Alamos targets 1M oz in gold output by 2030

Alamos Gold (TSX, NYSE: AGI) predicted annual output will climb 46% by 2028 as expansion work at Ontario’s Island Gold District bears fruit and costs decrease. The stock rose.

Gold production this year will probably range between 570,000 and 650,000 oz., rising to 735,000-835,000 oz. in 2028, Alamos said Wednesday in a statement. This year’s target is smaller than the range of 630,000-680,000 oz. that the Toronto-based miner had provided earlier. 

Central to the company’s growth trajectory is the multi-phase expansion of the Island Gold District – which includes the namesake underground mine and the Magino open-pit mine and mill – and the startup of the Lynn Lake project in Manitoba. By 2030, those two assets should lift annual gold output to 1 million oz., Alamos said.

“We see the 2026 guidance in particular as a reset opportunity for the company following weaker operational performance in 2025,” Jefferies mining analyst Fahad Tariq said Wednesday in a note. “We maintain that there is nothing structurally wrong with the assets and expect the Island Gold District to drive production growth in the near term.”

Alamos shares rose 5.3% to $55.01 Wednesday morning in Toronto, boosting the company’s market value to about $23 billion (US$17 billion). The stock has traded between $30.51 and $61.83 in the past year.

New study

A new study for the Island Gold District, released Tuesday, outlines a 30% increase in reserves – to 8.3 million oz. – and a US$542 million ($743 million) mill expansion to 20,000 tonnes per day that should be completed by 2028.

With annual production of 419,000 oz. over a 19-year life, the operation would become one of Canada’s largest and longest‑life gold mines, Alamos said. At a long-term gold price of US$3,200 per oz., Island Gold has a net present value of US$8.2 billion.

Additional growth will come from Lynn Lake, a property that includes two open-pit sites, starting in 2029. Annual production is expected to average 186,000 oz. over the first 10 years, Alamos said.

“All of this growth is in Canada, it’s all lower cost, and we can fund it internally while generating growing free cash flow,” CEO John McCluskey said in the statement. “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 into the second half of the year as production ramps up and costs decrease with the completion of the shaft expansion at Island Gold.”

Construction restart

Construction activities at Lynn Lake are expected to restart this spring, with 2026 spending pegged at US$140 million to US$160 million. That’s 43% less than the previous guidance for 2026, which reflects the deferral of construction activities due to wildfires in Northern Manitoba last year.

Capital spending on Lynn Lake is expected to peak at US$380 million to US$410 million next year before slowing.

Total cash costs are expected to fall from US$1,020–1,120 per oz. this year to US$775–875 per oz. by 2028, Alamos also said. All-in sustaining costs (AISC) will probably shrink from US$1,500–US$1,600 per oz. to US$1,200–US$1,300 per oz. over the same span.

Capital expenditures this year will probably range from US$850 million to US$940 million, higher than a previous target communicated by the company. The figure includes up to US$720 million for growth projects.