Alamos Gold (NYSE:AGI) reported second-quarter gold production of 130,600 ounces, up 5% from the first quarter and in line with its revised quarterly guidance, while lowering its full-year production outlook following operational disruptions at the Young-Davidson mine and slower leach recoveries at La Yaqui Grande.
President and Chief Executive Officer John McCluskey said the company generated $144 million in free cash flow during the quarter despite continued investment in growth projects and exploration. Alamos returned $67 million to shareholders through $50 million of share repurchases and $17 million in dividends. Year-to-date shareholder returns reached $84 million, exceeding the company’s total returns in 2025.
Guidance revised after Young-Davidson seismic event
Alamos reduced its 2026 consolidated production guidance to between 510,000 and 560,000 ounces, a 12% decrease from its previous outlook. The revision primarily reflects a June seismic event at the Young-Davidson underground mine, which caused localized damage to drift access on the 9410 level. No injuries occurred, but the event limited access to higher-grade stopes that had been expected to supply roughly 2,500 tonnes per day during the second half of the year.
Luc Guimond, chief operating officer, said Young-Davidson is expected to average mining rates of approximately 5,000 tonnes per day for the remainder of 2026, with grades similar to the 1.75 grams per tonne mined in the second quarter. The company reduced Young-Davidson’s full-year production outlook to 100,000 to 115,000 ounces.
Alamos plans to complete rehabilitation work and introduce enhanced ground support in the second half, including longer dynamic support bolts, additional cable bolting and heavier-gauge screen. Guimond said the company has not lost reserves in the affected area and expects the work, an optimized mining sequence and enhanced ground support to support higher rates beyond 2026. The company expects the additional support to add about $10 million to sustaining capital this year.
Separately, production at the Mulatos District was affected by longer-than-expected leach cycles at La Yaqui Grande, where ore characteristics and increasing leach-pad height delayed recoveries of previously stacked ore. Alamos lowered Mulatos production guidance to 120,000 to 135,000 ounces. Guimond said the company’s overall recovery expectation of 85% at La Yaqui Grande remains unchanged, with ounces expected to be deferred into 2027 rather than lost.
Costs rise on lower output, labor and contractor pressure
Second-quarter total cash costs were $1,303 per ounce, up 6% from the first quarter, while all-in sustaining costs declined 7% sequentially to $1,728 per ounce due to the timing of sustaining capital expenditures. For the full year, Alamos increased total cash cost guidance by 14% to a midpoint of $1,225 per ounce and raised all-in sustaining cost guidance by 18% to a midpoint of $1,825 per ounce.
Fisher said lower expected production accounts for an estimated $190-per-ounce impact on all-in sustaining costs. Higher contractor costs, labor inflation and a new compensation and retention program at Canadian operations are expected to add approximately $90 per ounce, while rehabilitation and enhanced ground support at Young-Davidson are expected to add another $15 per ounce. A weaker Canadian dollar is expected to partially offset the increase.
Alamos sold 130,800 ounces in the quarter at an average realized gold price of $4,504 per ounce, generating revenue of $594 million. Reported net earnings were $270 million, or $0.64 per share, while adjusted net earnings were $248 million, or $0.59 per share. The company ended the quarter with $637 million in cash, net cash of $437 million and $1.2 billion in available liquidity.
Island Gold District posts records and advances expansion
The Island Gold District produced a record 67,500 ounces in the second quarter, up 10% from the first quarter. Underground mining rates averaged a record 1,550 tonnes per day, and total milling rates surpassed 10,000 tonnes per day, including nearly 8,900 tonnes per day at the Magino Mill.
Guimond said underground mining rates have continued to improve in the third quarter and remain on track to reach 2,000 tonnes per day by year-end. The company expects rates to rise to 2,400 tonnes per day in the first quarter of 2027 after commissioning of the Phase III+ shaft, and ultimately to 3,000 tonnes per day in 2029.
Alamos spent $66 million in growth capital at the district during the quarter. Substantially all capital for the Phase III+ shaft expansion has been spent or committed, with commissioning expected in the first quarter of 2027. The Magino Mill expansion remains on track for completion in the first quarter of 2028, with 33% of its growth capital spent or committed.
The company also highlighted exploration results across the Island Gold District, including a newly identified high-grade zone west of existing underground reserves and resources. Management said further drilling could support additional high-grade mill feed, potentially displacing lower-grade Magino open-pit material in an expanded mill.
Other projects remain on schedule
The PDA project at Mulatos remains on budget and on schedule for first production in mid-2027. Alamos spent $21 million on PDA development during the quarter, with construction activity expected to increase in the second half.
At Lynn Lake, the company spent $36 million in development capital, advancing camp construction, site preparation, mill-area earthworks and the MacLellan starter pit. Alamos said Lynn Lake remains on budget and scheduled for completion in the first half of 2029.
McCluskey said the company remains focused on its internally funded organic growth pipeline rather than acquisitions. Despite the revised 2026 outlook, he said Alamos expects production and costs to improve in the coming years and remains on track toward its target of producing 1 million ounces of gold annually by 2030.
About Alamos Gold (NYSE:AGI)
Alamos Gold Inc is a Canadian-based intermediate gold producer engaged in the exploration, development and operation of mining projects in North America. Its principal activities include the acquisition, exploration and development of gold-bearing properties, and the management of operating mines. The company focuses on sustainable production practices and maintains a portfolio that spans both producing assets and advanced-stage development projects.
Alamos Gold operates multiple open pit and underground mines, including the Young-Davidson and Island Gold mines in Ontario, Canada, and the Mulatos mine in Sonora, Mexico.
