Gold Shines Bright: Miners Poised for Growth and Value Creation

Gold Market and Macro Insight

The gold market is navigating a complex environment with both challenges and opportunities. Gold prices have sustained relatively high levels around $1,950/oz, but mining companies face significant inflationary pressures. John McConnell, President & CEO of Victoria Gold, highlighted this issue: "We've seen major increases over the last 3 and a half years. Caterpillar parts, for example, are up 40% year-to-date. That's just this year alone."

Despite these cost pressures, executives remain optimistic about the long-term outlook for gold. Oliver Turner, EVP of Corporate Development of Karora Resources, pointed to strong investor interest, particularly from Europe: "It's refreshing to come to Europe. Not so much in London, but certainly the Swiss and the Germans are very bullish. They love gold."

John McCluskey, President & CEO of Alamos Gold, emphasized the potential for gold prices to move significantly higher: "We're investing at the moment. We're investing $750 million in the expansion of Island Gold. By the time we finish that expansion, we'll be able to produce 300,000 ounces of gold a year at roughly $600 all-in sustaining costs. At a $1,900 gold price assumption, that's an amazing margin."

For investors, gold mining stocks offer leveraged exposure to rising gold prices. At current levels, miners are generating robust cash flows, strengthening balance sheets, and self-funding growth initiatives. As production expands at attractive margins, miners provide the potential for share price appreciation, dividend growth, and reserve expansion.

While risks remain, investing in high-quality gold miners with experienced management, strong assets, and clear growth strategies presents a compelling risk/reward proposition. In an environment characterized by economic uncertainty and inflationary concerns, gold and gold equities can offer valuable portfolio diversification and upside potential. Gold prices will continue to make gains in 2024. We expect to see it end the year at $2,450. And gold equities, especially those with gold production and strong fundamentals will be the main beneficiaries.

Here are three string candidates worth looking at.

Karora Resources: Expanding Gold Production and Developing World-Class Nickel Asset

• Expanding gold production from its Beta Hunt mine in Australia
• Significant nickel resource could reduce gold production costs
• Generating strong cash flow to internally fund growth
• Several new gold deposits entering production in the near future
• Attractive valuation considering growth potential in both gold and nickel

Karora Resourcesis a growing gold producer with strong potential to increase gold production and develop a major nickel asset. The company is expanding production at its Beta Hunt gold mine in Australia, leveraging a huge resource base, improving grades and making infrastructure investments. Nickel provides additional upside, with over a billion dollars worth of nickel resources that could significantly reduce gold costs.

Under the leadership of Executive Chairman Paul Huet, Karora has grown gold production by around 50% over the past few years while maintaining low costs. The company is generating significant cash flow, allowing it to internally fund future growth. With several new deposits entering production and continued exploration success, Karora appears well-positioned to further expand gold output and drive share price appreciation. While execution risks remain, Karora offers an attractive valuation considering its growth potential in both gold and nickel.

www.karoraresources.com

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Victoria Gold: Ramping Up Canada's Newest Gold Mine

• Successfully ramping up Canada's newest major gold mine, Eagle
• Expecting to produce around 250,000 ounces of gold per year at low costs
• Strong cash flow generation allowing for debt reduction and expansion investment
• Exploration success adding ounces and supporting potential mine expansion
• Undervalued considering the cash flow potential of the Eagle mine

Victoria Gold has successfully built Eagle, Canada's newest major gold mine, and is now focused on optimizing and expanding the operation. After achieving commercial production in 2020, Victoria is steadily increasing output and expects to produce around 250,000 ounces of gold per year at industry-low costs.

President & CEO John McConnell, a mining veteran with a track record of building companies, believes Victoria is hitting its stride operationally. With the initial development capital behind it, Eagle is now a cash flow machine that is allowing Victoria to strengthen its balance sheet and reinvest in expansion. Exploration is adding ounces and the company is evaluating the potential for a larger operation.

For investors, Victoria offers exposure to a large, long-life and low-cost gold mine in a top jurisdiction. With a market cap of around C$1 billion, Victoria appears undervalued compared to the cash flow potential of Eagle. As the company delivers steady production growth and continues paying down debt, the stock could be poised for a re-rating as investors gain confidence in the Eagle story.

www.victoriagold.com

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Alamos Gold: Building a Leading Intermediate Gold Producer

• Building a diversified intermediate gold producer in North America
• Expanding production at its Young-Davidson and Island Gold mines in Ontario
• Island Gold emerging as a world-class, low-cost asset with significant growth potential
• Strong balance sheet and internally funded growth pipeline
• Attractively valued considering its growth profile, margins, and asset quality

Alamos Gold is building a diversified intermediate gold producer with a high-margin growth pipeline in North America. After achieving record production and financial results in 2022, Alamos is further expanding output at its Young-Davidson and Island Gold mines in Ontario. Island Gold is emerging as a world-class asset, with production expected to nearly double at extremely low costs.

President & CEO John McCluskey has a track record of shrewd dealmaking and building shareholder value over the past two decades. Alamos has a pristine balance sheet and is funding its growth internally. Longer-term, the Lynn Lake project offers the next leg of growth in a top jurisdiction.

For investors, Alamos screens attractively across all key metrics - growth, margins, balance sheet and valuation. The company offers exposure to expanding production at low costs, mine life extension and a top-tier development asset. Trading at a discount to peers, Alamos shares appear poised for a re-rating as the company executes on its growth plans and continues generating strong free cash flow.

www.alamosgold.com