Three-year guidance towards 1Mozpa
Alamos Gold has reported an expansion study for its Island Gold operation in Ontario, Canada, which features a 30% increase in reserves, and an expansion of the Magino mill to 20,000tpd that is expected to drive production to an average of 534,000ozpa over 10 years, and 490,000ozpa over 15 years.
Alamos will invest US$542 million in the project, which includes expanding the Magino mill, accelerating underground development, and deploying mobile equipment to support higher underground and open pit mining rates. This will support increased processing rates of 3000 tpd of high-grade underground ore, and 17,000tpd from the open pit. Growth capital over the next three years will total $704 million, including the remaining spend on the Phase 3+ expansion. Island Gold is expected to self-finance all growth capital while generating growing free cash flow through to the completion of the expansion in 2028The expansion will yield an after-tax net present value of $8.2 billion at a 5% discount rate and an internal rate of return of 53% using a $3200/oz gold price assumption. These improve to $12.2 billion and 69% at $4500/oz."The IGD expansion is starting to unlock the true potential of the Island Gold district with the increase in mining rates expected to drive production to more than 530,000ozpa at among the lowest costs in the industry. … Given our significant ongoing exploration success within the main Island Gold structure and spectacular high-grade results we are seeing within the nearby Cline-Pick targets, we are confident there is further growth and upside to come," said Alamos Gold chief executive John McCluskey.Following the expansion, which is due to be completed in 2028, Island Gold will enjoy an all-in sustaining cost of $1025/oz over the initial 10 years following the expansion, a 31% decrease from 2025, and $1032/oz over 15 years.Alamos said the larger, long-life operation at Island Gold is underpinned by a 30% increase in reserves to 128.2Mt grading 2.01gpt containing 8.3Moz, including 5.1Moz grading 10.61gpt at Island Gold underground, and 3.1Moz grading 0.86gpt at the Magino open pit.The phase 3+ expansion is on track for completion late in 2026, with the shaft and paste plant infrastructure designed to support higher underground mining rates of 3000tpd. Construction of the larger mill is underway and is sized for 20,000tpd, meaning key components of the IGD expansion are largely de-risked.Three-year guidanceThe IGD expansion is expected to help lift Alamo's gold production towards 1Mozpa by 2030, the company said as it also issued updated three-year production and operating guidance. This showed an expectation of delivering 46% production growth by 2028, with a nearly 20% decrease in AISC. In addition to the multi-phased expansion at Island Gold, Alamos expects to start producing from Lynn Lake in Manitoba, starting in 2029 with annual production expected to average 186,000ozpa over its first 10 years. The required capital has increased to $934 million.2026 production is forecast at 570,000-650,000oz at an AISC of $1500-1600/oz. 2027 production is forecast at 650,000-730,000oz at an AISC of $1325-1425/oz. 2028 production is forecast at 755,000-835,000oz at an AISC of $1200-1300/oz."Our operational performance over the past year was not up to our standards and not reflective of our long-term track record. We expect to deliver a stronger performance in 2026, particularly in the second half of the year as production ramps up and costs decrease with the completion of the shaft expansion at Island Gold," said McCluskey.Shares in Alamos Gold have increased in value by 83% over the past year. They are trading at $38.29, valuing the company at $16 billion.
Island Gold Lynn Lake Alamos Gold Magino Mill
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