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Analyst Actions: Alamos Gold Estimates Revised at Credit Suisse

2012 production lower than expected; Revising Estimates:

2012 production guidance lower than CS expectations, costs higher than expected. Alamos (AGI) issued a 2012 production forecast of 200-220kozs (from 250-260kozs) at cash operating costs of $365-$395/oz below Credit Suisse forecasts of 242kozs at $351/oz. The company had previously been indicating (as per the November 2011 corporate presentation) production in the range of 250-260kozs.

We have lowered our 2012 estimates: production was revised to 219kozs (from 242kozs) now at the high-end of AGI guidance. Our 2012 total cash costs have been revised upward to $409/oz (from $351/oz) as a result of increasing unit costs at Mulatos, but still remain below company guidance of $445-$470/oz, the result of higher grade expectations than the 13.4g/t from Escondida. We have lowered our 2012 capex estimate to $48M (from $139M) after incorporating lower than expected capex guidance in Turkey.

So what are we modelling now? We are now modelling a ramp up to 17,000tpd over the course of 2012, for the heap leach, averaging 16,500tpd, up from 15,500tpd previously. For Escondida grades, we ramp to 22g/t over Q2/14 to Q4/14, with low grade ore put into the mill in March, after start up. Our grades over the course of the year are 20g/t, very similar to our prior expectations of 19.5g/t. The major reason for the downward revision in production from 242kozs to 219kozs is lower grades at the Mulatos heap leach. For further detail on AGI's guidance assumptions, see the full report or our First Read note from earlier yesterday.

EPS revisions - We have revised our 2011/2012 EPS forecasts downward to $0.54/$1.32 (from $0.56/$1.58) after incorporating lower gold production expectations in today's guidance. Our 2013 EPS estimate has been revised upward to $2.11 (from $1.96) on the back of higher run-rate throughput expectations (17,500tpd) at Mulatos.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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