Alamos Gold Inc. · TSX:AGI
Alamos Gold — Merger or Acquisition (March 2024)
60 slides from Alamos Gold's merger presentation, Mar 27, 2024
Slide 1: Alamos Gold Acquisition of Argonaut Gold
Island Gold Mine Dubreuilville, Ontario Alamos Gold Acquisition of Argonaut Gold Unlocking value through the creation of one of Canada’s largest and lowest cost gold mines Magino Mine Dubreuilville, Ontario March 27, 2024
Slide 2: Alamos Gold - Cautionary notes
Alamos Gold - 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”), have been prepared by Alamos Gold Inc. (“Alamos”) and Argonaut
Slide 3: Argonaut Gold - Cautionary notes
Argonaut Gold - Cautionary notes Certain information contained or incorporated by reference in this presentation, including any information as to our strategy, projects or future financial or operating performance, constitutes “forward-looking statements”. Forward-looking statements are frequently c
Slide 4: Call participants
Call participants John A. McCluskey President & Chief Executive Officer Richard Young President & Chief Executive Officer Greg Fisher Chief Financial Officer Marc Leduc Chief Operating Officer Luc Guimond Chief Operating Officer TSX:AGI | NYSE:AGI 4
Slide 5: Transaction highlights
Transaction highlights Combination of Island Gold and Magino to create one of the largest and lowest-cost gold mines in Canada Immediate value creation Long-term upside potential ~$515M pre-tax synergies1 to be realized over the life of mine Significant upside potential at both operations through th
Slide 6: Transaction summary
Transaction summary • Alamos Gold Inc. (“Alamos”) to acquire Argonaut Gold Inc. (“Argonaut”) via a Plan of Arrangement • Implied equity value of US$276 million1 (C$375 million), excluding the value of SpinCo Proposed Transaction • Implied enterprise value of US$516 million1 (C$702 million), excludin
Slide 7: Benefits to Alamos shareholders
Benefits to Alamos shareholders • ~$515M1 of synergies expected to be created through integration of adjacent Magino & Island Gold mines Significant value creation • Immediately accretive across key financial & operational metrics including net asset value, cash flow, production & Mineral Reserves p
Slide 8: Benefits to Argonaut shareholders
Benefits to Argonaut shareholders • 34% premium to Argonaut’s closing price on March 26, 20241,2 Significant premium • 41% premium based on Argonaut and Alamos’ 20-day volume-weighted average prices1,2 • Provides exposure to Alamos’ high quality portfolio of assets including diversified North Americ
Slide 9: Alamos Pro Forma Asset Overview
Alamos Pro Forma Asset Overview ✓ Enhanced growth profile: > 900k oz long term annual production potential ✓ Leading Canadian exposure with 88% of net asset value in Canada ✓ Adding value on aggregate & per share basis
Slide 10: Asset overview – increasing Canadian exposure
Asset overview – increasing Canadian exposure Producing Assets Exploration/ Development Assets Island Gold Ontario, Canada Underground 2024E Au production: 145-160k oz Lynn Lake 2024E Mine-site AISC1,2: $875-925/oz Manitoba, Canada Open-pit Phase 3+ Study LOM average (2026+) 2023 Feasibility Study4
Slide 11: Growing, long-life North American production; declining cost profile
Growing, long-life North American production; declining cost profile 1,000 $1,264 900 $1,204 $1,160 $1,150 $1,143 $1,070 > 900k oz 800 $1,100 $1,025 annual production potential of Alamos 700 pro forma with development of PDA & Production (000 oz Au) Lynn Lake 600 Magino Magino Magino Magino 500 400
Slide 12: Adding value within top-tier jurisdiction
Adding value within top-tier jurisdiction Expanding upon leading exposure to Canada Adding value on aggregate & per share basis Leading Canadian Exposure Gold Production (k oz Au) Mineral Reserves (M oz Au) Asset NPV3 by Geography +25% 630 +22% 13.0 Mexico 505 10.7 12% Canada 2024E 2024E Pro Forma 1
Slide 13: Strategic & Financial Rationale
Strategic & Financial Rationale ✓ Immediate value creation: ~$515M of synergies over the life of mine ✓ Long-term upside potential: via further expansion of both mines & single optimized milling complex ✓ Combination to create one of the largest and lowest-cost gold mines in Canada ✓ Continued conso
Slide 14: Significant near-term synergies
Strategic & financial rationale Significant near-term synergies Capital savings: ~$140M • through use of one central mill & tailings facility at Magino Procurement savings • Island Gold mill & ongoing tailings expansions no longer required • increased purchasing power with ~$515M three Canadian oper
Slide 15: Shared infrastructure to drive significant synergies
Strategic & financial rationale Shared infrastructure to drive significant synergies • Island Gold & Magino deposits within ~300m • Magino Mill incremental 2km haul distance from Island Gold shaft • Larger mill & tailings facility to accommodate growing Island Gold deposit TSX:AGI | NYSE:AGI 15
Slide 16: Island Gold + Magino – significantly larger Mineral endowment
Strategic & financial rationale Island Gold + Magino – significantly larger Mineral endowment 11.5M oz of total Mineral Reserves & Resources • 6.1M oz at Island Gold1 • 5.4M oz at Magino2 12,000 Mineral Reserves M&I Mineral Resources 9,000 Inferred Mineral Resources 4,525 K oz Au 6,000 2,912 843 3,6
Slide 17: Synergies through shared infrastructure
Strategic & financial rationale Island Gold + Magino – synergies through shared infrastructure Significant capital & operating savings through central, optimized Magino mill & tailings facility Magino Mine Magino Mill Island Gold Mine Open pit mill feed Total milling rate Underground mining rate (tp
Slide 18: Long-term upside potential
Strategic & financial rationale Long-term upside potential Significant long-term upside potential at both operations through single optimized milling complex • Magino mill expansion to 12,400 tpd expected in 2026 with modest capital investment • Further expansion beyond 12,400 tpd would support pote
Slide 19: Long-term upside potential at Island Gold
Long-term upside potential at Island Gold Ongoing exploration success supporting expanding operation 6.1M oz 1M oz Significant upside total Mineral Reserves & increase since completion of Phase 3+ main structure open laterally & at depth; Resources2, a 16% increase YoY Expansion Study in 2022 emergi
Slide 20: Magino overview
Magino overview Initial production June 2023, commercial production November 2023 Location: Ontario, Canada 19-year mine life based on January 2022 Mineral Reserves Stage: Producing Large Mineral Resource base to support mine life extension Operation: Open pit & CIP mill Current design capacity 10k
Slide 21: Magino mining metrics continue to improve
Magino mining metrics continue to improve Daily Total Material Moved (ktpd) With mine tonnage approaching design rates, 60 focus has turned to mining accuracy & efficiency 45 50.5 42.6 45.4 • Implementation of the Fleet Management System 41.3 40.8 30 37.3 well-underway and already having a positive
Slide 22: Magino mill continues to ramp up towards nameplate throughput
Magino mill continues to ramp up towards nameplate throughput Mill Daily Tonnage (tpd) & Throughput Rate (tpoh) 12,000 457 470 Mill tonnage continues to improve Nameplate capacity: 439 437 422 424 422 10,000 tonnes per day • Shortfalls attributable to excessive 10,000 374 370 unscheduled mill downti
Slide 23: Magino exploration upside
Magino exploration upside Significant upside potential through conversion of existing Mineral Resources within pit • 2.4M oz1 within current Mineral Reserve pit • 5.4M oz1 total Mineral Reserves & Resources within larger Resource pit E W Current Reserve Pit Max Depth 350m Current Resource Cone Max D
Slide 24: One of largest, lowest-cost, & longest-life gold mines in Canada
Island Gold + Magino One of largest, lowest-cost, & longest-life gold mines in Canada Annual production - 4th largest Canadian production – 3rd largest & growing 2023A Production1 2024E Production1 Operation Owner Company (koz) (koz) Canadian Malartic Agnico Eagle 685 Agnico Eagle 2,880 Detour Lake
Slide 25: Consolidation of Michipicoten Greenstone Belt
Strategic & financial rationale Consolidation of Michipicoten Greenstone Belt • 2017: Richmont Mines acquisition • 9,500 ha total TSX:AGI | NYSE:AGI 25
Slide 26: Consolidation of Michipicoten Greenstone Belt
Strategic & financial rationale Consolidation of Michipicoten Greenstone Belt • 2017: Richmont Mines acquisition • 9,500 ha total • 2020: Trillium Mining acquisition • +5,400 ha (14,900 ha total) TSX:AGI | NYSE:AGI 26
Slide 27: Consolidation of Michipicoten Greenstone Belt
Strategic & financial rationale Consolidation of Michipicoten Greenstone Belt • 2017: Richmont Mines acquisition • 9,500 ha total • 2020: Trillium Mining acquisition • 5,400 ha (14,900 ha total) • 2023: Manitou Gold acquisition • +40,000 ha (54,900 ha total) TSX:AGI | NYSE:AGI 27
Slide 28: Consolidation of Michipicoten Greenstone Belt
Strategic & financial rationale Consolidation of Michipicoten Greenstone Belt Growing land package, with significant near mine & regional exploration potential across underexplored • 2017: Richmont Mines acquisition Michipicoten Greenstone Belt • 9,500 ha total • 2020: Trillium Mining acquisition •
Slide 29: Consolidation of Michipicoten Greenstone Belt
Strategic & financial rationale Consolidation of Michipicoten Greenstone Belt Growing land package, with significant near mine & regional exploration potential across underexplored • 2017: Richmont Mines acquisition Michipicoten Greenstone Belt • 9,500 ha total • 2020: Trillium Mining acquisition •
Slide 30: SpinCo overview
SpinCo overview Growing junior producer with attractive US & Mexican exposure • Argonaut shareholders to own 80.01% of SpinCo Ownership • Alamos to own 19.99% following $10 million equity financing upon SpinCo going public • Two producing assets with over 100k oz of production expected in 20241 • At
Slide 31: Long-term track record of creating value
Long-term track record of creating value $2.7 billion of combined value created at Young-Davidson, Island Gold & Lynn Lake since acquisition1,2 Mulatos (US$M) Young-Davidson (US$M) Island Gold (US$M) Lynn Lake (US$M) $158 Acquisition Cost Consensus NPV1 Cumulative FCF2 $366 $494 $2,210 $1,236 $950 $
Slide 32: Transaction highlights
Transaction highlights Significant value creation Strengthens core portfolio Established infrastructure to accommodate rapidly growing Island Gold deposit Stronger platform to optimize Magino & execute on organic growth Enhanced growth profile Solidifies unique positioning as a leading Canadian inte
Slide 33: Appendices
Appendices
Slide 34: Pro forma capitalization
Pro forma capitalization ALAMOS GOLD PRO FORMA1 Exchanges (exchange) TSX/NYSE TSX/NYSE Trading Share Price (C$/sh) $18.45/US$13.60 Market Capitalization (C$ mm) $7,323 $7,698 Market Capitalization (US$ mm) $5,398 $5,675 Capitalization Enterprise Value (US$ mm) $5,173 $5,690 Cash (US$ mm) $225 $309 D
Slide 35: Board of Directors, Executive and Management Team
Board of Directors, Executive and Management Team Board of Directors Paul J. Murphy John A. McCluskey Elaine Ellingham David Fleck David Gower Claire M. C. Kennedy Monique Mercier J. Robert S. Prichard Shaun Usmar Chairman Director Director Director Director Director Director Director Director Execu
Slide 36: 2024 guidance
2024 guidance 2024 Guidance 2023A Young-Davidson Island Gold Mulatos Lynn Lake Total Total Gold production guidance (000 oz Au) 180 - 195 145 - 160 160 - 170 — 485 - 525 529 Cost of sales (US$M)1 — — — — $620 $638 Cost of sales (US$/oz)1 — — — — $1,225 $1,212 Total cash costs (US$/oz)2 $950 – 1,000
Slide 37: 2024 guidance: capital budget
2024 guidance: capital budget 2024 Guidance 2023A Sustaining Capital Growth Capital Total Total Operating Mines (US$M) Young-Davidson $40 - 45 $20 - 25 $60 - 70 $62 Island Gold $50 - 55 $210 - 230 $260 - 285 $222 Mulatos $3 – 5 $2 - 5 $5 - 10 $19 Total – Operating Mines $93 - 105 $232 - 260 $325 - 3
Slide 38: 2024 - 2026 guidance: operating mines
2024 - 2026 guidance: operating mines1 2024 2025 2026 Gold Production (000 oz) Young-Davidson 180 - 195 180 - 195 180 - 195 Island Gold 145 - 160 170 - 185 220 - 235 Mulatos District 160 - 170 120 - 130 120 - 130 Total Gold Production (000 oz) 485 - 525 470 - 510 520 - 560 Total Cash Costs2 (US$/oz)
Slide 39: Producing mines: High quality, long-life production base
Producing mines: High quality, long-life production base; low geopolitical risk profile Young-Davidson, Ontario, Canada Island Gold, Ontario, Canada Mulatos District, Sonora, Mexico Underground Underground Open pit, heap leach 2024E Au production: 180-195k oz 2024E Au production: 145-160k oz 2024E A
Slide 40: Development projects: High-return organic growth in low-risk jurisdictions
Development projects: High-return organic growth in low-risk jurisdictions Island Gold Phase 3+ Expansion Puerto Del Aire (Mulatos) Lynn Lake Expansion to create one of lowest cost & Higher-grade, underground deposit adjacent to Long-life, low-cost, open-pit project with most profitable gold mines i
Slide 41: Young-Davidson – long-life, low-cost production
Young-Davidson – long-life, low-cost production Location: Ontario, Canada One of Canada’s largest underground gold mines Ownership: 100% interest 15-year mine life based on YE 2023 Mineral Reserves Stage: Producing Large resource base & exploration potential to support mine life extension Operation:
Slide 42: Island Gold – growing, high-grade, low-cost production
Island Gold – growing, high-grade, low-cost production Location: Ontario, Canada World’s sixth highest grade gold mine1 Ownership: 100% interest Phase 3+ Shaft Expansion to 2,400 tpd expected to be completed in H1 2026 Stage: Producing Significant exploration potential laterally & at depth Operation
Slide 43: Island Gold Phase 3+ Expansion
Island Gold Phase 3+ Expansion Larger, longer-life & lower capital intensity Phase 3+ Expansion production & cost profile 89% 400,000 $1,100 production growth to 287k oz/yr in 20261 350,000 $1,000 $900 300,000 Mine-site AISC (US$/oz) Gold Production (oz) $800 250,000 $700 $576/oz 200,000 $600 averag
Slide 44: Island Gold Phase 3+ Expansion On track for completion H1 2026
Island Gold Phase 3+ Expansion On track for completion H1 2026 90% of shaft area 51% of total Phase 3+ Shaft sinking growth capital spent & growth capital spent & commenced December 2023; committed to date committed to date current depth ~90m (in US$M) As of December 31, 2023 Growth Capital P3+ 2400
Slide 45: Island Gold main structure 2023 Mineral Reserve & Resource Additions
Island Gold main structure 2023 Mineral Reserve & Resource Additions 1M oz of high-grade Mineral Reserves and Resources added, before depletion1 Low-cost to develop & produce; additions in proximity to existing infrastructure Significant ongoing upside with main structure open laterally & down plung
Slide 46: Island Gold Hanging Wall & Footwall
Island Gold Hanging Wall & Footwall Significant growth within recently defined zones ~70% of 2023 additions within HW & FW zones • >630k oz high-grade Mineral Reserves & Resources added • Low-cost to develop: 10-150m from main structure Recently defined zones driving growth • NTH: 146 oz total Miner
Slide 47: Island Gold – regional exploration highlights
Island Gold – regional exploration highlights High-grade mineralization intersected across multiple targets Pine & Breccia zone high-grade mineralization defined to 150 m depth over 50 m strike, including 29.8 g/t Au over 9.3m (23IGX057)1 88-60 zone 6.0 g/t Au over 11.2 m (23IGX066) intersected 7 km
Slide 48: Longitudinal of Canadian underground gold deposits
Longitudinal of Canadian underground gold deposits Island Gold Mine Red Lake - Campbell La Ronde • Commercial Production 1949 • Commercial Production 1988 • Commercial Production 2007 • Historical Production 20 Moz Au • Historical Production 6 Moz Au • Historical Production 1.4 Moz Au • Reserves 2.7
Slide 49: Mulatos District – our founding operation
Mulatos District – our founding operation Location: Sonora, Mexico Initial production 2005; >2M oz produced & $494M FCF1 generated to date Ownership: 100% interest Low-cost growth from La Yaqui Grande driving strong ongoing FCF1 Stage: Producing Large underexplored land package (28,773 ha) Operation
Slide 50: Puerto Del Aire – Mulatos District
Puerto Del Aire – Mulatos District Growing, higher-grade underground deposit 33% 16% 55 km Significant growth potential; deposit open in Low development costs; adjacent to main Mulatos Development plan in Q1 2024 multiple directions open pit increase in Mineral increase in Reserve 2024 exploration d
Slide 51: Lynn Lake Project 2023 Feasibility Study highlights
Lynn Lake Project 2023 Feasibility Study highlights Higher production Lower-cost Attractive economics Larger operation 176k oz $699/oz $670M 44% average annual production over average mine-site AISC2 over initial after-tax NPV3 at $1,950/oz; increase in Mineral Reserves1,4; initial 10 years; up 23%
Slide 52: Lynn Lake Project: Substantially de-risked; significant exploration upside
Lynn Lake Project Substantially de-risked; significant exploration upside Project significantly de-risked1 Significant exploration upside ▪ Low-cost hydro-electric power Regional pipeline of targets within trucking distance of MacLellan mill Good infrastructure: ▪ Proximity to paved highways ▪ Burnt
Slide 53: Alamos Gold - Total Proven & Probable Mineral Reserves
Alamos Gold - Total Proven & Probable Mineral Reserves PROVEN AND PROBABLE GOLD RESERVES (as at December 31, 2023) 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
Slide 54: Alamos Gold - Total Measured & Indicated Mineral Resources
Alamos Gold - Total Measured & Indicated Mineral Resources MEASURED AND INDICATED GOLD MINERAL RESOURCES (as at December 31, 2023) 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)
Slide 55: Alamos Gold - Total Inferred Mineral Resources
Alamos Gold - Total Inferred Mineral Resources INFERRED GOLD MINERAL RESOURCES (as at December 31, 2023) Tonnes Grade Ounces (000's) (g/t Au) (000's) Young-Davidson - Surface 31 0.99 1 Young-Davidson - Underground 1,350 3.31 144 Total Young-Davidson 1,381 3.26 145 Golden Arrow 2,028 1.07 70 Island G
Slide 56: Notes to Mineral Reserve and Resource estimates
Alamos Gold - Notes to Mineral Reserve and Resource estimates Qualified Persons Chris Bostwick, FAusIMM, Alamos Gold’s Senior Vice President, Technical Services, has reviewed and approved the scientific and technical information contained in this Presentation. Chris Bostwick is a Qualified Person wi
Slide 57: Cautionary Note to U.S. Investors
Alamos Gold - Cautionary Note to U.S. Investors All Resource and Reserve estimates included in this Presentation have been prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and
Slide 58: Argonaut Gold - Consolidated Mineral Reserves & Resources
Argonaut Gold - Consolidated Mineral Reserves & Resources Total Proven & Probable Mineral Reserves1 Total Measured & Indicated Resources1 Contained Contained Contained Contained Contained Contained Tonnes Au Grade Ag Grade Cu Grade Tonnes Au Grade Ag Grade Cu Grade Project Category Au Ounces Ag Ounc
Slide 59: Argonaut Gold - Notes & Disclosures
Argonaut Gold - Notes & Disclosures Argonaut Gold is a Canadian gold company with a portfolio of operations and multi-stage assets in North America. The Company is in the commissioning stage at its Magino Mine, located in Ontario, Canada. The Company also has three operating mines including the Flor
Slide 60: Investor Relations contacts
SCOTT K. PARSONS, CFA JOANNA LONGO SVP, Investor Relations Investor Relations 416.368.9932 x 5439 416.575.6965 sparsons@alamosgold.com investor.relations@argonautgold.com