Dual-listed miner Alamos Gold’s operations performed well across the board in the second quarter ended June 30, with gold production in line with its guidance, while total cash costs were down 16% year-on-year, driving stronger margins and record cash flow from operations.

Alamos produced 125 200 oz of gold, in line with its performance in the second quarter of 2018.

The company achieved record gold production of 39 500 oz at the Island Gold mine, in northern Ontario, Canada. This marks the third consecutive quarter of record production, driving mine-site free cash flow of $11.7-million at Island Gold.

Through the first half of 2019, Island Gold produced 75 100 oz and generated $28.3-million of mine-site free cash flow.

Alamos achieved underground mining rates of 6 700 t/d at the Young-Davidson mine, also in Ontario, and produced 45 000 oz of gold, consistent with yearly guidance.  

The company achieved record cash flow from operating activities of $72.3-million, reflecting higher operating margins driven by lower costs, and higher gold sales.

Consolidated total cash costs of $699/oz were below the low end of guidance, and $133/oz, or 16%, lower than the second quarter of 2018, driven by low cost production at Island Gold and lower than budgeted costs at Mulatos, in Sonora, Mexico.

All-in sustaining costs (AISC) of $926/oz and cost of sales of $1 021/oz were both at the low end of yearly guidance, and down 7% and 12%, respectively, from the second quarter of 2018.

Alamos sold 128 457 oz of gold at an average realised price of $1 309/oz, for revenues of $168.1-million.

The company reported adjusted net earnings of $17.7-million, or $0.05 apiece, which includes adjustments for unrealised foreign exchange gains recorded within both deferred taxes and foreign exchange of $7.1-million, partially offset by other one-time losses totalling $1.2-million.

Alamos reported realised net earnings of $23.6-million, or $0.06 apiece.  

It ended the quarter with cash and cash equivalents of $183.2-million and no debt.

During the period, Alamos received permit approval for the Phase II expansion of Island Gold to 1 200 t/d.

The company also advanced construction activities at the Kirazlı project, in Turkey, and the Cerro Pelon project, in Mexico.

Moreover, it received approval for the environmental impact assessment for La Yaqui Grande project, in Mexico, during the second quarter, and the Change in Land Use permit in July.  

Alamos continued to demonstrate exploration success at Island Gold with results from surface exploration drilling further extending high-grade gold mineralisation between the Eastern and Main extensions.  

“With solid first-half performance, we are well positioned to meet full-year production and cost guidance,” said Alamos president and CEO John McCluskey.

“The lower mine expansion at Young-Davidson is progressing well and construction activities at our Cerro Pelon and Kirazlı projects continue. Each remain on track and we are now less than a year away from starting to see the benefit from these projects through strong free cash flow growth,” he added.