Good morning, my name is Joanna and I will be your conference operator today. At this time I would like to welcome everyone to the Alamos Gold First Quarter 2020 Results Conference Call and Webcast. I will now like to turn the meeting over to Mr. Jamie Porter, Alamos' Chief Financial Officer. Please go ahead.

Thank you, operator, and thanks, everyone, for attending Alamos' First Quarter 2020 Conference Call. In addition to myself, we have on the line today both, John McCluskey, President and CEO; Peter MacPhail, Vice President and COO. We will be referring to our presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during this call, please refer to the cautionary notes included in the presentation, news release and MD&A as well as the risk factors set out in our annual information form. The technical information in this presentation has been reviewed and approved by Chris Bostwick, our Vice President of Technical Services and a qualified person. Also please bear in mind that all the dollar amounts mentioned in this conference call are in United States dollars unless otherwise noted. Now I'll turn it over to John to provide you with an overview.

Thank you, Jamie. Good morning, everyone, and welcome to the call. We had a number of highlights to start the year in what has been a very challenging environment with the COVID-19 crisis. We had a strong first quarter from operations, while also making good progress on our growth initiatives at Young-Davidson an Island Gold, which we expect will be transformative for the company. We produced 110,800 ounces of gold exceeding the top end of our first quarter guidance, with particularly strong performances at Island Golden and Mulatos. Consolidated total cash costs of $759 per ounce, and all in sustaining costs of $1,010 per ounce, both at the low end of our original annual guidance. Moving to slide 4, our foremost priority has and will continue to be the health and safety of our employees, their families, and our local communities. We are fortunate to not have any confirmed cases of COVID-19 at any of our operations or offices, but that has not stopped us from taking action to help prevent the potential spread of the virus. Throughout March, we instituted a number of increasingly strict health and safety protocols across the company. These range from medical screening for all personnel prior to site entry to social distancing practices across our operation. On March 25, we voluntarily placed Island Gold on temporary care and maintenance. In early April we suspended operations at Mulatos following the mandate by the Mexican Government to suspend all non-essential businesses. In light of the temporary operational suspensions at Island Golden and Mulatos we withdrew 2020 guidance on April 2nd. These suspensions will impact our second quarter results, but not take away from our strong second half outlook. We expect to resume operations that Island Gold in early May and will do so safely in a…

Thank you, John. Moving on to slide 6, we sold a total of 111,900 ounces of gold at a realized price of $1,582 per ounce driving strong first quarter revenues of $177 million. Total cash costs of $759 per ounce and all in sustaining costs of $1,010 per ounce were both at the lower end of our original guidance. In addition to strong operational performances from both Island Gold and Mulatos, our costs are benefiting from both the weaker Canadian dollar and the weaker Mexican peso. And Island Gold our total cash costs decreased to a multiyear low of $452 per ounce. On top of a solid quarter operationally Island Gold's cost benefited from the repurchase of a 3% NSR royalty in March for $55 million. The royalty was payable on the majority of reserves and resources that Island Gold and its repurchase has reduced cost by approximately $45 per ounce, and reduced the effective royalty on reserves to approximately 2.2% from 4.4% previously. We also received terrific news from the Ontario government that Island Gold was accepted into the Northern Industrial Electrical Rebate or NIER program during the quarter, which is expected to reduce electricity costs by approximately 20% going forward. With a strong performance on costs Island Gold generated an impressive $20 million of mine site free cash flow in the first quarter. Operating cash flow before change the non-cash working capital was a near record $82 million or $0.21 per share in the first quarter. Our reported net loss of $12 million or $0.03 per share included unrealized foreign exchange losses of $42 million, largely within deferred taxes that resulted from the significant movements in foreign exchange rates in the quarter. Excluding these items our adjusted net earnings were $29 million or $0.08 per share. Between higher…

Thank you, Jamie. Moving to slide 7, Young-Davidson produced 28,700 ounces in the first quarter. As planned, this was down from previous quarters reflecting lower tons mined process with the shutdown with the Northgate shaft in February to complete the tie in of the upper and lower mines. Prior to the start of the tie in mining rates were consistent with those achieved in 2019 at 6,700 tons per day. This decreased as plan following the start of the tying in February and March to approximately 3000 tons per day with coarse ore trucked to surface from the upper mine. Total cash cost of $193 per ounce and mine site all in sustaining costs of $1,242 per ounce. Both increased from previous quarters due to the planned lower mining and processing rates during the tie in. Costs are expected to temporarily increase in the second quarter until we complete the lower mine expansion. We expect costs to decrease significantly once we begin skipping ore from lower mine infrastructure in July. Over to slide 8, Young-Davidson has continued to operate under strict health and safety protocols. As John noted, we have not had any confirmed cases of COVID 19 amongst any of our employees or contractors and we have implemented a number of measures to help keep it that way. These measures include medical screening before entry to site and physical distancing practices across our sites. To give you some perspective on some of those social distancing practices, we are now allowing only four people in the mine cage, whereas normally we would have about 12. These measures have resulted in some labor and productivity constraints. This is slightly slower progress with the lower mine expansion not expected to be completed in July. Despite these challenges we've made significant progress on…

All right. Thank you, Peter. Thanks, everyone for listening. That concludes our formal presentation. I'll now turn the call over to our operator to open the calls for your questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Dalton Baretto from Canaccord. Please go ahead.

Thank you. Good morning, everybody. And congratulations on an excellent quarter. My first question is around Island Gold. Maybe John or Peter, can you explain to me what a phased restart would look like?

Go ahead, Peter.

Yes. I'm happy to take that. Yes, thanks Dalton. So we're starting up our phase restart his first week, with only local employees, people from the community will then go to day and night shift, again with local employees. And then we'll start bringing in people from outside. We've changed. We used to have the camp right in the middle of town. That camp is still there, but we've added to that through last year and just conditioned camp closer into the mine site. So, we'll be using that predominantly, although we probably still need to use the other one. So, over the course of about a month, we'll be up to full speed.

Perfect, that's helpful. And then just maybe sticking with Island Gold. So, the study the expansion study is almost done. Any chance we can get a sneak peek around the parameters in terms of sizing shaft versus ramp, that sort of thing?

Sure. I think it's we've stated before, we're looking at higher production rates, obviously than 10 to 1200 tons per day where we're currently permitted. We're looking at ramp and shaft. We're looking at several options, but it wouldn't be surprising to see us looking at either a ramp or a shaft option at around 1500 or 1600 ton per day range, and maybe shopping loan options sneaking a bit higher than that. So, that's kind of where we're looking right now.

Okay, perfect. And then just maybe one more for me, then I'll jump back in queue. And I apologize if I missed this in your disclosure. But have you guys looked at La Yaqui in the current exchange rates and deal prices particularly in Mexico?

Yes, Dalton, it's Jamie. We do, we're fairly active on our currency hedging program. So, we have put some hedging in place at the start of the year. And we're continuing to do so now to take advantage of the certainly the weakness in both the Canadian dollar in the Mexican peso. As of now we've got about two thirds of our Canadian dollar exposure for the remainder of the year hedged between about $0.70 to $0.725 and $0.76. And we've got about 80% of our Mexican peso exposure hedged between 19 and 22. We are adding to our hedge positions currently more so in Mexico where we're seeing color ranges of between 22 and 32. So, there's good opportunities now to lock in very, very low currency prices.

Okay, that's helpful, guys. Thanks. I'll jump back in here.

Thank you. The next question comes from Mike Parkin from National Bank. Please go ahead.

Alright guys, thanks and congrats on the good quarter. Couple of questions for me. With regards to Mulatos where are we at with the power line? Is that in site and connected or is that still further upside in terms of cost reductions to come?

Yeah, Mike, it is Peter. No, it is not connected yet, it is actively being worked on. It should be connected later this year probably in the third quarter, it will be barring unforeseen COVID restrictions.

And we have seen the phenomenal drop in cost because of the cap on the royalty. What would this in addition drop costs?

Mike, it is Jamie. It's both another $30 an ounce.

Super. And then with YD, your lower mine connection gets done. What's that do in terms of staffing for the mine? Do you need to add more people? I remember it's quite heavily automated compared to the mid low level loading pocket. Do you have more than sufficient staff on the books now or would you actually be hiring a few in the third quarter?

Now we're pretty static with the staff or the manning levels between the upper mine at 6,700 tons a day and the lower mine ramping up to 7,500 tons a day by the end of the year. It is more automated, so it - you get more bang for your buck there.

Thanks. That's it for me guys. Thanks so much.

Thank you. The next question comes from Cosmos Chiu from CIBC. Please go ahead.

Hi. Thanks John, Jamie and Peter. Maybe first off, just a quick one here, at Island Gold. Could you remind me what percentage of the workforce is actually local versus fly in, fly out?

It's about half and half.

Half and half. Okay. And then maybe Peter as well. In Mexico here clearly a restart is dependent on the Mexican Government giving the okay, maybe as soon as May 18th. But could you talk about is it potentially going to be a staged approach in terms of the restart as well? And if it is then what are the different stages?

Yeah. I think once we get the goal, we would be able to come back a full steam ahead. If it was a staged approach, we have a contingency there where we could - we have quite a stockpile of that subsidic material, it's slightly lower recovery but higher grade. So we could certainly dip into that and just crush that and put on the leach pad with significantly lower numbers on site. So that's in our back pocket if we need it.

Great. And then at YD, as you mentioned at D&A Q1 the throughput went down to about 3000 tons per day, as you connect the lower mine or as you continue to work in the lower mine, now trucking or up the ramps. Is that sort of the throughput that we should be expecting once again in Q2?

Yeah. I think we had guided 2,500 tons a day, so we exceeded that in Q1. We're continuing to try to exceed that. So, I mean, we've established that that's what we can do and we'll try to keep it there.

Yeah, that was my other question as well, Peter, in terms of how were you able to exceed your expectations in Q1? And as you mentioned, can you continue that into Q2?

Good operators.

And then maybe, one last question here, bigger picture. With gold hitting $1700 an ounce and I haven't seen that for a while now, but on the other hand with COVID-19 restrictions, has that changed how you look at capital allocation? Clearly, John, you were active on share buybacks in the past quarter and you have, Island Gold, the expansion study coming in. The potential here at La Yaqui Grande, bigger picture. Has that changed or has it not? And how do you look at it?

Well, it hasn't changed substantially as far as our current capital expenditures plans are concerned. We're well positioned as you know, from a balance sheet perspective to continue with what we're doing. So, we have the option if we want for example, to pick our pace as far as the pre strip at La Yaqui Grande is concerned. So we can approach that a little more aggressively with higher gold prices in view. And of course, we're going to be generating pretty strong free cash flow in the second half of the year, as Young Davidson comes on full steam from the lower mine infrastructure. So I really don't, I don't see us backing off on our current schedule. It's nice to know that if something unexpected happens, we have the option to do that. But we're not planning, we weren't planning any capital expenditures that we couldn't afford to do and part of our financial situation actually looks very strong. So we're in a good position to keep going.

Well, I guess on the other hand, John, would you speed it up? Because, the other factor is that we're hitting fairly high good numbers in terms of the commodity itself. Has that changed your plans? And roping in even like Lynn Lake and some of the other assets as well.

Well, we're going at a very good pace at Lynn Lake right now. And if we thought that the gold price movement was merely a blip. I guess what you would do is you'd push everything as hard as you could to take advantage of the gold price. We don't believe it's a blip. We think these higher prices are going to be around for a number of years ahead. And we think that the production that we have coming online as we bring on new assets will benefit from higher gold prices.

Great. Thank you. Those are the questions I have. Thanks a lot.

Thanks Cosmos.

Thank you. The next question comes from Kerry Smith from Haywood Securities. Please go ahead.

Thanks, operator. Maybe Jamie can answer this question. Just on the hedging. I know you've got just right around 61,000 ounces hedged this year in those callers [ph]. Do you have the flexibility under that hedging program to deliver all your production into the hedge whenever the gold price is below 1709 an ounce or are you mandated to deliver a certain number of ounces every month, let's say? And you can't deliver anymore, despite what the gold price may or may not be?

Kerry, yeah. I mean, we do have some flexibility in terms of being able to roll those contracts or move them forward. But the majority of those contracts are spread out kind of on a monthly basis. So, over the next six or seven months, it's I think about around 8000 ounces a month. The hedge book had no impact on our realized gold prices, as you would have seen. We came in within $1 of the [indiscernible] in the first quarter. And we're right at the kind of top-end of those callers currently. But we are - as we say we're delivering into them on a monthly basis. So there will be - that exposure is pretty limited now. And any additions to the hedge books are obviously substantially higher, substantially higher rate.

And is there a plan then Jamie to add to that hedge book over the course of time, let's say into 2021 today or what is the thought process?

Yeah. So our policy is that we can do up to 20% of our plan kind of steady state production of around 500,000 ounces. Well, so that's 112,000 ounces total only 12 months out. And we're not increasing that limit. We're not extending beyond the 12 months, just given the positive momentum in the gold price. We think it's prudent to be conservative here. So we're doing some short term additional callers. I think we just added some with the 1600 floor and the 1950 ceiling. But we're - like I say we're taking a fairly conservative approach.

Okay. And then maybe Peter just on Mulatos grade in Q1 was quite a bit better than I expected. And I presume the grade at the main pit must have been better than you were budgeting. Because I can't imagine that Pelon delivered that that big bump in grade ore by itself or how did you get that better grade?

Well, Pelon did deliver a big bump in grade. We were mining multiple grams per ton there of oxides and putting it on the pad. So it was really good stuff. The main pit did well as well - I think was maybe a bit higher than planned.

Okay. So the grade at Pelon was quite a bit better than perhaps you were expecting?

No, we were expecting to be too high in the first quarter. It came in around where we expected it actually in first quarter. We expected production to be a bit higher in the first quarter in the first half and the second half.

Okay. Great. Thanks. That's all my questions.

Thank you. The next question is a follow up from Dalton Baretto at Canaccord. Please go ahead.

Thanks again. I just wanted to ask one question on Turkey. John, just given the fiscal situation in Turkey now and just restrictions on COVID-19 and large guidance and that sort of stuff, has that in any way improved your odds of renewing the mining concession in the near term?

I would say it's definitely improved our odds if you want. But I'm not expecting anything imminent, certainly not before the end of Ramadan. And the situation in Turkey, you've got to watch the politics as much as anything else. And, right now the government is facing pressures from multiple sides, but the real key one is the economy. And just like you've seen in many countries, unemployment, which already was suffering in Turkey, Turkey went into a recession two quarters ago. The unemployment rate has soared. And in the region where we are, it's in excess of 25%. So this is something that's going to obviously weight very heavily on the government and even the local party. The government isn't really sort of controlling the local mayorships and they only have half the MPs in that region. So the CHP is fairly prominent in the Canakkale region. They can't really afford to stand very strongly in opposition to investment and employment, regardless of what, one element of that party might think. By and large, the CHP party is very supportive of mining and has been since the very beginning of Turkey. So, I do see things shaping up well for us, just because of economic pressures. And there's also been a very strong shift in sentiment, due to the fact that this whole crisis was essentially, precipitated by a social media campaign that was just all standing on a foundation of life. There's not a single thing they were alleging that was true. So you can get away without for so long. But eventually, given enough time and effort that we've certainly been putting in the effort, you can start to make people question both initial assertions, when they have to stare the facts in the face. So while,…

That’s very comprehensive and helpful. Thanks, John. So if I can ask a follow-up and this is related to what Cosmos was asking earlier on the capital allocation side. If we assume that the mining concessions are renewed in the next few months, let's say, would you guys have the appetite to take on Kirazli, Island Gold Phase 3 and La Yaqui Grande all at the same time?

John, I can touch on that just quickly. And Dalton, I think, our strategy in terms of capital allocation hasn't changed over the last three years. It's been once we start generating that meaningful free cash flow, that we'll start seeing in the second half of this year. A third of it will go to further bolstering our balance sheets of building up our cash balance. A third will go to returning capital to shareholders, which we've been doing with the share buybacks and the dividends. And a third will go to our internal project development pipeline. So that's La Yaqui Grande. I mean, if you look at current prices and at our plant production for next year, Young Davidson and Island Gold will generate, well north of $200 million, between the two of them. Mulatos will generate enough free cash flow to support construction of La Yaqui Grande. And then so will net of all the investment in La Yaqui Grande they will still be generating a free cash. So I think there's room to, if we wanted to go ahead with Kirazli, advance Lynn Lake, while building La Yaqui Grande, there's room to do that within our one third, one third, one third plan. So yeah, I don't see that as being an issue at all. And with respect to the Phase 3 expansion of Island Gold, we'd be looking at about 18 to 24 months of permitting before we'd start spending any significant capital on that. So that doesn't - there's no real cash outflow associated with that for the next couple of years.

Perfect. That's all for me. Thank you, guys.

Thank you. There are no further questions at this time. This concludes this morning's call. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at 416-368-9932 extension 5439. Thank you.