Q4 2023 Alamos Gold Inc Earnings Call

Operator: Thank you for your patience. Nous vous remercions de bien vouloir patienter. La conférence commencera sous peu.

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Operator: Nous vous prions de bien vouloir attendre quelques instants, et nous vous remercions de votre patience. Thanks for watching! This conference is being recorded. All participants, please stand by; your conference is ready to begin. Good morning.

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This conference is being recorded so it's closer to homes that don't go as you see.

All participants please standby your conference is ready to begin good morning, and I will now turn the call over to Scott Parsons.

Operator: I will now turn the call over to Scott Parsons, Alamos' Senior Vice President of Investor Relations. Please go ahead. Thank you, Operator, and thanks to everybody for attending Alamos's fourth quarter 2023 conference call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer, Greg Fischer, Chief Financial Officer, Luke Guimond, Chief Operating Officer, and Scott R.G. Parsons, Vice President of Explo

Senior Vice President of Investor Relations. Please go ahead Sir.

Thank you operator, and thanks to everybody for attending <unk> fourth quarter 2023 Conference calls in addition to myself we have on the line today, John Mccluskey, President and Chief Executive Officer, Greg Fischer, Chief Financial Officer, Luke <unk>, Chief operating Officer, and Scott RG Parsons.

This president of exploration.

Scott Parsons: To address any questions with respect to our reserve and resource update earlier this week, we also have on the line today Chris Boswick, Senior Vice President, Technical Services. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, the news release, and the MD&A, as well as the risk factors set out in our annual information form.

To address any questions with respect to our reserve and resource update earlier. This week. We also have on the line today, Chris Baldwin Senior Vice President Technical services.

We will be referring to a presentation. During the conference call that is available through the webcast and on our website I would also like to remind everyone that our presentation will be followed by a Q&A session.

As we will be making forward looking statements during the call. Please refer to the cautionary notes included in the presentation news release and M DNA as well as the risk factors set out in our annual information form.

Scott Parsons: The technical information in this presentation has been reviewed and approved by Chris Boswick, our Senior VP, Technical Services, and a qualified person. Also, please bear in mind that all of the dollar amounts mentioned in this conference call are in U.S. dollars, unless otherwise noted. Now, John will provide you with an overview. Thank you, Scott. I'd also like to welcome everybody to the call.

Technical information in this presentation has been reviewed and approved my question, Chris Bostwick, Our senior VP technical services and a qualified person.

Also please bear in mind that all the dollar amounts mentioned in this conference call are in U S dollars unless otherwise noted.

Now John will provide you with an overview.

Thank you Scott I'd also like to welcome everybody to the call.

John McCluskey: I'd like to turn your attention to slide 3. 2023 marked our 20th anniversary, and it was a record year on multiple fronts. With a solid fourth quarter performance, we produced a record 529,000 ounces of gold for the full year, achieving the top end of our increased production guideline. That's a 15% increase from 2022. Our costs, which are already well below the industry average, decreased 4% to $1,160 per ounce, meeting guidance once again. With record production, lower costs, and a stronger gold price, we set a number of financial records in 2023. Revenue increased 25% for the year to a record $1 billion.

Hum I'd like to turn your attention to slide three.

2023 marked our 20th anniversary and it was a record year on multiple fronts.

With a solid fourth quarter performance, we produced a record 529000 ounces of gold for the full year.

Achieving the top end of our increased production guidance, a 15% increase from 2022.

Our costs, which are already well below the industry average decreased 4% to $1160 per ounce meeting guidance once again.

With the record production lower costs.

<unk> gold price, we set a number of financial records in 2023.

Revenue increased 25% for the year to a record 1 billion odd.

John McCluskey: Operating cash flow, working capital, increased 44% to a record $520 million. We also generated $124 million of free cash flow, a significant increase from 2022, while continuing to invest in high-return growth. Now looking at slide four.

Operating cash flow.

Working capital increased 44% to a record 520 million.

We also generated 124 million of free cash flow.

<unk> increased from 2022, while continuing to invest in.

In high return growth.

Now looking at slide four.

John McCluskey: Earlier in the year, we announced our updated 3-year guidance, which included a 3% increase in our 2024 production guidance to approximately 505,000 ounces, with costs expected to remain flat year over year. By 2026, we expect our production to increase 7% to approximately 540,000 ounces and all-in sustaining costs. Dalton Baretto, Dalton Baretto, Scott Parsons, Alamos Gold Inc. Our PDA underground deposit represents further upsides that we plan on outlining in a development plan later this quarter.

Earlier in the year, we announced our updated three year guidance, which included a 3% increase in our 2024 production guidance to approximately 505000 ounces with costs expected to remain flat year over year.

'twenty 'twenty six we expect our production to increase 7% to approximately $540000.

And all in sustaining cost.

Decreased 11% to approximately $1000 ground with the completion of the phase III plus expansion at island gold.

R. P D underground deposit represents further upside that we plan on outlining in a development plans later this quarter.

John McCluskey: Beyond 2026, the Lynn Lake project represents further upside with initial production as early as the second half of 2027 and capacity to increase our production to an annual rate of 800,000 ounces per year. At current gold prices, we expect to continue generating strong free cash flow. Combined with $225 million in cash and no debt, we are well positioned to fund this growth internally.

Beyond 2026, the Lynn Lake project represents further upside with initial production as early as the second half of 2027.

And the capacity to increase our production to an annual rate of 800000 ounces per year.

At current gold prices, we expect to continue generating strong free cash flow.

Bind with 225 million of cash and no debt.

We are well positioned to fund this growth internally.

Now looking at slide five.

John McCluskey: In addition to record operational and financial performance, we delivered on a number of our growth initiatives in 2023. For example, after receiving the key environmental permit for the Lynn Lake project in March, we completed an updated feasibility study outlining a larger, longer-life, low-cost operation. The project is a track of economics that we expect will continue to improve as we capitalize on its considerable exploration upside. We have doubled our budget at Wood Lake to $25 million for this year, with the focus on upgrading site infrastructure and de-risking the project ahead of the expected construction decision in 2025. At Island Gold, we made significant progress on the Phase 3 expansion with the completion of key shop infrastructure, including the headframe and hoist house. This allowed us to start shop thinking in December, a significant milestone for the project, putting it on track for completion in the first half of 2026.

In addition to record operational and financial performance, we delivered on a number of our growth initiatives in 2023 after receiving the key environmental permit for the Lynn Lake project in March we completed an updated.

The ability study.

Finding a larger longer life low cost operation the.

The project has attractive economics that we expect will continue to improve as we capitalize on it.

Considerable exploration upside.

We have doubled our budget. It was like 25 billion for this year with the focus on upgrading site infrastructure and Derisking. The project ahead of the expected construction decision in 2025.

Island Gold, we made a significant we made significant progress on the phase III expansion with the completion of key shop infrastructure, including the head frame and White House, that's allowed us to start with shark tank in December which is the <unk>.

Significant milestone for the project, putting it on track for completion in the first half of 2026.

John McCluskey: We also released our Year-End 2023 Reserve and Resource Update earlier this week, which outlined growth in all categories, reserves increasing for the fifth consecutive year to 10.7 million ounces, with slightly higher grades, reflecting another year of high-grade additions at Island Gold and PDA. Over the past five years, reserves have grown 10% net of depletion, with grades also increasing 9% as we continue to improve on the quality of our overall reserve base. We continue to create value through exploration and investing in high-return growth projects. We expect that trend to continue in 2024, with a number of upcoming catalysts, starting with our PDA development plan later this quarter.

We also released our year end 2023 reserve and resource update earlier, this week, which outlined growth in all categories.

Reserves increased for the fifth consecutive year to $10 7 million ounces and slightly higher grades, reflecting another year of high grade additions at island Gold N P D. A.

Over the past five years reserves have grown 10% net of depletion with grades also increasing 9% as we continued to improve on the quality of our overall reserve base.

We continue to create value through exploration and investing in high return growth projects, we expect that trend to continue in 2024 with a number of upcoming catalysts, starting with our PDA development plan later this quarter.

Greg Fischer: Ongoing exploration updates with our largest budget ever. Continued progress with the expansion at Island Gold and a study incorporating the burnt timber and Linquid satellite deposits into the Lynn Lake project towards the end of the year. I'll now turn the call over to our CFO, Greg Fischer, to review our financial performance. Thank you, John.

Ongoing exploration updates with our largest budget ever.

Continued progress with the expansion at island gold.

And that study incorporating the burden timber and linked with the satellite deposits at Lynn Lake project towards the end of the year.

I'll now turn the call over to our CFO, Greg Fisher to review our financial performance.

Thank you John.

Greg Fischer: Moving to slide 6, we sold 129,000 ounces of gold in the fourth quarter at an average realized price of $1,974 per ounce, $3 per ounce above the 1 p.m. fix for revenues of $255 million. For the full year, we sold 526,000 ounces at a realized price of $1,944 per ounce for record revenues of just over $1 billion, up 25% from 2020. Fourth quarter total cash costs of $900 per ounce and all in sustaining costs of $1,233 per ounce were consistent with quarterly guidance. For the year, total cast costs were $850 per ounce, and all in sustaining costs were $1,160 per ounce, both in line with annual guidance and down 4% from 2020. Operating cash flow before changes in non-cash working capital was $120 million in the fourth quarter, or $0.30 per share.

Moving to slide six we sold a 129000 ounces of gold in the fourth quarter at an average realized price of $1974 per ounce $3 per ounce above the London PM fix for revenues of $255 million for the full year, we sold 526000 ounces at a realized price of $1944 four.

For record revenues of just over 1 billion up 25% from 2022.

Fourth quarter total cash cost of $900 per ounce and all in sustaining costs of $1233 per ounce were consistent with quarterly guidance.

For the year total cash costs were $850 per ounce and all in sustaining costs were $1106 per ounce. Both in line with annual guidance and down 4% from 2022.

Operating cash flow before changes in noncash working capital was $120 million in the fourth quarter or <unk> 30 per share for the full year operating cash flow increased 44% to a record $519 million or $1 31 per share.

Greg Fischer: For the full year, operating cash flow increased 44% to a record $519 million, or $1.31 per share. Our reported net earnings were $47 million in the fourth quarter, or $0.12 per share. This included unrealized foreign exchange gains of $13 million, recorded within deferred taxes in foreign exchange, offset by other losses of $15 million. Excluding these items, our adjusted net earnings were $49 million, or $0.12 per share.

Our reported net earnings were 47 million in the fourth quarter were 12 cents per share. This included unrealized foreign exchange gains of 13 million recorded within deferred taxes, and foreign exchange offset by other losses of $15 million excluding.

Excluding these items, our adjusted net earnings were 49 million or <unk> 12 per share.

Greg Fischer: Our full-year adjusted net earnings were $208 million, or $0.53 per share. Capital spending in the quarter totaled $110 million and included $27 million of sustaining capital, $73 million of growth capital, and $10 million of capitalized exploration. For the full year, capital expenditures totaled $349 million, including growth capital of $217 million. This was in line with guidance and up from 2022 due to the ramp-up of construction activities on the Phase 3 expansion at Island Gold. Precastle's revenue in the quarter was $14 million and totaled $124 million for the full year, a significant increase from 2022, while continuing to reinvest in the Phase 3 Plus expansion. This reflected the strong operational performance of Young-Davidson, generating more than $100 million in free cash flow for the third consecutive year, and the Mulatus District generating an impressive $142 million. Given the increased profitability of mulattoes through 2023, we expect to pay significantly higher cash taxes in Mexico in 2024. This includes a 2023 year-end tax payment of approximately $40 million due in the first quarter of 2024.

Our full year adjusted net earnings were 208 million or <unk> 53 per share.

Capital spending in the quarter totaled $110 million and included 27 million of sustaining capital $73 million of growth capital and $10 million of capitalized exploration.

For the full year capital expenditures totaled 349 billion, including growth capital of 217 billion. This was in line with guidance and up from 2022 with the ramp up of construction activities on the phase III expansion at island gold.

Free cash flow in the quarter was 14 million and totaled 124 million for the full year, a significant increase from 2022, while continuing to reinvest in the phase III expansion.

This reflected the strong operational performance with young Davidson generated more than 100 million of free cash flow for the third consecutive year and the modest district generating an impressive $142 million.

Given the increased profitability of modest through 2023, we expect to pay significantly higher cash taxes in Mexico. In 2024. This includes a 2023, you're at a tax payment of approximately 40 million due in the first quarter of 2024.

Luc Guimond: With the strong free cash flow generation, our cash balance grew nearly $100 million to end the year at $225 million while remaining debt-free. We expect to continue generating strong free cash flow at current gold prices and remain well-positioned to fund our growth initiatives. I'll now turn the call over to our COO, Luc Guimond, to provide an overview of our operation. Thank you, Greg.

With a strong free cash flow generation, our cash balance grew nearly 100 million to end the year at $225 million, while remaining debt free.

Spect to continue generating strong free cash flow at current gold prices and remain well positioned to fund our growth initiatives.

Now I'll turn the call over to our CFO to provide an overview of our operations.

Thank you Greg.

Luc Guimond: Moving to slide 7, Young-Davidson ended the year on a strong note with production of just under 50,000 ounces, taking full-year production to just over 185,000 ounces, in line with guidance. Cash costs and all-in sustaining costs were also in line with guidance, both for the quarter and the year. Young-Davidson continues to demonstrate strong operational and financial consistency with mine site free cash flow of $35 million in the fourth quarter and a record $118 million for 2023. This marks the third consecutive year the operation has generated more than $100 million of mine site free cash flow. We are expecting production and all-in sustaining costs to be in a similar range in 2024, supporting another year of strong free cash flow, with Young-Davidson's 15-year reserve life maintained at the year-end. We expect similar levels of free cash flow over the long run. Over to slide 8, Island Gold produced 31,600 ounces in the fourth quarter, a decrease over the previous quarter due to lower grades mined and processed as planned.

Moving to slide seven young Davidson ended the year on a strong note with production of just under 50000 ounces, taking full year production to just over 185000 ounces in line with guidance.

Cash costs and all in sustaining costs were also in line with guidance, both for the quarter and the year.

Young Davidson continues to demonstrate strong operational and financial consistency with mine site free cash flow of 35 million in the fourth quarter and a record $118 million for 2023.

This marks the third consecutive year. The operation has generated more than 100 million of mine site free cash flow.

We are expecting production and all in sustaining cost to be in a similar range in 2020 for supporting another year of strong free cash flow.

Young Davidson is 15 year reserve life, maintaining our year end update earlier this week.

We expect similar levels of free cash flow over the long run.

Over to slide eight I'll.

<unk> produced 31600 ounces in the fourth quarter, a decrease over the previous quarter due to lower grades mined and processed as planned.

Luc Guimond: Costs in the quarter were above annual guidance, reflecting the lower plan grades, as well as one-time costs associated with the transition from contractor to owner development and production drilling, which was completed in the quarter. Foyer production of 131,000 ounces was in line with the midpoint of guidance, and costs came in slightly above guidance. The operation used $34 million of cash in the quarter and $68 million for the year, reflecting the ramp-up of capital spending on the Phase 3 plus expansion as well as a significant ongoing exploration program. At current gold prices, Island Gold is expected to continue to fund the majority of the Phase 3 Plus expansion growth capital. Production is expected to increase 16% in 2024 to approximately 153,000 oz at 12% lower all-in sustaining costs driven by higher grades. We expect further production growth in 2025 with another increase in grades, followed by another significant increase in production and decrease in costs into 2026 with the completion of phase three plus expansion. Now over to slide 9.

In the quarter were above annual guidance, reflecting the lower planned grades as well as one time costs associated with the transition from contractor to owner development and production drilling which was completed in the quarter.

Full year production of 131000 ounces was in line with the midpoint of guidance and costs came in slightly above guidance.

The operation used $34 million of cash in the quarter and $68 million for the year.

Reflecting the ramp up of capital spending on the phase III plus expansion as well as the significant ongoing exploration program.

Coal prices Island gold is expected to continue to fund the majority of the phase III plus expansion growth capital.

Production is expected to increase 16% in 2024 to approximately 153000 ounces at 12% lower all in sustaining costs driven by higher grades.

We expect further production growth in 2025, another increase in grades followed by another significant increase in production and decrease in costs into 2026 with the completion of the phase III plus expansion.

Over to slide nine the phase III expansion continues to advance well with the majority of the shop site infrastructure completed last year, including the hoist house and headframe.

Luc Guimond: The Phase 3 plus expansion continues to advance well, with the majority of the SHOP site infrastructure completed last year, including the hoist house and headframe. The project achieved a significant milestone in December with the start of shaft sinking, which is ramping up towards an ultimate rate of over 3 meters per day. The focus in 2024 will be on shaft sinking down to a depth of 1,000 metres by year-end. We also expect to start construction activities on the mill expansion in the second quarter, followed by the paste plant in the second half of the year. Over to slide 10. We remain on track to complete the expansion during the first half of 2026. At year-end, approximately 51% of the total initial capital of $756 million had been spent on the project.

The project achieved a significant milestone in the step in December with a startup shafts sinking, which is wrapping up towards that ultimate rate of over three meters per day.

The focus in 2024 will be on shafts sinking down to a depth of 1000 meters by year end.

We also expect to start construction activities on the mill expansion in the second quarter, followed by the paste plant in the second half of the year.

Over to slide 10, we remain on track to complete the expansion during the first half of 2026.

And approximately 51% of the total initial capital of $756 million had been spent and committed on the project.

Luc Guimond: Our capital spending is tracking well for the work completed to date; however, we are seeing some pressures from ongoing labour inflation in Canada. Growth capital spending on the Phase 3 plus expansion is expected to range between $210 and $230 million in 2024. A similar rate of spending is expected in 2025 before decreasing considerably in 2026 following the completion of the expansion.

Our capital spending is tracking well for the work completed to date. However, we are seeing some pressures from ongoing labor inflation in Canada.

Growth capital spending on the phase III expansion is expected to range between 210 and $230 million in 2024.

The rate of spending is expected in 2025 before decreasing considerably in 2026 following the completion of the expansion.

Luc Guimond: On slide 11, the Milados District produced 48,100 ounces in the fourth quarter and 212,800 ounces for the full year, well above the top end of the guidance range driven by younger performance from the Yaqui Grande. Production from Illaqui Grande totaled 33,700 ounces in the fourth quarter and 153,400 ounces for the year, well ahead of expectations reflecting higher-than-planned mining rates and positive grade reconciliation. All in sustaining costs were slightly above annual guidance in the fourth quarter but well within the range of guidance on a full year basis.

Over to slide 11.

Along with district produced 48100 ounces in the fourth quarter and 212800 ounces for the full year well above the top end of guidance range driven by the outperformance from the Yaqui Grande.

Production from La Yaqui Grande totaled 33700 ounces in the fourth quarter and 153400 ounces for the year.

All ahead of expectations, reflecting higher than planned mining rates and positive grade reconciliation.

All in sustaining costs were slightly above annual guidance in the fourth quarter, but well within the range of guidance on a full year basis.

Luc Guimond: Reflecting the exceptional performance from Yaki Grande, mine site free cash flow totaled $27 million in the quarter and $142 million for the full year. As outlined earlier in the year, production guidance for the Milanos District was increased 14% to between 160,000 and 170,000 ounces. As previously guided, this is down year over year reflecting the end of mining in the main mulatto's pit or stacking of stockpiles. The increase in production guidance was driven by higher expected production through residual leaching of the main mulatto's leach pads. The additional allowances recovered through residual leaching carry higher reported costs, but they are very profitable from a cash flow perspective with the majority of these costs previously incurred. I will now turn the call over to our VP of Exploration, Scott R.G. Parsons.

<unk> the exceptional performance from our Yaqui Grande mine site free cash flow totaled 27 million in the quarter and $142 million for the full year.

As outlined earlier in the year production guidance for them a lot of district was increased 14% to between 160000 and 170000 ounces.

As previously guided this was down year over year, reflecting the end of mining in the main mulattoes tip and stocking of stockpile ore.

The increase in production guidance was driven by higher expected production to residual leaching of the main them a lot of leach pad.

The additional ounces recovered through residual leaching carry a higher reported costs. However are.

Very profitable from a cash flow perspective, but the majority of these costs previously incurred.

I will now turn the call over to our VP of exploration Scott RG Parsons. Thank you Luke moving over to Slide 12, we had another successful year on the exploration front across all of our assets with reserves, increasing 2% to $10 7 million ounces of gold and Green is also increasing 1%.

Scott Parsons: Thank you, Luke. Moving over to slide 12, we had another successful year on the exploration front across all of our assets, with reserves increasing 2% to 10.7 million ounces of gold and grains also increasing 1%. The increase in reserves reflects higher grade additions at Island Gold and PDA and growth at Lynn Lake. This marks the 5th consecutive year the reserves have grown for a combined increase of 10%.

The increase in reserves reflects higher grade additions at island gold and PTA and growth at Lynn Lake.

This marks the fifth consecutive year the reserves are growing for a combined increase of 10%.

Scott Parsons: Over that time frame, we've discovered more than 4 million ounces of reserves before modeling a depletion of 3 million ounces. The majority of these additions have been higher grades, driving a 9% increase in grades over that time frame, as our reserves continue to grow in both size and quality. Global measured and indicated resources also increased by 12% to 4.4 million ounces, with grades increasing 9%, reflecting higher grade additions at Island Gold and growth at Young-Davidson. Similarly, import resources increased 3% to 7.3 million ounces. Moving to slide 13.

Over that timeframe, we've discovered more than 4 million ounces of reserves before mining depletion of 3 million ounces.

The majority of these additions have been higher grade driving a 9% increase in grades over that timeframe as our reserves continue to grow in both size and quality.

Global measured and indicated resources also increased by 12% to $4 4 million ounces with grades increasing 9%, reflecting higher grade additions of island gold and growth at young Davidson.

Similarly, inferred resources increased 3% to $7 3 million ounces.

Moving to slide 13.

Scott Parsons: Alamos Gold's significant pace of growth continued, with reserves growing 18% to 1.7 million ounces and reserves and resources across all categories increasing 16% to 6.1 million ounces. These additions have had a very attractive discovery cost of $7 per ounce over the past year and $13 per ounce over the past five years. Including mining depletion to date, 7.5 million ounces of gold have been discovered at Island Gold as it continues to establish itself as one of the highest grade and fastest growing deposits in the world.

I don't know significant pace of growth continues with reserves growing 18% to $1 7 million ounces in reserves and resources across all categories, increasing 16% to $6 1 million ounces.

In addition to that a very attractive discovery cost of $7 per ounce over the past year and $13 per ounce over the past five years.

Including mining depletion debate seven 5 million ounces have been discovered at island gold.

<unk> two established itself as one of the highest grade and fastest growing deposits in the world.

Over to slide 14.

Scott Parsons: The growth in reserves and resources was driven by an expanded underground exploration drill program targeting high-grade additions in proximity to existing underground infrastructure. This included zones within the main Island Gold structure, which hosts the majority of the mineral reserves and resources, as well as emerging opportunities outside of the main structure in the hanging wall and the foot wall. The program was successful on both fronts, with nearly 1 million ounces of high-grade gold discovered within the main structure and in the hanging wall and foot wall.

The growth in reserves and resources was driven by an expanded underground exploration drill program targeting high grade additions and proximity to existing underground infrastructure.

This included zones within the main island gold structure, which hosts the majority of the mineral reserves and resources as well as emerging opportunities outside of the main structure in the hanging wall and footwall.

The program was successful on both fronts with nearly 1 million ounces of high grade gold discovered within the main structure and in the hanging wall and footwall.

Scott Parsons: As outlined in the long section, ongoing growth of the main structure occurred in Island East and Island West, our two primary areas of focus. These additions are all near our existing infrastructure, will be low cost to develop, and continue to increase Island Gold's ounce per vertical meter profile. Furthermore, gold mineralization within the main structure remains open, both long strike and down plunge, highlighting the excellent potential for this growth to continue.

As outlined on the long section ongoing growth of the main structure occurred in island East and island West are two primary areas of focus.

These additions are all your existing infrastructure will be low cost to develop and continue to increase of island gold ounces per vertical meter profile. Furthermore, Goldman amortization within the main structure remains open along strike and down plunge highlighting the excellent potential for this growth to continue.

Over to slide 15.

Scott Parsons: The expanded underground drill program also provided better access and more optimal drill orientations to target and expand the growing number of mineralized zones within the hang wall and foot wall of the deposit. The program has been extremely successful, with initial reserves and resources declared and expanded on in a number of these recently defined zones, which have now become significant contributors to the overall growth of the deposit. In fact, more than 600,000 ounces of high-grade reserves and resources were added in the recently defined hanging wall and footwall zones, representing approximately 70% of the total increase in 2023. A few of the highlights of the growth in these zones include the NTH zones, where 146,000 ounces were added, including reserves of 53,000 ounces, creating 12 grams per ton.

The expanded underground drill program also provided better access and more optimal drill orientations to targeting and expand the growing number of mineralized zones within the hanging wall and footwall of the deposit.

Program has been extremely successful with initial reserves and resources declared and expanded on a number of these recently defined zones. We should now become significant contributors to the overall growth of the deposit.

In fact more than 600000 ounces of high grade reserves and resources were added in these reasonably to find Haynesville footwall zones, representing approximately 70% of the total increase in 2023.

A few of the highlights the growth in these zones include the N th zones, where 146000 ounces were added including reserves of 53000 ounces grading 12 grams per ton.

Scott Parsons: The E1D zone has more than doubled to contain 332,000 ounces of inferred resources, grading 16 grams per ton and remaining open in multiple directions. This zone is located on average 30 meters from the main structure, highlighting both the near mine opportunity and the lower dissolvement costs. These zones and other targets within the Hanging Wall and Footwall represent significant opportunities for further growth. There are nearly 2,000 intersections, about 3 grams per tonne gold, outside of existing reserves and resources in the Hanging Wall and Footwall.

But you wont need zone has more than doubled to contain 303 2000 ounces of inferred resources, creating 16 grams per ton remains open in multiple directions. This zone is located on average 30 meters from the main structure highlighting both the near mine opportunity and the lower development costs.

These zones and other targets within the hanging wall footwall represent significant opportunities for further growth.

There are nearly 2000 intersections above three grams per tonne gold outside of existing reserves and resources and the hanging wall and footwall highlighting the opportunity for further near mine I, great additions ongoing drilling further tests these areas.

Scott Parsons: Highlighting the opportunity for further near-mine, high-grade additions as ongoing drilling further tests these areas. The photo of the Corps on the bottom of this slide is one of those opportunities, at nearly 1400 grams per tonne over three meters. This is one of the best intercepts drilled to date at Island Gold. It's located 12 meters away from existing infrastructure, and it's currently classified as an unknown zone, highlighting one of the many near-mine opportunities that we're following up on. Now, over to slide 16.

The photo of the core on the bottom of this slide is one of those opportunities.

Nearly four 200 grams per tonne over three meters. This is one of the best intercepts drilled to date at island gold.

It is located 12 meters away from existing infrastructure.

Currently classified as an unknown zone.

One of the many near mine opportunities that were following up on us.

Over to slide 16.

Scott Parsons: The PDA deposit represents the future of the Mulatto District and continues to grow, reflecting another year of exploration success. Mineral reserves at PDA increased 33% to 1 million ounces at 16% higher grades of 5.6 grams per ton. Mineral reserves and resources now total 1.2 million ounces of PDA, a 26% increase for 2022 and a 116% increase over the past two years. With the deposit open in multiple directions and another significant expiration program planned at PDA in 2024, there's excellent potential for this growth to continue. This larger reserve base is being incorporated into a development plan for PDA to be completed later this quarter, and we expect we'll outline another significant mine life extension at the Mulatos District. Following up on this broad-based exploration success and reflecting the potential we see across our assets, we've increased our global exploration budget to $62 million in 2024, the largest in the company's history.

Deposits represent the future of them a lot of district and continues to grow reflecting another year of exploration success.

Mineral reserves and PTA increased 33% to 1 million ounces, 16% higher grades of five six grams per tonne.

Mineral reserves and resources now total $1 2 million ounces of P. D. A 26% increase for 2022 and 116% increase over the past two years.

With the deposit open in multiple directions, and another significant exploration program planned to Pee Dee in 'twenty 'twenty four there's excellent potential for this growth to continue.

This larger reserve base being incorporated into a development plan for PTA to be completed later this quarter and we expect another significant mine life extension at the water district.

Following up on this broad based exploration success and reflecting the potential we see across our assets. We've increased our global exploration budget to $62 million in 2024, the largest in the company's history.

John McCluskey: With that, I'll turn the call back over to John. Thanks, Scott. That concludes our formal presentation. I will now turn the call back to the operator to open the call for questions. Thank you. We will now take questions from the telephone lines. If you have a question, please press Star 1 on your device's keypad. You may cancel your question at any time by pressing Star 2.

With that I'll turn the call back over to John.

Okay.

Thanks, Scott that concludes our formal presentation I will now turn the call back to the operator to open the call for questions.

Thank you we will now take questions from the telephone lines. If you have a question. Please press star one on your devices keep that you make and so on your question at any time by pressing star two.

Operator: Please press star 1 at this time if you have a question. There will be a brief pause while participants register for questions. We thank you for your patience. Our first question is from Cosmos 2 from CIBC, please go ahead. Thank you John, Greg, Luke, Scott, and Scott.

Please press star one at this time, if you have a question that would be a brief boswell participants, but just a couple questions.

We thank you for your patience.

Our first question is from Cosmos <unk> from CIBC. Please go ahead.

Thank you John like Luke Scott and Scott.

Cosmos 2: Maybe my first question is on inflation. I think Greg you kind of touched on it, or was it Luke that talked about labor costs, but could you maybe make a general comment in terms of inflation? Are you still seeing inflationary pressures, or are they getting better? As you mentioned in the MD&A, I think you added about $40 an ounce in terms of cost based on inflation, and $20 an ounce in terms of cost due to a stronger peso. So again, just a general comment, is it getting better, are you seeing it worse in Canada versus Mexico? Just maybe some comments on that.

Maybe my first question is on the inflation I think Greg you kind of touched on it what was that Luke talked about the labor cost, but could you maybe I'll make a general comment in terms of inflation are you still seeing inflationary pressures are they getting better as you mentioned in the MD&A I think added about $40 in terms of cost.

Based on inflation and $20 an ounce in terms of costs due to a stronger peso. So I got just a general comment is it getting better so you're seeing it are you know worse in Canada versus Mexico, just making some comments.

Greg Fischer: Yeah, Cosmos, it's Greg here. I can give a high-level comment, overall, we're seeing relief in some areas, but labor continues to be the biggest headwind with respect to inflationary pressures, and that gets us to about a 4-5% overall inflationary impact year over year, and we've built that into our budget. But, ultimately, labor pressures are going to continue to be active. There's a lot of competition And maybe my next question is on Lynn Lake. I see that in your MD&A, you now talk about production as early as... the second half of 2027. Is that timeline new? I don't seem to recall that timeline from past conversations. Yeah, we outlined that in the guidance release in January, Cosmos. But yeah, I mean, it's not new.

Cosmos, it's Greg here I can give a high level comment I mean overall, we're seeing some relief in some areas, but you know labor.

The biggest headwind with respect to our inflationary pressures and that gets us to about a 4% to 5% overall.

Inflationary impact year over year, and we built that into our budget, but ultimately I mean labor pressures are going to continue to be active I mean, there's a lot of competition in the area. So we need to make sure that we're we're staying in line with that competition and paying our people appropriately.

Right.

And maybe my next question is on Lynn Lake I see that then you Gotta DNA without talk about production as early as second half of 2027 is that timeline.

I don't seem to recall.

That timeline from past conversations.

We are we outlined that in the in the guidance released in January Cosmos, but yeah. I mean, it's it's not new we've talked about the fact that this could come online as early as 2027.

Greg Fischer: We've talked about the fact that this could come online as early as 2027. And we're looking at, you know, doing some early works in 2024 to basically set ourselves up so that if we make that construction decision as early as 2025, it puts us in a position to be in production by the second half of 2027.

And we're looking at are you know doing some early works in 'twenty 'twenty four is basically set ourselves up that if or when we make that construction decision as early as 2025, it puts us in a position to be in production by a call at the second half of 2027.

Great.

As a follow up I see that there's a study on branch timber link what.

Greg Fischer: And then as a follow-up, I see that there's a study on burnt timber and link wood, shadowlight deposits in Linn Lake that should be released in Q4 of this year. I guess my question is, number one, to confirm that I don't believe burnt timber and link wood are in the current 2023 study. And do you need it?

Satellite deposits or something like that.

You know it should be released in Q4.

This year.

Yes. My question is never wanted to confirm I don't believe.

French timber and what if a car in 2023 study and that you like or.

Greg Fischer: Or is the current Linn Lake already big enough to kind of justify development? Yeah, I can start there, and then I'll hand it over to Luke. But I mean, ultimately, the project stands on its own. It doesn't need burnt timber or link wood. It's just between McClellan and Gordon.

That's like already big enough to kind of justify.

Hello.

Yeah, I can start there and then I'll hand, it over to Luke, but I mean ultimately the project stands on its own it doesn't need for timber liquid it's just between Mcallen and Gordon that's a 20% plus IRR project. It doesn't require that we're just looking at ways to maximize.

Greg Fischer: It's a 20% plus IRR project, but it doesn't require that. We're just looking at ways to maximize production after year 10. Because if you look at the production profile for Linn Lake, it has a very strong production profile from years 1 to 10, as we're mining the better grades at McClellan and Gordon. But then we move into stockpiles, which are lower grade. What we're looking to do with burnt timber and link wood is to sequence that in at higher grades than what those stockpiles are to kind of maintain that 170,000-ish ounce profile for a longer term than the first 10 years. Yeah, I would just add, Cosmos Luke here, I would just add to that as well as Craig mentioned.

Production after year 10, because if you look at the production profile for Lynn Lake. It has a very strong production profile from years, one to 10 as we're mining that data.

Grade the better grades at Mcallen, and Gordon, but then we move into stockpiles, which are lower grade what we're looking to do with burnt timber and liquid is just you know sequence that in at higher grades than what those stockpiles are to kind of maintain that 170000 ish oh its profile for a longer term debt in the first 10 years.

Yeah, I would just add Cosmos look here I would just add to that as well as Craig mentioned.

Luke: I mean, you know, we see that as a pretty prolific district for us. Certainly, Burt Timber and Linkwood are the early targets on our radar, but we've got an extensive land package there, about 90 kilometers of strike length, and, you know, we see this as one processing plant with a number of deposits being able to be mined within our land package, centralized to that one mill complex, and extending it well beyond what, you know, we've certainly communicated with regard to our feasibility study with regard to Little So we expect to be in this district for a long, long time. Great And so what can we expect from that study that's coming out for burnt timber and link wood?

We see that as a pretty prolific district for us certainly for timber in linked quarter or the early targets on our radar, but we've got an extensive land package there about 90 kilometers of strike length.

And you know we see this as one processing plant with a number of deposits being able to be mined within our land package.

Shall I forgot one mill complex.

Extending well beyond what you know what we've certainly communicated with regards to our R. A feasibility study with regards to lake at this point. So we expect to be in this district for a long long time.

Great and so what can we expect from that study that's coming up coming out for brunch timber and link what is it really just kind of conversion in June.

Luke: Is it really just your kind of conversion into, you know, reserve? You know, better drill spacing, some kind of infrastructure study. What can we expect? Yeah, I mean, the intent with that program is to get it into a more confident category from a resource to a reserve position and then look to incorporate that into our overall study and management plan for the longer term. And as Greg mentioned, really it's...

Our reserves are you know better drill spacing at all.

Some kind of infrastructure study or what what can we expect.

Yeah, I mean, the intent to what that program is to get it into a more confident category from a resource to our reserve position.

And then look to build that incorporate that into our overall, Saudi and mine plan for the longer term and as Greg mentioned really is.

John McCluskey: It extends the district for us for the longer term, and it really backfills the, you know, beyond 10 years with regard to the production profile. As we mentioned, the first 10 years are pretty solid at 175,000 ounces per year, and then it drops off. But the intent would be to bring burnt timber and linkwood into the mix and sustain that for the long term. And just the comments on infrastructure causes, I mean, the key is that we have a centralized mill, right? So that's going to be where the infrastructure is in place, and the tailings are in place there. So it's really looking at satellite deposits, no different than what we've done in Mexico, where we have a kind of central processing area, and we've had satellite deposits over, you know, a 20-plus year period. Cosmos, it's John here.

It extends the the district for us for the longer term and it really backfill. The you know beyond 10 years with regard to the production profile.

You mentioned, the first 10 years of pretty solid at 175000 ounces per year, and then it drops off but the intent would be to bring for timber and liquid in into the into the mix and sustain that for the long term and just the comments on infrastructure Cosmos I mean, the key is that we have a centralized mill right. So that that's going to be where the infrastructure is in place and the tailings are in play.

There are so it was really looking at satellite deposits no different than what we've done in Mexico, where we have that kind of a central processing area and we've had satellite deposits over 20 plus year period.

It's John here I think another point worth mentioning is.

Yeah in in year, 10, and beyond we're going to be processing stockpiles, which means we've got a a.

John McCluskey: I think another point worth mentioning is... Yeah, in year 10 and beyond, we're going to be processing stockpiles, which means we've got a fleet that's ready to go. So the incremental cost of developing Burnt Timber in Limquid is going to be very, very low. Great. Thank you, John, Greg, and Luke, for answering all my questions. That's all I have.

Fleet, that's ready to go so the incremental cost of.

Developing burn timber and limb quite it's going to be very very low.

Mhm.

Great job. Thank you John Greg Luke Bryan.

For answering all my questions. That's all I have.

Operator: Thank you. Thank you. Once again, please press star 1 at this time for any questions or comments. Our first question is from Ovais Habib from School Shoebilling. Ovais, please go ahead.

Thank you.

Thank you.

Once again, please press star one at this time for any questions or comments.

My first question is from almost a bit from Scotiabank Scotiabank. Please go ahead.

Ovais Habib: Hi John and the Alamos team, congrats on achieving the top end of increased production guidance. Just two questions from me, number one, John, you're obviously looking to release a new mine plant at PDA by the end of Q1, is the study still contemplating a 2,000 tonnes per day processing plant? And what I'm getting to is, is there potential to bring in additional sulphides in the area beyond PDA? So is there a potential to increase the size of the plant or do an expansion of the size of the plant going forward?

Hi, John and the animals team congrats on achieving the top end of increased production guidance are just two questions from me.

Number one John you're obviously looking to release, a new mine plan at <unk> by the end of Q1 E ease the study's still contemplating 2000 tonnes per day processing plant.

What I'm getting to is is there potential to bring in additional sulfides in the area beyond P. D. So there's a potential to increase the size of the plant.

So with expansion besides the plan going forward.

John McCluskey: Answers to both questions are yes, and yes, there is plenty of potential beyond what we're currently drilling to increase sulfide reserves in the district, and we've already indicated where some of those... Particular Zones Are. Even running parallel to PDA itself, there's another zone that goes through the gap in El Victor. There's a parallel trend where we've already started delineating sulfide mineralization over top of that. We've got some high-grade sulfides underneath the old Cerro Palon pit that we drilled previously and just left in place because we had no means of processing them.

And so the both questions are yes, and yes, there is plenty of potential beyond.

What we're currently drilling to to increase.

I'll fight reserves in the district and we've already.

Indicated where some of those particular.

Particular zones are you.

Even even running parallel to P. D itself, there's another something that goes through the gap in El Victor is that there's a parallel trend where.

We've already started delineating sulphide mineralization over about that so we've got some high grade sulfides underneath your surplus pit.

That we drilled previously and and just left in place because we had no no means of processing them. So I would say that potentials is very very high as far as.

John McCluskey: So I would say that the potential is very, very high. As far as expandability of the mill, that's certainly going to be one of the components that we will build into it. We're going to essentially keep that in mind, but in the future, we might increase the scale of production. Thanks for the color on that, John, and then, you know, again, we continue to hear a lot of noise in Mexico regarding permits, especially open pit. Any color you can provide on any potential impact to your operations at Monato's or even PDA or any other expansion possibilities there? Yeah, I don't really see it impacting us at all. Right now, it is sort of a pre-election period in Mexico, and a lot of the comments are coming from the outgoing president.

Expand the ability of the melt that's certainly going to be one of the components to.

That we will build into it we're going to.

Essentially keep that in mind, but in the future we might increase the scale of production.

Okay. Thanks for the color on that John and then you know again, we continue to hear a lot of noise in Mexico.

Permits are.

Especially open but any color you can provide on any potential impact to your operations or even PD L. B.

She's also been a piece of that.

Yeah, I I don't really see it impacting us at all right now is sort of a pre election period in Mexico. One of the comments are coming from the outgoing president.

John McCluskey: The chances of that, I think at this point, are very, very slim, and I don't think that's a controversial thing to say. But over and above that, we're transitioning right now from open pit operations to underground processing sulfide through mills, and that looks like the way forward at Mulatto's in any case. I hate to rule out the idea altogether of finding near-surface oxides. That's certainly not the case; there is potential, but right now, our focus is very much on building reserves for mill feed. Politics in Mexico are always a relatively noisy affair, and there is a huge segment of that country that recognizes that mining and resource development are absolutely key to their economy.

The chances of that.

I think disappointed by our very very slim and I don't think that's a controversial thing to say.

Hum.

But over and above that some weird trend sustaining right now from from open pit operations too.

Underground.

Processing sulfide through mail and that that looks like the way, Florida, a lot of us in any case I hate to room, yeah, you'll gather are fighting for a near surface oxide.

That's certainly not the case, there is potential but but right now our focus is very much on.

And building reserves for for mill feed.

Politics in Mexico are always are a relatively noisy up there.

And there is.

A huge component of that country that recognizes that that mining and resource development is absolutely key to their economy, you know between oil and gas and and and mineral that.

John McCluskey: You know, between oil and gas and minerals, that employs most of the people that work outside of cities. So I would say there's a very slim possibility of that ever happening. Okay, thanks for the color on that as well, John. And that's it for me. Thanks for taking my question. Thank you. There are no further questions registered at this time, so this morning's call is concluded. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at 416-368-9932, extension 5439. Again, the phone number is 416-368-9932, extension 5439. You may now disconnect your line. We thank you for your presence. www.globalonenessproject.org

Unemployed most of the people that are working outside of cities.

So I would I would say, there's a very slim possibility of that ever happening.

Okay. Thanks for the color Oh, God, there's a lot of that and that's it for me. Thanks for taking my questions.

Thank you.

There are no further questions, but just so at this time. This concludes this morning's call. If you have any further questions that have not been answered please feel free to contact Mr. Scott Parsons at.

163689932 extension 5439 again the phone number is 41636899 tweet do extension 5439.

You may now disconnect. Your line, we thank you for your presence.

Yeah.