"Our first quarter production and costs were in line with guidance and with stronger results expected through the year, we remain well positioned to achieve our annual guidance. La Yaqui Grande remains on track for initial production in the third quarter and is expected to drive our production higher and costs significantly lower in the second half of the year," president and CEO John A McCluskey said.
La Yaqui is part of Alamos' Mexican Mulatos operation. Meanwhile, with the phase III expansion underway, Alamos is also expecting to update the mine plan at its Canadian Island Gold mine mid-year.
"Both of these high-return projects support our strong outlook with growing production, declining costs and increasing profitability," McCluskey said.
The company's first quarter production stood at 98,900 ounces of gold which compares to full year guidance of 440,000-480,000oz Au.
Total cash costs for the three months were US$992 per oz, all-in sustaining costs were $1,360 per oz, and cost of sales were $1,376 per oz. Alamos expects those costs to come down throughout the year in order to reach cash costs, AISC, and cost of sales guidance ranges of $875-$925/oz, $1,190-$1,240/oz, and $1,325/oz, respectively.
Canaccord Genuity Capital Markets analyst Dalton Baretto said the operating results were largely in line with CG's estimates, while financial results were modestly below forecasts.
"Importantly, the company made no changes to cost or capex guidance despite ongoing industry wide inflationary pressures," Baretto said.
Total capital expenditures and capitalised exploration guidance for the year is $332 million-$373 million.
Alamos noted that it is managing the impact of the industry-wide inflation on input costs such as diesel, cyanide, steel, and labour.
"That said, the company is relatively immune given hedges in place as well as the fact that Canadian mines are underground and are connected to the grid," Baretto said.
"We like AGI for its pure gold exposure, organic growth profile, relatively low cost structure, strong balance sheet, and safe jurisdictional risk profile," he added.
Alamos' share price on the Toronto Stock Exchange rose 3% day on day to C$9.98 (US$7.82) on April 28—giving the company a market capitalisation of C$3.91 billion.