Alamos Gold Inc. (TSX: AGI) (NYSE: AGI) saw an increase in its gold production during the quarter thanks to its operations at the Mulatos District in Sonora, Mexico.
On Wednesday, the leading gold producer announced its financial results for the second quarter of 2023. Alamos reported record production and robust margin expansion, which has led to a free cash flow of $61.6 million.
The company produced a record 136,000 ounces of gold during the quarter, exceeding its quarterly guidance of 120,000. This represented a 31 per cent increase from the second quarter of 2022 and 6 per cent increase from the first quarter of 2023 driven by strong production growth from the Mulatos District.
“This was driven by another excellent quarter from La Yaqui Grande which contributed to the highest production and free cash flow from the Mulatos District in more than 10 years,” Alamos Gold CEO John A. McCluskey said.
“With the solid first half, we are well-positioned to achieve our full-year production and cost guidance.”
The Mulatos District saw a production of 60,300 ounces, marking a 19 per cent rise from Q1 2023, and achieving the highest output in a decade. This surge was largely due to another robust quarter from La Yaqui Grande.
This high performance led to a 28 per cent surge in mine-site free cash flow from Q1 2023, reaching $47.0 million. Consequently, the total for the first half of the year amounted to $83.8 million.
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The Phase 3+ Expansion at Island Gold, one of Alamos Gold’s key projects, remains on track. The company is also in the final stages of completing the updated Feasibility Study for the Lynn Lake project.
Alamos Gold expects to continue generating strong free cash flow over the next several years while funding the Phase 3+ Expansion at Island Gold. This projection indicates a promising future for the company and its stakeholders.
“The Phase 3+ Expansion at Island Gold remains on track with construction of the shaft surface infrastructure well underway, and the updated Feasibility Study for the Lynn Lake project is in the final stages of completion,” McCluskey said.
“Both projects are key components of our strong outlook, with the capacity to nearly double our rate of production in Canada at significantly lower costs.”
Alamos Gold operates the Young-Davidson and Island Gold mines located in northern Ontario, Canada, as well as the Mulatos mine situated in Sonora State, Mexico. The company also boasts a robust portfolio of growth projects including the Phase 3+ Expansion at Island Gold and the Lynn Lake project in Manitoba, Canada.
Alamos Gold stock dropped by 1.4 per cent on Wednesday on the Toronto Stock Exchange.
