Alamos Gold Announces Island Gold District Base Case Life of Mine Plan Outlining One of the Largest and Lowest-Cost Gold Mines in Canada with Significant Upside

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There is no net impact on gross margin from the accounting for in-kind NSR royalties compared to cash-paid NSR royalties given the lower royalty expense is offset by a reduction in ounces sold.

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Capital Costs

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Total growth capital is estimated at $453 million (as of January 1, 2025), with the majority to be spent over the next two years. Growth capital is focused on completing the Phase 3+ Expansion and the Magino mill expansion to 12,400 tpd.

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As of the end of 2024, $486 million had been spent on the Phase 3+ Expansion. Remaining growth capital on the Phase 3+ Expansion is expected to total $349 million bringing total expected capital for the expansion to $835 million. This represents a 5% increase from the updated total growth capital estimate of $796 million provided in September 2024. The increase reflects ongoing labour inflation, as well as the use of a contractor to support off shaft development, and construction activities related to the ore and waste handling system for a total increase of approximately $39 million.

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The addition of a pebble crusher and auxiliary mill to the Magino mill to support 12,400 tpd represents a potential scope change at an additional cost of approximately $40 million. These component changes will be re-evaluated over the next several months to assess if they will be required as part of a potential larger expansion of up to 20,000 tpd. This evaluation process will be completed before finalizing a decision and committing capital.

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The other key difference between Island Gold District remaining growth capital and the Phase 3+ Expansion is the addition of a truck shop at Magino at a cost of $28 million. This will support improved maintenance practices of the open pit mobile fleet and increased utilization rates. The construction of a truck shop had been deferred by the previous owner.

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Sustaining capital is expected to total $1,808 million over the life of mine, including reclamation costs and capital leases. The key increases relative to the Phase 3+ Study reflect the addition of the Magino operation, as well as increased underground development at Island Gold. As noted above, increased development will support a better managed stress environment as the ore body continues to grow and mining extends deeper, while also allowing for higher mining rates beyond 2,400 tpd, which is being reviewed as part of the Expansion Study.

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Sustaining capital per ounce is expected to decrease within the Expansion Study reflecting the potential inclusion of a larger Mineral Reserve, through ongoing Resource conversion, which will leverage infrastructure being constructed to support the Base Case operation.

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Combined growth and sustaining capital are expected to total $2.26 billion over the life of mine, or $380 per ounce sold.

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Including operating costs and total capital, the all-in cost is expected to total $1,079 per ounce sold over the life of mine.  

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A breakdown of the capital requirements for the Base Case Life of Mine Plan is detailed as follows.

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Taxes

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At current gold prices of approximately $3,300 per ounce and taking into account existing income tax pools of approximately C$2 billion, the Island Gold District is not expected to pay any significant taxes until 2026. At a long-term gold price of $2,400 and USD/CAD foreign exchange rate of $0.75:1, the Island Gold District is expected to pay approximately $2.2 billion in federal and provincial income taxes and Ontario mining taxes over the life of the mine. The effective tax rate is expected to average approximately 25% reflecting the use of the substantial tax pools.

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Permitting

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The Island Gold District has all the key permits in place for the current operation, with normal course permits required for further expansions of the operation. The Closure Plan Amendment (“CPA”) for the Island Gold mine was received in March 2022 allowing for the ramp up of construction activities for the original Phase III expansion to 2,000 tpd. In December 2023, another CPA was approved that incorporated scope changes in the Phase 3+ Expansion to operate at 2,400 tpd.

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The CPA for the Magino mine was approved in September 2024. Under the approved Federal Environmental Impact Statement (“EIS”), the Magino mill is permitted to operate at a processing rate of 35,000 tpd, well above the current rates. The TMF at Magino is permitted under the Federal EIS to contain up to 150 mt of material. This is more than sufficient tailings capacity for the Base Case LOM Plan as well as the expected larger Mineral Reserve to be incorporated in the Expansion Study.

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For the expansion to 12,400 tpd, there are a number of normal course provincial permits that will be required including an amendment to the Environmental Compliance Approval (“ECA”). The ECA will also need to be amended for any potential further expansion up to 20,000 tpd as will the CPA. These are permit amendments that have been approved multiple times previously. All permitting activities fall within a well known jurisdiction where Alamos has successfully operated for years, achieving various permitting milestones at both of its Young-Davidson and Island Gold mines.

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Upside to Base Case LOM Plan:

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Expansion Study expected to be released in the fourth quarter of 2025  

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The Base Case LOM Plan is based only on Mineral Reserves and long-term milling rates of 12,400 tpd. The Expansion Study to be released in the fourth quarter of 2025 is expected to demonstrate attractive economics and significant upside to the Base Case with the key drivers as follows:

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Key elements of a larger expansion have been de-risked, including:

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Significant exploration upside

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The Island Gold District remains highly prospective, with significant exploration upside that can support further potential growth over the longer term, including:

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Technical Disclosure

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Chris Bostwick, FAusIMM, Alamos Gold’s Senior Vice President, Technical Services, has reviewed and approved the scientific and technical information contained in this news release. Mr. Bostwick is a Qualified Person within the meaning of Canadian Securities Administrator’s National Instrument 43-101 (“NI 43-101”).

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The Company will file a technical report prepared in accordance with NI 43-101 on SEDAR+ at www.sedarplus.ca within 45 days of the date of this release.

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About Alamos

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Alamos is a Canadian-based intermediate gold producer with diversified production from three operations in North America. This includes the Island Gold District and Young-Davidson mine in northern Ontario, Canada, and the Mulatos District in Sonora State, Mexico. Additionally, the Company has a strong portfolio of growth projects, including the Phase 3+ Expansion at Island Gold, and the Lynn Lake project in Manitoba, Canada. Alamos employs more than 2,400 people and is committed to the highest standards of sustainable development. The Company’s shares are traded on the TSX and NYSE under the symbol “AGI”.

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FOR FURTHER INFORMATION, PLEASE CONTACT:

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The TSX and NYSE have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.

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Cautionary Note

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This news release contains or incorporates by reference “forward-looking statements” and “forward-looking information” as defined under applicable Canadian and U.S. securities laws. All statements in this news release, other than statements of historical fact, which address events, results, outcomes or developments that the Company expects to occur are, or may be deemed to be, forward-looking statements and are generally, but not always, identified by the use of forward-looking terminology such as “expect”, “assumption”, “anticipate”, “intend”, “potential”, “opportunity” “plan”, “estimate”, “continue”, “ongoing”, “evaluating”, “on track”, “target” or variations of such words and phrases and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved or the negative connotation of such terms. Forward-looking statements contained in this news release are based on information, expectations, estimates and projections as of the date of this news release.

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Forward-looking statements in this news release include, but may not be limited to, information, assumptions, expectations and guidance as to strategy, plans, and future financial and operating performance, such as those regarding: the Base Case Life of Mine Plan for the Island Gold District; mine life; Mineral Reserves and Mineral Reserve life; Measured and Indicated and Inferred Resources and expected conversion of the Mineral Resource base at the Island Gold District deposits and the timing of that expected conversion; size, length, and anticipated cost profile and profitability of operations at the Island Gold District; expected timing of the release of an Expansion Study and detail to be incorporated therein; further expansions of the operations at the Island Gold District; costs (including cash costs, AISC, mine-site AISC, growth capital, sustaining capital, total capital expenditures); cost structure and anticipated declining cost profile; budgets; free cash flow; NPV calculations; payment of taxes; gold and other metal price assumptions; foreign exchange rates; mining, milling and processing rates; total mill feed and throughput rates; expected average recoveries; anticipated gold production, production rates, timing of production, further production potential and growth; mined and processed gold grades and weights; the Phase 3+ Expansion at Island Gold and timing of its progress and completion; project-related risks; new mining approaches to the Island Gold underground mine, expected increased in underground development and resulting improvements in mining stress management and mining rates; intended method of mining the Magino open pit; intended use of the Magino mill and tailings facility; operational savings to be achieved through the use of the Magino mill; future expansion of the Magino mill; planned exploration, exploration potential and results; anticipated results of the delineation drilling program; anticipated timing of the completion of the 115kV powerline project; the expectation that the Magino mill will be connected to grid power in 2026; reduction in greenhouse gas emissions and intensity; permitting requirements for expanded operations and expectations that permits will be received; returns to stakeholders; and any other statements or information that express management’s expectations or estimates of future performance, operational, geological or financial results.

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Exploration results that include geophysics, sampling, and drill results on wide spacings may not be indicative of the occurrence of a mineral deposit. Such results do not provide assurance that further work will establish sufficient grade, continuity, metallurgical characteristics and economic potential to be classed as a category of Mineral Resource. A Mineral Resource that is classified as “Inferred” or “Indicated” has a great amount of uncertainty as to its existence and economic and legal feasibility. It cannot be assumed that any or part of an “Indicated Mineral Resource” or “Inferred Mineral Resource” will ever be upgraded to a higher category of Mineral Resource. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into Proven and Probable Mineral Reserves.

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The Company cautions that forward-looking statements are necessarily based upon several factors and assumptions that, while considered reasonable by management at the time of making such statements, are inherently subject to significant business, economic, technical, legal, political, and competitive uncertainties, and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements, and undue reliance should not be placed on such statements and information.

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Such factors include (without limitation): the actual results of current and future exploration activities; changes to current estimates of mineral reserves and mineral resources; conclusions of economic and geological evaluations; changes in project parameters as plans continue to be refined; the speculative nature of mineral exploration and development; risks in obtaining and maintaining necessary licenses, permits and authorizations for the Company’s development stage and operating assets; operations may be exposed to new illnesses, diseases, epidemics and/or pandemics which may have impacts on the broader market and the trading price of the Company’s shares and may affect many aspects of the Company’s operations including the ability to transport personnel to and from site, contractor and supply availability and the ability to sell or deliver gold doré bars; changes in national and local government legislation, controls or regulations; failure to comply with environmental and health and safety laws and regulations; labour and contractor availability (and being able to secure the same on favourable terms); disruptions in the maintenance or provision of required infrastructure and information technology systems; fluctuations in the price of gold or certain other commodities such as, diesel fuel, natural gas, and electricity; operating or technical difficulties in connection with mining or development activities, including geotechnical challenges and changes to production estimates (which assume accuracy of projected ore grade, mining rates, recovery timing and recovery rate estimates and may be impacted by unscheduled maintenance, weather issues, labour and contractor availability and other operating or technical difficulties); changes in foreign exchange rates (particularly the Canadian dollar, U.S. dollar, Mexican peso and Turkish Lira); the impact of inflation; any tariffs, trade barriers, and/or regulatory costs; employee and community relations; the impact of litigation and administrative proceedings; disruptions affecting operations; risks associated with the start-up of new mines; availability of and increased costs associated with mining inputs and labour; delays in the Phase 3+ Expansion at Island Gold; delays in construction of the 115kVpowerline; changes with respect to the intended method of mining and processing ore from the Island Gold District; inherent risks and hazards associated with mining and mineral processing including environmental hazards, industrial accidents, unusual or unexpected formations, pressures and cave-ins; the risk that the Company’s mines may not perform as planned; uncertainty with the Company’s ability to secure additional capital to execute its business plans; contests over title to properties; expropriation or nationalization of property; political or economic developments in Canada, Mexico, the United States, Türkiye and other jurisdictions in which the Company may carry on business in the future; increased costs and risks related to the potential impact of climate change; the costs and timing of exploration, construction and development of new deposits; risk of loss due to sabotage, protests and other civil disturbances; the impact of global liquidity and credit availability and the values of assets and liabilities based on projected future cash flows; risks arising from holding derivative instruments; and business opportunities that may be pursued by the Company.

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For a more detailed discussion of such risks and other risk factors that may affect the Company’s ability to achieve the expectations set forth in the forward-looking statements contained in this news release, see the Company’s latest 40-F/Annual Information Form and Management’s Discussion and Analysis, each under the heading “Risk Factors” available on the SEDAR+ website at www.sedarplus.ca or on EDGAR at www.sec.gov. The foregoing should be reviewed in conjunction with the information, risk factors and assumptions found in this news release.

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The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

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Cautionary Note to U.S. Investors

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Alamos prepares its disclosure in accordance with the requirements of securities laws in effect in Canada. Unless otherwise indicated, all Mineral Resource and Mineral Reserve estimates included in this document have been prepared in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the “CIM Standards”). NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Mining disclosure in the United States was previously required to comply with SEC Industry Guide 7 (“SEC Industry Guide 7”) under the United States Securities Exchange Act of 1934, as amended. The U.S. Securities and Exchange Commission (the “SEC”) has adopted final rules, to replace SEC Industry Guide 7 with new mining disclosure rules under sub-part 1300 of Regulation S-K of the U.S. Securities Act (“Regulation S-K 1300”) which became mandatory for U.S. reporting companies beginning with the first fiscal year commencing on or after January 1, 2021. Under Regulation S-K 1300, the SEC now recognizes estimates of “Measured Mineral Resources”, “Indicated Mineral Resources” and “Inferred Mineral Resources”. In addition, the SEC has amended its definitions of “Proven Mineral Reserves” and “Probable Mineral Reserves” to be substantially similar to international standards.

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Investors are cautioned that while the above terms are “substantially similar” to CIM Definitions, there are differences in the definitions under Regulation S-K 1300 and the CIM Standards. Accordingly, there is no assurance any mineral reserves or mineral resources that the Company may report as “proven mineral reserves”, “probable mineral reserves”, “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” under NI 43-101 would be the same had the Company prepared the mineral reserve or mineral resource estimates under the standards adopted under Regulation S-K 1300. U.S. investors are also cautioned that while the SEC recognizes “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” under Regulation S-K 1300, investors should not assume that any part or all of the mineralization in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralization described using these terms has a greater degree of uncertainty as to its existence and feasibility than mineralization that has been characterized as reserves. Accordingly, investors are cautioned not to assume that any measured mineral resources, indicated mineral resources, or inferred mineral resources that the Company reports are or will be economically or legally mineable.

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Cautionary Notes on non-GAAP Measures and Additional GAAP Measures

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Note that for purposes of this section, GAAP refers to IFRS. The Company believes that investors use certain non-GAAP and additional GAAP measures as 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.

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“Cash flow from operating activities before changes in non-cash working capital” is a non-GAAP performance measure that could provide an indication of the Company’s ability to generate cash flows from operations and is calculated by adding back the change in non-cash working capital to “cash provided by (used in) operating activities” as presented on the Company’s consolidated statements of cash flows. “Cash flow per share” is calculated by dividing “cash flow from operations before changes in working capital” by the weighted average number of shares outstanding for the period. “Free cash flow” is a non-GAAP performance measure that is calculated as cash flows from operations net of cash flows invested in mineral property, plant and equipment and exploration and evaluation assets as presented on the Company’s consolidated statements of cash flows and that would provide an indication of the Company’s ability to generate cash flows from its mineral projects. “Mine site free cash flow” is a non-GAAP measure which includes cash flow from operating activities at, less capital expenditures at each mine site. “Return on equity” is defined as earnings from continuing operations divided by the average total equity for the current and previous year. “Mining cost per tonne of ore” and “cost per tonne of ore” are non-GAAP performance measures that could provide an indication of the mining and processing efficiency and effectiveness of the mine. These measures are calculated by dividing the relevant mining and processing costs and total costs by the tonnes of ore processed in the period. “Cost per tonne of ore” is usually affected by operating efficiencies and waste-to-ore ratios in the period. “Total capital expenditures per ounce produced” is a non-GAAP term used to assess the level of capital intensity of a project and is calculated by taking the total growth and sustaining capital of a project divided by ounces produced life of mine. “Growth capital” are expenditures primarily incurred at development projects and costs related to major projects at existing operations, where the projects will materially benefit the mine site. “Sustaining capital” are expenditures that do not increase annual gold ounce production at a mine site and excludes all expenditures at the Company’s development projects. “Total cash costs per ounce”, “all-in sustaining costs per ounce”, “mine-site all-in sustaining costs”, and “all-in costs per ounce” as used in this analysis are non-GAAP terms typically used by gold mining companies to assess the level of gross margin available to the Company by subtracting these costs from the unit price realized during the period. These non-GAAP terms are 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 these metrics as determined by the Company compared with other mining companies. In this context, “total cash costs” reflects mining and processing costs allocated from in-process and doré inventory and associated royalties with ounces of gold sold in the period. Total cash costs per ounce are exclusive of exploration costs. “All-in sustaining costs per ounce” include total cash costs, exploration, corporate and administrative, share based compensation and sustaining capital costs. “Mine-site all-in sustaining costs” include total cash costs, exploration, and sustaining capital costs for the mine-site, but exclude an allocation of corporate and administrative and share based compensation. “Capitalized exploration” are expenditures that meet the IFRS definition for capitalization and are incurred to further expand the known Mineral Reserve and Resource at existing operations or development projects. “Adjusted net earnings” and “adjusted earnings per share” are non-GAAP financial measures with no standard meaning under IFRS. “Adjusted net earnings” and “adjusted earnings per share” are non-GAAP financial measures with no standard meaning under IFRS. “Adjusted net earnings” excludes the following from net earnings: foreign exchange gain (loss), items included in other loss, certain non-reoccurring items, and foreign exchange gain (loss) recorded in deferred tax expense. “Adjusted earnings per share” is calculated by dividing “adjusted net earnings” by the weighted average number of shares outstanding for the period.

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Additional GAAP measures that are presented on the face of the Company’s consolidated statements of comprehensive income and are not meant to be a substitute for other subtotals or totals presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. This includes “Earnings from operations”, which is intended to provide an indication of the Company’s operating performance and represents the amount of earnings before net finance income/expense, foreign exchange gain/loss, other income/loss, and income tax expense. Non-GAAP and additional GAAP measures do not have a standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures presented by other companies. A reconciliation of historical non-GAAP and additional GAAP measures are detailed in the Company’s latest Management’s Discussion and Analysis available online on the SEDAR+ website at www.sedarplus.ca or on EDGAR at www.sec.gov and at www.alamosgold.com.

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Table 1: Base Case Life of Mine Plan – Detailed Summary

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1 Gold sales are lower than gold production reflecting the delivery of in-kind royalties on Island Gold and Magino
2 Please refer to Cautionary Notes on non-GAAP Measures and Additional GAAP Measures
3 For the purposes of calculating mine-site all-in sustaining costs, the Company does not include an allocation of corporate and administrative expense and corporate share-based compensation expense

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Figure 1: Island Gold District Map

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Figure 2: Island Gold District – Long Section

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Photos accompanying this announcement are available at

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