Alamos Gold Inc. Reports 2005 Year End Financial Results.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- Alamos The name Álamos can refer to the following:
TSX Transfer from Stack Pointer to Index TSX True Space Extension :AGI (Artificial General Intelligence) A machine intelligence that resembles that of a human being. Considered impossible by many, most artificial intelligence (AI) research, projects and products deal with specific applications such as industrial robots, playing chess, ) announces that it has released its financial results for the year ended December December: see month. 31, 2005. Financial Statements are attached and full audited financial statements including Notes and Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial for the fiscal year ended December 31, 2005 will be available under the Company's name at www.sedar.com by March 31st, 2006. All figures are in US dollars unless otherwise stated. Company Highlights for 2005: - Closed a CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $50 million convertible debenture Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. issue in February February: see month. 2005, the proceeds of which were used to fund construction of the Mulatos Mine ("the Mine"); - Secured a $10 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, which was increased to $16 million subsequent to year end; - Poured its first bar of gold dore from the Mine in July July: see month. 2005; - Substantially completed construction of the Mine in the fourth quarter of 2005 at a total cost of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $74 million, compared to the feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. budget of $73 million; - Commenced a $20 million expansion program to increase throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. by 50% above the feasibility fea·si·ble adj. 1. Capable of being accomplished or brought about; possible: a feasible plan. See Synonyms at possible. 2. level to 15,000 tonnes of ore per day; - Produced 7,647 ounces of gold in dore and sold 5,950 ounces of refined gold for proceeds of $2.7 million at a cash operating cost of $382 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. ; - Invested $4.7 million in exploration activities resulting in the discovery of the new high grade Escondida Hanging Wall Zone, located 500 meters northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. of the Estrella Pit and a 55% increase in resources in the El Salto/Mina Vieja Vieja is a genus of fish from the family Cichlidae. The geographic distribution of the genus is limited to Central America, primarily Mexico, Guatemala and Nicaragua. In general Vieja are high bodied cichlids which grow to between 15-35 cm (6 - 13.8 inches). areas; - Entered into a letter agreement to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose its non-core La Fortuna Fortuna (fôrt  `nə), in Roman religion, goddess of fortune. Worshiped under several forms, she appears to have originally been a goddess of fertility. property for proceeds estimated at $2.0 million;- Incurred a loss of $9.4 million ($0.12 per share) Operations Construction of the Mine began in 2004 and was essentially completed in January January: see month. 2006 at a cost of approximately $74 million, although $2.5 million of budgeted construction was deferred to the 2006 capital budget. A $20 million expansion was approved to take the operation to 15,000 tonnes of ore per day. Approximately $10 million of the expansion budget was incurred in 2005. The Mine began operations in 2005 as a run-of-mine conventional open-pit heap-leach operation with a gold recovery plant consisting of a carbon-in-column circuit. While the feasibility plan called for a 10,000 tonnes of ore per day crushing crushing deaths of newborn animals, especially those in litters, caused by the mother lying on them accidentally. Contributed to by weakness of the neonate or awkward accommodation. A problem in piglets and puppies. Called also overlying. operation, the Company acquired the major components of the Mine including the crusher/conveyor and gold recovery plant, to handle a mining and processing operation with a capacity in excess of 15,000 tonnes per day. The Company acquired additional haul trucks and loaders to accommodate this additional tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. . In 2005, the Company began pre-commercial run-of-mine operations until the crusher crusher, machine used to reduce materials such as ore, coal, stone, and slag to particle sizes that are convenient for their intended uses. Crushers operate by slowly applying a large force to the material to be reduced. was commissioned in January 2006. Although not contemplated in the feasibility study, the Company operated temporarily on a run-of-mine basis to take advantage of the gold price, which was significantly higher than the price at which the feasibility study was prepared. The Company produced 7,647 ounces of gold in 2005, before final refinery settlements. Gold is produced on site as dore containing approximately 70% - 80% gold by weight. The dore is sent to a refinery for final processing prior to sale. The tables below outline key production and cost indicators during the fourth quarter of 2005 and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. compared with feasibility study rates and costs in the pre-commercial phase of production:
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Production summary Q4 2005 YTD 2005(1) Feasibility Study(2)
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Ounces produced 5,517 7,647 N/A
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Ore mined - tonnes 634,398 829,509 519,000
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Waste mined - tonnes 2,207,501 3,262,553 2,482,000
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Total tonnes mined 2,841,899 4,092,062 3,001,000
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Waste to ore ratio 3.48 3.93 4.78
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Grade (g/t) 1.57 1.52 1.67
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Costs per tonne
summary Q4 2005 YTD 2005(1) Feasibility Study(3)
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Mining cost per tonne $1.56 $1.45 $1.11
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Mining cost per
tonne of ore $7.00 $7.15 $6.40
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Crushing cost per
tonne of ore N/A N/A N/A
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Processing cost per
tonne of ore $2.31 $2.00 $1.98
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Administration cost per
tonne of ore $0.99 $0.95 $0.97
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Cost per tonne of ore $10.30 $10.10 $9.35
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(1) YTD 2005 is from July 1 to December 31, coincident with
production from the Mine.
(2) Reflects mine production indicators during the start up period
as reported in the feasibility study.
(3) Mining cost per tonne and mining cost per tonne of ore reflect
mining costs during the start up period as reported in the
feasibility study. Crushing cost per tonne of ore is not
applicable as the feasibility study contemplated stockpiling of
ore during the start up phase. Processing cost per tonne of ore
and administration cost per tonne of ore presented in the table
above reflect average life of mine amounts.
Mining costs were somewhat higher than the feasibility amount, reflecting costs such as cyanide cyanide (sī`ənīd'), chemical compound containing the cyano group, -CN. Cyanides are salts or esters of hydrogen cyanide (hydrocyanic acid, HCN) formed by replacing the hydrogen with a metal (e.g., sodium or potassium) or a radical (e.g. , lime and diesel fuel, which have increased in price since the feasibility study was prepared and will continue to impact production costs if such prices remain high. Higher per unit mining costs in 2005 also reflect the haulage distance to the leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. pad from the Estrella Pit, whereas the feasibility study contemplated hauling ore to a stockpile stock·pile n. A supply stored for future use, usually carefully accrued and maintained. tr.v. stock·piled, stock·pil·ing, stock·piles To accumulate and maintain a supply of for future use. near the crusher. Cash operating cost per ounce of gold sold was $382 in 2005. Cash operating costs operating costs npl → gastos mpl operacionales were higher than the feasibility cost of $174 due to the higher mine costs noted above and due to expected lower recoveries from run-of-mine ore compared with crushed ore. The Company expects to improve its operating performance after it achieves commercial production, when it anticipates improved operating efficiencies and higher recoveries from crushed ore. Financial results for the quarter ended December 31, 2005 and comparable figures from 2004 are:
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Q4 2005 YTD 2005 Q4 2004 YTD 2004
(restated)(1) (restated)(1)
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Gold sales (ounces) 4,950 5,950 - -
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Realized gold price
per ounce $462 $458 - -
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Revenue ($000s) 2,285 2,726 - -
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Cash flow used in
operations (before
working capital
change) ($000) $1,801 $5,105 $1,534 $3,568
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Loss for the
period ($000) $3,145 $9,447 $2,076 $4,767
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Loss per share $0.04 $0.12 $0.03 $0.08
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(1) Financial results for 2004 have been retroactively restated to
conform with the Company's change in accounting policy for
mineral property plant and equipment made in 2005. The Company's
new policy is to expense exploration costs except where
exploration and development expenditures are incurred on a
property identified as having development potential, as evidenced
by a positive economic analysis. Accordingly, exploration and
development costs which have the characteristics of mine
development costs are capitalized and amortized on a
units-of-production basis over the period of future benefit.
Increased costs in 2005 on a quarterly and year-to-date basis are primarily the result of interest expense ($1.8 million), accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. discount ($1.3 million) and foreign exchange losses ($1.8 million) associated with the Company's issuance of a CDN$50 million convertible debenture in February 2005. For the year ended December 31, 2005, these costs represent an increase of $4.9 million over the comparable period in 2004. Included in the 2005 loss are $3.8 million of non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc amortization ($0.7 million), stock-based compensation ($1.1 million), accretion and foreign exchange losses ($0.7 million). Corporate and administration costs in 2005 were $2.8 million compared with $2.4 million in 2004. In addition, exploration costs charged to operations during the year of $1.9 million were $0.9 million higher than the same period in 2004. Exploration The Company made a new discovery at the Escondida Hanging Wall (EHW EHW Evolvable Hardware EHW Explosive Handling Wharf EHW Extremely High Water EHW Electrically Heated Window ) Zone, 500 meters northeast of the Mulatos Mine, in December 2005. Since that announcement, additional high-grade High-grade Credit quality of AAA or AA. high-grade Of, relating to, or being a bond with little risk of default on the part of the issuer. High-grade is usually reserved for bonds rated AAA or AA by the rating services. gold intervals were encountered from drilling designed to further define and extend the zone. Drill hole 06EI065, designed to extend the zone to the southwest Southwest or south west is the ordinal direction halfway between south and west, the opposite of northeast. Southwest or south west may also refer to:
The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. from underground drill stations. The Company currently has six drill rigs on site: two reverse circulation rigs drilling at its El Realito and EHW Zone, one core rig at the EHW Zone, two underground rigs at Escondida and one at El Victor. Liquidity and Capital Resources During 2005 the Company raised $50 million from several sources including a convertible debenture issue ($40.3 million) in February, $1.7 million in equity from the exercise of stock options and warrants, $3 million through bank debt and $4.8 million in capital lease obligations to finance mining equipment. The Company completed construction of its Mulatos Mine at a cost of about $74 million, with some non-essential non-essential Adjective not absolutely necessary non-essential adj → unnötig n non-essentials → nicht (lebens)notwendige Dinge pl facilities deferred to its 2006 capital budget. Approximately $10 million was spent on expansion capital out of a $20 million budget to raise the production rate from 10,000 tonnes of ore per day to 15,000 tonnes. An additional $10 million will be spent in 2006. The Company had $4.5 million in unrestricted cash at December 31, 2005, with another $1.2 million set aside to pay interest on its debenture on February 15, 2006. At December 31, 2005 the Company had drawn $3 million on its $10 million line of credit; after year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. the company increased the amount available to it under its line of credit to $16 million. Liquidity was further improved through the receipt of over $7.5 million in warrants exercised after year-end. Outlook The Mulatos Mine placed over 1,070,000 tonnes of ore on the leach pad at an average grade of 1.7 grams of gold per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. in the first 85 days of 2006, averaging 12,500 tonnes per day. The year-to-date waste-to-ore ratio is 1.9:1, in line with the mine plan of 2.0:1 for 2006, which compares to life-of-mine ratio of 1.4:1. Production in 2006 is expected to be between 140,000 and 155,000 ounces of gold at an average cash operating cost (exclusive of royalties) of between $210 and $225 per ounce of gold as the Mine achieves commercial production. Cash operating costs in the first quarter of 2006 are expected to be significantly higher than that range. The Company plans to continue exploration of the EHW Zone as well as the underground zones at Escondida and El Victor. The Company expects to revise its reserves for development drilling at El Salto
El Salto (or El Salto de Ciánega de González) is a climbing area in the Mexican state of Nuevo León. It lies in the Ciánega de González, about two hours from Monterrey. and Mina Vieja in 2006. Conference Call Alamos will host a conference call to discuss the results on Tuesday Tuesday: see week. , March 28th, at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT (8:00 am PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ). You may access the call by calling the operator prior to the scheduled start time. A playback Playback could mean:
Conference Call Information: ---------------------------- Local and International 416-695-6622 Toll Free (Canada & U.S.) 1-866-902-2211 Participant Audio Webcast: www.alamosgold.com Conference Call REPLAY: ----------------------- Replay Local and International : 416-695-5275 password 617849 Toll Free: (Canada & U.S.) 1-888-509-0081 password 617849 Alamos' common shares are traded on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol "AGI" and convertible debentures under the symbol AGI.DB". Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act of 1995: Statements in this release that are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , including statements relating to the future recovery of the Mulatos Project, are subject to various risks and uncertainties concerning the specific factors identified about in Alamos periodic filings with the Ontario Securities Commission The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. and the U.S. Securities Exchange Commission. Such information contained herein represents management's best judgment as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" based on information currently available. The Company does not intend to update this information and disclaims any legal liability to the contrary.
ALAMOS GOLD INC.
CONSOLIDATED BALANCE SHEETS
As at December 31
(Stated in United States dollars)
2004
2005 (Restated)
--------------------------
ASSETS
Current Assets
Cash and cash equivalents $4,518,590 $13,127,463
Restricted cash 1,219,458 -
Short-term investments - 15,000,000
Fair value of forward contracts 966,400 -
Amounts receivable 3,861,990 112,117
Advances and prepaid expenses 1,934,704 1,733,284
Inventory 9,989,355 -
--------------------------
22,490,497 29,972,864
Deferred financing charges 1,183,356 -
Mineral property, plant and equipment 101,514,078 43,900,941
Mineral property held for sale 1,012,538 1,010,638
--------------------------
$126,200,469 $74,884,443
--------------------------
--------------------------
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $5,323,015 $ 943,319
Bank loan 3,000,000 -
Current portion of capital lease
obligations 1,190,448 -
--------------------------
9,513,463 943,319
Capital lease obligations 3,615,856 -
Convertible debenture 33,325,939 -
Asset retirement obligations 2,100,000 50,000
SHAREHOLDERS' EQUITY
Share capital 87,829,646 86,170,028
Warrants 265,000 -
Convertible debenture 9,983,025 -
Contributed surplus 3,170,036 1,877,036
Deficit (23,602,496) (14,155,940)
--------------------------
77,645,211 73,891,124
--------------------------
$126,200,469 $74,884,443
--------------------------
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ALAMOS GOLD INC.
Consolidated Statements of Operations and Deficit
For the years ended December 31
(Stated in United States dollars)
2005 2004
(Restated)
--------------------------
OPERATING REVENUES
Gold sales $2,726,391 $ -
--------------------------
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OPERATING EXPENSES
Mining and processing 2,269,927 -
Amortization 677,627 90,268
Exploration 1,889,060 994,591
Corporate and administrative 2,791,411 2,415,256
Stock-based compensation 1,142,000 943,965
Accretion of asset retirement obligations 16,000 -
Other loss 93,600 -
--------------------------
8,879,625 4,444,080
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LOSS FROM OPERATIONS (6,153,234) (4,444,080)
FINANCIAL REVENUES AND EXPENSES
Interest income 856,044 234,219
Interest expense on long-term debt
(net of capitalized interest of
$253,750, 2004 - $nil) (1,823,609) (288,149)
Financing charges (342,082) (390,473)
Accretion of convertible debenture
discount (net of capitalized accretion
of $178,980, 2004 - $nil) (1,272,125) -
Foreign exchange (loss) gain (711,550) 121,668
--------------------------
Loss for the year (9,446,556) (4,766,815)
Deficit, beginning of year (14,155,940) (9,389,125)
--------------------------
Deficit, end of year $(23,602,496) $(14,155,940)
--------------------------
--------------------------
Loss per share $ (0.12) $ (0.08)
--------------------------
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ALAMOS GOLD INC.
Consolidated Statements of Cash Flows
For the years ended December 31
(Stated in United States dollars)
2005 2004
(Restated)
--------------------------
Cash provided by (used for):
Operating Activities
Loss for the year $ (9,446,556) $ (4,766,815)
Adjustments for items not involving cash:
Amortization 677,627 90,268
Accretion of asset retirement obligations 16,000 -
Foreign exchange loss on convertible
debenture 1,845,093 -
Fair value of forward contracts (966,400) -
Accretion of convertible debenture discount 1,272,125 -
Amortization of deferred financing charges 355,117 -
Foreign exchange loss on note payable - 164,180
Stock-based compensation 1,142,000 943,965
Changes in non-cash working capital:
Amounts receivable (1,847,877) (64,497)
Inventory (8,796,576) -
Prepaid expenses (228,607) (25,443)
Accounts payable and accrued liabilities 3,302,828 407,250
--------------------------
(12,675,226) (3,251,092)
--------------------------
Investing Activities
Short-term investments 15,000,000 (15,000,000)
Advances to contractors 27,187 (1,666,895)
Mineral property held for sale (1,900) -
Mineral property, plant and equipment (57,944,692) (26,055,026)
--------------------------
(42,919,405) (42,721,921)
--------------------------
Financing Activities
Convertible debenture issued 40,306,300 -
Common shares issued 1,659,618 51,800,346
Bank loan 3,000,000 -
Capital lease obligations 4,806,304 -
Note repayment - (2,362,792)
Deferred financing charges (1,689,473) -
--------------------------
48,082,749 49,437,554
--------------------------
Restricted cash (1,096,991) 681,347
Net (decrease) increase in cash and
cash equivalents (8,608,873) 4,145,888
Cash and cash equivalents
- beginning of year 13,127,463 8,981,575
--------------------------
Cash and cash equivalents - end of year $4,518,590 $13,127,463
--------------------------
Supplemental information:
Interest paid $1,270,979 $288,149
--------------------------
The TSX has not reviewed and does not accept responsibility for th e adequacy or accuracy of this release. Alamos Gold Inc. (TSX:AGI) |
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