Can you summarize Alamos Gold’s 2024 performance?

2024 has been a very successful year for Alamos Gold, as we have met our objectives across the board. The Argonaut acquisition was not something we initially planned for, but as neighbors, we would keep a close eye on their progress. Early this year, Argonaut Gold’s chairman approached me with an acquisition idea, believing they could benefit from joining Alamos. We seized the opportunity, raising our annual production guidance by 20%. Historically, we have only made acquisitions when gold prices were low. However, the Argonaut Gold acquisition was an exception, with its share price declining even as gold prices rose. This decline presented a rare opportunity, as Argonaut had over 4 million oz of reserves and about C$1 billion of capital invested in Magino. We acquired Argonaut for an enterprise value of US$727 million and identified US$515 million in total synergies. This acquisition uniquely benefited Alamos because of our proximity to their operations, allowing us to capitalize on the opportunity in a way no other company could.

Additionally, with the rise in gold prices, we are seeing record cash flows and earnings, all while maintaining our operating costs across our three main mines.

What factors contributed to Alamos Gold’s performance in 2024?

We have seen considerable interest in Alamos Gold shares, and I believe this is because of a few key factors that investors value. First, we have projects in highly stable jurisdictions, particularly Canada, where regulatory and tax environments are more favorable. Additionally, we have heavily invested in exploration, achieving tremendous mineral reserve and resource growth, a standout in an industry typically facing depletion challenges.

Could you elaborate on Alamos Gold’s mineral reserve growth and exploration efforts?

In early 2024, we shared a reserve and resource update, revealing significant increases. We have continued with a strong focus on exploration, investing over US$60 million this year alone, and that has been paying off with excellent results. I am confident that our next resource update will show further growth. We are not only replacing reserves as we mine but expanding them, which is rare in the industry. 

How are your other major growth projects progressing, especially in Mexico?

At our PDA project in Mexico, reserves have expanded to 1 million oz, and we are advancing with permitting to enable construction next year. At Island Gold, our Phase 3+ expansion has been underway since 2022. We have reached a depth of over 800 m on the new shaft sink, and by early next year, we will surpass 1,000 m. The target depth of 1,373 m should be reached by mid-2025, keeping us on track to start production from the shaft in 2026.

Can you discuss the recent acquisition of the Magino mill and its role in the Island Gold expansion?

Acquiring the Magino mill, a 10,000 t/d facility and integrating Magino into our Island Gold expansion plan enables us to handle ore from both Island Gold and Magino in a single facility. Instead of upgrading the older Island Gold mill, we are expanding the Magino mill initially to 11,200 t/d and eventually to 12,400 t/d. This will accommodate all the underground ore from Island Gold and the open-pit ore from the Magino mine, simplifying operations and consolidating production in one streamlined facility.

Initially, we expected to produce around 400,000 oz/y from the Island Gold District, but this is just a stepping-stone. We anticipate that the Island Gold District will ultimately produce well over 500,000 oz/y. 

Can you expand on Alamos Gold’s approach to cost management?

Between 2015 and 2017, we made three acquisitions that have driven much of Alamos' growth. Back in 2015, when merging with AuRico, we had a market cap of C$1 billion, which has now grown to around C$12 billion. With each acquisition, we invested in exploration to increase reserves and resources, as well as capital investments to reduce production costs. Our development projects are lower cost, and the Island Gold Phase 3+ expansion and the development of Lynn Lake are set to drive costs down further, thereby expanding margins as gold prices rise.