EX-99.2 3 ex99203312020quarterlyfs.htm EXHIBIT 99.2
ALAMOS GOLD INC.

FIRST QUARTER 2020 REPORT
March 31, 2020
(Prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”) and stated in millions of United States dollars, unless otherwise indicated)
INDEX
Unaudited Condensed Interim Consolidated Financial Statements
▪Condensed Interim Consolidated Statements of Financial Position
▪Condensed Interim Consolidated Statements of Comprehensive (Loss) Income
▪Condensed Interim Consolidated Statements of Changes in Equity
▪Condensed Interim Consolidated Statements of Cash Flows
▪Notes to Condensed Interim Consolidated Financial Statements

|  | Q1 2020 FINANCIAL REPORT

ALAMOS GOLD INC.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited - stated in millions of United States dollars)

| March 31, 2020 |  |  | December 31, 2019 |
A S S E T S |  |  |
Current Assets |  |  |
Cash and cash equivalents |  | $214.7 |  |  |  | $182.8 |
Equity securities | 15.6 |  |  | 22.8 |
Amounts receivable (note 3) | 42.8 |  |  | 37.4 |
Income taxes receivable | 6.6 |  |  | 4.6 |
Inventory (note 4) | 132.0 |  |  | 126.9 |
Other current assets | 15.9 |  |  | 19.8 |
Total Current Assets | 427.6 |  |  | 394.3 |
Non-Current Assets |  |  |
Long-term inventory (note 4) | 25.3 |  |  | 25.7 |
Mineral property, plant and equipment (note 5) | 3,009.7 |  |  | 2,933.4 |
Other non-current assets | 41.2 |  |  | 43.1 |
Total Assets | $3,503.8 |  |  | $3,396.5 |
L I A B I L I T I E S |  |  |
Current Liabilities |  |  |
Accounts payable and accrued liabilities (note 6) |  | $124.2 |  |  |  | $127.3 |
Total Current Liabilities | 124.2 |  |  | 127.3 |
Non-Current Liabilities |  |  |
Deferred income taxes | 563.0 |  |  | 513.7 |
Decommissioning liabilities | 55.7 |  |  | 57.1 |
Debt and financing obligations (note 7) | 100.0 |  |  | — |
Other non-current liabilities | 3.0 |  |  | 3.1 |
Total Liabilities | 845.9 |  |  | 701.2 |
E Q U I T Y |  |  |
Share capital (note 8) |  | $3,690.5 |  |  |  | $3,693.3 |
Contributed surplus | 89.7 |  |  | 90.7 |
Accumulated other comprehensive loss | (18.4 | ) |  | (0.2 | )
Deficit | (1,103.9 | ) |  | (1,088.5 | )
Total Equity | 2,657.9 |  |  | 2,695.3 |
Total Liabilities and Equity |  | $3,503.8 |  |  |  | $3,396.5 |

Commitments (note 13)
The accompanying notes form an integral part of these condensed interim consolidated financial statements.

2 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

ALAMOS GOLD INC.
Condensed Interim Consolidated Statements of Comprehensive (Loss) Income
(Unaudited - stated in millions of United States dollars, except share and per share amounts)

| For three months ended
| March 31, |  | March 31,
| 2020 |  | 2019
OPERATING REVENUES |  | $176.9 |  |  |  | $156.1 |
COST OF SALES |  |  |
Mining and processing | 82.5 |  |  | 82.2 |
Royalties (note 13) | 2.4 |  |  | 5.4 |
Amortization | 35.4 |  |  | 39.4 |
| 120.3 |  |  | 127.0 |
EXPENSES |  |  |
Exploration | 2.0 |  |  | 1.6 |
Corporate and administrative | 6.2 |  |  | 5.5 |
Share-based compensation (note 8) | 2.2 |  |  | 3.3 |
| 130.7 |  |  | 137.4 |
EARNINGS FROM OPERATIONS | 46.2 |  |  | 18.7 |
OTHER EXPENSES |  |  |
Finance expense | (0.8 | ) |  | (0.5 | )
Foreign exchange (loss) gain | (5.1 | ) |  | 0.2 |
Other gain (note 9) | 0.2 |  |  | 2.2 |
EARNINGS BEFORE INCOME TAXES |  | $40.5 |  |  |  | $20.6 |
INCOME TAXES |  |  |
Current income tax recovery (expense) | 0.3 |  |  | (7.5 | )
Deferred income tax (expense) recovery | (53.1 | ) |  | 3.7 |
NET (LOSS) EARNINGS | ($12.3 | ) |  | $16.8 |
Items that may be subsequently reclassified to net earnings: |  |  |
Unrealized (loss) gain on currency hedging instruments, net of taxes | (11.4 | ) |  | 3.3 |
Unrealized (loss) gain on fuel hedging instruments, net of taxes | (0.8 | ) |  | 0.6 |
Items that will not be reclassified to net earnings: |  |  |
Unrealized (loss) gain on equity securities, net of taxes | (6.0 | ) |  | 2.3 |
Total other comprehensive (loss) income | ($18.2 | ) |  | $6.2 |
COMPREHENSIVE (LOSS) INCOME | ($30.5 | ) |  | $23.0 |
(LOSS) EARNINGS PER SHARE (note 8(d)) |  |  |
– basic | ($0.03 | ) |  | $0.04 |
– diluted | ($0.03 | ) |  | $0.04 |
Weighted average number of common shares outstanding (000's) |  |  |
– basic | 391,341 |  |  | 389,735 |
– diluted | 391,341 |  |  | 394,196 |

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

3 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

ALAMOS GOLD INC.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited - stated in millions of United States dollars)

| For three months ended
| March 31, |  | March 31,
| 2020 |  | 2019
SHARE CAPITAL (note 8) |  |  |
Balance, beginning of the year | $3,693.3 |  |  | $3,705.2 |
Repurchase and cancellation of common shares | (5.7 | ) |  | (24.4 | )
Repurchase of common shares | (2.6 | ) |  | — |
Issuance of shares related to share-based compensation | 3.9 |  |  | 0.6 |
Issuance of shares related to dividend reinvestment plan | 0.3 |  |  | — |
Transfer from contributed surplus of share-based compensation redeemed | 1.3 |  |  | 0.4 |
Balance, end of period | $3,690.5 |  |  | $3,681.8 |
CONTRIBUTED SURPLUS |  |  |  |  |
Balance, beginning of the year | $90.7 |  |  | $87.3 |
Share-based compensation | 1.2 |  |  | 1.8 |
Transfer to share capital of share-based compensation redeemed | (1.3 | ) |  | (0.4 | )
Distribution of share-based compensation | (0.9 | ) |  | — |
Reclassification of expiration of warrants | — |  |  | 3.9 |
Balance, end of period | $89.7 |  |  | $92.6 |
WARRANTS |  |  |
Balance, beginning of the year | $— |  |  | $3.9 |
Expiration of warrants | — |  |  | (3.9 | )
Balance, end of period | — |  |  | — |
ACCUMULATED OTHER COMPREHENSIVE LOSS |  |  |  |  |
Balance, beginning of the year on currency hedging instruments | $4.6 |  |  | (1.4 | )
Unrealized (loss) gain on currency hedging instruments, net of taxes | (11.4 | ) |  | 3.3 |
| ($6.8 | ) |  | $1.9 |
Balance, beginning of the year on fuel hedging instruments | — |  |  | (0.5 | )
Unrealized (loss) gain on fuel hedging instruments, net of taxes | (0.8 | ) |  | 0.6 |
| ($0.8 | ) |  | $0.1 |
Balance, beginning of the year on equity securities | ($4.8 | ) |  | ($7.3 | )
Unrealized (loss) gain on equity securities, net of taxes | (6.0 | ) |  | 2.3 |
| ($10.8 | ) |  | ($5.0 | )
Balance, end of period | ($18.4 | ) |  | ($3.0 | )
DEFICIT |  |  |  |  |
Balance, beginning of the year | ($1,088.5 | ) |  | ($1,184.9 | )
Dividends (note 8(e)) | (5.9 | ) |  | (3.9 | )
Repurchase and cancellation of common shares (note 8) | 2.8 |  |  | 13.8 |
Net (loss) earnings | (12.3 | ) |  | 16.8 |
Balance, end of period | ($1,103.9 | ) |  | ($1,158.2 | )
TOTAL EQUITY | $2,657.9 |  |  | $2,613.2 |

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

4 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

ALAMOS GOLD INC.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited - stated in millions of United States dollars)

| For three months ended
| March 31, |  | March 31,
| 2020 |  | 2019
CASH PROVIDED BY (USED IN): |  |  |
OPERATING ACTIVITIES |  |  |
Net (loss) earnings for the period | ($12.3 | ) |  | $16.8 |
Adjustments for items not involving cash: |  |  |
Amortization | 35.4 |  |  | 39.4 |
Foreign exchange loss (gain) | 5.1 |  |  | (0.2 | )
Current income tax (recovery) expense | (0.3 | ) |  | 7.5 |
Deferred income tax expense (recovery) | 53.1 |  |  | (3.7 | )
Share-based compensation | 2.2 |  |  | 3.3 |
Finance expense | 0.8 |  |  | 0.5 |
Other items (note 10) | (2.3 | ) |  | (1.5 | )
Changes in working capital and cash taxes (note 10) | (25.1 | ) |  | (19.7 | )
| 56.6 |  |  | 42.4 |
INVESTING ACTIVITIES |  |  |
Mineral property, plant and equipment | (63.3 | ) |  | (53.3 | )
Repurchase of Island Gold royalty (note 5) | (54.8 | ) |  | — |
| (118.1 | ) |  | (53.3 | )
FINANCING ACTIVITIES |  |  |
Proceeds from draw down of credit facility (note 7) | 100.0 |  |  | — |
Repayment of equipment financing obligations | (0.2 | ) |  | (1.1 | )
Repurchase and cancellation of common shares (note 8) | (2.9 | ) |  | (10.6 | )
Proceeds from the exercise of options | 3.9 |  |  | 0.6 |
Dividends paid | (5.6 | ) |  | (3.9 | )
| 95.2 |  |  | (15.0 | )
Effect of exchange rates on cash and cash equivalents | (1.8 | ) |  | 0.5 |
Net increase (decrease) in cash and cash equivalents | 31.9 |  |  | (25.4 | )
Cash and cash equivalents - beginning of period | 182.8 |  |  | 206.0 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $214.7 |  |  | $180.6 |

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

5 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

ALAMOS GOLD INC.
Notes to Condensed Interim Consolidated Financial Statements
March 31, 2020 and 2019
(Unaudited - in United States dollars, unless otherwise indicated, tables stated in millions of United States dollars)

1. | NATURE OF OPERATIONS

Alamos Gold Inc. ("Alamos"), a company incorporated under the Business Corporation Act (Ontario), and its wholly-owned subsidiaries (collectively the “Company”) are engaged in the acquisition, exploration, development and extraction of precious metals. The Company owns and operates the Young-Davidson and Island Gold mines in Canada, as well as the Mulatos mine in Mexico. In addition, the Company owns the Kirazlı, Ağı Dağı and Çamyurt gold development projects in Turkey, the Lynn Lake gold project in Canada, the Esperanza gold project in Mexico, as well as an option to acquire a 100% interest in the Quartz Mountain gold project in Oregon, USA.
Alamos is a publicly traded company with common shares listed on the Toronto Stock Exchange (TSX: AGI) and the New York Stock Exchange (NYSE: AGI).
The Company’s registered office is located at 181 Bay Street, Suite 3910, Toronto, Ontario, M5J 2T3.

2. | BASIS OF PREPARATION

Statement of Compliance
These condensed interim consolidated financial statements are prepared in accordance with IAS 34, Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”). These statements were prepared using the same accounting policies and methods of computation as the Company’s consolidated financial statements for the year ended December 31, 2019, except as noted below.
These condensed interim consolidated financial statements do not include all disclosures required by International Financial Reporting Standards (“IFRS”) for annual consolidated financial statements and accordingly should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2019, prepared in accordance with IFRS as issued by the IASB.
The Company adopted the following accounting standards and amendments to accounting standards, effective January 1, 2020:
On October 22, 2018, the IASB issued amendments to IFRS 3 Business Combinations, that seek to clarify whether a transaction results in an asset or a business acquisition. The amendments include an election to use a concentration test. This is a simplified assessment that results in an asset acquisition if substantially all of the fair value of the gross assets is concentrated in a single identifiable asset or a group of similar identifiable assets. If a preparer chooses not to apply the concentration test, or the test is failed, then the assessment focuses on the existence of a substantive process. The amendments apply to businesses acquired in annual reporting periods beginning on or after January 1, 2020. The Company will apply the requirements of the amendments to transactions entered into after January 1, 2020.
On September 26, 2019, the IASB issued amendments for some of its requirements for hedge accounting in IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement, as well as the related Standard on disclosures, IFRS 7 Financial Instruments: Disclosures in relation to Phase 1 of IBOR Reform and its Effects on Financial Reporting project.
The amendments are designed to support the provision of useful financial information by companies during the period of uncertainty arising from the phasing out of interest-rate benchmarks such as interbank offered rates (IBORs). The amendments modify some specific hedge accounting requirements to provide relief from potential effects of the uncertainty caused by the IBOR reform. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties. The amendments are effective from January 1, 2020, and did not have any impact on the Company.
The condensed interim consolidated financial statements were authorized for issue by the Board of Directors on April 28, 2020.

6 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

3. | AMOUNTS RECEIVABLE

| March 31, 2020 |  | December 31, 2019 |
Sales tax receivables |  |  |
Canada | $10.3 |  | $8.9 |
Mexico | 22.5 |  | 18.1 |
Other | 5.4 |  | 5.7 |
Other receivables | 4.6 |  | 4.7 |
| $42.8 |  | $37.4 |

4. | INVENTORY

| March 31, 2020 |  | December 31, 2019 |
In-process precious metals | $64.7 |  | $59.0 |
Ore in stockpiles | 34.2 |  | 33.4 |
Parts and supplies | 49.9 |  | 49.2 |
Dore, refined precious metals and gold in concentrate | 8.5 |  | 11.0 |
| 157.3 |  | 152.6 |
Less: Long-term inventory | (25.3 | ) | (25.7 | )
| $132.0 |  | $126.9 |

Long term inventory consists of long-term stockpiles which are expected to be recovered after one year.
The amount of inventories recognized in mining and processing costs for the three months ended March 31, 2020 was $83.9 million (three months ended March 31, 2019 - $84.1 million). The amount of inventories recognized in amortization costs for the three months ended March 31, 2020 was $35.4 million (three months ended March 31, 2019 - $39.4 million).

7 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

5. | MINERAL PROPERTY, PLANT AND EQUIPMENT

|  | Mineral property |  |
| Plant and equipment | Depletable | Non-depletable | Exploration and evaluation | Total
Cost |  |  |  |  |
At December 31, 2018 | $1,185.7 |  | $2,314.1 |  | $95.8 |  | $250.8 |  | $3,846.4 |
Additions | 125.2 |  | 131.9 |  | 9.1 |  | 11.6 |  | 277.8 |
Revisions to decommissioning liabilities | — |  | 13.3 |  | — |  | — |  | 13.3 |
Right-of-use assets | 2.4 |  | — |  | — |  | — |  | 2.4 |
Disposals | (1.9 | ) | — |  | — |  | — |  | (1.9 | )
At December 31, 2019 | $1,311.4 |  | $2,459.3 |  | $104.9 |  | $262.4 |  | $4,138.0 |
Additions | 3.5 |  | 47.5 |  | 8.0 |  | 3.4 |  | 62.4 |
Repurchase of Island Gold royalty (i) | — |  | 54.8 |  | — |  | — |  | 54.8 |
At March 31, 2020 | $1,314.9 |  | $2,561.6 |  | $112.9 |  | $265.8 |  | $4,255.2 |
Accumulated amortization and impairment charges |  |  |
At December 31, 2018 | $397.1 |  | $624.6 |  | $5.1 |  | $6.3 |  | $1,033.1 |
Amortization | 67.7 |  | 105.0 |  | — |  | — |  | 172.7 |
Disposals | (1.2 | ) | — |  | — |  | — |  | (1.2 | )
At December 31, 2019 | $463.6 |  | $729.6 |  | $5.1 |  | $6.3 |  | $1,204.6 |
Amortization | 10.5 |  | 30.4 |  | — |  | — |  | 40.9 |
At March 31, 2020 | $474.1 |  | $760.0 |  | $5.1 |  | $6.3 |  | $1,245.5 |
Net carrying value |  |  |  |  |
At December 31, 2019 | $847.8 |  | $1,729.7 |  | $99.8 |  | $256.1 |  | $2,933.4 |
At March 31, 2020 | $840.8 |  | $1,801.6 |  | $107.8 |  | $259.5 |  | $3,009.7 |

The net carrying values by segment (note 11) are as follows:

|  | Mineral property |  |
| Plant and equipment | Depletable | Non-depletable | Exploration and evaluation | Total
Young-Davidson | $670.5 |  | $707.1 |  | $107.8 |  | — |  | $1,485.4 |
Mulatos | 73.7 |  | 165.0 |  | — |  | — |  | 238.7 |
Island Gold | 89.8 |  | 793.7 |  | — |  | — |  | 883.5 |
Kirazlı | 0.3 |  | 135.8 |  | — |  | — |  | 136.1 |
Corporate and other | 6.5 |  | — |  | — |  | 259.5 |  | 266.0 |
At March 31, 2020 | $840.8 |  | $1,801.6 |  | $107.8 |  | $259.5 |  | $3,009.7 |
Young-Davidson | $658.0 |  | $709.6 |  | $99.8 |  | — |  | $1,467.4 |
Mulatos | 82.6 |  | 161.4 |  | — |  | — |  | 244.0 |
Island Gold | 99.9 |  | 724.4 |  | — |  | — |  | 824.3 |
El Chanate | 0.2 |  | — |  | — |  | — |  | 0.2 |
Kirazlı | 0.3 |  | 134.3 |  | — |  | — |  | 134.6 |
Corporate and other | 6.8 |  | — |  | — |  | 256.1 |  | 262.9 |
At December 31, 2019 | $847.8 |  | $1,729.7 |  | $99.8 |  | $256.1 |  | $2,933.4 |

8 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

(i) Repurchase of Island Gold Royalty
During the three months ended March 31, 2020, the Company acquired and canceled a 3% net smelter return royalty payable on production from certain claims at the Island Gold mine for consideration of $54.8 million.
Other
The carrying value of construction in progress at March 31, 2020 was $230.2 million (December 31, 2019 - $203.7 million).

6. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

| March 31, 2020 |  | December 31, 2019 |
Trade accounts payable and accrued liabilities | $103.4 |  | $118.3 |
Royalties payable | 2.4 |  | 4.4 |
Share-based compensation liability | 4.2 |  | 3.8 |
Current portion of leases | 0.6 |  | 0.8 |
Derivative liabilities (note 12) | 13.6 |  | — |
|  | $124.2 |  |  | $127.3 |

7. | REVOLVING CREDIT FACILITY

In 2019, the Company increased the existing credit facility (the "Facility"), from $400.0 million to $500.0 million, expiring on December 17, 2023. The Facility bears interest at a rate of Libor plus 1.875% on drawn amounts and stand-by fees of 0.42% on undrawn amounts.
During the period ending March 31, 2020, the Company drew $100.0 million from the Facility; the remaining $400.0 million was undrawn at March 31, 2020.
The Facility is secured against all of the material present and future assets, property and undertakings of the Company. The Facility contains various covenants customary for a loan facility of this nature, including limits on indebtedness, asset sales and liens. It contains financial covenant tests that include (a) a minimum interest coverage ratio of 3.0:1.0 and (b) a maximum net leverage ratio of 3.5:1.0, both as defined in the agreement. As at March 31, 2020, the Company is in compliance with the covenants.

9 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

8. | SHARE CAPITAL

a) | Authorized share capital of the Company consists of an unlimited number of fully paid Class A common shares (Common Shares) without par value.

| Number of Shares | Amount
Outstanding at December 31, 2018 | 391,250,203 |  | $3,705.2 |
Shares issued through: |  |
Share-based compensation plans | 1,555,989 |  | 9.5 |
Shares repurchased and cancelled | (2,748,352 | ) | (26.1 | )
Exercise of warrants | 45 |  | — |
Flow-through share financing | 1,132,169 |  | 5.9 |
Cancellation of unexchanged post-amalgamation shares | (119,237 | ) | (1.2 | )
Outstanding at December 31, 2019 | 391,070,817 |  |  | $3,693.3 |
Shares issued through: |  |
Share-based compensation plans | 727,653 |  | 5.2 |
Shares repurchased and cancelled (i) | (606,461 | ) | (5.7 | )
Shares repurchased and cancelled subsequent to March 31, 2020 (i) | — |  | (2.6 | )
Dividend reinvestment plan (ii) | 59,977 |  | 0.3 |
Outstanding at March 31, 2020 | 391,251,986 |  | $3,690.5 |

(i) Normal Course Issuer Bid
In December 2019, the Company renewed its Normal Course Issuer Bid ("NCIB") permitting the purchase for cancellation up to 28,734,677 Common Shares, representing 10% of the Company’s public float. The Company may purchase Common Shares under the NCIB up to December 23, 2020.
During the three months ended March 31, 2020, the Company repurchased and canceled 606,461 Common Shares at a cost of $2.9 million or $4.77 per share. The Company recognized a $5.7 million reduction in share capital, and a gain of $2.8 million recognized within deficit.
On March 30 and 31, 2020, the Company repurchased a total of 527,100 Common Shares at a cost of $2.6 million or $5.03 per share. As the transaction did not settle until after March 31, 2020, the Company canceled the shares subsequent to March 31, 2020.
(ii) Dividend Reinvestment Plan
During the three months ended March 31, 2020, the Company implemented a dividend reinvestment and share purchase plan ("DRIP"). This provides shareholders the option of increasing their investment in the Company by electing to receive common shares in place of cash dividends. The Company has the discretion to elect to issue such common shares at up to a 5% discount to the prevailing market price from treasury, or purchase the common shares on the open market.
For the three months ended March 31, 2020, the Company issued 59,977 shares pursuant to the DRIP, valued at $0.3 million.

10 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

b) Stock options
The following is a continuity of the changes in the number of stock options outstanding:

| Number | Weighted average exercise price (CAD$)
Outstanding at December 31, 2018 | 6,655,455 |  | $7.38 |
Granted | 965,876 |  | 6.59 |
Exercised | (1,555,989 | ) | 5.93 |
Expired | (1,600,080 | ) | 10.52 |
Outstanding at December 31, 2019 | 4,465,262 |  | $6.59 |
Granted | 876,425 |  | 7.66 |
Exercised | (727,653 | ) | 7.17 |
Expired | (100,920 | ) | 15.47 |
Outstanding at March 31, 2020 | 4,513,114 |  | $6.51 |

During the three months ended March 31, 2020, the weighted average share price at the date of exercise for stock options exercised was CAD$8.95 per share (for the year ended December 31, 2019 CAD $9.66 per share).
Stock options granted
During the three months ended March 31, 2020, the Company granted 876,425 stock options (three months ended March 31, 2019 - 950,002). The following table presents the weighted average fair value assumptions used in the Black-Scholes valuation:

For options granted for the three months ended: | March 31, 2020 | March 31, 2019
Weighted average share price at grant date (CAD$) | 7.66 | 6.58
Risk-free rate | 1.07% - 1.62% | 1.64% - 2.06%
Expected dividend yield | 1.02% | 0.84%
Expected stock price volatility (based on historical volatility) | 52% | 54%
Expected life of option (months) | 42 - 84 | 42 - 84
Weighted average per share fair value of stock options granted (CAD$) | 3.27 | 3.00

Stock options outstanding and exercisable as at March 31, 2020:

|  | Outstanding |  | Exercisable
Range of exercise prices (CAD$) |  | Number of options | Weighted average exercise price (CAD$) | Weighted average remaining contractual life (years) |  | Number of options | Weighted average exercise price (CAD$)
$3.00 - $5.00 |  | 1,062,500 |  | 3.75 |  | 2.71 |  |  | 1,062,500 |  | 3.75 |
$5.01 - $6.00 |  | 20,724 |  | 5.52 |  | 0.03 |  |  | 20,724 |  | 5.52 |
$6.01 - $7.00 |  | 1,959,102 |  | 6.57 |  | 5.14 |  |  | 989,412 |  | 6.57 |
$7.01 - $8.00 |  | 863,727 |  | 7.62 |  | 6.77 |  |  | — |  | — |
$8.01 - $9.00 |  | 28,571 |  | 8.63 |  | 6.91 |  |  | — |  | — |
$9.01 - $10.00 |  | 578,490 |  | 9.62 |  | 3.73 |  |  | 578,490 |  | 9.62 |
|  | 4,513,114 |  | $6.51 |  | 4.86 |  |  | 2,651,126 |  | $6.10 |

11 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

c) | Other employee long-term incentives

The following is a continuity of the changes in the number of other long-term incentives ("LTI"):

| Restricted share units ("RSU") | Stock appreciation rights ("SAR") | Deferred share units ("DSU") | Performance share units ("PSU")
Outstanding units, December 31, 2018 | 1,567,696 |  | 509,192 |  | 645,413 |  | 983,441 |
Granted | 832,366 |  | — |  | 208,882 |  | 423,628 |
Forfeited | (305,300 | ) | (309,566 | ) | — |  | 0 |
Settled | (427,937 | ) | (108,319 | ) | (165,868 | ) | (324,916 | )
Outstanding units, December 31, 2019 | 1,666,825 |  | 91,307 |  | 688,427 |  | 1,082,153 |
Granted | 650,885 |  | — |  | 165,313 |  | 468,867 |
Forfeited/expired | (66,874 | ) | (13,195 | ) | — |  | — |
Settled | (16,718 | ) | (61,446 | ) | — |  | (247,866 | )
Outstanding units, March 31, 2020 | 2,234,118 |  | 16,666 |  | 853,740 |  | 1,303,154 |

The settlement of LTI is either in cash or equity depending on the feature of the specific LTI plan. The settlement of SARs and DSUs are in cash, PSUs are equity or cash settled at the Company's discretion, and certain RSUs are cash settled with the remaining settled in cash or equity at the Company's discretion.
d) Earnings per share
Basic earnings or loss per share amounts are calculated by dividing earnings or loss for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of common shares outstanding during the period, including the effects of dilutive common share equivalents.

| For three months ended
| March 31, | March 31,
| 2020 | 2019
Net (loss) earnings | ($12.3 | ) | $16.8 |
Weighted average number of common shares outstanding (in thousands) | 391,341 |  | 389,735 |
Basic (loss) earnings per share |  | ($0.03 | ) |  | $0.04 |
Dilutive effect of potential common share equivalents (in thousands) | — |  | 4,461 |
Diluted weighted average number of common shares outstanding (in thousands) | 391,341 |  | 394,196 |
Diluted earnings per share |  | ($0.03 | ) |  | $0.04 |

The following table lists the equity instruments excluded from the computation of diluted earnings per share. The instruments were excluded as they have an anti-dilutive effect on diluted earnings per share. The exercise price relating to the particular security exceeded the average market price of the Company's common shares of CAD $7.90 for the three months ended March 31, 2020 (CAD $6.04 for the three months ended March 31, 2019).

| For three months ended
| March 31, | March 31,
(thousands) | 2020 | 2019
Stock options | 4,513 |  | 6,151 |

12 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

(e) Dividends
In December 2019, the Company announced it had increased its quarterly dividend from $0.01 to $0.015 per share, paid quarterly. During the three months ended March 31, 2020, the Company declared dividends of $5.9 million, of which $5.6 million were paid in cash. The remaining $0.3 million were issued in the form of common shares pursuant to the Company's DRIP.

9. | OTHER GAIN

Other (loss) gain recorded in net earnings:

| For three months ended
| March 31, | March 31,
| 2020 | 2019
Unrealized (loss) gain on non-hedged derivatives | ($0.1 | ) | $1.0 |
Reduction of obligation to renounce flow-through exploration expenditures | 0.1 |  | — |
Other | 0.2 |  | 1.2 |
| $0.2 |  | $2.2 |

10. | SUPPLEMENTAL CASH FLOW INFORMATION

Changes in working capital and income taxes received or paid:

| For three months ended
| March 31, | March 31,
| 2020 | 2019
Amounts receivable | ($5.4 | ) | $1.9 |
Inventory | (2.0 | ) | (4.1 | )
Advances and prepaid expenses | 1.3 |  | (1.8 | )
Accounts payable and accrued liabilities | (16.7 | ) | (11.6 | )
Income taxes paid | (2.3 | ) | (4.1 | )
| ($25.1 | ) | ($19.7 | )

Other items:

| For three months ended
| March 31, | March 31,
| 2020 | 2019
Unrealized loss (gain) on non-hedged derivatives |  | $0.1 |  |  | ($1.0 | )
Reclamation activities | (1.2 | ) | — |
Credit facility standby fees | (0.5 | ) | (0.5 | )
Distribution of share-based compensation | (0.9 | ) | — |
Reduction of obligation to renounce flow-through exploration expenditures | (0.1 | ) | — |
Interest received | 0.6 |  | 0.9 |
Other non-cash items | (0.3 | ) | (0.9 | )
| ($2.3 | ) | ($1.5 | )

13 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

11. | SEGMENTED INFORMATION

(a) Segment revenues and results
The Company manages its reportable operating segments by operating mines and significant development projects. The Company operates in three principal geographical areas - Canada, Mexico and Turkey. The Young-Davidson and Island Gold mines operate in Canada, and the Mulatos mine operate in Sonora, Mexico. In addition, the Company is developing the Kirazlı project in Turkey. As of January 1, 2020, the El Chanate mine in Sonora Mexico is in the reclamation phase and is no longer considered an operating segment by management; the results from El Chanate have been included in the comparative period only. The results from operations for these reportable operating segments are summarized in the following tables:

For the three months ended March 31, 2020
| Young-Davidson | Mulatos | Island Gold | Corporate/other 1 | Total
Operating revenues | $45.7 |  | $69.3 |  | $61.9 |  | — |  | $176.9 |
Cost of sales |  |  |  |  |
Mining and processing | 30.8 |  | 35.3 |  | 16.4 |  | — |  | 82.5 |
Royalties | 0.8 |  | 0.3 |  | 1.3 |  | — |  | 2.4 |
Amortization | 12.2 |  | 10.4 |  | 12.8 |  | — |  | 35.4 |
| 43.8 |  | 46.0 |  | 30.5 |  | — |  | 120.3 |
Expenses |  |  |  |  |
Exploration | — |  | 1.3 |  | 0.2 |  | 0.5 |  | 2.0 |
Corporate and administrative | — |  | — |  | — |  | 6.2 |  | 6.2 |
Share-based compensation | — |  | — |  | — |  | 2.2 |  | 2.2 |
Earnings (loss) from operations | $1.9 |  | $22.0 |  | $31.2 |  | ($8.9 | ) | $46.2 |
Finance expense |  |  |  |  | (0.8 | )
Foreign exchange loss |  |  |  |  | (5.1 | )
Other gain |  |  |  |  | 0.2 |
Earnings before income taxes |  |  |  |  | $40.5 |

1. Corporate and other consists of corporate balances and exploration and development projects. During the construction phase of Kirazlı, all operating costs are capitalized to the project, however costs that are expensed are included in the Corporate and other segment.

14 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

For the three months ended March 31, 2019
| Young-Davidson | Mulatos | Island Gold | El Chanate | Corporate/other 1 | Total
Operating revenues | $57.4 |  | $47.1 |  | $43.8 |  | $7.8 |  | — |  | $156.1 |
Cost of sales |  |  |  |  |  |
Mining and processing | 35.9 |  | 24.5 |  | 14.6 |  | 7.2 |  | — |  | 82.2 |
Royalties | 1.0 |  | 2.3 |  | 2.1 |  | — |  | — |  | 5.4 |
Amortization | 20.0 |  | 7.0 |  | 11.9 |  | 0.5 |  | — |  | 39.4 |
| 56.9 |  | 33.8 |  | 28.6 |  | 7.7 |  | — |  | 127.0 |
Expenses |  |  |  |  |  |
Exploration | — |  | 0.9 |  | 0.2 |  | — |  | 0.5 |  | 1.6 |
Corporate and administrative | — |  | — |  | — |  | — |  | 5.5 |  | 5.5 |
Share-based compensation | — |  | — |  | — |  | — |  | 3.3 |  | 3.3 |
Earnings (loss) from operations | $0.5 |  | $12.4 |  | $15.0 |  | $0.1 |  | ($9.3 | ) | $18.7 |
Finance expense |  |  |  |  |  | (0.5 | )
Foreign exchange gain |  |  |  |  |  | 0.2 |
Other gain |  |  |  |  |  | 2.2 |
Earnings before income taxes |  |  |  |  |  | $20.6 |

(b) Segment assets and liabilities
The following table presents assets and liabilities by segment:

| Total Assets | Total Liabilities
| March 31, 2020 |  | December 31, 2019 |  | March 31, 2020 |  | December 31, 2019 |
Young-Davidson | $1,592.0 |  | $1,595.8 |  | $288.5 |  | $264.6 |
Mulatos | 416.8 |  | 411.3 |  | 113.7 |  | 102.6 |
Island Gold | 948.5 |  | 921.4 |  | 274.0 |  | 269.4 |
Kirazlı | 147.6 |  | 147.5 |  | 13.2 |  | 14.9 |
Corporate/other 1 | 398.9 |  | 320.5 |  | 156.5 |  | 49.7 |
Total assets and liabilities | $3,503.8 |  | $3,396.5 |  | $845.9 |  | $701.2 |

1. | Corporate and other consists of corporate balances, exploration and development projects and mines in reclamation.

12. | FINANCIAL INSTRUMENTS

Fair values of financial instruments
The following table sets forth the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy. The Company does not have any non-recurring fair value measurements as at March 31, 2020. Levels 1 to 3 of the fair value hierarchy are defined based on the degree to which fair value inputs are observable or unobservable, as follows:

• | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• | Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the net asset or liability, either directly or indirectly; and

• | Level 3 inputs are unobservable (supported by little or no market activity).

15 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

| March 31, 2020 | December 31, 2019
| Level 1 | Level 2 | Level 1 | Level 2
Financial assets (liabilities) |  |  |  |
Fair value through profit or loss |  |  |  |
Gold options | — |  | (0.9 | ) | — |  | (0.7 | )
Fair value through OCI |  |  |  |
Equity securities | 15.6 |  | — |  | 22.8 |  | — |
Currency hedging derivative instruments | — |  | (11.9 | ) | — |  | 3.3 |
Fuel options | — |  | (0.8 | ) | — |  | — |
| $15.6 |  | ($13.6 | ) | $22.8 |  | $2.6 |

The methods of measuring financial assets and liabilities have not changed during the three months ended March 31, 2020. The Company does not have any financial assets or liabilities measured at fair value based on unobservable inputs (Level 3).
The fair value of option and forwards (gold and currency) contracts are determined using a market approach with reference to observable market prices for identical assets traded in an active market. These are classified within Level 2 of the fair value hierarchy. The use of reasonably possible alternative assumptions would not significantly affect the Company’s results.
Derivative Instruments
The fair value of derivative instruments is as follows:

|  |  | March 31, | December 31,
|  |  | 2020 | 2019
Derivatives designated as hedging instruments |  |  |  |
Currency hedging derivative instruments |  |  | ($11.9 | ) | $3.3 |
Fuel options |  |  | (0.8 | ) | — |
Derivatives not designated as hedging instruments |  |  |  |
Gold options |  |  | ($0.9 | ) | ($0.7 | )

Currency derivative instruments
The Company enters into option and forward contracts to economically hedge against the risk of an increase in the value of the Canadian dollar and Mexican peso versus the US dollar. These option and forward contracts are for the purchase of local currencies and the sale of US dollars, which settle on a monthly basis, and the Company believes this is an appropriate manner of managing currency risk.
The effective portion of the changes in fair value of the hedging instrument for the three months ended March 31, 2020 recorded in accumulated other comprehensive income is:

| Three months ended
| March 31, | March 31,
| 2020 | 2019
Balance, beginning of the period | $4.6 |  | ($1.4 | )
Unrealized (loss) gain on currency instruments | (15.7 | ) | 5.0 |
Less: realized loss (gains) on CAD currency instruments | 0.5 |  | — |
Less: realized gains on MXN currency instruments | — |  | (0.3 | )
Deferred income tax related to hedging instruments | 3.8 |  | (1.4 | )
| ($6.8 | ) | $1.9 |

For the three months ended March 31, 2020, the Company did not recognize any ineffectiveness on the hedging instruments.

16 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

The contracts, which settle on a monthly basis in 2020, are summarized as follows:
Canadian dollar contracts

Period Covered | Contract type | Contracts (CAD$ Millions) | Average minimum rate (USD/CAD) | Average maximum rate (USD/CAD)
2020 | Collars | 240.5 | 1.31 | 1.36

Mexican Peso contracts

Period Covered | Contract type | Contracts (MXN Millions) | Average minimum rate (MXN/USD) | Average maximum rate (MXN/USD)
2020 | Collars | 825.0 | 19.52 | 22.02
2021 | Collars | 150.0 | 22.00 | 28.52

The fair value of these contracts was a liability of $11.9 million as at March 31, 2020 (December 31, 2019 - asset of $3.3 million).
Gold option contracts
As at March 31, 2020, the Company held option contracts to protect against the risk of a decrease in the value of the gold price on a portion of gold sales.
The following gold collar and forward contracts are outstanding as of March 31, 2020:

Period Covered | Contract type | Ounces subject to contract | Average purchase put option | Average sold call option
2020 | Collars | 60,675 | $1,449 | $1,709

The fair value of these contracts was a liability of $0.9 million at March 31, 2020 (December 31, 2019 - liability of $0.7 million).
For the three months ending March 31, 2020, the Company realized losses of $0.1 million related to the settlement of option contracts (for the three months ended March 31, 2019 - $nil). The Company recorded unrealized losses of $0.2 million for the three months ended March 31, 2020 (for the three months ended March 31, 2019 unrealized gains of $1.0 million). The Company has elected to not apply hedge accounting to gold option contracts, with changes in fair value recorded in net earnings.
Fuel contracts
The Company enters into option contracts to economically hedge against the risk of an increase in the price of diesel fuel. These option contracts are for the purchase of New York Harbour Ultra Low Sulfur Diesel ("ULSD") contracts, which settle on a monthly basis, and the Company believes this is an appropriate manner of managing price risk.
As at March 31, 2020, the Company has hedged 1,512,000 gallons of diesel at a range of $1.65 to $1.86 per gallon.
For the three months ended March 31, 2020, the Company recorded an unrealized loss of $0.8 million in accumulated other comprehensive loss related to the fuel hedges.

17 | Alamos Gold Inc.

|  | Q1 2020 FINANCIAL REPORT

13. | COMMITMENTS

Capital commitments
As of March 31, 2020, the Company has $15.7 million in committed capital purchases (December 31, 2019 - $44.0 million).
Royalties
At the Mulatos Mine, the Company pays a royalty obligation to the Mexican government of 0.5% Extraordinary Mining Duty, which totaled $0.3 for the three months ended March 31, 2020 (three months ended March 31, 2019 - $0.3 million).
The Company pays a 1.5% net smelter royalty on production from the Young-Davidson mine. For the three months ended March 31, 2020, the Company recorded a royalty expense of $0.7 million (three months ended March 31, 2019 - $0.8 million). In addition, other royalties related to production totaled $0.1 million for the three months ended March 31, 2020 (three months ended March 31, 2019 - $0.2 million).
At the Island Gold mine, the Company pays a 3% net smelter royalty on production from the Lochalsh claims, a 2% net smelter return royalty in addition to a 15% net profit interest royalty per ounce produced from the Goudreau claims, as well, a 2% net smelter return royalty and a 10.38% net profit interest royalty per ounce produced from Goudreau Lake claims. For the three months ended March 31, 2020, the Company recorded a royalty expense of $1.3 million at Island Gold (three months ended March 31, 2019 - $2.1 million).
In addition, a third party has a 2% net smelter return royalty on production from a portion of the Company's Turkish projects. The Company is also subject to a state royalty on production in Turkey, subject to certain deductions. No payments have been made, as the projects are not in production.

18 | Alamos Gold Inc.