Alamos Gold forecasts 2019 gold production

Alamos Gold (TSX: AGI; NYSE: AGI) produced 505,000 ounces of gold from its four mines in North America last year and expects a “similar rate of production” this year.

The company anticipates production of between 480,000 and 520,000 ounces of gold in 2019 at total cash costs of between US$710 and US$750 per oz., down 10% from its revised 2018 guidance of US$810 per oz., and all-in sustaining costs of between US$920 and US$960 per oz., down 5% from revised 2018 guidance of US$990 per oz. (Total cash costs and AISCs for 2018 have not been finalized yet.)

The gold miner has penciled-in a 2019 capital budget of US$290 to US$315 million, reflecting the construction of two new mines in Turkey (Kirazli) and Mexico (Cerro Pelon), and a global exploration budget of US$33 million, including US$19 million budgeted for its Island Gold mine.

Alamos Gold was debt-free at the end of last year and had about US$206 million in cash.

The intermediate gold producer has two operating mines in Canada (Young-Davidson and Island Gold in northern Ontario), and two mines in Mexico (Mulatos and El Chanate, both in Sonora state).

At presstime in Toronto Alamos Gold was trading at $5.41 per share.

Macquarie Research has trimmed its target price on the company from C$10 to C$9.25 per share following its 2019 guidance and Investor Day. Haywood Securities has lowered its target price from C$10 to C$9.00 per share.

Laurentian Bank Securities’ price target of C$9.00 per share and BMO Capital Markets’ target of C$10.00 per share remain unchanged.