Island Gold finishes strong in 2022 with sights fixed on growth

In the Fourth Quarter of 2022 Island Gold had its strongest quarter, producing 40,500 ounces while continuing to make substantial progress on the Phase 3+ Expansion including completing the pre-sink of the shaft. Island Gold produced 133,700 ounces, while self-funding $102.0 million of growth capital with the ramp up of construction activities on the Phase 3+ Expansion. Mill throughput averaged 1,304 tpd, 9% above annual guidance of 1,200 tpd, reflecting the processing of 5,800 tonnes of Island Gold stockpiled ore at the Young-Davidson mill. Given current permit limits at Island Gold, excess stockpiles were trucked to Young-Davidson during the second and third quarters and processed as capacity was available at the Young-Davidson mill.

Island Gold generated $235.3 million of revenues for the year which were, lower than the prior year as a result of less ounces sold. Cost of sales (including mining and processing costs, royalties and amortization expense) for the year were $120.4 million which was higher

Total capital expenditures were $53.9 million in the fourth quarter, including $4.9 million of capitalized exploration. Spending ramped up significantly on the Phase 3+ Expansion during the second half of the year, including shaft site preparation and clearing. This included the pre-sinking of the shaft which was completed down to its 42 metre final depth in November. In addition, capital spending was focused on lateral development and other surface infrastructure. For 2022, capital spending was $157.3 million, inclusive of capitalized exploration of $18.8 million, higher than the prior year period given the ramp up of construction activities on the Phase 3+ Expansion.

Construction Activities Ramp Up at Island Gold

Construction activities continued to ramp up during the fourth quarter, with the focus on shaft site surface preparation and completion of the pre-sinking of the shaft and concrete foundations for shaft surface infrastructure.

• Shaft site earthworks, including access road to the shaft area and buried services excavation, were substantially completed

• Shaft pre-sink completed down to a 42 metre depth in November

• Critical path concrete foundations completed

• Substation foundation work commenced

• Galloway fabrication completed to support shaft sinking

• Commenced structural steel erection for the Hoist House and Hoist Drive Cooling Building

• Paste plant detailed engineering ongoing

• Lateral development to support higher mining rates with the Phase 3+ Expansion remains ongoing

• Commenced basic engineering for the mill expansion

Capital spending at Island Gold (excluding exploration) is expected to be between $210 and $235 million in 2023 as spending on the Phase 3+ Expansion ramps up, and is expected to remain at similar levels in 2024 and 2025 and then

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