Alamos Gold Q1 2025 Earnings Report

Alamos Gold EPS Results

• Actual EPS: $0.14
• Consensus EPS: $0.19
• Beat/Miss: Missed by -$0.05
• One Year Ago EPS: $0.13

Alamos Gold Revenue Results

• Actual Revenue: $333.00 million
• Expected Revenue: $324.98 million
• Beat/Miss: Beat by +$8.02 million
• YoY Revenue Growth: +20.00%

Alamos Gold Announcement Details

• Quarter: Q1 2025
• Date: 4/30/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 1, 2025
• Conference Call Time: 11:00AM ET

Alamos Gold (NYSE:AGI) engages in the acquisition, exploration, development, and extraction of precious metals in Canada and Mexico. The company primarily explores for gold deposits. It holds 100% interest in the Young-Davidson mine and Island Gold mine located in the Ontario, Canada; Mulatos mine located in the Sonora, Mexico; and Lynn Lake project situated in the Manitoba, Canada. The company also holds interest in the Quartz Mountain project located in the Oregon United states. Alamos Gold Inc. was founded in 2003 and is based in Toronto, Canada.

Alamos Gold Q1 2025 Earnings Call Transcript

Presentation

[Operator]

morning. I'll now turn the call over to Mr. Scott Parsons, Alamos' Senior Vice President of Corporate Development and Investor Relations.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Please go ahead, sir.

[Scott Parsons, Senior Vice President of Corporate Development & Investor Relations at Alamos Gold]

Thank you, operator, and thanks to everybody for attending Alamos' first quarter twenty twenty five conference call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer Greg Fischer, Chief Financial Officer Lou Quimont, Chief Operating Officer. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q and A session. As we will be making forward looking statements during the call, please refer to the cautionary notes included in the presentation, news release and MD and A as well as the risk factors set out in our annual information form.

[Scott Parsons, Senior Vice President of Corporate Development & Investor Relations at Alamos Gold]

Technical information in this presentation has been reviewed and approved by Chris Boswick, our Senior VP of Technical Services and a qualified person. Also please bear in mind that all the dollar amounts mentioned in this conference call are in U. S. Dollars unless otherwise noted. Now John will provide you with an overview.

[John McCluskey, President & CEO at Alamos Gold]

Thank you, Scott. I'd like to turn your attention to Slide three. We produced 125,000 ounces of gold in the first quarter consistent with the lower end of quarterly guidance. Island Gold continues to perform well offsetting a slower start to the year from Young Davidson and Magino. As we will outline through this call, we've seen a significant improvement from both operations in April and expect this to contribute to a stronger production in the second quarter.

[John McCluskey, President & CEO at Alamos Gold]

With a further increase in production expected into the second half of the year driven by higher grades and mining rates at Island Gold and increasing grades at La Yaqui Grande, we remain well positioned to meet our full year production guidance. All in sustaining costs for the quarter were above our first half guidance reflecting lower production at Young Davidson and Magino, increased royalties due to the sharply higher gold price and higher share based compensation given the 45% increase in Alamos' share price during the quarter. Through a combination of higher tons and grades processed, we expect rising production and a significant improvement in our cost through the remainder of the year. We expect this to drive a 20% decrease in all in sustaining costs in the second quarter with further decreases into the second half of the year. Turning now to slide four, we continue to advance our high return permitted and fully funded organic growth projects that are expected to support further production growth and declining costs in the coming years.

[John McCluskey, President & CEO at Alamos Gold]

Following our construction decision at Lynn Lake earlier in the year, we attended a groundbreaking ceremony alongside the Premier of Manitoba as well as representatives from the First Nations local communities. Construction activities are ramping up and will be completed over the next three years with initial production expected in the first half of twenty twenty eight. In February, we announced a 31% increase in our global mineral reserves to 14,000,000 ounces. This included another substantial increase in reserves and resources at Island Gold highlighted by a 32% increase in reserve ounces and an 11% increase in grades. We will be incorporating this growth along with large mineral reserves along with the large mineral reserve at Magino into an expansion study to be completed in the fourth quarter that we expect will outline significantly larger and more valuable operation.

[John McCluskey, President & CEO at Alamos Gold]

Turning to slide five, our outlook has never been stronger and we have never been better positioned. We have one of the strongest growth profiles in the sector underpinned by three high return projects. All of this growth is fully funded. We started last year at a run rate of 500,000 ounces per year. With the addition of Magino, we expect to produce approximately 600,000 ounces this year.

[John McCluskey, President & CEO at Alamos Gold]

With the Phase three expansion in its final full year of construction, we expect further growth to 700,000 ounces per year by 2027 with all in sustaining costs trending lower to approximately $1,200 per ounce. With initial production from the Lynn Lake project expected in the first half of twenty twenty eight, our longer term production rate is expected to increase to 900,000 ounces per year with a further decrease in costs. At current gold prices, our all in sustaining cost margin is expected to exceed $2,000 per ounce supporting over $1,000,000,000 in annual free cash flow. Longer term, we see excellent potential to take the company wide production to 1,000,000 ounces per year with a further expansion of

[John McCluskey, President & CEO at Alamos Gold]

the Alangold

[John McCluskey, President & CEO at Alamos Gold]

District. Turning to slide six, we expect stronger free cash flow through the remainder of 2025 at current gold prices while funding all of our growth initiatives and record exploration program. With the Phase three plus expansion on track for completion in the first half of twenty twenty six, We expect considerably higher free cash flow starting in the second half of twenty twenty six. We expect further growth into 2027 and beyond driven by higher production, lower costs and decreasing capital with the start of production from the PDA and Little Lake projects. I will now turn the call over to our CFO, Greg Fischer to review our financial performance.

[Greg Fisher, Chief Financial Officer at Alamos Gold]

Greg? Thank you, John. On to Slide seven, we sold approximately 118,000 ounces of gold in the first quarter at an average realized price of $2,802 per ounce for revenues of $333,000,000 The average realized price was below the London PM fix for the quarter, primarily as a result of delivering over 12,300 ounces into the gold prepayment facility based on a prepaid price of $2,524 per ounce. We will continue to deliver the same quarterly number of ounces into the facility until the obligation is completed at year end. As a reminder, the prepaid facility was executed in July 2024 with the proceeds utilized to retire 180,000 ounces of forward sale contracts inherited from Argonaut Gold across 2024 and 2025 with an average price of $18.40 dollars per ounce.

[Greg Fisher, Chief Financial Officer at Alamos Gold]

Total cash cost of $11.93 dollars per ounce all in sustaining cost of $18.00 $5 per ounce were both above the top end of guidance for the first half of twenty twenty five, driven by higher costs at Young Davidson and Magino as well as higher royalties and share based compensation. Given the 45% increase in our share price in the first quarter, long term incentives outstanding were revalued and resulted in a $230 per ounce increase to all in sustaining costs compared to our guidance. All in sustaining costs are expected to trend lower through the year with a 20% decrease expected in the second quarter and a further decrease in the second half of the year. We are monitoring our full year cost guidance given the higher share based compensation and royalty costs compared to guidance, which is challenging to forecast given the nature of these costs. Excluding the impact of these variables, which are outside of our control, we remain confident with our full year cost guidance.

[Greg Fisher, Chief Financial Officer at Alamos Gold]

Our reported net earnings were $15,000,000 in the first quarter or $04 per share. This included $46,000,000 of unrealized losses on commodity hedge derivatives for the legacy Argonaut twenty twenty six and 2027 gold hedges and other adjustments totaling $2,000,000 Excluding these items, our adjusted net earnings were 60,000,000 or $0.14

[Greg Fisher, Chief Financial Officer at Alamos Gold]

per share.

[Greg Fisher, Chief Financial Officer at Alamos Gold]

Operating cash flow before changes in non cash working capital was $131,000,000 in the first quarter or $0.31 per share. Capital spending totaled $100,000,000 and included $27,000,000 of sustaining capital, 66,000,000 of growth capital and $7,000,000 of capitalized exploration. Free cash flow was negative $20,000,000 and was impacted by $53,000,000 of cash taxes paid primarily related to year end mining and income taxes in Mexico as well as the settlement of 25% of the prepayment obligation. Cash tax payments are expected to decrease through the remainder of the year of between 10,000,000 and $15,000,000 per quarter. We expect stronger free cash flow through the remainder of the year driven by higher production, lower costs and lower cash tax payments.

[Greg Fisher, Chief Financial Officer at Alamos Gold]

Combined with a strong cash position of $290,000,000 and nearly $800,000,000 in total liquidity, we remain well positioned to internally fund our growth plans. I'll now turn the call over to our COO, Luc Guimant to provide an overview of our operations.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Thank you, Greg. Over to Slide eight, Production from the Island Gold District totaled 59,200 ounces in the quarter, with the strong performance of Island Gold offsetting lower production from Magino. At Island Gold, mining and milling rates as well as grades were all consistent with annual guidance. This included 1,200 tonnes per day process with grades averaging 11.36 grams per tonne. Milling rates at Magino were lower than planned, averaging 7,200 tonnes per day.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

As I will review shortly, efficiencies in the ore flow design limited throughput rates earlier in the quarter. These have since been rectified, has driven significantly higher throughput rates into March and April. Grades processed at Magino averaged 0.86 grams per ton, slightly below annual guidance. Given the lower mill availability in the quarter, mining activities were focused on waste stripping. With less ore mined, less the relatively higher grade ore was available for process.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Mining rates have improved to average over 15,000 tonnes per day of ore in April and are expected to remain at similar levels to the rest of the year. This is expected to support the availability of higher grades for processing through the remainder of the year. Combined with higher milling rates, we expect significant improvement in production and decrease in costs from the Magino portion of the operation through the remainder of the year. With the strong contribution from Island Gold, the combined operation generated positive mine site free cash flow of $19,000,000 in the quarter, net of significant capital investments in the Phase three plus expansion and a robust exploration program. The operation is expected to continue self funding the Phase three plus expansion at current gold prices with significant free cash flow growth following its completion in 2026.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Moving to Slide nine, Magino had a challenging start to the year, but we believe we have now turned the corner with milling rates steadily improving and nearing planned levels. Milling rates were lower than planned due to restricted ore flow through the crushing and conveying circuit. This was caused by deficiencies in the initial ore flow design for winter conditions, which created blockages within the feeders and undersized transfer shoots. The shoots were expanded during the quarter and combined with the various optimization activities undertaken in the second half of twenty twenty four, milling rates increased substantially towards the end of the quarter. Milling rates increased to average 8,200 tonnes per day in March and approximately 9,500 tonnes per day in the last two weeks of April, with further improvement expected in May.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

In advance of the transition in advance of the transition to processing Island Gold ore through the Magino mill, approximately 8,000 tonnes of high grade ore from Island Gold were blended with Magino ore and processed through the Magino mill in April. The batch test was successful with recoveries averaging ninety six percent from the blended ore, in line with expectations. With the significant improvement in Magino's milling rates and successful batch test of Island Gold's high grade ore, Island Gold mill is expected to shut down in early May, following which ore from Island Gold will be trucked and processed through the larger and more cost effective Magino mill. Given the significantly lower processing costs from utilizing the Magino mill, this is expected to contribute to declining costs through the remainder of the year. Moving to Slide 10.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

The transition to the Magino mill is an important step towards the completion of the Phase three plus expansion. The Magino Hall Road is now substantially complete and will be used to transport ore from the Island Gold Portal to the Magino Mill. Progress is being made on the mill expansion at 12,400 tons per day with bulk earthworks underway and detailed engineering ongoing to support a larger, longer term expansion of the mill. Within the shaft site area, we continue to make progress having recently completed the second shaft station breakthrough at the 1050 level. At quarter end, the shaft sink had reached the depth of ten fifty five meters and remains on track to reach the ultimate depth of thirteen seventy three meters in the third quarter of this year.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

The construction of the paste plant is also advancing well with 30% of the building steel now erected and boreholes for the delivery of paste underground completed in advance of liner installation. Over to Slide 11. As of quarter end, we spent and committed 75% of the total Phase three plus expansion capital of $796,000,000 The expansion remains on track for completion in the first half of twenty twenty six and will be a significant driver of low cost production growth and free cash flow generation. Over to Slide 12. Young Davidson produced 35,400 ounces in the first quarter, lower than planned due to lower milling lower than planned due to lower mining rates.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Lower production drilling and SCOOP availability in the first two months of the quarter impact stope productivity and mining sequence. Production drilling meters and SCOOP availability improved within the quarter and mining rates were back to design capacity of 8,000 tonnes per day in March and April and are expected to remain at similar levels throughout the rest of the year. Through higher mining and processing rates as well as increased grades, production is expected to increase and costs decrease the remainder of the year. With another strong quarter of mine site free cash flow of 39,000,000 Young Davidson is on track to deliver more than $100,000,000 of free cash flow for the fifth consecutive year. Over to Slide 13.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Total production from the Milados District was 30,400 ounces in the quarter, with two thirds of production coming from La Yaqui Grande and the remainder from residual leaching at Miladros. As previously guided, grades at the La Yaqui Grande were expected to be at the low end of the guidance range in the first quarter and steadily increase throughout the year. With lower grade stacked in the quarter at La Yaqui Grande and higher contribution from residual leaching, costs were above the top end of the annual guidance range. Costs are expected to trend lower through the year as production increases, driven by higher grades from La Yaqui Grande. Environmental permit amendment for the PDA project was received in late January, allowing for the start of construction activities.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

The focus during the quarter was on procurement of long lead items and detailed engineering. Construction activities are expected to ramp up towards the middle of the year with first production on track for mid-twenty twenty seven. Mine site free cash flow totaled $1,000,000 in the quarter, net of $48,000,000 in cash tax payments for the 2024 year. With production increasing and costs decreasing, the Mulatos District is expected to generate strong mine site free cash flow through the remainder of the year, while funding the development of PDA and a robust exploration program. With that, I will turn the call back to John.

[John McCluskey, President & CEO at Alamos Gold]

Thank you, Luke. I'll now turn the call over to the operator who will open the call for your questions. After that, I'm going to ask the operator to turn the call back to me for some final remarks.

[Operator]

Certainly. Thank you. We will now take questions from the telephone lines. Questions. Our first question is from Cosmos Chiu from CIBC.

[Operator]

Please go ahead.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Thanks, John, Greg, Luke and team. Maybe my first question is on the Magino mill. It sounds like some of the issues in terms of the restrictions of the conveyor or conveying and crushing bottlenecks have now been rectified. Now looking at you're getting to close to 9,500 tonnes per day in terms of throughput. But I guess my question is, previously, you had expected to get to 11,200 tonnes per day by the end of Q1.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Is that still what you're trying to aim for near term in terms of getting up to 11,200 tonnes per day? And do you need to reach that level before you can fully integrate the Island Gold and Magino and shut down the Island Gold mill?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Hi Cosmo, it's Luke here. As I touched on in the communication, our expectation is actually we're going to make that transition at the May, actually at the end of next week. We've seen some continuous improvement certainly over the last three quarters as we've talked about with regards to the jaw crusher, cone crusher. And last component, which kind of held us back from actually making the transition by the end of Q1 was some of the bottlenecks that we saw in the crushing and conveying system. We've since addressed those.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

And as I mentioned at the April, we were running at 9,500 tons per day. We had a couple of smaller minor operational issues, to be frank with you, that would have actually put us well above 10,000 tonnes per day with regards to running the processing plant. And really, the final step for us was to be able to complete the higher grade batch test of Island Gold ore co mingled with the Magino ore just to validate the metallurgical recoveries in the processing plant from a plant scale perspective, and we did that. And we had no issues with regards to the overall performance of overall recovery as well as overall leach circuit performance. So we're now quite comfortable to make that transition and our expectation is at the end of next week, will start actually bringing all of the island ore underground ore over to Magino and being processed on a co mingling basis with the Magino

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

guess, Luke, in terms of numbers, I bring up the 11,200 tonnes per day. I know that was a number that was given out previously. Is that a number that we should stick to? Or is that still like a number that we should look as a target or not so much these days? I guess that's really the crux of my question.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

No, that's still the number we expect to deliver on, Cosmo, is the 11,200 tonnes per day as we move forward here through the remainder of the year.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Okay. Sounds good. And then maybe moving to Young Davidson here, just a quick question on Young Davidson. It's always been steady as it goes, very steady operation. I was kind of surprised that throughput on mining output was a bit lower in Q1, as you mentioned, due to kind of the equipment availability underground.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Is that due to kind of the age of the equipment? Can you maybe comment on that? Is there any kind of renewal of the equipment needed at this point in time? Or is it just really kind of like a maintenance? Actually, don't know.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Maybe you can just touch on what happened? And should we be concerned about the age of the equipment?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Sure. It was really more mining sequence related to be honest with you Cosmo. Typically with the lower mine infrastructure from ninety fiveninety down has a direct feed into our crushing and conveying system, where the upper mine, the legacy from the upper mine from the early years of mining, there's a transfer point required to be able to provide that ore distribution down into the lower mine. And as a result of that, we had some more productive stopes that we were expecting through the first quarter in the lower mine that are much more productive for us to be able to maintain the 8,000 tons per day. We typically like to keep about a fifty-fifty blend.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

And as a result of some of those stopes not coming online in a timely fashion in the first quarter, In combination with a couple of production drills that we actually had working in the lower mine to get those stopes online, we had a couple of unscheduled maintenance issues with a couple of those drills that we had to address and that really affected the performance in the quarter. But as far as the overall fleet management and replacement management of our equipment, it's always done in a timely fashion. The equipment that we're currently utilizing still has useful life. It was more just in relation to some unscheduled downtime with the drills as well as couple of scoops, which also puts a bit more pressure obviously for re handling from the upper mine to the lower mine. But as part of our equipment replacement strategy, I mean, do have a couple of new units that we brought in last year.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

We have a couple more new units coming in this year as far as scoops and another production drill as well based on operating hours and the life cycle of those pieces of equipment.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Understood. Maybe just one last question turning to likely Greg. Greg here. Two things on guidance costs. Number one, Greg, could you remind us what kind of gold price assumption you factored into your cost guidance for the year?

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

And number two, a bit more of an accounting nerdy question here, but the $230 an ounce was in part due to higher management compensation with the increase in the share price of Alamos this past quarter, maybe this past year. But how does it work? Like normally, higher kind of revaluation of management compensation that was issued in a previous quarter, the revaluation, does it usually get into your all in sustaining cost number for the quarter? And number two, yes, it's up 45% year to date, but today your share price is down 11%. So doesn't that mean later on it might get revalued again in terms of those management compensation expenditures?

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

And does that mean we're going to see like a reversal of today's $230 an ounce sometime later on. Other than that introduce a lot of volatility into that number?

[Greg Fisher, Chief Financial Officer at Alamos Gold]

Yes, Cosmos, it's Greg here. So, I'll answer the easy question first which is the gold price assumption. That was $2,400 So we had budgeted that and obviously the increase in the gold price above that $2,400 has an impact on royalties expense as well as other charges that are related to mine site performance. On the stock based compensation, I mean, relates to the fact that we issue PSUs, RSUs, DSUs and they all have terms of, call it three years or longer. Those all need so it's all from units that have been issued in the past and because we settled those in cash, they're considered liability based instruments and therefore under accounting rules they are required to be mark to market every quarter.

[Greg Fisher, Chief Financial Officer at Alamos Gold]

So to your point, could we see a reversal of this? Yes, I mean if the share price drops, you have a negative mark to market and if the price increases, you have a positive mark to market. Why it was so profound this quarter was because we were up 45% in the quarter, which we've never seen before and frankly it's a good thing. So, yes, mean that's just how the accounting works on that and every company will include stock based compensation in their definition of all in sustaining costs.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Okay. Great. Thanks John and team. Those are the questions I have. Thank you.

[Operator]

Thank you. Following question is from Michael Ciperco from RBC Capital Markets. Please go ahead.

[Michael Siperco, Director at RBC Capital Markets]

Yes. Thanks very much for taking my question. Just on Magino, I know you said higher grades over the rest of the year on the higher milling. Apologies if I missed it somewhere, but are you able to quantify that? Should we be thinking back in line with original guidance or is there a potential for a bit of a catch up and some higher grade?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Yes. We should we'll track to being within guidance for the rest of the year with regards to Magino with regards to the grade profile that would have put out at the beginning of the year. I mean, we're slightly below on the Magino side certainly for the head grades that went into the mill, but that was really a function of not actually mining the entire mine plan through the quarter because of some of the challenges that we had with regards to the crushing and conveying with regards to those drop sheets that we had to replace. So that prevented us from getting all of the higher grade portion of the ore that we were expecting in the quarter, which would have put us within guidance.

[Michael Siperco, Director at RBC Capital Markets]

Makes sense. And then

[Michael Siperco, Director at RBC Capital Markets]

just another question on the testing you were doing blending the Magino and Island ore. What sort of grade were you testing there in terms of the Magino material? And are you confident at those levels of recovery sort of no matter what you're putting into the mill between the Island ore and the Magino ore?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Yes, we're comfortable. I mean, the high grade test, we ran about 8,500 tonnes of Island ore co mingling with the Magino ore. The Island ore was running from a day to day perspective anywhere from seven to 10 grams on average in that range with Magino ore that was running at about 0.9 at that point. So that's typically the sort of blend that we would expect to see as we start to continue to co mingle this ore for the long term running that entire plant with both ore sources feeding into the one mill. And the overall recoveries that I mentioned were in our expectation, we ended up with about a 96% recovery overall on the combined ore stream, which is what we're which is what our expectation was.

[Michael Siperco, Director at RBC Capital Markets]

Okay, great.

[Michael Siperco, Director at RBC Capital Markets]

Thanks. That makes sense. And then maybe one more if I could. If you look out longer term, obviously, you've got a lot of growth on deck through 02/1930, but construction really starts to ramp up in the second half. You'll soon have three projects on the go.

[Michael Siperco, Director at RBC Capital Markets]

Can you give any color on how you're managing that sequencing it or otherwise managing risk over the next couple of years?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Yes. We're I mean, our Phase three plus expansion is well underway. I mean, we're well over halfway through certainly the shaft depth is nearing completion there by the end of this year. Phase plant we're starting construction, it's not on critical path, but we expect to have that completed by the end of the year. And the next phase, obviously, for us is the continued mill expansion to support more throughput through the Magino mill.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

And we're working through that time wise, expecting to have that completed in the second half of twenty twenty six. But we've got a solid team built there. We've got lots of people to be able to manage the Phase three plus expansion. With regards to Mexico PDA, we've done a lot a number of projects down there over the twenty year period. And we basically have the team that's seconded within our operations team to be able to manage these projects.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

That's the way we've always done it in Mexico over the twenty year period. So we already have the complement of people that we need to be able to deliver on PDA certainly with regards to the construction on the milling infrastructure that we're going to be building there. On the mining side, it's going to be managed also with our operations team, but it will be contract mining. So there'll be a complement of people that obviously will oversee that on the contract side. And then Lynn Lake, certainly we're in the early stages of that, but we're in the process of building our team.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

All of the key figures that we need as far as management as we start the project are in place. So we're quite comfortable certainly moving on those three areas of growth over the next couple of years.

[Michael Siperco, Director at RBC Capital Markets]

Okay, great. Thank you very much. Appreciate it. I'll pass it on.

[Operator]

Thank you. Our following question is from Oves Abib from Scotiabank. Thank you. Please go ahead.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Thanks, operator. Hi, Alamos team. Just a couple of questions from me. Most of my questions have been answered. One question that's been coming up since my calls this morning is just on the ASIC side.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

So basically in terms of based on your Q1 results and you're expecting that 20% decline in AISC, we're kind of estimating kind of you would need about to hit about $1,000 to $10.50 dollars per ounce in order to achieve your cost guidance or AISC guidance. How confident are you in terms of achieving these cost levels?

[Greg Fisher, Chief Financial Officer at Alamos Gold]

Hey, Uves, it's Greg here.

[Greg Fisher, Chief Financial Officer at Alamos Gold]

So we are very confident in what we can control which is our operating costs, our sustaining capital that is tracking well against the budget. What we really don't have any control over and don't have any foresight on is where the gold price is going to go and the share price. Those are two things that we have some control, but actually don't have control over and therefore can't manage the impact on the cost. So, really what we're saying is from what we have oversight on, we're very comfortable with respect to budget. We are over budget on what we had put in the guidance for our share based compensation and the royalty expense and that continues to impact us then it could have an impact on our overall cost guidance.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Okay. Thanks for that Greg.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

And just moving on quickly on to on the exploration side at Alingold, You guys hit some pretty good results on the Western Side Of Island Gold. Is there plans to continue drilling on that side and any sort of color on that front?

[Scott Parsons, VP, Exploration at Alamos Gold]

Hi, it's Scott Parsons, VP of Exploration. Yes, results were encouraging and positive and drilling is ongoing as we speak in the Western Part of Ireland both from underground and surface following up on the up plunge extension of the Western Ore Chute. So that continues to grow and expand as we step out. We had a good increase in resources there than of last year and we continue to step out both closer to surface from surface drills and underground from our underground platforms in that area.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

And with those underground platforms, Scott, mean, is there possibility that you have infrastructure to actually mine those areas as well?

[Scott Parsons, VP, Exploration at Alamos Gold]

That's our approach with basically establishing our exploration drifts underground is utilizing them initially for exploration. We'll put a drill at the end of the platforms drill, we hit mineralization and define resource. We'll extend that platform further to be able to infill drill convert it to reserves, but also to continue exploration and ultimately those will be used for production in the future.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

That's it for me. Thanks for taking my questions.

[Operator]

Thank you. The following question is from Carey Farquhari from Canaccord Genuity. Please go ahead.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Hey, good morning guys. Just a

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

couple of follow ups on Magino. You've made a lot

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

of upgrades to the processing circuit there. Are there any more upgrades that you still need to do to get to the 11.2 or you're kind of there now?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

No, it's Luke here. No, we're there now. I mean, as I mentioned, we've made obviously a few modifications there from the original design that was installed. I can't emphasize that enough. Was some poor design considerations there with regards to the crushing circuit and conveying circuit.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

We've made all of those changes. We made some other modifications to the grinding circuit that we felt would improve the overall throughput. We've completed the batch testing with regards to a low grade and a high grade component of Island Ore Coaming with Magino ore. And so we're confident on the metallurgical side of things. So there's nothing stopping us now from moving forward and starting hitting our stride to that 11,200 tonnes per day.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

And as you think about the expansion to 15,000 plus, can you just remind us what sort of components are going to need upgrades to get to that level?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

It's basically twinning the infrastructure that we have now, Kerry. It's talking about another crushing circuit, so two stage crushing as well as two stage grinding with additional leach capacity both CIP and CIL, upsizing the elution circuit and upsizing the refinery to actually handle higher gold content overall coming in on a bigger processing plant potentially up to 20,000 tons per day.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

And that's twinning the grinding circuit as well?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Correct.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Yes. Okay. Okay, great.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Thank you.

[Operator]

Thank Following question is from Don DeMarco from National Bank Financial. Please go ahead.

[Don DeMarco, Equity Research Analyst - Metals & Mining at National Bank Financial]

Thank you, operator. And good morning, John and team. So, question, it looks like a bit of a catch up on sustaining CapEx over the rest of the year. Is this as expected and aligned with your planned ASIC reductions and lower costs in H2?

[Greg Fisher, Chief Financial Officer at Alamos Gold]

Yes, that's correct. I mean sustaining capital is always going to be timing based and we had expected it to be a little bit lower in the first quarter and catch up over the rest of the year.

[Don DeMarco, Equity Research Analyst - Metals & Mining at National Bank Financial]

Got it. Okay. And so sticking with costs, mean full year guidance was issued before some of the tariff announcements in the state. Are you seeing any impacts from the tariffs on your costs here or maybe some of the FX volatility weighs on them?

[Greg Fisher, Chief Financial Officer at Alamos Gold]

So, we aren't seeing any of the impact on tariffs now. And I mean, I'll step back and say that about 50% of our cost structure is labor and contractors and contractors are predominantly labor as well. So, no real exposure there as well as on another 15 that's energy and fuel. So majority of our cost base is not really exposed to anything that could potentially have tariffs on it. But right now, we aren't experiencing anything.

[Greg Fisher, Chief Financial Officer at Alamos Gold]

What we are experiencing is the

[Greg Fisher, Chief Financial Officer at Alamos Gold]

last part of what you said, which

[Greg Fisher, Chief Financial Officer at Alamos Gold]

is a weaker Canadian dollar compared to what we had budgeted. So we are benefiting from that.

[Don DeMarco, Equity Research Analyst - Metals & Mining at National Bank Financial]

Okay. Good to hear. Then maybe just looking ahead, I mean, indicate potential for 1,000,000 ounces a year with further expansion of Island. Can you add some color on the Island expansion study that's pending release in Q4, including maybe the scope, the timing and magnitude of CapEx that might be related to that study?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Well, we're I mean, as far as the larger mill complex, we're still working through that. We don't have specific numbers that we can talk to at this point. It's a bit too

[Luc Guimond, Chief Operating Officer at Alamos Gold]

early. But

[Luc Guimond, Chief Operating Officer at Alamos Gold]

it's I think we've talked about we've communicated that we're going to put out a development plan by the end of the year, which we talk about what the larger mill complex would look like both from supporting Magino mining rates, but as well as looking at Island underground mining rates to see if we can go certainly beyond the 2,400 tonnes a day as part of what we're contemplating is looking to bring the underground component of that mill feed to about 3,000 tonnes per day from Island underground.

[Don DeMarco, Equity Research Analyst - Metals & Mining at National Bank Financial]

Okay,

[Don DeMarco, Equity Research Analyst - Metals & Mining at National Bank Financial]

great. Thank you. That's all for me and good luck with Q2 and the rest of the year.

[Operator]

Thank you. We have no further questions registered at this time. I would now like to turn the meeting back over to Mr. McCloskey.

[John McCluskey, President & CEO at Alamos Gold]

Thank you, operator. I just wanted to say in conclusion that we have a long history of meeting or exceeding our guidance and we take pride in that record. I think it's at least five years where we've either met or exceeded guidance. So coming in at the low end of production and higher on costs, it's not illustrative of our track record and it's not indicative of our expected performance for 2025. We're already on track for a much stronger second quarter and further improvement in the second half of the year.

[John McCluskey, President & CEO at Alamos Gold]

And furthermore, if you take a look at our three year outlook, it continues to demonstrate that we're going to have further growth in production and further declines in costs. So our outlook, it looks better than ever. So from that point of view, as a management team, we remain very confident in what we're doing. We saw the market reaction this morning to the quarterly results. We think it's certainly overdone.

[John McCluskey, President & CEO at Alamos Gold]

We have a strong year in front of us. We've come through a tough quarter, stronger quarters lie ahead and we're very, very confident in our ability to deliver on that. So with that, I'll conclude my remarks and turn it back to you operator.

[Operator]

Thank you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.

Participants

Executives

• Luc Guimond, Chief Operating Officer
• Scott Parsons, Senior Vice President of Corporate Development & Investor Relations
• John McCluskey, President & CEO
• Greg Fisher, Chief Financial Officer
• Scott Parsons, VP, Exploration

Analysts

• Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets
• Michael Siperco, Director at RBC Capital Markets
• Ovais Habib, Precious Metals Analyst at Scotiabank
• Carey MacRury, Equity Research Analyst at Canaccord Genuity Group
• Don DeMarco, Equity Research Analyst - Metals & Mining at National Bank Financial