Alamos Gold Reports Fourth Quarter and Year-End 2023 Results

Press Release

TORONTO, Feb. 21, 2024 — Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today reported its financial results for the quarter and year ended December 31, 2023.

“With the strong finish to the year, we delivered a record operational and financial performance in 2023. Production increased 15% to a record 529,300 ounces, achieving the top end of our increased full year guidance. Costs were also in line with annual guidance and decreased 4% from 2022 reflecting strong performances across our operations. With the record production, lower costs, and higher gold price we set a number of financial records in 2023. Revenue increased 25% to a record $1 billion, and cash flow from operations increased 44% to a record $519 million. We also generated $124 million of free cash flow while reinvesting in growth that will support higher levels of free cash flow in the years ahead,” said John A. McCluskey, President and Chief Executive Officer.

“This reinvestment in high-return growth continues to create long-term value. Global Mineral Reserves increased for the fifth consecutive year with grades also increasing driven by another year of exploration success. This included higher-grade additions at Island Gold and PDA, supporting longer-life, and more valuable assets. The growth at PDA will be incorporated into a development plan to be completed later this quarter that we expect will outline a significant mine life extension at Mulatos. The Phase 3+ Expansion at Island Gold continues to advance having achieved a significant milestone with the start of shaft sinking in December. The expansion remains on track to deliver significant production growth at substantially lower costs in 2026 and beyond.”

Fourth Quarter and Full Year 2023 Highlights

Operational and Financial Highlights

• Produced a record 529,300 ounces of gold in 2023, achieving the top end of increased production guidance and representing a 15% increase from 2022. This included a strong finish to the year from all three operations with fourth quarter production of 129,500 ounces
• The Mulatos District exceeded guidance, producing 212,800 ounces in 2023, a 58% increase from the prior year, reflecting a strong performance from La Yaqui Grande in its first full year of production. The higher margin ounces from La Yaqui Grande drove a significant increase in mine-site free cash flow¹ to $142.1 million, including $27.4 million in the fourth quarter
• Young-Davidson produced 185,100 ounces in 2023, meeting guidance and generating record mine-site free cash flow¹ of $117.6 million. This marked the third consecutive year mine-site free cash flow has exceeded $100 million, demonstrating the strong ongoing performance and consistency of the operation, including $35.0 million in the fourth quarter
• Island Gold produced 131,400 ounces in 2023, meeting guidance and continuing to self fund the majority of $178.1 million of growth capital invested in the Phase 3+ Expansion during the year
• Total cash costs¹ of $850 per ounce, all-in sustaining costs (“AISC”¹) of $1,160 per ounce, and cost of sales of $1,212 per ounce for the full year were in line with guidance. Fourth quarter total cash costs of $900 per ounce, and AISC of $1,233 per ounce were consistent with quarterly guidance
• Record financial performance with full year gold sales totaling 526,258 ounces at an average realized price of $1,944 per ounce for record revenue of $1.0 billion, a 25% increase from 2022. This included fourth quarter sales of 129,005 ounces at an average realized price of $1,974 per ounce, generating $254.6 million in revenue. The average realized gold price was $3 per ounce above the London PM fix for both the quarter and the year
• Record annual cash flow from operating activities of $472.7 million (including $518.9 million, or $1.31 per share before changes in working capital¹), a 58% increase from 2022. Fourth quarter cash flow from operating activities was $124.1 million ($120.2 million, or $0.30 per share, before changes in working capital¹)
• Strong free cash flow¹ of $123.8 million in 2023 while funding the Phase 3+ Expansion at Island Gold
• Realized adjusted net earnings¹ of $208.4 million, or $0.53 per share¹ in 2023. Reported net earnings were $210.0 million, or $0.53 per share
• Realized adjusted net earnings¹ for the fourth quarter of $49.2 million, or $0.12 per share¹. Adjusted net earnings includes adjustments for net unrealized foreign exchange gains recorded within deferred taxes and foreign exchange of $12.6 million, offset by other adjustments, net of taxes totaling $14.7 million. Reported net earnings were $47.1 million, or $0.12 per share
• Cash and cash equivalents increased $95.0 million, or 73%, to $224.8 million at year end, with no debt and $13.0 million in equity securities
• Paid dividends of $39.4 million, or $0.10 per share for the full year

Growth Projects, Mineral Reserves and Resources and Other Highlights

• Issued three-year guidance on January 10, 2024, which included increased production guidance for 2024 of between 485,000 and 525,000 ounces. Production is expected to increase 7% by 2026, with AISC decreasing 11% reflecting low cost production growth from Island Gold with the completion of the Phase 3+ Expansion
• Reported year-end 2023 Mineral Reserves of 10.7 million ounces of gold, a 2% increase from 2022, with grades also increasing 1%. This marked the fifth consecutive year Mineral Reserves have grown for a combined increase of 10% with grades also increasing 9% over that time frame. Additionally, Measured and Indicated Mineral Resources increased 12% to 4.4 million ounces, with grades increasing 9%, and Inferred Mineral Resources increased 3% to 7.3 million ounces, at 1% higher grades
• Advanced construction of the Phase 3+ Expansion with completion of key shaft site infrastructure in 2023 including the headframe and hoist house. Construction remains on schedule with shaft sinking commencing in December and engineering on the mill and paste plant well underway
• Received approval of the updated Closure Plan Amendment from the Ontario Government in December allowing for the start of construction on the larger mill expansion and paste plant as outlined in the Phase 3+ Expansion study
• Achieved a significant permitting milestone for the Lynn Lake project in March with a positive Decision Statement issued by the Department of Environment and Climate Change Canada based on the completed Federal Environmental Impact Statement, and Environment Act Licenses issued by the Province of Manitoba
• Completed an updated Feasibility Study on the Lynn Lake project in August outlining a larger, longer-life, low-cost operation with attractive economics and significant exploration upside. Lynn Lake is expected to produce an average of 176,000 ounces of gold per year at mine-site AISC of $699 per ounce over its initial 10 years
• Completed the acquisition of Manitou Gold in May, adding significant exploration potential across the Michipicoten Greenstone Belt by more than tripling the regional land package adjacent to and along strike from Island Gold
• Publication of Alamos’ inaugural Climate Change Report, outlining corporate governance around climate-related risks and opportunities, and issued the 2022 Environmental, Social and Governance (“ESG”) Report, outlining the Company’s progress on its ESG performance
• Announced the acquisition of Orford Mining in January 2024, through which the Company will consolidate its existing ownership of Orford shares and add the highly prospective Qiqavik Gold Project, located in Quebec, Canada. The Company expects to issue approximately 0.9 million shares for total consideration of approximately $12 million with the transaction expected to close in April 2024

⁽¹⁾ Refer to the “Non-GAAP Measures and Additional GAAP Measures” disclosure at the end of this press release and associated MD&A for a description and calculation of these measures.

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