Alamos Gold has announced drilling results from its Island Gold mine that have defined high-grade mineralization across multiple areas, potentially serving as sources of additional higher-grade mill feed within the expanded Magino Mill. The findings include a new zone of high-grade mineralization located 250 metres west of underground Mineral Reserves and Mineral Resources, referred to as the Island Gold West Extension. Additionally, the company has continued to extend mineralization within the Island West up-plunge area.

Operational Implications

The proximity of the Island West up-plunge area to the surface allows for mining utilizing the ramp. This access method provides further upside potential regarding combined underground mining rates. The expansion of mineralization supports the company's strategy to feed the expanded Magino Mill with higher-grade material.

Regional Exploration Results

Beyond the immediate mine site, the regional exploration program has intersected high-grade gold mineralization at past-producing locations. The Cline-Pick and Edwards mines, both situated seven kilometres from the Magino Mill, have returned significant results. These intersections suggest the potential for future resource additions in the region surrounding the milling infrastructure.

Alamos Gold Inc. has revised its second quarter production guidance to between 130,000 and 135,000 ounces, reflecting a 12% decrease from previous expectations due to operational challenges at its Young-Davidson mine. The company now anticipates that consolidated production for 2026 will fall below the low end of its guidance range, with costs expected to exceed full-year estimates. The revised outlook follows seismic events and unplanned power outages that disrupted mining rates and access to higher-grade stopes.

Operational challenges at Young-Davidson

The Young-Davidson operation experienced two seismic events recently, one at an active mining front, which damaged infrastructure and limited access to two higher-grade stopes scheduled for mining in the second quarter. No injuries were reported. Consequently, the company expects mining rates to average approximately 5,000 tonnes per day for the remainder of the year. Additionally, storm-related damage to a regional power line in late May caused three days of unplanned downtime, further impacting production.

Revised guidance and financial impact

The company stated that production at Young-Davidson for the second quarter is expected to be in-line with the first quarter, while Island Gold production is anticipated to meet quarterly plans. However, lower production volumes are driving higher costs for the quarter. Alamos Gold plans to provide revised 2026 consolidated production and cost guidance alongside its second quarter financial results in late July.

Island Gold District performance

In contrast to the issues at Young-Davidson, the Island Gold District operations continue to perform well. Underground mining rates have reached a new record of more than 1,500 tonnes per day in the second quarter and are on track to increase to 2,000 tonnes per day by the end of 2026. Magino mill throughput rates have also improved, averaging nearly 9,800 tonnes per day in June, with expectations to rise to 10,000 tonnes per day by the third quarter.

Strategic financial moves

During the second quarter, Alamos Gold repurchased and eliminated all remaining forward sale contracts maturing in the second half of 2026, totaling 35,000 ounces at an average price of $1,821 per ounce. The cost to eliminate these contracts was $92.3 million. Additionally, the company repurchased 753,600 shares in May 2026 under its Normal Course Issuer Bid at a cost of $30.0 million, or $39.84 per share.