Alamos Gold Inc. Class A Common Shares 2026 Q3 Earnings Call

Thank you, operator, and thanks to everybody for attending Alamos's third quarter 2026 conference call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer, Greg Fisher, Chief Financial Officer, and Luc Guimond, Chief Operating Officer. 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 MD&A, as well as the risk factors set out in our annual information form. Technical information in this presentation has been reviewed and approved by Chris Bostwick, our Senior Vice President, Technical Services, and a qualified person.

Also, please bear in mind that all of the dollar amounts mentioned in this conference call are in USD, unless otherwise noted. Now John will provide you with an overview of the quarter.

Thank you, Scott. We produced 119,000 ounces of gold in the third quarter, in line with quarterly guidance, with record production from the Island Gold District offsetting lower planned production from Young-Davidson. The Island Gold District continues to perform well, with both underground mining rates and the Magino Mill throughput rates setting new quarterly records. Underground mining rates increased to average nearly 1,800 tons per day in the quarter, and the Magino Mill averaged over 10,000 tons per day. We expect a further increase in Island Gold underground mining rates, as well as higher grades, to drive a 26% increase in consolidated production in the fourth quarter, putting us on track to meet our revised annual guidance. As previously guided, all-in sustaining costs increased from the second quarter due to lower production and timing of sustaining capital spending.

With the Island Gold District expected to drive costs lower in the fourth quarter, we are well-positioned to achieve our full-year consolidated cost guidance. Financially, we generated strong free cash flow of $76 million this quarter, net of our reinvestment in high-return growth and exploration. We are on pace for another year of record free cash flow while continuing to advance our growth projects. Turning to slide 4. During the quarter, we returned $22 million to shareholders through our quarterly dividend and ongoing share buybacks. We remain active on our buyback, repurchasing an additional $17 million worth of shares in October thus far, bringing our year-to-date shareholder returns to $123 million. We continue to eliminate gold hedges inherited from the Argonaut Gold transaction, having repurchased 36,000 ounces of the remaining 50,000 ounces of forward contracts since the second quarter.

Since our acquisition of Argonaut in 2024, we have bought back 96% of the legacy gold hedges, substantially increasing our exposure to higher gold prices. Earlier in October, we received the $160 million anniversary payment related to the sale of our Turkish assets, which further strengthened our balance sheet. With a solid net cash position of over $400 million and strong ongoing cash flow, we remain well-positioned to self-fund our growth initiatives and support our increased shareholder returns. Turning to our growth initiatives, we continue to make progress across our assets. Construction of the Lynn Lake project is ramping up as planned, and work on the shaft and mill expansion at Island Gold is advancing. With the shaft sink completed earlier this year, our focus is on the shaft bottom infrastructure.

During the excavation of the bins in the ore and waste handling system at Island Gold, we encountered a dike that will require additional ground support. As a result, shaft commissioning has been delayed by approximately one quarter, and is now scheduled for completion in mid-2027, with ramp-up of mining rates to 2,400 tons per day expected in the second half of the year. Turning to slide 5. Delay does not change our strong long-term outlook. We expect the completion of the shaft expansion at Island Gold in 2027, mill expansion at Magino in 2028, and Lynn Lake production in 2029 to drive significant growth over the coming years. We remain on track to nearly double our rate of production to approximately one million ounces annually by 2030 at substantially lower costs. We have one of the best growth profiles in the sector. This growth is all located in Canada.

It's lower cost, and it's expected to support significant free cash flow growth over the coming years. I'll now turn the call over to our CFO, Greg Fisher, to review our financial performance.

Thank you, John. On to slide 6. We sold 118,400 ounces of gold in the third quarter at an average realized price of $4,258 per ounce for quarterly revenues of $510 million. Total cash costs were $1,375 per ounce, and all-in sustaining costs were $1,956 per ounce. Operating cash flow before changes in non-cash working capital was $235 million in the quarter, or $0.56 per share. This was a decrease from the second quarter due to lower production and margins. Included in cash flow from operations was the use of $86 million, or $0.21 per share, of cash to repurchase and eliminate 33,000 ounces of legacy Argonaut Gold hedges that were scheduled to mature in the first half of 2027. We repurchased and eliminated a further 3,000 ounces in October and expect to eliminate the remaining 14,000 ounces prior to their maturity in 2027.

Our reported net earnings were $166 million in the quarter, or $0.40 per share, and our adjusted net earnings were $184 million, or $0.44 per share. This includes an after-tax adjustment for net loss on commodity hedge derivatives of $10 million, adjustments for net unrealized foreign exchange losses recorded within deferred taxes and foreign exchange of $7 million, and other adjustments of $1 million. Capital spending in the quarter totaled $227 million, consisting of $50 million of sustaining capital, $164 million of growth capital, and $13 million of capitalized exploration. We expect capital spending to increase in the fourth quarter, in line with guidance as we continue to ramp up construction activities at Lynn Lake and PDA. Our growth continues to be funded internally while generating strong free cash flow. All of our sites generated positive free cash flow during the third quarter, for a total of $76 million.

Through the first three quarters of 2026, net of significant capital spend to support our growth, we have generated $321 million of free cash flow, all of which has been allocated to increase returns to our shareholders and the repurchase of legacy Argonaut hedges. Year to date, we have utilized $228 million to eliminate the majority of the remaining legacy hedges and returned $123 million to shareholders through dividends and share buybacks. This included another 17 million of shares repurchased in October. Given our strong financial position and outlook, we expect to continue to be opportunistic on our share buyback. We ended the quarter with a strong net cash position of $397 million. Earlier in October, we received the first anniversary payment of $160 million related to last year's sale of our Turkish development projects, with the final payment of $150 million to be received in October 2027.

I will now turn the call over to our COO, Luc Guimond, to provide an overview of our operations.

Luc? Thank you, Greg. Over to slide 7.

The Island Gold District had a record quarter from a number of perspectives, including record production of 68,700 ounces. The operation is on track to achieve its full-year production guidance, with higher underground mining rates and grades expected to drive additional growth in the fourth quarter. Underground mining rates averaged a record 1,790 tons per day, consistent with our ramp-up schedule. Grades mined of 8.69 grams per ton were slightly below plan due to higher than expected dilution within certain stopes mined in August. Underground grades mined are expected to increase towards the top end of our annual guidance range in the fourth quarter. Open pit operations continue to perform well, as did the Magino Mill, with milling rates increasing to average a record 10,300 tons per day.