Alamos Gold Inc. · TSX:AGI
Alamos Gold — Investor Presentation (September 2014)
36 slides from Alamos Gold's investor presentation, September 2014
Slide 1: September 2014 Corporate Presentation
September 2014 Corporate Presentation
Slide 2: Cautionary Notes
Cautionary Notes Cautionary Notes No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Certain statements in this presentation are “forward-looking statements”, including within the meaning of the United States Securitie
Slide 3: Alamos Well Positioned for Low-Cost Growth
Alamos Well Positioned for Low‐Cost Growth • We remain a low‐cost, mid‐tier gold producer • Mexico (Sonora State): own and operate the Mulatos Mine • 2014 guidance of 150,000‐170,000 ounces at all‐in sustaining costs1 below $1,000 per ounce • Low cost production growth from Cerro Pelon and La Yaqui
Slide 4: Mulatos – Proven, Low Risk, High Reward Strategy
Mulatos – Proven, Low Risk, High Reward Strategy $10m $70m $350m cost to acquire initial capital raised to free cash flow Mulatos in 2003 build Mulatos generated to date Long term track record of capital discipline…. 1 Please refer to Cautionary Notes on non‐GAAP Measures and Additional GAAP Measure
Slide 5: Track Record of Delivering Shareholder Value
Track Record of Delivering Shareholder Value Return on Equity – 5 Year Average 20 15.2% 15 13.9% 12.8% 10 8.8% 4.5% 4.2% 5 3.3% 2.8% 2.6% 0.5% 0 AGI SMF CG NEM BTO ELD YRI G IMG NGD AEM AUQ ABX K ‐1.2% ‐5 ‐5.7% ‐10 ‐8.2% ‐11.8% ‐15 Source: Capital IQ 5
Slide 6: Strong Growth Profile – Proven Strategy
Strong Growth Profile – Proven Strategy We intend on replicating this success many times over… Cerro Pelon & La Yaqui Open pit, heap leach projects Kirazlı Total acquisition cost • Low capital intensity Ağı Dağı • <$150m Çamyurt • ~$20/oz of • Low operating costs Esperanza resource1,2 • Low technica
Slide 7: Strong Growth Profile – Fully Funded
Strong Growth Profile – Fully Funded • Fully funded growth – $390m cash and ongoing cash flow generation • Further potential upside through Çamyurt & Quartz Mountain 500 400 Production (000 oz Au) 300 200 100 0 Esperanza 2006 2007 2008 2009 2010 2011 2012 2013E 2014E Kirazlı & Ağı Dağı Mulatos 7
Slide 8: Mulatos Mine – Our Foundation
Mulatos Mine – Our Foundation Project: Open pit, heap leach Location: Sonora State, Mexico Ownership: 100% interest Stage: Producing Throughput: 17,700 tpd (700 tpd from mill) • Among the lower cost producers globally • Mine life of 8 years based on reserves • Generated ~$350m in free cash flow to d
Slide 9: Mulatos Mine – H1 2014 Highlights & 2014 Guidance
Mulatos Mine – H1 2014 Highlights & 2014 Guidance Operating Data H1 2014A 2014E Guidance Production oz Au 70,000 150,000 ‐ 170,000 Cash Operating Costs1 US$/oz $571 $630‐670 Total Cash Costs1 US$/oz $641 $700‐740 All‐in Sustaining Costs1 US$/oz $980 $960‐1,000 Combined Gold Recovery % 69% 75% Combin
Slide 10: Mulatos Mine – Transition Year
Mulatos Mine – Transition Year Transitioning to underground mining for high grade mill feed • Mill feed: ~4 years @ 700 tpd based on reserves • San Carlos on track; initial mill production in Q4 • UG mineral reserves 929,000 t @ 7.02 g/t Au (209,527 oz)1 • Further conversion potential – UG mineral M
Slide 11: San Carlos on Track for Mill Production in Q4
San Carlos on Track for Mill Production in Q4 11
Slide 12: Mulatos Mine – Cerro Pelon & La Yaqui Satellite Projects
Mulatos Mine – Cerro Pelon & La Yaqui Satellite Projects Incremental low‐cost production growth starting in 2016 • Production additive • Independent crushing circuit & heap leach pads • Average production of 33,000 oz per year over 5 year mine life • Peak production of ~50,000 oz per year • Higher g
Slide 13: Turkey – Low-Cost Production Growth
Turkey – Low‐Cost Production Growth Projects: Open pit, heap leach Location: Turkey Ownership: 100% interest Stage: Development • Excellent infrastructure; low technical risk • Ağı Dağı EIA approved August 2014 2012 Positive Pre‐feasibility Study – Summary1 Kirazlı Ağı Dağı Mine Life Years 5 7 Avera
Slide 14: Esperanza Gold Project – Significant Growth Potential
Esperanza Gold Project – Significant Growth Potential Project: Open pit, heap leach Location: Morelos State, Mexico Ownership: 100% interest Stage: Development • Excellent infrastructure; low technical risk • Low capital intensity and operating costs • Average annual production potential > 100,000 o
Slide 15: Quartz Mountain Property – Compelling Opportunity
Quartz Mountain Property – Compelling Opportunity Location: Oregon, United States Ownership: Right to earn a 100% interest Stage: Advanced Exploration • Located on northern extension of the prolific Basin and Range Province of Nevada • Low strip ratio, favourable metallurgy2 • Aligned with our strat
Slide 16: Alamos Gold – Value Proposition
Alamos Gold – Value Proposition 10.00 9.00 8.00 7.00 US$/share 6.00 $5.96 5.00 $9.04 4.00 3.00 2.00 $3.08 $3.46 1.00 0.00 3 2 2 Current Share Price Cash/Share Working Capital/Share Implied Value for Mulatos, Turkey, Esperanza & Quartz Mountain 3 1 Please refer to Cautionary Notes on non‐GAAP Measure
Slide 17: Alamos Investment Case
Alamos Investment Case • Low cost, mid‐tier gold producer • Strong growth profile • Robust balance sheet – fully funded development pipeline • Track record of delivering shareholder value • Lean capital structure – 127.4m shares outstanding (139.5m fd) • Healthy semi‐annual dividend – current yield
Slide 18: Appendices
Appendices 18
Slide 19: Robust Balance Sheet
Robust Balance Sheet Cash & Cash Equivalents1 ~US$390 million Working Capital1 ~US$440 million Debt None Gold Hedging None Semi‐Annual Dividend US$0.10/share Shares Outstanding1 127.4 million Warrants1 7.2 million Employee Options1 5.0 million Fully Diluted 139.5 million Recent Share Price (TSX)2 C$
Slide 20: Board of Directors and Executive and Management Team
Board of Directors and Executive and Management Team Board of Directors Executive and Management Team Paul J. Murphy Chairman John A. McCluskey President and Chief Executive Officer John A. McCluskey Director Jamie Porter Chief Financial Officer David Gower Director Manley Guarducci Vice President a
Slide 21: 2013 Reserve & Resource Update – High Grade Growth
2013 Reserve & Resource Update – High Grade Growth 20131 TOTAL MINERAL RESERVES AND RESOURCES 20122 % Change High grade mineral reserves PROJECT Tonnes Grade Contained Tonnes Grade Contained Tonnes Grade Contained • 16% increase in ounces (000) (g/t Au) Ounces (000) (g/t Au) Ounces Ounces PROVEN AND
Slide 22: 2013 Reserve & Resource Update – High Grade Growth
2013 Reserve & Resource Update – High Grade Growth Increase in mineral reserve grades at Mulatos expected to positively impact production and costs 43% 9% increase higher 7.02 0.93 4.92 0.85 2012 2013 2014 Budget 2013 Open Pit Reserve Grade San Carlos Underground Open Pit Mineral Reserve Grade1 Mine
Slide 23: Growing Resource Base Enables Production Growth
Growing Resource Base Enables Production Growth1 12 P&P Reserves 2.03 Measured & Indicated 10 Inferred 8 2.37 M&I resources Au oz (millions) 2.39 6.67 increased 24%1 2.39 6 2.39 4 5.08 Inferred resources1 2.05 1.69 4.98 increased 142% 1.92 3.18 4.40 reflecting 2 acquisitions of 1.66 3.68 1.58 1.93 E
Slide 24: Resource Growth on an Aggregate and Per Share Basis
Resource Growth on an Aggregate and Per Share Basis1 100 P&P Reserves (per 1,000 shares) 90 Measured & Indicated (per 1,000 shares) 16 Inferred (per 1,000 shares) 80 70 Au oz per 1,000 shares 20 60 20 22 21 52 50 40 21 18 42 30 29 42 38 20 17 20 29 10 11 14 13 5 8 8 0 2007 2008 2009 2010 2011 2012 2
Slide 25: Remain Among the Lower All-In Sustaining Cost Producers
Remain Among the Lower All‐In Sustaining Cost Producers1 1,400 1,280 1,211 1,172 1,147 1,119 1,200 1,077 1,047 1,027 1,019 1,017 1,003 2014E All‐in Sustaining Costs (US$/oz) 985 957 1,000 934 921 919 912 907 881 838 800 600 400 200 0 JAG AUQ SGR IMG KGC AEM NEM TMM ABX LSG AGI GG SMF BTO ELD CG OSK
Slide 26: Track Record of Delivering Shareholder Value
Track Record of Delivering Shareholder Value 100% 80% 60% 40% 20% 0% ‐20% Alamos Gold Inc. (TSX:AGI) ‐ Share Pricing ‐40% S&P/TSX Global Gold Index ‐ Index Value Gold (COMEX ‐ C$/oz) ‐ Day Close Price ‐60% Sep‐09 Dec‐09 Mar‐10 Jun‐10 Sep‐10 Dec‐10 Mar‐11 Jun‐11 Sep‐11 Dec‐11 Mar‐12 Jun‐12 Sep‐12 Dec
Slide 27: Mexico: The High-Grade Story Continues
Cerro Pelon Mexico: The High‐Grade Story Continues East Estrella Estrella PdA El Salto/ PdA Mina Vieja Extension Escondida Gap El Victor April 2013 LEGEND Mineralized trends San Carlos +1 opt intercepts
Slide 28: Mulatos District Mulatos Alteration Map
Mulatos District Mulatos Alteration Map 28
Slide 29: Ağı Dağı Project: Map
N Ağı Dağı Project: Map Deli Pit Alteration Types Baba Pit Propylitic Argillic Çamyurt Pit Advanced Argillic Silica 2012 Resource Pit Outlines 29 29 1 Please refer to press release dated April 1, 2013 on Reserve and Resource calculations for 2012.
Slide 30: Kirazlı Project: Map
N Kirazlı Project: Map Kirazlı Pit Alteration Types Argillic Advanced Argillic Silica 2012 Resource Pit Outlines 1 Please refer to press release dated April 1, 2013 on Reserve and Resource calculations for 2012. 30 30
Slide 31: Sustainability
Sustainability Our commitment to principles of sustainable development has been a critical factor in our success to date, enabling us to maintain our social license from a broad range of stakeholders, including our employees, our shareholders, and our host communities and countries.
Slide 32: Sustainability
Sustainability • Recently completed first Annual Sustainability Report pursuant to GRI framework • Our Objectives • As we pursue further growth, we will continue to measure our success as an organization by our performance in achievement of our sustainability objectives: • protecting the health and
Slide 33: 2013 Mulatos Proven and Probable Mineral Reserves
2013 Mulatos Proven and Probable Mineral Reserves 1,2,3,4,5,6,8,9 Proven and Probable Reserves as at December 31, 2013 2 2 2 Proven Probable Proven + Probable Tonnes Grade Contained Tonnes Grade Contained Tonnes Grade Contained Reserve Area (000s) (g/t Au) Ounces (000s) (g/t Au) Ounces (000s) (g/t A
Slide 34: 2013 Total Measured and Indicated Mineral Resources
2013 Total Measured and Indicated Mineral Resources 1,2,3,4,5,6,7,8,9 Total Measured & Indicated Mineral Resources as at December 31, 2013 Cut‐off (g/t Tonnes Grade Grade Contained Contained Au) (000s) (g/t Au) (g/t Ag) Ounces Au Ounces Ag Mexico Mulatos 0.5 70,200 1.02 2,302,044 San Carlos UG 2.5 6
Slide 35: 2013 Total Inferred Mineral Resources
2013 Total Inferred Mineral Resources 1,3,4,5,6,7,8,9 Total Inferred Mineral Resources as at December 31, 2013 Cut‐off (g/t Tonnes Grade Grade Contained Contained Au) (000s) (g/t Au) (g/t Ag) Ounces Au Ounces Ag Mexico Mulatos 0.5 9,690 0.95 295,803 San Carlos UG 2.5 8 5.79 1,488 El Realito 0.3 91 0
Slide 36: Scott K. Parsons, CFA
Scott K. Parsons, CFA Director, Investor Relations 416.368.9932 x 439 sparsons@alamosgold.com