Alamos Gold Announces Development Plan for High-Return Burnt Timber and Linkwood Satellite Deposits

2025-02-13

TSX - Toronto Stock Exchange · Gold · Canada

Burnt Timber and Linkwood to significantly extend mine life of Lynn Lake project and enhance economics given low-capital and high after-tax Internal Rate of Return of 54%

All amounts are in United States dollars, unless otherwise stated.

TORONTO, Feb. 13, 2025 (GLOBE NEWSWIRE) -- Alamos Gold Inc. ( TSX:AGI; NYSE:AGI ) (“Alamos” or the “Company”) today reported positive results of an internal economic study completed on its Burnt Timber and Linkwood satellite deposits located in proximity to the Lynn Lake project in Manitoba, Canada. In August 2023, an Updated Feasibility Study (“2023 Study”) was released on the Lynn Lake project outlining a long-life, low-cost project in Canada with attractive economics. The 2023 Study was based only on the Gordon and MacLellan deposits which are to be mined over the first 11 years, with the processing of lower-grade stockpiled ore for the remainder of the 17-year mine life.

The Burnt Timber and Linkwood deposits are expected to provide a source of additional mill feed to the Lynn Lake project starting in year 12, deferring the lower grade stockpiles until later in the mine plan. This is expected to extend the mine life of the combined Lynn Lake project to 27 years, increase longer term production rates, and enhance its economics as a low-capital, high-return satellite project.

Burnt Timber & Linkwood Study Highlights:

Average annual gold production of 83,000 ounces over a 10 year mine life Higher margin production: total cash costs of $1,140 per ounce and mine-site all-in sustaining costs of $1,164 per ounce, providing lower costs and higher margins than stockpiles from Lynn Lake Low initial capital of $67 million with mining equipment and planned processing infrastructure at Lynn Lake to be utilized . Life of mine capital, including sustaining capital and reclamation, is expected to total $88 million Low initial capital intensity of $77 per ounce produced , or $101 per ounce based on total life of mine capital including sustaining capital and reclamation Low total all-in cost of $1,241 per ounce, including life of mine capital Lower execution risk with key infrastructure from the Lynn Lake project to be utilized

High-return project with additional upside potential After-tax Internal Rate of Return (“IRR”) of 54% and after-tax Net Present Value (“NPV”) (5%) of $177 million (base case gold price assumption of $2,200 per ounce, and CAD/USD foreign exchange rate of $0.75:1, discounted to 2025); after-tax NPV (5%) of $317 million discounted to the start of construction After-tax IRR of 83% and after-tax NPV (5%) of $292 million at closer to spot prices of approximately $2,800 per ounce of gold, and CAD/USD foreign exchange rate of $0.70:1; after-tax NPV (5%) of $524 million discounted to the start of construction Payback of less than one year at the base case gold price of $2,200 per ounce

Lynn Lake + Burnt Timber and Linkwood Highlights:

40% increase in combined Mineral Reserves to 3.3 million ounces of gold, including: Initial Mineral Reserve of 940,000 ounces of gold at Burnt Timber and Linkwood (31 million tonnes (“mt”) grading 0.95 grams per tonne of gold (“g/t Au”) Lynn Lake Mineral Reserve of 2.3 million ounces (48 mt grading 1.52 g/t Au) as of the end of 2023 40% increase in combined life of mine production to 3.1 million ounces

Longer mine life, with higher longer-term average production rate Lynn Lake mine life extended to 27 years, from 17 years in the 2023 Study Average annual production of 176,000 ounces over the initial 10 years, unchanged from 2023 Study Higher average annual production of 85,000 ounces years 12 to 17 , up 60% from 53,000 ounces in the 2023 Study

Significant near-mine and regional exploration upside Burnt Timber and Linkwood deposits remain open to the west and at depth with the 2025 drill program focused on expanding mineralization beyond existing Mineral Reserves Multiple regional targets across most of the east-west trending Lynn Lake Greenstone Belt, of which Alamos has a total of 58,000 hectares of mineral tenure covering 80 kilometres (“km”) of strike length. This includes the Maynard and Tulune targets where broad zones of near surface gold mineralization have been intersected. Both targets are within trucking distance of the planned MacLellan mill.

“Lynn Lake is an attractive, long-life, low-cost stand alone project. The addition of Burnt Timber and Linkwood has enhanced the overall project and already strong economics by leveraging existing infrastructure to extend the mine life, and increase longer term production rates, at a low capital cost. The high returns within the Burnt Timber and Linkwood study highlight the significant upside potential across the larger, underexplored Lynn Lake greenstone belt. With a number of targets already identified across the Lynn Lake District, we see excellent opportunities to define and develop additional satellite deposits to feed the centralized mill well beyond the currently defined 27 year mine life,” said John A. McCluskey, President and Chief Executive Officer.

| Burnt Timber & Linkwood Project Highlights | | | | | Production | | | | | Mine life – starting year 12 of the Lynn Lake mine plan (years) | | 10.5 | | | Total gold production (000 ounces) | | 871 | | | | | | | | Average annual gold production (000 ounces) | | 83 | | | | | | | | Total ore mined (000 tonnes) | | 30,667 | | | Total waste mined (000 tonnes) | | 85,348 | | | Total material mined (000 tonnes) | | 116,015 | | | Total waste-to-ore ratio | | 2.8 | | | | | | | | Average gold grade mined (grams per tonne) | | 0.95 | | | Average mill throughput (tonnes per day (“tpd”)) | | 8,000 | | | | | | | | Gold recovery (%) | | 92.7 | % | | | | | | | Operating Costs | | | | | Total cost per tonne of ore (C$) 1 | $ | 43.27 | | | Total cash cost (per ounce) 2 | $ | 1,140 | | | Mine-site all-in sustaining cost (per ounce) 2 | $ | 1,164 | | | Capital Costs | | | | | Initial capital expenditure (millions) | $ | 67 | | | Sustaining capital expenditure and reclamation costs (millions) | $ | 21 | | | Total capital expenditure (millions) | $ | 88 | | | Total capital expenditure (per ounce) | $ | 101 | | | Total all-in cost (per ounce) 2,3 | $ | 1,241 | | | Base Case Economic Analysis at $2,200 per ounce Gold Price | | | | | IRR (after-tax) | | 54 | % | | NPV @ 0% discount rate (millions, after-tax) | $ | 549 | | | NPV @ 5% discount rate (millions, after-tax) – discounted to start of construction | $ | 317 | | | NPV @ 5% discount rate (millions, after-tax) – discounted to start of 2025 | $ | 177 | | | Gold price assumption (per ounce) | $ | 2,200 | | | Exchange Rate (CAD/USD) | $ | 0.75:1 | | | Economic Analysis at $2,800 per ounce Gold Price | | | | | IRR (after-tax) | | 83 | % | | NPV @ 0% discount rate (millions, after-tax) | $ | 886 | | | NPV @ 5% discount rate (millions, after-tax) – discounted to start of construction | $ | 524 | | | NPV @ 5% discount rate (millions, after-tax) – discounted to start of 2025 | $ | 292 | | | Gold price assumption (per ounce) | $ | 2,800 | | | Exchange Rate (CAD/USD) | $ | 0.70:1 | |

1. Total unit cost per tonne of ore includes mining, processing, ore haulage, G&A, royalties and refining costs 2. Please refer to the Cautionary Notes on non-GAAP Measures and Additional GAAP Measures 3. Total all-in cost per ounce produced is calculated as total cash cost per ounce plus total capital per ounce produced over the life of mine

Mineral Reserves and Resources

An initial Mineral Reserve totaling 940,000 ounces grading 0.95 g/t Au (31 mt) has been declared at Burnt Timber and Linkwood reflecting the successful conversion of Inferred Mineral Resources. Additionally, the two deposits host 287,000 ounces in Measured & Indicated (10.6 mt grading 0.84 g/t). Only Mineral Reserves were included in the mine plan and economic analysis, with Mineral Resources representing potential upside.

Mineral Reserves – Effective as of December 31, 2024

| Classification | Tonnage (000’s) | Grade (g/t Au) | Contained oz (000’s Au) | | Proven | 2,902 | 1.33 | 124 | | Probable | 27,769 | 0.91 | 816 | | Total Proven & Probable | 30,670 | 0.95 | 940 |

Mineral Reserves reported are consistent with the CIM Definition Standards for Mineral Resources and Mineral Reserves. Mineral Reserves are reported to a cut-off grade of 0.39 g/t Au. The cut-off grades are based on a gold price of $1,600/oz Au. Metallurgical Au recovery is 93%. Totals may not add up due to rounding. Chris Bostwick, FAusIMM, Senior Vice President, Technical Services is the Qualified Person for the Mineral Reserve estimate. Mr. Bostwick is a Qualified Person within the meaning of Canadian Securities Administrator's National Instrument 43-101 ("NI 43-101").

Mineral Resources – Effective as of December 31, 2024

| Category | Tonnage (000’s) | Grade (g/t Au) | Contained oz (000’s Au) | | Measured | 114 | 3.14 | 11 | | Indicated | 10,459 | 0.82 | 276 | | Measured & Indicated | 10,573 | 0.84 | 287 | | Inferred | 926 | 1.04 | 31 |

Mineral Resources reported are consistent with the CIM Definition Standards for Mineral Resources and Mineral Reserves. The Mineral Resources are reported at an assumed gold price of US$1,800/oz. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves. Contained Au ounces are in-situ and do not include metallurgical recovery losses. Mineral Resources are exclusive of Mineral Reserves. Totals may not add up due to rounding. Jeff Volk, CPG, FAusIMM, Director Reserves and Resources, is the Qualified Person for the Mineral Resource estimate. Mr. Volk is a Qualified Person within the meaning of Canadian Securities Administrator's National Instrument 43-101 ("NI 43-101").

Economic Analysis

Burnt Timber and Linkwood’s estimated after-tax IRR is 54% and after-tax NPV (5%) is $177 million, discounted to the start of 2025, assuming a gold price of $2,200 per ounce and CAD/USD foreign exchange rate of $0.75:1. Assuming closer to spot gold prices of approximately $2,800 per ounce and CAD/USD foreign exchange rate of $0.70:1, the after-tax IRR increases to 83% and after-tax NPV (5%) increases to $292 million. These economics represent upside to the 2023 Study prepared for the Lynn Lake project which only included the Gordon and MacLellan deposits. The payback on the Burnt Timber and Linkwood project is less than a year under the base case scenario.

The mine plan, operating parameters, and capital estimates incorporated in the study are based on operating experience and benchmarking against Alamos’ current operations.

The project economics are sensitive to metal price assumptions, foreign exchange rates, and input costs as detailed in the tables below.

Burnt Timber and Linkwood After-Tax NPV 1 (5%) Sensitivity ($ Millions)

| | -10% | -5% | Base Case | 5 % | 10 % | | | | | | | Gold Price | $ | 142 | $ | 160 | $ | 177 | $ | 194 | $ | 214 | | Canadian Dollar | $ | 196 | $ | 185 | $ | 177 | $ | 169 | $ | 160 | | Operating Costs | $ | 195 | $ | 185 | $ | 177 | $ | 168 | $ | 159 | | Capital Costs | $ | 178 | $ | 178 | $ | 177 | $ | 176 | $ | 175 | | | | | | | | | | | | |

Burnt Timber and Linkwood After-Tax NPV 1 (5%) Sensitivity to Gold Price and CAD/USD ($ Millions)

| | | Canadian Dollar | | | | | | | | | | | | Gold Price US$/oz | | | $0.700 | | $0.725 | | $0.750 | | $0.775 | | $0.800 | | | $ | 2,000 | $ | 157 | $ | 151 | $ | 145 | $ | 138 | $ | 131 | | | $ | 2,200 | $ | 189 | $ | 182 | $ | 177 | $ | 171 | $ | 165 | | | $ | 2,400 | $ | 224 | $ | 218 | $ | 210 | $ | 203 | $ | 197 | | | $ | 2,600 | $ | 257 | $ | 252 | $ | 245 | $ | 239 | $ | 232 | | | $ | 2,800 | $ | 292 | $ | 285 | $ | 278 | $ | 273 | $ | 266 | | | | | | | | | | | | | | | |

Burnt Timber and Linkwood After-Tax IRR 1 Sensitivity to Gold Price and CAD/USD (%)

| | | Canadian Dollar | | | | | | | | | | | | | | | | Gold Price US$/oz | | | $0.700 | | | $0.725 | | | $0.750 | | | $0.775 | | | $0.800 | | | $ | 2,000 | | 51.4 | % | | 48.9 | % | | 46.3 | % | | 43.8 | % | | 41.7 | % | | $ | 2,200 | | 59.6 | % | | 56.3 | % | | 53.6 | % | | 51.3 | % | | 48.9 | % | | $ | 2,400 | | 67.9 | % | | 64.5 | % | | 61.3 | % | | 58.7 | % | | 55.6 | % | | $ | 2,600 | | 75.4 | % | | 72.3 | % | | 69.1 | % | | 66.0 | % | | 63.0 | % | | $ | 2,800 | | 83.4 | % | | 79.6 | % | | 76.1 | % | | 73.2 | % | | 70.3 | % |

1. Discounted to start of 2025

Project Overview

The Burnt Timber and Linkwood deposits are accessible by an all-season gravel road from Highway 397, approximately 28 km from the planned MacLellan mill. The two deposits will be mined using conventional open pit mining methods with mining equipment from the Lynn Lake project to be utilized once the MacLellan deposit has been depleted. Ore will be hauled to and processed through the MacLellan mill to be constructed as part of the Lynn Lake project.

The 2023 Study for the Lynn Lake project outlined a 17-year mine life based on the Gordon and MacLellan deposits. The two deposits are expected to be mined and depleted over the first 11 years, with lower-grade stockpiled ore to be processed over the final six years.

With the incorporation of Burnt Timber and Linkwood, these relatively higher grade deposits will be mined and processed starting in year 12, deferring lower-grade stockpiled ore from Lynn Lake until year 22. This is expected to extend the mine life of the combined project to 27 years, from 17, and provide higher average annual rates of production from year 12 onward.

Mining

The Burnt Timber and Linkwood deposits will be mined using conventional shovel/truck open pit mining methods, with owner mining to be employed. The Burnt Timber deposit will be mined over a seven-year period and the Linkwood deposit will be mined over an eight-year period. Mining activities at both deposits will overlap, for a combined mine-life of 10 years, including pre-stripping activities.

Total mining rates (ore + waste) will vary between 13,000 and 35,000 tonnes per day (“tpd”) at an average life of mine waste to ore strip ratio of 2.8:1. The majority of the mining fleet from the Lynn Lake project will be utilized once the MacLellan deposit has been depleted. Ore from Burnt Timber and Linkwood will be transported approximately 28 kilometres to the MacLellan mill.

Processing (MacLellan Mill)

Ore from Burnt Timber and Linkwood will be processed at a rate of 8,000 tpd through the MacLellan mill to be built as part of the Lynn Lake project, therefore no processing capital is expected to be required to process ore from these deposits. No changes to the mill are anticipated.

The mill being constructed for the Lynn Lake project is a conventional milling operation with a nominal capacity of 8,000 tpd. The plant design is based on leach/carbon in pulp (“CIP”), and will consist of crushing, grinding, thickening, pre-aeration and leaching, CIP, cyanide detoxification, carbon elution and regeneration, and gold smelting.

Mill recoveries from Burnt Timber and Linkwood ore are expected to average 92.7% for gold over the life of mine, consistent with the Lynn Lake project. Power to the MacLellan site, which will host all the process facilities and major infrastructure, will be supplied from Manitoba Hydro through the commercial electricity grid.

The tailings management facility (“TMF”) to be built as part of the Lynn Lake project will have sufficient capacity, with additional lifts required to accommodate current Mineral Reserves at Burnt Timber and Linkwood.

Operating Costs

Total cash costs are expected to average $1,140 per ounce of gold and mine-site all-in sustaining costs $1,164 per ounce of gold over the life of the operation. Total unit operating costs are expected to average C$43.27 per tonne of ore processed. This includes average mining costs of C$4.25 per tonne of material mined across the Burnt Timber and Linkwood deposits, and processing and haulage costs of C$19.15 per tonne of ore.

The breakdown of unit costs is summarized as follows.

| Operating Costs | | C$/t | LOM US$M | | | | Mining 1 | C$/t mined | $ | 4.25 | $ | 353.8 | | | | | | | | | Mining 1 | C$/t ore | $ | 15.38 | $ | 353.8 | | Processing & Ore Haulage | C$/t ore | $ | 19.15 | $ | 440.5 | | G&A | C$/t ore | $ | 8.35 | $ | 192.0 | | Refining, Transport, Royalties | C$/t ore | $ | 0.39 | $ | 8.9 | | Total Operating Costs | C$/t ore | $ | 43.27 | $ | 995.1 | | | | | | | | | Total Cash Costs 2 | US$/oz | $ | 1,140 | | | | Mine-site All-in Sustaining Costs 2 | US$/oz | $ | 1,164 | | |

1. Average mining cost per tonne is for the production years 2. Please refer to the Cautionary Notes on non-GAAP Measures and Additional GAAP Measures

Royalties

There is a capped third-party royalty on a portion of production at Linkwood. Based on a $2,200 per ounce gold price, the cap is expected to be reached in the first two years, and will total approximately $6 million in royalty payments over that period. Burnt Timber and Linkwood are not expected to be subject to any other third-party royalties for the remainder of their mine life.

Capital Costs

Initial capital of $67 million will be spent over a two-year period starting year 10. This will include haul road upgrades, truck shop relocation, pit dewatering, and pre-stripping activities, with mobile equipment from the Lynn Lake project to be utilized for mining activities.

The mill, tailings management facility, and permanent camp, to be constructed as part of the Lynn Lake project, will be utilized for Burnt Timber and Linkwood keeping initial capital costs low.

A breakdown of the initial and total capital requirements is detailed as follows.

| Capital Costs (US$ millions) | | | | Infrastructure | $ | 26.8 | | Pre-production mining | $ | 12.9 | | Owner Costs & Indirects | $ | 12.7 | | TMF (additional lifts) | $ | 9.1 | | Contingency | $ | 5.7 | | Total Initial Capital | $ | 67.3 | | | | | | Sustaining capital | $ | 5.8 | | Reclamation and Closure Costs | $ | 15.0 | | Total Capital | $ | 88.1 | | | | |

Taxes

Burnt Timber and Linkwood will be subject to provincial, federal, and mining taxes. Assuming a gold price of $2,200 per ounce and CAD/USD foreign exchange rate of 0.75:1, taxes paid are expected to total $284 million over the 10-year mine life for an effective tax rate of approximately 34%.

Environment & Permitting

The mining and processing of ore from Burnt Timber and Linkwood deposits through the MacLellan mill will require amendments to existing authorizations for the Lynn Lake Project (the federal Decision Statement and the provincial Environment Act License). Additional federal and provincial authorizations, specific to the development of the Burnt Timber and Linkwood deposits, will also be required.

Additional Upside Opportunities

In-pit tailings

Utilizing the MacLellan open pit as a tailing storage facility once the deposit has been depleted will be evaluated as a longer term opportunity. This could provide capital and operating cost savings relative to completing additional lifts on the Lynn Lake TMF. This could also provide additional longer term capacity to accommodate the development of additional satellite deposits across the Lynn Lake District.

Exploration upside at Burnt Timber and Linkwood

There is significant potential to continue expanding mineralization beyond the currently defined Mineral Reserve pits at Burnt Timber and Linkwood. The 2025 drill program includes over 7,000 metres of drilling focused on expanding mineralization to the west of both Mineral Reserve pits. At Burnt Timber, drilling is also planned below the eastern portion of the previously mined-pit where there has been limited historical drilling. At Linkwood, drilling is also planned immediately below the main portion of the 2024 Mineral Reserve pit where no drilling has been completed and mineralization remains open, as well as following up on near-surface mineralization to the west (see Figures 2 to 4).