Alamos has a good Q1 in Mexico

Alamos Gold (AGI-T) is off to a good start for the year, with record earnings and cash flows for the three months ended March, 31, 2012.

Earnings grew by 65% to US$29.5 million, or US25¢ per share, compared to the year-ago period, partially helped by a US$1.9-million foreign tax gain.

Revenue totaled US$70.3 million, a 29% jump from a year earlier.

Cash from operating activities before changes in non-cash working capital came at US$44.9 million, or US38¢ per share. After changes, cash from operations equaled US$36.1 million, or US30¢ per share.

This allowed Alamos to boost its semi-annual dividend to US10¢ per share in the first period. 

Alamos produced 40,500 oz. gold from its Mulatos in Mexico, an 8% year-over-year increase, owing to higher crusher throughput and the start up of its gravity mill used to process high-grade ore from the Escondida zone.

Crusher throughput for the quarter averaged 13,900 tonnes per day, a 17% gain from the year earlier, but below the annual budgeted rate of 17,500 daily tonnes as the company refurbished its crushing circuit. This scheduled maintenance resulted in eight days of downtime.

After that, throughput improved in the latter half of the quarter, averaging 17,000 daily tonnes in March, before hitting a record 18,000 tonnes per day in April.

Alamos fired up its gravity mill for Escondida in late January, which churned through 500 tonnes per day in March. The debt-free company forecasts Escondida producing at least 67,000 oz. gold this year at a grade of 13.4 grams per tonne.

Gold sold during the quarter increased by 7% to 41,745 oz. from a year ago.

Cash costs rose to US$360 per oz. gold sold, from US$349 per oz. a year earlier, as costs for inputs, such as labour, cyanide and diesel, climbed.

Total cash costs, including a 5% royalty, jumped 7% to US$442 per oz.

On day of the results, the company gained 5.8% to close May 1 at $19.13 per share.

For the year, the company forecasts its Mulatos mine to produce between 200,000 oz. to 220,000 oz. at a cash operating costs of US$365 to US$390 per oz., not including the 5% royalty.

Mulatos is expected to produce its one millionth oz. of gold this year.

Following its resource update released in the first quarter, the mine life remains at nine years.

During the quarter, the company also reported reserve and resource updates for its Agi Dagi and Kirzali gold projects in northwestern Turkey.

The company plans to deliver an initial resource estimate for Agi Dagi’s Camyurt zone by mid-May.

By July, it intends to complete prefeasibility studies for Agi Dagi and Kirzali, and secure environmental impact assessment approvals in the third quarter before it starts construction at the two projects in the fourth quarter of 2012.