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(Kitco News) - Alamos Gold (TSX: AGI) (NYSE: AGI) announced Wednesday it produced a record 136,000 ounces of gold in Q2 2023, exceeding quarterly guidance of 120,000 to 130,000 ounces.
The company said that its Q2 2023 production increased by 31% from the second quarter of 2022 and by 6% from the first quarter of 2023 driven by strong production growth from the Mulatos District.
According to a press release, total cash costs of $847 per ounce were consistent with annual guidance, and all-in sustaining costs (AISC) of $1,112 per ounce were below the low end of guidance and down 5% from the first quarter of 2023, reflecting low-cost production growth from La Yaqui Grande and lower sustaining capital.
Importantly, Alamos said that financially it was a record quarter on a number of fronts reflecting the strong operational performance and higher gold prices, adding that the company generated record quarterly revenues, cash flow from operations and free cash flow.
Alamos noted that its record free cash flow of $61.6 million in Q2 2023 (Q2 2022: $6.7 million) reflects strong operating results and margin expansion, and benefits from the collection of sales tax receivables in Canada that had been temporarily delayed in the first quarter.
The company said it expects to continue generating strong free cash flow over the next several years while funding the phase 3+ expansion at Island Gold.
Alamos also reported net earnings of $75.1 million in the quarter, compared to $6.4 million in the prior year period, as well as adjusted earnings of $59.3 million (Q2 2022: $29.3 million), or $0.15 per share.
With the strong start to the year, the company said it remains on track to achieve annual production and cost guidance.
Production is expected to range between 480,000 and 520,000 ounces in 2023, a 9% increase from 2022, and remain at similar levels in 2024 and 2025. Company-wide AISC is expected to decrease 4% in 2023 and 17% by 2025 to between $950 and $1,050 per ounce.
The company said the phase 3+ expansion at Island Gold remains on track with construction of the shaft surface infrastructure well underway, adding that the updated feasibility study for the Lynn Lake project is in the final stages of completion.
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. The company also has a portfolio of growth projects, including the phase 3+ expansion at Island Gold, and the Lynn Lake project in Manitoba, Canada.
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