(Kitco News) - Alamos Gold (TSX: AGI) announced Wednesday that the company produced 103,900 ounces of gold in Q2 2022, up 5% from the first quarter, down 9% from the prior year quarter, and in line with guidance.
The company said that the Young-Davidson mine continued its strong operational performance, with mining rates exceeding 8,000 tonnes per day for the fourth consecutive quarter, driving production of 46,400 ounces.
The company’s Island Gold mine produced 37,300 ounces in the second quarter of 2022, a 12% improvement from the prior year period reflecting higher grades mined and processed.
Mulatos produced 15,200 ounces in the second quarter (excluding La Yaqui Grande), significantly lower than the prior year period but consistent with first half guidance.
Importantly, the company noted it completed construction of La Yaqui Grande ahead of schedule in June, and produced 5,000 ounces at total cash costs of $451 per ounce.
"Mining and stacking rates continue to ramp up and are expected to drive stronger consolidated production from the Mulatos District at significantly lower costs in the second half of the year," Alamos said.
The company added it produced 202,800 ounces in the first half of the year, and with stronger production expected in the second half driven by the ramp up of La Yaqui Grande, the company remains well positioned to meet full year production guidance of between 440,000 and 480,000 ounces.
Alamos pointed out that total cash costs of $895 per ounce, and AISC of $1,170 per ounce were significantly lower than the first quarter and consistent with annual guidance, reflecting higher grades mined at Island Gold, the strong start at La Yaqui Grande, and the weaker Canadian dollar.
The company also reported it realized adjusted net earnings for the quarter of $29.3 million, or $0.07 per share (Q2 2021: $38.7 million), adding that Q2 2022 adjusted net earnings includes adjustments for a non-cash, after tax inventory net realizable value adjustment at Mulatos of $14.7 million and unrealized foreign exchange losses recorded within both deferred taxes and foreign exchange of $12.5 million, partially offset by other gains totaling $4.3 million.
"We achieved several key short- and long-term objectives in the second quarter. Production was in-line with guidance and costs well below quarterly guidance reflecting solid performances at our Canadian operations and a strong start from La Yaqui Grande which achieved initial production ahead of schedule. With La Yaqui Grande expected to drive stronger production in the second half of the year, we remain on track to achieve full year guidance," said John A. McCluskey, President and Chief Executive Officer.
"La Yaqui Grande will be a key contributor to stronger operational and financial results over the shorter term, and as outlined in our Phase 3+ Expansion Study, Island Gold will be the driver of higher production, lower costs and significantly stronger free cash flow generation over the long term. The Phase 3+ expansion will transform Island Gold into one of the largest, lowest cost and most profitable gold mines in Canada. With increasing cash flow from our operations, we can fund this high-return growth internally while generating strong free cash flow over the next several years," he added.
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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