Alamos Gold : Corporate Presentation – June 2021 Download PDF (opens in new window)

Corporate Presentation June 2021

Cautionary Notes

This presentation, the information contained herein, any other materials provided in connection with this presentation and any oral remarks accompanying this presentation (collectively, the "Presentation"), has been prepared by Alamos Gold Inc. ("Alamos" or the "Company") solely for information purposes. No stock exchange, securities commission or other regulatory authority has approved or disapproved of the information contained herein. This Presentation does not constitute an offering of securities and the information contained herein is subject to the information contained in the Company's continuous disclosure documents available on the SEDAR website at www.sedar.comor on EDGAR at www.sec.gov.

Cautionary Notes

This Presentation contains statements that constitute forward-looking information as defined under applicable Canadian and U.S. securities laws. All statements in this Presentation, other than statements of historical fact, which address events, results, outcomes or developments that Alamos expects to occur are, or may be deemed to be forward-looking statements. Forward-looking statements are generally, but not always, identified by the use of forward-looking terminology such as "expect", "assume", "inferred", "schedule", "estimate", "budget", "continue", "potential", "outlook", "trending", "plan", "target" or variations of such words and phrases and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved or the negative connotation of such terms. Such statements include information as to Alamos' net asset value, operating cash flow, free cash flow, forecast gold production, Mineral Reserves, Mineral Resources, exploration potential, mine life, gold grades, recoveries, waste-to-ore ratios, total cash cost, all-in sustaining costs, debt levels, capital expenditures, the Company's COVID-19 measures and outlook, Lynn Lake project, expected completion date of the shaft expansion project at Island Gold, and future plans and objectives based on forecasts of future operational or financial results. Alamos cautions that forward-looking statements are necessarily based upon several factors and assumptions that, while considered reasonable by Alamos at the time of making such statements, are inherently subject to significant business, economic, legal, political and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors and assumptions include, but are not limited to: changes to current estimates of Mineral Reserves and Resources; changes to production estimates (which assume accuracy of projected ore grade, mining rates, recovery timing and recovery rate estimates which may be impacted by unscheduled maintenance, labour and contractor availability and other operating or technical difficulties); ; operations may be exposed to new diseases, epidemics and pandemics, including the effects and potential effects of the global COVID-19 widespread pandemic; the impact of the COVID-19 pandemic on the broader market and the trading price of the Company's shares; provincial and federal orders or mandates (including with respect to mining operations generally or auxiliary businesses or services required for our operations) in Canada, Mexico, the United States and Turkey; the duration of regulatory responses to the COVID-19 pandemic; governments and the Company's attempts to reduce the spread of COVID-19 which may affect many aspects of the Company's operations including the ability to transport personnel to and from site, contractor and supply availability and the ability to sell or deliver gold dore bars; fluctuations in the price of gold or certain other commodities such as, diesel fuel, natural gas, and electricity; changes in foreign exchange rates (particularly the Canadian Dollar, Mexican Peso, U.S. Dollar and Turkish Lira); the impact of inflation; changes in our credit rating; any decision to declare a quarterly dividend, employee and community relations; litigation and administrative proceedings; (including but not limited to the investment treaty claim announced on April 20, 2021 commenced against the Republic of Turkey by the Company's wholly-owned Netherlands subsidiaries, Alamos Gold Holdings Coöperatief U.A, and alamos Gold Holdings B.V.); disruptions affecting operations; availability of and increased costs associated with mining inputs and labour; expansion delays with the Phase III Expansion Project at the Island Gold mine; inherent risks associated with mining and mineral processing; the risk that the Company's mines may not perform as planned; uncertainty with the Company's ability to secure additional capital to execute its business plans, the speculative nature of mineral exploration and development, including the risks of obtaining and maintaining necessary licenses and permits, including the necessary licenses, permits, authorizations and/or approvals from the appropriate regulatory authorities for the Company's development stage and operating assets; labour and contractor availability (and being able to secure the same on favourable terms); contests over title to properties; expropriation or nationalization of property, inherent risks and hazards associated with mining including environmental hazards, industrial hazards, industrial accidents, unusual or unexpected formations, pressures and cave-ins; changes in national and local government legislation (including tax and employment legislation), controls or regulations in Canada, Mexico, Turkey, the United States and other jurisdictions in which the Company does or may carry on business in the future; increased costs and risks related to the potential impact of climate change; failure to comply with environmental and health and safety laws and regulations; disruptions in the maintenance or provision of required infrastructure and information technology systems; risk of loss due to sabotage, protests and other civil disturbances; impact of global liquidity and credit availability and the values of assets and liabilities based on projected future cash flows; risks arising from holding derivative instruments; and business opportunities that may be pursued by the Company. The litigation against the Republic of Turkey, described above, results from the actions of the Turkish government in respect of the Company's projects in the Republic of Turkey. Such litigation is a mitigation effort and may not be effective or successful. If unsuccessful, the Company's projects in Turkey may be subject to resource nationalism and further expropriation; the Company may lose the full value of its assets and gold mining projects in Turkey and its ability to operate in Turkey. Even if successful, there is no certainty as to the quantum of any damages award or recovery of all, or any, legal costs. Any resumption of activities in Turkey, including renewal of the requisite operating licenses or permits, or even retaining control of its assets and gold mining projects in Turkey can only result from agreement with the Turkish government. The litigation described in this presentation may have an impact on foreign direct investment in the Republic of Turkey which may result in changes to the Turkish economy, including but not limited to high rates of inflation and fluctuation of the Turkish Lira which may also affect the Company's relationship with the Turkish government, the Company's ability to effectively operate in Turkey, and which may have a negative effect on overall anticipated project values. Additional risk factors and details with respect to risk factors affecting the Company's ability to achieve the expectations set forth in the forward-looking statements contained in this Presentation are set out in the Company's 40-F/Annual Information Form for the year ended December 31, 2020 under the heading "Risk Factors", which is available on the SEDAR website at www.sedar.com or on EDGAR at www.sec.gov. The foregoing should be reviewed in conjunction with the information found in this Presentation. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Market data and other statistical information used throughout this Presentation are based on internal company research, independent industry publications, government publications, reports by market research firms or their published independent sources. Industry publications, governmental publications, market research surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. Although Alamos believes such information is accurate and reliable, it has not independently verified any of the data from third party sources cited or used for the Company's management's industry estimates, nor has Alamos ascertained the underlying economic assumptions relied upon therein. While Alamos believes internal company estimates are reliable, such estimates have not been verified by any independent sources, and Alamos makes no representations as to the accuracy of such estimates.

Note to U.S. Investors

All resource and reserve estimates included in this Presentation have been prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the "CIM Standards"). NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. The terms "Mineral Reserve", "Proven Mineral Reserve" and "Probable Mineral Reserve" are Canadian mining terms as defined in accordance with NI 43-101 and the CIM Standards. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into reserves. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in very limited circumstances. Investors are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable. Disclosure of "contained ounces" in a Mineral Resource is permitted disclosure under Canadian regulations.

Cautionary non-GAAP Measures and Additional GAAP Measures

Note that for purposes of this section, GAAP refers to IFRS. The Company believes that investors use certain non-GAAP and additional GAAP measures as indicators to assess gold mining companies. They are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP. "Cash flow from operating activities before changes in non-cash working capital" is a non-GAAP performance measure that could provide an indication of the Company's ability to generate cash flows from operations, and is calculated by adding back the change in non-cash working capital to "cash provided by (used in) operating activities" as presented on the Company's consolidated statements of cash flows. "cash flow per share" is calculated by dividing "cash flow from operations before changes in working capital" by the weighted average number of shares outstanding for the period. "Free cash flow" is a non- GAAP performance measure that is calculated as cash flows from operations net of cash flows invested in mineral property, plant and equipment and exploration and evaluation assets as presented on the Company's consolidated statements of cash flows and that would provide an indication of the Company's ability to generate cash flows from its mineral projects. "Mine site free cash flow" is a non-GAAP measure which includes cash flow from operating activities at, less capital expenditures at each mine site. "Return on equity" is defined as earnings from continuing operations divided by the average total equity for the current and previous year. "Mining cost per tonne of ore" and "cost per tonne of ore" are non-GAAP performance measures that could provide an indication of the mining and processing efficiency and effectiveness of the mine. These measures are calculated by dividing the relevant mining and processing costs and total costs by the tonnes of ore processed in the period. "Cost per tonne of ore" is usually affected by operating efficiencies and waste-to-ore ratios in the period. "Total cash costs per ounce", "all-in sustaining costs per ounce", and "mine-siteall-in sustaining costs" as used in this analysis are non-GAAP terms typically used by gold mining companies to assess the level of gross margin available to the Company by subtracting these costs from the unit price realized during the period. These non-GAAP terms are also used to assess the ability of a mining company to generate cash flow from operations. There may be some variation in the method of computation of these metrics as determined by the Company compared with other mining companies. In this context, "total cash costs" reflects mining and processing costs allocated from in-process and dore inventory and associated royalties with ounces of gold sold in the period. Total cash costs per ounce are exclusive of exploration costs. "All-in sustaining costs per ounce" include total cash costs, exploration, corporate and administrative, share based compensation and sustaining capital costs. "Mine-siteall-in sustaining costs" include total cash costs, exploration, and sustaining capital costs for the mine-site, but exclude an allocation of corporate and administrative and share based compensation. "Adjusted net earnings" and "adjusted earnings per share" are non-GAAP financial measures with no standard meaning under IFRS. "Adjusted net earnings" excludes the following from net earnings: foreign exchange gain (loss), items included in other loss, certain non-reoccurring items and foreign exchange gain (loss) recorded in deferred tax expense. "Adjusted earnings per share" is calculated by dividing "adjusted net earnings" by the weighted average number of shares outstanding for the period.

Additional GAAP measures that are presented on the face of the Company's consolidated statements of comprehensive income and are not meant to be a substitute for other subtotals or totals presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. This includes "Earnings from operations", which is intended to provide an indication of the Company's operating performance and represents the amount of earnings before net finance income/expense, foreign exchange gain/loss, other income/loss, and income tax expense. Non-GAAP and additional GAAP measures do not have a standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures presented by other companies. A reconciliation of historical non-GAAP and additional GAAP measures are detailed in the Company's Management's Discussion and Analysis available at www.alamosgold.com.

Technical Information
Chris Bostwick, FAusIMM, Alamos Gold's Vice President, Technical Services, has reviewed and approved the scientific and technical information contained in this presentation. Chris Bostwick is a Qualified Person within the meaning of NI 43-101. The Qualified Persons for the NI 43-101 compliant Mineral Reserve and Resource
estimates are detailed in the tables in the appendix of this Presentation.	TSX:AGI ǀ NYSE:AGI	2

Strong platform for delivering sustainable long-term value

Growing, diversified,

intermediate gold

producer

470-510k oz

2021E gold production

~750k oz

2025E production potential

12 year

average mine life3

Expanding margins &	Conservative, low-
profitability	risk strategy

$1,025-$1,075	Safe jurisdictions
2021E AISC per ounce1,2	100% North American production

~$800	Debt-free
2025E AISC per ounce1,2	$238m cash & $738m total liquidity4

Strong FCF outlook	Fully funded
including significant growth in 20252	organic growth

Sustainable business

model supporting

growing returns over

the long-term

Balanced approach

to capital allocation

$208m

Returned to shareholders through

dividends & buybacks

Long-term track record

of value creation for all stakeholders

1. Total consolidated all-in sustaining costs include corporate and administrative and share based compensation expenses. For the purposes of calculating all-in sustaining costs at individual mine sites, the Company does not include corporate and administrative and share based compensation expenses
2. Please refer to Cautionary Notes on non-GAAP Measures and Additional GAAP Measures
3. Average mine life based on Proven & Probable Mineral Reserves as of December 31, 2020 at Young-Davidson and Mulatos and Phase III Expansion mine plan at Island Gold
4. Cash & cash equivalents and debt as of March 31, 2021

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ESG - leading on key metrics with focus on continuous improvement

Environment

Social

Governance

Lower GHG emissions per oz gold produced1,2

			0.59
e/oz		0.51	27%
0.37		lower than
2
tCO			intermediate average
	AGI	Int Avg	Sr Avg

Higher water efficiency per oz gold produced1,2

Lost time injury rate

0.34

hours200,000 worked	0.17		59%
0.14		reduction
per				since 2018
2018	2019	2020

89%	33%
Director	board members
independence	are women

1. Alignment of executive pay to performance & shareholder interests

1. Top quartile ranking in 2020 Globe and Mail Board Games

o Improving ESG disclosure, reporting in accordance

with:

waterwithdrawal		30.8
		25.5
8.2
/ozm3
	AGI	Int Avg	Sr Avg

79%

recycled water use

80%	$2.4m
of global workforce	invested in
hired from local	community initiatives
communities	in 2020

1. Adopting TCFD recommendations and incorporating climate-relatedrisk into disclosures

1. Carbon footprint & energy reduction initiatives o Grid power connection at Mulatos
   o Automation with YD lower mine expansion
   o 35% reduction in life of mine GHG emissions with Island Gold Phase III expansion

1. Zero significant environmental incidents in 2020

1. Recognition for social contributions:

1. Best Corporate Social Responsibility Practice 20193 o Empresa Socialmente Responsable (ESR)4 award
2. • 12 consecutive years

1. Ethics and Values in Industry5 award

1. 26% reduction in recordable injuries since 2018

1. Alignment of practices to WGC's Responsible Gold Mining Principles and Conflict-FreeGold Standard

1. Responsible tailings management: support of
   Investor Mining & Tailings Safety Initiative

1. Top quartile ranking in Credit Suisse's 2020
   Precious Metals ESG Scorecard1

1	2020 data for Alamos; 2019 data for intermediate & senior average sourced from Bloomberg & Credit Suisse 2020 Precious Metals ESG Scorecard (October 2020)	4 Empresa Socialmente Responsable (ESR) - CSR Award received from Mexican Center for Philanthropy
2	Intermediate average includes BTO, CG, ELD, IMG, NGD, OGC, YRI. Senior average includes AEM, GOLD, K, KL, NEM
5 Awarded by CONCAMIN, the Industrial Chambers Confederation of Mexico	TSX:AGI ǀ NYSE:AGI	4
3 Best Corporate Social Responsibility Practice 2019 from Cemefi, AliaRSE and Forum Empresa for Alamos' voluntary relocation program of residents from Mulatos to Matarachi, Mexico

Q1 2021 results - solid operational & financial performance

	Q1 2021A	Q1 2020A	2021 Guidance
Gold production (000 oz)	125.8	110.8	470-510
Gold sales (000 oz)	126.5	111.9	-
Average realized gold price (US$/oz)	$1,798	$1,582	-
Cost of sales (US$/oz, includes amortization)1	$1,101	$1,076	$1,105
Total cash costs (US$/oz)3	$757	$759	$710-760
All-in sustaining costs (US$/oz)2,3	$1,030	$1,010	$1,025-1,075
Operating revenues (US$M)	$227	$177	-
Adjusted net earnings (US$M)3	$49	$29	-
Adjusted earnings per share3	$0.13	$0.08	-

126 koz

produced, exceeding first quarter

guidance

46%

increase in operating cash flow3

YoY to $120m

Cash provided by operations

before changes in working capital (US$M)3

Cash flow per share3

Capital expenditures & capital advances (US$M)4

Mine-site free cash flow (US$M)3

Consolidated free cash flow (US$M) 3

Cash & cash equivalents (US$M)5

$120	$82	-
$0.30	$0.21	-
$89	$63	$354-384
$25	$15	-
$10	($7)	-
$238	$221	-

$10m

free cash flow3 net of $89m

capital expenditures & advances

1	Cost of sales includes mining and processing costs, royalties and amortization	3 Please refer to Cautionary Notes on non-GAAP Measures and Additional GAAP Measures
2	Total consolidated all-in sustaining costs include corporate and administrative and share based	4	Includes capitalized exploration
compensation expenses. For the purposes of calculating all-in sustaining costs at individual mine sites, the	5	Comparative cash and cash equivalents balance as at December 31, 2020
Company does not include corporate and administrative and share based compensation expenses

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