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Alamos Gold Inc.
11/7/2024
Good morning. I'll now turn the call over to Scott Parsons, Alamos Senior Vice President of Investor Relations. Please go ahead.
Thank you, Operator, and thanks to everybody for attending Alamos' third quarter 2024 conference call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer, Greg Fisher, Chief Financial Officer, Lucie Mon, Chief Operating Officer, and Scott R.G. Parsons, 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 everyone 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 Boswick, our Senior VP, Technical Services, and a qualified person. Also, please bear in mind that all the dollar amounts mentioned in the conference call are in U.S. dollars unless otherwise noted. Now, John will provide you with an overview.
Thank you, Scott. The third quarter marks the first quarter with the Maginot Mine under our ownership, having completed the acquisition of Argonaut Gold in July. Reflecting the addition of Maginot, as well as strong performances from Island Gold and the Milados District, we delivered record production in the quarter of 152,000 ounces of gold. As guided, all in sustaining costs of $1,425 per ounce. increased from earlier in the year, reflecting the inclusion of higher cost production from Maginot, with the operation undergoing a transition period. With year-to-date production of 427,000 ounces, we remain on track to achieve our full-year production guidance, which was increased by 13% in September, reflecting the inclusion of Maginot and outperformance of Malaros. We are also on track to meet our full-year cost guidance with a marginal decrease in costs expected in the fourth quarter. We achieved a number of new financial records in the third quarter driven by record production and gold prices. This included our third consecutive quarter of record revenue as well as record cash flow from operations to four working capital of $193 million. We continue to generate strong, ongoing free cash flow, including $88 million in the quarter and $219 million year-to-date, while funding our high-growth, high-return initiatives. These include our largest exploration budget ever and the Phase III expansion at Island Gold, which will be a driver of significant free cash flow in the years ahead. The third quarter was a transition quarter at the Maginot Mine, As we implemented a number of improvements and advanced the integration of the operation with Island Gold, the combination of the two mines is expected to create one of Canada's largest, lowest cost and most profitable gold mines with significant long-term upside opportunities. This includes a centralized mill that can be expanded to support the significant exploration potential across the Island Gold District. In July, we provided a comprehensive exploration update at Island Gold, highlighting the potential. Based on our ongoing exploration success at Island Gold, we expect high-grade reserves to expand and the resource to increase for the ninth consecutive year. We are also defining opportunities to expand the Maginot Open Pit and other near-mine targets like the North Shear, which could serve as a source of additional mill feed within an expanded mill. In September, we announced the development plan for PDA, outlining an attractive, low-cost, high-return underground project that is expected to triple the mine life of the Mulatto District to at least 2035. Given the significant exploration upside at PDA and the nearby Cerro Palon target, we see excellent potential to further extend the mine life and improve already robust economics. Scott will delve into the details of the upside potential later in this call. We were also recognized as a top performer by the Toronto Stock Exchange, with inclusion into the TSX-30, reflecting a 134% increase in our share price over the trailing three-year period. Given the number of catalysts we have coming up over the next year, we expect this strong performance to continue This includes ongoing exploration updates, a burnt timber and linkwood study later this year, and our mineral reserve and resource update early next year. This will be followed by an updated mine plan for the Island Gold District mid-2025, and a larger mill expansion study outlining upside scenarios for the district later in the year. Turning to slide five. The addition of Magino complements our strong growth profile and has opened up longer-term upside opportunities. As outlined in our three-year guidance in September, Magino has increased our production rate by approximately 20% to 600,000 ounces per year. Our all-in sustaining costs have also increased approximately 11%. but remain well below the industry average and are expected to decrease by more than 10% over the next several years. In 2026, completion of the Phase III expansion is expected to push our annual production rate closer to 700,000 ounces of gold per year and decrease our all-in sustaining costs to 1,150 per ounce. Lynn Lake is expected to provide additional growth and takes us to a longer term rate of 900,000 ounces per year, while helping to drive all in sustaining costs below $1,100 per ounce. All of this growth is fully funded, and all of this growth is lower cost. What is not illustrated in this graph is the potential to further expand the Maginot mill to between 15,000 and 20,000 tons per day, which could support additional growth and take consolidated production closer to 1 million ounces per year. I'll now turn the call over to our CFO, Greg Fischer, who will review our financial performance. Greg.
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