01-08-2025
Alamos Gold Inc (AGI) Q2 2025 Earnings Call Highlights: Record Revenue and Production Growth ...
Second-Quarter Production: 137,000 ounces, up 10% from the first quarter.
All-In Sustaining Costs: Decreased 18% from the first quarter.
Revenue: Record $438 million, with an average realized gold price of $3,223 per ounce.
Net Earnings: $159 million, or $0.38 per share.
Adjusted Net Earnings: $144 million, or $0.34 per share.
Operating Cash Flow: Record $233 million, or $0.55 per share.
Free Cash Flow: $85 million.
Cash Balance: $345 million at the end of the second quarter.
Total Liquidity: $845 million, including undrawn credit facility.
Full-Year Cost Guidance: All-in sustaining costs expected to be 12% higher than original guidance.
Island Gold District Production: 64,400 ounces, a 9% increase over the first quarter.
Young-Davidson Production: 38,700 ounces, a 9% increase from the first quarter.
Mulatos District Production: 34,100 ounces, a 12% increase over the first quarter.
Warning! GuruFocus has detected 8 Warning Signs with CRK.
Release Date: July 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Second-quarter production totaled 137,000 ounces, up 10% from the first quarter, aligning with quarterly guidance.
All-in sustaining costs decreased by 18% compared to the first quarter, with further reductions expected.
Record revenues and cash flow from operations were realized, with strong free cash flow of $85 million.
The Island Gold District is expected to become one of the largest, lowest cost, and most profitable gold mines in Canada.
The company expects to generate annual free cash flow exceeding $1 billion at current gold prices after completing the Phase 3-plus expansion.
Negative Points
Full-year all-in sustaining costs are expected to be 12% higher than the original guidance due to higher share price compensation and royalty expenses.
A slower start at Magino and Young-Davidson impacted the first-half performance, not reflecting the company's long-term track record.
The increased inflow of groundwater at Young-Davidson led to nearly one week of downtime in May.
The average realized gold price was below the London PM fixed price due to deliveries into a gold pre-payment facility.
Mining rates at Young-Davidson were lower than targeted levels due to higher than average snowfall and precipitation.
Q & A Highlights
Q: How confident are you in meeting the production guidance comfortably, and what levers do you have within your portfolio to ensure this? A: John McCluskey, President and CEO, expressed strong confidence in meeting production guidance, citing a long history of accurate forecasting. Despite a slow start due to difficult conditions, the company is confident in its production targets, supported by higher milling rates and grades at Young-Davidson and increased underground mining rates at Island Gold.
Q: Are there any standout drill targets in the exploration near the Magino mill, and will these be incorporated into the expansion study? A: John McCluskey and Scott Parsons, VP of Exploration, highlighted exciting exploration results, particularly between Island Gold and Magino. The focus is on converting inferred resources to reserves for the expansion study, with longer-term targets like Cline, Edwards, and Pick expected to provide additional high-grade mill feed.
Q: Has the issue with higher groundwater levels at Young-Davidson due to the spring melt been resolved? A: Luc Guimond, COO, confirmed that the issue has been resolved. The company has enhanced regional watershed management and increased pumping capacity to prevent future occurrences.
Q: What is the expected throughput profile for the Magino mill for the rest of the quarter? A: Luc Guimond, COO, stated that the Magino mill is expected to gradually ramp up throughput, reaching 11,200 tonnes per day by Q4. The focus is on maximizing underground ore processing from Island Gold.
Q: Are you expecting to achieve production guidance at all the mines, given that Young-Davidson and Island are currently at the low end of their ranges? A: John McCluskey, President and CEO, affirmed confidence in meeting production guidance on a consolidated basis, with expectations to hit targets mine by mine, despite potential unforeseen challenges.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
