ALAMOS GOLD INC. 
By 130 Adelaide Street West, Suite 2200
Toronto, Ontario M5H 3P5
Telephone: (416) 368-9932 or 1 (866) 788-8801
All amounts are in United States dollars unless stated otherwise.
F O R I M M E D I A T E R E L E A S E
Monday, January 9, 2012
Alamos Gold Reports Fourth Quarter and Full Year 2011 Operating Results and
Provides 2012 Guidance
Toronto, Ontario - Alamos Gold Inc. (TSX: AGI) ("Alamos" or the "Company") reports fourth quarter and full year 2011 operating results. The Company is also providing its 2012 production guidance and operating, development and exploration budgets.
Fourth Quarter and Full Year 2011 Operating Results
In the fourth quarter of 2011, the Mulatos Mine produced
46,500 ounces of gold at a cash operating cost that is
expected to be within the Company's guidance of $365 to $390
per ounce, exclusive of the 5% royalty. Gold production for
the year ended December 31, 2011 was 153,000 ounces, at the
midpoint of the Company's annual production guidance of
145,000 to 160,000 ounces.
The Company sold 45,224 ounces of gold in the fourth quarter
of 2011 for record revenues of
$76.3 million, a 24% increase over revenues of $60.8 million
in the same period of 2010. While developing the Escondida
zone during the fourth quarter, the Company continued to
encounter ore-grade material that had been classified as
waste in the development plan. The
Company estimates that approximately 3,000 ounces were sold
from ore-grade material from the Escondida zone in the fourth
quarter of 2011, which will be offset against the capital
costs of the Escondida development.
Average crusher throughput for the fourth quarter of 2011
achieved record levels of 16,000 tonnes of ore stacked per
day ("tpd"). Crusher throughput improved substantially
throughout the year, with full year 2011 crusher throughput
of 14,100 tpd, representing an 8% increase over the 13,000
tpd achieved in 2010.
The average grade mined in the fourth quarter of 2011 was
1.33 grams per tonne of gold ("g/t Au"), higher than the
Company's budgeted grade of 1.24 g/t Au. The higher grade was
attributed to ore encountered while developing the Escondida
zone that had been modeled as waste in the development plan.
In the fourth quarter, approximately 250,000 tonnes
grading
1.50 g/t Au from the Escondida zone was stacked on the leach
pad. The average grade mined for 2011 was 1.31 g/t Au, which
is above the Company's 2011 budget of 1.24 g/t Au.
In the fourth quarter of 2011, the recovery
ratio1 was 74%, substantially higher than 61% in
the third quarter of 2011. The improved recovery ratio for
the fourth quarter over the third quarter was attributable to
cyanide concentrations returning to normal levels. The
recovery
1 "recovery ratio" is defined as the ratio of gold ounces produced divided by the number of contained ounces stacked over a specific period
T R A D I N G S Y M B O L : T S X : A G I
ratio in 2011 was 71%, in-line with the Company's annual
budget of 70%, and higher than the recovery ratio of 64%
achieved last year.
Key operational metrics and production statistics for the
fourth quarter and full-year 2011 and
2010 are presented in Table 1 at the end of this press
release.
The Company is forecasting strong production growth in 2012,
between 200,000 and 220,000 ounces of gold at a cash
operating cost of $365 to $390 per ounce of gold sold,
exclusive of a
5% royalty. Including the 5% royalty and assuming a $1,600
gold price, this equates to a total cash cost range of $445
to $470 per ounce of gold sold. The Company expects gold
produced
from the gravity mill, which will process high-grade ore from
Escondida, will add a minimum of
67,000 ounces of production in 2012 at a grade of 13.4 g/t
Au. Based on bulk sample testing conducted in 2007, the
Company believes that there is the potential for higher
production from
the gravity mill as a result of realizing positive grade
reconciliation to the reserve grade.
The following key parameters form the basis for the 2012
production forecast and operating cost estimate:
- Combined gold recovery of 77% (heap leach ore, 72%
recovery; mill ore, 90% recovery)
- Throughput: 17,500 tpd (includes 500 tpd from the gravity
mill)
- Average grade: 1.33 g/t Au blended grade (heap leach ore,
1.0 g/t Au; mill ore, 13.4 g/t Au)
- Waste-to-ore ratio of 0.64:1
- Mexican peso:United States dollar foreign exchange of
13:1
The Company expects these parameters to fluctuate throughout
2012 and as a result, these parameters should be treated as
full-year averages and will not necessarily be reflective of
quarterly operating results.
Commenting on Alamos' 2012 guidance, Manley Guarducci,
Vice-President and Chief
Operating Officer, stated:
"The gravity mill is on-track to commence processing
high-grade material from Escondida, which will significantly
increase production to over 200,000 ounces per year for the
next three years. In the main Mulatos pit, the expected lower
average mined grade relative to prior years is a result of a
lower cut-off grade associated with higher gold price
assumptions. We believe that higher crusher throughput will
offset the decline in the average grade mined and will allow
the Company to maintain similar production levels from
ongoing heap leach operations as in prior years. Our cash
costs for 2012 are expected to be the same as in 2011,
despite major increases in input costs, particularly in
labour, diesel, and cyanide. Our ability to keep costs in
check for 2012 reflects the addition of lower cash cost
ounces from the gravity mill and continued operational
efficiencies."
The 2012 Mulatos capital and development budget is $26.0 million and includes the following key items:
2 | ALAMOS GOLD INCT R A D I N G S Y M B O L : T S X : A G I
Capital Expenditure - Mexico 2012 Budget Capitalized pre-stripping costs $9.7 million Construction $3.0 million Crusher Improvements $5.4 million Sustaining Capital $7.9 million Total $26.0 million 2012 Mulatos Exploration Budget
The 2012 Mulatos exploration budget is $8.6 million. The
Company expects that approximately 65% of the 2012
exploration costs in Mexico will be expensed.
The locations of the Company's regional and near-mine
exploration targets within the Mulatos
District are presented in figures 1 and 2, respectively.
In 2012, a minimum of 22,500 metres ("m") of
reverse-circulation ("RC") and core drilling is planned at
Mulatos, with a focus on the following targets:
• San Carlos Northeast - 5,000 m
• Compadres - 4,500 m
• East Estrella - 3,000 m
• Mulatos Mine Area (Escondida, El Victor North, and El Victor South) - 10,000 m
In addition to the drill programs outlined above, the Company also has a large reconnaissance-level exploration program planned for 2012 to assess several of its regional grassroots targets, including Puerto del Aire, San Nicolas, La Dura, La Palma, El Halcon and West Halcon, and Ostimuri.
2012 A
