Alamos Gold Inc. · TSX:AGI
Alamos Gold — Merger or Acquisition (April 2015)
36 slides from Alamos Gold's merger presentation, Apr 13, 2015
Slide 1: Merger of Equals Between Alamos Gold and AuRico Gold
Merger of Equals Between Alamos Gold and AuRico Gold CREATING A LEADING INTERMEDIATE GOLD PRODUCER APRIL 13, 2015
Slide 2: Alamos Cautionary Statement
Alamos Cautionary Statement 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 State
Slide 3: AuRico Cautionary Statement
AuRico Cautionary Statement This presentation contains certain information that constitutes “forward-looking information” and “forward-looking statements” as defined under Canadian and U.S. securities laws. All statements in this presentation, other than statements of historical fact, are forward-lo
Slide 4: Call Participants
Call Participants John McCluskey Scott Perry President & Chief Executive Officer President & Chief Executive Officer Jamie Porter Peter MacPhail Chief Financial Officer EVP & Chief Operating Officer Charles Tarnocai Chris Richter VP, Corporate Development SVP, Corporate Development 4
Slide 5: Transaction Rationale
Transaction Rationale • Creation of a leading intermediate gold producer with diversified production from three North American mines ‐ Two flagship, long‐life mines in Young‐Davidson and Mulatos ‐ Additional steady state production from El Chanate • Peer‐leading production growth profile from high‐q
Slide 6: Setting A New Standard
Setting A New Standard • Merger of equals transaction with 50/50 pro forma ownership • Total transaction value of ~US$1.5 billion • SpinCo (to be distributed to all MergeCo shareholders) comprised of: ‐ the Kemess project located in British Columbia; Transaction ‐ a 1.5% NSR royalty on the Young‐Dav
Slide 7: MergeCo Capitalization Summary
MergeCo Capitalization Summary Units Alamos AuRico MergeCo (1) Share Price (NYSE) (US$) $5.89 $2.99 $5.89 Basic Shares Outstanding (MM) 127.4 253.5 254.8 Basic Market Capitalization (US$MM) $750 $758 $1,501 Cash & Short‐Term (US$MM) $358 $89 $427 Investments Debt (US$MM) ‐‐ $333 $333 Enterprise Valu
Slide 8: Benefits to All Shareholders
Benefits to All Shareholders Diversified • High quality, diversified gold production from three North American mines production Leading growth • Extensive portfolio of low cost development stage assets in safe jurisdictions that can be profile advanced in a disciplined manner • Strong combined balan
Slide 9: MergeCo Portfolio – Best In Class
MergeCo Portfolio – Best In Class LYNN LAKE JV (25%)(2) Stage Feasibility Est. Annual Production 145k oz Est. Cash Costs US$530/oz YOUNG‐DAVIDSON Att. Au Resources 1.2MM oz 2015E Au Production 160‐180k oz 2015E Au Cash Costs US$675‐775/oz QUARTZ MOUNTAIN 2P Au Reserves 3.8MM oz Advanced Total Au Res
Slide 10: Diversified Portfolio of Quality Assets
Diversified Portfolio of Quality Assets Producing Assets in Top Mining Jurisdictions • Young-Davidson (Canada): Flagship long-life underground gold mine • Mulatos (Mexico): Flagship open pit, heap leach operation • El Chanate (Mexico): Stable open pit, heap leach operation Strong Development Pipelin
Slide 11: Strong Organic Growth Profile
Strong Organic Growth Profile Consensus Gold Production (k oz) Consensus Operating Cash Flow (US$MM)(1) 900 $500 800 $400 Operating Cash Flow (US$MM) 700 Gold Production (k oz) $300 600 500 $200 400 $100 300 200 $0 2015E 2016E 2017E 2018E Y‐D, Mul a tos , 2015E 2016E 2017E 2018E Y‐D, Mul a tos , (Mi
Slide 12: Larger, Diversified Portfolio in Safe Political Jurisdictions
Larger, Diversified Portfolio in Safe Political Jurisdictions Gold Mineral Reserves & Resources (MM oz) Pro Forma Asset Breakdown (2) Consensus NPV by Geography P&P Reserves Total Reserves & Resources (1) Turkey 17% 19.7 Canada 50% Mexico 33% Consensus NPV by Stage 6.2 Development 23% Production 77%
Slide 13: Strong Financial Foundation
Strong Financial Foundation Basic Market Capitalization (US$Bn) $2.8 $1.8 $1.6 $1.5 $1.4 $1.2 $1.0 $0.8 $0.8 $0.8 $0.7 $0.6 Tahoe New Gold Detour MergeCo B2Gold Centerra SEMAFO IAMGOLD AuRico Alamos Alacer Primero Net Cash / (Debt) (US$MM) $358 $347 $319 $234 $126 $94 $21 ($74) ($244) ($274) ($365)
Slide 14: Peer Leading Production Growth
Peer Leading Production Growth 2015E – 2018E Average Consensus Gold Production (k oz) 799 710 625 565 551 528 435 298 258 151 (1) IAMGOLD B2Gold Tahoe Detour Centerra MergeCo New Gold SEMAFO Primero Alacer 2015E – 2018E Consensus Gold Production Growth (%) 80% 77% 70% 33% 31% 29% 20% 16% 6% (14%) Me
Slide 15: Compelling Valuation
Compelling Valuation Consensus P/NAV Premium Intermediate Multiples 1.4x 1.3x 1.0x 1.0x 0.9x 0.9x 0.8x 0.8x 0.7x 0.7x 0.7x 0.7x Agnico Eagle Randgold SEMAFO Tahoe New Gold Alacer B2Gold Primero MergeCo IAMGOLD Centerra Detour Enterprise Value / Gold Resources (US$/oz) Premium Intermediate Multiples
Slide 16: MergeCo Leadership
MergeCo Leadership Executive Team Board of Directors • John McCluskey – President, CEO & Director • Alan Edwards – Chairman ‐ Current President, CEO & Director of Alamos ‐ Current Chairman of AuRico ‐ Over 30 years of industry experience ‐ Over 30 years of industry experience ‐ Previously founded Gr
Slide 17: SpinCo Overview
SpinCo Overview • MergeCo to own 4.9% of SpinCo Ownership • Balance to be owned by Alamos and shareholders on a 50/50 basis • Kemess is a high‐quality, copper‐gold porphyry development project located in a safe jurisdiction High‐ • Long‐life and growing cash flow from Young‐Davidson 1.5% NSR Quality
Slide 18: The New Intermediate Producer
The New Intermediate Producer • Two flagship, long‐life assets in mining friendly jurisdictions • Leading growth profile with extensive portfolio of quality development stage assets • Significant exploration potential at all existing operations • Strong financial position and cash flow generation to
Slide 19: Investor Relations Contacts
ALAMOS GOLD INC. Scott K. Parsons, CFA Director, Investor Relations 416.368.9932 x 439 sparsons@alamosgold.com AURICO GOLD INC. Anne Day Vice President, Investor Relations and Communications 647.260.8880 anne.day@auricogold.com
Slide 20: Appendix
APPENDIX
Slide 21: Young-Davidson Mine
Young‐Davidson Mine Location: Ontario 2013 2014 2015E Ownership: 100% interest Gold Production (k oz) 120.7 156.8 160‐180 Stage: Producing Underground Cash Costs (US$/oz) $663 $719 $600‐700 Open Pit Cash Costs (US$/oz) $757 $1,071 $1,100‐1,200 • One of Canada’s largest underground gold mines Total C
Slide 22: Young-Davidson Ramp-Up
Young‐Davidson Ramp‐Up Production Ramp‐Up (Year End Exit Rates) • In 2014, accelerated capital investment initiatives supported higher than expected productivity 8,000 8,000 throughout the underground operation 6,000 ‐ Young‐Davidson exceeded the year‐end target of Ore Tonnes per Day 240 240 U/G min
Slide 23: Mulatos Mine
Mulatos Mine Location: Sonora State, Mexico 2013 2014 2015E Ownership: 100% interest Gold Production (k oz) 190.0 140.5 150‐170 Stage: Producing Total Cash Costs (US$/oz) $496 $703 $865(1) Capital Investment (US$MM) $39.6 $51.9 $40.6 • Conventional open pit, heap leach operation Current Reserve Life
Slide 24: Mulatos Mine – Lower Costs in 2016 & '17
Mulatos Mine – Lower Costs in 2016 & ‘17 Lower Costs in 2016 Higher Production, Lower Costs in 2017 Open Pit, Heap Leach Grade (g/t) • Low cost production growth from La Yaqui in Q4 2016 & Cerro Pelon in 2017 1.00 +18% • Production additive ‐ Average production of 33k oz per year 0.90 0.80 ‐ Average
Slide 25: El Chanate Mine
El Chanate Mine Location: Sonora State, Mexico 2014 2015E Ownership: 100% Interest Gold Production (k oz) 67.3 65‐75 Stage: Production Total Cash Costs (US$/oz) $669 $675‐775 Capital Investment (US$MM) $26.1 $17.5‐20 • Open pit, heap leach operation P&P Au Reserves (MM oz) 0.646 P&P Au Grade (g/t) 0
Slide 26: Kirazlı Project
Kirazlı Project Location: Turkey Ownership: 100% interest Stage: Development • Low cost, low capital intensity conventional open pit, heap leach project • After‐tax IRR of 39% as per June 2012 pre‐feasibility study • No material increase in capital expected from 2012 PFS • Operating costs expected t
Slide 27: Ağı Dağı Project
Ağı Dağı Project Location: Turkey Ownership: 100% interest Stage: Development • Conventional open pit, heap leach project • Positive cash flows from Kirazlı is expected to subsidize the construction of Ağı Dağı • Significant opportunities to enhance economics through the following: - Incorporating h
Slide 28: Esperanza Gold Project
Esperanza Gold Project Location: Morelos State, Mexico Ownership: 100% Interest Stage: Development • Low cost, low capital intensity open pit, heap leach project • Excellent infrastructure; low technical risk • Average annual production potential >100k oz • All‐in sustaining costs expected to be ~US
Slide 29: Quartz Mountain Project
Quartz Mountain Project 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 • Acquisition cost $3.5MM, with additional C$3MM due on completion of feasibility study and
Slide 30: Lynn Lake Project
Lynn Lake Project Location: Manitoba, Canada 2014 Preliminary Economic Assessment Highlights (1) Ownership: 25% (earn‐in up to 60%) Mine Type Open Pit Stage: Feasibility study Au Grade (g/t) 2.2 Au M&I Resources (MM oz) 1.5 • Strategic, low‐risk opportunity in early‐stage, highly‐ Avg. LOM Annual Mi
Slide 31: Alamos Mineral Reserve Estimates
Alamos Mineral Reserve Estimates Proven and Probable Reserves as at December 31, 2014 Tonnes Grade Contained Metals (000's) (000's) Au (g/t) Au (oz) Mulatos Mine 36,025 0.94 1,088 UG Reserves 679 6.72 146 Existing Stockpiles 5,720 1.51 277 La Yaqui 1,574 1.58 80 Cerro Pelon 2,617 1.67 141 Total 46,6
Slide 32: Alamos Mineral Resource Estimates
Alamos Mineral Resource Estimates Total Measured & Indicated Resources Total Inferred Resources as at December 31, 2014 as at December 31, 2014 Cut‐off Tonnes Grade Contained Metals (000's) Tonnes Grade Contained Metals (000's) (g/t) (000's) Au (g/t) Ag (g/t) Au (oz) Ag (oz) (000's) Au (g/t) Ag (g/t
Slide 33: Alamos Notes to Reserve & Resource Estimates
Alamos Notes to Reserve & Resource Estimates Notes to Mineral Reserve and Resource tables: • The Company’s mineral reserves as at December 31, 2014 are classified in accordance with the Canadian Institute of Mining Metallurgy and Petroleum’s “CIM Standards on Mineral Resources and Reserves, Definiti
Slide 34: AuRico Mineral Reserve Estimates
AuRico Mineral Reserve Estimates Proven and Probable Reserves as at December 31, 2014 Tonnes Grade Contained Metals (000's) (000's) Au (g/t) Ag (g/t) Cu (%) Au (oz) Ag (oz) Cu (lbs) Canada YD Surface 2,501 0.76 61 YD UG 42,773 2.74 3,763 Kemess UG 100,373 0.56 2.00 0.28% 1,805 6,608 619,151 Total 14
Slide 35: AuRico Mineral Resource Estimates
AuRico Mineral Resource Estimates Total Measured & Indicated Resources Total Inferred Resources as at December 31, 2014 as at December 31, 2014 Tonnes Grade Contained Metals (000's) Tonnes Grade Contained Metals (000's) (000's) Au (g/t) Ag (g/t) Cu (%) Au (oz) Ag (oz) Cu (lbs) (000's) Au (g/t) Ag (g
Slide 36: AuRico Notes to Reserve & Resource Estimates
AuRico Notes to Reserve & Resource Estimates Notes to Mineral Reserve and Resource tables: • Mineral Reserves and Resources have been stated as at December 31, 2014. • Mineral Resources are exclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated econom