Alamos becomes debt free following $315m senior secured notes retirement

VANCOUVER (miningweekly.com) – Dual-listed Alamos Gold has completed the redemption of its outstanding $315-million 7.75% senior secured second lien notes due in 2020, resulting in interest savings of $24.4-million a year.

The notes were redeemed at a price of 103.88% of the principal amount plus accrued interest to the date of redemption. The notes were retired with net proceeds of $239-million from an equity financing completed in February, along with existing cash.

"Alamos is, once again, debt-free and will benefit from substantial interest savings over the next several years with the retirement of these notes. We have significantly strengthened our balance sheet and are well positioned to fund our portfolio of attractive internal growth opportunities," president and CEO John McCluskey said on Monday.

The Toronto-based company saw a substantial rise in mine site free cash flow in 2016, reflecting higher output combined with significant cost and capital reductions.

This trend is expected to continue into 2017, with further production growth and cost reductions, driven by the ramp-up of the Young-Davidson mine, in Ontario, and development of La Yaqui Phase I, located near the cornerstone Mulatos mine, in Mexico.

Gold output is forecast to rise to between 400 000 oz and 430 000 oz in 2017. All-in sustaining costs are expected to decrease to $940/oz of gold sold, reflecting further cost reductions at both Young-Davidson and Mulatos.