And the may is sometime of possibility the settlements. the the are come expectation, designed that's the there sort full of to with full this to course, a that process through negotiated the bring up not run then is together achievable, to And that this it some go intent if least, way an to We next come arbitration tribunal parties settlement. designed. always of with at the the under stage. over with into arbitration. just negotiated But it expectation that's we It's well sort goes year,

the to we have just follow So will process.

that cost And this called sort that rates pressures are how Island Okay. us are for of you pressures any Gold, III potential the in signs sort or on guess, I could budget? CapEx operations? much at expansion of impacts the can of you any from of I and more, then be there But guess inflationary labor sort you spent of, with the have is then remind exchange day-to-day year. to materials capital And seeing Phase there sort left

here. Peter

stable. pressure, labor. inflationary higher a things, not thing. temporary inputs, have Labor but rates On it's the A a few certainly little it looks steel been few a bit relatively like

So And knows, it point. hasn't I this really us. impacted guess, bottomline it are but not our at impact we to materially expecting who

you. Got

much. so Thanks Okay.

Thank The Fahad Tariq is of Suisse. go you. Please next Credit question from ahead.

Your is line open. now

Thanks Hi. taking Good for question. morning. my

You forward? had particularly [indiscernible] [X:XX:XX.X] example, also rate. mentioned on impact know cost the over cost favorable and hedging rates more peers, the going foreign impact potential Maybe year about and different, the rate talk XXXX. the are sensitivity, for exchange strategy the some past or Canadian/U.S. I in exchange

Thanks. hedging. on thoughts your get to want Just

the for to the way dollar dollar that in to or there much has over here. Yes. opportunities that to Canadian less strengthening in We been of past of the in a Fahad, But it's lock so. nine our more course do the of opportunities Canadian over period, months the line, way XX straight exposure. Jamie more look wasn't

So exposure at XXXX hedged remaining I X% of $X.XX. our below have think we well

said, is opportunities late. look to But of dollar. do the I in more that weakness will if Canadian side haven't there seen We as for we

covered Fortunately, XX, exposure Mexico. XX% relative got of very spot. hedged very contracts our between well and in XX we were current to which are about favorable those We

currently. that's at where are So we

do is none We for will more. continue there to opportunities look currently. But to certainly

you. That's helpful. Thank

McConnell Please ahead. Capital. go of next The Lauren Paradigm question is you. from Thank

Your line open. is now

Good know you that that on XX.X at there morning, mined expecting grams was on are to the I this reconciliation had I a know positive Island? quarter, still Congratulations question and of model? quarter. in on with Or history just reserve Jamie Peter. good positive reconciliation. John, a you Island. just the seeing you ton that what is were line per wanted I with

we are reconciled in quite No, well. is what line that with expecting. It

the owned years couple behaving see years. reconciliations significant that model. really quite it, well. the And we we reserve Over don't have of last the changes made we positive to It's for

Thank Okay. you. Great.

Thank ahead. from Please CIBC. next you. of Cosmos is go Chiu The question

now Your line open. is

Peter Young-Davidson and Jamie, John, first Thanks the Maybe Hi. team. on here. off

of And how that tons would was day As great sounds it's come the than were in terms yet are you you to rates to see in yet X,XXX targeting you could able highlights almost is, QX. us a were underground. not give question terms to my like mining mentioned, day key some in then part to you you able to throughput higher that what to it get that it's targeted? per X,XXX of when tons you per of repeatable point, second On

it still are QX. per is X,XXX repeatable? You targeting in tons And day why not

not for still tons I we But We which day as up QX mistaken bringing the am knows? to for wouldn't to QX, a will and that. for a the facilitate of year. up do Who A repeated had are it. tons that And us I plan. rest always day. we another X,XXX. than when X,XXX in things striving better? a on we tons are beat the am expecting Can I do do day in X,XXX. a that, are horizon planning quarter. helped if X,XXX beat mining actually X,XXX to help expect of ramping We We better our aligned few good QX well

highlights or what did QX kind of I beat one I surprised Could two Peter, tell you? then? it mean. Or Yes. in guess, happened? what you get But you how where key us you

continues there there. the to and be just being It's it ore

a infrastructure it and new just being able familiar figure while Getting out. So all it. takes move to it to trust with it's the

is between frankly. day tons difference, difference tons X,XXX the huge a a So and X,XXX day that not a

tons It's I our at and vary couple going might out up nice below It's a on hundred always -- we least. knocked park. of be it a the a within say down that. will So to We quarter bit day little higher at wouldn't of side to maybe a be the target. be

horizon you touched Where new are horizon? many this at Can this point about then location? you Got the you. you mining time? bit how Peter. more maybe mining is as it, on a And talk the little could you remind areas maybe then And in Thanks us here. mining new

Yes.

the a horizons be couple of the upper part we mining at that of actually continuing And on mine, have So another this part more the in one are of upper that would the we the westerly flank. to mine mine. one is

mine. have part We horizon lower in mining a the the of of couple

through horizons varies XXX from XX at stopes mining So have we stopes five year any time many three, between and a cycle would time time four, as as in given it to online.

kind mix. of the that's So

then still understand, infrastructure, ore to understand, in mentioned. expected not Is might it. running Or you Yes. the mine far. everything Great. trying time, lower be are you have about, point Got as you areas you it conveyor? Peter, familiar And with is limiting so bin that factors? think fairly getting to you as talked this would as any At

sort than much lower to a This that mine. we measure in at built so tons the of so frankly is get a day also what for better put as to had the X,XXX an frankly much and interim was mid-mine

XX capacity. we more have times think something like I bin

have skipping We additional capacity.

all of help We those make our numbers. have conveying trucking, instead of things us

in are We good shape.

of Yaqui a terms maybe factor concerned switching you Could that inflationary of gears comment The terms is we Yaqui factors kind we Grande, Any bit. CapEx? think in costs. La on aware and issues I Grande? terms impact of no about some already potential be in Great. should in inflationary or on La the there should little Maybe be discussions of that

any. seen haven't We

Grande building is Most rate fixed in is well at CapEx of down. contract really Yaqui construction. associated on per site with The and pads, came putting our order leach moving, lack liners into earth the pre-stripping, of the are liner La the on of We mining budget ton.

lot, inflationary So around sort don't moving of we opportunity really a pressures. for see diesel much

Can part you remind really that Or rainy not season coming me that there season my good. me, is of is finish question it's guess. key second any not you wrap That's Mexico? then Mexico? And northern of up? are in guess, think to up and issue season? And things rainy here, the want is I I rainy the the in leads an impact, ahead I an when to a

have rainy is July a can and a It do not do bit. August, we it No, you of start season certain in try kind And September. to little things.

try You That's season. not your on That's ahead it's of and on well that only Leach to be that try during thing clay not thing about do pad rainy we to we and the doing the liner. the issue. not an are only liner the going to

things wrap Sounds budget your And last is good. to million. the question, $XXX to million one I guess year up. maybe $XXX CapEx just for

You you and in the of did about remainder $XX terms throughout more give million XXXX? us remainder going in the how of granularity a distributed be to maybe QX. that's Could bit

here. Yes, can I Jamie take it's Cosmos, that.

Hi Jamie.

Yes. It should distributed. be pretty evenly

of You advances will the in $XX.X well. million we as note, as quarter we classify had capital what first

for long that's So contractor. for lead deposits the items

QX. overall was that I a cash in, evenly. would you the if be So spending pretty capital incurred factor to But higher expect that bit actual in

all you. lot questions Thanks Thank have. the guys. Those are Great. I a

of next Parkin is Mike The question you. Thank ahead. Please Bank. National from go

line now open. is Your

congrats questions certainly taking a start to on my and solid for Hi the guys. year. Thanks

Young-Davidson. on up Cosmos' Following questions on

movement similar Or the or so? using there massive. been Just that to have underground to they kind the of in now? you stopes, always the much know year what to sizes extracting stopes last for with pretty have But larger any is been is respect I

have In Yes. XX to height And the lower well. mine, it's the we as upper the XX have mine, was meters Peter zones to lower our the tends Mike, here. and in stope gone meters. mine wider

if the into you like. thickness So page,

don't more averaging and been remember might numbers in mine exactly, the think XX thickness. the we have the lower upper I would, meters but XX I like in mine meters we

on on bigger average. are stopes tend tons so average be or more and to the per So stope

you as then, open a in the set that up tailwind Generally, well you to have productivity. you are as lower mine up terms for of

Yes.

answered. great. That's of questions are Most my Okay.

I were this of COVID. that in Just do Plans Island guys Obviously, one of could planning What news be? you year. having bit On you at terms actual Island, got exploration are a more. that are year to great timeframe regional delayed success it know flow mine. our last to due to around the do

that's see if wondering stumble could else when you something Just initial maybe we results? upon interesting,

let's as surface or as that's around the more to I going to regional underground have and three year we Yes. X.X drilling. one do progresses, But couple say, be continue drill, a on poking guess have targets. well

in on frame of exciting currently the And So go. of a yes, see when will those waiting time setting. look a give regional we some got lots you for to things I on you at assays results. you can't There also.

right. All that's much. for Well, so me. Thanks it

Thank John go is next question Tumazos ahead. from The Tumazos you. Research. Very Independent John of Please

is line now open. Your

question. my taking for you Thank

here to the how you more With a or potentially adherence this Turkish your to the time just Does more for I a this management little commend of and attention for reallocate acquisition? want Lynn will Corrupt emphasis in addition little the mean Foreign but a genocides need Armenian Separately, genocide, commemorate little Does with Lake? to the you into troubles budget a property my exploration mean projects, resources? doing. can third in Thank and are bit, what the caving you. not I you if help Act, commend Practices several I am world. you content kidding that family And you history. to thousand

take John I question. McCluskey. will your is This

Turkey, in we well being Just at were everything sacrificing what to was see that, of the were budget back the company involved managed in not we management on essentially relation going time or to with on Turkey.

team. was that the the in really year, we weren't of by over work doing the being the that handled the say bulk given would Turkey I So any going for was on Turkish fact responsibility last what

Turkey. have XX We people in about employed

given way they that of change But course, things. the ones going no going fact what really be the on we for to manage is of that for vast team, the to going responsible reducing were We work, forward. was majority the the there be will big

Good for up you. your sticking Thank for rights.

Thank you.

you. ahead. go Kerry last of Smith question The Thank Please is Haywood from Securities.

is Your open. line now

what that for take to Turkey it John, file operator. filed? how claim? Thanks claim actually Like, does if get the long

a generally the you when actually of going you you weeks a would couple be announce that within Just filing are actual claim. file to claim,

it with report. So out And a news then with release this, starts like effectively something a notice. you and

it's that amount So of fair you a something do preparation on.

And so we were sort of the well announcement. prepared going into

So it be long. won't too

QX, Great. YD? any Okay. maintenance Thanks. no And Peter, planned large shutdowns then there are in or maintenance at

I every mean the shutdowns would but quarter, we maintenance that have nothing impact numbers.

Right.

basically? nothing So extraordinary

No.

that's Okay. the pre-strip Got finish? also actually through left then? does you in will ore Yaqui to La pit actually Grande the And run of you. when that startup the And

when El Sorry, your at the finishes, that pre-strip does was question? Salto

Yes.

are the and Pelon, La Towards of And between take in well us all pit Cerro have to we start yes, Yaqui this of sources to end and year. stockpiles the in Grande. enough drill Mulatos ore the between excess,

you. Got

Okay. just way the hedges ounces be new to then? course model of next And the the that this of that it? spread added on year, post Jamie, quarter, months the nine would evenly XX,XXX the through kind then of the to over that end of the you the a end Is last question

Kerry. right, That's Yes.

Thanks great. much guys. That's Okay. very

you. time. This concludes further are Thank questions this no morning's at There this call.

XXXX. at participation. we disconnect please contact and free lines Parsons Scott answered, feel have to further extension time this have your you not Mr. XXX-XXX-XXXX, thank you If for any Please that your been at questions