Lower Costs, Higher Gold Price Drive Alamos Q2 Earnings
(Kitco News) - Improved margins due to higher gold prices and reduced costs helped deliver broad-based gains for Alamos Gold (NYSE: AGI, TSX: AGI) in the second quarter, the company said in its latest earnings report.
Wednesday after the close, the mid-tier gold producer report adjusted net earnings of $17.7 million, or $0.05 per share, which was relatively in line with expectations. The company added that its earnings included adjustments for unrealized foreign exchange gains recorded within both deferred taxes and foreign exchange of $7.1 million, partially offset by other one-time losses totaling $1.2 million.
Looking at gold production, the company said that it produced 125,200 ounces of gold in the second quarter, which was in line with expectations. The company said that it saw the third consecutive quarter of record gold production at its Island Gold project.
“Our operations performed well across the board in the second quarter. Gold production was in line with guidance while total cash costs were down 16% year-over-year, driving stronger margins and record cash flow from operations,” said John McCluskey, president and chief executive officer said in a press release. “With solid first half performance, we are well positioned to meet full year production and cost guidance.”
The company also said it saw a record cash flow of $72.3 million in the second quarter.
Looking at costs, the company reported All-in sustaining costs ("AISC") of $926 per ounce, and cost of sales of $1,021 per ounce, down 7% and 12% respectively from the second quarter of 2018.
For gold sales in the second quarter, Alamos said that it sold 128,457 ounces of gold at an average realized price of $1,309 per ounce, for revenues of $168.1 million.