Alamos Gold Reports Third Quarter 2005 Financial Results & Progress on Development and Exploration Activities.TORONTO -- 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 results of operations and updates progress on mine development at Mulatos and exploration activities within its Salamandra group of concessions. All figures in 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. dollars unless otherwise stated. Highlights Third Quarter 2005: During the three months ended September 30, 2005, Alamos: - Poured its first gold dore bar Major gold mines process ore at the site of the mine, creating a low-purity gold metal. This metal is poured into dore bars, which are then transported to refineries for further purification. on July 22 weighing in at 3.65 kg (117 ounces); - Produced 2,130 ounces of gold in dore and sold 1,000 ounces of refined gold for $440,913; - Delivered 377,000 tonnes of uncrushed run-of-mine ore grading 1.1 grams per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. (g/t) 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; - Incurred expenditures of $6.6 million on mine development at the Mulatos Project and $8.5 million on plant and mining equipment; - Incurred exploration and development expenditures of: $0.5 million on exploration at El Salto/Mina Vieja zones adjacent to the Phase I Estrella Pit, $0.6 million on Escondida/El Victor zone underground drift development, and $0.3 million on exploration activities and drilling at El Jaspe Ja`spe´ a. 1. (Ceramics) Having the surface decorated with cloudings and streaks, somewhat as if imitating jasper. , El Realito and Los Bajios; - 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; - Incurred a net loss of $2.0 million ($.03 per share). Subsequent to quarter end Alamos: - 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 the La Fortuna property in exchange for consideration valued at approximately $1.7 million and a 1% net smelter royalty ("NSR NSR abbr. normal sinus rhythm NSR Normal sinus rhythm, see there "). Results of Operations Loss for third quarter 2005 was $2.0 million ($0.03 per share) compared with $0.4 million for the comparable period in 2004 ($0.01 per share). Loss for the nine months ended September 30, 2005 was $5.4 million ($0.07 per share) compared with $2.3 million in 2004 ($0.04 per share). Results for the third quarter included initial gold production from the Estrella Pit at its Mulatos gold mine located in Sonora, Mexico. Alamos is not operating at commercial rates nor does it anticipate doing so until first quarter 2006. Alamos commenced mining operations on a run-of-mine basis at the Estrella Pit, loading 377,000 tonnes of ore grading 1.1 g/t on the leach pad. 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. and conveying operations at the feasibility rate of 10,000 tonnes of ore per day will not commence until after 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. and conveyer assembly in December 2005. Ore to the leach pad came from the Estrella Pit at a planned waste-to-ore ratio of 5.4:1 and from colluvial material from the base of the Estrella deposit. Waste was hauled to the conveyer site to provide fill for final grading. The gold recovery plant operated routinely to recover 2,130 ounces gold in dore in the quarter, of which 1,000 ounces was refined and sold for proceeds of $440,913; there was no production revenue for the comparable periods in 2004. Unit operating costs operating costs npl → gastos mpl operacionales per tonne of ore and per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. of production were significantly higher than that which Alamos expects to achieve when the crusher/conveyer systems are completed and 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. is at the design rate. Factors adversely affecting unit costs for the quarter included a higher than feasibility level waste-to-ore ratio as waste was given priority as a source of construction fill for the conveyor Conveyor A horizontal, inclined, declined, or vertical machine for moving or transporting bulk materials, packages, or objects in a path predetermined by the design of the device and having points of loading and discharge fixed or selective. route. In addition, longer haul distances were experienced in the quarter and will continue until the conveyer system is completed in December 2005. The cash costs incurred to produce the first 1,000 ounces of refined gold sold was $299.69 per ounce. Corporate and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. were $0.5 million for third quarter 2005 ($0.5 million for the same period in 2004) and $2.2 million for the nine months ended September 30, 2005 (2004: $1.6 million). Other significant expenses and costs for the third quarter included interest expense ($587,388), accretion expense In accounting, accretion expense is the expense created when updating the present value(PV) of a financial instrument. For example, if one originally recognizes the present value of a liability at $650, which has a future value (FV) of $1000, every year one must increase the ($412,746) and financing costs ($113,867) mainly relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the February 2005 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, partially offset by interest income ($218,404) earned on Alamos' cash balances. Alamos also incurred a foreign exchange loss in the quarter of $579,246 mainly attributable to its convertible debenture liability, which is denominated in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents . There was no stock based compensation cost recorded in third quarter 2005. Capital Resources and Liquidity Alamos had $16.7 million cash on hand at the end of September 30, 2005, plus an additional $1.2 million from which to pay accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. on the convertible debenture due February 15, 2006. Excluding these items, its working capital position was $11.0 million. Alamos had $5.2 million in amounts receivable represented mainly by value added taxes value added tax n (BRIT) → impuesto sobre el valor añadido or agregado (LAM) value added tax n (Brit recoverable in Mexico, which Alamos expects will be recovered in fourth quarter 2005. Inventory of $3.5 million represents the cost incurred for in-process gold production, as ore in stockpiles, on the leach pad or gold/silver dore awaiting refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar . Alamos anticipates that there will be additional working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. for in-process costs as the company ramps up production in fourth quarter 2005 and first quarter 2006. At September 30, 2005 the estimated cost to complete Mulatos Phase I construction was less than $17 million, most of which will be spent in fourth quarter 2005. In addition, Alamos has also committed to acquiring up to nine new and used 100-ton haul trucks, of which an additional amount of $5.7 million remains to be spent. A portion of the truck purchase is anticipated to be funded through asset-based financing Asset-based financing Methods of financing in which lenders and equity investors look principally to the cash flow from a particular asset or set of assets for a return on, and the return of, their financing. . Alamos plans to finance mine construction, in-process inventory costs (until gold production operates at a break-even level), and additional mine capacity by utilizing its cash position, $10 million line of credit and periodic gold sales. Development at Mulatos Project Most essential development work at Mulatos, including the crusher/conveying system and enlarging ENLARGING. Extending or making more comprehensive; as an enlarging statute, which is one extending the common law. the leach pad area will be completed in fourth quarter 2005. The budget for construction was $73 million. Based on the scope of work prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by 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. , costs incurred at the end of September 2005 were $61 million out of a projected cost to complete of approximately $78 million. Most areas of construction, after allocations from contingency contingency n. an event that might not occur. , were near budget levels except for the crusher/conveyer, which was used when acquired and required additional refurbishing. Exploration Exploration focused on the El Salto/Mina Vieja infill in·fill n. 1. The use of vacant land and property within a built-up area for further construction or development, especially as part of a neighborhood preservation or limited growth program. 2. and step-out drilling to develop additional reserves adjacent to the Estrella Pit. Results were recently released showing growth in estimated measured and indicated resources. Approximately 1,100 meters of underground development drifting through mineralized min·er·al·ize v. min·er·al·ized, min·er·al·iz·ing, min·er·al·iz·es v.tr. 1. To convert to a mineral substance; petrify. 2. To transform a metal into a mineral by oxidation. 3. zones with excellent continuity has been completed in the Escondida-El Victor areas. A core rig is currently drilling from underground with 1,035 meters completed to date. A second underground rig is scheduled to arrive in the fourth quarter. Regional exploration work continued at El Jaspe and Los Bajios targeting newly identified mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. . There are currently three drill rigs on site. Outlook Alamos is well positioned to commence commercial operations at Mulatos in the first quarter of 2006. It has recently announced resource additions adjacent to the Estrella Pit at El Salto/Mina Vieja and expects to add resource and reserve ounces at Escondida and El Victor as a result of the underground drill program currently underway. Alamos is also conducting extensive exploration work on its 21,300 hectare hectare (hĕk`târ, –tär), abbr. ha, unit of area in the metric system, equal to 10,000 sq m, or about 2.47 acres. Salamandra group of concessions where nine project areas have been identified for follow-up work. Interim Financial Statements for September 30, 2005 are attached to this release, which should be read in conjunction with Notes to the Financial Statements Notes to the financial statements A detailed set of notes immediately following the financial statements in an annual report that explain and expand on the information in the financial statements. 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 third quarter of 2005 which is filed by Alamos at www.sedar.com. Conference call - Release of Financial Information Financial results for the period ended September 30, 2005 will be released on or before November 14, 2005. Alamos will host a conference call to discuss operating and exploration results on Tuesday, November 15, 2005 at 8:00 am PST/11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . You may access the call by calling the operator at 416-695-6120 or toll free 1-800-766-6630 prior to the scheduled start time. A playback Playback could mean:
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 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: Statement in this release that are forward-looking, including statements relating to the future recovery of the Mulatos mine, are subject to various risks and uncertainties concerning the specific factors identified about in the Company's 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
(Stated in United States dollars)
(Unaudited - prepared by management)
September 30 December 31
2005 2004
----------------------------------
A S S E T S
Current Assets
Cash and cash equivalents $ 16,728,593 $ 13,127,463
Restricted cash 1,210,860 -
Short-term investments - 15,000,000
Unrealized gains on foreign
exchange contracts 1,204,491 -
Amounts receivable 5,191,451 112,117
Advances and prepaid expenses 4,356,672 1,733,284
Inventory 3,506,499 -
----------------------------------
32,198,566 29,972,864
Deferred financing charges 1,323,606 -
Property, plant and equipment 81,874,960 43,900,941
Undeveloped mineral
properties 3,412,025 2,005,229
----------------------------------
$118,809,157 $ 75,879,034
----------------------------------
----------------------------------
L I A B I L I T I E S
Current Liabilities
Accounts payable and accrued
liabilities 3,245,179 943,319
----------------------------------
Convertible debentures 33,055,052 -
Asset retirement obligations 373,000 50,000
S H A R E H O L D E R S' E Q U I T Y
Share capital 87,511,605 86,170,028
Warrants 265,000 -
Convertible debentures 9,983,025 -
Contributed surplus 2,955,036 1,877,036
Deficit (18,578,740) (13,161,349)
----------------------------------
82,135,926 74,885,715
----------------------------------
$118,809,157 $ 75,879,034
----------------------------------
----------------------------------
See notes to consolidated financial statements
ALAMOS GOLD INC.
Consolidated Statements of Operations and Deficit
(Stated in United States dollars) (unaudited)
For the three months For the nine months ended
ended September 30 September 30
--------------------------------------------------------
2005 2004 2005 2004
OPERATING
REVENUES
Gold sales $ 440,913 $ - $ 440,913 $ -
--------------------------------------------------------
OPERATING
EXPENSES
Mining and
processing 299,693 - 299,693 -
Amortization 84,063 16,851 200,723 43,907
Accretion
of asset
retirement
obligations 4,000 - 9,000 -
Administrative
and
corporate
expenses 530,675 465,718 2,213,534 1,617,769
Stock
based
compensation - - 927,000 551,965
--------------------------------------------------------
918,431 482,569 3,649,950 2,213,641
LOSS FROM
OPERATIONS (477,518) (482,569) (3,209,037) (2,213,641)
FINANCIAL
REVENUES
AND
EXPENSES
Interest
income 218,404 63,422 823,098 128,770
Interest
expense (587,388) (64,257) (1,205,102) (193,593)
Financing
costs (113,867) - (201,832) -
Accretion
of
convertible
debenture
discount (412,746) - (866,083) -
Foreign
exchange
(loss)
gain (579,246) 82,946 (758,435) (16,540)
--------------------------------------------------------
Loss for
the period (1,952,361) (400,458) (5,417,391) (2,295,004)
Deficit,
beginning
of the
period (16,626,379) (11,283,671) (13,161,349) (9,389,125)
--------------------------------------------------------
Deficit,
end of the
period $(18,578,740) $(11,684,129) $(18,578,740) $(11,684,129)
--------------------------------------------------------
--------------------------------------------------------
Loss per
share $ (0.03) $ (0.01) $ (0.07) $ (0.04)
--------------------------------------------------------
--------------------------------------------------------
See notes to consolidated financial statements
ALAMOS GOLD INC
Consolidated Statements of Cash Flows
(Stated in United States dollars) (unaudited)
For the three For the nine
month period month period
September 30 September 30
ended ended
---------------------- --------------------------
2005 2004 2005 2004
Cash (used for)
provided by:
Operating Activities
Loss for the period $(1,952,361) $(400,458) $(5,417,391) $(2,295,004)
Adjustments for
items not involving
cash:
Amortization 84,063 16,851 200,723 43,907
Accretion of asset
retirement obligations 4,000 - 9,000 -
Foreign exchange
(gain) loss on
debenture 1,578,258 - 1,984,016 -
Unrealized gain on
foreign exchange
contracts (1,204,491) - (1,204,491) -
Accretion of
debenture discount 412,746 - 866,083 -
Amortization of
deferred financing
costs 113,867 - 214,867 -
Foreign exchange
gain on note payable - 122,000 60,388
Stock-based
compensation - - 927,000 551,965
(963,918) (261,607) (2,420,193) ( 1,638,744)
---------------------- --------------------------
Changes in non-cash
working capital
components:
Amounts receivable 361,063 (130,892) 30,899 (167,859)
Inventory (2,319,897) - (2,865,989) -
Prepaid expenses (88,587) (115,618) (65,900) (123,486)
Accounts payable and
accrued liabilities (836,284) 92,477 18,203 (207,620)
---------------------- --------------------------
(3,847,623) (415,640) (5,302,980) (2,137,709)
---------------------- --------------------------
Investing Activities
Short-term investments - - 15,000,000 -
Contractor advances and
deposits (158,373) (625,569) (2,557,488) (999,505)
Undeveloped mineral
properties (453,983) (266,080) (1,406,796) (268,353)
Property, plant and
equipment (16,095,188)(6,432,453) (40,997,849) (14,041,618)
---------------------- --------------------------
(16,707,544)(7,324,102) (29,962,133) (15,309,476)
---------------------- --------------------------
Financing
Activities
Proceeds from
issuance of
convertible
debentures - - 40,306,300 -
Deferred financing
costs 26,211 (245,000) (1,689,473) (245,000)
Proceeds from the
issue of common
shares 248,349 5,970,926 1,341,577 28,373,490
---------------------- --------------------------
274,560 5,725,926 39,958,404 28,128,490
---------------------- --------------------------
Restricted cash 1,262,853 681,347 (1,092,161) 681,347
Net (decrease)
increase in cash
and cash
equivalents (19,017,754)(1,332,469) 3,601,130 11,362,652
Cash and cash
equivalents
- beginning of
period 35,746,347 21,676,696 13,127,463 8,981,575
---------------------- --------------------------
Cash and cash
equivalents
- end of period $16,728,593 $20,344,227 $16,728,593 $20,344,227
---------------------- --------------------------
---------------------- --------------------------
See notes to consolidated financial statements
ALAMOS GOLD INC.
CONSOLIDATED STATEMENTS OF UNDEVELOPED MINERAL PROPERTIES
(Stated in United States dollars) (unaudited)
December Expend- December Expenditures September
31, itures 31, September 30,
2003 2004 2004 30, 2005 2005
---------------------------------------------------------------------
Active
Projects
Drilling - $ 534,457 $ 534,457 $ 412,285 $ 946,742
Assaying - 127,166 127,166 56,920 184,086
Geology - 86,789 86,789 101,250 188,039
Administration - 113,449 113,449 15,474 128,923
Equipment - 18,170 18,170 46,058 64,228
Underground
development - - - 670,799 670,799
Other
costs - 114,560 114,560 104,010 218,570
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- 994,591 994,591 1,406,796 2,401,387
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Inactive
Project
La Fortuna
Property
Acquisition 295,300 - 295,300 - 295,300
Exploration:
Analytical 28,714 - 28,714 - 28,714
Field work
and
supplies 347,776 - 347,776 - 347,776
Geological 226,336 - 226,336 - 226,336
Claims
maintenance 75,043 2,273 77,316 - 77,316
Travel and
accommo-
dation 35,196 - 35,196 - 35,196
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1,008,365 2,273 1,010,638 - 1,010,638
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$1,008,365 $996,864 $2,005,229 $1,406,796 $3,412,025
---------------------------------------------------------------------
See notes to consolidated financial statements
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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