Improved Production From The High Grade Mill At Mulatos

TORONTO, ON - Alamos Gold Inc. reported fourth quarter and annual 2015 production. The Company also provided 2016 production and operating guidance.

"We closed 2015 on a strong note achieving full year guidance with record production of 104,700 ounces of gold in the fourth quarter. The strong fourth quarter performance was driven by improved production from the high grade mill at Mulatos and record production from Young-Davidson where we achieved our year-end underground mining rate target of 6,000 tonnes per day," said John A. McCluskey, President and Chief Executive Officer.

"Through merger and acquisition, capital investment, and cost reduction we have built a stronger company that is better positioned to navigate the challenges of the current gold price environment. As we execute on our core plan of completing the underground ramp up at Young-Davidson and developing the Cerro Pelon and La Yaqui deposits at Mulatos, we expect the benefits of these efforts will continue to unfold," Mr. McCluskey added.

Young-Davidson produced a record 44,694 ounces of gold in the fourth quarter, up from 38,201 ounces in the third quarter of 2015 and 40,945 ounces in the fourth quarter of 2014. The increase was driven by higher underground mining rates. Underground grades averaged 2.58 grams per tonne of gold ("g/t Au") in the fourth quarter and 2.67 g/t Au for the full year, consistent with the mineral reserve grade of 2.74 g/t Au. Underground mining rates averaged a new record of 5,900 tpd in the fourth quarter and over 6,000 tpd in December, consistent with guidance. The mill operated at an average of 7,630 tpd in the fourth quarter with lower grade open pit stockpiled ore supplementing the higher grade underground ore feed. The increase in underground mining rates drove the processed grade higher to average 2.17 g/t Au in the fourth quarter and 2.02 g/t Au for the full year. Recoveries averaged 91% in the fourth quarter and 89% for the full year.

For the full year, Young-Davidson produced 160,358 ounces of gold, consistent with guidance and up from 156,753 ounces in 2014. The increase reflected higher underground mining rates and recoveries.

Mulatos produced 41,830 ounces of gold in the fourth quarter of 2015, up 52% from 27,500 ounces in the third quarter, reflecting the recovery of deferred production from the seasonally weak third quarter and a strong improvement from the high grade mill. The open pit heap leach operation at Mulatos continued to perform well in the quarter with grades stacked on the leach pad of 0.94 g/t Au, well above the full year guidance of 0.80 g/t Au. For the full year, stacked grades averaged 0.87 g/t Au, again above the full year budget. Combined total throughput rates averaged 17,700 tpd in the quarter consistent with the budget and up sharply from the third quarter reflecting the end of the rainy season and higher mill throughput. The mill operated at improved throughput rates of 440 tpd in the quarter driving the strong increase in high grade production. For the full year, Mulatos produced 140,330 ounces of gold, below full year guidance reflecting the slower commissioning of the mill.

El Chanate produced 18,210 ounces of gold in the fourth quarter of 2015; down from 21,932 ounces in the third quarter, though up from 15,638 ounces in the fourth quarter of 2014. This closed off a record year at El Chanate with production of 79,312 ounces of gold exceeding guidance of 65,000 to 75,000 ounces. The operation generated positive free cash flow in 2015 in a challenging gold price environment, reflecting disciplined cost control.

2016 Guidance

Alamos' core focus in 2016 is on lowering costs and capital spending while continuing the ramp up at Young-Davidson and expansion at Mulatos. The Company expects to produce between 370,000 and 400,000 ounces of gold in 2016 at substantially lower costs and capital spending levels. All-in sustaining costs are expected to decrease to $975 per ounce of gold sold, driven by an 18%, or $175 per ounce decrease at Young-Davidson (based on the mid-point of 2015 guidance). Total capital spending for the Company's operating assets is also expected to decrease to between $111 and $131 million, down 19% from the mid-point of 2015 guidance. Given the decrease in costs and capital spending, the Company expects each operation to self-finance its sustaining and growth capital and exploration spending at a gold price of $1,100 per ounce.

Mulatos is expected to produce 140,000 to 150,000 ounces of gold in 2016, an increase from 2015 production of 140,330 ounces. All-in sustaining costs are expected to decrease to $925 per ounce of gold sold reflecting higher open pit grades, increased high grade mill production and various cost synergies. Total cash costs are expected to average $850 per ounce of gold sold.

Open pit grades mined and stacked on the heap leach pad are expected to increase to an average of 0.89 g/t Au, up from the 0.87 g/t Au stacked in 2015. The waste to ore ratio is expected to decline to 1.10:1 from a budget of 1.27:1 in 2015.

Milled grades are expected to average approximately 7.9 g/t Au, above the current mineral reserve grade as the Company continues to encounter higher grades, but fewer tonnes at San Carlos.

Total crusher throughput is expected to average 18,600 tpd, including approximately 475 tpd from the mill. This represents a 6% increase over total crusher throughput of 17,500 tpd in 2015 reflecting both higher throughput rates from the mill and crushing circuit. The combined recovery ratio is expected to average 66% reflecting higher grades stacked late in 2016 and a higher proportion of mixed and sulphide ore stacked. Open pit, heap leach recoveries are expected to increase to approximately 70% in 2017 and beyond.

The open pit heap leach operation continues to be the driver and is expected to supply approximately 80% of production in 2016. The Company continues to exploit opportunities for further cost reductions, including shortening waste haul routes; however, the main focus is on expanding and developing the higher grade La Yaqui and Cerro Pelon satellite projects. Cerro Pelon and La Yaqui will be substantially lower cost operations and are expected to start contributing production and drive costs lower in 2017. Both projects continue to advance with the environmental impact assessment ("EIA") for La Yaqui expected to be submitted in the first quarter of 2016. The EIA submission for Cerro Pelon is expected to follow in the third quarter.

These deposits are also among the highest priority exploration targets for Alamos with results from the 2015 drill program indicating strong potential to expand their mineral reserve and resource base. Given their low cost profile, any expansion of these projects is expected to have a positive impact on profitability of Mulatos.

Capital spending at Mulatos is expected to total $25-35 million, which includes

El Chanate is expected to produce 60,000 to 70,000 ounces of gold in 2016, down from 79,312 ounces in 2015 primarily reflecting lower throughput rates. Total crushed and run of mine ore is expected to average 18,500 tpd, down from 20,400 tpd in 2015 as part of an optimized mine plan in 2016 that will lower stripping requirements. The processed grade (run of mine and crushed ore) is expected to average 0.64 g/t Au.

All-in sustaining costs are expected to average $1,100 per ounce of gold sold. Total cash costs are expected to be in a similar range and are not comparable to 2015 as the Company expects to expense all waste stripping costs in 2016.

El Chanate is a mature operation with a relatively short remaining mine life. The operation was successful in generating positive free cash flow in 2015 and the focus in 2016 and beyond will be on keeping the operation free cash flow positive. Given the long leach cycle at El Chanate, more than 100,000 recoverable ounces have built up in the leach pad. These ounces are expected to be recovered at low costs once mining ceases at the operation, providing significant free cash flow at the end of its mine life.

Drilling throughout 2015 has indicated the existence of a large hydrothermal system in the Yaqui area with continuous alteration over a large area of approximately 1.5 kilometers ("km") by 1 km and ore-grade intercepts at distances of up to a 1.25 km from known in-pit mineralization. Preliminary metallurgical test work indicates mineralization is amenable to heap leaching. The results of the 2015 program at La Yaqui will not be incorporated into the 2015 year end mineral reserve and resource statement planned for the end of March 2016, but will be incorporated into subsequent updates.

A system of this size will require systematic testing and infill drilling. Therefore, the 2016 program will be conducted in two phases. The first will be focused on ongoing exploration along the northwest-trending massive silica ridge. This will be followed by systematic delineation and definition drilling over portions of this approximately 1,000 m strike length with the aim of increasing mineral resources and reserves at La Yaqui. Approximately $5 million has been budgeted at La Yaqui for the year.

Alamos is a Canadian-based intermediate gold producer with diversified production from three operating mines in North America. This includes the Young-Davidson mine in northern Ontario, Canada and the Mulatos and El Chanate mines in Sonora State, Mexico. Additionally, the Company has a significant portfolio of development stage projects in Mexico, Turkey, Canada and the United States. Alamos employs more than 1,300 people and is committed to the highest standards of sustainable development. The Company's shares are traded on the TSX and NYSE under the symbol "AGI".