Alamos Gold Inc. · TSX:AGI
Alamos Gold — Investor Presentation (September 2020)
48 slides from Alamos Gold's investor presentation, Sep 18, 2020
Slide 1: Corporate Presentation September 2020
Corporate Presentation September 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 83% recycled water u
Slide 5: COVID-19 measures & outlook
COVID-19 measures & outlook COVID-19 testing facility at Island Gold • 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 f
Slide 6: Q2 2020 results – well positioned for strong H2 2020
Q2 2020 results – well positioned for strong H2 2020 Revised Previous Q2 2020A Q2 2019A Q2 YTD 2020A Q2 YTD 2019A 2020 Guidance 2020 Guidance6,7 Guidance revised Reflecting COVID-19 related temporary Gold production (000 oz) 78.4 125.2 189.3 250.5 405-435 425 - 465 suspensions & delays in H1 2020 Go
Slide 7: Diversified asset base; low political risk profile
Diversified asset base; low political risk profile Canada ~500k oz1 70% 100% Mexico 30% North American gold production Island Gold Mine Ontario, Canada Lynn Lake, Canada Young-Davidson Mine Ontario, Canada Turkish Development Quartz Mountain, USA Projects 85% Consensus Net Asset Value North American
Slide 8: Young-Davidson – lower mine expansion completed July 2020
Young-Davidson – lower mine expansion completed July 2020 • One of Canada’s largest underground gold mines • Transition to new, larger infrastructure completed July 2020 • Production expected to increase to ~200k oz in 2021 at significantly lower costs • Capital expected to trend down to rate of $40
Slide 9: Young-Davidson – transition to lower mine infrastructure completed July 2020
Young-Davidson – transition to lower mine infrastructure completed July 2020 Lower mine infrastructure larger, more productive & highly automated Upper mine Lower mine % Change infrastructure infrastructure Long term – H2 Timeline Pre-July 2020 2020 onward Upper mine infrastructure Design ore capaci
Slide 10: Island Gold – multi-phase growth
Island Gold – multi-phase growth • One of Canada’s highest grade gold mines • Phase I expansion: record production of 150k oz & record free cash flow of $65m in 2019 • Phase II expansion: mining rates increasing to 1,200 tpd in 2020 • Phase III Shaft Expansion: mining rates increasing to 2,000 tpd i
Slide 11: Island Gold – ongoing exploration success driving growth in size & quality
Island Gold – ongoing exploration success driving growth in size & quality Significant Growth in Mineral Reserves & Resources Since November 2017 Acquisition 4,000 12 Mineral Reserves M&I Mineral Resources Inferred Mineral Resources Mineral Reserve grade 10 3,000 Cumulative oz produced 2,298 8 2,000
Slide 12: Island Gold – Phase III Shaft Expansion to 2,000 tpd
Island Gold – Phase III Shaft Expansion to 2,000 tpd Shaft Expansion production & cost profile 4 • Strongest economics of five options considered 350,000 $1,000 • Highest annual production & lowest operating costs $900 • Lowest combined LOM capital & operating costs 300,000 $800 • Most efficient & p
Slide 13: Mulatos District – stable production; declining cost profile
Mulatos District – stable production; declining cost profile • Founding asset; produced 2 millionth oz of gold in 2019 • Declining cost profile; connection to grid power & development of La Yaqui Grande • La Yaqui Grande fully permitted, low-cost, high return project • Five year mine life with initi
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 IRR ($1,250/oz Au)1 Peer leading, 253% high-return Çamyurt After-tax IRR ($1,250/oz Au)1 growth; after- 39% Ağı Dağı After-tax IRR ($1,250/oz Au)1 tax IRR 20%+ at
Slide 15: Growth: Turkish Development Projects – low-cost, high-return, fully funded
Growth: Turkish Development Projects – low-cost, high-return, fully funded • Kirazlı construction activities suspended pending renewal of mining concessions which expired October 13, 2019 • Delay in concession renewal related to protests following a social media misinformation campaign • All conditi
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$201 million $201m Total Liquidity3 US$601 million Total Debt US$100 million 1,2,3 $601M Capital Structure Shares Outstanding (Basic) 391.4 million $400m Shares Outsta
Slide 18: Track record of adding value on aggregate & per share basis
Track record of adding value on aggregate & per share basis Gold Production (000 oz Au) Mineral Reserves (M oz Au) Cash provided by operations before changes in WC (US$M) +254% 495 +460% 9.7 +482% $297 140 1.7 $51 1 2014A 2019A 2014A 2019A 2014A 2019A2 Gold Reserves Per Share Cash Flow Per Share Gol
Slide 19: Long-term track record of delivering shareholder value
Long-term track record of delivering shareholder value Long-term track record of outperformance 1.68 1.68 2 Average annualized return since 2003 1 1.60 Consensus P/NAV 15% 1.27 1.13 1.10 1.06 0.92 0.88 10% 0.62 0.58 0.53 4% AGI (TSX) S&P/TSX Global Gold Gold (US$/oz) PAAS BTO Sr YRI NGD SSRM Int CG
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 Young-Davidson – lower mine expansion completed July 2020 Island Gold – Phase
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: Revised 2020 guidance
Revised 2020 guidance Previous 2020 Revised 2020 Guidance Guidance4,5 Young-Davidson Mulatos Island Gold4 Other Total4 Total Gold production (000’s oz) 135-145 140-150 130-140 — 405-435 425-465 Cost of Sales (in millions) (3) $209 $165 $113 — $487 $491 Cost of Sales ($ per ounce) (3) $1,490 $1,135 $
Slide 24: Revised 2020 guidance – capital budget
Revised 2020 guidance – capital budget Previous 2020 Revised 2020 Guidance Guidance2 Sustaining Capital Growth Capital Total Total Operating Mines (US$M) Young-Davidson $30-35 $45-50 $75-85 $75-85 Island Gold $35-40 $35-40 $70-80 $50-60 Mulatos $15-20 $15-20 $30-40 $20-25 Total – Operating Mines $80
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 – 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 28: 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 29: 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 29
Slide 30: 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 31: 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 -$1
Slide 32: Island Gold Shaft Expansion – operating cost by level
Island Gold Shaft Expansion – operating cost by level Unit mining cost by elevation Difference (C$/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 33: 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 34: Island Gold Mine – 2020 exploration highlights
Island Gold Mine – 2020 exploration highlights W E Resources as of December 31st, 2019 Crown pillar 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 - 500 m - 500 m 620 Level 583,300 t at 16.06 g/t Au, 301,200 oz Au 840
Slide 35: Island Gold Mine East areas – surface directional drilling results
Island Gold Mine East areas – surface 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 Resou
Slide 36: 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 8 800 20,000 $1,000 $800 6 600 15,000 $600 4 400 10,000 $400 5,000 2 200 $200 0 $0 0 0 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
Slide 37: 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 with connection to grid power & development of La Yaqui Grande • No thi
Slide 38: 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 39: La Yaqui Grande Internal Economic Study – 2020
La Yaqui Grande Internal Economic Study – 2020 La Yaqui Grande Project Highlights Life of Mine1 Production Mine life (years) 5 Total gold production (000 ounces) 616 Total silver production (000 ounces) 1,471 Average annual gold production (000 ounces) 123 Total ore mined (000 tonnes) 19,205 Average
Slide 40: 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 41: 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 42: 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 43: 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 44: 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 45: 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 46: 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 47: 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 48: Scott K. Parsons, CFA
Scott K. Parsons, CFA VP, Investor Relations 416.368.9932 x 5439 sparsons@alamosgold.com