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Alamos Gold drops takeover bid for AurizonGetty Images/iStockphoto

Alamos Gold Inc. (TSX:AGI) saw its first-quarter profit shrink to US$2.7-million or two cents per share, down 90 per cent compared with the same period last year as it sold fewer ounces at a lower price, but says the second half of 2014 is expected to be stronger.

The Toronto-based company, which has its mining operations in Mexico and reports in U.S. currency, says it produced 37,000 ounces of gold and sold 32,161 ounces at an average realized price of US$1,291 an ounce – a 21 per cent decline in price from a year earlier.

In the first quarter of 2013, Alamos sold 53,000 ounces of gold at a realized price of $1,628.

Revenue for the first three months of 2014 was $41.5-million, down 51 per cent from US$86.2-million in the first quarter of 2013, while the first quarter profit was down from $25.99-million or 21 cents per share.

Despite the weaker first-quarter results, Alamos noted that it's previously declared semi-annual dividend – payable April 30 – remained unchanged at 10 cents per share.

"Production of 37,000 ounces in the first quarter of 2014 was consistent with our expectations, and total cash costs of $617 per ounce and all-in sustaining costs of $908 per ounce were below our cost guidance," said Alamost president and CEO John McCluskey.

Alamos said it remains among the lower-cost producers and looks forward to a stronger second half of 2014 as production shifts to higher-grade ore, including at the San Carlos deposit.

"With the 43 per cent increase in the underground reserve grade at San Carlos that we recently announced, we are excited about the potential of this deposit to supply the next four years of high grade mill feed," McCluskey said.