Alamos Gold Q2 2025 Earnings Report

Alamos Gold EPS Results

• Actual EPS: $0.34
• Consensus EPS: $0.33
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.24

Alamos Gold Revenue Results

• Actual Revenue: $438.20 million
• Expected Revenue: $400.61 million
• Beat/Miss: Beat by +$37.60 million
• YoY Revenue Growth: +31.70%

Alamos Gold Announcement Details

• Quarter: Q2 2025
• Date: 7/30/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 10:00AM 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 Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Second quarter production of 137,000 ounces was in line with guidance and up 10% sequentially, and full-year output guidance was reaffirmed.
• Negative Sentiment: Full-year all-in sustaining cost guidance was increased by 12%, with ~40% of the rise due to external factors, driven by higher share-based compensation and royalties.
• Positive Sentiment: Record revenues and operating cash flow generated $85 million in free cash flow, boosting cash to $345 million and total liquidity to $845 million.
• Positive Sentiment: The Island Gold District life-of-mine plan projects average annual production of 411,000 ounces at $915/oz AISC over 12 years, with an expansion study underway to increase mill capacity to 20,000 t/d.
• Negative Sentiment: Young Davidson experienced groundwater inflows and storm-related power outages causing downtime in Q2, though additional pumping capacity and watershed management were implemented to prevent recurrence.

Presentation

[Scott K. Parsons, SVP - Corporate Development & IR at Alamos Gold]

Thank you, Patrick, and thanks to everybody for attending Alamos' second 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 and Luc Guimant, 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 K. Parsons, SVP - Corporate Development & IR at Alamos Gold]

Technical information in this presentation has been reviewed and approved by Chris Foswick, our Senior VP, Technical Services and a qualified person. Also please bear in mind that all of 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 & Director at Alamos Gold]

Thank you very much, Scott and good morning everyone. Draw your attention to slide three. Second quarter production totaled 137,000 ounces in line with quarterly guidance and up 10% from the first quarter reflecting stronger performances from all three operations. With a further increase in production expected in the second half of the year, we remain on track to meet our full year production guidance. We've been providing guidance like this for a very long time.

[John McCluskey, President, CEO & Director at Alamos Gold]

We take it very seriously. We put a lot of effort into coming up with these numbers and we're very confident in our forecast. The stronger operational performance contributed to an 18% reduction in all in sustaining costs compared to the first quarter. Costs are expected to decline further in the second half of the year as production continues to increase driven by higher grades and tons processed. In mid July, the Island Gold Mill was shut down with the higher grade underground ore now being processed within the larger and more productive Magino Mill.

[John McCluskey, President, CEO & Director at Alamos Gold]

This transition will allow us to start realizing significant processing cost synergies at the Island Gold District for years to come. With the stronger production, lower costs and higher gold prices, we realized record revenues and cash flow from operations. We also delivered strong free cash flow of $85,000,000 while funding our growth projects and exploration programs. At current gold prices, we expect strong ongoing free cash flow while reinvesting in our high return growth projects that will support further free cash flow growth. As a result of higher than budgeted share price compensation and royalty expense through the first half of the year and a slower start at Mogino and Young Davidson, we are revising our 2025 cost guidance.

[John McCluskey, President, CEO & Director at Alamos Gold]

Full year all in sustaining costs are expected to be 12% higher than our original guidance with approximately 40% of that increase attributable to external factors. From a cost perspective, our first half performance was not reflective of our long term track record of meeting or exceeding expectations nor is it reflective of our strong outlook. We expect a significant improvement in both production and costs into the second half of the year that trend of growing production and declining cost expected to continue over the next several years anchoring one of the strongest outlooks in our sector. Turning to Slide four, key driver of that strong outlook is our expanding Island Gold District. During the quarter, we released the base case life of mine plan for the Island Gold District integrating the Island Gold underground and Magino open pit operations.

[John McCluskey, President, CEO & Director at Alamos Gold]

As outlined in the study, the Island Gold District is expected to become one of the largest lowest cost and most profitable gold mines in Canada. The base case life of mine plan was prepared using mineral reserves only and outlined average annual production of 411,000 ounces at mine site all in sustaining costs of $915 per ounce over the initial twelve years. As a base case, this is a very attractive operation and we believe there is significant upside to come. Turning to Slide five, an expansion study is currently underway and is expected to outline an ever larger and more profitable operation. Our base case plan is based on combining milling rates of 12,400 tons per day.

[John McCluskey, President, CEO & Director at Alamos Gold]

Within the expansion study, we expect to be evaluating an expansion to 20,000 tons per day which we expect to support higher mining rates from the underground and the open pit. Additionally, through ongoing infill drilling, we expect to incorporate a larger mineral reserve through the conversion of a significant portion of the 5,000,000 ounces of resources not incorporated into the base case. The expansion study remains on track for completion during the fourth quarter of this year. There is also longer term growth potential beyond the expansion study and is expected to outline support significant increase near mine and regional exploration. Late in the second quarter, we provided an exploration update that demonstrated the potential across the Island Gold District.

[John McCluskey, President, CEO & Director at Alamos Gold]

Recent drilling continues to extend high grade mineralization across the Island Gold deposit as well as within several hanging wall and football structures. Turning to Slide six, the regional exploration program has also been successful in intersecting high grade gold mineralization in proximity to past producing mines including Klein Pick and Edwards Mines. Some of those highlights include drill holes grading eight grams per ton over 21 meters, 19 grams per ton over five meters and 56 grams per tons over two meters. The early results have been impressive extending high grade mineralization beyond the extent of historic mining. These targets are located within seven kilometers of the Magino mill and represent opportunities for additional high grade mill feed with a larger mill expansion.

[John McCluskey, President, CEO & Director at Alamos Gold]

They also highlight significant potential we see across our 60,000 hectare land package within the underground within the underexplored Michiquotin Greenstone Belt. Our portfolio of high return projects supports one of the strongest growth profiles in the sector. We expect steady growth and declining costs over the next several years driven by the completion of the Phase three expansion. Towards the latter part of 2028, we expect Lynn Lake to take our consolidated production rate to over 900,000 ounces per year at well below industry average all in sustaining costs. Longer term, there's excellent potential to increase production to approximately 1,000,000 ounces per year through a further expansion of the Island Gold District.

[John McCluskey, President, CEO & Director at Alamos Gold]

We expect to outline this upside in expansion study that we will release in the fourth quarter. Turning to slide five, pardon me, turning to slide eight, we expect strong ongoing free cash flow while funding this growth. Following the completion of the Phase three plus expansion, we expect to generate even stronger levels of free cash flow starting next year. This growth is expected to continue with the completion of our PDA and Lynn Lake projects such that at current gold prices we expect our annual free cash flow to exceed $1,000,000,000 I'll now turn the call over to our CFO, Greg Fischer to review our financial performance.

[Greg Fisher, CFO at Alamos Gold]

Thank you, John. On to Slide nine, we sold approximately 135,000 ounces of gold in the second quarter at an average realized price of $3,223 per ounce for record revenues of four thirty eight million dollars The average realized price was below the London PM fixed price 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 by 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. Total cash cost of $10.75 dollars per ounce and all in sustaining cost of $14.75 dollars per ounce decreased 1018% respectively from the first quarter.

[Greg Fisher, CFO at Alamos Gold]

Costs are expected to trend lower through the remainder of the year as production increases driven by higher grades and tons processed. Our reported net earnings were $159,000,000 in the second quarter or $0.38 per share. This included $17,000,000 of unrealized losses on commodity hedge derivatives net of tax, 34,000,000 of unrealized foreign exchange gains recorded within deferred taxes and foreign exchange loss and other adjustments totaling $2,000,000 Excluding these items, our adjusted net earnings were $144,000,000 or $0.34 per share. Operating cash flow before changes in non cash working capital was a record $233,000,000 in the second quarter or $0.55 per share. Capital spending totaled $115,000,000 and included $34,000,000 of sustaining capital, 72,000,000 of growth capital and $10,000,000 of capitalized exploration.

[Greg Fisher, CFO at Alamos Gold]

Free cash flow for the quarter totaled $85,000,000 a significant increase from the first quarter driven by strong contributions from all three operations. This included $55,000,000 from the Mulatos District, 52,000,000 from the Island Gold District and a record $59,000,000 at Young Davidson. Following the release of our first quarter results, we are active on our share buyback repurchasing 400,000 shares at a cost of $10,000,000 Including our quarterly dividend of $11,000,000 we returned $21,000,000 to shareholders in the quarter. Our cash balance at the end of the second quarter grew to $345,000,000 and combined with the undrawn balance on our credit facility, our total liquidity is $845,000,000 With production increasing and cost decreasing through the remainder of the year supporting strong ongoing free cash flow, we are well positioned to internally fund our growth plans. Moving to Slide 10.

[Greg Fisher, CFO at Alamos Gold]

As John outlined earlier on the call, we have increased our full year cost guidance. This reflects higher than budgeted share based compensation and royalty expense through the first half of the year as well as a slower start to the year at Magino and Young Davidson. Full year total cash costs are now expected to be between $975 and $10.25 dollars per ounce, and all in sustaining costs between $1,400 and $14.50 dollars per ounce. This represents a 12% increase in all in sustaining cost guidance with approximately 40% of the increase attributable to external factors. This included the revaluation of previously issued share based compensation given the significant increase in our share price during the first half of the year and higher royalty expenses given the sharply higher gold price.

[Greg Fisher, CFO at Alamos Gold]

Consistent with our updated guidance, we expect a significant improvement in our costs in the second half of the year. We expect costs to continue to trend lower over the next several years, driven by low cost production growth. I'll now turn the call over to our COO, Luc Guimon, to provide an overview of our operations.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Thank you, Greg. Over to Slide 11. Production from the Island Gold District totaled 64,400 ounces, a 9% increase over the first quarter, driven by higher combined milling rates from the Island Gold and Matino mills. Production is expected to increase further through the remainder of the year, reflecting higher mining and processing rates. Island Gold delivered a strong quarter with both underground mining rates and grades in line with annual guidance.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Magino's mining rates averaged 13,700 tonnes of ore per day in the quarter, a 16% increase over the previous quarter. Mining rates are expected to increase in the second half of the year to be consistent with annual guided levels of 14,800 tonnes per day. Costs declined slightly from the first quarter with a more significant decrease expected in the second half of the year. This is expected to be driven by higher milling rates within the Magino mill and increasing underground mining rates at Island Gold. Mine site free cash flow increased to $52,000,000 more than double the first quarter, an impressive performance given the ongoing reinvestment in growth through the Phase three plus expansion and a significant exploration program.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

The Island Gold District remains well positioned to self fund its expansion plans with significant free cash flow growth expected from 2026 onwards. Moving to Slide 12, The performance of the Magino mill continued to improve during the quarter, with milling rates increasing 18% from the first quarter to average 8,500 tonnes per day. Following the installation of a redesigned liner and bolt configuration within the SAG mill earlier this month, throughput rates have steadily improved to average approximately 9,500 tonnes per day in the July. We remain on track to reach 11,200 tonnes per day later this quarter. Reflecting the improved performance of the Magino mill, the Island Gold mill was shut down mid July and underground ore is now being processed within the larger and more productive Magino mill.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Since the introduction of higher grade underground ore, the mill has performed well with recoveries from the blended ore consistent with expectations. Moving to Slide 13. The Phase three plus expansion continues to progress well with the shafts in currently at a depth of twelve sixty five meters, representing 92% of its ultimate planned depth. The remainder of the shafts in is on track for completion in the fourth quarter of this year. Other progress during the quarter included completing cladding and roofing for the bin house, advancing work on the paste plant, which is now 70% complete and completing bulk earthworks for the administrative complex and the mill expansion to 12,400 tonnes per day.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Lateral development also continued to advance, which is expected to support higher mining rates later this year and following the completion of the overall expansion. Over to Slide 14, work is also underway on the evaluation of a larger expansion of the mill beyond 12,400 tonnes per day. Detailed engineering for the larger mill expansion is ongoing and expected to be completed by early twenty twenty six. To support a potential larger expansion, the earthworks for the new mill building was sized with a footprint that can accommodate an expansion up to 20,000 tonnes per day. The new building will be configured to allow for additional leach tanks, as well as a second SAG and ball mill, all of which can be sized to support increased processing rates of up to 20,000 tons per day.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

The larger mill is expected to have a parallel circuit dedicated to processing a higher grade blend of underground and open pit ore. Given the increased capacity, a larger expansion is expected to allow for higher underground and open pit mining rates. We look forward to outlining the upside potential within the expansion study later this year. Over to Slide 15, as of quarter end, we spent and committed 79% of the total Phase three plus expansion capital of CAD835 million. The expansion is expected to be completed in the 2026, will be a significant driver of low cost production growth and free cash flow generation.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Over to Slide 16, Young Davidson produced 38,700 ounces, a 9% increase from the first quarter with further improvement expected in the second half of the year, driven by higher mining rates and grades. This is also expected to drive costs lower compared to the first half of the year. Mining rates improved over the first quarter, but were lower than targeted levels. Higher than average snowfall and precipitation earlier this year led to significantly higher than normal spring melt. This resulted in the increased inflow of groundwater into parts of the underground mine.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

This impacted the ability to skip ore to surface, resulting in nearly one week of downtime in May. Additionally, mining rates were impacted by power outages caused by storms in the region. Managing groundwater is a normal part of operating an underground mine. The increased inflow in the second quarter and resulting downtime was the first occurrence in fifteen years of operating Young Davidson. Through enhanced regional watershed management practices and increased pumping capacity, this is not something we expect to recur in the future.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Mining rates are expected to improve in the third quarter following a planned five day shutdown for rope changes in the Northgate shaft that was completed in July. We expect a further increase to targeted levels of 8,000 tonnes per day in the fourth quarter. Grades mined and mill were consistent with the low end of full year guidance. Grades mined are expected to be at similar levels in the third quarter, but increase in the fourth quarter. Reflecting higher milling rates through the remainder of the year and higher grades in the latter part of the year, we expect a much stronger second half.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Young Davidson generated record mine site free cash flow in the quarter of CAD59 million and CAD98 million in the first half of the year, putting the operation on pace for another annual record in 2025. Over to Slide 17, the Mulatos District delivered a solid quarter and achieved a significant milestone producing its three millionth ounce of gold over its twenty year history in operation. With at least another decade of production defined within PDA and a number of other emerging opportunities for higher grade ore within the district, we expect more milestones to come. Production during the quarter totaled 34,100 ounces, a 12% increase over the first quarter reflecting higher grade stock. Further increases in Corti production are expected as a significant portion of the higher grade stacked in the second quarter will be realized over the second half of this year.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Cost decreased 18% compared to the first quarter with a further reduction expected in the second half of the year. Bladens remains well positioned to meet its production and cost guidance for the year. PDA development continues to advance with a focus on detailed engineering during the second quarter. Spending will accelerate in the second half of the year with the commencement of underground development and placement of long lead time orders for the mill. The Mulatos District generated mine site free cash flow of CAD55 million in the second quarter.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

The stronger free cash flow expected in the second half of the year driven by higher production and lower costs. The operation is well positioned to continue generating strong ongoing free cash flow while funding the construction of PDA. With that, I will turn the call back to John.

[John McCluskey, President, CEO & Director at Alamos Gold]

Thank you, Luke.

[John McCluskey, President, CEO & Director at Alamos Gold]

Our operations demonstrated significant improvement in the second quarter. We expect this trend of growing production and declining costs to continue into the second half of the year and over the next several years. The Island Gold District will be a key driver of this improvement. Transition of processing high grade island ore within the Magino mill was one of the last key steps towards integrating the operations and realizing significant cost synergies going forward. I'll now turn the call back to the operator to open the call for your questions.

[Operator]

Thank you. We'll now take questions from the telephone lines. The first question is from Ovais Habib from Scotiabank. Please go ahead.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Thanks, operator. Hi, John and Alamos team. Really great to hear that Magino mill is ramping up and that Island Gold ore is being processed at Magino. John, a couple of questions from me. First one, I mean, look, it was widely expected that you would increase the ASIC guidance.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

So glad that's out of the way. And I'm glad you maintained the production guidance as well. John, I'm getting a lot of questions on this, so I just want to make sure that I'm asking this on this conference call. How confident are you in meeting the production guidance comfortably? And what levers you have within your portfolio to make sure the production guidance remains on track?

[John McCluskey, President, CEO & Director at Alamos Gold]

Let me put it in this perspective, Oves. I've been the CEO of the company since 02/2003. I participated in close to 90 quarterly calls. We've been giving guidance all along starting from the time when we were trying to get the mine built which we managed to achieve the first mine, Mulatos. So we achieved it in record time and brought it in on budget.

[John McCluskey, President, CEO & Director at Alamos Gold]

This was in 02/2005, very, very difficult time in the market and we operating those days in a wing and a prayer and we've been giving guidance all through that period and we are remarkably accurate over that period of time. Can check it out for yourself. If you look for 14 up to Q1 of this year, we basically either met or we beat our production and cost guidance. So here we are, we got off to a slow start this year. We had very difficult conditions in Canada this year that affected both our operations at YD and Island Gold but we got through it.

[John McCluskey, President, CEO & Director at Alamos Gold]

It has had an impact on our cost guidance for this year. We just won't be able to catch up from a cost perspective to met our cost guidance and so we revised it. But with respect to production, we're very confident. We're very confident. We would not have reiterated guidance if we did not have that type of confidence.

[John McCluskey, President, CEO & Director at Alamos Gold]

Mean we revised costs, we could have just as easily revised production guidance if it was required. We didn't think that was required. You want to add something Greg?

[Greg Fisher, CFO at Alamos Gold]

I could just touch on the drivers a little bit as Ovez asked about. I mean, we outlined our Q3 guidance to be between 145,155 ounces And we expect Q4 to step up even higher than that. And really the key drivers are going to be at YD. At Young Davidson, it's higher milling rates. It's higher milling rates and grades that are going to drive that in the second half of the year.

[Greg Fisher, CFO at Alamos Gold]

And we had expected that from when we released our original guidance in January. With Island Gold, Magino is ramping up, so we'll have higher milling rates from Magino, but we're also looking to step up the underground mining rates coming from Island Gold given the fact that we have the bigger mill now. And then at La Yaqui Grande, we stacked very good grades in Q2. We're going to continue to stack good grades or higher grades in Q3 and Q4. So it's just a matter of the ounces coming off the pad.

[Greg Fisher, CFO at Alamos Gold]

So all of those things are going to drive our production significantly higher in the second half of the year.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Thanks for the color on that John and Greg. Just want to move on to the exploration side then. John, when we were visiting the Island Gold site in June, your team was really highlighting exploration potential close proximity to the Magino Mill, the regional kind of exploration work, plus you guys were hitting some interesting intersections on the West Side of Island Gold. Any of these drill targets really standing out? And are we expected to see more results from this area?

[Ovais Habib, Precious Metals Analyst at Scotiabank]

That's part one. And then part two of the question is also is the plan to delineate a source to feed the Magino mill from these areas before you release the expansion study?

[John McCluskey, President, CEO & Director at Alamos Gold]

Look, we have exciting exploration results coming from right across the company. We've made some interesting new discoveries down in Mexico. We've been hitting into some fabulous grades as I outlined in my comments as far away as seven kilometers from our mill in areas of old workings. We had high expectations for those areas. They've come in very well.

[John McCluskey, President, CEO & Director at Alamos Gold]

We've been drilling. We've actually been focusing quite a lot of our effort converting resource to reserve. So we can incorporate more reserves into this big expansion study we're coming up with on the fourth quarter. We're having excellent results on that front. But I've got Scott RG Parson sitting next to me here and I'm going to turn it over to him to give further color to your question.

[Scott R.G. Parsons, VP - Exploration at Alamos Gold]

Thank you for the question, Obese. There's a number of opportunities that we touched on that our team is very excited about. I'm equally excited. To Off to the West, you touched on some of the surface drilling and underground drilling we've been doing between Island Gold and Magino and that area is essentially the up plunge extension of the Island West zone. And as we establish underground drill platforms and continue drilling from surface, continue to define high grade mineralization in that area.

[Scott R.G. Parsons, VP - Exploration at Alamos Gold]

So that's no surprise to us and it's just a matter of time before we could get there and start drilling it. We continue to have success in the hanging wall footwall zones. Those are all incremental ounces in terms of ounces per vertical meter in proximity to existing infrastructure. So those all continue to expand and we define as we define new zones as well. The most exciting part is Island's down plunge.

[Scott R.G. Parsons, VP - Exploration at Alamos Gold]

It continues to remain open at depth below 1,500 meters. This is shallow in terms of these gold systems in Canada. We have indications from earlier drilling that the island continues down plunge and later this year, once we've pivoted back from our delineation drill program, we will continue exploring the island at depth. And then as John touched on as well, near mine opportunities, including Cline and Edwards and Pick, these are historic mines seven kilometers from the Magino Mill. They've gone through a series of different operators over the years.

[Scott R.G. Parsons, VP - Exploration at Alamos Gold]

We've consolidated all the land there and really it's a new gold system we're just starting to explore and you see the results already this year quite encouraging and we'll be continuing to drill at those targets going into the second half of the year.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Scott, based on this drilling and drilling results expected, I mean, is the plan to kind of have these results incorporated into the expansion? Or is this kind of the next phase of that expansion that these opportunities will be brought into any sort of production profile at Island Gold Complex?

[Scott R.G. Parsons, VP - Exploration at Alamos Gold]

Yes. Our absolute focus right now is getting the inferred mineral resource base at Island Converted to indicated to bring that into the expansion study before year end. There's about 1,000,000 ounces sitting there that we're actively drilling on from surface and underground right now and we're on track to complete that program for the year end expansion. The other targets I referenced will be more longer term, mid term targets in terms of the Klein Edwards and PICCs. There is also the North Shear, which I didn't touch on, but those will come in as new, what I would anticipate as new resources in the mid term that would provide potential opportunities for higher grade mill feed at Magino.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

That's great color, Scott. I appreciate that. That's it for me guys. Thanks for taking my questions.

[Operator]

Thank you. The next question is from Cosmos Chiu from CIBC. Please go ahead.

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

Thanks, John, Greg, Luke and Scott times Chiu. Maybe my first question is on Young Davidson. Just to talk about the higher levels of groundwater due to the spring melt. Has that been fully resolved? Just to confirm that the groundwater is now normalized?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Cosmo. Yes, Luke here. Yes, it has been resolved. It was as we mentioned, it was kind of a bit of a perfect storm there with a quick spring melt and significant precipitation during the spring melt as well, which added more water within the regional watershed and resulted in more groundwater and flowing into the mine. We're more and more adherent to making sure that we understand the whole regional watershed and keeping an eye on that moving forward for the longer term as well as we've actually added some additional pumping capacity as backup to our both our open pit dewatering as well as our underground dewatering.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

So we don't expect that event to happen again. And as we've mentioned, we've been operating there for fifteen years. It's the first time this sort of significant event happened. But we feel we have it addressed moving forward.

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

Great. I guess there's no pun intended when you said perfect storm. Maybe on the throughput here, you did 7,190 tonnes per day in Q2. Reading your MD and A, you will get to 8,000 tons per day, but likely not until Q4. Am I correct in that interpretation?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Yes. I mean, had a rope change schedule part of this year for the head ropes at the Northgate Shaft and that occurred early July. Post completion of that rope change, we've been running at 8,000 tons per day. But obviously, you factor in the number of days over the course of the quarter, we'll probably come in around 7,500 to 7,600 tonnes per day for the quarter. But as we move into Q4, we don't have any significant scheduled maintenance requirements for the plant and would expect to be running at 8,000 tonnes per day.

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

Great. And then also at YB, I think you mentioned that in Q3 grades will remain at the lower end of full year guidance at closer to 2.05 gram per tonne. Is that as expected? And was there any ability on your end to potentially mine higher grades in Q3 even maybe in Q2 to offset the lower than 8,000 tonnes per day throughput?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

So, I mean, we've got a pretty committed schedule with regards to the extraction sequence for the underground. And again, it's just to manage the overall regional extraction of the ore body to be responsible as far as the mining phase of what we're doing for Young Davidson. So I mean really the lower grade being at the lower end of guidance has been a function of obviously the slower first half of the year not mining all the tons that we expected. And as well as a slight change in sequence has resulted in us being more at the lower end of guidance as opposed to maybe being near the mid or upper end of guidance. But as we move through the mine plan through the second half of the year, it is pretty flat line between Q2, Q3.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

But as we move into Q4, as per our mining sequence that we expected, we will be getting into higher grades that would be more near the higher end of our guidance. And then the other point I would make is based on where we have been mining, even though there has been a slight sequence change or we haven't mined all of the tons, from a reconciliation point of view, the planned grades that we were expecting are aligned with the actual grades that we've been seeing from a reconciliation point of view.

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

Great. And then maybe just a few numbers question on Island Gold. As you mentioned, with the transition of the Island Gold ore to the Magino mill, recovery looks to be as expected. So how should we look at recovery? Like in Q2, it was 98% for Island Gold, 95% for Magino.

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

So should we just take a weighted average and that should be kind of the expectation we should expect on a go forward basis?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Yes. Our expectation based on the blended mill feed into the Magino mill with the Island ore as well as the Magino ore, the expectation should be an overall recovery of about 96% is what you should

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

Okay. Great. And then in terms of the redesigned liner and the bolt configuration of the SAG mill, just to kind of confirm, you now have the configuration needed at the Magino mill to achieve your near term target of 11,200 tonnes per day. So it's just really down to kind of getting it up and running, availability and things like that. You don't need to change anything else.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Correct. I mean, the last step really there was just having more plant availability for the SAG mill. And by making the change that we did in early July with the liner configuration as well as the bolts, That will give us more industry standard plant availability for the SAG mill moving forward to be able to continue that ramp up to strive for the 11.2% that we're expecting as we move through the quarter.

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

And then one last question on the grades at Magino, the open pit. As you mentioned 0.82 gram per ton in Q2. How should we look at the mine grade on a go forward basis? I think your full year guidance is anywhere between zero point eight zero point nine gram per tonne. Your reserve grade is 0.91.

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

So could you remind us how we should look at grade? Or does it really matter given that you stock plasma at a lower grade anyways? And what's actually going through the mill is high?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Yes. I mean, if you look at what we processed in Q2, we averaged about 0.94, which falls within our guidance of 0.9 to 105. So obviously, mine grade overall is always going to be a bit lower because we're stockpiling the low grade and feeding the best grade material. So really the way you should look at it is on a basis of what we're going to be processing in the quarter, On a quarter by quarter basis moving forward, certainly in the second half of the year, we should be within that range of 0.9 to 105 coming from Magino ore.

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

Perfect. Great. Those are all the questions I have. Thanks everyone. Thanks.

[Operator]

Thank you. The next question is from Don DeMarco from National Bank. Please go ahead.

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

Thank you, operator. And good morning, John and team. Good to see the strong free cash flow in Q2 while keeping the projects on track. So first question for me is at Island. And congratulations on the shutdown of the Island mill.

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

Now Magino mill throughput, I understand it's running around 9,500 tonnes per day in the last couple of weeks of July. So what should what do you expect the throughput profile to be through the rest of the quarter over August and September? Like do you expect a quick ramp up to 11,000 tonne per day and potentially even exceed it or more moderate increase maybe reaching 11,000 tonne per day in September?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Don. Hi, it's Luke here. It will be a bit of a gradual ramp up as we continue to move forward through the quarter. But certainly as we hit our stride in Q4, we'd be more consistently running at 11,002 Just with the liner change that we've just completed, the liner and bolt change, we've got the ball charge setting that we're looking at optimizing certainly as well as there's a little bit less volume with the new liners. So that's part of where the gradual ramp up occurs through the quarter.

[Luc Guimond, Chief Operating Officer at Alamos Gold]

But we would expect to hit our stride certainly in Q4.

[Greg Fisher, CFO at Alamos Gold]

And just to add, critical thing for us is to ensure we're maximizing the amount of underground ore that's coming from Island and that's continuing to be where we expect it to be.

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

Okay, great. And it was mentioned in response to an earlier question that you plan to step up the processing of the high grade ore at the Magino mill. So should I take this as that Island might contribute more than 1,200 tonnes per day to the mill in Q3 or Q4?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Yes. I mean, as part of our Phase three plus expansion and our ramp up, our mining rates were starting to gradually increase from the Island underground component. So yes, see the second half of the year, you will start to see there would be more contribution from Island underground ore going into the Magino mill on a combined basis. We'd be targeting about 1,400 tonnes per day.

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

Okay. Well, should that be through 1,400 for the entirety of H2 or how should we look at Q2, Q3 versus Q4?

[Luc Guimond, Chief Operating Officer at Alamos Gold]

Q3 you're running around 1,300 tons per day. Q4 we'd be running at about 1,400 tons per day.

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

Excellent. And it's great to hear that John, the final question, he reiterated the consolidated production guidance. Are you expecting to achieve production guidance at all the mines like of course Young Davidson and Island are currently running at the low end of their respective ranges. So So just wondering if it's on a consolidated basis or if there's any additional color on a mine by mine basis?

[John McCluskey, President, CEO & Director at Alamos Gold]

Well, hit it on a consolidated basis, you've got to hit it mine by mine. So we give variations across each of those operations just given the unforeseen things that can happen in mining operations. But all things being equal, we're quite confident in the guidance we provided on a mine by mine basis and on a consolidated basis.

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

Okay, great. Okay, well that's all for me.

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

Thank you for that and good luck with the rest of the year.

[John McCluskey, President, CEO & Director at Alamos Gold]

Thank you.

[Operator]

Thank you. There are no further questions at this time. This concludes this morning's call. If you have any further questions that have not been answered, please feel free

[Luc Guimond, Chief Operating Officer at Alamos Gold]

to

[Operator]

contact Mr. Scott Parsons at (416) 368-9932 extension 5439. Thank you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.

Participants

Executives

• Scott K. Parsons, SVP - Corporate Development & IR
• John McCluskey, President, CEO & Director
• Greg Fisher, CFO
• Luc Guimond, Chief Operating Officer
• Scott R.G. Parsons, VP - Exploration

Analysts

• Ovais Habib, Precious Metals Analyst at Scotiabank
• Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets
• Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial