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Alamos Gold Provides 2021 Production and Operating Guidance

Alamos Gold Provides 2021 Production and Operating Guidance

All amounts are in United States dollars, unless otherwise stated.TORONTO, Dec. 09, 2020 (GLOBE NEWSWIRE) — Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) today provided 2021 production and operating guidance.“This has been a transformational year for Alamos. Operationally, we continue to execute and remain on track to achieve our 2020 production, cost, and capital guidance. We also delivered on several significant catalysts which have solidified our strong outlook. We completed the lower mine expansion at Young-Davidson, transitioned to strong free cash flow generation in the third quarter, and began construction on the high-return La Yaqui Grande project and Phase III Expansion at Island Gold,” said John A. McCluskey, President and Chief Executive Officer.“The ramp up of mining rates at Young-Davidson is expected to drive a 17% increase in our production in 2021. Young-Davidson will also be a key driver of strong ongoing free cash flow generation supporting both higher returns to shareholders and the reinvestment into high-return growth opportunities at Island Gold and Mulatos. These investments form a key part of our balanced approach to capital allocation which will provide further growth and returns that are sustainable over the long term,” Mr. McCluskey added.2020 Operational UpdateProduction and costs remain on track to achieve full year 2020 guidance
2021 Guidance OverviewStrong production growth with guidance of 470,000 to 510,000 ounces of gold: a 17% increase from 2020 guidance (based on the mid-point), driven by significantly higher production at Young-Davidson with the completion of the lower mine expansion in July 2020Lower costs with total cash cost guidance of $710 to $760 per ounce: an 8% decrease from 2020 guidance (based on the mid-point) reflecting lower costs at Young-Davidson as mining rates continue to ramp up from the new lower mine infrastructure. This includes approximately $25 per ounce of COVID-19 testing and other related health and safety costs across all operationsAll-in sustaining cost (“AISC”) guidance of $1,025 to $1,075 per ounce: consistent with 2020 guidance with lower total cash costs offset by higher sustaining capital at Mulatos, which includes $50 per ounce globally related to El Salto pre-stripping activitiesTotal capital guidance, excluding capitalized exploration, of $320 to $350 million: an increase from 2020 guidance of $185 to $215 million primarily reflecting higher capital spending on internal growth initiatives including La Yaqui Grande and the Phase III Expansion at Island Gold. This total capital budget includes:Sustaining capital guidance of $110 to $125 million: a temporary increase from guidance of $80 to $95 million in 2020 to complete $25 million of stripping activities at the El Salto portion of the Mulatos pitGrowth capital guidance of $210 to $225 million: an increase from the 2020 guidance of $105 to $120 million in 2020 reflecting the ramp up of construction of La Yaqui Grande and the Phase III Expansion at Island Gold. This is partly offset by lower growth capital at Young-Davidson with the completion of the lower mine expansion in 2020Exploration budget increased to $50 million: up from the initial 2020 exploration budget of $36 million, reflecting increased spending at Island Gold, Mulatos, and Lynn Lake, as well as Young-Davidson, with improved access for underground drilling from the lower mineStrong ongoing free cash flow: La Yaqui Grande and the Phase III Expansion at Island Gold are expected to be self-funded by their respective operations at current gold prices with Young-Davidson providing strong ongoing free cash flow generationIncreased dividend of US$0.02 per share (US$0.08 annually) to be paid out later this month, representing a 33% increase from the previous quarter: with the higher dividend rate supported by the Company’s strong free cash flow outlook at current gold prices
Outlook to 2025Production growth to approximately 600,000 ounces per year from existing operating mines in 2025: driven by low cost growth at Island Gold with the completion of the Phase III ExpansionAdditional growth potential to approximately 750,000 ounces per year in 2025: incorporating growth from the Lynn Lake project with permitting expected to be completed in 2022Declining cost profile: the completion of La Yaqui Grande and the Phase III Expansion are expected to drive all-in sustaining costs lower to approximately $800 per ounce by 2025Fully funded organic growth: the Company’s growth initiatives are expected to be funded internally given its strong balance sheet and free cash flow outlook2021 Guidance
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