Alamos Gold : Corporate Presentation - January 2023 Download

Corporate Presentation January 2023

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 the contained information. 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 development that Alamos expects to occur are, or may be deemed to be, "forward-looking statements" and are based on expectations, estimates and projections as at the date of this Presentation. Forward-looking statements are generally, but not always, identified by the use of forward-looking terminology such as "expect", "assume", "schedule", "estimate", "budget", "continue", "plan", "potential", "outlook", "believe", "anticipate", "intend", "ongoing", "forecast", "target", "on track" 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, expectations and guidance as to strategy, plans, future financial and operating performance, such as expectations and guidance regarding: costs (including cash costs, AISC, capital expenditures, exploration spending), cost structure and anticipated declining cost profile; budgets; growth capital; sustaining capital; cash flow; gold prices; anticipated gold production, production rates, timing of production, further production potential and growth; returns to stakeholders; the mine plan for and expected results from the Phase 3+ expansion at Island Gold and timing of its progress and completion; development of the Lynn Lake project, including anticipated timing of completion of permitting, Environmental Impact Statement approval and updated feasibility study; completion of an updated development plan for the Puerto Del Air (PDA) project (Mulatos); mining processing and rates; mined and processed gold grades and weights; mine life; reserve life; reduction in greenhouse gas emissions; value of operation; effects on profitability; project-related risks; planned exploration, exploration potential and results, as well as any other statements related to the Company's production forecasts and plans, expected sustaining costs, expected improvements in cash flows and margins, expectations of changes in capital expenditures, expansion plans, project timelines, and expected sustainable productivity increases, expected increases in mining activities and corresponding cost efficiencies, cost estimates, sufficiency of working capital for future commitments, Mineral Reserve and Mineral Resource estimates, and other statements or information that express management's expectations or estimates of future performance, operational, geological 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, technical, 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, and undue reliance should not be placed on such statements and information.

Such factors and assumptions include, but are not limited to: changes to current estimates of mineral reserves and mineral resources; the speculative nature of mineral exploration and development, risks in obtaining and maintaining necessary licenses, permits and authorizations for the Company's development stage and operating assets; operations may be exposed to new diseases, epidemics and pandemics, including the ongoing effects and potential further effects of COVID-19 and its impact 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 operations) in Canada, Mexico, the United States and Türkiye; the duration of regulatory responses to COVID-19 and government 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 doré bars; fluctuations in the price of gold or certain other commodities such as diesel fuel, natural gas, and electricity; changes in foreign exchange rates; the impact of inflation; employee and community relations; litigation and administrative proceedings (including but not limited to the investment treaty claim announced on April 20, 2021 against the Republic of Türkiye by the Company's wholly-owned Netherlands subsidiaries, Alamos Gold Holdings Coöperatief U.A, and Alamos Gold Holdings B.V.); 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, weather issues, labour and contractor availability and other operating or technical difficulties); disruptions affecting operations; inherent risks associated with mining and mineral processing; the risk that the Company's mines may not perform as planned; increased costs associated with mining inputs and labour; contests over title to properties; changes in national and local government legislation, controls or regulations in Canada, Mexico, Türkiye, the United States and other jurisdictions in which the Company does or may carry on business in the future; risks related to climate change; risk of loss due to sabotage, protests and other civil disturbances; the costs and timing of construction and development of new deposits; permitting, construction or other delays with the Phase 3+ expansion or the Lynn Lake project; delays in the completion of an updated development plan for PDA and/or production from PDA (Mulatos); the 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 Türkiye, described above, results from the actions of the Turkish government in respect of the Company's projects in the Republic of Türkiye. Such litigation is a mitigation effort and may not be effective or successful. If unsuccessful, the Company's projects in Türkiye may be subject to resource nationalism and further expropriation; the Company may lose any remaining value of its assets and gold mining projects in Türkiye and its ability to operate in Türkiye. 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 Türkiye, or even retaining control of its assets and gold mining projects in Türkiye can only result from agreement with the Turkish government. The investment treaty claim described above may have an impact on foreign direct investment in the Republic of Türkiye which may result in changes to the Turkish economy, including but not limited to high rates of inflation and fluctuation in the Turkish Lira which may also affect the Company's relationship with the Turkish government, the Company's ability to effectively operate in Türkiye, and which may have a negative effect on overall anticipated project values.

Additional risk factors affecting Alamos and 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 latest 40F/Annual Information Form and Management's Discussion and Analysis, each under the heading "Risk Factors" available on the SEDAR website at www.sedar.com or on EDGAR at www.sec.gov, and should be reviewed in conjunction with 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, however such content providers do not guarantee the accuracy, adequacy, completeness, timeliness or availability of such content and generally disclaim liability for any errors, omissions or losses of any kind suffered in connection with the use of such content. 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. U.S. investors should review in detail the cautionary note set out on slide 61.

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 capital expenditures per ounce produced" is a non-GAAP term used to assess the level of capital intensity of a project and is calculated by taking the total growth and sustaining capital of a project divided by ounces produced life of mine. "Total cash costs per ounce", "all-in sustaining costs per ounce", "mine-siteall-in sustaining costs", and "all-in costs per ounce" 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 doré inventory associated 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.

TSX:AGI ǀ NYSE:AGI

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Growing, diversified, intermediate gold producer

Fully funded	~500k oz	~800k oz
organic growth	2023E gold production1	Longer-term
		production potential

Declining	~$1,150	<$1,000
cost profile	2023E AISC/oz1,2,3	2025+ AISC per ounce2,3

Lynn Lake, Canada

Quartz Mountain, USA

Mulatos, Mexico

Island Gold, Canada

Young-Davidson, Canada

Producing Assets

Exploration / Development Assets

High quality, long-life assets in safe jurisdictions

88%	17 year
Net asset value	average mine life of
Canadian assets4
Canadian operations	5

TSX | NYSE: AGI

Recent share price6: C$14.60

52-week range: C$8.30 - 14.83

Market cap: ~C$5.7B

Cash & cash eq7: ~US$130M

Debt7: US$0

Dividend8: $0.10/sh

Shares o/s (basic): 392.6M

1	Based on mid point of 2023 guidance
2	Total consolidated all-in sustaining costs include corporate and administrative and share based compensation expenses
3 Please refer to Cautionary Notes on non-GAAP Measures and Additional GAAP Measures	6 As of January 11, 2023
4	Based on consensus analyst net asset value (NAV) estimates for mining assets	7 Cash & cash equivalents and debt as of December 31,2022
5 Average mine life at Young-Davidson based on Mineral Reserves as of December 31, 2021, and Phase 3+ Expansion mine plan at Island Gold	8 Dividend is annualized rate. Quarterly dividend is US$0.025 per common share

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Sustainable business model supporting long-term value creation

Conservative, low-risk

strategy

Safe jurisdictions

100% North American production

Debt-free

~$130M cash & $630M total liquidity1

Fully funded

organic growth

Balanced approach to

growth

Return capital to

shareholders

Strong free

cash flow2	Strengthen
balance sheet

generation

Reinvest in high-

return internal growth projects

Long-term track record

of value creation

Counter-cyclical

Approach to M&A, acquiring high-quality

assets at weaker points in cycle

$1.8 billion

combined value2,3 added at Young-Davidson

& Island Gold since acquisition

$12/oz

cost to discover 3.7M oz of Inferred Mineral Resources at Island Gold over past four years

1. Cash & cash equivalents as of December 31, 2022. Total liquidity includes cash, and cash equivalents and undrawn $500M credit facility
2. Please refer to Cautionary Notes on non-GAAP Measures and Additional GAAP Measures
3. Based on consensus analyst net asset value (NAV) estimates plus cumulative free cash flow generated since acquisitions as of Q3 2022, and net of acquisition costs

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ESG - leading on key metrics with focus on continuous improvement

Environment

Social

39%

lower than

industry average

Lower GHG emissions per oz gold produced1,2

0.8	0.67
0.6		0.41
Au
0.4
e/oz0.2			0.17
2
tCO	0
	Industry Average	Alamos - 2021	Alamos - 2030
				(30% Reduction
				Target)

				Lost time injury frequency rate
	hours	0.25			0.20
	worked
63%		0.15
		0.2	0.16	0.14
	200,000
since 2019	0.05
Reduction in LTIFR		0.1				0.06
	per	0
			2019	2020	2021	2022

71%

recycled water use3

Higher water efficiency per oz gold produced2

waterconsumed	12.3
/oz	10.7
3
m
	Industry Average	Alamos

78%

of global workforce

hired from local

communities;

99.9% in country

30%	0
reduction target in GHG	significant environmental
emissions by 2030	incidents in 2022

1. Industry average sourced from S&P Global Market Intelligence (2020 average)
2. Industry average sourced from RBC Capital Market's Dec. 1, 2021 "Digging Deeper on ESG" publication based on 2020 data. Alamos water efficiency reported for 2021
3. Three year average ending 2021
4. Best Corporate Social Responsibility Practice 2019 from Cemefi, AliaRSE and Forum Empresa for Alamos' voluntary relocation program of residents from Mulatos to Matarachi, Mexico

Awards:

1. Empresa Socialmente Responsable (ESR)5 award - 14 consecutive years o CAMIMEX Silver Helmet Award 2022 - Mulatos Mine6
   o Best Corporate Social Responsibility Practice 20194 o Ethics and Values in Industry7 award

1. Empresa Socialmente Responsable (ESR) - CSR Award received from Mexican Center for Philanthropy
2. Rewards companies with the best Safety indicators in mining processes

7 Awarded by CONCAMIN, the Industrial Chambers Confederation of Mexico

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