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Alamos Gold generates strong cash flow, further increases dividend

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(Kitco News) - Alamos Gold (TSX:AGI; NYSE:AGI) yesterday reported that the company produced 426,800 ounces of gold in FY2020, meeting revised production guidance. Alamos said that the company met or exceeded production guidance at all three of its operations.

Alamos generated free cash flow of $122.3 million, reflecting a strong second half performance following the completion of the lower mine expansion at Young-Davidson, and the restart of operations at Island Gold and Mulatos which were impacted by COVID-19 in the second quarter.

The company also reported record cash flow from operating activities of $368.4 million ($382.9 million, or $0.98 per share, before changes in working capital), a 41% increase from 2019.

Realized adjusted net earnings were $156.5 million, or $0.40 per share, an 87% increase compared to 2019. Reported net earnings were $144.2 million, or $0.37 per share.

Alamos added that the company’s Board has authorized a 25% increase to its quarterly dividend to US$0.025 per common share. This represents the second consecutive quarterly increase for a cumulative increase of 67% over the past two quarters.

"We closed 2020 on a strong note, meeting full year guidance with our highest production for the year in the fourth quarter. With ongoing strong margins, we had another solid quarter financially, generating $58 million of free cash flow,” said President and CEO John A. McCluskey.

"We are expecting production to grow 15% in 2021, supporting strong ongoing free cash flow generation while we reinvest in high-return organic growth projects,” added McCluskey.

Alamos is a Canadian-based intermediate gold producer with diversified production from three operating mines in North America. This includes the Young-Davidson and Island Gold mines in northern Ontario, Canada and the Mulatos mine in Sonora State, Mexico.

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