Shares of Alamos Gold (NYSE:AGI) are up 11% as of 11:15 a.m. EDT following the release of the miner's second-quarter earnings.
Alamos Gold announced fiscal Q2 earnings this morning, reporting that it made "significant gains," achieved "record production," and produced "the highest combined free cash flow from our operations in years" -- all of which sounds pretty good. Now here's what it means in dollars and cents.
Alamos produced 105,900 ounces of gold at a cost of sales of $1,053 per ounce in the quarter, then turned around and sold most of that gold (104,023 ounces) at an average price of $1,262 per ounce. This produced $131.3 million in revenue for the company, and profits of $0.01 per share. The company exceeded analyst expectations for sales (Wall Street had been looking for only $126.4 million in sales), and met expectations for profits.
Free cash flow for the quarter was $18 million.
Having beat the Street once, Alamos now seems ready to repeat the feat. CEO John A. McCluskey told investors that the same wide divide between its costs and its selling price for gold will "continue in the second half of the year with stronger production and lower costs driving strong free cash flow growth from our operations."
That would be a nice change. According to data from S&P Global Market Intelligence, it's been about six years since Alamos managed to produce a full year of positive free cash flow. Despite Q2's strong results, Alamos actually remains $13.3 million in the red, free cash flow-wise, over the past 12 months. If that trend is about to reverse, and Alamos can succeed in producing cash as well as gold, investors may be right to be optimistic.
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