Alamos Gold Inc. · TSX:AGI
Alamos Gold — Investor Presentation (June 2020)
46 slides from Alamos Gold's investor presentation, Jun 19, 2020
Slide 1: Corporate Presentation June 2020
Corporate Presentation June 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 underway • Lower mine expansion expected to be completed in July 2020 • Significant reduction in costs & capital expected to drive strong free cash flow growth starting in H2 2020 Total capital (US$m) 1 Operating cash flow (US$m)
Slide 9: Young-Davidson – transition to lower mine infrastructure July 2020
Young-Davidson – transition to lower mine infrastructure 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 Short term – Long term – H2 Timel
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 expansion study beyond 1,200 tpd expected mid-2020 • 3% NSR royalty covering majority of deposit r
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 – growing, high-quality Inferred Mineral Resource base
Island Gold – growing, high-quality Inferred Mineral Resource base High-quality Resource • same structure & consistent style of mineralization as Mineral Reserves • high-grade Inferred Mineral Resources drilled to 50-80m spacing 83% Conversion rate with 830k oz Mineral Resources converted to Reserve
Slide 13: 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 14: 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 15: 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 16: 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 17: 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 $400m Shares Outsta
Slide 18: Track record of adding value on aggregate & per share basis
Track record of adding value on aggregate & per share basis Gold Production (000 oz Au) Mineral Reserves (000 oz Au) Cash provided by operations before changes in WC (US$M) +254% 495 +460% 9.7 +482% $297 140 1.7 $51 1 2014A 2019A 2014A 2019A 2014A 2019A2 Gold Reserves Per Share Cash Flow Per Share G
Slide 19: Long-term track record of delivering shareholder value
Long-term track record of delivering shareholder value Long-term track record of outperformance 2 Average annualized return since 2003 1 1.54 Consensus P/NAV 1.45 15% 1.40 1.37 1.02 0.98 10% 0.92 0.89 0.77 0.72 0.53 0.51 3% AGI (TSX) Gold (US$/oz) S&P/TSX Global PAAS Intermediate NGD OGC ELD BTO Ave
Slide 20: 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 La Yaqui Grande – economics/construction decision Q2 2020 Young-Davidson – com
Slide 21: Appendices
Appendices TSX:AGI ǀ NYSE:AGI 21
Slide 22: 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 23: 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 $521 Cost of Sales (
Slide 24: Previous 2020 guidance – withdrawn following COVID-19 temporary suspensions
Previous 2020 guidance – withdrawn following COVID-19 temporary suspensions Previous 2020 Guidance2 2019A Sustaining Capital Growth Capital Total Total Operating Mines (US$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 25: 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 26: 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 27: Young-Davidson lower mine expansion – in the final stages
Young-Davidson lower mine expansion – in the final stages 8990 Crusher Several critical path items recently completed • Main ramp to the lower mine infrastructure completed • 8940 level loading pocket, including the conveyor and ore/waste bins completed ready for commissioning • 8930 level ore and w
Slide 28: Young-Davidson lower mine expansion – completion July 2020
Young-Davidson lower mine expansion – completion July 2020 Lower mine conveyor Items to be completed in Q2 2020 • 9025 rockbreaker station and coarse ore bins • Permanent installation and changeover of new ropes and installation of new skips • 8930 load-out, including conveyor drive Completion of lo
Slide 29: 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 30: 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 expansion study expected mid-2020 • Significant upside potential reflecting inclusion of all M
Slide 31: 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 31
Slide 32: Island Gold Mine – Changes in Reserves as of December 31, 2019
Island Gold Mine – Changes in Reserves as of December 31, 2019 W E Crown pillar Reserves as of December 31st, 2019 Category Tonnage Grade Au (g/t) Ounces Au Proven: 786,000 13.48 340,700 Probable: 2,856,900 9.52 874,400 340 Level TOTAL: 3,642,900 10.37 1,215,100 - 500 m • 361k oz of Reserves added -
Slide 33: Island Gold Mine – Changes in Resources as of December 31, 2019
Island Gold Mine – Changes in Resources as of December 31, 2019 W E Crown pillar Resources as of December 31st, 2019 Category Tonnage Grade Au g/t Ounces Au Measured & 878,600 6.51 184,000 Indicated: 340 Level Inferred: 5,392,300 13.26 2,298,000 • 46%, or 725k oz increase in Inferred - 500 m Resourc
Slide 34: Island Gold – Cross Section Looking West – E1E Zone Main & Eastern Extensions
Island Gold – Cross Section Looking West – E1E Zone Main & Eastern Extensions Schematic Cross Section (15940mE – 16060mE, looking west) LOCATION PLAN LEGEND Indicated Resources (Dec. 31, 2019) 620m Island Eastern Explo. Drift Inferred Resources (Dec. 31, 2019) E1E Interpreted Zone Extension HOLE-ID
Slide 35: 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 36: 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 37: 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 38: 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 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 45: 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 46: Scott K. Parsons, CFA
Scott K. Parsons, CFA VP, Investor Relations 416.368.9932 x 5439 sparsons@alamosgold.com