Alamos Gold ups 2024 guidance on outperformance of Mexican mine

Toronto-based miner Alamos Gold has upped its 2024 production guidance, mainly due to outperformance at its Mulatos property in Mexico, the company said. 

Alamos is an intermediate gold producer that has production from three mines, two in Ontario, Canada, and the Mulatos mine in Sonora state, northwest Mexico.

The miner expects gold production in 2024 to range between 485,000oz and 525,000 ounces, 3% higher than in the previous three-year guidance provided in January 2023 (based on the mid-point).

“The increase is driven by higher expected production from the Mulatos district through residual leaching of the Mulatos leach pad, in addition to ongoing production from La Yaqui Grande. Production is expected to be slightly higher during the first half of 2024, with the recovery of ounces through residual leaching at Mulatos expected to decline through the year,” Alamos said in a release. 

The company's updated three-year gold production guidance is 485,000-525,000oz for 2024, 470,000-510,000oz for 2025 and 520,000-560,000oz for 2026.

“We finished 2023 with another strong quarter, achieving the top end of our increased annual guidance with record production of 529,300oz of gold. This represented a 15% increase from 2022, at lower costs, driving a record financial performance and strong free cash flow, all while continuing to invest in high-return, low-cost growth,” said John McCluskey, president and CEO of the firm.

“We expect this strong performance to continue with growing production and declining costs over the next several years. Mulatos continues to outperform, supporting an increase in our 2024 production guidance,” he added.

Alamos forecasts that total cash costs and all-in sustaining costs (AISC) in 2024 will be consistent with 2023, ranging between US$1,125/oz and US$1,175/oz. 

“Costs are expected to be towards the upper end of guidance to start the year and trend lower through the year, reflecting declining rates of production from residual leaching at Mulatos,” the company said, adding that the AISC guidance has increased 12% from previous guidance, mostly related to the hike in production from Mulatos, the stronger Mexican peso, as well as inflation, but "partly offset by lower sustaining capital,” it added. 

The Yaqui Grande deposit is expected to supply approximately 75% of Mulatos district production at a similar low-cost structure as 2023. The remaining production is expected to come from residual leaching of the main Mulatos leach pad, which has a higher reported AISC of approximately US$1,850/oz. 

According to the miner, the majority of these costs were previously incurred and recorded in inventory. 

Alamos said that the cash component to recover these ounces in 2024 is expected to be approximately US$800/oz, providing stronger free cash flow than implied by the higher reportable costs. 

“Additionally, the stronger Mexican peso of 17:1 (MXN:USD), compared to 20:1 in previous guidance, increased costs by approximately US$20/oz," it said.