Rising production forecasts lift their appeal

Article Excerpt

Whatever the near-term outlook for gold, we think top-quality gold stocks like Alamos and Lundin remain buys. That’s in part because of their prospects for increased production and cash flow—regardless of precious metal prices. ALAMOS GOLD, $18.90, is a buy. Through the shares (Toronto symbol AGI; TSINetwork Rating: Speculative)(www.alamosgold.com; Shares outstanding: 396.4 million; Market cap: $7.5 billion; Dividend yield: 0.7%) investors tap into the company’s Mulatos mine in Mexico and the Young-Davidson and Island mines in northern Ontario. In the three months ended September 30, 2023, Alamos’ gold production rose 9.7%, to 135,400 ounces from 123,400 a year earlier. Higher output at the Mulatos and Island mines offset lower production at Young-Davidson. Revenue rose 19.9% in the latest quarter, to $256.2 million from $213.6 million. (All figures except share price and market cap in U.S. dollars.) Excluding one-time items, per-share earnings doubled, to $0.14 from $0.07. Mulatos has now successfully transitioned to a new, nearby deposit called the La Yaqui Grande project. Looking forward, La Yaqui…