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Alamos ups gold production in Q3, says earnings from operations down on higher costs and lower gold price

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(Kitco News) - Alamos Gold (TSX: AGI) announced Wednesday it produced 123,400 ounces of gold in the third quarter of 2022, up 19% from the second quarter and near the top end of the range for quarterly guidance.

According to the company's statement, this positive result represented the highest quarterly production in nearly two years driven by a solid first full quarter of production from La Yaqui Grande in Mexico.

With year-to-date production of 326,200 ounces of gold and a further increase in production expected in the fourth quarter, the company noted it remains on track to achieve full year guidance of 440,000 to 480,000 ounces.

During the third quarter of 2022, the company sold 122,780 ounces of gold for revenues of $213.6 million, an 8% increase from the prior year period driven by more ounces sold, partially offset by a lower realized gold price, it said.

Mining and processing costs were $104.2 million, 23% higher than the prior year period. Alamos explained that the increase primarily reflects higher processing costs at Mulatos related to stockpiled ore, as well as higher mining and processing costs at both Young-Davidson and Island Gold, partially offset by a weaker Canadian dollar.

Alamos Gold added it recognized earnings from operations of $29.9 million in the quarter, lower than the prior year period (Q3 2021: $57.3 million) as a result of lower realized gold prices, higher operating costs, and the net realizable value adjustment recorded in 2022.

The company also reported a net loss of $1.4 million in the quarter, compared to net earnings of $25.1 million in the prior year period. On an adjusted basis, earnings in the third quarter of 2022 were $26.9 million, or $0.07 per share.

"We had a solid third quarter overall, including our highest production in nearly two years. Our operations performed well with production near the top end of quarterly guidance and representing a 19% increase from the second quarter. Our costs were also down significantly from the first half of the year, coming in below full year guidance. With the strong year-to-date performance and even stronger results expected in the fourth quarter, we remain on track to achieve full year production and cost guidance," stated President and CEO John A. 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. Additionally, the company has a significant portfolio of development stage projects in Canada, Mexico, Türkiye, and the United States.

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