UPDATE 2-Alamos sees first output rise in 4 quarters, shares up

* Sees Q4 output rise on more capacity at recovery plant

* Q3 adj EPS in line with estimates at $0.10

* Revenue down 17 pct at $34.3 mln vs est $39.3 mln

* Back FY production

* Shares rise as much as 8 percent
(Rewrites; adds analyst comments, updates share movement)

By Gowri Jayakumar

BANGALORE, Nov 4 (BestGrowthStock) – Canada’s Alamos Gold Inc
(AGI.TO: ) forecast a rise in production in the fourth quarter,
after three straight quarters of declines, due to additional
capacity at its gold recovery plant, sending its shares up 8
percent.

The Mexico-focused miner’s production had fallen due to bad
weather and delays in installing a screening plant at its
flagship Mulatos mine.

The screening plant began operating in October and the
additional capacity boosted average daily throughput by about
28 percent, the gold miner said in a statement.

“They’ve introduced a new screening plant, which means
their crushing rate can increase by 13-20 percent, and their
stacking rates are already well up… all of these are positive
even more so into the next year,” said David Haughton, an
analyst with BMO Capital Markets-Canada.

Third-quarter revenue fell 17 percent to $34.3 million, due
to lower production. The gold miner had reported a 32 percent
drop in production late last month. [ID:nSGE69L0HQ]

For July-September, Alamos’ profit rose 38 percent to $19.5
million, or 17 cents a share, including a $12.5 million gain
related to a settlement agreement with Primero Mining (P.TO: )
over the ownership of the San Dimas mines in Mexico.

Alamos earned $14.1 million, or 13 cents a share, a year
ago.

On an adjusted basis, Alamos earned 10 cents a share, in
line with analysts’ estimates, according to Thomson Reuters
I/B/E/S.

Alamos also backed its full-year production outlook of
160,000-175,000 ounces, but raised its cash operating cost
outlook by 4 percent to $300 per ounce due to higher input
costs and a stronger Mexican peso.

The gold explorer, which is currently developing two
projects in Turkey besides expanding in Mexico, had capital
expenses totaling $15.8 million in the third quarter.

Haughton sees Alamos spending about $80-$120 million in
2011 on exploration in Mexico and elsewhere.

Last month, Alamos’ peer Aurizon Mines (ARZ.TO: ), which
operates in Quebec, cut its full-year production target due to
poor ground conditions at the mine and scarcity of underground
mining equipment. [ID:nSGE69L0HQ]

Alamos shares, which have shed about 4 percent of their
value since reporting lower production, touched a high of
C$17.36. They later pared some gains and were trading up 7
percent at C$17.23 Thursday afternoon on the Toronto Stock
Exchange.
(Reporting by Gowri Jayakumar in Bangalore; Editing by Anne
Pallivathuckal)

UPDATE 2-Alamos sees first output rise in 4 quarters, shares up