Alamos Gold Inc. · TSX:AGI
Alamos Gold — Investor Presentation (July 2020)
52 slides from Alamos Gold's investor presentation, Jul 16, 2020
Slide 1: Corporate Presentation July 2020
Corporate Presentation July 2020
Slide 2: Cautionary Notes
Cautionary Notes This presentation, the information contained herein, any other materials provided in connection with this presentation and any oral remarks accompanying this presentation (collectively, the “Presentation”), has been prepared by Alamos Gold Inc. (“Alamos” or the “Company”) solely for
Slide 3: Strong platform for delivering long-term value
Strong platform for delivering long-term value Diversified, long-life Expanding margins & Strong balance sheet Long-term track gold production from profitability to support growth record of creating three North American value for all mines stakeholders 2020 – transformational year ✓ Island Gold – 0.
Slide 4: Sustainability – creating shared value for all our stakeholders
Sustainability – creating shared value for all our stakeholders Environmental Social Governance o Zero significant environmental incidents in 2019 o Home Safe Every Day program: investing heavily in o 90% Director Independence a culture focused on safety first through safety & o Carbon footprint & e
Slide 5: COVID-19 update & outlook
COVID-19 update & outlook • Our primary focus remains the health and safety of our people and the communities in which we operate • We continue to be diligent in taking precautions to help prevent the potential spread of COVID-19 including instituting the following measures across the Company: o Med
Slide 6: Q1 2020 results – strong start to the year
Q1 2020 results – strong start to the year Previous Q1 2020A Q1 2019A Guidance 2020E6,7 111koz Gold production (000 oz) 110.8 125.3 425 - 465 produced, exceeding Q1 2020 guidance Gold sales (000 oz) 111.9 119.7 - Average realized gold price (US$/oz) $1,582 $1,304 - Cost of sales (US$/oz, includes am
Slide 7: Diversified asset base; low political risk profile
Diversified asset base; low political risk profile Long-term North American production base1 Mexico 30% ~500k oz Canada 70% Lynn Lake, Canada Island Gold, Canada Young-Davidson, Canada Diversified asset base Kirazlı, Turkey NAV by Country2 Quartz Mountain, USA Ağı Dağı, Turkey Turkey 17% Çamyurt, Tu
Slide 8: Young-Davidson – lower mine expansion
Young-Davidson – lower mine expansion • Tie-in of upper & lower mines completed early July 2020 • Mining rates expected to ramp up to 7,500 tpd by year-end 2020 • Significant reduction in costs & capital expected to drive strong free cash flow growth starting in H2 2020 Total capital (US$m) 1 Operat
Slide 9: Young-Davidson – transition to lower mine infrastructure completed July 2020
Young-Davidson – transition to lower mine infrastructure completed July 2020 Transition to lower mine infrastructure to drive strong free cash flow growth: • Higher production • Lower costs • Lower capital intensity Upper mine Lower mine % infrastructure infrastructure Change Long term – H2 Timeline
Slide 10: Island Gold – multi-phase growth
Island Gold – multi-phase growth • Phase I expansion drove record production of 150k oz & record free cash flow of $65m in 2019 • Phase II expansion taking mining rates to 1,200 tpd in 2020 • Phase III Shaft Expansion to 2,000 tpd announced July 2020 • 3% NSR royalty covering majority of deposit rep
Slide 11: Island Gold – ongoing exploration success driving growth in size & quality
Island Gold – ongoing exploration success driving growth in size & quality Significant Growth Since Nov 2017 Acquisition 4,000 12 +62% Mineral Reserves M&I Mineral Resources or 463k oz Increase in Mineral Inferred Mineral Resources Reserves, net of 364k oz mining Mineral Reserve grade 10 depletion3
Slide 12: Island Gold – Phase III Expansion Study
Island Gold – Phase III Expansion Study Shaft Expansion to 2,000 tpd best option of five considered • Strongest economics • Highest annual production and lowest operating costs • Higher capital more than offset by reduction in LOM operating costs $1.02B NPV5% & 17% IRR • Increasing margins vs ramp a
Slide 13: Island Gold Shaft Expansion – best option
Island Gold Shaft Expansion – best option Shaft Expansion Production & Cost Profile 2 350,000 $1,000 236k oz average annual 300,000 $900 production1; 72% increase from previous 2020 guidance3 $800 250,000 Mine-site AISC2 (US$/oz) $534/oz average mine-site Gold production (oz) $700 200,000 $600 AISC1
Slide 14: Island Gold Shaft Expansion – best option
Island Gold Shaft Expansion – best option Ramp Haulage Shaft Expansion 1200 tpd 2000 tpd Average production (post project) 2 000 oz Au 142 236 Total cash costs (post project) 1,2 US$/oz $539 $403 Mine-site AISC (post project) 1,2 US$/oz $767 $534 Sustaining capital US$ M $753 $552 $118m higher LOM t
Slide 15: Shaft Expansion – best option to capitalize on future exploration upside
Shaft Expansion – best option to capitalize on future exploration upside W Planned shaft location E Crown pillar 340 Level 620-616-07 - 500 m - 500 m 18.72 g/t Au (16.44 g/t Au cut) / 3.64 m 840-566-06 21.01 g/t Au (21.01 g/t Au cut) / 4.26 m 620 Level 620-616-02 21.30 g/t Au (15.52 g/t Au cut) / 2.
Slide 16: Mulatos District – stable production; declining cost profile
Mulatos District – stable production; declining cost profile • Achieved 2m oz of gold production in March 2019 – no third party royalty • Initial production from Cerro Pelon achieved ahead of schedule in Q4 2019 • Reducing diesel consumption – connecting to lower cost grid power in 2020 1 Total capi
Slide 17: Peer leading, multi-stage, fully funded growth
Peer leading, multi-stage, fully funded growth Quartz Mountain Longer term value creation Esperanza opportunities 13% Lynn Lake After-tax IRR1 253% Çamyurt After-tax IRR1 Peer leading, high-return 39% Ağı Dağı After-tax IRR1 growth 44% Kirazlı After-tax IRR1 Young-Davidson 13 • Completion of lower m
Slide 18: Growth: Kirazlı Project – low-cost, high-return, fully funded
Growth: Kirazlı Project – low-cost, high-return, fully funded Kirazlı Project, Turkey Project update • Construction activities suspended pending renewal of mining concessions which expired October 13, 2019 • Concessions are not revoked – can be renewed after expiration • Working with Turkish Departm
Slide 19: Growth: Lynn Lake Project – Low cost, high-grade, open pit
Growth: Lynn Lake Project – Low cost, high-grade, open pit • Favourable jurisdiction: Manitoba, Canada • High-grade, open pit with significant exploration & project optimization potential • Existing infrastructure in place; low-cost hydroelectric power • Feasibility Study completed December 2017 • E
Slide 20: Strong balance sheet; long-term focus on returning capital to shareholders
Strong balance sheet; long-term focus on returning capital to shareholders Cash & Total Liquidity Balance Sheet Cash & Cash Eq.1,2 US$215 million Total Liquidity3 US$615 million $215m Total Debt US$100 million 1,2,3 $615m Capital Structure Shares Outstanding (Basic) 390.7 million $400m Shares Outsta
Slide 21: Track record of adding value on aggregate & per share basis
Track record of adding value on aggregate & per share basis Gold Production (000 oz Au) Mineral Reserves (000 oz Au) Cash provided by operations before changes in WC (US$M) +254% 495 +460% 9.7 +482% $297 140 1.7 $51 1 2014A 2019A 2014A 2019A 2014A 2019A2 Gold Reserves Per Share Cash Flow Per Share G
Slide 22: Long-term track record of delivering shareholder value
Long-term track record of delivering shareholder value Long-term track record of outperformance 2 1 1.78 1.73 Consensus P/NAV Average annualized return since 2003 1.56 1.55 16% 1.14 1.08 1.05 1.03 10% 0.94 0.78 0.70 0.67 3% S&P/TSX Global AGI (TSX) Gold (US$/oz) AGI ELD BTO YRI CG SSRM IMG NGD PAAS
Slide 23: Alamos – value creation opportunities
Alamos – value creation opportunities Diversified, long-life gold Expanding margins & Strong balance sheet to Long-term track record production profitability support growth of creating value for all stakeholders Catalysts Young-Davidson – lower mine expansion completed July 2020 Island Gold – Phase
Slide 24: Appendices
Appendices TSX:AGI ǀ NYSE:AGI 24
Slide 25: Board of Directors, Executive and Management Team
Board of Directors, Executive and Management Team Board of Directors Paul J. Murphy John A. McCluskey Elaine Ellingham David Fleck David Gower Claire M. C. Kennedy Monique Mercier J. Robert S. Prichard Ronald E. Smith Kenneth Stowe Chairman Director Director Director Director Director Director Direc
Slide 26: Previous 2020 guidance – withdrawn following COVID-19 temporary suspensions
Previous 2020 guidance – withdrawn following COVID-19 temporary suspensions Previous 2020 Guidance5 2019A Young-Davidson Mulatos Island Gold4 Other Total4 Total Gold production (000’s oz) 145-160 150-160 130-145 — 425-465 495 Cost of Sales (in millions) (3) $207 $168 $116 — $491 $521 Cost of Sales (
Slide 27: Previous 2020 guidance – withdrawn following COVID-19 temporary suspensions
Previous 2020 guidance – withdrawn following COVID-19 temporary suspensions Previous 2020 Guidance2 2019A Sustaining Capital Growth Capital Total Total Operating Mines (US$M) Young-Davidson $30 - $35 $45 - $50 $75 - $85 $100 Island Gold $35 - $40 $15 - $20 $50 - $60 $53 Mulatos $15 - $20 $5 $20 - $2
Slide 28: Young-Davidson – flagship, long-life production
Young-Davidson – flagship, long-life production Location: Ontario, Canada Stage: Producing Ownership: 100% interest Operation: Underground • One of Canada’s largest underground gold mines • 13 year mine life based on YE 2019 mineral reserves • Large resource base & exploration potential to support m
Slide 29: Young-Davidson – lower mine expansion to drive costs lower
Young-Davidson – lower mine expansion to drive costs lower H2 2020E mining cost per tonne C$50/t Upper mine Lower mine Incremental improvement C$2.00/tonne; excluding productivity Lateral material handling trucking conveying improvements C$10/t decrease LOM Mid shaft ore trucking from below trucking
Slide 30: Young-Davidson – increasing grade & productivity
Young-Davidson – increasing grade & productivity Underground ramp up driving production higher 60,000 8,000 50,000 7,000 Gold production (oz) Underground TPD 40,000 6,000 30,000 5,000 20,000 4,000 10,000 3,000 0 2,000 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/1
Slide 31: Island Gold – high-grade, low-cost production
Island Gold – high-grade, low-cost production Location: Ontario, Canada Stage: Producing Ownership: 100% interest Operation: Underground • One of Canada’s highest grade & lowest cost gold mines • Phase III Shaft Expansion to 2,000 tpd announced July 2020 • Significant upside potential reflecting inc
Slide 32: One of Canada’s highest-grade gold mines
One of Canada’s highest-grade gold mines Mineral Reserve Grade (g/t Au) 22.1 +62% 14.4 10.4 10.2 10.2 9.2 8.7 8.4 7.0 6.5 6.5 6.4 6.1 5.7 5.3 5.3 5.1 3.1 2.6 1.6 Source: Company filings TSX:AGI ǀ NYSE:AGI 32
Slide 33: Island Gold Shaft Expansion – cash flow profile at $1,450/oz Au
Island Gold Shaft Expansion – cash flow profile at $1,450/oz Au S2000 $270 $266 $244 $229 $229 $223 $202 $188 $179 $173 $174 $173 $153 $150 $151 $161 $160 $152 $134 $136 $132 $131 $122 $117 $103 $68 $56 $68 $12 -$14 -$1 -$15 -$40 -$42 -$35 -$30 -$54 -$59 -$47 -$52 -$48 -$77 -$65 -$124 -$162 -$169 -$
Slide 34: Island Gold Shaft Expansion – cash flow profile at $1,750/oz Au
Island Gold Shaft Expansion – cash flow profile at $1,750/oz Au S2000 $332 $301 $302 $291 $253 $251 $239 $236 $196 $214 $220 $207 $223 $203 $192 $204 $195 $175 $177 $172 $162 $173 $161 $156 $137 $86 $98 $86 $52 -$15 -$9 -$14 -$15 -$1 -$26 -$40 -$35 -$30 -$52 -$48 -$42 -$77 -$65 -$124 -$162 -$169 -$1
Slide 35: Island Gold Shaft Expansion – operating cost by level
Island Gold Shaft Expansion – operating cost by level Unit mining cost by elevation Difference (C$/tonne) Elevation R1200 R1600 S2000 S2000 vs R1200 750m $106 $104 $96 -$10 1000m $124 $119 $98 -$26 1250m $141 $135 $100 -$41 1500m $159 $150 $102 -$57 • Ramp access costs will continue to increase as m
Slide 36: Island Gold Shaft Expansion – detailed mine plan
Island Gold Shaft Expansion – detailed mine plan 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Mill Feed mined (tonnes) 410,593 438,000 437,999 437,994 439,198 557,150 719,805 730,000 731,957 729,934 729,951 730,000 731,947 730,000 721,154 296,654 Waste mined (tonne
Slide 37: Island Gold Mine – 2020 exploration highlights
Island Gold Mine – 2020 exploration highlights W E Crown pillar 340 Level 620-616-07 - 500 m - 500 m 18.72 g/t Au (16.44 g/t Au cut) / 3.64 m 840-566-06 21.01 g/t Au (21.01 g/t Au cut) / 4.26 m 620 Level 620-616-02 21.30 g/t Au (15.52 g/t Au cut) / 2.24 m 840 Level 840-566-01 Island East - 1000 m 52
Slide 38: Island Gold Mine Main and East areas – directional drilling results
Island Gold Mine Main and East areas – directional drilling results 620m Level W E Ramp & Development LEGEND Mined out Au Cut (g/t) Au Cut * True Width (gm/t) Diabase Dyke < 4.0 <8 R & R Year End 2019 4.0 < 10.0 8 < 20 Proven Reserves 10.0 < 30.0 20 < 60 Probable Reserves >= 30.0 >= 60 Measured Reso
Slide 39: Island Gold Mine Main and East areas – underground exploration drilling results
Island Gold Mine Main and East areas – underground exploration drilling results W E 340 Level LEGEND E Ramp & Development Mined out Au Cut (g/t) Au Cut * True Width (gm/t) Diabase Dyke < 4.0 <8 R & R Year End 2019 4.0 < 10.0 8 < 20 Proven Reserves 10.0 < 30.0 20 < 60 Probable Reserves 620-616-07 >=
Slide 40: Island Gold Mine Main and East areas – schematic cross section
Island Gold Mine Main and East areas – schematic cross section Schematic Cross Section (15940mE – 16060mE, looking west) LOCATION PLAN LEGEND 620m R & R Year End 2019 Explo. Probable Reserves Drift Indicated Resources Inferred Resources E1E Interpreted Zone HOLE-ID g/t Au Uncut (g/t Au cut) / True W
Slide 41: Island Gold – historical operational results
Island Gold – historical operational results 40,000 $2,000 14 1,400 35,000 $1,800 12 1,200 $1,600 30,000 $1,400 10 1,000 25,000 $1,200 8 20,000 $1,000 800 $800 6 15,000 600 $600 4 10,000 $400 2 400 5,000 $200 0 $0 0 200 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4
Slide 42: Mulatos – our founding operation
Mulatos – our founding operation Location: Sonora, Mexico Stage: Producing Ownership: 100% interest Operation: Open pit, heap leach • Initial production 2005 • ~$435m of free cash flow2 generated to date • Declining cost profile; no third party royalty • Large underexplored land package (28,773 ha)
Slide 43: Mulatos – district exploration potential
Mulatos – district exploration potential La Yaqui Grande La Yaqui Phase I 888k oz Combined Mineral Reserves1,2 at La Yaqui & Cerro Pelon, a 304% increase since 2014 District potential Large underexplored land package; >70% of past drilling focused 1 See Mineral Reserve and Resource estimates and ass
Slide 44: Development – Kirazlı, Ağı Dağı & Çamyurt
Development – Kirazlı, Ağı Dağı & Çamyurt Location: Turkey Stage: Development Ownership: 100% interest Operation: Open pit, heap leach • Kirazlı EIA, GSM & Forestry Permits approved • Kirazlı & Ağı Dağı feasibility studies completed February 20171 outlining 185% increase in combined after-tax NPV8%
Slide 45: Kirazlı, Ağı Dağı & Çamyurt Economic Studies – 2017
Kirazlı, Ağı Dağı & Çamyurt Economic Studies – 2017 Feasibility Study - 2017 Preliminary Economic Assessment - 2017 Kirazlı Ağı Dağı Çamyurt Production Mine life (years) 5 6 4 Total gold production (ounces) 540,000 937,300 373,200 Total silver production (ounces) 3,141,000 2,365,200 1,612,600 Averag
Slide 46: Development – Lynn Lake, Esperanza & Quartz Mountain
Development – Lynn Lake, Esperanza & Quartz Mountain Lynn Lake Esperanza Quartz Mountain Location: Manitoba, Canada Location: Morelos State, Mexico Location: Oregon, United States Ownership: 100% interest Ownership: 100% interest Ownership: Right to earn a 100% interest4 Stage: Permitting Stage: Per
Slide 47: Lynn Lake Feasibility Study – 2017
Lynn Lake Feasibility Study – 2017 Feasibility Study Highlights - December 2017 Production Mine life (years) 10.4 Total gold production (000 ounces) 1,495 Total silver production (000 ounces) 1,263 Average annual gold production1 Years 1 to 6 (000 ounces) 170 Years 1 to 10 (000 ounces) 143 Total ore
Slide 48: Proven & Probable Mineral Reserves
Proven & Probable Mineral Reserves PROVEN AND PROBABLE GOLD MINERAL RESERVES (as at December 31, 2019) Proven Reserves Probable Reserves Total Proven and Probable Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces (000's) (g/t Au) (000's) (000's) (g/t Au) (000's) (000's) (g/t Au) (000's) Yo
Slide 49: Total Measured & Indicated Mineral Resources
Total Measured & Indicated Mineral Resources MEASURED AND INDICATED GOLD MINERAL RESOURCES (as at December 31, 2019) Measured Resources Indicated Resources Total Measured and Indicated Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces (000's) (g/t Au) (000's) (000's) (g/t Au) (000's) (000'
Slide 50: Total Inferred Mineral Resources
Total Inferred Mineral Resources INFERRED GOLD MINERAL RESOURCES (as at December 31, 2019) Tonnes Grade Ounces (000's) (g/t Au) (000's) Young-Davidson – Surface 31 0.99 1 Young-Davidson – Underground 1,329 2.43 104 Total Young-Davidson 1,360 2.40 105 Island Gold 5,392 13.26 2,298 Mulatos 8,122 0.92
Slide 51: Notes to Mineral Reserve and Resource estimates
Notes to Mineral Reserve and Resource estimates Qualified Persons Chris Bostwick, FAusIMM, Alamos Gold’s Vice President, Technical Services, has reviewed and approved the scientific and technical information contained in this presentation. Chris Bostwick is a Qualified Person within the meaning of C
Slide 52: Scott K. Parsons, CFA
Scott K. Parsons, CFA VP, Investor Relations 416.368.9932 x 5439 sparsons@alamosgold.com