Alamos Gold Inc.

Alamos Gold Inc.

April 07, 2009 12:49 ET

Alamos Gold Inc. Reports Record Quarterly Gold Production and Provides Operations Update

TORONTO, ONTARIO--(Marketwire - April 7, 2009) - Alamos Gold Inc. (TSX:AGI) ("Alamos" or the "Company") is pleased to report another quarter of record gold production at the Company's Mulatos mine in Mexico. In the first quarter ended March 31, 2009, the Company produced 46,000 ounces of gold at an expected total cash cost below $350 per ounce.

Q1 2009 Production Summary

The following table presents key operational metrics and production statistics for the first quarter of 2009 compared to the first quarter of 2008:

Q1 Q1 %
2009(1) 2008 Change
Ore mined (tonnes) 1,047,000 1,230,000 (15%)
Waste mined (tonnes) 1,532,000 1,653,000 (7%)
Total mined (tonnes) 2,579,000 2,883,000 (11%)

Waste-to-ore ratio 1.46 1.34 9%

Ore crushed (tonnes) 1,068,000 1,244,000 (14%)
Grade (g/t Au) 1.71 2.33 (27%)

Contained ounces stacked 58,700 93,187 (37%)
Gold production (ounces) 46,000(2) 33,253 38%
Ratio of gold production to
contained ounces stacked 78% 36% 117%

(1) All amounts for Q1-2009 are preliminary based on initial period-end
estimates - final adjustments may be required.

(2) Before final refinery settlements which may result in increases or
decreases to reported gold production.

The Company previously announced that the drum agglomeration process was commissioned ahead of schedule in December 2008. At that time, the Company reported that it expected drum agglomeration to improve leach pad percolation and increase gold recoveries. First quarter 2009 production has demonstrated the benefits of drum agglomeration, with indications that gold recoveries over the 17-week leach cycle are improving significantly.

Gold production in the first quarter of 2009 increased 38% over the prior year period to 46,000 ounces, a new quarterly record. Ore mined and crushed were below budget in the first quarter of 2009 due to two factors. The Company completed a rebuild of the grizzly crusher area early in the year, which resulted in shutting down the primary crusher for approximately five days. In addition, in February and March 2009, the Company mined through an area of the open pit with harder than usual ore. This necessitated reducing crusher throughput in order to achieve the desired crush size specifications. In early April 2009, the Company finished mining in this area of the pit and expects ore mined and crushed to increase from the first quarter level of approximately 11,700 tonnes per day to the budgeted level of approximately 13,400 tonnes per day.

The grade of ore crushed and stacked on the leach pad in the first quarter of 2009 was 1.71 g/t Au, slightly higher than the Company's 2009 budgeted grade of 1.60 g/t Au. In the first quarter of 2008, the Company crushed ore with a grade of 2.33 g/t Au, significantly higher than the budgeted grade.

Q1 2009 Gold Sales and Cost Summary

The table below presents preliminary gold sales and cash cost information for the first quarter of 2009 compared to the same period of 2008. All dollar amounts are expressed in Unites States currency.

Q1 2009 Q1 2008 % Change
Gold sales (ounces) 40,058 34,609 16%
Revenues (000) $35,520 $31,030 14%
Total cash cost per ounce sold(1) $350 $414 (15%)

(1) Costs for Q1-2009 are preliminary estimates - final adjustments will be

Gold sales (ounces) and revenues increased 16% and 14% respectively compared to prior year period. The calculation of total cash costs for the first quarter of 2009 has not yet been finalized. However, the Company expects that total cash costs (including the 5% royalty) will be consistent with the Company's guidance of $350 per ounce.


While gold production in the first quarter of 2009 exceeded budgeted levels, the Company is maintaining its 2009 annual gold production forecast of between 145,000 and 160,000 ounces.

Exploration activities have increased to a record level, with six drill rigs currently operating at four exploration project areas. The Company is currently investing in excess of $1 million per month on exploration and expects to significantly surpass its initial 2009 budget for exploration spending of $7 million. Highlights of recent drilling at the Escondida extension zone, Cerro Pelon, Puerto del Aire and Gap will be announced in conjunction with the Company's 2009 first quarter financial results in early May.

The Company's excellent financial position continues to improve, with over $118 million in cash and short-term bank deposits, no debt and strong free cash flows at current gold prices.

About Alamos

Alamos is a Canadian-based gold producer with operations, exploration and development activities in Mexico. The Company employs approximately 450 people in Mexico and is committed to the highest standards of environmental management, social responsibility, and health and safety for its employees and neighbouring communities. Alamos is fully leveraged to increases in gold prices. Alamos' common shares are traded on the Toronto Stock Exchange under the symbol "AGI".

Cautionary Non-GAAP Statements

The Company believes that investors use certain indicators to assess gold mining companies. They are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP. "Total cash costs" as used in this analysis is a non-GAAP term typically used by gold mining companies to assess the level of gross margin available to the Company per ounce of gold by subtracting these costs from the unit price realized during the period. This non-GAAP term is also used to assess the ability of a mining company to generate cash flow from operations. There may be some variation in the method of computation of "total cash costs" as determined by the Company compared with other mining companies. In this context, "total cash costs" reflects the per ounce cash operating costs allocated from in-process and dore inventory associated with ounces of gold sold in the period, plus applicable royalties. "Total cash costs" may vary from one period to another due to operating efficiencies, waste-to-ore ratios, grade of ore processed, gold recovery rates and gold prices during the period.

Cautionary Note

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact included in this release, including without limitation statements regarding forecast gold production, gold grades, recoveries, waste-to-ore ratios, total cash costs, potential mineralization and reserves, exploration results, and future plans and objectives of Alamos, are forward-looking statements that involve various risks and uncertainties. These forward-looking statements include, but are not limited to, statements with respect to mining and processing of mined ore, achieving projected recovery rates, anticipated production rates and mine life, operating efficiencies, costs and expenditures, changes in mineral resources and conversion of mineral resources to proven and probable reserves, and other information that is based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements." Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements.

There can be no assurance that forward-looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Alamos' expectations include, among others, risks related to international operations, the actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of gold and silver, as well as those factors discussed in the section entitled "Risk Factors" in Alamos' Annual Information Form. Although Alamos has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Alamos Gold Inc.
    John A. McCluskey
    President and Chief Executive Officer