7/27/2023

speaker
Operator
Conference Operator

Good morning. I'll now turn the call over to Scott Parsons, Alamos Senior Vice President of Investor Relations. Please go ahead.

speaker
Scott Parsons
Senior Vice President of Investor Relations

Thank you, operator, and thanks to everybody for attending Alamos' second quarter 2023 conference call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer, Greg Fischer, Chief Financial Officer, Luc Guimond, Chief Operating Officer, and Scott R.G. Parsons, our Vice President of Exploration. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everybody that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release, and MD&A, as well as the risk factors set out in our annual information form. Technical information in this presentation has been reviewed and approved by Chris Blaswick, our Senior Vice President, Technical Services, and a qualified person. Also, please bear in mind that all the dollar amounts mentioned in this conference call are in U.S. dollars unless otherwise noted. Now John will provide you with an overview. Thank you, Scott.

speaker
John McCluskey
President and Chief Executive Officer

Starting with slide three. We delivered an outstanding performance in the second quarter, achieving a number of operational and financial records. Production increased to a record of 136,000 ounces, exceeding our guidance for the quarter, while all-in sustaining costs decreased below our annual guidance. This was driven by another exceptional performance from La Yaqui Grande, which contributed to the strongest quarter from the Mulatto District in more than a decade. With production totaling 264,000 ounces through the first half of the year and costs well within guidance, we remain on track to achieve full-year production and cost guidance. Financially, we broke a number of records, including revenue and cash flow from operations, which increased for the fifth consecutive quarter to 138 million. We also generated a record 62 million of free cash flow, marking the fifth consecutive quarter of positive free cash flow as we continue to fully fund our growth projects and build our financial capacity. I'm turning to slide four. We're making excellent progress across our growth initiatives. We expect to release the results of an updated feasibility study on our Lynn Lake project in the next few weeks. Work on the phase three expansion continues to progress. and we continue to have exploration success at PDA in advance of a development plan that we expect to release in the latter part of the year. As we announced early in the year, we defined one million ounces of higher grade reserves and resources at PDA over the last two years. As demonstrated through our exploration update in May, we expect PDA to continue to grow and support a significantly longer life at the live mine at Milatos. At Island Gold, we're making significant progress on the phase three plus expansion. With the gullway recently lowered into the shaft, construction of the hoist house substantially completed and head frame erection well underway. We are on track to begin shaft sinking in the fourth quarter and deliver initial production from the shaft and expanded mill in the first quarter of 2026. We continue to have tremendous exploration success across the island gold deposit, as highlighted in our June news release, and are just scratching the surface of the regional potential across a much larger land package. This is highlighted by the photo at the bottom of the slide of a recently drilled core with significant visible gold from the prime breccia regional target, which is only four kilometers from the island gold mill. We also released our inaugural climate change report in the quarter, a significant milestone in our sustainability journey, which, among other things, outlines further details on our 30% reduction target in greenhouse gas emissions by 2030. Now turning to slide five, the key drivers of our strong outlook are all on track. As guided and seen through the first half of this year, low-cost production growth from Liaki Grande is taking our production higher and cost lower. Through the phase three plus expansion of island gold, we expect production will grow to 600,000 ounces per year, with all in sustaining costs decreasing below the $1,000 per ounce level. Longer term, through the development of Lynn Lake, we have the potential to increase production to 800,000 ounces of gold per year. All of this growth is in Canada. It's all lower cost. and we can fund it internally, providing one of the strongest outlooks in our sector. I'll now turn the call over to our CFO, Greg Fisher, to review our financial performance. Greg.

Disclaimer

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Investor presentation