Yahoo Finance

It's been a solid year so far for gold, reaching another fresh record today. Investors looking to the precious metal for safety amid economic concerns, rate cut hopes and geopolitical risks, the moves higher in gold giving producers like Alamos a lift, the company reporting record production in the second quarter. And joining me now is Alamos CEO and President John McCluskey. John, it's good to see you. So, you did report results this week, John, EPS and sales coming in above estimates, your stock's up about 30% this year. It's up about 50% here over the past 12 months, John. I'm interested in the quarter, John, what drove the business? Walk us through it.

We're just having great production across all of our assets. We have, um, we have three producing mines right now, and our mine in Mexico, which we call Mulatos, it had one of the best quarters it's ever had. Uh, we have an operation, an operation in Ontario called Island Gold. We're mining one of the highest grade zones at that mine that we've ever mined. In fact, the, um, the stopes were reconciling positive. We were scheduled to mine around 12 grams and we ended up mining, uh, around 14.4 grams. So we're getting better grade, higher production, and that's driving, you know, record cash flow, low costs. Uh, we're getting effectively some of the, um, some of the best performance, uh, that we've ever seen. And that's obviously resonating with the market. Just about the time the gold price takes off, our production's taking off and our costs are going down. I think what the market's looking for is that margin expansion and that's exactly what we're delivering right now.

And just more broadly, John, you know, just let's talk about the metal. I mean, the kind of strong run gold has had this year, John, just seeing these successive records, what is driving that in your opinion?

Well, for most of the past year, it's been driven by central bank buying and that's mostly out of Asia. And, um, lately though, I think it's a combination of things. I think it's a combination of, uh, political, uh, upheaval in the world. I mean, there's there's, um, there's been an ongoing war in the Ukraine now. There there is now added to that growing unrest in the Middle East. That's certainly been a contributing factor. But on top of that, we're getting into the later stages of the of the political, uh, the election cycle in, um, in the United States. And I I believe, you know, they they're talking more and more about the, uh, the the exponential growth of the, uh, of the US debt. You know, it's hit 35 trillion and, you know, it's growing at a record pace. And I think this is this is starting to, um, instill some some real fear in the minds of investors. And ultimately that is, um, is turning their attention towards gold.

So bring out, this is the part where I ask you to take out your crystal ball, John. If you were to look ahead now, you know, near, intermediate term, where do you see gold prices headed?

You know, I was asked that question about two years ago and oddly enough, I I settled on $2,400 an ounce two years ago. It was about 1,800. So it's, uh, from then till now, it's it's up just about 30%. Where it's going now, it's clearly in an uptrend. It's been in an uptrend really since, uh, it bottomed in 2016. Things turned around for gold in 2017, and it's been heading in an uptrend since. And you know, it's a sawtooth pattern. It's very typical for gold, but in point of fact, uh, you know, gold is, uh, in a solid uptrend and I I think we're going to see, you know, levels like 2650 at least by the end of the year. That's that's where I think it's going.

John, so great to have you on the show today. Appreciate it. Have a great weekend.

All right, thank you.