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Alamos Reports Fourth Quarter and Year-end 2013 Results

TORONTO, ONTARIO -- (Marketwired) -- 02/20/14 -- All amounts are in United States dollars, unless otherwise stated.

Alamos Gold Inc. (TSX: AGI)(NYSE: AGI) ("Alamos" or the "Company") today reported its financial results for the quarter and year ended December 31, 2013 and reviewed its operating, exploration and development activities.

"We had another strong year in 2013, achieving the mid-point of guidance with production of 190,000 ounces of gold and record sales of 198,200 ounces at total cash costs of $496 per ounce, below the low end of guidance. Even in the face of a lower gold price, we continued to generate strong operating margins with operating cash flow of $15.1 million and $86.6 million for the fourth quarter and full year 2013, respectively. Removing the impact of the non-cash deferred tax charge resulting from the tax reform in Mexico and severance payments related to our transition to contract mining, we reported fourth quarter earnings of $6.0 million, or $0.05 per share," said John A. McCluskey, President and Chief Executive Officer.

"Our Mulatos mine continues to generate cash flow and through our acquisitions of the Esperanza and Quartz Mountain projects we have assembled one of the strongest growth profiles of our peer group with projects that all work in the current gold price environment. With over $417 million in cash and no debt, our balance sheet remains one of our greatest strengths, affording us the flexibility to not only internally fund our development pipeline but also pursue further growth and value creation opportunities," Mr. McCluskey added.

Fourth Quarter 2013 Highlights

Financial Performance


--  Sold 42,198 ounces of gold for quarterly revenues of $53.8 million
--  Generated cash from operating activities before changes in non-cash
    working capital of $12.7 million ($0.10 per share); after changes in
    non-cash working capital of $15.1 million ($0.12 per share)
--  Recognized a quarterly loss of $5.3 million ($0.04 per share). Earnings
    in the fourth quarter were impacted by a one-time, non-cash deferred tax
    charge of $9.8 million ($0.08 per share) resulting from the recent tax
    reform in Mexico and a $1.5 million ($0.01 per share) charge relating to
    severance payments to be incurred as a result of the transition to
    contract mining
--  Cash and cash equivalents and short-term investments were $417.5 million
    at December 31, 2013

Operational Performance


--  Produced 39,000 ounces of gold at a cash operating cost of $566 per
    ounce of gold sold (total cash costs including royalties were $624 per
    ounce of gold sold)
--  Achieved quarterly average crusher throughput of 17,900 tonnes per day
    ("tpd"), above budget for the fifth consecutive quarter
--  Continued to realize a net positive ounce reconciliation of 13%
    comparing mined blocks from the global Mulatos Pit to the block model
--  Commenced development of the Escondida Deep underground deposit and
    completed the haul road to the El Victor and San Carlos deposits

Full Year 2013 Highlights

Financial Performance


--  Sold a record 198,198 ounces of gold at an average realized price of
    $1,424 per ounce for revenues of $282.2 million
--  Realized earnings of $38.8 million ($0.30 per share) compared to
    earnings of $118.0 million ($0.98 per share) in 2012
--  Generated cash from operating activities before changes in non-cash
    working capital of $113.3 million ($0.89 per basic share) compared to
    $178.5 million ($1.49 per basic share) in 2012
--  Realized proceeds of $111.1 million on the disposition of the Company's
    investment in the common shares of Aurizon Mines Limited ("Aurizon")
--  Completed the acquisition of Esperanza Resources Corporation
    ("Esperanza") for net cash consideration of $44.7 million and the
    issuance of 7.2 million share purchase warrants ("warrants") with a
    five-year term and an exercise price of CAD$29.48
--  Completed the acquisition of Orsa Ventures Corporation ("Orsa") for cash
    consideration of $3.4 million
--  Announced a normal course issuer bid ("NCIB") and repurchased 211,300
    common shares for cancellation.
--  Paid a total of $25.5 million in dividends to shareholders ($0.20 per
    basic share). The Company has paid a total of $71.5 million in dividends
    to shareholders over the past four years

Operational Performance


--  Produced 190,000 ounces of gold at total cash costs (including the 5%
    royalty) of $496 per ounce of gold sold, below the Company's full year
    guidance range of $500 to $520 per ounce
--  Achieved record average crusher throughput of 17,900 tonnes per day
    ("tpd"), above the Company's annual guidance of 17,500 tpd
--  Reported a net positive ounce reconciliation of 8% comparing mined
    blocks from the global Mulatos Pit to the block model

Subsequent to year-end


--  Released 2014 production guidance of 150,000 to 170,000 ounces at total
    cash costs of $700 to $740 per ounce and all-in sustaining costs of $960
    to $1,000 per ounce
--  Repurchased and cancelled 351,500 common shares under the Company's NCIB
    for a total purchase price of $3.3 million

----------------------------------------------------------------------------
                                      Q4 2013    Q4 2012  YTD 2013  YTD 2012
----------------------------------------------------------------------------

Ounces produced                        39,000     67,800   190,000   200,000
Ounces sold                            42,198     62,516   198,198   197,516

Operating Revenues (000)             $ 53,831  $ 106,946 $ 282,187 $ 329,372
Earnings before income taxes (000)   $  6,627  $  51,943 $  79,504 $ 166,925
Earnings (loss) (000)                $ (5,274) $  37,906 $  38,792 $ 117,956
Earnings (loss) per share (basic)    $  (0.04) $    0.31 $    0.30 $    0.98

Cash flow from operating activities
 before changes in non-cash working
 capital (000)                       $ 12,737  $  53,523 $ 113,279 $ 178,534
Cash flow from operating activities
 (000)                               $ 15,086  $  69,145 $  86,627 $ 183,424

Cash and short-term investments
 (000) (2)                                               $ 417,455 $ 353,710

Realized gold price per ounce        $  1,276  $   1,711 $   1,424 $   1,668
Average London PM Fix gold price per
 ounce                               $  1,276  $   1,722 $   1,411 $   1,669

Total cash cost per ounce (1)        $    624  $     460 $     496 $     438
All-in sustaining cost per ounce (1) $    921  $     684 $     772 $     681
All-in cost per ounce (1)            $  1,215  $     841 $     967 $     873

(1)  "Total cash cost per ounce", "All-in sustaining cost per ounce" and
     "All-in cost per ounce" are non-GAAP measures. Refer to the "Cautionary
     non-GAAP Measures and Additional GAAP Measures" disclosure at the end
     of this MD&A for a description and calculation of these measures.
(2)  Cash and short-term investments are shown as at December 31, 2013 and
     December 31, 2012.

Fourth Quarter and Full Year 2013 Financial Results

The Company continued to generate strong operating margins in 2013 despite a substantial decrease in the gold price, as low cash costs contributed to the Company generating $15.1 million ($0.12 per share) cash provided by operating activities in the fourth quarter of 2013. Cash from operating activities decreased 76% relative to the same period of 2012 as a result of lower gold sales.

Earnings before income taxes in the fourth quarter of 2013 were $6.6 million or $0.05 per basic share, compared to $51.9 million or $0.43 per basic share in the fourth quarter of 2012. On an after-tax basis, the Company recorded a loss in the fourth quarter of 2013 of $5.3 million or $0.04 per basic share compared to earnings of $37.9 million in the same period of 2012 as a result of lower gold sales, a one-time deferred tax charge of $9.8 million associated with the recent tax reform in Mexico, and a $1.5 million charge relating to severance payments to be incurred as a result of the transition to contract mining. On a year-to-date basis, cash flow from operations and earnings decreased substantially in 2013 relative to 2012 as a result of a significant decline in the gold price throughout the year.

Capital expenditures in 2013 totalled $59.7 million. Sustaining capital spending in Mexico in 2013 included operating and expansion capital of $19.1 million, consisting of $6.9 million for component changes on mobile equipment, $2.2 million for interlift liners, $1.3 million for mobile equipment, $1.9 million for improvements to the camp at Mulatos, and $5.4 million invested in other smaller capital projects. In 2014, the Company expects sustaining capital to decrease to approximately $13.2 million, as the Company transitions to contract mining.

In addition, the Company invested $20.5 million at Mulatos in expansion capital and capitalized exploration in 2013. This included development of the Escondida Deep area, in order to access high grade ore to provide gravity mill feed, and completing the haul road to the El Victor and San Carlos deposits during the fourth quarter. The Company also invested $17.8 million in development projects in Turkey, focused on engineering, permitting and community relations activities.

Key financial highlights for the three months and years ended 2013 and 2012 are presented at the end of this release in Table 1. The unaudited interim consolidated statements of financial position, comprehensive income, and cash flows for the three months and years ended 2013 and 2012 are presented at the end of this release in Table 2.

Fourth Quarter and Full Year 2013 Operating Results

Gold production of 190,000 ounces in 2013 decreased 5% compared to 200,000 ounces in 2012. In the fourth quarter of 2013, the Mulatos mine produced 39,000 ounces of gold, bringing full year production to the midpoint of the Company's guidance. Production in the fourth quarter was lower than previous quarters as a result of lower than anticipated grades milled from the high grade Escondida deposit.

Total crusher throughput in the fourth quarter of 2013 averaged near record levels of 17,900 tpd, above the annual budgeted rate of 17,500 tpd for the fifth consecutive quarter. For 2013, crusher throughput averaged 17,900 tpd, up 12% from 16,000 tpd in 2012. During the fourth quarter of 2013, mill throughput exceeded budgeted levels at 550 tpd. In 2014, the Company intends to increase mill throughput to an average of 700 tpd.

The grade of the crushed ore stacked on the leach pad in the fourth quarter of 2013 was 0.96 grams per tonne of gold ("g/t Au"). For the full year 2013, the grade of crushed ore stacked on the leach pad was 1.07 g/t Au, above the 2013 budgeted grade of 0.98 g/t Au. The grade of the Escondida high-grade zone mined and milled in the fourth quarter of 2013 was 3.46 g/t Au, below the Company's full year budgeted average grade of 11 g/t Au. For the full year, the grade mined and milled from the Escondida high-grade zone was approximately 6.84 g/t Au.

The reconciliation of mined blocks to the block model for the global Mulatos Pit, including Escondida, for the quarter was +21%, -6% and +13% for tonnes, grade and ounces respectively and for the year ended December 31, 2013 was +15%, -6% and +8% for tonnes, grade and ounces respectively. Since the start of mining activities in 2005, the project-to-date reconciliation is +4%, +5%, +9% for tonnes, grade and ounces, respectively. Positive variances indicate that the Company is mining more gold than was indicated in the reserve model.

The ratio of ounces produced to contained ounces stacked or milled ("recovery ratio") in the fourth quarter was 71% and averaged 73% for 2013, an improvement from 70% achieved in 2012.

Cash operating costs of $426 per ounce of gold sold in 2013 was in line with the Company's full year guidance, and 20% higher than $355 per ounce reported in 2012. This increase is primarily attributable to lower grades mined and milled in 2013 compared to 2012. Including the 5% royalty, total cash costs were $496 per ounce of gold sold in 2013.

Key operational metrics and production statistics for the fourth quarter and full year 2013 compared to the same periods of 2012 are presented in Table 3 at the end of this press release.

Turkey Developments

In August 2013, the Company received an Environmental Impact Assessment ("EIA") Positive Decision Certificate for Kirazli from the Ministry of the Environment and Urbanization (the "Ministry"). The EIA for Agi Dagi has been submitted and is currently under review. In January 2014, the Canakkale Administrative Court in Turkey (the "Court") issued an injunction order to the Ministry regarding its approval of the EIA for the Company's Kirazli project, on the basis that it failed to assess the "cumulative impacts" of the Kirazli project in conjunction with other potential mining projects in the region. Given that there had not previously been any requirement to include such an assessment in such an EIA report, the Ministry is formally challenging the Court's decision to temporarily revoke the EIA on this basis. A hearing on the merits of the claim which formed the basis for the injunction is expected to take place within 6 months. In the interim, the Company will amend its EIA for the Kirazli project to account for the cumulative impact of potential surrounding projects in the event that a revised EIA is required. The Court's basis for the injunction does not relate to concerns with any technical aspect of the Kirazli project.

With the Company already awaiting forestry and operating permits and given the recent political developments in Turkey, including criminal corruption investigations implicating several Government officials, as well as local and federal elections upcoming during the year, the Company does not expect the injunction to significantly alter the development timeline for the Kirazli project.

The Company has budgeted spending of $4.8 million in Turkey in 2014 associated with permitting, community and government relations, and general administration costs only. Given the continuing delay in receipt of key permits, the Company has reduced its headcount and curtailed spending significantly in Turkey. The full development budget for Kirazli and Agi Dagi will be re-initiated once all required permits are received. The capital spending budget for these projects is not expected to differ materially from the June 2012 preliminary feasibility study, with the exception that the recent devaluation of the Turkish Lira would result in significant capital and operating savings that would improve the overall project economics.

Fourth Quarter and Full Year 2013 Exploration Update

Total exploration expenditures in 2013 were $16.1 million. At Mulatos, total exploration spending was $12.1 million. This included $4.9 million of drilling costs at San Carlos and infill drilling at Mulatos, which were capitalized and $7.2 million of drilling costs at East Estrella, El Realito and Puerto del Aire ("PdA"), and administration costs, which were expensed. Total exploration spending in Turkey was $3.0 million, of which $2.7 million was capitalized, focused primarily on infill and step-out drilling at the Camyurt deposit. Further, $1.0 million of spending at the Esperanza gold project was capitalized as development costs. These costs were primarily related to the collection of baseline study data to support resubmission of the EIA.

In 2014, a minimum of 56,100 metres ("m") of reverse-circulation ("RC"), directional drilling, core, and underground core drilling is planned at Mulatos in 2014, focusing on the San Carlos Northeast extension; East Estrella; El Realito and the Mulatos Mine area. Exploration activities at Esperanza will be focused on required work for resubmission of the EIA for the project, which includes 7,000 m of confirmatory and condemnation drilling around the Esperanza deposit. At Quartz Mountain, the Company plans to complete a minimum of 16,000 m of drilling with a focus on infill and expansion drilling.

Outlook

The Company anticipates producing between 150,000 and 170,000 ounces of gold in 2014 at total cash costs of between $700 and $740 per ounce of gold sold, assuming a $1,250 gold price.

The lower gold production planned for 2014 relative to 2013 is primarily attributable to the lower budgeted grade for the mill feed of 5.3 g/t Au due to the transition to Escondida Deep and San Carlos in 2014, as well as a lower budgeted grade stacked on the leach pad of 0.85 g/t Au in 2014 compared to 1.07 g/t Au in 2013. The Company expects to transition to underground mining at Escondida Deep in the second quarter and then to San Carlos in the second half of 2014. With the transition to San Carlos, the Company expects to increase mill throughput rates to an average of 700 tpd in 2014 to help offset the decrease in grade. Underground throughput rates at San Carlos are expected to gradually ramp up to the expanded mill capacity through the second half of the year.

Looking beyond 2014, the Company expects development of the Cerro Pelon and La Yaqui satellite deposits to bring on additional low cost production which will help drive annual production closer to the level achieved in 2013. Both deposits are higher grade than Mulatos and could add annualized production of between 60,000 and 70,000 ounces. The Company continues the legal process to obtain the necessary surface rights to these areas, which is expected to be resolved within 6 months. In the interim, the Company is continuing negotiations with the land owners in an attempt to resolve differences in value expectations prior to the expropriation decision. It is expected that permitting and construction will take 18 months to complete after securing the necessary land access rights.

The 2014 Mulatos capital budget is $43.5 million. Sustaining capital spending is forecast to be approximately $13.2 million in 2014. Development spending of $30.3 million in 2014 will be focused on development of the San Carlos and Escondida Deep areas, in order to access high-grade ore to provide additional gravity mill feed.

The Company's mineral reserve and resource update is expected to be released at the end of the first quarter of 2014. The current focus of exploration at Mulatos is on continuing to delineate high-grade mineral reserves to provide mill feed beyond the life of the Escondida and San Carlos high-grade deposits.

Gold production from the first of the Company's Turkish projects, Kirazli, is expected within 18 months of receipt of the outstanding forestry and operating permits. The Company remains confident that these permits will be granted. However, recent legal developments and political changes have added to the lack of clarity with respect to the expected timing for receipt of these permits. Accordingly, the Company has implemented a cost reduction program in Turkey pending further progress on the current permitting challenges.

With the completion of the Esperanza and Orsa acquisitions in 2013, the Company has grown its development pipeline substantially. Development spending at Esperanza in 2014 of approximately $11.3 million (which includes $2.8 million of exploration spending) will be focused on baseline work required for the resubmission of an EIA report and an internal feasibility study to further support development of the project. Spending at the Quartz Mountain Property will be focused on validating the existing mineral resources.

The Company continues to strengthen its financial position, generating free cash flow from Mulatos in 2013 and ending the year with over $417 million in cash and cash equivalents and no debt. The Company`s development capital and exploration spending in 2014 is all expected to be financed from cash flow, and the Company is well positioned to pursue accretive opportunities and to deliver on its longer term growth objectives.

Associated Documents

This press release should be read in conjunction with the Company's consolidated financial statements for the years ended December 31, 2013 and December 31, 2012 and associated Management's Discussion and Analysis ("MD&A"), which are available from the Company's website, www.alamosgold.com, in the "Investors" section under "Reports and Financials", and on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).

Reminder of Fourth Quarter and Year-End 2013 Results Conference Call

The Company's senior management will host a conference call on Thursday, February 20, 2014 at 12:00 pm ET to discuss the fourth quarter and year-end 2013 financial results and update operating, exploration, and development activities.

Participants may join the conference call by dialling (416) 340-8527 or (877) 677-0837 for calls within Canada and the United States, or via webcast at www.alamosgold.com.

A playback will be available until March 6, 2014 by dialling (905) 694-9451 or (800) 408-3053 within Canada and the United States. The pass code is 8457270. The webcast will be archived at www.alamosgold.com.

About Alamos

Alamos is an established Canadian-based gold producer that owns and operates the Mulatos Mine in Mexico, and has exploration and development activities in Mexico, Turkey and the United States. The Company employs more than 550 people and is committed to the highest standards of sustainable development. Alamos has approximately $410 million in cash and cash equivalents, is debt-free, and unhedged to the price of gold. As of February 19, 2014, Alamos had 127,357,488 common shares outstanding (139,229,554 shares fully diluted), which are traded on the TSX and NYSE under the symbol "AGI".

The TSX and NYSE have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.

Cautionary Note

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact included in this release, including without limitation statements regarding forecast gold production, gold grades, recoveries, waste-to-ore ratios, total cash costs, potential mineralization and reserves, exploration results, and future plans and objectives of Alamos, are forward-looking statements that involve various risks and uncertainties. These forward-looking statements include, but are not limited to, statements with respect to mining and processing of mined ore, achieving projected recovery rates, anticipated production rates and mine life, operating efficiencies, costs and expenditures, changes in mineral resources and conversion of mineral resources to proven and probable reserves, and other information that is based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management.

Exploration results that include geophysics, sampling, and drill results on wide spacings may not be indicative of the occurrence of a mineral deposit. Such results do not provide assurance that further work will establish sufficient grade, continuity, metallurgical characteristics and economic potential to be classed as a category of mineral resource. A mineral resource that is classified as "inferred" or "indicated" has a great amount of uncertainty as to its existence and economic and legal feasibility. It cannot be assumed that any or part of an "indicated mineral resource" or "inferred mineral resource" will ever be upgraded to a higher category of resource. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into proven and probable reserves.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements." Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual events or results to differ from those reflected in the forward-looking statements.

There can be no assurance that forward-looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Alamos' expectations include, among others, risks related to international operations, the actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of gold and silver, as well as those factors discussed in the section entitled "Risk Factors" in Alamos' Annual Information Form. Although Alamos has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Note to U.S. Investors

Alamos prepares its disclosure in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. Terms relating to mineral resources in this presentation are defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Standards on Mineral Resources and Mineral Reserves. The United States Securities and Exchange Commission (the "SEC") permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. Alamos may use certain terms, such as "measured mineral resources", "indicated mineral resources", "inferred mineral resources" and "probable mineral reserves" that the SEC does not recognize (these terms may be used in this presentation and are included in the public filings of Alamos, which have been filed with the SEC and the securities commissions or similar authorities in Canada).

Cautionary non-GAAP Measures and Additional GAAP Measures

Note that for purposes of this section, GAAP refers to IFRS. The Company believes that investors use certain non-GAAP and additional GAAP measures as indicators to assess gold mining companies. They are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP. Non-GAAP and additional GAAP measures do not have a standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures presented by other companies.

(i) Cash flow from operating activities before changes in non-cash working capital

"Cash flow from operating activities before changes in non-cash working capital" is a non-GAAP performance measure that could provide an indication of the Company's ability to generate cash flows from operations, and is calculated by adding back the change in non-cash working capital to "Cash provided by (used in) operating activities" as presented on the Company's consolidated statements of cash flows.

The following table reconciles the non-GAAP measure to the consolidated statements of cash flows.


                                     Q4 2013  Q4 2012   YTD 2013   YTD 2012
                                   -----------------------------------------
Cash flow from operating activities
 - IFRS (000)                       $ 15,087 $ 69,145  $  86,627  $ 183,424
Changes in non-cash working capital
 (000)                                 2,350  (15,622)   (26,652)    (4,890)
                                   -----------------------------------------
Cash flow from operating activities
 before changes in non-cash working
 capital (000)                      $ 12,737 $ 53,523  $ 113,279  $ 178,534
                                   -----------------------------------------
                                   -----------------------------------------

(ii) Mining cost per tonne of ore

"Mining cost per tonne of ore" and "Cost per tonne of ore" are non-GAAP performance measures that could provide an indication of the mining and processing efficiency and effectiveness of the mine. These measures are calculated by dividing the relevant mining and processing costs and total costs by the tonnes of ore processed in the period. "Cost per tonne of ore" is usually affected by operating efficiencies and waste-to-ore ratios in the period. The following table reconciles the non-GAAP measure to the consolidated statements of comprehensive income.


                                    Q4 2013    Q4 2012   YTD 2013   YTD 2012
                                 -------------------------------------------
Mining and processing costs -
 IFRS (000)                       $  23,903  $  23,480  $  84,521  $  70,168
Inventory adjustments and period
 costs (000)                         (2,725)    (1,968)    (1,804)     1,979
                                 -------------------------------------------
Total cost (000)                  $  21,178  $  21,512  $  82,717  $  72,147
Tonnes Ore stacked / milled (000)   1,649.4    1,649.7    6,518.3    5,823.0
                                 -------------------------------------------
Total cost per tonne of ore       $   12.84  $   13.04  $   12.69  $   12.39
                                 -------------------------------------------
                                 -------------------------------------------

(iii) Cash operating costs per ounce and total cash costs per ounce

"Cash operating costs per ounce" and "total cash costs per ounce" as used in this analysis are non-GAAP terms typically used by gold mining companies to assess the level of gross margin available to the Company by subtracting these costs from the unit price realized during the period. These non-GAAP terms are also used to assess the ability of a mining company to generate cash flow from operations. There may be some variation in the method of computation of "cash operating costs per ounce" as determined by the Company compared with other mining companies. In this context, "cash operating costs per ounce" reflects the cash operating costs allocated from in-process and dore inventory associated with ounces of gold sold in the period. "Cash operating costs per ounce" may vary from one period to another due to operating efficiencies, waste-to-ore ratios, grade of ore processed and gold recovery rates in the period. "Total cash costs per ounce" includes "cash operating costs per ounce" plus applicable royalties. Cash operating costs per ounce and total cash costs per ounce are exclusive of exploration costs.

The following table reconciles these non-GAAP measure to the consolidated statements of comprehensive income.


                                    Q4 2013    Q4 2012   YTD 2013   YTD 2012
                                --------------------------------------------
Mining and processing costs -
 IFRS (000)                      $   23,903 $   23,480 $   84,521 $   70,168
Divided by: Gold ounces sold
 (1),(2)                             42,198     62,516    198,198    197,516
                                --------------------------------------------
Total Cash operating costs per
 ounce                           $      566 $      376 $      426 $      355
                                --------------------------------------------
                                --------------------------------------------

Mining and processing costs -
 IFRS (000)                      $   23,903 $   23,480 $   84,521 $   70,168
Royalties - IFRS (000)                2,459      5,255     13,829     16,411
                                --------------------------------------------
Total Cash costs (000)           $   26,362 $   28,735 $   98,350 $   86,579
Divided by: Gold ounces sold         42,198     62,516    198,198    197,516
                                --------------------------------------------
Total Cash costs per ounce       $      624 $      460 $      496 $      438
                                --------------------------------------------
                                --------------------------------------------

(iv) All-in sustaining cost per ounce

Effective 2013, in conjunction with a non-GAAP initiative being undertaken by the gold mining industry, the Company is adopting an "all-in sustaining cost per ounce" non-GAAP performance measure. The Company believes the measure more fully defines the total costs associated with producing gold; however, this performance measure has no standardized meaning. Accordingly, there may be some variation in the method of computation of "all-in sustaining cost per ounce" as determined by the Company compared with other mining companies. In this context, "all-in sustaining cost per ounce" reflects total mining and processing costs, corporate and administrative costs, exploration costs, sustaining capital, and other operating costs. Sustaining capital expenditures are expenditures that do not increase annual gold ounce production at a mine site and excludes all expenditures at the Company's development projects as well as certain expenditures at the Company's operating sites that are deemed expansionary in nature.

The following table reconciles these non-GAAP measures to the consolidated statements of comprehensive income.


                                      Q4 2013    Q4 2012  YTD 2013  YTD 2012
                                   -----------------------------------------
Mining and processing costs (000)   $  23,903  $  23,480 $  84,521 $  70,168
Royalties (000)                         2,459      5,255    13,829    16,411
Corporate and administration (000)
 (1)                                    4,060      4,074    19,964    12,368
Share-based compensation (000)           (740)       876     3,204     7,634
Exploration costs (000) (2)             3,849      1,900    11,379     8,444
Reclamation cost accretion (000)          214        113       902       486
Sustaining capital expenditures
 (000)                                  5,106      7,073    19,118    18,987
                                   -----------------------------------------
                                    $  38,851  $  42,771 $ 152,917 $ 134,498
Divided by: Gold ounces sold           42,198     62,516   198,198   197,516
                                   -----------------------------------------
All-in sustaining cost per ounce    $     921  $     684 $     772 $     681
                                   -----------------------------------------
                                   -----------------------------------------
(1)  Excludes corporate and administration costs incurred at the Company's
     development projects
(2)  Excludes exploration associated with the Company's development projects

(v) All-in cost

Effective 2013, in conjunction with a non-GAAP initiative being undertaken by the gold mining industry, the Company is adopting an "all-in cost per ounce" non-GAAP performance measure; however, this performance measure has no standardized meaning. Accordingly, there may be some variation in the method of computation of "all-in cost per ounce" as determined by the Company compared with other mining companies. In this context, "all-in cost per ounce" reflects total all-in sustaining cash costs, plus capital, operating, and exploration costs associated with the Company's development projects.


                                    Q4 2013    Q4 2012   YTD 2013   YTD 2012
                                --------------------------------------------
All-in sustaining cost (above)   $   38,851 $   42,771 $  152,917 $  134,498
Add: Development and expansion
 capital (000)                       10,782      5,792     33,025     26,645
Add: Turkey / other exploration
 (000)                                1,030      3,334      3,758      9,565
Add: Turkey G&A (000)                   590        682      1,975      1,809
                                --------------------------------------------
                                     51,253     52,579    191,675    172,517
Divided by: Gold ounces sold         42,198     62,516    198,198    197,516
                                --------------------------------------------
All-in cost per ounce            $    1,215 $      841 $      967 $      873
                                --------------------------------------------
                                --------------------------------------------

vi. Other additional GAAP measures

Additional GAAP measures that are presented on the face of the Company's consolidated statements of comprehensive income and are not meant to be a substitute for other subtotals or totals presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. The following additional GAAP measures are used and are intended to provide an indication of the Company's mine and operating performance:


--  Mine operating costs - represents the total of mining and processing,
    royalties, and amortization expense
--  Earnings from mine operations - represents the amount of revenues in
    excess of mining and processing, royalties, and amortization expense.
--  Earnings from operations - represents the amount of earnings before net
    finance income/expense, foreign exchange gain/loss, other income/loss,
    and income tax expense

Table 1: Financial Highlights


----------------------------------------------------------------------------
                  Q4 2013      Q4 2012        2013         2012        2011
----------------------------------------------------------------------------
Cash provided
 by operating
 activities
 before
 changes in
 non-cash
 working
 capital
 (000)(1) (2)     $12,730      $53,523    $113,279     $178,534    $107,226
Changes in
 non-cash
 working
 capital           $2,357      $15,622    ($26,652)      $4,890       ($692)
Cash provided
 by operating
 activities
 (000)            $15,087      $69,145     $86,627     $183,424    $106,534
Earnings
 before
 income taxes
 (000)             $6,627      $51,943     $79,504     $166,925    $105,935
Earnings
 (loss) (000)     ($5,274)     $37,906     $38,792     $117,956     $60,081
Earnings
 (loss) per
 share
- basic            ($0.04)       $0.31       $0.30        $0.98       $0.51
- diluted          ($0.04)       $0.31       $0.30        $0.98       $0.51
Comprehensive
 income (000)     ($6,078)     $38,812     $38,763     $117,972     $60,333
Weighted
 average
 number of
 common
 shares
 outstanding
- basic       127,709,000  120,796,000 127,340,000  119,861,000 117,375,000
- diluted     127,757,000  121,746,000 127,480,000  120,904,000 118,669,000
Assets (000)
 (3)                                      $898,028     $753,856    $599,224

(1)  A non-GAAP measure calculated as cash provided by operating activities
     as presented on the consolidated statements of cash flows and adding
     back changes in non-cash working capital.
(2)  Refer to "Cautionary non-GAAP Measures and Additional GAAP Measures"
     disclosure at the end of this MD&A for a description and calculation of
     this measure.
(3)  Assets are shown as at December 31, 2013, December 31, 2012, and
     December 31, 2011.

Table 2: Unaudited Consolidated Statements of Financial Position, Comprehensive Income, and Cash Flows

ALAMOS GOLD INC.

Consolidated Statements of Financial Position

(Unaudited - stated in thousands of United States dollars)


                                                December 31,   December 31,
                                                        2013           2012
                                              ------------------------------
ASSETS
Current Assets
Cash and cash equivalents                      $     409,663  $     306,056
Short-term investments                                 7,792         47,654
Available-for-sale securities                          1,896         10,340
Other financial assets                                   442          1,118
Amounts receivable                                    11,200          7,647
Advances and prepaid expenses                          9,068          3,207
Inventory                                             37,972         42,046
                                              ------------------------------
Total Current Assets                                 478,033        418,068

Non-Current Assets
Other non-current assets                               2,696          1,058
Exploration and evaluation assets                    214,387        127,015
Mineral property, plant and equipment                202,912        207,715
                                              ------------------------------
Total Assets                                   $     898,028  $     753,856

LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities       $      23,487  $      24,874
Income taxes payable                                   1,783         15,497
                                              ------------------------------
Total Current Liabilities                             25,270         40,371

Non-Current Liabilities
Deferred income taxes                                 38,715         38,365
Decommissioning liability                             21,406         13,934
Other liabilities                                        690            714
                                              ------------------------------
Total Liabilities                                     86,081         93,384
                                              ------------------------------

EQUITY
Share capital                                  $     510,473  $     393,752
Warrants                                              21,667              -
Contributed surplus                                   24,236         22,606
Accumulated other comprehensive loss                  (1,093)        (1,064)
Retained earnings                                    256,664        245,178
                                              ------------------------------
Total Equity                                         811,947        660,472
                                              ------------------------------
Total Liabilities and Equity                   $     898,028  $     753,856
                                              ------------------------------

ALAMOS GOLD INC.

Consolidated Statements of Comprehensive Income

(Unaudited - stated in thousands of United States dollars, except per share amounts)


                            For the three-month
                                  periods ended          For the year ended
                    --------------------------------------------------------
                     December 31,  December 31,  December 31,  December 31,
                             2013          2012          2013          2012
                    --------------------------------------------------------
OPERATING REVENUES   $     53,831       106,946  $    282,187  $    329,372
                    --------------------------------------------------------

MINE OPERATING COSTS
Mining and
 processing                23,903        23,480        84,521        70,168
Royalties                   2,459         5,255        13,829        16,411
Amortization               11,247        18,115        56,488        50,678
                    --------------------------------------------------------
                           37,609        46,850       154,838       137,257
                    --------------------------------------------------------
EARNINGS FROM MINE
 OPERATIONS                16,222        60,096       127,349       192,115

EXPENSES
Exploration                 3,282         1,448         7,559         6,488
Corporate and
 administrative             4,650         4,758        21,939        14,177
Share-based
 compensation                (740)          876         3,204         7,634
                    --------------------------------------------------------
                            7,192         7,082        32,702        28,299
                    --------------------------------------------------------
EARNINGS FROM
 OPERATIONS                 9,030        53,014        94,647       163,816

OTHER INCOME
 (EXPENSES)
Finance income                797           689         3,131         3,133
Financing expense            (224)         (148)         (912)         (536)
Foreign exchange
 (loss) gain                 (917)         (833)       (8,312)           14
Other (loss) income        (2,059)         (779)       (9,050)          498
                    --------------------------------------------------------
EARNINGS BEFORE
 INCOME TAXES FOR
 THE PERIOD                 6,627        51,943        79,504       166,925

INCOME TAXES
Current tax expense        (5,751)      (19,265)      (40,362)      (45,612)
Deferred tax
 recovery (expense)        (6,150)        5,228          (350)       (3,357)
                    --------------------------------------------------------
EARNINGS (LOSS) FOR
 THE PERIOD          $     (5,274) $     37,906  $     38,792  $    117,956

Other comprehensive
 income (loss) to be
 reclassified to
 profit or loss in
 subsequent periods:
- Unrealized loss on
 securities                  (804)       (1,065)       (2,697)       (2,350)
- Reclassification
 of realized losses
 (gains) on
 available-for-sale
 securities included
 in earnings                    -         1,971         2,668         2,366
                    --------------------------------------------------------
COMPREHENSIVE INCOME
 (LOSS) FOR THE
 PERIOD              $     (6,078) $     38,812  $     38,763  $    117,972
                    --------------------------------------------------------

EARNINGS PER SHARE
- basic              $      (0.04) $       0.31  $       0.30  $       0.98
- diluted            $      (0.04) $       0.31  $       0.30  $       0.98
                    --------------------------------------------------------
Weighted average
 number of common
 shares outstanding
- basic               127,709,000   120,796,000   127,340,000   119,861,000
- diluted             127,757,000   121,746,000   127,480,000   120,904,000
                    --------------------------------------------------------

ALAMOS GOLD INC.

Consolidated Statements of Cash Flows

(Unaudited - stated in thousands of United States dollars)


                              For the three-month
                                    periods ended       For the years ended
                        December 31, December 31, December 31, December 31,
                                2013         2012         2013         2012
                        ----------------------------------------------------
CASH PROVIDED BY (USED
 IN):
OPERATING ACTIVITIES
Earnings (loss) for the
 period                  $    (5,274)      37,906  $    38,792  $   117,956
Adjustments for items
 not involving cash:
  Amortization                11,247       18,115       56,488       50,678
  Financing expense              224          148          912          536
  Unrealized foreign
   exchange loss (gain)          900          722        5,938       (1,352)
  Deferred tax
   (recovery) expense          6,150       (5,228)         350        3,357
  Share-based
   compensation                 (740)         876        3,204        7,634
  Loss (gain) on sale of
   securities                      -        1,390        6,840          460
  Other                          230         (406)         755         (735)
Changes in non-cash
 working capital:
  Fair value of forward
   contracts                       -         (150)           -            -
  Amounts receivable          (5,855)      (4,142)     (21,356)     (18,865)
  Inventory                    1,928        3,365       (2,797)      (5,655)
  Advances and prepaid
   expenses                    4,770         (673)      (4,311)      (1,090)
  Accounts payable and
   accrued liabilities,
   and income taxes
   payable                     1,507       17,222        1,812       30,500
                        ----------------------------------------------------
                              15,087       69,145       86,627      183,424
                        ----------------------------------------------------
INVESTING ACTIVITIES
Sales (purchases) of
 securities                        -       (6,470)     111,116         (185)
Short-term investments
 (net)                        (4,104)     (17,785)      39,862        5,434
Contractor advances             (385)           -       (1,440)           -
Acquisition of Esperanza           -            -      (44,663)           -
Acquisition of Orsa                -            -       (3,403)           -
Exploration and
 evaluation assets            (5,920)      (7,307)     (21,437)     (18,561)
Mineral property, plant
 and equipment               (11,575)      (9,511)     (38,295)     (38,815)
                        ----------------------------------------------------
                             (21,984)     (41,073)      41,740      (52,127)
                        ----------------------------------------------------
FINANCING ACTIVITIES
Common shares issued               -        3,746        4,883       28,178
Shares repurchased and
 cancelled                         -            -       (2,624)           -
Dividends paid               (12,770)     (12,073)     (25,519)     (24,023)
                        ----------------------------------------------------
                             (12,770)      (8,327)     (23,260)       4,155
                        ----------------------------------------------------
Effect of exchange rates
 on cash and cash
 equivalents                    (640)        (731)      (1,500)       1,133
                        ----------------------------------------------------
Net increase (decrease)
 in cash and cash
 equivalents                 (20,307)      19,014      103,607      136,585
Cash and cash
 equivalents - beginning
 of the period               429,970      287,042      306,056      169,471
                        ----------------------------------------------------
CASH AND CASH
 EQUIVALENTS - END OF
 PERIOD                  $   409,663  $   306,056  $   409,663  $   306,056
                        ----------------------------------------------------

Table 3: Production Summary & Statistics (1)


----------------------------------------------------------------------------
Production
 summary          Q1 2013   Q2 2013   Q3 2013   Q4 2013   YTD 2013  YTD 2012
----------------------------------------------------------------------------

Ounces produced
 (1)               55,000    53,000    43,000    39,000    190,000   200,000

Crushed ore
 stacked on
 leach pad
 (tonnes) (2)   1,568,400 1,552,000 1,610,000 1,598,600  6,329,000 5,646,000
Grade (g/t Au)       1.25      1.10      0.99      0.96       1.07      1.19
                ------------------------------------------------------------
Contained
 ounces stacked    63,100    54,800    51,300    49,300    218,500   216,000

Crushed ore
 milled
 (tonnes)          45,600    46,000    46,900    50,800    189,300   176,500
Grade (g/t Au)       6.59     10.94      6.73      3.46       6.84     12.49
                ------------------------------------------------------------
Contained
 ounces milled      9,600    16,200    10,100     5,700     41,600    70,900

Ratio of total
 ounces
 produced to
 contained
 ounces stacked
 and milled           76%       75%       70%       71%        73%       70%

Total ore mined
 (tonnes)       1,509,000 1,900,000 1,777,000 1,843,000  7,029,000 5,786,000
Waste mined
 (tonnes)         702,000   907,000   992,000   784,000  3,385,000 3,360,000
                ------------------------------------------------------------
Total mined
 (tonnes)       2,211,000 2,807,000 2,769,000 2,627,000 10,414,000 9,146,000

Waste-to-ore
 ratio               0.46      0.48      0.56      0.46       0.48      0.58

Ore crushed per
 day (tonnes) -
 combined          17,900    17,600    18,000    17,900     17,900    16,000

(1)  Reported gold production for Q4 2013 and YTD 2013 is subject to final
     refinery settlement and may be adjusted.
(2)  Excludes mill tailings stacked on the heap leach pad during the period.

Contacts:
Alamos Gold Inc.
Scott K. Parsons
Director, Investor Relations
(416) 368-9932 x 439
www.alamosgold.com

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